On a point of order, Mr. Speaker. You will be aware that a lot of hon. Members are new Members and therefore probably not too well acquainted with the procedures of the House. Since there are many hon. Members opposite who are either chairmen or directors of breweries, would you make it clear that they must declare their interest before they speak, just in case their companies might be thinking of taking over some of those State-owned breweries which are very profitable enterprises?
I beg to move, That the Bill be now read a Second time.
The purpose of the Bill is a simple one and clearly indicated in the Short Title. Its purpose is to wind up State management of the liquor trade in three small areas of Great Britain where it now operates. In effect, it will bring to an end an experiment that began something like half a century ago. I would have thought that half a century was enough for any experiment, even an experiment in State management. It also accords completely with the Government's declared intention of eliminating any functions of the central Government which can be shown to be unnecessary in the sense that they can be carried out by other means—
It is my experience over many years that the word "doctrinaire" is one generally applied in Opposition to a Government carrying out the policies for which they were elected by the people. I do not particularly mind if we are declared doctrinaire on this. The Government's decision to abolish State management was announced by my right hon. Friend the Secretary of State for Scotland and myself on 19th January when we indicated that legislation would be forthcoming to wind up the activities of the Carlisle and District State Management Scheme and those of the State Management Districts of Gretna and Cromarty Firth. This is the object of the Bill. Its particular effect is to repeal the statutory provisions relating to State management and to facilitate the disposal of that management—
I will explain to the House. If the rather garrulous Members opposite will look at the Bill they will see that we have to dispose of the property on such terms as would be expedient in the public interest. That is the obligation laid on the Government by this Bill. I will describe the provisions of the Bill shortly.
Meanwhile, it might help the House if I were first of all to outline the historic origins of State management in England and Scotland and explain why we have concluded that this experiment ought now to be discontinued. When World War I arose it brought a sudden and unaccustomed affluence to various parts of Great Britain. Drunkenness increased, and the Government of the day was concerned about the effect of drink on war production. So in 1915 a Defence of the Realm Act set up a Central Control Board with wide powers to control liquor.
Some of the measures it introduced then, such as the "afternoon break", have since been incorporated into the general licensing law of the country. However, there were particular areas in which measures of this general character were not thought to be sufficient. In these areas there was started what became known as an experiment in "disinterested management". The underlying idea was that some publicans were encouraging excessive drinking to divert people's affluence into their own pockets
It was thought that if a "disinterested management" with no direct interest in the profits from the sale of liquor organised the liquor supply and if no one else was authorised to sell liquor the evil would be remedied. It was, to put it mildly, a rather peculiar conception.
So State management areas were designated, the Central Control Board compulsorily acquired all but a few of the licensed premises in the areas and sale by anyone else was prohibited. In Carlisle this power went hand in hand with the closing of a number of breweries and public houses. By the end of the war State management had been established in three districts: in Carlisle and the bordering Gretna area of Scotland where munition work had provided the affluence and in Cromarty where there was the naval base of Invergordon.
It might be thought that an emergency war-time experiment of this kind would have been brought to an end with the end of the war, but it was then decided that this so-called experiment in "disinterested management" should continue in all three districts. The Licensing Act 1921, abolished the Central Control Board and the function of controlling and supplying liquor in the districts was transferred to the Home Secretary and the Secretary of State for Scotland. The statutory powers conferred on Ministers have remained virtually unchanged since and are contained in the Licensing Act, 1964, Part V and Schedule 9, and in the Licensing (Scotland) Act, 1959, Part V and Schedule 8.
We should be clear that this experiment was never intended to be an experiment to determine whether the State can successfully run a liquor business. There are two things involved—State supply of liquor and State control over the provision of liquor. The Act empowers the Home Secretary to supply it and, with certain exceptions, prohibits anyone else from doing so except with the Home Secretary's legislation. The Scottish legislation is similar. It was an experiment to see whether a system of liquor control, in which the supply of liquor was in the hands of a "disinterested management" responsible to the Secretary of State, was better than the ordinary system in which the supply was by private enterprise subject to the control of local licensing justices. In other words, it was an experiment to see whether excessive drinking was better cured by abolishing any incentive to make the production of liquor efficient rather than limiting the times and conditions in which it could be provided in normal trading circumstances.
We are now far from the original problems that caused State management to be introduced in these three areas. No one could reasonably suggest that there is any risk there today of outbursts of drunkenness promoted by the publicans.
That is the whole point. We are bringing this area into the general system. The experiment must be judged on its value as a method of liquor control in the circumstances of today.
On this test, we can only say that there is no evidence that this is a better way of controlling liquor supply than through the ordinary licensing laws. There is still a social problem about the consumption of liquor, but one that has changed enormously in recent decades. I believe that the present system of licensing laws is archaic and, for that reason, I and my right hon. Friend have set up two Committees to consider the whole system of control of liquor supply and to make recommendations. I accept that between the wars the example of State management may have helped to improve the standard of licensed premises throughout the country, but the general system has now improved and I do not believe that State management is in any way in the lead. I do not believe that anyone can honestly claim this to be so.
It is a rather strange comment that the original purpose of the State management scheme was to stop people drinking through discouragement, whereas now I suspect that some hon. Members opposite will argue that the beer is so good and so cheap that people are being encouraged to drink far more than they otherwise would. The wheel has gone full circle. The Government have concluded that this experiment no longer serves any useful purpose. It is up to those who wish to continue it to show that it does, and I challenge them to do this. It certainly cannot be demonstrated by any drunkenness statistic or any other indicator or statistic of which I am aware.
As for the concept of "disinterested management", it seems wholly absurd in modern times. What we want is the maximum of interested management, the maximum of management interested as far as possible in doing its job as efficiently as possible and making its product as attractive as possible. If it is thought that there is something immoral in trying to sell liquor, then the sale of liquor should be limited by licensing laws, not by making those who purvey it operate in conditions of less than full efficiency.
It is more than a question of no good purpose being served. This experiment is certainly having bad consequences. It prevents the licensing authorities from exercising their proper function of liquor control. The justices may decide there is a case for additional facilities and may grant a licence, but their action is rendered nugatory by the Secretary of State who can decline to grant his written authority without necessarily himself supplying the facilities that the justices thought were needed. Enterprise thereby is certainly restricted. Shopkeepers are prevented from extending their trade by selling liquor. Supermarkets, which provide liquor at very competitive prices in many areas, are prevented from operating in these areas because of the power of the Secretary of State. People in the areas are deprived of the facilities which they should have and which the licensing authority may consider to be both needed and justified.
Nor is it any answer to say that State management will provide everything that is reasonably needed. This is certainly not so. The great disadvantage of a geographically restricted monopoly organisation is that it does not always have the resources to cope with all that needs to be done in the area, and the advantage of commercial freedom in these matters which the whole of the rest of the country enjoys is that it allows a flexible and more vigorous and efficient response to any consumer need that is not at present being met. So much for the State control aspect.
I now turn to the State management organisation, in other words, the organisation of supplies of liquor for sale in the areas—
I understand not under the present system. The point is that State management and State control go together, and the only reason why the present system operates as it does is because of the exercise of the monopoly powers by the Government. This is precisely the point I am coming to next. If one takes away the monopoly powers all that is left is a State organisation for brewing and providing liquor in general competition with other suppliers, and this in the view of the Government is not a sensible, reasonable or proper activity for Government enterprise in this country. These are the reasons why the abolition of the monopoly control necessarily embraces a change in the management operation of the organisation. There can be no justification for the expenditure of public money and Government resources on the operation of liquor businesses in three small areas of Great Britain alone, nor does it make any economic sense. I cannot help wondering why, if the Labour Party thought it was such a good idea in these areas, it did not take the opportunity when it was in power to extend the idea throughout the country as a whole. I shall be interested to hear the answer to that.
It has been suggested in some quarters that it would be wrong to dispose of what is described as a profitable nationalised industry. It is not a nationalised industry in the true sense. It is a Govern- ment Department, staffed by civil servants and run directly by Ministers. This is very different from the modern concept of a nationalised industry as it has evolved in recent decades. The activities are geographically restricted to three small areas. It is true that there is a profit, but it is a very small one and a very inadequate return on capital. The two Scottish districts in the last year for which figures are available had a return on capital of just under 7 per cent. The figure for Carlisle for the year 1969–70 was about 5 per cent. return on capital. The year 1970–71 will probably be better than that. But the previous year was much worse, only 3 per cent. Taking a three-year average the return on capital is 4 per cent., which is a wholly inadequate return on the capital invested.
I wonder when the Labour Party will finally come to realise that in a capitalist society, whether the capital is privately owned or State capital, the prosperity of society depends on the efficiency with which that capital is used and the rate of return on the capital. The rate of 4 percent. —
Yes, subsidised by the taxpayer, as I will now proceed to demonstrate. A rate of 4 per cent. return on taxpayers' capital invested is far below the normal target rate set for the nationalised industries by the Labour Government, which was something like 10 per cent., and is totally inadequate. It is also far below the rate of return which is normal in the brewing industry, which I am told is between 9 and 11 per cent. What is particularly important is that while the taxpayer has been getting about 4 per cent. on average in the last three years on the money invested he has been paying 8 or 9 per cent. for the money he has been borrowing. The going rate of Government borrowing has ranged between 7 and 9 per cent. over that period. Any business that went about borrowing money at 8 or 9 per cent. and investing it at 4 or 5 per cent. would very quickly go bust, unless it had a subsidy from the taxpayer, which is precisely where this subsidy comes from.
Will the Home Secretary tell me how much money this organisation has borrowed from the Treasury over any recent period of years?
It is not a question of borrowing from the Treasury. This is a capital investment by the taxpayer. A former Chancellor of the Exchequer should understand that. When this enterprise has been disposed of, the money will reduce the National Debt on which the taxpayer pays 8 or 9 per cent. in exchange for an asset on which he is getting 4 or 5 per cent., which is fundamental economic nonsense.
It is true that in recent years the amount of capital injected by the taxpayer has exceeded the amount actually received by the taxpayer from the operations of the enterprise. When this organisation is operated by private enterprise, and when the capital is properly used to produce the yield one would expect to get, the corporation tax payable by private enterprise will probably be almost as much, if not just as much, as the amount the taxpayer is getting at present for an investment of £4 million. In other words, as a matter of economics, this is the craziest thing I have seen. If the Labour Party thinks it makes sense to borrow money with one hand at 8 per cent. and invest money on the other hand at 5 per cent., I am not surprised that it left the economy in the state in which it was—
Surely the Minister realises that the relatively low return on capital at present is the result of past neglect and insufficient investment. In the last five to 10 years there has been new investment and the profits have been shooting up. It is precisely because those profits are rising that the Government want to denationalise the enterprise and the brewers want to get their hands on it.
I am afraid the hon. Gentleman has his facts wrong. Strangely enough, the hightest profit made was in 1963. Since then the figures have fallen and in 1969 the profit was less than half what it was in 1963. Those are the actual facts. This year will be higher, I do not know by how much because the figures for the financial year have not—
The figure is £259,000, an increase of £97,000. If I have those figures, why cannot the Home Secretary have them?
Because the financial year is the year on which the organisation operates and not the calendar year. I have not firm figures for that year. I gave the figures for 1969–70 and I said that 1970–71 will be higher and that 1968–69 was very much lower. Taking the average of three years, the return on capital was 4 per cent., which is a totally inadequate return on capital on any commonsense standards. That is the basic economic argument for the Government's Measure and is the background to our decision to end State management.
I will now briefly describe the Bill's provisions. Except for one licensing complication, the Bill is straightforward. Clause 1 provides for the immediate repeal of the provisions which prohibit other persons selling liquor in the State management districts except with the Secretary of State's consent. Private traders will still be subject to the control of licensing authorities, as they are now. The repeal of these prohibitions will put them in the same position as private traders in the rest of the country.
Clauses 2 and 3 apply to England and Scotland respectively. Subsection (1) is the main provision of the Bill and requires the Secretary of State to dispose of the property which he holds for State management purposes.
Could the right hon. Gentleman give an assurance that when this property is disposed of the new brewers will not increase prices and that the present Government, which profess a desire to keep down prices, will not allow the price to rise by as much as 90 per cent. if current beer prices are applied in Carlisle?
I do not think there is much reality in the extraordinary figure of 90 per cent. put forward by the hon. Gentleman. No doubt later on in his own speech he will provide the detailed evidence to prove what he is saying. I will deal with the matter of price a little later. I am now dealing with the provisions of the Bill.
Clauses 2 and 3 are the operative Clauses. There is provision to enable the Secretary of State in disposing of premises to "deem" a licence to be in existence, since technically at present the premises do not have to be licensed.
Clause 4 is a formal provision relating to expenditure and payment of moneys from and into the Exchequer.
Clause 5 provides for the repeal by Statutory Instrument of the remaining statutory provisions relating to State management. These are basically provisions which allow Ministers to trade in those districts. The continuation of these powers after the Bill's enactment will be necessary for the maintenance of service in the districts until the process of sale is completed. This inevitably will take some time and clearly cannot begin until the Bill has become law. Hence the need for these powers.
I will come to the sale in a moment. In the meantime, as long as State management remains we must ensure that it continues to be run profitably. This will mean an increase in price. Prices in Carlisle beer have been unchanged for over a year and sharply rising costs have made it necessary to review the prices shortly. Therefore, I regret that an increase in prices will be necessary in any circumstances to cover increasing costs.
As for the most important question of employment and staff, it will be appreciated that State management staff are all civil servants. They number about 1,500, 900 of whom are part-time—mostly barmaids, barmen, hotel staff and cleaners. Their future will be governed by ordinary Civil Service arrangements and will be the subject of discussion between the staffs and the Departments. The staff has worked loyally and well in a system which, in the Government's view, has now become obsolete and should be replaced, but we believe that we should do what we can to help in any cases of difficulty. Our hope—and it is a well-founded hope—is that such cases will be few.
There are a number of administrative posts and certain tradesmen's grades for which alternative suitable employment may be found in other parts of the Civil Service. But for the great majority of the rest, the job they have been doing will continue. I see no reason why a change of management should lead to reduction in job opportunities in these areas. Clearly, I cannot go into detail at the moment until we know what transpires, how the properties are disposed of and who will be the new owners. Those staff who cannot be found employment within the Civil Service will receive appropriate compensation under the Superannuation Acts or the Redundancy Payments Act, 1965, whichever would be the more favourable. The Civil Service Department at present is discussing with the national staff side some changes in compensation to those who become redundant and State management staff will receive the benefit of these new terms which will be agreed.
The right hon. Gentleman refers to the expectation of little redundancy on the part of barmen and barmaids and other staff in hotels, but can he say what will happen to the brewery? Could he give a guarantee that it will continue in being?
I cannot give a guarantee of that kind until I know what form the disposal will take. Clearly I cannot guarantee continuation of a particular enterprise which may be proved to be wholly uneconomic in modern conditions. The obligation placed by the Bill on the Secretary of State is to dispose of the property held by him on such terms as appear to him expedient in the public interest. The public interest means that we shall dispose of the properties in such a way as to realise the best possible return for the taxpayer, the highest possible price, bearing in mind the desirability so far as possible of maintaining freedom of choice for the consuming public. That must be the principle on which this sale takes place.
I have explained briefly the purpose of the Bill which seeks to bring to an end the anomalous situation involving a quite old-fashioned experiment which has continued throughout succeeding Governments in certain parts of this country, whose social purpose is outmoded and whose continuation is a burden on the taxpayer and is a burden which we intend to bring to an end.
The Press and the public have so far taken little interest in this proposal by the Government. Indeed, until this afternoon we have experienced some difficulty in getting information about what has been proposed by the Government. Even now, having heard the Home Secretary, I am still unclear as to his reasons for getting rid of these State premises and abolishing State management. I hope that in the weeks ahead, although this Bill has only a limited local connection and is not likely in the normal course to command very much public attention, we shall devote a great deal of public attention to this matter.
There are objectionable features about the Bill which I am sure will prove to be embarrassing to the Conservative Party and which, in my view, will lay them—unless major Amendments are made to the Bill—open to a charge of grave impropriety in their actions with the brewers. I will explain what I mean by that statement a little later.
Despite the ingenuousness of the Home Secretary's speech, I wish to make it clear that the Opposition object to the Bill on two grounds. First, that there is no real case for disposing of this business which has existed for 66 years under Liberal, Conservative and Labour Governments. Not until after the General Election was there any proposal to sell the business to the brewers in the way which is now intended. The public certainly never voted on this issue. The public was never given any idea by the Secretary of State for Scotland, who is now beginning to look a little impatient, or by the present Lord Chancellor, that this was the intention. If the Secretary of State wishes to intervene, I will gladly give way, but I warn him that I have with me exactly what he said before the General Election.
I will come later to what was in the Scottish Election manifesto. Whatever else was in it, it was certainly not this proposal. [Interrup- tion.] I understand the Secretary of State now to be saying that we must look at the 1966 manifesto. I did not realise that we were now discussing legislation arising out of the manifesto on which they were defeated. I thought we were considering what arose out of the manifesto on which they won.
The right hon. Gentleman did not hear what I said. If he looks at both the 1966 and the 1970 manifestos, he will see that the Scottish Conservative Party has for a considerable number of years made it clear that it aimed to do this for the two districts in Scotland.
I will come back to that. But the Secretary of State is misleading the House. That is not what his party undertook to do, and I will demonstrate that when I come to the appropriate part of my speech. What the right hon. Gentleman says is in line with the deception which is going on about this Measure and about which we intend to open the eyes of the public.
The first objection which we on this side take is to disposal in any case, because it was not put to the people in this form or anything like this form.
Secondly, we take the strongest objection to the proposed method of disposal. We submit that the proposed method of disposal, which is to be left to the Secretary of State for Scotland and the Home Secretary, must he changed in view of the financial payments which the intended beneficiaries of the Bill made to the Conservative Party's election funds. We shall expect changes in the Bill to safeguard the public interest in selling these assets. If they are not made, the Conservative Party, if not the Government, will lay themselves open to charges of corruption. I will return to that and demonstrate what I am saying in due course. Right hon. and hon. Gentlemen opposite need have no fear of that.
The Home Secretary thought that as a former Chancellor of the Exchequer I should know better than to make some of the comments that I made. As a former Chancellor of the Exchequer himself, his arithmetic on this matter seems to be as bad as it was when he left me an £800 million deficit on the balance of payments.
Whatever the right hon. Gentleman may say, the fact remains that this is a thriving business. I agree that the estimates are not yet translated into actual final figures. However, if they are correct, there has been a sharp recovery in profits during the past 12 months, for reasons which should be known to the Home Secretary and which he should have disclosed. I understand that the estimated profits for the year will show an increase of £97,000 on the previous year. In other words, the estimated profit is of the order of £259,000.
I have the report before me. I am referring to the estimated profits for the year ended March 1971, about which I have been given information and which should be available to anyone who chooses to inquire into these matters.
Of course, and so do his supporters in Carlisle. The hon. Member who represents Allied Breweries in this House, as well as the interests of his own constituents—
I am sure that Allied Breweries have other ways of communicating their views to the Government without using the hon. Member for Leicester, South-West (Mr. Tom Boardman). In any event, I have a great deal more to say about the brewers in this connection, including their contributions to Conservative Party funds. It is no use the hon. Gentleman getting indignant now. He will have to listen to a lot more before I finish.
The second point is that the historical cost of the land, the buildings and the plant is of the order of £3·7 million, before any allowance for depreciation. The real value is very much higher, but no one knows exactly how much higher, and we are being asked to leave it to two Ministers who are beholden to the brewing companies to determine what the real value of the assets is to be. We are not content to do it in that way.
Thirdly, as regards this State management situation, it has a wide range of products. It is in no sense a tied house. It blends its own whiskies and bottles its own wines. It sells 20 brands of beer, quite apart from the beer that it brews. Prices are low, and that apparently is a source of complaint. The former Chancellor of the Exchequer knows how to get a better return on capital, and apparently he intends to do so.
I have before me the list contained in the Sunday Mirror, which I hope all Members have seen. I must commend the Sunday Mirror for its inquiry of 21st March which, understandably, is headed "The sobering truth about the British pint". It is one of the best pieces of work that I have seen recently. In connection with prices, under the heading "medium beers", it lists all of the major breweries in the country. There are 27 brewing medium beers. The price of Carlisle State Bitter is much lower than that of any of the remaining 26. At 10½p per pint it is the lowest price in the country. Of course that is an embarrassment to the brewers. Prices range from 10½p in Carlisle to 16p for Double Diamond Keg, Charrington's Crown Bitter, Whitbread Tankard, and the rest. These are the people who are out to acquire this asset, and the Home Secretary intends to do their work for them in that he will see to it that the price is put up before they take it over.
I turn, then, to what are called "weak beers", and how weak they are. If there is one old song which has come true, it is the one which begins "I am the very fat man who watered the workers' beer". My right hon. Friend the Member for Cardiff, West (Mr. George Thomas) will be delighted to know that they have been lowering the gravity of the beer to the extent that some of it is almost near-beer which could be sold as non-alcoholic. However, the brewers continue to put up their prices.
The State brewery has the advantage of the cheapest prices in the country, and that is why the return on capital is so low. It has the advantage of a near monopoly. Its premises are concentrated in and around Carlisle. Because there is a compact area transport costs are low. These are among the reasons why it charges low prices.
This is to be broken up. But we do not hear why. It is not to produce cheaper beer. On the contrary, it will produce dearer beer. It will not produce more employment. Hon. Members will have noticed the discreet silence of the Home Secretary when we was asked whether the brewery will be kept in action. There is nothing in this about the public interest. There is nothing in it which will help the customer. All that the Bill is doing is to redeem whatever private pledges were made by the party opposite to the brewers before the election. There have been justifiable complaints—
I was paraphrasing the Home Secretary's statement that they were redeeming their election pledges. I was averring that these were not made to the public, because this view was never put to the public. Therefore, they can only have been made to other persons.
Our policy of reducing the area of State enterprise in every way was well known to the electorate. If the right hon. Gentleman is suggesting that we made private pledges or that I in particular am carrying out a private pledge to do this, he is talking arrant nonsense.
What I am saying is that what was put to the public before the election was different from what is in the Bill, and I shall come back to it later, as I told the Secretary of State for Scotland I would. The Bill has nothing to do with what hon. Gentlemen opposite told the electors before the election they intended to do.
The hon. Gentleman need not worry because I shall come to that. I made myself read even that turgid document in my pursuit of the truth.
There have been complaints about the remoteness of the Home Office, and the demand for local control has rumbled on. My hon. Friend the Member for Carlisle (Mr. Ron Lewis) has often said that he would have preferred something interposed between the Home Office control and the consumer so that local people could feel that they had more control over this matter. I agree that that is something which concerns people, and perhaps it is a matter about which something might have been done.
The Government, when they were the Opposition, took this matter up, and I now come to what they said then, because the former Shadow Home Secretary, now the Lord Chancellor, gave an undertaking on this matter. In January, 1970 he said:
It is increasingly obvious that it is thoroughly inappropriate for the Home Office to be directly concerned in a commercial operation of this kind.
We shall, therefore, be ready to consider any viable proposal for transferring the ownership and management of the State scheme to a suitably constituted local body, such as a trust.
There was not a word about the brewers. That is what was said by Conservative candidates. That is what appeared in any public pledges and promises, that they were going to consider transferring the scheme to some locally constituted body such as a trust, and it is no good the Home Secretary now saying that they propose to sell it to the brewers and not expect to arouse the deepest suspicions about what has gone on between the brewers and the Conservative Party in this matter.
The Scottish Conservative Party was slightly different and more evasive in what it said. It said that it intended to break the State monopoly.
For the benefit of the hon. Gentleman, let me tell him that breaking a State monopoly is not the same as selling to the brewers. A State monopoly can be broken in a number of ways. It can mean local competition. It could and did mean—although the Home Secretary did not seem to bring the House into his confidence on this matter —that others in these areas who applied could be granted licences to sell beer and spirits. That is what breaking the State monopoly can mean. The hon. Gentleman says that that is not what he means, but that is what it can mean.
