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Commons Chamber

Volume 800: debated on Thursday 30 April 1970

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House Of Commons

Thursday, 30th April, 1970

The House met at half-past
Two o'clock

Prayers

[Mr. SPEAKER in the Chair]

Private Business

Regent, Royal And Carlton Terrace Gardens, Edinburgh Order Confirmation Bill

Mr. Secretary Ross presented a Bill to confirm a Provisional Order under Section 7 of the Private Legislation Procedure (Scotland) Act 1936, relating to Regent, Royal and Carlton Terrace Gardens, Edinburgh: And the same was ordered to be considered upon Wednesday, 6th May and to be printed. [Bill 166.]

Royal Bank Of Scotland Order Confirmation Bill

Mr. Secretary Ross presented a Bill to confirm a Provisional Order under Section 7 of the Private Legislation Procedure (Scotland) Act 1936, relating to the Royal Bank of Scotland: And the same was ordered to be considered upon Wednesday, 6th May and to be printed. [Bill 167.]

Oral Answers Toquestions

Employment Andproductivity

Trade Unions (Collective Bargainingagreements)

1.

asked the Secretary of State for Employment and Productivity what representations have been made to her recently in her consultations on the proposed Industrial Relations Bill about the legal enforceability of collective bargaining agreements against trade unions; and what reply she has given.

14.

asked the Secretary of State for Employment and Productivity what representations have been made to her in the course of her discussions on the proposed Industrial Relations Bill to the effect that trade union funds should become liable for payment of damages for breach of collective agreements; and what reply she has given.

The First Secretary of State and Secretary of State for Employment and Productivity
(Mrs. Barbara Castle)

The Confederation of British Industry proposed that selected procedural agreements might be made enforceable by order of the Secretary of State. I have also received suggestions from some individual employers, notably in the motor industry, that collective agreements should be legally enforceable.

The Government reject the idea that responsibility for deciding which agreements should be enforceable, and for taking action to enforce such agreements, should rest with the Government themselves. The Government's view is that it is for the parties themselves to decide whether the agreements they reach should be enforceable in the courts.

There is, of course, nothing in the present law to prevent a company and a union from entering into a legally enforceable contract, and under the Industrial Relations Bill, published this morning, it will be possible for employers' associations to enter into similar contracts with trade unions if both parties so desire.

Would my right hon. Friend agree that to attempt to encourage better industrial relations by allowing employers to sue trade unions would be at best foolish and at worst disastrous? Is not the real answer to the industrial relations problem an attack on the root causes of industrial unrest, as my right hon. Friend is doing in her Industrial Relations Bill?

I would repeat to my hon. Friend that there has been no obstacle in the present law for many years to prevent a union and an individual employer from entering into a legally enforceable contract. The reason why they have not done so, as my hon. Friend says, is that this is not the most effective way of dealing with industrial relations problems.

Would my right hon. Friend agree that sensible employers are much more anxious to get their workers back to work than to take them to court to sue them for damages—the more so as the employers and the unions concerned have to continue to live together thereafter?

I entirely agree with my hon. Friend. This is why employers have not exercised the possibilities open to them under the present law. Nor, indeed, as was said by Mr. Pat Lowry, of the British Leyland Motor Corporation, in his very interesting document " Greener Grass ", is it found in the United States that the employer wants to sue.

Is it not a fact that the employers sue very rarely and that it is the unions which mostly sue in those countries where the policy works successfully?

If I were the hon. Gentleman, I would not be quite so emphatic about the success of the policy in other countries. His supplementary question proves what I have said—that the attempt of the Opposition to make a panacea for all our industrial relations troubles out of legal enforceability of contracts is just a gimmick which is meaningless.

Commission For Industrial Relations

2.

asked the Secretary of State for Employment and Productivity how many references are now before the Commission for Industrial Relations.

Reports have been issued on eight cases referred, and 13 references are currently before the Commission.

I am grateful to my right hon. Friend for that encouraging degree of activity. Is she confident that the Commission for Industrial Relations will he able to play an even more important rôle in sorting out difficulties over recognition disputes and collective bargaining agreements once it has been placed on a statutory basis?

I am glad to be able to tell the House that the commission is working at full capacity. I entirely agree with my hon. Friend that it has been doing invaluable work in recognition cases but in some cases employers have refused to abide by and act on the recommendations of the commission. My new Bill will give powers to enforce those recommendations.

Redundancy Payments

3.

asked the Secretary of State for Employment and Productivity what is the total sum so far paid out in redundancy payments; what is the number of recipients; and what is the average amount received by each beneficiary.

During the period 6th December, 1965, to 28th February, 1970, the latest date for which figures are available, a total of £210,781,000 was paid to 945,260 redundant employees. The average amount received was £223.

No one appreciates more than I do how helpful this £210 million has been to the workers affected, but does my right hon. Friend realise that redundancy payments are no substitute for a job, and that in my constituency in the next few weeks 1,100 men will become redundant at Palmer's ship repair yard? Will she give me an assurance that, with her Ministerial colleagues, she will do everything she possibly can to keep the yard open, and so provide employment in an area which has already had more than its fair share of unemployment?

I agree with my hon. Friend that redundancy payment is no alternative to a job, but it provides a breathing space to enable the employee to look around and to enable my Department to move in and help to re-deploy redundant labour. He will be aware that the future of the yard which he mentioned is a matter for my hon. Friend the Minister of Technology, but I assure my hon. Friend that my Department is setting up a special job-finding team to go into this area and do everything in its power to ensure that the redundant workers are given other jobs.

Is the Secretary of State aware that there is great anxiety on the Tyne that, in spite of all the efforts of the Government and the Opposition, the unemployment situation is becoming worse? Will she tell us what the Prime Minister means when he says that he will have a special look at ship building, because this would be of great interest to the Tyne and to all of us?

The hon. Lady is well aware, as I have said to my hon. Friend, that the policy for the ship building industry is not for me. I am aware of the unemployment anxieties which have been expressed by my hon. Friend and by the hon. Lady, and I give an assurance that my Department will be working actively to help place these men in other jobs.

Pay Settlements

4.

asked the Secretary of State for Employment and Productivity how many of the pay increases from 1st January, 1970 to date have been tied to productivity agreements.

Information is readily available only about increases affecting 10,000 or more workers. Of 65 such increases so far this year, 34 were related to increased productivity or efficiency.

Does not the Minister agree that, whatever is happening in other countries, the present deluge of pay increases will hit pensioners and the less well off very hard? Is not this manipulation of the economy for electoral purposes the most cynical, transparent and shameful thing?

I find the hon. Gentleman's approach refreshing, after the long sustained attack on the Government's attempts to operate effectively an incomes policy.

Has my hon. Friend noticed how the recent figures published by O.E.C.D. showing comparative unit labour costs give the lie to the distortions of hon. Gentlemen opposite? They show, for instance, that in the United States and Canada costs have gone up faster than here, that Japan is only slightly better, and that a good deal of the credit for this is due to the Government's policy on productivity.

Yes, I recall that three weeks ago the Prime Minister gave the House some very impressive figures showing that the United Kingdom was maintaining and improving its competitive position in world markets.

Following the hon. Gentleman's initial answer, so that we can judge the success of the Government's policy, will he tell us how much incomes went up in percentage terms during the period of the statutory policy, and how much productivity went up? Does not the disparity show that the policy failed completely?

If the hon. Gentleman will take the trouble to read the Department of Employment and Productivity Gazette he will see the figures published monthly.

27.

asked the Secretary of State for Employment and Productivity how many pay settlements in the public sector have been approved this year which fall within the norm of 2½ per cent. to 4½ per cent.

Will the Under-Secretary specify what the six are? Does he realize—I am sure that he must—that the wages explosion is very serious? What is his Department proposing to do about it, or is it being completely disregarded in advance of the General Election?

I cannot give the hon. Gentleman details about particular cases at Question Time. I am willing to write to him, if he wishes.

Concerning the alleged wages explosion, I have been under criticism for apparently being unduly alarmist. I find it astonishing, on the one hand, to be accused of causing alarm and, on the other, of being asked to respond to it.

Is my hon. Friend aware that the Opposition are seriously concerned about the wages and salaries explosion and that they, like me, will be looking to see whether the six that my hon. Friend has mentioned include the judges' salaries which are to be put up tonight with the support of the Opposition. Perhaps they might oppose that. Can my hon. Friend answer that one?

Industrial Training

6.

asked the Secretary of State for Employment and Productivity how many employees are receiving training in industries covered by industrial training boards at the latest convenient date and each year since 1964; what action has been taken by boards to increase the proportion of trained women, to extend the range of jobs in which they are trained, and increase their opportunities to train for promotion; and what encouragement the Central Training Council has given them to use the grant scheme therefor.

17.

asked the Secretary of State for Employment and Productivity how many employees are currently undergoing industrial training; and how this figure compares with the figure in 1964.

Separate information about numbers in training in industries covered by industrial training boards is not available. My Department's new earnings survey, however, indicated that in September, 1968 nearly 1,400,000 persons were receiving training in all industries and services, including over 500,000 apprentices. As this is a new survey, corresponding figures are not available for earlier years, but the number of employees receiving training in manufacturing industries increased by about 15 per cent. between 1964 and 1968.

In promoting and improving training in their industries, the training boards pay full regard to the needs of women, and the Central Training Council encourage them to do so on equal terms with men.

Will my right hon. Friend agree that, in spite of her well-known interest in equality for women, when it comes to training women are still second-rate citizens? Will she ask the Central Training Council to look not only at the industries where women are conventionally employed, where there are great difficulties, but also at the engineering industry, in which women are being employed in increasing numbers?

I am anxious to do everything possible to stimulate the training of women, and the Equal Pay Bill made it clear that in giving women equality of terms and conditions we were legislating for them to get equal opportunity for training where this was part of the contract of any male employee. There is no need for us to press the Engineering Industry Training Board to train more women. The board has made it clear in all its recommendations that no distinction is drawn between the sexes, and goes on to say:

" Indeed the board would hope that girls will in future become more and more interested in engineering careers at all levels."
The board would welcome that. It is for the women to respond.

Does not my right hon. Friend agree that the figures she has announced represent an impressive advance since 1964? As a result of this policy, are not many of those who are undergoing training greatly improving their skills to the benefit of themselves, their families and the country as a whole?

Yes, I agree with my hon. Friend. Not only has there been this massive increase in the quantity of training, but the quality of training is improving all the time, and this is what we want.

Industrial Disputes

7.

asked the Secretary of State for Employment and Productivity how many strikes there have been since 1st September, 1964, to the latest date for which figures are available; how many workers were involved; how many work days were lost; and what were the comparable figures for a similar period of time prior to 1st September. 1964.

The number of stoppages of work due to industrial disputes in the United Kingdom which began in the period from 1st September, 1964, to 30th March, 1970, was 13,781. In all stoppages in progress in this period there were 6,747,000 workers involved and 22.245,000 working days lost at the establishments where the disputes occurred. The 1969 and 1970 components of these figures are provisional. The comparable figures for the period from 1st February, 1959, to 30th August, 1964, were 13,644 stoppages, 7,879,000 workers involved and 20,546,000 working days lost.

Does not that answer show that the Sunday Times was correct in its assessment on 5th April when it accused the right hon. Gentleman the Leader of the Opposition of deliberately selecting statistics for his own party political purposes, and that this is not a responsible way in which to treat a very serious problem?

My hon. Friend is right. Many recent public speeches have exaggerated and distorted the statistics primarily for political ends. We should take a balanced view, but I do not want to minimise the serious problems we face.

Could the hon. Gentleman deny that when coalmining is excluded, as his right hon. Friend in the White Paper and also the Donovan Report recognised, the number of strikes in the last 54½ years is greater than in the whole of the previous thirteen years?

This is part of the distortion. The White Paper followed the pattern of the Royal Commission, and for statistical purposes in making a current assessment excluded coalmining. But neither the White Paper nor the Royal Commission suggested for a moment that strikes in the coal mines were any less severe than any other strikes in their impact on the economy.

8.

asked the Secretary of State for Employment and Productivity whether she is aware that loss of working days due to industrial disputes increased from 2·277 million in 1964 to 4·69 million in 1968: what was the comparable rate of loss during the 15 months ended 31st March, 1970; and what steps are now to be taken to reduce losses and damage to exports.

The answer to the first part of the question is yes. During 15 months ended 31st March, 1970, 8,898,000 working days were lost. This figure includes 6,772,000 working days lost in 1969. Both figures are provisional. My right hon. Friend is stimulating and encouraging the reform and extension of collective bargaining, but the primary responsibility lies with individual managements.

While recognising that nobody in the world has any panacea for ending industrial disputes altogether, would not the right hon. Lady recognise that throughout the last six years the trend of industrial stoppages and the aggregation of days lost has been steadily upwards, including or excluding the coalmining industry? Should we not all be gravely concerned about this disruption of production?

I was pleased to hear the hon. Gentleman say that there was no magic elixir. Of course, in the past we have been led to believe that the Opposition could provide one. It is our belief that it would turn out to be a poison chalice if ever they have the opportunity to try to apply it to those in industry. The hon. Gentleman is right that there is genuine cause for concern, although I would point out that the 8 million-odd days lost during the 15 months concerned in his Question were also equalled by the 12 months of 1957 during the period of office of the right hon. Member for Enfield, West (Mr. Iain Macleod). [Interruption.] It is a fact that in 1957 8 million days were lost. The phenomenon which we are now experiencing is not unique in that other countries are undergoing the same kind of experience.

This is a serious matter, despite the trivial way in which the subject is being treated by hon. Members opposite, but bearing in mind that it is essential that both sides of industry and firms should get together, would not my hon. Friend condemn the attitude of a firm in Perivale, Middlesex—Davalls— which has refused to meet officers of the A.E.F. and also conciliation officers from his Department? Does he not agree that this sort of attitude does not assist industrial relations?

I would be reluctant to comment about a particular situation without knowing all the facts, but I would regret that any employer should refuse to meet trade union officials or officers of the Department.

10 and 11.

asked the Secretary of State for Employment and Productivity (1) what was the total number of days lost through strikes between 1965 and 1969; and what was the comparable figure for 1959–63; and

(2) how many strikes took place between 1965 and 1969; and what was the comparable figure for 1959–63.

11,806 stoppages of work due to industrial disputes began in the period 1965 to 1969. In all stoppages in progress in this period, 19,572,000 working days were lost at the establishments where the disputes occurred. The 1969 component of these figures is provisional. Comparable figures for the period 1959 to 1963 are 12,128 stoppages and 18,893,000 working days lost.

In view of that further enlightenment, can my hon. Friend say what all the fuss is about? Have not we proved conclusively today that all the noise from the party opposite is so much humbug and that if right hon. and hon. Gentlemen opposite want an issue to improve their rating in the opinion polls they must look elsewhere?

I have already said how deplorable is this practice of the Opposition in selecting and distorting figures in order to make political capital. I repeat that we should not seek to minimise the problems, but we shall not help by approaching them in a fashion which exaggerates and distorts them.

Is it not a fact that the incidence of stoppages in the last 12 months, including or excluding mining, is the worst in our industrial history?

It is not the worst in our history, but it is certainly serious. I repeat that we should not minimise the problem, but we only exacerbate it by making a political football of the situation.

36.

asked the Secretary of State for Employment and Productivity if she will state the total number of stoppages due to industrial disputes, excluding mining, from October, 1964 to the latest date.

Excluding mining and quarrying, the provisional total of stoppages of work due to industrial disputes in the United Kingdom which began in the period 1st October, 1964 to 31st March, 1970 is 11,154.

Will the Under-Secretary confirm that that figure is greater than the comparable figure from October. 1951, to September, 1964?

Unemployment

9.

asked the Secretary of State for Employment and Productivity out of more than 600,000 men and women registered in early April as unemployed, how many have been out of work, respectively, for three months and over, for six months and over, and 12 months and over; and what steps she is now taking to reduce long-term unemployment.

32.

asked the Secretary of State for Employment and Productivity how many persons have been registered unemployed for six months or more.

38.

asked the Secretary of State for Employment and Productivity if she will state the number of persons who have been registered unemployed for 12 months or more.

The latest detailed duration analysis available relates to January, 1970. At that date, 628,325 males and females were registered as unemployed. They included 608,736 who were wholly unemployed and of these 263,124 had been on the registers for more than three months, 165,108 for more than six months and 97,364 for more than 12 months.

The developments in our employment services and in industrial training and rehabilitation will make some contribution to relieving long-term unemployment, though it is a deep-seated problem.

Does not the right hon. Gentleman recognise that Government policy is creating and perpetuating a stagnating pool of unemployed? Is that not a policy of which the Labour Party in bygone years sought to indict my party, whereas the right hon. Gentleman and his Government really are the responsible and culpable persons?

The hon. Gentleman will be aware that my right hon. Friend the Chancellor of the Exchequer forecast a reduction in unemployment during the next 12 months. Long-term unemployment, about which the hon. Gentleman was asking, is largely a matter in the higher age groups and in large part has been an effect of the industrial changes which have taken place over the last few years. More than half of those unemployed for 52 weeks are 55 and over; 45 per cent. of those unemployed for six months were 55 or over. Two-thirds of the increase in the over-12 months category in the last two years occurred in the Northern, and Yorks and Humberside Regions and are attributable to the extensive colliery closure programmes and the run-down of many other traditional industries. This creates a serious problem. All the departmental services are available to assist wherever possible.

In presenting these appalling figures, does not the Minister recognise that industrial training and priorities are useless without employment opportunities to go with them? Does he not also recognise the urgent need for consultation with his colleague the Secretary of State for Local Government and Regional Planning to ensure that the money available for development is spent most effectively in the creation of new jobs?

The regional development policies introduced by this Government have been more effective than any previous policies. Without them the massive run-down in traditional industries which has occurred in this country would have resulted in far worse unemployment figures. In fact, there has been a considerable increase in the employment opportunities in the development areas as a direct result of this Government's regional policies.

Is my hon. Friend not nauseated by the crocodile tears of hon. Members opposite about unemployment while they constantly attack the massive incentives in regional development policies pursued by this Government?

I know their attitude, and I also know that their policies in regional employment incentives could only have a disastrous effect on employment opportunities in development areas.

The right hon. Gentleman has referred to the generalised assertion by the Chancellor that he thought unemployment was likely to fall. Since the Minister of State answers for the Ministry directly responsible for employment, could he give to the House some kind of quantification of that fall which was referred to by the Chancellor in such general terms?

I cannot give any such quantification, and no Minister in any Government would reply to that question in quantitative terms. I merely drew attention to the estimate made by the Chancellor in regard to employment prospects in the next 12 months.

Would my right hon. Friend, despite the crocodile tears opposite, admit nevertheless that the level of unemployment is much too high? Would he not agree that it is particularly high in the building industry, whose members comprise almost a quarter of the unemployed? Would he make it clear to the Chancellor that we must do more to help the industry out of this difficult situation?

I agree that the unemployment figures are too high, and I agree that the situation in the construction industry is serious. On the other hand, the recent measures introduced by my right hon. Friend the Chancellor and other measures referred to in a recent debate by the Minister of Public Building and Works will, I hope, have a considerable impact on unemployment in the construction industry.

But are not regional policies failing when in the Northern Region alone 23 per cent. of the unemployed have been out of work for a year or more? Is it not time that the Minister started taking some positive action, beginning by cutting S.E.T.?

That particular remedy would make the difficulties greater. One of the greatest aids given by this Government to development areas has been the regional employment premium, which I understand the Conservative Party wishes to abolish, though it has not clearly stated when. What is clear is that it would do major damage to employment opportunities by taking away the one labour-intensive incentive for employment in the development areas that currently exists.

Is my right hon. Friend aware that the situation on Merseyside is not helped by the attitude of Merseyside dock employers, who are now refusing to employ or recruit any man who is over 30? This is making the position of the older man almost impossible.

I agree with my hon. Friend that if that is happening it is a serious matter which should be investigated.

25.

asked the Secretary of State for Employment and Productivity whether she will make a statement on her Department's policy towards those areas with above average unemployment in regions with below average unemployment.

In these areas, as in all areas, our local officers do all they can to help workers who register with us to find employment, including the offer of training opportunities where appropriate. My right hon. Friend the Minister of Technology takes full account of local levels of unemployment in considering applications for industrial development certificates for the areas referred to in my hon. Friend's Question.

While thanking my right hon. Friend for that reply, may I ask whether he will not agree that an unemployed person is a supreme social challenge, wherever he may be? Will not he further agree that in, for example, Kent, Sussex and Hampshire there are pockets of disturbing unemployment in areas which do not share in the prosperity of the South-East? Will he ensure that his Department has the interests of such people high in its priorities at all times?

I agree about unemployment being a supreme social problem. As for my hon. Friend's constituency, he will be interested to know that 98 projects which have been issued i.d.cs are still to be completed and are expected to create 4,350 jobs in the Portsmouth travel-towork area when the projects are fully manned.

Although the right hon. Gentleman agrees that unemployment is a supreme social problem, when will the level be reduced to what the Prime Minister calls an acceptable level, which is somewhere between 1½ and 2 per cent?

As I have said, the significance of the unemployment figures has greatly changed over the last few years due to certain measures introduced by this Government. But my right hon. Friend the Chancellor of the Exchequer has forecast a fall in unemployment during the next 12 months.

Race Relations

15.

asked the Secretary of State for Employment and Productivity what discussions she has had with both sides of industry about the recommendations of the Select Committee on Race Relations as they affect her Department.

I met the C.B.I. in March, and next week I am to meet the T.U.C. to discuss the relevant recommendations of the Select Committee.

Is my right hon. Friend aware that the report dealt with the necessity of achieving a fair crack of the whip for coloured school leavers in the interests of racial harmony and of using all the nation's talents? Is he further aware that, from the evidence given to hon. Members, it is apparent that there is an enormous amount of good will on all sides of industry? Will he pay strict attention to all the recommendations, including the possibility of local conferences, and see that they are carried out?

My hon. Friend refers to local conferences to assist in giving equal employment opportunities to young people. We have supported local initiatives in three or four cases in recent months, and we are prepared to support other local initiatives on this subject where they arise. Our general policy is to support the development of equal employment opportunities for all people on an equal basis, whatever their origin—British or immigrant.

New Towns (Industrial Selectionscheme)

16.

asked the Secretary of State for Employment and Productivity what result her department has achieved in placing those registered under the Industrial Selection Scheme in London in employment in the new towns.

One thousand and five London Industrial Selection Scheme registrants were placed in employment in the London new towns during 1969. During the same period, 3,137 were placed in the London expanding towns.

Can my right hon. Friend assure us that this policy will be continued with vigour, since it relates to homes with jobs in new and expanding towns, and that no impediment will be put in the way of people such as my constituents going to those new and expanding areas?

There should be no such impediments. Certainly it is the Government's intention to persist with this scheme. At the moment, the Government's Social Survey is carrying out an investigation into the operation of the scheme with a view to finding out why it is not more successful than it is. Certainly we will go on with the scheme.

Will the right hon. Gentleman make representations to his colleagues about the need for i.d.c.s being available in the expanded towns to which these people are due to go?

As the hon. Gentleman knows, priority for i.d.c.s is given to the intermediate and development areas. The next priority is the expanded towns.

Government Training Centres

18.

asked the Secretary of State for Employment and Productivity what proportion of those attending courses at government training centres has left employment to take up places.

A little over half in recent years. 54 per cent. of those accepted for training during March were in employment at the time.

Can my right hon. Friend say what rate of expansion is planned for Government training centres in the current year and in what direction it is most likely to be?

We intend to continue to complete the current programme for opening Government training centres which has resulted in the numbers trained in G.T.C.s rising from 4,000 in 1964 to 12,500 in 1969. We shall introduce a new programme if it proves necessary on the basis of current experience.

Portsmouth (Employment)

26.

asked the Secretary of State for Employment and Productivity what was the total number of people placed in employment vacancies in Portsmouth by her Department in the year ended 31st March, 1970.

Between 6th March, 1969, and 4th March, 1970, 17,732 persons were placed in employment by employment exchanges and youth employment service careers offices in Portsmouth, Fareham, Gosport and Havant.

While again thanking my right hon. Friend, may I ask whether he will accept that there is widespread respect and appreciation for the dedicated work of his officers, often in difficult circumstances, and that throughout the House there is every possible support for all that they endeavour to do?

I am grateful to my hon. Friend for those remarks. They will be greatly appreciated by the officers to whom he has referred.

Why does the right hon. Gentleman keep repeating the bromide put out by the Chancellor of the Exchequer about a drop in unemployment? Since the right hon. Gentleman spoke, the figures have gone up. Does not the situation emphasise the fact that no attention can be paid to these pre-election fantasies, which are designed to do nothing other than mislead the public?

If the hon. Gentleman chooses to talk about pre-election fantasies, one need only consider the programmes of the party opposite, in so far as it is possible to identify them.

I do not see the relevance of that to this Question. However, as I have indicated, the change in the country's industrial structure has created a serious problem of unemployment amongst older people. We are doing everything that can be done about it. The hon. Gentleman will be aware especially of what we have done about older people made redundant as a result of coal mining closures.

Disabled Persons (Unemployment)

29.

asked the Secretary of State for Employment and Productivity if she will state the number of registered disabled unemployed on 1st April this year and for the same date in 1966, 1967, 1968 and 1969.

53.

asked the Secretary of State for Employment and Productivity how many registered disabled were unemployed at the latest date for which figures are available.

The April 1970 unemployment figures for registered disabled persons are not yet available. On 9th March 1970 in Great Britain 73,037 registered disabled persons were registered as unemployed. The March figures in the previous years are as follows:

196646,551
196758,500
196866,240
196969,758

These figures are rather horrific. They have almost doubled since 1966. Will the Minister and his right hon. Friend do something with the Chancellor of the Exchequer to get rid of S.E.T., which is the real cause of increases in the unemployment of disabled persons?

There is no evidence for that statement. Action is being taken to deal with this very difficult problem, which is a matter for great concern. In particular, we are strengthening and reorganising the disablement resettlement advisory services, and our reorganisation should be fully operational by the summer. In addition, we have increased the facilities for industrial rehabilitation, vocational training and sheltered employment.

Is the right hon. Gentleman aware that any rise in the overall figures of disabled unemployed is very serious, as we all accept that this is the most vulnerable section of employed persons? Will the Minister give special attention to this matter and do everything that he possibly can to reduce the unemployment of registered disabled?

I entirely agree with the hon. Gentleman that this is the most vulnerable section. We shall certainly do all that we can to assist in situations such as exist at present.

In answer to the original Question my right hon. Friend said that he had no evidence that the payment of S.E.T. on disabled workers was having any effect on employment. Will my right hon. Friend tell us where his evidence for that comes from, because it is contrary to the evidence that I have?

I answered a Question in the House on this point some time ago. The evidence comes from our officers in the regions and from an examination of the figures. I am prepared to send the detailed evidence to my hon. Friend.

On a point of order, Mr. Speaker. In view of the extremely unsatisfactory nature of that reply, I beg to give notice that I shall try to raise the matter on the Adjournment.

Retail Prices

37.

asked the Secretary of State for Employment and Productivity what were the percentage increases in the Index of Retail Prices for nationalised industries, food, housing, fuel and light, durable household goods, clothing and footwear, transport and vehicles, miscellaneous goods, services, and for all items in the Index since October, 1964, since July, 1966, and since November, 1967, respectively, to the latest convenient date.

As the reply contains a table of figures, I will, with permission, circulate a statement in the OFFICIAL REPORT.

In the light of those figures, can the Minister say what the pound in his pocket in November, 1967, is now worth?

Not without notice. I can, however, tell the hon. Gentleman that, as a result of the economic policies of this Government, we are now in the strongest economic position that this country has ever known.

Has my right hon. Friend had drawn to his attention the report in this quarter's publication by Hill, Samuel, the banking people, which clearly indicates that the productivity of those in the nationalised industries is much higher than in any of the private industries?

That publication has been drawn to my attention. It gives encouraging backing to the Government's policies in the sphere of public ownership.

Following is the information:

13.10.64 to 17.3.70

19.7.66 to 17.3.70

14.11.67 to 17.3.70

Nationalised industries31·919·711·9
Food27·418·416·4
Housing31·517·210·6
Fuel and light32·721·612·0
Durable householdgoods19·214·512·3
Clothing and footwear15·410·48·7
Transport and vehicles24·516·111·9
Miscellaneous goods30·822·419·8
Services38·424·116·9
All items27·017·513–8

Notes:

1. The items included under the heading " nationalised industries " are:—

  • Coal,
  • Coke,
  • Gas,
  • Electricity,
  • Road and rail passenger transport,
  • Postal and telephone services.

2. These items are also included in other groups as follows:—

  • Coal, coke, gas and electricity in Fuel and light,
  • Road and rail passenger transport in Transport and vehicles,
  • Postal and telephone services in Services.

Northern Ireland

Q1.

asked the Prime Minister whether he will initiate a meeting with the Prime Ministers of Northern Ireland and the Republic of Ireland with a view to easing tension and creating a more peaceful atmosphere in Northern Ireland.

I would refer to my reply to a question by my hon. and learned Friend the Member for Aberdeen, North (Mr. Hector Hughes) on 6th November, 1969. —[Vol. 790, c. 1173–5.]

Would not such a meeting serve three purposes: first, to assure the Unionists that there is no intention on the part of the Republic of Ireland to coerce them; secondly, to demonstrate the futility of any attempt by extreme Unionists at U.D.I.; and, thirdly, to make clear to Northern Ireland that the British Government are willing to legislate, above the head of Stormont if necessary, to secure the same rights, privileges, democracy and equality as in the rest of the United Kingdom?

On the attitude of the Republic of Ireland, my hon. Friend will be aware of the helpful statement made by its Prime Minister which I quoted in a recent exchange at Question time. That is the position of the Irish Republic.

On the question of U.D.I., no responsible person in Northern Ireland is contemplating such a solution to the difficulties. Therefore, I think that we can regard that as hypothetical.

Regarding legislation and human rights, I refer my hon. Friend to the declaration signed by Major Chichester-Clark and myself at Downing Street last August when we made clear that all citizens of the United Kingdom, whether in Northern Ireland or anywhere else, have the same rights in respect of civil rights, freedom from discrimination on the basis of religion, or any other matters.

Concerning the last point, may I ask whether the Prime Minister is aware that any threat, either direct or indirect, is counter-productive in present circumstances, because it encourages the Nationalists and aggravates the extreme Right wing, and that, therefore, it is better in this case to avoid making any threat one way or the other?

We have not made threats in this matter. Our policy throughout the troubles of last summer and since—indeed, over the period since we took office—has been to assert the rights which are necessary in Northern Ireland, but not to give any aid or comfort to extremists on either side in the dispute.

Is my right hon. Friend aware that some of us are not as pessimistic about the affairs of Northern Ireland as others? For instance, in the sphere of voluntary church schools the Northern Ireland Government treats almost every Church with the same facility as does this Government, and equally generously. It is not a pity that this could not be emulated in Northern Ireland in the housing and employment spheres?

I am grateful to my hon. Friend, knowing his strong feelings on many of these matters, for putting his supplementary question in the way that he did. Concerning housing, discrimination in jobs, and investigation of grievances not only in central Government policies, as we have here, but also in local government now, it is a fact that, as a result of discussions that we have had over a period with Major Chichester-Clark, the Northern Ireland Government have moved, if belatedly—I also include what Lord O'Neil did—with a clear determination in the spheres referred to by my hon. Friend, and in other matters as well.

Is not the violence in Northern Ireland largely caused by people who wish to promote violence to disturb the Governments of both Northern and Southern Ireland and play upon local grievances to cause the present disputes and violence?

It is true that this is an extremely complicated issue. It has been debated in the House, and the whole analysis was set out by my right hon. Friend the Home Secretary. It is true that some of the violent trouble comes from extremists who can be acceptable to neither the Government of Northern Ireland nor that of the Irish Republic. There is, however, a great deal of other violence, arising in some cases from fear, perhaps irrational fear, and some violence which arises, as we know, from drink, and other violence, because violence breeds and begets violence, some even resulting, we are told, from the deployment of a Scottish Regi- ment there—because of some doubts about which football team in Glasgow some of the members of the regiment supported.

As the Prime Minister referred to a previous reply to me, may I ask whether he will endeavour to include in any such conference as is proposed ecclesiastical leaders to give a lead to their flocks who seem to be at the root of much of the trouble?

As my hon. and learned Friend knows, when my right hon. Friend the Home Secretary visited Northern Ireland twice last year he made it his business to have very full discussions with all sections of opinion in Northern Ireland, including church members of all persuasions. He received an extremely helpful response from the vast majority of church leaders of all denominations whom he saw. He met trade unionists, industrialists, and representatives of all shades of opinion. I do not think that it is necessary to contemplate the kind of conference which my hon. and learned Friend has in mind.

Is the Prime Minister aware—and I say this as moderately as I can—that in contradistinction to the Home Secretary, by his tendency to party political replies in this House and by some of his television broadcasts, notably the one on " This Week " during this month, he has himself done a certain amount to encourage the very forces of Paisleyism and the like which he detests so much?

No, Sir. In this House I always reply to questions in the spirit in which they are put, and if I have sometimes been a little rough with the hon. and learned Member for Antrim, South (Sir Knox Cunningham), I think that I have shown considerable restraint in view of his continued attitude on some of these questions.

With regard to other remarks that I have made, I think that the hon. Gentleman will be the first to recognise that all of us in this House have shown great restraint in these matters, because the difficulties of the last year, particularly, all stem from the failure of politicians over 50 years to move fast enough. I am sorry, but the hon. Gentleman cannot wipe out the past, nor his party's responsibility for it.

Will the right hon. Gentleman be generous enough to admit that over the past 50 years people of all parties in this House have been alarmed lest intrusion into the delicately poised affairs of Northern Ireland might cause the loss of innocent lives and the very sort of thing which has been happening during the last 12 months?

Yes, Sir. The right hon. and learned Gentleman is particularly right in using the phrase " delicately poised ". We have all had bitter experience during the last year or more of how true that phrase is. But, taking the situation over 50 years, it would perhaps have been easier to avoid some of these confrontations, or at any rate to concentrate blame on the intruders to whom he referred, and other extremists, if more progress had been made on reform, particularly in regard to civil rights and non-discrimination, on which great progress has been made by Lord O'Neill and his successor, Major Chichester-Clark, during the last three or four years. The whole of human history shows what happens when reforms are pressed on with in a situation where too little was done before.

On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the last part of the Prime Minister's reply, I beg to give notice that I shall seek to raise the matter on the Adjournment at the earliest possible opportunity.

Housing

Q2.

asked the Prime Minister what requests he has received to receive deputations on housing.

I have received two or three such requests mainly from tenants' associations.

What action do the Government intend to take over those local authorities which refuse to carry out their house building responsibilities? Is my right hon. Friend aware that many private tenants fear that their security of tenure and protection will disappear if the Tories are returned? Rachmanism could come back to Britain.

On the first question, I have nothing to add to the answers given by myself and my right hon. Friend the Minister for Housing and Local Government about local authorities which are failing to carry forward their housing programmes as they should be doing.

