Lords Sitting of 8 March 1927

Preamble
The House met at a quarter past four of the clock, The EARL OF KINTORE on the Woolsack.

BUSINESS OF THE HOUSE.
EARL BEAUCHAMP: My Lords, there is a question on our future business which should like to be allowed to address to the noble Marquess the Leader of the House. A number of members of your Lordships' House are anxious to speak on the Motion relating to national expenditure which stands in my name for March 16, and as there is an important Bill [Education (Employment of Children and Young Persons) Bill] down for March 17, I understand it would probably meet the general convenience of your Lordships if the discussion on my Motion were continued on March 22 and if my noble friend Lord Oxford and Asquith moved the adjournment of the debate on Wednesday the 16th, so that he should speak at the beginning of the resumed debate on March 22. I should be very much obliged if the noble Marquess would let me know if he thinks that that would meet with his approval and that of the members of your Lordships' House.
LORD PARMOOR: My Lords, perhaps before the noble Marquess replies I might be allowed to say that it would quite suit the convenience of noble Lords on this Bench if the debate were adjourned from the first day until March 22.
THE LORD PRIVY SEAL (THE MARQUESS OF SALISBURY): My Lords, it appears to be the general wish that if the debate which begins on March 16 is adjourned it should be continued on the 22nd. I understand that my noble friend Lord Astor, who has a Bill down on that day, has been extremely courteous in this matter and has been willing to alter the day for the Bastardy Bill. He is going to ask your Lordships, as will be observed by the Orders which are before us, to allow him to anticipate the date upon which he had put it down, and in that way to free the 22nd entirely so far as he is concerned. I hope, I must say,
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that your Lordships will be willing to let him do that, and we have only to express our thanks to my noble friend for his courtesy in the matter. But, of course, it is open to any of your Lordships to put down another Bill on that day.
So far as the Government is concerned, I will promise at once to the noble Earl that no Government Order shall be allowed to interfere with his Motion on the 22nd. I have no control, of course, over the freedom of your Lordships, but perhaps I may be allowed to express the hope that as so distinguished a member of our House as Lord Oxford and Asquith desires to speak first on that day perhaps your Lordships would co-operate with the Government in trying to avoid the interposition of any Order of the Day which would take precedence of the noble Earl's Motion. I cannot help thinking that your Lordships will be willing to agree to that, and in that case the matter would work exactly upon the lines which the noble Earl has foreshadowed.
THE EARL OF CRAWFORD: My Lords, I am entirely in favour of the measure of sacrosanctity for the 22nd proposed in the interests of Lord Oxford and Asquith, but Lord Astor's Bill excites much controversy, and it is a contentious proposal to bring it forward by five days. This Bill has for weeks been down for March 22, and now, unexpectedly, we are told it is to be taken on the 17th instead of on the 22nd. I should prefer that the Bill were postponed to a later date than the 22nd rather than brought forward.
EARL BEAUCHAMP: Lord Astor, unfortunately, is going abroad, and therefore cannot take a date subsequently to that day. I am very much obliged to the noble Marquess the Leader of the House for what he has been good enough to say in meeting our wishes with regard to the debate and we will promise not to try to take a snap Division on Wednesday the 16th.
THE MARQUESS OF SALISBURY: My Lords, as my noble friend Lord Crawford has indicated, it is a strong measure to bring this Bill forward. There is no question about that, but when I was approached on the subject I said: "If you are going to do anything of that kind, for goodness sake give as long a notice as possible to the House of Lords." It was

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under my direction that the Motion anticipating this was put down so as to give your Lordships full notice. I hope, therefore, that the inconvenience of noble Lords will be minimised.

WEST HAM ELECTRICITY (EAST HAM AND ILFORD BULK SUPPLY) SPECIAL ORDER, 1926.
  STEPNEY ELECTRICITY (ST. GEORGE-IN-THE-EAST TRANSFORMING STATION) SPECIAL ORDER, 1926.

