HC Deb 27 February 1973 vol 851 cc1455-70
Mr. Ronald Bell (Buckinghamshire, South)

I beg to move, Amendment No. 51, in page 3, line 17, leave out from 'transaction' to end of line.

Mr. Deputy Speaker (Sir Robert Grant-Ferris)

With this amendment it will be convenient to debate Amendment No. 48, in Schedule 3, page 24, line 36, leave out from 'whatsoever' to end of line 40.

Mr. Bell

After the wild gallop across country which developed as a result of the amendment moved by the hon. Member for Bristol, Central (Mr. Palmer), my amendment may seem a little static, but it is nevertheless important.

The amendment to Clause 3 is a mere paving amendment for the main amendment in Schedule 3. The amendment would remove from the Bill the right of the Minister to interpret the provisions of Part II. Paragraph 1(1) of Schedule 3 states that An order or notice under Part II of this Act may be framed in any way whatsoever". If my amendment were accepted the paragraph would end there, but as at present drafted the paragraph continues: and may define any expression used in the provisions under which it is made or given (other than an expression defined by section 18(1) of this Act) both for the purposes of the order or notice, and for the purposes of the said provision as it applies in relation to the order or notice. That provision is very similar to the provision which exists in the Counter-Inflation (Temporary Provisions) Act. It happened that I was asked to advise professionally upon that similar provision in that Act. It was then—and, I am afraid, only then—that I found that no one could be advised on his rights under the Act, and that it will not be possible to advise anyone of his rights under Part II of the Bill. In each case the application of the provisions in the statute is by the making of an order or the serving of a notice. The Act does not take effect of itself; it is applied to provisions by a Minister's serving a notice or making an order. In that order or notice the Minister may say that anything in Part II of the Act means what he says it means, and that is conclusive.

The exception in Clause 18(1) is unimportant. At this hour I shall not go through the reasons why it is unimportant. Clause 18(1) defines certain things of a fairly obvious character. The sort of examples which may be interpreted by the Minister in an order or notice are of the greatest significance. I shall mention a few of them to show how it would apply. There is, for example, the phrase "increases in any prices", the words "remuneration" and "implementation" of an increase, the word "restrict" and, above all, the word "transaction", which can be given any meaning at all in an order or notice by the Minister. There is the word "selling"; the phrase "performing services"; the words "restriction", "agreement", "arrangement", "employee", and "payment". There is the phrase "terms or conditions of employment", and so on. I shall not go through them all, but it is above all the word "transaction", and the freedom to give any meaning at all to the expression "relevant transaction", which puts the subject completely at the mercy of the Minister. There can be no appeal to a court, because the Minister can make the law as he goes along. And if notices are mainly used, as seems most likely, there is no possibility of challenge in this House, because notices cannot be challenged here.

Wide drafting, which is carried to extreme limits in the Bill, is one thing, and one might argue that the need justifies the means, though I find that a hard argument to accept in peacetime. But the conferment on Ministers of a power to give any meaning convenient to them to the words of an Act of Parliament, and to do so in a way which withdraws their exercise of that power from the scrutiny of this House as well as of the courts, is immensely objectionable and inconsistent with the practice of a free society in which people have defined and ascertainable rights and defined and ascertainable duties.

It is no answer to say that Ministers are answerable to this House generally for the discharge of their duties, for a Parliament so dominated by the executive that it would concede to it the right to interpret the law conclusively would not be a Parliament that would call the executive to account for oppressive use of that power.

Nor is it any answer to say that the discretion otherwise given to the Minister in this Bill is so wide that this further power hardly matters. If the power is unnecessary, it is all the more objectionable. But the objection I make in the amendments is not that the powers are wide, as they are—too wide, I think—but that they have no defined limit. It is not that a person within the scope of the Bill is subject to a wide discretion but that a person cannot know whether he is or is not within the scope of the Bill. He cannot be advised about that because a Minister can make Part II mean anything he wants it to mean. He is given an unlimited right of interpretation of any expression.

That was bad enough in the three-months' temporary provisions Act. We should not let it through in that measure. I confess that I did not then notice those words in the schedule. In a measure that is intended to last three years such a provision is a constitutional outrage.

