asked the Minister of Agriculture, Fisheries and Food what is his policy towards the use of agricultural land for reservoirs, and in par ticular the use of land in Devon; and if he will make a statement.

As with all other substantial development proposals, our objective is to avoid the loss of good quality agricultural land where acceptable alternatives exist. In applying this policy, agricultural considerations have to be weighed alongside all other relevant factors, including cost and amenity.

I thank my hon. Friend for that reply. Is he aware that this is one of the most serious long-term problems affecting agriculture today? Does he realise that over 1,000 acres of good land are being lost each week? Will he make every effort to call a halt once and for all to the use of good agricultural land for reservoirs and use boggy and waste land rather than land which can produce food to feed the nation?

I readily give my hon. Friend an absolute assurance that we shall always advance the need to preserve land, particularly land of average or above-average quality.

Will my hon. Friend bear in mind that, whether or not we go into the E.E.C., the population of Britain goes up each year while the amount of land available to provide food for it goes down by 50,000 acres a year? Does he appreciate that this is highly material to the choice of sites for reservoirs?

Yes, Sir.

asked the Minister of Agriculture, Fisheries and Food if he will pay an official visit to Macclesfield.

While I at present have no plans to visit Macclesfield, I should be very glad to accept any invitation to do so after the holiday season is over.

Will the right hon. Gentleman accept an invitation from the official Labour candidate and take the opportunity to explain to the electors of Macclesfield which speeches made by him and the Prime Minister are made in jest and which have to be taken seriously?

I am interested to hear the hon. Gentleman refer to the "official" Labour candidate. Do I assume that, like in so many other cases, there are more than two views?

Would my right hon. Friend think it a good idea if he were to join me in Macclesfield on a joint platform shortly before the by-election so that I may have a public opportunity of leading him into the paths of righteousness?

I think it would be more appropriate if my hon. Friend went to West Fife.

asked the Minister of Agriculture, Fisheries and Food what discussion has taken place in the European Economic Community negotiations concerning production grants for hill farmers.

I would refer the hon. Member to the statement made by my right hon. and learned Friend the Chancellor of the Duchy of Lancaster on 24th June.—[Vol. 819, c. 1606.]

Could the Minister be a little more specific than his right hon. Friend was on that occasion? Is it not the case than in an enlarged Community all the production grants for hill farmers will be able to continue throughout and beyond the transitional period? Can one conclude, therefore, that any phasing out of production grants which takes place during the next five years will be at the initiative of the British Government and not in response to pressure or suggestion from the Commission?

I thought my right hon. Friend made the position pretty clear. No one can say that the present arrangements, whether or not we entered Europe, would be absolutely and utterly immutable in every detail. I certainly thought that the reaction of the President of the Scottish National Farmers Union—Scotland is more affected than any other area on this subject—that this was the best news of the week was a pretty good tribute.

In view of the announced intention to withdraw up to 15 per cent. of continental land from agriculture, which I understand would be marginal or hill land, can we be certain that in the future we shall not be required to withdraw a percentage ourselves?

It would be very unwise for any Minister of any party to express absolute certainty about anything. I use those words deliberately. But there is nothing in the Treaty of Rome which makes these subsidies undesirable or difficult to pay. I have every confidence, considering that the French already pay a headage subsidy on their breeding sheep, that we shall be able to continue to do this.

Would the hon Gentleman be rather more certain and precise in his answer to the very reasonable question put by my hon. Friend? Will it be possible to continue the policy of additional production and capital grants, for example, for drainage, which are at present paid to hill farmers in Britain, on broadly the same scale and to broadly the same number of farmers?

I would certainly think so, because the grants mentioned by the right hon. Gentleman are of a distinctly structural nature.

Would my hon. Friend agree that under the E.E.C. rules as long as the production grant is tied to the land is acceptable, and that under the existing Community rules it appears from the guidance lines that there will be money available for such areas as the hill areas of this country and we shall benefit greatly from this?

I absolutely agree with my hon. Friend.

Is it not time the Government were much more explicit on this problem? The hill farmers want to know which of the subsidies payable at present offend the Common Market code and which would be acceptable. After negotiations for years, under the previous and the present Government, the Government should now be in a position to be much more explicit about it.

With the greatest respect to the hon. and learned Gentleman, I must again call in evidence someone whose opinion is worth a very great deal, and that is the President of the Scottish N.F.U., who has said that this is just the assurance that the union has been waiting for all along.

asked the Minister of Agriculture, Fisheries and Food what discussions he has had with officials of the Commission of the European Economic Community with respect to their proposal that the Common Agricultural Policy covers hops.

Officials of my Department have had contact with officials of the Commission about the draft regulations concerning hops which have been submitted by the Commission to the Council of Ministers.

Does the hon. Gentleman realise that the effect of these draft regulations will be considerably to increase the price of British beer? We recognise the hon. Gentleman's difficulties in protecting the British beer drinker against British brewers, but may we at least hope for some support from him against the depredations of Brussels bureaucrats?

I do not accept for one moment the hon. Gentleman's proposition. The main difference is that in this country we have hops with seeds in them, whereas the Community does not. There is quite a large body of opinion which favours seedless hops in this country, suggesting that these would give higher bittering qualities, which I should have thought would have pleased the hon. Gentleman.

The Parliamentary Secretary will be aware that the Hops Marketing Board has been outstandingly successful in its work. Could he indicate how he sees the future of the board if we enter the E.E.C.?

This question has been asked and answered many times before, and I refer the right hon. Gentleman to what I have said on the subject previously.

asked the Minister of Agriculture, Fisheries and Food if the Government's conservation policies in respect of inshore fishing between the 6-mile and 12-mile limits will now require any modification within an enlarged European Economic Community.

Even as it stands the Community's common fisheries policy would not entail any modification of our existing conservation measures. Nor would it restrict our right to introduce any new measures which might prove necessary provided these were not discriminatory.

Does not the Minister's answer mean that, provided we continue with our existing conservation policies and open up our waters between six and 12 miles to all the fishermen of the E.E.C., this must inevitably reduce the catch available to British fishermen?

If we opened our waters in the six to 12-mile belt to other E.E.C. countries which at present do not have traditional rights in that belt, there would be some, but a relatively small, additional weight of fishing carried out in that area. The total catch which comes from the six to 12-mile belt is a comparatively small proportion of the total British catch.