    MILFORD HAVEN ELECTRICITY SPECIAL ORDER, 1926.
    LUTTERWORH AND RUGBY RURAL DISTRICTS ELECTRICITY SPECIAL ORDER, 1926.
    CRANLEIGH ELECTRICITY SPECIAL ORDER, 1927.
    WHITSTABLE ELECTRICITY (EXTENSION) SPECIAL ORDER, 1927.
    CLAYTON ELECTRICITY SPECIAL ORDER, 1926.
    BOLSOVER, ELECTRICITY SPECIAL ORDER, 1926.
    HOLBEACH ELECTRICITY SPECIAL ORDER, 1926.
    GALASHIELS AND DISTRICT ELECTRICITY (EXTENSION) SPECIAL ORDER, 1926.
    THE FIRST COMMISSIONER OF WORKS (VISCOUNT PEEL): My Lords, I beg to move that these Orders be approved.
    Moved, That the Special Orders which were presented on the 8th of February last be approved.—(Viscount Peel.)
    On Question, Motion agreed to.

PUBLIC WORKS LOANS BILL.
Order of the Day for the Second Reading read.
THE EARL OF PLYMOUTH: My Lords, this in an annual Bill, though it does not in fact cover an exact period of twelve months but covers the interval between one Act and another. Clause 1 authorises £40,000,000 as the maximum which can be advanced by the National Debt Commissioners to the Public Works
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Loans Commissioners until the passing of the next Public Works Loans Bill. For this last year, 1928–1927, the authority will run out a month earlier than was estimated. I think that is mainly due to the heavy commitments for housing and that is the reason why this Bill has come on rather earlier than usual. Clauses 2 and 3 deal with the Eyemouth Harbour Loan, which I do, not think calls for any comment. It is a simple business.
Clause 4 ratifies the Agreement which was reached with the Irish Free State with regard to the Local Loans Fund. The Irish Free State Government agree to discharge their liability outstanding on April 1, 1926, in respect of the Local Loans Fund by the payment of an annuity, payable half yearly, of £600,000 to the Fund for a period of twenty years, but in addition to that this country will save the cost of collection, which comes to about £20,000, and bad debts amounting to £27,000. That means that we shall receive about £650,000 annually, which capitalised, represents a sum of just over £8,250,000. The amount we shall receive from the Irish Free State is therefore sufficient to clear our liabilities and to leave an ample margin to cover the possibility of local loan stock rising in price during the period over which the Free State payments are spread. I venture to suggest to your Lordships that this is an arrangement which is financially sound. I do not think there is anything further in the Bill which calls for comment, but if your Lordships have any questions to ask I will attempt to answer them satisfactorily. I beg to move.
Moved, That the Bill be now read 2a.—(The Earl of Plymouth.)
LORD ARNOLD: My Lords, I should like to make a few remarks upon the Second Reading of this Bill and to put some questions to the noble Earl. The questions deal with matters of great complication and therefore I have given him notice of my intention, otherwise it would scarcely have been reasonable to expect an answer. Before I come to those points I should like to make some general observations on the issues raised by the Bill. In regard to the arrangement with the Irish Free State I would say nothing except that the Treasury is as a rule able to look after itself, and I