I hope that my hon. Friend the Chief Secretary will not offer a collection of bad precedents. Some dreadful things escape the notice of this overloaded House. Great battles are sometimes joined on the early clauses of a Bill, but incredible things slip through in the calm after the storm. I do not believe that in peace or war there is any parallel, in scope and importance, to the delegation of parliamentary sovereignty to what the amendment relates.

I hope that we are about to hear from my hon. Friend that at least the principle of the amendments is accepted. At this hour I do not intend to press the amendment to a Division. I doubt whether there is anything left to divide. After the hilarious episode through which we have just lived I doubt whether there is even the energy left to divide. But I impress upon my hon. Friend that this is not a trivial matter. Far too many things go through the House unnoticed. I should not have noticed this extraordinary power in the Bill if, in another capacity, I had not been called to scrutinise the existing temporary provisions Act. I do not think that most hon. Members on either side are aware of the power conferred. I am sure that it is unnecessary. It goes far beyond what the circumstances of the time require, and it is a lamentable precedent for the future.

Inasmuch as the Bill can be operative as an Act without the power, and inasmuch as the power would entrench inescapably upon the proper rights of the people, I hope that my hon. Friend will not brush the matter aside as merely one of the appurtances of an emergency Bill that we should take along with all the rest without looking too closely at it.

These things do matter. Too many of them go through the House late at night. Too many slip through in schedules, and the matter before us should not be allowed to go through at all.

Mr. Peter Rees (Dover)

Although I find the Bill unpalatable, I recognise the need for it and support it in principle, but it equips the executive with far-reaching powers over every aspect of our national economic life. Beyond that, the executive have equipped not only themselves but the commission and the board with such powers. It is therefore of supreme importance that the House should scrutinise with great care the powers conferred by the Bill.

Like my hon. and learned Friend the Member for Buckinghamshire, South (Mr. Ronald Bell) I am appalled by the scope of the powers contained in paragraph (1) of Schedule 3. The point was raised in Committee, when I found the answers of my hon. Friend the Chief Secretary singularly unconvincing. I should like to give some examples of the kind of construction an order could put on the simple words contained in Part II.

12.15 a.m.

The word "company" could be defined as a unit trust; "debenture dividend" as including interest, and "pay" as including a Christmas gift. My hon. Friend the Chief Secretary, possibly without the assistance of our right hon. and learned Friend the Solicitor-General, attempted to import some concept of reasonableness. He said that the courts were bound to insist on some concept of reasonableness being inserted to circumscribe the powers of definition in the Clause. I know of no such overriding power as my hon. Friend has invoked. The courts may say that the definition must bear some relation to the Bill, but this is a very tenuous connection. If this provision is construed in the way suggested it will be largely otiose.

If it is, in other words, merely to clarify an expression in Part II, it is pointless, because the courts would always allow a word to be defined in that way, but sub-paragraph (1) has given the executive power to enlarge the scope of the phrase used in Part II. It is designed to bring within the definition of "company" things which in the ordinary use of language would not be included.

In Committee my hon. Friend said—I hope that I interpret him correctly, having read it—that the provision must be read as defined—as limited in some way —by the introduction of the code. I see no connection between this provision and the code. The code would not be considered by the courts as limiting the power of definition. We recognise that "company" could not be held to include "elephant", because the courts would recoil from such a definition, but there is much scope on the fringe for matters to be swept into the provisions of the Bill without people recognising it.

As the years go by there seems to be a growing tendency for the Legislature to legislate for overkill. That is utterly wrong, for one knows the power of the executive and its capacity to force unpalatable legislation through both Houses. It is important that it should limit the powers to those strictly necessary for the operation in mind. It has gone far beyond the necessary powers in this case.

There may well be a case for bringing in unit trusts, dividends, debenture interest and Christmas gifts, but if that be so let the case be made on substantive parts of the Bill, and in such a way that it can be debated on the Floor of the House and not in a roundabout, covert way by a subsequent order.

As my hon. and learned Friend said, at this late hour we shall not press the matter to a Division, but we expect much greater reassurance from the Chief Secretary than he was able to give in Committee.

Mr. Brian Walden

I need not detain the House as long as either hon. Member opposite has—and that implies no criticism of them. The hon. and learned Member for Dover (Mr. Peter Rees) said the Bill was unpalatable but that he supported it in principle—which says a good deal more for his loyalty than for his sense, because what he is complaining about, not having had the high and joyous privilege of being a member of the Standing Committee, occurs in every clause of the Bill. The hon. and learned Member had better get used to the idea that he is buying a pig in a poke.