On the second question, I have expressed anxieties about the programme of the right hon. Gentleman the Leader of the Opposition, particularly with regard to the Rent Act. I was pleased to see that the Opposition housing spokesman said that it is now Conservative policy—should the matter ever arise—to accept our Rent Act, including the standards of fair rent laid down by us, and not to return to the Tory Rent Act which the right hon. Gentleman the Leader of the Opposition, when Chief Whip, forced through the House.

Would the Prime Minister welcome an opportunity to explain to a deputation how it is that if the Government's promises or pledges, call them what one will, had been kept between 1965 and 1970 more than another 300,000 houses would have been built?

I have answered that question before in the House. The hon. Gentleman cannot get away from the fact that we have built 2 million houses in our period of Government, which is about 25 per cent. more than our predecessors did even in their last five years.

Would my right hon. Friend be willing to receive a deputation from the Borough of Bexley, which started no local authority housing in 1969, and had one of the lowest under-construction programmes of the London boroughs? Perhaps my right hon. Friend would be able to tell the deputation how it could get someone to lead its borough, never mind lead a party.

I feel that if there were to be such a deputation it should be received by my right hon. Friend the Minister of Housing and Local Government, who would no doubt reply appropriately to its anxieties. It may be that in Bexley there is perhaps a feeling that there might be a Conservative Government, and they probably feel that they must get ahead of the situation because local authorities all over the country will be unable to build council houses under the Tory proposed subsidy policy.

May I ask the Prime Minister whether, in his reply to the original Question, he included the request of Dr. Reid, the Deputy Chairman of the Northern Economic Planning Council? When he saw the Prime Minister he drew attention to the fact that certain action was needed by the Government in relation to housing in Northumberland.

I am grateful to the hon. Lady. She has written to me about this, and I hope to let her have a reply because there is a Press report which is somewhat at variance with what I said to her in the House. Unfortunately, Dr. Reid has been abroad since then and I have not been able to check with him the accuracy of what he said. As I and others who were at the meeting recall he, as acting Chairman of the Planning Council, did not raise the question of help for housebuilding but referred to the construction industry in a different context. I hope to be able to satisfy the hon. Lady on the question she has raised by writing to her as soon as Dr. Reid returns.

In view of the Prime Minister's quite erroneous remarks about our housing policy, may I ask whether it is not a fact that he inherited from us a housing programme rapidly advancing and that he will bequeath to us a housing programme rapidly falling?

We inherited an advance in one year, an election year, after 12 years in which that figure was not reached. We shall not hand over anything to the right hon. Gentleman, nor do we intend to, because he will not be there.

The right hon. Gentleman seemed to think that I had not understood the Opposition's subsidy policy. I know that the right hon. Gentleman is a declared maverick on nearly all Conservative policies and that he likes to dissociate from time to time, whether on investment grants or whatever else it may be. I was assuming that the right hon. Gentleman the Leader of the Opposition was speaking on behalf of his party, and even of his right hon. Friend, when he gave assent to an estimate that the present record level of housing subsidies of £130 million would be cut by £100 million if the Conservatives got in. The right hon. Gentleman can calculate what that would mean for council housing.

Can my right hon. Friend do anything about the sordid Tory political manoeuvring in the town halls of the country and especially of my constituency? For example, last year 1,900 starts of housing units were to be made and we had only 24, and this year once again they have been cut back to less than 300. Is it not obvious that the hon. Member for Yeovil (Mr. Peyton) is using this kind of action to arrive at the national figure?

As to the decision of Conservative councils, which we were told on high authority three years ago was being orchestrated from Tory Central Office, I have nothing to add to what my right hon. Friend the Minister of Housing and Local Government has said on these questions. As to the broader aspect of what I think my hon. Friend called squalid or sordid manoeuvring by the Tories, I will in due course give my attention to the question whether anything further might be done about that.

Will the Prime Minister now acknowledge the facts, which are that under Conservative housing policy local authorities will be able to build houses for the disabled and the elderly, for slum clearance, and for those who cannot afford the full rent? Will he explain why he believes that subsidies should be given to people who do not require them?

In answer to the first part of the right hon. Gentleman's question, local authorities are free now to build the houses needed for the disabled, for slum clearance and for the other categories to which he referred. Many Tory authorities are cutting down on their building in these respects, despite the fact that we are giving a record amount of help to them to get on with the job, and despite the fact that they can borrow for this purpose at 4 per cent., under legislation passed by this House.

With regard to the second part of the question, in which the right hon. Gentleman referred to the non-priority categories of the Selsdon Park policy— [Interruption.]—the right hon. Gentleman has referred to his policies, and these should be noted.

I will when hon. Gentlemen are listening. It is clear from the right hon. Gentleman's own pronouncements—[Interruption.] The right hon. Gentleman asked me about the Conservative Party's policy. I have at last got him up; I must be allowed to enjoy it.

The right hon. Gentleman asked about subsidies for general housing need. What I am saying is that they are not to be equated, as he puts it, with people who do not require them. The right hon. Gentleman knows this to be the fact. What he is saying is that there will be no provision of subsidies.

The right hon. Gentleman is saying that there would be no provision of subsidies either for overcrowding or for general housing need, because if he cuts the subsidy from £130 million to £30 million there will not be a penny left over for those purposes.

First, the Prime Minister is making up the figures for himself. Second, it is our declared policy that under us local authorities should be able to build for people in need. What I am asking the Prime Minister is: how does he justify giving subsidies to people who do not require them? Will he now answer that single, simple question?

Yes, Sir. I will first answer the first part of the right hon. Gentleman's question.

I will answer both parts of the right hon. Gentleman's question, whether that is convenient to him or not.

The right hon. Gentleman suggested that I invented these figures. If he is now saying that he has not said them, if he is now saying that he has not confirmed the figure of £100 million cuts, I shall be delighted to let him have the evidence, as on the last occasion he denied that the Tories in 1955 said that they would not introduce a Rent Act—[Interruption.] Oh, yes. If the right hon. Gentleman makes assertions in his questions of alleged facts which are not true I reserve the right to reply to them. He was wrong then, and he is wrong again today.

With regard to the second part of the question—why do I justify general housing subsidies?—I do it on the basis that it has been the policy of every Housing Ministry in this country since 1924. The right hon. Gentleman wants to cut housing back to the level before 1924.

Questions To The Prime Minister

On a point of order, Mr. Speaker. Despite the fact that Prime Minister's Question Time has lasted 21 minutes instead of 15, he has dealt with only two Questions. Is there nothing in Standing Orders, Mr. Speaker, which will allow the House to stop the Prime Minister giving long-winded answers, obviously with the intention of evading other Questions on the Order Paper?

Order. I am not interested in the motive of any right hon. or hon. Member. Long questions and long answers are not confined to one right hon. or hon. Member. We happened to he on two Questions that the House thought to be rather important.

Consumption Of Liquor(Crimes Of Violence)

The following Question stood upon the Order Paper:

Q3.

To ask the Prime Minister if he will propose the establishment of a Royal Commission to inquire into the relationship between the increased consumption of alcoholic liquor and the increased incidence of crimes of violence.

On a point of order, Mr. Speaker. You will no doubt recall the recommendations of the Select Committee on Procedure on Questions to the Prime Minister. Quite clearly, the spirit of the recommendations is being flouted in that we have had only two Questions to my right hon. Friend the Prime Minister answered in a quarter of an hour. I feel fairly strongly about this, particularly as the Question No. Q3 seeks to relate the drink trade with the Tory Party and crimes of violence, and more particularly since the drink trade gave the Tory Party £98,000 last year instead of spending it on research into the links between crimes of violence and the drink trade.

Order. On the first part of what the hon. Gentleman said, he is quite right. It is an embarrassment, especially for someone as high up the list as No. 03, not to have his Question reached on Prime Minister's day. It is similarly an embarrassment for anyone as high up as No. 30 not to be reached on an ordinary day. I have appealed from time to time for brief questions and brief answers.

The rest of the hon. Gentleman's point seemed to me to be political.

Further to that point of order. Mr. Speaker. In view of the large number of supplementary questions which it seemed right for you to call on Northern Ireland and housing, and the length of some of the supplementaries, and, therefore, of the answers, and of the very wide interest obviously shown by the whole House in the point of order raised by my hon. Friend the Member for Fife, West (Mr. William Hamilton), if it is the wish of the House I would be glad to ask your permission to answer my hon. Friend's Question.

On a point of order. I understand, Mr. Speaker, that under the rules of the House the Prime Minister is allotted 15 minutes in which to answer Questions addressed to him and that you cannot intervene however long the supplementary questions and answers may be. My submission, however, is to ask you if you think that the Prime Minister should be allowed to bore the House for about 22 minutes rather than the 15 minutes allotted to him?

On a point of order. I understand that the Prime Minister has expressed his willingness to answer Question No. Q3, which is addressed to him. As my right hon. Friend is prepared to give his time—indeed, is prepared to work overtime—surely the House should allow him to do so?

Several Hon. Members rose

Order. I did not refuse the Prime Minister permission. If he asks for it he will get it, but he has not asked.

In these circumstances, and in view of the wide interest being shown by hon. Members in Question No. Q3, and of the suspicion that the length of some of the supplementary questions and answers has prevented this Question from being reached, may I have your permission to answer it now, Mr. Speaker?

Several Hon. Members rose

Order. If a Minister asks for permission to answer a particular Question which has not been reached, it is for the Chair to decide whether to give permission.

Further to the point of order raised by the hon. Member for Fife, West (Mr. William Hamilton), is it in order for me to ask the Prime Minister whether he will—that is, if he intends to answer Question No. Q3—answer Question No. Q25? I had intended to raise in connection with that Question the very important matter of the Walter Terry report in the Daily Mail about the Government's intention to send an expedition up the Gulf of Aquaba before the Suez trouble broke out. It follows, does it not, that if the right hon. Gentleman will answer Question No. Q3, he should seek permission to answer Question No. Q5 as well?

Several Hon. Members rose

Order. It is in order for the hon. Gentleman to ask that, but it is for the Prime Minister to ask for permission to reply, if he decides so to do.

On a point of order. If the Prime Minister is to be allowed at this stage to seek permission to answer Question No. Q3, then surely he should be encouraged to answer two other Questions, since two unfortunate people, General Gowon and President Nasser, are under serious threat in those Questions of the awful possibility of a face-to-face meeting with the Prime Minister. Is it not your solemn duty, Mr. Speaker, to put these unhappy gentlemen out of their misery?

Several Hon. Members: On a point of order—

One at a time, please. No doubt the Prime Minister has heard the serious plea which the hon. Member for Yeovil (Mr. Peyton) has made.

May I raise with you, Mr. Speaker, a point of order which I have been seeking to raise for some time? The Prime Minister has claimed that it was because of the length of supplementary questions—

I do not recall the right hon. Gentleman mentioning the length of his own answers. [HON. MEMBERS: " He did."] Be that as it may, it is not really material.

In view of the right hon. Gentleman's claim that the length of supplementary questions is largely to blame for the situation in which we find ourselves, may I suggest that what the House requires is an impartial examination, which perhaps the Leader of the House could set under way, into the respective lengths of the average replies given by the Prime Minister and the average supplementary questions?

Order. That is a piece of research in which any hon. Member could indulge.

On a point of order. May I ask you respectfully to consider, Mr. Speaker, the possibility of a precedent being created if the Prime Minister is permitted to answer Question No. Q3? [Interruption.] I have not asked him to ask permission to answer it. I have been in the House of Commons for many years and if my memory serves me correctly I have never heard a Front Bench spokesman answering a Question immediately when asked to answer it. It has always been the case that he has been asked some time beforehand to answer it.

The hon. Lady is a distinguished parliamentarian, but her recollection is not quite the same as mine.

On a point of order. While the Prime Minister may be very good at arranging extra time for himself on " Sports Report ", may I ask you if we are justified in arranging to give him extra time in the House in view of the unsatisfactory nature of the replies which he gives to Questions, anyway?

Several Hon. Members: On a point of order—

Not more points of order. I remind the House that we have a lot of work ahead of us. A multiplicity of points of order do not help us to get through that work.

On a point of order. Would you now rule unequivocally, Mr. Speaker, on this matter so that it is beyond doubt that what the House wants is Wilson's and not Watney's?

On a point of order. It is my recollection, Mr. Speaker, that it has always been the custom, if a Minister wants to answer a particular Question which has not been reached, for him to say, " With your permission, Mr. Speaker, and that of the House, I should like to answer Question No.…" whatever the Question might be. You may have given permission to the Prime Minister to answer Question No. 03, but I am not sure that the House has.

The hon. Gentleman has a long career in the House and yesterday celebrated his 36th year in Parliament. However, it has been ruled time and again by the Chair that the expression " With your permission, Mr. Speaker, and that of the House ", is just a courteous convention.

On a point of order. As the Prime Minister's Questions have now taken more than double the time that they are supposed to take, and as we have Business questions to follow, do you consider it a desirable precedent to set, Mr. Speaker, that in response to a request made by one of his hon. Friends on purely political grounds Prime Minister's Question time should be further extended in this way?

Several Hon. Members rose

On a point of order. Would you be kind enough, Mr. Speaker, to help the House by advising the Prime Minister to take something for his verbal incontinence?

With your permission, Mr. Speaker, I will now answer Question No. Q3, as follows:

No, Sir. The Government have agreed to give financial support to a programme of research into crimes of violence, and this seems the most appropriate method of inquiry.

Is my right hon. Friend aware that this Question was put down with a very serious intention, as there is a link between the consumption of alcoholic liquor and crimes of violence and there seems to be an insufficient amount of research done to establish the relationship between them? Could he not appeal to the brewers to make a contribution to this field of research rather than to the Conservative Party because, if £98,000 spent by them in 1968 had been spent on research into this matter, that would have shown much greater sense of responsibility than has been shown hitherto?

I think that it is generally felt, and that there is some evidence for the view, that alchohol has been responsible for a significant proportion of crime and of the increase of crime in this country. But there is not any very conclusive evidence, certainly not conclusive statistical evidence. A report from other countries suggests that there is some connection. That is why we have set in hand these inquiries. Anyone feeling able to contribute to the cost of such inquiries, be they brewers or anyone else, should feel that they are making a helpful contribution.

Is the Prime Minister aware that there is in my part of the country a beer called " Wilson's Bitter " and that we have known it for some time?

Middle East (Israel Andegypt)

(by Private Notice) asked the Secretary of State for Foreign and Commonwealth Affairs whether he will raise in the Security Council as a threat to world peace the direct intervention by Russia in the conflict between Israel and Egypt.

I assume that my right hon. Friend has in mind the statement issued by the Government of Israel yesterday. This has caused us deep concern, and we are urgently examining the prevailing situation in the light of this statement.

At present, United Nations action is being handled by the four Powers, and I believe that this is right.

May I ask my right hon. Friend two short questions? If, as a result of his inquiries and representations to our representative at the United Nations and the Security Council, he obtains information which, in his opinion, is worth while giving to the House, will he do so at an early stage and perhaps make a statement next week on the position?

Secondly, is he at all satisfied with the recent declaration by U Thant on the situation in the Middle East, particularly because of recent events which do not appear either objective or satisfactory? Is he altogether satisfied with those statements?

On the second part of my right hon. Friend's question, I do not think that I would disagree with what was said recently by the Secretary. General.

On the first part of the question, I will, of course, always endeavour to keep the House informed. There will be an opportunity when I am answering Questions next Monday.

Does the Foreign Secretary's Answer mean that the four Powers are considering whether this matter should be taken to the Security Council, or is it intended that they should deal with it themselves?

I believe that this is a matter which has still to be examined. It would, of course, be open to the Government of Israel to take the action my right hon. Friend suggested. On present information 1 have no ground for supposing that they would decide to do this.

Will my right hon. Friend bear in mind that among all the things happening at the moment there is a great propaganda war, and that it is tremendously important for those of us who might be able to help to avoid getting drawn in before we understand whether it is pure propaganda or has any reality behind it?

I think that we have been aware of this on a great many occasions, of the extreme tension there is among the parties concerned and the great need for everybody to try to exercise restraint. We had a debate on this recently and that was the message I endeavoured to give to the House then.

Does the right hon. Gentleman agree that if the Israeli allegations are confirmed we should no longer be faced with an Israel-Egypt conflict, but an Israel-Soviet conflict, and that it would be tantamount to the declaration of a Soviet protectorate over Egypt? This would be as serious for Europe as Mr. Khrushchev's attempt to take over Cuba was for America.

I think that the right hon. Gentleman will realise that these questions are extremely hypothetical. It is no secret that there have been Soviet pilots in the United Arab Republic for some time. We are now carefully examing the allegations in the statement made by the Government of Israel, but it depends on what they mean by the words, " operational missions ". It is not our information that Soviet personnel has been engaged over the territory of Israel or the occupied territories.

Would my right hon. Friend agree that with reference to the recent statement by the Secretary-General of the United Nations there is an unfortunate tendency to heap the criticism for failure to reach a solution in the Middle East upon his shoulders? No long-term solution to this problem can be found through independent action by U Thant and the Secretariat of the United Nations unless he and the Secretariat have the continued support of the major Powers and the Powers party to the immediate conflict?

I think that I would be in agreement with that, but I think I have made it clear that we believe that the basis of any settlement must be the Security Council resolution. As things now stand the modality of trying to turn that resolution into a clear programme of action must be agreement between the four Powers of a character which will enable Dr. Jarring to resume his mission and turn the resolution into a resolute programme of action. That, I believe, on present evidence, is the only way in which we can get a solution.

Is the Foreign Secretary aware that a new British initiative, possibly calling for a conference in Geneva, has been widely expected in the Middle East for some time? This would both help to bring about a settlement and strengthen British influence. Why has it not taken place?

Because I believe that the right course for us is to co-operate in the work now being done by the four Powers. Progress there, I admit, has been disappointingly slow, but I have no ground for believing that an attempt to shift the place of meeting or the method of trying to reach agreement would help us. We must go on working within the four Powers. There remains a responsibility, as I tried to point out in the recent debate, on the parties directly concerned to try to get nearer to each other's position.

If my right hon. Friend ascertains that the allegations are correct and that the Russians are using their pilots in this manner, how can he rely on Russia, as one of the four Powers, to take an objective view? Meanwhile, will he please refrain from supplying arms to those who are being supplied with unlimited arms by Russia?

As my hon. Friend will recognise, the first part of his suggestion is entirely hypothetical. We have no evidence at present which enables us to accept the statement. If, in the light of further evidence, we came to believe that it was true, that indeed would be a new situation.

As to policy in regard to the supply of arms by this country, I have explained the principles on which we work and I think that there has been agreement in the House on them. We would have desired to have seen a complete stoppage of the supply of arms from outside to this area. If other Powers had agreed with us on that after the war, that is what would now be happening.

Failing that, we have taken the view that on any request for the supply of arms we will bear in mind whether by saying " Yes " or " No " we help to promote the chances of peace in the Middle East. We do not wish to put either party in the Middle East in a position where it believes that it is so advantaged that it would pay it to engage in acts of aggression. Those are the principles on which we have proceeded and shall proceed. This means that we have to take into account, in order to apply them, any change in the situation. We shall find out exactly what the facts are on this and bear them in mind.

In all his deliberations on this matter, will the right hon. Gentleman give an assurance that he will keep uppermost in his mind the consideration that, until we solve the Arab refugee problem, it is unlikely that we shall get very much further in bringing about peace in the Middle East?

Secondly, will the right hon. Gentleman point out to the Soviet Union that it would ill become them at one moment to make charges against Mr. Chappell here of having participated in the slaughter of Jewry if, at the same time, they participate in doing exactly that in the Middle East?

I accept and understand the last part of the hon. Gentleman's question. A settlement of the refugee question is part of the Resolution. We have always taken the view that any settlement must be based on the carrying out of the whole of the Resolution.

Several Hon. Members rose

Business Of The House

May I ask the Leader of the House whether he will state the business of the House for next week?

The Lord President of the Council and Leader of the House of Commons
(Mr. Fred Peart)

Yes, Sir. The business for next week will be as follows:

MONDAY, 4TH MAY—Private Members' Motions until 7 p.m.

Afterwards, remaining stages of the Administration of Justice Bill [ Lords].

TUESDAY, 5TH MAY—Second Reading of the Finance Bill.

Consideration of Lords Amendments to the General Rate Bill and to the Roads (Scotland) Bill.

Motions on the Ploughing Grants Schemes.

WEDNESDAY, 6TH MAY—Supply [22nd Allotted Day].

Debate on Unemployment, which will arise on an Opposition Motion.

Remaining stages of the National Health Service Contributions Bill.

THURSDAY, 7TH MAY—Debate on the Report of the Royal Commission on Assizes and Quarter Sessions. (Command No. 4153.)

Motion on the Gaming Clubs (Licensing) (Amendment) Regulations.

FRIDAY, 8TH MAY—Private Members' Bills.

MONDAY. 11TH MAY—Remaining stages of the Fishing Vessels (Safety Provisions) Bill, the Conveyancing and Feudal Reform (Scotland) Bill, and the Local Authority Social Services Bill.

Consideration of Lords Amendments to the Films Bill.

Subject to the progress of business, we shall propose that the House should rise for the Whitsun Adjournment on Friday, 15th May, until Monday, 1st June.

The House has just heard a statement from the Foreign Secretary about the Middle East. Will the Leader of the House ask the Foreign Secretary to bear in mind the need to keep the House informed about the grave situation developing in Cambodia, and to do this by means of a statement rather than by answering individual Questions?

My right hon. Friend, who is present on the Front Bench, will note that request. Naturally, he is watching developments closely and will wish to keep the House informed.

Is my right hon. Friend aware that we should want an urgent debate if incidents should occur of incursion by Egyptian sorties into Sinai with Soviet pilots? If that were to happen, that would be a very serious development.

I cannot go beyond what my right hon. Friend the Foreign Secretary has said. Obviously, he will want to keep this matter in mind.

Is the Leader of the House aware that it is now about three weeks since the Select Committee on Procedure made a Report recommending a modest extension in the time available for Parliamentary Questions—a view which seems to be shared by the Prime Minister? Is it not a terrible waste of the time of those who serve on such Committees and of those including yourself, Mr. Speaker, who give evidence before them, if, after all this work is done and carefully considered proposals are made, they are simply ignored?

The right hon. Gentleman must not feel that matters of that kind are ignored. I can assure him that they are not ignored by me.

Is my right hon. Friend aware that many of us would like a statement as soon as possible about what representations are being made by Her Majesty's Government to the American Government about the extension of the Vietnam war in Cambodia, warning the American authorities of the folly and madness of further extending this unnecessary and futile war?

I cannot go beyond what I said in reply to the Leader of the Opposition. My right hon. Friend the Foreign Secretary is watching developments closely and will, if necessary, make a statement to the House.

As it is months since we had the Duncan Report, may we, in view of its great importance, have a debate on it soon? If not, will the right hon. Gentleman assure the House that he will not make any major alterations before there is a debate?

I am aware of the importance of the report. I note what the hon. Lady says, but I cannot arrange a debate for next week.

May I congratulate the Leader of the House upon the anniversary of his birthday and ask whether he will find time in the coming week for a debate upon the industrial progress of North-East Scotland and the need for better facilities for its extension?

I thank my hon. and learned Friend for his expression of good wishes for—I was about to say " not next week ", but it is today. I regret that I cannot provide time for a debate on this subject next week.

Further to the question asked by the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), does the Leader of the House recall that it is well over a year since the Select Committe on Science and Technology submitted a weighty and carefully argued report on defence research, which is still awaiting debate? Does he recall also that during business questions for the last three weeks he has been asked to find time for a debate on the Report of the Select Committee on Members' Interests (Declaration), a very important subject which should be resolved during this Session?

Will the Leader of the House bear in mind that hon. Members will not be prepared to serve on Select Committees if their recommendations are ignored for so long?

The hon. Member must be aware of the pressure on parliamentary time. I wish that I could have more time. I have decided for this week that we shall have a debate on a very important report affecting the courts. I was pressed continually by hon. Members for such a debate, and I have conceded one. I am aware of the importance of the matter to which the hon. Gentleman refers and I take note of his request.

May we have an early debate on the proposals for drastic increases in London Transport fares, which were announced this morning but which were carefully concealed from Londoners by the Conservative leadership during the recent G.L.C. elections?

I am aware of the announcement. I note what my right hon. Friend has said, as no doubt other people in London will. But I cannot find time for such a debate next week.

Can we expect next week an assurance from the Secretary of State for Education and Science that the Government do not intend to put at risk the other good proposals in the Education (Miscellaneous Provisions) Bill by trying to reinsert in the Bill the ill-judged and controversial provision which was deleted on Tuesday in another place?

The Bill has not yet finished its stages in another place, so it would be premature to announce an attitude at this stage.

Reverting to the question asked by the right hon. Member for Kingston-upon-Thames (Mr. Boyd Carpenter) about Cambodia, I underline to my right hon. Friend the extreme urgency of this matter. May we have a statement in the House—perhaps tomorrow—because what appears to be occurring in the United States is that the decision of President Nixon is strongly opposed by weighty opinion and prominent Senators? May we have a statement from Her Majesty's Government in time to influence this decision, which could be as disastrous as was the original decision to go into North Vietnam? May we have an urgent statement of our own Government's policy?

I know that this is an important matter. I fully understand the feelings of my hon. Friends. I cannot go beyond what I said in my earlier reply.

Is it not vital that the House should have the opportunity of pronouncing upon this very serious situation which has now been created. which may considerably extend the war in the whole of South-East Asia and result in enormous problems which the House will have to consider over many years? Should not hon. Members have an opportunity to make their views clear at an early stage?

My hon. Friend is asking not only for a statement, but—by inference—that there should be a debate. As I have already said, my right hon. Friend the Foreign Secretary is watching developments and will, if necessary, make a statement on Monday.

Since the right hon. Gentleman said that he understood the feelings of the hon. Member for Ebbw Vale (Mr. Michael Foot), would he also please understand my feelings, that it seems to me only natural that the Americans should respond to what has been a Communist invasion of Cambodia —

I am aware of the views of the right hon. Member, and of many other hon. Members. There are differences of opinion on this matter, but I cannot go beyond what I said earlier about a statement.

While it is evident that the gravity of the situation in South-East Asia would fully justify a debate next week, may we at least urge on the Leader of the House that, in view of the grave doubts about what has been done in Cambodia by the United States Central Intelligence Agency, we shall have a statement from the Foreign Secretary as soon as possible and whenever necessary?

In view of the allegation that the Evening Standard Lobby Correspondent was dismissed after receiving £500 from an hon. Member of the House, provided by a foreign Government, does it not make it even more important that we should now discuss this question of Members' interests, and particularly the interests of Members who accept bribes and money from foreign Governments to put over their policies in this House?

Order. The hon. Member is referring to a sub judice case. He was very wrong to do so.

With great respect, Mr. Speaker, there is no question of sub judice in this case.

On a point of order. With due respect to my hon. Friend, should we debate a matter concerning a journalist who cannot defend himself in this House? Would it not have been far better for my hon. Friend not put this question?

The hon. Member for Croydon, South (Mr. Winnick) has put his own business question. He must n x deprive other hon. Members of the right to put their business questions. One proviso which the House makes is that we do not ask questions about any case which is sub judice.

Bill Presented

International Monetary Fund

Mr. Chancellor of the Exchequer, supported by Mr. John Diamond, Mr. Dick Taverne, and Mr. William Rodgers, presented a Bill to enable effect to be given to a proposed increase in the United Kingdom's quota of the International Monetary Fund and to provide for certain loans to that Fund to be made out of the National Loans Fund instead of the Consolidated Fund: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 165.]

Orders Of The Day

Shipbuilding Industry Bill

Order for Second Reading read.

4.13 p.m.

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

This is a short Bill and, in other circumstances, the House might not want to devote a great deal of time to it, but, in view of the public interest in the shipbuilding industry at present, I hope that you will allow me, Mr. Speaker, to present it by making a report to hon Members about the progress of the industry, which has real problems but is making real progress, and, therefore, to set the Bill in that wider framework.

First, I should deal with the Bill itself. which, like its immediate predecessor, the Shipbuilding Industry Act, 1969, is of great importance to the industry and to a lesser extent important to its ancilliary supplier industries. Section 7 of the Shipbuilding Industry Act, 1967, gave the Minister power to give guarantees to facilitate the financing of orders for ships placed by British owners with British shipbuilders. The Bill would simply and solely raise from £400 million to £600 million the statutory ceiling on the guarantees which the Minister can give. This is part of a rotating fund.

As I explained when I moved it, the main aim of the original Bill in 1967 was to prevent British shipowners being forced to place their orders abroad solely to obtain better credit terms. British owners can take advantage of other countries' export credit, but are not eligible, of course, for British export credit arrangements. As our shipbuilding industry enjoys no natural protection, and, in the absence of a home credit scheme offering broadly similar terms to those available abroad, British shipowners would be fighting a losing battle for the custom of the British owner.

Shipbuilding does have a number of difficulties. First, there is no tariff protection for it. It is genuinely a wholly international market, although not by any means a perfect market, and this makes the shipbuilding industry's need for a home credit scheme quite unique. Practically all the other shipbuilding countries have such schemes and I will be referring to other forms of aid abroad. Without such schemes, there would be a ridiculous situation in that the industry would be competitive only in the export market, although our home market is one of the largest in the world.

When I introduced the previous amending Bill, I hoped that the £400 million would last the life of the Shipbuilding Industry Board. I was too pessimistic, in the sense that the orders since then have taken us above that top. This therefore provides a natural moment to pass this Bill, against the background of a very big world shipbuilding boom.

The House may know the figures, but if not, perhaps I might give them. Net new world orders rose from 18·3 million gross tons in 1965 to 25·4 million in 1968 and 29·5 million last year. Orders for United Kingdom registration have risen even more spectacularly. The total order book for United Kingdom registration at the end of 1968 was 6·8 million gross tons, worth £618 million. The present order book is 9 million gross tons, worth £900 million. The net new orders secured by the industry are 2·5 million gross tons in 1968 and 2·1 million last year.

These figures over the last year can be compared to average net new orders over the period 1960–64 of 1 million gross tons per year. This is a substantial increase in new orders.

I was interested in my right hon. Friend's reference to a world boom. I wonder whether he read the reference in The Times yesterday to the serious state of inflation? Can he relate the two? Is the boom part of the inflation or is the inflation part of the boom?

I aim to deal with some of my hon. Friend's points during my speech. In so far as I fail to do so, he can intervene to ask me to do so, and in so far as I fail again, he can raise the matter with my right hon. Friend the Paymaster-General, who will be winding up. I am just trying to set the Bill against the background of a very big boom in world shipbuilding and an increase in new orders for the industry.

These new orders have covered the whole spectrum of shipping—the giant tankers, container ships oil-drilling exploratory ships, as well as ships of traditional shape and size. The price of ships has also risen considerably, which, in part, answers the question of my hon. Friend the Member for Glasgow, Govan, (Mr. Rankin).

It is clear—clearer, curiously, than when we first debated this matter some years ago—that the ship market expansion is real and likely to continue. This further £200 million which I am bringing before the House is expected to last during the life time of the board. My office has kindly put on my brief that it is expected " with confidence " to last through the lifetime of the board. I struck out " with confidence " because this is the third time that I have come forward with a Bill of this kind.

The Bill does not change the requirements of the Shipbuilding Industry Act, in that, before I give guarantees, the S.I.B. must recommend them to me and must take into account what the shipbuilder is doing about the reorganisation of resources. This is not new, but I would remind the House of it. Before the board can consider recommendations, the shipbuilder has to tell the board about his investment plans, changes in organisation, expected profitability, industrial relations and so on. This is part of the general procedure which has been adopted to see that the shipbuilding industry policy has been directed, as far as possible, to strengthening the industry in the long term.

This check list on progress made is one of the means by which the board maintains contact with the industry on these points. The power not to recommend by the board is a sanction of last resort and may have played some part in encouraging the reorganisation which everyone recognised was necessary.

Some questions have been put about the Shipbuilding Industry Board and whether its life should be extended. When I introduced the Bill I made it clear that a decision on extension was one that we would have to consider nearer the time. I tell the House frankly that one of the reasons why I was extremely anxious about the future of the board was that the whole object of this exercise was to get a short, sharp reorganisation within the industry, not for the industry to feel that this was something in the nature of a permanent support programme.

Therefore, the sense of impending dissolution of the beard which was built into the Act was very much part of the policy. However, having now got near to the expiry of the life of the board and considering the problems of the industry and the progress made, we have decided, after consulting the interested parties, that it would be right to extend the life of the board to the end of 1971. I hope that I will carry the House with me in this. I will be making the necessary Order under Section 9 of the Shipbuilding Industry Act, 1967, for an extension of the board's life.

Other questions have been asked during the last few months about the credit aspect. My right hon. Friend the Paymaster-General, speaking in the House on 25th January, and explaining the Government's intention to introduce the present Bill, undertook to review the continuing need for a home credit scheme. This review is not yet completed, and whereas this £200 million will go some way to meet the immediate position it must not be confused by the House with any decision about a permanent scheme which will have to be reached later.

Section 7 provides for the limit to bite on the liability outstanding at any one time and this envisages a revolving principle because I am allowed under the Act to undertake further guarantees as repayments are made to the banks under the existing guarantees. The repayments, which only began to trickle in some time after the scheme came into operation, are expected to reach £13 million this year and will tend to rise, although I am not suggesting that this is a totally self-financing scheme. We are getting some benefit. We want to have a little more experience about the reorganisation and consider the proper procedure under the scheme when the S.I.B. has been dissolved in due course, before we come to a final view on the permanent scheme.

It would be wrong to present the Bill to the House without making a special reference to the London and Scottish clearing banks who have agreed to help the shipbuilding industry by making credit available under the scheme at the fixed export credit rate while the long-term review is carried forward. The banks have recognised the valuable balance of payments contribution made by the industry in building British ships which would otherwise have been built abroad. I would also like to express my thanks to the Ship Mortgage Finance Company, whose advisory committee has agreed from the outset to advise me on the determination of the security requirements and to act as my agent in the negotiations on the security and legal documentation with the shipowner.

I should also tell the House, although those who follow these matters will know it, that no cost will fall on the Exchequer unless there is a default by the shipowner and the security proves insufficient to cover the loan. Moreover, the shipowner in these cases pays the fees to cover the legal and administrative costs and there has been no case of default so far. If we are as fortunate in future as we have been hitherto with our scheme, reaching £400 million, this will be a very satisfactory operation.

That, broadly, is all I need to say in introducing the Bill. I will now turn to the state of the shipbuilding industry. I recognise that there will be many hon. Members on both sides who may want to refer to particular points about the firms in their own areas and my right hon. Friend the Paymaster-General will do his best to deal with them.

On a point of order. I apologise for interrupting the right hon. Gentleman, but it would be for the convenience of the House if you would rule, Mr. Speaker, whether it will be in order for us to follow the right hon. Gentleman and to speak a little wider than the actual Clauses of the Bill during the debate.

My first impression is that it would be in order. The Bill increases the amount of money from £400 million to £600 million, which is a 50 per cent. increase; and £200 million is a lot of money. I think that the debate is fairly wide.

I have never listened to a Ruling with greater interest, Mr. Speaker, because I was just in the process of packing up my speech. I have never known an hon. Member take such a risk in asking for a Ruling from Mr. Speaker at a time when everything looked as though it was going all right. Still, he has taken the risk and with those memorable words of yours, that £200 million is a lot of money, we can proceed.