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presume that the arrangement which has been come to is a reasonable and satisfactory one.
The discussions upon this Bill usually turn upon the effect, or the supposed effect, of the Bill upon the national credit. That was the case in another place. I think the national credit is something which may very well occupy the attention of Parliament. The national credit has been distinctly depreciated during the term of office of the present Government; indeed, the whole financial record of this Government is what I may call one of unredeemed failure. There will, however, be opportunities for discussing that in a more general way and they will be, taken. But take the national credit. When the Labour Government went out of office the Conversion Loan stood at 80, to-day it stands at about 75. Consols when the Labour Government went out of office were about 58½ to-day they stand at about 55. The yield of Conversion Loan then was, I think, £4 7s. 6d., to-day it is about £4 13 s. The yield of Consols was about £4 5s., now it is £4 10 s. That, is not a pleasant state of things. This is only one of the evil results which have come from the policy of the present Government, or largely from their policy.
At the same time I do not think that the effect of this Bill upon the national credit is one which need cause very much anxiety. I say that for two reasons. In the first place, this money which is advanced by the Public Works Loan Commissioners is very largely advanced for purposes which are in a sense reproductive; at any rate, nearly all the money is, as I understand it, used for the creation of assets, a good deal of it (under existing circumstances) for new houses. It might be argued that any expenditure of that kind—any expenditure the, ultimate effect of which is to increase the productive capacity of the country—goes to improve the national credit. I might even perhaps be taken here to be saying a word in support of the present Government and of course nothing would be more distasteful to me than that. But I am not really doing so, because this is not their policy, they are merely carrying on the usual policy, so they are not entitled to any credit. In the, second place—and this is of course most vital from the point of view of the national credit as I understand it; the
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noble Earl will correct me if I am wrong—there is to be no public issue under this Bill. This Bill permits a maximum of £40,000,000 for advances by the National Debt Commissioners, or at any rate by the Public Works Commissioners, for various works, but I think there is to be no public issue.
As I understand it such money as will be needed—it does not follow that £40,000,000 will be needed: that is the maximum—will be obtained from the National Debt Commissioners and they will get it mainly from savings banks' money, also perhaps some of it will be obtained from Loans previously made which have fallen in or which fall in during the period of the currency of this Bill. It is impossible for any one who is not at the Treasury to know exactly what is happening, but it seems to me that this is broadly what is happening. Still, although there is to be no public issue under this Bill, there might be a public issue another year. There have been public issues in connection with this kind of advance in the past and that is the main point I want to put to the, noble Earl opposite. If any such public issue had to be made it would have to be made on a 3 per cent. basis. That is because of the National Debt and Local Loans Act of 1887. Under that Act any public issue made for a purpose like this, as I understand it—if I am wrong the noble Lord will correct me—has to be made on a 3 per cent. basis. I need scarcely say that in 1887 financial conditions were very different from what they are to-day. Consols were then the chief Government security and they stood at about par. Three per cent. may have been a suitable basis for a statutory provision in 1887. It is quite unsuitable and in many ways highly undesirable under existing conditions.
At the present time the national credit may be put—taking a round figure—as being on a 4¾ per cent. basis. If a 3 per cent. issue had to be made it would have, to be made at a very heavy discount obviously. It would have to be issued at about £63 for £100 of stock. That is a very heavy discount and that is a point to which I should like to direct attention for a moment, or two. Look at the matter from the point of view of the local authorities. I think I am

