House Of Commons
Tuesday, 21st March, 1967
The House met at half-past Two o'clock
Prayers
[Mr. SPEAKER in the Chair]
Oral Answers To Questions
Commonwealth Affairs
Far East And The Pacific (Secretary Of State's Visit)
1.
asked the Secretary of State for Commonwealth Affairs if he will make a statement on his visit to Australia.
30.
asked the Secretary of State for Commonwealth Affairs if he will make a statement about his recent journey to Australia and New Zealand.
31.
asked the Secretary of State for Commonwealth Affairs whether he will make a statement about his recent Commonwealth tour.
During my tour of the Far East and the Pacific, which lasted from 10th February to 8th March, I visited Fiji, New Zealand, Australia, Malaysia, Singapore and Hong Kong. The object of the tour was to meet members of the Governments and see something of the countries with which I am concerned.
I was warmly received everywhere and felt this to be a reflection of the strength of the Commonwealth bond. At the same time I was able to take part in useful discussions with Prime Ministers and other Ministers on matters of common concern, and to familiarise myself with the problems of Fiji and Hong Kong which remain our direct responsibility.Is my right hon. Friend aware that all the reports which we have had in this country about his visit in- dicate that it was a very successful one, and we offer him our congratulations? Has he considered whether it would be possible, on his return from such visits, to make a more detailed report available than is possible by means of Question and Answer, either writing it into HANSARD or placing it in the Library?
I am quite prepared to consider placing in the Library a short report of my visit. I doubt whether time would be available for a report to the House and a debate upon it, but that is not a matter for me.
Can the right hon. Gentleman say whether his right hon. Friend the Prime Minister has signified agreement or disagreement since his return with a remark which he is reported to have made that it would be a matter of years rather than months before we joined the Common Market? Secondly, does the remark which he is reported to have made about the use of force in Rhodesia mean that the Government are considering that possibility if all other means fail?
On the second point, about the use of force in Rhodesia, that is one which has been made in the House on a number of occasions, and certainly it has been made by me once. There are two circumstances in which force might be used. The first is if the Governor requested it to maintain law and order. The second is, after a return to legality, if a second U.D.I. were declared. That was made quite clear in the House.
On the right hon. Gentleman's first point, I made the statement that, in my view, negotiations might take years rather than months. Whether my right hon. Friend the Prime Minister agrees is a matter for him.rose—
Order. Questions 30 and 31 are being taken with this, Mr. Fisher.
Mr. Speaker, I apologise if I was a few moments late and did not hear the right hon. Gentleman's original Answer. Can he say whether he took the opportunity to discuss with the Governments of Australia, New Zealand and Hong Kong our Common Market soundings? If he did, what was their reaction? In particular, did he reassure the New Zealand Government that special arrangements would be made for them?
I discussed our possible entry into E.E.C. both in New Zealand and Australia. In New Zealand, I made the point, which they accepted, that there would have to be a special arrangement made to meet their point of view. In Australia, too, I assured them that there would be consultations after Her Majesty's Government decided to negotiate, if they so decided.
Did the right hon. Gentleman have any discussions with members of the Australian Government as to their outlook about Her Majesty's Government's contribution or lack of contribution in Vietnam?
Yes, Sir. I touched on defence problems generally, and I am sure that the Governments of Australia and New Zealand understand the point of view of Her Majesty's Government and the attitude which we have taken over Vietnam.
Was my right hon. Friend able to acquaint the Governments of Australia and New Zealand with the intention of Her Majesty's Government to make application to enter the Common Market? If so, what was the reaction of those two countries?
I have answered the first part. As for the second part, both New Zealand and Australia accepted the explanation which I gave that there would be full consultation if Her Majesty's Government decided to negotiate for our entry into E.E.C.
Tasmania (Secretary Of State's Visit)
2.
asked the Secretary of State for Commonwealth Affairs if he will make a statement on his visit to Tasmania.
I would refer my hon. Friend to the Answer which I gave to the hon. Member for Rye (Mr. Bryant Godman Irvine) on 14th March.—[Vol. 743, c. 39.]
Is my right hon. Friend aware that this is asking for a little more information than was given in those Ques- tions? Can he now say whether there is to be any permanent evidence of an increase in our interest in the disaster areas in Tasmania in the form of perhaps a hospital or a school, or something of that nature?
I do not think that I can go as far as that. I visited the area of the fire devastation and had consultation with the Deputy Premier, since which time I have received a letter from the Premier of Tasmania in which he refers to the magnificent gesture of our contribution. In my discussion with the Deputy Premier, I offered to give any other assistance which they thought would be necessary. I understand, nevertheless, that the Commonwealth Government of Australia and the Tasmanian Government have agreed between them to replace all of the homes free of charge.
Rhodesia
3.
asked the Secretary of State for Commonwealth Affairs what is the latest estimate of the total cost of the consequences of Rhodesia's unilateral declaration of independence to the United Kingdom's economy, including the cost of sanctions, the effect on imports, exports and invisibles, and the military blockade measures off Beira, and extra aid to Zambia but excluding any hypothetical calculation of the effect of changing copper prices.
I have nothing to add to the Answer given to Questions on this subject by my right hon. Friend the Prime Minister on 21st February and 16th March, and my right hon. Friend the Chancellor of the Exchequer on 7th March.
Can the right hon. Gentleman confirm today whether those Answers to which he referred were intended to be authoritative for all interested parties and not just on a selective basis of consumption as hitherto? Secondly, can he also say whether, in them, account has been taken of increasing consumer resistance to British goods and services throughout Southern Africa as a whole as revealed in the latest Board of Trade figures, and what reason has he for this?
I am sure the hon. Gentleman will agree that it is extremely difficult to arrive at any firm figure as to the actual costs since the declaration of illegal independence. It depends upon which way one looks at this. One could arrive at a number of figures. It is extremely difficult to get an accurate one. I think the hon. Gentleman will agree that, whatever the figure may be, one cannot measure loyalty and actions against rebellion in monetary terms.
Would my right hon. Friend confirm that consumer resistance resulting from our Rhodesian policy is not confined to Southern Africa? It applies also to Australia. If he has any doubt about that, I can provide him with some correspondence. Secondly, can he tell us what, in fact, the increase in the price of copper has cost our balance of payments? Is it more or less than £250 million?
On the second part of my hon. and learned Friend's question, it is impossible to assess the actual difference in the cost, because we do not know what the price of copper would have been had there been no U.D.I. Regarding the first part of his question, I cannot confirm what he asked me.
5.
asked the Secretary of State for Commonwealth Affairs why Rhodesia continues to import large quantities of motor car fuel.
Because the refinery at Umtali has been out of operation since January, 1966, as a result of sanctions. Rhodesia has been compelled to develop expensive and complicated methods of procuring oil.
Is the right hon. Gentleman aware that his hon. Friend the Member for Lanark (Mrs. Hart) is reported to have said, on 19th February, that the white population in Rhodesia are no longer able to use their cars. Since this is obviously not the case, are the Government satisfied with the accuracy of the information they are getting about conditions inside Rhodesia?
All I know is that there is a very strict petrol rationing scheme in operation in Rhodesia.
7.
asked the Secretary of State for Commonwealth Affairs if he will make a statement on the effect of mandatory sanctions on the people of Rhodesia.
9.
asked the Secretary of State for Commonwealth Affairs what is the latest information available to the Government on the success of mandatory sanctions against Rhodesia.
As my hon. Friend informed the House on 14th February, we expect mandatory sanctions to result in a significant reduction in Rhodesia's export capacity. Mr. Wrathall's statement in the Rhodesian Legislature on 9th February reveals that the régime now accepts that Rhodesia is faced with a long economic siege. Spokesmen of the régime have made many claims about the alleged ineffectiveness of sanctions but there is little doubt that they are now worried about the large quantities of tobacco unsold from last year, the virtual bankruptcy of the sugar industry and the closure of the motor assembly plants due to lack of components.
Is the object of sanctions to cause widespread unemployment in Rhodesia and so inspire African unrest? If so, is it not true that so far, in the long term, sanctions have had more effect on the British economy than on the Rhodesian economy?
The object of sanctions, as the hon. Gentleman knows full well, is to bring the Rhodesian régime to an end and make them return to legality. The application of selective mandatory sanctions has taken a little time, because certain countries have had to take legislative procedures which we did not have to take.
Is my right hon. Friend aware that most Members of the House regard the Rhodesian issue as one that is fundamental to the credibility of the Government's overall foreign policy, that we constantly look for any evidence that the Government share this conviction, and that we would support any action necessary to make the present economic sanctions policy effective?
Given a little time—and it is not very much more than eight weeks—I think my hon. Friend will be quite happy with the results of selective mandatory sanctions.
Is it not a fact that Rhodesia has satisfactorily balanced her payments, notably on invisible account, and is it not a worldwide recognition now that sanctions of all kinds against Rhodesia are a dismal failure?
I am aware of the budget issued by the Rhodesian régime last year, when many figures were conveniently omitted. Perhaps the hon. Gentleman is, too, a victim of their own propaganda?
Would my right hon. Friend tell the House when it is expected that the tobacco sales in Rhodesia will be due, and what prospects he sees, from the information available to him, that they will be able to dispose of the tobacco this year?
The tobacco is already off the stalk and probably on the auction floor, but what has to be borne in mind is that a very high percentage of last year's crop is still unsold.
8.
asked the Secretary of State for Commonwealth Affairs what steps Her Majesty's Government intend to take to assist Rhodesians of all races who desire an early return to legality to enable their country to restore their links with Great Britain and the Commonwealth.
As the Prime Minister made clear on 20th December we wish to secure a settlement of the Rhodesian problem which is just and fair and Her Majesty's Government remain willing to reach such a settlement through discussion and subsequent negotiation with a legal government in Rhodesia. We naturally hope that all Rhodesians will come to realise the sterility of the path upon which the illegal régime is now set and I can assure them that the British Government look forward to the day when the links which have been abused by the present leaders in Rhodesia can be fully restored.
Would not my right hon. Friend agree that the Government have leaned over backwards to try to accommodate this illegal régime, that this illegal régime has received constant support from many members of the party opposite, and that it seems to many of us on this side of the House that there has not been enough demonstration by my right hon. Friend and the Government to encourage people who wish to return to the standards of decency to do so? Could they not announce that anyone who wishes to accept the standards of democratic decency, and those standards that were outlined on the "Tiger", will be encouraged to form a Government in Rhodesia?
Order. Long supplementaries mean that someone else fails to get one.
The British Government have no argument at all with Rhodesians as such, but only with the illegal régime, and it is at any time open to any group of individuals to approach the Queen's Governor, who is still in Salisbury, to make approaches to the British Government to end the illegal position that obtains there, after which we can look at the position once more.
11.
asked the Secretary of State for Commonwealth Affairs whether he will now make a statement on the extent of opposition in Rhodesia to the illegal régime.
This cannot be accurately assessed because of the measures of the illegal régime who have sought to suppress all effective opposition. But I believe it to be considerable.
Can my right hon. Friend say why so many self-styled democrats in this House seem to support a one-party régime in Rhodesia?
I am afraid that I cannot be responsible for the consciences of all hon. Members in this House.
Can the right hon. Gentleman say whether his office takes any steps to give advice in this respect to Rhodesian citizens who are on visits to this country?
As far as is possible my office makes itself available to any Rhodesian who wishes to come along and talk to us. In fact, these visits are extremely valuable.
12.
asked the Secretary of State for Commonwealth Affairs what reports he has received on the effect of mandatory sanctions on the policy of the illegal régime in Rhodesia; and whether he will make a statement.
The so-called Minister of Finance, speaking in the Salisbury Legislative Assembly on 9th February, 1967, admitted that our action in persuading the United Nations to impose mandatory sanctions had created a new situation. The holding operation was over and longer term measures had to be taken to secure the future. The régime had therefore reappraised its policies in recognition of the need to maintain the momentum of economic activity in the face of a reduction in export markets which might persist for some time.
Mr. Wrathall went on to say that while much progress had already been made, much more needed to be done if the decline in the gross domestic product was to be halted and economic growth resumed.As progressive opinion throughout the world supports Her Majesty's Government in this policy, will my right hon. Friend now call upon all sections of this House also to support the Government?
I should like to think that that is the position, but I am not sure that it is at the present moment.
The suppression of truth by the régime in Rhodesia proves the truth of what my right hon. Friend is saying about the effectiveness of sanctions. Can he say what compliance is being made by Portugal and Iran, and what we are doing about this?
The talks, negotiations, and representations with Portugal and Iran or South Africa are matters for the Foreign Office, and not for me.
Can the right hon. Gentleman say how many countries have failed to make their report to the Security Council about what measures they have taken under the mandatory sanctions order?
No, Sir, I am afraid that I cannot at the present moment.
13.
asked the Secretary of State for Commonwealth Affairs what information he has concerning the present effectiveness of oil sanctions against Rhodesia.
I have nothing to add to the reply which I gave to the hon. Member for Cardigan (Mr. Elystan Morgan) on 27th January.
Can the right hon. Gentleman say whether there is any evidence of an increase in the supply of oil to South Africa and Mozambique over recent months, and whether he will be prepared, if necessary, to control the supply of oil by British companies to these two countries?
The question of oil supplies to Rhodesia is always to the forefront in our consideration of the problem. At the present time, as far as I am aware, they are getting sufficient to maintain their rather strict rationing, but nothing very much in addition, and this oil is costing them a considerable amount of money.
Is my right hon. Friend aware that there is evidence that the South African Government are constructing large storage facilities near the Rhodesian frontier? Can he assure the House that if there is a breach of the oil sanctions to any great extent we reserve the right to take such steps as we think best?
We always reserve the right to make representations if we see any breaches whatsoever in the sanctions.
16.
asked the Secretary of State for Commonwealth Affairs what is the police state machinery now operating in Rhodesia.
The régime has resorted to the device of alleging an emergency in order to justify arbitrary powers which include those of detention and restriction of persons without trial or review, censorship and the dictatorial control of employment. The very existence of these powers, and still more the use made of them, operates to intimidate the population, to stifle criticism and dissent and to create an atmosphere of suspicion and insecurity.
May I ask the hon. Gentleman how many people are detained without trial in Aden? Is it not a fact that when the right hon. Gentleman the Commonwealth Secretary was in Australia he compared Mr. Smith's Government with that of Nazi Germany? However much the right hon. Gentleman may disagree with Mr. Smith, is this not a travesty of the truth, and a gross abuse of Australian hospitality?
If the House will be patient, I will just remind the hon. Gentleman of what my right hon. Friend said, and I will do it quickly. He said:
All this is going on in Rhodesia. It is happening to Africans, but I presume that the hon. Gentleman is as concerned about them as he is about white people."Those of you who remember the days of the 'thirties will recall one familiar feature of Nazi Germany, the knock on the door at midnight by the security police followed by arrest and detention without trial."
Is the hon. Gentleman aware that what is happening in the African townships is an end to the intimidation waged by one African political party against the other, which happened before the U.D.I.?
No, Sir.
Can my hon. Friend say whether there is a single country in Africa in which this does not happen?
Yes, Sir.
Which one?
There are many countries in Africa.
Does not the hon. Gentleman know that a state of emergency in Rhodesia preceded the U.D.I., and that that state of emergency was occasioned by the infiltration of arms and terrorists across the Zambesi? Is he not further aware that there are fewer people detained now than there were before the U.D.I.?
It is as well to get it on the record that His Excellency the Governor signed a state of emergency at the request of the Government the day before, and without being told that they were declaring U.D.I.
26.
asked the Secretary of State for Commonwealth Affairs when he now expects the United Nations mandatory sanctions to bring about a collapse of the Rhodesian economy.
27.
asked the Secretary of State for Commonwealth Affairs when he now expects United Nations mandatory sanctions to bring about a collapse of the Rhodesian economy.
I would not accept that our object is to bring about a collapse of the Rhodesian economy. Nor do I propose to make any guess as to when sanctions are likely to achieve our objective. But however long the haul may be we shall continue strictly to enforce sanctions in the firm belief that a stage will be reached when Rhodesians will realise that a return to constitutional rule is the only acceptable answer.
Is it not true that Rhodesia is getting all the oil she needs and that sanctions are hitting the United Kingdom very hard indeed in loss of trade and expenditure? When will this folly cease?
It may be wishful thinking on the hon. and learned Gentleman's part that Rhodesia is getting all the oil she needs. What I have said is that she is getting sufficient to maintain her already strict rationing. I can assure the hon. and learned Gentleman that sanctions are biting very deeply, but we have no desire to destroy the Rhodesian economy; what we have a desire to do is bring them back to the rule of law.
Is the right hon. Gentleman not aware that, up to 21st February, about 72 out of the 131 member States of the United Nations and associated agencies had failed to report any action on the implementation of mandatory sanctions? Since it is now abundantly clear that other countries will continue to trade with Rhodesia, what are his proposals now for bringing this rebellion to an end?
The last figure which I saw was that about 50 countries had not replied, but even that was more than a week ago and I should imagine that some others have replied since. The question of replies from these countries on their action to implement selective mandatory sanctions is a matter for the United Nations, but I have no reason to think that the majority will not apply them.
May I seriously put to my right hon. Friend the fact that, less than 50 years ago, a British Government were able to settle a much more serious revolution in Ireland? Has British statesmanship now ceased to exist?
I am rather staggered that my good friends the Irish should be referred to in the same terms and in the same sentence as the people in Rhodesia who are rebels.
28.
asked the Secretary of State for Commonwealth Affairs what information he has about the support Zambia is now giving to mandatory sanctions against Rhodesia.
The position of the Zambian Government is set out in their letter of 23rd February to the Secretary General of the United Nations which I will circulate in the OFFICIAL REPORT.
Is the right hon. Gentleman aware that Zambia, like Great Britain, is suffering much more from this policy of the British Government than Rhodesia is? Does he not think it time that he took a new initiative to bring about a settlement?
I accept that Zambia has been facing an extremely difficult situation as a result of the application of sanctions, but she is complying as far as possible, with our help, with the United Nations resolution.
Is my right hon. Friend aware that the whole purpose of these Questions about Rhodesia from the benches opposite is to give support to the illegal régime and that it is now obvious that the Conservative Party in the House is all out—
Order. The Question relates to Zambia.
In view of the fact that so many hon. Gentlemen opposite know how to solve this problem, has my right hon. Friend any objection to their going out and bringing a peaceful solution?
29.
asked the Secretary of State for Commonwealth Affairs what new proposals he has for solving the Rhodesian problem.
I have nothing to add to the statement made by my right hon. Friend the Prime Minister on 20th December or to the replies to subsequent Questions on this subject given by my colleagues and myself.
Is it not fantastic that one Ministry, the Ministry of Overseas Development, should be trying to build up countries in need, while another Department is trying to bring down Rhodesia's economy?
If the hon. and gallant Gentleman would use his good offices to persuade the régime to return to legality, many of his fears would be unfounded.
Overseas Students (Fees)
10.
asked the Secretary of State for Commonwealth Affairs what negotiations he has had with Commonwealth Governments concerning the application of the new scale of fees to students from developing Commonwealth countries who do not receive Government scholarships or assistance.
Commonwealth authorities are being consulted about the application of the new scale of fees to all categories of overseas students, including private students from the developing Commonwealth countries.
Whilst thanking my right hon. Friend for that information, may I ask whether he is aware that recently the High Commissioner of Jamaica is reported as saying that we have lost a wonderful opportunity of discriminating in favour of Commonwealth students? Can he, while these regulations are still in a state of flux, make representation to the Secretary of State for Education and Science to have a special concession made to Commonwealth students?
We have received no formal representation from any Commonwealth Government on this question. The House should remember that there are 1,400 students from the developing countries of the Commonwealth who are being financed entirely by the British Government, and who will have the increase of fees met by the British taxpayer.
Would the hon. Gentleman bear in mind that the people most affected are not those to whom Common wealth Governments are giving assistance!
We ourselves are helping 1,400 students whose Commonwealth Governments are not helping them.
Commonwealth Governments are helping some, and we are helping others. As the right hon. Gentleman will know, we have taken special steps to help protect those developing countries where students have to pay £50 extra. The money will be refunded to their Government, if the Government is paying it.Aden (United Kingdom Forces)
14.
asked the Secretary of State for Commonwealth Affairs which Commonwealth countries have made representations to him about the proposed withdrawal of United Kingdom forces from Aden.
None, Sir
.
That may be for the Commonwealth Secretary, but I understand that representations have been made to the Government. Will the hon. Gentleman give the House an assurance that when negotiations about Aden are taking place full weight is given to the views of the Commonwealth countries which are affected by our withdrawal from Aden?
The hon. Gentleman seems to be under a misunderstanding. I said that no Commonwealth country had made representations to us about the proposed withdrawal of United Kingdom Forces from Aden. I am sure the hon. Gentleman will agree that I ought to know the answer on this, and that is the answer.
Gibraltar
17.
asked the Secretary of State for Commonwealth Affairs what is the present situation in Gibraltar; and what reports he has received from the Governor regarding Spanish plans to erect buildings in the neutral zone.
As regards the first part of the Question I have nothing to add to the reply given to the hon. Member for Southend, West (Mr. Chan-non) by my hon. Friend on 14th February.
As regards the second part of the Question, the Governor has informed us of recent reports in the Spanish Press of plans to construct a sports stadium in the northern part of the Isthmus, and to demilitarise the area and incorporate it in the municipality of La Linea. On 2nd March the Spanish authorities started removing some of the old military installations and levelling the ground immediately to the north of the frontier fence, presumably in connection with those plans.With regard to the last part of that Answer, can the hon. Gentleman, having announced these talks, say what the Government's reaction will be to what would appear to be a breach of international law? Secondly, with regard to the first general part of that Answer, has the hon. Gentleman nothing to add to the continuing state of complete weakness in the face of continuing Spanish harassment? Thirdly, as the Government show themselves to be so keen on ultimata in other talks, ought not they to introduce some kind of time limit to the talks with Spain?
The question of talks with Spain is a matter for my right hon. Friend the Foreign Secretary.
Singapore (British Bases)
18.
asked the Secretary of State for Commonwealth Affairs if he will make a statement on the talks he had with the Government of Singapore on the future of British bases there.
24.
asked the Secretary of State for Commonwealth Affairs what consultations he has had with the Government of Singapore about the local economic and political consequences of the forthcoming reduction of British troops in the base.
The purpose of my visit to the Far East was to meet Commonwealth Ministers and see something of their countries. I did, however, take the opportunity of mentioning to the Prime Minister of Singapore our intention to make some reduction of the base facilities in Singapore by the end of next year, as disclosed in this House on 27th February by my right hon. Friend the Secretary of State for Defence. I told him that details had yet to be worked out and assured him that there would of course be full prior consultation between the two Governments.
Bearing in mind that it is less than two years before we make major reductions in the bases, and also bearing in mind the situation in Malta, does not my right hon. Friend agree that there should be an urgent examination of the problem of unemployment caused by closing down bases? Can he say whether the Ministry of Overseas Development will be involved here, as in Malta?
It must be borne in mind that the initial run-down of forces east of Suez is the result of the end of confrontation. That involves about 13,000 men, as was announced by the Secretary of State for Defence. This is clearly understood by the Prime Minister of Singapore. In his speech in the House while I was away my right hon. Friend mentioned a further figure of between 5,000 and 10,000 men. It is in respect of that figure that I promised full consultation with the Prime Minister of Singapore.
Is the right hon. Gentleman aware that I led a delegation of all parties in this House to Singapore five years ago, when the Governor brought home to us very clearly how much importance was to be attached to the question of the employment of the local civilians in the island of Singapore? Will the right hon. Gentleman see that if this run-down takes place these jobs will not be jeopardised?
I am aware of the situation in Singapore. I know that at the moment the unemployment rate is 12 per cent. This situation is very much in our minds.
Hong Kong
20.
asked the Secretary of State for Commonwealth Affairs what consultations he has had with the Governor in order to improve the conditions and hours of work of women and children in Hong Kong.
During my recent visit to Hong Kong, I discussed with the Governor the subject of hours of work of women and young persons. He has amending legislation under consideration.
Is my right hon. Friend aware that women and children in Hong Kong are liable to work a maximum legal week of 60 hours, plus overtime? Can my right hon. Friend assure us that the amending legislation proposed by the Governor will terminate this state of affairs?
I am aware that under the existing regulation what my hon. Friend has said is quite right. It is possible for young people above the age of 16, and also women, to work a 60-hour week. In fact, however, a considerable number—I cannot give the actual percentage—work an eight-hour shift, because many factories—and I have visited one or two—work three shifts in 24 hours. The Governor is looking into the question of an alteration of the regulation, and the question is under urgent discussion.
Can the Minister tell us when the amending legislation will be made into permanent legislation?
At the moment this is a matter for consultation between the Governor, the Legislative Council and industry in Hong Kong.
21.
asked the Secretary of State for Commonwealth Affairs why Hong Kong is not to have an elected legislative council.
Because of Hong Kong's special circumstances it is not possible to think of normal self-government in the Colony, or to consider an elected legislative council.
Does my right hon. Friend agree that if is right that the black man in Rhodesia should have a share in running the affairs of his country it is also right that the yellow man in Hong Kong should have similar rights in running his country? Is my right hon. Friend telling us that human rights are conditioned by the geographical situation?
That is a great oversimplification of the problem, as my hon. Friend is aware. The situation in Hong Kong is unlike that anywhere else in the world. Nevertheless, the Government of Hong Kong are considering an extension of the system by which people can be elected to deal with local authority matters and participate in what are regarded as neighbourhood activities It is difficult to go beyond that.
Does not the Commonwealth Secretary agree that there is no demand by the overwhelming majority of the population of Hong Kong for a legislative council?
It is the overwhelming desire of the people of Hong Kong—98 per cent. of whom are Chinese—to live in peace.
On a point of order. In view of the unsatisfactory nature of my right hon. Friend's answer, I beg to give notice that I shall try to raise the matter on the Adjournment.
Tanzania (British Firms)
22.
asked the Secretary of State for Commonwealth Affairs what action has been taken to protect the rights of British firms in Tanzania; and whether he will make a statement.
I would refer the hon. Member to my reply on 16th February. We have remained in close consultation with the British undertakings concerned, who are currently assessing their bids for compensation or negotiating their claims in Dar-es-Salaam with the Tanzanian authorities.
The British people, under present management, must sympathise with the desire of Tanzania to control its own national economy, but can the hon. Gentleman say whether steps are being taken to acquaint the Tanzanian Government of the disastrous effect that this is likely to have upon the prospects for aid and investment in this and other African States? Can he further say whether the Tanzanians have the resources to give fair and effective compensation?
We have been assured by the Tanzanian Government that they will pay full and fair compensation. We accept their word. On the question of the effect of this measure, there is no call on Her Majesty's Government to tell any other Government how to fulfil their economic policies.
First, is the hon. Gentleman convinced that the assurance that he has received can be carried out? Secondly, in view of the present diplomatic difficulties, how does he make these recommendations to the Tanzanian Government?
On the second part of that supplementary question, we speak to the Tanzanian Government through our Canadian friends. As to the first part, we must take the word of the Government there that they will pay full and fair compensation. It is time enough to shout when that compensation is not forthcoming.
Singapore And Malaysia (United Kingdom Military Presence)
23.
asked the Secretary of State for Commonwealth Affairs what representations were made to him by the Governments of Australia and New Zealand during his recent visits in favour of Great Britain retaining an effective military presence in Singapore and Malaysia.
Our discussions naturally included a general exchange of views on defence problems in the area. The Australian and New Zealand Governments expressed to me appreciation for the continuing British military presence in South East Asia.
Will the Commonwealth Secretary, against a good deal of pressure by some of his hon. Friends, ensure that Britain retains an effective military presence in Malaya and Singapore while our forces are welcomed there, until our allies in the area are better able to provide for their own defence? Will he do his best to avoid making the sort of misjudgment that we have made in respect of other bases, such as Malta and Aden, in respect of the reduction of our forces?
That is a long supplementary question. It has cut out one Question.
The Government's policy on defence east of Suez is contained in the 1966 Defence Review and the 1967 Defence Review. This was understood clearly when I was in New Zealand and Australia. They are concerned about our presence, but not about the number troops in the area.
Did my right hon. Friend have an opportunity to discuss the possibility of internationalising defence agreements in the area in good time, under the auspices of the United Nations?
No, Sir. That question was not raised when I was there.
Nevis And Anguilla (Local Councils)
25.
asked the Secretary of State for Commonwealth Affairs what information he has about the reception by Nevis and Anguilla of the constitutional arrangements with regard to local councils in those islands.
I understand that the necessary arrangements are proceeding and I am not aware that any difficulties have arisen since the inauguration of Statehood.
Would the hon. Gentleman not agree that considerable opposition to these proposals still exists? What can the British Government still do to allay the very real fears which are entertained?
My understanding is that a great deal of the feeling has died down. I believe that we must now give a fair chance to the Statehood which is being inaugurated.
South Arabian Federation
32.
asked the Secretary of State for Commonwealth Affairs if he will hold discussions with other Commonwealth Governments with a view to the posting of forces in the South Arabian Federation to assist federal forces with defence and the maintenance of law and order after the withdrawal of British forces.
No, Sir. As the provision of a peace-keeping force in the South Arabian Federation is a measure which the forthcoming United Nations Mission might wish to recommend it would be premature to take such steps as the hon. Gentleman has suggested.
Does the hon. Gentleman not consider that some Commonwealth Governments might like to avert a disaster in South Arabia by taking up the responsibilities which this country is to drop like hot potatoes?
That is in the realm of speculation.
European Economic Community
Q1.
asked the Prime Minister whether an application will be made to join the European Economic Community in the near future; and if he will make a statement.
Q8.
asked the Prime Minister whether he will now make a statement of Her Majesty's Government's policy on joining the Common Market.
I have as yet nothing to add to the Answer I gave on 9th March to Questions by the hon. Members for Banbury (Mr. Marten) and Shrewsbury (Sir J. Langford-Holt).
Is a formal application likely to be postponed if the Government feel that a French veto is likely, or that there will be long delays during the negotiations? Would my right hon. Friend also inform the House whether there is any way in which the Government can help to provide a balanced debate showing the pros and cons of entry?
As my hon. Friend and the House know, the Government have now started to consider very deeply—it will take a little time—all the issues which have arisen as a result of the visits of my right hon. Friend and myself. All relevant considerations will be taken into account before reaching a decision and announcing it to the House.
May I ask the right hon. Gentleman a very simple Question in the hope of receiving a simple answer? Can he assure the House that he does not intend to lose the momentum which he has acquired by his European visit, but will make up his mind very soon to have a go?
I have repeatedly told the House that I regard it as of great importance not to lose the momentum of these visits. They have done great good and provided us with a great deal of information which must now be very carefully considered. We shall certainly not delay it unnecessarily, but, with the importance of this historic decision one way or another, I do not think that the hon. Gentleman would want us to rush into a premature decision.
Having just returned from Germany, may I ask the right hon. Gentleman whether he is aware that it is universally believed in political circles there that he has informed the Bonn Government that he is prepared to accede to the Treaty of Rome, subject only to transitional arrangements and special arrangements for New Zealand? Does he appreciate the importance of saying the same thing on the Continent as he says in London?
Yes, Sir, which is why, on every visit, I spoke about the Treaty of Rome—as I have already told the House—in the exact words which I used in this House on 10th November and the exact words which I used in Strasbourg, which was, of course, a public speech. Nothing else about the Treaty of Rome has been said either by my right hon. Friend or by myself. On the second part of the question, the story which the noble Lord says is universally believed does not bear any relation to what I said in Bonn or in any of the other capitals.
On the question of momentum and timing, does my right hon Friend agree with the Commonwealth Secretary—I hope he does—that it is likely to be years rather than months before there is any chance of our getting into the Common Market?
What my right hon. Friend said was that it may be years. It is difficult to forecast, but I feel that we want to keep the momentum and if we feel that British and Commonwealth interests can be adequately safeguarded—that is what the probe was concerned with—we should try to settle the matter with as short a period of negotiation as possible. But there will be two sides to such negotiations and I would not like to forecast, especially after the last experience, how long they will take.
Will the right hon. Gentleman confirm the statement which appears today that he will make a second visit to Paris before he makes up his mind?
That report is pure speculation. We have no plans at all for second visits, apart from my right hon. Friend's visit to the W.E.U. in Rome. There are no plans for this. If, as a result of the Government's consideration, we thought that there would be any advantage in a second visit to any of the capitals, we should, of course, consider it at that time.
Is my right hon. Friend aware that the Common Market countries think that the transitional arrangements over the assimilation of agricultural prices cannot take less than six years and that this would lessen the effects of the change for all countries and make it more practicable?
I have had a great deal of advice from the Common Market countries about some of these problems. I would not say that that was the agreed view of all the Common Market countries. I do not believe that, as yet, they have got a set position on this matter and I am not quite sure why they should he expected to have one until it has advanced a little further.
Q4.
asked the Prime Minister what discussions he had with the French Foreign Minister during his recent visit to Paris about Great Britain's previous attempt to enter the Common Market in so far as it affects the present negotiations; and if he will make a statement.
I have, as yet, nothing to add to the report which I gave to the House on 26th January on the visit to Paris of my right hon. Friend the Foreign Secretary and myself.—[Vol. 739, c. 1765.]
In what way does the Prime Minister consider that his agreement with the French Foreign Minister that Britain was wrong in 1962 and 1963 and that the French veto of our application was inevitable is likely to assist this country in the present round of talks?
We must learn by the experiences of the past in connection with these negotiations. I have the very strong feeling, for example, that the fact that they were so long drawn out and dealt with so much detail, while some of this might be useful to us now, was one of the big factors involving the use of the veto by General de Gaulle. The other issue was the feeling that he had been seriously misled over certain questions which came to a head at Nassau.
Wages And Salaries
Q2.
asked the Prime Minister which Ministers are responsible for answering Questions as to how the wages and salaries of various types of workers are affected during the period of severe restraint.
The arrangements announced by my right hon. Friend the then First Secretary of State on 25th May, 1966, continue to apply.—[Vol. 729, c. 115.]
Does the Prime Minister think that it would be better if there were a single clearing house for all the injustices and anomalies that are arising under this policy? Does not he think that it would be appropriate for the First Secretary, as the Minister primarily responsible, to have the duty of explaining the consequences of a policy which the Prime Minister has himself described as steps which no other democratic Government in the world have taken?
The hon. Gentleman can be assured that, so far as coordination of Government action on this matter is concerned, there are adequate arrangements for what he calls a "clearing house". That is a different matter from the subject of answering a Question in this House. I know that the hon. Gentleman has been very bothered about the transference of a Question of his about the wages of employees of rabbit clearance societies. This is appropriately a matter for the Ministry of Agriculture, Fisheries and Food because these wages normally follow agricultural wages and my right hon. Friend the Minister of Agriculture, Fisheries and Food is normally responsible in those spheres.
Rhodesia
Q3.
asked the Prime Minister whether he will make a further statement about attempts from Rhodesia House to bribe junior members of Commonwealth delegations.
No, Sir.
Does the right hon. Gentleman uphold the charges which he made against the Rhodesia Residual Mission, the head of which belongs to the same order of chivalry as himself? [Interruption.] They are very serious charges which the Prime Minister made. May I ask the right hon. Gentleman whether these attempts were unearthed before or after his right hon. Friend the Commonwealth Secretary defended the continuance of the Rhodesia Residual Mission against the objections of some of his hon. Friends?
I certainly stand by the charge I made on that occasion. Loath as I am to cause dissension among the ranks of the O.B.E.s of all Commonwealth countries, I feel that the particular effort that was made by the method I described was reprehensible. While this does not, in my view, affect the future of the Mission in present circumstances in this country, I am sure that the hon. Gentleman, in addition to wanting to get Rhodesia back to the rule of law, will use what influence he has to stop this kind of behaviour in future.
Does not the revelation just made by the hon. Member for Chigwell (Mr. Biggs-Davison) constitute a serious argument for the abolition of the honours system?
On a point of order. In view of the very unsatisfactory nature of the Prime Minister's reply and the continued smear—
Order. Notice must be given in the formal way, and swiftly.
—I beg to give notice that I shall raise this matter on the Adjournment.
Eastern Europe
Q6.
asked the Prime Minister whether, in the interests of a wider European understanding following his visit to Moscow, he will consider visiting the capitals of other Eastern European countries.
Our many contacts, Ministerial and otherwise, with the countries of Eastern Europe show the great importance we attach to our relations with them, but I have no present plans for visiting them myself.
Would my right hon. Friend, while not having any present plans, bear this visit very much in mind because, having been twice or three times to Moscow and several times to Western Europe, surely his own support for a wider European concept would be encouraged by such a visit?
Since October, 1964, there have been a large number of Ministerial visits at all levels to and from Eastern Europe, including visits for official talks by eight senior Ministers from Jugoslavia, Hungary, Poland, Rumania, Bulgaria and Czechoslovakia, and visits by three Cabinet Ministers, including the then Foreign Secretary, and four Ministers of State to Czechoslovakia, Jugoslavia, Poland, Rumania, Bulgaria and Hungary. I think that my hon. Friend can feel that in the matter of visits both ways, Eastern European countries other than Moscow have been very well regarded in the arrangements that have been made.
Ussr (Long-Term Trading Arrangements)
Q9.
asked the Prime Minister which Ministers will be involved in implementing his agreement with Mr. Kosygin about long-term trading arrangements with Russia and her allies.
My right hon. Friend the President of the Board of Trade will pursue with the Soviet Minister of Foreign Trade the possibilities of long-term trading arrangements between our two countries and will consult all other Ministers concerned as necessary.
As the Prime Minister just said that a North Atlantic Free Trade Area might be an alternative, could he say whether the Government are studying the question of trade with the East as a possible alternative if we do not get the conditions of entry into the Common Market?
With trade as widespread as that of this country, it would be wrong to assume, whatever we do, that we shall be trading with only one area. Whether it be with Western Europe, Eastern Europe, or anywhere else, we want to maximise trade as far as we can in all directions and we look to an improved volume of trade with the Soviet Union. This was the purpose of my discussions with Mr. Kosygin, the remarks in the communiqué and the aim which my right hon. Friend is following up.
North Atlantic Free Trade Area
Q7.
asked the Prime Minister if he will make a statement on Her Majesty's Government's policy with regard to a possible North Atlantic Free Trade Area.
I have nothing to add to what my right hon. Friend the Foreign Secretary said in the debate on the European Economic Community on 16th November, 1966.—[Vol. 736, c. 446.]
Would not the Prime Minister agree that even if we do not succeed in entering the Common Market—and the majority of us hope that we shall succeed—a North Atlantic Free Trade Association is not a conceivable alternative solution to the major problems which this country faces?
As my right hon. Friend said in the House, having reviewed the various alternatives, we certainly feel that, on the right terms and given the right terms, entry into the Common Market would be most advantageous for this country—that is, given the right terms. We cannot guarantee that we will get the right terms, and it would be prudent on this occasion, unlike the last occasion, to have in mind what the alternatives should be if we cannot get entry on the right terms.
Is it not clear to my right hon. Friend that if we do not get into the E.E.C., then to agree to such a North Atlantic Free Trade Area would, in effect, lead us into an even more subservient position to the United States, and that that should not be our position?
I do not think that my hon. Friend should go to extremes on this question. I have said that, if we can get the right terms, I believe that entry into the Common Market is by far the most advantageous for this country—but, of course, one of the problems about a proposed North Atlantic Free Trade Area is that it is not in any sense in being and might never be in being. It is, to some extent, a visionary concept at this time. The E.E.C., on the other hand, is a reality. As for my hon. Friend's question, I cannot go as far as he did and talk about subservience, either in one area or the other.
As the Prime Minister, at the end of every visit he has made to Common Market countries, has made very optimistic statements about the success of those visits, what is actually preventing him from making an application now?
The hon. Gentleman could not have heard the exchange a few minutes ago. I did not make any optimistic statements about the success of the visits. I said that they had all been very helpful and encouraging in terms of the vast amount of information that we had been able to get. If there was success, it was in narrowing down the difficulties involved in safeguarding British and Commonwealth interests to three or four main issues. However, the difficulties are still formidable and I am sure that the hon. Gentleman would want the Government to take time to evaluate them before coming to a decision.
National Dividend
Q10.
asked the Prime Minister if he will define what is meant by a national dividend.
A national dividend is a means of expressing the total sum available in each year for distribution in increased wages, salaries and other incomes consistent with stability in the general level of prices.
While thanking the right hon. Gentleman for that enlightening Answer, may I ask whether it is the Government's intention now to distribute a dividend next year on these lines?
While, of course, under the right hon. Gentleman's leadership, his party never managed to work out an incomes policy, my hopes are that we now will. I think that the whole House agrees, whatever may be the views on methods, that we cannot as a nation afford to pay out in incomes more than we earn in productivity. That is the purpose of the national dividend proposal. In accordance with the T.U.C. document, we shall be discussing with the T.U.C. next autumn how much additional can be or should be paid out in incomes as a result of the increasing production that we expect to find from now on.
Can my right hon. Friend ensure that this dividend is paid to those who do the work as opposed to those who own shares?
My right hon. Friend the First Secretary will be dealing with some of the criteria for the period following the six months of severe restraint, and my hon. Friend can be sure that the question of the allocation between dividends and earned incomes will be looked after in my right hon. Friend's statement.
How does the right hon. Gentleman intend to assess the dividend when he is unable to forecast the rise in productivity in 1967?
I have said repeatedly that until we were certain that we had got a surplus on balance of payments we could not enter into a period of more steady advance, but the hon. Gentleman will have noted—with great satisfaction, I am sure, even if he is silent about it, like all his hon. Friends—the great progress shown in the figures published last week of a surplus.
Would my right hon. Friend agree that tied up with the need for increased productivity there is also the need to deliver the goods at the delivery date, and not later?
If my hon. Friend is talking about the delivery of increased productivity, this is something that presents a challenge to all sides of industry; for example, to those who attended my recent productivity conference and who will attend the next, to the Government, to the people of this country, and even to the Opposition.
Is not the Prime Minister's definition the same as that normally given in standard economic textbooks? [HON. MEMBERS: "Answer."]
I have never seen the phrase "national dividend" described in a standard economic textbook, but if the hon. Gentleman will give me a copy of whatever Victorian textbook he reads, I will look at it.
If, by any chance, there was to be a small dividend available next year under the Prime Minister's régime, would he not agree that it appears likely to go on another 24,000 civil servants?
No, Sir. If the hon. Gentleman would, after he has finished being funny, just sit down with a piece of paper and work out the total cost of the Civil Service, all voted for by this House, including those who have replaced the National Assistance Board and improved social security, and if he will then calculate how many "spivs" would have been borne [HON. MEMBERS: "Oh!"] on the national account—[Interruption.]—I did not mean the cap to fit on the hon. and gallant Gentleman—if the hon. Gentleman will then calculate the number of "spivs" who, until the Land Commission came into being, have been operating on racketeering in land prices, he can then discern where the national interest lies.
rose—
Order. We are after Question Time.
