Lords Sitting of 8 March 1934

Preamble
The House met at a quarter past four of the clock, The LORD CHANCELLOR on the Woolsack.
BRITISH HYDROCARBON OILS PRODUCTION BILL.
Brought from the Commons; read 1a; and to be printed.

SOLICITORS BILL. [H.L.]
THE LORD CHANCELLOR (VISCOUNT SANKEY): My Lords, I beg leave to introduce a Bill to prohibit bodies corporate from purporting to act as solicitors, and to move that it be read a first time.
Moved, That the Bill be now read 1a.—(The Lord Chancellor.)
On Question, Bill read la, and to be printed.

GAS UNDERTAKINGS BILL. [H.L.]
Order of the Day for the Second Reading read.
LORD TEMPLEMORE: My Lords, I beg to move that this Bill be read a second time. It has been drafted largely to give effect to the unanimous recommendations made in the Reports of the Gas Legislation Committee, a Committee generally known as the Wrottesley Committee, which was appointed by the President of the Board of Trade in 1931. As your Lordships are aware, almost the entire gas supply of the country is furnished by statutory undertakers who operate under powers conferred directly upon them either by special Acts or Orders. The fundamental Acts upon which these powers are founded are the Gasworks Clauses Acts, 1847 and 1871, which are incorporated when Parliamentary authority is given. This somewhat old legislation has, on the whole, operated extremely satisfactorily but, as a result of development in the industry and of the changed demand which it has to meet, the legislation in question in some respects became inadequate to meet the requirement of modern conditions. Such a change is naturally to be expected and the fact was recognised by the
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passage of the Gas Regulation Act, 1920, which authorised charging for gas on the basis of the heat which it will provide instead of on the volume of gas consumed.
This alteration in the method of selling gas gave an impetus to development in gas manufacture, and the industry, in 1926, made representations through the National Gas Council, in a memorandum addressed to the President of the Board of Trade, urging that fresh amending legislation should be introduced at an early date to facilitate still further the work being carried on by this great industry. The memorandum in question was, in 1927, referred for examination to the National Fuel and Power Committee, of which the late Lord Melchett was Chairman. This Committee appointed a sub-committee to consider and report upon the questions raised by the National Gas Council, and the sub-committee reported in August, 1928, that they had "been impressed by the representations of the National Gas Council," and urged that steps should be taken without delay to promote legislation to give effect to its recommendations. The sub-committee's report was approved by the main Committee in the Second Report of the National Fuel and Power Committee, which was issued as Command Paper 3252. To the more simple of the proposals thus approved effect was given by the Gas Undertakings Act, 1929, while the others were left over for further detailed examination which was deemed necessary because the National Fuel and Power Committee had considered the matter only on the general ground of broad national policy. Such a detailed examination has been carried out by the Gas Legislation Committee, who were appointed under the chairmanship of Mr. Wrottesley, K.C.
The Committee have presented three unanimous Reports. The proposals in the First Interim Report, relating to powers of gas undertakers to invest capital in other gas undertakings and allied industries, have already been dealt with in the Gas Undertakings Act, 1932, which I had the honour to conduct through your Lordships' House. This Bill, with your Lordships' approval, will give effect to the recommendations in the Second' Interim Report (Command Paper 4237) and the Final Report (Command Paper 4288). Your Lordships will find that all the recommendations which require legislation