Of course the hon. and learned Gentleman will not receive an answer that satisfies him, and it would be out of order for me to tell him of all the many other occasions on the Bill when he will similarly not get answers to matters which are of legal concern which affect the philosophy of his party and the lives of his constituents. The hon. and learned Gentleman had better get used to that idea.

What the Conservative Party as a whole has to get used to is the idea that, probably for the first time in its history, it has underwritten the massive power of the executive to do more or less as it chooses and defines with private interests. That is the price which the hon. and learned Gentleman must pay for supporting the Bill in principle.

Mr. Peter Rees

The hon. Gentleman has impugned my sense. I said "unpalatable", not "very unpalatable". I said that I recognised the need for the Bill. I believe that the party to which I am proud to belong is prepared, in moments of national need, not to be over-concerned with dogma. I should find it difficult to reconcile this with the dogmatic utterances made by myself before I was in the House—when the Labour Government were in power—and the dogmatic utterances of hon. Members who grace the Front Bench and adorn my party, but in a moment of national need my party is not going to be concerned overmuch with the niceties of dogma.

I am complaining not about a question of principle but about the detail of the Bill. The hon. Gentleman said that there are many points of detail, but this is a particular point on which I take issue with my hon. Friend, and I do not feel that it is any discredit to my sense.

Mr. Walden

I am sure that the hon. and learned Gentleman will not think me discourteous if I say that I find him somewhat cumbersome. Mr. Disraeli put it much better as an exposition of Toryism when he said Damn your principles! Stick to your party. That is what the hon. and learned Gentleman is doing, and he knows it as well as I do. That is what makes the hon. and learned Gentleman a Tory and me not. I do not believe in that creed. The hon. and learned Gentleman will damn his principles and stick to his party.

I can tell the hon. and learned Gentleman that he will not get satisfaction on this matter. We had no code in Committee, and there is no code now. We have a Green Paper which, apparently—as my old friend the Chief Secretary said today—contains a number of unfortunate printing errors, which may or may not, subject to the House, ministerial second thoughts and everybody else's second thoughts, eventually emerge as some kind of code.

The hon. and learned Members for Buckinghamshire, South (Mr. Ronald Bell) and Dover have more sense than to think that they will get any kind of satisfaction on a matter such as this. They must lump it. I think that they are right in saying that this provision conveys enormous powers upon the executive. The Chief Secretary will tell us, as he always does, that these powers will be limited by the Government's good sense, and that is the best that we can expect to get. For God's sake, why strain at a fly when one is prepared to swallow a camel? What the hon. and learned Gentlemen should be worrying about in the 1922 Committee is why, in the name of Heaven, the Conservative Government are prepared to take this Bill at all. The amendments are irrelevant, and from the Opposition's point of view the Chief Secretary can be as brief as he likes.

Mr. Patrick Jenkin

Almost all this legislation is acutely unpalatable to Ministers and to members of the Conservative Party. That may be a measure of the degree of necessity which exists for it.

I have a great deal of sympathy with the points made by my hon. and learned Friends the Members for Buckinghamshire, South (Mr. Ronald Bell) and Dover (Mr. Peter Rees). I, too, was dissatisfied with the answer that I gave in Committee when the matter was raised by my hon. Friends the Members for Oswestry (Mr. Biffen) and Cirencester and Tewkesbury (Mr. Ridley), and although I then gave no undertaking to return to the matter on Report I immediately instituted an inquiry with those who advise the Government to see whether there was a better way of achieving our objective here.

Like my hon. and learned Friend the Member for Buckinghamshire, South I am referring to Schedule 3(1), which is the substantive provision. In Committee I explained why we felt it necessary to have what are admittedly wide powers of definition. Perhaps I can begin to reply to the powerful attack by my two hon. and learned Friends by saying that the powers are not quite as wide as they appear at first sight.

I know my hon. and learned Friend the Member for Dover challenged what I said about the reasonable interpretation. I stick by that. I believe that any court called upon to consider an order or notice —and they are challengeable in the courts —which imported a definition of a phrase used in a provision conferring power to make an order or notice would be bound to apply a concept of reasonableness in the exercise of that power of definition.