Notices Of Adjournment Debates
On a point of order, Mr. Speaker. I think that I am right in saying that at least one of your predecessors has on more than one occasion ruled that when an hon. Member, after a series of questions, gives notice that he wishes to raise the matter on the Adjournment, whilst this may be a method of getting the attention of the House, it is not a point of order. Will you reconsider this point?
It is a point of order. It is the way in which an hon. Gentleman makes a protest about his dissatisfaction with an Answer. It has no validity beyond that. If an hon. Gentleman does wish to raise the matter on the Adjournment, he must go through the usual form. That is the position as it stands. It is a way of protesting—that is all.
Further to that point of order. Mr. Speaker. With respect, I think that you have missed the point. What I am trying to say is that standing up in one's place in this way is not raising a point of order, and it therefore does not have an immediate claim to your attention.
I do not recollect any of my predecessors having ruled on what is a very abstruse and erudite point. It would seem to my simple mind that it is a point of order—that an hon. Gentleman is calling attention to the fact that he is dissatisfied with the Answer—but I will certainly look into the matter.
Investment Grants
When I announced on 1st December the Government's decision to make a temporary increase in the rate of investment grants payable by the Board of Trade under Part I of the Industrial Development Act, 1966, I stated that I intended to speed up the payment of claims as soon as practicable. I have therefore reviewed whether the new organisation which we have built up could handle more claims. Claims on investment made in 1966 have so far not come in at the rate we allowed for and I am satisfied that the organisation can now start speeding up payments.
I have therefore decided, after consultation with my right hon. Friend the Chancellor of the Exchequer, that payments of valid claims for the first quarter of 1966 which have been cleared by the Grants Offices should begin in April instead of July. This will reduce the average interval between a firm's expenditure and payment of grant from 18 months to 15 months from the very beginning of the scheme. We have already invited firms to submit claims from the 1st April onwards on their expenditure during the second quarter of 1966, and it will be our aim to begin making payments on this second batch of claims in July. Under the old system of investment allowances the delay between a firm's expenditure and the receipt of the allowance averaged about 18 months. We shall be improving on that this year, and I hope that this will encourage firms to take full advantage of the temporary increase in the rates of grants for investment this year and next, and go ahead with schemes for modernising and expanding their production capacity.Is the President of the Board of Trade aware that we welcome this acceleration in payment, even though we still think that the system of investment grant introduced by the Government is far less good than the one it replaced? Will he answer three questions? First, does he agree that the slower-than expected rate at which claims have come forward only reflects a slump under this Government in investment intentions? Second, does he accept that confidence and expectation of profit are more important to the rate of investment than the level of the base of the grant? Third, does he now accept that, after one correction by his Ministry, the Board of Trade forecast of a 10 per cent. drop in private investment in 1967 is still too optimistic and that the February forecast of the C.B.I. of a drop of between 15 per cent. and 20 per cent. is far nearer the mark?
On the first question, what it means is that we took a cautious estimate of how well we could do. It now turns out that we have done rather better than we expected, and that is to everyone's advantage. As to confidence, there is no doubt that since today's statement will mean a quicker cash flow to industry, it will increase industry's confidence in future investment. The right hon. Gentleman asked whether we might make a still further amendment. It is quite possible that as we have managed this administration so much more efficiently than the previous Government we will be able to do so.
Is my right hon. Friend aware of the satisfaction his statement will give both to those in industry and to those who believe that investment is the key to the growth we must have in future years? Will he state what reassessment he may have in mind as to the new level of investment this year to be expected as a result of this change?
Yes, Sir. I think the statement will certainly give satisfaction to industry; indeed to everyone except the party opposite. As to estimates of future investment, I do not think it would be wise to put this into statistical terms, but obviously this is likely to increase the rate of investment rather than the reverse.
Will the right hon. Gentleman fully bear in mind the point made by my right hon. Friend the Member for Leeds, North-West (Sir K. Joseph) that the key to desirable investment lies in the ability of company management to foresee the possibility of earning good rates of profit and of being able to distribute those profits? Will he therefore use this intervening time between now and the Budget to persuade his colleague the Chancellor of the Exchequer to be appraised of that fact?
Yes, Sir. Certainly we have already increased the rate of these grants. There have been two reductions in Bank Rate, and today I have been able to announce an increased rate of payments. All this will tend to expand activity in the economy and, therefore, make production more profitable.
Is my right hon. Friend aware that his statement will be particularly welcome in such areas as Merseyside and elsewhere? Will he assure the House that regional machinery will be used fully so that this increased productivity can be continued?
Yes, Sir. The rate of grant is now 45 per cent. in the development areas and all our offices except one which are carrying out this administration are located in development areas.
Will the right hon. Gentleman indicate that he has understood quite clearly the point made by my hon. Friend the Member for Oswestry (Mr. Biffen) that the encouragement of national investment itself depends legitimately on a financial return, disbursable, spendable after tax to the advantage of the investor?
Yes, I understand that quite clearly, and I hope he does also.
While congratulating my right hon. Friend on this move in the right direction, may I ask him whether he does not feel that 15 months is still quite a long time and, that in order to make the cash investment grants—which is much better than the old system—really meaningful, will he have consultation with the Chancellor to bring them forward very much more than this, not only because that is more meaningful, but because it would be helpful to precisely the firms we need to help?
Yes, I think our record progress in this matter shows that possibly we may do better yet.
Is the right hon. Gentleman aware that his statement this afternoon, coupled with the statement on 1st December, will be very much welcomed by industry generally? Does he anticipate being able to increase, slightly at any rate, the rate of grant? Will he consider investment grants for hotel development?
I am always glad to have two-party if not all-party support, but I am afraid that I cannot this afternoon promise the hon. Member a further change in the rate of grant. We increased it for these two years only in December.
While my right hon. Friend may be disinclined to give any statistical estimate of the rate of investment at the end of this year, has his attention been drawn to the estimates by the National Economic Social Research Council, which predicts that unless some action is taken to increase consumer demand very soon there will be at least the same level of unemployment—perhaps a slightly higher level—at the end of this year?
Yes, Sir. But these estimates were made before the recent decrease in Bank Rate and before the statement which was made today. There are expansionary forces in the economy both from the present increases in exports and from the rising rate of public investment. Therefore we should treat forecasts with caution.
Is the right hon. Gentleman aware that it is gratifying to hear his support for profit-making which is based on improving the general pro- ductivity of the country, which has not always been the view expressed from the Dispatch Box while this Government have been in power? Is he the odd-man-out, or is he representing the Treasury Bench?
I do not think the hon. Member studies the speeches of Ministers as he should. We have always said that we are operating in a mixed economy and that so long as we are doing that a reasonable level of profits is desirable.
Will the increased grants be made available for fishing boats?
The timing of the grants does not depend on the type of grant in question. If the hon. Member wants details about fishing grants, he should address a Question to the Minister of Agriculture, Fisheries and Food.
Can the right hon. Gentleman say whether the information he has given to the House was given last night to the Press?
No, Sir.
Is my right hon. Friend aware that his decision and announcement will give great satisfaction, especially to smaller firms about which I have been in correspondence with him because of the particular difficulty of waiting so long for the grant? Is he aware that those firms in my constituency had invested their money and are getting no profit today, but they are quite delighted if ultimately through this grant they will reap the profits ultimately for that area?
Yes, Sir. All my statements give great satisfaction to smaller firms.
rose—
Order.
New Member Sworn
Peter Emery, esquire, for Honiton.
Orders Of The Day
Consolidated Fund (No 2) Bill
Considered in Committee; reported, without Amendment.
Motion made, and Question, That the Bill be now read the Third time, put forthwith, pursuant to Standing Order No. 89 (Consolidated Fund Bills), and agreed to.
Bill accordingly read the Third time and passed.
Iron And Steel Bill
Order read for consideration of Lords Amendments.
Motion made, and Question proposed, That the Lords Amendments be now considered.—[ Mr. Marsh.]
3.50 p.m.
At this moment of great nostalgia, someone from this side of the House should express the great regret that we are about to part with this abominable Bill. None of us would wish—
Order. The Question before the House is, That the Lords Amendments be now considered. The hon. Member for Yeovil (Mr. Peyton) must endeavour if he can to link whatever he has to say to the Motion.
I had only got through half a sentence when you called me to order, Mr. Speaker. I was about to address myself to the point, but I hardly had a chance, with great respect, of showing whether I was in order or not.
Order. The hon. Gentleman must not join issue with the Chair.
This Motion is the last point of the Bill and, with profund respect to everyone concerned, I wish to express regret that we should be parting with what I regard as a legislative disaster. The Government are minded to accept 41 out of the 44 Lords Amendments. I hope, Mr. Speaker, that it will be in order for me to comment that I regret that the Government are in such a generous mood.
The hon. Gentleman will have his opportunity of commenting on the Amendments which are proposed to be accepted or not accepted when we come to them. At the moment, we are simply discussing the question of whether the Lords Amendments should now be considered.
With great respect, Mr. Speaker, if I have a chance, I am about to express some reasons why I am hostile to the Motion. What I have been saying so far leads up to the point and expresses the view, which I hold very strongly, that we would be better not to consider the Lords Amendments at all. This springs from my never concealed hostility to the Bill. I am very sorry that when the House of Lords was framing these Amendments it did not take some more serious bites out of this horrid Measure.
On a point of order, Mr. Speaker. I have had some experience of the proceedings of this House, but this is the first time I have heard this Motion turned into a Second Reading debate. Is that in order?
I am grateful to the right hon. Member for Llanelly (Mr. James Griffiths). As the House will know, I am endeavouring to keep the hon. Member for Yeovil in order.
Further to that point of order. Perhaps I can be allowed to say to the right hon. Member for Llanelly (Mr. James Griffiths), who is, quite properly, shy of legislative horrors—
Order. The hon. Gentleman is quite out of order. He must get back to the Motion.
I rose to a point of order, Mr. Speaker. The right hon. Member for Llanelly was challenging my right to express my views on the Motion. I rose on a point of order and I was about to say that if the right hon. Gentleman had been here when a similar motion was moved in connection with the Land Commission Bill, which I dislike almost as much as this one, he would have heard this issue debated at some length. But evidently he was too shy to be here on that occasion.
Further to that point of order, Mr. Speaker. I understand that my hon. Friend the Member for Yeovil (Mr. Peyton) is on a point of order at the moment and I want to seek your guidance. If this Motion is debatable, is it not in order, under these circumstances, to comment upon the scope and scale and number of these Amendments?
It is not in order to comment on the scope and scale and number of the Amendments. Once the Motion is passed, we shall be debating whether this House agrees or disagrees with the Lords in the various Amendments. In those debates, right hon. and hon. Members will have the opportunity to say what they think about them.
There are two points that I would like to raise with the Minister of Power as being valid reasons why we should not now consider the Lords Amendments. The first is that still the Government have not made clear what the precise issue terms of the compensation stock will be. These are important matters.
On a point of order, Mr. Speaker. The hon. Gentleman is now proceeding to discuss a provision in the Bill, which may or may not have been amended in the House of Lords, dealing with compensation.
rose—
I do not object to the hon. Gentleman making a speech, but perhaps he will listen to me as I ask you, Mr. Speaker, to rule whether, on a Motion of this kind, it is in order to discuss at large the Bill and all its provisions. If it is in order, I can only say, with respect, that it is the first time that I have heard that ruled as being possible.
If we take the point of order as the right hon. Gentleman put it, it is not in order on this Motion to discuss the contents of the Bill and various actions which the Government have or have not done. The hon. Member for Yeovil must advance reasons why the House should not proceed.
With great respect—
Further to that point of order, Mr. Speaker. Surely an hon. Member is in order in putting forward arguments as to why Lords Amendments should not be considered if he thinks that the totality of the Measure itself is not in the national interest. I agree that the Lords Amendments are part of the Measure, but it must be in order, when arguing whether we should consider the Amendments, to discuss the Measure itself.
Order. The hon. Member for Ormskirk (Sir D. Glover) must submit his points of order. He must not tell Mr. Speaker what must be in order. I am sure he will appreciate that.
I apologise, Mr. Speaker.
It is not in order on this Motion to discuss the merits of the Bill.
In point of fact, what I am trying to deal with, if I get a chance from the right hon. Member for Llanelly, is that, before we part with the Bill we should have some information on three important points. [Interruption.] If hon. Members simply want to prolong proceeding they are going the right way about it. We still have not been given any information on some vital issues. The first of these is what are the terms of the issue of the compensation, which is a matter of very great importance to many people, although it may be a matter for mockery from hon. Members opposite. The second point is that the right hon. Gentleman the Minister of Power himself told us that the Bill was an umbrella which he sought to erect and under cover of which he was going to take over the steel industry.
Order. This is not a reason for or against considering the Lords Amendments. The hon. Gentleman is essaying a difficult exercise but he must do it rightly.
With respect, I hope I am doing it correctly. This is the last opportunity that we shall have to express our regret that we are parting—
Order. The hon. Gentleman has said that many times. He must not indulge in repetition and must accept the guidance of the Chair.
With respect, Mr. Speaker, I have had a great deal of guidance from the Chair and I accept it and will do my best, if I get a chance, to comply with it, as I am always willing to comply with the Rulings of the Chair. It is not my habit to challenge the Rulings of the Chair, but I hope I may be given an opportunity to make a few sentences. I want to make my position clear before we consider these Amendments. It is that we should have information from the Government which we shall be almost powerless to secure hereafter.
What are the issue terms of compensation stock and what do the Government mean about rationalisation? Until I can get a minimum of information on these two points, I consider that as a back bench Member I have every right to oppose the Motion. I realise that the rights of back benchers are in some jeopardy in modern times, but if I am unable to get up and challenge a very powerful Administration because they have failed throughout the passage of a Bill to give information of fundamental importance, I feel that one might as well not come to Parliament. [HON. MEMBERS: "Hear, hear."] There we are. How intolerable do hon. Members opposite find it that anyone should dare to disagree with them! I maintain my bitter and irreconcilable disagreement with the Bill and my opposition to it to the end.4.0 p.m.
We get the message.
I therefore ask the right hon. Gentleman, who has better manners than his hon. Friend, before we pass this Motion—and we need not spend long on it—to give us some information on these two all-important points. If he were to do so, I feel sure that—
On a point of order. If the hon. Gentleman is allowed to continue in this direction, is it within the bounds of possibility that an hon. Member on this side of the House will have a similar privilege and opportunity?
There is no privilege in free speech. Any hon. Member has the same rights as any other hon. Member.
Further to that point of order. The hon. Member for Yeovil (Mr. Peyton) is putting a series of questions to the Minister. I presume that those questions will have been discussed on Second Reading and in Committee and on Third Reading. My right hon. Friend will be out of order if he seeks to reply, because the Motion before the House is that we consider the Lords Amendments.
I am grateful for one thing, which is that the right hon. Member for Llanelly (Mr. James Griffiths) is not the occupant of the Chair. I would have concluded my comments long before had I been given a reasonable hearing by the passionate addicts of this silly Measure. However, I have asked the right hon. Gentleman whether he cannot give the House of Commons some information on these two vital questions. I hope that I can have the attention of my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) on the Opposition Front Bench, because we hope to have some support from there. On behalf of the back benchers anyhow, I am saying that we want some information on matters of vital importance and consequence to Parliament and the country. Until we get that information, I for one will be very reluctant to part with this Motion.
Sir Keith Joseph.
I wonder whether I might intervene very briefly. I apologise to the House, because I shall very rapidly have to leave the Chamber for another meeting, but I intend no discourtesy—[HON. MEMBERS: "It is a disgrace. Why go?"] Because Government continues.[Interruption]
On a point of order. As the right hon. Gentleman proposes to leave the Chamber, may I submit that this is not a suitable day upon which to take this business and that it would be better if the House now adjourned and considered these Amendments on a day when the right hon. Gentleman is able to grace us with his presence, which is essential to our deliberations on the Bill?
That is about the oldest gambit. It is quite out of order.
The Amendments before the House are very important.
Then the right hon. Gentleman ought to be here.
They are, almost without exception, Amendments which have been requested by the industry itself, and I should have thought that on both sides of the House there would be a desire to conduct our proceedings and to deal with—
rose—
If I can finish the sentence—what are not party points but specific Amendments of fact requested by the industry and frequently agreed by hon. Members opposite. We have quite a number of them here. They raise a difficult problem, because in Committee, in agreement with hon. Members opposite, we decided to look very seriously at the issues which they raised and about which they made speeches to see how far it was possible to meet them. These Amendments are a genuine attempt to meet the Opposition and views within the industry.
rose—
I would be grateful to the hon. Gentleman if he would allow me to finish this observation. I should have thought that it was to the advantage of The House—[Interruption]—one knows that many hon. Members opposite are violently antagonistic to the Bill. That is not news to anyone. Some of us have guessed it in the course of about four months' proceedings. None the less, the matters which the hon. Member for Yeovil (Mr. Peyton) has raised and to which he knows the answers, because he has raised these questions himself very well for so long—
Hear, hear.
I should have thought that it was in the interests of Parliament to get on with discussing the Amendments, for which the Opposition have asked and which appear on the Order Paper only because of the Government's desire to treat this matter sensibly. I can only say that people in industry would find this a particularly edifying spectacle.
The right hon. Gentleman has said three times that the 44 Amendments represent concessions to the Opposition, or are Amendments for which the industry has asked. Is he seriously suggesting that Amendment No. 5 involving—
Order. The hon. Gentleman can make that point when we come to Amendment No. 5.
The right hon. Gentleman began the proceedings by putting to the House a Motion which, presumably, had substance. It therefore seemed perfectly proper for my hon. Friend the Member for Yeovil (Mr. Peyton) in response to argue that certain major strategic points had not been revealed by the Government during the proceedings on the Bill. That argument seems to deserve a proper Ministerial reply. When the Minister courteously rose and, as we thought, intended to address himself in reply to my hon. Friend, he disclosed that he did not propose to be present during the discussion of what he himself described as very important Amendments.
I am new to this Shadow appointment during the last few weeks, but I gather that the date of the day on which these Lords Amendments would be dealt with has been known for some days. The only conclusion to be drawn is that the right hon. Gentleman has deliberately chosen to give priority to some non-Parliamentary obligation before his obligation to the House. Of course, we shall welcome an explanation from him.I am grateful to the right hon. Gentleman for giving way, because whatever disagreements there are, it would be wrong for Ministers to treat the House with contempt. The meeting to which I am going is a Ministerial meeting which involves a number of other Ministers. This is the only opportunity for it. The Government will be represented by two of my colleagues, including the Chief Secretary, whose presence was implored by the hon. Member for Yeovil (Mr. Peyton) for three and a half months.
I always confessed to some schizophrenia on the subject of the Chief Secretary. When he was not there I felt bound to complain, but when he was there I made his presence the subject of my complaint.
We have now reached the ridiculous state of affairs that not one of the eight Ministers whose names are printed on the Bill will be present in the Chamber after the right hon. Gentleman has departed. Is not that treating the House with utter contempt?
The Minister has shown himself to be too insensitive by his announcement that he will not see these debates through. I thought that it was accepted that the first priority of any Minister was to answer to the House of Commons and that that priority came before Ministerial meetings, or even Cabinet meetings. There are other people in his Department who can attend Ministerial meetings, but the right hon. Gentleman is the only one with final authority to address the House on this subject.
My hon. Friend the Member for Yeovil (Mr. Peyton) raised important questions which the right hon. Gentleman should answer before he goes. What my hon. Friend has said is that the matters which he has mentioned—my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) called them strategic points—will not be covered by the Amendments. My hon. Friend was saying that before allowing the Bill to go another inch along the way, even to the Lords Amendments, those points of strategy should be announced by the only person able to do so, the right hon. Gentleman. I believe that that argument is valid. My hon. Friend was saying that he would rather the Bill went no further. He would rather that we did not proceed to the Amendments, he would rather they fell to the ground until he has an explanation on these questions to do with compensation and other points of high strategy. This is the only stage at which my hon. Friend can raise this. Once we get on to the Amendments we are bound by the narrow point of the items contained in the Amendments, and these points of high strategy are not in order. I hope that the Minister will keep to the convention, if not the rule, that his duty to the House of Commons transcends any other as long as he holds ministerial authority. I hope also that he will recognise the validity of my hon. Friend's points, and without in any way infringing the rules of the Chair, not by any reference to any point in the Amendments, he will clear up these strategic points, particularly the one on compensation. If his answers are satisfactory, I take it that my hon. Friend would join with all of us in getting down to detailed discussion of the Amendments.I rise to a point of order, not because I want to stop discussion, but I want to know where we stand in Parliamentary procedure. The hon. Member for Peterborough (Sir Harmar Nicholls) has put the point very simply, and it is this: the hon. Member for Yeovil (Mr. Peyton) was seeking to raise points about this Measure, one of them, for example, was the scale of compensation, which is not covered by the Lords Amendments. The point that I raise is very important because this is not the first or the last time that the House will have to consider Amendments to a Bill made by the Lords, submitted to them by this House and returned to us for consideration. The Motion before the House is that we proceed to consider the Amendments made by the Lords and that we should consider them one after the other in sequence, as Mr. Speaker calls them.
In my experience, it has never been the practice, and I may be wrong, to allow discussion at this stage on matters which are not within the Amendments which we are considering. If we are to change the rules, and I do not for a moment object to a change, they should not only be changed for this Bill but for every occasion when this Motion comes before the House. This would mean that we can raise matters not covered by the Amendments submitted to us for our consideration by the other place but that we can consider any matter which any Member of this House puts forward. The hon. Member for Yeovil raised the point about the scales of compensation. The hon. Member may think that the scale is not adequate; I may think that it is too generous. If hon. Members on the other side of the House, holding views quite sincerely, believe that the scale of compensation is not adequate and are allowed to debate this at this stage, may I put it to you, Mr. Speaker, that so too are hon. Members on this side of the House, if they feel disposed, entitled to argue that the scales of compensation are too generous. We then get back to Committee stage. There need not be any Committee stage—[Interruption.] I am addressing myself to you, Mr. Speaker. Once the precedent is established by Mr. Speaker in this House, that precedent abides. That is how our constitution has been built up. Am I to take it that you are now ruling that it is permissible, on an occasion like this, not only to discuss the substance and the form of the Amendments which come before us on this Motion, but that it is also in order to do what the hon. Members for Peterborough and Yeovil wanted to do, to discuss provisions in the Bill which are not covered by the Amendments before us? If that is ruling, and I do not object to that ruling, all I say to you, with the greatest of respect, and to hon. Members opposite, is that this means that this debate can be constructed into another Second Reading and Committee stage. In my experience, here I have never before seen a debate of this kind allowed on provisions not covered by the Amendments. If we are to allow this now, let us do it with our eyes open and see that we are departing from what has been the custom of the House.Order. I must attempt to guide the House at this point. We are on a procedural Motion. The Bill has passed through this House and has been to another place. It has been sent back with Amendments. The question that we are deciding is whether we consider those Amendments. The right hon. Gentleman is perfectly, correct, it is not in order on the Question that the Lords Amendments be now considered to discuss any of those Amendments. They will taken in their turn. It is not in order—and this is laid down in Erskine May—that the provisions of the Bill can be discussed on this Motion. All that we can discuss now, and all that I have been patiently attempting to rule, is whether we shall consider the Lords Amendments.
4.15 p.m.
I rise only to try to be helpful, particularly in the light of what you have said, Mr. Speaker. I believe that my hon. Friend the Member for Yeovil (Mr. Peyton) was right, and I hope that he would agree, in bringing forward a number of reasons why he thought that the Lords should not now be considered.
I will not go into them, but he mentioned the fact that we did not know very much about compensation terms. Whatever the merits of that may be, this is an arguable reason for not proceeding with the Lords Amendments at this stage, What troubles me was the observation of the right hon. Gentleman the Minister that he is not able to be present during these important debates. If the right hon. Gentleman will say to the House that he has changed his mind and that he intends to be here, despite the calls made upon him from elsewhere, I for one, despite the arguments advanced by my hon. Friend the Member for Yeovil, with which I have much sympathy, would not advise my hon. Friends to divide the House on this particular Motion. I must say, with great respect to the right hon. Gentleman, that one of the problems with which we are faced is that the Chief Secretary and the Parliamentary Secretary would be dealing with this matter in the absence of the Minister. The Chief Secretary was not present during most of our discussions in Committee and, with the greatest respect to him, I do not think that he would be as capable of dealing with these Amendments as the right hon. Gentleman. The Parliamentary Secretary was not even a member of the Committee. I find these very compelling reasons indeed why we should not proceed with the Lords Amendments at this stage. I do not know how pressing the right hon. Gentleman's other engagement is, and it is for him to decide, but if he feels that he must leave the Chamber I would suggest—I understand one of my hon. Friends is intending to rise after me should he catch your eye, Mr. Speaker—that the Minister should consult with the Leader of the House, while my hon. Friend is talking, to see whether we could not make some satisfactory arrangement so that he can be present to answer these debates. The alternative is for him to change his mind out of respect for the House of Commons. In which case I hope that we can proceed with these very important Lords Amendments.It would be a very hard man who could fail to be moved by the realisation that he was wanted. It happens to few of us and to hon. Gentlemen opposite very infrequently. Having listened to these requests, which I appreciate and which I like. I know that hon. and right hon. Gentlemen want me, and it would be more than any Minister's ego could stand to leave in those circumstances. I hope that I will be allowed to leave for a cup of tea during the course of the proceedings. Otherwise it is my intention to stay.
Order. On this emotional note, I think we may pass.
Question put and agreed to.
Lords Amendments considered accordingly.
Clause 5.—(PUBLICATION BY CORPORATION OF LISTS OF PRICES AND CONDITIONS OF SALE.)
Lords Amendment: No. 1, in page 5, line 20, leave out "in normal circumstances" and insert "normally".
I beg to move, That this House doth agree with the Lords in the said Amendment.
With this Amendment we can also take Amendment No. 2. The Amendment changes the phrase "in normal circumstances" to "normally". There was a debate on this point in Committee. There is rather more in it than just a simple change in phraseology. It was argued that it was not clear whether the phrase "in normal circumstances" related to the prices or to the surrounding circumstances. It was suggested by my hon. Friend the Member for Rotherham (Mr. O'Malley) that in present circumstances the steel industry might be held not to be normal because of the under-utilisation of capacity. This Amendment, with the following Amendment, is designed to clarify Clause 5. I cannot believe that in this atmosphere they are contentious.The Minister, whom we are delighted to know will be with us for the rest of the proceedings, has put the point to the House as it was put on Report and has adverted to the question asked in another place. But I am no clearer as to what the answer is.
The Clause is concerned with the prices which the Corporation will charge and the prices which it will have to put in its published price lists. To my mind, it is still totally unclear as to whether "normally"—to which I do not give any different meaning from the phrase "in normal circumstances"—refers to the price which it would expect to charge in the normal course of trading—that is, no special prices to special customers—or whether it refers to the prices which it would expect to charge during normal trading circumstances. The hon. Member for Rotherham (Mr. O'Malley) asked this question on Report and pointed out that the present circumstances were very far from normal, with considerable over-supply and most plants running at substantial under-capacity. These, one would hope, would be abnormal circumstances. Is it intended that the price list, although published for prices which would operate in normal trading circumstances, would not be adhered to in the circumstances which we see today; or is it intended that it shall publish prices and amended lists from time to time to take account of trading circumstances but that that will leave the Corporation free in special circumstances to charge special prices which may depart from the published price list? I do not believe that the Minister has answered that question. It must be clear in his mind which it is, because he suggested that we should accept the Amendment. However, it would be helpful not only to the House but to the trade if we might know what is in his mind.I should have thought that the position was fairly clear, because the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) was present during the discussion in the House and the argument was fairly simple. It was suggested by a number of Members that the words "in normal circumstances" might relate to the surrounding circumstances and that, to this extent, there could be variations in price which reflected the abnormal circumstances within which the industry was operating. They could, none the less, be taken into account in normal circumstances.
A point was made about high unemployment, meaning were these circumstances normal or abnormal and, therefore, did prices relate to them? These are the prices which will normally be charged within the industry. I find it difficult to see a clearer way of putting it. The position was fairly clear, but the intention is to make it even clearer. The word "normally" means the prices which will normally be charged, not taking into account the surrounding circumstances which may from time to time be abnormal.My right hon. Friend the Minister has an enormous capacity for understanding complicated situations and circumstances, which, I must confess, having listened to this debate and the previous one, I find it difficult to follow. Would he confirm what I think he said but which I am not sure he said, that "in normal circumstances", which is now replaced by "normally", means that if the steel industry is in its present position in respect of capacity and utilisation, and so on, the Steel Corporation shall publish notices which normally, in this kind of circumstance, will be the prices to be followed, and that if, for example, the general circumstances change, one would again get a new set of criteria for price levels and normally those levels would be followed unless there were specific abnormalities in the general situation. Is that what my right hon. Friend means?
rose—
I hope that the debates today will follow some sort of pattern. The Minister can speak only once except by leave of the House. If hon. Members wish to intervene, perhaps they would do so before the Minister has exhausted his right to speak.
In view of what I said just now, I wish only to show that I can be completely non-partisan and to say that I warmly agree with what Lord Mitchison said in another place when, speaking on behalf of the Government, he pointed out that he found exactly the same ambiguity in the word "normally" as the noble Lord, Lord Windlesham, had found in the words "in normal circumstances". I am surprised that we should have an Amendment such as this before us, apart from the fact that it reduces, as one noble Lord said on behalf of the Government, three words to one. This is, in principle, a welcome change. It is the sort of tiny crumb thrown to the House of Lords before it threw its dentures away and did not take more serious bites at this Bill.
Question put and agreed to.
Clause 7.—(MISCELLANEOUS PROVISIONS RELATING TO THE CORPORATION.)
Lords Amendment: No. 3, in page 6, line 28, at the end to insert:
"( ) The Corporation shall not make, or permit to be made, any substantial change in the manner in which the carrying on of the activities mentioned in the last foregoing subsection is organised, so far as regards the direction thereof, except with the consent of the Minister or in pursuance of a direction given by him by virtue of that subsection".
I beg to move, That this House doth agree with the Lords in the said Amendment.
The purpose of this Amendment was to fulfil an undertaking which we gave to the hon. Member for Wokingham (Mr. van Straubenzee). The intention is to prevent the Corporation or the publicly-owned companies from making any substantial change in the nationalised steel industry's organisation except with the Minister's consent or in pursuance of a direction given by him under Clause 7(2). The Amendment goes further than the Opposition Amendment moved in this House. That amendment only prevented the Corporation from making substantial changes in organisation without the Minister's consent until it submitted its first report to him. It is illogical to do this, but to leave the Corporation free to make substantial changes after its report was, published in a way not envisaged in the report. 4.30 p.m. The Amendment prevents any substantial changes at any time except with the Minister's consent or by his direction. It also ensures that the Corporation cannot evade the intention of this provision by acting through the publicly-owned companies. In practice, of course, the Corporation undoubtedly would obtain the Minister's consent before making substantial changes in organisation. I think that the intention is shared by both sides of the House, with varying degrees of enthusiasm, to increase the extent of Parliament's control over the organisation of the nationalised steel industry by establishing the system on a formal basis and so that the Minister shall be answerable to Parliament for any consents which he gives or declines to give.We on this side categorically welcome the Amendment. As the Minister has said, it goes further than the proposal moved at an earlier stage by my hon. Friend the Member for Wokingham (Mr. van Straubenzee), and the right hon. Gentleman has explained why. The new Clause, as it was when my hon. Friend moved it, was accepted in principle by the Parliamentary Secretary, who used these words, which are worth noting because of a matter which I hope to raise presently:
There was one matter on which the views of Parliament were made known in no uncertain terms. The Minister will recollect that in Committee my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor) moved a new Clause concerning the location of the National Steel Corporation's offices. It was accepted by the Government after pressure from both sides of the Committee. Indeed, the hon. Member for Rotherham (Mr. O'Malley) will remember that that was about the only debate in which we heard from virtually every member of the Committee, with, I think, the notable exception of the hon. Member for Faversham (Mr. Boston), who maintained his silence throughout the Committee's proceedings. In accepting the new Clause concerning offices, the Minister emphasised on 14th December that in relation to offices, and particularly the London office,"The Corporation can, in practice, be expected and relied on to act in a way which will not prejudice the decisions of the Minister and the views and decisions of Parliament on the first report which is required under Clause 4."—[OFFICIAL REPORT, 19th January, 1967; Vol. 739, c. 769.]
He went on to say:"no decision has as yet been taken."
Indeed, that was the centre point of the arguments. Very strong rumours are circulating among estate agents in London that the National Steel Corporation, or the Organising Committee or someone acting on its behalf, has now concluded negotiations for the leasing of 150,000 sq. ft. of office space in Centre Point House, which hon. Members will know as the tall building standing near the crossroads of Charing Cross Road and Oxford Street. It is also rumoured that the rent which is being asked and which, apparently, the Organising Committee is prepared to pay is no less than 100s. per sq. ft., which must make it about the most expensive office accommodation in London. When one hears this, one wonders whether there is any substance in it. There has been mention in the Press of a possibility of the Corporation going to the offices owned by Richard Thomas and Baldwins in Euston Road, but this Centre Point House information, which has reached me from a reputable source, seems to be extremely circumstantial. In the light of the Amendment and the intention that no major changes should be taken without the Minister's consent, the right hon. Gentleman should take this opportunity of making the latest position known to the House. I ask this particularly in relation to the very full information which was given in an article in The Times on Monday, and which the Minister will, no doubt, remember, in which the whole structure of the Corporation was set out by that newspaper as it apparently is now thought to emerge. I realise that the Organising Committee will have been working hard and will, no doubt, have begun to formulate its mind about how the National Steel Corporation should be organised after it comes into existence. It appears, however, as if there will be a very large central office headquarters. When considering the organisation, one realises the reason for that. There will be at least six functional directors, who clearly will all have substantial staffs and who will have functional duties over what are thought to be the four or possibly, five production groups. If this is so and if they are to occupy a substantial office block—a prestige office block, a luxury office block—in the centre of London, this would go clean contrary to the intentions that were expressed from both sides of the Committee. I see the hon. Member for Rotherham looking round for support from his hon. Friends, because I am sure that if they were here they would be indignant at what looks like happening. It would make complete nonsense of the statement by the Minister in Committee that"I hope that we are not going to talk in terms of an office with thousands of people, which will provide opportunities for whole regions."—
It looks very much as if the views of the Committee have been given scant attention. It is incumbent upon the Minister to give the House an explanation of how he intends to reconcile what looks like happening with the assurances which were given to the Committee. If what I have suggested comes about, it looks very much as if the Amendment which we are now being asked to pass is being made a monkey of and important decisions are being taken without Parliament having an opportunity to comment on them. The Minister owes the House an explanation."there is no point in having a Committee if the views of the Committee are not taken into account."—[OFFICIAL REPORT, Standing Committee D, 14th December, 1966; c. 2413.]
I did not intervene in the interchange before you arrived, Mr. Deputy Speaker, but there is no doubt that the people affected by the Bill feel that in many ways it has given the National Steel Corporation a blank cheque to do what it likes.
One of the difficulties will be the interpretation of the Bill concerning actions taken by the Corporation. The incident to which my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) has brought to my notice has rather surprised me, because in the discussion on Clause 36, which was introduced by my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor), considerable concern was expressed about where the headquarters of the Corporation would be located. If what my hon. Friend has said is correct, it brings into question the interpretation that will be given even to this Amendment to Clause 7, which states:I believe that this is but the first instance which we will have of many differences about the intentions of the Minister and of the House of Commons and how they are interpreted by the National Steel Corporation. Although I welcome this addition to Clause 7, I very much fear that the difficulties of inter- pretation of the Bill will begin to become apparent once it receives Royal Assent."The Corporation shall not make, or permit to be made, any substantial change in the manner in which the carrying on of the activities mentioned in the last foregoing subsection is organised ".
I cannot believe that I would be in order in dealing at length with the point made concerning the Amendment by the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin). I am quite prepared to do so, but I would not think that an Amendment which provides that
would permit me to enter into a discussion about who is to sell the office blocks and how many people there are in one of them."The Corporation shall not make, or permit to be made, any substantial change in the manner in which the carrying on of the activities mentioned … is organised."
The right hon. Gentleman is quite right. However, I think that it would be in order to refer quite shortly to the point which the hon. Gentleman has made, without going into it at great length.
There is no problem here because, as always, the Government are acting in accordance with Government policy. It will be our intention that the central staff and the staff of the Steel Corporation shall conform to the Government's policies on dispersal and on office development in London. Clearly, when the Corporation comes into being, it will have to have an office in London, and, after vesting day, it will have a large number of offices in London which it will inherit from the private companies.
I take it that hon. Gentlemen opposite are not opposed to the Amendment. If they are, they have only to mention it. These Amendments are put down for their benefit, and we will certainly co-operate with them to remove them. This Amendment is concerned purely to fulfil an undertaking which we gave in Committee, which was heralded as an advance. No changes are being made by anyone in relation to the Steel Corporation, because it does not even exist at present. On the point about the location of the office staffs, the Steel Corporation will be inheriting about 1,800 office staff in London, and it will be its intention to see how far it can spread its activities over the rest of the country. The Amendment would clearly please both sides of the House, because hon. Gentlemen opposite wanted this sort of Amendment. In practice, in terms of staff, the policies supported by the Corporation will also meet with the approval of both sides.Question put and agreed to.
Clause 8.—(RE-ESTABLISHMENT OF CONSUMERS' COUNCIL AND COMMITTEES.)
Lords Amendment: No. 4, in page 6, line 39, leave out "subsections (2), (4), (5), (7)" and insert:
"subsection (2) (with the omission of paragraph (c) and the word 'and' where occurring immediately before that paragraph) and subsections (4), (5), (8)".
I beg to move, That this House doth agree with the Lords in the said Amendment.
This Amendment relates to the Iron and Steel Consumers' Council, which originally was to consist of an independent chairman, 15 to 30 consumers' representatives and two members of the Corporation. This and subsequent Amendments are intended to remove the two members of the Corporation from membership of the Consumers' Council. They also remove the provision for the Corporation to see copies of the Council's minutes. Plainly, it would be absurd to ensure that the Corporation received copies of the minutes of all meetings of the Council if they are not represented at the Council. Here again, the intention is purely to remove the members of the Corporation from the Council. I have had long talks with representatives of the Confederation of British Industry and, while there are arguments on both sides, it is essential that we should increase the independence of the Consumers' Council as far as possible, and make it plain that the Council is independent. For those reasons, the Government accept these Amendments, removing from the Consumers' Council the Corporation representatives.Question put and agreed to.
Clause 9.—(VESTING IN THE CORPORATION OF SECURITIES OF SCHEDULED COMPANIES.)
Lords Amendment: No. 5, in page 7, line 27, leave out" securities" and insert:
"ordinary and preference stocks and shares ".
I beg to move, That this House doth disagree with the Lords in the said Amendment.
I ought to draw the attention of the House to the fact that, in connection with this Amendment and the next two, a question of privilege is involved.
rose—
Sir Gerald Nabarro.
Mr. Deputy Speaker, as a question of privilege is said to be involved, if I heard you correctly—
I said that a question of privilege is involved in this Amendment and the next two Amendments. Is the hon. Member for Worcestershire, South (Sir G. Nabarro) rising on a point of order? I was about to call the Minister to move this Amendment.
4.45 p.m.
On a point of order, Mr. Deputy Speaker. I am not quite sure what you mean by that Ruling. Would you be good enough to guide the House by telling us what point of privilege is involved and in what way we shall be circumscribed in any financial arguments which we may wish to put to the Minister of Power or to the Chief Secretary?
The House is not inhibited in discussing these Amendments. I draw the attention of the House to this Amendment and the next two Amendments because they introduce and affect financial provisions involving the privilege of the House. They are Amendments made in another place which involve privilege, but that docs not inhibit the debate on them.
Would it be convenient for these three Amendments to be discussed at the same time?
We on this side have no objection.
There being no objection, so be it.
Mr. Deputy Speaker, this Amendment and the two to which you have referred cover ground which has been discussed fully in previous proceedings on the Bill in this House. The purpose of the Amendment is to replace the word "securities" with the words on the Notice Paper, and the effect of that is simply to leave out debentures from the assets which are to be acquired.
In putting forward the Bill, the reason why my right hon. Friend asked for the vesting of ordinary shares and preference shares was so as to enable the Steel Corporation to have control of the activities of the relevant part of the steel industry for the purposes which he described. The reason why it is necessary for debentures to follow is so that the Steel Corporation can take the same opportunity of achieving the same object in the same way and not be prevented, deterred, or inhibited from or delayed in achieving that object. In short, it is an essential part of the purpose of giving effect to the nationalisation Measure which this House has approved that there should be the vesting not only of the ordinary and preference shares, but of the debentures as well. The point was explained earlier in Committee and, on that occasion, almost every hon. Member here today was present. I am sure that the House would be distressed if I went over the arguments in extenso. As was explained previously, debenture holders have rights which are not consistent either with the rights of the Steel Corporation, which would be the shareholder on the assumption that the debentures remained in their present ownership, or of the Minister or of this House, and many of the powers and proposals which it would be the desire of the House, the Minister or the Steel Corporation to give effect to would be inhibited, delayed or prevented by this clash of interests. For that reason, it has been felt necessary that the debentures should vest in exactly the same way as the ordinary and preference shares.Can the right hon. Gentleman give the House some examples of a clash of interests between the debenture holders, the Corporation, the Government and the House, as he put it? So far as I know, the obligations do not clash, and it would help us if, in explaining his argument, the right hon. Gentleman could say specifically what he has in mind.
I am sorry that the hon. Gentleman has asked me that question. I thought that he had listened to the excellent speech made by his hon. Friend the Member for Scarborough and Whitby (Mr. Michael Shaw), who, when introducing a similar Amendment in Committee, explained the differences between the rights attaching to ordinary shareholders, preference shareholders and secured creditors, of which a debenture holder is one. The hon. Gentleman started off by explaining this in great detail. His explanation was, as one would expect, quite accurate. These rights are totally different, and, therefore, the obligations which a company has respectively to each of these three classes differ.