What I really wanted to say about the industry generally is that it is against this background, of a world market continuing at a high level, which has really in a sense doubled as compared in the 1960s, that the industry has had to face this challenge, while reorganising. I do not want to go over old history. Without quoting Geddes, or stirring any old memories—and everyone here has memories of the industry—the fact is that the industry has been reorganising and is different from what it was in 1966. Therefore, this period of boom and many of the problems which are not wholly resolved stem from the fact that these two processes had to go on together. In the post-Geddes years the industry missed out on the flow of orders that was beginning to pour out from customers from all over the world.

For example, in tonnage terms British industry took only 2·2 per cent. of new world orders in 1966 and only 5 per cent. in 1967. This reflected the extent to which the industry, before reorganisation, had not been able to take advantage of this growth in world demand. But in 1968 and 1969 there was a revival and British yards won 9·8 per cent. and 7 per cent. in those two years. The British order book at the end of 1969 amounted to £600 million in merchant ships. In my experience of the House, and I dare say that others will feel the same, the exchange of statistics across the Floor in a political spirit does not often illuminate the problem. But I am only trying here, without drawing particularly controversial conclusions, to indicate that the problem of the industry was that world demand was rising very rapidly.

The industry was in a difficult position which is why Geddes was set up and reported. Part of the difficulties stemmed from the fact that the reorganisation began rather late in the context of the increase in the world order position. Out- put in 1968 and 1969 as a result of these two factors inevitably fell behind, because of the low level of orders placed in 1966 and 1967. We often hear of very fast construction times measured in weeks and months, but these figures relate only to the construction or assembly of very simple ships and even these sometimes refer to hull structures. The period from order to delivery is much longer, particularly if the order books are full.

The recent level of output, which has been low, reflects this low level of ordering in 1966–67 and it is also, looking forward more optimistically, an explanation of the higher figure of completion, something like 1½ million gross tons or more, expected for the next two years, which is a substantial rate of completion.

Having said that, there is obviously disappointment—and this has been mirrored in Press comment—that the output has been rather slow to respond. I say candidly that the effects of reorganisation and of the productivity agreements have been slower than many really may have expected or hoped. There are favourable factors, for example, the new steel-working facilities at Harland and Wolff, which, when fully operating, in association with the new dock, should have a marked impact on the tonnage figures because this somewhat unsatisfactory form of measurement is so susceptible to changes in the number of giant tankers or bulk carriers produced. There have been other less spectacular production improvements which will also come on stream, for example, Appledore and Robb Caledon.

Possibly as important in considering the state of the industry today is the fact that the reorganisation, coupled with the high level of orders, has brought about an increase in the number of yards that have taken multiple ship orders, or orders for similar ships from different owners. This is not limited to the case, although it is the most outstanding case, of the SD 14 programme at two Wear yards. If there is a single fact which is important to shipbuilding productivity and makes better management easier to achieve it is the run of similar or identical ships produced by yards specialising in that type of ship.

Although it may have been attractive in the old days for yards to be able to say, " We can provide you with anything you want " it is absolutely fatal today for, at any rate, a single yard to boast that it can produce a wide range of ships. If one tried to maintain this position one would be striking at the security of employment of the men employed in that yard.

The challenge of this reorganisation, which is not merely a matter of company structure—although that can be important—but which very much concerns market and production policy and the mix of skills required in a yard, has not been without its problems.

Here one must distinguish between what one could call the special and different problems obviously affecting such undertakings as Upper Clyde Shipbuilders, of which the House has heard a great deal and upon which further reference may be made in today's debate, and which is now faced with the necessity of its 3,500 redundancies of which the House knows, or Harland and Wolff, where the basic problem is to achieve a profitable use of the new facilities as soon as possible. Anyone who has followed the Harland and Wolff problem will recognise that to get a good throughput of steel at the same time as one is building a big dock on the premises presents great difficulties.

Then there is the Cammell Laird problem of the transition to a specialised type of merchant shipbuilding, which has created problems inevitably for management.

Wherever one looks at the British shipping industry, in which every yard one visits, one can see how the reorganisation, just by merging and the redeployment of resources and the re-equipment where it has occurred, has imposed great strain on management and the people in the yard. It is easy for us, holding debates in the very airy atmosphere of the House of Commons, with a bright sun shining and controlled temperature, to forget that the people grappling with this problem of reorganisation have a difficult job on their hands. The occasions where people have " blown their top " in shipbuilding about each other, or about shipbuilding if they have not been in the industry, have always been occasions when unfair and foolish things have been said. I know that the House, and par ticularly hon. Members with shipping constituencies, want the debate to be conducted against a background of their real experience of what is involved in making this big change in an old and distinguished industry.

There have been other cases where shipbuilders are facing, or have faced, difficulties. The special case of Austin & Pickersgill, which I have mentioned, is one which is on the good side. Others, having obtained a good order book, are having difficulty in increasing productivity, more or less for the reasons I mentioned, and are finding that the fixed price they had to quote in negotiation, often as long ago as 1967, made insufficient allowance for the increases in shipbuilding costs which, as the steep rise in world ship prices shows, are not peculiar to this country.

This is another aspect of the problem of the increase in price: the combination of fixed prices, without escalation clauses, with a long period from order to delivery, and also the accountancy convention of making provision for losses as soon as they are identified, which may mean that company results can look particularly bad in a single year. So, while not wishing to under-estimate the problems which the industry still faces, it would be no service to the industry or those employed in it either to conclude—not that any hon. Members in the debate would do so—that the industry should be written off or, on the other hand, to go to the other extreme and demand massive further assistance for it.

I know that there is a special case for ship-repair, which really lies so far outside the terms of reference of the Bill that I do not think that any hon. Member would want Mr. Speaker or Mr. Deputy Speaker to broaden the range of the debate to cover the whole problem of ship-repairing.

At the same time, the relationship between shipbuilding and ship-repairing is so close that it would be wrong not to say something about the problems, particularly in respect of a special case which has come to public notice, the Palmer-Hebburn case. Although Geddes did not cover ship-repairing and it lies outside the ambit of the board, let alone the Bill, discussions are in progress, contact has been established at a number of levels, and the Department is as interested in trying to make a contribution as far as it can—and these things are never easy—to a solution of this problem as it has done with cases like Furness, where we have been able to help.

Our reason is that underlying our whole approach to this industry lies our concern for the people who work in it.

My point arises out of what the Minister was just saying. I was wondering whether ship-repairing was not included, because, for example, on the Tyne Smiths Docks are in a ship-repair yard and are in the consortium of the Swan Hunter group. It must, I think, although I may be wrong, come into the question of the money which we are arguing on the Bill.

I think that what the hon. Lady says, in common sense suggests a concern with both. Shipbuilding and ship-repairing are so close, and the possible use of facilities under certain circumstances across that frontier makes it relevant. But one does not want to base it simply on the fact that there is a ship-repairing capability within a shipbuilding firm, because that would make it too narrow. Although this was not specifically referred to in Geddes, we know that the association has looked at it. The council will be making a comment on it and I want the House to know that the matter is not out of our minds.

Finally, there is no reason why this industry, operating in a world market which has been rising with surprising steadiness despite the earlier prediction of decline—and I was cautious some years ago—should not be successful provided that premature judgments are not taken before recent changes have had time to be fully implemented. If ever an industry needed time to reshape itself, it is the shipbuilding industry.

This is the background against which the Bill will be debated. It is not a Bill to provide further grants or loans for the industry, to give it an easier ride. On the other hand, it provides what experience abroad, as well as in the United Kingdom, shows to be necessary if ship orders are not to go abroad simply to obtain cheap credit. There may be many who would prefer to see a situation in which there was no such competition for other countries' orders by way of favourable credit.

A lot of countries with shipbuilding industries recognise that the present pattern has unattractive and undesirable features and does not benefit anyone very much. We have played as positive a part as we can to bring about the international understanding reached through the O.E.C.D. last year with the maximum credit terms for ships' exports. When I see what sort of support is made available abroad in one form or another, it is quite remarkable. The Japanese have a home shipbuilding programme of construction on the basis of credit on terms more favourable than the international understanding agreed minimum export credit rate for ships and the E.E.C. has a 10 per cent. subsidy. Italy pays more and France rather less, although France has a cost escalation provision and Sweden has some other arrangement.

I can understand the situation because we are all under the same sort of pressures and concerns. There is a great deal to be said, if we could only do it, for moving forward towards a better international understanding in this direction. The people who have done best out of all this are those in the shipping industry, because over the years they have been able to get ships at a price well below their cost of production from many countries. This, of itself, does not make sense.

So this is the long-term objective which we have. Unfortunately, it really is not practicable to reach international agreements covering the whole range quickly, but we are playing an active part and, meanwhile, it is necessary that credits for home ship orders should continue to be made available in the interests of the industry and of the national balance of payments.

Having, in this brief tour d'horizon of the shipbuilding industry, identified some of the real problems, I make it clear that we ourselves think it right to review and examine the trends and tendencies and policies and prospects in the industry in the 1970s. My right hon. Friend the Paymaster-General is responsible within the Department for looking after shipbuilding, and I have agreed with him that we should look ahead and consider the state of the industry and the possible international developments.

This is the proper time for that, four years after Geddes and after we have had experience of the Shipbuilding Industry Board and in anticipation of its demise after its prolonged life. I believe that we have achieved something, with the good will of both sides of the House over the years, in contributing towards the recovery of this important industry.

I know that there is much that can be said in sharp debate on this subject today if hon. Members choose to do so, but I hope that the Opposition, in their comments. will not forget that next Wednesday they have chosen a debate on unemployment, and I hope that, in the speeches they make today on the shipbuilding industry, they will say nothing that would be incompatible with what they will be saying next week when we discuss the level of unemployment.

4.24 p.m.

I must first declare, as is usual, a remote interest in that I am a director of business which is owned by a ship builder, although it does not build ships. I will take up the broader review which the Minister of Technology went into first and then come to the more detailed questions of credit.

I agree with the right hon. Gentleman that there are grounds for optimism about the shipbuilding industry. I thought that his general review of the position was sound in many aspects, although perhaps he did underplay some of the real and serious difficulties which are facing shipbuilding at present. It could be said, judging from the newspaper reports and the financial results of the shipbuilders, that the industry is going through a very sticky patch. His approach today was much wiser that the approach of starry-eyed optimism which existed in the industry in Geddes days, when we thought that we had the answer to everything. He had reckoned without the physical and human difficulties which lay ahead. The success of the industry is still far from what we would like it to be and indeed what we hope it will become in future.

There is the serious worry of the balance of payments aspect. I have never understood how the right hon. Gentleman managed to claim, in his speech on the Address in reply to the Queen's Speech last November, that " great balance of payments benefit " was being conferred by the great success of the shipbuilding industry. We had figures only this week showing that its deficit on the balance of payments was £19 million in 1967, then £78 million in 1968 and £150 million in 1969. These are large deficits for a manufacturing industry in which one would hope that this country could at least break even if not make a surplus.

There are also these worrying figures about the declining share of world orders we have been taking. I know that world orders have increased so sharply that we have been able to increase our orders, and the House is glad that that is so. Nevertheless, the percentage we are taking has been dropping steadily, apart from year to year fluctuations, and it would have been a happier situation if we could have maintained our percentage. It has dropped from about 10·4 per cent. in the first half of the 1960s to about 7·2 per cent. in the second. If that had not taken place, the situation would have been very much better.

Despite the world boom, the profits of the industry give great cause for alarm because, without profits, investment in the future, and the money saved up to get through sticky patches are inadequate, and I think that the right hon. Gentleman's analysis of some of the factors which went wrong was perfectly reasonable. But there are other factors, too, I regret to say. Leaving aside the three big groups which have made big losses —U.C.S. Ltd., Harland and Wolff and Cammell Laird—there are some very low profit figures in many other firms in the industry. The firms which are making satisfactory profits are very few. Lower Clyde Ship Builders, Austin and Pickersgill, Vosper-Thorneycroft and Appledore are the only ones to make a healthy profit. These are all yards which resisted mergers, it is worth pointing out —although it is a party point—which were pushed by the Government through the Shipbuilding Industry Board. They resisted what they might otherwise have done.

In fairness, would not the hon. Gentleman agree that Camell Laird, Harland and Wolff and Vickers also resisted mergers and have no startling profits to show?

If Harland and Wolff and Cammell Laird had merged we would have had an almighty loss on our hands which would have been more difficult to deal with than the present situation.

Although some reorganisation has taken place in the industry, it has been far from the lines which Geddes laid down and to that extent the point made by the hon. Member for Barrow-in-Furness (Mr. Booth) bears me out. It is probably unwise to force shotgun marriages on these various yards, which know where their interests lie, and perhaps the most successful groups in the country are the two which resisted forced mergers. They knew best.

The hon. Gentleman claims that there was coercion for mergers to take place, but I know of no such case. Surely they were all on a willing seller/willing buyer basis.

There was coercion in the sense of threatening to refuse permission to borrow money under the provisions of the Shipbuilding Industry Acts through the Shipbuilding Industry Board unless certain mergers took place. Admittedly, the coercion was not carried to extreme but pressure was put on many yards. We should cease doing this and credit should be made available as of right rather than as a result of following some action which might well do more harm than good as the case may be.

But surely this is exactly contrary to the advice of Geddes. Before we had the Geddes Report, credit schemes were available to the industry whether it was reorganised or not. It was the failure to reorganise that led to the drop in percentage of world orders from 50 per cent. in 1946 to 2 per cent. in 1966. There had been some form of subsidy with no reorganisation made part of the scheme.

Let us be fair about this. These credits are, first of all, a subsidy to the shipowner, not the shipbuilder. They are secure forms of cheap finance so that the shipowner does not automatically go abroad for equivalent matching terms. To use the granting of subsidies or assistance to shipowners to chastise shipbuilders is a bad procedure. I am not saying that there should not be ultimate sanctions, but, following the mergers which the Government and the Shipbuilding Industry Board attempted to force, the evidence is that, while some were successful, quite a lot of firms which did not merge have had better results than they would have had had they merged.

Before leaving the question of sanctions, would not my hon. Friend think it a valid point to observe that Lower Clyde Shipbuilders has not been terribly successful in obtaining naval orders from the Government since it declined to join U.C.S.?

That is a case that I would not like to confirm or deny, not having information about where the Navy has or has not placed its orders. But that sort of pressure, if it has taken place, would be quite wrong. The ships should be ordered in the yard able to give the best service.

I do not propose to say much about the three big groups in difficulty. The right time to talk about them will be if the Government make specific proposals to help them. Incidentally, I wish that the money which has been given to Upper Clyde Shipbuilders could be legalised by means of the Bill which the House has been promised. It is wrong to make advances without giving the House the chance to debate the issue and to have a full report on the affairs of Upper Clyde Shipbuilders in a debate.

I find this particularly surprising since the Minister of Technology said in the shipbuilding debate on 23rd January, 1969
" The plain truth was that as the guarantees were being exhausted and there was urgent need to seek Parliamentary authority, and in view of my own reluctance, which I must confess, to proceed in anticipation of statutory authority, a practice which I very much deplore, I thought it proper to bring the Bill forward…"—[OFFICIAL REPORT, 23rd January, 1969; Vol. 776, c. 683.]
So the right hon. Gentleman has gone on record as saying that he very much deplores the practice of spending money or taking action for which there is not true statutory authority. I therefore hope that we shall have the Upper Clyde Shipbuilders Bill soon so that we can discuss the matter then.

The same applies to the other two yards in trouble—Harland and Wolff and Cammell Laird. There are many factors. The House is not in possession of the full facts and figures. We do not know what case has been put to the Government. We do not know how serious their plight is. We do not know how best they could be helped. Therefore, it would not be right for me to say what should or should not be done in either case unless the Government make full information available and put forward their proposals for us to comment upon.

From all this, it is clear that the industry should be examined again. It will not be the Prime Minister who will instigate a re-examination of the shipbuilding industry, because he will not have enough time to do it. But we on this side of the House feel that an examination to see what will be of the most help for the future would not be a bad thing.

Contributing to the poor results has been the big factor which the Minister mentioned, namely, that orders for ships now coming into the profit and loss accounts of shipbuilders were taken two or three years ago at very low prices. But ships for which orders were taken later than that, after the world market perked up, are also showing losses because the contracts on which they were taken were often on fixed price terms and there has been an escalation of costs far beyond what the shipbuilders foresaw or indeed what was likely on past practice, or what they could have obtained from the shipowners in view of the competition for the orders.

Since 1964, according to the official figures, the cost of materials has gone up by about 21 per cent. and the cost of labour has increased by 60 per cent. That is a very high rate of striking—60 per cent. in six years. But in the last few months there has been a further escalation of costs. There is some anxiety that even recently booked orders which appeared to be taken at profitable prices may well turn out to be not as good as had been hoped.

The same factors have hit ship-repairing, too. I agree with the Minister that we cannot have a debate about ship-repairing, now. But it is the Cinderella of the industry because it has had no help in the way of grants and loans and it has to meet the same rising costs and difficulties as the rest of the industry.

I am not against high and rising wages, but to be absorbed into a profitable business they must have two elements. First, there must be an element of predictability about them. It must be possible to make a fixed priced tender for two or three years ahead and to have a reasonable idea of what wage costs will be during that period. Secondly, no shipyard in world competitive conditions can pay higher wages than the productivity which it achieves allows.

There are several factors about this aspect of the scene which should cause the House concern. The escalation of shipyard wages has continued whether the industry was profitable or not, through boom and slump, and it was to some extent aided by the developments on the Clyde whereby people began to think that even if shipyards went bust there would be somebody to help and to save the business from ruin. There are stories on the Clyde that pressure has been put on shipyards to go bust because the Government would rescue them. I hope that that sort of attitude will not be encouraged by anything which happens in future because in the end all concerned must earn their own living.

The hon. Gentleman, a responsible Opposition spokesman, says that shipyards on the Clyde have been encouraged to go bust. Could he give an example? Is he referring to Lower Clydeside or Upper Clydeside? Could he say specifically which shipyard ever received such encouragement, and when?

The hon. Gentleman knows full well that the effect of the belief that there is a safety net under the shipbuilding industry and that no great yard can be allowed to go out of existence has encouraged people to try to get as much out of it as they can. I do not blame them. I am not making any allegations. But if the hon. Gentleman talks to any shipbuilder in the country he will know that the pressure for higher wages has been unabated by consideration of the profitability of the business, and that people believe that the Government will save the industry whatever happens. This is very unhealthy.

The retiring Chairman of Harland and Wolff made the same point. He said that as from 1st August labour relations in the shipbuilding industry suddenly became very much worse after a long and smooth passage. Yet what happened just before August?

May I answer my own question before I answer the hon. Gentleman's?

The Prime Minister ran away from his industrial relations legislation and it became clear that nothing at all would be done to intervene in a situation which, including the highest possible labour costs in estimates, still caused losses to be made on ships on which honest shipbuilders were trying to make a profit through the sweat, skill and brains of everybody in the yard.

There are still serious difficulties on the labour front. There are still restrictions on the entry both of apprentices and of retrained men. This is a nonsense in the development areas. There are probably vacancies for several thousand skilled men in shipbuilding on the North-East Coast, as the hon. Member for Wallsend (Mr. Garrett) knows. Yet there are 58,000 unemployed men in that region. The situation is the same on the Clyde and probably on the Mersey. How can there be so many vacancies for skilled men and at the same time such a large number of unemployed men? We have training centres and retraining schemes, and yet supply and demand simply do not match up.

Productivity is still not growing fast enough. Over-manning and inflexibility still exist in the industry. If the industry is to have the bright future for which we all hope then both sides of it—and I do not say that management is not guilty of imperfect performance in many areas —must try to clean up these blemishes and go ahead as hard as possible.

I am sure that the proposals which my right hon. Friend the Leader of the Opposition has put forward for reforming industrial bargaining and for trying to obtain fixed price contracts between management and men and making them enforceable have a real and dramatic importance in relation to the difficulties in the industry which I have been describing. The Prime Minister described the pro- posals as an attempt to drive down wages. If the Prime Minister knows how we are to drive down wages I should be grateful if he will tell us. It is not easy to drive down wages in the present climate. I do not think that my right hon. Friends know how to do it, nor have they the slightest intention of doing it. Institutionalising the bargaining system and getting wages on contracts in shipbuilding will help those who have to build ships on contract to deliver the goods and, I hope, also make a profit.

Turning to credit, I make no complaint that the Government have under-estimated twice how much this would be, because it gives us the opportunity again to debate this industry. It is surprising how much the Government have under-estimated the cost. No doubt, in a year or two, there will have to be another Bill, because I do not believe that this limit of £600 million will last for very long either. We are not quite clear how much is outstanding; how much has been lent, less how much has come back. We have always warned that the original £200 million would be too small and that the second £200 million would be too small. My hon. Friend the Member for Eastleigh (Mr. David Price) spotted this at the very beginning, and on each occasion he urged that a bigger sum should be allocated because the limit was obviously too small, and I am sure that he will feel the same about this Bill.

So long as both sides of the House welcome Bills of this sort, I suppose that there is no harm in debating the matter. On the other hand, if one tries to imagine what the total might reach, one gets to very big figures. Only now has the first repayment started—

The repayment is one-eighth of the sum outstanding on each ship every year, so it will be eight years before the first loans are totally repaid. If there were a stable level of ordering and the cost of ships remained the same —both very unlikely postulations—it would he eight years before the peak was reached. At the present rate, well over £1,000 million would be oustanding at that time. But we have to add to that the world boom in shipping and the increase in the cost of ships. I do not know when the Minister thinks the peak will be reached, nor what he thinks it will be, but it will clearly become a major item of credit which we shall have to watch carefully.

The effect of this on the banks must also be watched carefully. They are also asked to subsidise export credit at 5½ per cent., and it will become a very big item. I know that the first 5 per cent. of the value of their deposits is all that they are called upon to finance directly. That amounts to £500 million worth of credit at present. But the value of bank deposits is increasing, and will continue to increase, and that £500 million in seven or eight years' time may be a very much bigger sum. After the 5 per cent. of their deposits the burden is taken by the authorities, which is only right and proper; but I do not quite see why the first 5 per cent. should be taken by the banks. This is the banks' money and they have been very public-spirited and helpful in advancing it, but their shareholders, who have not been consulted in the matter, might not feel quite so generous if they were asked what they thought about it.

The Paymaster-General was a little ingenious about this in his statement of 21st January. He seemed to suggest that this was a gesture from the banks and their shareholders which no one had any qualms about, but the position is not very regular, and I hope that the Minister in winding up will tell us how he sees the development of bank lending for this purpose. because it is truly a Government responsibility and not one which the banks should meet.

I am very pleased that the Government concluded the agreement in O.E.C.D. last July which limited the credit to eight years, 20 per cent. down payments and 6 per cent. rate of interest. That 6 per cent., I understand, corresponds with our 5½ per cent. which is net, as opposed to gross of servicing charges and commissions, so we are within the terms of that international agreement.

A working party which was set up at O.E.C.D. to examine further impediments to true competition in shipbuilding listed five main headings: direct building subsidies; customs tariffs or any other import barrier; discriminatory tax policies; discriminatory official regulations or internal practices; specific aid for investment in and restructuring of the domestic shipbuilding industry. We are probabbly guilty of two or three of those practices, but I have no doubt that others are guilty of more of them. I heartily agree with the Minister when he said that the best way forward is to try to level up these different types of subsidy and to get an international understanding of what one can and cannot do; otherwise, subsidies will escalate.

It would be of great help if the Minister were to publish a White Paper, or place in the Library information of subsidies and aids which foreign countries give their shipbuilders or shipping. This would enable us to know the extent of the problem, and help the general cause by giving publicity to something which we would all admit to be a nonsense if we could only agree to get rid of it. If we have responsibility for the industry, we shall certainly take the initiative in getting that working party to hasten forward with its studies and recommendations and, if we can get the others to agree, to bring subsidy and aid to equal levels in every country.

In the meantime, I do not see that any country has an alternative to ensuring the suport of this industry. Otherwise, there would be completely unfair competition and the whole industry might be wiped out. This does not excuse the industry from trying its best, as it has done in the past, nor the work people from treating the serious challenge to the industry with the greatest responsibility. We hope that the shipbuilding industry will succeed and we feel that it must be supported until such time as international agreement can be reached. In this Measure we see something which is useful and is not a subsidy within the terms of the international agreement, and we intend to support the Bill.

5.8 p.m.

As my right hon. Friend said in opening the debate, the House is bound to be tempted to stray widely, because we are holding the debate under the shadow of anxiety and grave concern in a number of major and ancient shipyards in this country. Perhaps the House will therefore excuse me if I refer to some of the problems which beset my constituents on the Merseyside.

As my right hon. Friend implied, we are in the second stage of a crisis, the first stage of which seems to have occurred in the mid-1960s with a sharp fall in the proportion of world orders which British shipyards were achieving. He has given figures indicating that in 1966 about 2 per cent. of the orders then placed were gained by our own yards. In the second stage we have seen a remarkable recovery in order books, not only in this country but throughout the world, which has led to an almost unprecedented boom in shipbuilding which seems certain to persist throughout the early 1970s. The problem now is not one of lack of orders but of lack of profitability in the orders acquired. This problem straddles a whole number of shipyards.

We on Merseyside have realised in recent months that although no doubt some of the difficulties experienced by the Cammell Laird yard have been precipitated by the removal of the contract for the Fleet submarines which had previously been shared with the Vickers yard in Barrow-in-Furness, nevertheless it is clear that the range of problems being experienced by Cammell Laird is paralleled by the experience in other yards notably Upper Clyde Shipbuilders, and Harland and Wolff, to some extent Vickers and even Swan Hunter. This is a national problem and in some respects a national crisis.

The paradox is that, despite substantial injections of public money, despite considerable Government assistance which has been given to the shipbuilding industry in recent years, despite the fact that the orders have been sought and acquired and that there has been an unprecedented boom in world shipbuilding, we have nevertheless a situation that was emphasised only yesterday in regard to my Birkenhead yard of almost certain major losses on shipbuilding contracts from now until the end of 1972. An industry which is incapable of making a profit in the foreseeable future is on the path to disaster.

We must ask ourselves some serious questions about the place of shipbuilding in our economy during the 1970s. There are a whole number of problems which I am not competent to discuss with any expertise. But one problem which has rarely been looked at in general terms, though we have been aware of it on Merseyside, is that with the decline in the naval shipbuilding programme to which this country has become committed in recent years, and indeed in the whole post-war period, there is inevitably a loss to traditional naval shipbuilding yards of what were once secure contracts from the State. There is in the process of the withdrawal of naval contracts an inevitable problem involving the right mix of trades in the various yards.

The problem of redundancy is not simple. As we have seen on the Mersey, clearly the problem is moving from a sophisticated nuclear submarine programme, whether it be Polaris or the Fleet submarine, to what in most respects are relatively unsophisticated types of vessel.

All vessels present their own peculiarities, but the ratio of the outfitting trades to the other trades which applies to a sophisticated vessel is not applicable right across the board. The problem of the mix of labour is of critical significance and is particularly complicated by the traditional lines of trade union organisation in the yards. We appreciate that there are major and urgent problems facing the unions of reorganisation and rationalisation of their own structures to accommodate themselves to the pressing priorities of the next 10 years.

I agree to some extent with the hon. Member for Cirencester and Tewkesbury (Mr. Ridley). As I understand him, though I do not accept all his strictures on the Government, and once or twice he was guilty of political hyperbole, there is a problem of commercial discipline in the industry. About two years ago the Public Accounts Committee scrutinised the work of the Shipbuilding Industry Board. We ascertained without any equivocation that the work of the board was based on commercial criteria. The Government confirmed this and said in evidence that if there are to be social considerations they should be defined and made explicit. But until they are defined, justified and quantified, then so far as possible commercial disciplines have to be maintained.

It is self-evident that since we are in a highly commercial, competitive, cutthroat world our yards must be able to balance on their own feet and should not indefinitely look to a safety net from this Government or any other. There may be dangers involved if the impression is given that the Government exist as a Lady Bountiful prepared to fill every begging bowl from now into the indefinite future. I share the view that if this is the attitude in the shipbuilding industry, as well as in any other industry, it should quickly be removed.

I do not believe that it is the Government's function to prop up industry when it has outlived its usefulness. Moreover, it is self-defeating to give the impression that, no matter what the inefficiency of management or anyone else, the Government will always come along and bail an industry out of its misfortune. There must, if necessary, be a far more ruthless approach to the shipbuilding industry, because it is intolerable that after years of massive injection of public money we are now debating today a critical situation across the whole of our shipbuilding yards.

I am interested in what my hon. Friend is saying. I hope that he has taken into consideration that our shipbuilding industry is unprotected and that, if it has to live in the world in that state, then individuals within the wider community will not entertain that industry so long as there is plenty of protection elsewhere in the community.

I accept that the British shipbuilding industry is face to face with competition from yards overseas which are buttressed by hidden subsidies and very often cocooned by their Governments in ingenious ways. But one of the objects of the Bill is to put the British shipbuilding industry on a relationship of equality with those other yards.

What worries me about my hon. Friend's intervention, although I understand his object, is that if all the time we have to say, " There is an open-ended commitment to protection because all over the world the other yards are being protected ", we will never be in a position to impose commercial disciplines. It is an ever-receding mirage, like the pot of gold at the end of the rainbow. While there may be interfer- ence with the free market economy across the world, let us have this defined. Even if we are in an inferior position in relation to other overseas competitors —and this needs to be spelt out in far more detail—it seems to me that we should not be prepared to subsidise the British shipbuilding industry on an even more favourable basis than other yards.

This is a problem of the use of national resources. We have in this industry a vast amount of labour and capital locked up and we have in the year ahead a substantial commitment to the industry. We have to ask ourselves whether this is the best possible use of these vast resources over the next 10, 15 or 20 years. In the critical months ahead, we require to have a longer perspective forecast than we have tended to have recently.

Inevitably, one asks why profitability is absent from so many of the contracts which have been placed, and we need more information from my right hon. Friend. All shipbuilding yards throughout the world have been faced with escalations in costs. The rising cost of steel is not peculiar to Britain. It is rising internationally. Certainly the cost of labour is rising internationally. From some reports that we have from Germany and the Netherlands, the price of labour has been rising there no less than it has here.

For an industry which is of necessity having to place long-term contracts and where the end product does not materialise for years to come not to insist upon realistic escalation clauses in its pricing policy is almost beyond belief. An industry falling into this predicament is guilty of some inefficiency, to put it mildly.

It may be said that the cost inflation has been greater than could have been realistically anticipated. However, it is the function of management to anticipate these problems and, while one must have sympathy with industries which are facing these considerable increases in costs, it has to be borne in mind that other industries also face increases of this magnitude, and it is not the case that all of them are seeking Government assistance on the scale now considered appropriate for this particular industry.

I want to refer briefly to the position on Merseyside. I do it with diffidence, because, at a time when we all know that critical negotiations are taking place which are of enormous significance for the future of tens of thousands of people, we should not say anything to complicate the negotiations. I propose to say relatively little. But we have also to bear in mind that the workers in the industry are becoming a little impatient about the silence which has descended upon the negotiations that so vitally affect their livelihoods. It is one thing to maintain silence during a period of intense negotiation, but I hope that my hon. Friends recognise that the time is coming when many of us who are deeply concerned about the position on the Merseyside and elsewhere will feel disposed to speak out more forcefully and explicitly than we have been persuaded to do hitherto.

I must make one reference to what has appeared in the Press on the Merseyside this morning, because apparently it reflects the attitude of hon. Gentlemen opposite, some of whom I know to be normally well informed and moderate men. But I see that they are now quoted as saying that the whole cause of the distress and difficulty now being experienced by Cammell Laird is due to the Government. If that sort of accusation is to be made, for what I can only call mischievous and irresponsible political purposes, the rest of us will have a good deal to say about the other causes of the problems which Cammell Laird is experiencing.

Even with this provocation, however, it would be unwise tonight to dwell too explicitly on the complex causes underlying the present crisis at Cammell Laird. One of the spokesmen for the party opposite on the Merseyside is quoted as saying that the firm had no option but to place fixed-price contracts. I do not know who insisted that they had no alternative option—

Until recently, no shipbuilder has been able to obtain escalation clauses because his competitors were offering fixed prices all over the world to shipowners. I agree that the situation is changing now, but, hitherto, it has been almost impossible.

I am glad to hear the hon. Gentleman elaborate a little on the point. What he has said makes it clear that the Government have no responsibility for this predicament, assuming that it was inevitable.

We are told that the Japanese yards are incapable of accepting orders way into 1973. In the sort of seller's market that we have seen in the last two years, surely it would have been possible for the firms to have insisted upon more realistic escalation in their pricing policy. If the hon. Gentleman implies it is never possible, no matter what the boom, to put an escalation clause into a contract, the problems of the shipbuilding industry will be even more serious in the next five, six or seven years. I hope that he now feels that the firms should insist upon it. It is long overdue.

I felt compelled to speak briefly about Cammell Laird, to rebut those who do not know the details and who can easily make all sorts of accusations from an armchair. It is easy to criticise and, in the process, perhaps damage the achievement of the solution that we all want. I have responded in this way, and more could have been said, because in the last 12 months on Merseyside we have had a repeated barrage of accusations against the Government. They were held to be solely responsible for the afflictions that beset the yard. We all know that that is not so and never was so.

We have had forecast figures of redundancies, for example, of up to 3,000. We all knew at the time that they were wholly unrealistic and exaggerated. But many of us have been reluctant to say very much until now because we felt that there would be intricate negotiations which would have to be pursued without irresponsible accusations being made. But if such are to be made by hon. Gentlemen opposite in this run-up to a General Election, they cannot grumble if we begin to disclose some of the facts which we know and which do not lend themselves to the grossly over-simplified claims of hon. Gentleman opposite.

5.28 p.m.

The House is grateful to the hon. Member for Bebington (Mr. Brooks) for what he has said about the need for the industry to be commercially viable. It was a courageous line for him to take, representing, as he does, a yard which is in some difficulty.

I agree with him about escalation, though it is fair to say that it presents very great difficulties. It is not easy to estimate how far costs will escalate, especially in the case of what is essentially an assembly industry. Some of the troubles which the yards have met have not been due to them as much as to their suppliers. Many of the people who supply our shipbuilding industry have themselves a large export trade and have done well in export markets. So that argument cuts both ways.

The hon. Gentleman pointed out that wage rates and steel prices have risen all over the world. I do not know the latest position, and I hope that we shall hear more of the comparative figures, but some years ago when our industry was short of orders, wage rates were high in other industries, especially in Sweden, but the rate of productivity was also high. Many of our yards operate on old sites in constricted conditions in which it is not easy to make the fullest use of modern machinery.

The industry also suffers from the treatment that it gets in the news. It is always assumed that it is good to take orders. The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) and the hon. Member for Bebington pointed out that it is not much good taking orders which will run a company into heavy losses and prevent it making adequate investment. Anything which goes wrong in the industry is always news. One would think that there never was a ship delivered late until the "Jervis Bay ". But I believe that four other ships of that order, which were built abroad, had to be modified during the building process. We are not by any means the only shipbuilding country which suffers from late deliveries and occasional strikes and industrial troubles.