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correct in saying that advances made under this Bill when it becomes an Act will be nearly all made to what I may call intermediate local authorities. The larger local authorities, the big corporations and the big county councils, can issue their own loans. They do not have to apply, I think, to the Public Works Loan Commissioners for this kind of operation. The very small local authorities cannot qualify for advances because, as I understand it, their rateable areas, the assessable areas, are neither sufficiently large nor valuable. There is a limit below which the Public Works Loan Commissioners will not consider applications. Therefore the money largely goes to the intermediate authorities.
The intermediate authorities ought, I think, to be put into the best position so far as finance is concerned. But if a Loan is issued on a 3 per cent. basis at £63 it is virtually irredeemable—not actually but virtually irredeemable. That would correspond therefore to a 4¾ per cent. Loan, virtually irredeemable. But suppose that money goes cheaper, as it might. I do not think it is very likely to do so as long as the present Government remains in office, but it might conceivably go cheaper: Suppose it goes to 4 per cent. At any rate that is conceivable, although I think it is highly unlikely. In that case these intermediate authorities would have had money advanced to them on a 4¾ per cent. basis, or thereabouts, on terms which are virtually irredeemable, and they would not be able to take advantage of cheap money if cheaper money comes. Your Lordships are well aware that the larger local authorities, the big corporations, when they issue Loans, all have a redemption clause. Recent Loans have been issued, I think, at 5 per cent., with a redemption clause not many years ahead, which gives the issuing corporation the option at any rate of redeeming the Loan, so that if money has gone cheaper they can take advantage of that and make a re-issue. That would mean some assistance—not very large but some assistance—to the rates and that is something we all desire to see. But if an issue had to be made on a 3 per cent. basis in the way I have described, the intermediate authorities could not do that. They would be
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mulcted in a loan on a 4¾ per cent. basis for a considerable time, so long probably as the Loan lasted.
It is quite true that there is one circumstance which might qualify the point which I am putting to the noble Earl. It is this. I do not know the average currency of these Loans to the intermediate authorities. It may be that they are not made for very long terms of years. I should like to ask the noble Earl what the position is about that. If the Loans were made, for instance, only for an average of twenty years, there is not a very great deal in the point, but I should imagine that, particularly for some housing schemes, the currency is decidedly longer than that. In that case the position which I have been putting before your Lordships is one which I think merits the closest consideration. As a matter of principle—leaving out of account the fact of the irredeemability or virtual irredeemability—it is bad finance to issue a 3 per cent. loan at such a heavy discount as £63. It is undesirable. The Financial Secretary to the Treasury admitted that in the recent discussions in another place. He said the Treasury were alive to the desirability of issuing Loans as near par as possible. I was very glad to hear that, but it is rather in the nature of a deathbed repentance on the part of the Treasury because in recent years since the War there have been, as I hold, some very serious things done in the direction of issuing Loans at a very heavy discount.
Take the recent conversion operation which has been heralded as such a huge success. Was it really a success? What happened? A 4 per cent. Loan was issued at £85. So far as actual conversion was concerned the capital liabilities of the country were increased by about £20,000,000, from £109,000,000 to rather over £130,000,000. A certain adjustment brought down the actual increase to about £20,000,000. So far as cash subscriptions were concerned, the position was very unsatisfactory in my opinion, because there, again, the capital liabilities of the country were, in effect, increased by about £12,000,000. Adding these two together, the increase of the capital liabilities under the actual conversion operation and under the cash