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in these two Reports have been dealt with in this Bill, with the exception of two. The first of these is that gas undertakers should be empowered to impose a minimum quarterly charge upon consumers, and the second, a recommendation that, where an application for a Special Order is unopposed, it should not be necessary to lay the Order in draft before both Houses of Parliament and obtain an affirmative Resolution approving the draft before the Order is made, but that the Board of Trade should make the Order and then lay it.
To come to the clauses of the Bill, the first group, Clauses 1 to 4, deals with capital and renewal funds. These clauses are based on the recommendations of the Final Report of the Gas Legislation Committee. Similar clauses have recently been embodied in Private Acts approved by your Lordships and these clauses will extend the additional powers to all undertakers to whom they are appropriate. The second group of clauses (Clauses 5 and 6), relating to charges for gas, gives effect to the recommendation in the Second Interim Report of the Gas Legislation Committee, with the exception to which I have directed the attention of your Lordships. These clauses will, by liberating the industry from unnecessary restrictions in entering into contracts with consumers desirous of contracting out of the normal conditions of sale, facilitate the use of gas by industrial and other special contract consumers, and will tend to develop the use of home-produced fuels, which your Lordships will agree is much to be desired.
The third group of clauses (Clauses 7 to 9) gives effect to the recommendations of the Gas Legislation Committee with respect to non-statutory undertakers and undertakers other than thermal unit undertakers. These undertakers, who are operating on a small scale, sell gas on the old system, that is, by volume, and the requirement is placed upon them that after January 1, 1939, gas supplied by them should be at a pressure not less than a specified minimum. Non-statutory undertakers are defined in the Bill and quite roughly are persons whose principal business is supplying gas to the public and who have not statutory powers. It is proposed that non-statutory undertakers that supply more than 30,000,000
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cubic feet of gas a year shall, after a short period, become statutory, receiving thereby the powers necessary to the efficient conduct of the business of gas supply and having imposed upon them the usual obligations. The clauses further impose upon all non-statutory undertakers and non-thermal unit undertakers a requirement to supply gas at a pressure not less than a specified minimum. The fourth group of clauses (Clauses 10 to 14) deals with various amendments to the Gas Regulation Act, 1920, some recommended by the Gas Legislation Committee, some consequential upon the provisions of the last group of clauses that I have mentioned, and some to assimilate the position of the standards utilised in the sale of gas to other commercial standards.
I may, perhaps, remind your Lordships that in 1920, when the sale of gas by the therm, that is to say, on the basis of the heat units which it will yield, was authorised, the measurement for commercial purposes of heat units was by no means in a satisfactory condition. Accordingly, it was at that time deemed necessary to place the responsibility for the necessary tests in the hands of the Gas Referees. To-day, as a result of the work of the eminent scientists, who have been appointed by the Board of Trade to the office of Gas Referees, the determination of calorific value is one which can be effected for commercial purposes with great precision. Representations were made last year by the industry through the National Gas Council, that the position should be reviewed, and the Government propose that the Board of Trade should be made responsible for this work just as they are now responsible for the maintenance of other commercial standards.
An interval of five years is, however, provided in the Bill to admit of certain improvements, now in process of development, being effected in the testing apparatus and methods of its use, but, after this, the office of Gas Referee will no longer be required and is, therefore, being abolished. When the Gas Regulation Act, 1920, was passed, provision was made for various appeals from the prescriptions of the Gas Referees and the reports of the Gas Examiners, and these appeals were all to be heard by the Chief Gas Examiner. Experience has

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shown that some of these appeals are never required and has led to the view that the remaining duties attached to this post could be more reasonably carried out by the appointment, ad hoc, of a competent and impartial person to hear an appeal than by a single annual appointment. It is, therefore, proposed by the Bill to abolish the post of Chief Gas Examiner.
Clause 15 of the Bill makes provision for enabling a gas undertaker to give a supply of gas in bulk to another undertaker. This clause makes applicable the provisions of the Gasworks Clauses Acts, with respect to such breaking up of streets as may be necessary for its purposes. The remaining clauses make general powers which are commonly given to undertakers in Special Acts and Orders. The proposals in the Bill have to a large extent been asked for by the gas industry and have been considered favourably by two entirely independent Committees. The necessity of freeing the business of gas supply from restrictions, which, though possibly necessary when the industry was in a monopolistic position, are to-day but a handicap to efficiency, has long been represented on all sides. I think I have explained this Bill as far as I can to your Lordships. When we come to the Committee stage I shall have a certain number of Amendments, some of them, in fact I think most of them, of a drafting nature, to propose to the House. In conclusion I can only say I regret to have kept your Lordships longer than I had hoped on this somewhat dull but very necessary subject of gas. I beg to move that the Bill be read a second time.
Moved, That the Bill be now read 2a.—(Lord Templemom.)
THE CHAIRMAN OF COMMITTEES (THE EARL OF ONSLOW): My Lords, may I add one word to the words which have fallen from my noble friend who has so eloquently and with such great scientific knowledge explained this complicated Bill to your Lordships? This is one of those useful Bills which further local legislation by embodying—as a great deal of the Bill embodies—clauses which have been introduced for some time past into Private Bills and are what is known as stock clauses in Private Bill legislation. That is a method by which our local
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legislation has been developed, and usefully developed, for many years. Your Lordships had all example of it in Lord Falmouth's Electricity Bill of last year. This Bill, as my noble friend has said, has been carefully examined by the Board of Trade and it is based upon recommendations of what is known as the Wrottesley Committee. I have been through it in my Department very carefully, and I think it is a Bill which will further the interest of local legislation and simplify Private Bill legislation. Therefore I venture to recommend it to your Lordships.
LORD MOUNT TEMPLE: My Lords, may I say one word in support of this Bill? It is really necessary that some legislation should be passed in order to enable the gas undertakings to compete more on equal terms with the electrical undertakings. It was my privilege some years ago to pilot a Bill through the House of Commons to give more liberty and more advantages to the electrical undertakings. One always felt at the time that the gas undertakings were under a very substantial disability compared with electrical undertakings. This Bill does not give to the gas undertakings all that they are really entitled to, but at any rate it does go a good way, especially in Clause 15, to help them to carry on business more expeditiously and with greater economy. For that reason I support the Bill most enthusiastically.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