The hon. Gentleman does not bounce me. Does he want to intervene?
Yes. When I rise to my feet, it is because I wish to intervene. I am obliged to the right hon. Gentleman for giving way. What I said was that breaking a State monopoly means breaking a State monopoly, and that is precisely what the Bill does.
Of course it breaks a State monopoly, but if one reads the Conservative Scottish manifesto, and puts it alongside what Lord Hailsham said, it is quite clear—I may not convince the hon. Gentleman, but I shall convince the public—that what was intended was to make arrangements for transferring this business to a suitably constituted local body, such as a trust. That is what Lord Hailsham said, and that is what breaking a State monopoly means. What it does not mean is enriching the brewers, and that is what will happen.
The State monopoly has already been broken. There is no need for the Bill. A privately-owned hotel in Carlisle has been given a full licence. It only needs the Home Secretary not to enter an objection for a full licence to be granted, and this has happened. Bass-Charrington—not Allied Breweries in this case—have plans for a new hotel on the Carlisle by-pass. Their application has been supported by the local committee, and the Home Secretary can give permission now for a licence to be granted. The right hon. Gentleman does not need any legislation to help him break the State monopoly, which is all that was put to the people of this country before and during the election.
Whatever complaints may have been made about the attitude of the Home Office, or about its remoteness, or about the Scottish Office, there is precious little
support for the Conservative Party's plan, outside of the directors of the brewery companies. Indeed, there is very little support for it among back-bench Members. If hon. Gentlemen opposite do not believe me, perhaps they will believe the Chairman of the State Scheme Advisory Committee, Mr. Jim Aspey, a Conservative councillor who said:
It is disgusting treatment. The State sells the best and cheapest beer in Britain, and they are just about to announce
he knows the figures, apparently—
the highest ever profit of £269,000 for last year".
That is what a local Conservative councillor on the spot has to say about it.
I hope that the Secretary of State for Scotland, who is to reply to the debate, will answer these questions. Has Lord Hailsham's undertaking been carried out? Has this undertaking been offered to a local trust? Has any effort been made to transfer it to a suitably constituted local body? Have the Government considered setting up a public corporation to run this scheme? If they have, for what reasons have they turned down the idea? If they have not considered it, why have they not carried out the undertaking given by Lord Hailsham? Why is the right hon. Gentleman's first recourse to sell this to his friends the brewers? That is the charge which the right hon. Gentleman has to answer.
I must make it clear that we take the strongest exception to the Home Secretary and the Secretary of State for Scotland having any hand in the disposal of these assets. These two right hon. Gentlemen are handling an extremely attractive business proposition. It is clear that the properties are undervalued. I take it that there is no denial of that. The historic cost of acquisition is known, but today's values are clearly much higher. Does anybody deny that? The assets are written into the balance sheet at their historic value. There is no businessman on the other side of the House who, if he were selling a business on that basis, would not want the up-to-date value of the premises to be substituted for the historic value. It is the Home Secretary and the Secretary of State who will determine the true value today unless an Amendment is made to the Bill.
If this were a private company I would agree with the Home Secretary if he took the line that it was ripe for a take-over bid. It would be a classic case. Some smart gentleman would acquire these assets. If he were handling a sleepy corporation, he would do a little revaluation followed by asset stripping, and pay himself substantial dividends. This is a classic case, and I am not prepared to leave it to these two Ministers to deal with in this way, when I recognise what is happening.
One must consider, too, the value of the goodwill. There is nothing in the balance sheet in respect of that, and in all these businesses that is a matter of great controversy. If any hon. Gentleman cares to look at Appendix 12 of the report on the supply of beer, published in April, 1969, under the heading of costs and profits he will see that there is a great controversy between the leading brewers and the Monopolies Commission which investigated the question of how far and to what extent goodwill should be taken into account. I should not care to dogmatise about it. I know that it is a complicated and a technical subject, and some of the exchanges with the Home Secretary earlier show how much room there is for argument.
I say that there is clearly a substantial sum to be included in the disposal price of this set-up for goodwill. Who will determine it? The Home Secretary? The Secretary of State for Scotland? No. We are not prepared to allow this to happen. I shall come back to that and say why.
There are other issues, too. Thanks to the Labour Government's industrial policy, there is to be a new aluminium smelter at Invergordon which will employ hundreds of workers and their families within a relatively short time. This is a wonderful asset for somebody to get his hands on. What value will the Home Secretary and the Secretary of State for Scotland put on it? If I were a purchaser—the brewers know all about this—I should recognise that I had a very good asset here because there is no commercial competition in this sphere. It is tied, tied, tied. The Home Secretary knows this as well as I do.
There are two ways of disposal. I asked the Home Secretary which he intended to follow, but I did not get an answer, so I put the question now to the Secretary of State for Scotland. We shall want to pursue these matters in Committee. It will not be a short Committee stage. I hope that no one is under any delusion about that. Although it is a short Bill, there are too many serious issues of public importance involved.
Either the Home Secretary and the Secretary of State for Scotland can sell this asset on the basis of the break-up value—that is, they can sell each house or collection of houses without regard to the business they are doing—or, alternatively, they can sell it as a going concern.
As a going concern, sold in one or two lots, I believe that it would fetch much more than if sold on the basis of the break-up value. We have had no indication from the Home Secretary today as to which of these two important methods will be adopted. Which is it to be? Surely the Government have made up their mind about this before coming to the House. How will it be done? We do not know.
My suspicion has been aroused, although the Home Secretary gave a partial answer on this point, by Clause 2 which refers to the repeal only of Section 103 of the Act. If the Home Secretary does not oppose any new application for a licence by anyone else—my hon. Friends should understand the inwardness of this —ipso facto if that application is successful before the licensing justices the monopoly is broken, and if the monopoly is broken the going value of the concern will fall straight away. This is a simple matter of fact. We should like to know from the Home Secretary—he should have told us in his speech—whether it is his intention, in repealing Section 103 of the 1964 Act, and only that Section, not to oppose any applications for licences by others in the interim period between the passage of the Bill and the sale of the assets. If so, he is giving away public money. We ask for an assurance on this matter, because to do it by permitting new applications for licenses and not opposing them would destroy the goodwill of the business straight away.
I said earlier that there was no real competition here. The brewers have survived, as the Monopolies Commission makes clear—the same firms have been in the business for 70 years—because they keep a closed shop. It is essentially a closed shop in which the retail outlets are tied to the brewers. The licensing system constitutes an effective barrier to any new entrant, so, in disposing of the licences, or, putting it another way, if the Home Secretary does not object to anyone coming in and getting a new licence, he is removing the effective barrier which has maintained the value of this asset. It would be a public scandal if this system were to be followed.
If this system is not to be followed, if it is not to be done on the basis of the break-up value but selling as a going concern, how can we trust the Home Secretary and the Secretary of State for Scotland and no one else to do the valuation? This situation is pretty embarrassing to the Government and certainly to the Conservative Party because they will be selling to purchasers who are their close allies.
On 19th January The Times said:
At this stage the brewers are standing cautiously by. Bass Charringtons said yesterday they were adopting a 'wait and see' approach. Allied Brewers are 'interested' in the situation and Scottish and Newcastle are keeping mum 'until we know how the Government plan to dispose of' their brewing interests. These are three of a bevy of some 10 brewery companies into whose existing pub profile the state pubs would fit fairly neatly. Watney's Whitbread's, Cameron's, Vaux, Brown are some others.
This group of firms which have been named contributed £104,000 to the Conservative Party's election funds in the run-up to the election. The Lord President, the Secretary of State for Scotland, the Home Secretary and other senior Ministers are under pressure from these interests. But it goes further than that.
This, incidentally, is why, although it was not said before because dear Quintin Hogg genuinely believed that he was going to convert it into a public trust of some kind, since the election the pressure which has been put on Ministers is resulting in their now being willing to sell it to the brewers. But it goes further than that.
Perhaps the right hon. Gentleman will hear further what I have to say and then I will give way.
It goes further than that. The new Chairman of the Conservative Party in Scotland is Sir William McEwan Younger. He is not only here for the beer; he is here for the gravy!Scottish and Newcastle Breweries are not as well known in the South as in the North. However, for the benefit of my hon. Friends from the South, they qualify in all the league tables as one of the big six breweries. I should have said that Sir William McEwan Younger was the chairman and managing director of those breweries until a few months ago. His companies contributed £16,000 to Tory Party funds in the run-up to the election, and he has recently become chairman of the Scottish Tories. What a remarkable coincidence!I should like my hon. Friends to know that we would have known nothing of these payments to Tory Party election funds if it had not been for the Act which requires them to be disclosed.
Clause 2(1), which talks of disposal in the public interest, is a mockery of words. It is not in the interests of the public, it is not in the interests of the customers, and it is not in the interests of efficiency. The Home Secretary referred to disposing of this asset in the public interest. Let us look at what those who have studied the matter say about the brewers and the public interest. In paragraph 415 of the Monopolies Commission's Report of April, 1969—not so long ago—the Commission gives its conclusions about the tied house system. We must remember that the Home Secretary said that he wanted to dispose of the scheme in the public interest. The Report states:
We conclude that the conditions which we have found to prevail operate and may be expected to operate against the public interest since the restrictions on competition involved in the tied house system operated by the brewer suppliers concerned are detrimental to efficiency in brewing, wholesaling and retailing, to the interests of independent suppliers (including potential new entrants), and to the interests of consumers.
Yet the Home Secretary has the brass-faced cheek to come here and say that
he is disposing of the scheme in the public interest to people who have been condemned in this way by those who have studied the matter.
What is to be done? I wish to make it clear what is the least the Opposition thinks should be done if the Conservative Party is to be acquitted of charges of corruption. First, the brewers who have contributed to Conservative Party funds should be ruled out of the bidding. Next, there should be protection for the public from the Secretary of State for Scotland and the Home Secretary in the disposal of these interests. The public should be protected from both of them in particular and from the Government in general.
There is a precedent for this. When iron and steel was denationalised in 1953 the Government of the day did not leave it to the Minister to do the job, although it was a far cleaner operation than this is ever likely to be. Under Section 18(1) and 18(5) of the Iron and Steel Act, 1953 it was provided that there should be established a body called the Iron and Steel Holding and Realisation Agency. The Act stated that before appointing anybody to be a member of the Agency
the Treasury shall satisfy themselves that the person has no such financial or other interest as is likely to affect prejudicially the exercise or performance by him of his functions as a member of the Agency, and the Treasury shall also satisfy themselves from time to time with respect to every member of the Agency that he has no such interest; and any person who is, or whom the Treasury propose to appoint and who has consented to be, a member of the Agency shall, whenever requested by the Treasury so to do, furnish to them such information as the Treasury consider necessary for the performance by them of their duties under this subsection
We believe it to be essential that in this Bill amendments should be made to provide for an independent valuation of the assets, that that should be taken out of the hands of the Secretary of State for Scotland and the Home Secretary, that there should be a proper, independent assessment of the capital value of the business and that a special agency should be appointed to ensure that there can be no accusation made against the Government that contributions to their election funds are influencing them in the disposal of these assets. The Governments of Sir Winston Churchill, R. A. Butler and Sir Anthony Eden had higher standards than this Government have shown so far—
I apologise to the right hon. Gentleman for my absence, which was unavoidable.
I naturally have, in a constituency capacity, been concerned with this matter for certainly the last 16 years. In view of some of the right hon. Gentleman's accusations, I feel entitled to tell him that at no time in any of those 16 years has any member of a brewery company, or anybody concerned with breweries, ever approached me with any suggestion that this scheme should be sold off, or discussed any matter at all with me of that kind. I wish to make that perfectly clear, so that the accusations of pressure which the right hon. Gentleman has made are absolutely unfounded. I repudiate them absolutely and I hope that he will take my word for that.
The right hon. Gentleman has no need for any approaches to be made to him. [HON. MEMBERS: "Withdraw."] No. The fortunes of the Government and the brewers are too closely intertwined. Indeed, one of the Joint Under-Secretaries of State at the Scottish Office is a former director of a subsidiary of these brewery companies. What does the Leader of the House think we are? We know how close is this tie-up.
If the Leader of the House wants to rid himself of any accusation of impropriety, which is what I am alleging at the moment, he will no doubt urge his hon. Friends to accept amendments which will ensure the establishment of an independent disposal agency, containing independent persons unassociated with the Conservative Party who will value the assets and put a capital value on the business. If he does that, and if we can be given an answer to the effect that that will be done, then this debate will have been well worth-while, for it will have shown that our strictures have gone home.
Indeed, the right hon. Gentleman must not only say that he is above suspicion but look as though he is; and in the eyes of the House and the country, he and the Government must be seen to be beyond suspicion. The setting up of an agency similar to that of the Iron and Steel Realisation Agency would go a long way to achieving that. Unless these changes are made and unless the disposal is taken out of the hands of Ministers, this affair has all the makings of a nasty scandal, with talk of the friends of the Conservative Party plundering the assets.
There are others ripe for the picking. Thomas Cook is just waiting for a similar sort of operation—[HON. MEMBERS: "Hear, hear."]—and I appreciate that hon. Gentlemen opposite would welcome that. On the same basis, there is a particular steel works which we are watching very closely to see what the Conservatives will do because we know that their friends are pressing for its return.
Do not let hon. Gentlemen opposite be under any illusion about this. This will build up into a big public campaign unless the Government are willing to show that they intend to make the necessary amendments to prove that they are not acting just in the interests of those who subscribe to the funds of the Conservative Party, but out of a mistaken sense of irrelevant ideology.
As for the future, we, the next Labour Government, reserve the right to reacquire these assets either in total or in part as best suits the national interest at the time. We shall not be bound in these cases by our conventional basis of compensation. Up to now we have, of course, operated on the basis of either share or asset value. In defining the area of denationalisation, we shall take into account the extent to which the resources have been stripped in an attempt to frustrate any attempt at renationalisation in this case.
I re-emphasise that as licences are granted by the justices for only one year, we shall not have to pay compensation in respect of those licences at the end of any particular period of 12 months. We shall carefully scrutinise the extent to which resources or profits have been pillaged or salted away. Indeed, we shall judge it by reference to the public interest.
I have shown that the Bill does not carry out what the Conservative Party said it would carry out. I have shown that these interests are not to be sold to any group of people who can be construed to be in public competition or to be serving the public interest. I have shown that the method of disposal is of such a character that unless it is substantially altered, Ministers will stand accused of grave impropriety. I have shown that this dissipation of assets will bring no benefit to the people of Carlisle or the customers of the Carlisle State Breweries. Accordingly, we shall vote against this squalid and corrupt piece of legislation.
I have not heard a more nasty, cheap and sneering type of speech in the six years that I have been in this House than that to which we have just listened. I hope that the right hon. Member for Cardiff, South-East (Mr. Callaghan) will repeat outside the House some of the remarks he made today. Indeed, having made those remarks, he should, in honesty, repeat them outside. I am prepared to sit down and give way to him if he will rise and give an assurance that he will repeat them outside.
I shall come to that matter. I have not finished with the right hon. Gentleman. In charity, the right hon. Gentleman must have listened to the earlier exchanges in the House, in which his right hon. Friends the ex-Prime Minister and the ex-Chancellor of the Exchequer were accused of joining in a leadership race. I can only assume that he made his speech this afternoon joining in that sort of race.
I have no interest to declare in this matter, except that I am a consumer of alcoholic beverages of all sorts. I warmly welcome the Bill. I have an interest in that my constituency is nearby. Although no pubs which are operated under this scheme are to be found there, a great number of my constituencts spend their time in Carlisle and in parts of Cumberland, where they know a good deal about it. Constituents seem to have very little interest in this matter. I have had no representations opposing the Government's plans. All of my constituents to whom I have spoken about them have told me that they think it is a good thing that the Government should divest themselves of capital and business which they never had good reason to begin, and should get out of as soon as possible.
What staggers me about the whole business is the history of this extraordinary set-up. In 1970, it is astonishing to find an operation of this sort still in existence and to think that we still have State-managed pubs and State-managed beer, and so on, which were brought in by Mr. Lloyd George during the First World War as a means of combating drunkenness among the munitions workers and against a background of what Mr. Lloyd George said in 1915:
We are fighting Germany, Austria and drink, and the greatest of those deadly foes is drink".
It seems astonishing that under various previous Governments opportunities to get rid of this astonishing scheme have been missed. The only excuse I have been able to find for continuing it is that it has been kept going as a useful social exercise. Surely no one can argue today that this "useful social exercise" still has a useful purpose. It has surely served its purpose. Various Royal Commissions have, in the past, been very lukewarm about the continuation of the Carlisle part of the scheme, and I believe that one Royal Commission suggested forcibly that the Scottish side of it should be abolished. This so-called useful social experiment has been a most astonishing way of running drinking habits. Some of the most uncivilised practices of pub behaviour have been insisted upon in the pubs, especially in the Carlisle area.
I am told that one was not allowed to buy a drink for a friend. One could buy only one drink at a time. One could not buy whisky on a Sunday at one time.
I am talking about some of the rules which have been in practice —[HON. MEMBERS: "When?"]—and I am told that, until very recently, one was not allowed to stand at the bar and have a drink. I believe that that has been curtailed since the war. Certainly in some bars in the Carlisle area, until not
so long ago, no women were allowed to be served. I find it hard to understand how this has survived for 50 years. Although the amenities of some of these pubs are very much improved now, as recently as 28th October, 1966, the Financial Times was talking about the pubs in these terms:
Many—probably the majority—are very basic drinking establishments, where no food is provided. The furnishings are institutional, the floor covering generally linoleum.
If that is the "useful social experiment" which we are told justifies the continuation of this scheme, surely it is high time it was abolished. It may be said that all of these rules have been done away with and that the amenities of the pubs are now brought up to normal practice. If normal practice is found throughout the State pubs, if the practices and the furnishings and amenities are brought up to normal standard with the rest of the country, this is the moment to do away with the scheme altogether.
There is no need for this "useful experiment" in the future. It seems that it is merely an example of unecessary State interference in all of our lives. It is no place of the State to be operating a scheme of this sort, which, as my right hon. Friend said, has such a very poor return on capital.
It seems extraordinary that the right hon. Gentleman did not seem to understand what my right hon. Friend was trying to explain, that the overall return on capital with the scheme is around 5 per cent., and that means that the capital is being subsidised. In view of the mess which the right hon. Gentleman made when he was Chancellor of the Exchequer, it does not surprise me that he did not understand it.
I take up one point. The right hon. Gentleman seemed to suggest that the capital value of this enterprise is greater than it appears to be. If that is so, the return on capital is even less, and it is an even worse deal for the State.
We heard a good deal about low prices, and the right hon. Gentleman said that, because of the low return on capital, prices tended to be a little lower. Why should my constituents in Westmorland, a few miles down the road, have to subsidise the beer drinkers of Carlisle? I do not see why they should do this by making use of State capital, which is not being used properly.
I welcome the Bill very much. The Labour Party oppose it. They say that it is a very good scheme, although we heard little from the right hon. Gentleman about the merits of the scheme. We did not hear much about the interests of the consumer and all the rest. We must ask them what their policy is over this matter. I repeat my right hon. Friend's question. Why did they not extend the scheme, if it is so marvellous, in the years when they were in power? Is that their policy now?
Will it be their policy in their next election manifesto? The hon. Member for Fife, West (Mr. William Hamilton) nods his head and indicates that this will be so. I am sure that the public will be delighted to know that. It will want to know whether it will be the policy of a future Labour Government to nationalise the pubs. We ought to know this, and to know it very soon. Does the Labour Party approve of having, all over the country, the concept of disinterested salaried landlords who have no interest in the business or pub and who do not receive any commission from increased sales, and so on?
In my experience as a consumer, I have always found Carlisle barmen very friendly, but I prefer a barman who has an interest in the business and a publican who is interested in the sales. I like a landlord who will have a drink with me and buy me one in return. That is all part of the stock in trade of the publican, who tries to boost consumption in that way. The Labour Party must come clean and tell the country whether it wants a civil servant behind every bar.
I am told that fewer than one-third of all the pubs are managed. Managers have a commission and are interested in boosting the business, which I find attractive.
I ask my right hon. Friend the Secretary of State for Scotland to tell us how the property will be disposed of. I should like an assurance that there will be nothing to stop the grocers in Carlisle and elsewhere from getting back the off-licences which were taken from them during the First World War, an act of deprivation which caused a great deal of bitterness in those districts. I hope that my right hon. Friend will also assure us that when the pubs are disposed of some thought will be given to ways in which private individuals will be able to buy individual pubs and operate free houses.
The right hon. Member for Cardiff. South-East talked of those who will acquire the pubs as beneficiaries. He then read an extract from The Times of 19th January and named a whole lot of brewery companies which might be interested in buying and described the State Management Scheme as a very attractive proposition. If it is a very attractive proposition, and if all the breweries the right hon. Gentleman mentioned are potential buyers, I envisage the greatest possible competition amongst breweries to lay their hands on what the right hon. Gentleman described as a very attractive proposition. It therefore seems inconceivable that the State will not sell this operation at the best possible price, because although I am not qualified to comment on the merits of the scheme, I envisage hot competition among brewery companies if the right hon. Gentleman's description is accurate.
I have rarely heard so much synthetic indignation as that which issued from the Opposition spokesman this afternoon. I hope that the Bill will have a speedy passage and that we can soon rid the State of this encumbrance.
We have just listened to some synthetic indignation from the hon. Member for Westmorland (Mr. Jopling): I doubt whether the hon. Gentleman has ever been to Carlisle to see any of these pubs.
I declare my interest immediately, as my hon. Friend the Member for Fife, West (Mr. William Hamilton) suggested that everyone should in this debate. Today I am in a position in which very few Members of the House can have been. I am the Member for Carlisle, within whose boundaries lies the greater part of the State management scheme. During the last seven years I have made numerous visits to almost every part of the Carlisle and District State Management Scheme. I am also a member of the Temperance Group and secretary of the Temperance Group of the House of Commons.
It may seem rather illogical for a member of the Temperance Group who represents a constituency which has an enterprise like the State brewery within its boundaries to be speaking in the vein in which I am speaking; but I should be acting dishonourably if I abdicated my responsibility as a Member of Parliament and allowed the State Management Scheme, in view of its importance to my constituency, to die without a protest from me. I have never attempted to hide my temperance views from my constituents. Wherever I go in Carlisle my views are well known.
I estimate that if the Bill goes through it will affect 40 per cent. to 50 per cent. of the adult population of my constituency and in the end will mean dearer beer for them. So I shall not abdicate my responsibility, even though I hold certain views.
During the General Election not one word was said about the intention to denationalise the State brewery. Not once during the last General Election did the right hon. Member for Penrith and The Border (Mr. Whitelaw) make any statement to that effect. The Bill is the voice of Reggie, but behind it is the hand of Willie.
I charge the right hon. Member for Penrith and The Border with being the instigator in this matter and with bringing it to the attention of the Cabinet. After the Bill becomes law and the State Management Scheme is handed back to private enterprise, every time the right hon. Gentleman comes to Carlisle the slime and the trail will follow him as the one who sold out the Carlisle State brewery.
Many hon. Members know nothing about the scheme. The Carlisle and District State Management Scheme is run by the Home Office. The Home Secretary's speech was the biggest piece of bluff since the spider sheltered Bruce. The scheme is essentially a business enterprise with most of the problems with which ordinary businesses must contend and which are found in any organisation of a similar kind. The scheme produces malt, draught and bottled beers. It bottles Guinness, Bass, Worthington, Tennants, lagers, wines and spirits. So the State Management Scheme is already looking after private enterprise.
The scheme's properties include 11 hotels, 147 public houses, two restaurants, ten off-sale shops, and about 200 unlicensed premises. It also owns a number of business premises scattered in various parts of Carlisle, many houses, and the brewery. The annual turnover is over £3 million, including sales worth about £320,000 to about 100 free trade customers outside the city. The staff employed, including part-timers, number about 1,350.