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subscriptions, you have an increase of our actual liabilities of £32,000,000 through issuing this Loan at £85. What did we save in interest, which may, perhaps, be put forward as some palliation? The saving of interest was about £500,000 gross. That is all. The net saving so far as the Exchequer is concerned only amounts to about £375,000 because if the interest to be received is less the Income Tax and Super-Tax to be paid must be less. Taking these at an average of 5s. in the £ you have to reduce the gross amount of the saving in interest by the conversion operation by about 25 per cent. Thus the £500,000 annual saving comes down to about £375,000. Is that a successful operation?
Is there any noble Lord who can say that is really good finance? But that result was only obtained by, as I hold, an unsound fiscal expedient. It was attained by having a very heavy Sinking Fund allocated to this specific Loan of £10,000,000 a year. I do not think that is good finance. An expedient of that kind, I am glad to say, was condemned by the Colwyn Report. Issuing Loans at a heavy discount was condemned by the Colwyn Report. In fact, the Colwyn Report—the Majority Report, a Report of non-Party experts—very largely justifies many of the criticisms which have been made from this Bench of the Government finance in the last two or three years, and very largely condemns everything said from the Government Bench in defence of that finance. There will be other opportunities to return to that matter. I submit that there is the strongest case for reviewing the position and amending this Act of 1887, this Act which compels an issue to be made for the purpose we are now discussing, if such an issue has to be made, on a 3 per cent. basis. It ought to be altered, and it ought to be altered now. Do not let us wait until the time when some issue is needed. Then it will be too late.
There is an opportunity now, and I would like to ask the noble Earl what the main arguments are—if there are any arguments—against making the alteration I suggest. The Government really cannot say that they have not time, because suppose that in modern times there has never been a more meagre programme of business put before Parliament in any King's Speech. There is
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plenty of time, there is a majority of about 200 in another place and of 70 to one in this House, and, moreover, the Opposition would support them in this. Accordingly no excuse of that sort can be made that will for a moment hold water, and I very much hope to hear from the noble Earl—I gave him notice of this question—that the Government are really going to move. This is not a new question. It has been raised in the past, and I submit that, in the interests of the intermediate local authorities and of sound finance, the out-of-date Act of 1887 ought to be amended.
I do not think that I need apologise for bringing these matters forward, for they are germane to the Bill. It is quite true that this Bill is not, certified as a Money Bill, though that does not really make any difference from the point of view of discussion. It is also true, as I am glad to think, that your Lordships' House has no real power in finance, but so long as it exists—and that may not be very long—it has the power of financial discussion, and I think there are from time to time certain financial discussions which can take place here and which are not altogether without their modest usefulness. We shall have other opportunities of discussing these matters. At the opening of business to-day the noble Earl, Lord Beauchamp, referred to the important Motion which he has put down, and no doubt a valuable debate will take place upon it. These opportunities ought to be taken because, as I have said, it is unhappily the case that the Government's record in finance is one of unredeemed failure. They can scarcely bring forward a single circumstance upon which they can look with satisfaction. I will say no more to-day, but I would ask the noble Earl if he will be good enough to reply to the various points that I have raised.
THE EARL OF PLYMOUTH: My Lords, I did not gather that the noble Lord was going to make this an opportunity for a general attack upon the financial policy of the Government, but I should like to-state as forcibly as is in my power that this falling off of the credit of the country during the period in which His Majesty's Government have been in office would probably have been very much greater if the Party to which the noble Lord belongs had been in office in their stead.
LORD ARNOLD: Credit improved with us.
THE EARL OF PLYMOUTH: There are many contributory causes, and I am sure that the noble Lord will not deny that those causes must be taken into consideration.
LORD ARNOLD: I said so.
THE EARL OF PLYMOUTH: I do not intend to enter upon a general discussion of that kind, but the noble Lord has raised one or two points of a very technical character indeed and I will endeavour so far as is in my power to answer them, and to explain anything that may have seemed a little obscure. The noble Lord was quite right in the statements he made with regard to the way in which these Loans are raised. The Local Loans Fund first borrows money—this is probably all quite well understood, but it is just as well that I should repeat it and make it quite clear—and then re-lends it to the local authority. The way in which they borrow it is by the issue of 3 per cent. Local Loans stock under the Act of 1887. This stock may be either issued to the public—it was last so issued, I think, in January, 1922—or may be issued privately to the National Debt Commissioners as an investment for the various Funds that they control. I should like to point out, however, that, whichever method is adopted, it makes not the slightest difference to the actual borrowers from the Local Loans Fund. As a matter of fact it is not possible to say that there will be no further public issue. I do not think that it is likely, but that depends entirely upon how much the National Debt Commissioners are able to lend at the present moment. There is power under the Public Works Loans Act, 1897, to issue stock at such rate of interest and for such period as the Treasury determine.
The point upon which the main part of the noble Lord's argument hinged was that it would be much more advantageous to issue stock nearer par than at the price at which it would have to be issued at present. That, I think, is a very debatable point indeed. Undoubtedly there are arguments upon both sides, but I do not think that the noble Lord showed very clearly what the
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exact advantage would be in changing that which has been the custom up to now and issuing this stock nearer par. I should like to assure the noble Lord, however, that it is recognised that this is a very important point and that the Treasury have the matter under consideration.
Another point that the noble Lord made was that, so as to help the local authorities when borrowing from the Local Loans Fund, it would be advisable that, in raising this stock, there should be a redemption clause, so that the advantage of the greater cheapness of money, if it ever did become cheaper, might be passed on to the local authorities concerned. That, again, is a very complicated point and I do not know exactly what suggestion the noble Lord makes in regard to it. The outstanding point is that any option to repay stock which is likely to be of any value obviously has to be paid for in the terms of the issue and, if you put in an optional redemption clause, those who take up the stock will naturally require better terms. Among several other points raised by the noble Lord, he mentioned that the larger authorities have optional redemption clauses, but I think it must be remembered that the money which these larger authorities raise is used in financing their own services. They do not lend it to other people, and they know the exact conditions that they have to face. I think it must also be mentioned that, although they do this, it has been commented upon unfavourably and it is practically certain that they have to pay more for their money through having this optional redemption clause included.
It is perfectly clear that, in the present circumstances, it would be impossible, if money were to be cheaper, to pass on the benefit, as the noble Lord has suggested, to the local authority. The Local Loans Fund has no profit out of which it can grant an uncovenanted remission of interest, and naturally, if the price of money were to go up, no one would expect that the Government would break their contract and expect the local authorities to pay more. I do not know whether the noble Lord suggests that the inability of the Fund to reduce its rates to the local authorities is due to the fact that the Fund itself borrows on a long-term stock, but it is obvious that a long-term stock