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

MILK MARKETING.
LORD STRACHIE LORD STRACHIE rose to call attention to the milk policy of the Minister of Agriculture and of the Milk Marketing Board; and to move for Papers. The noble Lord said: My Lords, I have put this Motion on the Paper with the object chiefly of asking for information as regards the present position. I notice that a good many people are referring to the money which is to be found by the Treasury in the next few years for the

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assistance of farmers in the matter of cheese made in farmhouses, and also manufactured milk, as a subsidy. Of course it is not a subsidy. It is only a repayable advance in respect of factory milk and milk made into cheese on farms. In fact, it is a case of feeding the dog with its own tail. In some way or other —it is not explained how it is to be done and I do not suppose the noble Earl or anybody else knows—the money is to be repaid. It is true that the Minister said that if the industry cannot repay what would happen would be that the Treasury would have to bear the loss of what was not repaid. I hope, however, that there will be no question of the Treasury having to bear anything, and that the dog may be successfully fed with its own tail, and no harm done.
One question which I should like to ask the noble Earl is whether I am right in thinking that farmhouse butter is excluded from any advantage from this repayable advance. I should like also to ask the noble Earl whether he can give us more information with regard to the guaranteed prices of 5d. and 6d. a gallon to be secured to the Milk Board for manufactured milk. That can be done better in this House than in another place. When Mr. Walter Elliot spoke in another place he was making a statement by leave of the House and, as old members of the House of Commons know very well, a Minister is unable in those circumstances to make a very long statement and there cannot be any general debate. Therefore we really know very little about what is going to happen in this matter or what advantage there will be to the farmers. In my own part of the country, which is a great dairy country, farmers are not very satisfied with the statement made in the House of Commons and would very much like to have it elaborated. I should like to know from the noble Earl what he thinks will be the result this summer on liquid milk prices. in my own part of the country farmers fear that they will not get more than 7d. or at the outside 9d. for liquid milk instead of, as now, over per gallon. I do not know whether the noble Earl will be able to give any estimate or whether he will simply have to tell us that we most wait and see.
I notice that The Times agricultural correspondent—who, I think the noble Earl will agree, is generally well in
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formed about agricultural questions—wrote in The Times on Monday that these prices "are not highly attractive figures." It is quite evident that agriculturists do not think that much is going to be done for them, and I should like to know what the noble Earl thinks about the statement in The Times. As regards cheese, I should like to know what the maker of farmhouse cheese is likely to get. At the present moment it is really impossible to sell farmhouse cheese, because the farmer can only get 3½d. or 4d. a pound. One of my own tenants told me that he has still got the whole of his cheese-make at home and could not sell it. By that he meant he was not going to get more than 3½d or 4d. and that would not meet the cost of production. I should also like to ask the noble Earl on what grounds the price is fixed at which the producer may sell milk while the retailer is allowed to sell at any price on which the retailers in any district agree. In some districts that is 6d. a quart and in London, I believe, it is 7d. Again, why should there be a difference made between Scotland arid England in this matter? In Scotland the retailers have their prices fixed by the Milk Board in the way that producers have their price fixed. It seems to me that as the position is at present both producers and consumers suffer. The producer gets less and the consumer pays more. I am not surprised that there is less milk consumed in London when the price charged is 7d. a quart. I understand that the price is to be reduced this month, but so far the position has been unsatisfactory.
The whole trouble arises, of course, from the Ottawa Agreement. There is no doubt that the milk industry was damnified by that Agreement. It is not the fault of the present Minister of Agriculture. The man who sacrificed agriculture to the vested interests of shipping and iron and steel was Sir John Gilmour. He sacrificed the milk industry, and fortunately for him he had the support of representatives of the National Farmers' Union who went out there, one of them being Mr. Baxter, who is now the Chairman of the Milk Board. When I say that he had their assent I say it for this reason, that they went to Canada and when they came back they did not say a word denouncing the unholy Agreement with the Dominions. It was left

