Lords Sitting of 9 March 1937

Preamble
The House met at a quarter past four of the clock, The LORD CHANCELLOR on the Woolsack.

HASTINGS EXTENSION BILL. [H.L.]
THE CHAIRMAN OF COMMITTEES (THE EARL OF ONSLOW): My Lords, I beg to move that Standing Order No. 105 be considered in order to it being dispensed with in respect of the Hastings Extension Bill. I ought to explain that Standing Order No. 105 requires that a Private Bill originating in your Lordships' House shall be read a second time not later than seven days after the First Reading. This Bill was read a first time on January 28 and has been waiting since then for the Report of the Attorney-General. That Report was received only on Wednesday last and so it is necessary to ask your Lordships to suspend the Standing Order in order that the Bill may be read a second time.
Moved, That Standing Order No. 105 be considered in order to it being dispensed with in respect of the said Bill.—(The Earl of Onslow.)
On Question, Motion agreed to.
THE EARL OF ONSLOW: My Lords, I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a—(The Earl of Onslow.)
On Question, Bill read 2a, and committed.

MINISTRY OF HEALTH PROVISIONAL ORDER (EARSDON JOINT HOSPITAL DISTRICT) BILL.
Brought from the Commons; read 1a; to be printed, and referred to the Examiners.
FOLKESTONE PIER AND LIFT BILL. [H.L.]
Read 3a, and passed, and sent to the Commons.

AGRICULTURAL WAGES (REGULATION) (SCOTLAND) BILL. [H.L.]
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Strathcona and Mount Royal).
On Question, Motion agreed to.
House in Committee accordingly:
[THE EARL OF ONSLOW in the Chair.]
Clause 1:
Establishment of agricultural wages committees and an Agricultural Wages Board.
1.—(1) Subject to the provisions of this Act the Department of Agriculture for Scotland (in this Act referred to as the Department) shall, as soon as may be, divide Scotland into districts and establish an agricultural wages committee for each district, and an Agricultural Wages Board for Scotland, to be called the Scottish Agricultural Wages Board.
(3) The Department may, if they think it expedient, from time to time vary the boundaries and number of the districts into which Scotland is divided under subsection (1) of this section and may make such provision as is necessary in consequence of any such variation, with regard to the establishment of committees for the districts affected by the variation.
THE MARQUESS OF ABERDEEN AND TEMAIR THE MARQUESS OF ABERDEEN AND TEMAIR moved, in subsection (1), to leave out "divide Scotland into districts and." The noble Marquess said: I feel that I ought to apologise to your Lordships for not having been here for the Second Reading of this Bill and for my name appearing so often on the Amendment Paper. As the Second Reading was postponed I had to go North on business and was unable to be here. The first two Amendments are mainly an attempt to deal with a point raised in connection with the English Bill of 1924, which was introduced in much the same form as that in which this Bill now appears. During its passage, however, Parliament thought it undesirable to put so much power into the hands of the Minister of Agriculture in saying what should be the various districts in which the committees should be set up for considering and settling upon the wages to be paid. Here we have it left to the Department of Agriculture for Scotland to decide what the districts shall be. I suggest that Parliament should say what the districts should be rather than give uncontrolled power to the Minister. I therefore suggest that we should leave

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out "divide Scotland into districts and" and later, after "district," insert "specified in the First Schedule to this Act;" and perhaps I might mention that later on I have an Amendment proposing a new Schedule setting out the districts. I therefore beg to move the first Amendment standing in my name and, if I may do so, I will put the second one also, which is part and parcel of the same thing.
THE LORD CHAIRMAN: The noble Marquess should move his Amendments one by one.
THE MARQUESS OF ABERDEEN AND TEMAIR: I beg to move the first Amendment standing in my name.
Amendment moved—
Page 1, line 9, leave out (" divide Scotland into districts and").—(The Marquess of Aberdeen and Temair.)
LORD SALTOUN: I rise to support the Amendment of the noble Marquess, because it binds itself naturally to the proposed new First Schedule, which corresponds to all intents and purposes with the sheriffdoms of Scotland. These sheriffdoms, I claim, represent real differences in the character of the population of Scotland. For instance, for Aberdeenshire it would be a disaster indeed to us if the sheriffdom of Banff, Aberdeen and Kincardine were incorporated with Angus to the south or Moray-Nairn to the west. I can illustrate this point best by the following fact. Farm servants are more inclined now to remain in their situations than when I was a lad, but at all times, and even now, the practice has been for farm servants who really want to feel that they know the world to travel within the sheriffdoms and to accept places as far as fifty miles or more apart. That is a very common thing. It is quite a common thing to have a man in your service who knows every corner of the district Banff, Aberdeen and Kincardine. But they never go outside that area. There is a line beyond which you will very seldom find Aberdeenshire farm servants travelling. That indicates to my mind that the sheriffdom is a proper boundary for the local committee, because it corresponds to a real difference in population even though it may be too subtle to be noticed otherwise.