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is the proper method of borrowing for a capital work of long life, and, of course, many of these Loans are granted for works covering considerable periods. I think that was one of the questions which the noble Lord asked. It is very difficult to say exactly what the average term of Loan is, as the nature of the Loans, and of the services for which they are made, varies very greatly indeed. For housing, which is a very important part, naturally, Loans are granted up to 60 years for the buildings and 80 years for the land. Last year, which I think may be taken more or less as representative, about one-third of the Loans granted were for periods up to 20 years, nearly one-fourth for periods between 20 and 30 years, and one-third for periods exceeding 50 years.
I have endeavoured to answer all the points which the noble Lord brought forward. It is perfectly clear that to borrow for a short period, and to lend for a long period, is quite unsound, and I have endeavoured to show to your Lordships that if an optional redemption clause were included in these Loans, it would increase the amount that would have to be paid for the Loan, and that increase of interest would have to be passed on to the local authorities, which would be very undesirable indeed. At the present moment they pay about 4½ to 4¾ per cent., and the interest is charged at the same rate which it costs the Government to borrow, plus a small allowance for expenses. The Sinking Fund is calculated so that the Loan will be repaid during the anticipated life of the works for which the authority is borrowing. In the case of housing that would be 60 years. Naturally, if money became cheaper in the future the Government would not attempt to make a profit out of it, but all future Loans would be issued at that cheaper rate. I do not know if there is any other point mentioned by the noble Lord to which I have not replied, but I have not gathered the arguments which the noble Lord brought forward to prove that a change in the present method would be a real advantage not only to the people to whom money is lent, but also to the Government.
LORD PARMOOR: My Lords, there are two points to which I should like to call attention. My noble friend Lord Arnold,
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in speaking of the desirability of issuing Loans as nearly at par as possible, was not so much quoting his own opinion as an opinion stated in another place by the Financial Secretary to the Treasury. Does the noble Earl take a different view from that stated by the Financial Secretary to the Treasury in another place? Because the latter certainly stated that the nearer you can issue to par the better the financial transaction, and it is to that point that my noble friend Lord Arnold called attention.
THE EARL OF PLYMOUTH: I think if the noble Lord had been listening—
LORD ARNOLD: I was listening.
THE EARL OF PLYMOUTH: The noble Lord was talking to Lord Parmoor—I did say that it was a very debatable point and that the Treasury were considering the matter.
LORD PARMOOR: I accept what the noble Earl says, but I want to emphasise the fact that the point made by Lord Arnold was exactly in the same terms as that stated by the Financial Secretary to the Treasury in another place. Therefore, although I would not for a moment get into controversy with the noble Earl, I think his criticisms were hardly fair as regards my noble friend Lord Arnold. There is one other point upon which I did not quite understand what the view of the noble Earl was, and it is this: I quite understand the relationship between the Local Loans Fund, as I think it is called, and Loans for local authorities, and questions of that kind, but the noble Lord as regards these matters approached them from the ratepayers' standpoint. I think he stated what I have always thought to be true for a number of years, that although there is ample protection for the Treasury in another place, and here, there is no similar protection for the ratepayer, nor is he represented nearly to the same extent, with the result that a large amount of expenditure is thrown upon the ratepayer which, according to all principles, and particularly according to the principle of the Report of a Royal Commission of which I happened to be a member, ought to be placed upon the national Exchequer. Surely, if you have the present conditions the noble Lord was right from the ratepayers'