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to a past President of the Royal Agricultural Society to denounce the way in which the interests of agriculture had been sacrificed. Then Mr. Baxter, the present Chairman of the Milk Board, with the support of the present Minister of Agriculture, went out in order, as he thought, to get New Zealand to agree to limit their dairy competition with this country. Of course everyone knew that it was going to be a perfectly hopeless task. What New Zealand said was: "We entirely agree that the home producer should have the first place in the market, but we are not going to depart from the bargair, we have made." Australia would not even see Mr. Baxter. When he came back: he made the extraordinary statement that, although he had been unable to do anything with the Dominions, yet on the other hand we could make a levy at the ports on dairy produce coming from the Dominions. I should like to ask the noble Earl to tell us whether that is the case. I cannot myself understand how, if the Dominions are to have free entry into this country, a levy can possibly be made on dairy produce from the Dominions.
There is another point on which I should like to ask for information. No doubt the noble Earl noticed in The Times the other day a letter written by the Chairman of United Dairies, Limited, in which he said that the Milk Board in the past five months had with-held enormous sums from milk producers. That is a most startling statement to be made, and I think it ought to be contradicted either by the Ministry or by the Milk Board, because if it be true it shows that we are getting a less price for milk than ought to he given. I hope that the noble Earl will clear up that question, and if he does not do so to-day perhaps he will be inclined to take some opportunity of seeing that it is corrected in The Times, where that statement was made.
One other matter that I would like to refer to is with regard to the£750,000 to be provided for a campaign to secure a purer milk supply. Of course I am entirely in favour of a pure milk supply, but in this White Paper no indication appears to be given of how it is likely to be applied. It would be interesting to know whether the idea is to give the county councils more money, so as to assist them in eliminating not only
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wasteful and doubtful cattle, but the more expensive and less productive herds. No doubt many of the councils have their veterinary officers, but to inspect all the herds in a County like Somerset, for example, would be a very expensive matter. Still, a great deal has already been done by the councils, assisted by the Government, in getting rid of cows suffering from tuberculosis, which is the only case in which you can trace direct infection of children or other people from cows. All I am a little afraid of is that the Government, or rather the Ministry of Agriculture, may be inclined to be misled by a letter in The Times, signed by several distinguished doctors, with regard to this question of pure milk. I notice they say this:
"Until purity at the source and during subsequent distribution can be guaranteed it is imperative in the public interest that all milk should by adequate pasteurisation he rendered safe…
I agree with regard to the importance of purity both at the source and during distribution, but I do not know that enough attention is paid to milk being kept pure after it leaves the farm.
I remember a great many years ago, when I was at the Board of Agriculture, I received a deputation of doctors on the question of the impurity of milk, and I pointed out then that there was a question of impurity not only before the milk left the farm but afterwards. I cannot but think that there ought to be something more than this mere statement of these distinguished doctors, that there were 2,000 person s who died from tuberculosis of bovine origin and also 4,000 other cases. We see nothing, as regards that letter, to show on what basis they make this statement, and I think it is rather unfortunate that they should do so because we are always being told of the great advantage of milk drinking, and that we must try to advertise milk. I am glad to see that the Government are going to provide a large sum for advertising, but what is the use of advertising milk when on the other hand we have these distinguished doctors holding out that a large amount of milk is not in a proper condition for human consumption? I am doubtful indeed whether it can be proved that people are really suffering from bovine tuberculosis which has its origin on the farm. It is all very well to say that the farmer is in fault and at