It would not be merely the "black cannot be white" example I used in Committee or "a company" cannot mean "an elephant". It would be a question of what is "reasonable" having regard to the overall intentions of the Act, as embodied in the legislation passed by Parliament. Further, the court would be bound to have regard to the terms of the code. The agencies, as well as the Minister, have power to make orders and issue notices under Part II. When the agencies exercise the power to define expressions they are wholly circumscribed by the code—which will have been debated in draft and subsequently, if Parliament is so minded, passed into law. They are enjoined by the Bill to exercise their powers to restrict pay or prices for the purpose of ensuring that the provisions of the code are implemented.

They would not be able to use the power conferred by this paragraph to bring within their purview any matter expressly excluded by the code. As an illustration, let me put this to the House. It is clear that the agencies cannot, by the use of this sub-paragraph, or any other provision in the Bill, confer upon themselves power to issue price reduction orders or notices affecting, let us say, insurance premiums, under the first new clause that was incorporated into the Bill this afternoon.

This is because, provided the code follows the line of the consultative document, that control on insurance premiums will be reserved to the Secretary of State as a consequence of new Clause 1. I quote that as an example. I differ with my hon. and learned Friend the Member for Dover, who has greater legal training than I, when he says that the code is irrelevant. The power which will be exercised by one of the agencies must have regard to the code and it cannot exercise power in a way that goes outside the code. Therefore, it cannot exercise its power to define a provision in a way that takes it outside the code.

Mr. Peter Rees

Perhaps I put the case a little high in making the point. I intended to say that no definition or restriction of definition can be found in the code to limit the power, although I recognise the point that my hon. Friend makes, that the commission or board have power to perform its functions in implementation of the code. The point may be of considerable interest in the City, and to insurance companies. Clause 6(2) provides that For the said purpose the Price Commission may restrict any prices or charges for the sale of goods or the performance of services in the course of business…". Notwithstanding the new clause that was introduced this evening—and I do not recall that that limited insurance to the purview of Ministers—the agency could, under paragraph 1 of Schedule 3, define the performance of services as including the business of insurance. Therefore, it would be perfectly proper for the Price Commission to make orders in relation to the insurance business. Will my lion. Friend deal with that?

12.30 a.m.

Mr. Jenkin

Clause 2(1) provides that it shall be the duty of the agencies to have regard to that code in performing their functions under this Act. The Government intend that those words should be limiting. They limit and define the powers of agencies so that they cannot act outside the terms of the code. Although the words in Clause 6 would, on the face of it, entitle the agencies to make orders about any price or charge, in fact they are constrained by Clause 2 to have regard to the code. The words limit the power not only to make orders but to define provisions under paragraph 1 of Schedule 3.

Mr. Brian Walden

Why be so modest about it? There is a further limitation. If the Minister does not care what the agencies have done he will make use of his appellate functions and override them, and return to the status quo ante.

Mr. Jenkin

The hon. Gentleman is making mischief, but he does so in such an engaging way that it is difficult to feel any malice towards him.

Within these limits the powers conferred by the sub-paragraph are, in the Government's view, essential. I have satisfied myself of this. They are essential to enable the control powers to be exercised effectively and clearly. In the interests of the persons affected it is obviously desirable that orders and notices imposing restrictions should be as precise as possible.

Here I refer to a point that was made repeatedly in Committee. The code does not set up legal obligations or restrictions. Those arise only when one of the agencies, or a Minister, makes an order or issues a notice in pursuance of the code. Therefore, what is important is that the notices or orders should define with the greatest possible clarity the ambit that they are intended to cover.

Mr. Ronald Bell

What is equally important, if not more important, is that the individual—a company, perhaps—should know where he stands and whether he is subject to an order or notice. How can he be advised whether he falls just outside or just inside the purview of the Act? He may go to a lawyer, like myself, but how can he be advised when there exists power to define so that the boundary line is not clearly drawn but diffuse? Not to be able to tell someone whether or not he is within the scope of the Act cannot be in accordance with our traditions.