EARL CAWDOR: I should like to support what my noble friend has said
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or this Amendment and to ask the Government, if they are unable to accept it, to give the matter sympathetic consideration.
THE UNDER-SECRETARY OF STATE FOR WAR (LORD STRATHCONA AND MOUNT ROYAL): It will perhaps be for the convenience of your Lordships if in answering this Amendment I also give an answer to the two Amendments following, which are consequential, and also to the Amendment to the Schedule on page 3 to which the noble Marquess referred. As he explained, the object of his first Amendment is quite clear. It would have the effect of attaching to this part of the Bill a definition of the districts in Scotland for which the first agricultural wages committees are to be established. I should like to make it plain to your Lordships at the outset that in refraining from scheduling the districts the Government had no sinister motive. They have rather been moved by the consideration that, since it is desirable that power should be taken, as it is taken in Clause 1 (3) of the Bill, to make such modifications in the number and boundaries of the districts as may be found expedient in the light of experience, it might be better to leave the whole matter of the definition of districts to be effected departmentally rather than to put it in the Bill itself. There seems to be an objection in principle to an arrangement whereby an Act of Parliament can be amended at will by a Government Department, and I should have liked to avoid this happening if possible.
Moreover, if you put the districts in the Bill and give power to the Department to amend them subsequently, you run the risk that in the course of a few years that part of the Act may become out of date. May I give an example of what I mean by the Schedule falling out of date? While the Bill was in course of preparation the Government had in mind the districts recommended on pages 50 and 51 of the Caithness Committee Report. Those were the districts adopted for the previous wage regulations scheme set up in Scotland by the Corn Production Act of 1917. More recently, however, some suggestions have been made—some of them by the noble Lord, Lord Saltoun, himself, I think—for modifying those districts. It is true that if the suggestions were adopted they would not involve any

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very large departure from the recommendations of the Caithness Committee, but since they have been made it seems to the Government that they should be carefully considered, if possible, in consultation with the bodies representing the organised agricultural industry in Scotland, who will be intimately concerned either directly or indirectly in the working of the scheme. The position, therefore, is that the districts have not yet been fully determined.
I have carefully considered whether, and if so, how far. it is practicable to meet the views of the noble Lord who has put down this Amendment. In order to see whether it may be possible to reach a. firm decision on this matter while the Bill is still before Parliament, the Department has invited the representative organisations to confer with them, but in the meantime I can only say that at some stage in the progress of the Rill through Parliament there will be a clear indication of the Government's intentions in the matter of the determination of the districts, and that the Bill will be amended either to include a schedule of the districts or to provide for the determination being made by way of an Order which will be laid before both Houses of Parliament. That, of course, will give an opportunity for the Legislature to raise any objections to the Department's proposals. After that assurance I very much hope that noble Lords will not press this Amendment.
THE MARQUESS OF ABERDEEN AND TEMAIR: I am rather disappointed with the noble Lord's reply, because I thought I was on safe ground, seeing that the Department have had experience of the English Bill and that Parliament has practically told them that Parliament itself should lay down these districts. Still, perhaps the noble Lord will enable us to put down something on the Report stage, in case he has come to some agreement with the parties he has named, although, frankly, I think we in this House know Scotland as well as anybody. With reference to the actual Schedule, I may say that in every case except one it conforms with the present boundaries, the only exception being Dumfries, where the conditions are different from the other counties in the proposed Schedule. The whole point of drawing up the Schedule has been that where there are differences
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of practice in the engagement of farm servants there should be a separate committee who would know the customs in the area. That Schedule has been most carefully drawn up with that in view. If the noble Lord can give me an assurance that if possible he will produce the decisions of those with whom he is conferring before the Bill leaves this House I shall be quite willing to consider withdrawing my Amendment at this stage.
LORD STRATHCONA AND MOUNT ROYAL: If the noble Earl likes to put down an Amendment for the Report stage I have no objection, but I am afraid I cannot give him the assurance that I shall be able to make a Government statement before the Report stage, although it will be given during the progress of the Bill through Parliament.
Amendment, by leave, withdrawn.
THE LORD CHAIRMAN: The next two Amendments in the name of the noble Marquess are consequential, I believe?
THE MARQUESS OF ABERDEEN AND TEMAIR: Yes, and I will not move them.
LORD SALTOUN LORD SALTOUN moved, in subsection (3), to leave out "from time to time" and insert "after receipt of a resolution in that behalf passed by the committee concerned." The noble Lord said: The object of this Amendment is merely to ensure that the areas of local committees are not changed without their consent, and as I do not suppose the Department wishes for power to over-ride all local attachments I hope that no objection will be raised to this Amendment. I think it ought to be made perfectly clear in this Bill, and I would like to draw your Lordships' attention to the fact that the resolution mentioned in this Amendment is a resolution "passed by the committee concerned." That means that it is not what is called a "resolution of representative members," as outlined in Clause 15, subsection (2) of the Bill, but merely an ordinary resolution of the committee. That would not, I think, present any difficulties. If they could not obtain a majority they could not pass a resolution.
