House Of Commons
Tuesday, 5th May, 1970
The House met at half-past Two o'clock
Prayers
[ Mr. SPEAKER in the Chair]
Private Business
WELLAND AND NENE (
EMPINGHAM RESERVOIR) AND MID
NORTHAMPTONSHIRE WATER
BILL.
Lords Amendments considered and agreed to.
DONCASTER CORPORATION BILL
[ Lords]
Read the Third time and passed, with Amendments.
Manchester Corporationbill
Read the Third time and passed.
Barclays Bank Trustcompany Bill
As amended, Considered; to be read the Third time.
Cumberland County Councilbill
As amended, to be considered Tomorrow.
EAST SUFFOLK COUNTY COUNCIL
BILL [ Lords]
PRESTON CORPORATION BILL
[ Lords]
NOTTINGHAMSHIRE COUNTY
COUNCIL BILL [ Lords]
Read a Second time and committed.
Oral Answers Toquestions
Housing And Localgovernment
Housebuilding, Liverpool
asked the Minister of Housing and Local Government if he is satisfied with the number of homes under construction for both the public and private sectors in Liverpool; what action he is taking to increase the numbers and quality in the public sector; and if he will make a statement.
We cannot be satisfied with the number of homes being built while people are in housing need and living in slums. The corporation is now considering its future housebuilding programme and improvements policy, and we shall certainly take the matter up with it if we find its proposals inadequate.
I thank my hon. Friend for that reply. Concerning the private sector, as the Ministry has given tremendous aid by way of rate and rent rebates, will my hon. Friend use his influence with the building societies to see whether we can have a reduction in mortgage interest after the reduction in the Bank Rate? Secondly, is my hon. Friend aware that the Liverpool Corporation seems to spend most of its time considering its housing programme instead of getting on with the job, under the powers that it has been given, of building houses and doing repairs?
On the first point, we are in touch continually with the Building Societies Association. This is the kind of point which is a matter for discussion with it. Concerning the building programme and the improvements policy of Liverpool Corporation, I appreciate the point that my hon. Friend makes. But we must await the proposals which the corporation will be putting forward at city council level. If it requires action and contact by us we will pursue the matter with the corporation.
Will my hon. Friend tell us what steps he is taking, concerning quality, to ensure that, if possible, condensation is in future eliminated from new structures?
Generally speaking, on quality there has been a considerable increase in standards both in public authority housing and in private building in recent years. The Ministry of Housing and Local Government has recently completed the first half of a study on condensation and has issued documentation to local authorities advising them on the problem.
Housing Subsidies
asked the Minister of Housing and Local Government if he will consider introducing an effective interest rate of 2½per cent. on local authority borrowing for new housing limited to authorities which have the gravest slum clearance and housing need problems.
In present circumstances my right hon. Friend cannot contemplate even more generous housing subsidies. The basic subsidy for new building is now running at several times the level under the previous administration and amounting to about £3 per week for each dwelling completed.
While recognising the great contribution that this new subsidy system has made, under which Sheffield, for example, last year received more than £2 million in the housing revenue account, may I ask my hon. Friend whether he agrees that there is a case for extending the admirable precedent set by the educational priority areas and the urban programme of giving special aid to those great industrial cities which have inherited serious problems from former Tory and Liberal administrations?
My hon. Friend will appreciate that to some degree we have already started along this road because in 1966, for the first time, we established a list of housing priority areas where the greatest possible effort will be made, if need be restraining other authorities in their programmes, to get the resources in the right places. How we might in future more effectively assist the social priority areas is a matter that we are still studying.
As the hon. Gentleman has just said that he cannot do anything about this in present circumstances, will he tell us what circumstances would enable him to do something about it? In view of the fact that at the last General Election the Labour Party promised 3 per cent. mortgages, will the Government partly redeem that promise by doing something for the slum dwellers by getting the borrowing rate down?
With the greatest respect, the hon. Gentleman is confusing two issues. On slum clearance, this Government have increased the rate by about 25 per cent. since the last Government left office. On assistance to local authorities, we have under the 1967 Housing Subsidies Act, introduced an effective interest rate level of 4 per cent. for public authority housing. As for the future, we have a major housing finance review under way in the Department.
Cost Yardstick Limits
asked the Minister of Housing and Local Government what consultation he has had with the local authority associations about the alteration of the cost yardstick limits.
Following discussions with representatives of the local authorities, the cost yardstick limits have been increased on average by a little over 5 per cent. for tenders accepted on or after 15th April.
Does the Minister appreciate that we welcome this increase in the cost yardstick? Does he realise how much this has been due to the Government's taxation policy, particularly S.E.T.? Why has this been so long delayed? Does he not appreciate that this has been holding up the local house building programme?
We have had arguments across the House about S.E.T. in the past and I have noted the hon. Gentleman's views. We could not have had discussions about revising the cost yardstick earlier. A great deal of firm information has to be collected before a decision is taken. I have agreed with the local authority associations to further talks with them this year to review the progress made between now and then, but that does not necessarily imply an automatic increase later this year or early next year.
Is the right hon. Gentleman still receiving representations from local authorities that the cost yardstick procedures are causing delays in their getting on with their programmes?
I did some time ago. I am not aware of any complaints being made recently, but if the hon. Gentleman has any cases in mind, I will look at them. This was largely a phenomenon of the early days of the cost yardstick. Most authorities now know the proper procedure and find that, if anything, it speeds up the procedure for their applications.
But is my right hon. Friend not aware that many Conservative- controlled authorities, including Liverpool, are using every possible excuse not to build houses or to look after the municipal houses they already have? Would he consider not persuasion or help or encouragement but at least a kick in the pants to some local authorities?
That is a very tempting proposition, but I am not sure whether my general relations with local government would be eased if I took my hon. Friend's advice. I am sure he realises that last year I went to Liverpool and had lengthy talks with the housing department about the cost yardstick. I sanctioned a special increase in the cost yardstick in respect of that authority.
Direct-Labour Departments (Repairand Maintenance Work)
asked the Minister of Housing and Local Government what action he takes to satisfy himself that the cost of repair and maintenance work carried out by local authority direct-labour departments is reasonably competitive with contractors' prices.
It is for local authorities to satisfy themselves on these matters, having regard to the nature of the work, the availability of suitable private contractors, and other factors.
Would it not be helpful to efficiency and economy, however, if the Minister recommended to local authorities that they might put out a representative section of maintenance and repair work to contractors?
It might be useful in the case of direct labour to take prices by competitive tender. We accept that, but there are factors which suggest that, in many fields of activity, direct labour is not only more efficient but produces better quality.
Is my hon. Friend aware that, in Liverpool, where certain direct-labour work has been turned over to private enterprise contractors, the quality of the painting and other maintenance work has deteriorated rapidly? Is it not clear that we need the direct-labour departments to ensure that people get both good quality and a reasonable cost?
I have no personal experience of Liverpool, but I know that, in Birmingham, there are more complaints about the quality of work on this sort of operation than almost anything else affecting tenants.
Mr. Rossi, Question No. 5.
Would the hon. Gentleman agree that, in the last year or so—[HON. MEMBERS "Order."]—
Order. Mr. Rossi, Question No. 5.
House Building Programme(Representations)
asked the Minister of Housing and Local Government what recent representations have been made to him about the effect of the credit squeeze on the housebuilding programme; and what reply he has sent.
Representations have recently been made to me on behalf of the Federation of Master Builders and in reply my hon. Friend the Minister of State referred to the proposals made by my right hon. Friend the Chancellor in his Budget speech, and to the measures already announced in my statement in the House on 18th March.
Does the Minister think that those measures are sufficient? If he is really interested in helping house builders to get on with the job, does he not think they should be given even greater help than has been given so far?
The hon. Member should be a little careful about suggesting that I do not want local authorities to get on with the job. I do, very much. That is one reason that I made my proposals in my statement in the House on 18th March. As it is now only the first week of May, it is a little early to condemn proposals made as recently as the third week in March.
Does my right hon. Friend recall that representations on this aspect of the housing problem and many others were made to him as long ago as 11th December, 1969, in a Report by a Sub-Committee of the Estimates Committee? Does he also recall that, although this request has been made, we have not yet had a reply from his Department to those recommendations? Will he see that we get it forthwith?
My hon. Friend will know that the Report of the Committee is engraved on my heart. I am not sure what the position is about the reply which is being prepared to the suggestions made, but I will look into her question and see how quickly I can give her an answer which will be wholly satisfactory.
Tenants (Save-As-You-Rent Schemes)
asked the Minister of Housing and Local Government which local authorities and Government-aided housing associations are now sponsoring save-as-you-rent schemes for their tenants; and whether he will consult local authority and building society associations about this way of encouraging home ownership.
We are already examining the possibility of save-as-you-rent schemes as a way to help average wage-earners to become owner-occupiers. So far as I am aware, only the London Borough of Newham and the Family Housing Association sponsor such schemes for their tenants; but I will gladly consider any information my hon. Friend will send me on this.
Is my hon. Friend aware that his answer affords one further proof, if proof were needed, that the Labour Government do more for owner-occupiers than any Tory Government have ever done? Would he note that the recent adoption of the save-as-you-rent scheme by the hon. Member for Worcester (Mr. Peter Walker), whose absence today we regret, is a further example of blinding revelation of unoriginal thought on the Tory benches?
The hon. Member for Worcester (Mr. Peter Walker) has apologised to us for his absence: he is ill, and I am sure that we all regret that. Our action in trying in many ways to stimulate home ownership for those who can afford it is well-known. It is true that there is nothing original about this proposition.
Housing Loans (Interest Rates)
asked the Minister of Housing and Local Government (1) in how many housing authorities the rate of interest paid on loans for house-building is now in excess of 4 per cent.;
(2) what is now the effective average rate of interest paid by local authorities on loans for house-building.
asked the Minister of Housing and Local Government what recent representations he has received from local authorities as to the cost of borrowing for their housing programmes.
I do not have the precise interest rates paid by individual authorities. A number of authorities have made representations to my right hon. Friend about the effect on their loan pool rates of financing old house-building debt at higher current rates of interest and of the representative rate of interest being fixed on the basis of the previous year's borrowing. This arrangement may, however, reduce this year's effective borrowing rate for new housing.
Are the higher interest rates over 4 per cent. suffered mostly by those authorities with the worse housing problems?
The hon. Gentleman is making a mistake which seems to be common on the other side of the House. The effective borrowing rate for any local authority building houses is 4 per cent. on completion of the dwellings.
Would my hon. Friend agree that the 4 per cent. loan to councils is the biggest boon for housing that this country has ever known? However, could he back-date it to the date of commencement of the building rather than completion, as this would make a considerable difference and prevent the excuses made by the Conservative Party that they are having to pay more than 4 per cent.?
As my hon. Friend knows, this point has been put by him and one or two other hon. Members to my right hon. Friend a number of times recently. My right hon. Friend has considered it, but it is not felt that this is possible. I welcome my hon. Friend's point in underlining what I have just said. I hope that it will be accepted clearly on the other side of the House that this is the position—there is an effective 4 per cent. borrowing rate. Indeed, for some local authorities, for example, Birmingham, one of the major housing authorities in the country, this year the effective borrowing rate will be even less than 4 per cent.
Would the hon. Gentleman not agree that to suggest that the local authorities are getting a subsidy of anything above 4 per cent. interest is misleading, because there is an ever-widening gap between the representative rate and the actual rate and that some authorities today are having to borrow at 6 and 7 per cent.?
I am afraid that the hon. Gentleman is misleading the House and himself. He should not pay too much attention to the farrago of mistakes which his hon. Friend the Member for Crosby (Mr. Graham Page) published in The Times only last week in connection with this subject. The effective rate of interest is 4 per cent. The only gap in time is between one year and the immediately preceding year. As I have said, if interest rates vary in some cases, it can produce a lower rate; I have given one example this year.
Housing Associations
asked the Minister of Housing and Local Government if he is satisfied that the amount of money available to the voluntary housing movement is adequate to meet the programmes which they require to undertake; and if he will make a statement.
The output of new dwellings by housing associations has increased and is likely to go on increasing. Starts in 1969 were 18 per cent. higher than in 1968. Housing associations are also playing an increasing role in the improvement and conversion of older houses, and are benefiting from the increased provisions made in the Housing Act, 1969.
Would not the Minister agree that the voluntary housing movement has a tremendously valuable part to play in the housing of this country and that it needs even greater help than it has received from the Government? Would he be prepared to offer that help?
I think that the voluntary housing movement would be the first to admit that it has received more positive and generous help from this Government than from our predecessors. I am glad that the hon. Member referred to the importance of the movement. The important thing is that the houses it builds should be in addition to those supplied by local authorities, not instead of them.
Would my right hon. Friend agree that the Housing Corporation would be able to do even more if it could have a pool of borrowing from building societies instead of having to get one building society to link up with each housing association scheme?
We are examining the suggestion my hon. Friend has made. He will welcome the fact that in March we made available an additional £10 million to the Housing Corporation which should enable it to meet half the cost of new dwellings instead of simply a third.
Elderly People (Municipal Dwellings)
asked the Minister of Housing and Local Government how many municipal dwellings for elderly people were built from 1964 to 1969.
Between 1964 and 1969 local and new town authorities in England and Wales built 224,000 one-bedroom dwellings, suitable for elderly people.
Is my right hon. Friend aware that, in spite of all the economic problems we have had to face, those are very remarkable figures? Now that he has given the figures for 1964 to 1969, can he give the figures for 1959 to 1964?
Yes, Sir. Over the five-year period from 1960 to 1964 the total was only 140,000. From 1965 onwards it was 191,000. That is an increase of over 50,000 in that period and an increase of rather more than one-third.
What steps is the Minister taking to ensure that when these homes for elderly people are built they will be let at rents which elderly people can afford?
They are, of course, entitled to the subsidy and other financial help which the Government have given. If my hon. Friend has examples in mind where he thinks more could be done, I will certainly look at the possibility of helping him.
Housing (Chronically Sick And Disabled)
asked the Minister of Housing and Local Government what action is being taken by his Department to encourage housing provision for the chronically sick and disabled.
Under the Housing Subsidies Act, 1967, increased subsidy is payable where local authorities incur extra costs in providing specially designed housing for the chronically sick and disabled. My right hon. Friend is considering what formal advice can be circulated in the light of the Chronically Sick and Disabled Persons Bill; but we have already made clear that we wish local authorities to search out the various housing needs of their areas more carefully and meet them by greater building activity and action on establishing improvement areas.
Is my hon. Friend aware that his answer will be greatly welcomed by the disabled? Can he speculate about how effective these provisions will be if Conservative councils persist in cutting down house-building programmes?
Obviously it will be a matter of great distress if Conservative councils insist on cutting down house-building programmes.
Hon. Members: They do.
It is a matter of great distress that they do so. It is even more distressing if this affects the special needs of handicapped people. This is something which I assure my hon. Friends the Government will keep under review.
May I assure the Minister of State that Conservatives are just as much concerned about the disabled as is the Labour Party?
I quite agree, but those authorities which are not building houses are not showing concern for anyone.
New Houses (Average Price)
asked the Minister of Housing and Local Government what is his latest estimate of the price of an average new house.
A provisional estimate of the average price of new private dwellings mortgaged with building societies in the first quarter of this year is £4,960.
Does not this confirm the opinion of the Building Societies Association that the average price of a house has increased by nearly 50 per cent. since 1964 and that the rate of increase is accelerating? Does not this mean that houses are now getting beyond the reach of the average wage-earner?
No, Sir. The rate of increase has been about 40 per cent. over the past five years. The rate of increase over the previous five years was 41 per cent.
What proportion of this increase is due to higher standards of houses which are being built?
I cannot attribute a proportion concerning the private sector, but, taking as a guide-line the estimated increase in cost of public authority housing, it has risen by 8 per cent. due to the adoption of mandatory Parker-Morris standards. In so far as private building reaches somewhat in that direction, if not as far, one must attribute increase in costs to a proportion attributable to higher standards.
New Towns (Housing Assets)
asked the Minister of Housing and Local Government if he will now publish an advance timetable on the transfer of housing assets for local authorities in new towns so that they may make the appropriate organisational arrangements and to recruit staff.
I would refer my hon. Friend to the answer I gave him on 7th April.—[Vol. 799, c. 225.]
Will not my hon. Friend reconsider his earlier decision and not delay the transfer of assets from new town corporations to the council and so avoid the natural suspicions, uncertainties and anxieties which will arise among staff affected by the change? Will he try to give an answer before the Whitsun Recess?
I was not quite sure what issue my hon. Friend was asking me to reconsider. We have undertaken to give this statement to the House during the summer. I could not say that it will be available before Whitsun, but we are anxious to make it available at the earliest possible moment.
Public Swimming Pools
asked the Minister of Housing and Local Government what action he is taking to introduce economy into the design and to reduce the high cost of public swimming pools.
In conjunction with my right hon. Friend the Secretary of State for Education and Science it has been arranged for the Technical Unit for Sport to undertake a development project on the design of a swimming pool for Newquay Urban District Council. I am confident that this project will provide valuable information and will act as a guide to local authorities on what can be achieved for a limited sum of money.
While I welcome this initiative, would my hon. Friend agree that if it transpired that a substantial saving can be made on design for something so complicated as a swimming pool it might also be used for other kinds of sporting amenity?
Indeed. That is why we established the Technical Unit for Sport. It is doing a study on the minimum size of sports halls and sports pavilions which most voluntary bodies would put on to a sports ground. We are anxious about design and cost.
As the present design is so old-fashioned and not encouraging to swimmers, either young or old, will the Minister consult the Council for the Promotion of Education in Swimming, who are experts in this matter and can give him some proper advice?
We should be delighted to receive advice from any source, not least from my hon. and learned Friend who has championed this cause over many years. We are anxious to build more swimming pools, but at an economic price which the community can afford.
Has any research been done on cheaper heating of swimming pools?
This ties up with the research being done at Newquay.
Slum Clearance
asked the Minister of Housing and Local Government how many slums were demolished from 1964 to 1969.
385,270 houses in England were demolished or closed as a result of slum clearance action in the period 1964–69.
Are not these again an example of how this Government really care about the whole question of housing? Can my right hon. Friend give the figures for 1959 to 1964? Can he also say what encouragement is being given to local authorities to speed up slum clearance programmes?
I am most grateful to my hon. Friend. The average for 1960 to 1963 in England was 58,000 a year. From 1964 to 1969 the average was 64,000. My hon. Friend will no doubt know that I have written to all local authorities asking them to let me know what are their plans for the next five years. For 1970–1973 the average should be 82,000 if local authorities keep to their programmes. I think my hon. Friend will remember that in the Housing Act passed last year we improved the provisions for owner-occupiers in slum clearance areas and also the disbursement of well-maintained payments.
Instead of indulging in self-satisfaction, is it not time the Minister took account of the fact that there are still about 5 million people living in condemned housing in this country, and that if the Government had lived up to their housing promises 1 million of them would now be rehoused?
It is not self-satisfaction but simply dissatisfaction with what hon. Gentlemen opposite were able to achieve in their period in Government. The fact that slum clearance was running at so low a rate during that time was a disgrace of those years. I do not know whether the hon. Gentleman was present in any of our debates on the Housing Act, 1969, but he will realise that one of the main reasons for introducing that legislation was to deal with slum clearance problems.
Does my right lion. Friend agree that the latest figures could be much better if he did not have to write to corporations like Sunderland asking them to increase the number of houses to be built for slum clearance?
Yes, Sir. I am afraid that there are many local authorities in that category.
Is the right hon. Gentleman's forecast to be described as a promise or a pledge? Does it have the approval of the Prime Minister?
That is a question I cannot answer, because my forecast is based on returns from Conservative local authorities.
Local Authority Mortgages
asked the Minister of Housing and Local Government if he will estimate the amount of money now required for local authority mortgages to have equivalent value of £179 million in 1964, taking into account increased costs.
About £250 million, Sir, as compared with about £155 million allocated for 1970. Building society lending this year is expected to reach £1,700 million which is about £650 million more than they lent in 1964.
Does the Minister appreciate that the figure of £179 million was the amount of mortgages which the Conservative Government gave in 1964? Does not his answer show how hopelessly inadequate is the sum of £155 million the Government are now offering?
I suggest that the hon. Gentleman gets in touch with the Association of Municipal Corporations, because its representatives and representatives of other associations we have consulted do not take such a view.
House-Building Programme
asked the Minister of Housing and Local Government what is the latest available figure for the number of houses, started, under construction and completed during 1970.
asked the Minister of Housing and Local Government how many homes were started and finished in the public and private sectors, respectively, in the first three months of 1970 compared with the numbers for the first three months of 1969, 1968 and 1967: and if, in the light of the Budget, he will now consider new measures to increase the numbers of houses started.
With permission, I will circulate the figures in the OFFICIAL REPORT.
I am confident that the measures announced by me on 18th March and by my right hon. Friend the Chancellor of the Exchequer in his Budget statement will greatly benefit the house-building industry.Is the right hon. Gentleman aware that there has been a marked decline in new housing starts in recent years? Will he take further steps to get the building industry out of its present depression, which looks like continuing for many months?
I hope that the hon. Gentleman will study the proposals I made on 18th March. Any figure for starts is bound to be disappointing, but this figure is substantially higher than hon. Gentlemen opposite achieved in 1963.
Have the discussions now taken place with the 20 worst offenders among the local authorities cutting their housing programmes? What was the outcome, and will my right hon. Friend now consider taking compulsory measures which are available?
My hon. Friend the Joint Parliamentary Secretary and I have completed those discussions. We are now assessing the results, and we hope to draw from them conclusions as to the further steps which can be taken to increase the house-building programme. I am not sure that my hon. Friend's suggestion would have the immediate effect of stimulating house-building, but it is one with which I am very sympathetic.
Is it not remarkable, considering all the bravado from the Front Benchħopposite this afternoon, that the Government will build 140,000 fewer houses this year than they promised in their election manifesto?
This is going over old ground. I expect that the result this
| GREAT BRITAIN | |||||||
Started
| Completed
| ||||||
Public
| Private
| Total
| Public
| Private
| Total
| ||
| 1st quarter 1967 | … | 47,500 | 59,694 | 107,194 | 46,454 | 42,312 | 88,766 |
| 1st quarter 1968 | … | 40,015 | 50,498 | 90,513 | 44,975 | 52,616 | 97,591 |
| 1st quarter 1969 | … | 35,515 | 35,380 | 70,895 | 40,884 | 42,578 | 83,462 |
| 1st quarter 1970 | … | 29,018 | 29,635 | 58,653 | 42,821 | 37,136 | 79,957 |
Under construction Public at 31st March, 1970
| ||||||
| Public | … | … | … | … | … | 232,719 |
| Private | … | … | … | … | … | 177,981 |
| Total | … | … | … | … | 410,700 | |
asked the Minister of Housing and Local Government what is his latest estimate of the number of new houses to be started and completed during 1970.
asked the Minister of Housing and Local Government how many houses he now estimates will be built in 1970.
asked the Minister of Housing and Local Government what is his revised estimate now of the number of new dwellings to he built during 1970.
asked the Minister of Housing and Local Government what estimate he has now made of the number of houses likely to be completed in 1970. year will be very much the same as it was last year, which is much better than in any year under a Tory Government except in 1964.
is not it remarkable that when the Conservatives left office there were 434,000 houses under construction, whereas now there are only 411,000 under construction?
The only thing which is remarkable about that is that the only successful year in the Conservative period of office was the General Election year of 1964.
Will my right hon. Friend seriously consider the proposal made by my hon. Friend the Member for Salford, East (Mr. Frank Allaun), bearing in mind that some local authorities, including Reading Corporation, flatly refuse to start any new houses at all?
Yes, Sir.
Following are the figures:
The specific measures which I announced on 18th March coupled with the reductions in Bank Rate and the easing of bank lending will help house building, but the year's performance will depend on how quickly housing authorities, prospective purchasers, and house builders respond.
That reply does not give any estimate of the number of houses which are expected. Surely the Minister has some opinion on that. Will he confirm that the number of houses being built is very substantially less than those built in 1964 under the Conservatives. that there are at least 80,000 fewer starts being made this year—
Tory local authorities.
Yes, and many Tory local authorities have been forced to cut back their housing programme at the specific request of the Minister. How does the Minister reconcile this with the Prime Minister's pledge that a Labour Government would build no fewer than 500,000 houses a year by 1970?
It is a little early to say what results will be achieved by the proposals announced only six weeks ago. In the meantime, perhaps the hon. Gentleman and his colleagues would like to reflect on why it is that, for example. Thurrock can go ahead with a large house-building programme whereas Kingston-upon-Thames cannot and that Scunthorpe can, while Bradford cannot.
Is my right hon. Friend aware that it is not only the number of houses built that matters but that today more than ever it is the quality of those houses which counts, and that many of us feel we already have too many tower blocks on Merseyside?
I have a good deal of sympathy with what my hon. Friend has said. What he says about quality is absolutely right. It is no good simply increasing the numbers if that is done at the expense of quality. One of the things the present Government have done is to make Parker Morris standards mandatory since the beginning of last year.
Will the right hon. Gentleman refer to the last quarter's figures for starts? At 79,500 starts in the first quarter of this year were the lowest for years past. How does he reconcile that with the record number of bricks lying on the floor—1,100 million?
The question of starts in the first quarter of the year has been dealt with in answer to a previous Question. I am very happy to repeat that the number started in the first quarter of this year was substantially higher than in the first quarter of 1963.
Will my right hon. Friend institute a pilot study into some of these problems, particularly at Bexley, which, under the lack of inspiration of Conservative leadership, started no houses at all in 1969, presumably on the basis that everyone is going to live on yachts on the Thames now?
We are reviewing a number of programmes, or lack of them, of local authorities. I am very grateful to my hon. Friend for pinpointing one authority whose programme, or lack of it, may merit further investigation.
Local Governmentand Regional Planning
West Midlands Economic Planningcouncil
asked the Secretary of State for Local Government and Regional Planning if he will add members from parts of the West Midlands not at present represented on the West Midlands Economic Planning Council.
While the members of economic planning councils are appointed as individuals having wide knowledge and experience of their regions rather than as representatives of particular interests or areas, we naturally try to ensure that the membership in total provides as broad a coverage of each region as possible. My right hon. Friend will shortly be making a few further appointments to the West Midlands Council and in doing so will bear my hon. Friend's point in mind.
While thanking my hon. Friend for that reply, may I point out that the spread has not been very even in the appointment of this economic planning council? Is he aware that there is no person representing the County Borough of Wolverhampton on this body while there is a large number of representatives from Birmingham? Is he further aware that this does not endear the Maud proposals to members of Wolverhampton County Borough Council? Will he give an undertaking that in making appointments to fill all the places on the council lie will appoint representatives from Wolverhampton?
With so many local authorities it is difficult, if not impossible, to provide representation for them all—
It is the only one that has been left out.
I would ask my hon. Friend to bear in mind that the planning council will give full consideration to the problems of the region, wherever they exist, in formulating regional strategy and in the advice given to the Government. As to the specific promise which my hon. Friend requests, I cannot go beyond what I have already said. Further appointments will shortly be made by my right hon. Friend which will take into consideration the representations made.
Water Sources (Toxic Fluids)
asked the Secretary of State for Local Government and Regional Planning what estimate has been made of the quantity of potentially dangerous toxic fluids, not detectable by the routine tests now being carried out by water authorities, which are likely to be present in rivers or other water sources from which the water supplies are drawn.
No estimate of the total quantity of such fluids in water sources would be meaningful. Methods of testing water are constantly being refined and improved, and there is no evidence to suggest that public water supplies are other than safe and wholesome. Nevertheless, we aim to widen the margin of safety through continued research, improved local administration and better controls over the sources of pollution.
Is the right hon. Gentleman aware of the evidence given to the Central Advisory Water Committee by the Institution of Water Engineers and the recent report by the Chief Medical Officer of Health of the Ministry of Health which indicates that a very large part of our water supplies are taken from sources polluted by chemicals not easily detectable? Does that not show that there is a very serious source of danger to public health? What action is the right hon. Gentleman taking to deal with this?
I have read both the evidence of the institution, and Sir George Godber's speech. The institution was not mentioning the subject to suggest that public water supplies are dangerously polluted. It was concerned to make the point, with which I agree, that there will be an increasing problem which in its view involves changes in the organisation of the water industry. This question is now being looked at by the Central Advisory Water Committee.
Development Areas (Aid)
asked the Secretary of State for Local Government and Regional Planning, to what extent it is Her Majesty's Government's policy, in applying to enter the Common Market, to forgo their present powers to settle the terms of the aid given to Scotland, Wales, and other development areas and to conform to Common Market regional policy.
Our regional policies have much in common with those of the Six and we believe them to be fully compatible with membership of the Communities.
Is my right hon. Friend aware that the 14 permanent officials called the Commission, who actually run the Common Market under the Council of Ministers, have recently put forward proposals which would have the effect of depriving member countries of their power to order their internal affairs in this fashion, and which would deprive this country of the ability to carry out the sort of policy which the Government have been carrying out in the last few years? In these circumstances, will he make it a condition of entry to the Common Market that this Article 92 is not applicable to this country?
No, Sir. With respect, my hon. Friend is misinformed, unusually so, if I may say so. The ideas put forward by the Commission, which have not been approved yet, carry with them no implications that would cause us to alter our regional policies. Perhaps I could mention that the Commissioner most responsible for these matters, Herr Von Der Groeben, who came to this country a few months ago, said after examining our regional policies:
" Those areas which have developed their own regional policies have nothing to fear from joining the Community … We are not concerned with interfering in individual regional policies."
Pit Closures
asked the Secretary of State for Local Government and Regional Planning if his Department will require the economic planning councils in mining areas to examine the possibilities of securing the maximum advantage from the Government's financial assistance to delay pit closures.
Information about impending pit closures supplied by the N.C.B. is carefully considered, in consultation as necessary with the council concerned. The possible use of our powers under the Coal Industry Act, 1967, is taken fully into account.
Is my hon. Friend aware that while this goes so far in dealing with the problem it does not go far enough, and that a large amount of money could have been used by the Northern Economic Planning Board in delaying pit closures and offsetting the effects of rising unemployment? Will he have talks with the board about this?
Frequent discussions take place with the planning councils and hoards on this subject. I would remind my hon. Friend that the Report of the Select Committee on Nationalised Industries published last December has demonstrated how costly temporary deferment of pit closures can he in relation to the benefits obtained. My right hon. Friend the Minister of Technology has made clear that it would be appropriate to use the power only for limited periods so there could be no question of using it to postpone all proposed closures indiscriminately.
National Economicdevelopment Council
asked the Prime Minister when he will next take the chair at the National Economic Development Council.
On 3rd June, Sir.
As the Prime Minister will no doubt be discussing unemployment at that meeting, can he tell the House whether, in view of the consistently high level of unemployment, the Labour Government are considering going back to the 1951 formula of Mr. Gaitskell, that 3 per cent. is the rate of unemployment for full employment?
Remembering that particular controversy, I can tell the hon. Gentleman that, most unusually for him, he has totally misquoted what Mr. Gaitskell said on that occasion. With regard to unemployment generally, I understand that the House will be debating it tomorrow.
As my right hon. Friend will no doubt be discussing the recovery in our balance of payments, may I ask him whether he is aware that the whole country admires the enormous progress made in this direction? Does he think it would be a good idea to consider giving the Queen's Award for Industry to the retailer on the South Coast who sells more British and Commonwealth food to our Common Market visitors than any of his competitors?
I referred to the last part of my hon. Friend's Question the other day. I did not realise that it was only one retailer. I thought they were all able to provide goods at much lower prices and, judging from what I have read in the newspapers covering this story, this goes far beyond those prices and commodities covered by Common Market policies. It extends to things which are not the subject of Common Market agricultural prices, where we are very much more than competitive. On the first part of my hon. Friend's Question, I am aware that the whole country rejoices in the success of the Government and the people in the matter of the balance of payments—
Get on with it.
—including no doubt the hon. and gallant Member for Knutsford (Sir W. Bromley-Davenport). Some members of the community are more articulate than others in expressing their pleasure.
Local Governmentand Hospital Services(Commissioners)
asked the Prime Minister if he will make a tatement on the progress of the consultations about the possibility of setting up commissioners for local government and for the hospital service.
Consultations are now in progress with the local authority associations on the Government's proposals for a local government commissioner, and with professional and other interests on a health commissioner.
I am grateful for that reply, which is certainly welcome. Is my right hon. Friend also aware that there is clearly a crying need to deal with the problem of democratisation in both these institutions and that we hope he will make a further statement before the Summer Recess?
The Government attach very great importance to the provision of some degree of machinery for investigating grievances on a local government basis and independently and also in the Health Service. It is right that these consultations should be taken a little further before any statement is made.
Before reaching any final conclusion on these important matters, would it not be helpful to the Prime Minister to hear the views of Members on the working of the Parliamentary Commissioner? Is it not regrettable that, despite the fact that he has now been working for three years, none of his reports or the reports of his Select Committee have yet been fully debated in the House?
This is a matter for my right hon. Friend the Leader of the House, but the rather cautious proposal introduced about the ombudsman. turned down by right hon. Gentlemen opposite, has already had some valuable results.
Government Informationservices
asked the Prime Minister why it has been necessary to expand the number of staff in the office of the Chief Information Adviser to Her Majesty's Government serving in the Cabinet Office from nil in 1969–70 to eight in 1970–71 at a cost to public funds of £24,200 per annum.
I explained the initial staffing of this office in reply to a Question by the hon. Member on 18th December, 1969. There has been no expansion beyond this.—[Vol. 793, c. 410.]
Is the Prime Minister aware that since October, 1964, the taxpayers have had to pay for an extra 139 information officers in Government Departments? Does not this figure, with the extra eight in the Cabinet Office, reflect the Prime Minister's desire to manage the news in his own favour at someone else's expense?
I am sorry to have to correct the hon. Gentleman's figure. The increase since 1964 is not 139, but a higher figure than that. Unfortunately, we do not have a precisely comparable figure for the increase in the information service under the Conservative Government. In those Departments for which figures are available, the figures are higher than the hon. Gentleman suggested. From 1964–69 the increase in the information service under the present Administration has been by 44 per cent. in information officers. In the four and a half years up to 1964 in the same Departments the increase was not 44 per cent., but 59 per cent.
Does not my right hon. Friend agree that there is a considerable demand from the public for more information, and is not it odd that hon. Gentlemen opposite, who are constantly pressing the Government to give information on all sorts of matters, often when it is difficult, are now apparently arguing that the public should be deprived of information which they want from Ministers?
No, Sir, I want to be fair to right hon. Gentlemen opposite. Indeed, I have offered to put Government resources at their disposal to make clear the cost of their programmes, provided they tell us and the country what their programmes are.
Will the Prime Minister tell us why he claims credit for building on the basis of Tory extravagance? Is this what leads him to believe, in an unusual burst of immodesty on his part, that he is the lesser of two evils?
I have indeed used that phrase, and I have not yet met anybody who disagreed with it. What I have succeeded in doing in five and a half years, in addition to meeting the voracious demands for information from right hon. and hon. Gentlemen opposite, is to restrain the growth in the information service.
Gaming
asked the Prime Minister if he will recommend the appointment of a Royal Commission to inquire into the problems arising from gambling and gaming laws.
No, Sir. I am satisfied that the Gaming Board will continue to keep a tight control over gaming.
Does my right hon. Friend agree that the Gaming Act has been one of the most effective means of backing up the police? It has cut down the number of clubs and got rid of some of the undesirable elements, the racketeers and musclemen, who had come into the gaming world as the direct result of the naive legislation drawn up by the Conservative Government? Will he continue to give full support to the Gaming Board in its efforts to bring gaming into manageable proportions?
Yes, Sir. When right hon. Gentlemen opposite seek to make law and order a football in party politics, they should take account of the fact that the Act of 1960, however well intentioned, was, as my hon. Friend said, very naive and led to the danger of a big importation—a brain drain in reverse—of Mafia types into this country. It is the action of this Government that has stopped it.
Leaving politics out of it, will the Prime Minister keep a close eye on the workings of the Gaming Board, bearing in mind that the principles of justice which we seek to apply in these matters ought to apply even to people who run gaming establishments?
The principles of justice are laid down, in the Act introduced by this Administration, by Parliament, and these were matters of much debate and many amendments. It must always be for Parliament in drafting legislation to bear this in mind. But the right hon. Gentleman would be the first to agree, leaving politics out of it, as I know he always does, like his right hon. Friend the shadow Home Secretary —[Interruption.] We put up with a lot from right hon. Gentlemen opposite. Leaving politics out of it—it is our politics that stopped the Mafia, not theirs.
Is my right hon. Friend aware that I entirely agree with what he has said about the Act? Indeed, unlike my right hon. Friend, I voted against it. Is he also aware that the chairman of the board is finding his powers inadequate and urgently requires additional powers, and will my right hon. Friend reconsider looking into this matter?
Certainly, Sir. If any powers are needed to make this control effective—and this is control not on the question of justice referred to by the right hon. Gentleman, but on the more seamy side of gaming—it will be for my right hon. Friend the Home Secretary to bring proposals before the House.
Is the Prime Minister aware that it is because of the widespread feeling that a Mafia is operating that perfectly respectable casinos in perfectly respectable towns like Banbury have been closed down? Should not much more latitude be allowed to local authorities to decide whether casinos should continue?
I am aware of representations on this question from a number of localities, in addition to that mentioned by the hon. Gentleman, but these are matters to address to my right hon. Friend the Home Secretary and not to be taken up at this time.
Cabinet Ministers (Scotland)
asked the Prime Minister whether, in view of the fact that there are three Treasury Ministers in the Cabinet, he will include an additional Scottish Minister.
asked the Prime Minister if he will include an additional Scottish Minister in the Cabinet.
No, Sir. My right hon. Friend the Secretary of State for Scotland, who has now held this post longer than any of his predecessors, is a very effective representative in the Cabinet of Scotland and of Scottish interests.
Is my right hon. Friend aware that none of us on this side of the House will be in the slightest degree alarmed by the answer which he has given? All of us in Scotland are highly gratified with the results achieved by my right hon. Friend in Scotland and for Scotland and regard the attempt by the Opposition to decry the fact that my right hon. Friend is not in the inner Cabinet as a sheer bit of nonsense?
I am grateful to my hon. Friend. He will appreciate that my right hon. Friend needs no second voice to further his work for Scotland inside the Cabinet and throughout the Government machine. If his predecessors had pressed the case of Scotland with similar vigour, he would not have inherited what he did.
When is the Secretary of State to be given a first voice in the inner Cabinet? The Prime Minister has told us that the Secretary of State is summoned to the inner Cabinet, like the Minister without Portfolio, or the deputy chief bottle-washer at the Ministry of Public Building and Works, when the affairs of his Department are under consideration—
MacFauntleroy, sit down!
Will the Prime Minister say whether this reflects his opinion of his right hon. Friend's competence or of Scotland's interests?
The longer the hon. Gentleman goes on the more he shows his total ignorance of the Government machine, and ignorance which he will have for a long time to come and which is likely to grow rather than diminish. My right hon. Friend is present on all occasions when anything affecting the interest of Scotland is discussed. Unlike his predecessors he pipes up for Scotland and fights for Scotland.
I accept what my right hon. Friend has said on this matter, but does not he realise that another matter is inherent in this Question? Has not the time arrived when Scotland deserves one representative in the inner Cabinet all the time and one representative in the Cabinet itself?
The phrase used by my hon. Friend is not known to the constitution of this country. As I have said, I assure my hon. Friend that, whenever any issues affecting Scotland are involved, my right hon. Friend is there. I wish that I could portray to the House the effectiveness of my right hon. Friend not only in meetings, but also outside individual meetings, in the pressures which he puts on all his colleagues to see that the interests of Scotland are safeguarded.
Would the Prime Minister give an idea of the range of subjects discussed by the inner Cabinet which do not affect Scotland? Would he agree that the exclusion of the Secretary of State for Scotland from the inner Cabinet is an unprecedented devaluation of the office and an insult to Scotland?