My right hon. Friend the Foreign Secretary told the House last week that the 6-mile limit stays as it is. Can my right hon. Friend confirm that that is, and will remain, the policy of Her Majesty's Government?

There has been absolutely no change in the position which the Government put forward at the recent discussions in Luxembourg, and those discussions will be resumed in the week beginning 12th July.

The Minister must admit that Belgians, Dutchmen or Frenchment will enter this six to 12-mile limit with small-mesh nets and catch fish Would he confirm that Article 2 of the Common Market Fisheries Convention would give us some help here, and that we can exclude vessels of a certain length with certain types of gear during certain parts of the year and that we can exclude them for certain kinds of fish?

I do not want to intrude on later Questions on the Order Paper. It would be entirely within our own hands what conservation policies are pursued in the 12-mile belt. If, as the hon. Gentleman says, foreigners enter with nets of a smaller mesh than we use, we can keep them out.

asked the Minister of Agriculture, Fisheries and Food (1) what help, other than the payment of compensation, he proposes for the horticultural industry in the event of British entry into the European Economic Community;

(2) what is the nature and measure of the compensation which he proposes for the horticultural industry in the event of British entry into the European Economic Community; and if he will make a statement.

We have secured agreement to exceptional transitional measures to help the horticultural industry adapt to the conditions that would obtain in an enlarged Community. Nevertheless, we recognise that there will be some growers who will face difficult problems of adjustment. I have given a firm undertaking to discuss with leaders of the industry the help the Government might give in such cases, but it is too soon to say what the form or extent of compensation or other help might be.

On 8th June my right hon. Friend referred to "forms of compensation" and "or other help". Would he be a little more explicit and say whether he envisages any form of compensation other than straight monetary compensation and, if so, what? Could he undertake that these matters will be fully amplified in the proposed White Paper?

It will be too early for all these measures to be fully amplified in the White Paper because one has to form an accurate assessment of what sections of the industry, if any, will suffer as a result of joining the Community.

On the first part of the question, when I referred to "other forms of help" I was thinking of, not only compensation but perhaps additional aids, to enable people to change from one type of production to another.

Bearing in mind the increasing growth of acreage in certain agricultural crops, will my right hon. Friend consider giving a date after which he will not pay compensation on new agricultural projects so that he may pay more generous compensation to the older horticultural holdings?

I would not visualise paying compensation to growers who are at present planting up new acreages or going in for new methods of horticultural production, because presumably they are doing that now only because they see a future for it, and I am glad that they see a future for it. What we are concerned with is those who for one reason or another have large investments in holdings which might be affected as a result of our joining the Community.

asked the Minister of Agriculture, Fisheries and Food whether he will now give his revised estimate as to the expected rise in food prices in Great Britain if Great Britain joins the European Economic Community.

asked the Minister of Agriculture, Fisheries and Food when he expects to publish the revised figures of the increase in the cost of food on entry into the European Economic Community.

I have nothing to add to the reply I gave the hon. and learned Member for Leicester, North-West (Mr. Greville Janner) on 8th June.—[Vol. 818, c. 835–6.]

In the reply to which he has referred the right hon. Gentleman assured the House that figures were being prepared. Is it not deplorable that the figures are not yet available? Is not the delay in producing the figures caused because food prices are constantly increasing and the longer the Government postpone the time when they estimate the increase the lower the increase will be?

The hon. and learned Gentleman must contain his impatience for another few days. The figures will be published in the White Paper.

I share the concern of the hon. and learned Member for Leicester, North-West (Mr. Greville Janner) about the need for these figures to be published. However, will my right hon. Friend confirm that they will show that the gap between our prices and continental prices will have narrowed and that this will reflect the way that continental farmers have kept down their prices as against the rise in world commodity prices?

My hon. Friend is absolutely right. World commodity prices have gone up by between 30 per cent. and 50 per cent. over the last year or so, whereas the E.E.C. over the last four years has retained practically constant prices for commodities: there have been very small increases in prices. The figures which will be published in the White Paper within the next few days will bear this out.

asked the Minister of Agriculture, Fisheries and Food what further consultations he has had with the National Farmers' Union with regard to Great Britain's possible entry into the European Economic Community; and if he will make a statement.

asked the Minister of Agriculture, Fisheries and Food what consultations he intends to have with farmers' and farmworkers' representatives immediately after the completion of the European Economic Community negotiations.

asked the Minister of Agriculture, Fisheries and Food what further consultations he has had with the National Farmers' Union regarding possible entry into the European Economic Community.

My right hon. Friend will continue to maintain close contact with the farmers' representatives and will be glad to consider any views farmworkers' representatives may wish to put forward.

Can my hon. Friend give an assurance that when it comes to negotiating the change over from one system of price support or subsidy to another the National Farmers' Union will be consulted at every turn and not presented with a fait accompli?

Yes, Sir; I can indeed give that assurance.

Will the forthcoming White Paper give us a real indication of the changes that will have to take place in the structure and organisation of our marketing boards?

I do not think that is very relevant to the Question that the hon. Gentleman has tabled. If the hon. Gentleman will table an appropriate Question I shall be delighted to answer it.

To what degree has the National Farmers' Union expresed satisfaction with the progress so far made and announced in the negotiations and, in particular, with the announcements made about horticulture?

The N.F.U. has taken note of the progress made so far. It has asked that it should receive details as progress is made. The N.F.U. realises— indeed, neither my right hon. Friend nor I has ever made any bones about this— that there will be certain difficulties for horticulture, but I do not think these should be exaggerated.

Is the Parliamentary Secretary aware that there are those on both sides of the House who welcome the improvement in his health and his return here?

May I ask the hon. Gentleman whether he will be discussing with the N.F.U. the very serious difference between the interpretation of the terms for New Zealand made by President Pompidou and that given to the House of Commons last Thursday by the Chancellor of the Duchy of Lancaster?

I am greatly obliged to the hon. Gentleman for his opening remarks.

My recollection of what the Deputy Prime Minister of New Zealand said was that New Zealand was thoroughly satisfied with the package deal. I do not think anything that President Pompidou says is in contradiction of that.