Amendment moved—
Page 1, line 20, leave out (" from time to time ") and insert (" after receipt of a resolution in that behalf passed by the committee concerned ").—(Lord Saltoun.)
LORD STRATHCONA AND MOUNT ROYAL: As Clause 1 (3) stands power is given to the Department of Agriculture to vary the boundaries and number of districts if they think it expedient to do so. The proposed Amendment would have the effect of transferring the initiative in the matter from the Department to the committees, since the Department could then only act upon receipt of a resolution passed by the committee concerned. If the Amendment were accepted, the only case in which a modification of boundaries could possibly be made would be by agreement between two adjoining committees. That being so, in all probability no changes would in fact be made, however much the Department might think them expedient. The English Act provides in Section 1 (3) for action by the Minister, if he thinks it expedient, only in the event of unanimous resolutions by the representative members of the county committees concerned. The action that the Minister may thus take is concerned with combinations of whole counties. In Scotland it is modifications of boundaries that are most likely to be in question, and not combinations of districts. It appears to me that the noble Lord, Lord Saltoun, would be content, in the case of Scotland, with a majority resolution of the committee as a whole, and that would meet his case. This certainly does make some difference, and on the whole I think I can accept his Amendment in principle, on the understanding that it will be redrafted to mean what Lord Saltoun intends—namely, a majority resolution.
LORD SALTOUN: I am very much obliged to the noble Lord. I accept that.
Amendment, by leave, withdrawn.
THE LORD CHAIRMAN: The next two Amendments in the name of the noble Lord are consequential, and will not be moved.
LORD SALTOUN: That is so.
Clause 1 agreed to.
Clause 2:
Duties and powers of agricultural wages committees with respect to minimum rates of wages.
2.—(1) Subject to the provisions of this Act, committees shall fix minimum rates of wages for workers employed in agriculture for time work, and may also, if and so far as they think it necessary or expedient, fix
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minimum rates of wages for workers employed in agriculture for piece work.
(6) If, on an application in that behalf, a committee are satisfied that any worker employed or desiring to be employed on time work to which a minimum rate fixed under this Act is applicable is so affected by any physical injury or mental deficiency, or any infirmity due to age or to any other cause, that he is incapable of earning that minimum rate, the committee shall grant to the worker a permit exempting, as from the date of the application, or from any later date specified in the permit, the employment of the worker from the provisions of this Act recuiring wages to be paid at not less than the minimum rate, subject to such conditions as may be specified in the permit, including, if the committee think fit, a condition as to the wages to be paid to the worker;
(9) Before fixing, cancelling or varying any minimum rate, the committee shall give such notice as may be prescribed of the rate which they propose to fix or of their proposal to cancel the rate or of the proposed variation of the rate, as the case may be, and of the manner in which and the time within which objections to the proposal may be lodged, not being less than fourteen days from the date of the notice, and shall consider any objections to the proposal which may be lodged within the time mentioned in the notice.
Where the proposal is modified in consequence of any objection so lodged, notice of the modified proposal need not be given except where in the opinion of the Board the proposal has been altered so materially that a fresh notice ought to be given.
LORD SALTOUN LORD SALTOUN moved, in subsection (1), after "time work," to insert with the exception of married workers employed under a contract of service by the year or half year and in the occupation of dwelling houses provided by their employer." The noble Lord said: This Amendment brings up the whole question of the position of farm servants who have a contract of service for a year and are living in houses provided by the employers. That brings up the whole question of the tied-house system. I do not want to elaborate what I said about that system on the Second Reading. I will merely content myself with two observations upon it. In the first place I think anyone who has had practical experience of agriculture in Scotland must agree that the tied-house system offers a great measure of security to the worker. Secondly, if you do away with the tied-house system you are not really going to put the worker in any better position, for, considering what I have already said

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upon the subject, what use is it to a man to be tenant of a cottage which he does not in fact leave when he leaves his engagement, if he is going to take another engagement perhaps fifty miles distant, where he may, or may not, be able to get another cottage.
On the Second Reading Lord Marley, speaking I believe as the mouthpiece of organised labour, suggested that the future of agriculture depended upon the lowering of costs by the substitution of machinery for man-power. Speaking for the men on the land, I do not accept that solution. When I was assisting in the management of an estate and of a home farm, farming, as I might say, de haut en bas, I shared the opinion of the noble Lord, but my experience of practical farming in Aberdeenshire has given me a very modified opinion of the value of machinery in agriculture. In that County, at any rate, I am sure that when all is reckoned machinery is just as expensive as horse-power; but although, like everybody else who has had to do with the land, I am a little inclined to dislike machinery as I think it leads to defective tillage, it has certain quite definite advantages. It makes the farmer independent of labour and destroys any chance of a successful strike of agricultural labourers. Anyone who doubts this has only got to think for a moment of the disastrous results of the strike of farm labourers in Southern Ireland not long ago. In the second place—and this is a most important point—machineiy assists in the substitution of casual for permanent labour. In the third place, it enables a great deal of necessary work to be done quickly and betimes during intermittent spells of good weather.