The hon. Gentleman is quite wrong. I have already answered this question twice. What the hon. Gentleman will never know, nor will any of us, is the basis on which decisions were taken in the Conservative Government by cliques, not Cabinet committees.
Is the Prime Minister aware that his reply to my hon. Friend was a little obscure? Could he confirm that the reason the Secretary of State is not in the inner Cabinet is not his personal qualities, to which tribute has been rightly paid, but the fact that the Prime Minister does not consider that the Secretary of State for Scotland should be in the inner Cabinet?
The concept of the inner Cabinet is not one known to the constitution. All decisions are taken by the Cabinet itself or by appropriate Cabinet: committees. My right hon. Friend is present on all matters affecting Scotland. En many other matters, as I have said, both in his internal administration within Scotland, which arouses the admiration of hon. Members opposite, even if they will not admit it publicly, and also in his work for Scotland, his work transcends both in duration and in quality that of any of this Conservative predecessors.
If there is no constitutional position of an inner Cabinet could the Prime Minister say what 11 Ministers and the Chief Whip were doing for a whole day at Chequers one Sunday without the Secretary of State for Scotland?
It is not the practice to reveal these matters, any more than there was any revelation of the meeting of the Cabinet at Chequers to plan the election programme in 1963, nor was there any information, until it was given by Mr. Nutting, about secret conclaves in Chequers before the Suez operation, unknown to the Cabinet.
While nobody doubts the real needs of Scotland or decries the excellent work of the Secretary of State, would the Prime Minister in recognising the employment needs of Scotland and the interests of industry, trade and commerce, reconsider his answer with regard to appointing separate Ministers for each of these Departments?
My hon. Friend will he aware of the wide-ranging responsibilities of the Secretary of State for Scotland. He will also be aware that the same Secretary of State introduced the Highlands and Islands Development Board when right hon. Gentlemen opposite refused to do so and indeed threatened to vote against it. They will also know that, due to the activities of my right hon. Friend, emigration from Scotland has been sharply changed, as can be seen from the latest figures published by my right hon. Friend.
Questions To The Primeminister
On a point of order. May I seek your guidance, Mr. Speaker, about the increasing practice of Questions put down for Oral Answer by the Prime Minister being transferred to other Ministers?
At the beginning of last week I tabled for Oral Answer today to the Prime Minister a Question asking whetherYesterday, I received notification that this Question had been transferred to the Minister of Housing and Local Government. Erskine May, on gage 350, on the matter of transfer of Questions, says:" he will initiate an inquiry into the cause of the decline in the rate of house-building? "
" A question should be addressed to the Minister who is primarily responsible "—
Hon. Members: Hear, hear.
Wait for it:
The issue here is who has primary responsibility for inquiring into the decline in the rate of house-building. I suggest that it would be inappropriate for the Minister of Housing to take that responsibility. This is an issue on which the Prime Minister, on many occasions, has accepted personal responsibility. I need say no more than perhaps quote from his well-known speech, in which he assumed that responsibility—[HON. MEMBERS: "Too long."] He said, when he pledged that Labour would build 500,000 houses—[Interruption.]" and misdirected questions are transferred by the clerks at the table on the notification of the departments concerned."
Order. The hon. Gentleman must not wander from his point of order to a point of political argument.
I recognise that, Mr. Speaker, but, according to Erskine May, the question is one of primary responsibility. This responsibility rests on the Prime Minister and I am entitled to pray in aid the words from his own speech so that there can be no doubt about that acceptance. I hope that you will bear with me if I quote the relevant passage— [HON. MEMBERS: "Too long."] The Prime Minister, referring to his pledge of 500,000 houses, said:
In subsequent debates, when the Prime Minister has been challenged on this subject, he has prayed in aid devaluation. —[HON. MEMBERS: "Sit down."] That could not be the primary responsibility of the present Minister of Housing. I would suggest, therefore, that the Question was not misdirected to the Prime Minister. Since there is a conflict in what the effects of devaluation may be, I would say that immediately after that the Prime Minister, in a broadcast, referred to the priority programme—" This is not a lightly given promise. It is a pledge. We shall achieve the 500,000 target and we shall not allow any developments, any circumstances, however adverse, to deflect us from our aim."
Order. The hon. Gentleman is drifting from his point of order. He must not make a political speech.
I recognise that, Mr. Speaker, and I abide by your Ruling. But so that I can establish the primary responsibility for inquiring into the rate of house-building, and the fact that the Prime Minister is shedding responsibility by transferring his Questions, I believe it right to seek to put forward those occasions on which, in various ways, he has accepted that personal responsibility. If it be that having failed in his pledge he seeks to shift the responsibility on to the Minister of Housing—
Order. The hon. Gentleman is again drifting into a political speech.
I must, of course, again accept your Ruling, but I think that my point is made.
If the Prime Minister, by transferring this Question, denies primary responsibility for the declining rate of house-building, I must accept that. But let him say so. I feel that this was a Question tabled to him for Oral Answer which he should have answered and not transferred to another Minister.I am seized of the point of order which the hon. Member for Leicester, South-West (Mr. Tom Boardman) has made. It is not unknown for an hon. Member to be dissatisfied with the transfer of a Question from one Minister to another. But I must rule against the hon. Gentleman. This is a repetition of a Ruling that the Chair has given many times this century. It has been ruled on numerous occasions by my predecessors, as well as by me, that the transfer of Questions from one Minister to another is not a matter for the Chair.
According to page 349 of Erskine May, my responsibility in regard to QuestionsThe basic rule is that there must be some degree of Ministerial responsibility for the substance of a Question. But, once a Question has been accepted, the Ministers have the right to decide which one of them can most appropriately answer it." … is limited to their compliance with the rules of the House."
On a point of order, Mr. Speaker. Would you care to reflect on whether we have heard a speech from the hon. Member for Leicester, South-West i Mr. Tom Boardman) in favour of a Ten-Minute Rule Bill, or a long harangue of parliamentary cheating?
The right hon. Gentleman has expressed his opinion.
Further to that point of order. This is a serious matter—
It is a serious matter, and it is a serious matter on which the Chair has ruled. Mr. Speaker has ruled categorically that the transfer of Questions by Ministers is not in any way a matter for the Chair or a matter for order. It is a matter for the Ministers themselves.
My point is this, Sir. Back-bench hon. Members are having increasing difficulty in pinning anything on the Prime Minister [Laughter.] The Prime Minister is responsible for the overall conduct of his Government, I think. But it will be within your recollection, Mr. Speaker, that I tabled a Question to the Prime Minister—
Order. I appreciate the hon. Gentleman's difficulty in the first part of his point of order. But the issue that he is raising now is identical with the one on which I have ruled. The transfer of Questions is a matter for the Ministers. It is not a matter of order, or a matter for the Chair.
On a point of order, Mr. Speaker. With no disrespect to you, should not we be discussing Cambodia?
I had an idea that that was in the minds of most right hon. and hon. Members.
On a point of procedure, Mr. Speaker. We on these benches—and I speak for all on these benches—have found ourselves in a quandary this afternoon. Some time ago. my hon. Friend the Member for Banbury (Mr. Marten) put down Question Ql. on the Order Paper—[Interruption.] Has that sunk into the oafs opposite? I worked out, as we all do on these occasions, a "humdinger" of a supplementary. Earlier this afternoon, I asked my right hon. Friend the Deputy Leader of the Opposition to let me get in my "humdinger" before he got his in, because he had one which was much bigger than mine.
This is my point of procedure. My hon. Friend the Member for Banbury asked his Question. In a blast of halitosis, the Prime Minister gave a short answer. My hon. Friend then asked a supplementary, which received another short answer. Then one of the uglier Members on the back benches opposite asked a supplementary, and the Prime Minister proceeded to give a long, flannelling answer. What are we to do in those circumstances?—[Interruption.] This is procedure—[Interruption.] Ugly brutes! My right hon. Friend the Deputy Leader of the Opposition wanted to put a supplementary, as I did. My right hon. Friend wanted to give me the opening ball. However, Mr. Speaker, you did not call me, and, as a result, you did not call my right hon. Friend. My suggestion is that, in order not to do my right hon. Friends on the Front Bench out of their supplementaries, they should raise one or two fingers as the case may be to indicate that they wish to ask supplementary questions. I do not mind being done out of mine. I am always done out of mine. But I think that any one of my right hon. Friends on the Front Bench ought to have a chance.Order. Again, I remind the House that we have one of the gravest debates ahead of us. All that the hon. and gallant Member for Knutsford (Sir W. Bromley-Davenport) has done is call attention to the fact that, from time to time, right hon. and hon. Members on both sides do not get called for supplementaries which they think are most important and which the hon. and gallant gentleman thinks are "humdingers". That has happened throughout history.
Town And Countryplanning Appeals(Amendment) (Scotland)
3.47 p.m.
I beg to move,
That leave be given to bring in a Bill to repeal Part III (Appeals) of the Town and Country Planning (Scotland) Act 1969. I know that a very important debate is about to take place, so I shall keep my remarks as short as possible in seeking the permission of the House to introduce my Bill. On the other hand, it concerns a matter about which we may be able to do something, whereas the debate that is to follow is rather questionable. The Bill is concerned with certain provisions of the Town and Country Planning (Scotland) Act, 1969, and raises issues which were debated at some length in the Scottish Standing Committee exactly a year ago today. It would be appropriate if I explained shortly the background to the legislative provisions which I seek to excise from the Statute Book. In Scotland—[Interruption]. If I may have the attention of the House for a few minutes; I will be as brief as I can—if an application is made for planning permission, and if that application is refused by the planning authority, or if planning permission is given subject to conditions which are unacceptable to the applicant, there is, under present legislation, a right of appeal to the Secretary of State. Except in very special circumstances, the Secretary of State then orders a public inquiry—and appoints a person called a reporter to hold it. After hearing the evidence and the submissions made on behalf of the various parties, the reporter reports to the Secretary of State and makes recommendations. This procedure is rather different from the procedure, as I understand it, followed in England and Wales, because there the remit to an inquiry is made to a full-time salaried officer called an inspector and reliance is placed on him— [Interruption]—to make his recommendations. In Scotland, on the other hand, this matter is normally dealt with—On a point of order, Mr. Speaker. Some of us are very interested in this Bill, but there is such a hubbub of conversation that we cannot hear what the hon. and learned Member for Edinburgh, Pentlands (Mr. Wylie) is saying.
I am grateful to the hon. Member for Aberdeenshire, West (Mr. James Davidson). The House insists that Ten-Minute Rule Bills be taken at this time and it must listen.
I am obliged to the hon. Member for Aberdeenshire, West (Mr. James Davidson), who supported my argument on this matter a year ago.
What normally happens in Scotland is that the matter is remitted to a reporter. who is sometimes a member of the Bar, sometimes a retired civil servant and sometimes, indeed, a solicitor. The appointments are made on an ad hoc basis. They are not made to salaried officials of the Secretary of State. The second feature of the system which I regard as important is that the final decision on a matter of this nature is reached by the Secretary of State himself when an appeal is made. The system has over the years worked very well indeed from two points of view. First, it has worked well from the point of view of the member of the public who appeals against a decision of the local planning authority because the process by which the hearing is conducted is quasi-judicial and is one in which the public have confidence. Secondly, it has worked well from the point of view of public interest, because the decision of the Secretary of State is one which he makes in the public interest and it is essentially an administrative decision. So here we have a system in which the public have confidence and in which the Secretary of State takes an administrative decision in the general interest. I believe that it has been possible to operate the system in Scotland—although I can well understand why it may not be possible to do so in England—for two primary reasons. One is that the number of appeals against planning decisions in Scotland is relatively small—no more than 300 or perhaps 400 a year—whereas in England and Wales the number runs to about 14,000. The second and primary reason why the system has worked fairly well in Scotland over the years, particularly recently, is because we have in Scotland a planning department under the jurisdiction of the Secretary of State which brings all planning matters as it were under one roof. It is possible in this way to treat all planning considerations on application or appeal at one and the same time. We do not have to go from the Ministry of Housing and Local Government, for example, to the Ministry of Transport, and so on, to get their views on different aspects of the problem. The system works very well indeed. But Part III of the Town and Country Planning (Scotland) Act, 1969, sought to introduce an entirely novel proposition into our planning law. In the first place, it introduced what was for Scotland the entirely new concept of a full-time permanent inspectorate in place of the ad hoc appointments to which I have referred. Secondly, it will delegate, when the provisions of the Measure are activated, to the inspectorate, except in special cases, the ultimate decision of the matter instead of the Secretary of State himself taking the decisions. Both these proposals are to be deplored. In the first place, the idea of introducing a permanent inspectorate is not appropriate to Scotland. We do not need it and I think that it is calculated to destroy the confidence which the public in Scotland have in the planning system. Secondly, and perhaps even more important, it deprives the Secretary of State of the right to take a decision on a planning matter himself. He is functus, as it were, after he has made a remit. On both grounds, these are propositions which should be opposed. The only reason adduced for the changes was largely speculative. It was suggested by the Minister of State that there was going to be a vast increase in the number of appeals. But the Royal Commission on Local Government in Scotland strongly recommended that the Secretary of State should retain his jurisdiction because there was no likelihood, in its view, in the foreseeable future of planning appeals arising to the extent to which it would introduce a complication. If I am given leave to introduce the Bill, I would like to expand it to stop the provisions in the 1969 Act which enable a local authority to decide an issue to which it is itself a party. It is wrong in principle that a party to litigation or an inquiry should itself decide the outcome. I can think of nothing more calculated to destroy public confidence in our planning system than a proposition of that kind. For all these reasons, I ask leave of the House to introduce this short, but important Measure.Question put and agreed to.
Bill ordered to be brought in by Mr. W. R. Wylie, Mr. Gordon Campbell, Mr. Hector Monro, Mr. Ian MacArthur, Mr. Alick Buchanan-Smith, and Mr. George Younger.
Town And County Planning Appeals(Amendment) (Scotland)
Bill to repeal Part III (Appeals) of the Town and Country Planning (Scotland) Act, 1969, presented accordingly and read the First time; to be read a Second time upon Friday, 19th June and to be printed. [Bill 171.]
Indo-China (Extension Of War)
Before the debate opens may I announce to the House that I have had 32 requests from right hon. and hon. Members to take part in this three-hour debate.
3.59 p.m.
I beg to move, That this House do now adjourn.
It is surely right that this House of Commons should discuss the latest developments in Cambodia and Vietnam, so I express my gratitude to you, Mr. Speaker, for the acceptance of my Motion yesterday, and to the support of members of the Government for the fact that we should have this debate. The events there can have the gravest consequences for all of us. In my opinion, it is sheer despair for people to say that nothing that we can do or say can have much influence on such distant occurrences, and that, therefore, we should keep our mouths shut, and possibly keep our eyes closed as well. I believe that we should debate these matters, for I certainly do not accept the view that the voice of this country cannot have an effect upon these events throughout the world. First, I refer to the legalities of the matter, not very extensively, but a bit more extensively perhaps than President Nixon did when he ordered the invasion of Cambodia.Hon. Members: Which invasion?
I shall try to deal with such questions.
On the legalities of the matter—[Interruption.] I am sorry that the mention of the legalities of this matter should cause such instant offence on the other side of the House. On the legalities of the matter, no attempt has been made to justify the action which President Nixon ordered as being in accordance with international law. On this occasion even the country to be saved was not consulted. Nor is it a defence to say that others had violated the neutrality of Cambodia before. The fact that one country holds the view that others have violated the neutrality of the country does not entitle a third country to say that it will take the law into its own hands. Indeed, that would be a recipe for international anarchy. Her Majesty's Government hold the view—and I believe that all parties have hitherto held it—that in the Middle East violations by one side do not justify retaliations on the other side according to their own decisions. Therefore, that is not a defence of the action which has been taken by President Nixon, and I hope that it will not be made in this House.rose—
I shall give way to my hon. and learned Friend for a second. In fairness to others who wish to take part in the debate, it is only right that I should speak as briefly as possible.
I am most grateful to my hon. Friend for giving way. It is important to take the matter further when a question of law is raised and asserted in this way. International law is that a nation owes an obligation of neutrality. If it fails to perform that obligation of neutrality because it is unable to control its border areas, as is the case of Syria, and was the case of Cambodia, then, under international law, the victim of aggression from those areas which are out of the control of the neutral Government is entitled to take the action which the Americans have taken.
That is an interpretation of international law which would be a guarantee of international anarchy. My hon. and learned Friend is not a great authority on international law, either in the Far East or in Africa. Nor am I claiming to be so.
On this aspect of the matter, I stand by the statement made by the New York Times— [Horn. MEMBERS: "Oh."] I am sorry, but hon. Gentlemen opposite should listen to a matter of this importance without being so testy about it. The President of the United States took the action that he did in Cambodia without any consultations with other countries, without any authority under the Charter of the United Nations, and, indeed, as far as we can see, without any consultations with the Senate of the United States itself, such is the arrogance of the super-Powers now in dealing with the lesser breeds, and on that ground alone it would be proper to raise this question. If hon. Gentlemen opposite do not like to discuss the legal aspects of the matter, and whether international law has been bided by, let me turn to the practicalities. The danger of the action which the United States has taken in Cambodia is that it will extend and lengthen the war. It is said that it is merely to be a dash in and out, a short cleaning-up operation, that it will all be over in a very short time, and, therefore, it does not constitute an invasion at all.A matter of weeks, not months.
I know. Some may say that that is to happen, but I hardly believe that anybody observing this development in the Far East would accept that view. If sense is to be made out of the operation, it is much more probable that the American forces will have to plunge deeper and stay longer.
Hon. Members have shown that they do not accept my views on these matters. Perhaps they might weigh to some degree the view of Senator Mansfield— [An HON. MEMBER: "Who?"] The hon. Gentleman can, if he wishes, dismiss a prominent figure in the United States Congress, but I do not think that it is wise for the House to do so. He said:Hon. Gentlemen opposite, or others, may dismiss that judgment. But I suggest that it would be wiser for them to consider it at least, because it appears that, in this action in Cambodia, President Nixon, to put it no higher, has learned insufficiently from the actions of his two predecessors in that same theatre of war, the actions of President Johnson and of President Kennedy. The first false step which both of them made into the bog of Indo-China was made most gingerly, but they sank in so deeply very soon that they and the whole world have had the greatest difficulty in seeking to extricate themselves, so I think that that judgment should be considered. Even more serious, in my opinion, are the diplomatic consequences for the discussions between great nations all over the world. It may be argued by some that the Soviet Union has an interest in perpetuating the war in Vietnam. Some may hold that view, but I certainly do not share it. I believe that there have been times, which were shown by some of their actions, when they took a different view of these matters from that taken by the Chinese Government. Perhaps that is not too daring a proposition for hon. Gentlemen opposite to consider. Perhaps they might be prepared to weigh that, because it appears to anybody who has tried to consider these matters seriously that there have been arguments, at least, in the Government in Hanoi, about whether they should negotiate, about whether they should send emissaries to peace conferences, and about which strategy they should employ. I think that it would be very unwise for this House to underrate the significance of these arguments. I believe it to be the case, not only on the basis of Mr. Kosygin's statement yesterday, but on the common sense of the matter, that the action which the United States Government have taken has made it infinitely more difficult for the Soviet Government to use such influence as they have to try to persuade the Government of Hanoi to stay at the peace table and negotiate a settlement. In other words, the action of the United States in Cambodia has played into the claws of the hawks all over the world —in Peking, in Moscow, in Hanoi, and no doubt on the benches opposite as well, among the various breeds of buzzards, harriers and kites we see on that side of the House. Their action, in my opinion, has gravely injured the possibility of securing a reasonable settlement there. I believe the possibility of getting a settlement, or of negotiation to reach a settlement, has been something that has been supported on all sides of the House; and I would have thought most people would understand and appreciate the diplomatic consequences of what has occurred, consequences which make the possibility of a peaceful settlement very much more difficult. Now, what is this country to do about it? What action can we take to influence the present situation? The claim on which I sought leave of the House yesterday to debate this matter was on the grounds that I thought action should be taken by Her Majesty's Government to influence it. First, the Government may say that they intend to seek to reactivate the machinery of the Geneva Conference, of the Control Commission, as no doubt they have been seeking to do over recent weeks; and there have been indications that there were discussions in New York and elsewhere on the possibility of that machinery being re-established. I hope that the Government will continue to press those matters as strongly as they can. But for the reasons I have already indicated, I believe that the action taken in Cambodia. the reopening of some of the bombing of the North, makes it much more unlikely that that process can be successful. Certainly, the developments that have occurred make necessary much stronger action to express the views, I hope, of this country and of this House, on the action which the United States Government has taken. I do not propose to retrace the whole of the argument which some of us on these benches have had with the Government about the Vietnamese war in recent years except in so far as I believe a reference to it is necessary in order to underline the case I wish to put here this afternoon. In my judgment, the error of Her Majesty's Government was their mistaken view of the nature of the Vietnamese civil war; and furthermore, their misunderstanding of the sharp, convulsive reflections which that civil war would have in the mirror of American society itself which, in some respects, however much hon. Gentleman may complain of my raising this debate, is the most important feature in our world today. The whole situation in 1968 was transformed by events which have certainly not been foreseen by hon. Members opposite, nor, alas, by spokesmen for Her Majesty's Government, but were prophesied by many from this side of the House; the change in American opinion when Senator Eugene McCarthy made his statement and politics in America were transformed because there became, in the United States, a powerful peace party which is now brought again to the centre of the political stage, not only of the United States but of the world. It is to the renewal and reinvigoration of those forces that we must look if we are to succeed in preventing the evil consequences of what occurred last week. I listened on television yesterday to a prominent American Senator who said that great nations cannot be defeated in war and survive—a curious proposition, incidentally, for an American Senator to put to the people of this country, because great nations, sometimes the greatest nations, engaged in unjust and hopeless wars do have to admit defeat, and their greatness has been shown when they have been prepared to admit it. Sometimes they have been able to escape from such situations precisely because there have been people who have been prepared to oppose an unjust war, even when conducted by the leaders of their own country. We in this country, particularly when we are arguing with the people of the United States, have a right to recall the part played by Chatham, Edmund Burke and Charles James Fox, who opposed a war waged by a great nation which did suffer defeat but survived its defeat because it was prepared to admit that the opposition to the war had justice on its side. This is the lesson to be learned." There is nothing in past experience in Indo-China to suggest that casualties can be reduced by enlarging the area of military operations. There is nothing in past experience to suggest that the way out of the Vietnamese conflict follows the road of a Second Indo-China war. Indeed, the road may well meander throughout all of South-East Asia, and end nobody knows where."
rose—
This is the lesson to be learned from these events. Although opinion in the United States may have reached this conclusion for a variety of reasons, just as opinion throughout the world has reached this conclusion for a variety of reasons, the conclusion is all the stronger and more certain. The conclusion is that the military machine of the United States, all-powerful almost though it may be, cannot win a civil war in Indo-China. It can kill. It can destroy. It can defoliate. It can bomb. It can exterminate. It can spread horror and devastation. But it cannot win a victory.
Perhaps at this moment some of the poor people in Cambodia are recognising the wisdom of their leader, Prince Sihanouk, who strove so valiantly for so long to prevent his people from being scorched and devoured in the inferno which is occurring in their country. People can hurl the word "appeaser" at Senator Eugene McCarthy, Senator Fulbright, Mr. Lippmann and all the others if they like, but nobody will believe them. This is the truth of the matter—[Interruption.]Order. This is a serious debate. Running comment is not desirable.
The truth of the matter—and hon. Members opposite may hate the conclusion, but none the less it is true—is that the military machine of the United States can create a wilderness and desolation, but it can never win a victory; and the best friends of the Americans are those who join the growing host of brave Americans who themselves are telling the truth about this war. That is the truth that this House has to face, just as the Americans have to face it.
This is the truth which I say this country and a Labour Government should voice. I trust that they will do it clearly and unmistakably in this debate today and that our Labour Movement and Government will stand with those who wish to bring this hideous war to as swift an end as possible and restore peace to that part of the world.Mr. Michael Stewart. [Interruption.]
rose—
Order. I called the Foreign Secretary. This is a grave debate. I hope that hon. Members will conduct themselves adequately today.
4.19 p.m.
My hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) has every right, as has everybody, to feel very gravely concerned about events in Indo-China.
I appreciate that many hon. Members wish to take part in this debate and I will, therefore, be as brief as possible. I intervene at this stage because I felt that the House would wish, at an early stage in the debate, to have a statement of the Government's view. My right hon. Friends and I, as we made plain yesterday when the request for the debate was made, believe it entirely right that the House should have an opportunity for an early debate on this very grave question. We all recognise that recent events in Cambodia are tied up with the terrible conflict that has raged in Vietnam for so many years. Throughout that conflict it has been the view of Her Majesty's Government, repeatedly expressed, that neither side could achieve, or should seek to achieve, an outright military victory or a 100 per cent. military solution. We have made this clear repeatedly and have, therefore, said that what both sides, and the friends of both sides, should work for is an agreed and negotiated solution. We believe that the instrument most ready to hand for this purpose would be a reviving of the Geneva conference. However, we have said that if, at any, time, any other form of instrument proved more acceptable, we would not be dogmatic about the exact Geneva formula. But we have said time and again that a search for a 100 per cent. military victory or solution by either side would fail and that we must work for a Geneva conference or whatever other instrument of negotiated solution might seem possible. We have also said that, in our view, the bare essentials of such a negotiated solution were that Vietnam, both North and South, should be completely neutral, free of foreign bases or foreign troops and that the people of South Vietnam should have a chance to decide their own future. [Interruption.] The people of North Vietnam have a Communist Government. If I could see a way of establishing, as the Geneva agreements require, free elections there, I would welcome it. What I have said are the bare essentials of a solution seem to me as being as near as one can get, in the light of present facts, to what was originally laid down in the Geneva agreements, and I hope that that commands general support. The tragedy is that while this war has raged in Vietnam, it has for a long time spread to Laos and Cambodia. Considerable parts of the territories of those countries have been used by North Vietnamese and Vietcong forces for the purpose of helping them to improve their military position in Vietnam. These events—this involvement of these two other countries—underlined the necessity to seek an agreed and negotiated solution. The hon. Member for the Isle of Ely (Sir H. Legge-Bourke) suggested that the Government might issue a White Paper listing all the efforts that we have made. I am not quite sure that we shall want to do that, and I do not want to weary the House now with what is a familiar chronicle. However, I believe that everybody knows that time and again we have sought, partly by appeals to our fellow co-Chairman, Mr. Gromyko, to the Soviet Union, publicly and privately, to see if there was any way by which an agreed solution could be reached. We were not successful. I say without offence that this was sometimes an occasion for a certain amount of merriment among hon. Gentlemen opposite. It is always fair for an Opposition to criticise the Government when they try to do something and are not successful. However, we were determined to make every effort to get an agreed solution, knowing how difficult that would be and how limited were the chances of success. About two years ago a new chapter seemed to open. Mr. Johnson, the then President of the United States, made a major decision about the use of military power against the territory of North Vietnam. As a result of his decision, talks in Paris were able to open. More recently, President Nixon set out the policy of the progressive withdrawal of United States troops, and he has repeated what the United States has said before, namely, that as part of a final agreed settlement there would be a complete withdrawal of United States troops from Vietnam. These developments, which stretched over two American Administrations and over the past two years, were welcomed by Her Majesty's Government. Indeed, they were in line with our own thinking, with the views that we had expressed to the Government of the United States and with the views that I think commanded support in all parts of the House. But to all of these there was one important and, I think, unavoidable qualification, namely, that if the United States was to proceed with this policy, we must expect some degree of constructive response from Hanoi. At one point during the last two years to which I have been referring some of my hon. Friends, some of whom had often been critical of the view of Her Majesty's Government on this matter, addressed an appeal to the authorities in Hanoi asking them to be, to put it in the broadest terms, forthcoming and constructive in the talks in Paris. I was very glad that that approach was made. I greatly regret that there was no response to it and the months have dragged by without success. It is against this background that we must look at recent events in Cambodia. Whatever differences of opinion there may be, a very large number of hon. Members in all parts of the House must have felt great sympathy with the continued efforts of Prince Sihanouk to keep his small, peace-loving, kindly country at peace in this maelstrom of South-East Asia. This is certainly what I felt. However, to do so he had to pay a terribly heavy price, which was a recognition that considerable parts of his territory would be used by Communist forces. This is not a partisan view. Prince Sihanouk himself made it very clear when, on 13th March, on leaving Paris to visit Moscow and Peking, he said:Later, he said:" I intend to ask Moscow and Peking to advise their friends in Hanoi and in the Vietcong to put a brake on their interference in Cambodian domestic affairs."
This was the dreadful dilemma with which Prince Sihanouk was faced. Before anyone in the House criticises him, let us be fortunate that this country is not in the position that his was. I believe that, according to his best judgment, he tried to keep his country at peace. He was obliged to pay a price for this in allowing it to be more and more used as a base for Communist forces. This is a fact which we must now take into account, because the areas which United States forces have recently entered in Cambodia could not be regarded in any real sense as neutral. For a long time no Cambodian authority has operated in them. They have been used by the Communist forces for administration, command, control, supply and retraining. My hon. Friend the Member for Ebbw Vale raised the question of the legalities of the matter. Neither he nor I are lawyers. I think that we must look at this as a matter of common sense. if a country is supposed, and desires, to be neutral, and is unable, with the best will in the world, to prevent part of its territories being used by one side in a dispute to promote its own war, can one really say that the other side in that dispute is absolutely bound by neutrality that has ceased to have real effect? I ask hon. Members, whatever they may feel, to think over this. I do not put it forward as a lawyer's proposition. It seems to me to be the common sense of the matter." I should like to affirm to my fellow countrymen that I will never tolerate either the infiltration of the Vietcong and Viet Minh or their interference in our affairs, because ours is sovereign country. Yesterday, I informed the friendly Soviet leaders of this matter."
Strange doctrine.
At any rate, in the light of this, a simple condemnation of the action of the United States, and of the United States alone, could not be justified either in common sense or as a useful contribution to peace-making in this area.
We have to notice that more than a month ago, shortly after the fall of Prince Sihanouk and before the United States had taken any action, Communist forces in Cambodia advanced still further, occupying what was supposed to be neutral territory. This House did not at the time think it right to make any expression condemnatory of their action. I think that we were right. It would not have helped if we had. Having so refrained, I do not think that it would be sensible, logical, or, what matters most, constructive towards peace for us now to make a single pronouncement on the actions of the United States. There remains one question of very great concern. The United States claims that in what it has recently done it is following the policy which President Nixon set forth. I do not propose to advance in the House detailed military explanations or justifications of policy. I do not think that it is for this House, which does not bear the responsibility of the conflict on either side, to do that. I merely mention that the United States claims that it is still pursuing the policy outlined by President Nixon. It is a fair question to ask—a question to which I think that the Government of the United States will address themselves—will this new action help or hinder that policy. There are some in this House who would like me to make a resounding pronouncement condemning what the United States has done—[HON. MEMBERS: "Hear, hear."] For the reasons that I have already given, I do not believe that this is justified in logic, common sense, or wisdom. I stand resolutely by what I said to the House when answering a Private Notice Question from the right hon. Member for Kinross and West Perthshire (Sir Alec Douglas-Home). I do not think that we have either the right or the duty to pronounce on the American action—Why not?
—for the reason that their decision was taken in the light of advice and information which, in the nature of the case, cannot be available to us.
I have already set out the reasons why I think it would be unreasonable for this House, not having condemned earlier violations of Cambodian neutrality, to come up with pronouncements against this one. Neither do I think it right for this House to make a pronouncement—rose—
rose—
I must ask my hon. Friends to wait a moment.
Neither do I think it is right for this House to make a judgment either way on a military decision which belongs to the Power which is engaged in hostilities in that area. I will give way, very briefly, to my hon. Friends who rose, but, following the example of my hon. Friend the Member for Ebbw Vale, I should not wish to give way after that.My right hon. Friend is surely aware that this House debated the aggression in Czechoslovakia and, quite rightly, condemned that aggression. Is the argument that my right hon. Friend is putting forward not an excuse? If we can condemn the situation in Czechoslovakia, surely we can equally condemn American action in Cambodia—[Interruption.]
Order. The hon. Gentleman is making an intervention, not a speech.
I am being as brief as I can. Is my right hon. Friend also aware that the Socialist International, only yesterday, made its position quite clear in opposition to the American policy?
On the last point, we must all decide by individual judgment and conscience.
On the first point, if there had been areas in Czechoslovakia which, for a long time, had been occupied by N.A.T.O. forces and used for N.A.T.O. purposes, might we not all have taken a rather different view on the Soviet action in Czechoslovakia?Does my right hon. Friend agree that in circumstances such as these there is no reason why we should not offer advice to the Americans in the spirit that they offered it to right hon. and hon. Gentlemen opposite in 1956, when they were engaged in equally stupid and indefensible actions in Suez? Could we not say to the Americans that we are offering this advice as friends in the way that they offered advice to the Conservative Government in 1956 regarding their actions in Suez?
My hon. Friend will realise that there is an important difference between the Suez situation and this one. At that time, the Government of this country chose to take armed action against another country, for which there was no international justification at all. We could not claim, as is the fact here, that certain parts of the territory were being used and had been used for years by another Power for military purposes hostile to us.
The House and my hon. Friends must understand this. This was a plain fact of the situation—that there had been for a long time grave infractions of Cambodian neutrality. This is a solid fact in the situation which does not apply to either of the analogies put forward by my hon. Friends—Will my right hon. Friend give way—
No, I will follow the example of my hon. Friend and conclude speedily.
I will go this far with my hon. Friend the Member for Jarrow (Mr. Fernyhough): it is right for us to draw the attention of the American Government to anxieties in this country, indeed in the whole world, that the action which they have taken might have the result of hindering rather than helping the policy of withdrawal on which President Nixon had pronounced.You can say that again.
I say it deliberately. I do not believe that it is right for us to pronounce this judgment. The United States Government are no doubt aware of the concern all over the world that their action might hinder rather than help the policy proclaimed by President Nixon. It seems to me that the task of this country is to assert and to continue the work for a policy of an agreed and negotiated solution, which has been ours from the start.
It was to that end that, last Friday, I invited the Soviet Ambassador to see me and gave him a message to convey to my colleague, Mr. Gromyko, urging again the reconvening of the Geneva conference. I believe that, violent though the conflict has been, and little as the prospect has seemed of establishing the rule of law, we should never forget that we hold this duty as co-Chairman. I have not yet received a reply, but I have seen, as the whole House has seen, reports of Mr. Kosygin's Press conference and the deep discouragement from there of any possibility of getting a conference on this matter. I also saw the chargée d'affaires from the United States Embassy and made clear to him, as in the last few sentences I have made clear to the House. the anxieties which people in this country and elsewhere must feel about the actions which his Government felt it necessary to take. Earlier the Cambodian Government urged that the International Control Commission should be reactivated. If this could be done with life and reality, it would help. It was Her Majesty's Government who did their best to promote that request and to transmit it to other Governments. We had to do that by ourselves, because our fellow co-Chairman would not act with us. We have also felt, throughout all this dispute, that it should be possible to bring this within the jurisdiction of the United Nations. So far, the hostility of North Vietnam and others has prevented this—What about the bombing?
I believe that it would be right to try again to see when an approach could be made through the United Nations. But I say this. finally—
rose—
No, I will not give way—
Would my right hon. Friend give way?
Order.
Would my right hon. Friend give way on this point?
Order. The Secretary of State is not giving way, so the hon. Gentleman must resume his seat.
On this point—
No.
My right hon. Friend is extremely discourteous.
I am trying to safeguard the interests of those hon. Members who want to speak in the debate—
Disgraceful shadow of a Foreign Secretary—
Order. The hon. Member for Smethwick (Mr. Faulds) must contain himself.
A Foreign Secretary of a Labour Government!
On a point of order. I distinctly heard the hon. Member for Smethwick (Mr. Faulds) refer to the Foreign Secretary as a "disgraceful shadow of a Foreign Secretary". Is this acceptable in the House?
Further to that point of order. The remark made by my hon. Friend is no more offensive to me than many remarks which the hon. Member for Mid-Bedfordshire (Mr. Hastings) himself has made, and I do not bother about them.
I hope that I have established to the House why I believe that an attempt by Her Majesty's Government to make solemn pronouncements of condemnation or of support for the American Government on this issue would be wrong—wrong in logic and basically wrong in that they would not help find a solution. Our duty is rather in line with what we have always done, to work, through whatever channels may be available, for that agreed and negotiated solution to which, in the end, the parties will have to come. Let us hope that there will not be so many more months and years passed and lives lost before the necessity for an agreed and negotiated solution is realised.4.47 p.m.
I warmly welcome the fair and realistic speech made by the Foreign Secretary. I am very glad that the Government have not allowed themselves to be bullied into a condemnation of American policy. It is quite right that Parliament should immediately consider the important new developments in South-East Asia. I am, therefore, glad that the hon. Member for Ebbw Vale (Mr. Michael Foot) asked for this debate, although I disagree profoundly with the intemperate views which he has expressed.
Every peace-loving person, must, of course, he concerned about the enlargement of the area of conflict and the possibility of wider repercussions upon East-West relations. But, having expressed our concern about the gravity of the situation, it does not follow that we should be right in accusing the Americans of irresponsibility. It is obvious that President Nixon did not lightly reach his decision to send American troops into Cambodia.It was not his decision; it was the Pentagon's decision.
He was well aware of the violent protests in the United States and throughout the world which this would provoke and he knew that he was endangering his prospects of re-election. History will judge whether he was right or wrong. But it is clear that he took this momentous decision because he felt that it was his duty to do so, and for no other reason.
It has been said that he ought first to have consulted the Senate. That is a matter for constitutional experts in the United States to argue about. It seems to me that to ask a Government to announce in advance their intention to launch a military operation, the success of which depends upon surprise, is like asking the Chancellor of the Exchequer to consult Parliament about devaluation. Throughout this tragic conflict there has been a tendency, as on so many issues, to apply double standards. There is a general outcry when American troops are sent into neutral Cambodia. Yet everyone seems to ignore the fact that the North Vietnamese for a long time past have established military bases and lines of communication in Cambodia, without the slightest regard for her neutral status. The hon. Member for Ebbw Vale said that a breach of neutrality by one country does not justify similar action by another. But it may make it inevitable. The Americans up till now have not reacted very vigorously over the presence of North Vietnamese forces in Cambodia—[HON. MEMBERS: "Oh!"]—but with the planned reduction of their troops in South Vietnam they evidently felt that they could not any longer sit still and allow themselves to be encircled by forces operating from the safety of neutral territory. The hon. Member for Ebbw Vale urged the need for a political settlement, but that is precisely what President Nixon and his predecessor have been striving to achieve. President Nixon has gone so far as to promise to withdraw American troops as soon as a settlement can be reached, which will allow the people of South Vietnam freely to determine their own destiny. It was the Americans who took the initiative in opening negotiations. They have made it clear that they would like to find a political solution at the conference table and that they are prepared to make concessions to secure it. Unfortunately, as the Foreign Secretary said this afternoon, the response from the North Vietnamese has so far been entirely negative. It seems that they are determined to keep up the fight until the Americans go home, after which they hope to be able to subjugate South Vietnam by force. It is said, and the hon. Member for Ebbw Vale made a great deal of it this afternoon, that the American action runs the risk of provoking an escalation of the war and might lead to a deeper involvement of Russia and China. This is perfectly true: and I have no doubt that this possible danger was never absent from President Nixon's mind. One can always avoid trouble by always giving way. One can always avoid provoking others if one is prepared never to be provoked by anything they do against one. But where would the free world be if it yielded to every sabre-rattling demand from Moscow or Peking? To dispatch American troops into Cambodia at this juncture was undoubtedly a crucial decision. But a decision not to do so would have been equally crucial. It is evident that President Nixon and his military advisers came to the conclusion—and I believe they were right —that, if they did not act in time, the continued defence of South Vietnam would become impossible.Will the right hon. Gentleman now give way?