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standpoint. It would be better to have shorter terms, if you are expecting cheaper money, and I hope we are not expecting dearer money at the present time. Those were the two points to which I think my noble friend Lord Arnold specially called attention. We are grateful for the clear explanation given by the noble Earl, but I hope the Government will carefully consider the views which my noble friend put forward, which, from a national standpoint, we believe to be perfectly sound.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

DISEASES OF ANIMALS BILL [H.L.]
Read 3a (according to Order): Amendment (Privilege) made: Bill passed, and sent to the Commons.

BOILING OF ANIMAL FOODSTUFFS ORDER.
LORD STRACHIE LORD STRACHIE rose to draw attention to Order No. 4420 of the Ministry of Agriculture which provides that offals fed to animals shall be boiled on the farm instead of providing that such offals shall be sterilized before being sold. The noble Lord said: My Lords, the subject to which I want to draw the attention of the House has reference to the Order issued lately by the Ministry of Agriculture. I hold it in my hand, and as it is very short I will read it to the House. It is as follows:—
"Every person having in his possession or under his charge:—

"(a) any meat, bones, offal, or other part of the carcase of an animal; or

"(b) any swill or broken or waste foodstuffs which have been in contact with any meat, bones, offal or other part of the carcase of an animal;

"which are intended to be fed to animals shall cause all such foodstuffs to be boiled for at least one hour before they are brought into contact with or fed to animals."
There really is a little difficulty in that Order. It is not quite certain what is the proper interpretation of it, because it might mean that the stuff had to be sterilised at the source, and not after being brought on to the farms.
I have the advantage of knowing, from what the noble, Lord, the Parliamentary
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Secretary of the Ministry, said the other day to the council of the Agriculture Society, what it means. The interpretation which is put upon it by the Ministry is that the stuff has to be sterilised after it has been brought on to the farm. That is their intention. I ask the noble Lord now to consider very carefully whether what he proposes under this Order is really going to be of advantage in protecting our flocks and herds from foot-and-mouth disease, because it has been laid down by the important Committee on Foot-and-Mouth Disease that infection can be brought, and has been proved to be brought, by fresh carcases imported into this country. I shall have something to say presently about frozen or chilled carcases. Now, that having once been admitted, I cannot understand why this Order does not at once deal with the source of infection when it is detected, and why the foodstuff should not be sterilised there before it is distributed throughout the country. The noble Lord will remember that a very important member of the council of the Royal Agricultural Society pointed out that a great many farmers have not the means for properly sterilising swills and offals. It is ridiculous to think that smallholders would be able to sterilise them. I may be told that these offals will not go to these farms, but that is not the point. It is very much better to lock the door against any means of infection.
There is another point to remember. You must have some sort of supervision, to see that these offals and swills are properly sterilised. It is much easier for that, supervision to take place at a few big hotels and eating houses than at every single farm in the country. It may be that this Government likes creating officials. We all know how many officials were created under the Coalition Government, which was practically a Conservative Government, though it had a Radical at the head of it. But what would happen under this Order? If you had this inspection made on the farms you would have to increase the number of officials. Therefore, on the ground of economy it is desirable to have it done at the source. I should like to refer to the very interesting Report on Research, brought out the other day, which makes it quite clear—what has not been known in the past—that the microbe of foot-and-mouth disease, which is, of course,