Now this Bill and this clause in the Bill have made farmers in Aberdeenshire turn their attention more and more to the use of machinery because they carry on their industry in a latitude where the short days in winter and continuous bad weather render farming operations impossible for prolonged periods of the year. They argue that if they are to be compelled, as they think they would be compelled, by the local committees to pay extra money to their men for overtime they will seek to economise by reducing their permanent staff and falling back on casual labour during the times when they will require it. In Aberdeenshire most farms are equipped largely for married
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farm servants. The farmers have at their disposal several cottages for these servants on farms of any size, and it is very easy for the farmer to use one of these cottages as a man's chaumer, as they call it, and to let the other cottages for any price that they can get. As conditions are in Aberdeenshire, they can get very good prices in any part of the county from tenants of these cottages. They will then simply turn one. of the cottages into quarters for single men sufficient to form the nucleus of their staff, and rely for the rest on casual labour obtained from amongst neighbouring smallholders or their tenants.
Of course I blame the farmers who reason in this way, because I stand for the retention of the harmonious relations between farmers and farm servants which have been the rule hitherto, but I do not see how the Government can blame these men, seeing that under this Bill they are putting the farmers on one side and the farm servants on the other, and they must expect them each to seek their greatest advantage. Moreover, at the present moment, though it may be only the worst type of farmer who is adopting this course, it is in the end bound to be the rule for all. I have said that this will be the result of the clause, but I can go further. I am not the only person to say this. There was a very good leader on the subject in the Aberdeen Journal, which carries deserved authority in the agricultural North, indicating that this is about to take place. And I have myself heard from two sources in Aberdeenshire that, in consequence of the introduction of this measure, the harder driving type of farmer is already adopting this course. I do not wish to detain your Lordships with other arguments which occur to me on this matter, seeing that this one fact appears to me to be unanswerable.
I have no reliable means for making an estimate, but I have estimated that in the first two years of the working of this Bill, if it should pass, there may be as many as a thousand families put out of work and rendered homeless and—worse than anything—deprived of that access to the land which is not only the means of their existence but the greatest pleasure in it. Even if I am wrong, take one half of that figure, I should like to ask the noble Lord who represents the Government whether they have contemplated such a dislocation of rural life as I have sug-

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gested will result from this Bill. If it should take place I would like to ask him how they would propose to deal with it. I can assure him that, although the passage of this measure affects me with feelings approaching to despair, there is no one who is more willing than myself to do everything in his power to make it a success and to prevent its affecting harmfully people for whom, in spite of the abolition of all hereditary jurisdictions, I still feel so large a measure of responsibility. I beg to move.
Amendment moved—
Page 2, line 3, after ("work") insert ("with the exception of married workers employed under a contract of service by the year or half year and in the occupation of dwelling houses provided by their employer").—(Lord Saltoun.)
THE MARQUESS OF ABERDEEN AND TEMAIR: It may not be known to many of your Lordships that married men on farms in Scotland not only get fixed wages, but they get perquisites, and these perquisites are very valuable to the men and their families. I have rather a fear that if minimum wages are laid down and those minimum wages become rather higher than the farmer is able to afford, these perquisites will cease, and the state of these married men will be worse than it is now. I should like some assurance from the noble Lord in charge of the Bill that perquisites will be taken into account when the committees are set up and that instructions will be given to that effect when the minimum wages are fixed. It is a very important part of the married man's advantage, and also of the farmer's provision for his men. I think that unless we can have some guarantee that perquisites will be taken into account that would be a very good reason for leaving out married men, as proposed by the Amendment.
LORD STRATHCONA AND MOUNT ROYAL: In dealing with this Amendment I think it will be well to inform your Lordships that it is the normal practice throughout Scotland to engage married farm workers by the year or half-year, and to provide them with Jiving accommodation on the farm. The Amendment would have the effect of excluding from the scope of the Bill a very important proportion of the total number
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of farm workers in Scotland. I think your Lordships will agree that in a measure of this kind it is plainly impracticable to make exceptions, such as those suggested, on a territorial basis. I sincerely appreciate the depth of feeling which the noble Lord, and also the noble Marquess, Lord Aberdeen, expressed when speaking on this Amendment, but I think that the noble Lord seemed to have lost sight of the main object of the Bill. In general there is no question but that married men receive a fair deal from the farmer, and such fair-dealing farmers have nothing to fear from wage regulation, to which, after all, they will be parties through their representatives on the wages committees. The only difference, so far as they are concerned, is that many rates will be settled in round-table discussions on the district basis, instead of by private negotiation on the individual basis, which has operated hitherto.