I welcome the Bill. I do not blame all the industry's troubles on the Government, but I think that the Government have placed too much emphasis on amalgamations and size. In some cases this may be good, but in others it is not. The Lower Clyde Shipbuilders seem to have been a success, but the Upper Clyde less of a success. There is no particular advantage in amalgamating shipyards unless economies can be effected. Either the berths must be used better or the labour force must be deployed to better advantage.

Some small yards inevitably depend on expertise and on having made a corner for themselves in the industry or upon doing a particular job rather well. I could not understand the advantage of taking Connell's yard into the Upper Clyde Shipbuilders. It is a specialised corner of the industry. It added little to the consortium and gained little from it.

I am not clear what the Government's attitude is on the Lower and Upper Clyde. It would seem to be a blessing that the Lower Clyde resisted any blandishments to amalgamate with the Upper Clyde.

On Government subsidies, the hon. Member for Bebington is right that it is not a satisfactory position where all shipbuilding countries subsidise their yards and enter into a kind of competitive spiral. I was glad to hear what was said both by the Minister and by the hon. Member for Cirencester and Tewkesbury about the latest agreements on limiting credit. Have any steps been taken to control or have some agreement about other forms of assistance by Governments to the industry?

I understand that the Swedish Government give a subsidy not only to the shipbuilding industry, but all Swedish industry through the taxation system. I suspect that the new Swedish yard at Gothenburg was built through being able to accumulate profits in a way which would be impossible in this country.

I now turn to other questions that 1 want to put to the Government. First, is it right that if we go into the Common Market it will no longer be possible to deliver steel to the industry at a uniform price all over the country? For example, Harland and Wolff obtains steel at the same price as the North-East Coast or the Clyde. Would it not be a serious matter if this became illegal under the Common Market regulations?

Secondly, concerning the Upper Clyde, I am always suspicious about unemployment statistics and figures for redundancy. I think that we have to look at the river as a whole. I sympathise with those who are now working on the Upper Clyde who are worried in case they lose their jobs. But it would assist us if we could be told what the overall situation on the Clyde really is.

Is it right that there is a shortage of labour on the Lower Clyde'? It may be said that it is not easy for labour to move from the Upper to the Lower Clyde. However, the fact is that some of Denny's workmen from Dunbarton are working at Yarrows and other places. It is not impossible to move considerable distances up and down the river. I do not suggest that it is convenient for those who live high up on the north bank to come to the south bank, as from Dunbarton to Govan and so on, but it can be, and is, done. It would be interesting to hear what the overall situation may be.

It is essential that we should not damage Yarrow. It is one of the most important and profitable enterprising units on the Clyde. Yarrow's Admiralty Division is of great importance in Scotland as a high-level experimental and research place.

Is there any news about the site at Burntisland? There have been rumours in the Press, but I have not see what the end is to be. I understand that it is out of shipbuilding. Is it out of the industry altogether? Is it being used on prefabrication or for any other purpose?

Lastly, the general development of the industry. I take it that now it is settled policy that the major groups, and indeed some of the smaller yards which are being assisted, should form the fixed equipment of the industry. It seemed at one time that there was a case for building a new yard on a new site. As I said earlier, many of these yards from Greenock to the Upper Clyde—no doubt also Cammell Laird, to which I have not been for many years, but certainly Swan Hunter on the Tyne—are jammed in on narrow rivers and launch ships with difficulty. John Brown's has to launch big ships up the Cart. I know that Sir John Hunter thinks that this has a certain advantage in that it concentrates the mind and makes for economy. I am not being dogmatic, but to the layman there is something in going to a green field site in Sweden and seeing a yard laid out where the steel goes in at one end and goes straight out into the dock at the other as a ship. I do not know the economics of it. It may be that these great experiments on the Continent have proved less successful than was thought. After all, some of the big Dutch yards are in difficulty.

I should like to know whether attention is being given to the possibility of developing new sites or whether it is considered that, with the lack of capital and the other problems of the industry, it is out of the question.

5.37 p.m.

The right hon. Member for Orkney and Shetland (Mr. Grimond) referred to what is happening on the Upper Clyde. I do not wish to say too much about what is happening there at this stage, but I am concerned.

The workers and their representatives are the longest continuing unit on the Clyde. Fairfield's has had changes of management, so it has had difficulties. I think that to fix a figure like 3,500 starkly in the face of trade union negotiations is hardly a correct assessment. These matters should have been negotiable rather than be stated as facts. I hope that the outcome on the Upper Clyde will be satisfactory.

Both my right hon. Friend and the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) paid unswerving adherence to the restoration of the health of the shipbuilding industry in Britain. I do not know whether the Tories—if they ever get into power—mean to retain the Ministry of Technology and whether the hon. Member for Cirencester and Tewkesbury is to be the health technician for the industry. If so, it causes me to despair. The shipbuilding areas in Britain have been areas of constant struggle under the regional employment zone; that is, they carry R.E.P., which has helped with wage contracts and making them competitive. To that degree, it would not appear to be the best solution to have a change of Government.

The Minister dismisses history, but I do not think that we can dismiss the history of this industry. The D.S.I.R. reported in 1960 and mentioned criticism by the Institution of Professional Civil Servants on the troubles of the industry. That criticism was not welcomed by the industry. In 1966 we had Geddes. Everybody was relieved, and the illusion was created that this was the real answer, but in fact it is only part of the answer. Geddes dealt with reorganisation, and the interesting thing is that the people who welcomed Geddes most were the trade unions. Within three months they issued a declaration of intent to support Geddes right to the end.

I shall short-circuit my argument by considering the scene in 1950. In those days we had Clore and Hugh Fraser. In 1950–51 Clore acquired shipyard sites, and other forms of investments were taking place. Barclays Bank Review for 1967 shows that investment in this industry was only 1·1 per cent. of the total. In terms of investment, the only people who are likely to give guarantees are the Government who have done everything that it is reasonable to do to help.

When the Shipbuilding Industry Board was set up it was given a life of five years. The assumption was that within that time, which would bring us to 1970, it would be possible for the board to do the job envisaged by Geddes. The setting up of the board was accepted by the trade unions and by the employers. To use football parlance, we are now playing in injury time. It is proposed to add one year to the board's life, but this is not enough. We cannot expect the board to do in one year what has not been done in five, and to this extent the Bill falls short in what it should do.

I have here a copy of The Times for today. The leading article is headed:
" Shipbuilding: using public money to best advantage."
The writer says
" The Minister of Technology has little option but to extend the life of the Shipbuilding Industry Board (though directing it to be far tougher in securing trade union cooperation when handing out new grants)."
That is a reasonable statement, and one with which I agree.

I come now to the question of grants. When an employer applies to the board for a grant, the unions know nothing about the reason for the application. I think that this matter should be on the agenda for a meeting between employers and unions so that the latter know what the money is for. If they know the state of play, they have a far better understanding of the issues at stake and respond much better.

Most of the employers have " bought out " the trade union rule book, and there is now a new working set-up between employer and worker. To that extent progress has been made. I support the extension of the credit being afforded to the industry, and I hope that it will soon be restored to health.

5.45 p.m.

It is always a pleasure to follow the hon. Member for Glasgow, Scotstoun (Mr. Small). He speaks with great authority, and he has fought hard for Yarrow, in his constituency.

I agree that there is real concern in the industry about the board's life being extended for just one year. We cannot criticise the Government for this, because this is what the Act provides for, but one thing which is clear from the results published by Cammell Laird and Harland and Wolff, as well as from the troubles at Upper Clyde Shipbuilders, is that if there was a case for the board, there is now a case for considering its extension for a period during which one might reasonably hope the industry will sort out its problems.

Both sides of the House have accepted that this is a special Bill, making special provision for the shipbuilding industry. It can be justified, first, because, as the hon. Member for Glasgow, Govan (Mr. Rankin) said, the industry has traditionally been unique in that whereas other industries have been able to shelter behind tariff walls, this industry, until we had the Marples credits, and then the Shipbuilding Industry Board, was virtually unprotected against foreign competition. If this industry had the same kind of protection as others have, and if it could rely on the home market for British shipping orders, it would be in a profitable and prosperous situation.

The second reason why the industry is rather special is that it not merely provides jobs, but that these jobs are concentrated in areas where there are chronic unemployment problems, such as the Clyde, the Tyne, and elsewhere. For this reason, the industry deserves special consideration.

There is a feeling in the industry—which may or may not be justified—that the board has concentrated its attention on those who have the biggest problems, or have failed most to cope with some of the problems confronting them, and that those yards and groups which have been successful have failed to get a great deal of support. There is a feeling on Clydeside that Scot Lithgow has had little assistance from the board, yet this group has made remarkable progress. It has coped with cash and inflation problems very successfully, and has launched into a great deal of new shipbuilding activity. Labour relations are also very good.

This might be justified if there were no plans for expansion by the Lower Clyde, but the Minister knows that there is an ambitious plan under which the James Watt dock might be used as a covered building berth. The plan is attracting a great deal of attention, and I hope that the Minister can give us an assurance that this group is not regarded as the " step-bairn " of the board and that their problems will not be neglected. Surely success is worth backing more than failure.

The Government should make it crystal clear that they have abandoned any intention which they might have had at any time of forcing a shot-gun marriage between Upper and Lower Clyde. My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) talked about sanctions and disciplines which had been used. We all know that, probably for well-intentioned reasons, pressure was brought to bear on Lower Clyde to join Upper Clyde. It firmly refused to do so, and it is disturbing that thereafter there seemed to be remarkable absence of British naval orders awarded to Scot Lithgow. I hope that the Minister can make it clear that no pressure of this sort will be brought to bear in future.

The Geddes Report said that the future of the Upper Clyde lay in building specialist ships. We have all seen that the recent policy of Upper Clyde Shipbuilders has been to move away from specialist shipbuilding and towards the building of a standard cargo vessel. This may be more profitable than a wide range of ships and the possibility of passenger liners, but this is not the path which Geddes saw for Upper Clyde. Is it entirely wise for Upper Clyde to put virtually all its eggs in one basket in this way? The other thing which the Geddes Committee recommended was special provision for a lower negotiated price for steel for the shipbuilding industry. That was one of its firm recommendations. Has any progress been made here? I was very interested to hear the Minister emphasise, rightly, the problem of labour relations. Good labour relations are vital if we are to have a good shipbuilding industry. Bad labour relationships mean that strikes are held, and penalty payments add up. On Upper Clyde, we have suffered a great deal from losses of this sort.

But I hope that neither the Government nor anyone else will think that the solution to this problem lies in legislation. The Government had a well-intentioned plan called " In Place of Strife ", which they abandoned for the wrong reasons, apparently because of pressure. We should make it clear that the way to avoid strikes, in shipbuilding in particular, is not by legislation or interference or committees. It is by having employers who, in their ordering, purchasing, building and industrial relations, are prepared to accept responsibility for the job.

I hope that the hon. Gentleman will inform his hon. Friends and his Leader of his view that legislation is not the answer.

No one on this side or elsewhere has said that legislation is the answer in industrial relations. I am just putting my own view that perhaps too much emphasis is placed on the possibility of legislation.

I spent a lot of my working life in labour relations in this industry before I came to the House. The reason that we have strikes, I believe, is that they pay. Far too often, particularly in the shipbuilding industry a trade union official puts forward a claim, which is turned down automatically, whereupon he tells a mass meeting of the men that there is " nothing doing ". Then, just before a launch to which have been invited half the nobility of England, Wales and Scotland there might be an unofficial strike, and the claim is conceded.

In shipbuilding and elsewhere, if we could have employers—I am aware of all the difficulties—who can say " Yes ", when they mean yes and " No " when they mean no, this would be a far more effective deterrent of strikes and industrial problems.

But is it not a fact that there need never be another strike from now to Domesday if the workers were treated as quickly and as generously as this and the other Governments have dealt with people like the judges and those on the boards of nationalised industries? If they were, I can assure the hon. Gentleman that there would be no strikes.

I do not want to widen the debate, but I do not entirely agree with that.

Major concessions are not always the way to avoid strikes. They can often buy trouble for the future. But what would help in shipbuilding is to make it clear as soon as possible to those who run our shipyards that it is their job to sort things out: they have the responsibility and the power. I know that all hon. Members would accept that there was a real case for Government aid to enable the industry to sort out the short-term problem, but no one would support continuing subsidies for all time in all circumstances.

The Ministry of Technology has played a noble and helpful rôle in the development of Upper Clyde Shipbuilders by his repeated visits to the area. We are also grateful for the recent visit of the Paymaster-General. The management there has had to face more crises in a short time than any other industrial organisation. It is understandable that the Government have been reluctant to give the House too much information in case it affected confidence. But I have three brief questions.

First, what progress is being made with orders which have been accepted? Secondly, can the Government make it clear that the Shipbuilding Industry Board will continue to back the obtaining of further orders by Upper Clyde Shipbuilders? Thirdly, when will the legislation be forthcoming which was promised to safeguard the offer made to Upper Clyde Shipbuilders last year?

It is difficult to make the right decision, but the Government's decision today is the right one, and the general policy of a temporary injection to enable the industry to sort out its own problems is the right assessment. For that reason, I support the Bill.

5.58 p.m.

I join other hon. Members in their wholehearted welcome of the Bill. The query which some of us have is whether the rôle and responsibility of the S.I.B. is wide enough for the kind of problems which arise today. One cannot completely separate, when considering the whole industry, the position of the ship-repair industry. That is, of course, excluded from the consideration of the board as at present constituted. I should be very glad to know whether any thought is being given to the possibility of establishing or reconstructing the board, so as to widen its responsibilities.

This is in the minds of some of us on the Tyne. We equally recognise the considerable contribution of the earlier Act and of the board itself to the regeneration of shipbuilding on the Tyne. There can be no doubt that, had matters gone on as they were going before the Act was passed and the board constituted, we should have been in an even worse position than we are. The flood of orders and the much more healthy general attitude towards building on the Tyne would not have been possible without the positive contribution of the board and the Government.

In my constituency, in South Shields, the prospects and future of the yard have been very much strengthened. When there is so much publicity for the things that go wrong, it is only right to give much more emphasis to the number of cases in which earlier delivery has been given, as with the yard in South Shields and up the river. This is something for which the industry has every right to take credit.

This also applies to ship-repair, which is in such great difficulty. There have been some notable examples of major ship-repair work on the river being done well ahead of time. One example is of a Russian transport vessel which came in for the insertion of stabilisers. The job was completed well ahead of schedule. The docks in North Shields, in the constituency of the hon. Lady the Member for Tynemouth (Dame Irene Ward), have a good record in this respect.

In spite of these favourable developments, we are only halfway through the reconstruction problems of the industry. There are many complexities and even on a river like the Tyne there are many different rates of pay and differences in working conditions. In other words, the number of complexities on a river as short as the Tyne is fantastic. They must all be reconciled with the development of the new consortium.

The fact that there are now better industrial relations on the Tyne is due to the hard work that has been done by all concerned on both sides of industry. I was interested in an article in The Guardian today by the President of the Amalgamated Society of Boilermakers, Mr. Dan McGarvey, who is well known to hon. Members. He wrote:
" The trade unions are to blame for some of the present trouble in the shipbuilding industry, but the major part of the responsibility must be put elsewhere"
That indicates that the leadership of the unions recognises the joint responsibility. I have no doubt that the unions have taken major steps to move away from traditional practices in an effort to put the industry on a modern basis.

It is right that we should call attention to the situation which we on the Tyne face and this applies particularly to the mouth of the Tyne, where large numbers of shipbuilding, ship-repairing and marine contracting men are out of work. About 850 men in my constituency are out of work all from these trades. Everything possible must be done to ensure that the repair yard up the river at Hebburn is saved, that the current rundown in the repair industry is checked, and that an effective examination is made of both the ship-repairing and shipbuilding industries to discover what are the most constructive lines which future development should lb/> Emergency action is needed to save the yard about which many hon. Members are concerned particularly when one recalls the background to Hebburn. We must also tackle the problems of other repair yards which are facing great difficulty. In addition to this emergency action, we need a thorough investigation to decide the longer-term structure of the industry.

I welcomed the announcement of a review of the industry. I assume that the Minister was referring to a review of the whole industry and not only the shipbuilding section. I hope that he will give more information about this review.

The Shipbuilding Council, which represents both building and repairing, is at present conducting some inquiries on behalf of the Government. It is to be hoped that it will make some constructive recommendations quickly, because we cannot wait long before at least some emergency action is taken. I hope, therefore, that my right hon. Friend will comment on this situation and will announce what emergency and longer-term action may be practicable. We at least hope that he will consider the possibility of the board having greater responsibility.

All of us on Tyneside are deeply concerned about the level of unemployment and the threat of the closure of the famous repair yard at Hebburn. After all, it is only recently that it was in large part reconstructed. People have some very bad memories indeed of what occurred at this place some years ago. In those bad days, when there was great anxiety about the terrible level of unemployment, the Government of the day gave little encouragement and response to the efforts that were made to bring the situation to the attention of the Administration.

Fortunately, today, the situation is different. The Government have shown their concern with this and other matters and we anxiously await knowledge of the practical steps which can be taken to overcome a situation which no hon. Member is willing to accept.

6.7 p.m.

It seems clear from the debate so far on this very acceptable Measure that whatever happens to the Bill, the shipbuilding and ship-repairing industries will continue to face a large number of problems.

This occasion gives us an opportunity, to which we are entitled, to debate, river by river, the problems of these industries and to state our views. I support everything that the hon. Member for South Shields (Mr. Blenkinsop) said. We are all most anxious about the future of the River Tyne.

As hon. Members on both sides of the House who have spoken are extremely knowledgeable on these issues, I have been considering what sort of contribution I can best make. Although a number of important points have been raised, it might be a good idea if I were to inject into the debate a few different aspects of the general problem.

I have concluded that part of the problem of the shipbuilding and ship-repairing industries lies in the fact that they are, in a way, schizophrenic. I say this because their technical performance, in terms of the production and repair of ships—this can be said of the whole future of both industries—depends to a great deal on the actions of certain Government Departments.

The actions to which I refer affect not only ship-repairing, but the economy of the country. For example, Britain recently contributed to the opening of ship-repairing yards—these yards are no doubt necessary in other parts of the world—in Hong Kong and on the Island of Malta. Those new ship-repairing yards bring about an improvement in the overall economy of the country.

It is much more economical when large new tankers are developed to have necessary repairs done where that is most convenient. There are two angles from which we should consider this problem. We have suffered in this country and there is little reassurance for the ship-repairing part of the industry on the Tyne.

When we were debating the Ports Bill, the hon. Member for South Shields and I argued forcefully about it. I pay tribute to the hon. Members for Wallsend (Mr. Garrett), Newcastle-upon-Tyne, North (Mr. R. W. Elliott) and Jarrow (Mr. Fernyhough) for not voting for the Port of Tyne Bill. I feel strongly that the port authority wishes to upset traditional backgrounds with reference to travel arrangements in work on shipbuilding and shiprepairing. This is regrettable. The authority has to produce a profit, but if, in producing a profit for the port, it makes it more difficult for those working there to work efficiently, again we have a schizophrenic outlook.

I wonder whether the Ministry of Technology would agree with the arguments pat forward by the hon. Member for South Shields and by me. It is traditional for men who live on the north bank of the Tyne to be employed on the south and those who live on the south to be employed on the north. This travelling to and fro has been a great feature of work on the river. It is regrettable if the authority is not to work in the interests of the port and in favour of the maintenance of the shipbuilding and ship-repairing industry. Here again, there is a schizophrenic approach.

If we are to produce additional credit for the Shipbuilding Board it is important that it should have the full support of the Government and the Opposition and that the interests of shipbuilding and ship-repairing should not be interfered with by other interests. The Government of the day have to come down in favour either of supporting shipbuilding and ship-repairing, or of taking an attitude sometimes on one side and sometimes on the other. When we were debating this question, all hon. Members who know about the Tyne and about shipbuilding and ship-repairing regretted the decision taken on the Port of Tyne Bill.

The hon. Member for Gateshead, West (Mr. Randall) supported the Second Reading of the Bill, but I am not sure whether he knows much about shipbuilding and ship-repairing. Again, there was a schizophrenic approach, making it more difficult for those engaged in the industry. The workers were on the side of the hon. Member for South Shields and myself, but the Port of Tyne authority paid no attention to our views and went ahead with its proposals, which was very regrettable.

Reference has been made to naval orders. They are tremendously important. When they come to a river such as the Tyne a satisfactory home base is provided by which tenders can be obtained for work elsewhere. In 1931–32, we had disastrous unemployment in the industry on the Tyne and almost immediately naval orders ceased. Firms working on the river could not make a profit and they could not employ workers only on fulfilling merchant shipping orders.

When we have discussed defence policy, especially in relation to east of Suez and aircraft carriers, I have thought how very important this is to shipbuilding, and, of course, to ship-repairing. When arguments pass to and fro in defence debates between those who want to reduce our defences to an almost negligible quantity and those who want to maintain them, there is never any reference to the lack of employment which can follow if we do not get naval orders. If we could have two new aircraft carriers that would be of great benefit to the shipbuilding industry. Here, there is a shizophrenic attitude between the two sides of the House.

More schizophrenia is to be found over steel policy. Yesterday, when we were debating the Ports Bill, many hon. Members opposite commended nationalisation of steel, but the escalation of prices in relation to the shipbuilding and ship-repairing has stemmed from nationalisation of steel. The British Steel Corporation has decided to transfer iron-ore shipments from the Tyne to the Tees. That is a devastating blow to our prosperity. It could affect the capacity of the Tyne to compete in the markets of the world.

My hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor) said that the shipbuilding industry never had a protective power. My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) said that there might be a reduction in the price of steel going to shipbuilding and ship-repairing.

My schizophrenia comes to the fore again and I look back to 1931, when a protection Bill, promoted by all parties, was introduced in an endeavour to meet the economic collapse of the early part of the 1930s. I decided to make my maiden speech on the question of giving protection to all the various parts of the shipbuilding industry which we had to import. Daringly, I decided to move a new Clause designed to protect shipbuilding against increases in prices accruing from the protection Bill aimed at protecting the general economy.

In fact, I subsequently made by maiden speech on the mining industry. The then Government introduced a Clause, which lasted in legislation for a long time, to relieve shipbuilders from having to pay increased charges for imported goods. This was a helpful step in the long haul back until we were at full speed ahead at the outbreak of the Second World War.

If, in 1932, the Government could do that for the protection of shipbuilding and ship-repairing, which we have always regarded as part of our national heritage, there is no reason why it cannot be done now even with steel nationalisation. The materials used in the production of steel must be imported. Shipbuilders and ship-repairers should be exempted from having to pay escalating prices to the British Steel Corporation.

I should like a specific answer tonight. If the matter is under consideration, it is important that deep thought should be given to the action taken in 1932 to protect the industry. There are some very full order books now. My suggestion, if implemented, would be a good protection for the future.

I was interested in the Prime Minister's announcement of a new inquiry into the problems arising from shipbuilding and ship-repairing. Whatever hon. Members opposite may think about profits, there cannot be better conditions for workers, nor can taxes be levied so that social welfare can be improved, unless profits are made. Through no fault of its own, shipbuilding and ship-repairing is not making a realistic profit on the capital being injected into the industry.

As the Government and the Opposition are joining in trying to find solutions to our problems, it would be advantageous to examine some of these suggestions and not always have schizophrenic problems arising, with those of us who are interested in shipbuilding and ship-repairing not knowing the final outcome.

We on the Tyne have just had the devastating news about the closure of Palmer's Yard, which will cause increased unemployment, which is already above the national average, and have a serious effect on morale.

I hope that the other parts not essential to the national economy, which takes first place in the thoughts of all of us, will allow the Paymaster-General to be on our side. It is not often that the Government and the Opposition have the wholehearted support of both sides of the House.

6.27 p.m.

References have been flying around to the possibility of " a shot-gun marriage " between Upper and Lower Clydeside. I have heard such references, but they have been accompanied by a suggestion that naval orders have not come the way of Lower Clydeside as frequently as they did in past years, as a form of Government pressure on Lower Clydeside to look with approval on this possible consortium.

I hope that my right hon. Friend will deal with this problem in winding up the debate and let us know that there is no truth in it. After all the turmoil there has been in Upper Clydeside, I do not think that we should start to create even greater turmoil, possibly, by a tie-up between the upper and lower reaches. I do not deny that in the evolution which will take place in the industry in the west of Scotland there may be such a happening in due course, but at present it would be quite out of keeping with the situation on Clydeside, and it would make matters worse.

I went again to make my position clear over the decision to build standard cargo vessels at Upper Clydeside. I realise that there are arguments for it, but I think that it will reduce the total engineering and scientific skill in this part of Glasgow. Before I became a Member, I was a headmaster in the part of Glasgow which I now represent. I had technical classes in my school and when students were qualified they went to Glasgow's technical college. For those technical classes I required seven separate schools in the Govan area. With the introduction of the standard cargo vessel, I think that we shall reduce the rôle of those schools. There will not be the same demand for so many of the highly-qualified people to run the yards as are required in the type of economy when the specialised ship prevails.

I intervened in the speech of my hon. Friend the Member for Bebington (Mr. Brooks), who suggested that the wages of those in the shipbuilding industry, which was a nationally-based industry, were affected by world conditions. This meant that they were operating in a market where they had to be subsidised by the income made at home, and this, he felt was unfair. I believe that that is not an unfair account of what he said.

I differ from my hon. Friend—with respect, because his speech was of a very high quality and covered a wide area. I feel that to treat the wages of the shipyard workers in this way would be to create a physically unworkable different- tiation. The draughtsman in the shipbuilding office, if this idea were applied, could almost earn a lower wage than the draughtsman working in a sheltered industry. That would create a differentiation that is impossible to defend. The draughtsman in an engineering industry in the city would probably be more highly paid than the draughtsman working in the shipyard.

Until today I believed that all the problems of shipping and shipbuilding resided on Clydeside. I have been living with them for so many years that I thought that there were no problems in shipbuilding anywhere but on Clydeside. It seemed to me that whenever I said anything about it in the House everyone sighed and thought, " Here's Clydeside again ". I am sorry to hear that the problems are not located only in Clydeside, and I sympathise with my hon. Friends who perhaps have been in the same situation for longer than I suspected. I am sorry that shipbuilding is causing them worries.

Yesterday's edition of The Times made it clear to me that the problems which I thought belonged to Clydeside were British problems. The losses incurred by Harland and Wolff of about £3·7 million were one example, and what has happened at Cammell Laird's is another. But despite those losses the demand for new ships is not expected to lessen, and that is a good thing. The Times, reporting the views of the Shipbuilders and Repairers National Association, warned us yesterday:
" It must be emphasised that the industry is faced with the paradox of full order books and mounting losses. The future employment of all concerned can be secure only if everyone cooperates to produce ships as quickly and as economically as possible."
Co-operation is a method of controlling inflation, and it must be world cooperation. Japan and Sweden are no more immune than we are to the forces affecting shipbuilding production. If we are to face up to our task in Britain the necessary co-operation must start within the shipbuilding industry. There should be a continuous contact between the workshop floor and the management desk.

That is one of the things I have found absent on Clydeside. I have in former years gone round the entire Govan yard with the chief executive, and when I stopped to talk to men working in the yard he kept aloof 15 and 20 yards away and never joined in what were important little conversations. Contact between men and management is absolutely essential to the success of any shipbuilding undertaking, particularly as the men are so spread over a very wide area compared with those in more orthodox industries. The mass meeting of men and management must not be disregarded as a method of keeping confidence alive between both factors in production. It can be the quickest way of allaying fears and suspicions, which do arise and spread all too easily.

For example, in an inflationary period such as now affects us labour costs always come to the fore. There are many other factors, the price of ships, for example and getting the ship out in time, which, in turn, depends often on labour relations. These are weakened by the fact that men and management have not kept a sufficiently close relationship. Failure to observe this condition with the QE2 cost U.C.S. nearly £30 million and, in turn, upset the flow of work on other ships, causing them to be late in delivery and resulting in further financial penalties. The importance of delivery on time cannot be overstated, but it implies confidence between men and management which means continuing consultation.

If this spirit is to live and thrive then wages should be maintained during redundancy when men are training for a new job. It is wrong that because a man is made redundant and starts training, his wages go down. No one can say how long any trade will last. Therefore, those on the shop floor, to safeguard their future, should be trained when entering the industry for at least two jobs.

British shipbuilding has been in trouble for over 20 years. It is not something that has happened during the last five or six years. Between 1957 and 1966 profits earned and capital employed fell steadily from 10 per cent. to 2·6 per cent. During that process of continual rundown very little was said. To take Clydeside as an example, John Brown's yard was making heavy losses year after year without anyone saying much about it because the losses were always met by the engineering group which sustained them. Linthouse yard, also in my constituency, along with Govan, was not having a happy time, either, and when its yard closed not so long ago the labour force was absorbed at Govan. What was the result? It was that 1,600 men came to work with the 2,800 already at Govan to do the same amount of work.

And so, in June of last year, I stood here and told of what was happening in Govan, when two and sometimes three men were having to use the same tool, two standing by and saying to the other, " Give us a shot of your tool." I was told that that was not a very cautious thing to say; but it was true. This was one of the reasons why costs rose pellmell on Clydeside. Now we are told that Yarrow wants to join up with the yards on Lower Clydeside. Yarrow wants to get out. Linthouse shipbuilding has ceased, Clydebank has not, but that day is not perhaps far off. Whether it will make much difference I am not sure.

Now that Yarrow wants to get out, Govan is to be deserted by the other members of the consortium created by my Government. Govan and Scotstoun will be the only two yards left in. Will my right hon. Friend carry on the system created some time ago? I would like him to make the position of the Yarrow yard clear. This may result in the break-up of U.C.S. and that might or might not be a good thing. It might have serious results.

Yet I pay my tribute to the present organisation because, since 1968, it has launched eight ships and delivered five. It has built nine ships in 1969 and delivered 10. So far this year it has launched three and delivered one. This does not take into acount the output from Yarrow which is purely naval. I have a good idea of what the figures are there but I had better not give them in public. I do not know whether they are suposed to be secret. That represents altogether £100 million worth of merchant shipping, which is an encouraging result and the reason why, in the long run, it might be better if the consortium is kept together. We must also add the output of naval vessels from Yarrow.

With the co-operation of men and management U.C.S. could, given the chance and the time, be brought to a triumphant success. The challenge is there, to men and management and to this House. I hope that we will all respond to it.

6.49 p.m.

I am particularly pleased to follow the hon. Member for Glasgow, Govan (Mr. Rankin), as I have done in many debates on this subject. I can support most of his arguments.

I believe that both Front Benches were perhaps a little too complacent today. They placed the problems of the industry before the House in rather a minor key. I am somewhat alarmed by this attitude and particularly the attitude of the Minister of Technology. Any hon. Member— or, indeed, anyone else— who has followed the articles in the Press, particularly in the weekend Press, would be concerned. I have here copies of two articles in the Sunday Times, one in the Sunday Observer, the article in The times yesterday, which the hon. Member for Govan referred to, and the leading article in today's issue.

Anyone who has read those would be concerned as would anyone who had read the report of Harland Wolff, in my constituency, which has announced a loss of about £3·7 million in the last year and Camell Laird, which has announced the loss of more than £2 million. Indeed, that loss may not represent the full loss if one takes into account contracts on its books on which it will make a further loss and on which it has announced that it is to delay its final estimation of losses for some weeks.

We have heard a great deal about the difficulties in the Upper Clyde—during the debate—three hon. Members from Glasgow have already taken part, as well as hon. Members representing constituencies on the Tyne and Wear, and in my case on the Lagan. The main shipbuilding areas of this country have expressed great concern about the position of our shipbuilding industry.

It cannot be claimed that the Government have been taken by surprise by this turn of events. When they came into office they set up the committee under the chairmanship of Lord Geddes which sat between 1965 and 1966 and reported in great detail on the state of the industry. I refer briefly to the final part of that report, part 7, chapter 27, which set out the committee's conclusions and recom- mendations. At paragraph 568, on page 152, the report says that there are three possible courses for the industry—either it will decline or it will hold on, or it will enter a period of growth. I shall refer in some detail to the first of those three alternatives because if one studies that alternative carefully one becomes alarmed. Under the heading " Decline ". the report said:
" Gradual evolution on recent trend, with no real gain in competitiveness, a decline to seven and a half per cent. of the world market or less and an output of little more than one million gross tons per annum on average. The mix containing more big ships at a lower average price per ton, turnover showing no improvement, profitability falling and cash resources inadequate. Foreign industries growing and renewing themselves: the British industry failing to attract its share of good, young managers and men. Sporadic appeals for Government aid to ease the decline. Employment on new building falling to some 30,000 as productivity rises gradually."
That was a forecast for 1972–75. What has happened in the short period since Geddes reported in 1966? We now have a position—at the beginning of 1970 and not in 1972—of a decline to 7 per cent. Geddes said 7½ per cent. in 1972: our output is less than 1 million gross tons and here we are appealing to the Government for further help, just as Geddes forecast in the least favourable of his three prognostications for the industry.

Geddes went on to suggest certain remedies as he saw them. He mentioned first management, under the main heading of " Rationalisation ". There has been a substantial rationalisation under the Shipbuilding Industry Board. Reference has been made to the facilities provided in the Harland and Wolff yard, in my constituency. They are most impressive. There is a new, magnificent building dock which has been erected there, with a fine, German-built crane over it, with new fabrication sheds in the process of completion and modernisation which should place our shipyards in Britain in the forefront of world production.

The Geddes Report's first recommendation under the heading, " Employers and trade unions jointly ", contained the following passage, paragraph 573(e).
" Agreements. To observe bargains in the spirit and the letter." I was pleased to hear the hon. Member for Glasgow, Scotstoun (Mr. Small) referring to the way in which the trade unions had welcomed the publication of the Geddes Report. How different, I regret to say, in practice their performance has been. Anybody who read the article which appeared in the Sunday Times of 26th April entitled, "Will unions put skids on Upper Clyde's slipways?" knows that it set out in great detail—and it was a carefully drafted article—the traditional dispute between the boilermakers and the finishing trades and showed how this merry-go-round had led to ever-increasing costs, which can cause nothing but alarm.
The Geddes Report went on to recommend action for the trade unions
"To review union structure and procedures, having regard to the special situation of the industry, and bearing in mind the possibility of covering all shipyard operatives in five unions."
There has been an amalgamation of the unions, but, unfortunately, as hon. Gentlemen opposite know, the old demarcation problems still exist in our yards. The articles which I have mentioned referred to the problems in one yard when time and motion study men came on to the scene. Because one of those men did not belong to the Boilermakers' Union—and these were time and motion study experts appointed to help the yard improve its efficiency—the men came out on strike.

Would the hon. Gentleman agree that there has been a diminishing of the number of demarcation disputes as such in the yards, and further agree that there have been amalgamations of unions in the yards—such as the shipwrights and the boilermakers—and that there are moves towards amalgamation in other directions? Would he agree that this is not a matter which can be overcome in one or two years? It will take a long time. The unions are moving as fast as possible in this direction to overcome these problems, but a speech of the kind which the hon. Gentleman is making does not help those trade union officials who are doing their utmost to overcome these difficulties.

I certainly willingly agree. As I said before, there has been some progress. But hon. Gentlemen opposite gloss over the problem that it will take time. But we have not got time. One cannot lose £3 million, £4 million,£6 million, or £8 million in a single yard and remain in the business.