Referring to the Parliamentary Secretary's rather brusque reply to my hon. Friend the Member for Edinburgh, East (Mr. Strang) about the attitude of the N.F.U. to marketing boards, is it not the case that the union is very concerned about the future of the boards and particularly of the Milk Marketing Board? In the light of this concern, which is generally shared in the House, will the Minister consider including in the White Paper an indication of how the Government see the future of the boards if we enter the E.E.C.?

That is a slightly different question. The hon. Gentleman invited me to say specifically whether a reference would appear in the White Paper, but his Question makes no reference to this and concerns discussions with the farmers' unions. I am perfectly prepared to put this point to my right hon. Friend.

asked the Minister of Agriculture, Fisheries and Food if member States of the European Economic Community can regulate the size of netting used by fishermen in their waters.

Members of the European Economic Community have power to apply conservation measures to protect stocks within their fishery limits provided they do not discriminate on grounds of nationality. However, the most important regulations governing the mesh of nets are those adopted by the North-East Atlantic Fisheries Commission, which apply outside national fishery limits as well as inside, and which are binding on members of that Commission whether or not they are in the European Economic Community.

Can the member States of the Community take any other conservation steps which may be considered appropriate to their own waters?

Yes; within their 12-mile limit they can. The only stipulation is that the measures must not be discriminatory between one nationality and another. In so far as they fall within the 12-mile limit, an individual nation can take whatever conservation measures it wishes to.

In the event of British entry to the Common Market, what proposals has the Minister for strengthening the fishery protection service, which at its present strength is clearly inadequate to do that work?

This is a very important matter which has been raised with me by the inshore fishing industry on several occasions and which I take very seriously. The Government will be looking into this.

Is my right hon. Friend aware that this is not just a question of net size and boat size? We have recently negotiated with the Danes a fixed quota on the number of salmon that they are allowed to take out by drift netting? Will these arrangements stand once Denmark joins the E.E.C.? Will my right hon. Friend consider this very important point?

This is again a matter of conservation. We shall wish to pursue with Denmark and other countries all matters of conservation.

Will the right hon. Gentleman clarify a very important answer to a previous Question on this issue? Is he saying that after the five-year transitional period this country can exclude foreign fishing boats from the outer six-mile limit?

I do not want there to be any misunderstanding on this. The proposal we have put to the Community is that between the 6-mile and 12-mile limit from 1973 those who have traditional fishing rights should be joined by the rest of the E.E.C. countries, but that the band up to six miles is exclusive to us.

asked the Minister of Agriculture, Fisheries and Food, what steps he is taking to prepare to harmonise food prices with the European Economic Community.

There is no question of harmonising retail food prices, which vary widely within the Community. Farm gate prices will be brought gradually into line with Community levels under the transitional arrangement already announced.

If the Community harmonises its value-added tax and decides to place it on food, shall we have to follow suit, or can we opt out specifically on food?

Do not be silly. You cannot opt out of anything.

That question is really not for me but for my right hon. Friend the Chancellor of the Exchequer. All the harmonisation we have to undertake at this stage with the Community is harmonisation of farm gate prices. This will still lead to enormous variations in retail prices, and certainly to lower prices for us, chiefly because our retail system is much more efficient.

The Minister cannot slide out of the question as easily as that. The truth of the situation is that he knows that one of the first harmonisation programmes in the E.E.C. is of taxation and V.A.T. Will he now reply to the point made by his hon. Friend? Will the V.A.T. apply to food once the harmonisation programme is put into operation? If it is insisted that it shall apply to food, what will be the Government's attitude?

That is a hypotheical question. It will depend entirely on what happens after we join the Community, but, as the hon. Gentleman knows, it is not the Government's policy to put a value-added tax on food.

asked the Minister of Agriculture, Fisheries and Food what consultations he has recently had regarding Great Britain's possible entry into the European Economic Community with British fisheries organisations.

My officials have been in frequent touch, particularly with the British Trawlers' Federation and the Fisheries Organisation Society, and I have met the latter twice in the past fortnight.

My right hon. Friend will know that fish, being itinerant creatures, derive no special advantage from flying under the flag of one nation as against another, and are totally oblivious to the phoney frontiers we draw in the marine environment. As, therefore, effective conservation of living resources of the sea is so self-evidently an international exercise, does he agree that the anxieties expressed about the common fisheries policy are, to say the least, somewhat exaggerated?

I am grateful to my hon. Friend for that lengthy and erudite supplementary question. There are genuine anxieties on the part of the inshore fishermen, and the Government are determined to allay them. But I hope that they will not over-state their case and not pay too much attention to some other people who perhaps are not so interested in fisheries but have hopped on that band wagon for other reasons.

The Minister has spoken of his discussions. In view of the statement by the British Trawlers' Federation, will he be having discussions with its representatives before the meetings in Brussels on 12th July?

Yes, Sir. We have arranged to see the B.T.F. before 12th July.

Will my right hon. Friend remove another worry? If we are to allow our partners in the E.E.C. to come within our 6-to-12-mile limit, will he make certain that our vessels will be allowed within the 6-to-12-mile band of the Six and the four associated States?

That is a very important matter, in which my hon. Friend is rightly extremely interested. What is sauce for the goose is sauce for the gander.

Will the Minister consider entering into discussions with the E.E.C. about the possibility of having a variable withdrawal price to enable fishing ports, particularly of the inshore fleet, far from the central markets to benefit to a greater extent than they would if there were a flat rate?

This is another very important point. It has been the subject of negotiation in the secondary legislation committee in which we are concerned at Brussels. The hon. Gentleman's point will be well taken care of in the course of the negotiations.

asked the Minister of Agriculture, Fisheries and Food what arrangements are now proposed for the marketing of Great Britain's apples and pears if the United Kingdom joins the European Economic Community.

Adoption of the Community's common organisation of the market would not affect the industry's general responsibility for the marketing of home-grown apples and pears.

Does not my right hon. Friend agree that effective marketing arrangements are vital for the future of the industry? What discussions has he had with representatives of the Six to ensure that the market does not become excessively glutted by too much low grade continental production?

This will not happen during the period of transition because we have made arrangements to cover it. After the period of transition is over, and long before that has come about, negotiations must take place on proper marketing, and I hope that this will involve the present members of the Community in getting their surplus production under control.

Is the right hon. Gentleman aware of the concern felt by the Apple and Pear Council regarding the imminent removal of import quotas? Is he prepared to reconsider, even at this stage, the possibility of extending the life of these quotas?