As I see it, the case which will be affected by the operation of the minimum wage is the exceptional one where a fanner may in the past have taken advantage of the absence of any collective bargaining scheme to pay rates of wages below the standard of customary rates to married men who are willing to accept then in order to get a house. I do not see that such adjustment as may be decided upon by the wages committees is likely to bring in its train any of the extreme results which the noble Lord apprehends. It will, after all, be open to the committees under the terms of Clause 2 (2) to fix a minimum rate so as to vary according as the employment is for a day, week, month or other period, or according to the number of working hours or the conditions of the employment. It will be possible for the committees, with this wide discretion, to devise arrangements dealing with long hirings, which will fit equitably into the general framework, and will not cause any undue local disturbance. Noble Lords may therefore rest assured that the special case or cases in which they are interested can be met without amendment of the Bill. I am sure the noble Lord, Lord Saltoun, will realise the difficulty which the Government would fee in accepting any such Amendment, and I hope that after this explanation of mine he will feel able to withdraw the Amendment which is on the Paper.
THE EARL OF STAIR: I am in considerable difficulty about this Amendment. I am very strongly in sympathy with Lord Saltoun's object in moving it, but I am not entirely satisfied as to whether it answers the purpose or not. The usual practice in my part of the world, in the dairying districts in the South-West of Scotland, is to engage a man to supply possibly two, three, or four milkers, which puts a man with a large family in rather a strong position. The position is governed by the number of available cot houses and whether these cot houses are big enough to hold large families and whether, failing large families, there is i. sufficient number of cot houses to supply the necessary labour on the farm. It is these conditions which appear to me to make it almost impossible for any wages board to decide the actual value of a man according to the size of his family. It is this particular difficulty, in tact which is my chief objection to the Bill at all, and which points to the absolute necessity of private bargaining, for in practically every case the circumstances are different. I have had this difficulty myself a vast number of times. You lose a man with a wife and perhaps two grown-up sons and one or two daughters, and it is almost impossible to find a corresponding number of workers for a house accommodating six or seven people without engaging two families who require two houses. I do not quite see how the Bill is to be framed to meet these cases. I hope the noble Lord in charge of the Bill will take this point into very serious consideration before the Report stage and, in consultation with his advisers, see whether this Amendment moved by Lord Saltoun will cover the case or not.
LORD SALTOUN: May I ask the noble Lord also if he is able to amplify a little of what he said? The real difficulty is the question of overtime. On a farm you cannot reckon overtime. I gave examples of that on the Second Reading. I myself have never been able to reckon overtime and, what is more, my men knew I could not. It was a case of my men putting in extra time of their own accord, not one of my driving them. What farmers are frightened of is that they will have to reckon regular hours and overtime. They are throwing up their hands and saying, "This is not worth it. We shall engage unmarried
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men and depend on casual labour for our overtime, and cut down our expenses when there is no work to be done on the land in the winter time." If the noble Lord can give me some assurance that the local committee can definitely disregard the question of overtime, that will go a long way to meet me.
LORD STRATHCONA AND MOUNT ROYAL: I quite appreciate what the noble Lord has said, and with regard to Lord Aberdeen's point I believe that the question of perquisites will be taken into consideration. Also I understand that the question of overtime will be considered, but I hope noble Lords will believe me when I say that ample provision is made in subsection (2) of this clause, and I ask them to be content with that assurance for the time being. I will, of course, report what they have said to the Department, but I really do not see that I can withdraw from the position I took up before, that in a Bill of this nature you cannot possibly bring in special provisions such as noble Lords are pressing for.
LORD SALTOUN: In the circumstances, as I may raise this point at a later stage, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
LORD SALTOUN LORD SALTOUN moved, in subsection (6), after "behalf," to insert "made either by an employer or by a worker." The noble Lord said: In moving this Amendment, I only want an assurance from the noble Lord in charge of the Bill. The point is this, that a worker who is suffering from a disability will very often be extremely unwilling to go before the local committee and declare his disability. He will feel thereby that he is publishing his disability, and if he is unwilling to do so he will only be able to accept casual labour and eventually fall on unemployment relief. The object of this Amendment is to enable the application to be made by the employer, or I would be willing that it should be made by either party. If the committee are satisfied, it appears to me unnecessary for us to go into the means whereby they have satisfied themselves.
Amendment moved—
Page 2, line 38, after (" behalf ") insert (" made either by an employer or by a worker ").—(Lord Saltoun.)
LORD STRATHCONA AND MOUNT ROYAL: I appreciate that this Amendment is intended in the interests of the infirm or disabled worker. It is the Government's desire, and I am sure it will be the desire of your Lordships, that those workers who are affected by physical injury or mental deficiency should have their case specially taken into account. The clause provides that where in such case the committee are satisfied that the worker is incapable of earning the minimum rate the committee shall grant him a permit which will enable him, subject to any conditions that may be necessary, to work for a lower rate without his employer incurring any penalty under this Bill. The noble Lord's Amendment would enable effective application to be made to the committee by the employer or the worker alternatively; but it would have the further result that nobody else could apply on behalf of the worker. Application in such cases may sometimes be necessary before the worker obtains any employment. In such cases, if they are mental cases, it would not be wise to put the duty of application on the worker himself. It is desirable that parents and guardians and institutions charged with the care of infirm persons should be enabled to apply. As the clause stands the application can be made by anyone on the workers' behalf. In view of that explanation I think that perhaps the noble Lord will be prepared to withdraw his Amendment which, I venture to suggest, happens to imply the opposite of what he intends.