Time is against us, but if the hon. Gentleman will listen to the rest of my speech I intend to go into the point in more detail.

I admit that I castigated the trade unions firmly for not going fast enough with their amalgamations and for not adopting a sensible enough attitude. There has been an improvement, but we must look at the go-slows during the last six months and the work-to-rules in furtherance of wage claims against a background of substantial losses in the shipyards. These are causing alarm.

Management is equally to blame. But first I should like to turn to the next section in the Geddes Report, because I feel that this is of great importance to the country. Geddes' main recommendation, so far as the Government were concerned, was at paragraph 575(a). It said:
"Policy. To adopt a positive policy towards ship building as a potential contributor to economic growth and the balance of payments."
The report went on to deal with implementation. It recommended the Government:
"To initiate the proposed process of consultation about our proposals within the shipbuilding industry and to ensure that proper consideration is given by those concerned to the price of shipbuilding steel; and, if the necessary response is forthcoming, to establish the Shipbuilding Industry Board…and…to consult with other governments about the early establishment of a study group…"
The last passage from the report to which I want to refer is from page 159, which contains a summary of conclusions and recommendations. Under the heading "Steel", the report says:
"Steel accounts for about twenty per cent. of merchant ship costs and the key factor is the basic price of heavy plate.
Shipbuilders and steelmakers have a joint interest in maintaining and increasing the British share of the growing world market for ships.
The eventual objective should be a ten per cent. reduction (at constant prices) in the steel costs of British-built ships and as a start the arrangements for a differential price for such plate supplied to shipbuilders should be reinstated."
That was one of the principal recommendations of the committee. Yet, during the last 10 months of this critical year, the price of steel has risen three time. The first increase became operative in June last year, when, after reference to the Prices and Incomes Board, the Government conceded only part of the full increase sought. It was, nevertheless, the major part. The British Steel Corporation was allowed to add the balance in November, and a further increase of 10 per cent.—Geddes recommended a reduction of 10 per cent.—came into force in January this year. Here is yet another cause of the current troubles facing shipbuilding.

In his study of the steel industry, has the hon. Gentleman examined the competitive prices of shipbuilding industries overseas? Does he not also agree that the British Steel Corporation has made provision for any shipbuilder who has committed prices ahead to make application for them to be considered in the committed contract price?

Those are excellent points and I accept the force of the hon. Gentleman's remarks. I am glad to expound this subject a little more.

First, I deal with our competitors overseas. Six months ago it was hard to find figures of what they were offering, because obviously they will not provide them to competitors. But more favourable steel purchasing terms were available in Germany and Sweden and perhaps also Japan. Since then, there has been a sharp increase in the price of steel on the Continent and their prices are now comparable with those in Britain. But that is not the full picture. In Japan, the industry is vertically integrated and it is well-nigh impossible to discover what the comparable price of steel is there. Japan is our main competitor.

I accept the hon. Gentleman's second point that the steel producers here, where contracts have been taken for the delivery of a ship at a fixed price, have allowed that the price of steel should not escalate during the ship's production, and I welcome that concession. However, I go further. Geddes recommended that the Government should go further.

The shipbuilding industry is a main purchaser of British steel. It takes it in very large quantities. The Government should look again at that Geddes recommendation in the critical situation facing the industry today and consider whether a concession price by quantity of order of heavy plate could not be granted, as Geddes recommended, to the shipbuilding industry. This is essential for the viability of the industry.

Steel comprises about 20 per cent. of the price of a ship, but labour costs are perhaps the most critical factor. I have already referred to the way in which labour costs have risen at U.C.S. It is a matter of some regret that the trade unions have not adopted a more sensible attitude. I see the objections of hon. Members opposite on this, and I hope to deal with them. I draw their attention to what has happened over the last 12 months. The situation has been stated by leading members of the industry, including Mr. Len Redshaw, Chairman of Vickers, and also in an article in the Sunday Times about shipyard costs. They estimate that labour costs have risen by between 10 and 15 per cent. in the last 12 months—a frightening increase.

The article says that without doubt the main problem is wages and elaborates that theme fully. It says:
"Exactly how much they have risen is hard to estimate. Redshaw claims 12 to 15 per cent. more is being paid for 10 to 12 per cent. less output;"

I take the point and I agree. The article goes on:

"but the unions naturally find this a wild exaggeration. But it is no secret that in many yards the management has given way to pay claims that did not have the equivalent increased productivity so as to avoid a strike."
The author of that article, Mr. John Fryer, put his finger on the basic problem. This is just one of the many articles which have appeared in the national and technical Press on the subject.

No, unfortunately not, but I believe that they are relevant to the whole of Vickers. The article goes on to deal with the position of Palmer's yard in a subsequent passage about why it has had to close down. The remarks are not confined to Palmer's. The recent rapid rise in wages has also taken place at U.C.S., Harland and Wolff and other yards.

I want now to meet the point put by the hon. Member for Liverpool, Walton (Mr. Heifer). I believe, as does my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley), that wages should be fair and reasonable and that reasonable increases should be granted by the shipbuilders, but I must add—and the Government have made the point many times—that this must be matched by increased productivity. This is an international industry. We are competing with world shipbuilding and if we raise wages by 10 or 15 per cent. to keep them level with other industries and to keep workers in the shipbuilding industry, that is fair enough—as long as productivity goes up by the same amount at the same time.

Does not the hon. Gentleman agree that the important question of profit is basically a management question? If one operated a shipyard on the basis of the critical path system, there might be better results than if one operates it in the way that so many yards have been operating in the past—a way of totally incompetent management with hundreds of workers sometimes not being able to work because the materials are not there for them at the right time.

For example. there have been cases where joiners, arriving to put a deckhead up, have found that the plumbing work has not been done. I could give example after example from my own experience of total incompetence on the part of management. The workers cannot be blamed for that sort of thing when hundreds of man hours have been wasted through lack of initiative on the part of incompetent managements.

As I said to the hon. Gentleman, I accept that much of the blame rests on management—there has not been proper planning and a proper work-flow—but I think that he is oversimplifying. I would be in error if I sought to blame it entirely on labour, but I do not—I seek to spread the responsibility. Surely both labour and management are equally responsible and must work together to ensure higher productivity.

This does not turn simply on the flow of materials to the work, but on demarcation agreements and overmanning. The hon. Gentleman knows these problems well. This is where more co-operation is needed. I agree with the point about spending. It leaves a great deal to be desired in most of our yards. I have been around most of them and seen some of these faults for myself.

Therefore, management has failed in its duty. After all, productivity is principally their responsibility, as is the estimation of prices, in which they have been wildly out. We have spent a good deal of time considering the fact that we have taken too many fixed-price contracts. But they were taken two or three years ago. Since then one of the reasons why the estimates were at fault was devaluation in 1968, which would make a fixed price contract which did not take that possibility into account substantially out.

Contracts in the shipbuilding industry are signed one year, work does not begin for two or three years and is not completed for two, three or more years after that—at least five years from the date of the original contract. On top of the effects of devaluation was the escalation in wages which I have mentioned. Here I would lay the blame squarely on the Government, who, up to last year, insisted that wage increases should be matched by productivity. Then, suddenly, their policy collapsed six months or a year ago. They have just introduced the Industrial Relations Bill, which completely abandons all concept of controlling—

Order. This is a broad debate, but not quite so broad as that. We will debate that subject on Second Reading of the Bill.

I will return to my main point.

Some of the contracts taken after 1968 had escalation clauses built in. The order books were becoming fuller and they could bargain a little more keenly, but these clauses also grossly underestimated the rise in prices. They allowed for about 3 or 4 per cent. and, as I said, there has been a rise of at least 10 per cent., perhaps 12 and in some cases 15 per cent. in wage rates alone, which are a substantial part of costs, in the last 12 months.

There is one slightly silver lining, in that demarcation—hon. Gentlemen opposite, many of whom have worked in the industry, know this—is playing a lesser part, because we are moving away from the complex passenger ships towards the large bulk carriers and tankers. Therefore, where there is not so much work for the finishing trades, demarcation is a lesser obstacle. But progress here has been lamentably slow since the Geddes Committee reported. The facts are clear Lo the nation and to everyone who works in the industry.

My suggestion to the Government and to my own Front Bench, who may be in charge of these affairs within the next few months, is that there should be an immediate plan for the industry. After all, we are a maritime nation. I admired the courage of the hon. Member for Bebington (Mr. Brooks), who suggested that the resources employed in shipbuilding would be better employed in other industries. I am sorry that he is not still here, because I do not believe that it is quite so easy to redeploy these resources.

There could be grave disadvantages in allowing our shipbuilding industry to die—and that is what we are facing. As a great maritime nation, we could be held to ransom by any foreign country which drove us out of the business. It is ironic that a Government who began their period in office with a National Plan should have failed so lamentably to plan clearly for our shipbuilding industry. They have allowed too many British orders to go abroad.

I accept that there is a serious problem for the future of the shipbuilding industry, but has not private enterprise utterly failed here? It has to have money pumped into it by the Government. Therefore, is not the logical conclusion that we shall have to take over the industry? I hope that this would be at very reasonable share prices, but not inflated prices. They could almost give it to us at the moment, to put it back on a proper and viable basis.

This shows the unwisdom of giving way. I know the hon. Member's fondness for nationalisation, but I was about to deal with those points.

At present, the shipbuilding industry is facing a very serious crisis. I believe that the Government have failed, first, through the failure of their incomes policy, which has led to this rapid escalation in costs, direct and indirect. There are 70,000 men employed directly in the shipbuilding industry and 200,000 or more indirectly. Orders have gone abroad which should have been placed in this country. We debated just before Christmas a British Railways order which went to Italy. Where is the logic in that? Italy pays a subsidy of 15 to 20 per cent. to its shipyards. We allowed British Railways, a nationalised industry, to order its boat in Italy when we are putting millions of pounds into our industry to try to save it. It is nonsense.

When it comes to private or seminationalised industry, British Petroleum orders its ships in Japan because, it says, it wants to sell it petrol there. Have Her Majesty's Government attempted to say to American oil companies, "We will buy your oil if you build your boats in Britain"?

Is the hon. Gentleman suggesting that British Petroleum is a nationalised company; or that, though not nationalised, the Government should interfere in its commercial decisions by reason of its powerful shareholding? Is that what the hon. Gentleman is inviting the Government to do?

I shall deal with that point later. But the Government should certainly have interfered in the British Railways case and should not have allowed the order to go to Italy.

Foreign countries give assistance to their shipyards. It has been suggested by hon. Members opposite, particularly by the hon. Member for Bebington, that we should not give a lead in assisting our shipyards, but should attempt to negotiate with foreign countries to persuade them to abandon their unfair practices.

That is all very well, but it is extremely airy-fairy. We have been bargaining with foreign countries for many years and we have not made much progress. France subsidises its shipyards by 10 per cent. In development areas it gives them an even larger subsidy. Italy pays a subsidy of 15 to 17 per cent., depending on the location of the shipyard.

Japan assists her yards by granting special credit terms. An interest rate of 4 per cent. over eight years is available for Japanese owners who place orders in Japanese yards. Until very recently, Japan imposed a 15 per cent. duty on Japanese owners who ordered boats abroad. Last year, in Japan, which has the biggest and most productive shipyards in the world, shipowners ordered 1,566,000 gross tons of shipping, all of which was placed in Japanese yards. Even though the duty has been dropped, Japanese owners are still ordering their boats in Japanese yards.

I suggest that we impose a similar duty while our shipbuilding industry is facing competition from Japan, France, Italy and other countries. Unless we build up our own industry with British orders, it cannot hope to compete in world markets.

The troubles of the industry are not unique to this country. We have spent a lot of time in this debate considering the difficulties of Upper Clyde, Cammell Laird, Harland and Wolff and other yards, but leading Swedish and German yards are also showing losses.

Against this background, I advocate that the Government publish a cohesive plan for the industry, and announce clearly their intentions and the way in which they plan to put the industry in a position to compete not only with German and Swedish yards, but with the massive Japanese yards. Otherwise, our industry will go out of business altogether.

I know the Government's difficulty. They are afraid that if they announce their intention to support the industry the trade unions will take it as a cue for slapping in more wage demands. The management may rest on its laurels and say, "The Government will support us, whether we put our house in order or not. They will bail us out, whether or not we are efficient". We must face this difficulty. The trouble about the Government's not publishing a plan and announcing their intentions is that uncertainly continues in the industry. It does not attract men to it. People do not see a future in it.

As the hon. Member for Walton said, the fault is that of management. Perhaps the weakest part is middle management which needs to be supported. More life must be coaxed into the industry. Men of ability must go into the shipyards instead of into other engineering enterprises. Before they can be persuaded to do so they must be sure about the industry's future. Who, reading the articles in the Sunday newspapers, would be sure about the future of our yards?

We need a master plan for shipbuilding. A Minister for Shipping and Shipbuilding, responsible to the House, who gives his time exclusively to the industry, should be appointed. We have had Ministers of Civil Aviation. The aviation industry, important as it is, is less essential for the country than the shipping and shipbuilding industry.

I welcome the provisions in the Bill. I was glad to hear the Minister say that so far they have not cost the Government a penny. The banks have been paying the money. We could pass a Bill increasing the limits from £600 million to £800 million, but who would pay for it? It would be the bankers and the shareholders in the banks, who receive a slightly lower dividend because the money could be lent elsewhere at a higher rate of interest. I congratulate the joint stock banks and other banks which have contributed money at a special guaranteed rate to home and overseas owners. I am glad to learn of this protection.

I should like the Government to reconsider the pros and cons of protecting the industry for a limited time to enable it to put its house in order and to make it clear to the industry that it is for a limited time. There have been too many extensions in the past. We must give the industry the protection it needs so that it can face the competition to which I have referred. It is no use Britain saying to other countries, "We shall not protect our industry. You can protect your industry until you drive us out of business. We are going to lead the way".

I am glad that management is getting away from the idea of fixed price contracts and that it is in a better negotiating position and can write in escalation clauses, which I hope will be reasonable. However, I hope that the Government will ensure that wages do not increase to such an extent that, whatever the escalation clause, the position is nonsensical in four or five years.

I have every confidence in the ability of our industry, with assistance, to match the competition of any other shipbuilding industry in the world, whether it be the recently modernised Japanese industry, or the older, well-established Swedish and German industries. I am convinced that the steel makers and the shipbuilders, with their years of experience and traditional skills, can turn out boats as good as, and indeed better, cheaper and quicker—and the question of delivery is important—than any other shipbuilders in the world. But the Government should let the industry know what they intend.

7.30 p.m.

The hon. Member for Belfast, East (Mr. McMaster) in his closing remarks appeared to be asking for massive Government interference into the private enterprise industry. He wanted a national plan for the industry, which I welcome. Probably the best plan a Labour Member of Parliament could advocate is the one which was discussed briefly by my hon. Friend the Member for Liverpool, Walton (Mr. Heller), which is to take all the firms into public ownership. What worries me is that we would also have to take into public ownership a large section of the present management. There is no doubt that part of the deep-rooted malaise affecting the industry at the moment has been caused by bad management.

The hon. Gentleman then seemed to imply that increases in wages and salaries in the industry would have a disastrous effect. He is saying that although workers in the industry see increases in wages going to workers in the car industry and other industries, they themselves should say, "We do not want any increases". The situation will never arise in which, because their industry does not happen to be viable, workers will accept the situation that their salaries are at such a level that they will underpin that sort of arrangement.

If I may make the point clear, I do not expect the trade unions to accept the situation. I was saying that along with rises in salaries they should make sure they play their part in keeping of productivity.

That is quite fair and I follow what the hon. Gentleman is saying. There have been great strides in productivity by the trade unions in the shipbuilding and ship-repairing industry. Perhaps it has not gone as far as it ought to go, and there are many ancient reasons for this. It is an old industry containing a large number of trades and there are difficulties in arranging agreements and in deciding what new skills will be done by what old trades.

The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) referred to the demarcation problems which exist in the industry. I believe that these disputes are often misunderstood by the general public and by hon. Members opposite. They are not disputes about who drills what hole, or draws what line, as would appear from the newspaper headlines. They involve all the new technologies which exist in a cold, hard, competitive world. This affects the angle iron smith, the driller, the corker and the rivetter, most of whose industries have disappeared. Arguments as to who should do what job are felt very deeply because a man may lose his livelihood and skills and have to start afresh. These are the main reasons for the deep-rooted arguments and negotiations which take place in many demarcation disputes, matters which seem to the outsider who is not personally affected to be so trivial. However, they are most important to the individual who will be knocked out if he is the loser of the argument.

The shipbuilding industry employs many thousands of men. Had it been a corner shop which was not paying its way, it would probably be allowed to close. But it is not. It is a huge industry which, with its good workmanship and skills, has built up a world wide reputation. But it is an internationally competitive industry and many of its problems should have been foreseen 20 years ago on the lines that the industry would eventually have to face up to the hard competitiveness of shipbuilding industries in Japan, Sweden, Western Germany, Lisbon and elsewhere. But it was not foreseen.

The hon. Member for Cirencester and Tewkesbury chided the Government for giving too much scope in one direction and saying that in other matters we should have done a little more. In reply I would say that we compare favourably with the £70 million offered by the right hon. Member for Wallasey (Mr. Marples) who was responsible for the industry under the Conservative Government. He gave no indication to the industry about how it should put its house in order to meet the hard, competitive problems of the outside world. This process should have taken place some time ago. The structure of an industry and the jobs in it cannot be changed overnight. The social consequences must be carefully taken into consideration.

I am pleased that the industry has begun to write escalation clauses written into its contracts. The fixed-price contract has been a problem, which is nothing to do with this Government. It is a question of negotiation probably on an international level. Like my hon. Friend the Member for Bebington (Mr. Brooks), I fail to see why, if we were in a position of having short order books when our Japanese competitors had long order books, some escalation clauses could not have been written into our contracts. There may be a good reply to this argument and I hope that I will hear it tonight. Escalation clauses of this kind will provide some cushion if there are to be improved standards for those who work in the industry and a possibility of profits.

I welcome the Bill for its two main provisions. The first is that it will provide an extra £200 million credit, but secondly it will also expand the life of the Shipbuilding Industry Board which has been doing a useful job. In its membership of the Shipbuilding Repair Council it plays its part, along with the trade unions, in discussing the problems of the industry. I also welcome my right hon. Friend the Minister's reference to the SD14 success. If I may be forgiven for making a constituency point, I wish to extend congratulations to Austin and Pickersgills on receiving the Queen's Award, which was mainly because of the huge success of the SD14. It is a pity that there is still a bitter dispute in the other consortia at Doxford, which has lasted six weeks. I am sure that deep-rooted problems are involved, but I hope both sides will get together and find a solution. This dispute has kept this shipyard idle, with disastrous effects on future orders and delivery dates.

The hon. Gentleman has mentioned the cold competition which the industry faces. This sort of strike will do inestimable damage to the reputation, as well as to the health and strength, of the shipyard. Does he not agree that something more has to be done if this problem is to be solved for the future?

I could not agree more, but I cannot take upon my shoulders apportionment of blame. There are great faults on both sides. This particular dispute is doing tremendous damage to future delivery dates in the yard, and I very much hope that the two sides will soon reach a solution.

I wish that we could get a little more clarity of thinking on the part of the managements in their dealings with the men. Part of the difficulties in the yards lies in the tremendous gulf which still exists between management and staff. Some yards have made progress on this matter timidly and slowly, but there is still an attitude in the industry of "them" and "us". It is based on a history of antagonism against managements who, in the old days, were rather tough towards the trade unions whose main job was to get what they could from them. Big changes are taking place, but managements have to do still better.

Serious social problems arise when men are made redundant. They are entitled to be consulted and told about their future at the earliest possible moment. Only recently, we have heard the tragic news that Palmer's yard at Hebburn is to close in June. The first indication that the shop stewards and members of the local council who represent 1,100 men in that town had was when they read about it in the Press. There was no consultation about the problems which the yard faced. There was no consultation about possible new working methods and potential savings which could be seen.

The most important factor, of course, is that it is disastrous for the 1,100 men involved. When they are added to an already inflated unemployment figure in the area, it is not surprising that it causes great concern to those who represent the area. My hon. Friends the Members for Jarrow (Mr. Fernyhough) and South Shields (Mr. Blenkinsop) and I have been given great assistance by the Ministry of Technology. Since last Thursday, we have had interviews with my right hon. Friend the Paymaster-General and my hon. Friend the Minister of State. My hon. Friend was courteous enough last night to meet the shop stewards and councillors who represent the area and to discuss the problems with them. That is the kind of human approach which ought to be copied by the managements.

Earlier today, we heard a slightly schizophrenic interjection by the hon. Member for Tynemouth (Dame Irene Ward) about the problems of the area, and both the hon. Lady and the hon. Member for Belfast, East referred to rising steel prices. Of course steel prices have escalated. In these days, it is difficult to keep costs level, and when they go up in ancillary industries, they go up in steel. However, steel prices remain competitive with, if not less than, those of most other countries with whom we are in competition. They are not really an Important factor.

Although I can understand it, it always strikes me as a little strange when hon. Gentlemen opposite undertake to provide cheap steel at the expense of the commercial expertise of a nationalised industry in order to help a privately-owned sector of industry like shipbuilding. I do not regard their remarks as very helpful. The hon. Lady, for instance, provided us with what appeared to be a number of 1930 or 1932 solutions, most of which are hardly applicable to 1970.

The Bill is one which should be welcomed by both sides of the House. With it, the Government have shown that they are concerned about the future of the shipbuilding industry. I hope that we shall hear from the Front Bench opposite a little about the possible implications of the Selsdon Park proposals. I have in mind, for example, the effect of withdrawing the regional employment premium which goes to our ship builders. Last year, it accounted for £1·5 million of the £F1·6 million profit made by Swan Hunter. The industry is entitled to know the Opposition's thinking. I hope at some stage that it will be made clear how it affects an industry like shipbuilding. We are entitled to know.

We are extending a hefty credit ceiling to the shipbuilding industry, and I welcome it. It compares very favourably with the meagre assistance which was offered when the right hon. Member for Wallasey was the Minister responsible. We hope to see a healthy future for the industry, and it will be seen provided that it is given the confidence which I am certain that the Government are prepared to give it.

I qualify those remarks with a note of warning. Although there is a boom in ship demand in the world today, I should prefer to see the state of the industry between periods of demand, when the demand tapers off gradually and finds a plateau where, in a real competitive world, this country is able to remain competitive hold up its head, get the orders and produce the goods. Only then can we say that we remain what we have always been—a great shipbuilding country.

7.45 p.m.

Mr. Speaker, I seek to endear myself to you in two ways, first, by referring to the Bill, and, secondly, by speaking briefly.

The Bill increases the limit on the guaranteed payment for ships built in British yards from £400 million to £600 million. To see this in perspective, it is necessary to recall that it is only three years ago that we legislated for this scheme with a limit of only £200 million. The necessity to increase the limit in this dramatic fashion is a measure of the success of the scheme and of the huge increase in the orders obtained by shipyards.

However, the amount of guarantee is only one part of the bargain laid down in the original Act. The other part was an improvement in the efficiency of yards. That was to come about as a condition of receiving these guarantees. I hope that my right hon. Friend will comment on the improved efficiency that has been brought about in our shipyards. Obviously, the reorganisation which has taken place in terms of yard amalgamations is much more readily apparent to the outsider than the improvements in efficiency which have come about inside the yards. Nevertheless, the latter point is even more important to the health of the industry than the former.

The improvement in our order books is best demonstrated by comparing the new orders obtained during the 12 months ended 31st March, 1968, with those obtained during the 12 months ended 31st March of this year. Over that period, the order books of United Kingdom yards rose from 2,094,000 tons to 4,605,000 tons. That is a remarkable increase, and one of the reasons for it is the high degree of subsidy being paid by the taxpayers of shipbuilding countries to ship owners.

The main beneficiaries of the policy being pursued by the Governments of ship building nations are the countries which own ships but do not build them. At present, 2½ million tons of shipping is under construction in the world's yards for Liberian registration. I suggest that Liberian taxpayers put precious little into the pockets of the owners who purchase those ships. The money is found by the taxpayers of the countries which build them. In view of that, I agree with those who say that an international agreement between the shipbuilding nations is urgently needed to redress the position.

I do not derive any satisfaction from the suggestion that this can be done only in the long term and by very small stages. On the contrary, it has to be done quickly and with a sense of urgency. We are in a good position to promote such an international agreement, because we do not suffer as much as many other countries as our merchant fleet is being rapidly expanded. Although our rate of shipbuilding is lower than that of Japan, the rate of expansion of our merchant fleet compares favourably with Japan's.

Inevitably, in shipbuilding debates, we tend to turn our eyes to the comparison of shipbuilding rates between ourselves and Japan and see Britain as a rather poor second. If we focused our eyes for once on the position of merchant fleet expansion we would see that 2,594,000 tons is being constructed in the world for the Japanese fleet compared with 2,531,000 tons for United Kingdom registration. We are almost on a par with Japan. It is amazing that on a par with ourselves and Japan is Liberia, with 2,464,000 tons now under construction.

For completeness, will the hon. Gentleman tell us what proportion of those Japanese orders are being built outside Japan and what proportion of the British orders are being placed outside Britain?

I am grateful to the hon. Gentleman for intervening on that point, because I want to challenge him on the point that he made relating to Japanese shipbuilding figures.

The hon. Gentleman pointed out, for example, that 1½ million tons were ordered last year to be built in Japanese yards for Japanese owners. To give a complete picture I would point out that about 2½ million tons are being built in Japan for Japanese owners. I believe that we could usefully combine with Japan and other shipbuilding countries to solve the problem of the percentage of our shipbuilding tonnage compared with the expansion of our shipping fleet.

At present, 1,130,000 tons are being constructed abroad for British owners compared with a total tonnage being constructed in the United Kingdom of 1,741,000. In other words, if all those orders had been placed in British yards and were being constructed now we would have a building rate of about 3 million tons, which would be a wonderful position to achieve.

I believe that this would justify an inquiry by the Ministry of Technology into the reasons why these orders have been placed abroad. I envisage that the inquiry would have to discover how far orders have been placed abroad because of the success in specialisation which has taken place in certain foreign yards, how far it is due to unfair subsidies, and how far it is due to other factors. I am sure that the result of such an inquiry would show that the explanation for the difficulties which face some of our yards is not that which has been offered by many hon. Gentlemen opposite.

I do not believe that it is due largely to wage claims in our yards. It is necessary to know the reasons why these orders have gone abroad. If it is due to specialisation, that points to what our policy should be on specialisation in our yards. If it is due to other factors, no doubt they would also show the way that we should go. I believe that we should have this information to determine what future Mintech policy should be for future British shipbuilding.

7.55 p.m.

I thought that my hon. Friend the Member for Wallsend (Mr. Garrett), who has sat here longer than I, was about to rise, Mr. Speaker. Therefore, out of courtesy, I wanted to give him this opportunity to speak.

I am sorry that I was not present when the Minister moved the Second Reading of the Bill. I was taking a deputation to another Ministry, so I was debarred from hearing what he had to say about the shipbuilding industry in general. I was particularly disappointed not to hear my right hon. Friend's reference to the pending closure of the Palmer's Yard. I wonder whether it will be possible, when the Bill goes to Committee, for Amendments to be moved so that the ship-repairing industry might be able to get some of the financial benefits which the Act does, and the Bill proposes to, give to the shipbuilding industry.

The yard in my constituency which is due to close in a few weeks' time is the most modern, best-equipped repair yard probably in the country—certainly on the North-East Coast. As some of my hon. Friends have said, the announcement came like a bolt out of the blue. It shocked not only the men, but also the whole community, because it meant that twice within most men's memory this community had suffered the same tragic consequences.

It is unbelievable that a company like Vickers should have neglected to consult the men with a view to seeing whether a way could be found to overcome the difficulties and keep the yard viable.

I met some of the men last night. They told me that they had not been asked to discuss the difficulties facing the yard. They said, "Had we been approached, had it been put to us that we were in any way responsible for endangering the life of the yard, we would gladly have cooperated." They made it clear that they would gladly co-operate, even at this late hour, if there was any chance, as it were, of giving the yard a blood transfusion to keep it open.

I hope that my right hon. Friend will be able to give me some assurance on this matter. Is there no possibility of the life of this yard being extended for a few months until such time as a microscopic inquiry can be made into the reasons why the most modern, up-to-date, best equipped dry dock facilities in the North-East should have become unviable? Neither the men nor I can understand why a great industrial complex like Vickers has not taken the men into its confidence to see whether, with both sides sitting at the table, some way could be found to avoid this catastrophe.

The hon. Member for Belfast, East (Mr. McMaster) said that Britain was a great maritime nation. I hope that we will not make the same mistake that we made in the coal mining industry. We have let that industry run down too rapidly and we could face great difficulties next winter, or the succeeding winter.

It would be a sorry state of affairs if we, as one of the principal maritime nations of the world, allowed our ship-repairing facilities to run down to such an extent that we became almost entirely dependent on repair yards overseas. I do not think that it is necessary to allow that to happen. We have been winning orders in competition with foreign yards, and the yard in my constituency has recently broken into the Russian market. The Russians have sent two ships to the Tyne to have stabilisers fitted and other improvements made. I cannot believe that this yard is to close because the firm has lost money on individual contracts. It may be that the flow of work has not been sufficient to meet all the amortisation charges, but this is something which should have been looked into.

There has not been one industrial dispute in this yard during the last six or seven years. Many questions have been asked today about the number of days lost through strikes and the number of disputes which have occurred during the Government's tenure of office. I repeat that there has not been one dispute at this yard. It has perhaps the best record for industrial relations in the country. How comes it, when there is a real base for what I call being competitive, that is, good labour relations, and after£4½ million being spent on it only five or six years ago, this yard is to close?

Is it not possible, for a few months while an investigation is made into the position, for some Admiralty and other repair work to be brought forward? Is it not possible to persuade B.P. to be ultra-patriotic and see to it that every repair job that it has goes to this yard? Unless we get a blood transfusion, unless we get some immediate help, 1,100 men will find themselves signing on at the employment exchange in a matter of weeks.

The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) said that there were plenty of vacancies for skilled men. The hon. Gentleman does not know what he is talking about. There will be a job for every boilermaker made redundant, but there will not be any jobs for fitters, plumbers, electricians, and scores of other men whose skill we as a nation can ill-afford to lose. The dismissal of these 1,100 men will make the male unemployment rate in the Tyneside conurbation almost 10 per cent., and I say that this is indefensible. We cannot call ourselves a civilised nation if, faced with the prospect of unemployment of that magnitude in any area, we are not prepared to do something about it.

We told the people at the last election that if private enterprise fell down on the job we would not hesitate to step in. I should like to think that we would be prepared to see whether in this industry the State can efficiently, effectively, and profitably run a ship-repairing yard which the great Vickers empire, with all its managerial skills and experience, finds it cannot do.

I hope that the skills of these men will not be lost. We have proved, and are proving, that the shipbuilding industry is competitive. Orders would not be forthcoming if people could get a comparable ship at a cheaper price at any other yard. If we have more or less won the battle there, the time has come for us to have a real, deep-searching inquiry into the repair side of the shipbuilding industry with a view to ascertaining, first, the size at which it can be maintained and, secondly, making certain that the men whose skills and ability are world renowned, and who have received messages of congratulation from all quarters of the globe for the work they have done, are given the opportunity of continuing to use those skills not only to the benefit of themselves and the community in which they live, but the nation.

8.6 p.m.

I think that the House must have been impressed by the speech of my hon. Friend the Member for Jarrow (Mr. Fernyhough) whose constituency is on the other side of the Tyne from mine. I think that he fairly set out the terrible industrial relations which must have existed at Vickers. As a former employee of Vickers, I am not surprised to hear of a complete breakdown of industrial relations in the company.

I have never before heard my right hon. Friend being so modest as he was this afternoon. Here we have a success story. We have rescued an industry which, in shipping parlance, was virtually on its beam ends. My right hon. Friend spoke for half an hour, during which he completely under-estimated the part which the Government have played in rescuing the shipbuilding industry and making it as efficient as it is now.

I have the good fortune to represent the Wallsend constituency, and I dare say that the House is unimpressed by the monotonous regularity with which these huge ships are launched, and the monotonous regularity with which members of the Royal Family come to Tyneside to launch them. Every ship is a success story of craftsmanship, design, and delivery on the dot to the satisfaction of the customers, so much so that they keep coming back, and the Swan Hunter group at Wallsend has the largest order book in its history.

Unfortunately I did not hear the speech of the hon. Member for Belfast, East (Mr. McMaster), but I wish that labour relations were as good in his yard as they are in mine.

We have a full order book but the point is what profit, if any, will be made on the orders either in the hon. Gentleman's constituency or in mine? That is the sore point.

We could get involved in a doctrinaire argument about whether profit, in the sense which the hon. Gentleman means it, or in the sense which I mean it, is essential to the industry.

Since 1944 we have seen the inherent conflict between private capitalism and State capitalism. Had it not been for State capitalism rescuing the industry, the situation would be extremely grave.

The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) made some play 'with the question of wages and, although he never said it outright, he implied that wage rates were one of the factors in reducing the competitiveness and profitability of some companies. I should hate the House to get the impression that those employed in shipbuilding are earning enormous wages. Some in the industry earn adequate wages, which are negotiated through very hard, cruel and harsh collective bargaining. But there are also people in the industry who come out every Thursday night with about £10. That is not uncommon. The House should not think that everybody in the industry is earning £40 a week. Those who are are working damned hard and those rates are the result of very close negotiations.

On Tyneside, labour relations, except for this terrible breakdown at Palmer's yard are very good and I should like to see them continue. I believe that they will, because there seems to have been struck up a personal bond between the leaders of the unions and the senior men who manage the industry. This can do only good. The Swan Hunter group is reorganising its Wallsend yard. No reference has been made to this, but a £2½ million reorganisation—albeit a comparatively modest sum—is taking place without any interruption of the flow of productivity. At the end, it is expected that through-put of steel will be increased by another 300 tons per week. This is what we want, and I hope that it will continue.

I have always wondered why, since the war, no real thought has been given to an adequate dry dock on the North-East Coast. The much-vaunted Palmer's yard, which is capable of taking a ship of 103,000 tons and which cost £4½ million to extend, is a case in point. Even at that period, it must have been realised that it was inadequate. I have never heard a statement from any Minister or any of the senior people in the industry about why we in Britain, particularly on the North-East Coast, cannot build a dry dock capable of taking these huge vessels of up to 300,000 tons. The Portuguese Government saw the advantages here and, with the aid of other foreign capital, they now have a dock which is taking virtually all these huge tankers for the necessary repairs.

It is ludicrous to think that we launch a huge ship into the river and give it sea trials in the North Sea, and that it never returns to the river because there is no dry dock facility for it. If my imagination ran riot, I would think of extending Palmer's dock, which is the subject of controversy at the moment, so that it could take 300,000-ton ships. We could then launch a ship on the north side, and after it had done its trials, we could take it into a dry dock on the south side before it went into commercial use. That may not be feasible, but has any feasibility study been done? This point has always given me some concern.

The people on Tyneside welcome this extension of credit. We are sure that it will be used wisely if the opportunity is given. We hope that the prosperity of this industry will continue for many years to come.

8.15 p.m.