That is all that I am saying. If one looks at it from the point of view of the shareholder who is interested in the remaining equity, it is not the same point of view as that of either the preference shareholder, who is not interested in the equity but in a prior dividend, or the debenture holder, who is neither interested in the dividend of the preference shareholder nor in the remaining equity, but is interested exclusively in his security and in his interest. If those rights ace challenged, if his security is affected, or there is the likelihood of his security continuing or the interest continuing, the debenture deed provides certain action, which he can take to protect his rights, vis-à-vis the shareholders. Obviously, one could find oneself in a situation in which there would be a clash of interests, and to prevent this happening—because the shares would be held by one body, the Steel Corporation, and, if this Amendment were accepted, the debenture, would be held by another group of individuals, the present debenture holders—it is necessary for the House, I would suggest, to disagree with the Lords on these three Amendments. I am fully aware of your anxiety, Mr. Deputy Speaker, which you have expressed on a previous occasion, that we should conduct the debate knowing that it is taking place in the full House. Mr. Speaker has expressed a similar point of view. I will, if the House permits, listen very carefully to everything that is said and, if the House permits, will seek to reply. There have been various arguments raised, which I can go over very shortly, as to why, in certain circumstances, this vesting of debentures should not take place. The main argument is, of course, that when the debentures, or some of them, were originally issued by the compaines in question, they were issued at prices and under certain circumstances in which the then holders expected, if they so desired, that they could retain the debentures until the maturity date, and that the debentures would mature at a given price, normally 100. What has happened is that most of these debentures have moved from hand to hand through a variety of agencies and are now in the hands of their present debenture holders. At present, debenture holders would prefer two things. They would prefer to have more money and greater security. That is not surprising. We can understand that. That applies to every shareholder. Any owner of property would prefer his property to be more valuable. All that is suggested is that if these debentures were held by the present debenture holders then the present debenture holders would be happier. Of course they would be happier, because they would be holding debentures which, on the market price, would otherwise be acquired as debentures holding a security in an industrial company and would now become debentures secured, in effect, in the same way as gilt-edged. Their price would immediately go up fairly substantially. It is quite understandable that debenture holders would prefer to hold debentures which, by an act of the Government, would be much increased in value. But the Government do not think that that is a sensible way of holding the balance fairly as between the taxpayer and the stockholder, quite apart from the problem which I explained earlier, of why it is necessary that the debenture should vest. The other increase in value which the present debenture holders would prefer is that if they hold these till maturity they can get the full price on maturity. Whether that is, in present terms of discount or cash value, a better price or not, I would not like to say without working out each one separately. It is difficult to say, because immediately one is forced against the problem of what is the discount rate at which to discount the future value of the 100 per cent. redemption value of the debenture. But, at all events, they would prefer to have the property increase in value, which would arise, and they would, in certain cases, prefer to have the redemption falling on a date which suits the arrangements which they had in mind when they acquired them. That is a very understandable point. The answer to that is that upon the debentures being acquired, compensation will be paid. The compensation will take the form, as has been stated many times, of Government stock, which normally one expects the stockholder would wish to retain. If the stockholder wishes to dispose of it, he can do so and reinvest in debentures carrying the same rate of interest as the present debentures, and maturing broadly at the same date as the present debentures. I can give the House details if they are wanted. In most cases there would be a small profit inuring to the present debenture holders. There is no difficulty or hardship, on the one hand, and, on the other, there is absolute need, in terms of sensible and wise administration, that these debentures should vest. There is one further argument to which I should refer. We have discussed all this before, but I would be discourteous if I did not refer to it again. That is the argument in connection with the expectation of rights of a debenture holder, and the allegation that in some sense there has been a breach of those rights. This is completely to misunderstand what is taking place. A number of companies accepted money on loan, and issued debentures. That is to say, they stated that they would repay the loans in certain conditions. Those companies should not be accused in any way of going back on any of their undertakings, because they are not doing so. The undertakings remain as valid today as they were the day they were issued, and when, in due course, the maturity date arrives, I have no doubt that the companies will be in a position to meet their obligations. Thus, there is no question of any variation in the undertakings given by companies at the time the debentures were issued. Of course, as I have already said, the debentures have changed hands many times, and certain expectations of individual holders might well have been that they should retain their holding until the maturity date. The simple answer to that is that this House accepts the fact that in a wide variety of fields it is proper for Parliament to require individuals to dispose of their property against their will, involuntarily, provided, of course, that they are paid compensation. We have been over this ground many times. With regard to the debentures as well as shares, it is proposed that they should be paid compensation which one can only describe as being both full and fair, and, it' anything, on the generous side. This applies both to debentures as well as to shares, ordinary shares and preference shares. Those who have taken the trouble to go through the individual debentures concerned will see that in every single case the amount being paid by way of compensation for the debenture is higher than the market price ruling at the date. If a debenture holder complains that he is being compelled to accept an involuntary sale as compared with a voluntary sale, I should explain that if it had been a voluntary sale it would have taken place at the market price—there is a large market for these securities—but, instead, it is an involuntary sale, which is taking place at above the then market price. That is all that I need to bother the House with on this occasion. I repeat that I shall listen most carefully to every speech, and, with the permission of the House, I shall do my best to reply to the debate.5.0 p.m.
I propose to raise shortly one point relating to the matter with which the Chief Secretary was dealing in his closing words, and it is the question of the compensation being given to debenture holders. The right hon. Gentleman said that they could have received the market price, which would have been lower than they will get.
The right hon. Gentleman has persistently denied and put away from himself any suggestion that the market price has been adversely affected by the Government. The Chief Secretary does not like the phrase which I used in Committee, that the Government had rigged the market. If he finds that offensive, I shall use another phrase and say that the Government, by their conduct, have persistently adversely affected the market, and, therefore, debenture holders, and, indeed, shareholders, have been put up against the wall fair and square by the Government. For the right hon. Gentleman persistently to get up at that Box, and in other places, and suggest that this compensation is fair on the basis that the price which they are going to get is one which would have ruled in a market free from all Government interference and intervention is quite unwarrantable.How can the hon. Gentleman say that the Government's attitude has adversely affected the market when he knows that over the last 12 months many of the share prices which have been quoted have been higher because of the Government's intentions than they would otherwise have been on normal market considerations?
In consideration of my hon. Friends, many of whom wish to speak on this Amendment, I shall not answer the hon. Gentleman at length. Suffice it to say that the Government's economic policy, which I am not at liberty to debate at large, has adversely affected the whole of industry in this country, and suffice it also to say that the Socialist Party's threat, held over this industry for many years, has been a serious matter from the point of view of the price of all shares, debentures and otherwise.
It is this threat, coming as it does from a party well known to be against the rights of the individual, to be opposed bitterly to the right to own property, which has affected the market, and the Government are now taking advantage of the consequences of their own actions and are suggesting that in a free market they are offering fair compensation, when they know that the market is far from free, and has not been for years. It has been affected by their actions, predictions, and threats.Would not my hon. Friend further agree that although equities may have been affected by the general malaise of all world steel industries, debenture stock prices have not been affected, because this is simply moneylending, and has nothing to do with the value of the steel industry?
I am obliged to my hon. Friend, because he has brought me back to the subject with which the Amendment is concerned. It was the hon. Member for Rotherham (Mr. O'Malley) who tempted me into rather larger issues.
The other point with which the right hon. Gentleman stands charged is that he has failed to take any cognisance of the fact that there is a difference between an equity share and a mortgage. The right hon. Gentleman has repeatedly told us that he believes in full and fair compensation, and that this is what the Government are offering. If we could all have a reward for every time that we have heard him say that, we would all be rich, and, of course, we would all have to pay the Capital Gains Tax on it.—[Interruption.]On a point of order. The hon. Member for Feltham (Mr. Russell Kerr), from a sedentary position, has interrupted my hon. Friend on seven occasions during the last seven minutes, and all the interruptions have been prefixed by "You", referring to the occupant of the Chair. Mr. Deputy Speaker, could you kindly, in defence of my hon. Friends and myself, who are constitutionally law-abiding, ask the hon. Gentleman to observe the decencies, the conventions, and the rules of procedure of the House?
I did not hear any sedentary interventions, but if any hon. Member wishes to intervene he should stand up and do so with the permission of the hon. Member who has the Floor at the time.
Mr. Deputy Speaker, You are in the fortunate position of being further away from the hon. Member for Feltham (Mr. Russell Kerr). We are left with no alternative but to judge him by the character of his sedentary interruptions, and this, I am sure, is exceedingly unfair to him.
I am very grateful, as always to my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) for the generous way in which he intervened to protect me, because I readily acknowlege my need in that direction. I return to my charge against the Chief Secretary, that he has been standing words on their ends and making them mean anything that he wants them to mean. The right hon. Gentleman talked about fair and full compensation. He is a master of tactics. This is why he is always given the unpleasant briefs to hold on behalf of the Government. He is a master when something gets a bit sticky. The right hon. Gentleman substitutes the word "inane" for "unpleasant" and says, "I shall not deal with it. I cannot be expected to deal with so unworthy a charge", and all serious allegations are put on one side in that supremely clever way; and when it comes to wriggling out of an unpleasant situation he could give points even to the Prime Minister. Without prolonging my remarks, I repeat this serious charge that the Government by their conduct, by their threats, by their words, and by their predictions of what they will do have seriously affected the market so as to make all holders, not only of debentures, but also of equity shares, tremble in their shoes, and the price has come down following what the Government said they would do. It is for this reason that we on this side of the House find the right hon. Gentleman's argument quite intolerable and wholly unacceptable.I rise to support the Lords in their Amendment, and to oppose the Treasury Bench. Rarely have I listened to a more disingenuous reply from a senior Minister of the Crown than that to which we listened this afternoon.
I do not wish to argue the legalities of the possession of debentures. This is not the issue at stake. The paramount issue is what compensation should be paid for these debentures if they were vested, as I believe they should be, along with the ordinary and preference stock, having regard to the fact that these debentures when issued were regarded by everybody on the Stock Exchange, by every member of the legal profession, by every chaptered accountant, and by every Member of the House as a gilt-edged security. It was futile and misplaced, in another place, for the Minister without Portfolio to argue as he did that the Iron and Steel Holding Realisation Agency had not in law been acting as an agent to the Crown to permit the sale of these debentures. Many of my hon. Friends, and, in particular, my hon. Friend the Member for Yeovil (Mr. Peyton), sat in this House with myself during the passage of the 1953 Statute which denationalised the iron and steel industry, and the agency for the sale of the State assets in that industry was established as I.S.H.R.A. Gradually, over the ensuing 12 years, these assets in the State steel industry were sold by I.S.H.R.A. They were sold at realistic prices as debentures. Many of the sales rightly took the form of debentures, and a redemption premium was offered in most cases. The Chief Secretary did not apply himself to that fact today. He said three times over that this stock constantly changes hands. Of course, all stock of this kind constantly changes hands at the contemporary market value—as it should do. But when that stock is bought and sold regard is had in the sale price to the ultimate redemption value of the stock and the premium on the stock at the time of issue. It is the premium that the Government are now negativing or denying to the holders of the stock. I regard that as an absolute breach of contract and of the terms on which this debenture stock was originally issued. We do not have with us today the hon. Member for Poplar (Mr. Mikardo), who so prominently adorned the Standing Committee for a large part of its deliberations, covering 2,590 columns of HANSARD, but that hon. Member will recall our heated debate on the value of these stocks—notably debentures—and his comment on one occasion that the debentures were not owned by the old-age pensioners of Poplar. Perhaps not, but they are owned extensively by old-age pensioners everywhere, having been purchased as gilt-edged securities. These people purchased these debentures because they regarded them as absolutely secure. It is important that the House should understand the feelings of these people, who are now being deprived of a substantial part of their investments. I do not buy debenture stock. I know better than to buy debenture stock I do not buy gilt-edged stock. I know much better than to buy gilt-edged stock. But old-age pensioners and others less gifted in investment virtues and experience will be beguiled by Her Majesty's Government or their creatures, such as I.S.H.R.A., into buying stocks of the kind that we are debating today. A very interesting letter was written by an old-age pensioner to the hon. Member for Poplar. I will read it. He said to the hon. Member—not to me—he is still addressing the hon. Member for Poplar—"With reference to your comments in the House it may interest you to learn that my wife and I (two working-class pensioners) started life on 2s. 6d. and 5s. per week and experienced long periods of unemployment, without the dole. We are the holders of £600 in steel prior charges. Obviously, you"—
the loans Dalton promoted—"think the Government is justified in bilking us. We did not expect such a dirty deal from one of your faith. We were also the victims of Dr. Hugh Dalton's blandishments and lost most of our small savings War Loans"—
"Yours faithfully, B. Riley,
The letter is dated 6th December, 1966—immediately after my speech in Committee attacking the appropriation by the Government, on unfair terms—which the old-age pensioner described as "bilking"—of this debenture stock. That is not the only letter in this sense which I and many other hon. Members have received. A second letter from this debenture holder followed on 10th December—again written to the hon. Member for Poplar. He said:12 Westbrook Park Road, Woodston, Peterborough."
I repeat—"a political Rachman"."Are not your attempts to defraud steel stockholders the efforts of a political Rachman?"
A very telling description.
I am deeply grateful to my hon. Friend the Member for Bournemouth, West (Sir J. Eden), who supports me by saying, "A very telling description".
The letter continues:that is, the hon. Member for Poplar—"And do you"—
He is still waiting for the answer. There are many more letters of this kind. What the Chief Secretary scrupulously avoided doing in his speeches upstairs and on Report, and what Government spokesmen in another place scrupulously avoided referring to, is the depriving of debenture stockholders of their redemption premiums. That is what they were led to expect they would receive when they bought debentures. They bought them as quasi-gilt-edged stock, and none of the arguments of the Chief Secretary has replied to these allegations. 5.15 p.m. I want to take matters further today, because there have been later developments since the Bill received a Third Reading. So aggrieved are a number of debenture stockholders at the deprivation which I have described that they have now taken their case, through London solicitors, to the European Commission on Human Rights. I see the hon. Member for Romford (Mr. Ledger) giggling and chewing the end of his finger at the same moment. The result is an extraordinary noise. He should not laugh at citizens of this country appealing to the European Commission on Human Rights, for his Government and his Party have already accepted the overriding jurisdiction of that body in Europe. [Interruption.] From below the Bar there are now noises of support from a Socialist Member. I am grateful to the hon. Member for Barons Court (Mr. Richard) for his courtesy."not dishonour your gifted and honourable brethren (some of whom are my best friends)? I do not expect you to reply to my protest, but, of course, I could be wrong."
rose—
I will give way to the hon. Member when I have finished my sentence. I was pleased to hear him intervene in support of my statement.
This application by aggrieved debenture stockholders is the first of its kind—an application from individual citizens of this country to the European Commission on Human Rights, the absolute jurisdiction of which, in the matter of human and personal rights, is recognised by the present Government.I was merely applauding the fact that my party recognises the jurisdiction of the Commission at Strasbourg, which the party opposite refused to recognise for at least 15 years.
No. The party on this side did not refuse to recognise it—
It did.
It continued negotiating—
Not true.
It is no good the hon. Member's muttering, "Not true."
rose—
Let me finish my sentence. The hon. Member has been sitting below the Bar. He has just crept into the House for the first time. He might allow me to get on with my speech.
It would be grossly out of order to talk about the jurisdiction of this Commission and its history over the last 15 years. I am referring to the fact that four aggrieved debenture stockholders—owners of stock in one of the companies to be nationalised—feel so strongly about the appropriation or sequestration of their investments that they have appealed to this body. This was fully reported in the Daily Telegraph of 27th February. The Daily Express of the same date prominently reported it and said that the subject of the application to the Commission was United Steel 4¾ per cent. debenture stock, 1968–78. Does the Chief Secretary mean, in the face of an action of this kind by individual stockholders, to steamroller through the House the sequestration of debenture investment by these old-age pensioners and others? They are not the only investors, but they are important—[Laughter.] The hon. Member is amused by my reference to old-age pensioners. [An HON. MEMBER: "I am wiping away the tears."] So he should. He has only ever shed crocodile tears on behalf of retirement pensioners—[An HON. MEMBER: "Get on with it."] I shall get on with it in my own time. For all these reasons, I hope that all my right hon. and hon. Friends will seek to agree with the Lords in the Amendment. My only complaint about the behaviour of the Members of the other place over the Bill is that they did not press their Amendments far enough and wide enough. Out of the 44 Amendments, this alone is of great substance, striking at the whole of he sequestratory terms pronounced so frequently, and with no attempt to conciliate the opposite view, by the Chief Secretary and his colleagues. I hope that, even at this late hour, he may think again about altering the terms of quasi-gilt-edged securities and thereby gravely undermining the credit of Her Majesty's Government.The Government's justification for this highly unusual and arguable act of taking over the debentures is that in some way they will obstruct the industry's rationalisation if they do not do so. The Chief Secretary said in Committee that the Government
Anyone would have thought from that that the debenture holders had some extraordinary power to interfere with the mechanics of the Steel Corporation, whereas the Chief Secretary himself would be the first to admit that debenture holders have simply lent money on a series of financial terms which are agreed implicitly in the contract between the lender and the borrower. There is no control whatever over the use to which the money subscribed in debentures is put. In reply to the debate in another place, Lord Mitchison said:"… must be unhampered in doing so … without being inhibited by any clash of responsibility. … In exactly the same way, debenture holders can prevent what ought to be done, in the view of an independent Steel Corporation, from being done … those … powers must be removed. …"—[OFFICIAL REPORT, Standing Committee D; 23rd November, 1966, c. 889, 891.]
This argument has been used throughout by Government spokesmen to justify this action. When I asked the Chief Secretary, earlier, what rights the debenture holders had to frustrate the Corporation, he rebuked me, in that slightly schoolmasterly fashion which he assumes when he is out of his depth, and accused me of not having listened to the excellent speech of my hon. Friend the Member for Scarborough and Whitby (Mr. Michael Shaw), three months ago. Apart from the fact that I heard every word of that admirable speech, what he said did not answer my point. I call upon him again to answer it. What ability does the debenture holder have to frustrate the wishes of the Corporation? He has two main rights in his capacity as moneylender to the former steel companies and now to the Corporation—first, a call, often first call, of the profits, and, second, a right of redemption at par or some stated value on a certain date. First, he has, usually, first call on the profits. All Government stock has first call to have interest paid upon it. No Government have ever failed to pay interest on their stock. This might well come to pass, with the financial mismanagement of this Government, but it has never happened in the past and we hope that it will not happen with the Government of which the right hon. Gentleman is a member. Therefore, the claim that a first call on the profits is embarrassing, hampering or frustrating does not stand up. In fact, whatever the financial structure, the Government can always pay interest on the compensation stock, even if it is worth virtually nothing, because those are the terms upon which it will be issued. Secondly, the right to redemption on a certain date is contained in a high proportion of existing Government stock. I would expect that a large proportion of the compensation stock issued to match these debentures will itself carry a right to redemption on a certain date. I cannot see, therefore, how this will frustrate what the Steel Corporation or the Government are trying to do. The main reason which the right hon. Gentleman has advanced why the purpose of the Amendment cannot be accepted falls down, but it is necessary for my hon. Friends to prove, in addition to destroying the Government's reason, that the action is wrong in itself. We are really discussing the nationalisation of a loan by investors to a private company, which the Government wish to take over. For the right hon. Gentleman to say, "We will give compensation which will be as valuable or perhaps a little more valuable" is not good enough. The people who made those loans did so on specific conditions which happened to suit them at the time. Whether it is worth the same, a little more, much more or less is not what we are arguing about. The point is that they want the rights into which they entered to be maintained. Furthermore, the Chief Secretary gives it only as his opinion that the compensation stock will be worth the same or a little more. It may not happen to be my opinion. What happens if he is wrong, and on the day of issue, the stock drops disastrously and is worth a great deal less? It will be too late then to make redress in this House to the share holders—"… to allow the debentures or similar securities to remain in private hands after the nationalisation of steel would be impossible, since the rights of the holders could frustrate the purpose of the National Steel Corporation."—[OFFICIAL REPORT, House of Lords, 27th February, 1967, c. 974.]
Has my hon. Friend considered the possibility of an exact coincidence in time, of the peak of the gilt-edged market being reached just at the moment when the terms of the issue of compensation are made?
This is certainly an interesting point and I am tempted by my hon. Friend's sagacious observation to delve into realms which I am sure would not be in order, connected with Corporation Tax and statements which should not be anticipated at this time of the year. I agree, however, that my hon. Friend has put his finger on a sensitive and vulnerable point.
5.30 p.m. We are discussing debentures issued by I.S.H.R.A., which was, in effect, a Government agency. Those debentures were issued on certain terms and under certain conditions which could not conceivably carry any power to frustrate or impede the Government in their action, yet the Government are solemnly proposing to breach this contract. I have tried to demonstrate that there is no reason for this contract being breached. If the Government insist on changing the name of the stocks, there is no reason why they should not consider swapping the existing debentures for identical debentures without the name of the particular steel company which issued them being involved in any way. There could be the same rate of interest, the same date of maturity and the same compensation price. The Government would, if they accepted this course, clear themselves of any charge of interfering with the terms of contract. It would be undesirable to change the name of the stocks, but I am sure that the public at large would acquit the Government of gerrymandering if they were to adopt this course. We argued this in Committee, the noble Lords in another place out-argued the Government on this score, and it is clear that the First Secretary is on very weak ground indeed. The Government's credit for keeping contracts and sticking to the letter of their undertakings is not good. This is a further instance of them doing something which will go even further to destroy the word of Her Majesty's Government—and the Government's word has hitherto been sacred. This is particularly annoying, because there seems no reason for the right hon. Gentleman to take this step and because there is no advantage to the Government in taking it. I hope that the right hon. Gentleman will accept the Amendment and clear himself and the Government of the charge of breach of contract. The Government would do credit to themselves if they showed that even at this late stage they are prepared to repent on this silly and unnecessary piece of legislation.I support my hon. Friends in calling on the Government to think again on this issue. The attitude of the Chief Secretary appears to mean that he wishes to disown the undertakings and contracts entered upon by I.S.H.R.A. and, as a result, he is inviting the Government to be a party to dishonouring contracts which have been solemnly entered upon. It is this aspect which is the most serious of the considerations before us.
I.S.H.R.A.'s terms were clearly stated. They were contracts properly agreed and entered upon with the purchasers. As I understand, I.S.H.R.A. subscribed to the stock and employed Treasury money for the purpose. That was subsequently recouped by the sale of the debentures and the proceeds from that sale went back to the Treasury, and no part of it went to the companies. I.S.H.R.A. was not a creation of the companies. It was an instrument of the Government, set up by the Government of the day, to carry out their declared policy of the denationalisation of this industry. The Chief Secretary has not answered the questions asked by my hon. Friends on this issue. I want the right hon. Gentleman to explain how he envisages that the debenture holders will, if they continue to hold on present terms, interfere with the reorganisation of the industry. This question has been asked many times. The right hon. Gentleman has made the bald statement that this should be done, but he has so far completely unsupported his argument with evidence. He said that the rights of debenture holders might not be consistent with the rights of shareholders as represented by the National Steel Corporation, the Minister or the House. In what way does he see a continuance of the existence of debenture holders, on the terms on which they entered into their contracts, being likely to interfere with the reorganisation of the industry? How does he envisage a clash of interests developing over this issue? I support the remarks of my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) in that if the nature of the stock is to be exchanged for something produced by the Government the terms on which the original contracts were defined should still be maintained. I cannot understand why that should not happen. It is important that it should for the reasons that have been stated, including those put forward by my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro), who spoke movingly of the situation in which many elderly people and others nearing retirement would find themselves as a result of the Government's action. The Government are proposing to repudiate a debt and this is likely to affect most grievously the holders of life policies and those who depend on pension funds for their years of retirement. Those who manage pension funds are advised by actuaries who take into consideration the likely death rate which might emerge in any one year ahead and, for this purpose, they are bound to have regard, in the management of their funds, to the repayment date of the stocks which they purchase and which form part of the funds out of which the pensions are subsequently paid. It is important that the Chief Secretary pays attention to this fact because, on behalf of the Government, he is by this action of confiscation, cutting the ground from beneath the feet of large numbers of retirement pensioners and others who are approaching retirement age. This aspect needs further emphasis and, in equity, the right hon. Gentleman should comment on it in detail. The terms for debenture holders form part of a solemn trust deed. Hon. Mem- bers are aware that it is open to Parliament to cut across anything and to establish its own rules. However, these are rules which the Government are seeking to force through this House in a manner which does them no credit. They are doing this without providing a proper supporting argument and they are proposing that, as a result of this action, they should not only confiscate the property of the ordinary citizen, but should do so without paying proper and fair compensation. In this they are dishonouring such little reputation as they still hold for fair dealing. I hope that the right hon. Gentleman will give proper consideration to the points that have been raised and will at least attempt to give a proper reply.I wish to comment on what I can only describe as one of the dodges used by the Chief Secretary, both in the House and in Committee, to try to argue that no expropriation was involved in what the Government are proposing. He said that they were simply erasing the name "Tom Jones" from the debenture and were putting in its place" The National Steel Corporation". What a charming phrase! He implied by that that there was no injustice, and that all these charges of a breach of faith could not be sustained because all that was happening was a change of names.
The Chief Secretary cannot get away with that argument. We want a definitive reply to the following point. If we look at the trust deeds of some of the debenture stocks involved—for example, that of the United Steel Company's 4¾ per cent. debentures—we find among other things in the small print:that is, the United Steel Company—"The company"—
and here comes the key wording—"will not create any mortgage or charge ranking in priority or pari passu with the charge secured on the stock"—
Here we have a specific trust deed inhibition written into the debentures which the Government are taking over. The Government are not allowed to involve themselves in debts, temporary borrowings and acceptances of credit totalling more than £5 million. Yet the Government are taking the most broadcast and general powers in this Measure—and here I refer particularly to Clause 19—to entitle companies taken over to borrow almost indefinitely. For example, to quote Clause 19(3):"other than fixed charges on current assets to secure temporary borrowings and acceptance credits together not exceeding £5 million."
We find that the specific sums which companies may borrow under that Clause can be up to as much as £400 million. The Government are seriously pretending that the delimitation written into the trust deeds of this particular debenture stock is not blown wide open by the general provisions of the Clause entitling the companies to raise money from any source up to almost astronomical figures, and immeasurably beyond the special limit of £5 million. Does the Chief Secretary give a firm, specific and definite guarantee that the provisions written into the trust deeds of the debenture stocks to be taken over in the name of the National Steel Corporation will not in any way be vitiated, undermined or altered by the provisions of Clause 19? If he does not, the whole miserable pretence that there is just a plain transfer of title to the debenture stock and not a fundamental alteration is entirely inconceivable and misleading, and the Chief Secretary cannot get away with it. We are firmly convinced that the argument that there is just a plain transfer, and that all the rights, titles and provisions in the trust deeds of the original debenture stock as there set out remain in existence, is pure padding to justify a piece of confiscatory legislation. I draw attention to another facet of the Chief Secretary's argument this afternoon. It is that it is not so much that the Government do not intend to compensate the original debenture stockholders unfairly—they say they will compensate them very fairly—but that they disagree with allowing the debenture holders of companies that are later taken over acquiring, as it were, a gilt-edged base to the original debenture stock, thus giving them an unfair advantage as between—to to use what I think was the right hon. Gentleman's phrase this afternoon—different citizens of the country at the expense of the taxpayer. We quite understand the significance of that point. It is that when the Corporation or the Government take over the individual companies the debenture stock, if left in the hands of the original debenture holders, would acquire an enhanced gilt-edged base. In that case, the Chief Secretary should be consistent. He should not, for example, allow the John Summers 4 per cent. debenture stock to run out its time under the special provision written into Clause 59 of the Bill, a point to which my hon. Friend the Member for Scarborough and Whitby (Mr. Michael Shaw) referred in Committee. It is there conceded that where the stock has up to 12 months to go before redemption date it can be left, and will not be expropriated. Why should the holders of debenture stock with a short expiring period remaining—up to 12 months, as the Clause says—be allowed to get away, as it were, with a gilt-edged enhancement to their holding and, at the same time, be entitled to the full recovery of the premium—to use the important point put by my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro), the full yield to redemption? Why should not the provision making that permissible to particular stockholders in a debenture with a year to run not be applied to, say. United Steel 4¾ per cent., which has a possible redemption date of 31st December, 1968? There will be just about 12 months between vesting date and the date under which, by the trust deeds of the United Steel 4¾ per cent., notice could be given by the company of determination to repay its stock. 5.45 p.m. Why should they be excluded if the principle is just duration of time and not the fact that some holders may get the enhanced gilt-edged base? What is the right hon. Gentleman's argument? Is it that one must not be allowed a special gilt-edged enhancement, or that we cannot allow people to hold on to a stock for too long in case it should inhibit the freedom of the Corporation? In neither case can the Government justify their inconsistency. They are leaving some people to get a gilt-edged enhancement, and not others. It is quite clear that the various trust deeds make it perfectly possible for the Government to get round any inhibiting limitations. There is, for example, the United Steel stock, to which I referred. I see the Chief Secretary is trying to explain the point to the Minister. The United Steel 4¾ per cent. has a specific provision in the trust deed whereby negotiations can be entered into between stockholders and the company to arrive at a modus vivendi. But, in any case, we know that a company can get round the inhibitions by going into liquidation. The Government have got their arguments all muddled up. They do not know which horse to run and back in their bogus proposition. All they want is to be certain that they get what the Minister has called the theological point of full possession. To justify their action they advance an argument which is inconsistent with what is written into the Bill. What does the Chief Secretary think the status of the Iron and Steel Holding and Realisation is? It seems to me to be quite clear from Clause 10, under which the remaining assets of I.S.H.R.A., namely, the R.T.B. holdings, are to be handed over to the Government without compensation. That clearly demonstrates that the possessions of I.S.H.R.A. are those of the Government. If that is not the case, R.T.B. has not been nationalised, and I.S.H.R.A. should get compensation for handing it over to the Government. It is quite evident that I.S.H.R.A. is not only an agency, but the creature of the Government, and all contractual obligations into which it has entered in the issue of debenture stocks may validly be claimed against the Government, and it is just the status and standing of Her Majesty's Government that the Chief Secretary is undermining. For those reasons, we entirely support, and hope that the House will support, the Lords Amendment."A publicly-owned company may borrow from the Corporation or, with the consent of the Corporation and the Minister, by way of temporary loan from any other person, such sums as the company may require for the purposes of their undertaking."
I wish to deal, not at great length, with this very important subject. I dealt with it quite a bit in Committee and devoted my Third Reading speech to it. I should like, first, to deal with the opening words of the Chief Secretary. I was nattered to receive his commendations for my speech, but I assure him I would be equally happy to receive his odium if he had accepted my argument.
The right hon. Gentleman announced that the purpose is to leave out debentures from the take-over. He gave as a reason that this was to enable the National Steel Corporation to have control of the industry. He said the Corporation should not in any way be inhibited from doing whatever it wanted to do. The debenture holders had rights which might not be consistent with the interests of the Corporation. It was said in the Explanatory Memorandum to the Bill, as originally printed, thatObviously, to bring into public control, as the right hon. Gentleman said, is a matter of acquiring ownership of the shares which carry the control. Therefore, one accepts that in taking over control of these firms it is necessary to acquire the share capital. Let us get this absolutely clear. There is not the slightest need to take over any of the debenture stocks in order to achieve the control of these companies. Therefore, it cannot be a valid argument to say that in order to gain control the debentures have to be taken over, for that just is not true. Let us look at the second argument, that the Steel Corporation, when it took over the various shares and had not taken over the debentures, would find itself prevented or inhibited from doing various things in future. I assumed that the argument was that if it did not take them over it might want to reorganise, change the groupings, change the identities of the various companies owned by the Corporation, and it might be difficult to deal with the debenture stock. I accept that that is a possible argument, but I do not believe that it would turn out to provide any difficulties whatever. We have seen as late as today a great merger taking place in the North-East. There does not seem to have been any difficulty whatever in arranging terms on which those three companies can come together in an amalgamation. The point is made much more clear if we look at certain of the terms of the various debenture stocks. My hon. Friend the Member for Barkston Ash (Mr. Alison) referred to the United Steel Company issue of debentures. If we look at some of the details connected with that issue, we see that practically every possible circumstance—except, I agree, the circumstance of nationalisation—has been taken into consideration in drawing up the trust deed It we look at how the Corporation might want to deal with debentures in future we find that whatever it wants to do can be perfectly well arranged within the existing terms of the debenture stock. For example, if it were decided to wind up the company for any reason, nothing in the debenture deed could stop the company being wound up and the debenture holders being paid out. By the end of next year the Steel Corporation could see that the company paid for the debentures, if it so wished, on stated terms. The company could go into the open market at any time and acquire the debentures and gradually redeem them. It could go to the trustees and, in accordance with the trust deed, get an agreement by an extraordinary resolution to modify or to compromise in respect of any arrangements in regard to their rights against the company. Were an amalgamation sought it could be arranged voluntarily with the trustees under the trust deed. It is very much on terms such as these that we devised Amendments in Committee to ensure that the future rights of debenture holders taken over in any new securities should be kept closely to the terms of the present debenture deeds by ensuring that the trustees should reach an agreement with the Treasury rather than those rights being forcibly taken over. I make the point very strongly. It is not necessary for control to take over these debenture stocks. Whatever amalgamation or adjustment may be wanted in the future reorganisation of a group, the fact that the debenture stock had not been taken over would prove no hindrance. I was very much surprised to hear the right hon. Gentleman argue this afternoon that the company's undertaking would remain the same as before even after the debentures had been bought from the public by the Steel Corporation. The right hon. Gentleman said that he had no doubt that the companies would fulfil their obligation under the trust deeds to the new holders, presumably the Corporation, on maturity, as they would have to the old stockholders. That is a quite extraordinary statement. It seems to assume that these debentures will run their full term exactly as the terms now exist. If they are to run their full term under the terms as they exist, what excuse is there for their being taken over by the Corporation? Possibly only one. That reason is that, by taking them over, the Corporation will make a quick "killing" of about £30 million. I believe that this is the only really valid argument in favour of taking over these debenture stocks. But, valid though it may be, it is still unworthy of a British Government. 6.0 p.m. Now I come to I.S.H.R.A. Many of these stocks were issued during the agency of the I.S.H.R.A., which put them forward for sale. But what is the Agency? If we examine the accounts for 1955–56, returned under the Iron and Steel Act, 1953, and ordered by the House to be printed on 3rd May, 1957, we find that paragraph 4 says:"The main purpose of this Bill is to bring into public ownership the principal companies concerned with the production of steel in Great Britain."
Thus, every indication, as we read through this and other documents, makes it clear that the Agency acted under the management and instructions of the Treasury. Here was this pupil, or subsidiary, or servant—[An HON. MEMBER: "Creature."]—of the Treasury making an offer of these debentures and selling them to the public on certain stated conditions. Those who bought the stock from the Agency were and are entitled to enjoy the peaceful possession of those stocks free from interference by those who sold it to them. The clear understanding at the time was that, as an Agency or servant of the Government, its stocks had been issued and that, by inference, the buyers were entitled to peaceful possession and enjoyment of those stocks until they were deemed to be realised or voluntarily sold. This is a very important Amendment. We were right to press it on many occasions during the passage of the Bill in this House. I am glad that their Lordships had better success. I hope that, even at this late hour, we may be able to persuade the Minister to accept the Amendment."The Iron and Steel Realisation Account was established under section 22 of the Act and is under the control and management of the Treasury."
I doubt whether the Chief Secretary to the Treasury will believe me, but I came with a completely open mind to hear the debate on this Amendment. Having heard it, the discussion seems to me to have fallen into two separate parts. The first concerns the question whether or not it is necessary to remove the debentures in their present form and exchange them for another form of security. The second point is that if it is not possible to leave the debentures exactly where they are, one must ask whether the terms being offered on the new stock being given in exchange are fair.
The right hon. Gentleman said that the debentures now outstanding would probably be inconsistent with the interests of the Corporation and its shareholders, the general public. In saying that, the right hon. Gentleman was probably referring to two distinct points. First, if it is intended that the Corporation should have certain groupings, it might be difficult to move the assets around between one group and another if there are charges outstanding on particular parts of the steel industry—and certainly such charges might inhibit a reorganisation of the industry. That point I would accept and understand. Secondly, there is the question whether there might be certain restrictions on the borrowings of the underlying company, which would also inhibit in some way the operations of the new Corporation. I do not regard these two problems as being insuperable, because it would be quite possible to leave the debentures outstanding, held by their present owners, without continuing with the inhibitions which now exist—and there are many ways in which they could be removed. First, the debenture holders could be offered as security a charge on all the assets of the new Corporation in exchange for the security they now have on the underlying assets of particular companies. The second alternative is that they could be offered in exchange for the charge they now have over the individual companies within the industry a Government guarantee. The Chief Secretary, in talking about a Government guarantee, implied that there would be something unfair about this because, if such a guarantee were involved, in some way the market price of these debentures would be higher because of the better security that the Government would provide than is provided with these debentures merely secured on the assets of any underlying industrial undertaking. The question of market price is not involved. What we are concerned with is fixed interest stocks and the relevant fact is what these debentures will be worth when they come to maturity at the end of their lives. Surely it should be possible to leave these debentures where they are and remove the restriction on borrowing which exists and also, in addition, charge these debentures in a different way, either on the National Steel Corporation as a whole or, alternatively, by giving a Government guarantee in exchange for their present security. I support very much the idea of leaving them where they are. This is because the Government will have to issue about another £123 million of Government stock in exchange for these debentures. If the Government offer a Government stock in exchange for the outstanding debentures now, a large proportion of the existing holders of these debentures will decide that they do not want Government stock and will sell it. Thereafter, it will have to be taken up by the Departments. In other words, it will have to be underwritten by the Government. Due to their obligations in the market anyhow, the Government cannot allow gilt-edged stock which will be exchanged for these debentures to fall too rapidly in price. The Government will have to underwrite them in some way, possibly by getting the Departments to take up the new Government issue. The effect of this will surely be that of drawing savings out of the private sector of the economy and putting them into the public sector, which is what is happening all the time under the present Government. People save and invest and then the Government take the savings out of the hands of the private sector and, as it were, acquire the savings themselves, and this has an inflationary effect, as the Chief Secretary will appreciate. Why do they not leave the debentures in the hands of their present holders, who are satisfied with them as they are? Why do they want to exchange them for a new Government stock when, by doing so, they will almost certainly put greater obligations on the Government, because some of the people offered Government stock will not want to hold it, thus forcing the Bank of England to step in and take it into its own portfolio or that of the Departments. This is the principal objection to offering Government stock in exchange for the present outstanding debentures. After all, the Minister of Power, who is not present, nodded most violently when, on Report, I drew his attention to statements made by Professor Edwards, of the Electricity Council, and by the Select Committee on Nationalised Industries in favour of the general public having a direct holding in the nationalised industries. There are many people, including the chairmen of the nationalised industries and the Select Committee, who have said that they are in favour of an experiment whereby the general public would hold direct fixed interest securities in nationalised undertakings. If we were merely to alter the security of the existing debentures and remove the present restrictions on borrowing, we would achieve exactly that effect. If, after all, however, the Government decide that this is rather awkward and that they do not want to do it and that they must issue Government stock in exchange, there is raised the second issue of whether the compensation will be fair. When discussing whether it is fair, four items must be taken into account. First, there is the question of whether the running yield of the new Government stock, the rate of interest, will be the same as on the debentures. The Government probably have that factor in mind and no doubt the running yield will be as good. There is, secondly, the question of whether the redemption yield will be as good, and perhaps the Government will issue stock with an equivalent or slightly better redemption yield than the debentures have. On both scores they will probably meet their commitments. The third question is that of security, and, clearly, the Government will meet their commitments in that respect, because the British Government are prob- ably still a better security than the assets of steel companies. The fourth item is probably the most important of all and it is the value of the investment at maturity. From what I have heard today, it would appear that the holders of the debenture stock will be extremely badly and unfairly treated. As I understand the Chief Secretary, the Government are taking the market value of the debenture stock as the basis for compensation in Government stock. I have never heard of such an extraordinary way in which to assess the value of a fixed interest security. When a person buys or accepts a fixed interest security on issue, he knows that on maturity he will get either the same amount in return—in money terms, if not in real terms—or that he will get the same amount in return plus a small premium. If the Chief Secretary is saying—and I confess to not having gone into these terms in the greatest detail—that although when issued these stocks had a value of, say, £100, because interest rates have changed widely—and they have changed because of Government monetary policy—and the price has now come down to £60, the Government are to issue as compensation a stock which will yield the same as that stock yields at £60, then that is clearly the most outrageous expropriation of the worst kind, and I cannot see the slightest argument to support it. 6.15 p.m. If the right hon. Gentleman was saying that about the equity shares of a steel company, he might have some small basis of support for his case. As the hon. Member for Poplar (Mr. Mikardo) said in Committee, if someone bought an equity steel stock in 1945 or thereafter, to some extent the threat of nationalisation was overhanging it. But people who bought debentures in steel companies never for a moment could have conceived that those debentures would be taken from them on a basis by which, when the debentures reached maturity, they would have a lesser capital value than when they were first issued. Yet I understood the Chief Secretary to say that this is in practice what is to happen. My hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) said that he never invested in gilt-edged securities or debenture stock, because he was experienced in these matters. I cannot quite agree with him. I am not as experienced as he is in these affairs, but it is reasonable to expect people, even private individuals, occasionally to hold debentures and gilt-edged stock. Six months ago, they were very good investments, because it was clear that interest rates would come down. However, widows and orphans hold debenture stocks in the belief that when they come to maturity the stocks would not lose them a penny in money terms. Now the Chief Secretary is saying that they will lose a lot in money terms. This is as expropriatory as taking a person's house from him, as expropriating his semi-detached house at below its value. I cannot see the slightest difference between the two. I hope that even at this late stage the Government will consider changing the proposals which they appear to be making. I would much prefer these debentures to be left where they are and for the present restrictions on borrowing to be removed. Let the public remain in the steel companies directly—control would not be affected and the companies would still be nationalised. We will then not be creating the problem for the money market—quite apart from anything else—of having to sell another £120 million of Government stock. If the Government do not want to do that, they must issue their new gilt-edged stock on a basis so that, when it reaches maturity, the capital value will be the same as the debenture holder could have expected of the debenture stock which he received from I.S.H.R.A.By leave of the House; I hope that I do not embarrass those who have spoken by saying that I agree with much of what has been said. I will explain in more detail those parts of the various speeches with which I completely agree.