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the same time ignore the question of securing freedom from impurity during distribution. I cannot help but remember that after distinguished doctors in this House had talked about infection from milk, Lord Iveagh followed and said he wondered that anyone ever drank any milk at all. I beg to move.
THE PARLIAMENTARY SECRETARY OF THE MINISTRY OF AGRICULTURE AND FISHERIES (EARL DE LA WARR): My Lords, the noble Lord has asked me a number of very interesting and important questions. If my answer to some of them is not quite as complete as your Lordships might wish, I hope you will forgive me, as unfortunately I had no prior notice of what the exact questions were going to be.
LORD STRACHIE: The noble Earl will pardon me, but I spoke to the Whip on Tuesday and said I would like to see the noble Earl very much, in order that I might tell him about it, and I came here specially yesterday to see him, but he was not here. Otherwise I would have given him full information.
EARL DE LA WARR: I hope the noble Lord will not misunderstand me. I make no complaint, but am merely apologising to the noble Lord and to the House for not being able to answer more fully. The noble Lord has raised questions on our general policy at Ottawa, and I hope he will not expect me to follow him on that point, except to deal with one quite unnecessary attack upon Sir John Gilmour, who made a most gallant effort at Ottawa to represent agriculture in this country. I do not agree at all with the noble Lord, and if we were to go into full debate I could show that the whole of our milk policy has only been made possible by certain arrangements which Sir John Gilmour made at Ottawa. It is perfectly true that they have had to be supplemented, but the foundations were laid there for the regulation which has since taken place. It is perfectly true that with regard to dairy produce certain concessions had to be made, as indeed concessions always have to be made in the making of an agreement. In the forming of the policy that the Minister of Agriculture has lately put before the country in another place, we have taken particular notice of the Ottawa Agreement, and we have
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been able to show, by what we propose, that it is possible to have a really helpful and constructive milk policy in spite of the failure of the Dominions to co-operate in the regulation of supplies.
The noble Lord has already mentioned the fact that this policy endures for a period of two years, as regards the grant to the Milk Board for fixing a bottom to the market. A period of two years takes us just to the end of the Ottawa Agreement, when the policy can be considered on a different basis. That is the first purpose of this new policy, to fix a bottom in the market, and we have fixed the bottom as being 5d. in the summer and 6d. in winter. We have been accused on the other side of taking steps that are going to inflate a too-greatly-supplied market of milk, but I think any of your Lordships who know anything about the production of milk will realise that in fixing the bottom at 5d. in summer and 6d. in winter we really were not fixing a price in any way excessive or likely to inflate the market.
The noble Lord on this point has asked me a number of questions. He has asked what is to be the future of farmhouse cheese prices. I can only tell the noble Lord that at the moment that very question is in process of negotiation between the Milk Board and the farmhouse cheese makers. The arrangement under this scheme is between the Government and the Milk Board. It is now for the Milk Board to make its own bargain with the cheese makers. He has also drawn attention to the fact that farmhouse butter is excepted, but it is only excepted for the purpose of a Government grant to the Milk Board. There is nothing in the scheme to prevent the Board coming to its own arrangements with butter makers, if it so desires or finds it necessary. The noble Lord has asked me further about the course of future prices. That is a question which, I think the noble Lord knows very well, it is quite impossible for me to answer at the moment. It is in process of discussion. And one last point which he has referred to is the question of the holding back of moneys by the Board which, he says, should have gone to the producers. That is not a fair statement. What has actually happened is that the Board has done to a not very large extent what all of us do when we go into