This is, of course, a limited Bill, dealing with Government guarantees for bank loans, but it raises very much wider issues than why home owners should go on ordering at home. It is not surprising that we have ranged over a wide field. The scope of the Bill is small indeed in the perspective of the industry's problems. We have had a valuable and interesting debate and many of the speeches I have heard—I apologise to those hon. Members whose speeches I did not hear—have interested me very much. The right hon. Member for Orkney and Shetland (Mr. Grimond) made a number of points with which I greatly sympathise. I used to have a personal sympathy for his idea of a new building site on green fields.

The announcement by the Minister about the continuation for an extra year of the Shipbuilding Industry Board was certainly overdue. I could never understand the hesitation here, because I gather that a number of approved plans are in the pipeline on which only the S.I.B. itself can finally pay the money. When the idea of the S.I.B. was first mooted, the Opposition doubted whether it could really end at the end of 1970, and those doubts have certainly proved true.

Those of us who know something of the industry—many hon. Members who have spoken do know it—know that it is an industry of cycles. There have been ups and downs, but usually, on the ups, the industry has been prosperous. What is a little alarming now is that there is an "up" in the industry throughout the world, yet we are getting disappointing results from many of our firms. There is a world boom, yet British shipyards are sustaining losses. I need only remind the House that Lloyd's recorded for last year three records. One was that the tonnage of ships for which plans were approved went up to 7¾ million and another was that the number of ships went up considerably to 156.

We are living with a certain amount of foreign subsidies. It is very satisfactory that the Government have succeeded in concluding an agreement in O.E.C.D. on credit terms, and it is equally nice to know that this is being honoured, so far as we know completely, by foreign Governments. At the same time, we must record that certain foreign Governments are going on with subsidies in other ways. In France and Italy in particular, subsidies have been estimated at between 10 and 17 per cent. In Japan, too, there are subsidies and all of the Japanese merchant fleet is built at home. Also, a study is being undertaken by O.E.C.D. of all subsidies. When the report is published, I hope that the Government will be able to get a little further in some international understanding on this matter.

The hon. Member for Bebington (Mr. Brooks) faced up to the question of the viability of this whole industry. There has been a lot of Press publicity in recent weeks and there have been some pessimistic arguments based partly on profits. In the past, there have been arguments against shipbuilding on the low conversion factor and other things. But there is a very strong case, in a maritime nation like our own, with still a large merchant fleet, for our having this industry and ensuring that it is viable.

We have a large national investment in shipbuilding; in the skill of the labour force, in management and in capital equipment, which must amount to a very large figure indeed. In addition, this industry is concentrated in certain areas, so that it has a big effect on employment. A factor which appeals to my hon. Friends is that it is a traditional British industry.

The Bill is designed to extend the guarantees. Guarantees were first mooted seven years ago, under the "Marples plan" of May, 1963, and the present scheme came into operation almost exactly three years ago. We discussed it in Standing Committee D on 20th April, 1967, when my hon. Friend the Member for Eastleigh (Mr. David Price) said that we would be forced to run some kind of credit scheme until such time as our competitor shipbuilding nations abandoned their credit schemes. That is the position we are in today, and the Government have been slow to recognise it.

The then Parliamentary Secretary, who I am glad to see in his place, though in another capacity, showed a shining faith in Labour policies at that time and suggested that borrowing rates were likely to go down under Labour. I regret that he has been disappointed.

Two years later, on 4th February, 1969, we again discussed the subject, when the original £200 million guarantee had run out and when no less than £287 million had already been committed. At that time, in Standing Committee E, I asked the Government for the secret of their calculations because it seemed to me, on their figures, that the additional£200 million, making£400 million in all, would be insufficient. Today, we are having the third bite of the cherry. I wonder whether we shall be coming back for a fourth bite before long, for I gather that already£400 million has been committed. The way things are going it seems unlikely that£600 million will be enough.

As has been mentioned, we are going into a revolving scheme and the repayments have only just started. It may be a long time before we reach the peak of loans. Further orders and demands on the fund will depend on a number of factors, such as on the world boom in shipbuilding continuing, which I think is likely, and on delivery dates abroad remaining long, which is also likely. There is every reason to suppose that we will be able to persuade home owners to go on ordering at home.

It therefore seems likely that by 1972 or thereabouts the then Government will be returning to the House for another£200 million, because£800 million will probably be the sum required to keep the revolving scheme fully operating.

The Government may believe that before that time there will have been a review of the Shipbuilding Industry Board to see whether it should continue in any particular form, and it might be thought now that that will be the moment to deal with the future of the scheme. However, in the meantime it strikes me as somewhat untidy not to have sufficient money in the scheme to make it revolve completely.

The effect of this extension of the scheme is merely that home owners will still be able to borrow at 6¼ per cent. if they are prepared to order in home yards. We have been told that the cost to the Government is likely to be nil, and I am glad to hear that. We do not know what the cost will be to the joint stock banks, though it cannot be a very profitable transaction for them. I suppose that it will cost the Bank of England something, because I understand that after a certain limit, some of the borrowing must be transferred to the Bank of England, and perhaps the Paymaster-General will comment on this.

It will be seen, therefore, that British owners ordering abroad will gain little advantage—probably a ¼per cent. advantage. I imagine that if they order abroad they will be able to get finance at about 6 per cent. compared with 6¼ per cent. here. Will there, in fact, be a disadvantage of¼ per cent. for home owners ordering at home?

I return to the question of the general state of the industry, about which there has been much Press comment in recent weeks. In the business section of The Times a leader stated:
"Clearly, something is wrong in British shipbuilding, particularly when order books are bursting at the seams, yet no one seems able to earn healthy profits."
That must be the cause of anxiety to hon. Members who have the interests of the industry at heart.

We need not go far to see the reason for this. As has been pointed out by many hon. Members, this is essentially an assembling industry, and the cost of materials has gone up considerably. My figures show that between 1964 and 1969 the price of materials increased by 20 per cent. I wonder how much more they are likely to increase in the next year or so? Hourly wage rates have gone up, according to my calculations, during this time by 58 per cent. Although one likes to see high wages being paid, one must consider the wages paid by one's competitors.

No doubt they have risen as well, and this brings me to the important question of productivity and competitiveness. The trouble has been the fixed price contract. Several hon. Gentlemen opposite have queried whether firms were wise to accept fixed price contracts when they did. The answer is that they could not have got the orders otherwise. Happily, things have changed and it is now possible to negotiate contracts on a cost price basis. Although some contracts may have had escalation clauses, the escalation allowed for was not sufficient to meet the inflation which occurred.

It is in considering this aspect that we come to a responsibility which the Government cannot shuffle off. I refer to inflation. It has gone on, and is going on, and hon. Members who are interested in this and other industries are extremely anxious about the speed with which it is likely to proceed in the near future.

The hon. Member went very quickly over the question of fixed-price contracts. He passed it off by saying that orders could not have been obtained except under those circumstances. Is he saying that if there could not be fixed-price contracts, they could not get a ship built? It seems obvious that they were not getting a ship built because most of our competitors were on long order books.

This is a matter of commercial judgment. I am sure that they were anxious to keep the yards going and that they saw better times ahead. It may be that they quoted too low prices in some cases, but that enabled the yards to survive. Now, with order books in foreign yards very long, it is easier to encourage orders to come here. That is a happier aspect of the situation.

In the meantime, there are a certain number of fixed-price contracts negotiated on what has turned out to be too low a price and they have to be worked through the books. That is an explanation of some of the bad results. We hope that if there is not undue inflation this situation will be remedied in future. This is the reason for the very bad news we have had in recent weeks.

The case of Harland and Wolff has been referred to. I am glad that one hon. Member referred to the fact that it has adopted the modern answer with its new shallow building docks and new shops. They should be the answer to many problems which may arise in future, but, meanwhile, there has been a substantial loss. I understand that the Shipbuilding Industry Board is looking at the present aspect and we may be told about that in the reply by the Government.

I sympathise with hon. Members opposite about the closing of Palmer's yard because I always regarded the North-East Coast as second to none in its reputation for ship-repairing. It is a sad fact that it is no longer in the right place. This is one of the difficulties and one of the facts of life. Nevertheless, I am very sorry to know that a yard of that kind, on which a great deal of money has been spent, should have to close. If I were to discuss ship-repairing at greater length that would widen the debate considerably. I hope, however, that the Minister will look carefully at this question, because problems of ship-repairing are at present more serious than those of shipbuilding. The remedy is less obvious because of the new geographical factor which did not exist to the same extent before.

We have heard that the Yarrow yard, which was always regarded as a yard of efficient warship builders, has left Upper Clyde Shipbuilders. Perhaps when we debate Clyde shipbuilding we shall be told more about this. We have read in the papers about the Cammell Laird loss and further losses to be announced later. This is disquieting to all of us. I do not think that the Government can escape all blame, for it was they who cancelled the contracts for nuclear submarines which were placed at that yard and which I believe most of us understood would continue there.

This brings me to the whole question of nuclear propulsion. I do not want anyone to think that I have a "bee in my bonnet" about this and, speaking from the Opposition Dispatch Box, I have to be careful what I say. I beg the Minister to remember that other people have had the idea of a fleet of container ships, nuclear propelled and built at a reduced price. It would be sad for a maritime nation such as ours if we allowed the Japanese to get ahead of us in this sphere. From what I hear there seems ground for believing that they are looking at this matter. If we are to get into this field of activity with a new type of propulsion we shall have to look to our laurels fairly quickly.

I come back to the Shipbuilding Industry Board and the decision on a year's prolongation. I do not see what else the Minister could have done. Sir William Swallow is himself on record in the last few weeks as saying that we have never before experienced inflation like this. It is posing day-to-day problems for the industry. We have read with great interest The Times report on 24th April of the statement by the Prime Minister that there is to be a new inquiry into the industry. We rather wonder what the Government's intentions are about this. I hope that we can be told.

One may inquire too much into an industry. Many problems are fairly evident. One of the remedies is co-operation, which, I think it is recognised on both sides of the House, is so necessary between management and unions in this industry. However successful co-operation has been in the past, it is vital that it should be successful in the future. I, too, read the article by Mr. McGarvey in The Guardian today; and I was glad to see the importance which he attached to it.

Several hon. Members have expressed the view that the outcome of Geddes has been a little disappointing. The hon. Member for Glasgow, Scotstoun (Mr. Small), who speaks with great authority, because he has spent many years in the industry, applied the telling description of "injury time" to the present period. As to the implementation of Geddes, which is largely a question of amalgamations, the results have been disappointing so far. Perhaps they will not be in the longer run.

Geddes made a very definite recommendation about steel prices. My hon. Friend the Member for Belfast, East said that it was necessary to have special price for steel for shipbuilding. This is the one recommendation of Geddes which has been ignored by the Government, although they have set so much store on the Committee's other recommendations.

The only report of the board available to us is that for 1968ߝ69. I hope that these reports can be published a little more quickly. I trust that we shall get the next one soon, because the figures I have been able to get from this report are a little out of date. According to this report, the board made grants to a total of£5·773 million and loans to a total of£9·435 million. That is probably old history, and it would be nice to know the up-to-date figures.

It is even harder to determine exactly what expenditure and loans have gone from the Government to Upper Clyde Shipbuilders. I have read in the newspapers that it is about£20 million, plus£3 million, or£4 million. The Opposition will look forward to debating this question on the forthcoming Bill on Upper Clyde Shipbuilders. Perhaps the Paymaster-General will tell us when we can expect that Bill.

Has all this money been spent wisely? I realise the difficulties. There have been special considerations in special areas like the Upper Clyde. But rescue operations are usually bad business. I was struck by the heading of the leading article in The Times Business News today:
"Using public money to best advantage".
Are we using public money to the best advantage? The amalgamations on the whole have been disappointing. In this as in any other industry we want to encourage success.

If we concentrate too much on rescue operations, the danger is that there will be too little money left for the new and exciting developments in the industry which have been the foundation of the success of our Japanese and Swedish competitors. We should not be propping up the uneconomic, except for the very best of social reasons. We should be giving every encouragment to the success stories. Let us not forget that there are success stories in the industry; and, when we have worked through the difficult phase of fixed price contracts, this will become even more evident.

Although, tonight, we must be somewhat depressed by the industry's problems, we should not be unduly pessimistic. We should remember that we are an island which has practically the largest merchant fleet in the world and that we need so to organise ourselves that we have a profitable shipbuilding industry. But today the money, whether private or public, needs to be well spent.

In June, we shall have a little evidence of the past success of British shipbuilding when a ship which is 137 years old is coming back to the constituency of the Minister. It has lasted all this time. British shipbuilding has had a great name throughout the world, and it has done a great deal for the prestige of our country. We must show in the future, as in the past, a certain amount of wisdom in the organisation of our shipbuilding yards. There is something to learn from the wisdom of our forefathers, who set up our successful yards on the Clyde, the Tyne, the Wear and other rivers. We must look forward, and not backwards.

8.40 p.m.

This is one of those days on which we can say with certainty that the House has had a very good, constructive debate, in which both sides have shown great sympathy for the very real problems of the shipbuilding industry. That is not to say, however, that the Opposition could resist those lurchings into demagoguery which they consider to be effective opposition. This is a sort of occupational reflex of the Opposition, which I regret because I have a high regard for them as an opposition. I am sure that they are the best opposition we have, and I am anxious that they should improve as an opposition. They are lacking in experience. I have no doubt that they will get more, but as they are bound to occupy this rôle for a considerable time I want to make modest contributions, not out of ill will but out of a constructive spirit, to improve their style of opposition.

For example, the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), who opened the debate for the Opposition, was at his best when being constructive and not attempting to make party points out of an issue on the fundamentals of which we are all agreed. He could not resist stepping aside and making one or two snide comments. For example, he talked about the groups that had failed and those that had resisted groupings and were successes.

The hon. Gentleman named as the groups that had failed Cammell Laird, U.C.S. and Harland and Wolff. Only U.C.S. of those three is a group formed in the relevant period, so only one out of the three failures, as the hon. Gentleman calls them, was a group. Of the successes, Austin and Pickersgill is a group. I cannot remember the names of the other two firms the hon. Gentleman gave as successes, but they were both groups, so all three successes were groupings. Vosper-Thorneycroft was one. So far from the groupings having failed, the three outstanding successes the hon. Gentleman mentioned were groups of recent formation.

The right hon. Gentleman should get his facts right. I did not say that Harland and Wolff and Cammell Laird were groups. I never said anything of the sort. The right hon. Gentleman tried to make Austin and Pickersgill merge with Doxford and Laing, and he tried to make Lower Clyde merge with Upper Clyde. It was those projected mergers that were resisted, and it was obviously for the benefit of the industry to resist.

When I quoted the hon. Gentleman has having said—and he will see it in HANSARD—that those which grouped failed and those which went their own way and did not group succeeded, he gave that statement an assenting nod, until he got the sting in the tail. The fact is that, apart from the phantasmagoria haunting hon. Gentlemen opposite about what I am supposed to have done, or my colleagues or predecessors are supposed to have done in the way of trying to make Austin and Pickersgill merge with somebody else and Lower Clyde join Upper Clyde, there is not the smallest evidence for any of this.

The fact remains that the three successes were groups and the notable failure, Cammell Laird, insisted on going its own way, and is having certain difficulties. I make no complaint. Harland and Wolff was not a group formed in the post- Geddes period. As for U.C.S. I will deal with that in due course.

The Paymaster-General cannot get away with this. He has made a slightly offensive attack upon me and now he is proving himself to be totally ignorant of what his Department has been trying to do. If he is not aware that the Shipbuilding Industry Board tried to force those two mergers, would he ring up Sir William Swallow, and then apologise to me for having maligned me?

The hon. Gentleman has got it quite wrong. Characteristically, he mistakes me for the Shipbuilding Industry Board. He must realise that this is an independent body set up by an Act of Parliament. It can give what advice it likes. He must not say that I or my Department tried to merge people, we have not done anything of the kind. Scott Lithgow's, a post-Geddes grouping on the lower Clyde, was the third successful firm—[Interruption.] If the hon. Gentleman says otherwise he must look at HANSARD tomorrow and see what he did say. These three successful firms were all groups formed after the Geddes Report and they have done very well.

It shows what lengths my party will go to to help the industry when I say that we went to the trouble of removing Charles Longbottom from membership of this House to equip Austin and Pickersgill with a first-class managing director. It just shows that there are no limits to the efforts of my colleagues in the interests of the important industries of the country.

The right hon. Member for Orkney and Shetland (Mr. Grimond) was troubled about Burntisland. It is now satisfactorily in the East Scotland Group and quite active.

I think it is building now. It is functioning well in another reasonably successful group.

The second demagogic point made by the hon. Member was that the labour legislation, not very specifically defined, intended for the distant date when his hon. and right hon. Friends will be governing, would solve many of the problems of the shipbuilding industry. It will solve all of the problems because it will bring the shipbuilding industry to a rapid end! It would attempt to impose on that industry's labour relationships the kind of vague, dogmatic claptrap which parades as labour legislation intended to govern our great industries.

I can think of no industry on which it would have a more fatal and speedy effect than the shipbuilding industry and on the sturdy men employed in it. The tasks of the industry, taken seriously, are tasks for management and men. Both have had their failings but the management failings are the more serious because the higher people go the more leadership they aspire to, the more responsibility they must take for shortcomings. The men are to be led by their management and expect to be led. The first responsibility will always be upon the management. The men must play their part, must seek to co-operate and improve their practices and their productivity, but the first responsibility will always rest upon the management.

Has the right hon. Gentleman read carefully through the proposals in Geddes dealing with this point and checked to see how the Government have come up to scratch on its requirements relating to labour relations?

The hon. Gentleman must not take this immature attitude of assuming that everything is done by the Govment. To say, "If labour relations have not progressed that is the Government's fault; the Government clearly dictate to everybody in the country what they should and should not do", is a stupid way of approaching the problem. Labour relations depend upon the amount of cooperation that can be got from the unions and the rank and file in improving conditions. The first responsibility for getting that is upon management and if they are not able to do it they ought not to undertake the task.

It is rather like the kind of wails we get about inflation, saying that it was not management's fault it was inflation. Anyone who wants to trade successfully without inflation should not have chosen this century in which to trade. Anyone who wants to treat with docile and easily bullied workers will get the same advice from me. They are not qualified for the leadership involved in modern management. As far as the men are concerned, I am by no means encouraging resistance to change or improvement in productivity and practices. On the contrary, the Government have always clearly and firmly expressed their position on this and they will continue to do so. We do not pretend that we have bayonets or legislative possibilities for coercing men to go where management has failed to lead them.

The third point which the hon. Gentleman could not resist as a point against the Government, was that in spite of our efforts we have a deficit on shipbuilding account. That means that we buy more ships abroad than we sell ships abroad. He really must think again if he is to fulfil his function as Opposition spokesman effectively—as I want him to do—and as he does when he is talking in a constructive fashion and not seeking to make these somewhat unsupportable points. He must do better than he did on that point. Is he really saying that it is a deficit because we buy more ships abroad than we sell abroad? The question all depends on the size of one's shipowning industry. If we had no ship-owning industry whatever we would be in surplus because we would not have bought any ships abroad but would only have sold ships abroad. That would be a strange way of reaching a surplus.

What the hon. Gentleman calls a deficit is the fact that shipowners here have invested in ships abroad over and beyond, as it happens in recent times, the capacity of the British industry to supply. It would be impossible for the British industry to have supplied the whole range of ships that have been ordered abroad by British shipowners. What the Opposition regard as a deficit is a very valuable revenue-earning asset.

The hon. Gentleman may think that I am being malicious this evening, but to show how kind my real intentions are to him I shall mitigate his offence by saying that he is in good or bad company because his habits of presentation are followed on current account by the Board of Trade. I hope that I shall not get into trouble for saying that. Ships bought abroad which are a revenue earning asset and vital to our exports are treated as deficits on the current account by the Board of Trade, although the Board of Trade is not putting that in the context of a shipping debate or criticising the Government for it. But the hon. Gentleman has that in mitigation in attempting to make this false point.

The hon. Gentleman has asked for the White Paper on Government Aid. The O.E.C.D. will produce a revised version which will cover the whole of the world and it would he better if we awaited that—

In the near future it is expected.

There has been some mention of the fact that the banks are paying the cost of this finance because they are providing cheap finance. This point has been raised before and I do not understand whether those who raised it, raise it to regret the concession is being made to shipowners who buy in Britain at the low interest rates, or regret that the Government do not lend the money instead of the banks. They are always agreeably inexplicit about their complaint. They feel that there is a point to be scored but they are not sure what it is so they content themselves by saying that it is generosity at the expense of the banks' shareholders. Would they rather that the Government made good the difference in interest rates to the banks, although the banks are content to accept this rate and they do it reasonably as part of their overall banking business in contribution to the economy of the country today? This seems to me a very sensible position. What point is it that the hon. Member for Belfast, East (Mr. McMaster) and other hon. Gentlemen would like to make upon this? I should be keen to hear it.

It would be fairer and much more honest if the Government provided the money.

What the hon. Gentleman is complaining about is that the banks are willing to provide this money at cheaper rates. My right hon. Friend has stressed the gratitude of the Government for the far-sighted and wise view they have taken of the over all advantages to their shareholders in the contribution they are making to the general economy. Now the hon. Gentleman wants the Government to pay, quite unnecessarily in view of this cheap money that is available. I hope that his constituents note that their prospects of getting finance would be worsened by the hon. Gentleman by his suggestion that the money should be obtained the harder way by throwing it into the general burden of public obligations when here are the banks wise and far-sighted enough and helpful enough to provide the money. The point has at last been made explicitly and I am grateful to the hon. Gentleman for doing so.

Although the subject of ship-repairing is not strictly covered in the debate I want to say something about it in reply to the anxieties which have been expressed. The general trend of ship-repairing has tended to be adverse to our yards. We must look at this in the light of what are to be the future developments affecting the ship-repairing trade. We shall shortly be getting a report from the group which has been studying this matter on behalf of the Shipbuilding and Ship-Repairing Council. I promise the House that the report will be immediately studied with a view to seeing what my Department can do to help the ship-repairing trade to meet changing conditions.

It will be a public report. I see no reasons why it should not be published, since it will not have any obvious fingerprints on it indicating secrecy.

I want to deal particularly with the question of Palmer's yard. I understand he anxieties felt about this by my hon. Friends, particularly my hon. Friend the Member for Jarrow I Mr. Fernyhough). I assure him that we are looking earnestly at all the possibilities—and I know that he will not expect me to say more at this moment—of providing job opportunities in that area, where male unemployment is high.

I turn now to the general position of the industry. In 1965, the shipbuilding industry was in a state of despair. As my hon. Friend the Member for Wall-send (Mr. Garrett) pointed out, my right hon. Friend was singularly modest. I think that he has been modest, but then cautious understatement carries a great deal of weight and my right hon. Friend did not wish to blow his own trumpet. It would therefore be improper of me. after the modest way in which he presented the Government's achievement, to attempt to magnify it. But however modestly he spoke, he made it clear that in 1965 little hope was left in the industry. It looked as if it would fall apart. The nation had a choice to make as to whether it would do something to assist the industry or allow it to fall to pieces and leave great and perhaps permanent pools of unemployed lying around in areas already subject to high unemployment, such as Scotland, the Tyne, Sunderland and elsewhere.

The Government took action. This is not the right time to summarise all we have done. The record is known to the House. In fairness, I think that the Opposition supported the view that the Government had to take action. On the whole, we have great successes to record.

The only problem which arises now is the question of profitability of yards in some cases with orders on a fairly wide scale based on fixed price contracts and the like. This is a hump over which the industry will have to climb. It took the orders at world prices. It is wrong to assume that the managements are to be criticised as wholly incompetent and in a state of moronic depravity in signing contracts at fixed prices.

This is a great industry which, apart from wartime and post-war booms, had had the greatest difficulty in getting orders. It was anxious to get them and here were orders available, but they had to be taken at fixed prices. Although certain things might have been more skilfully done, in fairness to them one should add that it was understandable that the managements had to take these orders at world market prices, and if the thing is now having to be fought out it is partly because they have been unable to take into account sufficiently the escalation of costs and partly because the time scale has meant that they have not been able to organise the productivity increases which would have existed if the industry had not been recovering from a state of deep depression. People should get their time scales right.

My hon. Friend the Member for Glasgow, Scotstoun (Mr. Small) said that Lord Geddes said that all would be well by 1970. He said nothing of the kind. Lord Geddes said that action should be completed as far as possible by 1970 but that the harvest should be reaped in 1972–75. In saying 1972–75, he was, if anything, putting too short a time scale on the completion of a vast operation. It is a tremendous job to take a battered and beaten industry without orders and organise its recovery and put it on a viable basis in a very short time. A satisfactory time scale is needed to make the necessary adjustments on all fronts—ordering policy, labour policy, yard reorganisation, and so on. It takes years to make all this effective.

I say to some of the critics of our shipbuilding industry that they can criticise the comparative efficiency of the British shipbuilding industry vis-à-vis other shipbuilding industries only after a careful appraisal of the subsidies given by other Governments and the tariffs applied. It is taken for granted by some of what I call the seminar tough guys that if an industry is losing money common sense indicates, however hard one's heart may beat for the people in it, that it must be abandoned and we must assume that it is totally inefficient. There is no difficulty in pinpointing possible inefficiencies in every industry, but before pronouncing on an industry we must consider what is going on in other parts of the world concerning subsidies and compare it with what is being offered to the British shipbuilding industry. Other industries enjoying substantial tariff protection, unlike the shipbuilding industry, and making relatively modest profits are not regarded as wholly incompetent because they do not make vast fortunes protected by tariff barriers which the shipbuilding industry does not have.

I come to the last part of the story of Government help, namely, what we should do about some of the weaker brethren. I have been asked to say what is to happen about Cammell Laird, Harland and Wolff and others, but at this point in time I cannot usefully go into detail on them. It is, however, clear that, with orders being no problem—the order situation is excellent and strong the problem is to make the industry reasonably viable. At the fringe there are the weaker brethren who need a little more patience and help. This is always said to be subsidising inefficiency.

The hon. Member for Dorset, West (Mr. Wingfield Digby) said that rescue operations rarely paid. Is that so? It is hard for a Government always to judge the situation correctly, but I remind the hon. Gentleman of the rescue operation which we mounted for the Cunard Company. Seventeen million pounds worth of British effort had gone into a hulk which would not be launched. It was regarded as no longer feasible by the Cunard Company to launch it. If anything looked like a failure, it was that vast ship which everyone pronounced could not make a profit and would not succeed. The seminar tough guys were well to the fore urging the Government to stay away from it and to let it be scrapped. But the Government stepped in and provided the money and the ship was launched. It has been a great success and the Cunard Company has gone from strength to strength in its general shipbuilding business and is playing a very big rôle in our invisible exports, much to the advantage of the country, and is placing orders in syndicate with others in the shipbuilding industry of this country.

We put up£20 million towards that venture. There was a great deal of criticism of our action at the time. But the Government will get every penny of it back if they have not already done so. The Cunard Company has achieved immense success. The ship was completed and is an ornament in support of our invisible earnings.

The Minister skipped quickly over what he must have realised from the debate is the main problem mentioned in the Sunday newspapers—the present spiral of inflation through wages rising too quickly. What do the Government intend to do to stop this inflationary spiral which threatens to make all our contracts unprofitable?

I thought I had dealt with that point briefly. This is not a debate on inflation. I know that the hon. Gentleman travels from country to country, but he does not seem to broaden his horizons in so doing. There is inflation as a worldwide phenomenon. It is not only in Northern Ireland and Great Britain. Those who journey abroad in wider directions, not just this interesting little trip which the hon. Gentleman makes, find that this inflationary problem exists in every country and, indeed, has been going on for a considerable time.

The hon. Gentleman wants to know what the Government intend to do to stop it. He might also legitimately ask what action the American Government intend to take, what action the French Government intends to take, what action the German Government intend to take. what action the Dutch Government intend to take, and what action a number of other Governments intend to take. I think that the matter would have to be taken to the Security Council if it were regarded as a matter for Government intervention. [An HON. MEMBER: "Tell the electorate."] The Opposition are in their irresistible pusillanimous condition when they can think of any grievance which the electorate might conceivably be expected to have, whether or not it can be substantially supported in intellectual argument.

It is not good enough to say, "Tell the electorate". Inflation is worldwide. It is raging in America. It is going on in all European countries. We are all doing our best to reduce it and pursue policies, with international co-operation, to cool it off as much as we can. At some level it has been going on since the Battle of Waterloo. I must resist all invitations to pose in the supposed role of King Canute and order back the tides. I have listened to many speeches in my 25 years in the House in which Ministers thumped the Dispatch Box in their determination to control inflation, but I regret to say that the Dispatch Box has been the only visible recipient of the impact of their policies.

To return to the question of rescue operations, I believe that we should not subsidise inefficiency. Subsidising inefficiency, however, must not be confused with patience in difficult situations in helping people who are in difficulties to move from the situation of difficulty to the situation of strength, as in the case of Cunard and as in many cases where we have intervened.

We will not always be perfect, and there will not always be perfect timing in so dealing. My right hon. Friend has been frequently criticised because he did not throw 14,000 men summarily on the unemployment scrap heap on the Upper Clyde based on some supposedly justifiable doctrine of gainful operation. It is said that the efforts made to keep alive shipbuilding on the Upper Clyde are to be condemned, and are without justification.

I do not accept this. I believe that it is time that people understood that the workpeople in these situations are not mere factors of production. They are human beings. There are much wider considerations than are known of by those who sit, however earnestly and sincerely, in seminar conclave about the consequences of their gainful calculation.

As to the Upper Clyde, we tried with a complement of 14,000 men to keep it viable on its original business, making a mixed bag of ships. One Glasgow Member complained that we are abandoning that policy for simpler ships. We tried the other, to keep employment at its maximum. There is nothing at all for my right hon. Friend to apologise for in trying. He is entitled to every credit for having tried to keep the maximum employment in an area of high unemployment. If he failed to keep the whole 14,000, it was right to try to turn it to greater viability by making smaller and simpler ships.

I agree with the right hon. Member for Orkney and Shetland that there is a lot to be earned in the making of smaller ships and that we need not be constrained solely by impressive-looking schemes involving 500,000-ton tankers. Upper Clyde has rightly made decisions to move to small, repetitive cargo ships where, given the co-operation of the work people, they will have a real chance of viability.

I sympathise with the hon. Member for Glasgow, Govan (Mr. Rankin) who wanted to keep 14,000 employed on the traditional skills in that area. I sympathise with the men who are affected. These are not easy decisions for men to make, or indeed for Ministers to ask men to make, in accepting a redundancy of 3,500 out of a working force of 14,000. I have every sympathy with the men in having taken time to ponder this matter and in having found it difficult to swallow. I admire immensely the discipline and understanding shown by the men and their trade union leaders in seeking to make possible plans for a permanently viable Upper Clyde shipbuilding industry on a somewhat reduced scale.

This Bill will provide another piece of support for the British shipbuilding industry. We do not know—and very few of us will know even when the published figures are available—the full extent of subsidy and help given to shipbuilding. But it must be right for the British Government to seek by every reasonable means to give help to the shipbuilding industry to make it more efficient through the S.I.B. and generally to further its prospects in the future. I have every confidence that the prosperity of the shipbuilding industry will not be cyclical as has been suggested has always been the case in the industry. That might have been so before the war, but we are now living in a different world. It is a world in which continual burgeoning international trade increases year by year to an extent that has never been seen in the world's history. So long as that continues there will be a great rôle for British shipbuilding. I want to see our great traditional shipbuilding industry encouraged to become more efficient and to play a successful part in meeting that demand.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

Shipbuilding Industrymoney

Queen's Recommendation having been signified

Motion made, and Question proposed,

That, for the purposes of any Act of the present Session to amend section 7 of the Shipbuilding Industry Act, 1967, it is expedient to authorise any increase in the sums payable out of moneys provided by Parliament or into the Consolidated Fund which is attributable to any amendment of the section increasing the limit of£400 million imposed by subsection (5), as amended by section 1 of the Shipbuilding Industry Act, 1969, on the Minister of Technology's liabilities on guarantees given under section 7, but so that the new limit shall not exceed£600 million less the amount of any sums which have been paid by the Minister to meet a liability falling within the subsection and have not been repaid to him.—[ Mr. H. Lever.]

9.15 p.m.

I should like to ask a question on the Money Resolution which provides for money to be paid out of the Consolidated Fund in support of the higher level of£600 million. I understand that there will be further loans upon public funds. Since the banks have already reached 5 per cent. of their deposits in advances under similar legislation to this Bill and the export credit guarantee arrangements, they will be reimbursed with an extra£200 million which might be lent under the Bill by the authorities. Therefore, under the Bill a figure of up to£200 million can be lent to the banks at cheap interest rates. This will not be paid by the banks directly because they are already up to their ceilings. There will be further financial burdens on the Treasury via the Bank of England.

It is odd that this is not mentioned in the Resolution. It is also odd that the Bill says:
"No expenditure by the Minister in consequence of the Bill is at present foreseen."
I am prepared to accept that there is some explanation for this apparent discrepancy, but it will be helpful if we are told why there should be this apparent omission.

I hope that I can put the hon. Gentleman's mind at rest on this matter. The Minister of Technology gives guarantees to banks on loans made. Against those guarantees the banks are prepared to lend at a fixed rate of 5½per cent. There is no cost to the Exchequer unless the shipowner defaults on the loan, and no net costs to the Exchequer unless security for the loan is insufficient to repay the bank. The Ministry is advised on security requirements and, so far, there has not been a single case of default. So there is no reason to anticipate any difficulty.

The Ministry's limit of liability under the scheme is at any one time, so that the money revolves in the end. We have the limit, and, as soon as it is repaid, we can go up to the limit again.

The Money Resolution carries forward the technical Amendment first introduced by the Shipbuilding Industry Act, 1969, under which any amounts paid out by the Minister on guarantees, so far as they have not been received by him, are ex- cluded from the amount available to him for guarantees. So that produces the limit satisfactorily provided by the Money Resolution.

We are not only concerned with the joint stock banks. They are only able to finance money up to 5 per cent. of their deposits for shipbuilding and export credits. When they have exceeded that figure, the surplus has to be provided by the Bank of England. We want to know how that money is provided by the Bank of England and where the cost falls.

This Bill does not control the Bank of England or the joint stock banks. It merely gives the Minister power to give a guarantee of£600 million on a revolving basis. It is up to the Minister to see where he can get the money. When he gets the money offered from one quarter, he takes it. As long as he keeps within the statutory limit of£600 million, when the fund starts to revolve, that allows him to give guarantees above the first£600 million, and all is well. I cannot see what is troubling the hon. Gentleman.

With the leave of the House, despite the fact that I am such a novice—

Leave is not normally accorded in a case like this without an explanation from the Chair.

Order. It would be satisfactory if the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) spoke on the sitting down of the Minister.

Order. It would be more convenient if the hon. Gentleman the Member for Cirencester and Tewkesbury made his remarks on the sitting down of the Minister.

In that case, before the right hon. Gentleman sits down, I do not think that he has quite got the point. It is that the passing of the Bill will enable £500 million to be advanced by the banks. The banks have an arrangement that, when they have advanced£500 million. they can draw from the Bank of England the excess to support the amount above£500 million. Therefore, since they are already on their ceiling, there will be money coming from the Bank of England which will fall eventually upon public funds.