I rest my first argument for my case for the acquisition of these debentures on the need to acquire them in order that the National Steel Corporation shall be free to carry out the duties which the House is placing upon it. In that connection, I am much reinforced by having the support and experience of the knowledgeable hon. Member for Worcestershire, South (Sir G. Nabarro), who said that these debentures should be vested along with the shares. I entirely agree with him that this is the sensible way in which to do it. I am also grateful for the equally intelligible speech which has just been made by the hon. Gentleman the Member for St. Ives (Mr. Nott), who drew attention to the extraordinary omissions in the speech of the hon. Member for Cirencester and Tewkesbury (Mr. Ridley). He gave two relevant and valid examples of the way in which the Corporation could be prevented or delayed, possibly prevented, so long as there were debenture holders. The hon. Gentleman the Member for St. Ives gave us two examples of the difficulties in which the National Steel Corporation would be placed if these debentures, and the powers residing were extant. The hon. Gentleman the Member for Cirencester and Tewkesbury pretended, although I would not accuse him of it, to be an innocent in these matters, and said that the only rights of a debenture holder were the two he gave as examples. He completely omitted the most obvious, the first right of any secured creditor, security. He never mentioned one word about security, but he made a long speech demonstrating that, if secured creditors were unsecured, dealing with their security would not affect the issue. The whole essence of the matter, as was said by the hon. Gentleman the Member for St. Ives—who deals with these matters every day, and whose expertise is recognised—is that a secured creditor has a right over the security which might be wholly inconsistent with the wishes and ultimate welfare of the shareholder. He has to be protected. If the shareholder, in this case the National Steel Corporation, wants to deal with the property which forms the security of the secured creditor, the secured creditor has a right to go to the court to get the plan stopped. The reorganisation which this House is requiring the National Steel Corporation to achieve could be affected, delayed, or prevented by debenture holders sticking to their rights under their existing debentures. The hon. Gentleman said that he was prepared to take the risk, but we are not. We think that there should be an opportunity for the Corporation to carry out its duties uninhibited in this way and that is why, as I have already made absolutely clear, it is right that the debentures should be taken over and fully compensated. The debenture holders' rights have been quoted. Let me refer specifically to one particular debenture which gives these very examples—the sum of £7,500,000, 6½ per cent. second debenture stock. I have in front of me the trust deed, clause 9(1,B) of which says:Everyone knows, including the hon. Gentleman the Member for Cirencester and Tewkesbury, that when one tries to enforce a security one appoints a Receiver, who takes prior authority over directors and other agents of the shareholders, and over the shareholders themselves. The Receiver proceeds to carry out his duty of realising the assets in the interests of the debenture holders. I will not go so far as to say that he pays no attention to the shareholders' interests but his duty is laid down under the trust deed to realise the assets in the interests of the debenture holders. But this House has laid upon the National Steel Corporation the reorganising of the steel industry. The Trust Deed goes on:"The security hereby constituted … shall become enforceable in each and every of the events following:—"
It is conceivable that the Corporation might wish, as the 100 per cent. shareholder of a certain company, to wind that company up. I have been asked what happens then. Precisely what the Opposition wants—a debenture which was due to mature in 10, 15, 20 years' time at a certain price matures immediately, and a price which was £80 becomes £100 overnight. That is what happens and I am very glad that I have been asked. This is what is behind this movement; it is an attempt to hold up the National Steel Corporation to this ransom that the debenture holders shall get, not the market price, not something more than the market price, but get what would be payable to them in 10, 15 or 20 years' time, when the debenture matures."(B) If an order shall be made or an effective resolution passed for the winding-up of the company …"
It would also be the contractual price in so far as this part of the trust deed is concerned.
The contractual price is exactly what it would be. The contract provides that in the event of liquidation this would have to be paid. That was one of the circumstances under which it would mature, and the effect of accepting this Amendment would be that the Corporation would be prevented from carrying out the reorganisation which we are putting upon it, if one of the methods of achieving that reorganisation was to wind up a particular company.
Then, automatically and immediately this Clause which I am reading and which is typical—it would be extraordinary if it was not in every Deed—would operate, and the sum secured by the debenture would become repayable immediately. I have misled the House slightly in saying that it would be repaid in full, indicating that it would be 100 per cent. In the case of Summers it would be a maturity price of 102 per cent. for every £100. I have understated the case there. Clause 9(1,H) deals with the circumstances under which the security shall become enforceable. It says:and the conditions specified are irrelevant to what is proposed. I am sure that the House will accept that from me. My reply to the hon. Gentleman the Member for Cirencester and Tewkesbury is that if the National Steel Corporation desired, in order to achieve reorganisation, in its position as 100 per cent. shareholder to dispose of a company, or of a substantial part of the assets, it would result in the debenture holder being entitled to take it to court and hold the procedure up, to prevent it going through in certain circumstances, unless the debenture holder were paid off in full, up to 102 per cent. Either this House must say that it does not want the reorganisation to be carried out—and it has given full powers for that to be done—or it must say that it will remove the preventive powers of debenture holders, the inhibition given to debenture holders to prevent that being done, except at the ransom price of paying not the market price, not the compensation price, but some price considerably in excess of both, 25 per cent. in certain cases. That is what this is about."If the company shall sell or dispose of, or attempt to sell or dispose of the whole or a substantial part of its undertaking or assets except in accordance with the conditions specified"—
Would not the right hon. Gentleman agree that the rights of and restrictions on debentures are being changed every day? There is not the slightest reason why the Government should not have offered the existing debenture holders some arrangement under which the current restrictions about which the right hon. Gentleman is concerned would be removed. I am sure that the debenture holders would have accepted the removal of those restrictions. It would have required negotiation. Would the right hon. Gentleman deal with that point?
6.30 p.m.
We are dealing with the point of the negotiations we envisage taking place between the trustees for the debenture holders and the Government, with the Government coming to the trustees of the debenture holders, probably in the person of the Treasury, which is generally supposed to have some money behind it, and saying, "We would like you to forgo certain of your rights for nothing". One can imagine the sort of response which there would be to that. I imagine that any trustee—and trustees are nearly always banks or professional men—of debenture holders who gave up the rights of the beneficiaries for whom he was acting as trustee for no consideration when it was perfectly clear that all that they had to do was to hang on to their rights to get an appreciation of up to 25 per cent. more than they otherwise would get, would be committing an act of negligence.
rose—
I hope that the hon. Gentleman will remember what Mr. Speaker said about the nature of our debates: I give way once more only.
The point is that the restrictions which now exist in the trust deed were put there for the security of the debenture holders. When the Government become the owners of the Corporation, the security is immeasurably improved and therefore the restrictions which are there now are no longer necessary.
The rights of the debenture holders, as the hon. Gentleman says, with a little naivety, are immeasurably increased. Of course they are. That is the point I am making. Either one would have to buy these debentures at maturity prices immediately one wanted to achieve this or, if they were retained, the debentures would automatically have a much higher price. The hon. Gentleman probably has more knowledge about how much higher the price would be than I have. However, one generally reckons that a gilt-edged security yields about per cent. more than a first-class industrial debenture with the same rate of interest. Therefore, they would be quoted at a considerably higher price—perhaps between five and 10 points higher.
Some hon. Members say, "This does not matter because they will wait until maturity". How will it be ensured that everyone waits until maturity? Is it suggested that we should impose restrictions on the debenture holders in selling? Of course not. They will have the right, if they remain as debenture holders, to sell after nationalisation and those rights will result in their selling at a somewhat increased figure. If either of these two—I would go further than to call them natural eventualities—almost inevitable eventualities, if the reorganisation is to be carried through, took place, the debentures would have to be acquired to enable the Corporation to have the freedom to carry out the duties which the House has placed on it. That is the first answer which I would give to those hon. Members opposite who have asked why it is necessary to secure the rights of the debenture holders to the nationalised Corporation in order that it can carry out its functions. In that respect, I am grateful for the support of two hon. Members opposite in believing that the debenture holders should be vested along with the shares. The next argument on which I base my case has been connected with the position of I.S.H.R.A. Since a great deal has been said about I.S.H.R.A., and although it does not affect the situation one iota, I will reply to hon. Members' comments. I did not refer to this matter in my opening comments because it does not affect the situation, since all we are dealing with is the principle whether a citizen should involuntarily be compelled by Parliament to dispose of some of his property at a figure laid down by Parliament. This is what we are doing in connection with the ordinary shares and the preference shares. This is what we do in connection with houses. Many authorities have the power compulsorily to acquire houses and land. In every case proper compensation is to be paid. I shall come to the question of compensation later. That is the only principle involved here. There is no difference in the debentures compared with the shares or preference shares. The debentures were issued by various companies. I.S.H.R.A. did not issue a single debenture. Many people have based the whole of their argument on the assumption, which they have not, obviously, been sufficiently interested to check, that the debentures were issued by I.S.H.R.A. They were not. They were issued by the companies.Who owns the companies?
The debentures were issued by the companies. I.S.H.R.A. was merely a holding agency which held some of the debentures and which, like any other holder, sold from time to time. The continuing contractual liabilities taken on by I.S.H.R.A. were nil. We discussed this matter in Committee. Time and again I asked the right hon. Member for Altrincham and Sale (Mr. Barber), who was then leading for the Opposition, to tell me who were the parties to the contract to which he was referring and what were the contractual obligations. The parties to the contract were, on the one hand, the company, and, on the other hand, the shareholder or debenture holder.
rose—
I will give way shortly.
I.S.H.R.A. was in no sense a contracting party, except to the extent that, like any other shareholder, if it desired to transfer shares or stock, it had, on receipt of the price, to give effect to its undertaking to transfer, and in every case it delivered its stock and completely carried out its function.rose—
I will give way shortly.
It is said that I.S.H.R.A. was the agent of the Government. Some Members chose their words with a good deal of care. Others relaxed into saying that it was the agent of the Government and built up their case on the basis that this is what the Government did through their agent. Section 28 of the Iron and Steel Act, 1953, which set up I.S.H.R.A. and which was passed by the Conservative Administration, provides:I can read Section 3 if required to do so, but perhaps the House will take it from me that it is not relevant to our discussion—"It is hereby declared for the avoidance of doubt that, except where the Board act as agent for the Minister under section three of this Act"—
I do not think that it could be clearer than that."neither the Board nor the Agency are to be regarded as the servant or agent of the Crown or as enjoying any status, immunity or privilege of the Crown, and no property of the Board or the Agency is to be regarded as property of, or held on behalf of, the Crown."
I am grateful to the right hon. Gentleman for giving way. He said that he put questions to my right hon. Friend the Member for Altrincham and Sale (Mr. Barber). I should like to reciprocate by putting a question to him which I should be grateful if he would answer. When the purchaser of securities from I.S.H.R.A. paid his money, he was instructed to pay it into the Bank of England; and to whom did the Bank account for the money? May I by way of gloss say that at the bottom of the issue document, the prospectus, the following words appear:
By whom was it received?"No part of the proceeds of the present offers is receivable by The United Steel Companies Limited."
It was received by I.S.H.R.A. on behalf of the Treasury. [HON. MEMBERS: "Hear, hear."] There is no dispute about this. I am grateful to the hon. Member for reinforcing himself by looking at the prospectus. He knows full well that there is not a line in that prospectus under which I.S.H.R.A. takes on any continuing responsibility to the purchasers of the debentures.
I.S.H.R.A., like any other holder who had to carry out a sale—as I have said, all this is completely irrelevant to the issue but I am answering it because questions have been put by hon. Members—has the responsibility of delivering the stock on payment of the purchase price, and that is the end of the matter. If anybody thought that the document conveyed more or that there was in some ways a mystical agency, the Act—which was brought in by the Administration of right hon. and hon. Members opposite—makes it clear that that is not the case.The right hon. Gentleman has just used the words "mystical agency". At column 900 of the OFFICIAL REPORT of the Standing Committee there are these words:
Surely, that connotes responsibility by the Treasury as I.S.H.R.A. was itself only a Treasury agency."The Iron and Steel Holding and Realisation Agency offer for sale debenture stock of the United Steel Company Limited's …".— [OFFICIAL REPORT, Standing Committee D, 23rd November, 1966; c. 900.]
It is all very well for the hon. Member to keep on repeating that I.S.H.R.A. was the agent of the Treasury or of the Government and to build his argument on that. He can keep on repeating it, but he cannot make it a fact by doing so. Surely, it was not so.
I am sure that the hon. Member was present when I read out precisely what was the law to which he assented. He, among others, was present when the House passed that very Act making it clear for the removal of any doubt. If the hon. Member still has any doubt, I repeat:I repeat that this was the normal circumstance of a block of shares or stock, as in these cases debentures, being offered for sale by the holder but the obligations being the obligations of the issuer, namely, the companies in question. Those companies retain those obligations to this day and will retain them after the vesting of the debentures. They will retain them either until maturity or until negotiations take place to do something else with them. But they will retain them. I have, therefore, demonstrated—and I have, I hope, answered most of the questions which have been put to me—first, that to carry out the duties which we are placing on the Corporation it must be free of the restrictions of the opposing or differing rights of stockholders; and secondly, that the fact of I.S.H.R.A. having taken part as a holder in the sale of stock which it was temporarily holding does not affect the issue in the slightest; but that if we were to accept the Clause, the only effect would be that in order to be rid of these differing obligations, the National Steel Corporation would be compelled in most cases to buy out the debenture holders' rights, to buy out the debentures at their full price, and the debenture holders would achieve what they would like to achieve: a vastly increased price. For those reasons, I cannot possibly recommend the House to support these Amendments."for the avoidance of doubt … neither the Board nor the Agency are to be regarded as the servant or agent of the Crown."
rose—
Has not the hon. Member spoken already in this discussion?
No, Mr. Speaker.
I beg pardon.
6.45 p.m.
The Chief Secretary has an astonishing facility for convincing himself of the validity of his arguments. I am certain that he has failed to convince any of my right hon. or hon. Friends on this side, and by the time that I have finished I hope to have convinced hon. Members opposite that the Chief Secretary is, as usual, wrong.
This is a narrow question. It is simply the question of whether the debentures—the loan stock or securities—are to vest in the National Steel Corporation under the Bill. As has been apparent from this debate, this matter raises wide issues of principle, which have attracted substantial interest outside his House. As the Chief Secretary rightly said, it was debated fully in Standing Committee D, and it has been debated twice in another place, both in Committee and on Report, but this specific issue has not been debated until today on the Floor of the House of Commons. Therefore, I make no excuse, and I hope that no hon. Member will try to blame us, for devoting time to it, because it is a crucially important issue. I concede at once that there is no clear-cut solution. There is no obvious answer, It is essentially a question of weighing the advantages and disadvantages, of weighing the argument one way and the other. Our contention on this side is that the balance of argument leads unmistakably to the conclusion that these securities should be excluded from the take-over. To assess the arguments properly, they must be weighed most carefully. In particular, the arguments must on no account be overstated, because to do so would distort the position. The main burden of the Chief Secretary's case, which he has repeated today, is that the reason why the Bill is being introduced is to effect a rationalisation of the steel industry. As the right hon. Gentleman put it, the National Steel Corporation must be free to rearrange its affairs and the assets which it will take over without regard to conflicting ownerships. I use those words deliberately because they are neutral. I had thought of quoting from the Standing Committee but I need not do so because the Chief Secretary has over and over again reinforced what he then said by his use and his long argument of the proposition that if the debenture holders were excluded from the take-over, they would be enabled to prevent the Corporation from carrying out that function. I intervened, perhaps from a sedentary position, to ask whether the right hon. Gentleman meant "prevent" and he emphasised that word. He believes that the continued existence of these debentures in private hands would prevent the reorganisation of the steel industry. I challenge this. It simply is not true. The debenture holders cannot prevent the reorganisation of the industry. It is well established—the point has been made by my hon. Friends the Members for Scarborough and Whitby (Mr. Michael Shaw) and Barkston Ash (Mr. Alison) and I hope that it need be no more than asserted—that a company has an unfettered right to go into liquidation. This is so even though there may be express terms—I do not believe that there are any in the debentures which we are considering—in the debenture trust deed precluding the company from going into liquidation. This is a statutory right and the court will not fetter it. If I need authority for that proposition, I quote a case from the Chancery Division in 1953. In re House Property and Investment Company Ltd., reported at page 612 of Chancery Division, 1954:The right hon. Gentleman has rightly said that, if a company goes into liquidation, the effect is that the loan stock becomes immediately payable. He has made the point that that would result in a higher redemption money being paid to the debenture holders than is being paid by the compensation which the Government are offering under the Bill. That may be. There are quite a lot of debenture trust deeds which provide for a graduated scale of redemption in the event of the liquidation of a company before the final redemption date written into the debenture trust deeds. I agree with my hon. Friend the Member for St. Ives (Mr. Nott) who said that, in that event, all that would happen is that the company would repay its just debts in the terms on which it entered into them. I have reinforced myself on this point with counsel's opinion, and it is important that the House should have the benefit of hearing it. Learned counsel practising at the Chancery Bar has written:"It is the right of a company to wind itself up even though it is not insolvent, and this company certainly was not insolvent … it is a statutory right. It is part of the policy of the law of England that a company should be able to wind itself up even though it is not insolvent. It is one manifestation of that wide branch of the law which abhors perpetuity."
The right hon. Gentleman was entirely wrong when he said that this reconstruction could be prevented. His argument was over-stated, and that is why I emphasised the importance of saying that the arguments should not be overstated if they were to be weighed fairly."I know of no reconstruction which could be frustrated on the basis that a company can pay off its debentures by going into liquidation. The problem is merely one of mechanics. A company can go into liquidation and its assets disposed of or hived off into subsidiaries whose shares are disposed of. I know of no kind of reconstruction which cannot he carried out in this way through a liquidation."
Nor should they be repeated inaccurately, because I went on to make the point which the hon. Gentleman has been good enough to confirm, that, so long as he remains a debenture holder, the result would be that the company would have to pay out its debenture holders at the full price, and, therefore, the effect of these Amendments is to increase the price very substantially.
The burden of the case made by my hon. Friends in this debate is that these debentures have been purchased by the Government at below the proper price. In that event, I cannot see why the Chief Secretary regards that as an improper thing to do. He told the Committee and repeated it to the House that the continued existence of these debentures would frustrate and prevent the reconstruction. The Committee was misled, and the House has been misled. That is not true.
I take comfort from the fact that, in another place, the noble Lord, the Minister without Portfolio, did not pitch his case anything like as high. He did not seek to argue that it would be prevented if the debentures remained in existence. Lord Shackleton said:Instead of using the words "prevent" and "frustrate", the noble Lord referred merely to a risk of delay. Later on in his speech, he said that it "might be inhibited". That is a very different argument from the one which the Chief Secretary sought to put before us today. It is so different as to alter the whole nature of the case. At its worst, the power to inhibit or delay could entitle the debenture holders to make application to the court under the Companies Act, and the court would have to be satisfied that any terms which were put forward in a scheme of arrangement were fair to debenture holders. I have taken advice, and I am told that in any straightforward scheme that whole exercise should not take more than three months. If rights are known, a scheme can be drawn up so that a fair deal is done for the debenture holders. At the outside, if they wanted to exercise their rights, it could lead to a delay of three months. In fact, it is open to the Corporation to do a proper deal with the deben- ture holders, as is done every week of the year. I have before me a scheme of arrangement put up by the Whitbread Company with its subsidiaries. It had a large number of subsidiaries, each of which had debenture stock, and they wanted to consolidate the debenture stocks in the name of the parent company. That has involved a delay of about one month since the scheme of arrangement was published to the debenture holders before the meeting at which this was to be approved. That is the sort of delay which is likely to arise. It cannot prevent or frustrate, and it cannot seriously embarrass the Corporation. At the most, it could be a minor inconvenience, and that is as far as it goes."The plain fact is … that the continued existence of these debentures in the hands of persons other than the Corporation would constitute—and I put it no higher than this—a continuing risk of interruption and delay in the execution of the Corporation's plans to reorganise the structure of the industry quickly and effectively."—[OFFICIAL REPORT, House of Lords, 9th March, 1967; Vol. 280, c. 1600.]
The hon. Gentleman gives as an example a case which happens regularly where a company is dealing with its subsidiaries. Such a case is unlikely to be paralleled in the National Steel Corporation, where the essential feature is that, in order to give effect to the reorganisation, assets would be transferred not to a subsidiary but to another company.
The whole point of the Whitbread example is that these debentures were owned outside and therefore might have been minority shareholders outside. The case is exactly the same. The only obstacle which the Corporation would face if it were not prepared to pay the true price which had been agreed to the debenture holders would be that minor inconvenience. That is what it amounts to.
Against that, what are the arguments for excluding the debentures from the Act? They are very much more serious. This amounts to a repudiation of debt and interference with contractual rights of citizens, of bodies and corporations of all sorts of people who entered into those contractual rights in good faith. I will quote two examples, and I take first the Consett 5 per cent. redeemable debenture stock, 1975–85. That stock was offered to the public by I.S.H.R.A. in March, 1961, at £81 per cent. The compensation price is £77 and, therefore, they are getting substantially less than they would have got. It has a redemption price of £100. Second, I take the South Durham 5¼ per cent. debenture stock, 1976–81. That was offered to the public by I.S.H.R.A. in January, 1956, at £97. The compensation price is £79 12s. 8d., and the investors in that are losing substantially the money which they invested in that stock. It is the Government's case that there was no repudiation and that this was simply a transfer. This is the Tom Jones argument which was exploded so effectively by my hon. Friend the Member for Barkston Ash, who asked the Chief Secretary a number of questions which he has not answered. He asked in particular that, if these stocks are intended to remain in existence so that there cannot be said to be a repudiation of debt, is it intended to have a certain term set out in the offer which will be adhered to? Of course not. The whole object of the exercise is that these matters should continue to be dealt with entirely at the will of the National Steel Corporation. Therefore, the substitution of the name of Tom Jones for that of the National Steel Corporation is a bogus argument. It is a repudiation of a debt, but, as the right hon. Gentleman said, subject to compensation. 7.0 p.m. Of course, there will be compensation, but many of my hon. Friends have made the point that compensation is, having regard to the terms under which they were issued, quite inadequate. Even accepting the right hon. Gentleman's point for this purpose that the compensation is adequate, I would venture to suggest that the rights which the stockholder will get are, in fact, quite different from those which he enjoyed before. Indeed, the Chief Secretary used those very words during the Committee stage. He said they were different rights. I would say that their difference is such as to amount to a repudiation. That is serious enough by itself, but this is repudiation of obligations to which the Government were privy. These securities, or many of them, were issued by I.S.H.R.A., a statutory body, a creature of the Treasury. Its members were appointed by the Treasury. The right hon. Gentleman is shaking his head. Does he doubt this? Let me read to him the relevant Sections of the 1953 Act. The members were appointed by the Treasury, under Section 18. I.S.H.R.A. was answerable to the Treasury. It had to report to the Treasury. My hon. Friend the Member for Scarborough and Whitby produced a copy of one of the annual reports which said that I.S.H.R.A. was under the direction of the Treasury. The selection of the members was fixed by the Treasury. Under Section 19 of the 1953 Act, I.S.H.R.A. was closely supervised by the Treasury. It could give it directions. It could make sure that there was adequate consideration given of any agreement entered into by I.S.H.R.A., and it could interfere with, and indeed, in the last resort, could prevent, any action by I.S.H.R.A. Indeed, I.S.H.R.A. required Treasury sanction both to lend money and to borrow money. Under Section 22 of the 1953 Act, there was set up an Iron and Steel Realisation Account under the control and management of the Treasury. Any surplus was to be paid to the Exchequer and any deficit was to be met by the Consolidated Fund. The Treasury had power to dissolve I.S.H.R.A. The only limitation was the one which the right hon. Gentleman read to the House a few moments ago under Section 28. He relied on that for his proposition, which he did not repeat today, that I.S.H.R.A. was merely a shop. My hon. Friend the Member for Yeovil (Mr. Peyton) promptly intervened by calling it a "bucket shop".I do not think that I ever wished to suggest that I.S.H.R.A. was a bucket shop. What I was endeavouring to indicate was that the right hon. Gentleman had sunk below his usual level and was treating I.S.H.R.A. as though it had been a bucket shop.
That is exactly what the right hon. Gentleman is turning I.S.H.R.A. into. The purpose of Section 28, which said that it was not to be the servant or agent of the Crown, was to ensure that it did not enjoy that immunity from legal process to which any servant or agent of the Crown is entitled. There was no suggestion that the Treasury—or the Crown—was to wash its hands of any of the obligations which were entered into under its aegis.
This is, in fact, a legal technicality, on which the Chief Secretary is attempting to wriggle out of the argument, and, indeed, a legal technicality which is unworthy of a Government of this country. In the eyes of the purchaser, this was a Government-sponsored transaction, and, in those circumstances, the Government have a duty that they should not indulge in a unilateral repudiation of the terms of the contract. As supporting evidence, I have already referred to the United Steel offer, in which it said that no part of the proceeds of the present offer was receivable by the United Steel Companies Ltd. The moneys that were paid for the securities which were issued as a result of this offer were paid into the Bank of England and were accountable to the Exchequer, to the Treasury, because they were paid into the I.S.H.R.A. account. It simply does not lie in the mouth of the Government to wash its hands of this transaction. Of course, technically, I.S.H.R.A. was not bound by the terms of the contract, and technically, as a matter of law, the Government were not a party to the contract, but clearly they are morally bound, and I would have thought that that was a consideration for which any Government would have regard. This strikes at the foundation of
Division No. 294.]
| AYES
| [7.8 p.m.
|
| Albu, Austen | Craddock, George (Bradford, S.) | Gardner, Tony |
| Alldritt, Walter | Crawshaw, Richard | Garrett, W. E. |
| Allen, Scholefield | Crossman, Rt. Hn. Richard | Ginsburg, David |
| Atkins, Ronald (Preston, N.) | Cullen, Mrs. Alice | Gregory, Arnold |
| Atkinson, Norman (Tottenham) | Dalyell, Tam | Grey, Charles (Durham) |
| Bacon, Rt. Hn. Alice | Davies, Dr. Ernest (Stretford) | Griffiths, David (Rother Valley) |
| Bagier, Gordon A. T. | Davies, G. Elfed (Rhondda, E.) | Griffiths, Rt. Hn. James (Llanelly) |
| Barnett, Joel | Davies, Harold (Leek) | Hale, Leslie (Oldham, W.) |
| Baxter, William | Davies, S. O. (Merthyr) | Hamling, William |
| Benn, Rt. Hn. Anthony Wedgwood | de Freitas, Rt. Hn. Sir Geoffrey | Hannan, William |
| Bennett, James (G'gow, Bridgeton) | Dell, Edmund | Harper, Joseph |
| Bid well, Sydney | Diamond, Rt. Hn. John | Harrison, Walter (Wakefield) |
| Bishop, E. S. | Dickens, James | Heseldine, Norman |
| Blackburn, F. | Dobson, Ray | Hattersley, Roy |
| Blenkinsop, Arthur | Doig, Peter | Hazell, Bert |
| Boardman, H. | Dunn, James A. | Heffer, Eric S. |
| Booth, Albert | Dunnett, Jack | Hooley, Frank |
| Boston, Terence | Dun woody, Mrs. Gwyneth (Exeter) | Horner, John |
| Boyden, James | Dun woody, Dr. John (F'th & C'b'e) | Houghton, Rt. Hn. Douglas |
| Braddock, Mrs. E. M. | Eadie, Alex | Howarth, Harry (Wellingborough) |
| Bradley, Tom | Edwards, Robert (Bilston) | Howarth, Robert (Botton, E.) |
| Bray, Dr. Jeremy | Edwards, William (Merioneth) | Howie, W. |
| Brooks, Edwin | Evans, loan L. (Birm'h'm, Yardley) | Huckfield, L. |
| Brown, Hugh D. (G'gow, Provan) | Faulds, Andrew | Hughes, Emrys (Ayrshire, S.) |
| Brown, Bob (N'c'tle-upon-Tyne, W.) | Finch, Harold | Hunter, Adam |
| Brown, R. W. (Shoreditch & F'bury) | Fitch, Alan (Wigan) | Hynd, John |
| Butler, Herbert (Hackney, C.) | Fletcher, Ted (Darlington) | Jackson, Colin (B'h'se & Spenb'gh) |
| Cant, R. B. | Floud, Bernard | Jackson, Peter M. (High Peak) |
| Carmichael Neil | Foot, Michael (Ebbw Vale) | Jeger, George (Goole) |
| Carter-Jones, Lewis | Ford, Ben | Jeger,Hn.Lena(H'b'n&St.P'cras,S.) |
| Chapman, Donald | Forrester, John | Jenkins, Hugh (Putney) |
| Coe, Denis | Fowler, Gerry | Jenkins, Rt. Hn. Roy (Stechford) |
| Coleman, Donald | Fraser, John (Norwood) | Johnson, Carol (Lewisham, S.) |
| Concannon, J. D. | Freeson, Reginald | Jones, Dan (Burnley) |
| Corbet, Mrs. Freda | Galpern, Sir Myer | Jones,Rt.Hn.Sir Elwyn(W.Ham,S.) |
Government credit in the eyes of the world, and does grave damage to the Government's reputation for financial integrity. It is not answered by bleating "fair and full compensation". This is a change in the terms. This is a repudiation of contractual rights, and the first duty of any Government is to uphold the sanctity of obligations, particularly of obligations which have been entered into under the aegis of a Government Department, and any Minister, particularly a Treasury Minister, should have greater regard for the good name of a British Government.
This is the main burden of our case—whether we are to weigh the potential minor inconvenience of all the possible powers of delay reconstruction against a lasting stain on Britain's reputation for financial integrity. This is the true balance, and I have no doubt where the duty of this House lies. The duty of this House is to support the Lords in their Amendment, and I hope that my right hon. and hon. Friends will join me in dividing the House in their favour.
Question put, That this House doth disagree with the Lords in the said Amendment:
The House divided: Ayes 212, Noes 142.
| Jones, J. Idwal (Wrexham) | Morris, Charles R. (Openshaw) | Shaw, Arnold (Ilford, S.) |
| Jones, T. Alec (Rhondda West) | Newens, Stan | Sheldon, Robert |
| Kelley, Richard | Norwood, Christopher | Short, Rt. Hn. Edward(N 'c' tle-u-Tyne) |
| Kerr, Mrs. Anne (R'ter & Chatham) | Oakes, Gordon | Silkin, Rt. Hn. John (Deptford) |
| Kerr, Dr. David (W'worth, Central) | Ogden, Eric | Silkin, Hn. S. C. (Dulwich) |
| Kerr, Russell (Feltham) | O'Malley, Brian | Silverman, Sydney (Nelson) |
| Lawson, George | Oram, Albert E. | Skeffington, Arthur |
| Lee, John (Reading) | Orbach, Maurice | Slater, Joseph |
| Lestor, Miss Joan | Orme, Stanley | Small, William |
| Lewis, Ron (Carlisle) | Oswald, Thomas | Snow, Julian |
| Lomas, Kenneth | Owen, Dr. David (Plymouth, S'tn) | Spriggs, Leslie |
| Loughlin, Charles | Padley, Walter | Steele,Thomas (Dunbartonshire,W.) |
| Lyon, Alexander W. (York) | Page, Derek (King's Lynn) | Stonehouse, John |
| Lyons, Edward (Bradford, E.) | Paget, R. T. | Swain, Thomas |
| Mabon, Dr. J. Dickson | Palmer, Arthur | Symonds, J. B. |
| McBride, Neil | Pannell, Rt. Hn. Charles | Taverne, Dick |
| Macdonald, A. H. | Park, Trevor | Tinn, James |
| McGuire, Michael | Parker, John (Dagenham) | Tuck, Raphael |
| Mackenzie, Gregor (Rutherglen) | Parkyn, Brian (Bedford) | Varley, Eric G. |
| Mackie, John | Pearson, Arthur (Pontypridd) | Wainwright, Edwin (Dearne Valley) |
| Mackintosh, John P. | Pentland, Norman | Walker, Harold (Doncaster) |
| Maclennan, Robert | Perry, Ernest G. (Battersea, S.) | Wallace, George |
| MacMillan, Malcolm (Western Isles) | Perry, George H. (Nottingham, S.) | Watkins, David (Consett) |
| McMillan, Tom (Glasgow, C.) | Price, Christopher (Perry Barr) | Wellbeloved, James |
| MacPherson, Malcolm | Price, Thomas (Westhoughton) | Wilkins, W. A. |
| Mahon, Simon (Bootle) | Price, William (Rugby) | Willey, Rt. Hn. Frederick |
| Manuel, Archie | Probert, Arthur | Williams, Alan (Swansea, W.) |
| Mapp, Charles | Randall, Harry | Williams, Clifford (Abertillery) |
| Marquand, David | Rankin, John | Williams, W. T. (Warrington) |
| Marsh, Rt. Hn. Richard | Redhead, Edward | Willis, George (Edinburgh, E.) |
| Mendelson, J. J. | Rhodes, Geoffrey | Winterbottom, R. E. |
| Mikardo, Ian | Roberts, Albert (Normanton) | Woodburn, Rt. Hn. A. |
| Millan, Bruce | Rogers, George (Kensington, N.) | Vates, Victor |
| Miller, Dr. M. S. | Rose, Paul | |
| Milne, Edward (Blyth) | Ross, Rt. Hn. William | TELLERS FOR THE AYES: |
| Mitchell, R. C. (S'th'pton, Test) | Rowlands, E. (Cardiff, N.) | Mr. Charles Grey and |
| Morgan, Elystan (Cardiganshire) | Ryan, John | Mr. William Whitlock. |
NOES
| ||
| Alison, Michael (Barkston Ash) | Goodhew, Victor | Morrison, Charles (Devizes) |
| Allason, James (Hemel Hempstead) | Gower, Raymond | Mott-Radclyffe, Sir Charles |
| Baker, W. H. K. | Grant-Ferris, R. | Murton, Oscar |
| Barber, Rt. Hn. Anthony | Grieve, Percy | Nabarro, Sir Gerald |
| Batsford, Brian | Griffiths, Eldon (Bury St. Edmunds) | Neave, Airey |
| Beamish, Col. Sir Tufton | Grimond, Rt. Hn. J. | Nott, John |
| Bell, Ronald | Gurden, Harold | Orr-Ewing, Sir Ian |
| Bessell, Peter | Hall, John (Wycombe) | Osborn, John (Hallam) |
| Biffen, John | Hall-Davis, A. G. F. | Page, Graham (Crosby) |
| Black, Sir Cyril | Harrison, Col. Sir Harwood (Eye) | Page, John (Harrow, W.) |
| Bossom, Sir Clive | Hastings, Stephen | Peel, John |
| Boyd-Carpenter, Rt. Hn. John | Hawkins, Paul | Percival, Ian |
| Brewis, John | Heald, Rt. Hn. Sir Lionel | Peyton, John |
| Brinton, Sir Tatton | Higgins, Terence L. | Pink, R. Bonner |
| Bruce-Gardyne, J. | Hobson, Rt. Hn. Sir John | Pounder, Rafton |
| Buchanan-Smith,Alick(Angus,N & M) | Hogg, Rt. Hn. Quintin | Powell, Rt. Hn. J. Enoch |
| Buck, Antony (Colchester) | Holland, Philip | Pym, Fancis |
| Bullus, Sir Eric | Hornby, Richard | Quennell, Miss J. M. |
| Campbell, Gordon | Hunt, John | Ridley, Hn. Nicholas |
| Carlisle, Mark | Hutchison, Michael Clark | Ridsdale, Julian |
| Chichester-Clark, R. | Iremonger, T. L. | Rippon, Rt. Hn. Geoffrey |
| Clegg, Walter | Irvine, Bryant Godman (Rye) | Rossi, Hugh (Hornsey) |
| Cooke, Robert | Jenkin, Patrick (Woodford) | Russell, Sir Ronald |
| Corfield, F. V. | Jones, Arthur (Northants, S.) | St. John-Stevas, Norman |
| Craddock, Sir Beresford (Spelthorne) | Jopling, Michael | Scott, Nicholas |
| Crowder, F. P. | Kaberry, Sir Donald | Sharpies, Richard |
| Cunningham, Sir Knox | Kimball, Marcus | Shaw, Michael (Sc'b'gh & Whitby) |
| Dance, James | Kirk, Peter | Stainton, Keith |
| Davidson, James (Aberdeenshire, W.) | Lambton, Viscount | Steel, David (Roxburgh) |
| d'Avigdor-Goldsmid, Sir Henry | Langford-Holt, Sir John | Stodart, Anthony |
| Dean, Paul (Somerset, N.) | Legge-Bourke, Sir Harry | Stoddart-Scott, Col. Sir M. (Ripon) |
| Deedes, Rt. Hn. W. F. (Ashford) | Lewis, Kenneth (Rutland) | Summers, Sir Spencer |
| Digby, Simon Wingfield | Lloyd, Ian (P'tsm'th, Langstone) | Taylor, sir Charles (Eastbourne) |
| Dodds-Parker, Douglas | Lubbock, Eric | Taylor, Frank (Moss Side) |
| Doughty, Charles | Mackenzie, Alasdair(Ross & Crom'ty) | Temple, John M. |
| Eden, Sir John | McMaster, Stanley | Turton, Rt. Hn. R. H. |
| Elliott, R.W.(N'c'tle-upon-Tyne,N.) | Maginnis, John E. | van Straubenzee, W. R. |
| Eyre, Reginald | Marten, Neil | Vaughan-Morgan, Rt. Hn. Sir John |
| Farr, John | Maude, Angus | Vickers, Dame Joan |
| Fisher, Nigel | Maxwell-Hyslop, R. J. | Wainwright, Richard (Colne Valley) |
| Fortescue, Tim | Maydon, Lt.-Cmdr. S. L. C. | Walker-Smith, Rt. Hn. Sir Derek |
| Foster, Sir John | Mills, Peter (Torrington) | Walters, Dennis |
| Gilmour, Sir John (Fife, E.) | Mitchell, David (Basingstoke) | Ward, Dame Irene |
| Glover, Sir Douglas | Monro, Hector | Webster, David |
| Goodhart, Philip | More, Jasper | Wells, John (Maidstone) |
| Whitelaw, Rt. Hn. William | Wolrige-Gordon, Patrick | TELLERS FOR THE NOES: |
| Will, Sir Gerald (Bridgwater) | Wood, Rt. Hn. Richard | Mr. Anthony Grant and |
| Wilson, Geoffrey (Truro) | Wright, E. | Mr. Timothy Kitson. |
| Winstanley, Dr. M. P. |
Subsequent Lords Amendments disagreed to.
Clause 11.—(VALUATION OF SECURITIES QUOTED BEFORE MAY, 1966, AND OF NEW ISSUES.)
Lords Amendment: No. 8, in page 12, line 42, at end insert:
"and for the purposes of subsection (1) of this section, an alteration effected, after the last of the relevant days, in rights attaching to securities shall not be taken to have changed them into different securities".
I beg to move, That this House does agree with the Lords in the said Amendment.
This technical Amendment proposed by the Government is designed to facilitate the proposed merger between Dorman Long, Stewarts and Lloyds, and South Durham. The three companies believe that the merger will bring considerable advantages from rationalisation, and will facilitate Stewarts and Lloyds' project to build a new medium-diameter pipe mill at South Durham's West Hartlepool works, using plate supplied from Dorman Long's new Lackenby plate mill. Both the Organising Committee and the Minister have welcomed the proposals as a step towards reorganisation, and Amendments were put into the Bill on the Report stage in another place to facilitate the merger. The present Amendment is merely consequential, and is designed to make it clear that technical changes in rights which might result from the merger do not affect the present compensation position of the different classes of shares.Question put and agreed to.
Clause 15.—(PROVISION OF PRODUCTION FACILITIES TO BE SUBJECT TO MINISTER'S CONSENT IN CERTAIN CASES.)
Lords Amendment No. 9, in page 15, line 36, leave out from "by" to "require" in line 38 and insert "order".
7.15 p.m.
I beg to move, That this House doth agree with the Lords in the said Amendment.
I understand that Amendments Nos. 9, 10, 11 and 12 are fairly well related, and may be taken together.
This Clause provides that the Minister can require the private sector of the industry to submit for his approval major projects involving the provision of more iron and steel-making capacity. Under the Clause as it left the Commons, the Minister could from time to time publish notices defining those projects which must be submitted to him, and these notices were not subject to any form of parliamentary procedure. These Amendments will provide, instead, that the Minister should make an Order defining the cases to be submitted, and that such an Order should be subject to the negative Resolution procedure.
The Amendments have resulted from a suggestion made by the Opposition in the House of Lords that the substance of notices under Clause 15 should instead appear in Orders subject to parliamentary procedure, and the Government were glad to accept this suggestion because they recognised the need to keep Parliament fully informed where appropriateThis Clause is of considerable concern to the private sector of the industry. During our discussions in Committee on the original Clause, which is now Clause 13, various Amendments were made, and we now have these Amendments which were accepted in the House of Lords.
As Lord Windlesham said in the other place on 28th February, 1967, these Amendments deal with a politically explosive area of potential problems. The whole question of the extension of production facilities in the private sector will be affected by this Clause when the Bill becomes law. The Millom case will no doubt arise. You will remember, Mr. Speaker, that on Report, in a slightly different context, I raised the Millom case. I do not wish to elaborate its pros and cons, but it is a typical, complicated case. Only a short time ago, after my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) and I had visited Millom, not only to see the process, but also the factory and its environs, the Iron and Steel Board gave grudging approval for the Millom scheme to go ahead.Order. The hon. Member must link his remarks with the rather narrow terms of the Amendments before us.
I agree that I should deal with the Amendments, Mr. Speaker. Lords Amendment No. 13, in page 16, line 24, after "except" insert:
and No. 14, in line 25, leave out "the person seeking the consent" and insert "that person"."after giving to the person seeking the consent notice containing particulars of the reasons for which he has not yet given the consent and"
Order. We are not discussing those two Amendments. We are discussing Lords Amendments Nos. 9, 10, 11 and 12. We are concerned with the question of a notice, or of publishing a notice, or of making an Order. We shall reach the other two Amendments later.
I do not know what the wish of other hon. Members is in dealing with the Amendments to this Clause. Perhaps I should speak on the last two later on.
I cannot see how the case that the hon. Member is dealing with has anything to do with the four Amendments with which we are dealing at the moment.
The Amendments make it incumbent upon the Government to bring an Order before the House if they wish to curtail any extension of steelmaking capacity in the private sector, rather than merely giving notice that they have decided to curtail that development. This is of fundamental importance. I agree that the nationalised steel industry must be able to compete with the private sector. I am not sure that I like the doctrine, but I accept it for the future. But I urge the Minister to agree that there must also be ability for the private sector to compete with the public sector.