I concede that the scheme has a virtual monopoly of public houses in Carlisle. But other breweries run public houses in competition with the scheme in the major part of the 320 square miles of Cumberland in which the scheme is empowered to trade. There is competition from licensed hotels, restaurants and clubs throughout its trading area, and in Carlisle itself we have two hotels run under private ownership. So there is competition, although, admittedly, that competition is mostly outside the perimeter of Carlisle.
As has been said, the scheme is small in comparison with the national breweries, but, despite everything said by the Home Secretary, it is an efficient business making its contribution to the Exchequer. An analysis of brewery costs published by the National Board for Prices and Incomes in 1966 showed that the cost of production labour at Carlisle brewery was 20 per cent. below that of the average of the large number of commercial breweries examined by the Board. The brewery's net profit in Carlisle was 17 per cent. of the wholesale price, compared with an average of 15 per cent, for other breweries covered by the inquiry at that time. In the past five years, certain major schemes of reconstruction have been completed in five hotels and 33 of the public houses.
My right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan)
referred to what Mr. Quintin Hogg, as he then was, said in a letter to the prospective Tory candidate for Carlisle. The Tory candidate, after his adoption as candidate for the forthcoming general election, wrote a rather lengthy article in the Cumberland News of Friday, 19th July, 1968, and, among other things, this is what he said:
Before coming to Carlisle, I would have supported denationalisation of the State Management Scheme. However, having been introduced to it, I would strongly oppose such an idea for several reasons. As a former accountant of a brewery, I recognise that the State Management Scheme is comparatively successful, with modern plant and spare capacity, and a capable management. Denationalisation would mean its being bought out by one of the large combines and private monopolies"—
and he was opposed to that. That was written by him in the Cumberland News. [HON. MEMBERS: "He did not get in, did he?"] No, he did not get in, and no wonder, because of the trickery and treachery of the Tory Party.
Not only did he write that in 1966, but, coming nearer to the date of the General Election, in the Newcastle Journal he came out boldly in praise of what Mr. Quintin Hogg had said the Tories would do. This is what he said then, only a few months before the General Election:
I am delighted that under a future Conservative Government it will be up to local people and organisations to decide whether they can run the scheme without Government interference, which on several occasions has proved extraordinarily inept. It is also sensible that the question of licences should be left to the local justices. Denationalisation of the Scheme is not the answer, for there are many good features about it. Prices are marginally cheaper than elsewhere, and reforms should protect local benefits.
Here comes the crunch, as I see it:
Denationalisation would also mean that the Scheme would be swallowed up by one of the brewery giants, and I am very hostile to that idea. It would inevitably mean the closure of the brewery, and that is the last thing I want to see in Carlisle.
That is what the Tory candidate said, and there was not one word about it at the General Election. I charge the present Government with unsavoury dealings in the way they have handled this matter, for the first intimation we had came in a report in the Sunday Times. When I raised the matter on a point of order and challenged the Government on why the Press had news of it before those of us who represent the area, we
never had an answer. This has added insult to injury.
We are now told that the scheme is not paying. There is a lot of juggling with figures. The Home Secretary did his best today, aided by his hon. Friend the Member for Westmorland, but if ever the Home Secretary were uncomfortable in making a case, it was this afternoon, for I am sure that he had no heart in what he was trying to put to the House.
The finance needed to purchase the property and settle compensation claims at the inception of the scheme came, I understand, direct from the Treasury, and by 1928 the debt had been cleared. From 1928 until 1966, the golden jubilee of the scheme, the profit from the Carlisle area alone, which does not include Gretna and Cromarty, was £4,793,877—and that from a very small organisation. The profits from 1966 were as follows: 1966, £249,514; 1967, £228,301; 1968, £159,590; 1969, £112,457; 1970, £203,314. According to the chairman of the Local Advisory Committee, who I understand has had his fingers rapped by the Tory Central Office because he has been speaking out of turn, the profits for the year ending 31st March this year are estimated to be £300,000.
The right hon. Member for Cardiff, South-East (Mr. Callaghan) spoke of an increase in profits of about £97,000. The hon. Gentleman's figures show an increase of about £30.000. Can he reconcile those figures?
The figures are taken from a reply to a Question I put to the Home Secretary.
Another important feature of the scheme is that, unlike the private breweries, it never advertises its products. The only advertising is of the hotel side, which is understandable, because we are in the centre of an area of tourist attraction. The beer sold in Carlisle is about 3d. or 4d. a pint below the national average for beers of a corresponding gravity. I admit that the profits showed a decline after the General Election of 1964. In my view, that was the direct result of the Labour Government's price control. With the removal of price restriction by the present Government, prices in the State Management District have increased in line with increases elsewhere, and the profits of the scheme have gone up accordingly, but the prices are still well below those in the rest of the country. If high profits are the criterion of efficiency, the State management scheme could boost its profits by £240,000 a year by charging an extra 4d. for a pint of beer, which would give the scheme a profit of £540,000 a year and the profitability ratio after tax would be better than that of the private brewery generally. It is no wonder that the Government are anxious to sell the scheme out, and it is no wonder that the citizens of Carlisle in the main approve of the scheme, with the exception of a few Tories, who have been trying rather belatedly, aided by the Cumberland News, to whip up a little opposition, but so far that opposition is negligible. The plain fact is that if private enterprise takes over the scheme in Carlisle, the prices to my people will rise considerably.
Charges for hotel accommodation and food in our hotels are well below the national average. The prices in the Carlisle area tend to be comparatively low because of the competition from the State management scheme.
I understand that the Labour Government of 1950 passed legislation allowing new towns to set up State Management Schemes if they desired. I hope that this is something to which we shall give attention.
I come to the question of the current value of the assets. There has been much speculation about this. Whoever produced the figure in the Bill suggesting that the assets are worth about £4,700,000 should see a psychiatrist.
Heaven save him from that. My information is that the figure is much nearer £6 million on current prices. The figure given in the Bill is a long way out.
Capital investment has gone ahead in the past few years. Expenditure on the modernisation of the brewery, hotels and public houses has increased to six times the expenditure 10 years ago—four times in real money values. This rate of improvement is well above the national average.
I come to the question of the brewery, about which we have heard so much. I invite anyone who has not been there to go and see it.
The brewery occupies an old building which is nevertheless sound and well maintained. In the past 10 years it has been equipped with the most modern plant and machinery, and it is recognised by the brewing industry to be as well equipped as any brewery of its size in the country, and better than many of the large breweries.
If the scheme is taken over the brewery will inevitably close. That will mean the loss of about 80 jobs in the brewery, including clerical staff, another 70 in the works department, and about 60 in the head office of the scheme. With the rise in the unemployment figures since the present Government took over last June, I shudder to think what the position will be in Carlisle if this happens. One of the Government's major themes in their programme at the General Election was that they would cut out many civil servants. How many civil servants will be made redundant in the Home Office as a result of the take-over?
Are the pension rights of my constituents in the scheme to be safeguarded? What about the 60 private dwellings owned by the scheme and those who occupy them? What about the business premises? Many business people with businesses in the premises are becoming a little alarmed and have even been to see me about the matter.
The scheme has another important feature which the private breweries do not have. It has certain sporting facilities. Every Tuesday and Thursday in the winter five divisions of the Carlisle and District State Management Darts League play their matches. In summer, we have the bowling greens.—[Laughter.] The hon. Member for Woking (Mr. Onslow) may laugh, but it is no laughing matter to people in Carlisle. He is showing his ignorance and upbringing. I am concerned about my people and about supporting the facilities they have. It is all very well for him to laugh and shake his head. The summer months see the bowling greens attached to a number of our pubs as hives of activity for league games and friendly matches. This will all go by the board if the private brewers take over. [Interruption.] Yes, it will.
I do not see why the hon. Gentleman should assume that. But even supposing that he is right, as an ardent temperance worker he has been trying to make it go by the board for some time.
If the private breweries take over, they will turn the bowling greens into car parks. They have done it elsewhere.
The differences between the State management public houses and those of the commercial breweries have lessened over the years with the decline in drunkenness, which we all welcome. I certainly welcome it. I only wish we could bring it down even lower. I confess, as the Member for Carlisle, that the State Management Scheme is no longer a temporary social experiment. It is expected to justify itself as a commercial enterprise and has succeeded in that despite what has been said to the opposite, and it has done it without promotional advertising. In the public houses in Carlisle, great care is taken to maintain a high standard of supervision and to ensure that the sale of liquor is conducted in a creditable manner. That cannot be said of a lot of private enterprise public houses.
I confess that, during the term of office of the last Government, I was critical of certain aspects of the scheme. I raised many points with my right hon. Friends the Members for Cardiff, South-East and Birmingham, Stechford (Mr. Roy Jenkins) and Lord Stow Hill, our Home Secretaries. I agree with every word said today by my right hon. Friend the Member for Cardiff, South-East. I want to see the monopoly taken out of the hands of the Home Office but I do not want to see it handed back to the private brewers.
Why not some kind of liquor board? Why not a small board with full or part-time members, with power to run the scheme as a business? Or why not a trust—call it by any name, I shall not argue about it?
The hon. Gentleman has just come in, so he does not know what keg is or anything else.
I want to see the scheme taken over as some kind of trust. Over the years, it has become as important to Carlisle as Prince's Street has become to Edinburgh. I believe that some kind of trust could be formed and that the voice of the temperance movement could be heard upon it, as it has been heard already, because we have had a representative of the temperance movement on the local advisory committee almost since the inception of the scheme.
I shall not labour this point, but I remind the House that the Tory Party has benefited by over £150,000 from the breweries. In case the House is not aware of the fact, I add that within two weeks of this de-nationalisation Measure being announced, the private brewers were on the ball and going around the pubs in Carlisle checking up and asking questions of the various managers. Yet hon. Members opposite have the audacity to say that there is no connection between the Bill and the brewers' political donations.
To me as a temperance worker, this is a vital issue of principle between private enterprise and public enterprise. I come down on the side of public enterprise every time. One of the tragedies with the Labour Party is that when we are in government we tend at time to become too soft. I say to my right hon. Friends that when we become the Government again we have to take the kid gloves off and behave in the same way as the Tories are doing now. We have been gentlemanly, and look where it has landed us!
The Government have no mandate to denationalise the Carlisle and District State Management Scheme, and they will do so at their peril because, as far as I am concerned, they can be assured that there will never be another Tory Member sitting for Carlisle. I end with some advice to the Government. I suggest that the Post Office issue a new stamp to mark the demise of the scheme and that it should include on the stamp a symbol commemorating the brewers' successful bid in return for their financial generosity in donating just over £150,000 to Tory Party funds in the last two years.
We all recognise the concern which the hon. Member for Carlisle (Mr. Ron Lewis) has for the people living in his constituency, for the brewery there and also for the various sporting competitions he has told us about. But I think that his concern is vastly over-exaggerated. I was sorry to hear him using the phrase, "trail of slime". If anything, that could be applied more to the speech of the right hon. Member for Cardiff, South-East (Mr. Callaghan). The right hon. Gentleman's speech was amusing and knockabout at the start but got out of hand and ended up as disgraceful. It was one of the worst speeches I have heard in this House.
I welcome the Bill because it carries out one of the pledges in the Conservative Party's Scottish manifesto, which said that we should end—not break up, but end—the State monopoly in the two districts in Scotland.
The hon. Gentleman must not distort the case. This means a whole number of things. As the person in charge of State management for the last few years, I was under continual pressure from hon. Members opposite to grant licences within the State area but not one of them raised the question of taking it over and handing it to the private brewer. Secondly, the manifesto was rejected by the people of Scotland.
The hon. Gentleman replied to a debate in the House on 29th April to which I shall refer. I certainly understood that ending the State monopoly meant exactly what we are debating.
I want to say a few words about the Gretna district. Although it is not in my constituency and is represented by my hon. Friend the Member for Dumfries (Mr. Monro) who I am glad to see in his place, it has a certain amount of interest for the people who come to Galloway. They come up the A74, which has recently been greatly improved, and often they would like to stop in Gretna because it is a place of considerable renown and a great tourist attraction. They can look round the numerous blacksmiths' shops and try to decide which is the authentic one.
Hon. Gentlemen may be interested to know that, until recently, there was not a single hotel in Gretna with a full licence. There was, for example, the Gretna Hall Hotel which had more bedrooms than all the other hotels in the Gretna district put together. It did not have a full licence, nor did another hotel—the Hunter's Lodge Hotel. The Gretna Hall Hotel has numerous historical connections and is a very good hostelry.
I understand that licences have frequently been applied for in Gretna, have been agreed to by the local licensing court under the Licensing Act and then vetoed by successive Secretaries of State for Scotland in the interests of the State Management District. To protect a Government monopoly by turning down the decision of a licensing court is disagreeable. It shows the Secretary of State acting as both judge and jury in his own case. Overruling local representatives on the licensing court is equally distasteful because it is redolent of the Socialist remark that the man in St. Andrew's House knows best. Certainly the lack of facilities in the State Management District of Gretna has militated against the tourist trade.
I am glad that my right hon. Friend has, as I understand it, granted full licences to the two hotels I have mentioned. Not only is it unfair to people who want to stay at hotels in the management district, but it is also unfair to the local grocers because many of them had off-licences in the old days and now such licences are not granted to grocers in State Management Districts. It is easy for a grocer outside the district, say in Dumfries, to supply bottles of liquor to people in the State Management District when his van is going round. To that extent, he is pinching the trade which belongs to the grocers in the district.
It is interesting to note that the three schemes we are discussing were more extensive. There used to be four State-owned public houses in the Enfield Lock area in London. They were taken over at much the same time and sold back in 1922. I suppose the reason for that was that four public houses in a highly populated area did not give a sufficient monopoly. People, if they were dissatisfied, could go round the corner. This is certainly not true in the extensive districts now covered by the State Management Scheme.
Facilities for the tourist trade are undoubtedly best improved by competition. It must be competition reasonably supervised by the licensing courts and the police. At the moment there are a number of social clubs which have sprung up in recent years within the State Management Districts. There is nothing wrong with social clubs as such, except when they are an effort to avoid the licensing laws. They are not nearly so strictly supervised by the police as are licensed premises.
Another point is that considerable sums of capital must be injected into licensed premises to keep them up with modern trends. For example, it cannot be imagined that the Aviemore Centre could ever have been built by a State Management District because the funds simply would not have been released by the Government. It is the same in the Cromarty district, where little interest has been shown by State management in the tourist centre developing at Ben Wyvis.
In Annan, for a number of years, there was no hotel with a room large enough for big functions. Once again, a private enterprise hotelier came into the area and proposed that he should provide this. I believe that he was vetoed for a long time and eventually the Queensberry Hotel, one of the State management hotels, was greatly improved and now provides the necessary facility. Here we see the effect of outside competition.
The Government are notoriously closefisted when it comes to capital expenditure. The hon. Member for Carlisle, in his remarks about his State Management District, mentioned many figures. One that struck me forcibly was the value of the assets, which he said was about £6 million.
I wonder whether the hon. Gentleman realises that the higher the asset value the more lamentable appears to be the performance. Take the Gretna district, which is the district I know best. There the gross trading profit compared with turnover shows something like 15·7 per cent. profit in 1968–69 and 13·7 per cent. in 1969–70. I am informed that the average publican normally works on a margin of more like 28 per cent. between gross turnover and gross profit.
Mr. Neil Kinnoch:
While the hon. Member is on the subject of subsidy, would he like to explain why every beer drinker in the United Kingdom—or almost every beer drinker—is obliged compulsorily to subscribe to Tory Party funds?
That would be off my beat. I will leave that sort of canard to hon. Members opposite, who do it so much better. In the Gretna area, the not State profits were 6·7 per cent. in 1968–69 and 4·1 per cent. last year. Taking the net profit compared with the assets, this is a very low return. This presents a perfect hiving-off situation. If this district had been in private hands there would have been a takeover bid long before. If the assets were worth £6 million, which was the hon. Gentleman's estimate, I would much rather see £6 million spent on improving public services like hospitals and houses rather than invested in public houses which bring in a very small return. As my right hon. Friend the Home Secretary said, one could obtain a much better return by investing the money in Government securities.
I am glad that my right hon. Friend the Home Secretary was able to say that provision is being made to look after the interests of the staff who will be affected by the Bill. I do not envisage that there will be too much difficulty for the staff because most of their jobs are bound to remain in being.
I do not know the ins and outs of the hon. Gentleman's constituency, but I hope that the brewery continues.
If the State scheme has been such a remarkable success, why has it not been extended? It has been in existence for 60 years. It is a social economic experiment which has not been a success. It should not be extended and I am glad that it is to be wound up by the Bill.
The hon. Member for Galloway (Mr. Brewis) ended his speech on a rather peculiar note by wondering why the State scheme had not been extended in 60 years. Why has it not been abolished? If the Conservative Party was so enthralled with the prospect of private enterprise as against State enterprise in breweries, it had from 1916 to 1964 to deal with it. It is only now taking steps to remedy what it regards as an evil—a profit-making public enterprise.
The public will be appalled by the priorities of the House. Yesterday we heard one of the most serious statements about the economic situation in this country which we have heard for 30 years. There was an announcement about unemployment figures which were a disgrace to a civilised society. There are more than 800,000 people unemployed, 122,000 of them in Scotland, and here we have the Secretary of State for Scotland sitting on his backside and probably later winding up the debate and trying to justify the handing back to his brewery friends of a few pubs in Scotland in reward for the few thousands of pounds his party received to help to win the election in England—but not in Scotland.
I am reminded of almost the first Bill passed by the Tory Party on its accession to power in 1951. Its object was to repeal the legislation which the Labour Government had put on the Statute Book to provide for State pubs in new towns. I served on the Committee which dealt with the Bill. It was in the charge of Maxwell Fyfe, who was then the Tory Home Secretary, and when the Tory Party wanted a dirty job to be done it gave it to Maxwell Fyfe. The fact that the new towns had been built up by public enterprise and with public money from the Treasury made the Labour Government think it right that profits from drink in State enterprise—because that is what new towns were and are—should go to public enterprise and be ploughed back to the people who made them.
The Tory Party did then what it is doing now: it prevented the extension of State enterprise into this field. I hope that my party will commit itself to the extension of State enterprise into this field. If the Tory Party should go one way, there is no reason why we should not go the other.
I said that we are discussing this squalid little Bill at a time when members of the public must be wondering what we are up to. They do not know why we are doing it, and I propose to tell them. My right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) referred to the contributions which the brewers had made to Tory Party funds. The Tory Party does not like to be reminded of them.
It is—but I want to put the facts and figures on the record.
It is disgraceful that there are hon. Members with financial interests in this matter who will be calculating the £.s.d. profit which they will make from this Bill who will be allowed to vote in their own financial interest tonight when a local councillor is not allowed to vote at local level. He is not even allowed to take part in the debate, let alone vote.
We must refer to Andrew Roth's book to find out which Tory members and Ministers were associated with brewery companies. I think that there is a powerful case—and I have stated it many times in the House and in other places—for a special register compelling Members of the House to declare all their outside financial interests, and members of the public should have access to it so that they may know exactly what is going on in the House. There is a good deal of corruption in the House, and I do not care who knows it. It is time that the public knew it. When the Tory Party talks about "flogging" Thomas Cook and Son Ltd. to private enterprise and "flogging" the profitable sections of the steel and coal industries and now the State breweries to their own friends because they made it financially possible for them to win the last election, it is time that the public knew that corruption here exists to a far greater degree than they know.
Let me give some examples—and I hope to God that I get on the Committee dealing with the Bill. On 29th April, 1970, when the Labour Party was in office, I asked my right hon. Friend the Member for Barnsley (Mr. Mason), then President of the Board of Trade, to give details of the political contributions made by the brewery companies to the Tory Party in 1968 and 1969 as disclosed in returns filed with the Registrar of Companies. I got a long list and I shall read it out; my right hon. Friend was, characteristically, very helpful.
In 1968, Arthur Guinness, Son and Co. Ltd. gave £16,700 to the Tory Party and, in 1969, £16,500. There is a member of the Guinness family in the Tory Government at this very moment. Will that company be allowed to bid for the State pubs? I hope that the Amendment suggested by my right hon. Friend the Member for Cardiff, South-East to the effect that such companies shall not be allowed to bid will be accepted. Scottish and Newcastle Breweries made small contributions—£3,906 in 1968 and £8,006 in 1969. I think that company is associated with the Youngers. There is a Younger in the Government, a junior Minister, who denied that he any longer had associations with the brewery trade, and I was bound to accept that. I wonder how neatly the ties have been cut since he became a Minister?
No, the right hon. Gentleman must bide his time. He has been a silent Member of this House for far too long, and he will not get a chance to break his silence by intervening in my speech. He will be winding up.
On a point of order. Aspersions have been cast on my hon. Friend who happens to be a junior Minister in the Department of which I am Secretary of State. I therefore seize the earliest opportunity of stating that lie of course severed all connection with the firm of Bass-Charrington Ltd. when he became a Minister, in accordance with the normal rules.
I do not withdraw one word of what I have said. I simply repeat what my right hon. Friend said about the Youngers and their association with the Tory Party still. It might be, as the right hon. Gentleman said—and my hon. Friend as a junior Minister accepted it at the time—that the junior Minister severed all his links with the brewery company, but there are family links. The Tory Party is riddled with party connections with business interests of all kinds in the City. One only has to look down this list of companies:
The whole ruddy lot contributed to party funds in 1968, 1969 and 1970. Watney Mann Ltd. contributed £24,750 in 1968 and £25,000 in 1969. Bass-Charrington, the firm my right hon. Friend referred to—they must be a mean lot—contributed £450 in 1968 and £67 in 1969. Their profits must have been very low in those years.
The Bill must be seen for what it is, a squalid Bill based on corruption and on an obligation felt by the Tory Party to reward its paymasters. It should not be called the Licensing (Abolition of State Management) Bill, it should be called the Brewers Loot Bill—for services rendered to the Tory Party. We shall see how many hon. Members who take part in the debate declare their interests and, because of those interests, refuse to vote to night in case their vote might be misinterpreted by the public. It is not enough to declare an interest. One must carry that to its logical conclusion and refuse to vote, lest one be accused of corruption. They would not like to be accused of that, I am sure.
Despite what has been said by hon. Gentlemen opposite, we are handing over valuable assets. I have here an article written by John Fowler in the magazine "Scotland" of December, 1970, on "Maudling's Pubs". North of the Border I suppose they will be "Campbell's pubs" and "Campbell's dole queues", they will go together, and he will be responsible for both of them. This is what the self-confessed rank Tory Alderman Jim Aspey said:
I can't imagine any sane Government getting rid of the only nationalised industry that makes a profit.
This is what the State Management Districts Council's top guy says—he knows what he is talking about. He is the fellow who says that the Government must be mad. They are mad. They are corrupt too, a terrible combination. The article goes on to say that the handing over is coming at a particularly propitious moment because the Cromarty
area is one of the growth points in Scotland, largely due to public enterprise. The expenditure of vast amounts of public money—£37 million on the aluminium smelter alone—will create a vast market for drink. It is at this moment that the Tory Party and the Scottish Office see fit to bring in this miserable little Bill to give the pickings to the friends of the Tory Party.
It is rather interesting. A profitable State enterprise like this the Government flog off to their friends. A private enterprise that is going bankrupt—Rolls-Royce—is taken over into public ownership. Where is the morality, the sense, the honesty of that allocation between State enterprise and private enterprise? There is no morality in it. The Bill ranks with the Profumo affair. [HON. MEMBERS: "Oh."] The Tories do not like that either, do they? It is on the same scale of morality in the economic field as the Profumo affair was in the social field. I believe in calling a spade a spade. This Bill is produced by a squalid Government for squalid reasons at the most inopportune time. I hope the House will reject it and that hon. Gentlemen opposite who have vested interests at least will have the decency not to vote tonight. If they do, I hope the people outside will understand what a corrupt lot they are.