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business, and that is has put aside a certain amount for the building up of reserves. It has not been possible to put aside as much as it would perhaps, to many of us, seem desirable, but it has made a beginning. I think we should all agree that that is quite a right and legitimate step for the Board to have taken.
Now, let us pass to the second item of the policy to which the noble Lord has referred, and that is the question of the cleaning up of the herds. I am afraid I cannot tell the noble Lord at the moment exactly what steps we intend to take for the disposal of that£750,000. He will realise that a policy of this kind can only be worked out to a final statement in consultation with many outside bodies, and we felt, quite rightly I think, that we must make the announcement of our general policy in the House first before going to outside bodies. I can assure him, however, that we are at the moment in process of making out that detailed policy, and that, of course, the House will be informed the moment we have our definite proposals ready. The noble Lord has referred to the correspondence in The Times a few days ago by certain very distinguished members of the medical profession. Of course, we all know the state of opinion in the medical profession at the present moment towards much of the milk that is produced in this country, and it is because we realise that no real milk publicity campaign can possibly prosper unless we get the sympathy, not only of the public generally but particularly of the leaders in public health—of the medical profession—that we have put forward this very bold proposal for spending no less than£750,000 in the next four years on cleaning up the herds. Certainly I shall consider that we have failed in our duty of making the best use possible of this money unless we are able to satisfy the medical profession to such an extent that they will stand behind us instead of against us, as in the past, in conducting a milk publicity campaign.
The third portion of our policy has not received very much attention from the noble Lord, but perhaps he will forgive me if I just mention it now that we are on the subject. We have promised grants or loans to assist the putting of a bottom into the milk market. That bottom is
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concerned mainly with the disposal of what is called surplus milk in the manufacturing market, but we all know perfectly well that if we are going to give real assistance to the milk industry, where the expansion in consumption has got to come is not with regard to manufactured and processed milks but with regard to the consumption of liquid milk. The first step that we have taken in regard to that is the step that I have already mentioned, that is, an attempt to clean up the herds of this country, and thereby give the public confidence in the commodity that we are attempting to sell. But the second step is, believe, almost equally important, and that is that we are making a grant of£500,000, on the pound for pound basis, to increase the consumption of liquid milk in that place where it is most needed for social reasons to-day the schools of this country. And when I say schools I include not only elementary schools but also nursery schools and secondary schools. That money has to be spent on a scheme which is agreed between the Government and the Milk Board, and again it is not possible for me to inform your Lordships of the details of the scheme. I can only say that we are hoping that, although the Vote comes under the name of publicity, as far as possible that publicity will be conducted by means of cheapening the price of milk rather than the conventional form of advertisement.
There is one other point to which the noble Lord has referred, and which is possibly the most important of all—namely, the question of retail prices. Well now, I think the noble Lord knows—in fact, I think he said so in his speech—that retail prices are not under the current contract the responsibility either of the Government or of the Milk Board itself. All that is being done is that retailers, in consideration of having to give fixed prices for their wholesale commodity, have been given power to protect themselves against under-cutting which would make it impossible for them to pay those wholesale prices. That has meant that in certain areas undoubtedly (we have to admit) the price of certain retailers' milk has been raised. Of course, the situation was made to seem rather worse than it actually was by reason of the rather unfortunate fact that this scheme came

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into operation just as there was about to be a normal rise from summer to winter prices. But still, in spite of that, there was a rise in price, which I fully admit. That matter is at the present moment under consideration by the Milk Board itself, who may be found to have certain powers of assisting in dealing with this question.
But in addition, I can assure your Lordships that His Majesty's Government also have the matter under very careful consideration, and it may well be that the situation, which quite admittedly is not satisfactory at the moment, may have to he dealt with at a later stage by the Government adopting further proposals. I think it would be generally agreed that to deal with this situation we had to take the steps which we have taken and that the only hope of getting a general reduction of prices to the consuming public was first and foremost to get control of the whole of the milk supplies of the country and to get the wholesale side of the trade in an organised state; and, having done that as a first step, it was then possible to consider going on to take the further steps, if necessary, of dealing with the milk at subsequent stages. I have endeavoured to deal as far as possible with the points which the noble Lord has raised. If there are any further points I hope he will let me know, and I will of course communicate the answers to him.
LORD STRACHIE: My Lords, I am very much obliged indeed to the noble Earl for the most careful answer that he has given me to the question, so far as it is possible to give an answer at the present time. I was very glad to notice that he evidently intended to indicate that at the end of two years something will be done to prevent our dairy interests being flooded by produce corning from overseas. It is only unfortunate that we have got to wait two years for it. Again, as regards factory butter, it is unfortunate that the farmhouse butter will get no advantage from the repayable grant, while on the other hand, as I understand it—I hope the noble Earl will correct me if I am wrong—the factory butter will get an advantage from this grant. Then he seemed to think that the amount which was referred to by the Chairman of United Dairies, Limited, as being an enormous sum which the Milk Board was keeping away from the
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producers, was not in fact an unduly large amount. Of course no one can possibly object to their making a reasonable reserve, but a sum which can be described as an "enormous sum" does not come within the description of a reasonable reserve. I think it is very desirable that the noble Earl should look into the matter and see whether that description is justified. If it is not justified, the Milk Board certainly ought to contradict such a statement, made by so important a person as the Chairman of United Dairies, Limited, which supplies London with practically the whole of its milk.
As regards what the noble Earl said about the repayable advance—or rather it is not repayable, I think, in that case; I understand that the £750,000 is a distinct grant?
EARL DE LA WARR: Yes.
LORD STRACHIE: I understand that already the breed societies have approached the Ministry with the object of getting a large grant from the Ministry. I only hope that the noble Earl will bear in mind that it is much more important to consider the ordinary farmer in this matter, and the best way in which he can be helped to clear his herds, if I may venture to say so—and the noble Earl, who, I think, is himself a member of a county council, will I hope agree with me—is to see that a large part of that grant is distributed through the county councils, who are really the very best people to control and supervise the matter of the clearing of the farm herds. I am entirely with the noble Earl as regards that matter, only I am anxious that, instead of the money going to the breed societies or other such bodies, it should go to public bodies like the county councils, who at the present moment at entrusted to a very large extent with the clearing up of the herds, and have done a very great deal indeed, as I am sure the noble Earl will admit, for the benefit of the farmer. I hope the noble Earl will agree that they are the people who should in the future administer these grants, and that he will see that they have a very large proportion of them, because we do not want all the expense to fall upon the rates. I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