I am aware of the concern in the industry about this. We cannot continue with the quota system as such, but the other arrangements we have made for the introduction of a levy, which will be phased out over the period of transition, will, I think, give approximately the same degree of protection as diminishing or extending quotas would.

Does my right hon. Friend agree that one of the ways in which those very efficient British producers, the horticultural growers of apples and pears, can protect themselves is to develop their marketing right down to the wholesale market, so that they have some control over the eventual purchase of apples and pears by the public?

Yes, of course. I think that the vast majority of the apple and pear growers, who are producing a high quality of product, will find a ready sale for these commodities after entry into the E.E.C.

Has the time not come for the right hon. Gentleman's annual message of encouragement to the British housewife—that if she cannot afford apples and pears she will have to eat peaches?

asked the Minister of Agriculture, Fisheries and Food what regulations there are in the European Economic Community in relation to lamb.

There is no common organisation of the market in the Community for sheep meat but there is a common external tariff of 20 per cent.

Does the hon. Gentleman appreciate that there is considerable concern in certain quarters in this country about the presence of draft regulations at Brussels relating to sheep meat? If these draft regulations become effective, can he offer any assurance to British and New Zealand sheep farmers?

There are many restrictions among different countries at the moment but I believe, as New Zealand believes, that an acceptable volume of trade will continue to jump over the 20 per cent. tariff, and New Zealand has accepted that access will be both adequate and remunerative. In the case of any regulations brought in before our entry, we would hope to be consulted and we certainly would be consulted if they were brought in after entry.

Do I understand from the hon. Gentleman that if we joined we should then have to impose a tariff of 20 per cent. on lamb imported from New Zealand and Australia?

We would phase in a 20 per cent. tariff against third countries gradually if we were to join.

asked the Minister of Agriculture, Fisheries and Food how many letters relating to food price increases he has received since 9th June, 1971.

About 70.

Is the Minister aware that, irrespective of how many letters he receives, nobody expects the British housewife to treat either him or, for that matter, the Prime Minister seriously after the statement he made on 9th June? Can we assume that in future the Minister will be able to interpret some of the statements that President Pompidou makes, such as the one that he made at the weekend? For instance, can we expect the Minister to be able to tell us whether cheap New Zealand cheese will reach vanishing point; or was President Pompidou at his meeting with the British Prime Minister doing another electoral con job?

The one thing that all hon Members in all parts of the House will agree about is that nobody ever takes the hon. Gentleman seriously.

asked the Minister of Agriculture, Fisheries and Food what increase in retail food prices occurred between 1st July, 1970 and 30th June, 1971, or the latest convenient date, expressed per centum.

asked the Minister of Agriculture, Fisheries and Food by how much the Food Index has risen from June, 1970, to the latest available date.

asked the Minister of Agriculture, Fisheries and Food what has been the increase in the index of retail prices between 19th June, 1970, and 18th June, 1971, or the last convenient date.

Between 16th June, 1970, and 18th May, 1971, the latest date for which information is available, the Food Index rose by 10·4 per cent.

Will my right hon. Friend take the increase in food prices very seriously? Is he aware that a rise of 10·4 per cent. in those 12 months added to a continuing rate of 9·6 per cent. would give 20 per cent. over two years, and that two results, both damaging to the economy, will flow from that? The first is that the whole of the tax reductions in the last Budget will be offset. Second, there will be much greater pressure for increased wages, leading to an even faster rate of inflation than in the past 12 months.

Of course I take the matter seriously. We dealt with it very carefully in debate both last Tuesday and yesterday.

Is the Minister aware that he gave a shocking reply and that the only way in which he can end the discomfiture of his hon. Friend——

I am not discomfited.

—and recover his self-respect is to resign?

The right hon. Gentleman may be interested to know that the last time a Conservative Government were elected after a Labour Government they had to face exactly the same problem.

Is the Minister aware that just two days before the General Election the Prime Minister said that the wage explosion was the only way in which people could protect their standard of living? Will the Government now recognise that wages are chasing prices, and not the other way round?

I might remind the hon. Gentleman that his leader said that one man's wage increase was another man's price increase.

In view of the serious increase in retail prices of food, will my right hon. Friend continue to emphasise the Government's policy of helping those people who are worst hit by inflation and rising prices?

Certainly, I believe it to be a very important part of the Government's social policy.

In view of the great emphasis the Prime Minister always places on the cut in S.E.T. when his policy on food price increases is criticised, can the right hon. Gentleman give us an up-to-date assessment of the impact that that cut will make on food prices? Has not the Prime Minister grossly exaggerated the extent to which the cut will be passed on to the housewife?

No, Sir. Only this morning I received a letter from the biggest personal service retail butchers in the country, with about 1,570 shops, saying that as soon as S.E.T. is reduced next week it will see that every single penny of the cut is passed back to the customer.

asked the Minister of Agriculture, Fisheries and Food if the committee he has appointed to inquire into the fowl pest epidemic will, in view of the gravity of the situation, issue an interim report.

The Review Panel has been asked to work as speedily as possible and may certainly make interim recommendations where these would be appropriate.

Is my hon. Friend aware that in certain parishes of Lincolnshire the disease has spread to avian predators and various song birds which are not normally the responsibility of the Ministry? Will they be covered by the interim report?

Yes, they will.

Will my hon. Friend ask the panel whether, as an interim measure at least, it can give guidance on the spreading—or, rather, not spreading—of manures from poultry houses affected with this disease?

It is an offence at the moment to spread manure or slurry which has not been disinfected, and our officials take particular care to ensure that this is carried out. I will draw the attention of the panel to what my hon. Friend has said so that it may consider it urgently.

asked the Minister of Agriculture, Fisheries and Food what steps his Department is taking to give guidance to growers on the orderly marketing of this year's cereal harvest.

My right hon. Friend considers that farmers need no guidance from him about the importance of orderly marketing of grain. It is up to the individual grower to study the market and match his sales to its needs.

Is my hon. Friend aware that current crop ratings are well above the 10-year average and that under the new system working this year there may be some initial confusion at the beginning of the cereal marketing period? Will he keep a close watch and give further guidance if necessary?

I am prepared to keep a close watch on it. But I counsel my hon. Friend not to be over-optimistic. The harvest is not here yet, and quite a lot can happen before then.

asked the Prime Minister if he will invite the Prime Minister of Sweden to pay an official visit to Great Britain.