Unless the Amendments are accepted, the private sector can be refused power to develop and expand, without even a protest being made in Parliament. I strongly support the Amendments, because it is vital that the Government should have to make an Order, not only so that the House can debate it, but so that the public shall be made aware of the fact that a development in the private sector has been prevented. I know of no industrial or commercial parallel where the Government have taken power to prevent industrial development, especially in development area. My hon. Friend the Member for Sheffield, Hallam (Mr. J. H. Osborn) mentioned Millom, which is in the middle of a development area. It seems crazy that the Government could stop the creation of increased capacity in such an area. If the Government are to take such power there must be an opportunity for the issue to be debated. The only justification for taking such a power as this is the wish to preserve a monopoly. I am against monopolies, both private and public. Any departure from a policy of allowing the private sector or the public sector to expand as it will is a matter of major national concern, which in my opinion should be subject to the affirmative Resolution procedure. Except on grounds of planning or amenity the idea that the Ministry should be able to prevent development in the private sector is one that I do not like. As far as I know, power has never been used by the Iron and Steel Board to prevent development. I know that there was a postponement of permission in the case of Millom, which the Board was unable to endorse at its later meeting because it felt that development at Millom would not substantially affect the pattern of steel making. I am extremely glad that that decision was arrived at. Nevertheless, if a development is proposed by a steel company which is held substantially to affect the pattern of steel making it surely ought to be incumbent upon the Government to bring an Order before the House, so that we are alerted to what is happening and have an opportunity to debate the matter. If the facility at Millom had been suppressed it would have been one of the most terrifying things that could have happened. I am trying to see into the future, when the Bill has become law. There is the possibility of another Millom, perhaps on a larger scale, as a result of which competitors of the National Steel Corporation would be strangled, without our having a chance to debate the matter. We must provide against that in the Bill. I therefore strongly support the Lords in the Amendments.It seems to me that we might, after all, take Lords Amendments Nos. 13 and 14 with this group. This will assist the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn.)
I am grateful, Mr. Speaker. My remarks will be very short.
On Report, I referred to the case of Millom. It is important that the criteria on which the Minister decides whether permission should be given for development in the private sector should be subject to the Government's bringing an Order before the House. The private sector welcomes these Amendments. Lord Hughes, speaking for the Government in another place, said that they would not accept the affirmative Resolution procedure. It would be of immense advantage if they would reconsider this decision, but failing this the private sector will welcome the fact that the Minister has to establish his criteria by way of the negative Resolution procedure. There will be difficulties of definition. The first development by Millom was under £100,000, the criteria under the 1953 Act, and subsequent developments were higher. The Minister will have to consider the criteria and we shall be able to give him our views when they are debated. The other difficulty arises over the question of a referee. Under the Clause as sent to the Lords, a person would be appointed by the Minister under a welcome procedure. Amendments Nos. 13 and 14, in effect, alter this procedure, but this gives the private sector an opportunity of voicing its views to the Minister. When this matter has been dealt with, the Minister will then operate the procedure in consenting or otherwise. It is becoming apparent that the Minister accepts responsibility for the private and public sectors. I hope that our points will be borne in mind, and the Clause will be operated as fairly as possible for the companies concerned and in the national interest. I welcome the Amendments as a move in the right direction.Question put and agreed to.
Subsequent Lords Amendments agreed to.
Clause 24.—(ACCOUNTS OF THE CORPORATION AND AUDIT THEREOF.)
Lords Amendment No. 15: In page 22, line 32, to leave out "or stock".
Perhaps it would be convenient to discuss also Amendments Nos. 16, 17, 18, 19, 20 and 21.
I beg to move that this House doth agree with the Lords in the said Amendment.
Clause 24 provides that the Minister may make regulations requiring the Corporation to put in or with its accounts information about shares or stock held by them in, or amounts owing to them from, companies or bodies corporate. Its object is to ensure that Parliament and the public are kept informed of the extent of the nationalised steel industry's interests. The Amendment, and the others to Clause 24, make certain drafting changes in this provision. Their main object is to delete reference to stock as well as shares because they are unnecessary. Subsection (2,a) provides that the Minister may make regulations requiring the Corporation to give information about "bodies" which are its subsidiaries, but subsection (2,b) empowers the Minister to require information only about "companies" and not about all "bodies" in which they have less than a controlling interest. Subsection (2,b) is, therefore, less comprehensive, and the Amendments extend the subsection to cover all "bodies corporate".I have one brief question, which can be answered with a quick "Yes" or "No". The argument for the elimination of the word "stock" is that, under Section 59 of the 1945 Act, as revived, the definition of "share" is:
The question arises whether any stock which might fall to be dealt with under the Clause has been converted from shares. Would the hon. Gentleman confirm that there are no securities which were issued in the form of stock ad initio and not in the form of shares subsequently converted?"'share' includes stock resulting from the conversion of any share into stock;".
The stock forming part of a company's loan capital is covered by the reference to amounts owing to the Corporation from the companies. There is, therefore, no need for the phraseology in the Bill.
I am not sure whether the hon. Gentleman has taken the point. This is a question of equity shares or stock. I am not concerned for the moment with loan stock. Was preference stock all issued as shares and subsequently converted? Can the hon. Gentleman confirm that none of that stock was issued as stock? If so, it would not come within the definition of "shares" in Section 59 in Schedule 4, because that includes only stock resulting from the conversion of any share into stock. The answer must be a simple yes or no.
The answer is "No", but not for the reason that the hon. Member has been putting. The only way in which stock forming part of a company's share capital can come into existence is by way of the definition in the revival of Section 59.
Question put and agreed to.
Subsequent Lords Amendments agreed to.
Clause 25.—(INFORMATION RESPECTING CERTAIN CLASSES OF BUSINESS OF CORPORATION AND PUBLICLY-OWNED COMPANIES TO BE CONTAINED IN CORPORATION'S REPORT TO MINISTER.)
Lords Amendment: No. 22, in page 25, line 35, after "make" to insert "next".
Perhaps it would be convenient also to discuss Amendments Nos. 23, 24, 25 and 26.
I beg to move that this House doth agree with the Lords in the said Amendment.
This Amendment and the others to Clause 25 are drafting Amendments to make the Bill read more smoothly.Question put and agreed to.
Subsequent Lords Amendments agreed to.
New Clause "A".—(RIGHT OF CERTAIN IRON AND STEEL PRODUCERS TO OBJECT TO TRADE PRACTICES OF THE CORPORATION AND PUBLICLY-OWNED COMPANIES APPEARING TO BE UNFAIR.)
Lords Amendment: No. 27, in page 30, line 2, at end insert new Clause "A":
"A.—(1) Subject to subsection (6) below, the three next following subsections shall have effect where an iron and steel producer, being neither one of a description mentioned in subsection (5) below, nor the Corporation nor a publicly-owned company, makes to the Minister written complaint about a practice employed by the Corporation or a publicly-owned company in selling iron and steel products, being products of an activity specified neither in paragraph 4 nor in paragraph 6 of Schedule 3 to the 1953 Act, and the complaint is expressed to be made on the ground that the practice is unfair to the complainant and specifies the respects in which he considers that it is so unfair.
(2) The Minister shall forthwith after receiving the complaint send a copy thereof to the Corporation and, after such period for consideration of, and comment upon, the complaint by the Corporation as the Minister thinks reasonable has elapsed, shall send to the complainant a statement of the comments, if any, made by the Corporation on the complaint and shall, if he is of opinion that the complaint raises a question of substance and that the complainant has a reasonable case to make in support of the complaint, afford the complainant and the Corporation an opportunity of appearing, either personally or by a representative, before a person appointed by the Minister.
(3) The Minister shall consider the report of the person appointed under the last foregoing subsection and may, if it appears to him that the practice complained of is unfair to the complainant, give to the Corporation such directions as appear to him to be requisite to secure the removal of the grounds on which it is so unfair; and the Minister shall furnish the complainant with a statement of any such directions and the Corporation shall give effect thereto.
(4) Where a complainant avails himself of the right conferred by subsection (2) above to appear before a person appointed by the Minister, the Minister shall furnish the complainant and the Corporation each with a copy of the report of the person so appointed, and a statement of the conclusions reached by the Minister on considering the report.
(5) The description of iron and steel producer referred to in subsection (1) above is an iron and steel producer who carries on business comprising one or more of the activities specified in paragraphs 4 and 6 of Schedule 3 to the 1953 Act, but no other iron and steel activity.
(6) The Minister may by order give either or both of the following directions—
I think that it will be convenient to discuss also, Amendment No. 29 to Clause 44, in page 38, line 32, leave out "section 5 and section 28" and insert:
and Amendment No. 31, in page 38, line 40, to leave out from "by" to "to" in line 41 and insert:"sections 5, 15, 28 and section (Right of certain iron and steel producers to object to trade practices of the Corporation and publicly-owned companies appearing to be unfair)".
"each of the following provisions, namely, section 4 of the 1949 Act and sections 5, 15 and section (Right of certain iron and steel produces to object to trade practices of the Corporation and publicly-owned companies appearing to be unfair) of this Act".
I beg to move, That this House doth agree with the Lords in the said Amendment.
The new Clause introduces a provision which I am sure is welcome to right hon. and hon. Gentlemen opposite and certainly to the industry, to establish a formal procedure for complaints by iron and steel producers about unfair trading practices by the Corporation. It provides that they can complain to the Minister when they think that the Corporation or a publicly-owned company is engaging in unfair practices in the sale of iron and steel products. If the Minister thinks that the complainant has raised a question of substance and has a reasonable case, he can refer the complaint to the person appointed by him, who can hear both sides and make a report. The report having been made, the Minister, if he decides that the practice in question is unfair, can give the Corporation such directions as he thinks are necessary to remove the grounds on which the unfairness arose. The new Clause therefore gives a right of appeal to the Minister—and this should be accepted as a major departure—on matters which are normally left to the commercial discretion of a nationalised industry. There is a special situation here in that it can be justified only by the special circumstances of the private sector in the iron and steel industry which, in respect of many products, is not only in direct competition with a very large public sector but is often frequently dependent on that sector for its supplies of semi-finished materials. The new Clause demonstrates the Government's desire to allay the fears of the private sector, even though—and I hope that I say this for the last time; I have said it so often in these long debates—I believe that these fears are exaggerated. Its introduction should reinforce the assurances I have given on several occasions to the effect that any Minister, whatever his party, must be concerned with the prosperity of the steel industry as a whole and with the legitimate interests of the private as well as the public sector.I have no doubt that in Committee I said more on behalf of the private sector than any other hon. Member. I have admitted that I have an interest in this sector of the steel industry and, having said so much about the private sector, I hasten to inform the right hon. Gentleman that the new Clause will be welcomed by this section of the industry, particularly since it shows that the Minister in another place has gone a long way in an endeavour to meet the fears of the private sector.
Nevertheless, the new Clause does not remove the suspicion and fear that exists in view of the inevitability of unequal competition when one has a large company like the National Steel Corporation alongside smaller companies. However, at least the Minister has shown his intention to have machinery to deal with complaints. Lord Erroll made a long speech in another place about the steel construction and bridging industry, 25 per cent. of which will be in the public sector, or 33 per cent. by value, and 75 per cent. in the private sector, or 60 per cent. by value. He outlined the work that this branch of the industry does, including the building of bridges, towers and schools, and in the debate he raised the problem of prices and delivery. The supplier, the nationalised concern, might give its subsidiary products favourable delivery dates and prices so that when supplies are short the subsidiaries would have that advantage. The right hon. Gentleman has referred to the Consumer Council and some of the complaints can, I understand, go to the body. Would the right hon. Gentleman therefore explain in which way the new Clause could be used to help the steel construction and development industry? One then faces the problem of trying to define the phrase "fair competition." In the Western Mail of 27th February last a paragraph appeared in this Welsh newspaper stating:This is a steel foundry which is expanding and is in competition with companies in the private sector. I raise this case because I have asked a number of Questions of the Minister and I wonder how it will be possible to prove fair competition. The right hon. Gentleman may have answered some of my Written Questions today, although I will be asking him a Question after Easter about this matter. I do not expect him to give a definite answer to some of these queries today. I trust, however, that he will bear my comments in mind. 7.45 p.m. I question how one will prove "fair competition", because one must take into account all the information about turnover, capital employed, profit and prices. A public company might deflate its selling prices and ultimately end up by not giving a fair return on its capital. The new Clause states that someone can make"An expansion plan for a South Wales plant which manufactures equipment for collieries has been approved by the National Coal Board—and is almost certain to lead to more jobs. The new scheme is at the Ystrad Mynach plant of Tredomen Engineering Works, where 500 men are employed. The N.C.B. has approved the installation of a new type of electric arc furnace as part of the plan."
I presume that the Ministry has considered what sort of evidence will be necessary to prove such unfairness. The case to which I referred, of a steel foundry, is one where the firm is not specifically dealing with iron and steel products. I trust that when the Minister answers the Questions which I have tabled he will be able to supply me with this information. Has he considered how difficult it will be, certainly in the early years, to collate this information and for this body to adjudicate upon these matters. Although I naturally welcome the new Clause—the Minister has been moving towards protecting the private sector to a certain degree, as has his counterpart in another place—I still believe that it will be difficult for this body in many cases to differentiate between whether or not competition has been fair. Nevertheless, I welcome the new Clause but hope that the right hon. Gentleman will remember that the phrase "fair competition" will present a problem for those who will have the destinies of the private and public sectors of the industry in their hands. It is, therefore, with a word of warning that I welcome the right hon. Gentleman's proposal. I also welcome the fact that the right hon. Gentleman will be coming to Sheffield to meet representatives of the private and public sectors. I assure him that I will be one of those who will give him a courteous welcome to Sheffield. He will find that Sheffield will buckle down to this Measure, whether or not it likes it, and will meet him with the courtesy which a Minister of Power deserves."… to the Minister written complaint about a practice … in selling iron and steel products … and the complaint is expressed to be made on the ground that the practice is unfair to the complainant and specifies the respects in which he considers it is so unfair".
I have a short and simple question for my right hon. Friend. He reminded the House, for the umpteenth time—it is this theme song or "pop" record and he is probably sick of hearing himself saying the words—that he considers it his duty to further the interests of the steel industry as a whole and to ensure that neither the public nor the private sector suffers an unfair disadvantage at the hands of the other. The new Clause is headed:
What right is my right hon. Friend providing to the Corporation and the publicly-owned companies to object to the trade practices of certain iron and steel producers which appear to be unfair? If he has no answer to this question, then he is not doing what, according to his "pop" record, he want to do, which is to hold the balance fairly between the two sectors."Right of certain iron and steel producers to object to trade practices of the Corporation and publicly-owned companies appearing to be unfair."
I assure the hon. Member for Poplar (Mr. Mikardo) that he will have to search long and hard before he finds in the private sector of the iron and steel producing industry any evidence of the sort of unfair practices against which the private sector feels that it is in need of protection from the National Steel Corporation. I should not have thought that there was any need to put in the Bill measures to protect the 90 per cent. which the National Steel Corporation will represent from threats of the unfair competition and eventual financial ruin the Corporation might face from the 10 per cent. sector. However, I shall be interested to hear the right hon. Gentleman's reply if only to get, as I think we will, his assurance that there is nothing from which to protect anyone.
We welcome the new Clause very much. My hon. Friend the Member for Sheffield, Hallam (Mr. J. H. Osborn) has been quite properly tireless in his efforts to secure the writing into the Bill of what we regard as the minimum measures necessary to ensure the Minister's objective of a healthy and viable private sector. The House will recollect that on 17th November in the Standing Committee my hon. Friend moved an Amendment which would have provided for an arbitration tribunal to adjudicate on any allegations of unfair trading practised by the Corporation. The Amendment was turned down, the then Parliamentary Secretary—now the Parliamentary Secretary to the Ministry of Technology—saying that any form of arbitration would be quite unworkable. He indicated that any interference with the freedom of the National Steel Corporation to trade in the manner which it regarded to have the greatest commercial advantage would be impossible. We were not dismayed by that reply, and on Report we tabled an Amendment to say that at any rate there must be a sort of complaint procedure. It is that suggestion, now enlarged and put in a somewhat over-complicated form, that the Minister has accepted by an Amendment moved in another place. We have pressed very hard for this provision. It was refused earlier, as I say, but we now welcome the fact that it has been accepted. Nevertheless, it is of a somewhat limited scope. In another place the Minister without Portfolio drew the distinction between those who would have to address all complaints they might have to the Consumer Council and those in the rather more limited body who would be entitled to make use of this special procedure of an appeal to the Minister. It is only iron and steel producers who have this right. Not all iron and steel products come in from the beginning, because the provision excludes castings and forgings. Those producers are not considered to be at the same risk as those who are actually engaged in making iron and steel and carrying out the other processes listed in the Third Schedule to the 1953 Act. I am not sure that this provision goes far enough. Although it is not open to us now to alter the Clause in any substance, I hope that the Minister will be able to go rather further than did the noble Lord in another place in giving an assurance to industries which might be described as being neither solely consumers nor iron and steel producers; they are neither one thing nor t'other—they are a sort of "mixty-maxty" in between. In this context, my hon. Friend mentioned the constructional steelworks industry. I understand that my noble Friend, Lord Erroll, referred to this industry in the debates in another place so I need not repeat in detail what he then said. Perhaps, however, I could just summarise the problems which the industry faces and which conics the context of the mischief at which this particular Lords Amendment is aimed. The industry is in a particularly vulnerable position by reason of the fact that the whole of its raw material, with the sole exception of limited items, comes from the steel makers and, furthermore, comes almost entirely from those companies which are being nationalised under the Bill. I can give some indication of the proportion which those purchases represent in the total turnover of the constructional steelworks industry. Its products are made up of approximately 50 per cent. fabricated steel and 50 per cent. labour costs. This is a far higher proportion of the input factor which is represented by purchases from the National Steel Corporation than is the case in almost any other industry. For comparison, one can take the example of the motor car industry. The proportion of that industry's turnover represented by steel purchases is probably less than 10 per cent., while with the constructional steelworks industry it is over 50 per cent. That is the first leg of that industry's difficulty. The second is that a very large proportion of the industry is being nationalised under the Bill. One does not need a fevered imagination to conjure up the name of companies which have substantial interests in the constructional steelworks business. There is no other steel consuming industry that will have quite as large a proportion of competition in its own industry coming from the public sector. The publicly-owned fabricating companies produce about one quarter of the tonnage output of the industry, and that quarter, by reason of the size of the companies and the capital investment was, in 1965—the last year for which figures are available—worth one-third of the value of the total turnover. In other words, the nationalised sector companies produce a high proportion of the more sophisticated work of the construction steelworks industry, and for the two reasons of the high proportion of turnover represented by imported steel and the very substantial proportion of the industry which will now be in the public sector, the industry feels itself particularly exposed and vulnerable. It would have liked to have come into the procedure which the Minister is now making available under the new Clause to the iron and steel producers. Those concerned recognise, however, that, as worded, the Clause would require an immense amount of amendment if it were to take this enlargement, as it would be, into account. In those circumstances, therefore, I wonder whether the Minister would be prepared to give to the industry, which has expressed its anxieties to me and to a number of my hon. Friends, the assurance that he will watch the position closely, and that if there is any evidence of the sort of unfair practice about which an iron and steel producer would be entitled to complain under the new Clause it will be open to those in the constructional steelworks industry to make an informal approach to the Minister under the new Clause, and that he would be prepared to give directions to the National Steel Corporation in the same way that he would be prepared to give directions to it under the new Clause. This would not give them the same statutory protection that is available to the iron and steel producers, but it would go a very long way. If the Minister could see his way to give that sort of assurance to those in this industry—and for all I know there may be other industries that are in the same category of being neither one thing nor t'other and which could take advantage of that assurance—I am sure that it would come as a considerable comfort and reassurance when, at the moment, they feel themselves vulnerable to competition—and, it might be, unfair competition—from an organisation which, of any kind, will be very formidable competition now, if only by reason of its size.8.0 p.m.
The interesting thing about the exchange on this new Clause is that my hon. Friend the Member for Poplar (Mr. Mikardo) made warning sounds about how far one could go in leaning so far over backward to protect the private sector that we endangered the public sector. I was worried for a moment until hon. Members opposite said that they had worries about the private sector, which convinced me that we must be about right on this matter.
It would be absurd to take into public ownership a massive industry like this and so hedge it with qualifications that it was a positive danger to the private sector. The answer to my hon. Friend, although I accept that it is a point which has to be watched, is that in the field to which this Clause applies the public sector is a pretty massive organisation. It is something like 95 per cent. to 5 per cent. There are fields of special sales in terms of some specialised products where, in spite of the fact that there is a small private sector, it could produce embarrassing reactions to the Corporation, but I am satisfied that this protects a relatively small unit from unfair practices which I do not believe are likely to take place. Yet there is this worry and the public and the private sectors have to live together. If one can avoid justified worries, one should get rid of them. I do not think the fears rightly put forward by my hon. Friend are valid in this case. We have drawn a distinction between that section of the private industry which is largely independent and completely dominated by the public sector and not applied the same argument to other sections which are capable of looking after themselves to same extent. The hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) and the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) both raised the question of the constructional steel industry. That was a fair point to raise. One has to take account of the fact that the constructional steel industry is not in relation to such a dominant competitor as is the case with iron and steel producers. It is much less dependent than the private sector is on iron and steel producers for supplies. It can get them from private suppliers, from merchants or from imports.The right hon. Gentleman has referred to the heavier end. What proportion of the turnover is represented by purchases from the heavier end? That may represent very large sales.
That is true, but in this case one is shading off a part of the industry in constructional steel where it is a minority interest. When we take the heavier end, we are taking a section of the constructional steel industry which has a minority of the activities or less than a whole part and the whole industry is not in the same position as being dominated by the public sector. It is a question of judgment, but the difference is that this is not an industry dominated by the massive organisation to the extent that the iron and steel producers are. The hon. Member asked, suppose this does not work out? It is new yet. Certainly the Association would have the right to go to the Consumer Council and to the Minister if it thought that this did not work. I hope that the House will see fit to accept the new Clause.
Question put and agreed to.
New Clause "B".—(POWER OF MINISTER TO CHANGE THE CORPORATION'S NAME.)
Lords Amendment: No. 28, in page 34, line 10, at end insert new Clause "B".
"B. The Minister may by order change the name of the authority established by section 1(1) of this Act, and an order under this section may make such provision as appears to the Minister to be requisite or expedient in consequence of the change of name effected thereby, including (without prejudice to the generality of the foregoing words) provision for amending enactments (whether contained in this or in any other Act)".
I beg to move, That this House doth agree with the Lords in the said Amendment.
This is a fulfilment of an undertaking given by the Government on Report in response to an Amendment moved by the hon. Member for Barkston Ash (Mr. Alison) to empower the Minister to change the Corporation's name by order. We believe that this Amendment, prompted by the Opposition, will prove useful. As I pointed out on Report, there is much to be said for using the word "British" in the Corporation's title, but the obvious alternatives, "British Steel Corporation" and "British Iron and Steel Corporation", are already used by subsidiaries. This difficulty should disappear when then Federation's trading services are transferred by agreement to the central trading organisation and the Amendment will permit this to be done without further legislation.As one who had the honour of moving the Amendment on Report, I wish to thank the Parliamentary Secretary for accepting this Amendment from the House of Lords. He is, perhaps, a little optimistic in thinking that the Corporation has succeeded in steering clear of all the difficulties in the title of "National Steel Corporation" because, although the permutations on "British Steel "or" British Iron and Steel" might be taken over, there is still the British Sugar Corporation. Having shown all sweetness and light, the Government are going to show themselves all lightness and sweet. Perhaps it will not be so easy as they thought.
A point worth mentioning is that the Minister in another place, moving the Amendment on behalf of the Government, was at some pains to stress the importance the Government attached to it and the need to adopt the affirmative Resolution procedure in the matter of the Order which may be required to change the title. It is worth noting that this Amendment is regarded as so important that the affirmative Resolution procedure was spelled out by Lord Shackleton in the House of Lords.Question put and agreed to.
Clause 44.—(REGULATIONS, ORDERS AND RULES.)
Lords Amendment No. 29, in page 38, line 32, leave out "section 5 and section 28" and insert:
"sections 5, 15, 28 and section (Right of certain iron and steel producers to object to trade practices of the Corporation and publicly-owned companies appearing to be unfair)".
Read a Second time.
I understand that we have discussed this Lords Amendment. Does the hon. Member for Wanstead and Wood-ford (Mr. Patrick Jenkin) wish to move his Amendment to the proposed Lords Amendment, in line 2, leave out '15'?
With the greatest respect, Mr. Deputy Speaker, we have not discussed Amendment No. 29.
Not with Amendment No. 27?
I am extremely sorry. I did not appreciate that.
Lords Amendments Nos. 29 and 30 cover Clause 15 as well as the new Clause we have just dealt with. Had I appreciated that it was proposed to take this Amendment at the same time, I would have voiced an objection, because it would seem inappropriate.I was not in the Chair at the time, but I understand that we took Lords Amendment No. 27 and discussed Lords Amendments Nos. 29 and 30. It is still open to the hon. Member to move his Amendment to Lords Amendment No. 29 and to discuss that Amendment, but we have dealt with the debate on the main Lords Amendment.
I beg to move, as an Amendment to the Lords Amendment, to leave out '15'.
We could perhaps take with this Amendment Lords Amendment No. 30, page 38, line 36, after "32(2)" insertand the Amendment in my name to the proposed Lords Amendment, to leave out 'after "32(2)" insert' and insert"section (Power of Minister to change the Corporation's name)",
'leave out "32(2)" and insert "15, 32(2)"'.
If that is for convenience of the House.
Obviously, if the hon. Gentleman wants to make a specific point, he must make it, but I assumed that these were consequential Amendments on the original Clause.
With respect, they are nothing of the sort. They are Amendments in fact, and although my hon. Friend the Member for Sheffield, Hallam (Mr. Osborn) adverted to them in talking about Clause 15 the merits and the affirmative and negative Resolution procedure were not discussed. I hope that the right hon. Gentleman will take no objection if we now address ourselves to these Amendments.
The only concern of the Chair is whether this will be for the convenience of the House.
indicated assent.
I am grateful to the right hon. Gentleman for his agreement. It is a sensible thing to do, because the Amendments stand and fall together. They are designed to make sure that the new power to make Orders, introduced into Clause 15 in another place—a Clause which we accepted earlier—will be exercisable by the affirmative and not by the negative Resolution procedure. There are two grounds on which we put this forward as a serious suggestion.
The first is the importance of the matters which will be comprised within the Orders. The second is the nature of the Orders, what kind of Orders they are to be. On the question of importance, I do not think that anyone could dispute that the power now contained in Clause 15 is of crucial importance to the private sector of the industry. The Minister has described it in the White Paper as a reserve power to control substantial development projects in the private sector and it is worth examining this a little more closely to see exactly what that power consists of. Under Clause 15, the Minister may make an Order in which he classifies the sort of development to which this power will apply. Subsection (2) of Clause 15 says that the applicantIn other words, the right hon. Gentleman has a complete yea or nay as to whether a project which falls within the terms of an Order that he has made is to go ahead. The only limitation that is written into Clause 3 is contained in subsection (4) which says, in effect, that a notice must be framed so that consent is only required"… shall not proceed therewith without the consent in writing of the Minister."
That is to say, the only limitation that is written into the Bill is a limitation on the type of Order that may be made specifying the production facilities to which the power is to apply. It in no sense limits or fetters the right of the Minister to give or withhold consent once the Order has been made. Thereafter, in fact, his discretion is completely unrestricted. This is quite different from the existing power under the 1953 Act, which is exercised by the Iron and Steel Board. Section 6(3) of the Act says:"… where the provision of the additional production facilities … would be likely, in the Minister's opinion, substantially to affect the efficient and economic development of production facilities in Great Britain."
There, as it were, the limitation is introduced at a later stage. This is a limit on the Board's authority to withhold consent for a development project. The Minister, in relation to his own unfettered discretion which the Bill contains, has acknowledged the fear—although he described it as a "folk fear" and an "exaggerated fear"—of the private sector. The fact is that the private sector feels that it has its head in a noose, that it is only necessary for the Minister to pull the knot tight and it will be "sunk". I mention this because it emphasises the vital importance of the Order which the Minister will have power to intro- duce under the Bill specifying the nature of the developments which are to come within it. This is the only stage at which there is to be any scrutiny by Parliament of the matter at all. I give an example as to how this control has worked in the past under the 1953 Act to illustrate how we envisage this working under the Bill. My hon. Friend the Member for Hallam has already mentioned the Millom Hematite and Iron Company and its development of the spray steel process. This company invested £75,000 of its own money in developing a new process for the production of steel—a process that was originally discovered in the B.I.S.R.A. laboratories. Since May, 1966, the company has been successfully operating this new process. It might be useful if I indicated the economic importance of why the issue arises by reading a short passage from an article in New Scientist, by Mr. David Fishlock, on 20th October, 1966. He wrote:"The Board shall not refuse their consent to any proposal submitted to them under this section unless it appears to them after consultation … that the proposal will seriously prejudice the efficient and economic development of production facilities in Great Britain.
In other words, the Millom Company saw its own survival dependent upon its being allowed to develop steel making facilities using this new spray steel process. It therefore applied for consent to the Iron and Steel Board to spend £190,000 on spray units and £760,000 on continuous casting. The company's case was that the new spray steel process revolutionised the economics of steel making and made possible what was not hitherto possible and what had hitherto not been accepted as possible—the manufacture of steel in relatively small units which was economic compared in process economics with the major units. Some people—I do not say whether they are right or wrong—have contended that the existence of this process destroys the whole basis of the case for the rationalisation of the industry and therefore, of course, for nationalisation. But I would be out of order if I pursued that now, What is true—and again I quote from the article—is that"Steelmaking history may thus repeat itself. The last great advance in steelmaking, the Linz-Donawitz (LD) process, in which oxygen replaces air as the agency whereby iron is refined to steel, was born of economic necessity on the part of a declining Austrian steel industry. Today, it is said, royalties from the LD process provide Austria's largest foreign income. Millom's concern was to use more fully the substantial output of its pre-blast furnaces, but it could not sell the extra iron. Nor was it economic to instal conventional steelmaking plant for an output of not more than ¾ million tons a year. The solution, its new managing director Mr. D. R. G. Davies decided, lay in an entirely different steelmaking technique."
It is, therefore, instructive in this context to see exactly what has happened. In the end, the Board felt that the terms of the 1953 Act debarred it from refusing consent to the Millom Company for this development, and there were many people who cheered when they read that consent could not be refused, because they defended, as my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) has defended this evening, the right of a company to invest its own money in its own assets. However, it is interesting to read some of the reasons why the Iron and Steel Board would have refused permission had it had power to do so, because those considerations will operate in the case of Clause 15 and any Order made under it. A letter dated 7th March and written by Mr. Moore, Secretary of the Iron and Steel Board, to the managing director of the Millom company, said:"… the indications are that the process is in direct competition with the new oxygen processes like LD and Kaldo. Its attractions—on large or small scale—may not induce a steelmaker who has already re-equipped with an oxygen process to change his mind. But it should make many who have still to re-equip—abroad as well as in Britain—think hard before they swap, say, their open-hearth furnaces for LD converters."
That means that the existing producer would have been favoured against the new man. The letter went on:"The consideration that has been uppermost in the Board's mind has been that the new process should be tried out in existing steelworks which already possess, in addition to ironmaking plant, the facilities for converting molten steel into saleable products".
It also said:"… the Board are satisfied that it is not necessary from a national point of view, that spray steelmaking by Millom should be carried beyond the present experimental stage."
and"… the Board consider that such a development is undesirable ".
The letter concluded by saying that because the development did not fall within Section 6(3) of the 1953 Act and would not seriously prejudice the efficient and economic development of production facilities in the United Kingdom, the Board felt itself precluded from withholding consent."contrary to the proper and efficient development of the British iron and steel industry".
The hon. Gentleman is making rather a point of Millom in some detail. Offhand, I cannot remember whether it is mentioned in the letter, but, of course, a strong consideration was that this process was already in existence in other plants.
Exactly, but it was developed to the commercial scale by this company and if this company wanted to exploit its own development, it seemed prima facie that it should have the right to do so.
Inevitably, we are getting into great detail. It was not only a matter of approval which was required. Public money was wanted, too.
I agree. An application for public money has been made, but I have not heard of the outcome of that application. However, I have been given to understand that the company is prepared to go ahead with its own money on the basis of the consent which has been given.
Would not the Minister agree that there is all the difference in the world in trying out spray steel at Lancashire Steelworks, by-passing existing furnaces and perhaps putting 20,000 or 30,000 men out of work in those and similar works, and trying out the process at Millom, where, although there are blast furnacemen, there are no process workers in the melting stage to be upset by the development of the spray steel process? Is not Lancashire Steel a different kettle of fish?
I am grateful for what my hon. Friend has said, for it reinforces the strength of my argument for Millom steel.
However, that is not the point of this debate. The point is—and by his words this evening the right hon. Gentleman has confirmed this—that, had the Minister had power, he would have refused consent. Had the power been his and had the decision been his, he would have refused consent, and the only test of whether consent would have to be obtained would be whether the Order came within the terms of Clause 15. Once the Order had been made, the Minister's consent would have been unfettered. This is, therefore, the classic case where the rights of the citizen or the rights of the private company depend entirely upon the terms of the Order, and in the Bill there is no indication of the limitations, except the blanket phrase that the development must be such as substantially would affect the development of iron and steel products. Once an Order is made, discretion is unfettered. For that reason I argue that Orders made under Clause 15 are of a critical and crucial importance and justify the affirmative Resolution procedure. I also base my argument on the kind of Order which justifies a distinction between a negative and affirmative Resolution procedure. The House will recollect that this matter was investigated by the Select Committee on Delegated Legislation which reported in October, 1953, and which although making no express recommendations about the principles which should divide the negative from the affirmative procedure, nevertheless accepted the evidence of the Senior Parliamentary Counsel about how the lines had been drawn in the past, evidence which was quite uncontradicted by any other evidence, let alone evidence of comparable weight. Sir Alan Ellis, then Senior Parliamentary Counsel, gave evidence to the Committee to which the Committee referred in paragraphs 75 and 76 of its Report. He said that there were four classes of Order which justified the affirmative Resolution procedure. The first two classes do not concern us. They are powers which substantially alter the provisions of an Act of Parliament by altering its language or increasing or limiting its extent or duration and, secondly, powers to impose financial charges, an example being Purchase Tax Orders. Clearly, the kind of Order which we are discussing is neither of those. The third class consists of cases of skeleton powers where the parent Act fixes the purpose and leaves the whole substance of the law to be dealt with by subordinate legislation. There is a fourth class of miscellaneous cases which for various reasons were deemed to be of special importance. This is a Case 3 instance. Clause 15 establishes the control over the investment by the private sector, establishes the broad principles, but the critical and definitive stage which determines exactly which investments are to be subject to control, subject to the unfettered power of the Minister to give or withhold consent, is to be left to the Order. This is, therefore, a case when the Act contains skeleton powers, when the parent Act fixes the purpose and leaves the whole substance of the law to be dealt with by subordinate legislation. Alternatively, one could say that this was a case of special importance within Sir Alan's fourth class. 8.30 p.m. It is interesting, in this context, to look at the reasons which were given by the noble Lord, Lord Hughes, on 28th February, when he said, in justifying the introduction of the negative Resolution procedure that the first reason was that the Order would do no more than define those projects which must be submitted to the Minister for his approval. In the light of what I have said, and of the argument that I have addressed to this House, I cannot conceive how that can be an argument justifying the more limited negative procedure. I therefore pass to the second reason. The Minister said that there was a wide range of consultation before the notice was issued under Clause 15. That is consultation outside Parliament and is no substitute for control by Parliament of the power which Parliament has conferred on the Minister. The third reason he gave was that there was no question here of the Minister being able to amend an Act of Parliament. As I have said, that is a different category of Order, which would come within the affirmative Resolution procedure. He might have added that there was no new tax being raised; it would have been as relevant. This is of great importance to the private sector, which is intended to be viable and efficient, and to have a life of its own. This is the Minister's cardinal principle which he has stated repeatedly. Clause 15 gives the Minister, when the Order has been made, an unfettered power to cut the private sector's throat. This is largely undefined in the Bill. Once the Order is made, the Minister has complete discretion and therefore the key is the Order. It is the Order which will give flesh and blood to the skeleton power contained in Clause 15. This is, therefore, an Order requiring Parliamentary control and an Order for which the affirmative Resolution procedure is the only really effective procedure to be established.I want to emphasise the apparent anomaly in the statements that the Government have made in another place on this matter. As I reminded the Minister the noble Lord, Lord Shackleton, took some pride in asserting that the Government had provided that any Order changing the name of the Corporation would be subject to the full affirmative Resolution procedure, as much as to say: "So substantial and far-reaching is the significance of changing the name of the Corporation that we must invest this possibility with the full affirmative Resolution procedure."
Then the Government come along in the House of Lords and present us with the possibility of an Order being made which might have repercussions as far-reaching as that suggested by my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) with regard to the Millom Company and the development of spray steel and yet here they fight shy of the full affirmative Order procedure. It is all right when one is just changing a name, but when one is denying a company the possibility of developing a totally new process, then they do not think this warrants the affirmative Order procedure. I am sorely tempted to inquire of the Minister whether it is that the penny has dropped about the possibility of hybridity arising under the affirmative Order procedure where the specification of particular companies takes place. Here he will recall the debate that we had in Committee. The disadvantage from the Government's point of view is that any such Order subject to the affirmative procedure is that it is liable to be hybrid in the House of Lords and therefore the Millom Company, which might be involved in any Order arising under Clause 15, could invoke the full panoply of counsel, and representation before the Special Orders Committee of the House of Lords, and argue its case fully in public in a Parliamentary setting. Instead of this, we have the set-up provided for under Clause 15 under which it seems quite clear that most of the basic decisions will be made before the Order is made. Any question of the company named in the Order just sitting tight waiting for the Minister to send a nice letter is entirely fatuous. Consultations relating to the administrative decision will have been made. The first thing that any company worth its salt will want to do as soon as it has an Order served upon it, if it is in accordance with our Amendment to the Lords Amendments is to appeal, to go to the House of Lords, and to bring counsel and to argue the case out fully in public. That is why we think that Lord Hughes was anxious to accept the Amendment, but diverted to the negative procedure. It is a most inconsistent attitude for the Government to take in the same debate, to apply the affirmative procedure to so small a thing as a change of name, but to deny it to the procedure of perhaps destroying the possibility of existence for a private company. For that reason, I earnestly support my hon. Friend's Amendment to the Amendment.I have made my contribution on this theme and on Millon in particular. One thing which alarms me is the Minister's reference to grants. There are two possible grants in this case, one from the Ministry of Technology for developing, and one from the Board of Trade in the normal grant which has been the subject of an announcement today. This means that a firm will not only have to comply with an Order but will be very much dependent on grants. This debate has shown that a private company will have to find ways round difficulties not only in legislation but on the question of grants. I do not think that the Minister will want to expand on this. Obviously, if a company in a development area wishes to expand its activities, it will expect to receive the development grants or investment grants which are available. This shows the extent to which an activity of this type will be encumbered with social and development problems and other problems.
As I have said, my view is that the Order should be an affirmative Order rather than a negative Order. I will not pursue that argument further.
This is a rather surprising debate. Hon. Members opposite have made rather heavier weather of this point than is justified. A great deal has been said about Millom. As the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) said, it would not be in order to deal with that concern at great length.
The only reason why I made a point about grants was that it is legitimate for industrialists to ask for money if an Act provides that they may do so. I was merely arguing that there are a number of factors in this case. What I find extraordinary is the fact that hon. Members opposite have been talking about the dreadful things which would have been done to Millom under the Iron and Steel Act, 1953, without saying that it was passed by their own party. The only restrictions which could be placed on the company had it gone against any regulation were restrictions placed on it by hon. Members opposite when they were in office. It is a bit much for the Opposition to complain to the Labour Government about the iniquities, of which there are many, of the Conservative Government in 1953. I am sure that hon Members opposite may have doubts about this Act, that they wish that it had not been enacted by their party and perhaps would like to get rid of it. This is exactly what we are doing.The Minister should recognise that that Measure was put forward in good faith by the Conservative Government as an attempted compromise solution which would determine the future of this great industry for a very long time. Unfortunately, it appears to have failed to achieve that purpose, as a result of which we have this Bill.
The hon. Gentleman is wriggling off the hook. The point which he makes clearly and pointedly—it has been made several times—is that the dreadful things which might have been done unto a company like Millom under the 1953 Act are so appalling that they have produced this Bill. My only point is that the powers which exist in the Bill exist in the 1953 Act, which is a creature of hon. Members opposite. Not one hon. Member opposite has complained before about this Act. I take no responsibility for the 1953 Act.
The point at issue is the enormous accretion of power which the Bill gives to the public sector and the threat of the wrongful use of this power to the remaining part of the private sector. In this context, the 1953 Act takes on a totally different complexion, and it is against this that we would argue.
The only change which has come about is that when hon. Members opposite sat on this side of the House they thought that the 1953 Act was all right, but now that they sit on the benches opposite they say that it is all wrong.
rose—
I am trying to be non-controversial.
How does the right hon. Gentleman conclude that we are complaining about the 1953 Act? Under that Act, Millom got its way. We are not concerned with the 1953 Act. We are concerned with what might take its place after the Act has been rescinded by the Bill.
I was coming to that point. I thought that the speeches of hon. Members opposite were largely centred around this particular case, which arose only as a result of the 1953 Act, one of the many pieces of legislation which hon. Members opposite enacted on an unsuspecting populace.
The hon. Member for Barkston Ash (Mr. Alison) has made a fair point about the reason for having an affirmative Resolution to change the name and not doing so in this case. The difference in changing the name of the Corporation is that consequential positions would be produced so that the name had to be altered in the Act, perhaps in other Acts, in legal documents and in leases. Although it does so in only a small way—this is the significant difference—an affirmative Order to change the name of the Corporation would be changing the law. In these circumstances this is quite right and proper. If an Order makes a change in the law, no matter how small, a Government cannot do so without coming to Parliament—although I sometimes think that it would be a good idea to change the law without coming to Parliament. [Interruption.] That is a view which must be shared by all Ministers from time to time. In terms of changing the law, there is a different position. This would be the justification for having an affirmative Order concerning the name of the Corporation but not in this case. I suggested earlier that hon. Members opposite were making rather more of this than is justified. The Order would do no more than define the projects which have to be submitted to the Minister for his approval. It would not change anything. All that it would decide would be which projects should be submitted to the Minister. The Minister then will have taken a decision under the Act and he would be directly answerable to Parliament by Questions, debate and Motion of censure. It is in this way that Parliament has its control. The considerations which determine the classes of projects which are to be submitted to the Minister for approval—not whether they are right or wrong, but whether they should go to him for approval—would be largely technical in character. There is not the same careful balancing of interests that there would be subsequently when the substantive decision had to be made. Reference was made to the discussion in the Select Committee. Clause 15 does not fit in with the evidence given in that case by the then senior Parliamentary Counsel. There is also the point—I hoped that before leaving that point, the Minister would explain why he considers that Clause 15 does not fit in with that evidence.