I will not deal with the speech of the hon. Member for Fife, West (Mr. William Hamilton) in detail, except to say that it was as nasty and cheap a speech as I have had the displeasure to hear in this Chamber. He made accusations and smears against hon. Members which he would be unwilling to make outside the House.
I did not need the hon. Gentleman's reminder that before participating in this debate hon. Members should declare their interests. I have an interest since I am a director of a brewery company, as has been made clear.
Although the hon. Member wishes to brand me with prejudice in the eyes of some hon. Members opposite, I hope that my remarks will compensate for the lack of knowledge on this subject which has been evident in the speeches on the other side of the House.
Many jibes have been thrown across the Floor of the House today about brewery companies and hon. Members with interests in such companies and people with a financial interest. I have always been prepared to declare an interest, and I hope that hon. Members have been prepared to accept it as honourably given. The fact that I have taken part in a debate is not in furtherance of any interest I may have but in the belief that I and other hon. Members who are so affected have a contribution to make.
It is a difficult matter to know whether to join in a debate such as this when one has an interest to declare, whether to sit silent and suppress such knowledge as one has of the industry and its problems, or whether to take part in the debate and then be accused, as the hon. Member for Fife, West has accused me, of speaking in my own cause.
The extent of my financial interest in the affairs which we are now debating and the consequences of this Bill or of any decision in regard to this State scheme could not make the difference of a pint of beer to my personal position. That is probably the extent of my interest.
Let me make clear that although my interest in this industry is well known on both sides of the House, at no time has any member of the Government or of the Conservative Party approached me to canvass my views or to examine me about my company's attitude on this matter; nor indeed, to the best of my knowledge, has any member of my company been approached or asked to give views on this subject. I do not know what the views of my company will be on the possible trade consequences of this Bill, but I know that its views will be in line with the views of many people throughout the country, namely, that in the interest of the taxpayers as a whole this Bill should go through. It is in that capacity in regard to the financial implications of the management of the State scheme that I am intervening in this debate.
I shall give no such undertaking. I have no power to bind my company on whether it bids. I do not know its attitude on this matter. It would be most improper of me to give any undertaking and it is ridiculous that the hon. Member should ask me to do so.
I turn now to deal with the speech of the right hon. Member for Cardiff, South-East (Mr. Callaghan), and I am sorry that he is not here to hear what I have to say. I was surprised that a right hon. Member who has held such high office should sink to the low level he did in seeking to score cheap and mean points in a debate of this kind, and that he should do so by producing wrong figures. That perhaps was the lesser of the evils. He quoted figures for the current year which he alleged were unknown to my right hon. Friend, and he said that profits of the current year were £97,000 up and would amount to £259,000. Those in fact are the figures for the year to 31st March, 1970.
If that is what he indicated, then I apologise, but the right hon. Gentleman certainly did not make that clear. Those were the figures which had been referred to by my right hon. Friend and therefore the point that was made by the right hon. Member for Cardiff, South-East was not relevant.
The right hon. Gentleman also made comparisons in regard to beer prices. He quoted the price of the traditional beers, mild and bitter, against what are known as the keg beers, and he sought to use the gap between the two to show an enormous variation in price. But had he wished, he could have arrived at an accurate comparison of the price differential between beers in the State managed houses and other beers in the immediate neighbourhood. He would have seen that there is a difference of about 1p a pint between mild beer and commercial mild beer—in other words, commercial mild beer is 1p a pint dearer. There is a similar differential in regard to bitter beer, which varies between 1p and 1½p a pint. Those are the figures with which I have been supplied—not, incidentally, by my company—as to the difference between the price of beers sold in Carlisle and those being sold in neighbouring companies in the districts immediately surrounding Carlisle. I am not suggesting that there are no differences as between individual houses, but this is the general category. It was certainly quite wrong to quote a differential of 4p a pint.
The hon. Member quoted beer prices in the immediate vicinity of the Carlisle State brewery. Has he any comparisons of prices of beers sold by competitive breweries away from the Carlisle State area where there is not the competition of the Carlisle State brewery?
No; the prices I am giving are in areas where there is an element of competition, as exists in those parts of the country which are not subject to a State monopoly. It is in Carlisle alone where there is a State monopoly. I will return later to the reasons for the difference in price. It was quite unrealistic for the right hon. Member for Cardiff, South-East to quote differences of up to 6p a pint. This was not the standard of honest debating one would expect of such a right hon. Gentleman. He also selected extracts from the Monopolies Commission Report and correctly quoted paragraph 415 on tied houses, which was not particularly relevant, but he did not go on to say that the Monopolies Commission did not recommend any change except in the context of a complete review of the licensing laws and a body has now been set up by my right hon. Friend to look into the licensing situation, as the Monopolies Commission recommended.
It is rather strange for the hon. Gentleman to say that the tied house issue has nothing to do with this matter. The Home Secretary said that he was against all local monopolies. The most glaring example that we have of a local monopoly in the brewery trade stems from the tied house itself.
To quote from the Monopolies Commission Report, to suggest that the breaking of the State monopoly was wrong was quite irrelevant and carried no weight. The right hon. Gentleman could have gone on to say that there is a problem with the tie which has been stated by the Monopolies Commission and which can be looked at only in the light of a complete review of the licensing system, to which my answer would be that the Government have initiated that review by setting up the Erroll Committee.
The right hon. Gentleman went on to produce his usual threat to reacquire the State group on penal terms, making the proposition so unattractive that no one is likely to pay a vey substantial price for these houses or even buy them at all. I cannot understand the right hon. Gentleman's objective. He ended by saying that he believed that to be in the public interest. However, it must be common ground between the two sides of the House that, if these State assets are to be disposed of, they should be sold at the most profitable price. We shall not sell them at the best price if the right hon. Gentleman threatens that they will be required in due course at some knockdown figure. However, the public will have the satisfaction of knowing that the right hon. Gentleman's threat is a hollow one and that it is unlikely that the party opposite will have an opportunity to put into effect in the span of most of us.
My criticisms of the State houses in no way reflect upon the staff, the management or the Council for them. I am sure that the hon. Member for Carlisle and I are in agreement about that. My criticism concerns the dead hand of bureaucracy and the disinterested management philosophy which has permeated the group and caused the financial results to which I shall refer in a moment. There must be no motivation; there must be no financial profit incentive, for fear that the management will be corrupted. The result is that we have a financial situation which is even less attractive than that put forward by a number of my hon. Friends.
Hon. Members may ask why this state of affairs has been allowed to continue. It is part of Socialist philosophy, of course. However, previous Conservative Governments were dilatory in not dealing with it, and I am glad that we now have a Government who propose early action to eradicate the Socialist bureaucratic system which was tried as an experiment and which has now developed into a situation where the State is making beer and running pubs in a way which is quite inappropriate for any Government. A Conservative Government have far better things to do than set themselves up to run pubs and a brewery.
No one has suggested in the debate that the State scheme provides more choice. There is a reasonable choice of beers in the State houses, but not even the hon. Member for Carlisle has suggested that they offer a greater choice than that to be found in any other well-run house.
Of course, the hon. Gentleman is bound to say that. However, I believe that any statistical exercise would show that the choice is no better and probably not as good—
No. I will not give way again. Despite not drinking himself, I am sure that the hon. Gentleman has been observant in watching labels and finding out from others what is on the shelves of the Carlisle pubs.
No one has suggested that the State products are better—
I have motored through Carlisle on occasions and I have been in some State pubs, though I could not say which ones. No one has said that the products, the choice or the facilities are better. In fact, there have been suggestions that they are rather worse than in other parts of the country.
The point has been made that some of the beers are cheaper. That may be so, although the price differential is not as great as has been suggested. It is 1 p or 2p, and not the 4p or 9p about which we have heard. According to my information, there was no differential until about the end of last year, when price increases were made throughout the industry. Until then, the prices of beers in Carlisle were roughly equivalent to those outside.
Obviously there will always be some variation in prices throughout the country, and no doubt there were differences between Carlisle and other places. It is an industry which competes, and one of the elements of the competition is a choice of product and a difference in prices. However, the price differential was comparatively small until general increases were made at the end of last year. Understandably, the State houses are now increasing their prices. As my right hon. Friend the Home Secretary has announced, they are having to keep up with the increased costs which have arisen.
I turn to the financial results of the group. Over the last three years, the average profit has been approximately £200,000. Of that, on average, £70,000 has been remitted to the Consolidated Fund. Over a long period, the returns from the Consolidated Fund to the State scheme for expenditure for which it has indented have been roughly equal to the sums that have gone into the Consolidated Fund. In other words, the actual return to the Treasury has been nil. Whatever has gone into the Consolidated Fund over the period has been approximately equal to the amounts which have been paid out from the Fund.
Various figures have been quoted for the value of the assets. The book value of the assets is just over £2·2 million. Various figures have been bandied about for their realisable value. The hon. Member for Carlisle referred to a figure of £6 million, and various figures below that have been mentioned. I make no suggestion other than that basically assets are worth what they will earn, and one must therefore look at the profit-earning capacity of these assets. It will be necessary for there to be a careful evaluation of the assets, and of the best method of disposing of them.
I notice that no charge is made for the work done by the Home Office. Perhaps the sum involved is comparatively small.
I think that it would have been fitting if hon. Gentlemen opposite had paid tribute to the substantial contribution that has been made to the State scheme by private brewers who, through the years, have made the results of their research and development expenditure available for the State scheme. In a way the State scheme has been a competitor of theirs but it has, nevertheless, leaned on them for their development work. I have in mind such things as the cultivation of yeast strains, and other matters. Hon. Gentlemen opposite who are unduly critical of the private brewers might acknowledge that that assistance was statesmanlike behaviour on the part of the private brewers.
Was the contribution made by means of a trade association, to which the State scheme would subscribe, or was this a donation of knowledge by individual brewery undertakings as a result of their own private research?
I think the hon. Gentleman will accept some hesitation on my part in answering that, because I am not certain of the precise way in which it was done. I believe that most contributions came from individual companies, but some may have come from trade research associations, which were provided, not from contributions from the State scheme, but were dependent on the private brewers. I think that is correct.
We know that there has been a nil return on the capital involved. If the value of the assets was £6 million, what sort of return would have been expected? I do not propose to use a figure of £6 million, because I think that to do so would exaggerate my case. I shall take what I hope may be considered to be a low figure. I shall use the figure of £3½ million as representing the value of the assets.
If the Government had financed that sum by loan capital, they should have required a return of about 10 per cent. In addition, it would have been essential for the scheme to generate sufficient surplus cash and profits to finance its capital expenditure. It is no good paying a 10 per cent. return on capital and then handing the whole lot back to enable development to be carried out. There would need to be a return of at least £450,000 profit per annum to give a return of 10 per cent. on the capital employed and provide for capital commitments.
Looking at it in another way, if the scheme were financed by equity capital, in an ordinary commercial transaction one would want a profit of £500,000 per annum to justify an asset value which I have put at the unrealistically low figure of £3½ million. I shall not bore the House by going through the arithmetic, but if hon. Members care to do it they will find that £500,000, less corporation tax at the rate which applied during the three years about which we are talking, would leave an earnings yield of about 7½ per cent. on the amount involved, which I do not think can be considered unduly extravagant. Instead of achieving a profit of £450,000 or £500,000 to justify the retention and use of the resources, the return has been nil. Putting it another way, if one ignores the capital which has been paid back, the return has been £70,000 a year for the last three years.
That has meant that the taxpayer has been deprived of a return on his capital. He has been deprived of his interest on his money. He has been deprived of the corporation tax which would normally be payable, which means that he has been subsidising the beer drinkers of Carlisle and the surrounding district. He has been subsidising them to the tune of 7d. or 8d. a pint.
In The People of 21st March, 1971, a former general manager, in an article headed
What a way to run a brewery!",
made some swingeing criticisms about the ineffectiveness of the State scheme which he said should be handed back to private enterprise.
The article referred to the sale of 50,000 barrels of beer per year by the Carlisle brewery. Hon. Members can calculate that if there is a shortfall of £350,000 in profits there is a subsidy of that amount being spread over 50,000 barrels of beer, which is £7 a barrel, or about 6d. a pint. Hon. Gentlemen opposite can do their arithmetic.
It is no wonder that the Carlisle brewery is able to sell beer at a 1p or 1½p per pint less than that charged by private firms. If hon. Gentlemen opposite believe that it is right for the taxpayer to subsidise the beer drinkers of Carlisle, let them stand up and be counted. Let the hon. Member for Carlisle tell his temperance friends that he considers it right that they should contribute 6d. a pint to the beer drinkers of Carlisle. That is what is happening, and it is that nonsense which the Bill proposes to stop.
In these accounts one sees a capital commitment at 31st March, 1970 of £480,000. There has been an expenditure of about £100,000 a year towards this type of capital expenditure over several years, and I think it will be found that that is part of the subsidy which has been paid.
I do not believe that it is the job of the State to run a brewery. In fact, it is not the job of the State to run anything which can be run as efficiently, or more efficiently, by private enterprise.
I do not believe that it is the job of the State to run Rolls-Royce, but I would be out of order if I expanded upon that.
Despite all the good will that has been earned by the staff and the brewery companies, I believe that there has been an inefficient deployment of resources, and an insufficient return on capital. The Labour Party's objective of "disinterested management" can only mean lower standards, resulting in the taxpayer having to subsidise the beer drinkers of Carlisle. That is not the job of the taxpayer, who has enough burdens to carry already. It is right that the taxpayer should pay for hospitals, schools, and so on. Let the money which has been devoted to the beer drinkers of Carlisle be devoted, instead, to those worth-while objectives. I can understand hon. Gentlemen opposite be- lieving that there should be subsidies for many things, but I am surprised that they should believe that there should be a subsidy for beer. Such a subsidy will be ended by the Bill, and for that reason, among many others, I shall support this Measure.
The debate has been in the pipeline for some time and from time to time I have wondered what line the Tory Party would take. I felt that two words which would occur in our discussions would be "monopoly" and "choice". The Home Secretary was early off the mark when he referred to the position in Carlisle as a monopoly. He said that what was required was the commercial freedom which the rest of the country enjoyed.
I ask who enjoys this freedom. Is it the general public or the shareholders of the large breweries? I do not believe that the two interests are necessarily synonymous. The Home Secretary also said that the function of brewers was to make their product as attractive as possible, but here, too, the product may be more attractive to the shareholders than to the general public. The Home Secretary talked of a choice for the consuming public, and I, too, should like to discuss that aspect of the matter.
I am sorry that in doing so I shall not comment on what was said by the hon. Member for Leicester, South-West (Mr. Tom Boardman), not because his figures were incomprehensible, but rather because of my own inadequacy to understand them. I am sorry that he spoke before me. I appreciate that he has wide knowledge of the industry and the comments which I want to make concern generally the way in which the industry is developing.
In the Carlisle area the local Labour Party issued a leaflet dealing with the proposal to denationalise the pubs and mentioning the possibility of one of the big breweries making a bid to take over the State group. It said that that would be a real monopoly and it gave as possibilities Bass of Birmingham and Courage of Bristol. I want to speak for a few moments about the position in Bristol, because there is an example of a big brewery in a dominant position—Courage.
Of the 50 public houses in my constituency in Bristol 47 are controlled by Courages, as I have found from looking through the records of the magistrates' courts. That is pretty nearly a monopoly. After the war, in Bristol there were some small local breweries, Georges and United, but a series of take-overs occurred and the unit became larger and in the end seemed to be dominated not so much by Bristol's interests as by London's interests. For a long time Bristol has been known as a city where a comparatively cheap pint of bitter was available. Many people enjoy a drink, including many old people for whom it is an important part of their social life.
Last year, advertisements began to appear in the local newspapers advertising a new beer by Courages—Full Brew; it was called "the regular's bitter." The advertisements showed three glasses and at the top were the words "Same again, Frank? Same again, Bert." I presume that using those names was some "adman's" idea of a working-class image, and it is a nice point of how far within the Trade Descriptons Act something may be called the regular's bitter when it has just come on the market.
Not surprisingly, this is a more expensive beer than the ordinary bitter, the "cooking" bitter, which is the general drink in Bristol. A number of my constituents were worried about this and some of them got in touch with me because they feared that the brewery was trying to persuade the general public to accept this more expensive bitter in place of the cheaper ordinary bitter to which they had become accustomed.
I was concerned because the more expensive price would obviously hit those of limited means who enjoyed a quiet drink. Someone wrote to the Evening Post, the local newspaper, pointing out that in her local the ordinary bitter had been withdrawn and that only this more expensive beer was available—apart from the other keg beers and so on. There was a reply from a brewery spokesman to say that there was another house nearby where the cheaper beer was available.
This was a bad answer, because it completely ignored the fact that elderly people get accustomed to going to one house over many years and they build up social contacts. If they are then told that if they go down the road to another house, their beer will be 2d. a pint cheaper, the way in which they have woven their local into the fabric of their life is completely ignored. I wrote to the managing director pointing out these fears and he replied that there has been a great deal of market research into the public's taste in beer and that some 1,500 opinions had been taken. He referred to this large-scale market research upon which the new beer had been evolved.
A big campaign was launched with prizes offered to the licensees who could get rid of the most new beer—one of the prizes was a Paris trip for two—and there was a large publicity campaign in the trade papers. In 1969, the managing director came to Bristol from another part of the Courage area and probably thought that we were making a bit of fuss about nothing. But Bristol people were suspicious about this move, because in 1968 there had been a similar campaign for Courage Light.
I went to Bristol Public Library and turned up the Courage house journal and found that a campaign had been launched for Courage Light and the advertisement said:
Who drinks Light Ale? What does he or she look like?…Are they rugger players, secretaries, dockers, doctors?
We researched the public's drinking habits for months before this tremendous new campaign was launched.
The trade advertisement went on to talk about displays and prizes and so on. When the campaign was launched, there was widespread newspaper and television advertising, and shortly after that the bottled bitter ale which had been one of the most popular bottled drinks in the Bristol area was withdrawn from circulation. A number of people saw a similar pattern beginning to emerge when this new campaign started.
I believe that when large companies claim that new products are based on the results of market research they should make those results available to the general public in order that anybody interested may see whether they are following trends in the public taste. I have written along those lines to the managing director of Courage today.
Some of the Courage representatives in the area have been outstandingly frank about this campaign. One man was reported to me as having said about the new beer, "The public has got to learn to like it". How did the public like it in my constituency? In the constituency there is the largest draught beer selling house in the whole of the SouthWest of England and I had a word with the tenant. He told me that when the campaign was in full swing he made a sample one Sunday when he sold seven barrels of ordinary draught beer and six pints of Full Brew. As hon. Members will know, seven barrels at 36 gallons a time means 2,016 pints, which hardly seems as though the new beer was regarded as the elixir of life, or nectar, by beer drinkers in the search to satisfy public taste.
It was a similar story elsewhere. Soon after this matter was aired in public these advertisements stopped, but they have lately reappeared. However, this time "Frank" has disappeared and it is simply, "Same again, Bert". I took one from a place which I visited last night. There is a suspicion that it is being tried again.
Many people believe that somewhere in this organisation the accountants said: "The profit margin on ordinary bitter is not large enough; we want something which shows a better profit margin". So the publicity department goes into action and there is an attempt to persuade the public to take something else.
How is the public to be protected against this kind of thing in an area where there is so little choice of houses which can be visted? For hon. Gentlemen opposite to talk about monopoly when people in my area have so little choice of houses in this respect is farcical.
Another disturbing thing is the way that the prices of beers and so on are really not accountable to the public. I should like to conclude with an example from my local area. Courage's Brewery has recently announced that, because of the Chancellor's Budget Statement about selective employment tax, it was cutting the prices of four of its bottled beers. The Western Daily Press welcomed this in its editorial, hoping that more popular brands would be cut. In fact, the chairman of the Bristol Licensed Victuallers' Association said that the prices had been reduced only on the worst selling beers. Four were mentioned: Bulldog, Barley Wine, Russian Stout and Magnet Old. The chairman said that out of these he only sold Barley Wine and had never heard of Magnet Old.
Here again, this is not treating the public fairly, because the brewery is in a position to say that it has reduced prices as a result of the Government's action over S.E.T. But when the number of bottles sold is so small, it is ludicrous; it is not part of its substantial trade.
This morning I rang a friend and asked how many he sold. He said: "Barley Wine, probably three a week. For Bulldog there is no demand. The last Russian Stout I sold was in 1964." He also had never heard of Magnet Old.
When the announcement about cuts was made there was a momentary drop in the value of Courage's shares on the Stock Exchange until it filtered through to the people concerned what the actual extent of the cuts involved. I am not necessarily happy to say that Courage's shares recovered and are again at the level at which they stood before the announcement. The share investing public has therefore rumbled what the cuts mean.
This is a serious position. I am concerned about trends in the brewing industry. My right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) mentioned an article in one of the Sunday journals. I think that that article did a great public service. If the Government are sincere in what they say about monopoly and giving a choice to the consumer, they should be prepared to support measures to give the general public more information about beers, about the different strengths of beers, and about the tax paid on beers. In this way they would be protecting members of the public at a time when the trends are all against them.
The hon. Member for Bristol, South (Mr. Michael Cocks) made a great plea for the consumer, which I support. He is right in saying that in this modern world the consumer is at a great disadvantage and that anything which we can do, jointly or severally, to protect him will certainly have the support of my party.
I should like to ask, in a perhaps discordant manner, one question. This is the first denationalisation Measure which this Government have produced. Thinking back almost exactly 20 years, our first denationalisation measures when we got power in 1951 were concerned with road transport and steel. They were matters of great and fundamental importance and we tackled them. What do we find today? We are denationalising a small local, not unimportant but nevertheless rather peripheral matter—the Carlisle and District State Management. Another similar Measure has been announced for Thomas Cook Limited, about which the same epithets might be ascribed. Are these two swallows which are to herald the summer or are they mere substitutes for what this party stands, namely, a denationalisation of the commanding heights of the economy?
I have a great suspicion that we are being put off by what is called the hiving off process. I am sorry to strike this discordant note, but it is a serious matter.
At one time I had some responsibility for the State Management Scheme and I visited it over two years. I found it not popular, but not unpopular; not brilliant, but not bad. I thought that its virtues lay in its smallness. It was moderately efficient because it was a small concern. It did not show the scandals of the steel, transport and coal nationalised industries. That was because it was manageable. I support its denationalisation, but if there is any idea that this is to be a substitute for a serious campaign of denationalisation then I think that the Government will get into serious trouble from behind it.
I remind my hon. Friend the Under-Secretary of State that in 1967, at the Conservative Party Conference at Brighton, a resolution, which I proposed, was passed without dissent saying that there should be a large and comprehensive measure of denationalisation by the next Conservative Government.
So far as we have had the Carlisle and District State Management Scheme, and Thomas Cook is promised. If that is thought to be a large and comprehensive denationalisation scheme, all I can say is that we vary very much on quality and degree. The truth of the matter is that it is not the periphery of the nationalised industries, it is not those things which are to be hived off, to use the modern phrase, which are the trouble; it is the rotten core. It is no good thinking that the problem of the nationalised industries will be solved by selling off bits and pieces at the edge. It will not have very much effect one way or the other. It will merely irritate our political opponents without causing any proper economic result. I should think that the noise in the Chamber today must persuade the Government that they do not get any less opposition from taking small bites at small cherries than they would from the kind of frontal attack upon the problem that was boldly taken and achieved 20 years ago.
This is the burden of my complaint. It is not that what we are doing is bad—what we are doing today is good—but that it pales into insignificance before what has to be done and makes one wonder where the Government's priorities are in this vital matter of denationalisation.