No. It is not in the interests of the House that in a short debate like this hon. Members should give way.
It is not only the future of South Vietnam which is at stake. If it is seen that America is unable or unwilling to fulfil her undertaking to protect the independence of South Vietnam, all the other countries in South-East Asia will doubt the value of her similar promises to them. Communist rebellions, organised and armed from outside, would be launched throughout the area; and law-abiding citizens, who have no sympathy with terrorists, would feel it wise to co-operate with people who may soon become their rulers.Does not the right hon. Gentleman think that the Americans are terrorists?
Once it is thought that America is no more than a paper tiger, the lawful Governments in one country after another will be confronted with the same dangers as the Government of South Vietnam. It will not stop at Indo-China. Siam, Malaysia and Singapore, with whom we have treaty obligations, will be threatened in the same way. Nor would the repercussions of an American collapse or capitulation in Vietnam be confined to South-East Asia. It would inevitably affect the credibility of America's military assurances to Australia, to New Zealand and to Europe.
For a quarter of a century Europe has been free from war. That has been primarily due to the strength and solidarity of N.A.T.O. If once it was thought that America could not, in all circumstances, be relied on to stand by her allies and see it through, the deterrent power of N.A.T.O. would be gravely weakened and the whole security of Western Europe would be endangered. President Nixon told us that this was a consideration he took into account in reaching his decision. We should be grateful to him for this. In the present critical situation in the Far East, Britain's role is clear. It is not for us to sit in judgment on the Americans or to criticise them for a decision which was probably inevitable. As the Foreign Secretary said, we should concentrate on the one positive contribution which we can make. As co-Chairman, the right hon. Gentleman should continue to put all possible pressure on the Soviet Government to agree to reconvene the Geneva conference, without further hesitation. If the Russians are sincere in their fear of an escalation of the war, they have no possible excuse for refusing to co-operate in a new effort to reach peace by negotiation. Meanwhile, we should show some understanding for the grave problems which face our American allies in their efforts to restore peace and preserve freedom in South-East Asia.4.58 p.m.
I shall be brief, because I realise that a great many hon. Members wish to speak in the debate. I shall confine myself to speaking for under 10 minutes, subject to interruptions.
This is an emergency debate on Cambodia and the hon. Member for Ebbw Vale (Mr. Michael Foot) is to be congratulated on making it possible. It is, nevertheless, basically a debate about the escalation of the war in Vietnam rather than on what is happening in Cambodia. It is an extremely serious debate against a background in Cambodia of more blood, death and misery, a debate about the rights and wrongs of what America is doing in Vietnam and what the future of it is to be. It is also inevitably, as the Foreign Secretary said, a debate about what Britain should say about this, because, as I think he recognised, we can do remarkably little. Truth, as we in this House have a unique capacity for recognising, is always the first casualty in war. If we consider what is said by the Americans and what is said by the N.L.F. in Vietnam, we realise how real that is and how emotions generated by war discourage objective analysis and clear and fair thinking. In the view of Liberals, the Americans' commitment in Vietnam, well intentioned as it was—and I credit them as being well intentioned initially—arose from a basic flaw in their analysis of the nature of Communism in Asia and, indeed, of what can be achieved about it anyway. It never occurred to John Foster Dulles and others who followed him that Communism in the East contains much more of nationalism than Communism perhaps anywhere else. Nationalism is such a strong element in Communism in the East and influences its popularity so much that we cannot discount it. I do not think, as some Conservatives appear to think, judging by their interruptions in the Foreign Secretary's speech, that we are faced with a choice between peace by appeasement and peace imposed. I think that the Americans must recognise that, long after they are gone—and go they must from Vietnam, either sooner or later—the Vietcong will still be there. Vietnam is, after all, the home of the Vietcong and South Vietnam is the home of most of them. They cannot, in the nature of things, be extirpated, as the hon. Member for Ebbw Vale himself said, unless the Americanes are prepared utterly to lay waste the country that they are pledged to defend. It is for this reason, looking around the world, that we realise that the equivalents of the N.L.F., whether in Aden, India, Cyprus, or anywhere else, are in the end bound to succeed, and are bound to triumph over vastly superior power. This is not to say that it always means a better and fairer form of government for the individual. I am against Com- munism. Its consequences, its behaviour and its motives are totally alien to the things that, as a Liberal, I believe in. I also recognise that when Britain withdrew her imperial presence, this did not necessarily lead to fairer government for the individual person in the places we were before. But we ourselves have had to face the fact that some time we have had to go. The Americans have to recognise that, whether they go today, tomorrow, or next year, or later, they have to go ultimately. Military force can restrain for a period but it can never achieve an ultimately satisfactory solution. The Americans have fallen into a fatal error, understandably from my point of view. In opposing Communism, they have often put themselves in the position of propping up Right-wing autocracies which are certainly no better, and sometimes much worse, than Left-wing autocracies. Neither is acceptable to me. The problem for the democrat is how one distinguishes between autocracies of the Right and the Left and how one deals with them. I am a bridge rather than a boycott man, but that is another question. What is incontrovertible is that, by her defence of the status quo in Vietnam and elsewhere, America puts herself, in the eyes of the people of the underprivileged world, in the position of defending a situation which condemns them again, it seems permanently, to a subservient role and prevents them making their own decisions. I am a great admirer of the United States and many of her people and many of the things she does, but she is trying to play Canute to the ineluctable tides of change in history. The dynamic of change will always in the end overcome the inertia of privilege. The very important reality not yet mentioned in the debate is that China's space shot has resulted in a new strategic position in the Far East, in that she can reprise nuclear attack and, therefore, is potentially in a militarily conventional position in the Far East similar to that which America occupies in the Caribbean. Radicals of many kinds are in the habit of boasting of their righteousness rather more for the good of their consciences than for constructiveness. The Foreign Secretary is conscious of that. I certainly think that, in Britain, our job is not to ally ourselves uncritically with the forces of people whose behaviour is perhaps worse sometimes than the American behaviour. Our position rather is frankly to say to our American friends and brothers that we recognise their feelings of responsibility as the world policemen because we once tried to do it ourselves. We recognise what they want to achieve, but in the world as it is no one country, however good it may be, however right it may think itself, has the right or capacity—certainly not the capacity—to seek to do this sort of exercise. We in this House have to say to our American friends, "We know that you are a more democratic country than any of the Communist countries and want to do the best you can for the world. But you are placing yourselves increasingly in a situation where you are defending that which is essentially undemocratic. You are defending and oppressing and forcing people into extreme positions, which in many cases they do not want to occupy, by what you are doing. Therefore, you are wrong." We know that the N.L.F. were in Cambodia before the Americans, and were not there for a holiday, but that is not the point. The basic issue we face is not that at all, but wheher America stays in Vietnam or not. We in the Liberal Party believe that she is wrong to stay there, and that she must, as quickly as she can, seek to extricate herself.rose—
rose—
Mr. Philip Noel-Baker.
On a point of order, Mr. Deputy Speaker. My hon. Friend the Member for Inverness (Mr. Russell Johnston) gave way to me.
I understood the hon. Member for Inverness (Mr. Russell Johnston) to have resumed his seat. Mr. Philip Noel-Baker.
rose—
rose—
Order. I called Mr. Philip Noel-Baker.
On a point of order, Mr. Deputy Speaker. I gave way to my hon. Friend the Member for Bodmin (Mr. Bessell).
The hon. Member for Inverness should have indicated to the Chair that he had given way. The Chair assumed that he had resumed his seat and called Mr. Philip Noel-Baker.
May I interrupt my hon. Friend?
Order. I have called Mr. Philip Noel-Baker.
On a point of order, Mr. Deputy Speaker. The hon. Member for Inverness (Mr. Russell Johnston) was on his feet when the hon. Member for Bodmin (Mr. Bessell) got up to interrupt. There was no doubt in the minds of those who saw the incident that he was giving way to a question from the hon. Member for Bodmin.
I am in as good a position as anyone in the Chamber to see what happens. I have called Mr. Philip Noel-Baker.
Further to that point of order. My hon. Friend the Member for Inverness has made it clear that he was giving way to me and there is no doubt in the minds of anyone in the Chamber that this was the case. In these circumstances, surely I may be allowed to make my intervention and my hon. Friend allowed to complete his speech.
The hon. Gentleman is making it very difficult for the Chair, especially in what is already a rather truncated debate. I had decided that the hon. Member for Inverness had resumed his seat and I called Mr. Philip Noel-Baker. I cannot go back on that decision.
My hon. Friend and Member for Inverness made it clear a moment ago that he had not resumed his seat, but had given way to me.
The hon. Member for Inverness stated that after the Chair had decided that he had resumed his seat. I can see the Chamber much better than other hon. Members. I am sorry, but I have made my decision.
Further to that point of order. With due respect, Mr. Deputy Speaker, there is, I think, a misunderstanding which could easily be resolved in 30 seconds if you would allow the hon. Member for Inverness (Mr. Russell Johnston) to finish his speech.
Order. It would be quite wrong for any change to take place at this stage. No doubt the hon. Gentleman may get an opportunity later to put his point.
5.10 p.m.
I have no objection to waiting for an hon. Member to answer a question, but I am obliged to follow your Ruling, Mr. Deputy Speaker, and I do so. I agree with the Foreign Secretary that it is impossible to make a sane evaluation of the situation in Cambodia today except against the background of the last 16 years of the history of Vietnam. Sixteen years ago, thanks to the work of Lord Avon and Mr. Khrushchev, who did admirable service with Chou En-lai, the French Colonial war was ended. The Geneva agreements were accepted by all the parties, including the United States.
Vietnam, Cambodia and Laos were to be disarmed and neutralised, elections were to be held, all foreign forces were to leave Indo-China, and an amnesty was assured to all who had fought against the French. It seemed that at long last an epoch of peace and prosperity was opening for those unhappy peoples to whom Western and Japanese imperialism had brought so much suffering for so many years. This was a great victory for those who wanted peace and international understanding. But we must remember that if Ho Chi Minh accepted the Geneva agreements it was because of the pressures and the assurances from Mr. Khrushchev and Chou En-lai. The fair hopes of 1954 did not last very long. The ink was hardly dry on the agreements before the United States C.I.A. began its disruptive and nefarious work. It chose Diem to be the dictator of South Vietnam; it gave him full support, military, financial, economic, while he destroyed the Geneva settlement. Already, in 1955, he said that there would be no elections. He knocked the very bottom out of the whole agreement. By that repudiation of solemn international agreements the whole work of Lord Avon in Geneva, was undermined. Diem withdrew the amnesty offered to the Viet Minh. He put them into prison, he shot them, he tortured them until at last, in despair, they organised the resistance which became the Vietnam civil war. For nine years the C.I.A. gave Diem its full support. After he was murdered, it turned out the civilian Prime Ministers who took his place and put in Marshal Thieu and Marshal Ky to run the corrupt military dictatorship which passes for a Government today. Laos did well after 1954 for a period of years. The popular Prime Minister, Prince Souvana Phouma, kept his country united, neutral and at peace. In 1960, the C.I.A. drove him out and replaced him with the corrupt and incompetent General Phoumi Nosovam, whose only merit was his extreme Right-wing, not to say, Fascist, view of policy. Two years later, President Kennedy was obliged to put Prince Souvana Phouma back into power, but the damage was done. The situation has worsened progressively ever since. The present Cambodian crisis began when the C.I.A. deposed the neutralist Prince Sihanouk six weeks ago. Prince Sihanouk may have defects, he may have made mistakes, but for many years he showed statesmanship of the highest order. Until six weeks ago, in spite of appalling pressures, he kept his country, as the Sunday Times said the other day, united and at peace. He tolerated the existence of Vietcong bases on the borders of his frontier with South Vietnam—bases on Cambodian soil, yes. Those bases may have been important, although the United States Army seems to find it very difficult to locate them now. Perhaps they were important. But on Prince Sihanouk's other frontier, in Thailand, the United States had 40.000 troops and great air bases, and they were bombing North and South Vietnam from those bases. On every raid they violated the neutral air space of Laos and Cambodia as they went. Whatever may be thought of Prince Sihanouk's policy and views, however things appeared to him, the C.I.A. had no right at all to turn him out, to organise a coup and to put in a Right-wing militarist dictator, just as it had no right, under cover of President Nixon's plan to withdraw 150,000 troops within a year, on condition that the Vietcong and Hanoi should not make provocative concentrations—it had no right to prepare and execute the Charter-breaking invasion of Cambodia which has aroused world-wide condemnation, and which we are, I hope, condemning this afternoon. I said "Charter-breaking invasion", and that is very important, for the central fact, the essential fact about this crisis is that Cambodia, like the United States, is an independent sovereign member of the United Nations. If President Nixon had a complaint against Cambodia, his only proper course was to take it to the United Nations. And the only proper course for our Government now—and here I go some distance with the Foreign Secretary, further than some of my hon. Friends—the only proper course for our Government now is to take this U.S. invasion of Cambodia to the United Nations, to join with other Governments in summoning a special Session of the General Assembly, as Chairman Kosygin summoned a special Session of the General Assembly after the six-day war in Sinai in 1967. Hon. Members opposite may say that it is Utopian to think that the General Assembly could bring about any practical results. Nothing is so Utopian, nothing is so founded on illusion, as to think that we can drift from one crisis to another, allowing the United Nations to be set aside, discredited, rebuffed, and still avoid the final cataclysm of a third world war. That is Utopian; that is founded on illusion. We are celebrating the 25th anniversary of the establishment of the United Nations. That does not conceal the fact that the United Nations today is in dire straits; that its Charter, the foundation of its authority and prestige, is fast becoming a scrap of paper. I remember that in May.. 1938, only 15 months before the war began, Sir Winston Churchill toured Britain for the League of Nations Union, demanding that our Government should lead the League in stopping Hitler. In 1944, he wrote to Robert Cecil:What the world needs today is not only the ending of the invasion of Cambodia; Cambodia is a small matter; it needs the ending of the Vietnam war, the ending of the anarchy which confronts us. It needs the application, at long last, of Lord Avon's Geneva agreements of 1954. It needs the abandonment of the militarist thinking and the militarist polices which still dominate and still curse the world. Hon. Members may say that it would be a miracle if the General Assembly of the United Nations produced this result. Perhaps we need a miracle to save the world. But let us remember that world opinion is still an instrument of enormous power, and that no human institution can organise world opinion on a world-wide scale except the General Assembly. Let us remember that 14 years ago President Eisenhower, Mr. Dulles, Mr. Lester Pearson and scores of other Foreign Ministers used the Assembly to get France and Britain out of Egypt. Let our Prime Minister and our Foreign Secretary use this instrument today to get a new start in world affairs. Would it be anti-American to do to President Nixon what President Eisenhower did to us in 1956? I remember the words used by Robert Kennedy, when he announced his candidature for the presidency of the United States in 1968:" This war could easily have been prevented, if the League had been upheld by its members with loyalty and courage."
Confronted with world anarchy, world hunger, war and the deadly arms race. Britain cannot stand aside today." I have talked and listened to the young people of our nation and felt their anger about the war they are sent to fight and the world they are about to inherit. In private talks and in public, I have tried in vain to alter our course in Vietnam before it further saps our spirit and our manpower, further raises the risks of wider war, and further destroys the country and people it was meant to save. I cannot stand aside from the contest that will decide our nation's future."
5.23 p.m.
I hope that the right hon. Member for Derby, South (Mr. Philip Noel-Baker) will forgive me, and I am sure that the House will forgive me, if I do not follow him either through his history of the last 16 years in South-East Asia or into the aspirations, which he realises to some of us seem visionary, of the concluding parts of his speech. For we have a very practical, precise and instant question before the House this afternoon.
It is not, however, as the form of the debate might perhaps suggest, whether this House should speak or hold its peace on the recent developments in Indo-China. It is not whether Her Majesty's Government should associate themselves with or disassociate themselves from the policies and the actions of the United States Administration. If there was ever a time when we still had that choice, that time has long gone past. What has been said in this House and by Her Majesty's Government for years has made it impossible for us to be silent now without being associated. I turned up this morning an old speech I made over four years ago, when I said:After what has been done by Her Majesty's Government in this matter over the past four years, there is no longer available to us the silence which does not mean consent. Silence now means consent and, whether we like it or not, we have to accept that the option of neutrality in word is no longer open to us. Very often the actions of nations do not depend for their wisdom or their morality upon absolutes. We have to judge whether they be wise or right according to the circumstances and often, above all, according to their practicability. If it were possible for the United States by military action to secure to the people of South Vietnam independence, security, self-determination, self-government, almost every hon. Member of the House would be willing to bless, at any rate to accept —American military action in South-East Asia. The central fact, the fact that we dare not blink, that we do an injustice to ourselves by pretending not to see, is that American military power cannot secure any specific political result in South-East Asia. It is beyond the capability even of the immense force of the United States to secure the kind of settlement, the kind of situation, which they and perhaps we would like to see in South-East Asia. This is a war in which the United States can win, if it wishes, every battle; but it is a war which the United States is bound to lose. This depends not upon the changes and chances of military events nor upon whether that port is bombed and this supply centre is invaded and extinguished. It depends upon the underlying facts of the situation. From the very inception of United States intervention in South-East Asia, it was predictable that the United States could not win, that it could not succeed by military means in achieving its objects; and I mention, as the best proof that this was predictable, the fact that it was predicted. My right hon. Friends who sit upon the Front Opposition bench will bear me out when I say that from the time when I first was entrusted to speak on affairs of defence on behalf of my party I advised them that there could be no ultimate military success for the United States in Vietnam and that, sooner or later, the outcome would be that the United States would have to disengage in circumstances of embarrassment not easy to distinguish from military defeat. This was a prediction made not only in private, but in public, too. I will trouble the House with one further quotation, a self quotation. I do so only because of its curious relevance to what was said by the Secretary of State earlier this afternoon. I wrote this in August, 1966, nearly four years ago:" As the Americans have ground deeper and deeper into the tragic morass of Vietnam. Britain's voice has been that of the obedient commentator. Each successive American act received prompt British endorsement. When they started bombing North Vietnam the Government said they agreed—when they stopped bombing North Vietnam the Government applauded them—when they started bombing North Vietnam again the Foreign Office could not wait to issue a statement saying that they understood and supported the decision. The Soviet Union could hardly have expected more favourable comment from its satrapies in Eastern Europe."
Everything that has happened during the last four years, every operation, has gone to reinforce the fact of the inability of the United States to secure her object, or indeed our object, in South-East Asia by military force and the inevitability, sooner or later, of her quitting the field and withdrawing her forces. If by a stroke here or there the situation could be altered, then we might say with the Secretary of State, "The President has good military advisers; he has advice and information which we cannot share in this House"; but our judgment does not depend on military advice, on a particular stroke, a particular battle, or a particular form of tactics. I have no doubt that the United States forces can eliminate the Vietcong base which has so long flourished—of course it has—in Cambodia. I do not doubt their power to do that any more than I doubt their power to succeed in any other individual military operation. But when it is over, the underlying facts of the situation reassert themselves like the tide washing out footmarks in the sand. The ultimate fact reasserts itself: the Americans do not live there; everyone knows that their presence there, long or short, is destined to be temporary; everyone knows the realities which will prevail over them. This is the background against which we in this House must judge what we shall say to Her Majesty's Government and with what voice we wish the Government to speak. There is nothing in friendship, there is nothing in alliance—and there is friendship and there is alliance, though not in Indo-China, between ourselves and the United States—which requires that we should encourage a friend or an ally in a course manifestly self-defeating, a course destined to end in ignominy and failure. It cannot be to the benefit of the United States, it cannot be to the benefit of this country—whatever view we take of the defence of the United Kingdom—it cannot be to the advantage of anyone in South-East Asia, that this continuing experiment to prove a result which was already knowable, predictable and predicted four or five years ago should go on any longer. The extension of the conflict, if one likes to describe it so, which has just taken place presents us with the necessity of deciding for ourselves what we shall say to our friend and to our ally. I believe it is the view of many people in this country, and of many hon. Mem- bers on both sides of the House— though, if that were not so, still I believe that wisdom and common sense require it—that we should say to our friends and allies: "At last, at length, enough!"" If I had to guess how peace may one day come in Indo-China, I would imagine the process to commence not when a Geneva Conference assembled again under its co-chairmen after so many years, but when the United States began to withdraw the forces and, like the Snark, `softly', if not suddenly ', to 'vanish away '."
5.35 p.m.
I should like to say one or two words to the right hon. Member for Wolverhamton, South-West (Mr. Powell), who has made a characteristically brave speech, as one can see from the look of his hon. Friends sitting alongside him. But he based his speech on a false hypothesis. It has always been my understanding that the Americans, apart from a few American military advisers, have never considered that this war could be won. The real issue is the status and sovereignty of South Vietnam. This is the important major element in this debate.
My hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) made, as always, an eloquent speech, but it was somewhat partial. I am long used to the intolerance of some of my hon. Friends when another point of view is put forward. This was certainly noticeable when my right hon. Friend the Foreign Secretary spoke. I wish to make one or two observations based partly on some personal experience and also on my own judgment. I was the only Member of this House to observe the elections in South Vietnam two years ago, which I regret. The elections were nothing like the Westminster pattern, but in South-East Asia they were in a sense unique. Although the elections showed that the contest was between individuals whose policies were not all that wide apart, it was nevertheless a step in the right direction—a genuine attempt to evolve some democratic institutions, in stark contrast to the situation in North Vietnam. It has never been my view that the ramshackle regime created by Ho Chi Minh is preferable to the ramshackle regime created by circumstances after the Geneva conference of 1954. We are not talking about a perfect situation. Neither Government is particularly attractive. They are both military regimes. But there is a chance in South Vietnam to do better. The real issue of this debate is not Cambodia. It is South Vietnam and its ability to survive. The hon. Member for Inverness (Mr. Russell Johnston) on behalf of the Liberal Party—and I am sorry he is not here—argued the curious case that although Left-wing Governments may be more unpleasant than Right-wing Governments, somehow or other they ought to be able to survive. The issue is whether the people themselves should decide freely whether a Left-wing Government survives and not for Governments to be imposed upon them from the outside. What we have seen over the last 20 years is a fight to impose government from the outside—By the Americans.
With the involvement of two great Powers the main issues to which I am trying to draw attention are sometimes lost sight of. There is considerable evidence that the infiltration of the Vietcong down the Ho Chi Minh line has been the way in which pressure has been kept up against the South. When I was in Vietnam during the elections, I met lots of intellectuals like some of my hon. Friends. They were very interested in doing some of the things we have been able to do in the past 50 years. A lot of them were extremely well read and were conversant with some of the books written by social democratic thinkers. They were not Fascists or reactionaries, but they are bitterly opposed to Communism. That is their right. It is our right. So it seems to me that this is the real crux of the argument.
The Vietcong do not speak for the whole of Vietnam, so it is important that the issue should be made crystal clear, although the action taken by the United States Government in Cambodia raises one's forebodings. As the right hon. Member for Wolverhampton, South-West said, once this kind of involvement starts, it is extremely difficult to know where it will stop. But I am convinced that the Americans do not intend to widen the war. Their objective is only to protect the sovereignty of South Vietnam. The Americans are not out to conquer North Vietnam. That has never been their aim. In the circumstances, we must try to be as objective as possible. I know the passions that can be aroused on this subject. I saw some of the horror in Vietnam. I went into the demilitarised zone, as other hon. Members have done. I went down into Mekong Delta and saw some of the horror of the war. But to be in favour of the sovereignty of South Vietnam does not mean that I or anyone else who supports that proposition is in favour of horror and war. The ability to achieve peace in this situation rests in many hands. Certainly the initiative for peace does not lie only with the Americans. One sees the lack of progress which has been made in the so-called peace talks in the last 18 months, during which not one word was uttered by some of my hon. Friends about the steady infiltration into the South, which was a de-stabilising factor. It is clear that responsibility for this war must rest more evenly than some of my hon. Friends think.Will my hon. Friend give way?
No, I will not give way. The only hope is for a negotiated settlement. There can be no military victory.
Tell that to the Americans.
The Americans are fully aware of it. The only way that this ghastly, terrible war can be brought to an end is by achieving a negotiated settlement at the conference table in Paris.
5.34 p.m.
We faced a very similar situation some eight years ago to the one that we face today. In 1962 the Communists looked like taking over Laos, and the Government of the day, in which my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) and I both served, dispatched a sizeable contingent of the Royal Air Force to Thailand to help exercise pressure in favour of a peaceful settlement, which I am glad to say was achieved.
I was at the Air Ministry at the time, and I went out to Thailand to see our Air Force detachments on the spot, after which I went on to Saigon to speak with the South Vietnamese and the American authorities. It is because of that experience and subsequent visits to the area that I venture to intervene in what necessarily must be a short debate. I came back from my first visit with two clear ideas about the situation in South-East Asia, and subsequent impressions have reinforced my conclusions. The first concerned the consequences of a possible Communist victory in Vietnam. I found in Laos, in Cambodia, in Thailand, in Malaysia, in Singapore, in Australia and in New Zealand a clear consensus that if the Communists prevailed in Vietnam, still more if they prevailed in the rest of former Indo-China, they would prevail in the whole area. I know that the domino theory is not very popular in this country today. But I have observed again and again that it is difficult to find any serious statesman anywhere in South-East Asia who does not share it. What is more, if one reads Communist literature on the subject, it is clear that both in China and in the Soviet Union they are domino men, too. They think that if there is a break-through in Vietnam and Cambodia, it will spread through the whole area. The other conclusion to which I came concerned the great difficulty under which the Americans labour. The North Vietnamese and their backers have a clear and precise objective. It is to win the war and take over Saigon. That was not the American view at any stage, as the hon. Member for Hornchurch (Mr. Alan Lee Williams) made clear in what I thought was a remarkable speech. The Americans have never tried to win the war. It might have been easier for them if they had. I dare say that they could have gone to Hanoi during the Cultural Revolution without any major international complications. But that has not been their aim. They have worked for a settlement, and it is difficult to define a settlement clearly because it has to be arrived at round a conference table by give and take between both sides. The Americans have fought with one hand tied behind their backs, and they have bent over backwards to try to get a settlement. I think that the hon. Member for Ebbw Vale (Mr. Michael Foot) might at least have paid tribute to the efforts made by President Johnson and President Nixon in favour of a settlement by stopping the bombing, with- drawing troops and undertaking to withdraw more troops. I do not think anyone can doubt that the Americans were sincere in their search for a settlement which would have kept South Vietnam out of Communist hands. They did not seek more than the maintenance of neutrality in Cambodia and Laos and a South Vietnam which was not dominated by the Communists. Unfortunately, they were misunderstood by the Communist world, and perhaps we are all a little to blame for this. We make such great efforts to appease our enemies that they read our good will for weakness, and they become the victims of their own propaganda. Those who advocate appeasement, like Senator Fulbright and Senator Mansfield, are built up in the Communist Press and taken much more seriously than the forces that they represent in their own country. All the talk of war weariness and student demonstrations assumes a proportion on the other side of the Iron Curtain which we who live among it know is not true.Will the right hon. Gentleman take note of the fact that President Nixon was elected on the promise to end the war? Does the right hon. Gentleman think he is doing it?
I said just now that I thought that President Nixon was bending over backwards to try to get a settlement. What the hon. Gentleman will also know is that the failure of the Communist Powers to respond to the American effort will stiffen American opinion in a way that they have not foreseen. We had a similar experience in this country. The Germans thought that we were a pushover when we surrendered at Munich and Prague. They did not expect us to fight for Danzig. The Communists may have a rude awakening.
There has been no Communist response of a positive kind. There has been a stepping up of the fighting in Vietnam and an increase of the fighting in Laos, and we have seen in the last few weeks the very sizeable build-up of Communist effort in Cambodia. This was not a consequence of the coup dďéetat in the Cambodian capital. It happened before that, as the Foreign Secretary rightly said. Indeed, Prince Sihanouk protested against it, and the reason he was kicked out was not because of the C.I.A., but because his protestations directed to the Communists failed to bring about any diminution of Communist infiltration into his country. What would be the implications of a Communist occupation of Cambodia? A glance at the map shows that Cambodia totally outflanks Vietnam, and that the tip of South Vietnam is 20 minutes' flying time from Singapore. What was President Nixon to do in the circumstances? If he left the Communists to establish themselves in Cambodia, Cambodian neutrality would be a thing of the past. If they were to dominate the whole country, including Port Sihanoukville, how could his plan to get Vietnamisation succeed? How could he withdraw the American Army without handing over South Vietnam to the Communists? He had no option but to try to restore Cambodian neutrality, which meant trying to break the Communists' growing hold on the country. I may be told that the present Government in Phnom Penh are not so neutral. Neutralism and neutrality are not the same thing, as Switzerland, Sweden and Austria have proved. What is essential is that the Communist grip on the country should be broken if its neutrality is to be restored and if the Americans can hope to proceed with their plans for Vietnamisation and withdrawal. I turn to our part in all this. We are directly concerned in this issue on two grounds. We have great interests in South-East Asia. Malaysia, Singapore, Australia and New Zealand are fellow members of the Commonwealth, and, as I said, it is only 20 minutes' flying time from Vietnam to Singapore. We also have a formal connection as co-Chairman of the Geneva conference, and I should like, if it does not cause them too much embarrassment, to pay tribute to the Government for the determined attitude which they have pursued from the beginning of their time in office in support of what I should like to call Sir Anthony Eden's settlement and the attempt to make it stick. Under pressure from the Left wing of their party the Government sponsored the mission of the right hon. Member for Leek (Mr. Harold Davies). They learned, as the right hon. Gentleman did, from bitter experience the intransigence of Hanoi, and everything that has happened since has confirmed that intransigence. What have the Government of Hanoi done? They have extended the war. It is not the Americans who have extended it. It was not the Americans who stepped up infiltration into Cambodian areas. It is not the Americans who are marching on the Cambodian capital.What should we do?
An Hon. Member: Stick to aviation.
The hon. Gentleman's remark is frivolous. If his party had stuck to my aviation policy there would be no complaint.
It seems clear that we should give our wholehearted moral support to the President of the United States in the action that he has undertaken. I have no doubt that it is politically justified. My right hon. Friend the Member for Wolverhampton, South-West has raised doubts about whether it is militarily justified. None of us can tell, but I do not accept his rather Marxist concept of the inevitability of defeat. I called it "Marxist"; perhaps I was wrong. It seems that there was an acho of his immigration views in what he said. He said that the Americans could not stay there because they did not belong there. I am not sure that this is a view of history which commends itself to me or to serious historians on either side of the House. My second proposal is this. I know that the Government want to withdraw from South-East Asia, but they should say that until this crisis is resolved they will not try to stick to any timetable of withdrawal. It would be irresponsible, at a time when the clouds are gathering again over South-East Asia, and when the prospect looks very dark, for Britain to pull the rug out from under Malaysia, Singapore and Australia. But there is a positive side, too, and that is what we can seek to achieve as co-Chairman of the Geneva conference. As the Foreign Secretary said, Mr. Kosygin was pretty discouraging yesterday, and the fact that Mr. Brezhnev is in Prague today—these are the gentlemen with whom we have to negotiate as coChairmen—shows that we shall get cooperation from the Soviet Union on this issue only when they are convinced that their side cannot win. What we have to look for is a settlement in which neither side extends its sphere of influence. I felt so much sympathy and respect for what the Foreign Secretary said that I hesitate to cross swords with him on any point, but there is one matter about which I am not altogether happy. He said "Let there be free elections in South Vietnam to see who can win", and when I asked "What about North Vietnam?" the right hon. Gentleman replied that that was already under Communist control. He seemed to accept that a robber can take a person's pocket-book and then discuss with him whether to take his wrist-watch. I think that this debate is very important because the forecast of it in the Press has cast a certain shadow over our political life. Broadly speaking, since the end of the Second World War there has been a general consensus in successive Parliaments that we were on the side of the free world, but now there is emerging increasingly a group of hon. Members who either want the Communists to win in South-East Asia, or at any rate, do not mind if they do. I do not think that many hon. Members on either side of the House dispute that. Some hon. Members would rather see the Communists win or, if the American withdrawal results in this, they would not greatly mind.Accepting for the sake of argument that the right hon. Gentleman's thesis is correct—though, in fact, I reject it—how does he think that the cause of anti-Communism is served by a military operation which has the effect of driving the Russians and the Chinese into each other's arms when, from his point of view, the more they are on bad terms with each other the better?
The hon. Gentleman is a little esoteric. I do not see much sign of South-East Asia driving the two into each other's arms.
It is clear that the speeches and views advanced by a number of hon. Gentlemen opposite have the effect of wishing for a Communist victory, and in many cases are motivated by that wish. They are entitled to their views. This is a free country. I am not suggesting that they are Communist agents. They do it for free. But we are entitled by the same token to draw our own conclusion, and they must not complain if, as a result, we label some of them crypto-Communists or fellow-travellers. There are, of course, broad differences between the Labour Party and the Conservative Party, but it is my view that the differences which separate the bulk of our two parties are as nothing compared with the great divide which separates the free world from the Communist world. That is why I was glad to hear the Foreign Secretary speak in terms which dissociated the Government and the majority of the party opposite from the Left wing below the Gangway and showed that the teachings of Ernest Bevin have not been forgotten by the Labour movement.6.0 p.m.
The last words of the right hon. Member for Brighton, Pavilion (Mr. Amery) were in keeping with much of his speech. He harked back to the great days of a very great man, Ernest Bevin. The basic theme of his speech was based on many of the assumptions of the 1940s and 1930s and even further back. His argument that the fact that a nation should not be on another nation's territory is not of itself an argument why it should leave is, for him, a perfectly logical proposition. It is a good old-fashioned imperialist proposition with which he agrees. That is his point of view.
What is disturbing to many of us is that the right hon. Gentleman can hold the views that he does and find himself in sympathy for and support of my right hon. Friend the Foreign Secretary. That is one of the things which have concerned many of us on this side. The right hon. Gentleman's speech was based upon the simple containment of Communism—one form of Communism, as though there were not others. It is the simple proposition that, somehow or other, one can maintain in South-East Asia in the 1960s and 1970s Right-wing Governments because they have the support of outside forces. There is no evidence that that is so. It has been tried for a long time now and, indeed, part of the price we have paid in that part of the world for pursuing that policy is that we have probably lost the opportunity of getting Governments which might well have been less extreme because they would have been left of centre, particularly in Vietnam. Now we are faced with Governments representing the most extreme forces. Governments must accept the simple fact that there are choices of Governments of the Left in South-East Asia, but there is no choice now in South-East Asia between Governments of the Left and Governments of the Right because the latter cannot continue to exist indefinitely. The speech of the right hon. Member for Wolverhampton, South-West (Mr. Powell) was more important than the speech of the right hon. Member for Brighton, Pavilion, for two reasons. It proved conclusively that the debate cannot be seen in terms of pro-Americanism and anti-Americanism, and neither can it be seen in terms of fellow-travellers and loyalists. The right hon. Member for Wolverhampton, South-West has been called many things, and I have added my share to the glossary, but the accusation of being an extreme Left-winger is not prominent among them. That accusation has not been levelled at me, either. But I found myself agreeing with his basic proposition on the whole sad story of Vietnam, which I agree with him is a war which could never have been won and shows no sign of being won. I do not want to go into the merits of the Vietnam war, since that is not the argument in the debate. The right hon. Gentleman said that we have a very precise question to answer in this House, and I agree. That question is: what is our view of the American action in Cambodia? We have to have a view. I also agree with him that, at a time when even traditional neutrals have a view, the British Government cannot say that they do not have a view, that they believe that it is all very sad but that we must not come down on the left hand too far but must recognise the difficulties and not come down too far on the right hand. Britain cannot hold that stance. Either we are opposed to this action or, by implication—and this is a perfectly defensible proposition to take up—we support it. It is impossible for a country to opt out of having any view at all. There are two arguments here. One is the merits of the American invasion of Cambodia and the other is whether the British Government can, should or have expressed a view today. This point worries me most of all. For years Her Majesty's Government have faced the problem, including when I had the honour to be a member, of what was their view in relation to the whole Vietnam question. Inevitably—and I give no secrets away—with a large number of people involved there are different points of view. I support solidly now and in retrospect the Government's policy on Vietnam then because the Government said, in effect, "When one has made all the calculations, it may be possible that we can make a contribution to peace, that we can exert an influence, that we can invoke the special relationship, that we can provide a bridge." Those were meritorious ambitions, and the Government tried every possible way to achieve some participation in a settlement. Hon. Members opposite should think back and remember how many times the Government's sometimes unconventional efforts were greeted with derision and mirth by them, but I think the Government were right to try every conceivable way they could to achieve a settlement. But those efforts had only one thing in common: they did not work. We discovered that the special relationship did not exist in real terms. We discovered that, try and try as we could and should, we could not deliver. The Government were right to try, but at the end of the period we had not got anywhere. Now, when there is a new move, we have to accept that hiding our views or trimming them gets us nowhere and, therefore, there is no reason for not speaking openly and clearly what our views really are. My right hon. Friend the Foreign Secretary expressed the difficulties, and it is an incredibly difficult position for a British Foreign Secretary to express views hostile to a long-time ally. But there can come a time when loyalty can become subservience, when the failure to express a point of view is of itself not an assistance to an ally but a negligence of one's duty to that ally. Countries all over the world are joined in argument on this development—not just Communist countries but good, middle-of-the-road Social Democratic leaders and even Right-wing countries. They are expressing a view. People in the United States, including Congressmen, the organs of communication and American people representing all sorts of factions in universities are arguing and expressing different points of view. It ill becomes any Labour Government in this situation to say that we alone are not to have a clearly-announced view on this issue, whatever that view may be. It is legitimate to express a view in support or against but to say that we can express no view at all is to finish this debate, if it finishes in that way, without any clear decision one way or the other. It is defensible to support the Americans openly or to say that they are wrong. It is not defensible on a major issue to blur the edges one way or the other.A strange doctrine has been enunciated by hon. Members opposite—
It is not strange.
It is strange from my point of view but I understand from my hon. and learned Friend the Member for Northampton (Mr. Paget) that apparently it is a legally respectable doctrine that a nation has a duty to ensure that nothing happens within its borders which may be regarded as hostile by another nation which may be at issue with a third nation. If we take that into practice we ignore the realities of life. There are countries all round the world with installations of one sort or another on behalf of another major Power.
If we accept that the Russians have the right to act unilaterally against any independent country which happens to be carrying support for the West, we open up a dangerous proposition—indeed, we do so in relation to ourselves, as well. Whatever the legal phrases may be—I accept that they are legal, because I am no lawyer, thank goodness—I do not think that in terms of international practice the doctrine can really be maintained.If we were at war with Russia, then Russia would be fully entitled to deal with any country which permitted us to maintain warlike installations on its territory. That is international law.
I have said that I do not quarrel with my hon. and learned Friend's definition of what the law is. All I say is that, in the modern world, if it is accepted that justification for intervention in a third territory is the fact that that territory contains things which are being used, there are gradations between hot war and cold war which, while one may argue about them in law, are thin definitions.
There is a rumour that possibly my right hon. Friend the Prime Minister may wind up this debate today. I do not know whether that is so and whether there will be a further intervention. But I do hope that when this debate is finished we have, as I hope we shall have, a declaration that the Government regard the present American action in Cambodia as something with which they disagree or a declaration that they support that action, and that we can move away from this question of rather "phoney" neutrality—Where does the right hon. Gentleman stand?
There is no doubt about this. I am opposed to it. I am not saying that that is right. I am saying one should come down on one side or the other.
Finally, it has been said that it is wrong, virtually, for us to express a view in this particular argument because these are the big Powers themselves. It becomes increasingly more obvious that the present world is divided between the enormous power of the Soviet Union and that of the United States of America. That is a reality of life. But part of the price we pay for that division is that we have to be more vigilant. Small countries have to express their views more noisily because if we do not, just as silence among the citizens within a nation can allow tyranny to take place, so compromise by smaller nations in a world dominated by one or two Powers can produce tyranny within the world.6.15 p.m.