Mr. Palme would always be welcome in this country but there are at present no plans for a visit.

At any such meeting, will the right hon. Gentleman be able to give the Swedish Prime Minister an assurance that in no circumstances would this country countenance the re-erection of trade barriers between Britain and Sweden?

The Swedes are responsible for their own negotiations with the E.E.C. They have been having discussions, as the hon. Gentleman knows. As I understand it, they are working out the sort of arrangements they want. The undertaking which every E.F.T.A. country gave to the others on 28th April, 1967, was that, if one of them wanted to join the E.E.C., there should be reasonable opportunity for the others to have a period in which they could work out transitional arrangements. As I said after my meeting in Paris with President Pompidou, we agreed that it was undesirable that where trade barriers had been reduced they should now be erected again.

Does not my right hon. Friend agree that comparison between this country and Sweden is not very helpful, as Sweden is not only a neutral country but one which has special need to look after the minority in Finland, which has already been threatened by the Soviet Union were Sweden to attempt to enter the E.E.C?

I think it has been widely recognised, and successive Governments in Sweden have always emphasised, that their political policy of neutrality provided certain difficulties in relation to full membership of the E.E.C. But, having always stated that policy, they have always understood that a form of association could be negotiated for them, and that, I understand, is what is happening now.

asked the Prime Minister how many persons he estimates in a full year will be subject to means tests following the implementation of all those means-tested schemes currently planned by various Departments.

As so many variable factors affect the numbers eligible, no reliable estimates are possible. The largest single category of means-tested beneficiaries are those covered by the supplementary benefit scheme introduced by our predecessors; and the total numbers benefiting from schemes for giving help selectively where it is needed will be higher than under the previous Administration because of the introduction of the family income supplement and increases in income limits.

The right hon. Gentleman is being coy again. Will he not acknowledge that the new housing allowance scheme which the Government will announce shortly, together with the family income supplement, will for the first time in the case of families where the head is in full-time work bring more than 10 million people—or at least one-fifth of the population—within the ambit of the means test? Will he explain how by yet another of his electoral dishonesties last June he failed to admit to the nation his intentions as the purveyor of a new poor law?

I will ignore the last part of the hon. Gentleman's supplementary question and answer the first part. One can identify 43 major means-tested benefits provided by central and local government. Sixteen of these are statutory assessments and 27 are discretionary assessments. The Government have added one more—for the family income supplement. The great majority of local authorities already have rent rebate schemes for their housing, which they operate themselves. We are extending this facility to privately-rented accommodation. This does not seem to me to be something which the hon. Gentleman should criticise. If he wants to say that the lower-paid workers should not get the family income supplement, that is a debatable question of policy, but we have concluded that this is the best way to help them, and it means an increase of one means test over the 43 operated under the last Government.

Would my right hon. Friend not agree that the introduction of rent rebates to local government was a process which was much encouraged by the right hon. Member for Coventry, East (Mr. Crossman)?

Yes. As I understand it, the previous Administration did not in the least disagree that local authorities, many of the Labour-controlled authorities, should operate rent rebate schemes. My hon. Friend is quite right; the right hon. Member for Coventry, East (Mr. Crossman) when he was Minister of Housing greatly encouraged this, and I believe that at one stage he contemplated making it compulsory for local authorities.

Does the right hon. Gentleman not recognise that the more means tests there are the tendency is for fewer people to apply for the benefits as of right, either through ignorance or because of personal dignity or whatever? Despite the increased publicity which the Government have given to these schemes, is he aware that the number of applicants has been fewer than expected? Will he reconsider the entire question of means tests, and particularly the family income supplement, which is a means of subsidising mean private industrialists?

As far as I am aware, there is no evidence to support the last part of the hon. Gentleman's supplementary question. Obviously, if this were proved to be the case, then any government must consider the situation. I must ask the hon. Member to keep this in perspective. What I have told the House is that to the 43 major forms of means tests which existed under the previous Conservative and Labour Administrations one more has been added. That is all. When it comes to the numbers of people who take advantage of the benefits, the Government have carried out what is generally agreed to be the biggest ever programme to provide information about these benefits to citizens. If the hon. Gentleman then complains that more people take advantage of them, what he is really saying is that he wants the benefits to go to people irrespective of their wealth. In view of the well-known interest of the hon. Gentleman——

Too long.

I know that the hon. Gentleman does not like this. I would not have thought that he wanted all benefits to go to people irrespective of their wealth, knowing his well-known interest in other people's wealth.

Do not the Government's housing proposals to which hon. Gentlemen opposite refer apply on a wide scale what used to be the Socialist principle of "to each according to his need"?

My right hon. Friend is absolutely right.

asked the Prime Minister if he will make a statement on the visit of the Italian Prime Minister.

Signor Colombo arrived in London on Sunday and after a visit to Edinburgh will return home tomorrow. I have had very full discussions with Signor Colombo and Signor Moro, who is accompanying him, covering European questions, including enlargement of the Community, and other international issues of common interest.

While, naturally, I welcome the visit of the Italian Prime Minister, could my right hon. Friend say whether Signor Colombo gave his wholehearted support to President Pompidou's aim of a confederation for Europe?

The Italian Government have always expressed a desire to have closer European unity. We have not on this occasion discussed the specific nature of that unity in the political sphere because all Governments in the Community and ourselves as a possible member agreed that this was something which must be discussed when the Community is enlarged.

Following upon that question, as the Italians played a leading part in the earlier discussions on the political future of Europe can the right hon. Gentleman say—although he says that no firm decision was made—whether any timetable was drawn up or preparations were made for taking this matter up again and perhaps following it up in the Fouchet and other committees in future?

No, Sir. No timetable or programme was worked out for these discussions. As far as I know, the Community has nothing in mind like the previous Fouchet Committee, which prepared a plan on a federal basis for greater unity in Europe.

Could the right hon. Gentleman say whether he discussed with the Italian Prime Minister the creation of a technological community in Europe since this was a major feature of the Labour Government's application about which we have not heard much from this Government?

Members of the Community recognise the immense importance of technological development. Signor Colombo in a speech last night paid tribute to the contribution which Britain could make in this respect. On the other hand, I think the Leader of the Opposition would agree that it has never been accepted policy of the members of the Community that a separate technological community should be created. The movement has been in the opposite direction, because Euratom and the Coal and Steel Community have become merged.

asked the Prime Minister if he will pay an official visit to Cowes.