PROPAGANDA: SOVIET UNDEETAKING.
LORD MOUNT TEMPLE: My Lords, the Question of which I have given Notice, to ask His Majesty's Government, is whether they will state what is the undertaking to refrain from propaganda in the Empire which they have received from the Soviet Government, and what power they have to see that the undertaking is regarded. I thought, and I think the majority of the people of this country thought, that as in the Commercial Agreement made between this country and the Soviet Government, which was discussed in this House only two days ago, there was no clause about propaganda, the Government had refrained from asking for assurances on that matter from the Soviet Government. Six months ago, when there was a debate on this question in your Lordships' House, I urged that such a clause should not be inserted in any Trade Agreement, not because I did not wait to stop propaganda, but because I recognised that as during ten years while this clause had been in operation no Government of any complexion had been able to stop propaganda in any way, it would be well not to put in such a clause. Having that clause in only made us the laughing-stock of the world; and indeed. I think that when spoke in this House on Tuesday last stated that I welcomed the omission of such a clause.
But I had not then seen a very important statement—really an important statement—which was made at the end of the debate in another place on March I last, when the Commercial Agreement was discussed. It comes at the very end of the debate, and it reads as follows:
"Sir N. STEWAET SANDEMAN: Will the honourable and gallant member—"
that is Lieut.-Colonel Colville, the Secretary of the Overseas Trade Department—
"say a word on the question of Russian Propaganda?
Lieut.-Colonel COLVTLLE: The Agreement, which is a purely Commercial Agreement, does not include propaganda, but we have an undertaking on the subject of propaganda which holds good, and we think that we have sufficient power to see that the undertaking is regarded."
The debate then ended. Having regard to the form in which I have put down this Question, I understand that the rules of your Lordships' House preclude me from saying anything after the noble
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Earl, Lord Stanhope, has replied. Therefore all I will say is that it is to my mind a very important omission which was made by Lieut.-Colonel Colville when replying for His Majesty's Government. If they have some undertaking which will stop propaganda, no one will be more pleased than myself and I am sure every member of your Lordships' House, but the point put in my Question which I would like to press is, what power have they to enforce this undertaking if the Soviet Government chooses to break it? I therefore await with interest what the noble Earl has to say, and he will not mind, supposing that his answer is not as satisfactory as I should like, if I raise the matter again at a future date.
The UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (EARL STAN-HOPE): My Lords, this matter was referred to in the debate which took place, as my noble friend said, two (lays ago, and I then stated to your Lordships that I thought the undertaking referred to was an arrangement which had been made in 1930. I was slightly wrong in my date, because it appeared in Clause. 7 of a Protocol signed on October 3, 1929, by Mr. Arthur Henderson, then Secretary of State for Foreign Affairs, and by M. Dovgalevski, the Soviet Ambassador at Paris, by which His Majesty's Government in the United Kingdom and the Soviet Government engaged themselves to confirm the pledge with regard to propaganda contained in Article 16 of the unratified Anglo-Soviet Treaty of August 8, 1924; and that engagement was confirmed in an exchange of notes on December 21, of that year between Sir Edward Ovey, then Ambassador at Moscow, and M. Litvinov, Commissar for Foreign Affairs.
I may say that this Protocol has been published in a White Paper, Cmd. 3467 of 1930. The terms of the relevant Article were as follows:
"The contracting parties solemnly affirm their desire and intention to live in peace and amity with, each other, scrupulously to respect the undoubted right of a State to order its own life within its own jurisdiction in its own way, to refrain and to restrain all persons and organisations under their direct or indirect control, including organisations in receipt of financial assistance from them, from any act overt or covert liable in any way whatsoever to endanger the tranquillity or prosperity of any part of the territory of the British Empire or the Union of Soviet Socialist