The right hon. Member for Greenwich (Mr. Marsh) said he was opposed to the American intervention in Cambodia. I am not, and now that my right hon. Friend the Member for Kinross and West Perthshire (Sir Alec Douglas-Home) has gone to Washington where he will be seeing members of the American Administration, he will be able to tell them that Conservatives in this House and in this country sympathise with President Nixon in the very difficult decision that he made and admire the courage with which he made it.
We on this side welcome the speech of the right hon. Gentleman the Foreign Secretary, whatever his hon. Friends may think of it. We are disposed to support him, but I hope he has the full support of his right hon. Friend the Prime Minister. If it is true that the Prime Minister is coming here to wind up the debate this evening, can it be, perhaps, that he is to inform us of a lightning trip across the Atlantic in order to assuage the emotions of his hon. Friends below the Gangway? I do not know. We are not called upon to underwrite this American military intervention. In reply to a Question of mine on Friday last, the Foreign Secretary told the House that he was not consulted. It is understandable that Her Majesty's Government were not consulted. We have heard a great deal about moral influence to be brought to bear on the Americans, but if one has no material power one has very little moral influence. If we are resolved to withdraw all our military forces from the Far East our influence in the Far East will be proportionately less, and if we lecture super-Powers without the military means of effective diplomacy we cut a somewhat pitiful and ridiculous figure. Had there been a British military contingent in Vietnam we might have been in a position to talk to the Americans and he listened to with respect. I am one of those who has stated in public the private opinion that earlier it would have been well for some British soldiers to be serving alongside our Australian and New Zealand subjects. That is of the past, hut we should sometimes consider not only the Americans, but our Australian and New Zealand partners. The "domino" theory in the Far East has been derided. In my view the Communist Powers believe in it. Certainly, the South-east Asia Powers and our Australian and New Zealand fellow subjects believe in it. For them, the Far East is the near North, and Cambodia is but 75 minutes flying distance to Darwin. The Australians and New Zealanders are not in Cambodia, but Vietnam, Laos and Cambodia are theatres in a single war waged by Communist-controlled Tonkin with the object of bringing all Indo-China under the leadership and control of Hanoi; and South Vietnam is the main target, including as it does important human and material resources and the Mekong Delta. When I was in Vietnam it was impressed on me that if South Vietnam fell, if the United States and South Vietnam's other allies withdrew without an adequate state of defence to replace them, it would be extremely difficult to prevent the whole of the South Asian mainland passing under the rule or domination of Peking. The late Ho Chi Minh laid down that each State in this particular area should liberate—his word —itself by a people's revolutionary war, and that Hanoi should give what help was necessary. It has been said in this debate that the Vietnam war cannot be won and that the Americans never thought it could be. But was the Korean war won? No, but the southern part of Korea was prevented from passing under Communist control; and there is no reason, except in the minds of defeatists, why South Vietnam should not be secured from Communist occupation. Hon. Members are eager to protest against the American intervention in Cambodia. Did they protest when North Vietnam occupied military sanctuaries, to use the jargon, all along the Cambodian frontier with South Vietnam, some of them several leagues inside Cambodian territory? Did they protest when North Vietnam began not only through subversion but through its own regular forces to invade South Vietnam, a sovereign State recognised by the Government of the United Kingdom and 81 other sovereign States? Did they protest when the neutrality of Laos was violated? Did they protest when the demilitarised zone was invaded? Cambodia was invaded by the Communists just because Cambodia wanted to be neutral. This has been an important debate, not because it will deflect the march of history but because it has revealed the state of affairs within the Labour Party. Some hon. Members below the Gangway, like some of the protesters who go to Grosvenor Square, and places like that, tell us that they are concerned with peace in Vietnam. But it is becoming more and more clear to the House and the country that what they are really concerned for is victory for the Vietcong.6.19 p.m.
The hon. Gentleman the Member for Chigwell (Mr. Biggs-Davison) is a prominent member of the Suez group. Some of his particular colleagues have spoken this afternoon. I am not surprised to find them cheering on what some United States Senators have called "Mr. Nixon's war". What matters much more is the attitude of Her Majesty's Government.
In his contribution, the right hon. Member for Brighton, Pavilion (Mr. Amery) talked of the non-representative character of the people who are protesting in the United States. The first point of which my right hon. Friend the Foreign Secretary ought to have taken note when he came to address us is that the Foreign Relations Committee of the United States Senate, unanimously, have sent to the President a message in which they told him that he is conducting an unconstitutional, unauthorised, illegal war. If the right hon. Member for Brighton, Pavilion, does not regard the Foreign Relations Committee of the Senate as representative of American opinion I do not know what kind of body we have to quote to get his approval.All fellow travellers.
Yes, they are all fellow travellers, led by Senator Fulbright, taking in most of the middle, and right wing of the two parties—all fellow travellers!
We see, in this situation, adventurism in high places. It is gravely disappointing that the Foreign Secretary found himself unable to denounce the adventurous character of this expansion of the war. This being so, my right hon. Friend must not be surprised when he finds many of his hon. Friends profoundly disappointed by his speech and unconvinced by the case which he pleaded. In the debate, my right hon. Friend and others have sought to put all the blame for the fruitlessness of the negotiations in Paris on to the North Vietnamese and the National Liberation Front. It is well known that one of the main reasons why there was no progress at the Paris talks was because President Johnson first, followed by President Nixon, were determined to keep in power the wholly unrepresentative military clique in Saigon. The former presidential candidate, Mr. Dzu, in the South Vietnamese elections campaigned on a platform of seeking to find a way towards negotiations between South and North Vietnam. That was his official platform, and he got 28 per cent. of the total vote. However, two days after the elections he was put in prison, and he is there now. That happened because he advocated an opening that might have led to a peaceful solution. We have not heard of any efforts being made by the U.S. Administration to get him released. There has not been, in this situation, a search for sanctuaries but a situation in which the United States President has agreed, with the C.I.A. and his military advisers, to destroy the neutral regime of Prince Sihanouk with the idea of putting in power another military clique, and the President is now sending in another large army to bail them out. It is for this reason that the United States Senate Foreign Relations Committee is adopting an unprecedented and tough line in its attitude towards its own President. It knows that this is no four or six-weeks' operation, but that this is an expansion of the war accompanied by a resumption of large-scale bombing. I was astonished that my right hon. Friend could not make even a brief reference to, and protest against, this resumption of bombing. The United States Congress is greatly alarmed by the latest dangerous development, a development which is completely contrary to the arrangements that had been made by Mr. Harriman, who is on record as having said that only a major attack across the demilitarised zone could justify a resumption of bombing. However, bombing has been resumed and it is a further sign that the American President is prepared to expand the war. I am told that my right hon. Friend the Prime Minister will reply to the debate. I welcome that news. He must know, however, that there are many of his hon. Friends and many members of the Labour movement—indeed, there are many in this category who do not belong to any one party—who regard it as absolutely imperative that, at the conclusion of the debate, the Government should strongly disapprove of the expansion of the war into Cambodia. It is earnestly hoped by all these people that Her Majesty's Government will align themselves with the expressed view of the Governments of France, the Federal Republic of Germany, Italy, India, Sweden—the new Swedish Prime Minister has openly pronounced his condemnation of the expansion of the war into Cambodia—because it would be a failure in duty if a Labour Government did not today condemn the present state of affairs in that part of the world. [Laughter.] Do I hear hon. Gentlemen opposite—or certainly one who can be called a member of the Suez Group—laughing? After the Suez invasion the Leader of the Opposition told him to which political ilk he belonged. I do not have to repeat it. I urge the Prime Minister to take clear note of the feeling and conviction of certainly hon. Members on this side of the House. I urge him to note carefully the views that have been expressed by many Prime Ministers of democratic countries. I urge him to join them today and to say that we condemn the invasion of Cambodia, that we are opposed to any resumption of the bombing and that we will ask for an approach to be made to see a coalition Government in Saigon. We must demand a halt to the invasion of Cambodia and call for new talks to occur in Paris on the basis of a cease-fire and a decision by the American Government not to continue the military operations in Cambodia.6.26 p.m.
This debate has been brief but weighty. That is how it should have been. It is right that the Prime Minister should reply and my hon. Friends hope very much that he will add his full weight to the clear speech that was made by the Foreign Secretary. In doing so, he will have from my hon. Friends full support for the policy which was put forward by the Foreign Secretary.
I cannot, of course, speak for others on this aspect. My reaction to the news of the American move into Cambodia was one of deep sadness—to see, once again, pictures of clanking vehicles moving forward, of casualties, and of civilians moving back. It is with sadness that, after all these years, I see pictures of children who were born in Vietnam growing up knowing nothing but war. This is a story of sadness, and we must all feel sad about it. That feeling came out in the speech of the hon. Member for Ebbw Vale (Mr. Michael Foot). Although I did not agree with his conclusions, I admired his sincerity. The Foreign Secretary spoke with equal sincerity, and nobody will deny that he feels as strongly as anybody about these matters. I believe it right, however, that the House should be guided not solely by the heart, but by the head as well; that we should decide clearly and as dispassionately as possible what the problems are that are raised by this American action and for whom in this country they are raised. Some people in Britain are totally opposed to America—to American policy and to the American way of life—for various reasons, and they are entitled to their view. For them, there is no problem. There are others who are not basically anti-American, but who have always been opposed to American policy and to an American presence in South-East Asia. For them, too, there is no great problem. This is merely, for them, confirmation of what they have been arguing for many months past. However, for those of us who look on the United States as a great and friendly country and who have given broad general support to United States policy in South-East Asia—and among "us" I include Her Majesty's Government—there are problems to be considered and resolved. There are, of course, bound to be doubts about the justification of the American action. There is, of course, bound to be sadness at the sight of a great people beginning to tear themselves apart. America is a country which has within it a great tide of idealism, and this underlay the original move into Vietnam. It is pathetic to see so much of that turning into gall and bitterness, as it now is. Our job in this country and in Parliament is to try to understand that when a friend is in trouble, as the Americans are, his need of friendship and, above all, of understanding is at its greatest. It was not a war of conquest or of subjugation that led the Americans to enter Vietnam. They did so in the belief that it was America's duty to help other countries to avoid subjugation and to enable them to choose their own government. Maybe this was an arrogant belief, but it was certainly not an ignoble one. It is all very well for Mr. Kosygin to talk about America's right to judge good or bad for others. That comes oddly from a man who presides over a Government who are sitting on freedom of choice in, for example, Czechoslovakia. The declared policy of America has been to create a situation in South Vietnam in which people can choose for themselves. This was the point of the original American operation in Vietnam. Over the years of bloodshed, frustration and propaganda this original idealism has given way to bewilderment, cynicism and a devout wish to be free of the South-East Asia commitment. How can anybody doubt that President Nixon, as a responsible President, fervently wants to see American forces withdrawn? His problem is how to do it. How can he withdraw his forces without casting away the fruits of all the efforts that America has made; that is, without abandoning South Vietnam to just the subjugation which, in the first place, America went in to avoid? This, surely, is the problem, and so, against that background, I come to the two charges—I think there are only two—levelled against the United States. The first is that they have escalated the war into a new area. This charge seems to me to be sheer hypocrisy. It is turning truth on its head to say that America has taken the war into a new area. The United States has sent her troops into Cambodia to find and to fight and to destroy an enemy who was already there and already operating from there against American forces. It is quite clear—and the Foreign Secretary gave confirmation of it this afternoon—and indisputable that this part of Cambodian territory has been used by the Vietcong and the North Vietnamese for the purpose of attacks on American forces and killing of American soldiers. How can any possible construction of international law or of international justice or of international common sense say to the Americans that they have no right whatever to react to the action taken by North Vietnam? Why should they alone be denied the right to hit back against an enemy already hitting them? Why should the Americans be expected to see American casualties mount at the hands of an enemy who could always enjoy an easy sanctuary a few miles away across a frontier which protects them from attack?Can the right hon. Gentleman explain how it is that there is so much opposition inside the United States, amongst American Senators, Democrats and Republicans, to the latest expansion of the war in Cambodia?
I am not dealing with that at all. I am dealing with the action of the United States, and the point I am making is that the United States were not the only people who carried action into Cambodia. They went there for the purpose of protecting themselves against people already operating from there. This seems to me to be something which is wholly justified in law, in common sense, and in morality.
The second charge is that their action makes an honourable solution more remote. This, clearly, must be a matter of judgment. No one can say with certainty what the results of the action will be, but, as the Foreign Secretary rightly said, the United States themselves are probably better placed to make the judgment than we are. I do not for one moment agree, as some hon. Members seem to have suggested, that it would be better made in Hanoi or Moscow, or Peking for that matter. They do not determine their policies on the basis of propaganda. They determine their policies on the basis of reality, and they know the reality of the situation in those parts of Cambodia where the Vietcong and North Vietnamese forces have been operating.Invasion is not propaganda.
Invasion is not propaganda, that is true, but the initial invasion was by North Vietnam. That is the real point.
It is fair to say clearly that a negotiated settlement in the long run is the only possible solution, and the Government are clearly right to persevere in their attempts to bring about negotiation, but there has been, as the Foreign Secretary said, singularly little response to these attempts. There is no doubt at all either about the Americans' desire for negotiation. There has been very little response, either, to their attempts to get it. There is no doubt about the Americans' desire to withdraw their forces, to withdraw their troops from Cambodia and Vietnam in the right circumstances and on the right terms. Of course, there cannot be any doubt at all. Why should they want to stay there and fight and spend their blood and treasure in a foreign land if they could come home? But they are determined not to come back till they are satisfied that the South Vietnamese can take over and protect themselves against the type of subjugation which the Americans originally went in to prevent. This is surely the reality of the situation. Surely it is right to say that withdrawal in military terms is always a very difficult operation when one moves into a country, and mounts a temporary counter-offensive, to facilitate withdrawal on broad strategic terms with the intention to carry it out. Whatever the tactical considerations, there is no reason to doubt that in President Nixon's judgment this action is calculated to shorten and not to prolong the agony which has lain for years on South-East Asia, and an agony which is now growing in the United States itself. Surely we in this House should profoundly wish that he is right in his judgment, because if he is wrong, if the solution cannot be found, then the consequences, spreading probably far beyond the boundaries of Indo-China, will be serious for the whole of the Western world. For these reasons we on this side of the House support the thesis advanced by the Foreign Secretary this afternoon. There is one further point I want to make, and only one major one, and that is the tragedy, it seems to me, that this House is so relatively impotent in the face of the awesome spectacle the world is facing. In spite of what the hon. Member for Ebbw Vale said, there is, frankly, little reason to believe that our words will have much influence in Washington, or in Moscow, or in Hanoi, or in Peking. Perhaps I should say something which I have said before to the House. I believe that there is a very real and serious danger of a growing division between the United States and the Western world. I think that the danger of a return to mutual isolation is now very apparent indeed. Of course, there have been faults on both sides. American policies at times no doubt have been insensitive, misguided. But Europe has made mistakes, too. The exclusiveness of the European community, the withdrawal—I do not want to go into the merits of that now—from east of Suez, foreshadowing, as the Prime Minister put it, leaving the Americans eyeball to eyeball with their enemies, will lead the Americans to feel that in facing their problems there they have no political support from no European country, to assist east of Suez. That must affect American thinking, so it would not be surprising if American public opinion were to say, "If the Europeans want to return to their own continent, to shut the door on the world, to look after their own affairs, let them get on with it: we will look after our affairs." They will have their own difficulties. But this could come about. This is a very real danger. It underlines the danger of a division in the Western world, and we should do all we possibly can to avoid that danger materialising. To sum up, our advice, if we may use the word, to the Government is to persist in the path outlined by the Foreign Secretary. It is right to express to the United States the grave and real public anxiety and sorrow at the tragedy which is taking place, but, above all, the Government must try to understand the American motive, American sufferings, American needs and American problems. Negotiation alone can lead to a right solution and a lasting solution, and America understands that, I am quite certain. We can play only a very small part in bringing about negotiation, but we must play this small part as far as we can, all the time, and in every single way. Finally, I would commend some words spoken in this House by Sir Winston Churchill in May, 1955:" Above all, never flinch, never weary, never despair."
6.29 p.m.
This debate has shown the deep sense not only of concern but of tragedy in the latest events in South-East Asia, and it was that sense which led the Government yesterday to decide that, whatever Ruling you gave, Mr. Speaker, within your discretion, about an emergency debate, time must be found so that these anxieties could be expressed. The anxieties, the apprehensions, are felt not only in Britain but throughout the world. For this is a debate on a world scale which is taking place, and of which our debate today forms only a part.
I think that everyone recognises the awesome decision facing the President of the United States last week, and since that decision nowhere has discussion of these events proceeded with greater anguish than in the United States itself. We have to proceed from the fact that we are not and have not at any time been involved in the fighting. Because of that we have to recognise that we must be aware of the agonies of those who have. It is for us in Britain, as so many hon. Members have done in many parts of the House, to examine the issues for the world and peace. We start from the point that we have a special responsibility through our position as one of the co-Chairmen under the Geneva agreements. It is right briefly to remind the House of the line we have taken throughout the history of this bitter conflict. We have said many times in the House, and I have said in Washington and in Moscow, that there cannot be a military solution to this war; that the only lasting and honourable solution will be one reached by negotiation, one which allows the people of Vietnam to decide their own future and to live their own lives free from foreign intervention. It is still the view of Her Majesty's Government that terms will not be imposed by a military decision. It is because we have always believed this that we have from the outset sought by every means to bring the parties to the conference table. I believe that in the events which led to the convening of the Paris conference and in the decision of President Johnson to stop the bombing of North Vietnam Her Majesty's Government played a very real part, although the decision had to be taken by the parties to the fighting. We have expressed our views publicly—still more privately—on all the issues at every twist and turn in this tragic war. It was done in my right hon. Friend's warning to the President of the United States and publicly five years ago about the use of gas, when he quoted the Declaration of Independence and its call for a decent respect for the proper opinions of mankind. We stated our view, again controversially, in the welcome we gave to President Johnson's decision first to limit the bombing and then to stop it altogether. We stated our view on another occasion when we felt it our duty to reject the policy of bombing Hanoi and Haiphong. More recently, last November, we expressed our concern and our sense of where that responsibility lay, that more progress was not being made in the Paris talks. The anxieties arising from the past few days relate to two main issues. The first is the formal extension of the fighting to Cambodia. I say "formal" because, as the former Head of State of Cambodia himself protested—and we were reminded of this today—the territorial integrity of Cambodia had already been breached systematically and over a period of time. No one will underrate the extent to which the danger had escalated before the President was called upon to make his decision last week. The anxieties which I think are felt throughout the House, throughout this country and the world arise from this question of judgment to which we have to apply ourselves: whether what was clearly stated last week to be an intervention limited in scale and in time will prove to be so, or whether, in fact, in contrast to the President's declared intention, a new dimension will have been added not only to the area of the fighting, but to the scale of the fighting. That is the real basis of the anxieties which all of us feel today. On the question of the first of these two issues, namely, the formal involvement of Cambodia in the fighting, hon. Members will have noticed, it has been quoted in the House—a statement by the Federal German Government on Sunday in these terms:That was quoted yesterday in the House. That is what we all feel, and it is what is felt in many parts of the world, not least by many of America's closest friends. The other issue which is a cause of deep anxiety is the recent bombing of North Vietnam. Over the weekend statements were made in Washington indicating that a possible change of policy was contemplated in that bombing might have to be resumed. I know with what concern we all read of accounts of the bombing incident which took place. The House will, however, have seen the statement made yesterday by the White House emphasising that there has been no resumption of the strategy of bombing North Vietnam and that the weekend raids did not mark a change in policy. The world supported the courage of President Johnson when he stopped the bombing because I think we all felt that this was a necessary condition of agreement at the conference table, just as the world supported the far-sighted line taken by President Nixon in his speech last November when he announced his programme of substantial reductions in American combat troops in Vietnam leading to their total withdrawal. All of us endorsed both those decisions. I think that no one with even the slightest knowledge of the depth of feeling on both sides in the United States would minimise the significance of that November decision; nor would he minimise the fact that it went such a long way to uniting the United States people. Nor will anyone who does not himself bear the responsibility for the safety, indeed for the lives, of American troops in action minimise for one moment the gravity, the agony, of the dilemma with which the President was faced last week. The concern which it is the duty of all of us to express today must centre around this question: whether these most recent decisions, whatever the intentions and whatever the hopes which surround them, will inevitably bring in their train a reversal of the policy so clearly stated by the President last November; for that policy I support, and I believe that the whole House supports it. I believe that we have the right to be reassured not only by his announcement of 20th April of further troop reductions, but by what he said to the American people last Thursday, namely, that the decision to enter Cambodia had been taken" The Federal Government notes with concern that troop reductions initiated by the American Government in Vietnam have not yet resulted in a lessening of hostilities, but that operations by both sides have extended into Cambodia. Therefore, peace in the whole of Eastern Asia is threatened more than before ".
He went on to say:" to protect our men who are in Vietnam and to guarantee the continued success of the withdrawal and Vietnamisation programmes".
I think that the House would be right to take those words as a denial that there is any change in policy. But it would be right, too, remembering the long history of this war and the long record of frustrated hopes about short cuts and quick solutions, to express concern whether a decision taken with the declared end of achieving peace more quickly may not sometimes set in train, both on the ground in the area concerned and more widely through world reaction, other events which are difficult to control. I believe that our role in this debate is, first, to assert what we believe to be our duty: our duty as co-Chairman in seeking, against whatever the odds may be, the settlement of these issues round the conference table. My right hon. Friend's initiative in proposing to his fellow co-Chairman the convening of a conference broad enough and representative enough to be able to deal with all these issues, all these dangers, which the world is facing in Indo-China. And, if this failed, the willingness which the Government have declared to support action through the United Nations, despite all the frustrations of past attempts to raise the issue in the United Nations. Hon. Members will have seen on the tape this evening—and I think that this is important—a report which says that U Thant" We have made and will continue to make every possible effort to end this war through negotiation at the conference table rather than through more fighting on the battle field."
This was U Thantťs" said today that an international conference ' to cope with the old war in South Vietnam and the new war in Cambodia ' was an indispensable step of the utmost urgency ".
and in making it U Thant said that" first public statement on the situation following the … intervention in Cambodia ",
That is the initiative that we took last Friday, and we look to all those whom we have approached and all those concerned, as U Thant said, with peace and justice to move with us to the conference table. But, beyond that, I believe that the Government and this House have a duty to express their concern and to draw whatever lessons must be drawn from that concern—concern for the peoples of these areas of tragic and prolonged fighting in South-East Asia—and, without feeding the flames of the debate which is raging within America itself—and we have seen sad news of how far that debate has gone— we should express our concern about what is happening there. I think that the whole House will agree that the whole world—certainly Europe, West and East— needs a strong, healthy, and united America, and no actions or words of ours should make it harder to achieve that strength, that unity. I have sought to express, in summing up this debate so far, the sense of concern and apprehension felt, I believe, by all right hon. and hon. Members of the House. That apprehension rests, I believe at any rate, not so much on whether any change of policy has taken place as on whether events have been set in train in the past few days which will make a change of policy inevitable; whether it will make inevitable a new, more intense, more embittered phase of fighting rather than, what we were told was hoped for, a limited extension of the area of fighting, limited in area and in time; and whether it could also lead—I have expressed our deep anxieties and concern about this—to the resumption of bombing as an instrument of military, or even political, policy. No final decision can be made by the House on these matters, but they will continue to be a matter of apprehension and of anxiety. What we have to emphasise today is what needs immediately to be done. Whatever views have been ex- pressed, I hope that we can at least agree about this. First, that the House gives its full backing to the actions of the Government, in this new perspective of danger, aimed at convening a conference capable of ensuring that all these questions can be resolved round the conference table. Second, that, as a matter of urgency, all the efforts of Her Majesty's Government, together with all those whom we can influence or persuade, should be directed to securing the withdrawal of all foreign troops from the soil of Cambodia. Third, for the very same reason, and because it has been the policy of Her Majesty's Government, of the American Government, of the Soviet Government, and, I believe, of practically every Government throughout the world, the withdrawal of foreign troops and foreign intervention from Vietnam itself, as soon as we have secured the elements of a lasting and honourable settlement which assures to the people of Vietnam their own inalienable right to decide for themselves their own future—[Interruption.] I hope that there will be no dissent from that. Fourth, that the Indo-Chinese territories, areas from which peace has been a stranger now for the whole of a quarter of a century since war ended in Europe, should have the right of peaceful development free from foreign interference. For this purpose they should have the right to declare their neutrality free of foreign interference, and to have that neutrality respected by international agreement. Fifth, and in a wider sense, the whole House recognises the undeniable very much wider fact, which overlies all conflict in Asia, that the conflict of South-East Asia, and every manifestation of that conflict, cannot be decided on a world scale without the representation on a world scale, at the United Nations, of the Chinese Government and the Chinese people. These five points, at the end of this debate, represent the basis on which Her Majesty's Government intend to work for a solution to this tragic problem. I ask the House to endorse them." all who supported peace and justice should support a move to the conference table ".
Question put, That this adjourn:—
| Division No. 117.] | AYES | [6.55 p.m. |
| Abse, Leo | Faulds, Andrew | Mikardo, Ian |
| Allaun, Frank (Salford, E.) | Fernyhough, E. | Milne, Edward (Blyth) |
| Anderson, Donald | Fletcher, Raymond (Ilkeston) | Molloy, William |
| Ashton, Joe (Bassetlaw) | Fletcher, Ted (Darlington) | Norwood Christopher |
| Atkins, Ronald (Preston, N.) | Foot, Michael (Ebbw Vale) | Orme, Stanley |
| Atkinson, Norman (Tottenham) | Galpern, Sir Myer | Padley, Walter |
| Barnes, Michael | Gray, Dr. Hugh (Yarmouth) | Pardoe, John |
| Barnett, Joel | Griffiths, Will (Exchange) | Park, Trevor |
| Bidwell, Sydney | Grimond, Rt. Hn. J. | Parkyn, Brian (Bedford) |
| Blenkinsop, Arthur | Heffer, Eric S. | Perry, George H. (Nottingham, S.) |
| Bray, Dr. Jeremy | Hooson, Emlyn | Price, Christopher (Perry Barr) |
| Brooks, Edwin | Huckfield, Leslie | Rankin, John |
| Butler, Mrs. Joyce (Wood Green) | Jeger,Mrs.Lena(H'b'n&St.P'cras,S.) | Ryan,John |
| Craddock, George (Bradford, S.) | Jenkins, Hugh (Putney) | Sheldon, Robert |
| Davidson, James (Aberdeenshire, W.) | Johnston, Russell (Inverness) | Silverman, Julius |
| Davies, E. Hudson (Conway) | Judd, Frank | Thorpe, Rt. Hn. Jeremy |
| Davies, S. O. (Merthyr) | Kelley, Richard | Wainwright, Richard (Colne Vaffey) |
| Devlin, Miss Bernadette | Kerr, Mrs. Anne (R'ter & Chatham) | Wilson, William (Coventry, S.) |
| Driberg, Tom | Kerr, Dr. David (W'worth, Central) | Winnick, David |
| Dunn, James A. | Kerr, Russell (Feltham) | Winstanley, Dr. M. P. |
| Edelman, Maurice | Lee, John (Reading) | |
| Ellis, John | Macdonald, A. H. | TELLERS FOR THE YEAS: |
| English, Michael | Mackintosh, John P. | Mr. Albert Booth and |
| Evans, Fred (Caerphilly) | Mendelson, John | Mr. Stan Newens. |
| NOES | ||
| Albu, Austen | Davies, Dr. Ernest (Stretford) | Hattersley, Roy |
| Alldritt, Walter | Davies, Rt. Hn. Harold (Lee) | Hazell, Bert |
| Allen, Scholefield | Davies, Ifor (Gower) | Healey, Rt. Hn. Denis |
| Amery, Rt. Hn. Julian | de Freitas, Rt. Hn. Sir Geoffrey | Henig, Stanley |
| Armstrong, Ernest | Dell, Rt. Hn. Edmund | Hill, J. E. B. |
| Atkins, Humphrey (M't'n & M'd'n) | Diamond, Rt. Hn. John | Hordern, Peter |
| Bacon, Rt. Hn. Alice | Digby, Simon Wingfield | Hornby, Richard |
| Bagier, Gordon A. T. | Dodds-Parker, Douglas | Houghton, Rt. Hn. Douglas |
| Bell, Ronald | Doig, Peter | Howell, Denis (Small Heath) |
| Bence, Cyril | Donnelly, Desmond | Howie, W. |
| Benn, Rt. Hn. Anthony Wedgwood | Doughty, Charles | Hoy, Rt. Hn. James |
| Bennett, Sir Frederic (Torquay) | du Cann, Rt. Hn. Edward | Hughes, Rt. Hn. Cledwyn (Anglesey) |
| Bessell, Peter | Dunwoody, Mrs. Gwyneth (Exeter) | Hughes, Hector (Aberdeen, N.) |
| Binns, John | Dunwoody, Dr. John (F'th & C'b'e) | Hutchison, Michael Clark |
| Birch, Rt. Hn. Nigel | Edwards, William (Merioneth) | Hynd, John |
| Bishop, E. S. | Elliott,R.W.(N'c'tle-upon-Tyne,N.) | Irvine, Rt. Hn. Sir Arthur |
| Blackburn, F. | Emery, Peter | Irvine, Bryant Godman (Rye) |
| Boardman, Tom (Leicester, S.W.) | Evans, Albert (Islington, S.W.) | Janner, Sir Barnett |
| Body, Richard | Evans, loan L. (Birm'h'm, Yardley) | Jay, Rt. Hn. Douglas |
| Bossom, Sir Clive | Eyre, Reginald | Jenkins, Rt. Hn. Roy (Stechford) |
| Boston, Terence | Farr, John | Jennings, J. C. (Burton) |
| Bradley, Tom | Finch, Harold flintier Nigel | Johnson, Carol (Lewisham, S.) |
| Broughton Sir Alfred | Johnson, James (K'ston-on-Hull, W.) | |
| Brown, Rt. Hn. George (Belper) | Fitch, Alan (Wigan) | Jones, Dan (Burnley) |
| Brown,Bob(N'c'tle-upon-Tyne,W.) | Fletcher-Cooke, Charles | Jones.Rt.Hn.Sir Elwyn(W.Ham,S.) |
| Brown, R. W. (Shoreditch & F'bury) | Foley, Maurice Foot, Rt. Hn. Sir Dingle (Ipswich) | Jones, T. Alec (Rhondda, West) |
| Buchan, Norman | Ford Ben | jopling, Michael |
| Burden, F. A. | Fortescue, Tim | Kenyon, Clifford |
| Butler, Herbert (Hackney, C.) | Fowler, Gerry | King, Tom |
| Callaghan, Rt. Hn. James | Freeson, Reginald | Lambton, Antony |
| Campbell, B. (Oldham, W.) | Ginsburg, David | Lancaster, Col. C. G. |
| Carmichael, Neil | Glover, Sir Douglas | Lane, David |
| Cary, Sir Robert | Godber, Rt. Hn. J. B. | Lawson, George |
| Castle, Rt. Hn. Barbara | Golding, John | Leadbitter, Ted |
| Channon, H. P. G. | Gordon Walker, Rt. Hn. P. C. | Ledger, Ron |
| Chichester-Clark, R. | Gower, Raymond | Lee, Rt. Hn. Frederick (Newton) |
| Clegg, Walter | Grant, Anthony | Lee, Rt. Hn. Jennie (Cannock) |
| Coe, Denis | Grant-Ferris, Sir Robert | Lestor, Miss Joan |
| Conlan, Bernard | Greenwood, Rt. Hn. Anthony | Lever, Rt. Hn. Harold (Cheetham) |
| Cooke, Robert | Grey, Charles (Durham) | Lewis, Kenneth (Rutland) |
| Corbet, Mrs. Freda | Grieve, Percy | Lewis, Ron (Carlisle) |
| Cordle, John | Griffiths, Eldon (Bury St. Edmunds) | Lloyd, Ian (P'tsm'th, Langstone) |
| Costain, A. P. | Gurden, Harold | Longden, Gilbert |
| Cronin, John | Hall-Davis, A. G. F. | Loughlin, Charles |
| Crosland, Rt. Hn. Anthony | Hamilton, James (Bothwell) | Lyon, Alexander W. (York) |
| Crossman, Rt. Hn. Richard | Hamling, William | Mabon, Dr. J. Dickson |
| Currie, G. B. H. | Hannan, William | MacArthur, Ian |
| Dalyell, Tarn | Harper, Joseph | McBride, Nell |
| Darling, Rt. Hn. George | Harrison, Walter (Wakefield) | McCann, John |
| Davies, G. Elfed (Rhondda, E.) | Haseldine, Norman | MacColl, James |
The House divided: Ayes 68, Noes 278.
| McGuire, Michael | Oswald, Thomas | Steele, Thomas (Dunbartonshire, W.) |
| McKay, Mrs. Margaret | Owen, Dr. David (Plymouth, S'tn) | Stewart, Rt. Hn. Michael |
| Mackenzie,Alasdair(Ross &Crom'ty) | Page, Derek (King's Lynn) | Storehouse, Rt. Hn. John |
| Mackie, John | Page, John (Harrow, W.) | Summers, Sir Spencer |
| Maclean, Sir Fitzroy | Paget, R. T. | Symonds, J. B. |
| Maclennan, Robert | Palmer, Arthur | Tapsell, Peter |
| McMaster, Stanley | Pannell, Rt. Hn. Charles | Taverme, Dick |
| McNair-Wilson, Michael | Parker, John (Dagenham) | Taylor, Sir Charles (Eastbourne) |
| McNair-Wilson, Patrick (NewForest) | Pearson, Arthur (Pontypridd) | Thomas, Rt. Hn. George |
| McNamara, J. Kevin | Peart, Rt. Hn. Fred | Thomson, Rt. Hn. George |
| MacPherson, Malcolm | Pentland, Norman | Thornton, Ernest |
| Maddan, Martin | Perry, Ernest C. (Battersea, S.) | Turton, Rt. Hn. R. H. |
| Marion, Peter (Preston, S.) | Price, Thomas (Westhoughton) | Urwin, T. W. |
| Mahon, Simon (Bootle) | Price, William (Rugby) | Varley, Eric G. |
| Mapp, Charles | Pym, Francis | Waddington, David |
| Marks, Kenneth | Randall, Harry | Wainwright, Edwin (Dearne Valley) |
| Marquan I, David | Rawlinson, Rt. Hn. Sir Peter | Walden, Brian (All Saints) |
| Mason, Ht. Hn. Roy | Rees, Merlyn | Walker, Harold (Doncaster) |
| Maude, Angus | Rees-Davies, W. R. | Wallace, George |
| Maudling, Rt. Hn. Reginald | Renton, Rt. Hn. Sir David | Ward, Dame Irene |
| Maxwell-Hyslop, R. J. | Rhodes, Geoffrey | Watkins, David (Consett) |
| Mayhew, Christopher | Richard, Ivor | Watkins, Tudor (Brecon Radnor) |
| Mellish, Rt. Hn. Robert | Ridley, Hn. Nicholas | Weatherill, Bernard |
| Millan, Bruce | Roberts, Albert (Normanton) | Weitzman, David |
| Mitchell, David (Basingstoke) | Roberts, Rt. Hn. Goronwy | Wellbeloved, James |
| Mitchell, R. C. (S'th'pton, Test) | Robinson, Rt. Hn. Kenneth(St.P'c'as) | Whitaker, Ben |
| Monro, Hector | Robson Brown, Sir William | White, Mrs. Eirene |
| Montgomery, Fergus | Rodgers, William (Stockton) | Whitlock, William |
| Moorman, Eric | Rogers, George (Kensington, N.) | Wilkins, W. A. |
| More, Jasper | Ross, Rt. Hn. William | Williams, Alan (Swansea, W) |
| Morgan, Elystan (Cardiganshire) | Rossi, Hugh (Hornsey) | Williams, A tan Lee (Hornchurch) |
| Morris Alfred {Wythenshawe) | Rowlands E. | Williams, Clifford (Abertillery) |
| Morris, Charles (Openshaw) | Royle, Anthony | Williams, Mrs. Shirley (Hitchin) |
| Moyle, Ronald | Sandys, Rt. Hn D | Willis, Rt. Hn, George |
| Mulley, Rt. Hn. Fredrick | Shinwell, Rt. Hn. E. | Wilson, Geoffrey (Truro) |
| Murray, Albert | Shore, Rt. Hn. Peter (Stepney) | Woodburn, Rt. Hn. A. |
| Murton, Oscar | Short, Rt. Hn. Edward (N'c'tle-u-Tyne) | Woof, Robert |
| Nabarro, Sir Gerald | Silkin, Rt. Hn. John (Deptford) | Worsley, Marcus |
| Nicholls, Sir Harmar | Silkin, Hn. S. C. (Dulwich) | Wylie, N. R. |
| Oakes, Gordon | Silvester, Frederick | |
| Oguen, Eric | Slater, Joseph | TELLERS FOR THE NOES: |
| O'Halloran, Michael | Smith, Dudley (W'wick & L'mington) | Mr. J. D. Concannon and |
| O'Malley, Brian | Snow, Julian | Mr. R. F. H. Dobson. |
| Orr-Ewing, Sir Ian |
Orders Of The Day
Finance Bill
Order for Second Reading read.
7.7 p.m.
I beg to move, That the Bill be now read a Second time.
As the hour is somewhat later than we had expected, I hope to speak reasonably shortly. The Bill gives effect to the recent Budget proposals, and nothing which has happened or has been said since Budget day alters my right hon. Friend's Budget judgment. Discussion has on the whole centred on wages and salaries. My right hon. Friend dealt with this during his Budget speech and particularly in his Budget broadcast. He explained that the various reliefs given in the Budget took into account the likely pressure of demand during the year. He sees no reason to alter the views which he then expressed. As to the speech of the noble Lord, Lord Shawcross, which, unfortunately, I have not had the privilege of reading in full—I have had to rely on newspaper reports—I am happy to say that the day following his speech was on unusually good day for sterling in foreign exchange markets. I can only assume, therefore, that informed opinion abroad paid the same regard to the more imaginative parts of that speech as did informed opinion at home. The modest size of the Bill is explained by the reasons which I gave in my speech in the Budget debate, namely that, for the most part, taxes are working well. We naturally seek—and this is the occasion—to simplify the tax structure, to improve the administration, to remove any injustice which comes to light and, particularly, to smooth the path of industry. A number of provisions are, therefore, devoted to those ends. Nevertheless, within the broad Budget strategy, no substantial amendments are required this year, because the taxes are working, on the whole, well and efficiently. When I say "efficiently" I am relying on the definition to be found in the textbooks on mechanics, namely, the carrying out of a task with least friction. It may at first sight sound a little difficult to reconcile that report of the way in which the taxes are working with the cases which have come to light where things have certainly gone wrong in dealing with the individual's tax affairs. The Parliamentary Commissioner found that there were 26 such cases last year. That by itself sounds a lot, but when this is put against the total number of people on the Inland Revenue's books—some 25 million—a better perspective is gained and one sees that the real situation is that the likelihood of a taxpayer's affairs being maladministered are one in a million. Of course, no one should regard such a figure with complacency, but the experience any one of us may have had in administration in the private sector would lead one to agree that one in a million constitutes a highly creditable performance.Would the right hon. Gentleman like to make it two in a million, because I have had occasion to complain about both my coding notices? Both were wrong, although I did not put in a claim to the Ombudsman.
Of course, the hon. Member did not put in a claim to the Ombudsman because there was no reason for him to do so. I am drawing attention to cases of maladministration which has a definite meaning in our parliamentary language. I repeat that case of maladministration, this was where things have seriously gone wrong, were one in a million.
The right hon. Gentleman is not being quite fair. There have been 26 cases with the Ombudsman, but the Financial Secretary to the Treasury has been very helpful to one of my constituents. I must have had half a dozen cases in which the Treasury has admitted that it was wrong and has put the matter right. There must be far more than 26 cases.