LORD SALTOUN: I beg to withdraw the Amendment.
Amendment, by leave, withdrawn.
THE EARL OF ELGIN AND KINCARDINE THE EARL OF ELGIN AND KINCARDINE moved, in subsection (9), to leave out "Board" and insert "committee." The noble Earl said: This is a very small Amendment. It is merely the substitution of the word "committee" for the word "Board." If your Lordships will look at the Bill you will find that Clause 2 deals entirely with and defines the duties of the committee. Clause 3 proceeds to the definition of the duties of the Board, and, except for this one word "Board," the whole of Clause 2 applies to the operations of the committee. I venture to suggest, therefore, that it should be left to the committee to decide whether
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or not the proposal is so modified in con-sequence of objection lodged as to need the issue of a, further notice, because in subsection (9) of Clause 2 the duty is given to the committee of publishing a notice prescribing the rate that they propose to fix. It would seem, therefore, reasonable that if, after they have received objections and have considered them, they come to the conclusion that this rate should be modified, they should have the power of saying whether or not a new notice should be issued. I beg to move.
Amendment moved—
Page 4, line 1, leave out (" Board ") and insert (" committee ").—(The Earl of Elgin and Kincardine.)
LORD STRATHCONA AND MOUNT ROYAL: This clause deals with the procedure of a committee in considering objections to any of their proposals. A case may arise in which, after the period of notice has expired, the committee may decide to modify their proposals as a result of representations received. The committee are not bound to give notice of such modifications, but may at once make their decisions and submit them to the Board for that body to carry out their functions under Clause 3, subsection (2)—that is, to make an order carrying out the committee's decisions. On the other hand there is nothing to prevent the committee from deciding to give further notice if they think that course desirable. The point of bringing in the Board is simply the obvious advantage of a second opinion in the matter. In this case it is the opinion of the body formally charged with the duty of seeing that legal provisions, including the provisions as to notice and publicity, are duly complied with. The question as to whether a committee have given adequate notice of their intentions is a legal point on which the validity of the order might possibly be challenged at some later date in the Courts. The provision is, therefore, in the committee's interest, and is designed to avoid any risk of their decision becoming void. The Government are, therefore, of the opinion that the subsection should stand as drafted, and I hope that in view of that explanation the noble Earl will see fit to withdraw his Amendment.
THE MARQUESS OF ABERDEEN AND TEMAIR: I think the noble Lord in charge of the Bill might perhaps consider

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before the next stage whether it would not be better to put in this clause a provision whereby the committee may give notice when they have considered an objection and desire to give notice accordingly, which would mean that it would save the time that would be taken up in going to the Board and certainly it would tend to the more smooth working of the committee. I hope the noble Lord will take that into consideration before Report.
LORD STRATHCONA AND MOUNT ROYAL: I shall be happy to make representations to the Department in that sense.
THE EARL OF ELGIN AND KINCARDINE: I confess that I am not altogether persuaded by what the noble Lord has said. I think the notice which the Board have to issue is dealt with in the following clause, but in view of what the noble Lord has; said I shall not press the Amendment.
Amendment, by leave, withdrawn.
Clause 2 agreed to.
Clauses 3 to 6 agreed to.
Clause 7:
Penalties and legal proceedings.
(4) Where an offence for which an employer is under this section liable to a fine has in fact been committed by some agent of the employer or other person that agent or other person shall be liable to be proceeded against for the offence in the same manner as if he were the employer, and either together with, or before or after the conviction of, the employer, and shall be liable on conviction to the same punishment as that to which the employer is liable.
(5) It shall be a defence for an employer who is charged with an offence under this section to prove that he has used due diligence to secure compliance with the provisions of this Act, and that the offence was in fact committed by his agent or some other person without his knowledge, consent or connivance.
THE EARL OF ELGIN AND KINCARDINE THE EARL OF ELGIN AND KINCARDINE moved, in subsection (4), after "with," to insert "the employer." The noble Earl said: This and the following Amendments which stand in my name raise a legal point. Your Lordships will see that in Clause 7 proceedings may be taken against the employer and, after conviction of the employer, the employee shall be liable on conviction to the same penalty as that to which the employer
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is liable. I venture to suggest that it would be incompetent to proceed against an employee in respect of an offence after the employer had been convicted of that offence, and for that reason I suggest that these words should be left out.
Amendment moved—
Page 6, line 35, after ("with") insert ("the employer").—(The Earl of Elgin and Kincardine.)
LORD STRATHCONA AND MOUNT ROYAL: I appreciate the noble Earl's point, and I am prepared to accept this Amendment and also the following two Amendments in the name of the noble Earl, but I cannot accept his Amendment in line 39, in subsection (5).
On Question, Amendment agreed to.