I have at present no plans to do so.

As a land-based sportsman of somewhat little consequence— [HON. MEMBERS: "Hear, hear!"]—I can understand the Prime Minister's desire to get away from it all. As far as I am concerned, he can sail all week.

Question !

I am coming to that.

Does the right hon. Gentleman realise that if he had drifted close to the French coast last weekend he would have seen President Pompidou, with his feet planted on terra firma, gloating about the French farmers and how they will now be able to rape British housewives?

I can assure the hon. Gentleman that while we were off the French coast we were not visualising such exciting possibilities. We were confining ourselves to meals of New Zealand cheese.

Would my right hon. Friend not agree that a number of hon. and right hon. Gentlemen opposite have a lot to learn from the manœuvres at Cowes and that they may learn to come about into the wind and save the nation the squalid spectacle of a gybe all-standing?

I was not warned of that nautical manœuvre. All I can comment is that some hon. and right hon. Gentlemen opposite seem to be able to tack all right when they think it suitable.

asked the Prime Minister if he will outline his specific duties as head of the Civil Service Department.

The position remains as it was under the previous Administration. I am ultimately responsible for the whole range of work of the Civil Service Department, which covers machinery of government, the broad organisation of Departments, the development of administrative techniques including the provision of certain central services, together with the central management of the Civil Service, the recruitment of civil servants and their pay, pensions and other conditions of service.

Day to day responsibility for the Department is delegated to my right hon. and noble Friend the Lord Privy Seal.

Is the right hon. Gentleman aware of the continuing sense of wonder that this enormous Civil Service machine did not find itself able to warn the Government within hours of the position over Upper Clyde Shipbuilders? Or is it perhaps that Mr. Anthony Hepper is right and the Government were indeed told?

The position has been stated to the House quite clearly, and it is that it was the Government director on the board of Upper Clyde Shipbuilders who asked for a fresh investigation to be made into the financial state of the company. The result of this investigation was made known to the board on Monday and the Government were informed by the board on Wednesday. It is difficult to see how under any organisation of Government it is possible to know more than the board of a company knows about its finances. As we were told within 48 hours of the company hearing of the result of the report, I would have thought that we had been speedily informed.

Does not the Prime Minister agree that it is rather fine accounting for a 49 per cent. shareholder to know that there is only enough cash to last three days?

I do not know whether the right hon. Gentleman is referring to the Government's decision, but when the board reported to us it reported that it was able to pay wages for the following week. At the same time it wished to give information to the trade unions that this was the case. We asked immediately for time in order to be able to examine this situation ourselves. We asked for only four days, and the company agreed to give us this. We said that, if the board wished it, we would undertake to pay wages for the following week in any case. On the Sunday the company informed my right hon. Friend the Secretary of State for Trade and Industry that it was not even in a position to pay wages for that week. The Government then undertook the responsibility of paying wages for the current week as well as for the following week, and have since accepted the responsibilities which have been explained to the House.

Will the right hon. Gentleman do the House the favour of reading in yesterday's HANSARD the answers to the large number of Written Questions on this subject? He will find, if the answers of the Secretary of State for Trade and Industry are to be accepted, that his Department was in continuous contact with Upper Clyde Shipbuilders from the middle of October last year, and that all the information that could have been given was continuously given. If the right hon. Gentleman accepts what is said in yesterday's HANSARD, will he hold a public inquiry into this matter?

It is well known that in February of this year, when the Government made the arrangements for Yarrow and provided a considerable sum of money to enable Yarrow to be separated as a defence asset from U.C.S., it was the firm view of U.C.S. that the company was then viable and that its outlook was bright, and this was accepted by the Government. Later on, as I said, a director on the board took the view that the company must look further into its finances. It was as a result of this report, information on which was passed to the Government two days after it was known by the board, that the board decided it should go into liquidation.

Order. I think we are getting a little far from the Question on the Order Paper.

I beg to move Amendment No. 3, in page 3, line 13, leave out 'the preceding paragraphs' and insert 'paragraph (a) above'.

On a point of order, Mr. Speaker. It is impossible to hear my right hon. Friend. Will you please direct hon. Members to leave the Chamber quietly?

I am obliged to the hon. Member. Will hon. Members wishing to leave the Chamber do so more silently?

We are still disturbed at the legislative preference that remains in the Bill which stresses that the Civil Aviation Authority shall have a duty to one major British airline which is not controlled by the British Airways Board. I refer, of course, to Caledonian/B.U.A. The Government have established by legislation an independence right, yet within the same Clause dealing with the powers of the Civil Aviation Authority there is no mention of the Corporations, B.O.A.C. and B.E.A. We think that this is a deliberately slanted Clause, forcing the C.A.A. at all times to keep in the forefront of its mind this badly-conceived airline of the Government's.

The Government, have robbed B.O.A.C. and B.E.A. of routes, having provided an illegal base from which this airline begins and having created this dangerous precedent of confiscation without compensation—and I keep reminding the House that this will not be forgotten —have then spelt out in legislation that their airline will have all the opportunities to participate in providing on charter and other terms, air transport services which satisfy all substantial categories of public demand. As my hon. Friend the Member for Feltham (Mr. Russell Kerr) said in Committee, it is not just a matter of allowing the airline to operate as a viable concern but of writing in special provisions "so that it is tucked up and statutorily preserved."

This legislative preference is wrong. I do not see how the right hon. Gentleman can defend it, especially when the two Corporations are omitted. It is incumbent upon the Government to withdraw this offending paragraph (b) of Clause 3(1), or at least, in this Clause dealing with the Authority's functions, to give the Corporations the same legal recognition.

I draw to the attention of the House the recent activities of this British independent airline, Caledonian/B.U.A. The company applies to the Air Transport Licensing Board for more licences in addition to the routes transferred by the Government from B.O.A.C.'s West African route licences. At the hearing, Mr. Laurie, the Chairman of the Board, said to Caledonian/B.U.A.:

"It is absolutely proper that you make your application but it seems it goes much farther than the Secretary of State's statement of intent. The Board wants to make it clear that it is not hearing what it thought it was going to hear today, a rather formal application based on Government policy."