I repeat what I said, although I am sure the hon. Member heard me say it, that in terms of maladministration the number of cases is one in a million. It is right that we should recognise that and that I should put the matter in perspective. That is the number of cases where they have been serious mistakes so far as concerns administration by the Inland Revenue. I express my appreciation both of the Inland Revenue and of the Customs Department for the way in which they carry out a very heavy and onerous task which we in this House lay upon them.
Will the right hon. Gentleman give way?
I have given way twice and I have covered about half a page of my notes. Perhaps the hon. Member will allow me to get on further. I am still on the same point.
As the Commissioner's report made clear, and as others have underlined, these problems have arisen mainly as a result of pressure of work. I should, therefore, say that we have in this year's Finance Bill, as in previous ones, paid special regard to the likely impact of our proposals on the volume of work in the Inland Revenue and Customs Departments. Although this year we are taking on additional responsibilities to assist other Departments, such as, for example, the task of collecting a levy in connection with sub-contracting, arising out of a Bill the Second Reading of which the House passed without a Division only last week, nevertheless there is an overall saving, due mainly to the new surtax provisions. We estimate that there is a net saving of the work of about 300 staff. This should help materially towards dealing with the Revenue's staffing problems, to which the Estimates Committee has drawn attention. I turn to procedure, as to which there is a Motion on the Order Paper. The Bill is, of course, smaller than last year —indeed it is only about one third of the size of last year's Bill—but in character it contains, as one would expect, the same variety of topics some of which are of a general nature and, therefore, suitable for debate in the Chamber, others of a more detailed nature which would call for rather closer examination in Committee upstairs. As an example of the former, one can think immediately of the rates provided for in the Bill which have to be fixed each year. The fact that we are proposing no alteration in the rates does not mean that different people might not hold different views and want to discuss them. Some might want the rates reduced; others, like the Opposition, might wish to argue for an increase in the rates so as to provide for the finance to meet additional defence expenditure. Whichever point of view is taken, these are matters of major interest and there may well be hon. Members other than those who wish to involve themselves in the detail of the financial provisions who might wish to put forward their constituents' points of view in the Chamber. It is right that they should have an opportunity of doing so.With respect, we shall have the procedural Motion later, when it will be in order for one hon. Member to speak for it and one against briefly.
I hope that I was not doing more than indicate that there would be an opportunity for doing this later in our proceedings. As that point has been so well taken, I can now turn to the content of the Bill itself.
This year's Bill is devoted to two things, to the provision of relief to the individual and assistance to industry. In both cases we have endeavoured to achieve our ends in the simplest possible way. As to the first, relief to the individual, all the provisions of Clause 14, which incorporate the reliefs, have been fully described by my right hon. Friend the Chancellor in his Budget speech. They amount all told to very widespread relief, including the freeing of 2 million people from tax completely. I will say a few words about the method chosen of concentrating relief on those whose need is greatest, which method involved the withdrawal of reduced rate relief. This in itself is a considerable simplification of our tax procedures which will be of assistance to both employers and employees. But the fact of moving straight into the standard rate of tax instead of approaching it by two or three steps naturally gives rise to questions as to the deterrent effect of what one is proposing. I have looked into this matter many times and of course have reconsidered it in relation to the proposal to remove the reduced rate relief. We can, of course, discuss this matter in full detail when we discuss the relevant Clause in Committee, but I ought to say at this stage that I am satisfied that the advantages of what we are doing, both in terms of giving the available relief on a just basis and in simplifying the structure of taxation, outweigh any possible disadvantage due to an alleged increased deterrent effect. I have to use the word "alleged" because all the inquiries and studies to which I have referred on previous occasions, and there are at least seven of them—some broad, some narrow, but all authoritative—have always reached the negative conclusion that there is no evidence to substantiate the allegation that the propensity to work harder is affected by the marginal rate of income tax. There is a positive conclusion which came out of one report, which appeals to my common sense and tallies precisely with the experience which I had time and time again in the early days of pay-as-you-earn, when I had to invite factory workers to work overtime and took note of those who responded and those who did not. This conclusion was, "Overtime was worked in response to financial needs irrespective of whether the rate of taxation was high or low". I recognise that that does not deal with the situation where there is no financial need. I recognise that different individuals no doubt react differently to a given set of circumstances. I recognise, also, that motivation is virtually impossible to determine with precision. So I do not wish to be dogmatic. But there is a fact—not a theory—which should be borne in mind in considering the effect of direct taxation. I mention it because it does not seem to be generally referred to. It is that, having regard to the way in which a wage earner's tax is computed, namely, that it depends on his total income, including overtime, bonuses, deductions for short-time working, and on his total personal circumstances and consequential personal allowances, including subsequent additions to the family, for example, for most wage earners the effective rate, and for many also the marginal rate, of income tax cannot possibly be ascertained during the course of the year. It just is not possible for an individual to determine precisely, even with an accountant sitting at his side, what the future will hold for him for the rest of the year in terms of remuneration, and possibly also in terms of allowances. The theory, therefore, that a man can say, "I know how my tax will be affected if I work three hours' overtime tonight, and, therefore, I shall work only two hours' overtime" cannot be sustained. I recognise that such a man may be deterred not by the facts of the situation, but by his misconception of them. Indeed, one of the conclusions of the study carried out by the Radcliffe Commission on the Taxation of Profits and Income read—What people do under a misconception, however, is an entirely different point; and that we are meeting as best we can by publicising information relating to both effective and marginal rates of taxation. Turning now to assistance to industry, the Bill contains one major and several minor proposals. The major one, which has already been fully described, is the increase in initial allowances for industrial buildings. As examples of the minor contributions, I mention the Clause on tobacco, which enables research on tobacco substitutes to go ahead; the Clause on hovercraft, which facilitates development of this British invention; and Clauses 5 and 34, which affect Customs duties on goods coming through airports and stamp duties on Stock Exchange transactions in such a way as to enable computerisation to take place. Then there is Clause 9, which extends the use of vehicle trade licences so as to correspond with the change in the use of the vehicles concerned and to assist in research and development; and Clause 29, which exempts certain company transactions from capital gains tax in circumstances where they would otherwise have been liable on a merger. In doing this, we are endeavouring to keep pace with developments in business practices, as I think that the Opposition would agree we have been anxious to do year by year. I have always taken the common-sense view that businesses should not be impeded by out-of-date tax provisions from taking the steps that they think would be most likely to lead to a successful result and would thereby produce the greater profits for their own enjoyment and that of the Inland Revenue. Finally, there are provisions in Clause 20 and Schedule 4 for simplifying the arrangements governing the manner in which companies account for income tax on distributions and other payments they make. This should reduce the administrative burden, both on companies and on the Revenue. The tax which bears directly on companies is corporation tax. Although I imagine that we shall in Committee be discussing the burden of corporation tax, I thought it would be helpful if I set the discussion in context by describing very shortly how that burden has varied over the last decade. The conclusion to which I am leading is a very simple one, namely, that companies are paying no greater proportion of their income in tax now than they did 10 years ago. In 1960 the proportion of companies' gross income taken by tax was 25·1 per cent. The provisional figure for 1969 is 23·1 per cent. If tax on dividends is included, the 1969 figure was exactly 34 per cent. compared with 34·7 per cent. in 1960. I repeat—the conclusion is the same whether one talks of gross profits or of profits after depreciation—that companies are paying no greater proportion of their income in tax now than they did 10 years ago. I want now to refer to one matter which does not yet appear in the Finance Bill, namely, the taxation of mineral royalties. The Government have been considering the implication of recent developments in the exploitation of minerals for the tax liabilities of the mineral owner. At present, that liability can arise in one of two ways. The minerals may be sold for a fixed capital sum. Alternatively, where it is not possible to calculate in advance the amount payable, a lease is granted in return for royalties which are related to the quantities of minerals extracted. In that event, the royalties received are, and always have been, treated as income. The recent developments to which I referred are essentially twofold. First, new mineral deposits have been discovered, particularly in the development areas, which, because they lie so deep, could for practical purposes be exploited only on a royalty basis, which attracts income tax and surtax where an individual owner is concerned. Second, modern methods of working are very much quicker, with the result that large amounts of royalty may be received over quite a short period of time, with a consequent sharp increase in the rate of surtax. My right hon. Friend has decided that this new situation, which faced landowners with the choice of either releasing their minerals for a negligible after-tax sum or holding on to them and so denying the country a significant contribution to our balance of payments, called for a review of the tax provisions. We therefore propose for the future the following treatment of mineral royalties. For the mineral operator who pays the royalty, there will be no change. The recipient of the royalty will, however, have his tax liability calculated on the basis of treating half the royalty as an income receipt, with the normal tax consequences, and the other half as if it were a receipt of capital. Where the granting of the mineral lease has not been subject to betterment levy, this latter half will be treated as a chargeable gain and will, therefore, normally be subject to capital gains tax at the 30 per cent. rate year by year as it is received. Where the levy applies, there will be rules to secure that the combined incidence of capital gains tax and levy on this half will normally be between 30 and 40 per cent. depending on the amount of the levy. There are several points of detail which we shall need to discuss with the interests concerned. Our consideration of this matter was not far enough advanced for my right hon. Friend to be able to refer to it in his Budget speech, and for full details I must ask the House to await the Clause which we shall be bringing forward for consideration in Committee; but the effect of the new arrangement in reducing the marginal rate of combined taxation where large mineral royalties are payable for a short time will be appreciable. Although this new tax treatment will apply to minerals generally, the main benefit of it will go to deep-mined minerals, where it is not normally possible for the deposits to be sold outright to the would-be operator as a capital transaction. In practice this means, I am glad to say, that the new tax treatment will be of special benefit to the mineral deposits being discovered in development areas. It was because of this help to our development area policy, and the importance of mineral development in the national economy as a whole, that I thought it right to make today this statement in principle about our decisions." Our evidence suggests that if productivity is related to income tax in any way it can only be related to misconceptions about the system. … The present structure and what people now know about it do not have any significant effect on the productivity of industrial workers."
Can the right hon. Gentleman say from when the new treatment will be applicable?
The answer is not straightforward, because there are leases already in existence. I would prefer the hon. Gentleman to wait until the details are published. I can promise him a favourable reply.
What will be the cost this year and in a full year?
It is not possible to give an exact calculation of what the cost will be in a full year.
The right hon. Gentleman will know that many people have been waiting for this announcement and will study it with great interest. He was good enough to say that he would consult the interests concerned over a period. He will also know that many hon. Members have a deep and continuous interest in the matter. Would I be right in assuming that it could be discussed on the Floor of the House rather than in privacy upstairs?
It is a matter of considerable detail. The fact that something goes to a Committee stage upstairs does not of itself debar the right of subsequent discussion on the Floor of the House on Report, if that is the desire of Members and the wish of the Chair at the time.
Perhaps I should add this to my hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) who was obviously asking about the cost in taxation. There is the other side, which he will not have failed to grasp immediately—the additional benefit accruing to the country, and to an extent to the Treasury and the Revenue, from the exploitation of minerals that would otherwise not be ex- ploited. It is virtually impossible to say what lies deep under the ground, nor the speed with which it will be exploited, and to give a responsible answer. I have explained that matter in some detail because it is not in the Bill. Nor is there anything in the Bill dealing with negative income tax, a topic on which there has been much discussion recently. Negative income tax involves a method of approach which at first sight is very attractive. I was several years ago much attracted by the possibility, as it seemed to me, of combining a selective method of relieving poverty with great administrative savings and simplification. It goes without saying that the Government, naturally, examined the various alternatives which people have in mind when negative income tax is referred to, in the hope that it would be possible to make some improvement along these lines. The conclusion we reached is broadly the same as that reached by most others who have examined these proposals in depth, and there is nothing that has since happened to alter it, namely, that I do not believe that we will be able to move in this direction in the foreseeable future. The various schemes of negative income tax all suffer from one or more major defects, some of which were outlined in paragraph 108 of the White Paper, "National Superannuation and Social Insurance" (Cmnd. 3883), namely, the inability to respond quickly to individuals' new needs; complexity; the great cost of any effective scheme; and the substantial unresolved problems of incentives. To the extent that one seeks to avoid complexity, one comes up against in-equity: and inequity in dealing with the varying needs of individuals becomes, of course, much greater when one moves from tax allowances to cash payments, and on a much broader scale. So, regretfully, I have reached that conclusion. I should be very interested to hear the views of other hon. Members. I know that there are many who have given substantial attention to this topic. The Bill does, as usual, include other Clauses designed to improve the machinery of taxation, give relief and to follow up the consequences of other legislation. But most of the provisions in the Bill have now been, I think, sufficiently mentioned either by the Chancellor or by myself, and as time is short I think that the remaining detail can appropriately be dealt with in Committee. I would sum up by saying that this is a relieving Bill, and that there is no Clause which should put up prices by as much as one penny.7.36 p.m.
The debate this year is likely to be somewhat different from Second Reading debates on the Finance Bill in recent years, first, because it starts much later than normal, and, second, because despite the efforts of the Chief Secretary it is a very thin Finance Bill. In some ways it could almost be described as an angostura bitter and tobacco-substitute Finance Bill.
But there is also a danger that the discussion will become more partisan than before, despite the lateness of the hour. In this respect we were grateful for the perhaps subdued way in which the Chief Secretary put forward his arguments. I found it preferable to the extraordinary speeches by the Prime Minister in the past few days, against the background of which this debate is taking place. One wonders how any Prime Minister can make a speech in which he says that Conservatives would increase unemployment the day before the figures come out showing that unemployment has reached a 22-year peak, or say that the Conservative Government would let prices rip on the day when the £ in our pockets, which he assured us glibly on the day of devaluation would not be devalued, had fallen in real purchasing power to 17s. 6d. I was sorry that the Chancellor omitted from his speech this year the hopes he had previously expressed that we should have full, detailed and open discussion of the Finance Bill. This was significantly missing. That being so, I hope to confine my remarks to fairly technical matters. But I cannot help commenting on the rather extraordinary proposal by the Prime Minister last weekend, when he offered to instruct the Chief Secretary to assist the Conservative Party in its tax proposals. He described the right hon. Gentleman in glowing terms as the greatest authority on public expenditure and taxation that any party could produce. I therefore feel bound to make one or two comments, and I assure the Chief Secretary that if he blushed then I hope that he will not do so now. First, I recall the famous occasion with regard to the charge on corporation tax when my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) pointed out that the Chief Secretary had made what he described as a schoolboy howler. The details are recounted at great length in cols. 1149–51 of the OFFICIAL REPORT of 7th June, 1967. I had resolved never to mention this again, but in view of the Prime Minister's glowing account I thought it right at least to bring it to his attention, and, I hope, to the attention of the Press, which has clearly forgotten about it. To do the Chief Secretary justice, he eventually—admittedly a year or more after the event —admitted that he had made a mistake. It was, indeed, a schoolboy howler. The second point comes up in the interesting debate on the vote on Account on 18th March 1968. Then we took the Government to task because the Supplementary Estimates were £440 million over the original Estimates. To take one passage from HANSARD during the debate on the Civil Defence Estimates, when I quoted from the Third Report from the Estimates Committee on the Spring Supplementary Estimates:This again is an indication of the efficiency of the Chief Secretary's arithmetic." As your Committee stressed last year, the objective should be to ensure that the out-turn should be as near as possible to the original Budget Estimate. This year the Treasury estimate provisionally that there will be an increase of about £440 million."—[OFFICIAL REPORT, 18th March, 1968; Vol. 761, c. 128.]
By how much did public expenditure go up compared with the Estimate?
I cannot remember the figure correctly but I think £1,107,000. But I may be wrong. The whole basis of the suggestion that the Prime Minister has made is that the Chief Secretary is the right man to forecast how changes of taxation are liable to take place. My point is that on that occasion the Chief Secretary and his Department were £440 million out. I do not feel that this is an occasion when we need the right hon. Gentleman's assistance.
To turn to a more fundamental point, the Chief Secretary would be better employed in telling the Prime Minister how his sums have worked out. Let us take the Prime Minister's statement that he could carry out his policies with no general increase in taxation over the life of the Parliament. My right hon. Friend the Leader of the Opposition said during the Budget debate:Given that this is so and that all that the Chancellor has really done, in the words of Samuel Brittan in the Financial Times is to offset the disproportionate growth of revenue from a progressive income tax in a world of rising incomes by selective concessions at the lower end of the incomes scale, and given that the whole of the Finance Bill must be put in the context of the Prime Minister's promise and the subsequent events, the Chief Secretary's undoubted talents—and he knows that we have great respect for him —would be better devoted to correcting the Prime Minister rather than offering advice to anyone else. The most important thing is that we must put this Bill against the general economic background. The Chief Secretary said that the Chancellor had dealt with the question of prices and incomes in his Budget speech. He did so, to the extent of about one sentence. We must look at this carefully if we are to appraise the actual place of this Finance Bill in our general economic affairs and examine what the principles underlying it are. It is a curious thing that in the debate so far very few speeches have asked why it is that the Government's fiscal and monetary policies, their policies of restraint, have failed to work. There must be a reason, and I believe that the answer is that people think that because the Government have imposed massive fiscal and monetary restraints and the balance of payments has improved, one is the result of the other; that is, the balance of payments has improved as a result of the Government's restraint policies. The truth is that the argument for restraint improving the balance of payments has always been that if we take measures of restraint they will depress the level of demand and prevent prices rising and that this will make exports more competitive and release resources, so far as devaluation goes, and, therefore, the balance of payments will grow. That argument cannot be used if the middle item of the syllogism is that prices and incomes have continued to rise. In that case the balance of payments effect is largely the delayed effect of devaluation, but it does not have the result of keeping prices and incomes down. They clearly have been going up at a rapid rate. We have to ask: why have the Government's measures to keep prices and costs down failed? I suggested in the Budget debate that the key to this must lie with the public sector. To put it more technically, what we are saying is: what has happened to the Phillips curve, showing the relationship between unemployment and prices and incomes? It seems to have been behaving in a very odd way. The Chief Secretary has tended to learn from his mistakes, and there have been a great many of those. What happened was that we started from the position where the Government took tough fiscal measures but not sufficient monetary measures. Now they have taken both fiscal and monetary measures, but at the same time the Government as a whole have not taken steps to ensure that the public sector does not use its monopoly powers to increase prices, with the result that revenue is taken away through increased incomes. I referred to that in the Budget debate, as did my right hon. Friend the Member for Enfield, West. It is wide open to misrepresentation, and sure enough the Prime Minister sought to misrepresent what I and my right hon. Friend said then. It is still very important from an analytical point of view to be clear about what has happened. We are not suggesting for one moment that the right course of action is to have a situation in which the public sector is discriminated against. However, it is the public sector which has been taking the lead with increases in prices and wages. This has inevitably led to a situation when private industry, to retain its labour force, has to put up its wages, and it has often been possible for particular firms to pass increased costs on in the form of higher prices despite the general economic situation. The Chancellor can go on adopting tougher fiscal and monetary measures, but if he lets the cat out of the bag on the other side then inevitably his measures will be frustrated. He knows perfectly well that this is what has been happening, and it is clear that he is not prepared to take the necessary action which is all that will make his other measures effective. No one on the other side of the House could accuse me of being in favour of a statutory prices and incomes policy. I have lost count of the number of debates when we have attacked that policy, from both sides of the House. But hon. and right hon. Gentlemen opposite should consider whether if they do not include the third aspect of the problem which I have mentioned they will not go on increasing unemployment more and more, with prices and wages still rising. This will have a serious effect on the workers. It was extraordinary for the Prime Minister to suggest last weekend that we would have to choose whether to have deflation or roaring inflation when the present Government have both. The Chief Secretary spoke about the effect of eliminating graduated bonding on the income tax scale. He asserted, as on many occasions, that the disincentive effect was negligible or outweighed by other effects. He used the expression "a deterrent effect" and resorted to the extraordinary argument that people could not actually calculate their tax. He should not believe that if the attitude which people take to the tax burden is based on misconceptions, none the less those misconceptions do not have a significant effect. On the point which the Chief Secretary makes about people not knowing what their tax burden is, some of them will take the trouble to estimate when they actually come into tax, and therefore if there is a single step effect, there will be people in the group who will realise that they will have to pay tax whereas they did not previously. Although there may be a lag, the general attitutde towards overtime will be affected. An article in the Industry Week of 24th April says:" Let me tell the Chancellor of the Exchequer what he has to do in April, 1970, to fulfil the Prime Minister's prophecy. … He must cut purchase tax by £352 million. He must take 6d. off Income Tax, is. 9d. off petrol, £10 off road fund licences, 3d. off beer. 13s. I ld. off whisky, 3s. 6d. off port, 2s. 10d. off wine, Is. Id. off cigarettes, £11 million off Estate Duty, and £5 million off short-term Capital Gains Tax, and some £615 million off S.E.T."—[OFFICIAL REPORT, 15th April, 1970; Vol. 781, c. 1047–9.]
The change which the Government have made has a retrograde effect on the overall pattern of the tax structure, and at the surtax stage we are developing a kinky tax system of the most extreme kind, which is also a retrograde step."The psychological effect of paving that first lot of tax is out of all proportion to the real value of the money lost. The workers really hate it! The difference between 23p and 32p may not look much to a manager on £3,000 per annum accustomed to paying heavy tax, but to the worker on say, £9 a week it looks a lot. So the effects will be: (a) It will be harder to get people to work overtime, if overtime pay is going to be suffering 32 per cent. tax; (b) it will be harder to get part-time workers to put in a few extra hours to meet seasonal pressures; (c) a rise which takes a worker into the tax zone will need to be about 12 per cent. larger if it is to compensate for the tax."
I am interested in the hon. Gentleman's argument about the disincentive effect of coming into and going out of taxation, but surely my right hon. Friend the Chancellor of the Exchequer has widened the non-taxpaying area.
There are two points here. First, there is the whole question of whether they are the same people, or a similar number of people, who are going in and out of taxation as a result of inflation. The second point is that a grading system is likely to have a less dramatic effect on people's attitude to taxation than a system which has a sudden kink in it. This is not a difficult point to understand or to make, and it is one which is generally appreciated.
My hon. Friend the Member for Wan-stead and Woodford (Mr. Patrick Jenkin) will be dealing with the Clauses concerned with pensions. I have one point on the Clause dealing with decimalisation, which is something that people are concerned about. I have received from my hon. Friend the Member for Working (Mr. Onslow) a letter from a manufacturer who is trying to implement decimalisation well in advance, on 5th April, 1970. He says that he is disgusted at the unprepared state of the relevant public departments and boards, and that the local tax and social security offices were generally in the dark. He goes on to say:The Government might bear in mind that the time has come, or is overdue, for these points to be followed up. I take up the point made by the Chief Secretary in the Budget debate in answer to the claim which was made by my right hon. Friend the Leader of the Opposition and my right hon. Friend the Member for Enfield, West that this is a one-month Budget in the sense that the effect of the tax reductions will be cancelled out by inflation within that period. The Chief Secretary went to considerable lengths in cols. 43–5 on 20th April, 1970, to try to rebut the argument of my right hon. Friend. Essentially, the argument of my right hon. Friend was that the Government had reduced taxation by a certain amount, but that this would be cancelled out by the rise in prices within a very short period. The Chief Secretary embarked on a rather complicated argument, and attempted to rebut this on the ground that one had only to look at the figures in table 4 of the Red Book to see that this was untrue because, he asserted, the forecast in the Red Book was that consumption would go up in real terms during the coming year, although he did not specify the exact year, by 3·9 per cent. He said that this was a clear rebuttal of the view that real incomes would not rise. This is an extraordinarily naive argument, and I will try to persuade him of this. The Chief Secretary says that the facts are available from the published figures. That is untrue, because time and time again we have asked the Government to publish their forecast before the tax changes and their forecast after the tax changes. They have never done so, and they have not done so on this occasion. It is, therefore, not possible to ascertain, as the Chief Secretary said, what exact impact on consumption the Budget changes are likely to have. He says that instead of the figure being £700 million it has been raised to £900 million by the tax changes. This cannot be ascertained from the published figures. If both sets of forecasts could be published we could then see what are the facts. It is most unlikely that a change in taxation of the amount which the Chancellor has in mind, of £220 million roughly in a full year, will be reflected in a £200 million increase in consumption, because it does not all go direct to consumption expenditure, and there are some very odd assumptions about the propensity to save if that is so. We hope that the Chief Secretary will make the figures available. The Chief Secretary's argument is that the Finance Bill will increase consumption by £200 million in real terms. If we look at this in greater detail we see that demand can still be choked off by rising prices, and that this is very likely to happen. Therefore—if I dare to use the expression—all else being equal, although the measures of the Chancellor of the Exchequer may increase demand by, say, £200 million, if prices rise this will choke off demand, so that the increase in real output which the Chief Secretary asserted would take place will be frustrated, because his forecast will not come to pass. It is always possible that the forecast may come to pass for quite different reasons, in particular the tremendous increase in demand which we believe will occur because of the wage inflation. But the Chief Secretary cannot sustain the argument which he made in his Budget speech for the reasons which I have given. I know this is a complicated matter, but if the Chief Secretary gives us advice we must examine his arguments closely. The Finance Bill is against a background of inflation which is increasing at a very rapid rate. Since October, 1964, we have had 14 Budgets and mini-Budgets, some of the mini-Budgets being larger than some of the Conservative main Budgets. This is the last Finance Bill which the Government are likely to bring in. Over the years we have been burdened by one new tax after another—corporation tax, long-term capital gains tax, S.E.T., the aggregation of minor's incomes, the disallowance of interest, and the rest. Therefore, although this is a thin Bill, it shows no real change in the Government's attitude. Their basic philosophy is still that one should bring in as much as possible in taxation from individuals and corporations, and that the Government shall decide who shall have the money back, whether it be individuals or corporations. This is a fundamental difference of approach between the two sides of the House of which the Government seem totally unaware. The Government can best be described by a notice which was seen in a building near London commented on by the new American judge of the International Court. It read:"Tax tables are not available in decimal currency thus making conversion, reconversion and re-reconversion necessary for each calculation. These tables will have to be ready soon, why not now? "
It is true to say that the Government in all their proposals believe with open-minded certainty that what they say is right. My own view is that there is one thing for certain about this Government and indeed about this Finance Bill. It is that for this Government it is the end of the road. I do not doubt that the only real answer is a fundamental change in our approach to taxation problems. The sooner this happens the better." Between scepticism on the one hand and dogmatism on the other there is a middle way which is our way, open-minded certainty."
8.0 p.m.
It has been the somewhat melancholy practice in recent Parliaments to accuse Governments in their final year before an election of using the Finance Bill to disburse electoral bribes. The hon. Member for Worthing (Mr. Higgins) said that in his view this is the last Finance Bill before a Dissolution. But the Bill is a happy exception to the practice I mentioned in recent Parliaments. This year the Budget is everywhere seen to have had more to do with national needs than with electoral considerations.
My brief intervention in this debate will not be concerned with the broader questions of financial policy. I wish to make one proposal for improving the Bill. My proposal is one for removing a social injustice that works to the disadvantage of some very severely disabled people. Under the Finance Act, 1964, the burden of excise duty was lifted from disabled persons who drive their own vehicles. This was a gesture of much value to many of the disabled. But persons who are too grievously disabled to drive themselves yet nevertheless own cars driven for them by their wives or husbands were left out of the benefit conferred by the Finance Act, 1964. Such people are frequently referred to as "disabled passengers"; that is to say persons who must always be passengers in their own cars. If they are to get about at all—and remarkably enough many of them do get about, even to work —they must pay the whole of their mobility costs. But at the same time others who are much less severely disabled receive help with their transport. It will be said, with justice, that this problem raises serious administrative difficulty. It will be pointed out that any extension of the present exemptions from excise duty to vehicles in which the controls are perfectly normal and have not been converted for use by a disabled person would be extremely difficult to delimit. I have given the matter a great deal of attention, for, as the House knows, I have spent much time recently with hon. Members on both sides in pressing forward the Chronically Sick and Disabled Persons Bill. I do not believe, nor is it the view of those hon. Members with whom I have been working on my Private Member's Bill, that the administrative problem is insuperable. It will be my intention if and when this Finance Bill receives a Second Reading—and one must be careful not to speak with too much certainty about any Bill these days receiving a Second Reading—to move a new Clause under the heading:The provisions will be as follows:" Exemption from vehicle excise duty of vehicle used by husband or wife of disabled person ".
" (1) Vehicle excise duty shall not be chargeable in respect of any vehicle included in the Fifth Schedule to the Vehicles (Excise) Act, 1962 which is registered in the name of a registered disabled person or of that person's husband or wife, and which is for the time being used by that person's husband or wife.
I hope that my right hon. Friend the Chancellor will greet this proposed new Clause with the maximum understanding and sympathy. I believe that the problems referred to in previous debates are met by the drafting I have suggested. We can, of course, confidently claim in this country to be well ahead of other countries in the provision of free vehicles to the disabled. But there is still a long way to go if we are to increase the mobility of those who are much too disabled to drive themselves. I cannot see why they should be treated less favourably than people with disablements which are not as severe and who, under present arrangements, are given cars to assist their mobility. I think it was Robert Lowe who said in this House when speaking, as it were, as Minister of Education before there were Ministers of Education, that:(2) Exemption under subsection (1) above shall not be allowable on more than one vehicle registered in the name of any of the above-mentioned persons."
He was taking part in an angry debate in the 1860s about payment by results for teachers. I would argue that much of our expenditure at present is neither cheap nor efficient. There are people who may think that if the House does not accede to my proposed new Clause it. will save a small amount of public money. That is not my view. There are supplementary pensioners today who would like to be taxpayers. There are people who are severely handicapped as individuals who feel that they have also social handicap imposed over and above their personal physical handicaps. We must, in my view, deal urgently with the problem of helping the blind man as well as the legless man to be as mobile as possible with his own family. It is simply a matter of social justice. We shall not only be acting with social decency but also spending money more effectively. I hope the House will realise that every organisation concerned with the mobility of disabled people attaches considerable importance to this new Clause. They would like S.E.T. to be lifted from registered disabled persons. They would like the category known as disabled mothers to be helped to become more mobile. The suggested new Clause is the least we can do in this Finance Bill to help some courageous people who want to become more active members of society." What is not efficient shall be cheap, and what is not cheap shall be efficient."
8.10 p.m.
The hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris) has made a single point clearly and well. I shall not be alone in saying that I hope he gets a clear and full reply this evening. All of us in our constituencies in dealing with correspondence and in meeting people are only too well aware that, however much the system may have improved in recent years, there can still be unhappiness about allocation of transport, and so on. I repeat that I wish the hon. Gentleman success in what he is trying to do.
If I may, I will follow his theme. There can be few hon. Members who neither respect nor like the Chancellor. After all, he has style and intellectual competence. But, holding those generous opinions, it is inevitable that one should find his Budget and this Finance Bill disappointing, particularly as they are both so lacking in imagination. I am not surprised that the right hon. Gentleman is silent about this Finance Bill. He would not be the first father to be modest about his offspring. As my hon. Friend the Member for Worthing (Mr. Higgins) said, we all respect the Chief Secretary, but, if the right hon. Gentleman does not mind my saying so, he made an extraordinary speech this afternoon. I was not sure to which Finance Bill he was referring. It could not have been the one to which we are supposed to be giving a Second Reading today. The right hon. Gentleman spoke of the Budget judgment, and the Finance Bill is all about the Budget judgment. I do not make my main comments on the Budget judgment, because the £200 million figure is largely artificial. However, I want to make three brief comments on it, since the Chief Secretary constantly referred to it with some pride and pleasure during the Budget debates. My three comments are these. First, it is high time that the Treasury appreciated that every tax relief does not necessarily mean increased consumption to exactly that amount. Secondly, as my hon. Friend the Member for Worthing has pointed out, we have heard only a sentence or two about incomes increases. It would be honourable if Treasury Ministers admitted that the reason why there cannot be a general tax relief this year lies in the very substantial increases that there have been in some incomes. Thirdly, I am not sure whether my hon. Friend has not already made the point obliquely that the £200 million figure will be belied by events and the so-called buoyancy of revenue, which is just a euphemism for inflation and the wage explosion. I agree with the Chief Secretary that there are some good points in the Bill, and I agree those matters with pleasure. I am especially pleased with Clause 6 which is concerned with angostura bitters. This is a matter for which I and other hon. Members have argued for a long time. However, by and large it was an empty Budget, and this is an empty Finance Bill. Picking up the theme of the hon. Member for Wythenshawe, I want to try to give some examples of the missed opportunities which I see. I do not agree with the general tone of the Chief Secretary's remarks, because I think that it is common ground in this House that our tax system is extremely complex. I would go further and argue that it is finicky in many particulars. Assuredly, there are many uncertainties in the law at present which impose a burden on the public and on the public's counsellors. What is more significant they bring the law increasingly into disrepute. The Chancellor of the Exchequer seemingly began to acknowledge this in practical terms when he arranged that a number of surtax payers should be freed from liability to the tax. We know that the number of surtax payers has doubled in the last seven or eight years. That, again, is an example of inflation. It is good that the new arrangement will free almost a third of the total, bringing staff savings and a comparatively small cost in its train. There are other instances which are equally to be applauded. For example, 2 million people will be removed altogether from the payment of income tax. But what put them in if it was not the Government's self-imposed inflation? So far, so good, but these are mere pecks at the problem. What is disappointing is that man-sized bites have not been taken. The Chancellor of the Exchequer admitted the deficiencies of our tax system in clear terms last year. He is equipped by instinct and ability to undertake reforms. Instead, he has done virtually nothing. Let us take the example of income tax. I associate myself warmly with what the Chief Secretary said about the devotion of officials in the Customs and Excise and the Inland Revenue. We all know that to be so. Nonetheless, the statement he made that there is only one complaint made through the Ombudsman in every million income tax cases shows only the tip of the iceberg, and I am sure that he knows that as well as I do. I do not argue that it is the fault of officials. We all know that they are grossly over-burdened. However, the other day the Economist commented:I have the honour to be a director of a company which has on its staff a number of highly-qualified tax advisers, as the Chief Secretary knows. I am told by their senior man that, of the assessments with which they deal, only one in 20 is correct. Many people do not receive repayments to which they are entitled. The policing of returns is elementary. No one knows how many potential taxpayers do not make and are not called upon to make returns of their income. It is a matter of the utmost regret that the Chancellor's brave words of yesteryear are followed by a failure to act this year on any significant scale. I realise that, in arguing for a simplification of our tax laws, I am naturally asking for a good deal. I do not under-estimate the difficulties. But it must be right for this House constantly to argue that our tax system should be better understood, as a consequence, should be more sympathetically viewed by the public than it is at present, and that it should be more effective and fair. Year after year in these Finance Bill debates we talk about simplification. In the event, we do very little. A start has to be made some time. If not this year, will it be next year or some time, or will it perhaps be never? I turn now to certain smaller but no less significant areas. I am sure that the House associates itself with the tribute paid by the Chancellor of the Exchequer to the National Savings Movement. We all respect my very old friend Sir Miles Thomas, and we wish his successor well. However, everyone knows that national savings are in a parlous state and that in real terms they continue to decline. Were it not for the support of the surtax payer, they would present a picture which is very different from that which we see today. Would it have been so difficult in this Budget to have rationalised the concessions to the different savings media? Is there any more urgent task than that of increasing the total amount of national savings by whatever means which may be used? Is it sensible to put shackles on the clearing banks while allowing the near-banks to lend as they please? Where is the logic in these matters? Was it really impossible in this Budget to simplify purchase tax rates? My hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) has done more than anyone to argue for sense in purchase tax matters. Was it really impossible to simplify the capital gains tax? Was it really impossible to simplify further the stamp duties beyond the mere abolition of the duty on cheques? Again, I and others of my hon. Friends have argued for this in Budget after Budget. There are numerous other duties which yield less than stamp duties. All these pettifogging duties should go. The Chancellor, in the Chief Secretary, the Financial Secretary and the Minister of State, has most competent lieutenants —no one would deny that. Even now he could get some credit for doing something in simplification, such as setting up a Select Committee on Taxation, as my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) has suggested. What I cannot understand is why, when there is so much obvious competence in Ministers at the Treasury, they do not do more than they have. I take another subject on which the Chancellor has spoken in the past, including last year. This is the disincentive of high marginal rates. Can anyone deny that it is essential to act with resolution in an endeavour to reduce these high marginal rates to more realistic levels and to put them on a par with comparable nations? The cost, as we know, would not be great. Why should a successful or ambitious businessman be penalised for his efforts, and penalised only because he is British? These problems, and the consequences they bring in their train, do not vanish because they are not faced. Nor will they. I am not teasing the Government because we are in a pre-election period—I leave it to competent colleagues like my hon. Friends the Members for Worthing and Wanstead and Woodford (Mr. Patrick Jenkin). I am not teasing the Government because we are in that period, but criticise them because of their failure to act where the country knows that action is overdue. Such failure to act makes others besides myself question the Chancellor's Budget judgment—indeed, his judgment altogether—and also breeds increasingly cynicism among thinking people. Clause 16 raises another question and one which is perhaps of the greatest significance for the future. Is industrial investment adequate at this time? I venture to judge that it is not. Could it be greater? I venture to judge that it could. Should it be greater? There is no doubt that the answer is unhesitating, "Yes". Back in mid-March, the Chancellor said that of all the major factors in the economic situation, this is the one about which there is the most conflicting advice. The Budget showed that unhappy uncertainty. Last year showed a good increase in industrial investment, although less perhaps than expected, but one must have doubt about 1970, particularly in the context of the C.B.I. survey of investment intentions. I know that one can argue—as I fancy the Chief Secretary argued tonight—that minor cuts in Bank Rate, although Bank Rate and interest rates in general remain far too high, and no corporation tax increase and the new bank lending restraints, which are still nevertheless restraints, are together a negative encouragement to invest. We take the point, but per contra the substantial fall in share prices for which the Chancellor argued last year, led unhappily by gilt-edged, will make financing much more difficult in 1970 than it should be. It is not satisfactory, surely, that a company can raise money more easily and in larger amounts in the Eurodollar market than it can begin to in the United Kingdom. I am sure that the Chancellor and his colleagues agree that the United Kingdom needs the highest possible level of investment in productive industry. We shall win this competitive international battle for prosperity only by putting the maximum capacity at the workers' elbow. The Chief Secretary said that he had seen nothing which would cause the Chancellor to alter his Budget judgment. He should see it. The signs that appear to me are that this year there will be an important squeeze on company liquidity. The signs are that investment is and will be lower than it should be, and it follows equally that it must be a criticism of the Chancellor that he did nothing to increase it. The Chancellor is getting credit for the Government's improved standing in the popular opinion polls. I suppose he deserves it as much as he did the credit for Britain's showing after his predecessor had been forced to devalue the £. I doubt whether the Bill will earn him much long-term credit. Nor should any Finance Bill which gives more benefit to the teenager than to the really poor. The Chancellor was concerned in his Budget speech to give the impression that the Budget might not be his last word. Perhaps that is as well. My mind goes back to the 1966 General Election campaign, in which I had some responsibility. I remember my right hon. Friend the Leader of the Opposition stating that 9–5–1 was not a very satisfactory formula in the national interest—9 per cent. increase in incomes, 5 per cent. increase in prices and 1 per cent. increase in production. I recall how a distinguished newspaper correspondent said to me, "That is a bad argument, for there, surely, is the formula which will spell for the Labour Party electoral victory". So it might, but who was the real winner after that election? What is the situation now? A 10 per cent. increase in incomes, a 5 or 6 per cent. increase in prices and the cost of living and a 4 to 5 per cent. increase in consumption—larger even than in 1966. When the election comes, who again will be the real winner? Immediately after the Budget, I asked the opinion of a prominent friend of mine on the benches opposite. He told me, "The Chancellor has done well. I think that he has snatched defeat from disaster". I do not know about that, but this theoretically neutral Budget is a highly political affair and nothing else, because it does so little of what so badly needs doing. It is disappointing, but it is dangerous, too, because there is not a single item in it of real significance. One does not need to be a genius to prophesy that there will be by the end of next year another currency crisis in the world, or to reflect that the 14 Budgets we have had from the Government are likely to be followed by another in 12 months. The Bill raises many questions which, unhappily, it does not answer. How many unemployed will there be this winter? If money incomes rise by 10 per cent. and money supply by only 4 or 5 per cent, someone must be squeezed. When I first came to this House, I asked an older and wiser Member how one could tell whether or not there would be a vote on any subject. He replied, "It is easy. Any Bill which gives money away will not be voted against". I suppose that that is just about true of this Measure, except, as my hon. Friend the Member for Worthing pointed out, what it does give away will soon be eaten up by inflation. I am sorry that we are not voting against the Bill. It is a poor little Bill. It is unworthy of its authors and in the long term it cannot but be bad for the country." There is a high proportion of individual assessments which is incorrect."