Speaking on the resolution which was passed unanimously at the Brighton Conference, the present Secretary of State for Education repeated a pledge previously given by the present Chancellor of the Exchequer, namely, that the steel industry would be returned to private hands during the period of the next Conservative Administration. I would have thought, if that was to be the case, that it would have taken priority over this modest, not ineffective but not very effective, little enterprise based on the Border between England and Scotland. I would have put steel somewhere above a travel agency, important though that is.
I therefore ask the Government not to withdraw the Bill, because I feel it right that the State should get out of the liquor business, but in the context of the Bill to consider the other and more important things that require to be done. I am amazed that so many hon. Gentlemen opposite want the State to stay in the liquor business. Of all businesses this seems the most unsuitable for the State to be in, if only because it arouses such deep-seated feelings among people.
The former Home Secretary, the right hon. Member for Cardiff, South-East (Mr. Callaghan), launched a great attack on the compensation provisions. He said there was a scandal in allowing this to be decided under Clauses 2 and 3 by the two Secretaries of State. I do not for a moment believe there will be any impropriety by those Secretaries of State, but I hope that that attack will not only be met but be seen to be met by an elaboration of the manner in which the property is to be disposed of and the method by which the price is to be fixed.
Let there be no doubt that the method of fixing the price in a denationalisation process is absolutely crucial to the operation and that the machinery for providing for it in this Measure is likely to become a precedent for the further denationalisation Measures which I hope we will see on the lines I have suggested. It is necessary, therefore, that we are more specific in the Bill about how the price is to be fixed, how the sale is to be conducted and in what lots the properties and shares, if it is to be done by way of shares, are to be split, or whether it is to be sold as a single concern.
It seemed strange that the former Home Secretary wished the property to be sold in one piece. That was his suggestion. I would have thought that that would have been more objectionable to him from the social point of view than that it should be sold split up. Be that as it may, the prime objective must be that the public should get the greatest amount of money. That must be the chief care of the Government. There are other interests and factors concerned in spreading the property as widely as possible among as many people as possible, but the Government are the trustees of the public purse and must get the highest possible price.
It is no good hon. Gentlemen opposite objecting to what the price must be if they have depreciated that price by their threats not merely to renationalise but to confiscate when they next get to power. If they do that, then the results are on their head and they cannot complain if people do not bid as highly as they might otherwise do for these assets.
It seems the fashion in this debate to declare one's interest. I am one of thousands of shareholders in the Northern Clubs' Federation Brewery, a co-ownership organisation about which many hon. Members know but about which I want them to know more. This brewery is an example which should be followed throughout the country, and in some respects the State brewery at Carlisle could be said to follow a similar pattern.
I have been saddened to realise that many hon. Members are completely ignorant not only about the operation of the State brewery but about the premises which are under its jurisdiction. For example, I was appalled at the ignorance of the hon. Member for Westmorland (Mr. Jopling), who unfortunately is not in his place. He does not live far from the area which we are debating, but it is clear that he has little knowledge of the licensed premises there.
I have been in those premises on many occasions and I assure the House that it is not true to say that they are dark and dingy. On the contrary, they are bright and well managed and I would call them some of the best in the United Kingdom. Some of the licensed premises built there in the last five or six years are equal, if not superior, to any in Britain.
It is alleged that the facilities in the licensed premises in the area are inadequate. The hon. Member for Leicester, South-West (Mr. Tom Boardman), who said this, is also no longer in his place. At least in the pubs of Carlisle one can, if one does not wish to spend one's time consuming drink, participate in many recreational pursuits from bowls to dominoes. I wonder in how many of the pubs owned by Allied Breweries, of which the hon. Gentleman is a director, one can bowl, play darts and dominoes and be occupied in that sort of pursuit instead of drinking. I suggest that the answer is very few.
It is completely untrue to say that the State-owned premises are featureless affairs. Equally untrue remarks are often made about the quality of the product. I have had the pleasure of sampling the beer in the brewery and I can assure the House, as a connoisseur of beer if not of wines and spirits, that it is first class. In terms of gravity, it is equal to any produced by any private brewery in Britain. One might ask why the brewers are so reluctant to specify the gravity of their products. If they were obliged to do so, I think we should find that the State brew would come out very near the top.
I recall the fuss caused by private brewers when the State brewery wanted to extend its products to the British Railways catering service. A terrific fight was put up by the private brewers, obviously because they feared the outcome of that competition. I hope that hon. Members will accept that in addition to offering a cheaper price range, the State brew is of a first-class quality.
I have been in a number of breweries both here and abroad and I assure hon. Members that the State brewery at Carlisle is as well equipped as any in Britain and contais some of the most modern machinery. It is a tribute to its efficiency, and particularly to the efficiency of its bottling section, that the Guinness group of companies allows its bottling to take place there. Guinness insists on very high standards of hygiene and efficiency before allowing a brewery to bottle its products under licence.
I should have been happier if the Home Secretary had given more information about the selling-off process. In my view, the big groups will get together, do a quiet little deal, and then step forward and there will be no competition for the licensed premises. In other words, it will be a Dutch auction. I dare say that Allied Breweries, Bass-Charrington and Scottish-Newcastle will have a complete monopoly, purchasing the premises at a knock-down price.
They will not be keen to get the brewery because they are already brewing to capacity in various parts of the country and cannot find outlets. For this reason they will be anxious to get the licensed premises, which will be additional outlets, but they will not be interested in the brewery. What is to happen to the brewery? Will it be a separate sale? Will it be dismantled? Will it be cannibalised, having parts taken out and put into other private breweries? We want more precise details as to what is to happen to the loyal people in the brewery, most of whom have worked there all their lives.
I am pleased that my hon. Friend the Member for Carlisle (Mr. Ron Lewis) is present. I was much impressed by his speech this afternoon. Bearing in mind his temperance outlook, he gave probably the best reply to the ill-informed criticism from the other side of the House on this subject.
The hon. and learned Member for Darwen (Mr. Fletcher-Cooke) claimed some administrative knowledge about the area gained from his experience as a Minister. He said it was not such a big matter. But to the people in that area, Cumberland, fringing on to Northumberland, Scotland, Westmorland and Lancashire, it is important. It is a tradition. We have a feeling that it should remain a State concern. This feeling should be allowed to exist.
The hon. and learned Member for Darwen also said that the State should not own any breweries. There are some successful breweries in Denmark which are owned by the State, and there is a very good one in Czechoslovakia which is owned by the State and produces the best Pilsen brew in the world. No one denies the right of those countries to run them efficiently and to make a profit. On beer production, the economics of the hon. Member for Leicester, South-West baffled me. I could not see how he could argue that the State was subsidising, by £7 per barrel of 36 gallons, the people of Carlisle. If that is the case, of how much are the people in this country being robbed by the private brewers? The Northern Clubs' Federation Brewery, to which I have referred, can give a rebate of £4·50 per barrel to all clubs which form its membership, so one has an indication as to how much is going into private profits and from there into Tory Party funds.
The figure is known. The profits made two years ago were £103 million.
I am grateful to my right hon. Friend for giving that information.
Finally, during the Committee stage we should be entitled to more specific information as to what is to happen. We cannot allow this transaction to take place without the detailed analysis required, because one thing that the people of this country like is to get fair play on their beer drinking habits, and they are getting sick and cynical about the monopoly of brewing in the private sector of this industry.
If the debate has done anything it has exposed once again the close relationship between the brewing industry, with its private monopoly, and the Tory Party, The Government will have a very unhappy experience before the Bill reaches the Statute Book.
I am happy to follow the hon. Member for Wallsend (Mr. Garrett). We were all grateful to him for the reasoned and rational way in which he presented his arguments. It is a pity that some of the speakers on the Labour benches did not adopt the same attitude earlier this afternoon.
I am sorry that the hon. Member for Fife, West (Mr. William Hamilton) is not in his place because he made probably the most vitriolic attack of all on my hon. Friends. One or two of his points should be dealt with. For example, he suggested that in 1951 a Conservative Government repealed the Act which would have enabled them to extend State management into new towns, but what he completely failed to point out was that previous Governments had had from 1916 until 1951 to extend this method if they thought it worth while. Indeed, for the previous six years, from 1945 to 1951, his party could have adopted this procedure. He also went to great lengths to read out the various contributions made by brewers to Conservative Party funds. To keep the matter in perspective, it might have been as well if he had also read out the contributions which certain unions make to Labour Party funds.
I hope that everyone will take note of what has been said from the other side of the House, especially with regard to the proposal—I take it to be a proposal—to recreate State management areas. Some hon. Members even went a little further and suggested that this should be vastly developed into a nationalisation of the pubs. This is interesting, but it will never come to pass because the Labour Party will not return to government. Even if they did, we have heard this sort of thing before. We have heard wild shouts from the other side of the House during the debates on the Industrial Relations Bill, and suggestions that it would be repealed. But it was noticeable that when the Leader of the Opposition was asked whether this would be the case, he did not answer the question.
The Bill deals with two aspects of the matter—first the removal from State control, and second, the termination of State management. People who have been resident in the areas in which these restrictions have taken place have been waiting for a very long time for this. Two generations have grown up without the facility of competition in the area. Despite the fact that the 1931 and 1932 Royal Commissions recommended that State management and control be discontinued, it was continued by successive Governments.
My right hon. Friend explained in detail how the scheme started in 1916 with the emergency legislation. But many of us believe that the scheme has outlived its usefulness. It has been said that State management contributed to the control of drunkenness in certain areas. This, indeed, was the case, but times have vastly changed and it is said, perhaps, to think that in a country which has moved forward so much we still have an acute problem of alcoholism. There are other ways of dealing with that problem, and State control is not one of them.
One of the most attractive aspects of the Bill is that it will enable licences to be granted to hotels which, up until now, have been denied them. It is ridiculous that for years licensing courts in these areas have approved licences and, purely because the area is State controlled, the Secretary of State has been reluctant to make the necessary ruling and they have been granted in only a few instances.
I am sure that the hon. Gentleman does not want to mislead the House. I thought that he said that the two Royal Commissions had recommended the discontinuance of State management. That is not the way that it is put in paragraph 111 of the Monopolies Commission Report which says about Carlisle:
The Scheme was examined by the Southborough Committee on the Disinterested Management of Public Houses (Cmd. 2862) in 1927 and by the Royal Commission on Licensing (England and Wales) 1929–1931 (Cmd. 3988) which reported in 1932. Both
bodies were in favour of the continuance of the Carlisle Scheme…
That is 90 per cent. of what we are talking about today.
I accept that, and I apologise if I have misled the right hon. Gentleman. I was referring particularly to Scotland.
The tourist boards have been encouraging areas such as mine to develop their activities; they have been encouraging hotels to expand. At a time when tourist boards, and in my area the Highlands and Islands Development Board, have been making money available to help the tourist industry, it is ridiculous that hotels should have been stifled by being unable to obtain full licences, which is what has applied in Gretna and in my area.
The public in these areas is undoubtedly in favour of competition. All the researches I have conducted in my constituency have shown this to be so. However, the public is apprehensive to some extent about the method of disposal. There is some concern that there will be a sell-out to one brewery. This is not the intention, and I am sure that my right hon. Friend the Secretary of State for Scotland will make it clear that it is hoped that there will be local participation.
I again make it clear that I am dealing, not with the Carlisle area, but with my area where there is a smaller number of licences and where the possibility of private individuals being purchasers is much greater.
There is no provision in the Bill to support what the hon. Gentleman has just said. This is why my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) was at pains to make it clear that the Bill gives far too much power to the Secretaries of State to dispose to one group or to sell as they choose and why we suggest a more satisfactory method of disposal.
The hon. Member for Rutherglen (Mr. Gregor Mackenzie) will appreciate that there is nothing in the Bill to substantiate what he has implied. It is a natural worry in an area where State control exists that a brewery will take over.
The State scheme has operated in the form of disinterested management. I do not wish to reflect upon those involved in the scheme, but it has been purely disinterested management in the matter of profits. Last year, in reply to an Adjournment debate raised by my hon. Friend the Member for Dumfries (Mr. Monro), the hon. Member for Renfrew, West (Mr. Buchan), who was then an UnderSecretary at the Scottish Office, said:
As we and successive Governments have seen, it would be contrary to the spirit of disinterested management for a private individual to sell for profit…"—[OFFICIAL REPORT, 29th April, 1970; Vol. 800, c. 1401.]
Hon. Members have asked: even though the monopoly is allowed to be broken, why sell the State-owned hotels? If the Government broke the monopoly but did not sell the hotels, there would be an obvious danger that by creating competition they would be devaluing their own assets. My right hon. Friends have obviously taken this reasonable argument into account in deciding to sell the State managed houses.
The hon. Gentleman does not understand the meaning of "disinterested management". I used the term in the sense in which it was used this afternoon by the Home Secretary, when he claimed that the Bill would be in the public interest. "Disinterested management" means management in the public interest.
The hon. Gentleman said that in the Ross and Cromarty area, which I know well, the people were keen to dispense with the State Management Scheme. Did the hon. Gentleman tell them that the price of their beer would rise, as it has with every private brewery?
The hon. Gentleman has misquoted me. I did not say that everybody wanted State management to go. I said that everybody was very anxious that the monopoly be broken and that competition be created. I pointed out that there was apprehension about what might happen if a brewery took over, and this is what I would oppose, as would some of my hon. Friends.
In the debate we have tended to get ourselves bogged down with Carlisle and to forget that Gretna and Ross and Cromarty are in a similar situation.
The amount of reinvestment in the project has been very poor considering that State ownership has been with us for 55 years. In my constituency there are 18 licensed premises. The profit in that area to 31st March, 1970, was £29,724. In the year to 31st March, 1971, I understand that the figure is just on £30,000—this is not a substantiated figure. This shows a minimal increase. This has been achieved without any competition. If they could not make a profit in these conditions, things would indeed be in a poor way.
It has been said that beer from the Carlisle brewery is supplied all over the surrounding area. My constituency does not benefit from that, because of the high transport costs. If beer from Carlisle were to be supplied in my constituency, presumably it would be that much more expensive and would compare with that which is already available there.
Again speaking only about my own area, unfortunately the State combine has not shown great initiative. The proposed development at Ben Wyvis has been mentioned. I should have thought that the State Management Scheme, having hotels nearby, would have been more anxious to further this project than has appeared to be the case. I am surprised that there is no State motel in the area. It is surprising that in an area which attracts so much tourism the State has not ventured out in these ways. Nowadays orders are placed for buffet snacks rather than for lunches. Although these snacks are available at certain State hotels, they compare very unfavourably with what is available in areas outside the State Management Scheme.
I stressed that I was referring only to my own area.
Although three statutory local bodies give advice, and although State management district committees are there to advise, some of the advice has not been accepted and some of the suggestions which have been made have not been followed up.
All that the hon. Gentleman is saying is an argument for the extension of the facilities of the State Management District. He should vote with us tonight and then seek to persuade his right hon. Friends to extend the State Management Scheme and spend more money in the area.
Our philosophies differ on that point.
It has been suggested that unemployment would come as a result of the hotels being sold off. I do not for a moment accept that—certainly not in Scotland. The breaking of the monopoly, the creation of additional licences, and the building—one hopes—of further hotels as a result will create more employment, not less. It is a little odd that everybody is worried about the loss of jobs in these hotels. In fact, the hotels will not be bulldozed away. They will merely be transferred from State management to private ownership, and the staff will be required in exactly the same way.
It is said that profits from the hotels will no longer go to the Government. They will go to the Government, but in a different way. [Laughter.] The profits will go by means of corporation tax, for example, or ordinary company or personal taxation. Moreover, the Government will receive capital sums for each hotel which is sold off. So I do not see that there can be much argument there.
One must be fair about it: local needs in the past have been met. But, while the food has always been good in these hotels, the hotels themselves have not been developed to the extent they should have been, particularly in an area which prides itself on the number of tourists which it attracts. I pay a tribute to the staff at these hotels, particularly in my own area, where one is always received in a most courteous manner. What I criticise about the system is not the staff but the policy and the principle.
That is true. My hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) raised an interesting point about the method which will be used for disposal. He emphasised the importance of this aspect of the matter, and how the method adopted could be taken as a precedent. I entirely agree. Although the public interest must always be served and the best price obtained, I am anxious that every facility should be afforded for local participation. This is an important matter, and my area is one in which that should operate.
I do not entirely agree. I agree to the extent that, if all the hotels in the area were sold to one brewery company, that would merely transfer one monopoly to the hands of another, but there is, I believe, a place for both public companies and private individuals.
That is a ridiculous argument. Obviously, one is not advocating that at all. There is a place for both. In the Highlands today, there are many excellent brewery-owned and brewery-run houses which give an excellent service. We must not forget that. There is a place for both.
I hope that my right hon. Friend will be able to tell us something about the methods for disposing of these premises. I should like him to consider carefully the question of hotel buildings in my constituency which are not used entirely for hotel or public house purposes. There are, for example, certain hotel premises in which there are shops as well. Those shops have been operated by local people who have built up a business over a period of years, and I wish to know whether it is intended that consideration will be given to these people when the premises are disposed of.
In the unlikely event of there being no bidders for, perhaps, one of these properties, for instance, one hotel in a relatively remote part of the country, may we have an assurance that the Government will continue to operate it until such time as a suitable buyer is found? It would be tragic in the more remote areas if, say, a village were to be left without its local hotel. I am sure that there is an easy way round this. I know of no case in my constituency where that problem would occur, but it is possible, and I hope that my right hon. Friend will give me that assurance.
I consider that the Government are wise in the move which they are making. I do not believe that there is a place for the Government in the running of pubs or hotels. I am certain that this scheme will prove successful, and I am glad that my right hon. Friends have embarked upon it in this first session of Parliament.
Several interesting points have arisen in the debate, notably the points about competition made by the hon. Member for Ross and Cromarty (Mr. Gray), to which I shall return later. Before coming to what I regard as the main theme of the debate, however, I must comment on the speech of the hon. Member for Leicester, South-West (Mr. Tom Boardman), who, unfortunately, is not in his place at the moment. The hon. Gentleman said that he has a notable brewery interest and he occupies a position of some responsibility in the brewery industry. In the light of the speech which he made, I can only say that I know several working men's club chairmen and several managers of local pubs who could qualify for at least twice the retainer which I imagine is paid by Allied Breweries to the hon. Member for Leicester, South-West. His total lack of knowledge of the "nitty gritty" of the Monopolies Commission Reports in 1969 on the brewery industry—notably the one on Allied Breweries and Unilever—give good reason for thinking that he came down in the last shower and found himself very fortunately placed at or near the head of a substantial brewery concern.
The hon. Gentleman made a point of referring to the variety of beers provided in Carlisle. My hon. Friend the Member for Carlisle (Mr. Ron Lewis) drew his attention to the fact that at least 20 brands were on sale in the city. He need not have gone that far. My hon. Friend could have reminded him of what does not happen in Carlisle, which, unlike Birmingham, is not dominated by one brewery; it cannot be called "Bass country", and it is not like Bristol, either, which the Monopolies Commission pointed out in its Report on brewery supply was dominated by the beers produced by Courage.
Had the hon. Member for Leicester, South-West done his homework, he could have avoided making that false point about the provision of a variety of beers by the State concern in Carlisle.
Again, on the subject of prices, I can only agree with my hon. Friend the Member for Wallsend (Mr. Garrett) that the hon. Member's sums—I cannot call them economics—were thoroughly confusing. First, he told us that Carlisle beer prices were only a penny a pint, on average, less than those paid in comparable establishments elsewhere in the country. Then he told us that the taxpayer was subsidising the Carlisle beer imbiber to the tune of sevenpence a pint. For a moment, I almost hared off to Carlisle to get my share of subsidised beer before denationalisation came in. It really is nonsense. We find it difficult to imagine that the taxpayer, or someone else, is subsidising the private brewer to the tune of sixpence a pint, that is, the difference between the penny less which, apparently, Carlisle charges and the subsidy of seven-pence about which the hon. Gentleman told us. I find those sums most confusing and extraordinary. The hon. Gentleman calculates on the basis of charges made for barrels, but if he had made any reference to the report of the Monopolies Commission on beer supply, he would have noted that it said in paragraph 388:
We note that there is now price competition between the off-licensed shops of a king that hardly occurs in the public house trade.
The main competition between brewers' public houses takes the form of rivalry in amenities and environment in order to acquire larger portions of the captive market and not competitive pricing. So how anyone as closely involved in the brewing industry as the hon. Gentleman could say that there is anything aproaching price competition is beyond me. He would not have to be involved in the industry at the level at which he obviously is, but would simply have to go to two or three pubs in different areas of a town and compare the prices charged, to discover that there is very little difference and that price competition between breweries does not arise.
The Home Secretary's is the speech to which we must pay most attention, because it was supposed to set the keynote for the Government's policy on the denationalisation of the State pubs. He said that he expected the word "doctrinaire" to be flung at him repeatedly from this side of the House during the debate. He then defined it as the title given by an Opposition to a Government who fulfil election pledges. He is only partially correct. When we have used it since 18th June last, we have done so against a Government who, in many spheres, have undertaken policies with no technical advantage, no social advantage, and no public interest advantage, but which are simply introduced to give preferential treatment and political reward. I do not think that we are in the least mistaken in describing the Bill as a purely doctrinaire and blind piece of legislation.
As to the question of fulfilling election pledges, I did not note anywhere in the Tory manifesto a specific—or even a vague—undertaking that one of the first targets for plundering would be the State pubs. It did not appear at all, but since the Bill has appeared so early in the Government's legislative programme, it leads me to think that the title of the Tory manifesto, "A Better Tomorrow" was a misprint and that, in view of the denationalisation of State pubs Bill it should have been called "A Bitter Tomorrow".
The Home Secretary said that, for a period of over 50 years, the State Management Scheme had been "an experiment in disinterested management". That is some experiment. It is probably heading for the world record in length of experiments. What baffles me is why this Government have now chosen to introduce a Measure which will enable them to denationalise State pubs. After all, we have had, regrettably, Tory Governments for most of the time since the First World War. At no time since then have they chosen to introduce such a Measure. Commissions established by Tory Governments have twice said that the system in Carlisle should continue. This Government have decided to denationalise.
Why now? The Home Secretary, in what was for him a rather puny explanation, explained that the reason seemed to be that the social problem connected with liquor consumption has changed out of recognition over past decades. I am not much of a mathematician, but I wonder how many decades have elapsed since 1964. Why in 13 years of fairly similar social circumstances, in a period when our present social habits were developing, did not the pre-1964 Conservative Government take it upon themselves to denationalise the pubs? There is a fairly straighforward reason. This Government are committed in a way that no other Tory Government have ever been committed, certainly not since the war, to setting three criteria against any State concern—is it profitable, is it risk-free, and can it be easily transferred to private enterprise? The Carlisle pubs meet those criteria. The consequence is that the present Government, acting on a strictly doctrinaire basis, have decided that the Carlisle and the Scottish State pubs will have to go.
It is a straightforward dogmatic decision. I do not blame them for their dogma. In some respects, I prefer the dogmatic to the pragmatic. But if they had intended to do this, if they were so proud of it as Government legislation, why did not they announce in their manifesto that they would do it, and why do they come before us so apologetically, trying to justify their denationalisation Measure as saving the taxpayers' money, or in terms of competition? Why do not they honestly say, proudly, that they owe a debt to the brewers and are prepared to pay their debt? At least we could give them credit then for being honest in those respects.
Hon. Members say "Rubbish", but it is stretching the credibility of hon. Members on this side too far, and the credibility of the country, when everyone can read in the columns Of HANSARD and in reports outside the House that the Tory Party has received contributions amounting to hundreds of thousands of pounds from a particular industrial interest, and when one of their first pieces of legislation is a Bill that will put well over 100 public houses and hotels on to the market. It is stretching the credibility of the British people too far for the Government to think that we are not bound to draw conclusions from that. Conservative hon. Members could shake their heads until they fall off. It would not make any difference to their thinking powers. No one will convince us that there is not a coincidence of interest.