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Republics, or intended to embitter the relations of the British Empire or the Union with their neighbours or any other countries."
I have conferred with my honourable and gallant friend the Secretary of the Overseas Trade Department, who informs me that what he had in mind in stating that we had the power to carry this out was, of course, that anybody indulging in propaganda who transgressed the law could be dealt with in the ordinary course of events in the Courts. But, apart from that, it will be clear to the House that His Majesty's Government possess at all times various means of pressure, diplomatic and other, which they are able, if necessary, to bring to bear against any foreign Government disregarding its obligations towards them. His Majesty's Government, of course, always reserve the right to judge for themselves when it is desirable to exercise pressure in any given case and, if so, what means and what degree of pressure should be employed; and until any particular case arises it does not seem necessary or desirable to discuss the particular action which they might take in hypothetical circumstances.
Probably my noble friend will think that he would like to have greater powers than are contained in that answer, but he will see that this is not an arrangement which has been made by the present Government—it is one which they inherited, and which has gone on since 1929. I think he will at any rate agree with me that we have had little cause during recent times to complain of propaganda from the Soviet Government, either here or in other parts of the Empire, and the hope of His Majesty's Government is that, as a result of the increased trading facilities in the Agreement which we discussed recently, we shall have less cause to complain in the future than we have had in the past.

BUSINESS OF THE HOUSE.
LORD PONSONBY OF SHULBREDE: May I ask the Leader of the House if he has any statement to make about the business for next week?
THE SECRETARY OF STATE FOR WAR (VISCOUNT HAILSHAM): My Lords, there is not very much to tell your Lordships beyond what appears on the printed
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Paper. On Tuesday, as your Lordships will see, there is the Committee stage of the Arbitration Bill; the Second Reading of the Dyestuffs (Import Regulation) Bill; the Committee stage of the Shops Bill; and the Report stage of Lord Amulree's Bill dealing with the supply of water in bulk. In addition to that there is the Second Reading of the Solicitors Bill, which is a small and, I think, wholly uncontroversial measure. There is also a starred question by Earl Peel. On Wednesday the noble Lord, Lord Hutchison of Montrose, has a Motion with regard to a proposed Ministry of Defence: Viscount Templetown has a Question with regard to the Dead Sea Oilfield; and Lord Davies has a Question with regard to the formation of an International Police Force. On Thursday we have the Committee stage of the Gas Undertakings Bill; the Second Reading of the British Hydrocarbon Oils Production Bill, which has just come from another place; the Committee stage of Lord Rankeillour's Judiciary (Safeguarding) Bill; and, it may be, a Motion, which at present stands in the name of Lord Allen of Hurtwood, with regard to Disarmament. I am not quite sure whether that Motion is effective for Thursday next. I shall have to find out whether Lord Allen proposes to postpone it or to raise it for discussion then.

PORT DINORWIC ELECTRICITY ORDER, 1934.
Special Order in respect of parts of the rural districts of Gwyrfai and Ogwen in the County of Caernarvon:
Laid before the House (pursuant to Act) for affirmative Resolution, and referred to the Special Orders Committee.

SHERIFFDOM OF PERTH AND ANGUS ORDER, 1934.
Order, dated 6th March, 1934, made by the Secretary of State for Scotland under Section 31 (4) of the Administration of Justice (Scotland) Act, 1933:
Laid before the House (pursuant to Act) for affirmative Resolution, and referred to the Special Orders Committee.
House adjourned at fifteen minutes past five o'clock.