I had not realised the hon. Gentleman's point. He claims knowledge of what goes on between the Bank of England and the joint stock banks, which is no concern of ours on this Money Resolution. This enables the Government to guarantee borrowing undertaken by the banks. What the joint stock banks do as regards the Bank of England is nothing to do with this Money Resolution.

For the record, I am now sitting down.

Question put and agreed to.

Resolved,

That, for the purposes of any Act of the present Session to amend section 7 of the Shipbuilding Industry Act, 1967, it is expedient to authorise any increase in the sums payable out of moneys provided by Parliament or into the Consolidated Fund which is attributable to any amendment of the section increasing the limit of£400 million imposed by subsection (5), as amended by section 1 of the Shipbuilding Industry Act, 1969, on the Minister of Technology's liabilities on guarantees given under section 7, but so that the new limit shall not exceed£600 million less the amount of any sums which have been paid by the Minister to meet a iability falling within the subsection and have not been repaid to him.

Guyana Republic Bill Lords

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. 55 (Third Reading), and agreed to.

Bill accordingly read the Third time and passed, without Amendment.

Judges' Remuneration

9.20 p.m.

I beg to move,

That the Judges' Remuneration Order 1970, a draft of which was laid before this House on 14th April, be approved.
The object of the Order is to increase the salaries of Lords of Appeal in Ordinary and of the judges of the Supreme Court in England and Northern Ireland and the judges of the Court of Session in Scotland. It is made under the powers conferred by Section 1 of the Judges' Remuneration Act of 1965, which, for the first time, enabled the salaries of the higher judiciary to be increased without the need for legislation. Judges' present salaries date from 1st April, 1966, when the increase made by the Act of 1965 came into force, so that the judges have had no increases in salary for over four years.

Although the increases proposed by the Order may at first sight seem large, they are well within the annual rate of increase of 4½ per cent. permitted by the Prices and Incomes Board. For instance. the increase of£1,500 for the High Court judges in England is equivalent to an annual rate of increase of no more than 3·7 per cent.

The Prices and Incomes Board and the Plowden Committee last year recommended substantial increases in the salaries of the chairmen and board members of the nationalised industries, and of the higher civil servants. The first stage of these increases was given last year and it was recently announced that the chairmen and board members of the nationalised industries would receive their second stage increase on 1st April this year, and that the civil servants would be receiving theirs on 1st July. This will bring the salary of a permanent secretary up to£11,900, as against the£10,000 which a High Court judge receives at present. It is true that there has never been any direct link between the salaries of the higher judiciary and those of top civil servants, but the fact that in 1963 permanent secretaries' salaries had drawn ahead of the judges' was one of the reasons which led Parliament to make the increases it did by the Act of 1965.

As the House knows, it is proposed that, in future, many top salaries in the public sector, as well as those of Ministers and Members of Parliament, should be kept under review by the special panel of the new Commission for Industry and Manpower. I am glad to say that, as I announced in answer to a Question on 14th April, the judges have agreed that the same should be done in the case of their salaries. This will enable the judges' salaries to be reviewed more frequently than has been the case in the past and will, I hope, serve to ensure that a proper relationship is established between the judges' salaries and those of people holding comparable positions.

Incidentally, it should make it easier to undertake the comprehensive review of judicial salaries which the Beeching Royal Commission thought would be necessary when its recommendations were implemented.

In the meantime, pending a review of this kind, it is essential that we should not allow the judges' salaries to fall further out of line and that we should now increase them by margins which are in full accordance with the Government's prices and incomes policy, and which cannot be thought excessive having regard to the ever-increasing burden of work falling on the judges.

Apart from the Privy Council the work done in courts manned by the judges with whose salaries we are concerned has increased substantially in recent years. Excluding divorce work, which is heard by county court judges, the number of cases heard in the High Court has increased by 86 per cent. since 1965, whereas the numerical strength of the High Court Bench has increased by only 19 per cent. Criminal work at assizes has increased by 42 per cent. and, although the number of persons tried in the Court of Appeal has fallen, work is up by 30 per cent. Criminal work in that court increased enormously last year and the year before and is likely to increase this year as well; 31 per cent. in sitting days since 1965; 221 per cent. in applications for leave to appeal which are decided by a single judge reading the papers in his spare time; and 119 per cent. in appeals heard by the full Court of Appeal.

While no one today would suggest that the judges should be paid salaries equivalent to what they received in the past, we should be foolish indeed if we allowed a situation to arise in which the office of a judge no longer held attractions for the man of character and ability on whom we are accustomed to rely for the manning of the higher judiciary.

I should perhaps add that, like the rest of the community, the judges are taxed on their salaries. Assuming a judge is married, with two children under 11, and no other income, his present net salary is£5,970. His new salary will be£6,365, so that the gross increase of£1,500 will amount to£395 net by way of increase after taxation.

On the assurance that the Order proposes increases in salaries which are no more than the present situation demands, I ask the House to approve the Order.

Before I address the House, I need a bigger audience than this. May I draw attention to the fact that there are not 40 Members present.

Notice taken that 40 Members were not present;

House counted, and, 40 Members being present

9.27 p.m.

Before my hon. Friends leave the Chamber may I say, Mr. Speaker, that I heard an unparliamentary word which one of my hon. Friends unconsciously uttered.

He was in the Chamber then, and I heard him say that the hon. Member who called the count was a swine. I assure him that that is not so. I called the count deliberately, in the hope that I could get some of the Opposition here to give their support to what I have to say. I did that for a specific reason. I shall put forward reasons why the Leader of the Opposition, in particular, and most of the Opposition in general, should be here for this debate.

Every day I read in the Press, almost every day I hear on the radio, and every day in the House I hear, hon. Gentlemen opposite, led by their Leader, condemning workers who ask for increases in wages. Hon. Gentlemen opposite tell us how dangerous is the inflationary spiral. They say that the Government ought to take action to prevent these large salary increases being given.

Indeed, they supported the Govern-mimes original attempts to hold back wages generally with the original Industrial Relations Bill and, as we all know, holding back increases in the pay of nurses, hospital workers, dustmen, and the like. Therefore, I was hoping that some of these Tories would be present to put forward their objections to these salary increases.

I am very surprised, because hon. Members who have been in the House any time know that the preponderance of Members in any one profession are hose in the legal profession. There are more lawyers on both sides of the House than Members representing any other profession. They usually turn up and support one another when it comes to the possibility of getting a recordership, a Q.C.-ship, or ultimately a judgeship.

I am producing reasons why I do not think that there should be the large increases proposed in the Order and suggesting that Opposition Members should be here to support my opposition.

The Government have been attacked by the Opposition because they are alleged to be giving way too easily to workers asking for wage and salary increases. Indeed, almost every weekend the Leader of the Opposition tours the country telling people how terrible the Government are for not standing up to the rapacious demands of workers earning £14 and £15 a week. But we do not find hon. Gentlemen here tonight complaining against the Lord Chief Justice having his salary increased from £12,500 to £14,250 a year.

Going home late last night I heard on my car radio the noble Lord, Lord Shawcross, saying that the present wage inflation is terrible. I should like to know whether some of these people have thought of complaining about an increase of£2,250 in one lump.

There is history attached to this business. The Attorney-General mentioned the original Act. I was a Member of Parliament when that Act was put through the House. I remember what went on behind the scenes. I remember the arrangement that was made. The late Sir Winston Churchill did a deal through the Government with the Opposition. The arrangement was that as it was a ticklish question—I have the HANSARD report here—it would be done in conjunction with an increase in the salary of Members of Parliament, because they had not had an increase for many years. This is tied up with the original 1954 Act. In those days Members of Parliament had to meet every item of expenditure out of their parliamentary salaries—

Order. We are discussing an Order which is made under the Judges' Remuneration Act, 1965. We cannot discuss the 1954 Act and the other matter which the hon. Gentleman seems to want to debate. We must discuss the Order.

I was about to pay tribute to the Library for supplying me with a brief which, I understand, is identical to that from which my right hon. and learned Friend the Attorney-General quoted. My right hon. and learned Friend referred to the Acts of 1954 and 1965 and it was as a result of the latter Measure that the increase in 1966 was granted. My remarks are, therefore, relevant to the Order.

I was explaining that as a result of an arrangement which was made between the two political parties, the whole thing was tied in with hon. Members' salaries. There was an independent inquiry in 1964, as a result of which hon. Members' salaries were increased, the increase taking effect from October, 1964. As a result, the judges had another increase in 1965, though it began to apply in 1966. This shows that the judges have not had to wait long to get their two increases. Hon. Members are still waiting for their next rise.

My right hon. and learned Friend said that the Government were willing to have judges on the same sort of inquiry basis in respect of their salaries as hon. Members. I was hoping that the judges would have their increases paid in the way that they apply to hon. Members, namely, that an inquiry would take place and that, if an increase was recommended, it would not be paid until after the following General Election.

My right hon. and learned Friend quoted only one rate and picked out the increase of£1,500 a year. I wish to pick out other increases for example, those of over£1,700 and those of£2,250. For judges who are getting these rises, will they also receive what in industry are known as "perks"?

How does my hon. Friend arrive at the figure of£2,250 as an increase?

Looking at the figures again, I believe that my hon. and learned Friend is right and that, rather than refer to the salary of the Lord Chief Justice, I should have given the figure of£1,700.

However, I believe I am right in saying that, in addition, judges receive what the general public call "perks of office" —what in the profession are known as assize and circuit allowances—to cover their expenses.

I have not been able to ascertain the extent of these allowances, but I gather that they are between six and seven guineas per day. These sums are paid in addition to their salaries—I refer to the salaries they are receiving now and those proposed—and they are supposed to cover the expenses which they incur when they are out on the job and living away from home. I am not complaining about this. I just want to know the precise figures.

It might be helpful if hon. Members—not me, because I represent a London constituency got such allowances when away from their constituencies. Some kind of payment should be made to hon. Members who—

With respect, Mr. Speaker, surely I am entitled to show why judges should not receive what others in a similar position are not entitled to receive?

Although judges' salaries were, from the timing point of view, tied up with the salaries of hon. Members, and although judges get the "perks" to which I eferred—these "perks" include travel allowances, clerks, and other extras that go with the job—people in similar occupations cannot claim such allowances.

These things should have been mentioned, because the Attorney-General tried to show how this was all in accordance with the Government's policy and programme for prices and incomes and how it tied up with general practice throughout the country. I think that I can show that these judges get a great deal more. I stand corrected by my hon. and learned Friend the Member for Derby, North (Mr. MacDermot). The increases range from£1,175 up to£1,750 a year. I hope that anyone who reads the report of this debate will realise that those are increases additional to already large increases on two previous occasions.

We sometimes hear it said that these gentlemen, of course, do not get so much out of it because of taxation, but there is not a person in the country—other than a person I cannot mention who has a salary free of income tax. Everyone pays taxes, some more or less.

I know, and I am emphasising it. Everyone in the House, certainly everyone in my constituency, would like to be left with£6,000 a year after paying tax.

Like my right hon. and learned Friend, who is my parliamentary neighbour, I have in my constituency many dockers and workers on low incomes. There are many old-age pensioners. The Government cannot afford to give them an increase yet awhile because the country is in difficulty. We hope that they will get an increase before the General Election, but it is very difficult for me when I see constituents aged 80 and have to tell them that they cannot get a few "bob" extra, particularly when their telephone and postage bills have gone up. Yet our Government allow another increase on salaries above£10,000 a year ranging between£1,175 and£1,750.

We are asked to show patriotism and hon. Members, it is said, should not ask for increases yet awhile because that would be difficult and the public would not like it. The Government are right. I do not think that the public like hon. Members to get increases, but it is curious to see how the Press play this up when it is a question of Members of Parliament, but not a word is mentioned about the judges. The Press does not trouble to publish what is happening concerning the judges. It may be said that there is some difficulty in filling jobs with the right men, but I have never yet found a shortage of persons clamouring for judgeships. I have met them in this House. They have said that they would like to have a judgeship.

I have looked at the wills which are published in the newspapers from time to time. I cannot find a case over the last 20 years in which a judge has died leaving anything below£35,000, and most of them have left up to a quarter of a million pounds. The right hon. and learned Member for St. Marylebone (Mr. Hogg) is not present. I hoped that he would be here, because I wished to refer to the fact that his late lamented father was one who left a quarter of a million pounds. He went through the whole gamut from barrister right up to Lord Chancellor.

This leads me to the question of the Lord Chancellor. It was said that the Lord Chancellor's salary was tied in with these arrangements. I am not sure whether the Lord Chancellor will be tied in with this.

I said that my hon. Friend should read the Schedule because I know that he always has a go at the Lord Chancellor.

I am glad the Attorney-General has risen and said that. I heard his previous remark, but others did not. I will now replay. Of course, I can read the Schedule. People who read HANSARD will not see the Schedule in HANSARD. My constituents may not have the opportunity of reading the Schedule.

The Attorney-General has been in the House as long as I have. He knows that it is customary for an hon. Member to ask questions, when he is opposing something, whether or not it is in the Schedule. It is customary, on a Bill or on an Order, for the hon. Member to make his point, even though the Attorney-General may say, in that rather excited, upset manner of his, that I should read the Schedule. I could read the whole Order, but Mr. Speaker might take objection if I did so.

The salaries of these legal luminaries are to rise to the following:

£
Lord of Appeal in Ordinary13,000
Lord Chief Justice14,250
Master of the Rolls13,000
President of the Probate, Divorce and Admiralty Division13,000
Lord Justice of Appeal11,500
Puisne Judge of the High Court of Justice11,500
Lord President of the Court of Session11,500
Lord Justice Clerk11,250
Ordinary Judge of the Court of Session9,500
Lord Chief Justice of Northern Ireland10,750
Lord Justice of Appeal in Northern Ireland9,300
Puisne Judge of the High Court of Justice in Northern Ireland9,300

As the Attorney-General invited me to read the Schedule, I did so.

By invitation, perhaps I may now examine the Schedule in more detail. I, as a trade unionist, like to see fair shares for all. I want everyone to be treated properly and fairly. Why is the salary of the Lord Chief Justice of Northern Ireland rising to only£10,750, whereas that of the Lord Chief Justice of England is rising to£14,250? If the argument is that these people need the money urgently, may I make a plea for a further increase for the Lord Chief Justice of Northern Ireland, because he has been very busy recently?

I was coming to that as my next point. On previous occasions we had wide-ranging debates, because we were debating Bills; we went through the whole gamut. I cannot amend this Order.

The Attorney-General may say that I should not mention that, because I know it and the whole House knows it. He knows it and I know it, but my constituents do not.

I am not allowed to move that it be reduced or increased. I am not allowed to make any alteration at all. All I can do is to vote completely against it or for it. Some of my constituents may well say, "Why didn't you try to suggest that this increase should be only the same as the nurses got?" I cannot do that. I have to explain to them, and this is the place to do it. I put it on the record.

Therefore, I should like to know why the Lord Chief Justice of Northern Ireland, who, I assume is doing a very important and arduous job, particularly at the moment, should not be entitled to£14,250. Perhaps his union is not the same as the one in England. Perhaps when the negotiations took place he did not have such good negotiators.

How come the Government to do this without any approach or any public outcry? I have not heard the T.U.C. clamouring that these overworked, underpaid judges and legal gentlemen should have increase of thousands of pounds in their salary. I have heard that the T.U.C. has clamoured for the nurses and other underpaid workers. But, strangely, the Government do not give increases immediately to people like that. They hold them up, and sometimes stop them completely. Why has there not been an attempt in this instance to hold up some of the increases? Why not refer them to the Prices and Incomes Board, or the T.U.C.'s vetting board?

I am one of those who believe in the Labour Party's policy of fair shares for all. If the public saw that this was being done on a basis of fair shares for all they would no doubt be very pleased to support the Order.

I have been looking through the election manifestos of both parties. I cannot find a reference to the Order or the suggestion of increases for judges of these amounts in either of the election programmes, and I have not seen it in any of the by-election literature. When we ask for progressive legislation dealing with matters affecting, say, the physically and mentally handicapped or when we want to get something through to deal with the problem of the hard-pressed sections of the population, the Government cannot find time, they cannot find the money, they cannot introduce such measures. Yet we find this slipped through more or less at the last minute, when it was hoped that most hon. Members would have gone home.

That is why I called a count. I must confess that I hoped there would not be 40 hon. Members present. It was no doubt hoped that the Order would go through on the nod, and that as most hon. Members here would probably support it no one would notice it. I do not support it, for a variety of reasons. There are many more that I could mention in much more detail.

If the judges are so hard-pressed because their costs have gone up, have those costs increased in the same way as those of other sections of the population? Do they have to meet their travel expenses when they go on assizes or travel from one court to another? Do they have to pay their postage or telephone bills or living away from home expenses? Do they pay their clerks, their butlers or valets? If so, this should be put right. But perhaps the time is not opportune.

I agree with the Leader of the Opposition and Tory Members and my right hon. and hon. Friends in the Government that the wage spiral should be stopped. Here is a good starting point. There would not be any strikes. There was once a strike of judges in the 1930s when they would not take a cut, but there would not be one today. If I were a betting man, I would bet a pound to a penny that they would not strike if the Order were rejected.

We could ask the judges to show their patriotism and to hold up their application which, although agreed in principle, would not be paid until after the election, when the economy was right. In the meantime, we should consider putting them on the same productivity basis as workers. What progress has been made on productivity since the last increase in 1966?

How many hours do judges work? I understand that they start about 10 o'clock in the morning, take usually a couple of hours over lunch and pack up at 4 or 4.30 p.m. They do not work Saturday or Sunday. It is said that they take cases home. They leave for home at 4 o'clock, perhaps take an hour to get home and after they have washed and had their tea, they do some overtime. Perhaps if some productivity scheme could be worked out, some cases might he dealt with more speedily than the three or four years which is common now.

My right hon. and learned Friend might be able to persuade me that they should have bigger increases. Hon. and learned Members tell me how hard these judges work and how difficult it is for them to manage. A productivity agreement might do away with the 12 months' waiting period for settlement, with costs mounting as high as£250,000, and refresher briefs bringing in 20, 30 or 100 guineas a day. If my right hon. and learned Friend consulted my right hon. Friend the Secretary of State for Employment and Productivity on working out a productivity agreement with judges, who knows but that we might not need the Order because the judges might well find themselves able to earn up to£20,000 or£30,000—which would be a good thing, because then litigants would be saved these prohibitive legal costs.

I hope that we shall look at the matter a little more carefully and that we, shall not be so willing to agree to this sort of thing. I want to pay a tribute here to our Library staff, who always do a marvellous job for us. I wish that I had time to read out some of the fascinating material they have supplied me about judges, but it would be technically out of order. It is interesting and amusing. If any of my constituents happen to read HANSARD, or another report of this debate, I shall be pleased to show them some of this information because, as we say in the East End of London, "It sure would make their eyes open".

10.2 p.m.

I want to keep to the terms of the Order, which is very limited, and the skilled manner in which my hon. Friend the Member for West Ham, North (Mr. Arthur Lewis) has done so gives me hope that I can pursue the line I wish to take, possibly in a different direction. I want to refer briefly to judges who are not mentioned in the Order.

Order. The hon. Gentleman cannot debate on this Order the judges who are not mentioned in it. He can vote against it because they are not mentioned, but we cannot amend the Order in the way he seems to wish to suggest.

I respect your guidance, Mr. Speaker, which is helpful. I am not seeking to amend the Order. I am basically in support of it, although I wish to make one or two submissions which I think the Government, having decided that the Order is necessary, might bear in mind in the near future. As you rightly remind me, I have a very limited line on which to argue and so perhaps I may use the arguement that I feel that some of these increases might have been used in a different way. I shall have to argue that the increases are excessive and that the priorities governing them should have gone in other directions, towards paying allowances for loss of earnings to other judges who are not mentioned in the Order—that is to say, justices of the peace.

Order. The question of justices of the peace may be raised on another Order or in another form, but the House has before it an Order which it must accept or reject. The hon. Gentleman may advance reasons for rejecting it.

In that case, Mr. Speaker, I must advance reasons for rejecting the Order, although I may support it later on. My submission is that the money being paid in increases for the judges might be well used in other ways. One may ask whether other workers are not entitled to increases, and, in view of the fact that that class of worker is not being paid allowances, whether these increases for the judges are justified at this time.

There are many low-paid workers in the country—miners, dockers, engineers farm workers and so on, many of them in my constituency. A number of them are magistrates who act on a voluntary basis. They do not receive adequate reward or income to allow them to fulfil their job as magistrates on the local bench without sacrifice and difficulty. I must declare an interest, because I am a member of a bench, as is my wife. Those who serve on the bench know that an immense amount of work is done and that a great sacrifice is made by these lower-paid workers.

Order. We cannot possibly on this Order right what the hon. Gentleman thinks to be a wrong concerning the payment of magistrates who are low-paid farm workers and engineers.

I accept that, Mr. Speaker. I am arguing that the Order should not be passed because the money involved could be used in other ways. I have in mind lower-paid workers than judges, among whom are magistrates who would be able to fulfil their duties more easily if the provisions of the Justices of the Peace Act, 1968, concerning the three mile limit and loss of earnings allowance were brought into effect. I understand that the Magistrates' Association, of which I am a member, has made representations to the Government and to Lord Chancellor to the effect that this Act should be applied. Magistrates who serve on local benches, in domestic court committees, in juvenile courts and who visit prisons, make an enormous contribution to society. Ninety-five per cent. of the cases, including many which go to the judges eventually, are initially tried by the magistrates.

Order. I should hate anyone to think that my interruption of the hon. Gentleman's speech meant that I did not share the high view which every hon. Gentleman has of the magistracy, but we cannot deal with the point which the hon. Gentleman is making on this Order.

Thank you for your guidance, Mr. Speaker.

I cannot support the Order, because I believe that the Government's priorities are wrong. The money which the Government are asking us to vote could be used in other ways. The country would feel that the time is over-ripe when justice should be given to justices of the peace as well as to full-time judges who make a valuable contribution to the community and to their fellow men.

10.7 p.m.

I dare say that there are other Members who. like me, never cease to wonder what stirs the bile of the hon. Member for West Ham, North (Mr. Arthur Lewis) so badly whenever we consider this subject. We have our differences of opinion, but I should have thought that this was one of the few subjects which would not generate heat of that kind. It is tempting to answer some of the hon. Gentleman's wilder inaccuracies and more ungenerous comments, but I do not propose to do so because he is entitled to his views. The matter is much too important to permit of that kind of comment, and I do not wish to indulge in it even by way of answering some of the things which the hon. Gentleman said, tempting though it is.

We support the Government. It is nice to be able to do so. We cannot always do that. I was sorry that the Attorney-General introduced the question of comparability. The judges' job is a special, separate job which is not comparable to anything. We do not gain anything by comparing it with anything else. I would not put it on the basis of productivity, although the hon. Member for West Ham. North must have written the part of his speech dealing with that aspect before he had heard the speech of the Attorney-General, who gave very convincing figures of the increase in productivity achieved by Her Majesty's judges.

The hon. Member for West Ham, North had the good fortune not to serve on the Committee considering the Administration of Justice Bill containing provisions which mean that some of Her Majesty's judges will be even more overworked. I hope that the hon. Gentleman realises that the hours to which he referred are comparable with the parts of the iceberg which are seen. I hope that he and others realise that to secure the proper administration, particularly of criminal law and particularly for the benefit and protection of those who find themselves in difficulties in the criminal law, a great many of Her Majesty's judges work very long hours outside of court hours to reduce the large number of cases set down for hearing which have built up in the Criminal Division of the Court of Appeal.

I accept what the hon. and learned Gentleman has said. said that when I spoke and I understood that this was the case. I also added that doctors, nurses and teachers did a lot of homework. This is not prayed in aid by the Opposition when they are attacked.

I am grateful to the hon. Gentleman for his acknowledgment, but sorry that he takes the opportunity to have another "dig" at someone. I will stick to my intention of resisting the temptation to enter into controversies of that kind because they are quite out of place in a discussion of an Order like this.

People generally have a much better appreciation of the services rendered by the judiciary than has the hon. Gentleman. Most of them appreciate that it is no exaggeration to say that in the last resort it is the judiciary alone which stands between them and the Executive. or, more simply, in the last resort between them and tyranny. The great majority of electors would be pleased to know that the House is at least doing what is set out in the Order. I hone that the House will approve the Order, not in any spirit of handing out largesse, but in a spirit of recognition and appreciation of what these men and women do for the country. We on this side of the House will regard it as a very pleasant duty to support Her Majesty's Government in the passage of this Order.

10.12 p.m.

I have found that the less a judge receives by way of salary the smaller are his awards of damages and maintenance. I do not see why that should be, but that is how it is. If there is a case involving matrimonial finances the same facts before a registrar produce a much smaller sum than those same facts before a High Court judge. I hope that this increase will produce an enlargement of vision on the part of Her Majesty's judges when they come to decide on the appropriate amount of damages which are now ludicrously low.

The system of calculating pensions for the judiciary is such that it is based on the final year of service as a judge. That means that in the light of the present inflationary situation, which has existed since the war, a judge knows when he retires—and this applies to many other employers in the public service and else where—that his pension will gradually diminish in value. If he lives for a long time in retirement what appeared to be a large sum will, in fact, be a small one.

Therefore, there is a move among judges, particularly county court judges, to obtain inceases in salaries, not because they want the increase as such but because it will give them a reasonable initial starting pension in retirement to take account of the full fall in the value of money which they anticipate. It seems to me that we must come to a time when pensions must have within them some provision for review to tie to them to the cost of living.

Order. We cannot, on this Order, amend pensions procedures for Her Majesty's judges or any other citizens.

That is so, but in considering whether these increases are appropriate we must bear in mind the pressure towards obtaining these increases.

I do not consider that the life of a High Court judge is a bed of roses. It is difficult to understand why any elderly man consents to drag himself round the country for the sake of the remuneration. It must be remembered that the Government operate against the background of the sort of incomes that can be obtained by leading members of the Bar. A judge's salary is calculated by assuming that judges come from a tiny handful of very highly-paid practitioners. If they are to he persuaded to leave those positions of advantage, it has to be made worth while.

They have to go round from lodging to lodging where, rumour has it, they are subject to a remarkably archaic discipline. It is said that a judge cannot bring his wife to the lodging unless the senior gives permission. It is said that judges tile into the dining room in order of seniority and the junior judges are very much under the sway of their seniors. I can see, Mr. Speaker. that I am about to be interrupted to be told that I am straying out of order, but certainly, if I were a junior judge, I would not want to put up with that kind of discipline.

Although people at large will regard this increase as substantial, we must, none the less, make sure that no man with the ability to be a High Court judge refuses the position because the financial reward is not good enough. There are 200 judges in the country, although they are not all High Court judges, and are drawn from about 2,000 practitioners. This does not give those in authority a very great choice. It is important that they get the best of what is available. I do not know the processes of choice, and I sometimes suspect that something has gone wrong. Since judges cannot be easily got rid of, a mistake has to be lived with, unfortunately, to the age of 75, which seems to me to be far too late an age. However, in all the circumstances I could not bring myself to oppose the Order.

10.19 p.m.

Perhaps I may begin by declaring for the benefit of the hon. Member for West Ham, North (Mr. Arthur Lewis) my close interest in the subject we are debating and that I have no desire to become a recorder, a High Court judge, or any other kind of judge.

I accept that without equivocation, but my hon. and learned Friend says that he has no interest. Since he is a Q.C., surely he has a slight interest in that he may perhaps have to appear before some of these judges.

I am afraid that there are implications to my hon. Friend's remarks which are unworthy of him, and I am sure that he did not really intend them. Perhaps he would like to think about them.

I share the wonderment which my hon. Friend the Member for Bradford, East (Mr. Edward Lyons) was expressing at why anyone wants to take on this job. The House may not be aware of the kind c life which the ordinary Queen's Bench judge leads today. He spends about three-quarters of his time out on circuit and about a quarter in London. That means that he is separated from his home for three-quarters of his time.

For about half the time that he is away on circuit, he attends assize towns which are usually too far away for him to get home at weekends. On those occasions when he can get home, he arrives fairly late on Friday night and usually has to pack his bags and leave his home again on Sunday afternoon in order to get back to the assize lodgings on Sunday night to be ready to start trying cases again next day.

He lives a somewhat lonely existence, perhaps with the company of fellow judges in the judges' lodgings. My hon. Friend the Member for West Ham, North may dislike or feel envious of the luxury in which he thinks that a judge lives in the judges' lodgings. I think that the life must be tedious in the extreme on many occasions and that most judges would far prefer to be at home in the evenings in the company of their families. Instead, they have very little family life.

As for their work, since we passed the amendment to the law which gives everyone the right to appeal in criminal cases without the risk of having his sentence increased, nearly every prisoner puts in an appeal, at least against sentence. The papers are all read, including the shorthand transcript. The papers are described as
"…being read by the single judge." In fact, the single judge is the entire High Court judiciary. The papers are sent to the judges on circuit so that they can read through them and see whether there are any possible grounds of appeal. On rare occasions, on reading the papers in a case, a judge will find that there is a possible ground of appeal of which the appellant was quite unaware when he drafted his notice of appeal.
That is the sort of work that our judges do. It is being done by men of the highest intellectual ability, all of whom would doubtless be earning a very much greater sum than that contained in this Order if they were in any other walk of life. I do not feel that that part of my hon. Friend's argument carried very great weight. I thought that his last point was by far his best. He suggested that the cost of litigation might be reduced by simplifying and reforming our procedures in ways which perhaps would increase the productivity of judges and enable them to try more cases. I think that my hon. Friend is on to a good point.
Our whole legal system is thoroughly out-dated An enormous amount of time wasting goes on due to our court procedures. Perhaps I can give some corn-fort to my hon. Friend by telling him that Lord Devlin has agreed to head an inquiry on behalf of Justice, a lawyers' organisation which feels that the time has come for such a review.

Many of us believe that an enormous number of cases which now last several hours could be dealt with very quickly if we increased the machinery for the exchange of information and the simplification of issues. In that way, the productivity of our judges could be greatly increased, and then perhaps my hon. Friend would join with us in voting for an even higher increase in salaries.

10.25 p.m.

I did not intend to get to my feet, because when lawyers begin to argue they tend to disagree.

Concerning the productivity of judges, may I say that it is not the judge who wastes time. Particularly in criminal cases, since legal aid, it is often the members of the Bar, who rightly think that they are doing the best for their clients. Therefore, I rise only to disagree, I hope most politely, with the hon. and learned Member for Derby, North (Mr. MacDermot).

I did not make my meaning clear. I was not suggesting that any time wasting in court is the result of anything that the judges do. I am suggesting that our legal procedures are time wasting and that judges would be enabled to try more cases if those procedures were simpler.

If I went into legal arguments I should not only be out of order, but also take up more of the time of the House.

I am sorry that the hon. and learned Member for Derby, North said that he did not wish to become either a recorder or a judge. I am sure that he would make a good judge. I can understand him not wishing to become a recorder, because recorders are so badly paid. Having said that—and I should declare an interest—I shall be happy to support the Order, if necessary.

10.27 p.m.

I am glad that on the whole the Order has been well received by the House.

I will deal with some of the specific matters of fact which have been raised in the debate. First, my hon. Friend the Member for West Ham, North (Mr. Arthur Lewis) asked questions about the circuit allowances paid to judges. Before dealing with them, may I say that, from my knowledge of these matters, the vivid account given to the House by my hon. and learned Friend the Member for Derby, North (Mr. MacDermot) is accurate. Six months of exile during the year in some of the assize towns must indeed be a burdensome commitment.

I will give the facts about circuit allowances in detail so that my hon. Friend the Member for West Ham, North can make a full note of them. First, judges on circuit are accommodated without charge in the judges' lodgings. They are allowed first-class railway fares from London to the assize towns and between towns on circuit, and when they go home at weekends. They may hire a car if railway travel is inconvenient or use their own cars and claim mileage allowance at 5·d. a mile. The travelling expenses of the judge's clerk and the cook and butler are paid out of public funds. Cooks and butlers are provided free of charge, being either paid direct out of public funds or, if they are paid by the judge he is reimbursed.

The judge or judges on circuit are required to meet their own living expenses and to feed the clerk, cook and butler and any other staff in the lodgings. They are also required, to do a considerable amount of entertaining. For this, they receive an allowance which varies according to the number of judges staying at the lodgings. The allowances are: for one judge£7 13s. 6d. a day, for two judges£7 Is. a day, or for three or more judges£6 7s. 4d. a day. Generally those allowances are just about enough to cover disbursements, but there are many occasions—in particular when a single judge is in lodgings on assize—when he is out of pocket on circuit. He may be out of pocket, as I have said. for months on end. That is the position about circuit allowances.

I was asked about the differentials between, for instance, the Lord Chief Justice of Northern Ireland and the Lord Chief Justice of England and Wales. These differences maintain existing differentials, but, as my hon. Friend has shown a touching interest in the salary of the Lord Chief Justice of Ireland, he may like to know that, at any rate, that has gone up 3·68 per cent. compared with an increase of 3·50 per cent. for the Lord Chief Justice of England and Wales—for what that may do by way of giving him comfort.

The salaries of judges hereafter will in future be kept under review by the special panel of the new Commission for Industry and Manpower as I have indicated.

Certain matters were raised which perhaps on another occasion it would be appropriate to discuss. I sympathise with the plea which my hon. Friend the Member for Newark (Mr. Bishop) made about the position of magistrates. No doubt, on a suitable occasion we shall be able to discuss that important matter.

Could my right hon. and learned Friend say when he thinks we may have an opportunity to discuss that provision? The Attorney-General: That matter will have to be raised with those in charge of the business of the House, and I can enter into no commitment on it.

Some observations were made about the problem of delays and the desirability of reducing the delays, and, so to speak, increasing the productivity of the courts. Next Thursday we shall be de- bating the Beeching Commission's Report which the Government have announced they propose to implement. Indeed, we have started to do so already. The implementation of that report will save a vast amount of time which is at the moment wasted by antediluvian assize town locations and the necessity of much wasted travel.

In addition, it will institute a major reconstruction of the courts which, I am sure, will help to speed up trials and eliminate a lot of time that is wasted at present. The Government have already introduced a number of reforms which are already on the Statute Book—some are going through the House at the moment—containing improvements in procedure which should expedite trials. I assure the House that we are very concerned about delays, in particular delays affecting the trial of those on criminal charges.

I commend the Order to the House, as its contents are well within the permitted percentage of the prices and incomes policy. It comes at a time when the burden of work on the higher judiciary is increased greatly, in conditions which are nothing like as attractive as they used to be for High Court judges, and finally because it is imperative that we should not allow a situation to arise where to be a judge ceases to be attractive to the ablest members of the Bar from whose ranks the High Court judges are drawn.

Question put and agreed to.

Resolved,

That the Judges' Remuneration Order 1970, a draft of which was laid before this House on 14th April, be approved.

Construction Industry(Training Board Levy)

10.32 p.m.

That an humble Address be presented to Her Majesty, praying that the Industrial Training Levy (Construction Board) Order 1970 (S.I., 1970, No. 471), dated 19th March, 1970, a copy of which was laid before this House on 2nd April, be annulled.