Does my hon. Friend agree that far more reprehensible conduct by the Government was allowing an official Tory candidate to make public pronouncements to the people of Carlisle that he would oppose denationalisation of the pubs, saying, in other words, as an official Tory candidate that his party was opposed to denationalisation of the State scheme?
I agree that it was thoroughly reprehensible. That is what we come to expect from the Tories, but it might have been the case that in Carlisle a unique character, an honest Tory candidate, appeared. Perhaps he was simply telling the truth on the basis of his experience while fighting the election in Carlisle. I suppose that such people exist, though they are very rare creatures. I will give the candidate for Carlisle the benefit of the doubt, since he is not in this House, and I hope never will be, though I have not had the pleasure of meeting the gentleman. I am very glad that my hon. Friend the Member for Carlisle beat him in such a resounding victory, because if my hon. Friend were not here we should not have been treated to the down-to-earth, factual description of what is going on in Carlisle that we had in his excellent speech.
The Home Secretary spoke of the First World War publicans who unscrupulously diverted the affluence of the workers into their own pockets. Villainous as those publicans of 50 or 60 years ago may seem to have been, they compared favourably with the Tory Government who have, as their first reward to the brewing interests, put those pubs on the market.
We have heard a great deal from hon. Members opposite about the effect that the denationalisation of the State pubs will have on competition in the brewing industry and how much of an improvement competition will make for the users of public houses and hotels in Carlisle. The right hon. Gentleman mentioned it several times. The hon. Member for Westmorland (Mr. Jopling) became positively euphoric about the idea of free market competition going into Carlisle, although he stumbled through one of the most ill-informed speeches that I have heard in my few months in this House. Then we heard the hon. Member for Leicester, South-West (Mr. Tom Boardman), who is, I suppose, an expert on brewery competition. The fact that there is no such thing as that competition probably qualifies my remark about his being an expert. Then the hon. Member for Ross and Cromarty (Mr. Gray) treated us to a dissertation on the advantages of competition and the fact that his constituents had told him that they were in favour of competition.
I say categorically that on the basis of the two recent reports of the Monopolies Commission, of personal experience and of conversations which anyone can undertake with the managers of tied houses or with the management committees of working mens' clubs it will be easier for the Home Secretary to pass through the eye of a needle—and that would really be something—than for competition to be found in the brewing industry. On the basis of the findings of the Monopolies Commission, competition is a rare gem in the beer industry. Paragraph 60 of Chapter 3 of the Commission's Report on Unilever Limited and Allied Brewers Limited said:
The United Kingdom is one of the major beer drinking countries in the world. In 1967, with a consumption of 20·5 gallons per head of the population it ranked seventh …
However, because of its barrel consumption,
… the United Kingdom was the third largest national market…
In paragraph 61 there came this important point:
The industry has been characterised for very many years by a substantial and continuing reduction in the number of separate breweries. This has been due to the disappearance during the later part of the nineteenth and the early part of the twentieth centuries of the small brewery belonging to and brewing for a single licensed house, and also to a process, which has continued up to the present, of amalgamations and acquisitions resulting in closures of redundant capacity.
The Report then gives some important figures:
In 1950, 567 brewers-for-sale licences were issued; in 1960, 358; in 1967, 244. The reduction in the numbers of breweries has been accompanied by an increasing concentration of ownership.
To get more detail on this, I refer the House to the Commission's Report on the Supply of Beer. This tells us that in 1900 there were over 6,400 breweries in this country. In 1961, as might be expected, there were 240. These were owned by 11l companies. Within a year—by the end of 1968—another eight companies had been swallowed up, and we now have 103 companies.
Even that figure would suggest, if there were a fair spread throughout the country, that there is a great deal of cutthroat productive competition between the brewery interests, but a close study of the figures shows that out of the 103 companies the "big seven" account for 73 per cent. of production—an overwhelming oligopoly if not monopoly. They own over 56 per cent. of all the pubs between them and those pubs sell about 67 per cent. of the beer. But it would not be any good for anyone who objected to buying his beer in an oligopolistic pub to go to an off-licence instead, because the "big seven" control 35 per cent. of the off-licences as well.
No one can pretend either that this Bill will promote competition in the brewery and catering industry in Carlisle and Scotland. Neither can anyone pretend that the influx of these 100 or so pubs and hotels into the market will promote competition in the brewery industry. The market is already carved up. The positions are already tightly drawn and, as has been said, it is only a matter of which one or two of the "big seven" breweries the rest of the big seven decide are to have the pickings of this bunch. Paragraph 388 of the Monopolies Commission's Report on the Supply of Beer says:
We note that there is price competition between off-licensed shops of a kind which hardly occurs in the public house trade.
There is also a reference to quality. I note with distress that the Commission interviewed a witness who said that he had "gassy beer" which is being served by all the half-dozen big companies which are gaining a complete monopoly of the pubs. He considered that tied houses obliged people to drink stuff they otherwise would not touch, or go without altogether. There is an extensive monopoly in the brewing industry.
Because we have a State concern in Carlisle, in terms of price the people of
Carlisle and parts of Scotland also are in some way insulated against the worst pressures of a monopolistic brewing industry. On that basis alone I would have asked the Government to reconsider the Bill, but there is added force when I get the support of a substantial but nearly defunct newspaper like the Daily Sketch. This is probably the first time that I have ever quoted from the Daily Sketch, and, due to its coming demise, it will probably be the last. It is perhaps a fitting epitaph to the odd occasion when the Daily Sketch has shown independent journalistic spirit. In its editorial on 1st February, it said:
Roll up!Roll up!State-owned bargains for sale!On offer … the nationalised pubs of Carlisle.
I will spare the blushes of the party opposite by not including the next passage. But afterwards it continues:
What's in it for the customers? Will the beer in Carlisle be cheaper and better under private management? Will selling Thomas Cook out to one or other of the independent operators give holiday-makers a better deal or do anything to improve travel standards? If the Government goes on flogging off—'hiving off', is the fashionable term—most of the State's money-making sidelines, what are we, the taxpayers, likely to be left with?
Hon. Members opposite have given us the excuse that it is in the interests of the taxpayers that the pubs are to be denationalised. Yet here is a newspaper which supports the Conservative Party asking how the interests of the tax payers are going to be guarded by the Tory Government. It says:
… selling off the succulent fillet steaks and leaving the loss-making rump behind would be a very bad bargain indeed for the public.
On that basis, every decision the Government have taken to hive off or "flog off" the best parts of the various nationalised industries, including the State-owned pubs, is a disservice to and a tragedy for the tax payer, and I therefore ask my right hon. and hon. Friends to vote against the Bill. I hope that people outside this House will have the sense to see what is involved.
I was at one time a director of a brewery company so I have a past interest which I am happy to declare. I was interested in the figures quoted by the hon. Member for Bedwellty (Mr. Kinnock) about the decrease in the number of breweries over the years. I have been through it and seen it happening. What I am certain of is that during these years, in spite of the closing-down of breweries and amalgamations, there has been a greater interchange of brands and much more coming and going between breweries than was the case in the past. Then they stuck rigidly to their own market and tied their tenants down to taking all of their products.
I should like to explain why I support the Bill. The State management areas are basically Carlisle and Gretna which are athwart the main tourist routes between England and Scotland. We have, fortunately, seen a great improvement in the route recently. The other State Management District is in the North of Scotland in a rapidly developing tourist and industrial area.
Opening the debate, my right hon. Friend mentioned the great amount of money that had to be ploughed back into the improvement of the State managed public houses. The hon. Member for Bedwellty mentioned the fact that competition among breweries has to do with providing better amenities and all the money that has to be spent in this way. This means that not only have we an asset which seems to be valued, from what is said in the Preamble, at about £5 million, but there will obviously be a need to spend a great deal more money, particularly in the tourist areas, if these public houses and hotels are to be brought up to date.
No Government ever find themselves flush with money and they always look for ways of spending it which have a high priority. One of the criticisms which the hon. Member for Fife, West (Mr. William Hamilton) made was that we were debating this subject and not that of unemployment. It is good sense to see whether there is a regional enterprise in which the State is engaged and in which it is not earning a high return—and all the figures quoted show that the return on investment is not high, that more needs to be put in. Then there is commonsense in saying that this should be one area of enterprise from which the State should remove itself and, not hand over as one hon. Member said, but sell to the best advantage.
The hon. Member has talked about the amount of money it has been necessary to provide for better furnishings and so forth in pubs. Has he seen the survey, which was of importance to people like myself who enjoy a drink, which indicated that in the last few years the alcoholic content of beer has gone down dramatically? Would he not agree that this is an absolute essential of an alcoholic beverage? Did he see the reference to "arms and legs" beer with no body? Did he see the reference to the fact that most of the beer produced in this country could have been produced during Prohibition in America? Would he not agree that the real bench-mark in terms of alcohol content and specific gravity is the State beer of Carlisle?
I do not think that is true of the State beer of Carlisle but what the hon. Member for Wallsend (Mr. Garrett) said about the Northern Clubs' Federation Brewery was more likely to be true.
This is not relevant. The point is, are we to continue, in changed circumstances, something which was started as an experiment, for what reason it is now difficult to discover? Are we to continue ploughing back money in this or are we to dispose of it? One of the difficulties is that while in Scotland it would be fairly easy to dispose of the hotels and public houses to a wide range of people, it might be more difficult to do so in Carlisle. The problem of the disposal of the brewery in Carlisle is real. There has been criticism that not enough is said in the Bill about how these assets are to be disposed of. The answer surely is that Ministers must be given discretion to dispose of these assets in the best way available. The hon. Member for Wallsend might help over the brewery. Perhaps the Northern Clubs' Federation Brewery might be interested in supplying beer.
I am glad to hear it. I shall be glad to hear what my hon. Friend says at the end of the debate about whether any information can be given on how the assets can best be disposed of. Perhaps the best answer is to leave my right hon. Friend with a wide discretion so that it is possible to experiment in finding out what is the best way of disposing of the assets.
Whatever else may be said about this debate it has certainly been wide-ranging and, on this side of the House, well attended. If the donations which have been given to the Tory Party by the brewers had been based on attendance today they would not have got as much as they did. They will be here at ten o'clock without any doubt.
The debate was opened rather weakly by the Home Secretary. I have listened to him now from time to time since 1964 and I have never heard him quite so unsettled and ill at ease in presenting a case. I felt that at the back of his mind, because he is basically an honourable man, he knew that there was no real case to be made for selling off this State-owned asset. He knew that he was so open to attack from this side of the House that he could not make too strong a case. His supporters have deserted the field in the face of the arguments against them.
My right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) put one of the strongest cases I have heard him present in this House. He made an appeal, certainly followed on this side, that this should not be looked at as an isolated case dealing with one small section of the country in the North-West of England and the South-West of Scotland. This was a matter of principle, he said, a measure based on the philosophy of hiving-off State assets. He asked that the whole country should note what was happening.
I have listened with interest to most speeches this afternoon to see what the case is. The debate has ranged widely and included the meanderings of the hon. Member for Westmorland (Mr. Jopling) who talked about some grotty pubs in Carlisle where they even had linoleum on the floor!I do not know where he does his drinking, but if he comes with me round some of the privately-owned pubs in London he would be surprised to see how much grottier they are than those in Carlisle. One cannot judge a pub in that way. We are talking about selling a State asset and not about whether one pub or hotel is better than another.
The hon. Member for Leicester, South-West said that he once had a drink as he passed through Carlisle. He admitted in answer to my hon. Friend the Member for Wallsend (Mr. Garrett) that he had been there. Probably he had it in the cocktail bar of the County Hotel. He would not have had much time to go round the 100 or so pubs in Carlisle. He opened his remarks by saying that he was an expert on the brewing industry and he hoped that the House would listen to him. I am surprised that the brewing industry made a £103 million profit last year because I tried to follow the hon. Gentleman's economics and found it extremely difficult.
The hon. Member for Leicester, South-West made his case on prices and competition. It is here that the Government's case for the denationalisation of the State-owned breweries falls down. It is the effect of competition against their friends which is the cause of the Bill. It is not without accident that the cheapest beer in Britain is to be found in a belt of the country from Carlisle to Newcastle, and the main reason is the competition, first, of the Carlisle State Brewery and, secondly, of the Federation Working Men's Brewery on the North-East Coast.
As we in the House have good reason to know, we can enjoy a pint of Federation beer at 11p a pint, brought from the North-East and sold at such a profit that the federation gives the equivalent of £4·50 a barrel bonus. This brewery does not have a monopoly in the North by any stretch of the imagination. The effect of the competition is that the beer of competitors can be bought cheaper in the North-East and North-West than anywhere else in the country. There is a North-East price and a South-East price for Double Diamond and brown ale, for example. The difference is not entirely due to transport costs.
The hon. Member for Leicester, South-West said that there was only a penny or twopenny difference in the prices charged in the pubs in the immediate vicinity of Carlisle. I was not sure whether he was talking about old or new pence. If the difference is two new pence, that represents about 5d. of the old currency in the cost of a pint of beer, and that is a considerable difference. The competition of the Carlisle State Brewery keeps down the prices of outside breweries in the area. When that competition does not exist elsewhere in the country, prices are extremely high. In London a pint of bitter is 2s. 10d. or 3s. in the old currency, or 15p.
The question of competition is always the "beefcake" in the Government's argument. The competition in the area of the Carlisle State Brewery on one side of the country and the Federation Working Men's Club on the other side is sufficient to keep down the price to the consumer, and I am much more interested in the price to the consumer than in the making of excessively high profits for the brewers who then use them to make donations to their friends.
The position of the staff should be taken into account. The Home Secretary said that he did not know how the State breweries would be sold. He was not able to say whether it would be a job lot or whether it would be done piecemeal. Yet he was able to say that the staff would be looked after. I wonder how. Surely some discussion has taken place on this subject. The right hon. Gentleman has not been in complete isolation since the Government's intentions were known. Is the right hon. Gentleman saying that representatives of the big breweries have not been to him to say that they are interested? They are friendly enough prior to elections. Surely they have had a chat about this nice little sweetmeat which is to be handed to them. What is wrong with that? We have no argument as long as it is done openly and above board. We are entitled to know what will happen to the staff.
The debate has ranged round another basic piece of Tory philosophy which follows in the line of Thomas Cook and the Rolls-Royce announcement. We saw it more plainly there than anywhere. From the Rolls-Royce announcement it was apparent that we hang on to the losing part and sell off the profitable part.
All right, this is Tory philosophy. Let us understand it, but let us not have these tittle tattling arguments about which will be more efficient. If it is a sell-off, then say so, be honest about it, and let us argue about it in the country. If the Government are not being honest about it, we are entitled to go into it in great depth. One of the most serious aspects of this short Bill, which was so eloquently underlined by my right hon. Friend the Member for Cardiff, East, is in Clause 2(1) where the Secretary of State is given power to dispose of property
on such terms as appear to him expedient in the public interest
We on this side of the House are entitled to be suspicious about that. The Secretary of State for Scotland owes it to himself and to his right hon. Friend to make some alteration to the Clause, and I hope he will reply to the point made by my right hon. Friend. If it is being done correctly, it must be seen to be done correctly and hon. Members on this side of the House have the right to be suspicious of the motivation of doing it in this way.
We heard from several hon. Gentlemen on the Government side about the competiveness of brewers and tied houses resulting in prices being kept down. We have seen many examples of this, particularly with petrol. We are told that there is competition in petrol, but the moment one brand goes up in price every other brand follows. It is exactly the same with the brewers. They work in conjunction with each other. The only place in the country where this has not happened has been in the North-East and North-West of England and on the South-West coast of Scotland.
This has been an interesting debate which has bared the soul of Tory philosophy. The country will see the Bill for what it is. It is a move which makes Robin Hood and his merry men look like amateurs in State plunder compared with hon. Gentlemen opposite. I hope that my hon. Friends will vote against the Bill.
Hon. Members opposite have asked us to declare our interest when we start to speak. I immediately declare mine, which is a family interest in the licensing trade over many years. On my father's side my family were all at one time licensees in the Birmingham district, going back to the time when pubs were mainly privately owned by individuals and not by corporate brewers as they are today.
My interest is not at director or executive level but from behind the bar, where one gets to know the problems and the trade by directly serving the public. I have pulled more pints than Opposition hon. Members have pulled faces today over the Bill. My mother and father when they started in the licensing trade were brewing their own beer—
The hon. Member for Gloucestershire, West (Mr. Loughlin) stays in his seat and mumbles but it is people of many parts who make up this House in all its facets.
People come to this House from many walks of life and have to earn their living in the ways best suited to them, and I have done all the things the hon. Member has attributed to me.
Certainly the licensed trade is a difficult life and competition has always been fierce. To hear the Opposition speak, one would think that the licensed trade wants to see unemployment. It is the last thing that the licensed trade or anyone else wants to see. The sooner they stop throwing those sort of charges across the House the better.
Competition in the trade at the moment is quite fantastic, as can be seen from the enormous cuts in various areas in the price of bottles of whisky and other spirits. This is the sort of competition we have to face. People who run their own private businesses can buy their wines and spirits cheaper from super-markets and stores than from the wholesalers who supply them. It can only be to the benefit of the shopping public if this is allowed to continue. Therefore, why should this not be allowed in Carlisle and in the Scottish areas as well as in other parts of the country?
I have been shocked by the smear campaign carried out by hon. Members opposite. The hon. Member for Carlisle (Mr. Ron Lewis) talked about the trail of slime. Certainly a great deal of slime has been thrown across at us, not least by the right hon. Member for Cardiff, South-East (Mr. Callaghan) who took the part of the Ena Sharpies of the Opposition Front Bench with his waspish thoughts and the evil intent of some of his remarks. It is sufficient to quote what was said of the right hon. Gentleman by his right hon. Friend the Member for Coventry, East (Mr. Crossman) in The Sunday Times on 29th November last year, when asked about one of the qualities he admired in the right hon. Member for Cardiff, South-East:
… it was his appearance of candour when saying something finely calculated.
Certainly the right hon. Gentleman was saying some finely calculated things in his speech today. In listening to the charges he made, I can only wonder at the deviousness of his mind. What sort of wheelings and dealings does he do in the background of politics if he thinks that other people do the same as himself? I shudder to think.
As I understood the case put by my right hon. Friend, it was that it was proven beyond doubt that the piper had been paid a handsome sum over the years and that it was not an unreasonable inference that the piper was able to call the tune. It was nothing more than that.
What sort of inference are we to draw from that as to other people who are being paid to call the tune? What about the trade unions? Are they the people who call the tune? Do they do such wheelings and dealings as was suggested? These are the pipelines one is talking about, and when these charges are turned back on hon. Members opposite, they must be prepared to contain them. Apparently, right hon. and hon. Gentlemen opposite are involved in all sorts of wheelings and dealings about which they tell us nothing. I reject their charges.
When we talk about management, we are discussing the quality of service and
the character of a house. However, the character of a house depends on the quality of the manager of that house. I remember reading a word picture in a magazine which ran a national competition to find the best description of a barmaid. It read:
Our local barmaid is Flossie and not bossy.
That describes the warmth of character that we expect from the staff and management of our licensed houses.
The personality of the host and hostess of licensed premises is the greatest asset of the trade, and we should pay tribute to the work of the staff and management of licensed houses not only in Carlisle but in the country as a whole. They put in very long and difficult hours. They work when others are playing, seven days a week and at holiday times. A tremendous amount of work has to be done when the doors are closed and before they open. Those workers deserve our thanks, and it is to be hoped that the State employees concerned will receive the utmost consideration when my right hon. Friend the Home Secretary negotiates the disposal of the houses that we are discussing. Whether they are passed over to a combine or sold to individual companies, it is to be hoped that every manager and manageress of a State licensed house will have the chance at least to become a tenant in the new system of enterprise being created. Funds should be made available to enable these people to do so, and I look forward to seeing my right hon. Friend's intentions in this connection. It is right that the breakdown of the present State monopoly should give the small people in our society a chance to participate—[Interruption.] I cannot understand why those sentiments amuse right hon. and hon. Gentlemen opposite. I am sure that my right hon. Friend will listen to us. He will not regret it, nor will the customers, who will get the best of all worlds. Certainly they will get the service of hosts and hostesses who understand them, and I say that against the background of a home life centred on the serving of customers in the licensed trade.
Our pubs are changing every day. Anyone looking at modern licensed premises must be amazed to see the change from spit and sawdust to wall-to-wall carpeting, modern lighting, and the different approach of managements.
There are working men's clubs which do exactly the same. I do not hold with it, because it is not the sort of thing that I appreciate. But if it is what people pay to see in working men's clubs, I can only assume that the customers are being considered. I do not say that that is the sort of way in which I want to serve my customers, but if that is how customers want to be served in that area, they should be catered for in that way.
Why should these differences be questioned in any case? I am surprised that the hon. Member should take this attitude. I thought that as a teetotaller he was against public houses, whether they were State run or privately run. I do not see how he can judge the two differently. But a public house is more likely to be in keeping with the character of the area and the people it serves if the management is recruited from among people who live in the area. That is why we should encourage the small men in the trade, and I hope that the Home Secretary will take this opportunity, when breaking up the State monopoly, to encourage the small man.
The hon. and learned Member for Darwen (Mr. Fletcher-Cooke) referred to this as the first denationalisation debate. In fact it is not the first in which I have taken part since June last year. We have had similar debates on the Coal Industry Bill, giving away the publicly-owned air routes and Thomas Cook—and all are part of the pattern in which the Tory Party is rewarding its friends for money given before the last election. The differences among Government supporters are differences of degree. Tonight we listened to a hawk, the hon. and learned Member for Darwen, who hoped that Thomas Cook and the Carlisle State Brewery were not the only two swallows. The hawks will be demanding more and more swallows as time goes on.
The arguments of the Tories have been pathetic, but at least the hon. and learned Gentleman was straight with the House. He argued in straight Tory ideological terms—"We want to denationalise Carlisle brewery because we want to denationalise". The arguments of the Home Secretary were different and bogus. He argued from the premise of the low rate of return on capital, trying to make a point of that. There is scepticism among Members of all parties about the use of rates of return as a measure of managerial efficiency. The Select Committee on Nationalised Industries in its Report on Ministerial responsibility clearly showed that to judge by rates of return was unsatisfactory, and the recent report of the British Airports Authority strengthens the scepticism of many of us about this measure.
It was significant that because he had a weak case the Home Secretary was forced to use the worst year for profits for the Carlisle brewery. He quoted 1968–69 when profits were £113,000. He did not say that the profit was almost double at £212,000 the next year, although he admitted, while trying to blur it as he went, that profits this year would be even higher. Any businessman deciding whether to put in a takeover bid would be concerned not with the rate of return or profits for 1968–69 but only with present and potential profits. It is clear that the Tories have got hold of a profitable business and, because it is profitable, they are prepared to give it as cheaply as possible to their friends in the brewing industry.
In the past, profits and the rate of return on capital could have been higher if the price of beer had been higher or the quality lower. There is no doubt that in future either prices will go up or the quality will be reduced, or both.
It is significant that the first product threatened by the Tory Party is one which "Which?", the watchdog of the consumer, has described as one of the best and cheapest beers in the country. That was the view of the Consumer Association.
People are interested in the quality as well as the price of beer. Being a non-beer drinker I cannot speak as passionately on this subject as my hon. Friend the Member for Stoke-on-Trent, Central (Mr. Cant), but I share his constituency interest in the quality of beer sold. It is significant that the Government have from time to time refused to agree to requests from my hon. Friend the Member for Dudley (Dr. Gilbert) that the brewers should be compelled to tell the public how strong their brews are. In fact, they appear to be getting away with a great deal of misrepresentation.
People are also interested in the price of beer. Hon. Members have given different amounts by which the price of beer is cheaper in Carlisle than in other parts of the country, but all are agreed that it is cheaper. Certainly the manager of the King's Head in Carlisle believes that 4d will be added to the price of beer in that area following denationalisation. This rings true to those of us from north of Watford, because the cost of beer is much lower in the communally-owned workingmen's clubs than in the privately-owned public houses. The brewers make considerable profits from the beer drinkers.