THE EARL OF ELGIN AND KINCARDINE THE EARL OF ELGIN AND KINCARDINE moved, in subsection (4), to leave out "conviction of". The noble Earl said: I understand that the noble Lord accepts this and the following Amendment. I beg to move.
Amendment moved—
Page 6, line 36, leave out (" conviction of ").—(The Earl of Elgin and Kincardine.)
On Question, Amendment agreed to.
THE EARL OF ELGIN AND KINCARDINE: I beg to move.
Amendment moved—
Page 6, line 36, after ("employer") insert ("is proceeded against").—(The Earl of Elgin and Kincardine.)
On Question, Amendment agreed to.
THE EARL OF ELGIN AND KINCARDINE THE EARL OF ELGIN AND KINCARDINE moved, in subsection (5), before "defence," to insert "good". The noble Earl said: This is perhaps not a very vital point, but it has a meaning legally. If a man has a good defence he is saved a certain amount of trouble in the Courts, and it seems reasonable to suggest, in view of the wording of the Bill, that if he met these provisions he should have a good defence.
Amendment moved—
Page 6, line 39, after ("a") insert ("good").—(The Earl of Elgin and Kincardine)
LORD STRATHCONA AND MOUNT ROYAL: I am advised that this addition really is unnecessary. If a defence is not a good defence, it is not a defence at all.
Amendment, by leave, withdrawn.
Clause 7, as amended, agreed to.
Clause 8:
Regulations.
8.—(1) The Department shall in addition to any special power to make regulations given to them under this Act, have power to make regulations for the following purposes: —
(a) for enabling a committee, on the application of any employer or worker, to determine any question which may arise as to any contract of employment so far as the application of this Act thereto is concerned;
(b) for requiring the Board, if so re quested by a resolution of the representative members of a committee, to perform any duty or exercise any power of the committee under any regulation made under this section, or requiring the Board to perform any such duty which a committee has failed to perform within such time as may be prescribed by the regulation, and for applying for that purpose as respects the Board any provisions of this section relating to committees;
LORD SALTOUN LORD SALTOUN moved, in subsection (1), to leave out paragraph (a) The noble Lord said: Clause 8 is a clause that enables a committee, on the application of any employer or worker, to determine any question which may arise as to any contract of employment. For a long time past the Sheriffs of Scotland have done a work which has deserved and earned the gratitude of the country for the expeditious, cheap and sympathetic manner in which they have settled disputes that arise as to contracts of service. It is common knowledge that the Sheriffs look upon themselves as trustees for the farm servant in this matter. It has been suggested to me that the reason of this clause is that of the expense involved in going to the Sheriff on questions of wage contracts. If a farm servant takes a case to the Sheriff and is successful it costs him between 5s. and 10s. and that is not a very large proportion of the wage he has received even in the worst times.
It has also been suggested to me that a local committee may, under this clause, merely get powers to explain the meaning of their regulations. The clause appears to me to go a very great deal wider than that. It appears to me to be a very wide clause indeed. In any case, if the committee's regulations are not clear, then no man ought to be blamed for mistaking them, and if they are not clear or if there is a possibility that they
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are not clear, then the committee is the last body in the world that should have to decide that question. The Sheriff is a far better judge of whether they are clear. Again there is another point. Committees may get known as being pro-farmer or pro-worker in complexion. Such a reputation will multiply vexatious cases and cause infinite trouble as well as a good deal of injustice. Then again, committee members may have special reasons for sympathising with one side or another even if they themselves are not parties. In fact from the constitution of the committee it is plain that almost any case that may be brought before them involves them in the danger of being auctor in rem suam, which is so obnoxious to Scottish law. I am allowed to say that unfortunately the noble Lord, Lord Alness, is prevented from being in his place to-day, but that he views with uneasiness the wide powers conferred in this clause. If the Government are unable to accept this Amendment I hope it will be possible for the noble Lord to move something on the Report stage. I beg to move.
Amendment moved—
Page 8, line 7, leave out paragraph (a)—(Lord Saltoun.)
LORD STRATHCONA AND MOUNT ROYAL: I appreciate that the noble Lord suggested that the determination of mutters of this kind can chiefly be effected in Scotland by bringing the case before the Sheriff. This is undoubtedly true and I am prepared to accept his Amendment with this provision: I think the noble Lord proceeds to cut out the second half of paragraph (b) as an Amendment consequential on the first Amendment. If (a) is cut out the whole of (b) should go and I would suggest that we should accept these two Amendments with a consequential official Amendment which will be tabled at the next opportunity.
LORD SALTOUN: I am very pleased to accept that, but there is of course the Amendment of the noble Marquess, Lord Aberdeen.
On Question, Amendment agreed to.
THE MARQUESS OF ABERDEEN AND TEMAIR: If it is desired by the noble Lord I am prepared to move form-ally the deletion of the whole of paragraph (b) and before the next stage of

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the Bill he can produce his Amendment. I therefore ask the Committee to delete paragraph (b) instead of only the second part thereof. It is really only consequential.