So Caledonian/B.U.A. has begun already. The airline is not going to the Air Transport Licensing Board for routes based on Government policy and statements of intent, but is trying at the very outset to twist the arm of the A.T.L.B., to cheat the Government and crudely try to extract from the Board even more than the Government had pinched for it. During the hearing, Mr. Laurie, having decided that the Board should reserve its decisions on all the applications, as a rebuke to Caledonian/B.U.A., said:

"Considering the vast number of words spoken in both Houses of Parliament, the gallons of printing ink used in leading articles, and the many pints of bad blood spilt of this, I am astonished that you two gentlemen are saying so little to the Board about this."

The House must note that Caledonian/B.U.A. at the first opportunity has ignored Government policy and has tried to browbeat the A.T.L.B. into granting it even more than its stolen routes. I hope that the Minister has taken note of this episode and, in the light of this experience, will make sure that the Civil Aviation Authority under Clause 3(1)(b) does not flout this decision of the A.T.L.B.

I was not entirely satisfied on this point with what the right hon. Gentleman said in Committee:

"No absolute preference will be given to the second force in terms of transfers. That will be laid down quite clearly in the guidance that we give. But if a new route fits into the second force airline operation it should be given preference if other things are equal on merit."— [OFFICIAL REPORT, Standing Committee A, 27th April, 1971; c. 115.]

Then only a minute or so later he said, in column 116:

"There is no question of our imposing upon the Authority a duty to prop up an inefficient, unviable second force. I have said over and over again that having made the necessary essential transfer to get the second force off the ground, we must leave it to stand on its own feet."

Perhaps the right hon. Gentleman will take this opportunity to tell us the truth of the matter. Was this done by Government preference or, now that the transfer has taken place, do the right hon. Gentleman and the Authority intend to let the second force airline stand on its own feet?

I have said enough about this offending paragraph. I think that the same legislative recognition within the Clause should be given to B.O.A.C. or B.E.A., or the Government should withdraw recognition from this one major British independent airline.

I should also like the right hon. Gentleman to make some reference to the attempt by Caledonian/B.U.A. to flout his directive before the A.T.L.B. I should like to know what he feels about his comments in Committee. Although he said that it would have preference provided that everything else was equal on merit, having now transferred the routes to Caledonian/B.U.A., is he going to allow the second force to stand on its own feet.

I rise briefly to support my right hon. Friend, but I suggest that he should have gone even further. I put down an Amendment to Clause 3, which, unfortunately, does not look like being called, which would drastically modify the whole of Clause 3. I have always felt that if we are to have any kind of regulatory air licensing body at all, it should be powerful. I do not recall seeing the same sort of directive in any other piece of legislation to set up any corresponding national air licensing body. If we are going to secure the continuity of one independent airline, why has it to be Caledonian/B.U.A.? I have often called this Bill the "Protection of Caledonian/B.U.A. (No. 2) Bill", just as I regarded the declaratory provisions legislation as the "Protection of Caledonian/B.U.A. (No. 1) Bill".

If we are to have an independent authority to promote the air services of British carriers and air transport, it should not be hamstrung in this way and should certainly not be hampered by paragraph (b). If we are to allow civil aviation to do its job properly, it should be allowed to shape its own policy. The kind of conclusion reached by the Edwards Committee missed out on one central point, namely, that if we are to have any central licensing body the policy should not be shaped by Government but by the licensing body itself. The whole emphasis of air transport licensing nowadays is that we are encouraging a situation in which cases are coming forward so thick and fast, that it is impossible for the Secretary of State to make up his mind on each one, as he will with the kind of legislation we have before us today.

We shall reach a situation where particularly in interpreting Clause 3(1)(b) the civil aviation authority will have to face further pleading from Caledonian/B.U.A. when it gets into further difficulties. It is well known that Caledonian/B.U.A. finds itself over-stretched, particularly in financing the domestic trunk competition which is now being foisted on B.E.A. It is also well known that the company faces stiff competition on the west coast of the U.S.A. from American charter operators and, presumably, will face stiffer competition when the rules and regulations proposed by the American C.A.B. ultimately comes into being. Are we about to see a situation in which Caledonian/B.U.A. will have to be subject to special pleading because the Civil Aviation Authority has this duty under paragraph (b)? I suggest that we should modify the Clause completely. Although I shall support my hon. Friend's Amendment I suggest that it would be far better to drop the whole Clause and seek to insert that it shall be the duty of the Civil Aviation Authority

"to secure that British airlines provide economic, safe and efficient air services in the interests of the consumer and of the nation",

I have listened with interest to the points made by the right hon. Member for Barnsley (Mr. Mason) and also by his hon. Friend the Member for Nuneaton (Mr. Leslie Huckfield). I am grateful to the right hon. Gentleman for saying, appropriately, that this might well be a short debate. We have on a number of occasions debated this particular problem in its various forms. It is unlikely that the right hon. Gentleman and I will ever entirely agree about this matter.

The right hon. Gentleman complains that neither B.O.A.C. nor B.E.A. has been specifically mentioned by name. I do not feel that this is a very serious point. I must have said on a large number of occasions, both in the House and in Committee upstairs, that in the Government's view—indeed I do not think any Government could take any other view—B.O.A.C. and B.E.A. are the two main carriers of the British flag in civil aviation. I do not think it is necessary to mention them by name in the Clause to makes this plain to anybody who has knowledge of civil aviation, and certainly not to the Civil Aviation Authority.

The second point raised by the right hon. Gentleman was that the Caledonian/B.U.A. application for licences before the A.T.L.B. covered one or two places which were covered by B.O.A.C. in routes to West Africa. I cannot see that Caledonian/B.U.A. was in any sense trying to browbeat the A.T.L.B. in applying for these routes. That company, just as any other airline, can apply to the Board for any routes it wishes and it is for the Board to make up its mind on whether it is a sensible or inadvisable application. In this case the Board concluded that it was not a sensible application to accept and turned it down. The right hon. Gentleman is stretching matters if he is saying that Caledonian/B.U.A., or any other airline, would attempt to browbeat the Board. Certainly neither my Department nor I myself gave the Board any advice on this matter. The Board came to its own conclusion from its own particular knowledge of the situation, and did what it thought right.

Would the right hon. Gentleman not agree that whether or not it was a question of browbeating the A.T.L.B., it is certainly cool cheek for Caledonian/B.U. A., just after it has received a massive handout from its political friends to come along with another begging bowl asking for more preferential treatment?