Division No. 295.]
| AYES
| [8.45 p.m.
|
| Albu, Austen | Brown,Bob(N'c'tle-upon-Tyne,W.) | Doig, Peter |
| Alldritt, Walter | Brown, R. W. (Shoreditch & F'bury) | Dunn, James A. |
| Allen, Sholefield | Butler, Herbert (Hackney, C.) | Dunnett, Jack |
| Armstrong, Ernest | Cant, R. B. | Dunwoody, Mrs. Gwyneth (Exeter) |
| Atkins, Ronald (Preston, N.) | Carmichael, Neil | Dunwoody, Dr. John (F'th & C'b'e) |
| Atkinson, Norman (Tottenham) | Carter-Jones, Lewis | Eadie, Alex |
| Bacon, Rt. Hn. Alice | Chapman, Donald | Edelman, Maurice |
| Bagier, Gordon A. T. | Coe, Denis | Edwards, Robert (Bilston) |
| Barnett, Joel | Coleman, Donald | Edwards, William (Merioneth) |
| Baxter, William | Concannon, J. D. | Ellis, John |
| Benn, Rt. Hn. Anthony Wedgwood | Corbet, Mrs. Freda | Evans, Ioan L. (Birm'h'm, Yardley) |
| Bennett, James (G'gow, Bridgeton) | Craddock, George (Bradford, S.) | Faulds, Andrew |
| Bidwell, Sydney | Crawshaw, Richard | Finch, Harold |
| Bishop, E. S. | Dalyell, Tam | Fitch, Alan (Wigan) |
| Blackburn, F. | Davies, Dr. Ernest (Stretford) | Fletcher, Ted (Darlington) |
| Blenkinsop, Arthur | Davies, G. Elfed (Rhondda, E.) | Foot, Michael (Ebbw Vale) |
| Boardman, H. | Davies, Harold (Leek) | Ford, Ben |
| Booth, Albert | Davies, S. O. (Merthyr) | Forrester, John |
| Boston, Terence | de Freitas, Rt. Hn. Sir Geoffrey | Fowler, Gerry |
| Bowden, Rt. Hn. Herbert | Dell, Edmund | Fraser, John (Norwood) |
| Braddock, Mrs. E. M. | Diamond, Rt. Hn. John | Freeson, Reginald |
| Bradley, Tom | Dickens, James | Galpern, Sir Myer |
| Brown, Hugh D. (G'gow, Provan) | Dobson, Ray | Gardner, Tony |
It is difficult for me to do so if the hon. Member will not let me finish the sentence. I certainly would like to explain. I did not expect the hon. Member to agree.
The difference is the very size of the activity, the fact that the Order does not change the law, that it does not make any decisions other than to refer a case or argument to the Minister and the fact that by subsections (2) and (3) of Clause 15, specific provisions are written into the Bill in considerable detail requiring the Minister to consult organisations representing the private sector, consumers and workers. We therefore have the situation that all that is happening is the reference to the Minister of particular cases for approval, which in most cases would probably be given. The moment that any decision is taken, it is a direct decision of the Minister, and he is answerable to the House. In addition to that, all the parties concerned—the consumers, the workers, and the private sector company itself—are consulted before decisions are taken. In those circumstances, it would not be realistic to think that every issue of this type should be brought to Parliament for Parliament to debate not the Ministerial decision, but merely that the Minister was examining the problem.Question put, That "15" stand part of the Lords Amendment:—
The House divided: Ayes 208, Noes 134.
| Garrett, W. E. | Macdonald, A. H. | Redhead, Edward |
| Ginsburg, David | McGuire, Michael | Rhodes, Geoffrey |
| Cordon Walker, Rt. Hn. P. C. | McKay, Mrs. Margaret | Roberts, Albert (Normanton) |
| Grey, Charles (Durham) | Mackenzie, Gregor (Rutherglen) | Rodgers, William (Stockton) |
| Griffiths, David (Rother Valley) | Mackie, John | Rogers, George (Kensington, N.) |
| Griffiths, Rt. Hn. James (Llanelly) | Mackintosh, John P. | Rose, Paul |
| Hale, Leslie (Oldham, W.) | Maclennan, Robert | Ross, Rt. Hn. William |
| Hamling, William | MacMillan, Malcolm (Western Isles) | Rowland, Christopher (Meriden) |
| Hannan, William | McMillan, Tom (Glasgow, C.) | Rowlands, E. (Cardiff, N.) |
| Harrison, Walter (Wakefield) | McNamara, J. Kevin | Shaw, Arnold (Ilford, S.) |
| Haseldine, Norman | MacPherson, Malcolm | Sheldon, Robert |
| Hattersley, Roy | Mahon, Simon (Bootle) | Short, Rt.Hn.Edward(N'c'tle-u-Tyne) |
| Hazell, Bert | Manuel, Archie | Silkin, Rt. Hn. John (Deptford) |
| Heffer, Eric S, | Mapp, Charles | Silkin, Hn. S. C. (Dulwich) |
| Horner, John | Marquand, David | Silverman, Julius (Aston) |
| Houghton, Rt. Hn. Douglas | Marsh, Rt. Hn. Richard | Silverman, Sydney (Nelson) |
| Howarth, Harry (Wellingborough) | Mendelson, J. J. | Skeffington, Arthur |
| Howarth, Robert (Bolton, E.) | Mikardo, Ian | Snow, Julian |
| Huckfield, L. | Miller, Dr. M. S. | Spriggs, Leslie |
| Hughes, Roy (Newport) | Milne, Edward (Blyth) | Steele,Thomas (Dunbartonshire,W.) |
| Hunter, A Jam | Mitchell R. C. (S'th'pton, Test) | Swain, Thomas |
| Hynd, John | Morgan, Elystan (Cardiganshire) | Swingler, Stephen |
| Irvine, A. J. (Edge Hill) | Morris, Charles R. (Openshaw) | Symonds, J. B. |
| Jackson, Peter M. (High Peak) | Newens, Stan | Taverne, Dick |
| Jeger,Mrs.Lena(H'b'n&St.P'cras,S.) | Noel-Baker,Rt.Hn.Philip(Derby,S.) | Thomas, George (Cardiff, W.) |
| Jenkins, Hugh (Putney) | Norwood, Christopher | Tinn, James |
| Jenkins, Rt. Hn. Roy (Stechford) | Oakes, Gordon | Tuck, Raphael |
| Johnson, Carol (Lewisham, S.) | Ogden, Eric | Varley, Eric G. |
| Jones, Dan (Burnley) | O'Malley, Brian | Wainwright Edwin (Dearne Valley) |
| Jones,Rt.Hn.Sir Elwyn(W.Ham.S.) | Orbach, Maurice | Walker, Harold (Doncaster) |
| Jones, J. Idwal (Wrexham) | Orme, Stanley | Wallace, George |
| Jones, T. Alee (Rhondda West) | Oswald, Thomas | Watkins David (Consett) |
| Kerr, Mrs.)Anne (R'ter & Chatham) | Owen, Dr. David (Plymouth, S'tn) | Wellbeloved, James |
| Kerr, Dr. David (W'worth, Central) | Padley, Walter | Whitlock, William |
| Kerr, Russell (Feltham) | Page, Derek (King's Lynn) | Wilkins, W. A. |
| Lawson, George | Paget, R. T. | Willey, Rt. Hn. Frederick |
| Leadbitter, Ted | Palmer, Arthur | Williams, Alan (Swansea, W.) |
| Ledger, Ron | Panned, Rt. Hn. Charles | Williams, Clifford (Abertillery) |
| Lee, John (Reading) | Park, Trevor | Willis, George (Edinburgh, E.) |
| Lestor, Miss Joan | Pearson, Arthur (Pontypridd) | Winnick, David |
| Lewis, Ron (Carlisle) | Pentland, Norman | Winterbottom, R. E. |
| Lomas, Kenneth | Perry, Ernest G. (Battersea, S.) | Woodburn, Rt. Hn. A. |
| Loughlin, Charles | Perry, George H. (Nottingham, S.) | Yates, Victor |
| Luard, Evan | Price, Christopher (Perry Barr) | |
| Lyon, Alexander W. (York) | Price, Thomas (Westhoughton) | TELLERS FOR THE AYES: |
| Lyons, Edward (Bradford, E.) | Price, William (Rugby) | Mr. Joseph Harper and |
| Mabon, Dr. J. Dickson | Probert, Arthur | Mr. William Howie. |
| McBride, Neil | Rankin, John |
NOES
| ||
| Alison, Michael (Barkston Ash) | Dodds-Parker, Douglas | Jones, Arthur (Northants, S.) |
| Allason, James (Hemel Hempstead) | Doughty, Charles | Jopling, Michael |
| Baker, W. H. K. | Eden, Sir John | Kaberry, Sir Donald |
| Barber, Rt. Hn. Anthony | Farr, John | Kirk, Peter |
| Batsford, Brian | Fisher, Nigel | Kitson, Timothy |
| Beamish, Col. Sir Tufton | Fortescue, Tim | Lamb ton, viscount |
| Bell, Ronald | Gibson-Watt, David | Langford-Holt, Sir John |
| Bennett, Sir Frederic (Torquay) | Gilmour, Ian (Norfolk, C.) | Legge-Bourke, Sir Harry |
| Bessell, Peter | Gilmour, Sir John (Fife, E.) | Lewis, Kenneth (Rutland) |
| Biffen, John | Glover, Sir Douglas | Lloyd, Ian (P'tsm'th, Langstone) |
| Black, Sir Cyril | Goodhart, Philip | Lubbock, Eric |
| Bossom, Sir Clive | Goodhew, Victor | Mackenzie, Alasdair(Ross&Crom'ty) |
| Brewis, John | Gower, Raymond | McMaster, Stanley |
| Brinton, Sir Tatton | Grant, Anthony | Maginnis, John E. |
| Bruce-Gardyne, J. | Grant-Ferris, R. | Marten, Neil |
| Buchanan-Smith, Alick(Angus,N&M) | Grieve, Percy | Maude, Angus |
| Buck, Antony (Colchester) | Griffiths, Eldon (Bury St. Edmunds) | Maxwell-Hyslop, R. J. |
| Bullus, Sir Eric | Gurden, Harold | Maydon, Lt.-Cmdr. S. L. C. |
| Campbell, Gordon | Hall, John (Wycombe) | Mills, Peter (Torrington) |
| Carlisle, Mark | Hall-Davis, A. G. F. | Mitchell, David (Basingstoke) |
| Chichester-Clark, R. | Harris, Reader (Heston) | Monro, Hector |
| Clegg, Walter | Harrison, Col. Sir Harwood (Eye) | More, Jasper |
| Cooke, Robert | Hawkins, Paul | Murton, Oscar |
| Corfield, F. V. | Heald, Rt. Hn. Sir Lionel | Nabarro, Sir Gerald |
| Craddock, Sir Beresford (Spelthorne) | Higgins, Terence L. | Neave, Airey |
| Crowder, F. P. | Hiley, Joseph | Nott, John |
| Cunningham, Sir Knox | Hobson, Rt. Hn. Sir John | Orr-Ewing, Sir Ian |
| Dance, James | Holland, Philip | Osborn, John (Hallam) |
| Davidson, James(Aberdeenshire,W.) | Hornby, Richard | Page, Graham (Crosby) |
| d'Avigdor-Goldsmid, Sir Henry | Hunt, John | Page, John (Harrow, W.) |
| Dean, Paul (Somerset, N.) | Hutchison, Michael Clark | Pardoe, John |
| Deedes, Rt. Hn. W. F. (Ashford) | Irvine, Bryant Godman (Rye) | Peel, John |
| Digby, Simon Wingfield | Jenkin, Patrick (Woodford) | Percival, Ian |
| Pink, R. Bonner | Stainton, Keith | Ward, Dame Irene |
| Pounder, Rafton | Steel, David (Roxburgh) | Webster, David |
| Powell, Rt. Hn. J. Enoch | Stodart, Anthony | Whitelaw, Rt. Hn. William |
| Pym, Francis | Stoddart-Scott, Col. Sir M. (Ripon) | Wills, Sir Gerald (Bridgwater) |
| Quennell, Miss J. M. | Summers, Sir Spencer | Wilson, Geoffrey (Truro) |
| Ridley, Hn. Nicholas | Taylor, Sir Charles (Eastbourne) | Winstanley, Dr. M. P. |
| Rippon, Rt. Hn. Geoffrey | Taylor, Frank (Moss Side) | Wolrige-Cordon, Patrick |
| Rossi, Hugh (Hornsey) | Temple, John M. | Wood, Rt. Hn. Richard |
| Russell, Sir Ronald | Turton, Rt. Hn. R. H. | Wright, E. |
| St. John-stevas, Norman | van Straubenzee, W. R. | |
| Scott, Nicholas | Vickers, Dame Joan | TELLERS FOR THE NOES: |
| Shaw, Michael (Sc'b'gh & Whitby) | Wainwright, Richard (Colne Valey) | Mr. R. W. Elliott and |
| Smith, John | Walker-Smith, Rt. Hn. Sir Derek | Mr. Reginald Eyre. |
Lords Amendment agreed to.
Subsequent Lords Amendments agreed to.
Schedule 2.—(TRANSITIONAL PROVISIONS IN CONNECTION WITH DISSOLUTION OF IRON AND STEEL BOARD.)
Lords Amendment: No. 32, in page 43, line 35, at end insert:
"( ) The foregoing provisions of this paragraph shall not apply to a document which appears to the Board to be relevant for the purposes of any legal proceedings pending immediately before the vesting date by or against the Board".
I beg to move, That this House doth agree with the Lords in the said Amendment.
On vesting day the property of the Iron and Steel Board will become the property of the Corporation, but with one important exception. Certain documents which the Board will be required to set aside before vesting date will be excluded. The documents which the Board will be required to set aside are those which appear to it to relate to the affairs of any company not coming into public ownership, or other documents which the Minister has directed it to set aside. The purpose of this provision is to prevent the Corporation acquiring documents which will be inappropriate for it to inherit because, for example, they contain information about its competitors in the private sector. For the same reason, although the Minister may direct that the Corporation may see or copy set aside documents which he thinks it requires to know about, it cannot see or copy any document relating only to the affairs of private sector companies. This Amendment will specially provide for the class of documents to which the Corporation will need to have access, even where they relate to private sector companies, in legal proceedings pending immediately before vesting date, but by this Amendment the Corporation will inherit only papers relating to cases where the Board itself found it necessary to undertake proceedings before vesting date.Question put and agreed to.
Subsequent Lords Amendment agreed to.
Schedule 3.—(AMENDMENTS OF REVIVED PROVISIONS OF 1949 ACT.)
Lords Amendment: No. 34, in page 45, line 36, at end insert:
"In subsection (6), for the words 'the publicly-owned companies' there shall be substituted the words 'their subsidiaries'".
I beg to move, That this House doth agree with the Lords in the said Amendment.
Mr. Deputy Speaker, I wonder whether with this Amendment we might discuss Amendment No. 39?I have no objection.
So be it.
The purpose of this Amendment is to ensure that there is a general account of the activities of all the subsidiaries of the Corporation and it makes logic of some of the earlier Amendments.
Question put and agreed to.
Subsequent Lords Amendment agreed to.
Lords Amendment: No. 36, in page 45, line 41, at end insert:
| "Section 6(6) | At the end, there shall be added the words 'but, if he decides not to give directions on any such matter, he shall lay before each House of Parliament a statement of that matter and of his reason for not giving directions thereon'". |
I beg to move, That this House doth agree with the Lords in the said Amendment.
I wonder whether with this Amendment we might take Amendment No. 42, which deals with a similar point?If the House agrees, so be it.
This Amendment follows the policy set out in the early parts of the Bill, and earlier Amendments, and says that wherever the Minister decides not to give directions on any such representations he shall lay a statement of the matter and of his reasons for taking no action before each House of Parliament.
Question put and agreed to.
Remaining Lords Amendments agreed to.
Committee appointed to draw up Reasons to be assigned to the Lords for disagreeing to certain of their Amendments to the Iron and Steel Bill: Mr. Diamond, Sir I. Eden, Mr. Freeson, Mr. Patrick Jenkin and Mr. Marsh; Three to be the quorum.—[ Mr. Marsh.]
To withdraw immediately.
Reasons for disagreeing to certain of the Lords Amendments reported and agreed to; To be communicated to the Lords.
Land Commission
Order read for resuming adjourned debate on Question [ 20th March]:
That the Betterment Levy (Prescribed Rate) Order 1967, a draft of which was laid before this House on 28th February, be approved.—[Mr. Greenwood.]
Question again proposed.
9.2 p.m.
I think that it would be convenient for us to follow the practice started yesterday of taking all these Orders and Prayers together. I must point out that there is a new Motion on today's Order Paper which was not taken yesterday.
rose—
On a point of order. My hon. Friend the Member for Northants, South (Mr. Arthur Jones) was in the middle of his speech when we adjourned yesterday.
Yes—I am sorry. Mr. Arthur Jones.
9.3 p.m.
When we adjourned yesterday morning I was drawing attention to the list of 10 regional offices which had been formed to deal with questions concerning the Land Commission and matters arising from the terms of the Act. Will the right hon. Gentleman given an assurance that these offices will be effectively manned and will be operative on the appointed day? Is there any indication as to the volume of inquiries reaching these offices? Am I right in assuming that all matters related to the Act, whether they be concerned with the acquisition of land or the question of the betterment levy, are properly directed to these offices?
I am not sure that the necessary publicity has been given to the matter, some concern exists as to what course should be taken by a person wishing to make an inquiry. It would be useful to have the Minister's assurance in this respect. Further, I should welcome the right hon. Gentleman's assurance that inquiries will be handled competently and that there will be staffs adequately trained and with adequate experience to deal with these questions—perhaps not now but at least on the appointed day.I can assure the hon. Member that the regional offices are already operative and giving advice, and that the other day the Chairman of the Land Commission said that he would ensure that there was effective liaison with the professions and the other people affected.
I am grateful to the right hon. Gentleman for that assurance. Is there any evidence from the inquiries which are reaching these offices that reveals the widespread concern about the terms of this Measure, especially on the issue of the imminence of the appointed day?
In spite of the Minister's assurance, is he aware that many offices of the Land Commission, including the Northern regional office, had not, by 17th March, received copies of the Order made on 8th February?
Builders and developers are of necessity having to start making arrangements to try to avoid the terms of the Bill. Mr. Deputy Mayor—[HON. MEMBERS: "Order."] I beg your pardon, Mr. Deputy Speaker. That reveals my background.
This may be what the right hon. Gentleman means in referring to bringing forward land for development. The very fact that many owners and developers of land are having to take measures to avoid the Act's effect and to start ridiculous minor works before 6th April. The outcome of this type of work will not be land coming forward early for development and will not mean the expansion of private building. It is not true development. These circumstances make a mockery of sound business common sense. It is the creation of artificial conditions which will still further unsettle the building industry. Uncertainty, difficulties in the assessment of future markets and unpredictable land values all flow from this unwanted Act. The indecent haste of its introduction aggravates this situation and will prove it to be a half-Measure in every sense.
9.6 p.m.
I apologise to my hon. Friend the Member for Northants, South (Mr. Arthur Jones) for not only trying to catch your eye, Mr. Deputy Speaker, but momentarily succeeding, when he was part heard in his admirable speech. I am all the more in dereliction because, although I could not be here yesterday morning, I have had the pleasure of reading the first part of his speech in HANSARD. I was glad to find that the quality of the remainder was equal to that of the beginning.
Although my hon. Friend may be excused for feeling a little indignant with me, he should not try to revenge himself upon the occupant of the Chair by addressing him as Mr. Deputy Mayor. I have heard many slips of the tongue during my years in the House, but this is the first time that that appellation has been addressed to the Chair, so my hon. Friend has made history. The Minister is also making history, but not in a good way. We are all in a sense making history, because this is a curious debate, having started on Monday morning, which up to last year we should have found surprising enough, and resumed at nine o'clock on a Tuesday evening, with the small matter of the nationalisation of the iron and steel industry sandwiched between. The debating of so many Regulations in so short a time after the Act has reached the Statute Book, and in a mixture of affirmative and negative Resolution procedures—at least on this scale—is unprecedented in my experience. This demonstrates three things, first, the industry, if not of Ministers personally, at any rate of officials. It is a reasonable assumption, because, throughout this complex Measure, one has had the impression that, although the voice is the voice of the Ministerial Jacob—and a hesitant, somewhat un-informative voice it has been in the main—the hand is the hand of the Departmental Essau. Ministers have had some ideas here, a few of them good but some a muddled over-simplification of the ideas of Henry George. They trusted to their officials to see them through and not, apparently, wholly in vain. The second thing which is demonstrated is the speed of preparation and promulgation of these Regulations and Orders. That, perhaps, constitutes a triumph of technical virtuosity, for which those responsible may take their blushing credit unseen. If experience counts for anything, these 20-odd Instruments are merely a prelude to further amending Orders and Regulations hereafter. This flood of initial Instruments will spill over into a further welter of amending and consequential Orders. The third and least satisfactory characteristic of this matter is, of course, the complexity of this new branch of land and property law which affects many citizens so closely in their daily lives. I have said in previous debates on this Measure that this Act outdoes in complexity the many complex Measures in this sphere with which I have been concerned both in this House and in the practice of the law. This first spate of Statutory Instruments confirms and reinforces the melancholy impression that I had formed. It is the last two of these characteristics—the complexity and speed with which they have been promulgated—which is the link between the criticism which my hon. Friends and I feel it our duty to make in respect of the Orders on which the debate started yesterday, and our criticism of the first appointed day Order which figures for the first time today. It is the complexity and difficulty of the procedures and arrangements in respect of the levy, and the inadequate time for the digestion and proper comprehension of these provisions, which makes 6th April next so wholly inappropriate and far too early a date for bringing this Measure into operation. I will, therefore, comment first on the Orders on which the debate started yesterday and then refer to the inescapable conclusion to be drawn as to the fixing of the appointed day. I say straight away that, so far as my researches have gone, some of these Statutory Instruments are reasonably inoffensive.Oh?
My hon. Friend, with his customary ingenuity, may be able to find offensive parts in them, which will be canvassed hereafter in the courts, if not in this House.
However, by and large, things like the three sets of Regulations dealing with Case F and the Notification Regulations—albeit at regrettable, if necessary, length—deal with matters inevitably arising out of, left over, by the Act. It is not so much for their individual content as for the contribution they make to the totality of complication that they merit criticism. I cannot tonight go into the detail of these 20 and more Regulations. I will, therefore, confine my comments to a few, particularly the Planning Assumption Regulations and the Material Development Regulations, together with the appointed day Order. As for the first two, both are concerned with what is, and what is not, a material development. They are, therefore, concerned with a vitally important concept in the scheme of this Act—doubly important, because the powers of compulsory acquisition of the Land Commission are confined to land capable of material development—that appears in Section 6(1) of the Act—and also important in the context of the betterment levy. In the context of betterment levy it assumes great importance because, as we see in Schedule 4, in the computation of base value we have to exclude the value of planning permissions for material development but are entitled to include them for non-material development. These two Regulations are a very good illustration of my submission that it is not so much the content and purpose of the Order taken in the general context of the Act as the complexity which they introduce in the law that is objectionable. I should like, therefore, to consider, first, the purpose and effect of the two sets of regulations, and then the complexity that they introduce into our law. The effect of the Material Development Regulations is to widen the scope of what is non-material development. That, of course, improves the position of the levy payer in the context of base value, because the tolerances in the Schedule are, broadly speaking, wider than in the corresponding provisions in the Town and Country Planning Acts, which are concerned not with levy, but with whether development requires planning permission in order to be undertaken. Therefore, the liability to betterment levy is correspondingly the less. So the purpose and content of the particular Regulation is not a bad one in that sense because, up to a point, it assists the levy payer. The effect of the Planning Assumption Regulations is also beneficial to the levy payer, although less obviously and less directly. Here, the effect is not to widen the range of non-material development—in fact, it is the opposite, it is to widen the scope of material development and, therefore, prima facie, it operates against the levy payer. But, in fact, the scope of the widening of what is material development is relatively small and specialised, compared with the potential of what might have been included in the Regulations under the powers accorded—and I should have thought very surprisingly accorded—under the Act. That is in paragraph 11 of Schedule 6 of the Act. It really is rather an extraordinary Act—again, I think, unprecedented in my experience—because under these powers the Minister could have brought Regulations to the House which would have virtually negatived the definition of material development in the Act itself under subsection (2) of Section 99. It could have done that by bringing back into the definition of material development a development permitted by the General Development Order which Section 99(2) takes out. In passing, that is a remarkable thing to find. It is remarkable to find in an Act of Parliament a basic provision, and in the same Statute to find a Regulation-making power which can negative the basic provision of the Statute. It should not be in the Statute—I must tell the right hon. Gentleman that—and the House of Commons should not pass legislation in that form. I hope that it will not happen again, if I might put it in that way. At least, the right hon. Gentleman, having taken these unreasonable powers, has not exercised them as widely as he could. He has in these Regulations confined the operation of bringing back material development to the classes specified in the Schedule to these Planning Assumption regulations; that is, as the House can see by looking at the Schedule, mainly to local authorities and statutory undertaker operations, leaving the private citizen levy payer, generally speaking, with the benefit of Section 99(2) and General Development Order permitted development. I say in the main, but not entirely, because the first matter is Class XII, which deals with development permitted by private and local Acts. As the House has been recently and topically reminded by the Brighton Marina Bill, private developers may still proceed in this way. But, in the main, it bites on local authority and statutory undertakers development and does not bear upon the private citizen. Although the purpose of these Regulations, up to a point, may be kindly, and the effect on balance even helpful, for the reasons I have given, the complexity is formidable. When we remember the key importance in this Act of the concept of material development, vitally important as it is to the citizen in assessing whether his land is likely to be liable to compulsory acquisition by the Land Commission or not, and again vitally important in assessing his liability to levy, then, if we consider the steps he must take to inform himself of his elementary and fundamental rights, they are formidable and perplexing indeed. I have not had very long to consider these Regulations, but I have compiled a little list of the provisions which the private citizen, potential levy payer or property owner, may have to consider to see whether any specific matter is comprised within material development which for those two reasons is so vitally important to him. At the moment, I have a list of 10, but I lay no claim to its being comprehensive. No doubt there are more which one will discover hereafter. He has to look, first, at the basic definition in Section 99(2); secondly, at the Third Schedule to the Town and Country Planning Act, 1962; thirdly, at the Schedule to the Town and Country Planning Act, 1963 which amended the Third Schedule to the Act of 1962; fourthly, at the General Development Order 1963 and the General Development Order, 1964. I see that I have included both those in No. 4. It appears that I am moderate in the presentation of my case. Fifthly, he has to look at the Schedule to the Planning Assumption Regulations to check the position under the General Development Order because the two are at variance; sixthly, at the Material Development Regulations, because excepted development under the Regulations is not the same; seventhly, at the Use Classes Order of 1963 plus the Use Classes Order, 1965; eighthly, at the Schedules to the two sets of Regulations to check this time the effect of material development and the inter-changeability of the Use Classes Order; ninthly, if one is concerned with advertisements, at the Control of Advertisements Regulations, 1960; and tenthly, possibly at other Acts affecting specialised forms of development.rose—
Does the hon. Gentleman rise to suggest an eleventh and a twelfth?
The right hon. and learned Gentleman realises that, of those 10, eight were passed by a Government: of which he was a distinguished member.
The hon. Gentleman is biographically mistaken. I retired from the late late Administration—the last but two. I retired from it on 21st July, 1960, and I think I am right in saying that all the enactments to which I have referred were passed after my light and learning, such as it was, was removed from the counsel of the Front Benches and took a more appropriate position further away.
Order. I am interested in the right hon. and learned Gentleman's obituary, but he must come to the Order.
Did you say my obituary, Mr. Speaker? I should have thought that going from the Front Benches to the back benches was more in the nature of a rebirth and regeneration than an obituary. That seems to carry all the House except the present incumbents of the respective Front Benches. I am sorry if I was temporarily led to other matters by the helpful intervention of the Parliamentary Secretary.
The point I was making was that all this farrago of statutes and regulations, at which the ordinary citizen has to look to find out matters of fundamental and inescapable importance, in regard to his land and property, makes it difficult for the citizen to understand his rights and makes nonsense of the assumption that he is expected to know the law. We know the old maxim that ignorance of the law excuses no man; but there is no excuse for any Government who make law too complex for the comprehension of the citizen whose life they regulate. All these diverse and difficult matters, arising, as they do, in this fundamentally important context of material development, could and should be grouped and codified into a single schedule to the Act. The right hon. Gentleman should give that consideration—provided the Act lasts long enough for him to be able to do so. It is apparent from the complexity of the Regulations, from the number and diversity of matters to be comprehended, interpreted and applied, that the appointed day has been fixed with a lack of realism and without proper regard for the rights and interests of the citizen. This conclusion is strongly reinforced by experience, in particular, the experience of the sad fate of Part VII of the Town and Country Planning Act, 1947, relating to development charges and all the regulations which it, too, spawned in its day. The Attlee Government were very proud of Part VII when they insisted on its enactment in the teeth of our criticism—just as proud of it as the right hon. Gentleman the Minister of State is proud of this Act. Now Part VII is irretrievably gone and none so poor to do it reverence. I speak on this with some feeling and perhaps even a little knowledge. I speak on it against a background which, happily for other right hon. and hon. Members, is unique. I think that I am the only hon. Member left in the House who participated in the debates at all stages of what was then the 1947 Bill. Certainly, I am the only person—not only in the House but, unhappily, in the country—who, having so participated, had the unenviable task of seeking in a professional capacity to interpret and apply the development charge provisions and now seeks to give some counsel to the House on this new proposal against that background. It is a melancholy qualification, but one which perhaps entitles my warning in this matter to be regarded as something more than the mere Cassandra contribution of the routine party line. Against the background of that experience, I counsel the right hon. Gentleman to think again on these matters, to seek greater simplicity in the law governing them and to give more time for its comprehension and interpretation. If the right hon. Gentleman does not, if he turns a deaf ear to my plea, which is well meaning and not one based on partisan feeling, then history may repeat itself and his proud edifice crumble in the dust like that of his predecessor. If that is not enough to influence him, there is one further consideration which may touch him more nearly. Not only may the edifice crumble in the dust but, with it, the architect who has given it form and substance.9.30 p.m.
I hope that the Minister will treat very seriously the expert contribution of my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith), because solicitors and estate agents have to be perfectly aware of the provisions of the Act if they are to advise their clients, and the ordinary people of Britain are entitled to know something about it. At this very late stage Regulations are being introduced which are too late, or the Act has been put into effect too early. The Minister cannot have it both ways. The Minister seems to be totally unaware that solicitors will have to advise their clients about these provisions. He thinks that his pamphlets are in print and yesterday he said:
However, today I received a note saying that the Stationery Office has asked the Ministry to supply these booklets when they come into print again. I received a letter from the Ministry this morning saying that the "Guide for Estate Agents and Surveyors" is out of print. Somebody is wrong and it is either the Minister or the Ministry. The two seem to be saying completely the opposite."The booklets are not out of print."—[OFFICIAL REPORT, 20th March, 1967; Vol. 743, c. 1006.]
A question was put to me by the hon. Member for Orpington (Mr. Lubbock) about a specific booklet. He had been misinformed, although I do not attach any blame to him for that misinformation. He said that that particular booklet was out of print. It is not; it is still available.
If the studies HANSARD, the right hon. Gentleman will see that I first raised the matter of these pamphlets being out of print when, in the course of a speech by my right hon. and learned Friend the Member for Hexham (Mr. Rippon), I drew attention to a letter which I had received from the Stationery Office and which was dated 16th March telling me that these pamphlets were out of print. The Minister flatly denied that, and yet his Ministry says that they are out of print. It is too bad that experts cannot even get the material on which they are expected to work.
Is my hon. Friend aware that only this evening the Stationery Office has sent a package to an hon. Member sending copies of the pamphlets, but saying that the "Guide for Estate Agents and Surveyors" is out of stock and that none is available?
That entirely confirms the message which I had from the Ministry. I prefer the message from the Ministry to the Minister's statement.
Is my hon. Friend further aware that many people cannot even get copies of the Orders and Regulations themselves and that some, which were laid on 14th and 16th March, have not even been heard of?
It is abundantly clear that the experts who ought to be advising people still do not have the information available to themselves.
If these pamphlets are out of print, as with any other best seller, new editions can be published.
The debate will be clearer if we do not have a multiplicity of interventions.
I apologise for being so good natured and giving way so freely, Mr. Speaker, but I have always been recognised as one who readily gives way.
Exactly two weeks ago, I wrote to the Parliamentary Secretary on the subject of relief from Estate Duty and asking a very simple question. He has not been able to supply me with an answer. Time is ticking by and 6th April is drawing very near. I know that the hon. Gentleman is extremely courteous and would wish to answer my simple query if he could, but my query deals with a problem which the Act does not expressly cover, and he is probably having to think up Regulations to meet it.I certainly remember signing a letter about a fortnight ago on this very point. It may be that the hon. Gentleman sent me two letters, I have certainly sent one.
The hon. Gentleman very courteously sent me one letter, and I wrote back saying that now the situation was slightly different, in that instead of the man who had died owning a property outright, he owned it through a property company, which makes the whole thing different. This is the problem and this is what will require regulations. How on earth is anyone to act, in this case the executor of the man who has died, and to sell land at about 6th April? He does not know the position.
Order. Perhaps the hon. Gentleman will come to the many Regulations and Orders that we have before us?
Property decisions have to be taken on the basis of the facts as they are available. Decisions have to be taken some weeks ahead. It is not reasonable to leave people in the dark right up to 6th April. It is grossly unfair to launch a new system of taxation, virtually retrospectively, and that is what the Minister is now doing. Even if it were not retrospective it is complicated enough.
I have calculated that there are 144 pages in the Act relating to taxation, to the levy element. In addition one must add 74 pages in these Regulations, and I exclude the explanatory notes, because they do not have the basis of law. That provides us with 218 pages of additional tax law so far supplied. To this must be added the additional Regulations, which will later be made, and any other elements of tax law which will arise in the Budget, in the new Finance Bill, which will be required as a result of this. All this adds up to it being quite un- reasonable to introduce these Regulations now, and to make sure that they begin applying on 6th April, when people do not understand them and cannot get advice about them. I am happy to say that I am luckier than some of my hon. Friends in that I have a complete copy of the Regulations. My right hon. and learned Friend the Member for Hexham read out a paragraph from page 12 yesterday. He said that it was the most appalling gibberish. It is worse than gibberish; it does something very peculiar indeed. It turns the laws of mathematics upside down, because if anyone has a copy they will see, on page 12, talking about the famous fraction T over T plus R. It is the phrase immediately before that which reads:It is a very long time since I was at school but, unless things have changed very substantially, an amount cannot be a fraction. An amount is a sum of money. Here we are told that an amount is a fraction. This means that the sum of money involved is a fraction, one sum of money divided by another. We have a large number of very highly educated university professors who ought to be gracing the benches opposite. I am glad to see that there are several supporters of the Government—a signal change from the position yesterday morning. Even so it would be helpful if we had a great many more of those experts, who might be able to instruct the Minister in those matters. This does not make any sense."… the amount of the landowner's expenditure … may be expressed as T/T+R …"
I do not follow the hon. Gentleman, because T is defined as an amount and R is defined as an amount. Presumably an amount over an amount plus an amount is still an amount.
That is not so. If we divide nothing by nothing, we do not get nothing; we get one. An amount divided by an amount does not result in an amount; it results in a fraction.
I cannot allow what the hon. Gentleman has just said to stand. Nothing divided by nothing is not one. It is indeterminate in mathematics.
Order. Whether it is or not, we are discussing some Orders, not higher mathematics.
On a point of order. Surely that is the same thing in this case.
I turn to Statutory Instrument No. 309, which deals with the notification of a chargeable act or event to the Commission. Taking, for example, Case D, it is in order to find out how notification to the Commission is to be expressed. Page 6 of the Statutory Instrument says that the authority paying the compensation is the right body to inform the Commission of various matters. The matters are set out in Schedule 3, the most appropriate of which are the amount of the compensation in paragraph 4 and, in paragraph 5,
That is a direct quotation from Section 40 of the Act. That does not help us very much in trying to ascertain how the person paying the compensation is to find out how much of the compensation is in respect of depreciation. Section 33(3) goes into greater detail. One has to discover"How much of the compensation is in respect of depreciation of the value of the interest in land in respect of which the right has accrued."
In Schedule 4 on page 112 of the Act there is a description of how one should discover the base value. All this is to be done, apparently, not by the owner of the land, but by the person paying the compensation. It is extremely unsatisfactory that the owner of the land who will have to pay the compensation is not concerned with the calculations and valuations which are made on his land and which are sent to the Commission and turned into the amount of money which has to be paid by the owner, who is suddenly presented with a fait accompli. Presumably, before that, the owner will have been sent a questionnaire asking how much he paid for the land and how much he had spent on improvements in the last 15 years. He has to work all this out and send it off to somebody who then sends it to Newcastle-upon-Tyne. This is the sum total of Statutory Instrument 309. All that it provides, in fact, is that somebody else does the job and the interested party does not come into the calculation at all. Material development is one of the most important issues. My right hon. and learned Friend the Member for Hertfordshire, East, has described the simple way in which anybody can discover what is material development merely by referring to 12 different places and hoping for the best and that he has got it right. My right hon. and learned Friend particularly drew attention to paragraph 11 of Schedule 6 of the Act, which completely contradicts what is said in Clause 99. I will come to that rather later. First, let us consider what is and what is not material development as laid down in the Material Development Regulations. We were told that the Act was to cope with land speculators. The first example of the land speculator is the man who fails to meet the requirement of"the amount of the compensation; the base value of the relevant interest; the amount of any expenditure on improvements or ancillary rights in so far as it has increased the development value of that interest; and the restricted value of that interest after the depreciation."
If he is so unwise as to erect a flagstaff which is not a single flagstaff, he is a wicked land speculator and he must pay the levy. What on earth is a single flagstaff? Does this mean that it does not have a cross tree or that it is more than one flagstaff on the roof of a building? Then, we have to look at the flag which is flown from the flagstaff. It must bear"a flag which is attached to a single flagstaff fixed in an upright position on the roof of a building".
Therefore, in the case of Fred's Cafe, one might have "Fred" on the flag but not "Fred's Cafe". All I can say is, poor old Fred."… no inscription or emblem, other than the name or device of a person or persons occupying the building".
Will my hon. Friend give way.
Order. The hon. Member for Hemel Hempstead (Mr. Allason) must decide to which hon. Member, if any, he is giving way.
I was just about to be very helpful and refuse to give way on the ground that you might have thought that I had overdone it, Mr. Speaker.
Will my hon. Friend allow me?
No, I will not.
rose—
Order. I thought that the hon. Member had not given way. Apparently, his hon. Friend wants some information about "Fred's Cafe".
Will my hon. Friend deal with the circular sock which is flown by Tote Investors from a flagstaff at every race course? Would that come within the definition?
That would not be on the top of a building. If somebody were to erect it from the ground, he would have to build the building round the bottom of the flagstaff and then it would be doubtful whether it was on the roof of the building. If, however, the building was built round it, it would probably be liable as material development.
We ought now to turn to the question of agriculture. Here arises the question of what is an agricultural building or a building on agricultural land. In my constituency, for example, the watercress growers now have a packing station so that instead of the watercress being packed on their own separate watercress farms, it is all sent to one packing station. Is that a building on agricultural land or is it not? If it is not, this type of building will presumably be liable for the levy although it is used for agricultural purposes. There is a great deal of confusion. Initially, the Selective Employment Tax was charged because it was held that it was not an agricultural object. Then there was a change of mind, because of an action in the courts, and it was no longer charged. Equally, in this case, there will be enormous difficulties over what is a building on agricultural land. I should be interested, for example, to know what will happen in the case of Covent Garden if it moves to Nine Elms. Will that be a building on land used for agriculture, or is it outside the definition of those words? These Regulations are perhaps too brief in that, as a result, they require a great deal of interpreting. As my right hon. and learned Friend the Member for Hertfordshire, East, said, paragraph 11 of Schedule 6 empowers other Regulations to be made to contradict the Material Development Regulations. We have precisely that, because Statutory Instrument No. 318 contradicts the Material Development Regulations, and it is done with intent. The Minister told us on 27th October of last year that the intention was that the Material Development Regulations would not count against a statutory authority when the activity was constructing a pipeline. On the other hand, when it came to the owner of the land receiving an easement, that, in turn, was betterment and therefore the levy would apply. That was the opinion of the Minister as expressed at the time, and he ended up by saying:He has now made Regulations which have been declared by my right hon. and learned Friend to have exactly the opposite result, and so it seemed to me. I am fortified by the fact that the same view is taken by my right hon. and learned Friend, who is a great expert on the subject. It would be interesting to see whether the Minister has changed his mind entirely or whether he has made Statutory Instrument No. 318 not in the sense that he explained it to the House in October of last year but in an entirely contrary sense that material development will apply to the laying of pipelines by statutory undertakers, although at other times it is expressly excluded—"The Regulations will, therefore, stipulate that value due to this sort of development is not to appear in current use value. It is impossible to set out in the Bill the sort of cases we have in mind, and for this reason we have to depend on the making of regulations."—[OFFICIAL REPORT, 27th October, 1966; Vol. 734, c. 1552.]
Order. I hope that the hon. Gentleman will not think me discourteous, but this debate must finish at 11.30 p.m.
On a point of order, Mr. Speaker. I understood that this was exempted business and that, although the Prayers might end at 11.30, the Motion could continue indefinitely, as could the debate on the Orders and Regulations.
The right hon. Gentleman is quite right. I am sorry.
Of course, I do not wish to keep out any of my hon. Friends, and I was not aware that there was any terrible shortage of time. I am glad that that has been made clear. However, it so happens that I am very near the end of my remarks.
I feel that these Regulations are an affront to the country and that it is unreasonable to expect professional men to advise their clients on the implications of them in time for them to study the property transactions which may take place as soon as 6th April. The Minister must admit that it is he who has failed the nation.9.55 p.m.
I have made my views known on a previous occasion, and I do not want to delay the House for more than a few minutes partly to repeat what I said before and partly to state what I have found out since I last abstained on the Land Commission Bill. The last time that I spoke was on the Lords Amendments. I thought that I had argued my case logically, coherently, and with a good deal of kindness towards the Minister. What reply did I get? None at all.
Order. This biographical detail is interesting, but the hon. Gentleman must come to the Orders.
I thought that you would have pulled me up before this, Mr. Speaker.