I have been confused today listening to the Home Secretary on the subject of prices. I had assumed that it would be Tory policy not to subsidise consumers by holding down prices in the nationalised industries. For example, let us consider the Government's policy and attitude towards steel, coal and postage prices. In each of these cases the argument has been: "Never mind the rate of return, never mind the profits; we shall keep down the level of prices in the nationalised industries."
So long as we have a system where the taxpayer subsidises mail order firms and farmers through the provision of rural posts and telephones and so long as we have a mixed economy in which some sectors of the community subsidise others, yes, I accept that it is reasonable to have lower prices—
—in the State breweries in Carlisle than those charged, and overcharged by other breweries. Whereas the Government are prepared to subsidise certain industrialists, they are not prepared to subsidise ordinary working people.
The Tory Party has historically been closely allied to the brewers. One can read the arguments that went on between the Tories and Liberals before the First World War. They were not concerned with education or reforming the House of Lords. The fight was between the brewers on the Tory side and those who opposed them on the Liberal side. The Tory Party remains a party of brewers and the brewers have poured money into Conservative funds not as donations or gifts but as an investment. Today they are picking the fruits of that investment at the cost of the consumer.
In many places the brewers have had to provide capital for building working men's clubs. Working men have had the sense to band together because they know that through the tied public house system they are exploited. They are now able to tell the brewers that unless they supply beer on reasonable terms they will lose their custom. In general, these working men's clubs have been independent of the Labour Party. They have been co-operative, publicly-owned clubs which have been well run to match the monopoly power of the brewers.
After the election in June the price of beer rose by at least 2½ per cent., according to Answers I received in the House. Naturally the brewers will back the Tory Party.
Particularly disturbing to me and other Midlands hon. Members has been the change in the character of many public houses. Some hon. Gentlemen opposite sneer about pubs having linoleum on the floor. We are more concerned with the disappearance of the public bar, first because of the destruction that this represents of centres of social life for working-class people and, secondly, because with the disappearance of the public bar come increases in beer prices by the brewers. The brewers get up to every mean trick they can to increase the price of beer. In my constituency they are now even having the cheek to charge more for two half pints of beer than for one pint. There is nothing that they will not do, with their natural allies the Tories, to increase the price of beer, to increase their profits—corruption is the word—and to take from the public purse the very last half penny from ordinary working people.
I have been troubled at times by the absence of enthusiasm on the Government side for their own Measure. For the greater part of the debate, one could count on the fingers of one hand the number of supporters they had. I attribute this to the uninspiring speech of the Home Secretary. It was not his best. He appreciates that himself. He was very unconvincing, rather cynical, and he did not succeed in doing what he set out to do, which was to explain the Bill in terms of why the Government propose to do this, defining the public interest, and then giving details of the very important aspects of disposal and details of the Bill.
The Home Secretary was ably dealt with by my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan). I do not want to appear patronising, as one colleague to another, but to every one of my hon. Friends it was a masterly performance and laid completely bare the embarrassing facts of the situation for the Government. Whether the Government like it or not, they are the facts and the facts will speak to the people about the traditional linkup today between the Conservative Party and the brewing interests. The facts and figures are there to be seen, to be totted up and calculated in respect of their contribution, and they cannot deny them.
It is all very well for the Leader of the House to get up in high fury and say that no one spoke to him about it. When one has a man bearing the name McEwan Younger as the Chairman of the Tory Party in Scotland, he need not speak to anybody about it. That is not a cheap remark. It is a fact that until recently he was chairman and managing director of Scottish and Newcastle Breweries. The point was made by the hon. Member for Fife, East (Sir J. Gilmour) that within Scottish and Newcastle there has been, especially in the last ten years, a considerable concentration of ownership. It would take only half an hour to look up in the reference library the Stock Exchange Gazette in order to see the extent to which there has been this concentration. One would never have thought that many of these things were so linked.
We start with Allied Breweries. The hon. Member for Leicester, South-West (Mr. Tom Boardman) will not mind this plug for his personal connection. It was embarrassing for him to sneak, having declared his interest, and then to try demonstrate that his knowledge and appreciation of all the facts about brewers and breweries was purely in the interests of his constituents. For Allied Breweries the figure is £92 million. That is all. It is probably a little more than that, as I am dealing with the 1969 figures. It has 100 hotels and 10,000 on- and off-licensed premises. This is the individual freedom we are talking about. Ind Coope, Tetley, Ansells are all there. They, too, make their annual contribution to the Tory Party.
Just over £1,000 a year from the main company in the three years before the General Election. I have figures here for the whole lot if the hon. Gentleman wants to keep me here for the whole hour, thus denying the Secretary of State for Scotland the opportunity of making his contribution. Then there is Bass-Charrington. My hon. Friends appreciate that the other Younger connected with this and with the Government was connected with Bass-Charrington. Bass-Charrington conceals not only Charrington but Canada Dry, Tenants, Caledonian Brewery, United Breweries of Ireland, Welsh Brewery, and United Breweries Ltd. Bass-Charrington has 10,750 licensed premises. Whitbreads has 16 breweries and about 6,000 licensed premises and in 1969 contributed £20,000 to the Tory Party.
Watney Mann Ltd. has breweries from Whitechapel to Edinburgh—very comprehensive in its concerns and interests. It has a mere 8,000 hotels and licensed premises. In 1969 its contribution to the Tory Party was £26,767.
Next, Scottish and Newcastle Breweries Ltd. This is where we come to the new Chairman of the Tory Party in Scotland with that lovely fruity name of McEwan Younger. This concern has only three breweries and 1,900 licensed premises. Since this list was compiled there has been further concentration, as was evidenced by the forlorn pleas which came occasionally from hon. Gentlemen opposite, including the hon. Members for Westmorland (Mr. Jopling) and for Ross and Cromarty (Mr. Gray). I could understand the distaste of the hon. Member for Ross and Cromarty for the job he had to do.
Those hon. Members wanted freedom. What type of promise can those hon. Members be given that the sell-off will not be to one brewer, because it may well be that the Secretaries of State for the Home Department and for Scotland, in the discretion which the hon. Member for Fife, East suggested should be given to them, will decide that in the public interest it is best to dispose of these assets to one of these very large firms? Those hon. Gentlemen must wear those embarrassments.
We have been talking about very valuable national assets. We have been talking about 14 public houses and hotels in Gretna, 15 in Ross and Cromarty, and 150 in Carlisle. These are considerable and very valuable, and they are probably even more potentially valuable. The whole plea from hon. Members opposite is that they could be much more valuable given the right approach.
Before the right hon. Gentleman leaves his figures, can he give an indication of how many hundreds of millions of pounds the companies he listed contribute to the national Exchequer and how many hundreds of thousands of pounds they contribute through the unions to which their employees belong to Labour Party funds?
Hon. Members opposite have spent months attacking the unions, but we must not mention any connection between private industry and the breweries and the Government. I hope that the hon. Gentleman will sacrifice some of his Tuesday mornings and Thursday mornings and be with me; because I have decided that, if I have to answer this debate, I should serve on the Standing Committee, and I hope to spend quite a few Tuesday mornings and Thursday mornings on the Standing Committee, when we shall have an opportunity of going into all these matters in considerable detail.
That is not a threat; it is a promise. I do not imagine that the hon. Member for Fife, East will have much chance of going on the Committee. Indeed, there was great surprise on the Tory Front Bench when he said that he supported the Bill. I could almost hear the Secretary of State say, "Thank God", remembering that the hon. Gentleman had shown a certain independence of mind in relation to some Tory measures.
I come to the question of mandate, which has not been cleared up by any Government speaker. The point was clearly made by my hon. Friend the Member for Carlisle (Mr. Ron Lewis), reinforced by my hon. Friend the Member for Bedwellty (Mr. Kinnock) and seven or eight others of my hon. Friends. There was no mandate in specific terms in the United Kingdom prospectus which the Tories put before the people. In Scotland, of course, there was something: they were going to end the monopoly. But we have some indications of what that ending of the monopoly meant, for in 1965 the Earl of Cromartie introduced a Private Member's Bill in the other place to end the monopoly, but it was not to abolish State management.
I invite right hon. and hon. Members opposite to do as I did—it will take only a quarter of an hour—and read the report of that debate in the Lords HANSARD. I think that it is Vols. 264 and 265, Second Reading and Committee—not very many columns, since their Lordships make their points very sharply.
It was interesting to note that not only was the intention not to end or abolish State management, but that every speaker, including ex-Ministers, paid tribute to State management for the job which it had done and for the kind of service which people received in the hotels in Gretna, the Annan area and the Cromarty Firth. It was a purely Scottish matter.
The question was asked—it was answered by Lord Drumalbyn, now a Minister, and a Minister also in previous years—why this idea was produced after the Tories had been the Government for 13 years. Why was it put forward as purely for Scotland? Lord Drumalbyn confessed that for 12 years the Scots had fought the English in Tory counsels and had eventually, in 1965, after they had ceased to be the Government, decided that Scotland could go on its own.
Every English Member should realise that the Home Secretary did not want to introduce this Bill. It was the Scots who wanted it—the big guns behind the scenes in Scotland, the McEwan Youngers and the rest. It was not the present Secretary of State for Scotland who won any kind of battle. And what a battle to win. I hope that the Secretary of State for Scotland is pleased with himself. My hon. Friend the Member for Fife, West (Mr. William Hamilton) was right to ask whether this was the sort of Measure which the Government proposed to deal with the problems of Scotland—the abolition of State management in Gretna and Cromarty Firth!
The hon. Member for Fife, East had an answer to that. He said that this was worth while. It is a wonder that he did not suggest that we could have been better employed discussing local government reform. [An HON. MEMBER: "Or the Cupar sugar factory."] Or the Cupar sugar factory, yes. I am sorry that I missed the first part of the hon. Gentleman's speech, but I hope that he was careful not to refer to what the local authorities feel. I can tell him what Fife, Ayrshire and others think about local government reform and the rest. But I shall not play that kind of game.
In fact, there was no mandate, and where they had some sort of mandate they lost the election. They lost the election in Scotland. The hon. Member for Ross and Cromarty had better be careful because he got only 33 per cent. of the votes in Ross and Cromarty, so he had no great mandate for this kind of thing, either.
What they are interested in up there is industrial development. It used to be said that we could not get industrial development in Invergordon because of the licensing laws. Now, thanks to a Labour Government, they have industrial development there, and it is criticised by the Prime Minister because of the cost to the taxpayer. In the Alness area the population is growing, and in the Invergordon area we have only to look at the returns of the State Management Districts in Cromarty to realise exactly what it means there, what pickings there are and will be.
The question we shall continue to ask the Government is why, whenever there is expenditure of Government money, whether in providing new roads for tourists to get nearer Gretna, Ecclefechan or anywhere else, or to bring industrial development to Invergordon, private enterprise must get all the fringe pickings. That is the question of principle that is at stake. There is no more justification for the Measure today than there has been in the past 40 years, and yet the Government introduce it.
I think that the reason is that there is more money to be made now. The argument they used was, "Look at the profits being made by the State management—only £259,000 last year, with a projected sum of something over £300,000 in the year 1970–71. If this were in private hands the profit would be very much greater". Is that the only touchstone whether we do things, or whether they are worth doing? The message that has come through in speeches by a number of hon. Members opposite is that the State must not be allowed to touch anything which private enterprise could run at a greater profit, or on which it could at least make a profit.
The bars in this House are not run by private enterprise. We shall wake up one day and discover that the Government are selling them off. The hon. and learned Member for Darwen (Mr. Fletcher-Cooke) thinks that the Bill is small beer. It is the commanding heights, not the commanding tights, that he wants to be sold off. The Government are very weak both on the question of mandate and why they have decided to introduce the Bill at this time, after the State management has done so well in service as well as in fulfilling the original justification for the scheme.
On the question of the image of the State Management Districts and the pubs there, we need not just to go to the Sketch, The Times and the rest. We have the Scottish Daily Express, a fair-minded paper, of 20th January this year talking about Mr. John Tredden, a night watchman. It says:
He likes his local. And he likes the price—1s. 10d.—at least 6d. cheaper than most pubs.
Incidentally, there has been concern about the prices quoted by my right hon. Friend. He quoted, I think, from the Sunday Mirror. It is no good the Minister telling us that the difference is only a penny, when he means that it is a new penny. They are all there!
But let us get back to the Scottish Daily Express and the night watchman. The article continued:
He can get a cheap nip of whisky too.
Then there is a reference to Stamandi, a kind of rum, and he gets that cheaper as well. The article, by Mr. John Enos, continues:
Now the Government has said it will wind up this healthy undertaking, which last year netted £25,000 profit in the Gretna state management area alone.
The touchstone is the £25,000 profit that could be maximised with the kind of prices which have to be paid in other places. That is what the debate is about. Right hon. and hon. Members opposite should be frank about the fact that they are subject to certain pressures from and loyalties to their friends. We would appreciate that honesty more than the dodging and manoeuvring we have had today from them.
My hon. Friends have asked about disposal. I repeat what was said by my right hon. Friend. Ministers have taken this power and discretion unto themselves for disposal. The Bill says:
The Secretary of State shall dispose of property held by him for the purposes…
of the Act … on such terms as appear to him expedient in the public interest
—he is the person who has to define "public interest" and "expediency"—
or shall use such property
—I am sorry to disappoint the hon. Member for Ross and Cromarty, who wants certain public houses kept even if they make a loss and no one wants to buy them—
for other purposes;
But when he is disposing of these, there is deemed to be a licence in operation. There are different kinds of licence—for example, table licences, restricted licences and full licences. Whether the Home Secretary knows it or not, Secretaries of State have exercised their discretion, although little of it has been exercised recently in Scotland, to give a full licence to a hotel. The licence can be granted on the written authority of the Secretary of State if the licensing authority has agreed. That is within the Secretary of State's power. He could end the monopoly tomorrow.
The right hon. Gentleman told us about 19 applications. What is he going to do about them? If he grants one of them, the other 18 applicants will be very annoyed with him. If he grants the 19, that reduces the potential value of the asset. Do the Government appreciate the difficulties in which they are placing themselves if they keep this to themselves?
This is particularly so if, by any chance, they decide that in the public interest it should be Scottish and Newcastle or Watney Mann or Whitbread's or Bass-Charrington or Allied Breweries in one area or a considerable part of it. What will be said then? We know about the contributions which the Conservative Party receives from the brewers. My right hon. Friend advised the Government to protect not just the public but themselves by using an independent realisation agency. That would put them in the clear, and I trust that they take his advice.
This is a sordid and disgraceful Bill. Right hon. and hon. Members opposite are being terribly insensitive about the facts of political life in respect of where they get their financial support. I hope that they will recollect that they have a past in this. It is not a new situation
for them to be accused of being connected with brewers or with vested interests.
We know what to expect when the Tories return to power, a party of great vested interests added together in a formidable confederation: corruption at home and aggression to cover it abroad, trickery of tariff juggles …?
Of course I am reading.—It continues:
and the tyranny of wealth-fed party machine; sentiment by the bucketful; patriotism and imperialism by the imperial pint, an open hand at the public exchequer; and an open door at the public house; dear food for the millions; cheap labour for the millionaire, and that is the policy which the Tory Party offer you.
That is Winston Churchill. Winston changed, but the Tory Party did not. This is only a sop. I hope that my hon. and right hon. Friends will rally round the Opposition to this Bill, not just tonight but in Committee, on Report and right through. Let us tell the people of Britain what this bedraggled Government really stand for.
The right hon. Member for Kilmarnock (Mr. Ross) expressed some surprise that we should spend a day debating this Bill. I am surprised at the result of his party's decision to oppose a short and necessary reforming Measure and to use it as a pretext for spending a day indulging in ludicrous smears. This has prevented us from spending some of the time on more important matters. We could have got through this Bill in half a day or less if the Opposition had not decided to take this attitude.
The Bill is designed to put an end to an experiment that is now 55 years old. It has become a complete anomaly. It started in the First World War at a time of emergency as a special measure in three small but important areas for reasons which have long since disappeared. Governments seem to have been too busy since then to rectify the situation. For some years I have been fully aware of the feelings of many people in the two areas of Scotland who wish this outdated system to be ended. My home and my constituency are beside one of the State Management Districts, the Cromarty district, and I have been well aware of the need to put an end to this anachronism for many years.
The State monopoly has had the effect of inhibiting private development of the tourist industry. It is also causing inconvenience to those living in the district. For example, there are no licensed grocers in the district. The Scottish Conservative Party said in their election manifesto in 1966 and 1970 that we would at last bring to an end the State monopoly in the two districts of Scotland, the Cromarty and Gretna districts, and the electors of Ross and Cromarty indicated their views and my hon. Friend won the seat.
I have listened to the speech of the hon. Member for Carlisle (Mr. Ron Lewis) and I will come to the point that he raised. We propose to relinquish an unsuitable and unnecessary function of Government, a function operating only in three areas as a result of historic circumstances which have completely changed. This is a reflection of this Government's policy that Government Departments should not take on or carry on functions or tasks inappropriate for them.
I spent last Thursday in the Cromarty district on an official visit. It is an area of industrial expansion. I visited an area where over 300 new houses had just been built and where a new community is coming into existence. With this industrial growth and increasing population it is natural that applications for licences to sell liquor are being made. But only the Secretary of State for Scotland and his Department have been able to retail liquor and manage the premises where it is sold across the counter unless exceptional licences are granted. The Invergordon area is also on the main tourist route to the north of Scotland, and it is difficult for me, as the Minister responsible for tourism in Scotland, to encourage those in the industry to build and expand and yet at the same time to preserve a monopoly which does not allow them to have licences.
On my visit to the Invergordon area last week, I was interested but not surprised to note the number of people who commented favourably on the fact that we were introducing this Bill. Of course I heard expressions of gratitude to me also for the number of times that I advocated in the House three years ago that the smelter should be built at Invergordon at a time when the Labour Government were dithering for months about it and the fact that two and a half years ago, when the work was started, I took my right hon. Friend the Prime Minister to the site where the company showed me the plans. It was typical of the right hon. Member for Kilmarnock that he should this evening have referred to the wrong project when he said that the Prime Minister criticised the project. I also refer to the announcement I made in the House before the Easter Recess about the new road across the Black Isle which will shorten the trunk road by eight miles.
In addition to hearing favourable comment on those matters, I was thanked by a number of residents for the fact that the Government were already carrying out the pledge in the Scottish election manifesto to bring an end to State monopoly. Why should a housewife living in the Invergordon area be unable to buy a bottle of sherry when she shops at the grocers? [HON. MEMBERS: "Oh."] The reaction of right hon. and hon. Members opposite confirms what we know about their attitude to the housewives.
The present situation stems from a system which started in 1915 and which was related to alleged or anticipated drunkenness in Invergordon when it was a naval base. It ceased to be a naval base years ago and the situation is completely changed. Why should the people of this area be stigmatised as being more susceptible to drunkenness than people living elsewhere? Coming from nearby, I repudiate any such suggestion. My hon. Friend the Member for Dumfries (Mr. Monro), where the Gretna State Management District is situated, is of the same opinion and is aware of the local views.
Much has been said about Carlisle, and I shall deal with Carlisle later. I am now talking about Scotland.
My hon. Friend the Member for Dumfries initiated an important Adjournment debate a year ago in which he pointed to the adverse effects of the present system on tourism and development generally in his area. Why should the stigma of drunkenness attach to these areas? There are no grounds for the continuation of the State management experiment in these three areas of Britain. It has not proved itself to be of special value as a method of controlling liquor. Otherwise—and I have not heard this suggested as a serious possibility—there would be a case for extending it to the rest of the country.
The whole system is an unnecessary activity of central government. It has been argued—and it has been argued here today—that while the State monopoly certainly should go the State management supply organisation could be kept in being since it is a sound organisation which has done well by the people in the districts. I can understand that point of view because, I am glad to say, the organisation has been well run. But State control and State supply cannot be divided in this way. If State control is abolished, the case against State supply becomes overwhelming. What has the State—the Home Office in Whitehall and the Scottish Home and Health Department in St. Andrew's House—to do with running a small liquor business in competition with other liquor businesses in three areas of the country only? On what theory of nationalisation could this be justified? Indeed, it is not nationalisation but direct administration by central Government Departments. If State control is ended there is no case for continuing State supply.
As the right hon. Member for Kilmarnock pointed out, although it is possible for the Secretary of State to grant licences in practice successive Governments have consistently refused to do so except in very exceptional circumstances. Certainly in the five years when he was Secretary of State he also adopted that attitude. In these areas of the country Government capital and Government resources are tied up in the provision of facilities which could be provided as well, if not better, by ordinary commerce subject to licensing control. It is right that the Government should move out of this unsuitable activity being practised in three areas only.
It has been suggested that it is important for employment—
It has been suggested that for employment and other reasons the Carlisle brewery should be continued in operation. This points to the sale of the bulk of the Carlisle pubs as one lot with the brewery, but against that it has been suggested that this would give the purchaser too monopolistic a position in the area. There have also been arguments that the staff and tenants should be given a chance to purchase themselves, which we accept.
On the question of disposal, the premises used for the sale of liquor will be sold as going concerns. In the execution of their normal duty to the taxpayer the Government will obtain a full and fair price for their assets. Contrary to rumours in the Press, however, I must make it clear that the Government have taken no steps yet towards sale. I will give way to the hon. Gentleman.
I am grateful to the right hon. Gentleman for giving way. I am sorry, Mr. Speaker. I understand it is not the custom to intervene in a maiden speech, and I apologise. Before the right hon. Gentleman gets to Carlisle I should like to deal with Scotland. The right hon. Gentleman mentioned Dumfries. Is he aware that at a conference in Carlisle a few weeks ago quite a num- ber of representatives from Dumfriesshire and Dumfries and Gretna were totally opposed to what the Government are doing?
I am aware of that, and I am also aware that these are many more who are in favour. In Scotland there is no brewery in either of the two districts. The property there to be sold consists mostly of hotels and public houses. The property in the three State Management Districts represents about £4½ million capital resources. We believe that this money could be better employed for the benefit of the taxpayers.
It has been pointed out that the State management system makes a profit, but it is modest. The return on capital is less than that which successive Governments, Conservative and Labour, have set as targets for the nationalised industries. It should also be remembered that the State management organisation does not pay corporation tax. The ending of the State monopoly and the change from a Government Department to private enterprise will reduce the Civil Service by about 1,500. Most of those employed are likely to keep their jobs, but they will cease to be in the category of civil servants. In future they will be in the same situation as everyone else in the country who is engaged in work in hotels and public houses.
The reduction of the number of civil servants by a withdrawal from a function which is totally inappropriate for a Government Department surely is to be welcomed. The Leader of the Opposition when Prime Minister, on one of the many occasions when he made a statement about an economic crisis, attempted to set a limit to the size of the Civil Service. He saw this as a necessary way of curbing public expenditure. Perhaps I am in a suitable position to make this comment since I was an established civil servant for a dozen years before a number of my constituents asked me to represent them in Parliament.
As for the remarks of the right hon. Member for Cardiff, South-East (Mr. Callaghan), I have seldom heard such a scurrilous and irresponsible speech. It was even wrong in its fundamental facts. For example, he began by saying that the State management system had operated for 66 years, when everybody concerned knows that to be incorrect. He ended by referring to State breweries in Scotland when there are none. By innuendo and accusation he debased the standing of the Dispatch Box.
I will give way in a moment. I crossed swords with the right hon. Gentleman in the last Parliament when he got up to a dirty trick in gerrymandering the constituencies. He was found out in that piece of skullduggery which has since been put right. But his speech today was even worse.
I only want to make clear that I was not making any smears or innuendoes. I was openly alleging, and wish to repeat, that the close relations that exist between the Conservative Party and the contributions made by the brewers to the Conservative Party are a disgrace when legislation such as this is introduced. I hope that before the right hon. Gentleman concludes he will give an assurance that he and the Home Secretary will divest themselves of the responsibility for valuing and disposing of these assets and will hand them over to an independent statutory agency.