Mr. Jenkin

Because the order or notice sets up the legal obligation it is important that it should define its scope as precisely as possible. The extent to which a person may be potentially within the ambit of an order or notice which may be contemplated cannot, by its nature, be determined. We are not dealing with fiscal legislation, where a person over many years—subject to one or two notable exceptions, of which we are aware —is able to say with a fair degree of certainty whether he is within or without the charge to tax. This legislation is not that kind. Having regard to the purpose of the Bill, the broad intent, the necessity for which my hon. and learned Friend the Member for Dover acknowledged, unpalatable though it may be, it is essential to include a power of this sort to ensure that we sweep up, as it were, within the terms of any order or notice particular kinds of pay or price or charge which might not, on an ordinary judicial interpretation of these words without an extended definition, be apt to include them.

I give another example. It is desirable that the expression charges for the performance of services should be capable of applying to sums which are clearly payments for services, whatever they may be called. They may be called "admission charges", but they are, in fact, payment for services. It is right that in these circumstances—if it is deemed necessary, as it was under the Counter-Inflation (Temporary Provisions) Act, to issue a notice restraining certain admission charges—it should be made clear that they are within the scope of the notice issued.

Mr. Peter Rees

It is important to clarify these points. Does my hon. Friend mean that the court will have no regard to the form of a transaction when applying the terms of the Bill?

Mr. Jenkin

I do not think that is a question I can answer.

Mr. Brian Walden

I am sure it is not.

Mr. Rees

Perhaps I phrased it badly. Is it the Government's intention that the court should have no regard to the form in which a transaction is cast?

Mr. Jenkin

If an order were made embodying a definition extending—shall we say?—to the word "charges" a particular meaning, if the question were at issue in the litigation the court would be bound to have regard to the use made of this paragraph to give an extended meaning of the word "charge"; whether that was reasonable, having regard to the general purport of the legislation, and whether it was comprehended, supposing an agency had made the order, within the terms of the code.

Clearly the court would have regard to the nature of the transaction to which the order or notice was directed. It could not otherwise construe the power that had been used. Deciding, "Was one comprised in the other?" will be a difficult question—difficult enough for the court and even more difficult for a lawyer advising his client. But by the time the lawyer is advising his client he has the order or notice. That is the point at which the legal obligation arises.

My hon. and learned Friend mentioned the phrase "relevant transactions". It is essential that it should be capable of definition in many different circumstances which apply, on the one hand, in relation to sales or agreement for sale of goods and, on the other, to charges for the performance of such services, for instance, as aircraft flights.

I turn now to the question of sale or agreement. It may be important to know whether a transaction comes under the Counter-Inflation (Temporary Provisions) Act or under this Bill. If it is an agreement for the sale of goods at a future date, is the transaction to be regarded as coming at the time when the agreement was made, which might fall within the Counter-Inflation (Temporary Provisions) Act, or at the time when the goods are delivered or appropriated to the contract, which might fall within after phase 2 is in operation? It is necessary to ensure that it will be made clear in the notice which transaction is to be regarded as the relevant transaction for the purpose of the notice or order. It is necessary for the person concerned to know where he stands.

Mr. Ronald Bell

That is why I attached importance to the phrase "relevant transaction". It means that the Minister can decide which phase he will put it in. The Minister can decide whether it comes under the temporary provisions Act or under this Bill. By a suitable definition of "transaction", the powers can be used retrospectively. The contract may be terminated, the payment finished, and then, by definition, transaction "may include the carrying out of a contract so that the Minister can catch people at almost any time afterwards. This is thoroughly oppressive, because no one will know where he stands until a notice has been made, and then he cannot appeal against it.

Mr. Jenkin

I hesitate to meet my hon. and learned Friend's legal arguments head on because he is a much more experienced lawyer than I am, but I should have grave doubts whether we could define a transaction as referring to a transaction which was past and finished and no longer in existence—

Mr. Bell

Still being executed.

Mr. Jenkin

Then one would have to refer to the transaction as it was in being at the time. However, I take my hon. and learned Friend's point. I conceded in Committee, and I have conceded on Report, that these are very wide powers. However, in the Government's view—and I have examined the matter with great care—they are essential if the general purport of the legislation, which the House has accepted, is to be carried into effect.

Over the years the words "remuneration" and "pay" have been given a variety of different and conflicting meanings in the courts. That alone points to the need for a power to define what one meant when making an order or notice referring to a particular kind of employee benefit. In addition, pay negotiations are becoming increasingly sophisticated. Many fringe benefits which hitherto perhaps have not often figured in the negotiations are now becoming more frequent. I refer to paragraph 113 of the Green Paper to show the range of benefits which may be included.