I want to argue against the Orders dealing with the betterment levy. Again, I am not sure that I expect an answer, possibly for two reasons. Having ruled out the possibility that the Minister may be discourteous, we are left with two possibilities: first, that he does not know the answers, or, secondly, that he does know the answers, but he does not want to tell us what they are. I want to know, very simply, what effect does the Minister say the Land Commission will have on land prices. This is a matter of very considerable concern to everybody in my constituency who might wish at some time to buy his own home. The Government were committed to holding stable, and possibly even reducing, land prices, but slapping on a 40 per cent. tax is a very curious way of going about it. We set out, as I understood, to curb the speculators. I forecast that the speculators will be the last people to suffer, because what will inevitably happen as a result of this Measure is that land prices will rise and that most of the 40 per cent. will be passed on. In other words, the spivs and speculators, friends of hon. Members opposite—[HON. MEMBERS: "Oh."] That is the sort of response I expected—will pass most of the levy on to the builders, and the builders will do the only thing available to them, which is to pass it on to my constituents who are buying their houses. I gave some examples last week, and I do not propose to repeat them. I do not propose to trouble the House with some of the anomalies that I found in the research which I did since the Lords Amendments. I would merely point out one to the Minister. It is the case of an elderly widow—a speculator, if you like—whose sole possession is an old house with a fairly large garden, with a brewery next door. The old lady thought for a long time that this would be a nice nest egg one day because the brewery wanted the land. The brewery has made an offer of £400, and the old lady will lose 40 per cent. of it. I must say that that is a very curious way of building what I would regard as being a Socialist State. There is only one way left open to the Minister to keep land prices down, and he knows what the answer is. It is very extensive use of compulsory powers. Whether or not he will use his powers at this stage, I cannot say.Order. Whether he uses them or not, is not within the purview of this debate.
I am sorry, Mr. Speaker.
I move on to say that the same situation will arise as a result of the Act, which has arisen so often in the past in the case of property, where some people lose all their property for a pittance and others, because they are more fortunate, get a fair market price. That is what will happen. There will be chaos. There is chaos and unfairness already.Order. We are discussing the Bill. We have about 12 Orders. The hon. Member must link his remarks to one of them. That is quite a broad avenue.
On a point of order. There are 22 Statutory Instruments.
Yes. I am just making a rough approximation.
I may be bold enough to attack the Minister, but I am not bold enough to attack the Chair. I was under the impression that compulsory powers were very much a part of the Act.
Order. We are not discussing the Act. As the right hon. and learned Member for Hexham (Mr. Rippon) reminded me, we are discussing 22 Statutory Instruments. If the hon. Member can find something about compulsory powers in them, he can deal with that.
I would like to come to the defence of the hon. Member for Rugby (Mr. William Price). As I understand, he is saying that there is a state of chaos and unfairness. The whole purpose of the Motion before the House is to try to remedy that situation.
As the right hon. Gentleman knows, we have a number of Statutory Instruments before us, and it is these that we are debating.
May I move on to my criticism that no one can understand the Act. I am delighted to admit that I find it difficult to get beyond the Title.
Order. The hon. Member really must understand what the Chair is saying to him. This is not the First, Second or Third Reading of the parent Act. We are discussing some Statutory Instruments, and the hon. Member, like everyone else, must link his remarks to them.
It being Ten o'clock, the debate stood adjourned.
Business Of The House
Ordered,
That the Proceedings on the Motion relating to Land Commission (S.I. 1967, No. 146) may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Walter Harrison.]
Land Commission
Question again proposed.
Mr. Price, if he can keep in order.
I cannot get beyond the Title of the Statutory Instruments.
I wonder whether I might be allowed to quote from the Statutory Instrument entitled "Betterment Levy, The Case F General Regulations 1967". It says:I ask whether my colleagues of the Left, Right or Centre know what that means. This is one of the few occasions on which I would be prepared to take legal advice if I thought that it would do any good. I was excluding my right hon. Friend from my question; I was asking my back bench hon. Friends. I expect a reply from my right hon. Friend in due course. May I say, finally, or towards the end of what I have to say, that hon. Gentlemen opposite have talked about the public outcry because these Statutory Instruments are very largely misunderstood. In my view, it is perhaps as well that they are misunderstood, or not understood at all, because if they were I do not think that we should be faced with a public outcry at all. I think that we should be on the verge of a revolt. [Laughter.] Hon. Gentlemen opposite can laugh. I hope that I shall get away with this long enough to point out that they created the situation which the Minister is trying to solve, I think misguidedly, but nevertheless trying to solve. I console myself with the thought that nothing did the party opposite more harm in the 1964 Elections than the lack of desire to do anything about land prices. This is one consolation which I draw from this debate. Whatever my views on the Commission, and particularly on the levy, and in view of your Ruling, Mr. Speaker, on the Statutory Instruments, I have the greatest respect for my right hon. Friend and for my hon. Friend the Joint Parliamentary Secretary. I am sorry that they are getting the blame for this Act. I believe that it will take more than one genius to think up a scheme whereby the rise in land prices can be controlled by a 40 per cent. tax."'disposition' has the meaning assigned to it by section 99(1) of the Act, and section 85(4) of the Act shall apply as it applies for the purpose of Part III of the Act; 'disposition falling within the antecedent period' has the meaning assigned to it by paragraph 2(2) of Schedule 5 to the Act; and 'the last relevant disposition' has the meaning assigned to it by paragraph 6 of that Schedule;".
Order. We are back to the Second Reading of the parent Act now. The hon. Member must come to the Statutory Instruments.
I was only going on to say that it would take a whole Cabinet full of geniuses to do that. I say with regret that I believe this legislation to be wrong in principle and to be suicidal in practice. In short—and this is my real objection—it will make it more difficult for my constituents to buy their own houses. I am not a professional abstainer by nature. I have supported the Government all along, but a situation has arisen in which I must take my bite tonight. I would dearly like to give the Minister the benefit of the doubt, but, in my view, there is no reasonable doubt, and for that reason I shall be unable to follow him into the Division Lobby.
10.6 p.m.
It will always be a matter of considerable surprise to me that so mild a mannered man as the Minister should produce such demoniac legislation as that which is reflected in these provisions. I find it equally surprising that he can sit so complacently through this debate—as he sat through yesterday's debate—when speaker after speaker on this side of the House complained of the number and complexity of these Orders and Regulations, which are required to give effect to the Act. Our main objection is the speed with which the Act is to be put into effect.
I am told on good authority that the drafting of the Orders is unexceptionable. I would not know, because I am not competent to judge, but if the drafting is good the complexity is superb. This, in itself, is a good reason why the right hon. Gentleman and the Government should abstain from putting the Act into operation on 6th April, so that those who have to advise their clients may have a chance to absorb what is placed before them by the Government. Yesterday, many of my hon. Friends drew attention to the Betterment Levy (Tenancies and Reversions) Regulations. They referred to the Explanatory Note, which runs to five pages and purports to simplify the preceding 10 pages of the Regulations. The situation was made no easier for me because when, over the weekend, I proceeded to study the Regulations, I discovered that through some mechanical error pages 3 to 6 and 11 to 15 in my copy were missing. I am tempted to suggest that the omission of the latter pages, at least, was no disadvantage to me, because the mathematical formulae T/T+R and R/T+R were omitted. I feel that such mathematical examples are extremely unhelpful. Fractions were never my strong point. I was no less confused by the paragraph dealing with the interpretation. This was referred to yesterday, but it bears reiteration. It saysIt goes on to provide that"'The Act' means the Land Commission Act 1967, and 'Schedule 4', 'Schedule 5', 'Schedule 6' and 'Schedule 7' mean Schedule 4, Schedule 5, Schedule 6 and Schedule 7 to the Act respectively."
It then says that"'the Case F Regulations' means the Case F General Regulation 1967 (c) and 'Case F disposition' means a disposition to which regulation 3 of those Regulations applies',
At that point I came back to sanity. At least I understood what we were discussing. I comment on these points only because I find the whole situation to be entirely unreal. However, enough has been said by other hon. Members on this subject and upon the failure of the Minister to ensure that adequate supplies of the explanatory leaflet are made available to hon. Members on both sides—because I know that tonight we have a greater attendance than we had yesterday, and hon. Members opposite are obviously anxious and worried about this matter—and, more important, to the general public. It is disgraceful that, when many anxious people want to know how the Act will affect them, the most important booklet, that entitled the Betterment Levy Explanatory Memorandum, should be temporarily out of print. My hon. Friend the Member for Hemel Hempstead (Mr. Allason) complained that A Guide to Estate Agents and Surveyors on the Betterment Levy was not available. Could we have an exchange and mart? If he can give me the Betterment Levy Explanatory Memorandum, price 4s. 6d., I will exchange it for A Guide to Estate Agents and Surveyors on the Betterment levy, which I received free. Between us, and with the help of other hon. Members, we might succeed in getting a full hand and might be able to do something about it. The hon. Member for Orpington (Mr. Lubbock) complained that constituents came to him in distress because they could not obtain information about the levy's application. This is not unique. I have come across the same difficulties in my constituency—"'the Commission' means the land Commission"
Does not the hon. Member think that it would be a good idea if all these publications, which the Minister says are in print—although we have been told that they are not—should be available through the Vote Office, so that hon. Members do not have to ring up the Stationery Office and the Ministry of Housing to try to get copies?
I agree. Not only should they be in the Vote Office: they should be distributed to hon. Members without more ado, so that they know where they are. After all, 22 Statutory Instruments are concerned and I am still not sure that I have the complete set—
I appreciate that some hon. Members have had difficulties over this. We have followed the conventional procedures. I understand that copies are available in the Library. The point about Stationery Office publications being made available is a broad question, but we can certainly consider it.
The right hon. Gentleman has made a helpful suggestion, that there are copies in the Library, but if there is only one copy of the Betterment Levy Explanatory Memorandum, we shall be in difficulty—
I meant that copies are available for hon. Members in the Library. There are difficulties about the procedures by which these publications are made available, but I understand that copies have been made available for hon. Members through the Library.
The right hon. Gentleman is being helpful, but on Friday the Betterment Levy Explanatory Memorandum was not in the Library. Through the good offices of the reference section of the Library, I obtained the other three, although not this one.
I am fortunate, in view of the problems of my constituents over the past weeks, that my Parliamentary duties bring me in frequent contact with my hon. Friend the Member for Crosby (Mr. Graham Page). He is a rara avis, in that I suspect that he knows very much more about the application of these pernicious Regulations than the Minister himself. He is the only man who is able to guide us through the labyrinthine technicalities of the Act and the Orders which flow from it. I should like to press the right hon. Gentleman once again. Will he please tell the House what is the expected net yield of the levy at 40 per cent. under the appropriate Order, The Betterment Levy (Prescribed Rate) Order. We wish to know the net yield, after taking into account all the administrative costs and the interaction of capital gains and other taxes. In this and the last Parliament the Minister has been pressed to answer, but he has refused to do so. Is it possible that, having made arrangements to set up 10 regional offices and having recruited a staff of 2,000—that is the minimum number; it may well be larger—and bearing in mind that the minimum cost for running these establishments will be £7 million a year, the estimated net yield will be so dangerously low that the right hon. Gentleman dare not declare it? He should at least say whether this is a fact. If not, he should explain the true position. I remind the right hon. Gentleman what happened earlier this century. The Finance Act, 1909, introduced the Lloyd George Land Tax. In 1920, it was abandoned. It had cost £5 million to administer and had given a yield of only £1·3 million. Are we to be faced with the same situation with this levy? The newly appointed Chairman of the Land Commission was reported recently as having stated about the 40 per cent. levy that he is expecting to make a substantial profit, although no figures were given. Will the Land Commission keep these profits and use them compulsorily to acquire more and more of other people's land, or will some of the money be passed to the Exchequer for the relief of taxpayers? Will the application of the 40 per cent. levy increase the costs of industrial development, on which the economy of the country depends? The answer must be "Yes" and I fear that this levy will be one more penalty on industry which, already faced with a lack of consumer demand, is cutting back on its capital investment this year by 10 per cent. If ever there was a case of hamstringing a horse and then whipping it for failing to gallop, this is it.
10.18 p.m.
One argument advanced against approving these Instruments is that there are too many of them and that they are complex. Having looked through them, I find that they are no more complex than the Regulations issued under the Town and Country Planning Act, 1962. With its advertisement Regulations, use classes Regulations and general development orders, that Measure contained many complicated matters, and these merely follow the same pattern. Many of them apply to only a small section of the population; for example, the minerals Regulations do not apply to my constituents. Although complex, they are excusable.
Would the hon. Gentleman turn to the Memorandum covering the Betterment Levy (Tenancies and Reversions) Regulations and give the House a brief explanation of the fourth paragraph on page 12?
It is contrary to professional practice to give free advice. I would not care suddenly to take hold of any Regulation under any of the Town and Country Planning Acts and supply such off-the-cuff information. However, that is no reason for saying that these Instruments should not be approved. Many of the arguments advanced against these Instruments are, I suggest, devised to delay the operation of the Regulations and to make the Measure unworkable.
It is true that our legislation and Statutory Instruments are becoming more complex. But this is not a reflection on my right hon. Friend or on the adequacy of the Government. It is a reflection on the way in which we draft our law. If something needs to be done about that, it can be done elsewhere, perhaps by the Law Commission. I agree that the law is far too complex and difficult to ascertain. Many laws are extremely complicated and difficult to ascertain, but that is no reason for running away from a problem that must be faced. I congratulate my right hon. Friend. Very early during the passage of the Land Commission Bill through the House I wrote to him asking whether he would issue an explanatory pamphlet very soon after the enactment of the Measure. To his very great credit, he has done so. He has done very much better than did my right hon. Friend the Chancellor of the Exchequer, who took three or four months after the passing of Finance Acts to issue Regulations. I want to deal particularly with the betterment levy, because this Regulation was attacked by the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). One is never quite sure whether, when the right hon. Gentleman attacks something, he reflects the views of the Opposition Front Bench or his own, but he is a man to whom great respect should be paid in these matters and I want to deal with the point he raised about the 40 per cent. This has also been referred to by several other hon. Members and by hon. Members of the Liberal Party—[Interruption.] The hon. Gentleman for Orpington (Mr. Lubbock) told me that he intended to vote against all the Regulations.Order. It is not the custom in the House to discuss what hon. Members say to each other outside.
On a point of order, Mr. Speaker. Since this conversation has been mentioned, I said that I felt inclined to vote against all the Regulations because I had not had an adequate explanation of their meaning from the Government Front Bench.
Order. The hon. Gentleman made his speech yesterday. Mr. Fraser.
I was about to deal with the betterment levy. This is to be at the rate of 40 per cent. It is important that this levy should be applied, and it would be a gross breach of pledges given if the percentages were less. That is a very good reason for fixing it at that figure, but I would prefer the Statutory Instrument to go further, and instead of making it nearly 40 per cent. it should be—
Order. The hon. Gentleman cannot amend a Statutory Instrument.
Very well, Mr. Speaker.
I think that 40 per cent. is a perfectly reasonable rate. Someone paying standard rate Income Tax who is prepared to work overtime, sweat at work, and leave the bosom of his family, pays tax at 42½ per cent. on his hard-earned money. Someone who invests in stocks and shares, takes a risk and makes a modest short-term capital gain pays 42½ per cent. tax. This levy of 40 per cent. is very modest, and one that should be generally welcomed. I would find it extremely difficult to explain to standard rate taxpayers paying tax at the rate of 42½ per cent. that someone who can make up to 3,800 per cent. on the development of agricultural land will pay tax at only 40 per cent.This is the crux of the argument. Does my hon. Friend know of any occasion when any Government have introduced any tax which eventually did not get passed to the man in the street?
Precisely, but I am not prepared to argue that point now. If a man who works overtime has to pay 42½ per cent. tax on his overtime earnings, why should not someone who makes an uncovenanted and very large gain by developing a piece of land pay 40 per cent.?
rose—
I do not wish to give way. I have often stayed in this Chamber for long hours, not being able to deliver a speech because other hon. Members have given way. I think that I have now given way enough.
I had hoped that we would find the Liberal Party voting for the betterment levy at 40 per cent. The former leader of the Liberal Party, in 1947, when the betterment levy was discussed, criticised a levy of less than 100 per cent. He said:If the leader of the Liberal Party in 1947 was able to advocate a levy of 100 per cent., I hope that his followers today could support a levy of 40 per cent. Lloyd George said:"This so-called Socialist Government says 'Well done thou good and faithful servant' to the man who happens to own the land, 'You have done nothing to increase the value of that land, but you have it'."—[OFFICIAL REPORT, 29th January, 1947; Vol. 432, c. 1007.]
The party apparently can accept the proposition that at least God gave 40 per cent. of betterment value to the people. An hon. Member opposite argued that some of the money from the levy should pass into the Exchequer. I put the converse of it. I hope that in winding up the debate, my right hon. Friend will tell us how the money will be used. I am extremely concerned about local authorities such as the Greater London Council which, under a beneficent Labour rule, has been acquiring premises for residential development and providing green and pleasant land for areas which lack open space. I hope that the money raised by way of the 40 per cent. levy will be applied to other planning operations in other parts of the country and I hope that tonight the Minister will say something about the disposal of the money for this purpose."God gave the land to the people."
10.27 p.m.
My hon. Friend the Member for Poole (Mr. Murton) said that the drafting of these Instruments was exemplary. I quarrel with that. I find the great majority of them almost as incomprehensible as the Act itself.
Some of the provisions as applied to England and those which apply to Scotland show a great divergence. If we look at the Material Development (Scotland) Regulations and the Material Development Regulations which apply to England and Wales, we find a very serious discrepancy which will have an adverse effect in Scotland. Paragraph 2(1) of the Schedule to the England and Wales Order says:The whole of paragraph (b) is missing from the Material Development (Scotland) Regulations, 1957. One is bound to ask why. How were these provisions framed? Were they framed separately by the Scottish Development Department and the Ministry of Housing and Local Government? One is tempted to ask, was there any sort of liaison between the two Departments? If there was none, one can understand the discrepancy. If there was collusion, why was paragraph (b) left out of the Scottish Statutory Instrument? Agriculture, particularly the breeding of cattle, is a very important part of the Scottish economy. If we are to be penalised because of this dichotomy—which seems a rather popular word in this House these days—of reasoning, it seems a very bad thing. The serious aspect is that Statutory Instruments are not amendable. If the Minister of State, Scottish Office—I am glad to see him here—decides that "little (b)", which has been left out of the Material Development (Scotland) Regulations, is pertinent and necessary, how on earth is it to be brought into the Statute? This is an extremely important point and I hope that, if we do not have a dichotomy of replies, the hon. Gentleman will be good enough to write to me and let me know the answer. Paragraph 5 of the Statutory Instrument contains the words:"The carrying out on land used for agriculture of any building or other operations, requisite for the use of that land for the purposes of agriculture other than operations for the erection, enlargement, improvement or alteration of—(a) dwelling houses, or (b) buildings of more than 5,000 sq. ft. in superficial ground area which are to be used for or in connection with the breeding, rearing or fattening of livestock and which are erected or constructed on land comprised in an agricultural unit which does not exceed 5 acres in that area."
That is an extraordinary statement to find in a Statutory Instrument. It looks as though the Government foresee various people tearing down buildings, putting them up again and then tearing them down again merely to escape the betterment levy. Paragraph 9 deals with physical recreation. It contains the words:"… as often as the person having the right to rebuild may desire …"
Certain things do not require buildings which I maintain come under the heading of physical recreation—for instance, the erection of the machinery for clay pigeon shooting. As a result of establishing a range of that nature, certain hard standings have to be provided for those who shoot. This is a material development. It is changing the use of the land. I wonder if that sport will be exempt under the Statutory Instrument. Paragraph 17 says:"… physical recreation taken otherwise than within the confines of a building …"
That is utterly incomprehensible. I draw attention particularly to the words"'original' means, in relation to a building existing on the first appointed day, the building as existing on that day, and in, in rela- tion to a building which is completed after the first appointed day, the building as so completed, and 'originally erected' has a corresponding meaning;".
What on earth does that mean? It is quite conceivable that it is a misprint."… on that day, and in, in relation to …".
Is it Gaelic?
One could possibly understand that reasoning because this is a Scottish Order.
What do the wordsmean? I remind the Minister of State, Scottish Office, again that these Statutory Instruments are not amendable. Are we to have to put up with this sort of gibberish as part of the law of the land, or can we have some indication that the dual use of the word "in" is necessary in the Schedule? There is no doubt that these Statutory Instruments are utterly incomprehensible. I was paid a high compliment recently at a party meeting when the Act was discussed. The chairman of the meeting said, as I entered, "Here comes probably the only man who can understand the Act." It was highly complimentary but, having got to Section 3, I started to wallow in verbiage and my feet are still wet from it. Be that as it may, these Statutory Instruments will not in any way help in the understanding or in the application of the Act, and we must have a great deal of simplification, particularly when we have phrases such as "and in, in relation to"."… and in, in relation to …"
10.35 p.m.
With permission, I should like to acknowledge the three points. In view of the interest in the main burden of the debate, I shall take only a few moments to do so. However, before doing that, I want to explain that for Scotland all of these matters are grouped under three headings—the Great Britain and Scottish Regulations, which require affirmative Resolution, the English Regulations, which correspond to the Scottish Regulations, and the Scottish, English and Great Britain Regulations, which do not require the affirmative Resolution, but which are indirectly relevant.
I have put it like that because there are Great Britain Regulations which affect the position in Scotland and there are English circumstances, for example in relation to Case F, which could apply to Scotland and there are peculiarly Scottish points. But in general, because of the Scottish situation with the Scottish feudal system as it stands—and my right hon. Friend has readily agreed to my saying this and it is said without offence to our English friends—the English Regulations are a straightforward adaptation of the corresponding Scottish Regulations, the adaptation being effected by the substitution of appropriate references to English statutory provisions and the replacement of Scottish by corresponding English legal terms, and so on. The reason is that we start from an extremely complicated position in Scotland, much more so than is the position in England. I should make it quite clear that by taking these feudal specialities into consideration the Land Commission is in no way indicating that the Government want to hold or prolong the feudal system in Scotland. However, the whole system of Scottish land tenure needs a great deal of investigation, and I am informed that any decisions which we may take in the light of the recommendations of the Halliday Committee, for example, can be fitted into the Land Commission system. I have to make that proviso before acknowledging the three matters which the hon. Member for Banff (Mr. Baker) has raised. The first issue arises because of the difference between the English and the Scottish Material Development Regulations concerning intensive farm production buildings and the other matters to which the hon. Gentleman referred by reading what he called, "little (b)". The reason for this is, of course, clearly because the town and country planning General Development Orders for Scotland and England are different. We in Scotland enjoy—this could be argued—an advantage in that we do not in our General Development Order include within the categorisation of material development intensive farm production buildings. We have not had the problems regarding this development which England has had to endure and for which special Regulations have had to be made. I am surprised that the hon. Gentleman should say that we are at a disadvantage. I am sure that the English would have a very strong case if broiler houses and other intensive farm methods were to be transferred to Scotland from England. The English would have a legitimate complaint which we would have to consider when it arose, but at the moment it does not arise, and if there is an advantage it is an advantage to Scotland and I am sure that the hon. Gentleman would not wish to disagree about that. Certainly the people in Banff would be very surprised if he did. He then asked for an explanation about parts of paragraph 9 which is concerned with physical recreation. These all flow from the ways in which we have dealt with the general development Orders in Scotland as opposed to those in England, without making a situation, which I admit to be complex, even more complex, as we would if we changed the rules at this stage. We are seriously trying to keep this in line with the general development Orders in both countries, and I suggest to the hon. Gentleman that if we did not do that we would be in serious danger of making an already complicated matter even more so. The burden of his argument was that he did not want us to go any further in this. If anything, he said that we had already gone too far. The last point that he raised concerned the interpretation section. I know that in another place this has been discussed. My hon. Friend the Joint Under-Secretary of State has taken advice, and I have had the advantage over him, in that I have had more time to look this up. There is nothing in law that could in any way make this an awkward matter. The fact that the word "in" occurs twice does not alter the meaning. We have taken legal advice. The alternative would be to withdraw the Regulation altogether, which would mean that we would defeat the major object of the exercise, which is to apply Regulations by 6th April. I do not want to touch on what my hon. Friend the Parliamentary Secretary will say about the timing, but the Government cannot accept that we should miss 6th April as a date. Certainly on this matter, which is clearly a misprint, even if we could not amend it—as I am told we can, administratively —if this were left, it would not make a button's worth of difference. Since we are prepared to live with it, I suggest that the hon. Gentleman should do the same.Can the hon. Gentleman answer my question about the use of a range for clay pigeon shooting? Does it come under the term "recreation"?
Without notice I could not give a direct answer, but I am told that it would fall within it. If the hon. Gentleman would leave it with me, I will write him a letter on the matter.
10.43 p.m.
I do not rise to cut short the debate from this side of the House on these Statutory Instruments, but because we have, if we wish to speak about those which are prayed against, to do so before half-past eleven o'clock. I am sure that the Parliamentary Secretary wishes to address some of his remarks to answering the questions which have been made in some detail on those particular Orders.
When the Land Commission Bill, which is now an Act, was debated in this House, the Minister was told again and again how difficult it was to understand the terms of the Bill. I am using very moderate words. It was called unintelligible, incomprehensible, gibberish, mumbo-jumbo and a lot of other similar epithets, and very nearly the four letter words referred to by my hon. Friend the Member for North Fylde (Mr. Clegg). No one was left in any doubt that the Act would need a great deal of study and explanation before it could be operated and that it ought not to be brought in within a couple of months after it had received the Royal Assent. It was clear that very careful and very clearly expressed Orders would be necessary in order to implement the half-formed—I nearly said half-witted—provisions of the Act. The Act received the Royal Assent on 1st February, 1967, and on 8th February the Minister made an Order, No. 146 of 1967, fixing the day on which the Land Commission could start its seizure of people's property, and the date from which certain transactions would give rise to a tax, which it is estimated, will realise £80 million a year. The appointed day was fixed at only eight weeks after the making of the Order, as 6th April 1967. At least that Order was intelligible, though it is quite incomprehensible that the Minister should have made it with that totally inadequate period for studying the Act, and for bringing in the Orders, under which the Act will operate. Bearing in mind the outcry there had been about the hideous complexity of the Act, to use the words of my right hon. and learned Friend the Member for Hexham (Mr. Rippon), to give only eight weeks between the making of the Order and the appointed day by the Order was the act of a cynic or a tyrant. We shall divide the House on the First Appointed Day Order because we consider it essential that a longer period should be given before putting the Act into operation. We have not been playing at politics or anything like that when we have said that the Act is impossible to understand in the time allowed. It is impossible to digest it. At the time when, on 8th February, the appointed day was fixed as eight weeks later, not one Order was available so that anyone could see how the Act would operate. Therefore, those whose work is deeply affected by the Act were attending conferences, seminars, lectures and the like at 30 and 40 guineas a day—and it takes a lot to get a busy professional man out of his office to attend school again. The Minister may smile. I declare an interest. I have been giving some of these lectures and I know how very concerned the professional men are about this matter. I have never had such big meetings politically as I have had from those who want to understand the Bill. No one at that time, six weeks before the appointed day, could tell those gentlemen the most practical matters of the operation of the Act. They are only just emerging in the Orders which are before us tonight. After 8th February, we had to wait three weeks of those all-important eight weeks before the first Order came before the House. That was the one concerning the prescribed rate of levy, which was laid on 28th February, and then only in draft. It is not an Order which was made for certain from which one could be sure of what would be the law. Then there was a lapse of another week, and with only four weeks to go before the appointed day the House received six Orders, which had been made but do not come into operation before the House approve them. Thus the law was still not known. Four of those Orders came on 6th March and two on 8th March. Those six Orders, which are essential to an understanding of the Act, dealt with material development, Case F and the betterment levy on minerals. All this was four weeks before the appointed day. Apart from the First Appointed Day Order, the other seven Statutory Instruments are not effective until this debate is finished and they are given the approval of the House. One is in draft. The other six require the affirmative Resolution of the House, and two of the six require affirmative Resolution of the other House—and we are only two weeks from the appointed day. I apologise if I appear to be giving the script of one of the old silent movies in which the heroine is strapped to the railroad track as the express approaches, but that is about the condition of things. We are faced with two weeks in which to learn how to operate the Act. It is not a matter of operating the Act by a lot of bureaucrats, civil servants or members of the Land Commission. There are thousands of professional men and property owners who must know before 6th April how the Act works. After we had the six Statutory Instruments which required affirmative Resolutions, the others began to pour in: four on 6th March, six on 8th March, one on 15th March, two on 14th March and one on 16th March. Those are the ones which we are discussing tonight. I regret to say that out of all this mêlée of Orders, I missed one which came in on 13th March and is not on the Order Paper. If the diligence of Members in this House cannot even discover that an Order has been published, how on earth are people outside to understand these things? Twenty-four Orders under this Act have to be considered at the eleventh hour, in order to see how they affect a million transactions a year. That is not my figure. That is the hon. Gentleman's figure. A million transactions a year will be affected by the Act, and a number of the Orders before us will affect every one of those million, because they deal with notification of the transactions. Nobody minds if this sort of travesty of legislation undermines confidence in the Government. What we do mind is that it undermines confidence in the law, and that it undermines confidence in plans for future progress and construction in this country. Nobody minds if the Government make fools of themselves over this, but people do mind if the Government make fools of them. That is what is happening. These Orders are the biggest price of April-foolery that has ever been played on the public, but disasters and tragedies do occur from practical jokes, and disasters will happen from these Orders, in particular from the prescribed levy Order, the rate of the levy. It imposes a levy of 40 per cent. on the net development value of property. It will increase the price of land and buildings. It will increase the cost of homes, factories, shops and offices. But do not let us waste any more time arguing that point. If we tax an article, the price goes up, and that is all there is to it. There is no point in anyone saying that this Act will reduce the price of land. The Minister claimed that this levy Order would cause land to be brought forward for development. He disclosed his philosophy about this. He said that put on a levy of 40 per cent. on 6th April, 1967, and developers would rush to start development, and therefore land would be released; put on 45 per cent. or threaten 45 per cent. next April, and we would keep the rush up; threaten 50 per cent. the following April and we would still get people coming in trying to beat the levy. Of course, we know that this happens with every pre-Budget wedding, but what a way to govern the country. Is this really the policy which the right hon. Gentleman puts forward as the main policy for bringing land forward for development? I wonder if he has been looking out of the window of the train or aircraft in which he may travel to Sunderland at the weekends and laughing with a sort of fiendish glee as he meets a number of labourers digging trenches in order to start development before 6th April. This really is a childish game. It is as unseemly for the Minister as it is for those who are forced to indulge in it. But it is the only way that the levy will make the land available at a sort of "pre-rise of levy rush" before April of every year. The Minister estimates that the Order will filch out of the incentive for development the sum of £80 million gross a year, but he has stubbornly refused to say how this sum is calculated. We must therefore make our own calculation. If the levy is 40 per cent., then £80 million must represent a net development value, arising out of the transactions in any one year, amounting to £200 million. Does the Minister really say that these 1 million transactions, and the 10 per cent. of those which he says will attract levy—only 10 per cent.—will produce a net development value each year of £200 million? Land dealers already pay tax on the whole of their profits, so a substantial part of the £80 million will be set against the taxable profits, and the Chancellor of the Exchequer will lose 64 per cent. or 70 per cent. of the larger part of the £80 million. This prescribed rate Order represents the taxation of the public, by Statutory Instrument, in the sum of £80 million gross. It produces net we know not what. The Minister has not told us; neither has he brought the Chancellor of the Exchequer here to tell us how much money is being taken from the public net. We are talking about £80 million gross. We do not know what it will be net, after the loss by the Exchequer of Income Tax, Capital Gains Tax and Corporation Tax has been set off. I had hoped that the Chancellor would be here to help us in these debates, and particularly to explain what the rate Order means. There are in these instruments some things which are comprehensible. The appointed day, 6th April, and the levy, 40 per cent.—we can comprehend them. Some other objects stagger out of the fog of incomprehensibility, and I want to refer to them as showing how objectionable these Orders are. I am not arguing that they are all incomprehensible. We can see, in some cases, how objectionable they are. I take them in the order in which they appear on the Order Paper. First, there are the Material Development Regulations, with which go the Material De- velopment (Scotland) Regulations. These graciously exempt certain works and acts from attracting a levy. They are set out in the Schedule. I am sure that the House will be glad to know that when a person sells a house and pays a levy of no development value on the purchase price he does not also have to pay for putting up a "House Sold" sign outside the house. The Order excuses him. Is it not astonishing that we should go to the limit of making a Statutory Instrument providing that a person should not have to pay a levy for putting up a "House Sold" or "For Sale" board outside his house? But for the Regulations this would have been advertising. The Minister went back on his word, as given in the White Paper, that advertising would not affect material development. He has now said that it will, and so he has had to go through this elaborate procedure of exempting things like "For Sale" boards outside houses, and flagpoles with flags on them. Another part of the Regulations provides that a person is allowed, without having to pay a levy, to turn a room of 200 sq. ft. into a shop, but that if it is 201 sq. ft. he will be chargeable to levy. A person can add a room or a garage to his house if it is not more than 10 ft. by 10 ft. by 10 ft., but if it is 10 ft. by 10 ft. by 11 ft. he has to pay the levy. That is the sort of stupid position we are in in relation to the Material Development Regulations. Where, in all that rigmarole, do we find the laudable purpose of the Act and the Orders, of reducing the price of land and bringing forward land for development? Where does that come out of a Statutory Instrument of the kind to which I have referred? I turn now to the Betterment Levy (Minerals) Regulations. One would think that they make mineral working chargeable to levy, but they do not, except in a few cases. They relieve the mineral worker, but they require payment from the grantor of mineral rights. They require payment in the form of a lump sum before the grantor receives any rent or royalties from the rights he has granted. This is unfair discrimination between the grantor and the developer which occurs nowhere else in the Act or the Orders. Then, No. 6 on the Order Paper, we have the Case F Regulations and the Case F Regulations for Scotland—No. 9 on the Paper. These introduce a levy on a wayleave. In case any hon. Member or right hon. Member happens not to know what a wayleave is, wayleaves include such things as a telephone wire across one's land, or a gaspipe laid across one's garden. If one allows that to happen, one is chargeable to levy. This is the sort of nonsense we have got to under this Act. Then come the Case F Supplemental Regulations. In this case, having laid down in the Act a formula for certain transactions, it has to be entirely altered by second thoughts in Regulations which come before the House a fortnight before the Act comes into operation, and those who have taken the trouble to learn the elaborate Schedules to the Act find they have to learn them all over again. Numbered 12 on the Paper are the Betterment Levy (Credits for Case F) Regulations. Here we have a formula in the Act which now results in an absurdity: if we apply the formula in the Act to Case F we find that the levy may be charged on a minus quantity. Why should the public have to submit to this sort of thing? The Government having learned that these formulas result in an absurdity, a levy on a minus quantity, we have to think it out all over again. Next are the Betterment Levy (Notification) Regulations. We were told again and again during the course of the Bill that all that had to be done if we sold our house, and took all these various transactions in cases A to F, was to fill in an ordinary form which is always submitted with a conveyance or lease for stamping. These Regulations give the lie to that. I have before me a very interesting table compiled by the Law Journal in which it gives 14 different types of notification of transactions to the Land Commission and only three of those 14 would come within the simple credits particulars form. Here we have notifications under Schedule 1, Part III; Schedule 1, Part II; Schedule 2, Part I; Schedule 2, Part II; Schedule 3, Part II; and so on. It was quite right that we said that notification, whether a chargeable act or not, would give the public a great deal of trouble and many of the transactions should be exempt. These Regulations require so much notification which is entirely unnecessary if only 10 or 15 per cent. of the transactions are to be charged to levy. Then come the planning assumptions Regulations. These bring in a third definition of the material development and by doing so they reduce the base value on which net development value is calculated. If it reduces the base value this increases the figure on which levy is payable. There is a greater charge to levy imposed by the Regulations. Then there are the tenancies and reversions Regulations. Nothing emerges from the fog here. It is absolutely terrible to try to understand it, and I do not intend to do so. I have only four or five more on the Paper, and I will deal with them briefly. There are the Betterment Levy Regulations which give the levy payer an allowance with one hand and take it away with the other; these are second thoughts about the Act itself, something which was forgotten in the drafting of the Act. There are the Betterment Levy (Waiver of Interest) Regulations, which allow waiver of interest to certain persons who may be liable for the payment of levy. The Order brings out the fact that a levy payer may be called upon to pay the levy without having received a penny from the transaction on which the levy is charged. These are cases in which the levy payer may be required to pay a lump sum when he is receiving only rent or royalties or an instalment of the payments. The vesting declaration prescribed form shows the whole arrogance of these Orders. My hon. Friend the Member for North Fylde referred to this. If any member of the public likes to look at the Schedule to the Order—it is in small print and a little difficult to read—he will see that here we have the form of vesting declaration—a deed for one party, the Land Commission, vesting someone's property in itself, vesting it by merely reciting that there has been a compulsory purchase order, not even reciting that notice of the compulsory purchase order has been served on the owner, but just declaring that the property is transferred to the Land Commission at some date which the Land Commission itself will certify—and its certificate will be in the form of "The editor's decision is final". This is the most arrogant piece of legislation that has ever come before the House. It comes into operation without any notice being served on the owner. It is certified as being in operation entirely at the whim of the Land Commission. The last Order is the Betterment Levy (Rate of Interest) Order. The right hon. Gentleman told us yesterday that it would probably be necessary to bring in another Order because since he drafted it Bank Rate had dropped. He should take the Order away straightaway and not present it to the House on this occasion. It is not merely because these Orders are incomprehensible in general that we object to them. It is in particular that they are a gross encroachment on the liberty of the subject and an arrogant imposition of bureaucratic powers. The Minister should taken them away and postpone the operation of the Act.11.7 p.m.
No one could complain that the debate on the Regulations has been lacking in variety. We have had some most interesting detailed technical points, to which I shall reply as far as I can in the time that has been allotted to me. I understand that for certain reasons of convenience the House wants to come to a conclusion before very long.
On a point of order, Mr. Speaker. May I clarify the position for the Joint Parliamentary Secretary? We are very anxious to hear him whatever length of time he requires.
I am sorry that the right hon. and learned Gentleman has started to cross swords so early thought I was meeting his convenience. I try to do that kind of thing. But if he would like me not to do so I shall know in future, but I rather regret what he said.
I apologise to the Joint Parliamentary Secretary if he misunderstands me. I was just making a procedural point, making it clear to him that there was no need or desire to bring the debate to a conclusion by any particular time, that we were anxious that he should not feel pressed for time and that we wanted to hear what he had to say.
I am very grateful to the right hon. and learned Gentleman. It seems, therefore, that his first intervention was probably unnecessary.
I was saying that I shall try to reply to as many points as I can. Some of them were new; some others we have covered again and again in Committee and on Report. The right hon. and learned Gentleman really made two speeches. At one stage he was being very helpful and constructive, but then he put on a swashbuckling attitude and became rather less relevant to the Orders and not very helpful. I shall reply to some of the broader, general reflections so far as I can remain in order. Frankly, a number of the points made were on the edge of order as I understand it, and if I attempted to follow them too closely—for example, by taking up the references to Section 63—I think I might find myself in conflict with the Chair. I certainly cannot answer the point made by some hon. Gentlemen indirectly as to why and how the Land Commission could reduce the burden of the cost of land. But I refer those who are interested in truth to the four reasons I gave in my winding up speech on Third Reading on 31st October. I think that I can best serve the House by trying as far as possible to refer to the detailed points made on the Order. The only coin I shall exchange with the right hon. and learned Member for Hex-ham (Mr. Rippon), who concluded by talking of the paralysing effect of the Land Commission, is to refer him to a paragraph in last Sunday's Observer. It said:That may be right or wrong, but it is certainly not a picture of paralysis. I must make one general point about which there is some political significance, and which the Opposition have used. In the interests of the public I should also put the other side. It concerns the complexities of the Orders and Regulations. I wish that I could tell the House that the Orders we are discussing are not complex, but I must admit that some are. I am sorry that that is so, and that the House must deal with these complex matters. Unfortunately, in many spheres today the House must deal with very complicated legislation. Every Finance Bill has sections that are very complicated—I think particularly not only of the 1965 Act but also of the 1961 Act. Most of us recall the complexities of the Town and Country Planning Act, 1959. The right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith) referred to a series of Orders or Statutes. They were not passed by this Government, but must be incorporated into the Act, unless one is to change the entire land and planning Acts. It is bound to—"All over Britain sites which have grown weeds for years have suddenly sprung into life as developers carry out specified operations."
rose—
I have very little time.
I am grateful to the hon. Gentleman for giving way. He knows that the professions have not had a fair chance to prepare for the administration of the Act and these Regulations by 6th April. That is the critical point that the Opposition are trying to make. Would he agree that extra time should be given to them?
I want to say something about that later in my speech, if I have time.
On a point of order. Why does the hon. Gentleman keep referring to his lack of time? Can we not discuss the Order relating to the first appointed day until any hour of the night, Mr. Deputy Speaker?
Further to that point of order. Perhaps the hon. Gentleman does not appreciate that one cannot discuss the Prayers after 11.30 p.m. I was anxious to do so and serve the House. I should have thought that that was reasonable.
The debate on the Prayers will come to an end at 11.30 p.m.
Further to that point of order. Does not the debate on the Motion continue thereafter? Will the Question be put separately so that discussion may continue?
Technically, we are discussing the first motion on the Order Paper, No. 3—the Betterment Levy (Prescribed Rate) Order 1967—and, as Mr. Speaker announced when the debate commenced yesterday morning, it was decided that for the convenience of the House all the Motions, including those that require affirmative Resolution, and the Prayers should be discussed together.
Today there was added Motion No. 10:in respect of which there is a suspension order, but, as the Minister has intimated, under our rules of order debate on the Prayers will automatically come to an end at 11.30 p.m.That the Land Commission (First Appointed Day) Order 1967 (S.I. 1967, No. 146), dated 8th February, 1967, be withdrawn.
Further to that point of order. May we assure the Parliamentary Secretary that we do not mind that, that we wish to vote on the affirmative Order, Motion No. 3, and on No. 10, which is that the appointed day Order should be withdrawn? That is satisfactory for our purpose to show that we want the whole of this operation to be postponed. We would therefore be most anxious that he should answer this debate as fully as possible. Thereafter, those hon. Members who wish to continue the debate can do so, I understand, both on the affirmative Orders and on Motion No. 10.
That is so, but it will not be possible to discuss the Prayers after 11.30 p.m.
If I catch your eye, Mr. Deputy Speaker, after the Minister sits down, does that mean that I am preventing my hon. Friends from voting on the Prayers?
We do not wish to vote on the Prayers.
Perhaps we can see how far we get before the magic hour. I am at the disposal of the House and if any hon. Member wants to continue the debate all night, and I have permission to speak again, I will answer any questions. The last thing that I want to do is to burke any issues.