I do not view it in that way. The hon. Member for Feltham (Mr. Russell Kerr) is entitled to his view. In the future, there may be perfectly good examples where Caledonian-B.U.A. or any other airline is entitled to go to the A.T.L.B. asking for routes which it believes that it can serve efficiently and perhaps better than B.O.A.C. or B.E.A. The Board is there as an institution blessed by Parliament, now to be superseded by the Civil Aviation Authority, and airlines can ask it for licences which they think make sense. The hon. Gentleman has a lot of experience in civil aviation. He will know that the Board has for many years established a very right and proper reputation for looking independently and sensibly at any application made to it and for making up its own mind about it. It would resent, just as the hon. Gentleman and some airlines would resent, pressure from outside as to how it should do its job.

My feeling on this point is simply that it is right for Caledonian-B.U.A. or any other airline to make application to the Board. It is equally right for the Board to turn down any application if it sees fit. There is no question of browbeating or of improper pressures.

The next point that the hon. Gentleman made is one of which I have some understanding, and it is a difficult one. On every occasion on which this subject has been debated, I have made it clear that it was the intention of the present Government to create a second force airline, as the Edwards Committee sug- gested and as the right hon. Gentleman and his right hon. and hon. Friends accepted in their White Paper. I accept that there is a difference between us. In our case, we realise that it could not possibly get started without being given some transfer of routes, and there is a division between the two sides of the House as to how much. That was our view, and I am certain that, if the General Election result had been reversed, this would have been a problem that right hon. and hon. Gentlemen opposite would have had to face if they really wanted to get a second force airline.

We did not.

Perhaps they did not. There may be a difference of opinion on that among right hon. and hon. Gentlemen opposite, but that is not unusual. Be that as it may, if the second force is to be a meaningful addition to the British civil aviation effort, it has to be able to be viable and to provide a thoroughly satisfactory service to consumers, whether they are in this country or overseas.

I have said that the guidance which will be given to the Civil Aviation Authority before it comes into operation—it will be presented to Parliament in due course—will make it clear that there is not to be an automatic preference given to Caledonian/B.U.A. over any other airline, be it on scheduled or other services. Each case will be looked at on its merits. If the merits are sufficient, the guidance will make it clear that a reasonable amount of preference should be given to the second force airline so that it can build up the strength which is necessary if it is to operate efficiently. It will not be given preference in all circumstances. The Civil Aviation Authority will look at the situation at the time, and, if it is clear that Caledonian/B.U.A. and any other airline are equal on merit, then perhaps preference ought to be given to the second force airline.

The hon. Member for Nuneaton asked why the second force airline should be Caledonian/B.U.A., and he described this massive Bill as the Caledonian/B.U.A. Protection (No. 2) Bill. The hon. Gentleman will be spending a good deal of this evening with us, and I can assure him that there is a vast amount in the Bill, over and above this point on which both sides of the House may be sharply divided.

If it was wise and sensible to try to create a second force, as the Edwards Committee reported, the fact is that there was no other airline to take that place in civil aviation. There may not be for a number of years. If Caledonian and B.U.A. had not decided to get together, it is possible that there would have been no available second force. Therefore, this is an accident of timing and of history, and that is why Caledonian/B.U.A. is the second force.

I accept entirely that there are considerable problems in civil aviation at the moment. As the hon. Member for Nuneaton said, there is considerable competition on charter services all over the world. Anyone who is interested in civil aviation has seen many points developing, some of them wisely and some not so wisely, and there is a great deal of discussion internationally of them. But, whether it is competition in charter services or lack of sufficient passengers for the scheduled services which in the past have been a very paying proposition for all the major airlines and which at the moment are not paying because there is a large surplus of aircraft and not enough passengers, there is no doubt that civil aviation is passing through a period of tough competition.

The right hon. Gentleman described the Caledonian/B.U.A. merger as an accident. Now he is telling us about a planned situation. If that planned situation has been guided by an accident, can we be sure that there are no other accidents in the Bill which have not yet been discovered?

The hon. Gentleman sat through a great many hours in Committee, and I am sure that, if he had spotted any accidents which were likely to be in the Bill, he would have drawn attention to them.

I said that it was an historical accident that, at the time that the second force was recommended by the Edwards Committee, Caledonian/B.U.A. happened to be the only possible choice, and that was only available because Cale- donian and B.U.A. were prepared to merge and so provide it. If that had not been so, there would have been no available candidate for this purpose.

Whether it is because of the general situation in civil aviation or for any other reason, the point that I have made continuously and continue to make is that we have made the transfers of routes which we thought necessary to the airline. In future, we shall ask the Civil Aviation Authority, on the basis of merit, to give it the preference which the Authority thinks necessary to maintain a viable second force airline. We are not prepared to go beyond that in giving any guarantees to Caledonian/B.U.A. that they have a right to demand anything else from us. I hope that I have made the situation clear to the House. I can do no more than state it quite plainly, as I have this afternoon.

Whilst the Minister's words about the positions of B.O.A.C. and B.E.A. are appreciated, they do not give enough recognition. The right hon. Gentleman knows full well that when the Bill becomes law his words, like much of the verbiage throughout Second Reading, 16 sittings of the Committee and today, will have drifted into history. Only the Act will be read and only that will matter. So, whilst we appreciate his reference to the importance of B.O.A.C. and B.E.A., it is not good enough that they have not been mentioned in the Clause.

I realise that to some extent in his judicial capacity the right hon. Gentleman must stand to one side regarding the A.T.L.B. However, he knows that the A.T.L.B. was pressured by Caledonian/B.U.A. to try to get more routes than was the intention in his general directive. The Minister also knows that the A.T.L.B. has recently, in its annual report, let him know that it is eager to help the Department to try to solve the problems of the independent airlines, the major charter operators, including Caledonian/B.U.A., who have been flouting the rules governing air fares, charter flights and affinity groupings. Yet on both counts, first, trying to breach his statement of intent and, secondly, breaching the rules governing international air fares, the Minister stands to one side. On these occasions he should stand up and condemn such practices.

The right hon. Gentleman said that the second force emerges as an accident of timing and history. He knows that, because of the political dogma which has motivated most of his and his right hon. Friends' activities, this was the first of the hiving off operations. It is a deliberate political act to confiscate the nation's aviation assets, and the Minister