8.28 p.m.
I found the remarks of the right hon. Member for Taunton (Mr. du Cann) about the Bill giving something away rather odd. I had the feeling that we were taking out about £15,000 million, but I think we took the point the right hon. Gentleman was trying to make.
The right hon. Gentleman had much to say about inflation. His hon. Friend the Member for Worthing (Mr. Higgins), as always, was more honest with the House. As Agnew is to Nixon so, in the best possible way, is the hon. Gentleman to the right hon. Member for Enfield, West (Mr. kin Macleod). The hon. Gentleman was honest enough to say that in following an incomes policy he would put his squeeze directly on the public sector. The hon. Gentleman made it clear what he would do. His right hon. Friend the Member for Enfield, West, the Leader of the Opposition, and other Opposition Front Bench spokesmen are not prepared to be quite so open with us. It is therefore always pleasant to hear the hon. Member for Worthing giving us an honest view of how he would deal with the situation.I think that that was a terribly unfair remark. Both during my Budget speech and today I stressed that it is a question of looking at each claim on its merits, and one cannot have a situation in which the Government say that they do not have any responsibility. That would be absurd.
I think that the hon. Gentleman knows that I was not being unkind to him. He knows that I hold him in great respect. I said what I did in the nicest possible way.
I am sorry that my right hon. Friend the Chancellor of the Exchequer did not open the debate. I find it significant that my right hon. Friend decided that the Second Reading debate on this, his third, Finance Bill was not important enough for him to open. I find it significant because it shows either a lack of interest in tax problems generally, or that he has decided that nothing can be done about the major and fundamental tax problems which confront us. For those reasons I am sad that my right hon. Friend did not open today's debate.I am grateful to my hon. Friend for giving way. I rise on a question of fact. It is nothing unusual for a Chancellor not to open the Second Reading debate on a Finance Bill. It is some time since a Chancellor on this side of the House has done so.
I do not dispute that this has happened on many occasions, but after six years of Labour Government I should have thought that it was important to do something about our tax system. When the right hon. Gentleman said that this was an empty Bill, my right hon. Friend the Chief Secretary said that everything was working well and that there was the least possible amount of friction. The fact that no changes have been made does not mean that the tax situation is not serious. I say that it is very serious, because by this so-called empty Bill we are perpetuating our tax system, but I take exception to anyone saying that because it does not make many changes, and because it is a small Bill, it is not an important Measure.
I want, now, to take up the point made in the House and elsewhere by right hon. and hon. Members on both sides of the House. It is said that there should be a major switch from direct to indirect taxation or, as the hon. Gentleman said at the end of his speech, cuts in public expenditure. I want to examine whether this is really a practical proposition, at least for us on this side of the House, because I believe that the public are in danger of having a confidence trick perpetrated upon them if they are allowed to believe that there is some way in which one can make a major switch from direct to indirect taxation, and also cuts in public expenditure, which will somehow not hurt them at all; that it will all be done in a simple way, that we shall have a simple tax system, and everything will be fine. It is said that people prefer to pay indirect taxes rather than pay taxes direct. I challenge that. Who would prefer to do that? Certainly not the millions of people who pay no direct taxes at all. It is only those, and there are now a substantial number of them, who pay direct taxes at the standard rate, and I shall deal with this later. It is those people who would prefer to switch to indirect taxation, but if one took an opinion poll one would find that they prefer that only because they feel that they would not be hurt by such a switch. Once they found that they would be hurt very much I am not sure that they would still prefer to change the system. A reduction of is. in the standard rate of tax—a fairly substantial cut—would mean an extra 5d. a week for a married man, with two children, earning £20 a week. A man earning £100 a week would be affected considerably more. The difference to him would be about £1 12s. 8d. But the cost of that Is. reduction, which would amount to about £450 million, would be the equivalent of a 35 per cent. increase in all purchase tax rates. I wonder for how long the bulk of direct taxpayers would prefer such a switch. I think that the proposition advanced for making a change assumes that by some sleight of hand one can pull the wool over people's eyes, and this was referred to by the right hon. Gentleman in another context. Therefore, I certainly do not accept that this is something which people would prefer if they understood precisely what is intended. Neither do I accept that collection under a direct taxation system would be simpler, unless one were simply to splash 35 per cent. across the board on all purchase tax rates—an impossible thing for any Government to propose. Certainly if one were to propose an added-value tax along the lines of that operated in Europe that would not be easier to collect. It might do all kinds of other things related to incentives to exporters and so on; but no one has argued that an added-value tax is a simpler method of collecting than direct taxation. It would not be simpler for the staff of Customs and Inland Revenue; nor would it be simpler for businessmen, particularly small businessmen who would need to have a set of books very different from those they have at present. Then there is the argument that we need a switch to indirect taxation in order to provide an incentive to saving. Some useful points were made by the right hon. Gentleman about methods that the Government could have adopted to increase the amount of savings. We all know that there is much constant criticism of the Government for having done this or that, that National Savings have dropped and so on. But we all know that particular incentives are not going to increase real savings. We can have a particular new gimmick one year and get a switch of savings from one kind to another; but at the end of the day any real increase in overall saving, not just National Savings, would come only from increased growth in incomes when it is also possible for something to be done about consumption. To argue that the Government have done nothing, in this Bill or in the past, to encourage savings is really to look very superficially at the problem. In past debates I have said that even the Save-As-You-Earn scheme introduced last year is one to be welcomed as a small help in this direction. But that could have only a modest effect on the general level of savings, because who are we trying to reach for real savings as opposed to switched savings? If we switch to indirect taxation we shall not be able to get more from the millions of people not now paying income tax. Nor shall we get more savings from the millions to whom we shall give a modest reduction in direct taxation while asking them to pay anything but modest increases in prices due to increased indirect taxation. Therefore, it would be only the small number of people earning above £5,000 a year who would really be given any incentive to save. These are the people we are discussing. I acknowledge that people in these income groups would probably be given some incentive to save by a reduction in taxation, but it is important to understand that if we are making a net switch from direct to indirect taxation of, let us assume, perhaps £200 million, really affecting those at the lower end of the scale—because if it is not a real switch it would have no meaning—at the expense of a reduction in consumption for those at the lower end, those at the higher end will have perhaps £200 million available for savings. I would not argue—and I would be interested to hear anyone who advocates it—that the whole of that £200 million could be saved. There are other factors such as estate duty involved, making those at the higher end of the scale reluctant to save too much, and making them consume rather than save. It is, therefore, impossible to measure this. While one would get some saving as a proportion of that £200 million it would be a very modest proportion; and it would and could be only at the expense of taking an equal sum away from the consumption of those at the lower end of the scale. This, therefore, is another argument against the idea of a major switch from direct to indirect taxation. It is then said that one could safeguard those at the lower end of the scale. I agree that one could safeguard a small number of them, through supplementary benefits and so on. But if one made a real switch, then, by the nature of things, substantial numbers of people at the lower end of the scale—I am thinking of those on, say, £20 a week, who would gain only 5d. from a Is. reduction in the standard rate of income tax—would be very much worse off. Thus, that argument does not stand up. One comes to the major argument which is always put forward, an argument which, it is claimed, answers all objections. It is that by making a big reduction in direct taxation one would provide a major incentive to increase production. Even if one made a major cut —if it was as large as Is. off the standard rate of income tax—for the average worker it would not be a major incentive and it would not make him decide suddenly to work harder or longer, simply because it would affect him to such a small extent. I did not go along with the argument of the Chief Secretary. Indeed, I thought that the Chancellor of the Exchequer contradicted him on the question of not having a reduced rate. However, I take the Chief Secretary's point that it may not necessarily have a disincentive effect and that to remove this progression could not be welcomed in a tax system. I thought that the Chief Secretary was trying to have it both ways when he said, first, that the removal of the reduced rate band would not have a disincentive effect and when he said, secondly, in relation to negative income tax, that the major argument against the negative proposal was the disincentive argument. He cannot have it both ways. I agreed with him on the major point, about the disincentive factor. The same point has been made by many people who have conducted genuine research into the disincentive question, one of which stands out. I refer to the P.E.P. broadsheet of January, 1969, which gave an analysis of the research done on this issue. It showed that even with a substantial cut—it referred to a "feasible alternative" and considered a cut of much more than the ls. off the standard rate to which I have referred—one could not expect more than perhaps a 1 per cent. increase in productivity. Such an increase in production would be useful, but it is important to consider the price and to realise that it would result only from a cut of substantially more than ls. off the standard rate. My reason for being uncertain on the negative income tax question arises because of the fact that, no matter how one juggles with the figures, at the end of the day, if one is to make a substantial switch, large sums of money will have to be switched to indirect taxation. If that is not done, one will be left with a negative income tax system. The only way to avoid such a state of affairs is at the same time to make a major switch to indirect taxation. I come to the major point that is always made about the disincentive effect of such a change on those at the higher end of the scale, by which I take those earning above £6,000 a year. Up to that sort of level a married man has an effective rate of 31.8 per cent., whereas the marginal rate is 53 per cent. Above the £6,000 a year level one starts getting into the higher reaches of progressive taxation. Whereas, by comparison with most of our international competitors, our direct taxation rates, as a percentage of either income or of the g.n.p., are not higher than theirs, at the higher levels which I am considering they are higher. About 64,000 people in this country are earning above £5,000 a year. It is said these are the people who are most affected. They are affected in the following ways. One, they do not work as hard as they would like to. Two, they will not move or accept promotion. Three, they are emigrating in large numbers. Four, the entrepreneur and professional man will not be bothered to expand to any great extent. These are serious arguments and I think they are worth looking at, although, in my view, it is only a small percentage of the 64,000 people who are affected by these arguments, because I frankly find it difficult to accept the suggestion that people certainly would not work as hard. A young executive—shall we say, at £6,000 a year?—will be affected by the tax level while he still sees prospects of advancement. Of course there will be cases of such young executives not wanting to take advancement, but very often this is for quite different reasons. One may not move to another town or another country because he finds his family do not want him to. Certainly, that there will be some young executives who will be affected I do not deny; there clearly will be some; but it will be a very small number, in my view. My own view is that something should be done for that type of person in the way of share option schemes, but it will have to be done in the context of a much fairer Budget than any we have had. I was myself not in favour of doing anything about share option schemes while at the same time many workers at the lower end of the scale were still badly off in real terms, but certainly a share option scheme is something one should look at. Then there is the argument about emigration because of the levels of tax. I thought that argument was dealt with once for all in the Jones Report on the brain drain, and it has been made clearer now by the numbers of our scientists and others who are returning from the United States to Britain because of opportunities no longer being available there and some opportunities being available here, indicating clearly that it is not the tax level which was forcing them to go in the first instance. So one comes finally to the entrepreneur and professional man. Clearly, in this sphere there is particular disincentive at the very highest level. But again I would like to qualify that substantially. Where we have a small private company making. perhaps, £200,000 a year profits, or likely to achieve that sort of level, the owner will not be deterred by levels of direct taxation because he may see a sale or flotation which will give him a capital gain. Therefore, levels of direct taxation will not really be a disincentive to that sort of man, although it is a disincentive after he has sold if he no longer has any incentive to work in that company, or sees nothing left for him, so that he may say it is not worth bothering to work any more because he cannot get anything out of it worth bothering about. This sort of person loses his drive and further ambition, but it is that rather than tax which affects him. So the man who is particularly affected in this category is the man a little lower down, making perhaps £20,000 a year, who could well go on if it were not for a particular level of tax. He is not big enough to float or sell, and he decides he will not go on just to earn a few thousand more a year. It is that type of man who will start taking it easier, and it could well be that it is that sort of man starting to take it easier that we should be missing unhappily, even though a small percentage of the 64,000 people.I am following the hon. Gentleman's point, and the whole House is interested in it. Would he not agree, however, that there is another result of high marginal rates of tax which he has not mentioned, and that that is what is developing today, the increasingly unhealthy development of fringe benefits?
I accept that because of the direct taxation system we have a high percentage of fringe benefits. Compared with the United States, where there are very few fringe benefits, there is a substantial difference in this country. But the chance of moving away from our direct tax system on a big enough scale to be able to do away with fringe benefits is very slight.
I sum up the disincentive argument. The effects are tiny, but important, on a small number of people. It is difficult, if not impossible, to help a few while being fair without giving large sums to people who would not be affected by the disincentive argument. I should be prepared to abolish the highest levels of surtax and have an amalgamation of surtax and income tax, which I am surprised we have not done before. But I would do that at the same time as introducing a wealth tax and a gift tax, which the Opposition do not cheer in the same way. While introducing those two taxes, I would reduce estate duty, which might do something about increasing the incentive to save. The thing about which I really wanted the Chancellor of the Exchequer to do something is the level of personal income tax. This would have involved substantial changes such as the removal of the earned income relief and coming to a clear understanding of the tax charge on the average taxpayers. This would have involved in turn a substantial change in the scale of personal allowances and a big upheaval in the structure of the income tax system. It is a little sad that after six years in office the Government have not recast the personal taxation structure. I do not know whether that is because the Chancellor of the Exchequer has accepted the argument about the administrative difficulty of the Inland Revenue finding the staff. If that is so, I am sorry, because we have had some years in which to prepare and to make sure that that was not a reason for making such a change. The Government should not use the argument that they cannot change the tax system simply because the Inland Revenue. or whatever branch of the Civil Service may be involved, would be incapable of coping. If that is not the reason. it is just as sad, because it means that insufficient attention has been given to the need for a radical upheaval of the direct tax system. I have never suggested, and I do not suggest now, that there is a magical formula. Unlike the Opposition, I do not believe that we can make major switches from direct to indirect taxation without being very unfair. But we can start with being honest and devising a system which is more readily understood. I hope that before long we shall have such a system from the Government.8.53 p.m.
The Chief Secretary to the Treasury concluded his speech by talking about "a relieving Budget". Were I not a Member of the House, I would refer to that as monstrous mendacity. Nothing has been relieved. On the contrary, we are all burdened more heavily than ever before by a rising scale of taxation, which will be evident as the months go by during this financial year.
During the period of Labour government of six years, the total central Government revenue from all forms of taxation has almost doubled. Nobody has yet quoted in the debate the extent of the rise in taxation for which the Labour Government have been responsible. I propose to put it on the record. In their first year of office, 1964–65, they raised £7,431 million in taxation. Their estimate for this year, 1970–71, is £14,553 million—practically double. Those figures are incontrovertible: they derive from Treasury sources. They may involve a couple of tiny qualifications about the method of calculation, but margins of error as to perhaps 0·1 of 1 per cent. only. Substantially, Labour has doubled the taxation of the country in five years. Has the nation got doubled value for its money? Of course not. When I say that taxation will not be relieved by this Finance Bill, I remind the Chief Secretary and the Chancellor, who is never here and never pays the House the courtesy—it is no good the F.S.T. shaking his head in dissent; he is making one of his rare incursions into a financial debate—of listening to later speeches—the Chancellor loves listening to himself, but to none others—that rising prices of manufactured goods, which themselves attract indirect taxation in the process of price increases, then attract more indirect taxation. I will give the Chief Secretary the best example to hand at the moment. If the right hon. Gentleman went away and looked up the records he would find that the principal contributor of revenue to purchase tax is the motor car. Out of £1,100 million raised through purchase tax, about £200 million comes from motor cars. Every time the prices of cars go up the Chancellor takes more revenue. The prices of cars have gone up right across the board about four times over the last 18 months, and not just marginally. They have gone up by £15, £20, £30 and £40 per car. Whenever the wholesale price goes up by perhaps £40 per motor car, of that £40 the Chancellor's grab—"grab" is the correct term—is 36⅔ per cent. That process will be enlivened and accelerated during the passage of this financial year as inflation hastens. Therefore, for the Chancellor of the Exchequer or his principal lieutenant to talk about relief is like a piddle from a full bladder, if the right hon. Gentleman understands the analogy. Let us be just. We all have bladders and we all do piddles, so perhaps we can understand the analogy. For the Chief Secretary to talk of relieving himself in this Budget is surely exactly what I described at the outset as being monstrous mendacity. Prices will rise ever upwards during this year. I want to draw attention to an even more damning indictment of Labour rule during the last six years in the context of taxation by pointing to the percentage of the gross national product taken by Labour in taxes since 1964–65. In 1964, central Government taxation took 24·5 per cent.; in 1969, it took 34·1 per cent. In 1964, National Insurance contributions took 4·9 per cent.; in 1969, they took 5·8 per cent. In 1964, the local authority rates took 3·7 per cent.; in 1969, they took 4·4 per cent. The total taken in 1964, as a percentage of gross national product at factor cost, was 33·1 per cent. and in 1969 44·3 per cent. So Labour has put up the percentage of gross national product taken by taxation by no less than one-third in six years. Indeed, that is the epitome of the election peroration I shall use on every platform in a few months' time. It is that the Labour Party is the party of increased and increasing taxation. The Tory Party is the party of reduced and reducing taxation. Let that be learnt throughout the nation as a first precept of true electioneering and be studied closely by all the new electors on the roll. I turn to the second feature of the Budget. I condemn it absolutely and this Finance Bill which implements it, because there is nothing in it to reduce high unemployment which we shall debate tomorrow. On 13th April last there were 616,000 unemployed, including 89,500, or 4 per cent. in Scotland—a record in all the years since 1940 for April returns. There is nothing to prevent the precipitate rise in prices we have experienced in the last 12 months. And there is nothing whatever to prevent prices continuing to rise at the same rate throughout the year in prospect. Third, there is nothing to promote additional exports or to reduce imports or to further a policy—or a non-policy perhaps would be a better description—of import substitution. Fourth, there are no production incentives in this Bill. Fifth, there is nothing in the Bill for 94 per cent. of pensioners. There is a modicum of help for the 6 per cent. paying income tax, but 94 per cent. of pensioners do not pay income tax. Sixth, and last, there is nothing to relieve—I am sorry to use the Chief Secretary's word again—the inordinately high interest rates which afflict all those who take on hire purchase or seek loans for the purchase of houses or capital equipment. I turn to indict the Government in perhaps a novel fashion. I would remind my own Front Bench that the Government, through a principal agency, namely, the Post Office Giro, are now offering loans at an interest rate of 1½ per cent. per month, or 18 per cent. per annum. That is what the Government itself regard as a norm for lending money through that principal agency. I call those usurious rates. If a private enterprise lending establishment had charged 18 per cent., what would the Fabians and Socialists opposite have dubbed them?—gnomes of Zurich if they were bankers, Shylocks if they were small traders. Yet here are the Government. through the Giro, charging 18 per cent.—an unpardonable rate for lending money. I promise that the Treasury will hear more about this matter from me in the next few months. I turn to the much-vaunted income tax reliefs. I thought my constituents had got the matter right. One gentleman from Malvern wrote me thus:He has got it right. That is what people have not yet realised-3s. 0½d. a week is what this Budget is worth to married couples all over the country. I have a word for it, nugatory—trifling, if you like. I spent my £7 17s. 6d. on a good "blow out" on Budget night. I went to the research department of the Library here to have some figures prepared for me in preparation for this speech on income tax matters. I asked the lady there how she fared and she said gloomily, "My tax has been increased." I said, "I don't believe you." She said, "My tax has been increased by 7s. 6d. a year." Not all people are thanking the Chancellor. They have to pay all the extra increases in indirect taxes. They receive no extra benefit from income tax relief. The trifling reduction for married couples will have no influence whatever on the price of goods in the shops. I condemn absolutely what the Chancellor has done with the application of any money he could afford for tax relief. Let me put the tax relief in proper perspective [Interruption]. I am not sure, Mr. Deputy Speaker, whether I am making a speech or one is being made from below the Bar of the House. I will put this in correct perspective. The total of tax relief is £220 million and the increase in taxation under Labour Governments is about £3,300 million per annum—repeat, per annum. One-fifteenth part of £1 is ls. 4d. So that on every extra—repeat extra—£1 on taxes levied by Labour since 1964, the Chancellor, in this Budget, has given back ls. 4d. The swag in the Chancellor's bag is 18s. 8d. [Laughter.] Stop laughing. The swag is 18s. 8d. and the relief, the piddle, is 1 s. 4d. That is how serious the position is. The country will hear about it from me, if not from the Leader of the Opposition. I do not need the Chief Secretary from Gloucester to work out my sums for me. My mental arithmetic is twice as good and twice as fast without a computer. I hesitate to estimate what the result would be with a computer. Probably the first cousin of the Government computer at East Kilbride, if hon. Members understand what I mean, which churns out more mistakes than right answers. The Under-Secretary of State for Scotland does not know that the principal income tax computer is at East Kilbride and that the main complaint north of the Border is that more mistakes have been made in the computation of P.A.Y.E. since they went on to the computer at East Kilbride than when they were done at local income tax offices. The hon. Gentleman should go there to smarten up the computer." Every tax-paying voter in the country has read the banner headlines proclaiming increases in personal allowances. But not one in 10,000 seems to have been made aware that the 6s. rate has been replaced by the flat rate. The result is that most people to whom I have spoken on the subject simply will not believe that married couples are only approximately £7 10s. a year better off while the single ones have a small increase in taxation."
We did observe the circus tour that the hon. Member made in Scotland when those remarks were made. I think that they were made more by the hon. Member than anyone in Scotland.
That seemed to be a rather irrelevant intervention—characteristic of feebleness.
Let us now talk about the pensioners. I could not get the Minister of State, Treasury, to give way to me on 15th April. He is not one of those people like the Chief Secretary, who frequently gives way. The Minister of State said this:Oh, indeed. Let us have a look at the old-age pensioners and have the truth of the situation dragged out. The number of people drawing State pensions at the last count was 7,015,000; that is the last figure available to researchers in the Library. Of that total, 5·7 per cent., or 400,000, were paying income tax and will benefit by the Chancellor's provisions in the Bill. Therefore, 94·3 per cent. of pensioners are no better off and 5·7 per cent. are slightly better off. That is the degree of the exaggeration from the Treasury Bench of which the Minister of State was guilty. I do not wonder that he would not give way to me on 15th April. He knew that I was going to shoot him. I shall return to this point in Committee. I shall address myself now to the question of tobacco—an unusual topic, but an important one in a Finance Bill. I will give the House the relevant figures so that they can be put in the correct perspective. The Chancellor raises from tobacco duty approximately £1,125 million. Of that figure approximately £985 million is in respect of tobacco in cigarettes. This is a massive sum. Smoking cigarettes is very bad for the health. I endeavoured to take through the House a Bill entitled Cigarettes (Health Hazards) Bill, designed to secure the bold and lurid labelling of every cigarette packet with a health warning. But the responsible Minister—the Secretary of State for Social Services—blocked the Bill. He would not like a Tory to have the credit of taking it through, though it is backed by four doctors who are Members of the House and an equal number of Labour and Tory Members. The real reason the Secretary of State blocked it is that the Treasury advised him to do so: it is afraid of losing revenue; it is afraid of suffering a loss of revenue from the £985 million. The Treasury is afraid that, if people are warned of the dangers of lung cancer by lurid health warnings being displayed on cigarette packets, sales of cigarettes will fall off and the Chancellor's revenue will also fall off. That is the Secretary of State's reason for blocking the Bill. Clause 4 of the Finance Bill deals with something rather new—synthetic tobacco. We are within sight of inventing a substitution for tobacco leaf to put in cigarettes which will amelioriate—I put it no higher than that—the health hazards from smoking cigarettes. To expedite the processes of research, Clause 4 at this stage postulates—I hope that it will become law—first, that this synthetic material may be manufactured; second, that when it is used for research purposes the tobacco duty will not be applied to the synthetic material; third, that if and when the synthetic material is used for production cigarettes—cigarettes that are not for research purposes—it will attract the same duty as an ordinary cigarette made out of tobacco leaf. That principle is wholly wrong, and I shall endeavour to alter it later. I have found out exactly what tobacco does in terms of our balance of payments. During the four years before devaluation of sterling, our average imports of tobacco were £85 million per annum. That is the average in four years 1964–67 inclusive. During the two years 1968 and 1969 the average import was £110·5 million a year. Not only, therefore, have tobacco imports increased by the expected margin arising from devaluation, but they have also increased by a further equivalent sum due to increased consumption of tobacco in this country, so that the overall increase of tobacco consumption during 1968 and 1969 is at the rate of 30 per cent. compared with the average of the four years before devaluation in 1968. These are very serious figures. It is manifestly in the national interest to try to diminish the volume of imports of tobacco, especially as—and this is not a party political point—I remind the Chief Secretary that out of the £110·5 million of tobacco imports in 1969, £59½ million came from the United States of America and were paid for substantially in dollars. The balance of £50 million came from many foreign countries, and to a very small extent from Commonwealth countries, due to the elimination, I am sad to say, of Rhodesian leaf. But the total of £110 million, I should have thought, is an import figure that we would all be anxious to diminish. I suggest to the Chief Secretary that what we should do is this. We should amend Clause 4 at a later stage to provide not only for relief from duty of synthetic tobacco on the application of that synthetic material to research purposes, but also of synthetic tobacco used for production purposes, knowing that the latter would be a direct substitution of pure tobacco leaf imported most largely from the United States of America. With those few words I wish to conclude, and say to the hon. Member for Heywood and Royton (Mr. Barnett) that I will deal with him in Committee as usual on Clauses 11 and 12, respectively, income tax and surtax. As before, I shall seek to reduce the standard rate of income tax from 8s. 3d. in the £ to 7s. 6d. in the £ and the top rate of surtax to a maximum of 7s. 6d. in the £, so that no direct taxpayer, however great his earnings, will ever pay more than 15s. in the £, will never pay more than £3 out of £4, always retaining £1 out of the last £4 he earns, somewhat worse than the United States of America, where the richest earner pays 70 cents. out of the last dollar he earns and retains 30 cents. Those are true incentives at which we ought to aim. I remind the hon. Gentleman that I am not a fly-by-night, changing my ground every year to a different aspect of taxation and becoming more and more righteous and "pro-Nabarro" in my fiscal outlook, as the right hon. Gentleman does year by year as the General Election approaches. Mine is an utterly consistent theme. This will be the fourth consecutive year that I shall have moved the reduction of the standard rate of income tax accompanied by the reduction of surtax rates which I regard as utterly indispensable to the restoration of incentives throughout industry, trade and commerce. This is a loathsome Bill, a horrible, bad, smelly joke of a Bill. If I had my way I would join my righ hon. Friend the Member for Taunton (Mr. du Cann) in the Lobby in voting against the Bill. All that it does is to give back ls. 4d. of the taxpayers' money out of every extra £1 of taxes which the Labour Governments since 1964 have taken. I allow the Chancellor, by my silence and my failure to vote, to keep 18s. 8d. of my money in the form of swag. If my right hon. Friend decides to change his mind and would like to tell with me, let Taunton and South Worcestershire be the fiscal purities in this House; and I should be delighted to accompany him into the Lobby." This Budget gives the best tax relief where it was needed—to the old-age pensioners …" —[OFFICIAL REPORT, 15th April, 1970; Vol. 799, c. 1415.]
9.22 p.m.
In a speech some tame last year the hon. Member for Worcestershire, South (Sir G. Nabarro) said what a good comedian he would have been had he not entered this House. Since then I have found that this was the key to an understanding of him, and I have enjoyed his performances ever since, not least that of today, when he excelled himself.
Thank you very much, dear boy.
The hon. Gentleman made one point which I want to take up, and that related to the tobacco duty and, in particular, Clause 4 of the Bill. I agree that there will be considerable repercussions as a result of experiments being conducted into the production of a synthetic tobacco. I was connected with this some time last year when I made representations to the Financial Secretary asking him to introduce a differential tax between cigarette tobacco and other tobacco. I was turned down by my right hon. Friend, although I would point out that there is nothing inherently administratively difficult in differentiating between these different tobaccos.
At this stage it is important to give massive encouragement to synthetic tobacco if it is found to be less injurious to health than the natural variety. We know that the investigations will need to be complex and long, and it is not for any of us to say with certainty, although indications are promising, that the health hazards of tobacco are at an end. Assuming that it satisfies the requirements of health, it will be the duty of the Chancellor progressively to forgo the large revenue which he obtains from the tobacco duties. This is not a matter peculiarly affecting tobacco. We are seeing it in other kinds of raw materials. We have seen it in synthetic textiles, to which we gave great encouragement by way of the application, at a high level, of import duty. We saw it again in connection with the growth and development of synthetic rubber, and it is obviously a pattern that will be repeated to our immense benefit. It may be that our historic role as a massive importer of many of these raw materials will be modified. If my right hon. Friend the Chancellor of the Exchequer is unable to accept a differential tax between ordinary tobacco and synthetic tobacco, which is accepted to be perfectly feasible, he must provide financial encouragement so that the work on tobacco substitutes for cigarettes, pipe tobacco and other kinds of tobacco can go ahead for the benefit of the health of the people and also of our balance of payments. I refer briefly to the Budget judgment of my right hon. Friend the Chancellor of the Exchequer. He called it a cautious Budget. He said:It is not a misquotation or a misattribution to say that this is the cautious Budget that many of us have thought it to be. The Chancellor of the Exchequer stated the three essential requirements that he foresees for the economy over the next year, two of which I am concerned with. One was the growth of total demand within the productive potential, and the other was the improved and sustained growth of industrial investment. This is what the Budget strategy largely consisted of. The total demand is to be kept within the rate of expansion of the productive potential. That means capital investment. The second demand was for improved industrial investment. There are no new proposals for industrial investment, and industrial investment has been much below what we wish to see. So the growth of productive potential will be limited, and, therefore, the growth of total demand will be limited. The Chancellor of the Exchequer also said that he wished" I have deliberately proceeded with caution."—[OFFICIAL REPORT, 14th April 1970: Vol. 799, c. 1253.]
He stated subsequently that to get the growth we must increase the productive potential, and to do that we must increase industrial investment, about which there were no fresh proposals. The commitment to steadily increasing growth, therefore, had no foundation, either in the Budget or in the Finance Bill. To get this steadily increasing growth when there are no new proposals to this end, we must assume that the strategy is to avoid massive "stops" and "goes", and to keep the economy on an even keel in the hope that it is so poised that it will of itself generate the steadily increasing growth to which my right hon. Friend referred. I can see nothing else that will give us increasing growth over the next year, or even the year after. This is the opposite of the planning that I wish to see. It is a reversion to the policy of holding the ring while the economic forces within the community work themselves through. We are now in a position to go further than that. With the balance of payments surplus, and the inventiveness and capacity of our people, who are inferior to none, we can assume that our economy is, at least, as good as that prevailing in other parts of Europe. The weakness of all this discussion is that we can never make the alternative decisions on which the House should decide. We have in this House a peculiar situation, in which we divorce taxation and expenditure. Thus, while the hon. Member for Worcestershire, South wants to reduce taxation, many other hon. Members want to increase expenditure. We shall never get a proper assessment until these two items are discussed together, until we discuss increases in expenditure and accept the consequences in increased taxation. So far are we from that fairly elementary principle that we are not even given the choice between different kinds of taxation. If the language of priorities is what this House is all about, we do not even have the presentation of choice, because that demands the adequate examination of alternatives. This House is no assembly in which to discuss the adequate examination of alternatives. They are not even put before us so that we can discuss whether one way of raising money is better than another. The House can never make this examination, which is absolutely essential to the Finance Bill and taxation. The powers of debate are valuable but limited ends in the modern world. What we need is the power of preparation and examination of alternatives. If that were all it would be bad enough, but it is even worse. The Treasury nowadays does not even need to defend its proposals adequately. We never have a real debate with the Treasury. We have not had the real debate about why the income tax system has been allowed to remain unreformed, and with no precision within the different income levels. So the increasingly powerful Treasury is not forced to defend its arguments save in debate, and this is no defence. But it is even worse than that. With the changes in Government Departments, we had the theory of "creative tension". Whatever criticism could be made of this —I was a critic also—it meant that at the higher levels of debate the Treasury was open to question within the Cabinet. There were other Ministries with equal economic interest which could challenge it. There was the Board of Trade, which, with a powerful economic interest, could defend arguments it thought important and suggest other methods by which the Treasury might move. But, with the elimination of the Department of Economic Affairs and the diminution of the Board of Trade's importance, even that restraint has gone. So the Treasury has no need today to argue its case before any powerful body in the land. This is a most serious consequence. What we should do is set up a Select Committee on economic affairs. This House was devised to do this, but changes in operation have meant that it cannot. The House must devise a new kind of instrument, so that the Treasury can be faced with an argument and can even have a dialogue with somebody. It can have no dialogue at all at the moment. It is useless to think that this kind of discussion can go on inside the Treasury alone. We all know of the kind of self-criticism which is being experimented with in the Soviet Union and the failure of that kind of system to provide the adequate debate which, by their very nature, democratic countries are able to have. Today our chief economic Department, the Treasury, is not required to defend itself, is not required to have a debate, and is not even required to have a dialogue with any body of importance. It is this which needs to be changed and to be challenged. If we wish to ask the Treasury why it is that we have the Budget judgment, the Budget strategy and a lack of change in our income tax system after all these years, we cannot put the questions and receive answers in the way that a Select Committee could, with advantage not only to itself but to the Treasury. I have felt unhappy about these changes in the income tax structure. We have been tinkering with it over the past year or two, but, far from improving it, we have been making it worse each time. My right hon. Friend is quite right to try to help those at the bottom of the scale. With our present structure, the difficulty is that we have to operate in such a way that when a person comes into the taxed category he immediately starts at the rate of 32 per cent. There was no other alternative available to my right hon. Friend in order to achieve what he wanted. There are other methods of creating tax structures which are not of enormous complexity. One could even provide simplification. One could have a tax as a varying percentage of income, for example. But we do not even know whether these kinds of proposal have been examined by the Treasury. We want someone who can appear before a Select Committee and be asked what investigations have been carried out and what conclusions have been reached as to the practicability of other methods. At the moment there is no way for us to find the answers. There are other methods. If we were to change the structure, not only could we get the shape of the curve any way that we liked. We would also get a result which would be of enormous advantage to Chancellors of the Exchequer in that the structure could be modified in any way required to take account of the changing circumstances of people and the differences in the amounts of money that the Chancellor wanted to raise, while also taking into account questions of fairness, lack of complexity, and so on. There are these methods. Some are simple, some are more complicated. Some are difficult to understand, some are easier to understand. Those of us who have given some thought to these matters felt that we have a contribution to make, but we may be wrong. These are vast problems. The difficulty is that the Treasury has not been obliged to face the kind of forum where it could be questioned sufficiently about its efforts in this direction as well as in others. The hon. Member for Worthing (Mr. Higgins) repeated a number of comments made by others about the level of inflation. What we must all get clear in our minds is that the rate of inflation in this country is matched in other countries. We must understand the reasons for it: I notice that the hon. Gentleman appears not to agree, so perhaps I might refer to one or two figures. I usually regard as comparable countries those which are in direct competition with us. Mine is not a list which has been specially selected for this purpose. Other hon. Members might make different lists, but I suggest that the countries involved would probably be much the same. They are the United States, Germany, Japan, Italy and France, and Canada is probably marginal for inclusion. In these countries the levels of inflation have risen from 3 per cent. in 1966 to 5 per cent. in 1969. If one takes the level of wage increases this year as being between 8 and 9 per cent. and the increases in productivity at about 3 per cent., we are left with much the same figure, 5 per cent. or 6 per cent., perhaps a shade more. We are thus not much out of line with what is going on in the rest of the world. The situation is international because all these countries face the same kind of problems. In the post-war years a generation has come into the factories and offices who have never known the fear of unemployment of the pre-war years. They thus behave in a way rather different from that of their fathers. They regard it as the responsibility of the State to provide them with continuous full employment. Because they do so, and because they are prepared to cast their votes for those parties which accept that responsibility,ipso factoit does become a responsibility of the State. A democratic State is responsive in this way. So wage increases, at least in part, become in general the responsibility of Governments to a greater extent than before. Whereas employers might have stood firm, as Governments become more and more involved in economic operations they tend to give way to wage demands a little more readily than some of the employers of the past. This in itself is a built-in inflation factor. It is therefore not surprising that the countries with which we can make direct comparisons are inflating at roughly the same kind of level as ourselves. There are, of course, variations, but over all, year by year, this kind of inflation is common to all these countries. What we are seeing is not even steady inflation but something a little worse than that. We are seeing an acceleration of the rate of inflation, and it is happening in all these countries because, as workers and trade unions get more sophisticated, they begin to anticipate inflation. When they make their demands, they do so on the basis of a built-in feeling about the rate of inflation likely to occur in the year following. What could be yet another twist in the spiral is that they may come to anticipate an increasing inflation, expecting that next year's will be greater than this year's and so on. Fortunately, that situation has not arrived in this country yet but it would be a great optimist who believed that it could never happen. Faced with such a situation, in which we may be only at the beginning of a spiral which I hope we shall not see, it becomes even more important to plan our defences. The only possible answer is some kind of prices and incomes policy. I have been against a rigid prices and incomes policy, and I laid my views on the line in 1966. I believed that the kind of slow start which my right hon. Friend the Member for Beim (Mr. George Brown) made—building on experience year by year so that we could get this kind of sharing—was the right way. Progress in this sort of thing can be measured only in decades and not years. Given such a start, then we might well have been somewhere along the road by now. These are matters on which we have to proceed very slowly indeed. It is a pity that we have wasted a number of years but, looking at it in the time-scale of this method of control, it is not too late even now to make this modest, cautious beginning. The Budget was too cautious for the present time. As my right hon. Friend the Chancellor of the Exchequer knows, many of us have been prodding him to remind him of his expansionist past. I hope that at some time we shall remind him successfully." to guide the economy into steadily increasing growth."—[OFFICIAL REPORT, 14th April, 1970; Vol. 799, c. 1213.]
9.45 p.m.
I was particularly glad to hear the earlier part of the speech of the hon. Member for Ashton-under-Lyne (Mr. Sheldon). His constituents share with mine an important weekly newspaper, and I am glad to think that both sets of readers will read his eloquent regret at the absence of any reform of the tax structure and, equally, his regret at the absence of dialogue between the House and the Treasury.