Ideally, and in theory, one should be able to spell out in the Bill every one of those benefits. In practice, it is asking the impossible. The ingenuity of employers and employees in inventing new forms of employee benefit is limitless. It would be unfortunate, and contrary to Parliament's intention in giving the Bill a Second Reading, that people should be able to circumvent the main purposes of the Bill by methods of that sort. Hence, this power is needed to extend to these other forms of remuneration the order-making, notice-giving power in Part II.

I have been referring to orders and notices made by the agencies. Orders can be made by Ministers—for instance, in relation to insurance premiums, dividends and rent. On dividends, I repeat what I said in Committee. I regard it as highly improbable that the word "dividend" could be construed to include interest, in the ordinary sense, though the code clearly indicates that there might be certain kinds of interest which are dividends dressed up as interest which are a distribution of profits and not a charge on the profits. In that case, it would seem not unreasonable that the definition should be extended to include them. But it would be an unreasonable extension of the word "dividend" to include straight interest—debenture interest or interest on a bank loan. That would be a matter for a court ultimately to decide.

In so far as one is dealing with orders made by Ministers there is a further safeguard. Use of the power will be subject to scrutiny by the Joint Committee on Statutory Instruments. The sub-paragraph is needed for ministerial orders and notices since in the light of the circumstances of each case, it will be necessary to define such expressions as "premium", or "insurer"—in relation to syndicates of underwriters or even brokers— "ordinary dividends", "distributions", and so on. The phrase restricting or preventing increases of rent in Clause 10 is another phrase which would need to be defined to get round the massive ingenuity of those who deal with property if they are not to be allowed to circumvent the Bill's intentions.

12.45 a.m.

I hope that I have said enough to make it clear that it would be extremely difficult to include any express limitations on this power—let alone to spell out the complete parameters of the power—without running a real risk of providing opportunities for those who are determined to seek loopholes and thereby frustrate the purposes of the Bill.

In Committee we referred to the long list of suggestions made by Mr. Clive Jenkins as to the way in which members of his union might circumvent the provisions of the Bill. We realise that we need to combat the ingenuity of such men if the purposes of the Bill are not to be frustrated. The important thing is that this subparagraph enables definitions to be made to deal with a widely differing variety of matters that fall within the scope of the Bill, but they do not and cannot be made to deal with matters falling outside the scope of the Bill and to deal with powers of the agencies. They cannot be made to deal with matters that fall outside the scope of the code.

I, too, regard powers of this sort as distasteful. I regard the whole legislation as distasteful, but if that legislation is to carry this policy into effect and not be frustrated, I believe that powers of this nature are necessary in the Bill.

In the light of this explanation, I hope that the House will accept that I have carefully considered both what my hon. Friends said in Committee and the points made by hon. Members today, but I cannot advise the acceptance of these amendments.

Mr. Brian Walden

I shall not detain the House for more than a few minutes. The Chief Secretary ploughed on like the battleship "Potemkin", for the simple reason that what is in the mind of the hon. and learned Member for Buckinghamshire, South (Mr. Ronald Bell) is the position of the man on the Clapham omnibus. He is trying to get a definition of "reasonable", but the Chief Secretary —a shrewd old bird—has been conning him along with the idea that somewhere in this legislation there is something that has some kind of applicability to the sort of law that the hon. and learned Member understands.

That is why the Chief Secretary tried to shrug off what I said as a joke. It is not a joke. I repeat—for the benefit of the hon. and learned Member—that it is true. If the Secretary of State does not like what one of these agencies has decided he will not implement it. If he does not think that it has gone far enough he has reserved the right to himself, in the Bill, to put in incidental or supplemental propositions. He can switch it and turn it to suit himself. This must be a surrender of authority to the executive. The Chief Secretary can talk all night. He can wring his hands and talk about his grief at this unpallatable legislation, and it will not change one jot or tittle. The Conservative Party had better get that idea into its head. It is true. It is not a joke; it is a fact.

Amendment negatived.

Further consideration of the Bill, as amended, adjourned.—[Mr. Patrick Jerkin.]

Bill, as amended (in the Standing Committee) to be further considered this day.

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