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still undiscovered, has great powers of life, because, as the Report states, the blood taken from chilled carcases is infected for thirty or forty days, and the marrow has been found to be infected for seventy-six days. The risk, therefore, is very great indeed if any of this stuff coming from abroad is not properly sterilised before it gets to the farms.
I hope that more attention will be paid to this matter by the Ministry, and that in future we shall not be told, as we have been told by the Ministry, that birds coming from the Continent are a possible source of infection. I have always contested that, and I am perfectly certain I am right, for the very good reason that during the War, when free communication with France was interrupted, there were no cases of foot-and-mouth disease, although birds were coming all the time. I am perfectly well aware that my noble friend is probably not in a position to give me any definite answer to-day, nor do I wish him to do so. All I would urge upon him is not to answer me with a non possumus. I would ask him carefully to consider this question, and to represent the views of agriculturists at the Ministry, because they are not at all satisfied with the Orders as they stand at the present moment. This country is very free of foot-and-mouth disease at the present time, but it is always a danger hanging over us, and in certain areas farmers are simply haunted by the idea of having a recurrence of these dreadful outbreaks, such as we had in Cheshire. I hope, therefore, that the noble Lord will represent to the Ministry the views of agriculturists, knowing, as he does quite well, that when this question was raised at the council of the Royal Agricultural Society only objections were raised to his Order, and not one word said in favour of it.
THE PARLIAMENTARY SECRETARY OF THE MINISTRY OF AGRICULTURE AND FISHERIES (LORD BLEDISLOE): My Lords, as regards the last sentence of the noble Lord's speech, the proceedings at meetings of the council of the Royal Agricultural Society, as the noble Lord is aware, are always very brief, and, although I believe he is right in saying that there were no arguments advanced, except possibly by myself, as against the contention which he put before the council of that body, there was, if my
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memory serves me aright, no large number of persons who supported his view. But I told him then that I myself was quite open to be persuaded, and that I would explore the whole position before he raised it in your Lordships' House, and that I have done.
But may I first of all deal with that part of his speech which had reference to the unknown origin of foot-and-mouth disease coming into this country. We have clearly established—and it means that we have travelled a long way—at any rate one important source of contagion brought from abroad in connection with foot-and-mouth disease; but I should not like to take the responsibility, and I am quite sure the Foot-and-Mouth Disease Research Committee, now sitting at the Lister Institute, would not take the responsibility, of saying that this was either the sole or even the main source of contagion. All we know is that we have blocked up one channel by which obviously this disease has been coming into this country for some time past. Beyond that we are not prepared to go Whether this micro-organism is brought on the feet of birds or by other means. I think it would be very rash in the present light of scientific knowledge for any of us to speak pontifically.
But as regards the particular criticism which the noble Lord has made with reference to this Order, which, as he rightly says, was founded upon this very interesting Report—which is called the Second Progress Report of the Foot-and-Mouth Disease Research Committee—we think, and we have some reason for thinking, that the Order would be much easier to enforce, and involve far fewer officials, to whom my noble friend rightly objects, if the boiling which is provided for in the Order took place where the animals are fed, and not at, the source of supply. May I remind your Lordships that this offal—I think the noble Lord described it as offal, but of course it includes anything that ultimately becomes what is called "swill"—is derived from several different sources, and travels in many different directions. In other words, the fat and the bones and the waste meat do not all become animal food. A good deal of the bone is converted into buttons; a very large proportion of it, and also some of the meat waste, is converted into

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manure; some of it, is converted into gelatine and other similar commodities. A very large proportion of the fat is used for soap boiling. Your Lordships are aware that soap is a glyceride of a fatty acid, and animal fat is very largely the basis of these fatty acids.
Let me ask the noble Lord whether he could picture the sort of hotel he has in mind, say the Carlton, or the Savoy Hotel in London, starting to boil fat and other similar offals. Even if it were possible under the restrictive covenants under which they hold their leases—under which it is probably out of the question—would not all their neighbours very strongly protest against any such noisome or noxious process? At any rate it is obviously impossible to deal with it there. But whether it be a hotel or a butcher that has to deal with this stuff, quite admittedly what is called animal protein is a foodstuff the value of which is being recognised every year as a source of useful food for pigs and other live stock. But it is comparatively worthless stuff, and if you are going to put those restrictions upon the supplier I venture to suggest that it will not be forthcoming and will not be available for many of the poorer pig-feeders who utilise it at the present time.
I told the noble Lord quite frankly when he raised this question at the council of the Royal Agricultural Society that I thought, to use an expression that has just fallen from the noble Earl behind me, it was "a distinctly debatable point" but on further exploration of the
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matter by the Ministry I am quite convinced that the Order would be less easy to enforce and would operate as a hardship upon the pig-feeder rather than be a benefit if his suggestion were adopted. After all, it is the pig-feeder who gets the benefit. First of all, he avoids having tainted or disease-affected food upon his premises which may spread foot-and-mouth disease. He avoids the risk of his premises being scheduled as infected premises and subjected to all the restrictions that follow upon an outbreak of the disease. I hope, after the explanation I have given the noble Lord, that he will not press the matter further. I can assure him that I have explored it in the best interests of that class in which we are both so deeply interested.

BASTARDY BILL. [H.L.]
LORD TEMPLEMORE: My Lords, on behalf of my noble friend Lord Astor I beg to move, in accordance with the Notice which he has given, that leave be given him to advance his Motion for the Second Reading of the Bastardy Bill from Tuesday the 22nd inst. to Thursday the 17th inst.
Moved, That leave be given to Viscount Astor to advance his Motion for the Second Reading of the Bastardy Bill from Tuesday the 22nd inst. to Thursday the 17th inst.—(Lord Templemore.)
On Question, Motion agreed to.
House adjourned at ten minutes past five o'clock.