I will. Here is a Bill which will end an anomaly and which could have been introduced by any Government during the last 40 years. The right hon. Gentleman has chosen to mount a wholly synthetic and personal attack alleging corruption. Is this a charade? Does he really mean what he says that his party would reverse the position—incidentally without proper compensation? Would he in that case limit reversal to three districts, or does he think that the whole of our hotels and public houses should be taken over by Government Departments and should be run by them? That is certainly what was being suggested by the hon. Member for Fife. West (Mr. William Hamilton). Or is there another reason? Has the right hon. Gentleman decided to use this Bill as a vehicle to try to make a political comeback, leading an assault against an imaginary plot? Is he indulging in trying to win the support of some of his more gullible Left-wing friends.
The right hon. Gentleman and the hon. Member for Fife, West have given us notice that they hope to be members of the Standing Committee which considers this Bill. Shall we see them outbidding each other in saying how many public houses and hotels they will take over in the country as a whole? Is this a new tenet of Fabian faith? Is the nationalisation or renationalisation of pubs to be, in the future, the touchstone of socialist orthodoxy?
The hon. Member for Fife, West made a shocking speech. It was almost more disgraceful than that of the right hon. Member for Cardiff, South-East. The hon. Gentleman made wholesale charges of corruption. They might be taken seriously if it were not clear that he had no argument against what the Government propose and, therefore, that all that he was trying to do was to impute base motives.
The hon. Gentleman asked us all to declare our interests. I had never been involved in the business of selling liquor until I became Secretary of State for Scotland. That was the occasion on which I found myself with the functions of which I am now asking to be deprived.
I dealt with that at the time.
The right hon. Member for Cardiff, South-East asked about the valuation of the assets. The Government accept that the valuation of the assets is an important aspect of the Bill. To what my right hon. Friend said, I add only that this is a matter the details of which can be gone into in Committee.
The right hon. Member for Cardiff, South-East has made the situation more difficult by his threat that the Opposition will reacquire the premises should they, by some mischance, again become the Government. How much is that likely to reduce the value of the assets at the expense of the taxpayer?
I should like the right hon. Gentleman to be quite clear. I do not wish there to be any uncertainty. We shall hold ourselves free in the public interest to introduce any legislation that we think right on the basis of the formula that I gave at the end of my speech, and I hope that that will be taken into account.
Before 10 o'clock, will the right hon. Gentleman give me a straight answer to the proposal that an independent realisation agency should be set up to preserve Conservative Ministers, if they deserve it, from the obliquy that will otherwise fall upon them?
I can assure the right hon. Gentleman that it is our intention to obtain an independent valuation to assist us in this operation.
The right hon. Gentleman appears to be ignoring the whole structure of the Government's administrative machine, and Parliament's administrative machinery, through the Comptroller and Auditor General and the Public Accounts Committee, in ensuring that the taxpayers' assets are not misused. He also appeared erroneously to think that there were only two possible methods of sale—as a going concern or break-up value. The Government intend the "going concern" basis for the premises selling liquor, for each of those premises is a going concern in itself. The question that the Government wish to consider further is how they should be grouped for sale. In deciding this, the Government will be guided by the two considerations referred to by my right hon. Friend the Home Secretary: first, the aim of getting the best price for the taxpayer; and, secondly, the question of freedom of choice for the customer.
My hon. Friend the Member for Ross and Cromarty (Mr. Gray) asked about the situation of a single pub or hotel not being sold and being let. The Government do not expect any difficulty in the disposal of premises in Scotland. But there is no time limit on disposal in the Bill. We would not hurry if that meant accepting an unreasonable offer.
We are ending an anachronism originated as an experiment in completely different circumstances during the First World War. In doing this, we are carrying out the undertaking in the Scottish election manifesto that we would abolish the State monopoly in the two Management Districts.
The Government are divesting themselves of an inappropriate and unnecessary function which, in any case, they have been exercising only in three districts. While most of those employed in State management are likely to continue in the same or similar jobs when it is ended, they will cease to be civil servants. Our action will also bring a bonus for the taxpayers by reducing public expenditure and making available the money from realising the assets.
The right hon. Gentleman also inquired what the Governments' attitude would be towards future applications for licences before disposal. He appeared to suggest that it was right that the taxpayer should benefit from the State's present monopoly position and that it would be wrong for the Home Secretary, in the instance of Carlisle, to try to prevent competition from growing. We think that the monopoly position of the State in the three districts is unnecessary and wrong. There is wide agreement about this, even if there are differences of opinion about the future of the property concerned.
We believe that it would be odd if, having enacted this long overdue Measure, the Ministers concerned were to continue to refuse applications and thus frustrate the effect of the Bill. I have received applications for my authority to provide liquor from no fewer than 19 persons who already hold certificates from the licensing courts authorising them to sell liquor. The Home Secretary has also received a number of such applications.
Under the policy which has been followed by the State management under successive Governments, in particular the policy that the supply of liquor should normally be in the hands of the organisation, very few, if any, of these applications for authority would have been granted. The local inhabitants would, therefore, have been deprived of facilities which the licensing courts thought they ought to have. It will be one of the best effects of the Bill that the requirement will be abolished that persons who have already received an authority from the licensing court must also receive the Secretary of State's permission before they can operate their licence or certificate. These people will immediately be able to provide liquor as they have already been authorised to do by the licensing court.
When in opposition my noble Friend Lord Hailsham put forward a proposal for consideration that a trust might be formed to manage the brewery in Carlisle. This was duly considered when we came into office. On looking at the full facts and figures made available by the Departments, we found that we should not have been justified in setting up a trust with public funds and that no such trust would be viable. Of course, if anyone were to come forward with a privately financed trust we should certainly consider that.
The right hon. Member for Kilmarnock recited the number of pubs in most of the rest of the country outside the three districts. He sounded as though he wanted to alter that rather than what was in the Bill. The Bill is a reform. [Laughter.] I suggest that hon. Members opposite visit the districts in Scotland where they will certainly hear about it. This reform has been increasingly needed in Scotland. The people living there have been fed up with being treated as though the clock had stood still for 50 years.
The debate has been marred by an extraordinary outburst from the right hon. Member for Cardiff, South-East. We are carrying out our undertaking to cut out unnecessary and inappropriate functions of the central Government and, in particular, our pledges to Scotland.
(seated and covered): On a point of order. May I draw your attention, Mr. Speaker, to a serious omission on the part of the Government Chief Whip? The right hon. Gentleman moved the closure from a standing position immediately in front of the Mace. In the opinion of the House and according to the rules of the House that puts him outside the Chamber.
|Division No. 341.]||AYES||[10.1 p.m.|
|Adley, Robert||Bryan, Paul||Edwards, Nicholas (Pembroke)|
|Alison, Michael (Barkston Ash)||Buchanan-Smith, Alick (Angus, N&M)||Elliot, Capt. Walter (Carshalton)|
|Allason, James (Hemel Hempstead)||Buck, Antony||Elliott, R. W. (N'c'tle-upon-Tyne, N.)|
|Amery, Rt. Hn. Julian||Bullus, Sir Eric||Emery, Peter|
|Archer, Jeffrey (Louth)||Campbell, Rt.Hn.G. (Moray&Nairn)||Farr, John|
|Astor, John||Carlisle, Mark||Fell, Anthony|
|Atkins, Humphrey||Channon, Paul||Fenner, Mrs. Peggy|
|Awdry, Daniel||Chapman, Sydney||Fidler, Michael|
|Baker, Kenneth (St. Marylebone)||Chataway, Rt. Hn. Christopher||Finsberg, Geoffrey (Hampstead)|
|Baker, W. H. K. (Banff)||Chichester-Clark, R.||Fisher, Nigel (Surbiton)|
|Balniel, Lord||Clark, William (Surrey, E.)||Fletcher-Cooke, Charles|
|Barber, Rt. Hn. Anthony||Clarke, Kenneth (Rushcliffe)||Fookes, Miss Janet|
|Batsford, Brian||Clegg, Walter||Fortescue, Tim|
|Beamish, Col. Sir Tufton||Cockeram, Eric||Foster, Sir John|
|Bell, Ronald||Cooke, Robert||Fowler, Norman|
|Bennett, Dr. Reginald (Gosport)||Cooper, A. E.||Fox, Marcus|
|Benyon, W.||Cordle, John||Fraser, Rt. Hn. Hugh (St'fford & Stone>|
|Berry, Hn. Anthony||Corfield, Rt. Hn. Frederick||Fry, Peter|
|Biggs-Davison, John||Cormack, Patrick||Galbraith, Hn. T. G.|
|Blaker, Peter||Costain, A. P.||Gardner, Edward|
|Boardman, Tom (Leicester, S.W.)||Critchley, Julian||Gibson-Watt, David|
|Body, Richard||Crouch, David||Gilmour, Ian (Norfolk, C.)|
|Boscawen, Robert||Crowder, F. P.||Gilmour, Sir John (Fife, E.)|
|Bossom, Sir Clive||Davies, Rt. Hn, John (Knutsford)||Glyn, Dr. Alan|
|Bowden, Andrew||d'Avigdor-Goldsmid, Maj.-Gen.James||Godber, Rt. Hn. J. B.|
|Boyd-Carpenter, Rt. Hn. John||Dean, Paul||Goodhew, Victor|
|Braine, Bernard||Deedes, Rt. Hn. W. F.||Gower, Raymond|
|Bray, Ronald||Dixon, Piers||Grant, Anthony (Harrow, C.)|
|Brewis, John||Drayson, G. B.||Gray, Hamish|
|Brinton, Sir Tatton||du Cann, Rt. Hn. Edward||Green, Alan|
|Brown, Sir Edward (Bath)||Dykes, Hugh||Grieve, Percy|
|Bruce-Gardyne, J.||Eden, Sir John||Griffiths, Eldon (Bury St. Edmunds)|
|Grylls, Michael||Macmillan, Maurice (Farnham)||Rost, Peter|
|Gummer, Selwyn||McNair-Wilson, Michael||Royle, Anthony|
|Gurden, Harold||McNair-Wilson, Patrick (NewForest)||Russell, Sir Ronald|
|Hall, Miss Jean (Keighley)||Maddan, Martin||St. John-stevas, Norman|
|Hall, John (Wycombe)||Madel, David||Sandys, Rt. Hn. D.|
|Hall-Davis, A. G. F.||Maginnis, John E.||Scott, Nicholas|
|Hamilton, Michael (Salisbury)||Marples, Rt. Hn. Ernest||Sharples, Richard|
|Harrison, Brian (Maldon)||Marten, Neil||Shaw, Michael (Sc'b'gh & Whitby)|
|Harrison, Col. Sir Harwood (Eye)||Mather, Carol||Shelton, William (Clapham)|
|Haselhurst, Alan||Maude, Angus||Simeons, Charles|
|Havers, Michael||Maudling, Rt. Hn. Reginald||Sinclair, Sir George|
|Hawkins, Paul||Mawby, Ray||Skeet, T. H. H.|
|Hay, John||Maxwell-Hyslop, R.J.||Smith, Dudley (W'wick & L'mington)|
|Heath, Rt. Hn. Edward||Meyer, Sir Anthony||Soref, Harold|
|Heseltine, Michael||Mills, Peter (Torrington)||Speed, Keith|
|Hiley, Joseph||Mills, Stratton (Belfast, N.)||Spence, John|
|Hill, John E. B. (Norfolk, S.)||Miscampbell, Norman||Sproat, Iain|
|Hill, James (Southampton, Test)||Mitchell, Lt.-Col. C. (Aberdeenshire, W)||Stainton, Keith|
|Holland, Philip||Mitchell, David (Basingstoke)||Stanbrook, Ivor|
|Holt, Miss Mary||Molyneaux, James||Stewart-Smith, D. G. (Belper)|
|Hordern, Peter||Money, Ernie||Stodart, Anthony (Edinburgh, W.)|
|Monks, Mrs. Connie|
|Hornby, Richard||Monro, Hector||Stoddart-Scott, Col. Sir M.|
|Hornsby-Smith, Rt. Hn. Dame Patricia||Montgomery, Fergus||Stokes, John|
|Howe, Hn. Sir Geoffrey (Reigate)||Morgan, Geraint (Denbigh)||Stuttaford, Dr. Tom|
|Howell, David (Guildford)||Morgan-Giles, Rear-Adm.||Sutcliffe, John|
|Hutchison, Michael Clark||Morrison, Charles (Devizes)||Taylor, Sir Charles (Eastbourne)|
|Iremonger, T. L.||Mudd, David||Taylor, Edward M. (G'gow, Cathcart)|
|Irvine, Bryant Godman (Rye)||Murton, Oscar||Taylor, Frank (Moss Side)|
|James, David||Neave, Airey||Tebbit, Norman|
|Jenkin, Patrick (Woodford)||Nicholls, Sir Harmar||Temple, John M.|
|Jennings, J. C. (Burton)||Noble, Rt. Hn. Michael||Thatcher, Rt. Hn. Mrs. Margaret|
|Jones, Arthur (Northants, S.)||Nott, John||Thomas, John Stradling (Monmouth)|
|Jopling, Michael||Onslow, Cranley||Thomas, Rt. Hn. Peter (Hendon, S.)|
|Joseph, Rt. Hn. Sir Keith||Oppenheim, Mrs. Salty||Thompson, Sir Richard (Croydon, S.)|
|Kaberry, Sir Donald||Owen, Idris (Stockport, N.)||Tilney, John|
|Kellett, Mrs. Elaine||Page, Graham (Crosby)||Trafford, Dr. Anthony|
|Kershaw, Anthony||Page, John (Harrow, W.)||Trew, Peter|
|Kilfedder, James||Peel, John||Tugendhat, Christopher|
|Kimball, Marcus||Percival, Ian||van Straubenzee, W. R.|
|King, Evelyn (Dorset, S.)||Peyton, Rt. Hn. John||Vaughan, Dr. Gerard|
|King, Tom (Bridgwater)||Pike, Miss Mervyn||Waddington, David|
|Kinsey, J. R.||Pink, R. Bonner||Walker, Rt. Hn. Peter (Worcester)|
|Kirk, Peter||Price, David (Eastleigh)||Walker-Smith, Rt. Hn. Sir Derek|
|Younger, Hn. George||Prior, Rt. Hn. J. M. L.||Ward, Dame Irene|
|Kitson, Timothy||Proudfoot, Wilfred||Warren, Kenneth|
|Knight, Mrs. Jill||Pym, Rt. Hn. Francis||Weatherill, Bernard|
|Knox, David||Quennell, Miss J. M.||Wells, John (Maidstone)|
|Lambton, Antony||Raison, Timothy||White, Roger (Gravesend)|
|Lane, David||Ramsden, Rt. Hn. James||Whitelaw, Rt. Hn. William|
|Le Marchant, Spencer||Rawlinson, Rt. Hn. Sir Peter||Wiggin, Jerry|
|Lewis, Kenneth (Rutland)||Redmond, Robert||Wilkinson, John|
|Lloyd, Ian (P'tsm'th, Langstone)||Reed, Laurance (Bolton, E.)||Wolrige-Gordon, Patrick|
|Longden, Gilbert||Rees, Peter (Dover)||Wood, Rt. Hn. Richard|
|Loveridge, John||Rees-Davies, W. R.||Woodhouse, Hn. Christopher|
|Luce, R. N.||Ronton, Rt. Hn. Sir David||Woodnutt, Mark|
|McAdden, Sir Stephen||Rhys Williams, Sir Brandon||Worsley, Marcus|
|MacArthur, Ian||Ridley, Hn. Nicholas||Wylie, Rt. Hn. N. R.|
|McCrindle, R. A.||Ridsdale, Julian|
|McLaren, Martin||Roberts, Michael (Cardiff, N.)||TELLERS FOR THE AYES:|
|Maclean, Sir Fitzroy||Roberts, Wyn (Conway)||Mr. Reginald Eyre and|
|McMaster, Stanley||Rossi, Hugh (Homsey)||Mr. Jasper More.|
|Abse, Leo||Boyden, James (Bishop Auckland)||Cronin, John|
|Albu, Austen||Bradley, Tom||Crosland, Rt. Hn. Anthony|
|Allaun, Frank (Salford, E.)||Brown, Bob (N'c'tle-upon-Tyne, W.)||Dalyell, Tam|
|Allen, Scholefield||Brown, Hugh D. (G'gow, Provan)||Darling, Rt. Hn. George|
|Archer, Peter (Rowley Regis)||Brown, Ronald (Shoreditch & F'bury)||Davies, Denzil (Llanelly)|
|Armstrong, Ernest||Buchan, Norman||Davies, G. Elfed (Rhondda, E.)|
|Ashley, Jack||Butler, Mrs. Joyce (Wood Green)||Davies, Ifor (Gower)|
|Ashton, Joe||Callaghan, Rt. Hn. James||Davis, Clinton (Hackney, C.)|
|Atkinson, Norman||Campbell, I. (Dunbartonshire, W.)||Deakins, Eric|
|Bagier, Gordon A. T.||Cant, R. B.||de Freitas, Rt. Hn. Sir Geoffrey|
|Barnes, Michael||Carmichael, Neil||Delargy, H. J.|
|Barnett, Joel||Carter, Ray (Birmingh'm, Northfield)||Dell, Rt. Hn. Edmund|
|Beaney, Alan||Carter-Jones, Lewis (Eccles)||Dempsey, James|
|Bennett, James (Glasgow, Bridgeton)||Clark, David (Colne Valley)||Doig, Peter|
|Bidwell, Sydney||Cocks, Michael (Bristol, S.)||Dormand, J. D.|
|Bishop, E. S.||Cohen, Stanley||Douglas, Dick (Stirlingshire, E.)|
|Blenkinsop, Arthur||Conlan, Bernard||Duffy, A. E. P.|
|Booth, Albert||Corbet, Mrs. Freda||Dunn, James A.|
|Bottomley, Rt. Hn. Arthur||Cox, Thomas (Wandsworth, C.)||Edwards, William (Merioneth)|
|Ellis, Tom||Lawson, George||Reed, D. (Sedgefield)|
|English, Michael||Leadbitter, Ted||Rees, Merlyn (Leeds, S.)|
|Evans, Fred||Lee, Rt. Hn. Frederick||Rhodes, Geoffrey|
|Faulds, Andrew||Leonard, Dick||Richard, Ivor|
|Fernyhough, Rt. Hn. E.||Lestor, Miss Joan||Roberts, Rt. Hn. Goronwy (Caernarvon)|
|Fisher, Mrs. Doris (B'ham, Ladywood)||Lever, Rt. Hn. Harold||Robertson, John (Paisley)|
|Fletcher, Raymond (Ilkeston)||Lewis, Arthur (W. Ham N.)||Roderick, Caerwyn E.(Br'c'n&R'dnor)|
|Fletcher, Ted (Darlington)||Lewis, Ron (Carlisle)||Rodgers, William (Stockton-on-Tees)|
|Foley, Maurice||Lomas, Kenneth||Roper, John|
|Foot, Michael||Loughlin, Charles||Rose, Paul B.|
|Forrester, John||Marsden, F.||Ross, Rt. Hn. William (Kilmarnock)|
|Fraser, John (Norwood)||Mabon, Dr. J. Dickson||Sheldon, Robert (Ashton-under-Lyne)|
|Freeson, Reginald||McBride, Neil||Shore, Rt. Hn. Peter (Stepney)|
|Galpern, Sir Myer||McCartney, Hugh||Short, Rt. Hn. Edward (N'c'tle-u-Tyne)|
|Garrett, W. E.||McElhone, Frank||Short, Mrs. Renée (W'hampton, N.E.)|
|Gilbert, Dr. John||McGuire, Michael||Silkin, Rt. Hn. John (Deptford)|
|Ginsburg, David||Mackenzie, Gregor||Silkin, Hn. S. C. (Dulwich)|
|Gordon Walker, Rt. Hn. P. C.||Mackie, John||Sillars, James|
|Gourlay, Harry||Mackintosh, John P.||Silverman, Julius|
|Grant, George (Morpeth)||McMillan, Tom (Glasgow, C.)||Skinner, Dennis|
|Grant, John D. (Islington, E.)||McNamara, J. Kevin||Small, William|
|Griffiths, Eddie (Brightside)||MacPherson, Malcolm||Smith, John (Lanarkshire, N.)|
|Griffiths, Will (Exchange)||Mahon, Simon (Bootle)||Spearing, Nigel|
|Hamilton, James (Bothwell)||Mallalieu, E. L. (Brigs)||Spriggs, Leslie|
|Hamilton, William (Fife, W.)||Mallalieu, J. P. W. (Huddersfield, E.)||Stallard, A. W.|
|Hamling, William||Marks, Kenneth||Stewart, Rt. Hn. Michael (Fulham)|
|Hardy, Peter||Marquand, David||Stoddart, David (Swindon)|
|Harper, Joseph||Mason, Rt. Hn. Roy||Strang, Gavin|
|Harrison, Walter (Wakefield)||Mayhew, Christopher||Strauss, Rt. Hn. G. R.|
|Heffer, Eric S.||Mellish, Rt. Hn. Robert||Summerskill, Hn. Dr. Shirley|
|Hooson, Emlyn||Mendelson, John||Swain, Thomas|
|Horam, John||Mikardo, Ian||Taverne, Dick|
|Houghton, Rt. Hn. Douglas||Millan, Bruce||Thomas, Rt. Hn. George (Cardiff, W.)|
|Howell, Denis (Small Health)||Miller, Dr. M. S.||Tinn, James|
|Huckfield, Leslie||Morgan, Elystan (Cardiganshire)||Torney, Tom|
|Hughes, Rt Hn. Cledwyn (Anglesey)||Morris, Charles R. (Openshaw)||Trew, Peter|
|Hughes, Mark (Durham)||Morris, Rt. Hn. John (Aberavon)||Urwin, T. W.|
|Hughes, Robert (Aberdeen, N.)||Moyle, Roland||Varley, Eric G.|
|Hughes, Roy (Newport)||Mulley, Rt. Hn. Frederick||Wainwright, Edwin|
|Hunter, Adam||Murray, Ronald King||Walker, Harold (Doncaster)|
|Irvine, Rt. Hn. Sir Arthur (Edge Hill)||Ogden, Eric||Wallace, George|
|Janner, Greville||O'Halloran, Michael||Watkins, David|
|Jay, Rt. Hn. Douglas||O'Malley, Brian||Wellbeloved, James|
|Jenkins, Hugh (Putney)||Oram, Bert||Whitehead, Phillip|
|Jenkins, Rt. Hn. Roy (Stechford)||Orbach, Maurice||Whitlock, William|
|John, Brynmor||Orme, Stanley||Willey, Rt. Hn. Frederick|
|Johnson, James (K'ston-on-Hull, W.)||Oswald, Thomas||Williams, Alan (Swansea, W.)|
|Johnson, Walter (Derby, S.)||Palmer, Arthur||Williams, Mrs. Shirley (Hitchin)|
|Jones, Barry (Flint, E.)||Pannell, Rt. Hn. Charles||Williams, W. T. (Warrington)|
|Jones, Dan (Burnley)||Parry, Robert (Liverpool, Exchange)||Wilson, Alexander (Hamilton)|
|Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)||Pendry, Tom||Wilson, Rt. Hn. Harold (Huyton)|
|Jones, Gwynoro (Carmarthen)||Pentland, Norman||Wilson, William (Coventry, S.)|
|Jones, T. Alec (Rhondda, W.)||Perry, Ernest G.||Woof, Robert|
|Kaufman, Gerald||Prentice, Rt. Hn. Reg.|
|Kelley, Richard||Prescott, John||TELLERS FOR THE NOES:|
|Kerr, Russell||Price, J. T. (Westhoughton)||Mr. John Golding and|
|Kinnock, Neil||Price, William (Rugby)||Mr. Donald Coleman.|
|Lambie, David||Probert, Arthur|