Earlier, the hon. Member for Heywood and Royton (Mr. Barnett), whose constituents share another weekly newspaper with mine, did such a magnificent demolition job on the opening and extraordinarily bland speech of the Chief Secretary that there is only one corner of the right hon. Gentleman's remaining structure which I should like to demolish so that everything is razed to the ground, to the level established by the hon. Member for Heywood and Royton. The Chief Secretary, whom I sought to interrupt, but who hoped that I would be able to make my point later in the debate, was so complacent as to declare at the Dispatch Box that the Inland Revenue is working efficiently and that the chances of maladministration are only about one in a million. This is to imply that maladministration works only one way, and that the Revenue is efficient if only a relatively small number of taxpayers discover serious maladministration in their own tax affairs. While admitting that, taking instance by instance, the direct suffering of a taxpayer through being charged too much is the worst of all possible offences, I cannot admit the implication of the right hon. Gentleman's speech that it is all right if the Revenue lets a great many taxpayers get by with less than this House has decided they ought to pay, not because I rejoice in the Government raking in the shekels, but for the obvious fact that now that so many taxpayers are allowed to get off with less than their proper obligations others have to pay more in the following year, because if the revenue is less than it should have been there is an inevitable tendency to put up rates in the following year. If the Chief Secretary had allowed me to interrupt him he could not have denied that he has seen, and not, apparently, taken any great exception to, the Fifth Report of the Estimates Committee in the Session 1968–69, which said, in paragraph 24:How in the light of an impartial, independent statement like that, the Chief Secretary is able to stand at the Dispatch Box and try to tell the country, through the House, that the whole system is working efficiently, I should not be able to understand had I not on many previous occasions listened to the complacencies of the right hon. Gentleman. It is necessary that something should be said to correct the impression which is still given to the country, through numerous newspaper reports, that the Finance Bill is the main vehicle for giving effect to the Chancellor's Budget proposals. That has been less and less the case in recent years and, certainly, the Bill we have before us carries out only a minor part of the Chancellor's proposals. In particular—and I have no complaint about this for I do not see how it could be otherwise—the Finance Bill contains no reference to the central part of the Budget strategy, namely, strict control of the money supply on the basis that the Chancellor himself spelt out in his speech. Nor does the Bill make any provision whereby the country or this House or, indeed, anybody outside the Treasury, can know whether that strict control is being applied. It is because of the fog of ignorance as to whether the Chancellor is diligently pursuing his avowed intentions that there is so much doubt, criticism and in some unfortunate cases excessive alarm being voiced in the country today. To take, if I may, the case of one outstanding example of excessive alarm, I had the misfortune, as one of the deputy chairmen of the Wider Share Ownership Council, a position I share with the right hon. Gentleman the Member for Sowerby (Mr. Houghton), to sift through what theEconomistthis weekend has called the over-alarmist views of Lord Shawcross. His speech contradicted itself so many times that there is no need for anybody to issue any contradictions from outside. I say simply to the right hon. Gentleman the Member for Sowerby that I have made known to my colleagues in the Wider Share Ownership movement how much I deplore that particular outburst and hope that steps are being taken to see that that kind of thing does not occur again at that particular type of meeting. But unless, before this debate closes tonight, the House can be reassured by the Minister of State that the Bank of England is selling enough Government stock to maintain the intentions of the Chancellor of the Exchequer of strict control over the money supply, and unless that is spelled out, doubts and queries will continue to resound and obviously will get louder, because this is the central weapon which the Chancellor chose—and not many people quarrelled with him—to deal at any rate with the most excessive part of the present and expected wage claims during the rest of the year. To Liberals, the most deplorable feature of the Bill is the utter lack of any attempt to reform the tax structure. In so far as there are any simplifications at all, they are merely to the clerical side of the most elementary parts of tax calculation. If Conservative Governments had started the computerisation of the revenue at the time it should have been started, even those minor clerical refinements would not have been necessary. This Government will leave the taxpayer even less able to understand why he is being charged his particular tax bill than he was five years ago when the Government came to power. It does not seem to occur to Ministers on the Treasury Bench that the very same features of our complex tax system which deter people from entering the service of the Inland Revenue, equally appal the ordinary taxpayer who is the victim of the process, and particularly the elderly taxpayer who very often is subject, if he has a pension and is doing a couple of part-time jobs, to the most fiendish series of calculations and demands, many of which show that the issuing tax office itself does not understand the taxpayer's circumstances. I concluded my remarks in the Budget debate by describing it as a "watch and pray" Budget and I said that we would have to pray very hard before the summer was out. The difficulties I had in mind have come upon us even earlier than I supposed possible, and unless the Minister of State is able to give some reassurance about the operation of money supply control many people will say that the Government are past praying for." In recent years, especially since 1965, the volume and complexity of the work done by fully trained inspectors have greatly increased. At the same time there has been a failure to produce, either by direct recruitment of graduates or promotion within the branch, enough such inspectors to keep up their numbers … The result has been that they are no longer able to do all the work that ought to be done at their level. In the words of the Chief Inspector of Taxes, they ' have to make a much more highly selective choice of the issues to pursue and fight than (he) would wish them to '."
9.56 p.m.
The hon. Member for Worthing (Mr. Higgins) used the phrase "open-minded sincerity", implying, I thought, that that was a bad thing. I cannot think why. It is obvious that any Government will advance their proposals tolerably confident that they are right. At any rate, it would be odd for a Government to put forward proposals which they thought were wrong. I therefore cannot imagine why the hon. Gentleman used that phrase in a critical spirit.
However, the hon. Gentleman was correct later when he referred to the great gulf which exists between the two sides. I do not hesitate to support the Chief Secretary and the Chancellor in thinking it right that we should take sums by way of taxation and use them for expenditure on public services. Several hon. Members, notably the right hon. Member for Taunton (Mr. du Cann) and my hon. Friend the Member for Heywood and Royton (Mr. Barnett), in disagreeing with many aspects of the Measure, combined in regretting that so little was being done in the Bill. They both described it as a Bill of wasted opportunities. It is, in a sense, for this reason that I am inclined to welcome the Bill—precisely because it does very little. In previous Finance Bill debates I have advanced the theme that we should be extremely cautious before making tax alterations. Indeed, I have made this point in every such debate since I had the honour of being elected. Now the Chancellor is doing what I told him to do. I do not suppose that he is doing it because he paid note to what I said; but that does not stop me from claiming credit for what he has done. We should be cautious before rushing too readily into tax alterations. The Chief Secretary said that it is common ground that we should do all we can to smooth the path of industry. I have felt for some time that what is a hindrance to industry and commerce is not exactly a high level of taxation so much as a fluctuating and uncertain level. In a competitive commercial atmosphere, long-term planning is more than ever essential, but it is difficult because there are a number of variables—interest rates, wage rates and, obviously, sales —which must be prophesised as best they can be. I have, therefore, always felt it undesirable that we should wilfully add to those variables by making alterations in the tax structure, particularly since I suspect that in many ways such tax alterations have little more than a marginal effect. I am thinking not only of substantial tax alterations but of what I regard as tinkering alterations. Some have come forward this year, and I regret them. They are often introduced because a loophole or anomaly has been noted, and they are introduced, with perfect justification, to modify faults that have been discovered. I am reminded of the knights of old who for excellent reasons put one piece of armour on after another and so added to the total burden which they had to carry that it was so cumbersome that if they were poked off their horses they had to stay lying on the ground.It being Ten o'clock, the debate stood adjourned.
BUSINESS OF THE HOUSE
Ordered,
That the Proceedings on Consideration of the Lords Amendments to the General Rate Bill and to the Roads (Scotland) Bill may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[ Mr. Dobson.]
Finance Bill
Question again proposed,That the Bill be now read a Second time.
The best of British luck to those Amendments when we get to them.
And to the knights of old?
I have often thought that we make a mistake if we come forward too readily with proposals to plug loopholes or remedy anomalies, though for the best of reasons, taking them in isolation in each case, when the accumulated effect is the harassment of industry and difficulty in understanding the tax structure. I know that these things have to be dealt with, but I would rather see one thundering bumper Finance Bill once in five years for such purposes, and leave the anomalies to some such occasion. I also note and support what the hon. Member for Colne Valley (Mr. Richard Wainwright) said when he referred to the evidence of the Estimates Committee about the difficulties which the Inland Revenue is facing. I accept that evidence, and it seems to me that it is an added reason why we should be cautious before we make alterations too readily.
If it is in order to refer to the actual Bill itself—for not everybody has—I think Clause 1 is a perfect example of the kind of thing I am criticising. That is the Clause which provides a certain amount of tax relief when there is a hedging bet. Of course, there are obvious questions which arise. What difference will this make to the Revenue, and why are we not discussing a real bet rather than a hedging bet—if I have understood the Clause correctly? However, that is not the point I want to make. The reform proposed in the Clause is a quite obvious one. I have always understood that the reason why it was not brought in right from the beginning was an administrative one. Evidently, something has happened. Either the administrative difficulty has been overcome or else somebody in the Treasury has decided that justice must prevail over administrative difficulty. Therefore, what I should really like to know is not why this reform is being brought in but why it is being brought in now. What is the significant thing which has happened now that makes it possible to bring in this reform which was apparently not possible at the time when the tax was introduced? If we could do it at all why was it not done at the beginning? Why are we tinkering with it at this stage? I make this point about that Clause because this reform is one of which I happen to approve. If the arguments I am advancing are valid at all then I think they must be valid in all cases, and are not just extra arguments, so to speak, which I can throw in if I want to oppose some alteration of which I disapprove ayway. We can see the same thing in Clause 2, which proposes an alteration in the gaming licence duty. I do not propose to go through the whole Bill in this way, but in this case I know why this alteration was not proposed when the gaming duty was first brought in. It was because we were then waiting for the Gaming Act. The Finance Act, 1966, which introduced the gaming licensing duty, established it on the basis of rateable value, which was an odd thing to do because the connection between the rateable value of casinos and the amount of money staked was an entirely random one. However, we were waiting for the Gaming Bill to be introduced when that system was brought in. Now the opportunity has come, and instead of sweeping it all away we have tinkered with it and merely modified it and, in a sense, made it more complicated by introducing a principle which I can only call the principle of leverage. The question which comes to my mind concerns not so much the effect of these changes on the Revenue, although naturally I should like to know about them, nor why these proposals come forward, but' why these particular and rather bizarre proposals come forward at this time. Is there any necessity for messing about in this way? I hope that in Committee we shall be able to explore these matters in more detail than we do usually. I should like to know whether these alterations, however desirable they may be in theory, and whatever arguments may be advanced in support of them, are worth the trouble. I should like to be told that in some detail, and I hope that that will be possible this year. In previous years, when the Finance Bill has been a bulky document, the prevailing theme in Committee has been to get the Bill through. The question whether we got it right was apparently of secondary importance. Perhaps this year we shall be able to discuss the Clauses in question in detail and have the opportunity to which my hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) referred of having a dialogue with the Treasury Ministers and getting them to explain their policies in more detail than they do usually. The arguments which I am advancing are not arguments against the tinkering Amendments. I hope that they are arguments in favour of lessening the frequency of tinkering Amendments. If there were a five-year embargo, as I have suggested, on minor alterations, there might be more incentive, when the magic year came round, for us to take a great deal more trouble to make sure that we got the matter right without subsequent alterations being necessary. That is the main point which I wished to make. There is, however, a further point on which I touch briefly. Clause 16 proposes an increase in initial allowances. It is no part of my function to criticise that proposal; on the contrary. But the implications of the Clause deserve a little thought. Although I could not agree with a great deal of what the right hon. Member for Taunton said, he was on a good point when he referred to the difficulty in which the National Savings Movement finds itself. His remarks need to be considered very seriously. I cannot avoid feeling that the implication behind Clause 16 is that the investment which we greatly need is, in the Government's view, to come mainly from internal savings. If that is so, does it mean that the Government have abandoned the National Savings Movement and any idea of savings being raised from outside? Are we to assume that in future all savings necessary for industry will be generated within industry itself? Is that the implication of the Clause, coupled with the fact that the National Savings Movement is in difficulty and, therefore, other savings are in decline? Perhaps I am reading too much into the Clause, but I hope that the Government will not assume that all the savings that we require, whether through public or private enterprise, are to be found by internally-generated savings.10.10 p.m.
I find this Finance Bill disappointing from a political point of view and alarming from an economic point of view.
Regarding my political disappointment, hon. Members may recall that before the Budget Statement there was considerable speculation about how much the Chancellor would reflate the economy—whether it would be £200 million, £300 million or £400 million. In the event he selected £200 million. The initial reaction to the Budget seemed to be that the Chancellor had been rather statesmanlike instead of playing the party politician. It appears from the opinion polls that the public have liked this. I hope that what is known on this side as "Macleod's iron law of Budgets" will operate—namely, that the initial reaction to the Budget is always reversed within three months. Indeed, I believe that it will be reversed more quickly, because I am beginning to get correspondence from constituents who realise that they get very little or no benefit from the Finance Bill, and in some cases have to pay more tax. It would require a financial genius of remarkable stature to discover a more secretive, obscure and private way of giving away £200 million. One could acquit the Chancellor of any political motive in doing it. Great play has been made by the Chancellor, and by the Chief Secretary in his opening speech today, of the two million taxpayers who will be dropped out of the tax net. But those two million taxpayers are the yo-yo of the Inland Revenue. When the Chancellor can think of nothing else to put in his Budget, I feel sure that the Permanent Secretary to the Treasury says "Bring out the yo-yo", and the yo-yo is the two million who drop down, bounce back, and are pushed down again. I believe that a regular feature of every Budget will be the yo-yo, so the Chancellor can put his hand on his heart and say, "I have dropped them down again; I have dropped two million out of the net." But this is what the Chancellor said a year ago. He said that he was going to drop 1·1million taxpayers. But we found that the number of taxpayers who were brought into the net last year had increased by 1 million. So this group is again going through the yo-yo procedure. The Government can take precious little credit for that. I find the Bill economically alarming because, with the domestic surplus last year at £598 million and the estimate for the current year at £224 million, the Government basically cannot make any substantial reduction in taxation. When can they make a substantial reduction in taxation? The argument at the end of the 1950s and the beginning of the 1960s used to be that we could never reduce taxation because there was a large domestic deficit. But now there is a large domestic surplus. I think that the mechanics of our tax collecting system in relation to economic control have got substantially out of gear. Indeed, the most important statements in the Budget are not in the Bill. The most important statements in the Budget were what targets the Chancellor set for the money supply and the domestic credit expansion for the current year. We might in future see a Budget which merely consists of these two figures being given. I dare say that the Chancellor will drag it out for two hours or so, but the nub of the Budget was those two key figures. I should say in parentheses that those two figures have already been exceeded by what has happened through the Government's promotion of lending through the Giro and also the system announced today by Barclays Bank. In effect, we have seen the demotion of the Budget as the central economic lever of the financial year. Indeed, to some extent we have seen the demotion of the Chancellor as the person who can uniquely control that lever. I believe that the Chancellor at the moment is a fugitive from economic management. By doing nothing in the Budget and nothing in the Finance Bill, he has acknowledged that other forces in society are in control. He cannot reflate the economy because Vic Feather, Clive Jenkins, Jack Jones, and Hugh Scanlon have decided to reflate the economy, and because every militant trade unionist and every non-militant trade unionist and every trade union negotiator has decided to reflate the economy. These forces are not subject to any control from this House. They are what used to be called in mediaeval England "over-mighty subjects". The kings of mediaeval England realised that, in dealing with them, one had to do one of two things—decrease their powers or increase one's own. That is something which the Government have shirked. As a result, we have considerable inflation and, as the hon. Member for Ashton-under-Lyne (Mr. Sheldon) said, it is accelerating inflation. That is the really worrying factor: it is going up at a rate which none of us has ever seen before and which very few of us can really understand. The Chancellor recognised this in his Budget speech, when he said, rather lightly and passing over it very quickly:The Chief Secretary made this point at the end of his speech today, in saying that the Budget does not add a penny to the inflationary spiral. But in the same week as the Budget, the Chief Secretary will recall, there was a bill for £40 million from the Government for an increased health stamp contribution and a bill for £65 million from the Government for increased telephone charges. Once again, the public sector is the pace maker in this regard. This is a disappointing Budget, because a great opportunity has been lost. It always used to be said that, when one does not have to do much in a Budget, that is a great opportunity to start simplifying or reforming the tax system. But the Bill does not simplify the system—it makes it immeasurably more complicated. There are 20 pages in the Bill on occupational pensions for a start. The change in surtax is not a simplification but a considerable complication. The Chief Secretary may recall the speeches which he used to make in 1963 and 1964, saying that, when Labour came in, they would be a great reforming Government and that the two Measures which they would undertake above all were law reform, under Lord Gardiner, and taxation reform. In both these areas, their record has been dismal. There has been very little in the way of law reform and virtually nothing in the way of tax reform—indeed, an immense complication of the tax system. The time for tinkering with reform of our tax system is past. The economic affairs of the country cannot be put right by taking 6d. off the standard rate or rounding down purchase tax rates. Something much more fundamental is needed. What we have at the moment is an immensely complicated structure. One goes into that building, one pays one's taxes and one passes through. As one comes out at the back, one collects something from the State through the social security system. The first step in reforming our tax system must be bringing the two doors of the body politic closer together by bringing together the tax collecting procedures and the cash distributing procedures. The claw-back measures for family allowances introduced two years ago seemed to be a step in the right direction. I only hope that more steps are made in this direction. We should be more frank and perhaps slightly more explicit on this side of the House as to what we would do. We are not ashamed of our proposals because they involve an entirely new approach, a fundamental restructuring and reshaping of our tax system, not only moving it more away from direct to indirect taxation, but everything that is involved in social security payments as well. We cannot reform the tax system without reforming the social security system at the same time. This is the task of the 'seventies and it will have to be faced by our Government. It will throw up exciting possibilities for restructuring our whole fiscal, economic and financial set-up. I am glad that my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) is in the House, because he will have heard the many suggestions from hon. Members on this side of how this can be done. That is what the country wants to hear and what the Opposition are prepared to tell it." Everyone concerned with wage settlements should understand that, if we are to achieve the reasonable stability of prices which is necessary for a sound economy and a healthy social framework. incomes cannot for long continue to rise at their recent rate"—{OFFICIAL REPORT, 14th April, 1970; Vol. 799, c. 1225.]
10.21 p.m.
I am grateful for the opportunity to contribute to this debate. I apologise to hon. Members who have borne the heat and burden of the night when I have not been able to be present in the Chamber. As the hour is late I shall make very few observations.
I wanted to speak on this Finance Bill because I think that it represents the culmination—I certainly hope it does—of a process which has been in evidence since the days of Gladstone. That is the increasing dryness and emptiness of the Finance Bill. All politics is an aspect of the relationship between the one and the many. Where the financial relationship of the individual with the State is concerned, there is no reason why it should be accompanied by the trappings of legalistic incomprehensibility and a total absence of fresh thinking. But that is the case with this Bill. To read it fills one with a sense of emptiness and almost of despair. There is so much which could have been done and so little which has, in fact, been attempted. I feel that this is a Budget which was dictated largely by the administrative convenience of the Inland Revenue department. All the innovations in it are bred from a need to simplify the processes before the machine breaks down. That approach is not the making of a happy relationship between the individual and the community. The object of the Budget should be the consummation of a union between the individual and the community, or at any rate an exchange of Easter cards. Instead, the Budget is something to which people look with anxiety and fear and from which they obtain less and less comfort and satisfaction. The other force which has dictated the style of the Budget is the preoccupation of the I.M.F. with making tidy balances of payments between its members, one fears to the exclusion of serious considerations about the long-term interest of the world economy. It is not edifying to see one country after another, under the influence of the International Monetary Fund, attempting to build up surpluses by drawing resources from its neighbours. In the West we should try to create the greatest wealth we can in the world. We should not simply pursue the building up of surpluses for prestige or for some Election advantage. One might have hoped that the Budget would be based on a theme so that one could see running through it the Government's sincerity in some objective, whatever it may be, right or wrong. Whether hon. Members on this side might have liked that or not, it would have been a better Budget if it had an objective which was clear and could be defined. The objective which suggests itself is the one which arises from the change in the cost of living. The Government have admitted that there was a 5 per cent. rise in the cost of living in the last financial year. I do not like the cost of living to be expressed in terms of percentages because all of us have to live. It would be better if it were expressed in terms of so many shillings on the basic income. Let us look at what that might mean. Putting it at its lowest, if the cost of living increase over the last year was 5s. per person that would mean 10s. per week for a married couple, £1 a week for an average family with two children, and 30s. a week for a married couple with four mouths besides their own to feed. For people at the lower end of the income scale these are extremely serious changes. I have often tried to point out that the services we provide to people who are poor are mainly available to those who have no income at all or who for one reason or another are temporarily out of employment or perhaps in retirement. We have not got to grips with the problem of people who have a regular income but who do not find it enough to keep them abreast of what society feels is a basic minimum standard of life. We must tackle this problem by a drastic reform of the social services, or by a drastic reform of the tax system, or, as several hon. Members have said tonight, and as many people besides myself have felt for a long time, by a complete reconstruction of the cash relationship between the individual and the State. It is no good regarding the Budget as a one-way movement of cash from the individual to the community without realising that ultimately money circulates through the community as the blood circulates through the body. We cannot consider movement in the one direction without considering movement in the other. What does this Budget do about child poverty, a problem which is preoccupying hon. Members on both sides of the House—child poverty where it affects a man who is in work but cannot earn more? The Government have shown themselves completely barren of ideas in this respect. Having, as it appears, £200 million to give away, they have given it primarily to single people and to married couples without children. This is an extraordinary priority to have chosen. It arises from the administrative difficulties of the Inland Revenue rather than from anything else. I listened with great interest to the Chief Secretary's remarks about negative income tax. "Negative income tax" is an unpleasant phrase. I try to avoid using it, because the system which is designated "negative income tax" is neither negative nor a tax. I have always been convinced, since it first began to be recommended, that it was administratively completely unworkable and was merely an interesting laboratory exercise. However, the Chief Secretary has put his mind to it seriously, and we must take his objections to it seriously too. Although negative income tax is not an ideal solution to the cash relationship between the one and the many, it is one which has received a great deal of attention lately. I noted, before I had to leave the Chamber, the four points the Chief Secretary mentioned as being insuperable difficulties in the way of a negative income tax system or something of the kind. As I understood them, they were, first, its inability to respond quickly to new needs. Our present tax system, under the creaking old war-time Pay-As-You-Earn system which has survived into the seventies, can change week by week in relation to a man's earnings. It cannot be too difficult to devise a system which changes even from week to week in relation to other circumstances as well. That system may not yet have been devised, but to say that it is impossible to devise it is like the attitude of people who have given up trying to improve the efficiency of their companies and are unconsciously waiting for a take-over. I think that the Chief Secretary is waiting for a take-over in regard to his responsibilities in this respect, sincerely though he spoke. Then the Chief Secretary mentioned the complexity of any system which might be devised. I think he balanced it with inequity. There has to be either complexity or inequity. Our relationship as a community of 50 million living together is bound to be a complex one. We should not seek any quick or super-simple solution; that would be like trying to put all truth into one sentence, and it is not possible. If we accept that a change of the kind I recommend may be needed to be brought in over 10 or even 20 years, one can at least make a start. Where one makes a start is in the obvious places. Once the public and the machinery have become accustomed to the new ideas, one will also become accustomed to degrees of complexity which would seem overwhelming if they were introduced all at one stroke. It is not necessarily inequitable to make changes in line with public opinion. It is necessary to devise machinery that will follow public opinion and not dictate to it simply because the machine appears to demand a particular course of action. We must allow the new relationship to develop gradually, using the machine as its servant. The matter deserves fuller study. The right hon. Gentleman talked about the great cost. There is no net cost at all if a system can be devised in which everybody is left with the same spending power as he has now. This is not impossible. Bat if we introduce such a change we hope that it will also lead to an improvement in the conditions of the people whom society wishes to help. There is no reason why it should not. If we are willing to give £200 million to help the poorest people it might be said that to introduce the system costs £200 million, but the £200 million is already there to give, so there is no extra cost, provided we see that the people who gain are the people we wish to gain. We have then already made the expense a moral commitment of society. Finally, the right hon. Gentleman mentioned incentives, a matter that we could argue at much greater length. It is most appropriate to ask about incentives in connection with our existing system. Although it may be true that the great majority of wage earners pay marginal income tax of 6s. 5d. in the £, it did not need Professor Prest's interesting document to show that the true marginal tax rates the individual consciously or unconsciously suffers in his relationship with the community at large are often much higher than that. It is, indeed, our obsolete social security and tax systems that are having this disincentive effect. There is no reason why anyone should pay a very exceptional marginal tax rate in the future provided we can get rid of the anomaly left over from William Pitt, that the great majority of taxpayers pay no tax at all on the initialtranchesof their income—in fact, no taxpayers do. That means that to raise any substantial sum through income tax it is obligatory for the State to set marginal rates at points which have undoubted disincentive effects. I did not mean to speak too long on this subject. There are one or two other things that I hope will be discussed in Committee in connection with occupational pensions. We welcome the tidying-up of the complexities that have grown up since the 1952 Act. However, one or two points must be made in the middle of our general welcome for what the Government are trying to do here. Their concept of the proper treatment for death in service has already been badly received. It is obviously one of those things that must be reconsidered. Every wise Chancellor includes in his Budget one point on which he has already decided to give way when pressure mounts. Perhaps this is such a point, because it is certainly one that needs to be revised. The other point is the tragic omission of any reference to the self-employed, those pitiful gipsies who have been gradually alienated and driven out of our society because we force them to feel that they do not really fit in, they no longer belong. The 1956 Act was an attempt to provide the self-employed with a way of providing pensions for themselves which would not be out of line with the sort of pensions people provide for themselves in normal employment. We had the figures not long ago. The total amount subscribed since the passing of that Act to self-employed people's occupational pensions is only about £200 million, whereas in case of people in employment, who work for another man, the figures have risen in the private sector to over £7,000 million. Those figures alone must be shouting out that something needs to be done about the 1956 Act to make self-employed pensions more attractive. I hope that we shall have an opportunity to consider this later. To summarise briefly, it seems to me that this dry and unloving Budget is the Budget of a party that has run out of ideas and exhausted its compassion.
10.35 p.m.
I shall be brief, as the hour is late and as the debate has been brief, having regard to the debate earlier today.
It is a slightly wry thought that the House should have been packed for three hours this afternoon discussing a matter which, important though it undoubtedly is, does not basically and directly affect the people of this country as this Finance Bill emphatically does. We have had a rather empty House for this debate. I am sorry that there were not more hon. Members present to hear the Chief Secretary make his remark about the tax system working so smoothly and so well, saying that there was only one case in a million of maladministration, to use his own word. I find that a frightening complacency and can only believe that since the right hon. Gentleman's translation to the Treasury he has had no direct experience of the tax system as a consumer. I imagine that someone else must do his tax returns, because his statement simply does not match the experience of every person with whom I have talked about this. Let me make it clear where the blame lies. It lies not with the hard-working, often grossly overworked officials in the Inland Revenue, but fairly and squarely with right hon. and hon. Gentlemen opposite who, by their ill-judged tax reforms and complications, have thrown such enormous burdens upon the machinery. My right hon. Friend the Member for Taunton (Mr. du Cann) and other hon. Members have called for a great simplification of the tax system. The hon. Member for Chislehurst (Mr. Macdonald) seemed to discount this and said that this tended to be tinkering, and he welcomed the Bill with its very few changes. The right answer is that one can satisfy my right hon. Friend and the hon. Member by saying that there is no doubt whatever that what needs to be done to our tax system is to have a radical structural simplification—then leave the damned thing alone for a number of years. This is what we really need. That this will be the policy of my party is now clear. It is a policy to which we have devoted several years of intensive study. [Interruption.] I am glad to have the attention of the hon. Member for Heywood and Royton (Mr. Barnett), because I think that he may find himself supporting us. It is the sort of work that can properly only be done by a party in opposition, which has the opportunity to study the thing in sufficient detail. There are two points I want to deal with before coming to the main part of the debate. The first concerns the interesting announcement which the Chief Secretary made about mineral royalties. We welcome this alleviation. We will await the new Clause for the details and I hope that the Government will feel able to put it down as early as possible. We must know tonight from what date the new arrangements are to operate. I appreciate that in dealing with existing contracts and leases there are bound to be complications. This is really the parallel of the Chancellor making an announcement in his Budget Statement, when he is extremely punctilious to make perfectly clear the date from which any tax change will operate. I hope that the Minister of State can give more information about this. The other point has to do with what the Chief Secretary said about the Bill dealing with injustices in the system. I mentioned an injustice when I spoke in the Budget debate. I mentioned the injustice done to wholesalers by their subjection to S.E.T. when they are in competition with industrialists who do their own wholesaling and who are exempt from the tax. It is the most glaring anomaly and injustice, to which the Reddaway Report drew attention. I have led a deputation to the Minister of State, but no reply was given by the Financial Secretary, the Minister of State, or the Chancellor to the criticism I made in the debate about the omission of any remedy for this anomaly. The Minister of State owes the House and the trade an explanation of why it has not been possible to relieve wholesalers of this anomaly. The Chief Secretary dwelt at some length on the reliefs granted in the Bill, amounting in a full year to £220 million and this year to about £179 million. One should recognise what this is relief on. The estimated yield for taxation for 1970–71, eliminating the repayment of import deposits and allowing only for the net yield of S.E.T., is £14,653 million. Compared with the previous year, calculated on the same basis, which was £13,183 million, that is an increase of £1,470 million, or 11·1 per cent. This is after allowing for the reliefs given in the Budget. The figure for income tax and surtax alone is even more striking. It is up from £5,155 million in 1969–70 to £5,930 million in the current year, an increase of £775 million, or 15 per cent. in the anticipated yield from income tax and surtax this year. I am glad to see the Chancellor of the Exchequer has joined us. I am grateful for his message. How does he reach the estimated increase of 15 per cent. in the yield of income tax and surtax, even after his reductions of £150 million a year applying to that figure, when he has a 3½ per cent. growth of G.N.P. and a 3·9 per cent. growth in consumer expenditure? How come the 15 per cent. increase in the yield of personal direct taxation? Surely, the only answer can be soaring inflation. We know that with a progressive system inflation produces a buoyant revenue. I hope that the Minister of State will deal with this, because it is very important. The Government must come clean on this. The estimates in the Red Book postulate a severe inflation, and we need to know the rate of inflation which the Government have assumed in that 15 per cent. increase in the yield of direct personal taxation. Perhaps the most glaring gap in the Chancellor of the Exchequer's strategy was that he gave no indication of the rate of inflation he expected in the year ahead.Would not it be a generous offer to suggest to the Prime Minister that he might have the help of the Conservative Research Department in working out the rate of increase in inflation?
I dare say it would be a generous offer, but the Prime Minister would find it an embarrassing gift.
The yield of all taxation is 11·1 per cent. up on last year. During the six years since right hon. Gentlemen opposite have been in charge of our affairs. the tax yield has gone up from £7,431 million to £14,653 million. It has virtually doubled in six years. For every £ people were paying in tax in 1964–65 they now have the dubious pleasure of paying £1 19s. 5d. Part of this is the natural buoyancy of the revenue. Mr. hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) said that increases by Socialist Chancellors of the Exchequer. even after this year's Budget, amount to over £3,000 million. The figure of £3,064 million was given in a Parliamentary Answer. Direct taxes accounted for £800 million. indirect taxation for about £1,600 million and selective employment tax for about £600 million—all this after allowing for the reductions this year. This is from a party which put in its 1964 election manifesto:The real answer is that the party opposite does not believe in stimulating enterprise. As the Chief Secretary has made clear again and again, he does not know or understand the meaning of the word "incentive". The objectives of the Labour Party are entirely different, and I support that by quoting again my favourite passage from a speech of the Chief Secretary in the House during the Committee stage of the 1967 Finance Bill. The right hon. Gentleman said:" The general effect of our tax changes will be to stimulate enterprise, not penalise it."
If I may say so, those few words from the Chief Secretary, by now engraved on my heart, are the quintessence of Socialist philosophy. I accept that right hon. and hon. Gentlemen opposite genuinely believe it. The hon. Member for Chislehurst is indicating his vigorous assent. I accept that that is why they have steadily, remorselessly and deliberately raised the level of taxation. Again, I quote the figures referred to by my hon. Friend the Member for Worcestershire. South: 32 per cent. of the gross national product in 1964; 44 per cent. in 1969–70. I accept, too, that that is why the public sector as a whole has risen from 42 per cent. in 1964 to over 51 per cent. in 1970. What sticks in my gullet and in those of my right hon. and hon. Friends is that the Prime Minister told the nation in 1964 that his programme could be carried out without any general increase in taxation. It is high time that the Labour Party came clean about what it intends to do in the future. Do right hon. and hon. Gentlemen opposite aim to reduce taxation, or do they, in the words of the Chief Secretary,"This Government believe in intervention by the State and taxation is better described as the level of intervention—[HON. MEMBERS: ' Oh.] Oh, yes. Taxation does not disappear into thin air. It is collected and is spent on a whole variety of social, economic and military services.… We believe that most of the things which the individual wants are best and most economically satisfied by the community. …."—[OFFICIAL REPORT, 6th June, 1967; Vol. 747, cc. 958–9.]
It is now abundantly clear that they cannot have it both ways. The truth is that the Labour Party has always been and always will be the party of high taxation. By 1964, millions of our citizens had forgotten this, and refused to heed our warnings of the result of electing the Labour Party. They have had to learn the hard way, and they will not be fooled again. Right hon. and lion. Gentlemen opposite put forward many reasons for the soaring increase in taxation that we have experienced. It is said, for example, to be part of a deliberate policy for the redistribution of wealth. However, there is a double fallacy in that argument. and I shall attempt to explain it. First, there is no evidence that there has been any acceleration in the redistribution of wealth since 1964, despite the enormous increase in taxation. If I am asked for evidence of that, I turn to two obscure tables at the end of the very valuable volume of Inland Revenue Statistics for 1970. There is given there the estimated wealth of individuals between 1960 and 1968. It is made clear in the notes that the figures have to be accepted with a good deal of caution. The basis on which they are compiled is open to some degree of error. They are based on the estates of deceased people and "blown up" by using the mortality rates. They may not be fully representative of the population as a whole. But they are put forward as giving a guide, and the Department has gone on to attempt to measure the changes in the degree of inequality in the wealth of our citizens. It uses a mathematical device with which some hon. Members will be familiar, the Gini co-efficient of concentration. I will not attempt to explain that, but I will read two short sentences from the Inland Revenue's explanation. On page 209, it states:"… believe that most of the things which the individual wants are best and most economically satisfied by the community …"?
What the figures show, using the Gini coefficient of concentration is that in the last four years of the Conservative Government the decline from inequality was from 76 to 72 per cent.; in the four years 1964–68 the trend continued at an identical rate. It went down from 72 to 68 per cent. In other words, there is no evidence that the penal rates of taxation, the additional burden of taxation which has been imposed by this Government, have had any effect on the rate of reducing the inequalities of wealth. It would be futile to imagine that they ever would have such effect. What the figures also show is that the growth in net personal wealth was a great deal faster under the Tories than under Labour, and very much faster indeed if adjustments are made for changes in the value of money. I will quote one or two more figures taken from the table at the back of the statistics volume. Total net personal wealth in 1960 is put at £51·6 billion, rising to £71·8 billion by 1964, an increase of £20·2 billion in those four years—39 per cent. up at current prices and 21 per cent. up if allowance is made for changes in the value of money. In the Labour years, however, the increase was from £71·8 billion in 1964 to £88 billion in 1968, a rise in four years of only £16·2 billion—22·5 per cent. up at current prices, as compared with the 39 per cent. of the four Tory years, and an increase of under 5 per cent. at constant prices because the rate of inflation was somewhat faster. Therefore, not only do we say that this high rate of taxation has had no effect in changing the rate of reducing inequality, but has brought about a drastic cut in the real growth of personal wealth. It demonstrates, as nothing else probably could, the truth of what we have said—that the way to reduce inequality is by levelling up and not by levelling down. The best way to achieve redistribution of wealth is not to tax wealth heavily, but to create a situation where people can acquire wealth. The encouragement of savings, of home ownership and of investment all do far more to reduce inequality than penal taxation of the rich. Looking at the figures for savings, one can see the real fall—a fall which the Budget and the Bill do nothing whatever to remedy. As recent Parliamentary Answers have shown, there are devastating figures in the annual average increase in personal savings per head at constant prices. In 1946–51, which were Socialist years, savings were minus 19·9 per cent. per annum; in 1951–64, which were Tory years, they were plus 17·4 per cent. per annum. In 1964–69, again Socialist years, they were again minus 0·1 per cent. per annum. A number of hon. Members opposite demanded in the Budget debate, that the Government should make a tougher attack on the wealthy, but it is futile for the Government to do so. The National Plan rightly said that the more rapid the rise in the ratio of savings to disposable income the lower would be the taxation required. The converse is also true. The lower the level of taxation, the greater the propensity to save. That is why the Conservatives place such high priority on reducing the levels of direct taxation, for it is savings which generate personal wealth, and it is creation of new personal wealth which is a vastly more worth while objective for any Government to pursue than the rather sterile redistribution of existing wealth. I am sure that in their hearts many hon. Gentlemen opposite know this to be true, but the policies which they support lead always in precisely the opposite direction. I turn next to one specific matter mentioned in the Bill, and the point mentioned by my hon. Friend the Member for Kensington, South (Sir B. Rhys Williams) about occupational pension schemes. We welcome the provisions for putting different kinds of pension schemes under the same general rules. We welcome the tidying-up which the Bill contains, but we deplore those provisions which cut down the maximum allowable pension which an occupational pension scheme can make to take account of the Crossman scheme. We shall probe these Clauses, and I am delighted to be able to tell the House that my hon. Friend the Member for Somerset, North (Mr. Dean), who is an expert in these matters, will be by our side to help us. I have three points which perhaps the Minister of State will be able to answer. Like my hon. Friend the Member for Kensington, South, I very much regret that the opportunity has not been taken in the Bill to bring up to date the Sections of the 1956 Finance Act which deal with the self-employed. The House will remember that the Millard Tucker Report, which was issued before that Act, recommended that some pension provision should be made for the self-employed. It recommended that they should be allowed to set aside out of their gross income before tax sums by way of provision for retirement, and a new right to spread their incomes earned over their working lives over the whole of their lives, but limits were imposed. The maximum was 10 per cent., with an upper limit of £750, and no provision was made for commutation to provide a small capital sum on retirement. Fourteen years later these provisions remain exactly as they were in 1956, and they are crying out for a change. The usual percentage in employment must be about 15 per cent. Some more generous schemes go to 20 per cent. of the employee's wage or salary as the contribution to a scheme, but for the self-employed the limit is 10 per cent., and that is inadequate. Employees are not subject to any upper limit at all, but the self-employed have this figure of £750 as the maximum tax-free contribution that they can make. Why is there no commutation? Civil servants get their lump sums on retirement. Employees in pension schemes get lump sums. The Inland Revenue said in paragraph 21 of its White Paper on Occupational Pension Schemes:" It provides a simple measure of the degree of inequality in the distribution of wealth. If all the wealth were owned by one individual the co-efficient would be 100 per cent.; if the wealth were all equally shared it would be 0 per cent. The larger the co-efficient the greater the degree of inequality."
Yet the self-employed have no right to commute any part of their retirement benefits under the 1956 Act. It is a great pity that the self-employed are not covered by the Bill, and it may be that we shall seek opportunities to try to put this right. In a number of cases the Bill is markedly less favourable than the White Paper. Perhaps I might quote one example, and that is the treatment of widows when the pensioner has died. Paragraph 26 of the White Paper says:" The Chancellor has considered whether to set an absolute limit of amount on tax-free lump sums, so that where a lump sum, although within the formula described above, exceeds the limit the recipient would be charged to tax on the excess, but has decided not to introduce such a charge in connection with the current revision of the rules for occupational schemes."
whereas paragraph 4 of the Fifth Schedule to the Bill says:" A widow's pension may be paid equal to two-thirds of the maximum pension … which would be approvable for the husband ",
Has there been a change of mind, or will there be a discretion which will allow the payment of widow's pension up to two-thirds? This is a matter of some importance to many people. Finally, there is the question of the deductibility of contributions to the Crossman scheme. The Chancellor will remember that the White Paper left this open. It said that this would be reconsidered for the future, but there is an obvious anomaly if contributions to an occupational pension scheme are to be deductible but contributions to the State scheme are not. The basic rule which is adhered to throughout the White Paper and Chapter II of the Bill is that one exempts the building up of pension schemes, but taxes the benefit. This was expressly approved by the Millard Tucker Report, whereas the Crossman scheme is in contravention of it. We are told that it will be reviewed later. I hope that during our debates on the Finance Bill we will have a clear answer on this issue and will be told what is the Government's intention about it. In a way, however, this is an academic exercise because it is part of the Crossman scheme, which will be repealed by the next Parliament. Hon. Members have found it difficult to say much about the Bill. While I do not believe that a Finance Bill need be exciting legislation, it should offer some hope, some encouragement and some inspiration, certainly more so than this rather tepid Measure. The Government's policy would have been more credible had the major threats facing the nation been faced in the Chancellor's Budget statement. They are outside the terms of the Bill, although everybody knows what they are. It is well known that we are embarking on a runaway cost and price inflation which will wipe out, within a few weeks, any tax advantage given by the Bill. More serious, this inflation represents the gravest possible threat to the future stability and solvency of the economy. Despite that, nothing is being done, simply because the Government hope to surf to electoral victory on a tidal wave of wage increases far in excess of what the Chancellor knows can be afforded. And the Government want to do this before they are swamped by the tidal wave of price increases which will follow, as sure as night follows day. The Chancellor has sought a reputation for financial integrity, but his supine inaction in the face of this soaring inflation will condemn him utterly." The annual amount of any pension payable to the widow of an employee who dies after retirement must not exceed one-half of the employee's pension."
