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Page 95 Commission as soon as the Report of the Catto Committee has been considered; and the Prime Minister, in reply to a question by Mr. Lewis on 7th May, said:
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"As the Honourable Member knows, we intend to recommend that a Royal Commission should be appointed. Consideration of its scope must await the Report of the Committee presided over by Lord Catto which is investigating the economic and financial relations between Scotland and the rest of the United Kingdom."
I am clear, therefore, that a Royal Commission must be appointed. If so, the questions for consideration are (a) what should be the Commission's terms of refer- ence, (b) when should it be set up, and (c) who should be its members?
(a) Terms of Reference
5. There are two questions which I think must clearly be excluded. First, it would be inappropriate to ask a Royal Commission to consider the case for and against a Scottish Parliament and I have already said that this is a matter for Parliament itself. Secondly, in view of the findings of the Catto Committee, there is now no point in asking the Commission to inquire further into the economic relationship between Scotland and England.
6. As regards the questions to be included, I think we must ask the Com- mission to consider the adequacy of the present machinery for exercising the Government's functions in relation to Scotland; and I propose that the Commission should be asked to review this against the general financial, economic and admin- istrative background of the present day and in the light of such other considerations as may be put before it. The Commission will thus be able to consider whether or not any further administrative decentralisation is desirable and practicable, and in doing so to take full account of the considerations which have led to the demand for a Parliament as well as of those which point in the opposite direction. This is necessary if the purpose of having a Commission is to be achieved. I would expect industrial and commercial interests, local authorities and trade unions, when giving evidence before the Commission, to come out strongly against any separatist ideas and against any proposal for change which would not lead to greater efficiency in the conduct of public business.
7. It
may be arguable as to whether to go further and ask the Commission to deal with the structure of the nationalised industries. On the one hand, there is no doubt that recent Scottish complaints of undue centralisation and London control are largely due to the organisation of the nationalised industries; and it may be argued that the Commission will be an ineffective answer to the critics if its terms of reference exclude one of the main subjects of criticism. On the other hand, it is difficult to see how the Commission could usefully examine the structure of the nationalised industries in Scotland at a time when surface transport and civil aviation policy is being modified, when steel is being restored to private enterprise and when legislation about Scottish electricity supply is in view. There is the further point that if the terms of reference cover the nationalised industries we may be pressed to extend them further to include private industry. I shall be glad to have the guidance of my colleagues on this question. On the whole, I am in favour of limiting the Commission to consideration of the machinery of govern- ment and the terms of reference suggested in paragraph 1 have been framed accordingly.
(b) Timing of Announcement
8. I think that we should announce our decision to set up a Royal Commission like our decision to prepare the return of revenue and expenditure, immediately on the publication of the Catto Report. Delay in making an announcement, accom- panied, as it would be, by renewed speculation and discussion of our intentions, could only be harmful. Indeed, we have been able to justify our refusal to appoint the Commission so far only on the ground that we could not settle its terms of reference until we knew what the conclusions of the Catto Committee were.
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(c) Membership of the Committee
9. It is, of course, essential to have a Chairman of standing and of known impartiality. I suggest that Sir George Cunningham should be invited to serve. He has had wide administrative experience in India, is known to have good judg- ment and, to the best of my knowledge, is in no way committed on the issues which
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