I would emphasise that from the earliest days of the White Paper there have been constant consultations with the professions at all stages. It is against that background that we must consider the time factor. I understand that the Opposition have now accepted in principle the policy of some impost on betterment. They have not said what the rate should be or to whom it should be applied, but if they imply that it would be possible to have an effective and just scheme of betterment without fairly complex legislation, they are misleading themselves—which perhaps does not matter much—and they are deceiving the country. As we have seen time and again, to translate the techniques of valuation into precise legal language required by the courts is bound to be difficult and complex. This is not the fault of the Government or, I hope hon. Members opposite will agree, due to their incompetence. It is the existing state of the law. If we want to improve that we have to look at actions which have been taken elsewhere in connection with the Law Commission under the brilliant leadership of Sir Leslie Scarman, through which many of these problems, we hope and believe, can be simplified. The right hon. and learned Member for Hexham asked a great many questions and I will reply to as many as possible. He asked how many regulations were to come. There are only two sets more. Under Schedule 7, Regulations have to be made in dealing with Estate Duty where this is applied to the interest in respect of land and under the Acquisition of Land Act a Regulation has also to be presented specifying a form of notice explaining the meaning of vesting declaration provisions. Both of these will shortly be available. I was asked why there were no Regulations under Sections 59 and 60. Section 59 deals with the exemption for non-charitable housing associations. No regulations are necessary because the Minister has absolute discretion in the matter. Section 60 deals with the Case C exemption shortly after disposal in Cases A and B, and this is a matter in which the Commission has absolute discretion, and therefore power to make regulations is not provided. I was asked about the laying of the Orders. The more important Orders—all those requiring affirmative Resolution and the other Regulations to which they refer—were laid on 6th and 8th March, a month before the appointed day. The provisions had previously been discussed in considerable detail by my right hon. Friend and myself in Committee and also with the professions. A number of points have been made about the rate of levy. We have been asked whether the rate would be increased from 40 per cent. As we have said many times, it is intended that the rate shall be increased progressively to 45 and 50 per cent. Some of my hon. Friends have always thought the 40 per cent. rate too low. Hon. Members opposite think it too high. The Government think that it is a modest beginning. But it would be wrong for any Government to commit themselves in advance on these fiscal matters and I cannot give a date for the increase or say whether, indeed, the levy should not go above 50 per cent. Strong arguments have been advanced, by those interested, that the rate should go to 60 or even 75 per cent. The second appointed day will be determined by the Government in due course in the light of the various factors with which the right hon. and learned Gentleman is familiar. On the Minerals Regulations, we were asked why no exemption is given to landowners when they grant mineral leases, whereas exemption is given to mineral operators. One main reason for the levy applying to those granting leases or licences is to obtain for the community part of the new value attaching to the land as a result of the operations. I am surprised that such a question should have been asked by right hon. and hon. Members opposite. Yesterday, my right hon. Friend explained that a mineral operator is creating a wasting development. As time goes on, he may end up with something valueless and consequently the exemption is made in his case. This has been generally accepted as fair and proper. The right hon. and learned Gentleman also asked about specific operations and a wider definition. We have had discussions with the industry about this and it raised no objection. On a matter of interpretation in industry and elsewhere, we do not expect any difficulty. One of the most difficult Orders is the Tenancies and Reversions Order. But I re-emphasise that the difficulty is not due to maliciousness on the part of my right hon. Friend. It arises from the nature of the intricacies with which we are dealing when one gets the complication of a tenancy and reversion with the creation of two interests in a unit of land where one interest previously existed. If one is having a levy or any other scheme and is trying to be fair and effective, one gets the situation where a new interest is created leading to difficulty in the equation of the burdens to be borne. I must say that sometimes I think that if we had ridden a little rough shod we might have got better treatment and less complexity. In Case B—the grant of a tenancy by a landlord—one knows the interest of the landlord and he can be so assessed. Where a tenancy or lease is granted, there are two interests which have to be catered for. The whole of this Order, difficult as it is to determine the two interests in the same land, is designed to see how they should be assessed for future chargeable acts. Some criticism has been made of the fractions. I must admit that I am not keen on the symbols, but I think that on reflection hon. Members opposite will appreciate that they do themselves less credit than they might when they make this symbol fearsome when it is not. Perhaps I can quickly explain the three elements of the formula, which is intended to be helpful rather than the reverse. T is quite simple, as hon. Members who have read the Explanatory Note will know. It is simply the amount of the consideration given for a Class B tenancy. R is the discounted market value of the right to the reversion of the Class B tenancy. I think that that is clear and straight forward. The sum T plus R represents the total value of the interest out of which the tenancy has been carved. T is the element which lasts for the duration of the tenancy and R is the residual element when the lease ends, the reversion. Although this is a fatal thing to do, I should like to give an example which will make this crystal clear. If a tenancy is granted out of a freehold at a rent of £1,000 a year and the expectant market value of the freehold at the end of the tenancy is £16,000; then the equation is T, that is the rent of £1,000 a year and which could be capitalised in the market at, say, £12,000; R, which is the £16,000, discounted to the ultimate end and the reversion of the lease—one would probably have to pay about £4,000, although in fact one cannot get one at present—so that the equation becomes T—£12,000—over T plus R, which is the total value of the whole interest—£16,000—or three to four, which gives the proportions in which levy would be charged on the interest of the parties.It is helpful to have these figures and perhaps the hon. Gentleman can help us a little further with that example. Will he, say on that example what amount of 40 per cent. levy would be payable and what in addition would be paid as tax if the person concerned were a trader in land—would it be 64 per cent.? Can he give the figures if it was a close company? Would it be 70 per cent.? Can he give similar figures for levy at 45 and 50 per cent.?
I am sure that the right hon. and learned Gentleman does not expect such figures. It depends on the amount of development value in the particular case and, of course, I cannot say what that would be. I have shown how the formula, which is simple, is applied when all the other factors are known. It is not nearly as difficult as the right hon. and learned Gentleman and others have suggested.
The right hon. and learned Gentleman raised another important matter, that of Regulation 14. I ought to deal with this at some length, because, although it is not unduly complex, it has been misunderstood. The right hon. and learned Gentleman suggested that Regulation 14 was inequitable. When he has heard what I have to say, I do not think that he will take that view. The Explanatory Note says that Regulation 7 under the scheme of levy ensures that notification is made of disposals where development value is realised, because unless the purchaser notifies, he will not get his Schedule 5 base value on a later occasion. That concept comes adrift when a tenancy is granted, because, as hon. Members will see from the fourth paragraph on page 13 of the explanatory note, a tenant does not have to identify this figure in relation to Case 5 and is under no obligation to do so. Regulation 14 provides that the tenant, unless he notifies, will, in a later transaction, have his top value increased by the capital value of the rent he is paying. Thus the Commission would recover on the next charge. There have been three objections made. One is that it penalises the tenant for not notifying, whereas there are already penalties provided for not notifying in certain circumstances. The right hon. and learned Gentleman the Member for Hexham said that it penalises the tenant for not notifying cases where he has no liability to notify. He will know that paragraph 5 of Regulation 14 gives complete discretion to direct that the levy be reduced in such a case, whether or not the failure to notify was due to inadvertence. It will be very rare for any liability for levy to arise on a seven-year tenancy. The third case, which I think the hon. Gentleman thought was unfair, was that the levy might be charged twice. Again, the Commission—I have stated this repeatedly—will always, where failure to notify has been due to inadvertence and levy has been collected, use its powers under 14(5) to relieve the tenant from any additional amount of levy he might otherwise have to pay.Will the Parliamentary Secretary understand that the difficulty for those advising clients is that he has just said that paragraph 5 of the Regulations gives a discretion to the Commission. He said that about Section 59, and Section 60, but how can one advise constituents, or others, when one does not have the practice notes as to how the Commission or the Minister will exercise that discretion? We will not have these until the autumn.
The practice notes will be issued as soon as they can, but I have made a statement on behalf of the Government as to how the Commission will act in this respect. I would have thought that the right hon. and learned Gentleman would feel that this was an undertaking which would be honoured by the Commission, and knowing the Chairman of the Commission and its members, I am sure that this can be accepted.
The right hon. and learned Gentleman asked about Case F Regulations and inquired why they were necessary. The short answer is that with a scheme of levy ones is creating new interests and the main Cases are A to E but there are three types which will not often arise, and which it was felt much easier to deal with in Regulations. There are three cases, the first of which is extensions and variations of leases, and extensions of tenancies. The second case is wayleave, which the hon. Gentleman the Member for Crosby (Mr. Graham Page) mentioned, and here there is an interest in land. It is not a lengthy interest and certainly not covered by Section 34. There is also the case where compensation is given for the laying of a sewer, which may be quite valuable and upon which levy can be paid. These are minor cases, but they will arise in some cases, and may be quite substantial. The hon. Gentleman the Member for North Fylde (Mr. Clegg), drew attention to the difference in treatment under the Waiver of Interest Regulations for buildings for outdoor sport—they are exempted of course under the Material Development Regulations—and those for indoor sport are not. Those for indoor sport are covered by the Betterment Levy (Waiver of Interest) Regulations. The reason for the difference of treatment is that it is not difficult to define buildings for indoor sport. I am sure that no one would have wanted to make the Bill longer. In the same way, it is possible to define buildings for outdoor sport, yet it is perfectly proper for a distinction to be drawn in the case of an indoor sport, indoor tennis and badminton, as opposed to a bowling alley or a bingo hall. Bringing the indoor buildings within the scope of the Betterment Levy (Waiver of Interest) Regulations means that the Commission will have power to waive not only the levy but also the rate of interest, so that where there is a genuine need of that kind the activities will not be caught by levy. The hon. Member also raised a Question of the Vesting Declaration (Prescribed Forms) Regulations and he asked an important question about the position of mortgagees when land which is mortgaged to them was vested in the Commission by a vesting declaration. I am glad to put on record that the position of a mortgagee is fully safeguarded. A vesting declaration vests his interest in the land in the Commission and the mortgagee is entitled to claim full compensation for it from the Commission. There is no question that he will lose his rights if the Commission pay out the mortgagor in ignorance of the mortgagee's debt. The mortgagor is still entitled to settlement of his debt. I may add that the Building Societies Association has been in correspondence about this and we have been able to satisfy all the queries that the Association has raised. The hon. Member for Southend, West (Mr. Channon) spoke about the Rate of Interest Order and made the interesting suggestion, which one other hon. Member raised, that the rate of interest should be tied to the Bank Rate for the time being in force.I spoke about this.
I thank the hon. Member for Orpington (Mr. Lubbock) for his interesting contribution, too. This matter has been considered but it was felt that there might be occasions when another specific rate of interest was desirable and that the rate should not, therefore, be tied absolutely to Bank Rate. While the Order was in draft, Bank Rate was reduced. Therefore, the new Order will be laid before the House very shortly. I gather from various speeches that we should either have altered the date of reduction of Bank Rate or deferred the printing of the Order for a few days. Whichever way we had acted, we would have been in trouble with somebody.
The right hon. and learned Member for Hertfordshire, East, who always speaks with great experience in these matters, made a non-party speech, particularly in his approach to the Material Development and Planning Assumption Regulations. I was grateful for his kindly remarks that these Regulations could have been much worse and could have been much more narrowly drawn. I pointed out that a great many statues have to be taken into account unless other planning legislation can be put through Parliament simultaneously. That is not possible. I hope that in due course considerable progress may be made in this direction. The right hon. and learned Member suggested a comprehensive schedule in due course. It would not have been possible to do that at this stage, but my right hon. Friend is prepared to consider the matter. We are grateful for the right hon. and learned Gentleman's interest and for the suggestion which he has made. The hon. Member for Hemel Hempstead (Mr. Allason) asked about a watercress packing station. No doubt, the hon. Member will send me another of his letters about this, and I will answer it as soon as I can. The answer depends on the circumstances. If the watercress packing station were associated with a farm, I think that it would be exempt. If it were not associated with a farm it might not be exempt. Again, however, that is the kind of question which cannot be answered without more detail. The right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), whom I am glad to see with us, and his hon. Friends the Members for Crosby and for Poole (Mr. Murton) asked about the net yield. I must give the same answer as has been given previously. It is not possible to state the precise figures in this matter.Why not?
I was about to say. The only comparison that can be made is an estimate of what Capital Gains Tax would yield were there no levy. That is one of the calculations. The fact is that with Capital Gains Tax starting only in April, 1965, and the fact that the levy in any event will bite much more heavily in certain cases than Capital Gains Tax because losses will not be able to be offset against levy, as they can be against Capital Gains Tax, these and other factors mean that it is not possible to give the net yield at this time.
Can the hon. Gentleman cite any precedent for an Order or a Finance Bill being brought before the House levying taxation on the subject at a heavy rate with no indication of the net yield to the Exchequer?
The right hon. and learned Member need not wax quite so eloquent. As we have said on a number of occasions, this is not taxation. [HON. MEMBERS: "Oh."] I should be out of order if I canvassed the whole argument about why the recovery of betterment value created by the community cannot possibly be a tax. I make the point in passing, to help the right hon. and learned Gentleman to appreciate the position. I have said that we have made calculations as to the yield in an average year, which we have given to the House, and, as more information becomes available, we will give that to the House.
I know that the hon. Gentleman cannot give the exact figure, but can he give us the lower and upper limits?
I should prefer not to do that at the present time, for the reasons I have already given. I say to the Opposition and the hon. Gentleman the Member for Orpington that, if it were possible to do this at this stage, it would be done. The fact is that there are so many imponderables in relation to the Capital Gains Tax that it is not possible to do that. We have given the total of the expected yield and I hope that that will be sufficient encouragement for the
Division No. 296.]
| AYES
| [11.44 p.m.
|
| Albu, Austen | Davies, Harold (Leek) | Harrison, Walter (Wakefield) |
| Alldritt, Walter | Dell, Edmund | Haseldine, Norman |
| Armstrong, Ernest | Diamond, Rt. Hn. John | Hattersley, Roy |
| Atkinson, Norman (Tottenham) | Dickens, James | Hazell, Bert |
| Bacon, Rt. Hn. Alice | Dobson, Ray | Heffer, Eric S. |
| Bagier, Gordon A. T. | Doig, Peter | Hooley, Frank |
| Barnes, Michael | Dunn, James A. | Horner, John |
| Barnett, Joel | Dunnett, Jack | Howarth, Robert (Bolton, E.) |
| Baxter, William | Dunwoody, Mrs. Gwyneth (Exeter) | Howie, W. |
| Benn, Rt. Hn. Anthony Wedgwood | Dunwoody, Dr. John (F'th & C'b'e) | Hughes, Roy (Newport) |
| Bennett, James (G'gow, Bridgeton) | Eadie, Alex | Hynd, John |
| Bidwell, Sydney | Edelman, Maurice | Irvine, A. J. (Edge Hill) |
| Bishop, E. S. | Edwards, William (Merioneth) | Jackson, Colin (B'h'se & Spenb'gh) |
| Blenkinsop, Arthur | Evans, loan L. (Birm'h'm, Yardley) | Jackson, Peter M. (High Peak) |
| Booth, Albert | Faulds, Andrew | Jeger,Mrs.Lena(H'b'n&St.P'cras,S.) |
| Boston, Terence | Fernyhough, E. | Jenkins, Hugh (Putney) |
| Boyden, James | Finch, Harold | Jenkins, Rt. Hn. Roy (Stechford) |
| Braddock, Mrs. E. M. | Fitt, Gerard (Belfast, W.) | Johnson, Carol (Lewisham, S.) |
| Bradley, Tom | Fletcher, Ted (Darlington) | Jones, J. Idwal (Wrexham) |
| Brown, Hugh D. (G'gow, Provan) | Foot, Michael (Ebbw Vale) | Jones, T. A. (Rhondda West) |
| Brown,Bob(N'c'tle-upon-Tyne,W) | Ford, Ben | Kerr, Mrs. Anne (R'ter & Chatham) |
| Buchanan, Richard (G'gow, Sp'burn) | Forrester, John | Kerr, Dr. David (W'worth, Central) |
| Cant, R. B. | Fowler, Gerry | Kerr, Russell (Feltham) |
| Carmichael, Neil | Fraser, John (Norwood) | Lawton, George |
| Carter-Jones, Lewis | Freeson, Reginald | Leadbitter, Ted |
| Coe, Denis | Galpern, Sir Myer | Lee, John (Reading) |
| Coleman, Donald | Gardner, Tony | Lector, Miss Joan |
| Concannon, J. D. | Garrett, W. E. | Lewis, Ron (Carlisle) |
| Craddock, George (Bradford, S.) | Ginsburg, David | Lipton, Marcus |
| Crawshaw, Richard | Gordon Walker, Rt. Hn. P. C. | Lomas, Kenneth |
| Cullen, Mrs. Alice | Grey, Charles (Durham) | Luard, Evan |
| Dalyell, Tam | Griffiths, David (Rother Valley) | Lyon, Alexander W. (York) |
| Cavies, Dr. Ernest (Stretford) | Hannan, William | Lyons, Edward (Bradford, E.) |
| Davies, G. Elfed (Rhondda, E.) | Harper, Joseph | Mabon, Dr. J. Dickson |
House to vote overwhelmingly for the Order in due course.
I have tried to answer as many of the questions as I can. I will conclude on this note: I understand from what the right hon. and learned Gentleman the Member for Hexham said that, should the party opposite ever get a chance, it will repeal this Act and the Regulations. [HON. MEMBERS: "Hear, hear."] I very much hope that this is known outside the House, because it will be an excellent thing if the Conservative Party is seen again as the true friend of the speculators and the landed interests. Let it be known that, for the first time, we have devised, with the very greatest care to be fair and effective, a system which should not only provide land where it is needed at the right time in national plans, but also a fair and just system for the community to get back some of the value it has created. The Opposition are against us, but I hope that my right hon. and hon. Friends will vote overwhelmingly for these Orders.
Question put,
That the Betterment Levy (Prescribed Rate) Order, 1967, a draft of which was laid before this House on 28th February, be approved:—
The House divided: Ayes 174, Noes 116.
| McBride, Neil | Noel-Baker,Rt.Hn.Philip(Derby,S.) | Silkin, Hn. S. C. (Dulwich) |
| Macdonald, A. H. | Norwood, Christopher | Silverman, Julius (Aston) |
| McGuire, Michael | Oakes, Gordon | Skeffington, Arthur |
| McKay, Mrs. Margaret | Ogden, Eric | Small, William |
| Mackenzie, Gregor (Rutherglen) | O'Malley, Brian | Taverne, Dick |
| Mackie, John | Orme, Stanley | Thomas, George (Cardiff, W.) |
| Mackintosh, John P. | Oswald, Thomas | Tinn, James |
| Maclennan, Robert | Owen, Dr. David (Plymouth, S'tn) | Tuck, Raphael |
| MacMillan, Malcolm (Western Isles) | Page, Derek (King's Lynn) | Wainwright, Edwin (Dearne Valley) |
| McMillan, Tom (Glasgow, C.) | Palmer, Arthur | Walker, Harold (Doncaster) |
| MacPherson, Malcolm | Park, Trevor | Watkins, David (Consett) |
| Mahon, Simon (Bootle) | Perry, Ernest G. (Battersea, S.) | Wellbeloved, James |
| Manuel, Archie | Perry, George H. (Nottingham, S.) | Wells, William (Walsall, N.) |
| Mapp, Charles | Price, Christopher (Perry Barr) | Whitlock, William |
| Marquand, David | Probert, Arthur | Wilkins, W. A. |
| Mason, Roy | Redhead, Edward | Willey, Rt. Hn. Frederick |
| Mendelson, J. J. | Roberts, Albert (Normanton) | Williams, Alan (Swansea, W.) |
| Mikardo, Ian | Rodgers, William (Stockton) | Williams, Clifford (Abertillery) |
| Millan, Bruce | Rose, Paul | Willis, George (Edinburgh, E.) |
| Miller, Dr. M. S. | Ross, Rt. Hn. William | Winnick, David |
| Milne, Edward (Blyth) | Rowland, Christopher (Meriden) | Woodburn, Rt. Hn. A. |
| Mitchell, R. C. (S'th'pton, Test) | Rowlands, E. (Cardiff, N.) | Yates, Victor |
| Molloy, William | Shaw, Arnold (Ilford, S.) | |
| Morgan, Elystan (Cardiganshire) | Sheldon, Robert | TELLERS FOR THE AYES: |
| Newens, Stan | Silkin, Rt. Hn. John (Deptford) | Mr. Charles R. Morris and |
| Mr. Alan Fitch. |
NOES
| ||
| Allason, James (Hemel Hempstead) | Grant, Anthony | Percival, Ian |
| Baker, W. H. K. | Grant-Ferris, R. | Pink, R. Bonner |
| Batsford, Brian | Grieve, Percy | Pounder, Rafton |
| Beamish, Col. Sir Tufton | Griffiths, Eldon (Bury St. Edmunds) | Powell, Rt. Hn. J. Enoch |
| Bell, Ronald | Grimond, Rt. Hn. J. | Pym, Francis |
| Bennett, Sir Frederic (Torquay) | Gurden, Harold | Ridley, Hn. Nicholas |
| Bessell, Peter | Hall, John (Wycombe) | Rippon, Rt. Hn. Geoffrey |
| Black, Sir Cyril | Harris, Reader (Heston) | Rossi, Hugh (Hornsey) |
| Blaker, Peter | Harrison, Col. Sir Harwood (Eye) | Russell, Sir Ronald |
| Bossom, Sir Clive | Hastings, Stephen | St. John-Stevas, Norman |
| Boyd-Carpenter, Rt. Hn. John | Hawkins, Paul | Scott, Nicholas |
| Brewis, John | Holland, Philip | Sharples, Richard |
| Brinton, Sir Tatton | Hornby, Richard | Shaw, Michael (Sc'b'gh & Whitby) |
| Bruce-Gardyne, J. | Hunt, John | Smith, John |
| Buchanan-Smith, Alick(Angus,N&M) | Hutchison, Michael Clark | Stainton, Keith |
| Buck, Antony (Colchester) | Iremonger, T. L. | Steel, David (Roxburgh) |
| Carlisle, Mark | Jenkin, Patrick (Woodford) | Stodart, Anthony |
| Chichester-Clark, R. | Jones, Arthur (Northants, S.) | Stoddart-Scott, Col. Sir M. (Ripon) |
| Clegg, Walter | Jopling, Michael | Summers, Sir Spencer |
| Cooke, Robert | Kaberry, Sir Donald | Taylor, Frank (Moss Side) |
| Corfield, F. V. | Kirk, Peter | Temple, John M. |
| Crowder, F. P. | Kitson, Timothy | Turton, Rt. Hn. R. H. |
| Cunningham, Sir Knox | Legge-Bourke, Sir Harry | van Straubenzee, W. R. |
| Dance, James | Lubbock, Eric | Vaughan-Morgan, Rt. Hn. Sir John |
| Davidson,James(Aberdeenshire,W.) | Mackenzie, Alasdair(Ross&Crom'ty) | Vickers, Dame Joan |
| d'Avigrtor-Goldsmid, Sir Henry | Maginnis, John E. | Wainwright, Richard (Colne Valley) |
| Dean, Paul (Somerset, N.) | Marten, Neil | Walker-Smith, Rt. Hn. Sir Derek |
| Deedes, Rt. Hn. W. F. (Ashford) | Mawby, Ray | Weatherill, Bernard |
| Dodds-Parker, Douglas | Maxwell-Hyslop, R. J. | Webster, David |
| Eden, Sir John | Maydon, Lt.-Cmdr. S. L. C. | Whitelaw, Rt. Hn. William |
| Elliott, R.W.(N'c'tle-upon-Tyne,N.) | Mills, Peter (Torrington) | Wilson, Geoffrey (Truro) |
| Farr, John | Mitchell, David (Basingstoke) | Winstanley, Dr. M. P. |
| Fisher, Nigel | Monro, Hector | Wolrige-Gordon, Patrick |
| Fortescue, Tim | Murton, Oscar | Wood, Rt. Hn. Richard |
| Gibson-Watt, David | Neave, Airey | Wright, E. |
| Gilmour, Sir John (Fife, E.) | Noble, Rt. Hn. Michael | Younger, Hn. George |
| Glover, Sir Douglas | Nott, John | |
| Goodhart, Philip | Page, Graham (Crosby) | TELLERS FOR THE NOES: |
| Goodhew, Victor | Pardoe, John | Mr. Jasper More and |
| Gower, Raymond | Peel, John | Mr. Reginald Eyre. |
Material Development Regulations, 1967, dated 24th February, 1967 [copy laid before the House, 8th March], approved.
Betterment Levy (Minerals) Regulations, 1967, dated 3rd March, 1967 [copy laid before the House, 6th March], approved.
Case F General Regulations, 1967, dated 3rd March, 1967 [copy laid before the House, 6th March], approved.
Material Development (Scotland) Regulations, 1967, dated 27th February, 1967 [copy laid before the House, 8th March], approved.
Betterment Levy (Minerals) (Scotland) Regulations, 1967, dated 6th March, 1967 [copy laid before the House, 8th March], approved.
Case F General (Scotland) Regulations, 1967, dated 6th March, 1967 [copy laid before the House, 8th March], approved.—[ Mr. Skeffington.]
Motion made, and Question proposed,
That the Land Commission (First Appointed Day) Order, 1967 (S.I., 1967, No. 146), dated 8th February, 1967, be withdrawn.—[Mr. Rippon.]
11.4 p.m.
This Order, which, I understand, it is permissible to discuss after the termination of the business we have just had in hand, deals with one of the most objectionable instances of date fixing which this Government or any other Government have ever introduced, because on 6th April of this year we shall have a whole host of Regulations which will have great impact upon people in every walk of life and throughout the community. I really think that it would be deplorable if after only two hours or a little more of debate upon it this House were to pass this Order. We had an opportunity of discussing some of the other Orders yesterday and we have continued considering them tonight, but we have had only a very short time especially to deal with this item in particular.
It is interesting, for a moment to look upon all the serious effects which the implementation of the first appointed day, 6th April, will have. For instance, after 6th April it will be impossible for anybody to commence a new house or the extension of an existing house without full levy. It is no use right hon. and hon. Gentlemen opposite saying that they were not warned that 6th April was too early a date to introduce the Regulations. They were warned by hon. Members on both sides in both Houses of Parliament that if the first appointed day was stabilised at 6th April this year a tremendous number of people throughout the country would be unfairly affected by the onrush of events. I and a number of other hon. Members have given examples to the right hon. Gentleman and his colleagues of just what these effects will be. I am not try- ing to put the case for the big man, the big developer. I am trying to put it for the small person, the little householder, the woman or old-aged pensioner who owns a house with a small plot of land, who, unless they carry out or make a start on the development before 6th April, will, because of this wicked Act, have to pay full development levy of 40 per cent. I have sent the right hon. Gentleman and his colleagues, and so have my hon. Friends, details of pathetic examples where, simply because the professional people were unable to advise their clients that after 6th April a 40 per cent. levy, or even higher, would have to be paid on the development, gross cases of unfairness and inequity will arise. I have drawn their attention to the fact, for instance, that unless a company wishing to extend its industrial premises does so before 6th April a 40 per cent. levy will be payable on the extension. I have sent several examples of cases of small factories in my constituency and outside which are playing a useful rôle in the export business and are desirous of rebuilding their premises in order to get more modem equipment. The tragedy is that unless the development is started before 6th April it will be subject to a 40 per cent. levy which in the case of small businesses, people with small means, small householders or owner-occupiers will be a very high rate of levy indeed. I have sent the right hon. Gentleman and his colleagues several particular examples which must be answered. I have sent him details of the tragic case of the village postmaster. [Interruption.] Hon. Members opposite laugh; they may not be interested at all. But this postmaster is living in a tumbledown old house with the village post office attached. He wishes to rebuild his house on an adjoining site with new post office premises there, but he cannot get any satisfaction or answer from the Minister as to whether the development will be subject to levy or not and whether the 10 per cent, limit on extension of living accommodation will apply to the office accommodation also—Hon. Members may only discuss on the Order when the appointed day shall be.
I quite understand that, Mr. Deputy Speaker.
On a point of order. Even if we can discuss only the appointed day, my hon. Friend has the right to be heard by the House.
The Order is of very limited scope, and the only question in the debate is whether the appointed day should be 6th April or some other day.
Further to the point of order. You completely missed my point of order, Mr. Deputy Speaker. It is that my hon. Friend has the right to be heard in silence. An enormous row is going on on the benches opposite. I am listening with great interest to what I can hear of what my hon. Friend is saying, but I cannot hear because of that row.
I have heard everything that the hon. Member for Harborough (Mr. Farr) has said so far.
I am trying to put some examples before the Minister and the House to show why the first appointed day should not be 6th April, and why it should be postponed. Hon. Members on this side—those on the other side do not care particularly—have tried to point out to the hon. Gentleman and the Minister the gross unfairness and injustice that will occur in a number of cases.
Hon. Members opposite tonight and yesterday morning seemed to indicate only that the big developers would get away with some of the worst consequences of the Bill, because they have the knowledge and can afford to pay advisers, who have told them that unless they start their work before 6th April they will be liable to levy. It is not such a travesty of the facts as the right hon. Gentleman would think to say that up and down the country earth works are being carried out in haste on big housing estates before 6th April to avoid payment of the levy. My point is that the big developers, the estate owners, know of the danger. But the little person, the householder, the small owner-occupier, the person living in a largish house with perhaps a little land around it, does not know the significance of the date, 6th April. He does not know it, simply because of the rush of events and the lack of suitable infor- mation. That is one reason why the first appointed day should be postponed. I could give a number of other examples, but in view of the late hour I do not intend to detain the House too long. Many firms, particularly the small ones, will not be able to afford to pay the 40 or 50 per cent. development charge for any extension they make to their factory buildings which begins after 6th April and which is over 5,000 square feet in extent. If our factories cannot build new buildings without having to pay this disgraceful levy, if they cannot modernise their premises to rehouse their machinery and put in new machinery, how will this country remain industrially competitive and efficient? For that and other reasons, which the Minister and his hon. Friend know well but try to keep quiet about, I ask them seriously to consider postponing once again the first appointed day to a date as late as possible this year, or even into next year. But, whenever it is, let us have fair play and make sure that the ordinary people know what it means when it comes upon them.12.5 a.m.
My hon. Friend the Member for Harborough (Mr. Farr) has given many general reasons why the appointed day should be postponed and I want to give one particular reason. I know that to intervene at this hour after we have had an all-night sitting and when hon. Members are eager to go does not attract the sympathy either of one's hon. Friends or of hon. Members opposite, and I want the sympathy of hon. Members in my attempt to persuade the Government to postpone the appointed day. I want to save the Government from what could be an act of ill faith if they do not find a way of dealing with the problem which arises in the City of Peterborough, and one way of dealing with it would be by postponing the appointed day.
The Government requested the City of Peterborough to be a good neighbour and to accept overspill from London. To do that, Peterborough was asked to implement the new towns legislation, which was an important step for an ancient city. The City of Peterborough, being a good neighbour, accepted this request from the Government to help overcome a national problem of London overspill. This meant that they had to appoint a consultant to prepare a blue print for the plan to fit in with the wishes of the central Government. The result was that when local people put in their plans for their own separate development, the local council had to reply that they could not accept these developments because they might cut across the blue print being prepared by the consultant to meet the wishes of the central Government. The Land Commission legislation came on the scene at that stage and the result was that developers who would normally have had their development approved and made a start with it, thus avoiding the 40 per cent. levy charged under the Land Commission, were prevented from doing so. That was because they had been good neighbours, and had helped to deal with London overspill. They had lost the one chance which was given to all other towns, cities and villages of having their normal development approved, making a start on it and avoiding the levy. As a result, developers in Peterborough, having lost that chance, will face a 40 per cent. levy. I suggest that the Government should postpone the appointed day until such time as they can look into the details of this case. I am sure that the Government do not wish to penalise the city for carrying out their wishes in helping to meet national policy. I can tell the hon. Member, as I could not tell him the other day, that both the city council and the county council recognise the force of the case which I have made and recognise that
Division No. 297.]
| AYES
| [12.10 a.m.
|
| Allason, James (Hemel Hempstead) | Cunningham, Sir Knox | Gurden, Harold |
| Baker, W. H. K. | Dance, James | Hall, John (Wycombe) |
| Batsford, Brian | Davidson, James(Aberdeenshire,W.) | Harris, Reader (Heston) |
| Beamish, Col. Sir Tufton | d'Avigdor-Goldsmid, Sir Henry | Harrison, Col. Sir Harwood (Eye) |
| Bell, Ronald | Dean, Paul (Somerset, N.) | Hastings, Stephen |
| Bennett, Sir Frederic (Torquay) | Deedes, Rt. Hn. W. F. (Ashford) | Hawkins, Paul |
| Bessell, Peter | Dodds-Parker, Douglas | Holland, Philip |
| Black, Sir Cyril | Eden, Sir John | Hornby, Richard |
| Blaker, Peter | Elliott, R.W.(N'c'tle-upon-Tyne,N.) | Hunt, John |
| Bossom, Sir Clive | Farr, John | Hutchison, Michael Clark |
| Boyd-Carpenter, Rt. Hn. John | Fisher, Nigel | Iremonger, T. L. |
| Brewis, John | Fortescue, Tim | Jenkin, Patrick (Woodford) |
| Brinton, Sir Tatton | Gibson-Watt, David | Jones, Arthur (Northants, S.) |
| Bruce-Gardyne, J. | Gilmour, Sir John (Fife, E.) | Jopling, Michael |
| Buchanan-Smith, Alick(Angus, N&M) | Glover, Sir Douglas | Kaberry, Sir Donald |
| Buck, Antony (Colchester) | Goodhart, Philip | Kirk, Peter |
| Carlisle, Mark | Goodhew, Victor | Kitson, Timothy |
| Chichester-Clark, R. | Gower, Raymond | Legge-Bourke, Sir Harry |
| Clegg, Walter | Grant-Ferris, R. | Lubbock, Eric |
| Cooke, Robert | Grieve, Percy | Mackenzie, Alasdair(Ross&Crom'ty) |
| Corfield, F. V. | Griffiths, Eldon (Bury St. Edmunds) | Maginnis, John E. |
| Crowder, F. P. | Grimond, Rt. Hn. J. | Marten, Neil |
promises are not being kept which were made to them when they first took on the onerous task of helping London's overspill if some of their citizens are put in an invidious position—a worse position than that of any other town in the country. Having asked their ratepayers to accept the scheme to deal with London overspill, they feel that they must press this matter on the Government and insist on their share in exemption under the Bill, otherwise a special and unfair penalty would be put on Peterborough. I ask the Government to delay the appointed day, which is one way in which they could try to deal with the problem.
Section 63 gives the Minister power to put right what I am describing. I gather from the right hon. Gentleman that he is not certain whether it would enable him to do so, however. I ask him, therefore, to postpone the operation of the Bill until he can find some way of keep-in the promise which was implied by the Leader of the House when he was Minister of Housing and Local Government and asked Peterborough to take on this good-neighbour task, at some disadvantage to itself, by helping with London's overspill.
If we can postpone the appointed day and have an undertaking from the right hon. Gentleman that he will look with sympathy at what I am putting to him, I am certain that he will sleep much better in his bed when eventually some of the other aspects of this Order are affecting people in this country.
Question put:—
The House divided: Ayes 116, Noes 168.
| Mawby, Ray | Pym, Francis | van Straubenzee, W. R. |
| Maxwell-Hyslop, R. J. | Ridley, Hn. Nicholas | Vaughan-Morgan, Rt. Hn. Sir John |
| Maydon, Lt.-Cmdr. S. L. C. | Rippon, Rt. Hn. Geoffrey | Vickers, Dame Joan |
| Mills, Peter (Torrington) | Rossi, Hugh (Hornsey) | Wainwright, Richard (Colne Valley) |
| Mitchell, David (Basingstoke) | Russell, Sir Ronald | Walker-Smith, Rt. Hn. Sir Derek |
| Monro, Hector | St. John-Stevas, Norman | Weatherill, Bernard |
| More, Jasper | Scott, Nicholas | Webster, David |
| Murton, Oscar | Sharples, Richard | Whitelaw, Rt. Hn. William |
| Neave, Airey | Shaw, Michael (Sc'b'gh & Whitby) | Wilson, Geoffrey (Truro) |
| Noble, Rt. Hn. Michael | Smith, John | Winstanley, Dr. M. P. |
| Nott, John | Stainton, Keith | Wolrige-Gordon, Patrick |
| Page, Graham (Crosby) | Steel, David (Roxburgh) | Wood, Rt. Hn. Richard |
| Pardoe, John | Stodart, Anthony | Wright, E. |
| Peel, John | Stoddart-Scott, Col. Sir M. (Ripon) | Younger, Hn. George |
| Percival, Ian | Summers, Sir Spencer | |
| Pink, R. Bonner | Taylor, Frank (Moss Side) | TELLERS FOR THE AYES: |
| Pounder, Rafton | Temple, John M. | Mr. Anthony Grant and |
| Powell, Rt. Hn. J. Enoch | Turton, Rt. Hn. R. H. | Mr. Reginald Eyre. |
NOES
| ||
| Albu, Austen | Gardner, Tony | Miller, Dr. M. S. |
| Alldritt, Walter | Ginsburg, David | Milne, Edward (Blyth) |
| Atkinson, Norman (Tottenham) | Gordon Walker, Rt. Hn. P. C. | Mitchell, R. C. (S'th'pton, Test) |
| Bacon, Rt. Hn. Alice | Gray, Dr. Hugh (Yarmouth) | Molloy, William |
| Bagier, Gordon A. T. | Griffiths, David (Rother Valley) | Morgan, Elystan (Cardiganshire) |
| Barnett, Joel | Hannan, William | Newens, Stan |
| Baxter, William | Harper, Joseph | Noel-Baker, Rt.Hn.Philip(Derby,S.) |
| Benn, Rt. Hn. Anthony Wedgwood | Harrison, Walter (Wakefield) | Norwood, Christopher |
| Bennett, James (G'gow, Bridgeton) | Haseldine, Norman | Oakes, Gordon |
| Bidwell, Sydney | Hattersley, Roy | Ogden, Eric |
| Bishop, E. S. | Hazell, Bert | O'Malley, Brian |
| Blenkinsop, Arthur | Heffer, Eric S. | Orme, Stanley |
| Booth Albert | Hooley, Frank | Oswald, Thomas |
| Boston, Terence | Horner, John | Owen, Dr. David (Plymouth, S'tn) |
| Boyden, James | Howarth, Robert (Bolton, E.) | Page, Derek (King's Lynn) |
| Braddock, Mrs. E. M. | Howie, W. | Palmer, Arthur |
| Bradley, Tom | Hughes, Roy (Newport) | Park, Trevor |
| Brown, Hugh D. (G'gow, Provan) | Hynd, John | Perry, Ernest G. (Battersea, S.) |
| Brown,Bob(N'c'tle-upon-Tyne,W) | Irvine, A. J. (Edge Hill) | Perry, George H. (Nottingham, S.) |
| Jackson, Colin (B'h'se & Spenb'gh) | Price, Christopher (Perry Barr) | |
| Buchanan, Richard (G'gow, Sp'burn) | Jackson, Peter M. (High Peak) | Probert, Arthur |
| Cant, R. B. | Jeger,Mrs.Lena(H'b'n&St.P'cras,S.) | Redhead, Edward |
| Carmichael, Neil | Jenkins, Hugh (Putney) | Roberts, Albert (Normanton) |
| Carter-Jones, Lewis | Jenkins, Rt. Hn. Roy (Stechford) | Rodgers, William (Stockton) |
| Coe, Denis | Johnson, Carol (Lewisham, s.) | Rose, Paul |
| Coleman, Donald | Jones, J. Idwal (Wrexham) | Ross, Rt. Hn. William |
| Concannon, J. D. | Jones, T. A. (Rhondda West) | Rowland, Christopher (Meriden) |
| Crawshaw, Richard | Kerr, Mrs. Anne (R'ter & Chatham) | Rowlands, E. (Cardiff, N.) |
| Cullen, Mrs. Alice | Kerr, Dr. David (W'worth, Central) | Shaw, Arnold (Ilford, S.) |
| Dalyell, Tam | Kerr, Russell (Feltham) | Sheldon, Robert |
| Davies, Dr. Ernest (Stretford) | Lawson, George | Silkin, Rt. Hn. John (Deptford) |
| Davies, G. Elfed (Rhondda, E.) | Leadbitter, Ted | Silkin, Hn. S. C. (Dulwich) |
| Davies, Harold (Leek) | Lee, John (Reading) | Silverman, Julius (Aston) |
| Dell, Edmund | Lestor, Miss Joan | Skeffington, Arthur |
| Diamond, Rt. Hn. John | Lewis, Ron (Carlisle) | Small, William |
| Dickens, James | Lipton, Marcus | Taverne, Dick |
| Dobson, Ray | Luard, Evan | Thomas, George (Cardiff, W.) |
| Dunn, James A. | Lyon, Alexander W. (York) | Tinn, James |
| Dunnett, Jack | Lyons, Edward (Bradford, E.) | Tuck, Raphael |
| Dunwoody, Mrs. Gwyneth (Exeter) | Mabon, Dr. J. Dickson | Wainwright, Edwin (Dearne Valley) |
| Dunwoody, Dr. John (F'th & C'b'e) | McBride, Neil | Walker, Harold (Doncaster) |
| Eadie, Alex | Macdonald, A. H. | Watkins, David (Consett) |
| Edelman, Maurice | McGuire, Michael | Wellbeloved, James |
| Edwards, William (Merioneth) | McKay, Mrs. Margaret | Wells, William (Walsall, N.) |
| Evans, Ioan L. (Birm'h'm, Yardley) | Mackenzie, Gregor (Rutherglen) | Whitlock, William |
| Faulds, Andrew | Mackie, John | Wilkins, W. A. |
| Fernyhough, E. | Mackintosh, John P. | Willey, Rt. Hn. Frederick |
| Finch, Harold | Maclennan, Robert | Williams, Alan (Swansea, W.) |
| Fitch, Alan (Wigan) | MacMillan, Malcolm (Western Isles) | Williams, Clifford (Abertillery) |
| Fitt, Gerard (Belfast, W.) | McMillan, Tom (Glasgow, C.) | Willis, George (Edinburgh, E.) |
| Fletcher, Ted (Darlington) | MacPherson, Malcolm | Winnick, David |
| Foot, Michael (Ebbw Vale) | Mahon, Simon (Bootle) | Woodburn, Rt. Hn. A. |
| Ford, Ben | Manuel, Archie | Yates, Victor |
| Forrester, John | Marquand, David | |
| Fowler, Gerry | Mason, Roy | TELLERS FOR THE NOES: |
| Fraser, John (Norwood) | Mendelson, J. J. | Mr. Ernest Armstrong and |
| Freeson, Reginald | Mikardo, Ian | Mr. Charles R. Morris. |
| Galpern, Sir Myer | Millan, Bruce | |
| ADJOURNMENT |
Resolved, That this House do now adjourn.—[Mr. Lawson.] |
Adjourned accordingly at nineteen minutes past Twelve o'clock.
|