11.2 p.m.
Lest this genial hour finally give way to weariness, I shall resist the temptation to follow the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) through the more philosophic and partisan parts of his speech. Nor will I attempt to answer all his detailed questions. [Interruption.] I said "all" of them. If the House is prepared to hear me till, say, midnight, I shall be happy to answer them all, but in my judgment that is not what hon. Members most desire. In 1968, the right hon. Member for Enfield, West (Mr. Iain Macleod) claimed in a similar debate that two days should have been provided, and. winding up for the Opposition, he spoke for 31 minutes. In 1969, the right hon. Gentleman said that Second Reading debates on the Finance Bill were often dull and that they were occasions with which we might well dispense. Then, he spoke for 15 minutes. In the debate this year the right hon. Member has contracted out altogether. Despite the excellent speeches that have been made today, I have some sympathy with his developing position. Although it seems that this debate is a conventional necessity, I have listened with the greatest interest to the various speeches and suggestions that have been made, and I assure the House that we will take account of them. I am left feeling that I more fully understand than I did before the debate some of the views that have been put forward; for example, the suggestion of my hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) about a Select Committee on Economic Affairs, even if I will not comment further on that matter tonight. I was also interested in the suggestion of my hon. Friend the Member for Chislehurst (Mr. Macdonald) that there should be one big Finance Bill every five years. He might like to amend that by deleting the work "big". The House might be content to have merely one such Measure that often. We have, therefore, had a gentle and, on the whole, constructive debate. My hon. Friend the Member for Heywood and Royton (Mr. Barnett), supported by my hon. Friend the Member for Ashton-under-Lyne, spoke particularly about the need for a radical upheaval in the tax system. I was glad that my hon. Friends made it clear that they were expecting us to take note of their remarks and bring forward proposals before long. I can make no promise, but I can say that we shall certainly be thinking of these matters, and when we present next year's Finance Bill my hon. Friends can judge whether they have been listened to adequately or not. I must say this also to the right hon. Gentleman the Member for Taunton (Mr. du Cann). He was fertile in suggestions. I am grateful to him. We shall take full account of them, and he will see the result in due course. I was interested in the speech of the hon. Member for Worthing (Mr. Higgins) in so far as he talked about prices and incomes, because I thought it an interesting refinement of the attitude of the Opposition to this question. In the Budget debate on 15th April the hon. Gentleman referred to the need for considering when in economic terms giving an increase is justified, but the system had failed, he believed,
He then went on to refer to the need to " because the Government have failed to take a tough line in the public sector…"— [OFFICIAL REPORT, 15th April, 1970; Vol. 799, c. 1506.]
The third time he said: " take a firm line in the public sector."
Then, this evening, in the main part of his speech, the hon. Gentleman said that we should not discriminate against the public sector. Then, in an intervention later, he said that we should look at each case on its merits. I think that that is a distinctive softening of the attitude of the Opposition as we have heard it. I have noted what the hon. Gentleman has said. I welcome it, but I must say that in making it more explicit he has confused even further what the Opposition would in practice choose to do if they were given the chance." It is in the public sector that we need to take a firm line.…"-[OFFICIAL REPORT, 15th April, 1970; Vol. 799, c. 1507.]
I said before that we must deal with each case on its merits.
I looked at the hon. Member's speech, and, as I said, he mentioned on two occasions the need to take a firm line and on the third occasion he mentioned a tough line. I thought that tonight he modified that speech and I had rather hoped for his sake that he might have done so.
My hon. Friend the Member for Manchester, Wythenshawe (Mr. Alfred Morris) had some fair and reasonable remarks to make about the handicapped and went on to say he would put down an Amendment on this question. As he knows, and as he fairly mentioned this evening, there are real problems of definition involved here. We wish very much that they should be solved and, of course, we shall scrutinise carefully any Amendment my hon. Friend puts down, because if we can overcome the administrative problems, we, like him, would like to do whatever we can for those who find themselves in these exceedingly difficult circumstances. I thought he summed it up very well when he said it is not only a question of physical handicap, but of social handicap, too. The hon. Member for Worcestershire, South (Sir G. Nabarro) had something to say about, among other things, tobacco substitutes. As he implied, this is something which we, no doubt, can pursue to the general profit in Committee. As for old-age pensioners, I think that he made a mistake in referring to the speech I made on 15th April, because I made none. He also made a mistake when he claimed that only 400,000 people with retirement pensions paid tax. I think that he would see, on reflection. that there are many people who have income in addition to their pension. The facts are that about 1·6 million people on retirement pension have sufficient other income to pay tax.On the two points on which the hon. Gentleman imputes a mistake to me, first, I definitely said the Minister, Treasury—[HON. MEMBERS: "That is the Minister."]—on 15th April. I am sorry: the Financial Secretary; I quoted the correct column, at all events. Second. the figure I quoted of 400.000 came from the Inland Revenue this afternoon to the research librarian of the House and so to me. I have no doubt at all that the figure is correct. Of course, I did not mean maximum incomes. What the Chancellor said in his Budget Statement was that 400,000 people would be relieved by the increase in the allowance for elderly people. That was the figure I employed this evening: 5·7 per cent. of State retirement pensioners—confirmed by the Inland Revenue this afternoon. Perhaps the hon. Gentleman will withdraw his remark that I made a mistake.
I have no need to withdraw. I am not disputing the figure of 400.000, as the hon. Gentleman described it. The point that I was making, and. I think, made clearly, was that whereas this figure is correct, there are many more people in receipt of retirement pensions who, because of additional income, in fact pay tax.
The hon. Member for Colne Valley (Mr. Richard Wainwright) fairly asked whether anything had occurred since the Budget which would give cause for alarm. I think that he had in mind, in particular. the growth of domestic credit. He will remember that my right hon. Friend. opening the debate, said that nothing had happened since the Budget debate which affected the Chancellor's Budget judgment. I can assure the hon. Gentleman that nothing has happened in this sphere which need cause concern. The hon. Member for Wanstead and Woodford asked about minerals and S.E.T. Concerning minerals, I regret that I cannot go farther than my right hon. Friend went this afternoon. There are real problems about the date. We shall. as soon as we possibly can, put the in formation before the House. I think that it was right and, in the view of the House, correct for my right hon. Friend to indicate our broad intention in this sphere. The hon. Gentleman's second main question was about S.E.T. I am sure that he did not intend to say that there had been no reference to it in the course of the Budget debate. My right hon. Friend the Chancellor, in his speech, dealt with S.E.T. and referred to the possibility of anomalies, but he said that this year it seemed better not to take action. There are a number of further matters upon which I should like to speak. I should particularly like to deal with savings, a subject touched on not only by the hon. Member for Wanstead and Woodford, but also by the right hon. Member for Taunton and I could speak happily on the Finance Bill for another hour. It is an excellent Bill, which I am sure commends itself to the House. I do not believe that the House will now dissent from that view.Question put and agreed to.
Bill accordingly read a Second time.
Ordered,
That the following provisions, namely—
be committed to a Committee of the whole House:
That the remainder of the Bill be committed to a Standing Committee:
That, when the provisions of the Bill considered respectively by the Committee of the whole House and by the Standing Committee have been reported to the House, the Bill be proceeded with as if the Bill had been reported as a whole to the House from the Standing Committee.—[ Mr. Diamond.]
Committee Tomorrow.
General Rate Bill
Lords Amendment Considered.
Clause 1
ASCERTAINMENT OF GROSS VALUE OF
DWELLING-HOUSE
Lords Amendment No. 1: In page 2, line 9, after "and" insert:
" without prejudice to any right under section 69 of this Act to make a proposal for the alteration of the valuation list so far as it relates to any particular hereditament ".
11.13 p.m.
I beg to move, That this House doth agree with the Lords in the said Amendment.
As the House will know, during the passage of the Bill hon. Members in Committee in this House and in another place expressed the hope that in the new proposals which the Government were putting forward which would cover the activities of the Inland Revenue there would be nothing in their operation which would detrimentally affect a particular hereditament. It proved possible, during the passage of the Bill in another place, to find a form of words, which I had not found possible when the Bill was upstairs, which seems to meet the fears expressed as reasonably as they can be met and placed in legislation. I am happy, therefore, to accept the Lords Amendment in the knowledge that this will give some satisfaction to hon. Members on both sides who raised this point with me upstairs and were anxious to proceed a little more definitely than I was able to indicate at that time.I am sure that the House is grateful to the Minister of State for his explanation of this comparatively small Amendment, which will give great solace to the ratepayers when, after the 1973 revaluation, they have to appeal before the valuation court. More people may, in fact, be affected by this small Amendment than by the whole of the Finance Bill which the House has just discussed.
I would pay a tribute to my noble Friend, Lord Brooke of Cumnor, who was very persistent in another place, moving two Amendments in Committee and then this Amendment on Report, which the Government graciously accepted. There are almost bound to be anomalies when the 1973 revaluation is published, and there might be errors by the staff of the Indand Revenue, so it is important that ratepayers should be given confidence. It will probably be the only time that these people, most of whom probably do not even pay Income Tax, will go before the valuation court. This is the third Amendment of assistance to ratepayers, as a result of our deliberations on the Bill. I said on Second Reading that our endeavours would be to provide a "belt and braces" for ratepayers and I am thankful that, through no fewer than three Amendments which the Government have accepted, ratepayers will have more chance in the court—Order. We are discussing only this one at the moment.
Yes, Sir. I was gratuitously giving the Government even more credit: perhaps I was overdoing my generosity!
We were told about the great urgency of the Bill. It has taken six months, through no fault of this House: there was certainly no delay in Committee. Can the Minister of State assure us that the work of the Inland Revenue has not been held up by this protracted consideration? Ratepayers should be grateful for the fairer and squarer deal which the Amendment will surely make possible for them, on the occasions when they appeal, which we hope will not be too frequent. We trust that the 1973 revaluation will go through smoothly.I appreciate the constructive role of hon. Members on both sides during the debates on the Bill, The fact that we were able to concede three Amendments, which I cannot talk about, shows that we were all trying to get the law right in the interests of the ratepayers.
On the point about which the hon. Member for the City of Chester (Mr. John M. Temple) was good enough to give me notice—although the Bill has taken longer to get through than we expected, Inland Revenue officers tell me that they needed every day of those six months to do their preparation and forward planning. This is not to say that they were anticipating legislation before it was passed, but they were using their intelligent anticipation of the likely outcome. They have been able to make good use of the time available to them. It has not adversely affected their work. I hope that the hon. Gentleman and the House can accept that explanation.Question put and agreed to.
Roads (Scotland) Bill
Lords Amendments considered.
Clause 9
FURTHER POWERS OF HIGHWAY AUTHORI
TIES TO CONSTRUCT HIGHWAYS OVER
OR UNDER NAVIGABLE WATERS.
Lords Amendment No. 1: In page 6, line 17, at end insert—
"() Any work authorised to be done by a scheme made by a highway authority under this section shall, for the purposes of section 7 of the Telegraph Act 1878 (provisions as to work which involves alteration in telegraphic line), be deemed to be work proposed to be done in the execution of an undertaking authorised by an Act of Parliament and the highway authority carrying out the work shall be deemed to be the undertakers."
11.20 p.m.
I beg to move, That this House doth agree with the Lords in the said Amendment.
This Amendment was made in another place to meet a request made by the Post Office after the Report stage had been completed in this House. Where such a bridge or tunnel forms part of a motorway, the Post Office already has similar protection under section 20 of the Special Roads Act, 1949. Clause 9 gives all highway authorities powers which are very similar to those possessed by special road authorities. Indeed, Clause 9 is modelled on the statutory provisions relating to the construction of bridges or tunnels as part of special roads. The Amendment gives the Post Office protection under Section 7 of the Telegraph Act, 1878, where a scheme is made by a highway authority for the provision of a bridge over or a tunnel under navigable waters. We are, therefore, trying to give the same protection in regard to this matter as exists in regard to special roads. We are very grateful to the Post Office for pointing this out to us. The matter had escaped the attention of all hon. Members. We are glad to make this rectification.I am interested to hear that, in the preparation of a Bill like this, consultations with an important body like the Post Office can in the early stages apparently go by default.
We welcome the Amendment, which makes a necessary importation into the Bill. How did the Bill manage to reach this stage without consultation with the Post Office?We consult all the authorities and ask them for comments from time to time. We do that at all stages of the Bill's passage. We are glad that the Post Office pointed out this omission. Otherwise, we should have had to find a place for this provision in another Bill. We are nearly perfect, but not completely so.
Question put and agreed to.
Subsequent Lords Amendment agreed to.
Clause 18
REMOVAL OF ACCIDENTAL OBSTRUCTIONS
FROM ROADS
Lords Amendment No. 3:In page 11, line 37, leave out "in the removal of the object".
I beg to move, That this House doth agree with the Lords in the said Amendment.
I suggest that the House should discuss also Lords Amendments Nos. 4 and 5.
The hon. Member for Dumfries (Mr. Monro) was good enough to point out in Committee the Difference between Clause 18(1) and Clause 18(3) and also subsection (2). We are grateful to the hon. Gentleman far his helpful suggestion.
Subsection (2) enables the highway authority to fence and light an obstruction, pending its removal, but there was no power in the subsection to recover the cost of fencing and lighting. It seems to us that the three Amendments taken together meet the point that there ought not to be different treatment of these cases. They ought to be on the same basis. Authorities can recover expenses either from the owner of the object causing the obstruction or from the proceeds of disposal of the object. The first Amendment extends the power of recovery to all expenses incurred by the highway authority under the Clause and not only to removal expenses. The second Amendment is consequential. The Clause enables a highway authority to sell an unclaimed object and use the proceeds for expenses. Amendment No. 5 ensures that these expenses may include lighting and fencing.Question put and agreed to.
Subsequent Lords Amendments agreed to.
Clause 19
DANGEROUS VEGETATION AND FENCES
NEAR ROADS
Lords Amendment No. 6: In page 13, line 3, at end insert—
"() The highway authority may make such contribution as they think fit towards any expenses reasonably incurred by a person in carrying out necessary work in pursuance of subsection (1) or (2) of this section."
I beg to move, That this House doth agree with the Lords in the said Amendment.
This Amendment would enable highway authorities, at their discretion, to contribute towards the costs incurred by owners and occupiers in carrying out remedial works on dangerous trees, hedges, walls, etc. under the Clause—that is, when required to do so by the highway authority. The Clause already enables the highway authority to waive recovery of expenses which it incurs in carrying out such works in an emergency or in default of action by the owner or occupier. The Amendment to some extent meets the representations which we have received since the Bill has been discussed in Parliament—representations from the Scottish Landowners' Federation and the National Farmers' Union. We have not been able to go all the way with these representations. It is fair to say that the Landowners' Federation would have liked us to put the whole financial responsibility on highway authorities, but this appears to us to be inequitable. Those who have had experience about arguments over retaining walls, and so on, know that they have long been a source of controversy. I shall not go into all these matters now, because I believe that these Amendments meet, to some extent, the represenations of the Federation and the N.F.U., and I hope that they will be agreeable to all concerned.I am grateful to the Minister for this Amendment, because it meets in part the point that I raised in Committee. I did so purely in relation to retaining walls and the problems where traffic conditions have changed. The Minister then leading for the Government pointed out that a highway authority had a discretion not to recover costs.
The Amendment goes very much further, in that it allows a highway authority to contribute positively towards doing this. On behalf of my hon. Friends, I welcome the Amendment, which meets the point that I raised in Committee.Question put and agreed to.
Lords Amendment No. 7: In page 13, line 8, leave out subsection (6), and insert—
" (6) As soon as may be after the necessity for work under this section arises on a tree which is subject to a tree preservation order made under section 26(1) of the Town and Country Planning (Scotland) Act 1947 and before any such work is commenced, the highway authority shall give notice of the proposed work to the local planning authority within the meaning of section 2 of the said Act of 1947:
Provided that if in the opinion of the highway authority there is imminent danger from the tree falling on the road, they may dispense with the giving of such notice."
I beg to move, That this House doth agree with the Lords in the said Amendment.
Subsection (6) as originally drafted permitted a tree which was subject to a tree preservation order to be felled or lopped if it created a danger or obstruction for road users. The Amendment would require the highway authority to give notice to the local planning authority before work has begun to lop or fell such a tree. If, however, the highway authority considers that there is imminent danger from the tree falling on the road, it need not give notice. The obligation to give notice is laid on the highway authority and not on any person whom it orders to do the lopping or felling. I shall not go into a full explanation of Section 26 of the 1947 Act, in defence of the Amendment, except to say that we are grateful to those in another place who made this suggestion.Question put and agreed to.
Clause 21
DEPOSIT OF MUD OR LIQUID FROM
VEHICLES ON ROADS
Lords Amendment No. 8: In page 13, line 36, leave out subsections (1) to (3) and insert—
" (1) A person who, being in charge of a vehicle on a road, allows such quantity of mud, clay, lime, farmyard manure, or other material from the vehicle, or from anything carried on the vehicle, to drop or be deposited on the carriageway of the road so as to create, or be likely to create, a danger or substantial inconvenience to persons using the road and who fails to remove the material as soon as is reasonably practicable thereafter, and in any event before the next occurring sunset, shall be guilty of an offence and shall be liable to a fine not exceeding £20."
I beg to move, That this House doth agree with the Lords in the said Amendment.
With this Amendment we can take Lords Amendment No. 9.
This was popularly known in Committee and elsewhere as the "mud" Amendment. I pay tribute to all those hon. Members who served on the Committee for the constructive suggestions they made in the debates we had on this Clause. It is true that at the end of the day the Commons were unable to come to a definite view on the right wording, and that we are taking this from another place, but this is really the work of hon. Members of this House.
These Amendments fulfil an undertaking given in this House that an Amendment would be tabled to make the Clause more flexible in operation and to overcome the difficulties foreseen by agricultural interests. The amended Clause makes it an offence to allow mud, and so on, from vehicles to drop on to the road and to fail to remove it within a reasonable time. The second Amendment ensures that the offence covers anything towed or pushed by a vehicle and any equipment, such as a harrow, which might not come within the normal definition of a vehicle. The Clause as originally drafted made it an offence to take a vehicle on the road without taking all reasonably practicable steps to remove mud, and so on. from the vehicle. Apart from the disquiet expressed by hon. Members in this House we had a number of representations about the difficulty involved in cleaning a vehicle in certain circumstances. The National Farmers' Union has been most helpful on this, and I am grateful to it. We have borrowed a Fife bylaw, with one modification. It is a byelaw that works and is acceptable to those who have to operate it. The amended subsection (1) also refers to "substantial inconvenience" to persons using the road. References to inconvenience were criticised in the House but on Report my hon. Friend the Member for Dunfermline Burghs (Mr. Adam Hunter) made a strong plea for the retention of the word "inconvenience". He mentioned a development scheme being carried out over a period of some years which has resulted in mud, clay and other materials being deposited on the roads, footpaths, and so on. We have, therefore, decided that there is a case for retaining a reference to inconvenience, but qualified with the word "substantial". I will willingly answer any points on this important Clause, even though we have called it the mud Clause, but I think that we have arrived at a sensible solution with the Fife byelaw suggested in this place by a former Solicitor-General. I hope, therefore, that it is acceptable to everybody.11.30 p.m.
I am glad to speak on the Lords Amendment, because, as the Minister has said, this Clause probably attracted more time in Committee and on Report in this House than almost any other Clause of the Bill. I should like, first, to express considerable interest in the Clause as it affects my constituency because, as the Minister of State knows—and I see that the Joint Parliamentary Secretary to the Ministry of Agriculture also knows, since he lives in my constituency—we have a particular type of very red soil in the Mearns which would mean that farmers and contractors in Kincardineshire are much more liable to come under prosecution as a result of the Clause—and I see the Joint Parliamentary Secretary nodding—than are those from almost any other area in the United Kingdom. I am sure that the Joint Parliamentary Secretary has practical experience of carrying that red soil on to the roads. Therefore, from a constituency view, apart from the wider interest, I am particularly concerned that we should get the right answer.
I certainly welcome the practical approach of the Government, and I pay tribute to the Minister of State for having been so flexible and open to suggestions on the Clause. I welcome, too, the fact that the Amendment is based on a practical byelaw of a county in Scotland which has had experience in administering it. At the same time, as the Minister of State has acknowledged, one must recognise that the Amendment is largely based also on suggestions put forward by my hon. and learned Friend the Member for Edinburgh, Pentlands (Mr. Wylie), to whom the House owes a great debt for his assistance in clarifying our minds on this matter in our earlier debates. My only other comment relates to what the Minister has said about "substantial inconvenience ". On Report, we had a great debate on what constituted an inconvenience. We discussed ladies crossing muddy roads wearing shoes which did not completely cover the feet. I remember that Mr. Speaker entered into that debate with an intervention. From what the hon. Member for Dunfermline Burghs (Mr. Adam Hunter) said in our earlier debate, I appreciate the need to use the word "inconvenience". What slightly worries me is its qualification by "substantial", because on Report, on an earlier Clause, my hon. and learned Friend the Member for Pentlands was chided by the Minister for using the word "material", which is much the same as "substantial", in qualifying something. Therefore, I am rather surprised that the Minister comes forward with an expression like "substantial inconvenience", which might prove difficult of definition in the courts. However, for lack of anything else, I suppose that we must accept it, but I hope that the Minister will recall—and, perhaps, read—the words of advice he gave to my hon. and learned Friend. I hope that this important Clause will be sensibly interpreted, and in practical terms, both by the police, who will be responsible for making any charges under it, and also by the procurator-fiscals in Scotland, who will be responsible for proceedings under it. The Minister of State has acknowledged that responsible and constructive attitude of the National Farmers' Union and others in Scotland. I am certain that there is anxiety that the Clause should be sensibly interpreted and, at the same time, that those who may be responsible for depositing mud on roads will be careful about it. Therefore, in the sense that we have had co-operation in the House in the formation of the Clause, there is hope also of common sense outside and co-operation between those who may deposit mud and the authorities who are responsible for administering the Clause. Only in that way, following the great deal of debate and thought that we have given to the Clause, can we make sure that in the event it is worth while.Question put and agreed to.
Subsequent Lords Amendments agreed to.
Clause 24
OBSTRUCTIONS AND EXCAVATIONS IN
ROADS WITHOUT CONSENT.)
Lords Amendment No.11: In page 15, line 40, at end insert—
"; and that person shall maintain an excavation filled in by him in pursuance of this subsection for such period, not exceeding 6 months from the completion of the filling in. as may be specified by the highway authority."
I beg to move, That this House doth agree with the Lords in the said Amendment.
With this Amendment it may be convenient to discuss Lords Amendments Nos. 12. 13 and 14.
Those are consequential on Lords Amendment No. 11. The purpose of the Amendment is to provide over Scotland for a maintenance period of six months rather than to have discrepancies as, for example, in Glasgow, which made the point to us, of three months. We are simply making this Scottish rather than local.
Question put and agreed to.
Subsequent Lords Amendments agreed to.
Lords Amendment No.15: In page 16, line 19, leave out subsection (7) and insert—
" (7) This section and subsections (1), (2) and (3) of the next following section shall not apply—
(a) in any circumstances where any of the following enactments applies—
(i) section 29 of the Burgh Police (Scotland) Act 1903 (penalty on unauthorised occupation of street),
(ii) section 8 of the Building (Scotland) Act 1959 (occupation of parts of road for deposit of building materials),
(iii) section 19 of the Civic Amenities Act 1967 (penalty for unauthorised dumping of motor vehicles etc.),
(iv) section 22 or 23 of this Act, or
(b) to any works to which the street works code as contained in the Public Utilities Street Works Act 1950 applies."
I beg to move, That this House doth agree with the Lords in the said Amendment.
Although this Amendment looks rather formidable it is, in fact, only drafting.Question put and agreed to.
New Clause "A"
POWER TO OBTAIN ROAD-MAKING
MATERIALS
Lords Amendment No. 16: In page 21, line 45, at end insert new Clause "A"—
" A.—(1) The highway authority may enter any land to search for, dig and carry away materials for the purpose of making or repairing a highway and may carry such materials through the land of any person.
(2) Before carrying out any operations under this section, the highway authority shall serve notice of their intention on the owner and the occupier of the land concerned together with a description of the proposed operations and of the right to object thereto within 28 days after the service of the notice.
(3) Where the highway authority is a local highway authority and within the said period of 28 days the owner or the occupier objects to the proposed operations, and that objection is not withdrawn, the local highway authority shall not proceed to execute the operations without consent aftermentioned but may refer the matter for the determination of the Secretary of State who may grant consent to the proposed operations either unconditionally or subject to such terms and conditions as he thinks just, or who may withhold his consent, and the decision of the Secretary of State on the matter shall be final.
(4) The highway authority shall pay compensation to the owner or occupier of the land for any damage done thereto by reason of the exercise of their powers under this section and for the value of materials carried away by them.
(5) Where an excavation is made by the highway authority in the exercise of their powers under this section, the authority shall—
(a) while the work is in progress, and thereafter so long as the excavation remains open, keep the excavation sufficiently fenced to prevent accidents to persons or animals,
(b) as soon as is reasonably practicable after the completion of the work, fill up the excavation or slope it down and fence it off, if the owner or occupier so requires, and thereafter keep it so fenced,
(c) so far as is reasonably practicable, when filling up the excavation, make good and level the ground."
I beg to move, That this House doth agree with the Lords in the said Amendment.
With this Amendment it may be convenient also to discuss Lords Amendments Nos. 17, 18, 22 and 24.
I must confess that this may be the most formidable task facing me at this stage of the Bill. In another place there was a discussion about three important items. Amendment No. 22 repeals Section 80 of the General Turnpike Act, 1831, which appears as Schedule C in the Roads and Bridges (Scotland) Act, 1878. Section 80 of the 1831 Act empowers highway authorities to obtain material for making and repairing roads. Our new Clause A re-enacts the main substance of Section 80 of the 1831 Act, but in wording more in keeping with modern drafting practice and embodying safeguards which we now regard as normal in authorising the exercise of such powers.
The third thing which we seek to do is to make consequential adjustments in the Bill itself and in previous Acts. It could be argued that we should not have done this at this stage and that we should have awaited a consolidation Bill. After listening to the debate in another place, my right hon. Friend decided that it would be far wiser if we took on this general task of making these substantial rewritings, for that is what it is, and of modernising a law which has served us well but which is written in terminology which is not as up to date as we should like for it to be understood both by the general public and those concerned with the operation of the Bill. If there are any specific points of elucidation about which I can help, and which will help to secure the agreement of the House to the Amendments, I shall be happy to explain.I cannot claim to have followed this provision back to the Turnpike Act, 1831, but I have taken the trouble, in anticipation of this matter being discussed at a late hour, to read the debates on the subject in another place. The fact that the Government have been persuaded about this important matter and believe it to be worth making this change at this late stage indicates the value of debates in another place in helping us to improve legislation.
Having read the debate in another place, I do not intend to go into the details now, but there is one general comment which I should like to make. When important consolidation of a modernisation Measure like this comes forward at a late hour, when the whole Bill is largely the modernisation of previous legislation, one's mind immediately boggles at the thought of what else the Government might have missed out which ought to have been included. One quickly draws back, because otherwise one might be here till kingdom come if one tried to modernise all the legislation that goes back over nearly two centuries. The Opposition welcome the Clause because it appears to help in certain circumstances particularly owners of land and others who find a road going through their property and become liable to having road materials excavated. But 1 should like elucidation on a small point. Subsection (5)(b) states:This is important. I have seen it where there have been road works, particularly in country areas, and local materials have been used. In Scotland, as elsewhere, we are concerned with tourist attractions and keeping the countryside beautiful, and at no time is this more important than in Conservation Year. Therefore, we want to avoid at all costs scars appearing in the countryside as a result of such measures. I welcome the subsection and hope that, in practice, it will be strictly adhered to, so that where quarries and other excavations become necessary there will be good landscaping and tidying up afterwards. After all, tourism is one of the main industries of Scotland. In modernising our roads, do not let us lose sight of other considerations such as tourism." as soon as is reasonably practicable after the completion of the work, fill up the excavation or slope it down and fence it off, if the owner or occupier so requires, and thereafter keep it so fenced."
11.44 p.m.
I am obliged to the hon. Gentleman for those remarks.
The three main defects of the previous provisions are that for purposes of notice to proprietors and compensation they distinguish between enclosed and unenclosed land, they authorise the taking of materials in certain cases without notice to proprietors, and the provisions for compensation are very odd indeed, being related to whether material taken from land is eventually used within three miles of the place where it was taken. Subsection (5) of the new Clause requires the highway authority to fence excavations while work is going on and, when it is completed, either to fence excavations or fill them in and make good the ground surface. I agree with everything the hon. Gentleman said about that. In the General Turnpike Act there are rather similar requirements in relation to unenclosed land, but there is no reference to enclosed land. That is why we thought we would make this revision and put it into modern terminology.Question put and agreed to.
Remaining Lords Amendments agreed to [ Several with Special Entry.]
Agriculture (Ploughing Grants)
11.45 p.m.
I beg to move,
That the Ploughing Grants Scheme 1970, a draft of which was laid before this House on 21st April, be approved. It might be convenient, Mr. Deputy Speaker, if we discussed, at the same time, the corresponding Scottish scheme, which is the subject of the second Motion: That the Ploughing Grants (Scotland) Scheme 1970, a draft of which was laid before this House on 21st April, be approved.If that is to the convenience of the House, so be it.
These schemes provide grant for ploughing grassland which is at least 12 years old, where the cost of the operations necessary to bring it into a satisfactory state for cropping is substantially above normal. By helping farmers to improve the condition of suitable land this grant encourages the effective use of agricultural resources and helps to offset the yearly drain of agricultural land to urban and industrial development.
The provisions of the schemes are virtually unchanged from previous years, but I should perhaps remind the House that the streamlining of capital grants will affect this grant. As hon. Members are aware from proceedings on the Agriculture Bill, the ploughing grant will be replaced by a grant under the farm capital grant scheme when it is introduced. The Ploughing Grants Scheme will then be closed to new applicants. The House may wish to have the latest figures of expenditure. In the financial year just ended £382,000 was spent, of which £323,000 was for England and Wales, £12,000 for Northern Ireland and £47,000 for Scotland. This was paid in respect of 32,000 acres ploughed. We estimate that the amount of grant paid will be slightly higher in the current financial year. I commend these schemes for the approval of the House.
11.46 p.m.
On the last occasion when such a scheme came before the House the Minister was asked why the figure of £12 was appropriate in 1969 whereas it was £10 in 1952. There was no satisfactory answer to that question last year, so I give the hon. Gentleman the opportunity to answer it this time.
Last year, the Joint Under-Secretary of State for Scotland said that the cost had not risen as much as we might have expected. I do not know what the hon. Gentleman will say today, but he will not overlook that there has been, according to the Price Review, a large net increase in costs this year—a total of £60 million. Even since the Review there has been a large increase in costs. For example, the cost of a tractor has gone up by £150 since the Review was announced. Therefore, if in 1952 the right figure was £10 it is time the hon. Gentleman told us why £12 is the correct figure today. Is the hon. Gentleman satisfied with the way in which the conditions are laid down? He mentioned that two of the conditions are that the land must have been under grass since 1958 and the expenditure substantially heavier than normal. Are there not one or two other things he should also bear in mind when these grants are being administered? In any area farmers will know that there are certain pieces of land which might qualify under the two conditions we have both mentioned, but that it is land which it is not economic to plough, because it is well known that it will not provide an adequate result. Second, should not the hon. Gentleman bear in mind that land should not be ploughed which is known not to be properly drained? There are examples where land has been ploughed and as a result of bad drainage very little has resulted from the work. Third, I would like the hon. Gentleman to bear in mind that although we all agree that new leys, if the land is put down to grass again, are much more productive than old pastures, many people have found that old pastures have certain merits. They can be of use in many ways. For example, when some herds affected by infertility have been put back on the old grass the difficulties that the veterinary surgeons were unable to isolate have disappeared. On at least the past two occasions when the schemes have been brought before the House the Minister has been asked to let us know whether chemical preparation of the land was covered by the definition of ploughing. There has ben no answer so far. Perhaps after three years' contemplation the Minister would make it clear either that it is or is not covered. The last thing I ask him to consider is whether he is doing enough by the scheme. The Minister said that the schemes this year covered 32,000 acres. Last year, it was said, in the House, to cover 45,000 acres and a week later when it got to the other place, 5,000 acres had disappeared. It is now 32,000 acres and the urban requirements come to about 50,000 acres a year, with that these schemes do not cover those requirements. Doubtless, the idea is to enable new land outside traditional farming areas to be brought under cultivation. The Minister will recall that as recently as March the Economic Planning Council for Agriculture said that the expansion of arable acreage envisaged by the Economic Development Council had not yet begun. It went on to say that the arable objectives would not be achieved unless there was a pronounced upturn in the next three years. These schemes however show a diminishing number of acres. If the total requirement in the selective expansion programme is to be achieved, according to the figures of the E.D.C. there is a deficiency in each of the years between now and 1972 of 413,000 acres and a total deficiency on cereals of 643,000 acres. The 32,000 acres does not seem a very significant addition when these figures are borne in mind, along with the fact that the cereal acreage has been declining since 1967. With these points in mind, I commend the scheme to the House.11.53 p.m.
I welcome these schemes. It must be clear now that the land being ploughed after having been rested for such a considerable time cannot be of the best quality. Going through the countryside I notice that much of this land needs draining, and it will be a waste of money and energy to give a ploughing grant unless conditions are laid down dealing with drainage and the application of the necessary lime and phosphorus. This land will not carry grass for long unless it is put into an initial state of fertility. I am not clear about the conditions attaching to the grants and I would be grateful if the Minister would explain them.
11.54 p.m.
I support what has already been said and would like to be sure that the Minister is satisfied that the grant will always be given in circumstance justifying it. There is a temptation when a grant is available for one purpose not to carry out the preparatory operations such as drainage. Often to plough up an old sward which has often provided a certain amount of drainage merely compacts the ground and makes drainage even worse. Equally important, is the regeneration and improvement of pastures. It is not necessarily the mechanical action of ploughing which is the best method here.
In rougher areas operations such as discing and direct reseeding, for which grants are available, are often much more effective. Because the ploughing grant of so much per acre looks simple, often the farmer goes for that method rather than for perhaps better methods which are eligible for assistance. Are the farmers made fully aware of the other types of assistance which are available for more suitable operations which may be in the best interests of husbandry?11.55 p.m.
Most of my points have already been covered. This scheme has been going for some time, but are we certain that it is keeping up with the times? It is rather depressing that whereas, in 1938 we were 38 per cent. sufficient in lamb and mutton, we are now down to 36 per cent. It may be true that the deficiency in our sheep stocks comes from the lowlands, and that the hill ground, where ploughing up and the renewing of pastures plays an important part in our livestock husbandry, is keeping pace. But unless we are certain what we are aiming at by continuing the payment of £12—and what my hon. Friend said about its inadequacies with present-day costs needs reinforcing—we shall be spending this £12 less effectively than we might.
My hon. Friend the Member for Edinburgh, West (Mr. Stodart) last month put down two Questions about Scotland, the replies to which showed that in 1969 the applications for ploughing grants in England were 4.266 and in Scotland 521. On a strict arithmetic calculation, this might appear to be a fair proportion. but the proportion of hill and upland area in Scotland is much higher than in England, and the 521 applications for Scotland is somewhat disappointing. There is in Scotland a much higher proportion of difficult land to plough than in England. and it seems that Scotland is not getting as much as it should. This may be the fault of the farmers, or of the Department of Agriculture for Scotland in not telling people what is available. The Minister stressed this year and last year that the purpose of the Scheme is to help farmers to bring into cultivation land which might otherwise remain uncultivated. In the Outer Islands bulb growing is developing, and land not previously cultivated is being brought into cultivation. Will the grant apply to this? The land has been uncultivated for hundreds of years.11.59 p.m.
The hon. Member for Rye (Mr. Bryant Godman Irvine) asked whether the increase in the grant from £10 in 1952 to £12 today was sufficient. As he knows, there has been a tremendous increase in efficiency over the years with machinery and the chemical treatment of the sward, and all this has made ploughing easier. It is a little difficult to estimate the 30.000 or 40,000 acre target; sometimes the target is reached. and sometimes not. It is obvious that farmers have taken advantage of it and that they find it profitable to take the £12.
The use of chemicals to kill sward forms part of the operation and comes in for grant with the rest because it represents a proportion of the cost. I was not sure about the first point raised by the hon. Member for Rye, but if a farmer owns land which is not good enough, I cannot imagine him spending money on it. It will cost considerably more than £12 an acre, and presumably he will not go ahead. The hon. Member for Ross and Cromarty (Mr. Alasdair Mackenzie) asked whether the land would be properly drained. There are various schemes for land. If a lot of draining is required and it is hill land, the best course for the farmer would be to take advantage of the Hill Land Improvement Scheme which attracts a 70 per cent. grant. I am sure that, if our officers saw that some land was very wet and required draining, the ploughing grant would not be given. I was then asked whether it is expected that new leys will give the same results as old ones. We all know that many farmers have land that they would not dream of ploughing. But the productivity of a new ley is such that one has to consider whether it will give better results than an old one. However, new leys will help to balance the 50,000 acres that we lose every year, and it is up to farmers to judge how much they will take on. The hon. Member for Ross and Cromarty mentioned drainage. Of course, it is ridiculous to plough land without draining it. But in his area, most of the land which would come under the scheme would be dealt with under the Hill Land Improvement Scheme. The hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) referred to chemicals and other methods of doing the job. There are other methods, of course, but most of the land will ultimately require to be ploughed. However, the use of chemicals to kill sward makes ploughing easier, and it all comes into the cost. The hon. Member for Rye raised the question of cereals and asked whether this scheme would add anything to arable production. Most of this land would be reseeded. Very little of it would come into cereal production. The hon. Member for Fife, East (Sir J. Gilmour) asked whether this would help keep up hill stocks. Lowland stocks are going down, but hill stocks are going up, and I presume that this grant is helping a little in that direction. The hon. Gentleman also asked about the proportion of land in England compared with Scotland. As he said, I know the terrain in Scotland, and quite a lot of it is improved by the direct seeding and harrowing of hill land. Certainly, the land is different, and there is more of this type which would react to definite ploughing. But there are other methods in Scotland which bring quite a lot of improvement to the land. I think that I have covered most of the points raised by hon. Members. No doubt, when we bring forward a similar scheme next year, the hon. Member for Rye will ask various points which I have not applied myself to tonight. So, if I have not covered everything this year, he will have another opportunity next year.Question put and agreed to.
Resolved,
That the Ploughing Grants Scheme 1970, a draft of which was laid before this House on 21st April, be approved.
Resolved,
That the Ploughing Grants (Scotland) Scheme 1970, a draft of which was laid before this House on 21st April, be approved.—[ Mr. Mackie.]
ADJOURNMENT
Resolved,That this House do now adjourn.—[ Mr. Armstrong.].
Adjourned accordingly at six minutes past Twelve o'clock.