In the past year or so there has been a fair amount of controversy about industrial training boards, and none more titan that over the Construction Industry Training Board whose actions have resulted in hon. Members on both sides of the House being bombarded with letters. Let me make it clear, though, that we on this side of the House, as the originators of industrial training as we know it today, support this concept and its major content, and, indeed, its implementation.

We believe, however, that the time has now come for a searching reappraisal of some of the aspects of industrial training. What has happened with the Construction Industry Training Board—to which, if I may, I should like to refer for simplicity as the C.I.T.B.—underlines the need for Government action. Some of us have been attempting to relay these feelings during the proceedings on the Industrial Training Bill, and we hope this may have been helpful.

This Order seeks to raise the sixth annual levy of the C.I.T.B. from this month until the end of February, 1971. It is important to recognise that the board's previous levies have been calculated on an entirely different basis from this one. The previous five levy Orders assessed the rate of levy on the basis of a percentage of a company's payroll. The first levy in 1965 called for 0· per cent. of payroll. In 1966, companies were charged 1 per cent. of payroll, and in 1967 1 per cent. The figure for 196–69 was deliberately cut by the hoard from 1 per cent. to 0·7 per cent. of payroll, and for 1969–70 the rate was 0·8 per cent.

It is important to note that the reasons for the cut in levy in the latter months of 1968 was that the board found itself with a considerable surplus. For the first two or three years of the levy and grant scheme, the take-up of training grants by building firms was fairly slow, and the total of grants claimed and paid fell far below the amount of levy which was paid. Quite fairly, in the opinion of many people, the board felt that it was wrong to hold on to a surplus of builders' money, and in the latter months of 1968, therefore, it cut the rate from 1 per cent. to 0·7 per cent., and also it delayed the collection of the new levy until April last year so as to use up the surplus.

Thus, the amount of the 0·7 per cent. levy was not demanded until last April, and firms then had not only a lower levy to pay but had an 11-month tax holiday, so to call it. By last year, however, the surplus, which had been about£5½ million, had already disappeared, and the board had moved into overdraft. The reason was the tremendous demand for grants from 1967 to 1969 as builders became progressively more aware of their rights in this respect. I would describe the rise in claims as spectacular, and it made an enormous difference to the board's financial position.

There were other complications. Throughout 1968 and 1969, there was growing dissatisfaction among certain sections of the construction industry over their assesments by the C.I.T.B. The system of assessment on the basis of a percentage of payroll, irrespective of the type of operation of the company, led, it was claimed, to inequity as between different sectors of the industry. For instance, companies in some sectors, notably civil engineering and some specialist contracting firms and builders merchants, had been able to claim back a fair amount of their grant. This was so because of their limited training requirements since they employed rather more general labourers than craftsmen, or because their particular demands were not adequately provided for in existing training schemes. On the other hand, companies such as those in mechanical and electrical contracting which have a high proportion of apprentices and craftsmen, and more complex training requirements, had been able to take up substantial grants towards their higher costs of training, and in many cases they had even made a profit.

To illustrate this point, I refer to the Annual Report of the C.I.T.B. for the year ended March, 1969. This shows that in the previous year the electrical contracting companies paid£805,276 in levy but received£1,974,834 back in grant. On the other hand, civil engineering firms paid£1,344,000 and received£735,277 back in grant. Builders and plumbers merchants paid£410,000 in levy and received£214,000 back in grant.

Strong representations were made by the civil engineering members and others and the board realised that the payroll system of assessment would have to be changed. It therefore decided that it must alter its assessment basis to an occupational one. The effect of this was that rather than a firm paying X per cent. of its payroll irrespective of the jobs of the men employed, it would pay£X per craftsman per year,£Y per administrative, professional or technical employees, and£Z for other types of employees. The builder members felt that much more research was needed into this matter, but the board in its wisdom decided to go ahead with the new basis of assessment.

We now come to last autumn, and the board then found itself in a most serious financial crisis. The sharp increase in grants, which I have mentioned, coupled with the disappearance of the previous surplus and the likelihood of an overdraft of fantastic proportions—£6 million or so—had coincided with the board's decision to change the basis of assessment. Added to this there was a serious recession in the building industry, which I need not go into tonight because I believe it is common ground on both sides of the House that this occurred.

Would my hon. Friend agree that apart from the recession in the industry during this period there was a fall in the number of apprentices, which is damaging the future prospects of the industry?

My hon. Friend has made a valuable point, because this came at the same time as the financial crisis. It caused the building industry considerable worry which I know was reflected in the strong representations made to the Opposition, and I think that the right hon. Gentleman and his colleagues had their share of protests. As my hon. Friend says, building firms were in trouble and many of them were faced with a grave cash flow arising out of their difficulties of obtaining the necessary bank credit to finance construction and, if it could be obtained, the high cost of borrowing money.

The board announced its preliminary proposals under the new system for 1970–71 last October. Summarised, the board made the following points. To meet forward grant claims,£21·7 million would have to be raised. A further£3 million would be needed to fund the likely overdraft of£6 million. On top of that a further£4·3 million would be needed for services to industry, capital, administration, and finance. This came to a total of about£29 million. The board said that the occupational basis of assessment would be£58 per year for each administrative, professional, and technical employee,£25 for each general building craftsman,£39 for mechanical and electrical craftsmen, and£8 for labourers.

To put it mildly, the reaction of the industry to these proposals was hostile in the extreme. As I have said, hon. Members were flooded with letters. The professional organisations of the builders were up in arms and were almost marching on St. James's Square. There were protests and representations about the board's inability to manage its own business and the need for efficiency and economy. There was talk of extravagant courses being given in expensive hotels, and many companies said that because of the crisis which my hon. Friend mentioned they just were not in a position to pay, and they could not possibly face the impost which was being placed on them by the board.

In December the board fortunately took note of the growing wave of dismay and it paid heed to the detailed representations made to it by the National Federation of Building Trades Employers, which appears to have done a good job in this connection on behalf of its members. The board then produced a new set of proposals. It said that the overall levy demand should be reduced from£29 million to£26 million. Of this,£18 million would go back to the industry in the form of grants,£4 million would be applied to reducing the expected overdraft, and£3·8 million would be spent on advisory services, training centres, administration, and so on. The new proposals for individual occupations were also reduced for administrative and technical workers from£58 to£41, but generally they remained unchanged for the other categories. But it was proposed that the very small firms employing three or fewer employees—there are many of these in the building industry—or those with a payroll of under£3,000 a year should be excluded. If this had come into operation, it would have affected 12,600 small firms.

But the industry remained very unhappy even about the revised proposals, and, in a strongly worded statement, the President of the National Federation, a Mr. Whittington, said that the £25 levy on building craftsmen was much too high, maintained that no levy at all should be paid on apprentices, and that the board's overdraft should be funded by the Government. This burning resentment in the industry continued until January, when at long last the leaders of the federation met the Minister of State.

He took this matter very seriously. In fact, the Department subsequently put out a Press statement saying that the industry had demanded further reductions in the levy call. Complaints continued to come in and the employers called for an impartial inquiry into the C.T.I.B. The right hon. Gentleman, to give him credit, invited the board to re-examine its proposals. It went back and had a further meeting. As a result, it made another cut in its proposals: the total demand was reduced from £26 million to £24 million. The rates of occupational levy for apprentices were halved. The board also changed its mind to exempt firms with a payroll below £3,000. This decision had not been popular with building firms because it was felt that the cost of training should be shared, and also because of the many borderline cases, which would create difficulties.

The board decided instead on a sliding scale for the small firms. Some 12,000 firms with a payroll of less than £3,000 will now pay 30 per cent. of the full levy, but will be able to claim full grant. Another 15,000 firms with payrolls of£6,000 to£14,999 will pay 75 per cent. of the levy but will also be able to claim full grant.

The result of all these changes is that the new levy will be marginally below that equivalent of 1·6 per cent. on the old payroll basis. A firm of leading accountants has been appointed to carry out a critical examination of the various aspects of the C.I.T.B.'s organisation, methods, levy-grant structure, and its procedure for controlling all aspects of its expenditure. I hope that the right hon. Gentleman will have something to say about that inquiry because I am sure that the industry regards it as of supreme importance.

The Government have approved the revised proposals, and they are in the Order. We are praying against it to draw attention to what has happened and to urge the Department, which after all has a father responsibility for industrial training boards, to ensure that this state of affairs does not happen again.

It is fair to say that many builders are still opposed to the levy proposals. As I understand it, the National Federation of Building Trades Employers feels that substantial concessions have been made and that generally the proposals should be accepted. I am sure that we shall await with interest the result of the inquiry. The industry will want to be satisfied that it is thorough and will do something to help the board put its finances in order, and that its recommendations will be speedily implemented. What is needed now is some constructive progress in training in the construction industry and some new unity and harmony, which has been signally lacking over recent months.

The C.I.T.B. has learned a valuable lesson from what has gone on. I hope that the Department has also learned a lesson about what might happen with every board, so as to do something to ensure that industrial training goes on along the right lines.

10.50 p.m.

In 1968 the board had a surplus of£5½ million. By the autumn of 1969 that had been turned into a deficit of no less than£6 million. This coincided with a period of recession in the industry and I understand that the board is now having to pay overdraft interest on that considerable deficit.

This means that those who are having to pay the levy are having to pay an increased levy as a result of the misjudgment of the board, which landed it with a deficit of £6 million and the consequent need to service this substantial overdraft. The Minister who, as my hon. Friend the Member for Warwick and Leamington (Mr. Dudley Smith) said in his helpful remarks, is a father figure in relation to this Order, should say how much the industry is having to find by way of interest to service this overdraft.

Paragraph 4(3) of the Schedule to the Order reads:
"For the purposes of this paragraph 'emoluments' means all emoluments assessable to income tax under Schedule E (other than pensions), being emoluments from which tax under that Schedule is deductible, whether or not tax in fact falls to be deducted from any particular payment thereof."
This has the effect of bringing in all employees of a company. This sounds straightforward until one realises that we are speaking of an industry which is comprised predominately—in terms of numbers of firms if not of employees—of small businesses; that is, small builders, electrical engineers, heating and ventilating engineers, plumbers' and builders' merchants, lavatory equipment suppliers and so on. These people make up an enormous cross-section of the industry and they have one feature in common, which is that they are overwhelmingly small firms. It would be interesting to know how many such firms are represented on the board.

If a man runs his own business he is an employer. He, on behalf of his employees, must pay the levy. But if he turns himself into a small company, then he is technically, in terms of Schedule E, an employee of that company. One may have in the same town two builders' merchants, ostensibly running identical businesses. One may be an employer with employees and the other a company with a working managing director who is an employee of his company in terms of Schedule E. As a consequence, those two firms, doing identical work with identical personnel, are classed differently in terms of paying the levy.

The Minister is aware of the problem which arises here because his attention was drawn to it in Committee on the Industrial Training Bill. We have an Order before us which is the crux of the matter. As the right hon. Gentleman rightly told the Committee, these sorts of problems were not such as could be dealt with by amendment of the main 1964 industrial training legislation, but were matters to be dealt with during the passage of training Orders. This is the first training Order going through the House since the Minister drew attention to the correct time at which to make representation.

I make these representations because we have a situation in which an employer of 2,000 or 3,000 and an employer of only a small number of men have to pay the training levy. The salary of an employer who is technically a managing director of a company and therefore technically an employee of the company goes in for levy. This means that he might be paying twice as much. This situation cannot be right as between two firms carrying on identical business with the technical difference that one is an employer and the other an employee of his company.

As this is the first opportunity since he was so helpful in Committee in drawing attention to this point, I ask the Minister whether he can do anything about it under this Order. If that is not possible at this stage, I ask him to give an undertaking that in future Orders this aspect will be taken care of, in particular in relation to the next Order dealing with the Industrial Training Board when it comes before the House. The industry initially proposed that employers whose total salary bill amounted to£3,000 should be exempt. Now they are all included and the problem to which I have referred is exacerbated as the first£3,000 is included for levy purposes.

I hope that the Minister will be able to give some assurance to the House about this matter, which is not of vital interest to large firms or large employers, but which is of great importance to the very large number of small firms which predominate throughout the construction industry. Since I spoke in Committee about this, I have had representations from people who drew attention to the fact that a number of other training boards are worried.

10.58 p.m.

The hon. Member for Warwick and Leamington (Mr. Dudley Smith) referred to the fact that many hon. Members have been bombarded with letters from firms in the construction industry about the C.I.T.B.'s levy during the various stages through which the preparation of the levy proposals went. I think there is no subject on which I as a Minister have had more letters than this one, or written more answers to representations made to me by hon. Members at the urging of their constituents. The fact that there are so few hon. Members present means, I hope, that some at any rate of those to whom I wrote were satisfied with my reply. I take comfort from the fact that the hon. Member has been advised by the N.F.B.T.E. that the levy Order in its new form should be accepted. So we have the comfort that at the end of the process of consideration of the Order it is accepted by a principal trade association. Tint is welcome, because I am sure that everyone working in the industry wants an active and influential training board operating within it, and any breakdown as a result of past difficulties would be regrettable from all our points of view.

The hon. Member for Warwick and Leamington went over the history so thoroughly and accurately that I do not think I need give any of the facts. I could detect no error in his statement of the history. I will therefore content myself with replying to the point made by the hon. Member for Basingstoke (Mr. David Mitchell), who asked about representation of small employers on the board, and also with making some general points about the situation in the industry.

The board is fairly representative of the industry. It has done quite a bit to keep the industry informed of its proposals and of its financial difficulties. There can be very great difficulties when boards come forward at a late stage with their proposals. The proposals of this board were put forward for public discussion in October. There was the reconsideration in December. There was the further reconsideration in January after its proposals had been sent back to the Board for it to take a further look at them. We shall be reconstituting the board this summer. In the course of doing so, we shall as usual take the advice of the relevant trade associations.

The right hon. Gentleman said that he would reply to my point about representation of small employers on the board. He has not done so. Will he deal with that point, or at any rate give an assurance that it will be considered at the time of the board's reconstitution later this year?

The hon. Gentleman will be able to find the existing board members listed in the board's annual report for the period ending 31st March, 1969.

Members of the board arc not representatives. They are appointed by the Secretary of State. We take the advice of the trade associations. It is a matter of judgment as to how far a board member who is a member of a small firm is representative of small firms. One of the points I made to the trade associations during the course of our discussions on this levy was precisely that they had people on the board. At one point in the discussion I made the slip of describing those persons as "representatives". I was immediately told, "They are not representatives. They are your appointees". This is formally true. They are appointed by the Secretary of State. Nevertheless, we take the advice of the trade associations because we want a hoard that is acceptable to the industry.

The board has been faced with one of the most serious problems of any first generation training board. It covers a large and widely scattered industry, but, unlike the other large first generation board—the Engineering Industry Training Board—it was dealing with an industry having relatively little systematic training. It therefore had to build up training, and this is what it has been doing since it was set up.

It had the difficulty that at the beginning claims for grant were not made and it built up a surplus. It decided that it should reduce the surplus by reducing the levy, and having reduced the levy, which it thought was an action that would he acceptable to the industry, it found that the claims for grant were coming in in greater numbers and it ran into the deficit to which hon. Members have referred.

Nevertheless, this series of events, from some points of view regrettable, is perhaps explicable in terms of the board's inevitable lack of experience in running an industrial training scheme in this industry, an industry without the long tradition of training of the engineering industry. We can take comfort from the fact that the claims for grant are now coming in and are certified as being justifiable, which indicates that training is taking place in the industry. This is important for its future.

Third, although there is an increase in the levy demand it can be exaggerated. In certain of the correspondence with which I have had to deal there was a certain exaggeration of the extent of the increase. The 1969–70 levy of 0·8 per cent. covered only eight months and is equivalent in a full year to a levy of 1·2 per cent. The current proposals are equivalent to a payroll levy of about 1·6 per cent., an overall increase of about 30 per cent. The increases to individual employers naturally vary above and Mow that figure. That is the intention of the occupational basis of this levy.

There are two points on which the board deserves commendation. First, it has introduced an occupational levy. This is intended to relate the employer's liability to the cost of training the personnel he employs. The second point is the full consultation the board had with its industry before the levy proposals were finalised.

The hon. Member for Basingstoke put to me a point he raised in Committee on the Industrial Training Bill, which I promised to consider. It related to the different position in which a firm can find itself in respect of levy depending on the position of the employer or managing director, as the case may be. That problem is very much less here, because there is an occupational basis for the levy. There is a fixed sum per head for different types of people. Therefore, it is a very different order of problem. The problem, if relevant at all, is relevant only in the case of the smaller firms, where certain rebates are given depending on the total payroll.

The board is taking measures to bring its expenditure under more effective control, and as a result of economies and other adjustments it expects to reduce its deficit, which was£7 million at the end of March, by£2 million by next March. It has reviewed its grant scheme for the year August, 1970, to July, 1971, and has decided, in addition to abolishing or reducing certain grants, to impose a ceiling on grant expenditure for that year. It has also commissioned a study by Cooper Brothers of its administrative and financial organisation and structure. The study is well advanced and is expected to be available to the board in about a month.

It is my wish that it should be. I think I can say that there is at any rate a probability that it will be published so that the industry shall be made fully aware of the contents. This is a report to the board and a matter for the board's decision.

The House should also bear in mind the work which the board has been doing over a wide front. Perhaps I might give one or two examples. First a new pattern of training for craft and operative skills has been set. On the basis of a report by the Building Research Station the board has introduced a modular scheme of training, which attempts to reflect current and future needs for flexible use of manpower and is a complete break from traditional training arrangements.

Second has been the establishment of a training centre at Bircham Newton. A number of courses held have been pioneering ventures in the application of systematic training techniques to the jobs concerned. Third has been the buildup of training staff in the industry. In 1964 the training officers in the industry could probably be counted on the fingers of one hand. Not only have more than 1,000 training officers, instructors and senior executives now gone through courses sponsored by the board, but the board has more than 250 of its own training staff in the field together with others engaged on all-important development work at headquarters. There has also been work by the board in management training.

Finally I would refer to the work of the board among small firms. The board had built up group training schemes. In 1964 there were no group training schemes in the industry. There are now well over 200.

This is the constructive record of the board and, despite all the criticism that has been made of the board's activities, this constructive attitude should be borne in mind because it establishes a very considerable credit balance for the board which is now going out of existence, to be reconstituted. I hope that in view of my reply the hon. Gentleman will feel able to withdraw the Motion.

I am grateful for that explanation. We shall watch developments with interest. On that basis I beg to ask leave to withdraw the Motion.

Motion, by leave, withdrawn.

Air Training Corps Cadet(Injury)

Motion made, and Question proposed, That this House do now adjourn.—[ Mr. Charles R. Morris.]

11.13 p.m.

I am sorry to have to bring the Under-Secretary of State for Defence here at an hour at which although by parliamentary standards is still comparatively early, is perhaps a little late in the day by the standards which most of our fellow countrymen would apply. I am also sorry because I understand that it has caused him to be brought from an official function, to which I also had the privilege of being invited, and because it is the second occasion on which the hon. Gentleman has; had to arrange to be present. He will agree, I am sure, that it was no more my fault than it was his that a Count was called 10 days ago when I had the Adjournment. I owe it to Mr. Speaker, with his characteristic care for the interests of individual Members, that the Adjournment of which I was deprived by that circumstance has been given to me again tonight.

I am sure that the House will agree that a Member should not seek to raise an individual issue on the Adjournment until he has taken, and exhausted, all other steps available to him. Whatever else the Under-Secretary may say in reply I hope that he will acquit me of having raised this matter before that stage has been reached. I have had two Questions answered by his hon. Friend the Minister of Defence for Administration; I have had voluminous correspondence with the Minister of Defence for Administration who was also good enough to invite me to see him. I had a fairly long conversation with him, to which I shall seek to refer tonight. It is only because the request I am making has been refused up till now that I sought, and I am happy to say obtained, Mr. Speaker's permission to raise this matter on the Adjournment.

I hope that the Under-Secretary of State will not mind my making a personal comment on behalf of my constituent, the father of the boy injured, and of myself. Neither of us is among that, I am afraid, quite substantial number of people in the country who enjoy sniping at the Armed Forces of the Crown. My constituent is a former Regular warrant officer of the Royal Air Force and his son, the cadet concerned, might well have been, but for the circumstances to which I shall refer, in due course a candidate for recruitment to that great Service. As far as I am concerned, apart from the period which I shared with many millions as a war-time soldier, I happen to be both the son and the father of a Regular soldier. Neither my constituent nor I therefore is a person who would wish to attack the Armed Forces of the Crown because of any antipathy. Our bias is in the opposite direction. I have for the Royal Air Force an enormous respect for its courage, devotion to duty and immense technical efficiency. If it has a weakness, it is a weakness which is a little more relevant to this issue, and that weakness is on the administrative side.

I shall outline the facts briefly because I know that the hon. Gentleman is well briefed about them. They will give rise, I think, to a clash of testimony between what he has been informed of and what I have been informed of. I think that there is here a clash of evidence. I would only say on that matter that my sources—my constituent and his friends —are people who have nothing to gain whatever by any suppression or misrepresentation. The damage has been done. The boy has been injured and, after a considerable interval, has made what I hope and believe is an adequate recovery.

The hon. Gentleman will not mind my saying that his information comes primarily from the officers and others concerned at the R.A.F. station whose competence and care of those entrusted to them are in dispute and whose professional standing and reputation and prospects could conceivably be affected by any decision about this matter.

Nevertheless, I am not asking the House, not even the hon. Gentleman, to come to any final decision tonight on the conflicting evidence. I am asking for something which, from my own Ministerial experience, I would have thought would be easier for him to concede. I am asking him only at this stage to allow an independent inquiry, and for that reason I do not propose now—because I know that there is this clash of evidence—even to mention the names of any of the officers or other people concerned. I think that at this stage it is fairer not to do so. I am going to ask him simply to agree to an independent inquiry.

There are two arguments which I hope will appeal to the hon. Gentleman. First, he belongs, as I do, to a profession which sets great store by the doctrine that justice should not only be done but manifestly be seen to be done, as I submit it has not been in this case. Secondly, if that argument does not sway him, as I hope it will, there is a practical one.

Plainly the object of the expenditure on the A.T.C. and on the camps to which they go at R.A.F. stations is largely because of the reasonable hopes that it will help recruiting to the Royal Air Force. In my own area, in the area of this particular A.T.C. squadron, that recruiting has had a set-back, not so much because of the facts of this case, but because of the way in which it has been handled by the Royal Air Force. I am sure the hon. Gentleman will understand that if one wishes young people to enter the service or their parents so to advise them, it is of crucial importance that they should feel that not only will they be given care and proper attention in that service but that if anything goes wrong it will be impartially investigated.

There is from the hon. Gentleman's own point of view—and he knows as well as I do that recruiting is a good deal less good than he and I would both like to see—there is an overwhelming practical argument, apart from the philosophical one, for conceding an independent inquiry. I understand that there has been an Air Training Corps inquiry, but as my constituent was neither asked to give evidence nor informed of the results, it is not material to my request tonight.

I will come to the facts. The cadet concerned, Paul Evans, who was at the material time 14 years of age, went last August as a member of 328 Squadron A.T.C. to a camp under the control of the R.A.F. Station, Scampton. They were accommodated at R.A.F. Station, Hemswell. The age of the cadet is perhaps material since when I asked one of my Questions earlier in the year I referred to him as a child. That was remarked upon by the Minister of Defence for Administration who said that the young gentleman concerned would not wish to be so described. That may be so, but it is important to realise that we are dealing with a case of someone who, certainly by the standard of this House, is pretty young and who in the case of our own families we would feel at the age of 14 still required a good deal of care.

The A.T.C. cadets concerned were accommodated, not in the well-equipped R.A.F. station at Scampton, though they did their training there, but at R.A.F. Hemswell, some miles away. Here I come to the first point of criticism. They were accommodated in huts at that station and throughout the evening or a large part of it these 200 boys, not only in the squadron I mentioned but also others, were under the disciplinary control of one adult only, one grown man officer, for a considerable part of the evening. Equally they had very little indeed to do by way of legitimate amusement or entertainment.

In his letter to me of 27th November the Minister of Defence for Administration described in the most eloquent terms the recreational facilities which according to his information, existed at Hems-well. I showed this letter to my constituent, the father of the boy concerned, and I will read it to the House his comment:
"Recreational facilities at Hemswell These are stated to be recreational hangar outdoor football pitch, badminton, youth club leader. None of those who attended the camp to whom 1 have spoken were aware of the existence of these, except the recreational hangar, which the cadets spent two evenings trying to clean of debris as a punishment for staying out late. The officer who told me this said it was not really punishment as it did at least give the cadets something to do in the evening."
It is often the case that the facilities provided for those in subordinate positions look rather more comfortable and splendid when seen from a distance.
"The toad beneath the harrow knows
Exactly where each pinpoint goes.
The butterfly upon the road
Preaches contentment to that toad."
The training took place in the day. For a considerable part of the evening, 200 boys with one adult in charge of them were at Hemswell with virtually nothing to do to occupy them. In the words of the late Philip Guedalla,
"The inevitable happened, as it so often does."
There was, of course, a good deal of liveliness and roughness. I am not suggesting that there was a riot or any misconduct. On the whole, these were very well-behaved boys. But it does not need much argument from me to enable the House to imagine what happened, and what the difficulty would be for the youngest cadets, which included my constituent's son.

On the last night that they should have been there, 22nd August, he was hit on the head by a pillow, fell sideways across a bed, suffered concussion, partial paralysis and, most enduring of all, a badly twisted neck.

Despite what I have said about disciplinary arrangements there, an A.T.C. warrant officer—a responsible senior boy—behaved very sensibly. He got in touch with Scampton, and transport was arranged for the injured boy. He was taken to Scampton and was seen by a medical officer. As I have said, I will not mention names. But that medical officer decided that the boy was sufficiently seriously injured to require immediate admission to hospital, and he arranged for his admission to Lincoln General Hospital.

Then comes the second point of criticism. He was sent there by ambulance, as his condition required, but no one accompanied him except the driver. It has been pointed out by the Minister of Defence for Administration that it was an ambulance with no obstruction between the driver's seat and the patient. Nonetheless, the driver had to drive the ambulance, and with an injured child inside. I suggest that that was a sufficiently responsible job at night to demand his full attention.

In the circumstances, with a boy of only 14 with a head injury sufficiently serious to demand immediate admission to hospital, it seems very much subject to criticism that no one saw fit from the fully staffed R.A.F. station at Scampton, with a full medical staff, to accompany him on the journey. The one memory that the concussed boy has was of being told insistently before the departed that in no circumstances must he go to sleep on the journey. Apart from the driver, no one accompanied him to make sure that he did not.

I hope that I will not break the rules of the House if I say that an A.T.C. officer, subsequently discussing this arrangement with my constituent, used an expression which I could not use except by way of quotation, saying that it was "bloody disgusting".

The boy was detained in Lincoln General Hospital for five days. He had been due to go home the next day, 23rd August. No step was taken to inform his parents. When he did not appear, they telephoned the local police station every half hour, since they were anxious lest a child of this age might have got lost on the journey. They were informed only at four o'clock that afternoon, hours after he was due home, when the boy himself, still partially concussed and with his head over at an angle, was sufficiently responsible to struggle to a telephone in the hospital ward and telephone his parents, whom he realised would be anxious. This again shows a good deal of lack of care either for the child or for his parents.

It is fair to say that he was not visited in Lincoln General Hospital by any member of the regular staff at Scampton, though an A.T.C. officer, since it was the last day of the course and he could not remain, went there prior to departing. He did not see the boy, but he left his kit, which otherwise would have remained at Scampton.

The boy remained in hospital for five days, which argues, as we know that hospitals do not like to have beds occupied by people who do not need them, that the injury was, at any rate, of a certain degree of severity in the view of the hospital authorities. On 27th August, after five days in hospital, he travelled south, unaccompanied, without any assistance in making the journey.

On 28th August he was examined by his family doctor. I should like to read what that doctor, a very experienced physician, said:
"I saw this patient on 28th August, 1969, when he was complaining of headaches and severe neck pain. On examination his neck showed gross limitation of movement—painful movement—and marked muscle spasm. These findings are consistent with those found in injury to the neck following head injury. He required five consultations in all, including a number of manipulative adjustments of his neck to put the matter right."
It appears from a later note that these treatments had to be continued until December.

It is a matter of comment that a boy with these injuries, in some pain, and, according to his parents, still pretty knocked out by it, was allowed to travel the substantial distance from Lincoln to Kingston without anybody at Scampton seeing fit to make arrangements to assist his journey.

Not unnaturally, his father wrote to the Group Captain commanding at Scampton asking for an explanation. For weeks he received no answer. At no time did he receive a full explanation. This in itself is a matter of criticism. It was only after some months of this kind of thing that my constituent, having failed to clear the matter direct, as he sought—particularly as he is an ex-warrant officer —came to his Member of Parliament.

I now come to the Parliamentary developments. On 3rd December I asked a Question. On 6th December, the Press department of the Ministry, referring to the Question, put out a statement which reads:
"A Ministry of Defence spokesman said yesterday that the boy had no head injuries at all. He had received a blow on the neck and was taken to hospital for an X-ray examination where he was kept overnight for a consultant's examination."
I ask the House to note those last words, because he was in fact in hospital for five days.

I am sorry that the Minister of Defence for Administration, when I saw him, sought to argue that that was a fair statement of the position. It is fair to the Minister of Defence for Administration to say that when I pressed him he agreed not to withdraw this wholly inaccurate and misleading Press statement, but to put out a further statement which I would read, but I know that the Under-Secretary wants time to reply. That statement does not withdraw it, but merely says:
"We naturally regret any misunderstanding that may have arisen."
If it were stated that unhappily the Minister had to be detained in hospital overnight for examination, very few people would realise the sad fact that he had been detained in hospital for five days. It is rather revealing of the Department's attitude to the matter. Even as experienced a man as the Minister of Defence for Administration did not immediately appreciate that, though the words were literally true, they were—I will not say intentionally—but manifestly misleading.

What has finally aggravated my constituent—and, I confess, has aggravated me—is this attempt to play down the matter. As those of us who have been in the services will recognise, it has all the signs of "covering up". It is obvious that the less the injuries, the less the officers concerned could be expected to have done. The worse the injuries, the longer the time in hospital, the more doubtful is their conduct, and the more careless and less competent they would seem to have been. It is because the Department and the Ministers concerned have not been prepared to probe the matter but have allowed this covering up process to take place that I raise the matter tonight.

I hope that the Under-Secretary will not think that I am presuming on a certain measure of ministerial experience if I say that it is a great mistake for Ministers to get themselves into a position of even appearing to be covering up. If Ministers are not prepared to allow an independent investigation where there is a clash like this, particularly in respect of an event concerned with the welfare of young people, it strengthens what suspicions there may be that there has been or is a covering up, whereas a Minister who has the courage to say, "I shall have this probed by an independent investigation. I am confident that my Department did not handle things as has been suggested. I believe it would come well out of an independent investigation", would have the respect of outside opinion, the opinion of the House, and, I would guess, even of his own Department.

Therefore, I hope that the Minister will say that although he will not necessarily concede the various points that I have made he is prepared to submit the issue between him and me and between my constituent and his Department to an independent inquiry. I do not wish to be dogmatic as to the form that such an inquiry should take. I am prepared to leave that to him, so long as it is independent. An examination that included hearing witnesses from both sides, conducted by a Queen's Counsel, or under, say, a chairman of quarter sessions, would seem to be a practical, economical and efficient method of proceeding.

I hope that the Minister will allow me to say—as one who has great admiration for the Royal Air Force as for all the Services of the Crown—that if, after such an inquiry, the Service is shown to hive behaved as they should have be-hived, and as one would have wished them to behave, no one will be happier than I. If, on the other hand, they are shown not to have behaved in that way, from what I know of the Minister he will be the first to seek to put them right. I ask him not necessarily to deploy a long argument on the merits of the case; I accept that these are in dispute. I ask h m to answer the simple question: why not concede an independent inquiry and resolve once for all a matter which, if it is not so resolved once for all, I shall pursue against him indefinitely?

11.37 p.m.

I am very surprised, having listened to the right hon. Member, that he should have taken the trouble to have an Adjournment debate on this matter, since it is now the second occasion that he has sought to raise it and has asked for an explanation—

I beg the right hon. Gentleman's pardon—the third occasion. He is an experienced Parliamentarian—far more experienced than I—and has sat through more Adjournment debates than I, and he will know that to allow a Minister precisely six minutes to answer is unfair. I am surprised that he should have stooped to such tactics on this occasion.

There is not only one question to answer. The right hon. Gentleman has deployed what he believes to be a powerful case. If he had allowed me the normal time to reply I should have been able to answer that case to his satisfaction—had he been prepared to judge it objectively—and, I hope, to the satisfaction of his constituent. But the right hon. Gentleman leaves me little alternative other than to sketch in the situation in the barest outline and to fill in some of the facts that he saw fit to leave out.

It is a great pity that he should have chosen that course. If he had not done so, this would not have been a matter of such great contention, and perhaps between him with his professed admiration and perhaps love for the Services—and myself, representing the Ministry of Defence and the Royal Air Force, we could have had a dispassionate, sensible, rational, moderate and, one would hope, helpful discussion of this incident. I regret that it is not possible so to do because of the short time that he has seen fit to leave me.

Perhaps I may now sketch in some of the background, because it is wry important. The House may like to know that about 20,000 cadets attended summer camps in 1969 at Royal Air Force stations. It is not possible to accommodate all the cadets that usually attend A.T.C. camps in the best possible accommodation, and from time to time the Royal Air Force is placed in the situation of having to decide whether it is better to cancel a camp or to make some such arrangement as was made in this case, namely, that one should accommodate some of the boys attending the camp at Scampton in the permanent barrack blocks at R.A.F. Hemswell. This is not the only camp that was so accommodated last year or, indeed, in previous years. I am told that six camps last year were accommodated in this way and that there was no trouble.

It is not true, as the right hon. Gentleman has alleged, that the only provision for the boys at Hemswell was one officer for some 200 boys. If the right hon. Gentleman re-reads the correspondence that he has had with the Ministry and, indeed, the conversation he had with the Minister of Defence for Administration, he will find that the ratio was one—that is, an adult officer—to 100, and there were a number of A.T.C. warrant officers present.

I do not accept in totality the criticism that the right hon. Gentleman makes of the recreational facilities provided. There were some provided, and again it is noteworthy that many cadets availed themselves of these facilities.

On the last night of the camp, Cadet Evans was involved in a pillow fight with two other cadets. That is the starting point of this whole affair. During the fight he received a blow with a pillow which resulted in injury. The cadet warrant officer responsible for the cadets—and certainly I do not think the right hon. Gentleman can complain of lack of supervision in this respect—as soon as an injury became apparent, did what he should have done. He summoned the duty officer.

I am glad that the right hon. Gentleman agrees with me that there was nothing wrong with the supervision. In other words, the people in charge of the cadets, when injury was sustained, did precisely what was expected of them. They summoned the duty officer. The duty officer then summoned the station medical officer at Scampton and the boy was carefully examined. Again I do not think the right hon. Gentleman could have had any complaint of that.

The station medical officer having diagnosed that the boy was suffering from no serious injury but that there was tenderness in the neck muscle—

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at seventeen minutes to Twelve o'clock.