THE LORD CHAIRMAN: The Amendment in the name of the noble Marquess is to leave out from "section" to the end of line 22. But the noble Marquess now moves to leave out the whole of paragraph (b).
Amendment moved—
Page 8, line 12, leave out paragraph (6).—(The Marquess of Aberdeen and Temair.)
On Question, Amendment agreed to.
Clause 8, as amended, agreed to.
Remaining clauses agreed to.
Schedule:

SCHEDULE.
Constitution and Proceedings of Agricultural Wages Committees and the Agricultural Wages Board.
Agricultural Wages Committees.
1. A committee shall consist of not more than eight and not less than five members representing employers and an equal number of members representing workers in agriculture in the district for which the committee act (in this Act referred to as representative members), and of a chairman. In addition, the Department may, if at any time they deem it expedient, appoint two independent members.
2. The representative members shall be nominated or elected in the manner prescribed by regulations made under this Schedule.
3. The chairman of a committee shall be appointed annually by the committee, but, if the committee at any time fail to appoint a chairman within the prescribed period, the appointment shall be made by the Department.
A committee may nominate one or more persons for the office of vice-chairman, and the chairman may from time to time appoint one of those persons to preside in his absence.
A representative member of a committee shall not be qualified to be appointed chairman or vice-chairman of the committee of which he is a member.
LORD SALTOUN LORD SALTOUN moved, in paragraph 1, after "employers," to insert "and being themselves employers in the district." The noble Lord said: The object of this Amendment is to prevent the political exploitation of either party and to prevent unnecessary disagreement. I am confident that if actual working farmers and farm servants found themselves together on the committee they would come to agreement far more readily
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than will persons who make a profession and livelihood from this kind of work and whose interest it is to keep questions in agitation rather than allow them to be settled. I beg to move.
Amendment moved—
Page 12, line 7, after ("employers") insert ("and being themselves employed in the district.")—(Lord Saltoun.)
THE EARL OF ELGIN AND KINCARDINE: My Amendment, to leave out "nominated or" in paragraph 2, which appears later on the Paper, was really put down for much the same reason—to enable that these committees should be elected locally—and I shall have much pleasure in supporting the noble Lord's Amendment.
LORD STRATHCONA AND MOUNT ROYAL: If I may take all these Amendments together, the effect of them would be that all the representative members of committees would be employers in the district and workers except that where the Farm Servants' Union could prove a 15 per cent. membership in the district that Union could nominate one workers' representative. I had better take the Amendment first of all of Lord Elgin and the question of nomination, because this Amendment would have the effect that all the representatives would necessarily be elected. The Caithness Committee contemplated exactly the opposite—namely, nomination by the representative organisations. No decision has yet been reached for or against either method. The effect of the situation—that is to say, that the organisation of both farmers and workers can claim only partially to represent the whole bodies of farmers and workers—rather suggests election, or a mixture of election and nomination, rather than nomination alone as the right solution. This, however, is one of the matters which must be discussed with the organisations. But it may be observed that without at least some measure of nomination the workers' side of a committee may be severely handicapped. This is recognised in the Amendments in the names of the noble Lord, Lord Saltoun, and the noble Marquess, Lord Aberdeen. There is, moreover, always the possibility in the future that an organisation may become fully represented in a district, in which case the convenient and obvious method of appointment would be

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therefore nomination by that organisation. The Government appreciate the point of the Amendment, which is to secure the principle that the representative members of the committee would represent the whole body of employers and workers and not only the organised parts of those bodies. The Government concur in this principle and will take care to secure that it is not lost sight of. On the other hand, they cannot, I am afraid, accept the Amendment, which would make nomination impossible in all circumstances.
THE EARL OF ELGIN AND KINCARDINE: I think the noble Lord was really answering my Amendment.
LORD STRATHCONA AND MOUNT ROYAL: I am afraid I took the question of nomination first. Of course all these Amendments really hang together. The effect of them would be that all the representative members of committees would be employers in the district and workers presumably also in the district, except that where the Farm Servants' Union could prove a 15 per cent. membership in the district that Union could nominate one workers' representative. This is, of course, a lopsided arrangement which may enable a Farm Servants' Union official to serve on the committee but not an official of the Farmers' Union. It is not necessarily an objection on that account, but it is a point on which the farmers' organisation are entitled to be consulted. The extent to which the Farm Servants' Union are to be permitted to nominate members of these committees is also clearly a matter which will have to be discussed with them. The Government's intention is to embody in Regulations the arrangements arrived at by the Union and such Regulations would be laid before Parliament. There are obviously difficulties in embarking upon such negotiations before the terms of the legislation are settled.
Nevertheless, in view of the interest taken by noble Lords in this matter, which I quite understand, steps are now being taken to meet the Union at an early date with a view to discussing the points which have arisen. It may be that this discussion will enable us to indicate before the Bill leaves your Lordships' House the lines on which Regulations are likely to proceed, but it is
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clearly desirable that the Bill itself should not contain provisions making it impossible without amending legislation to alter the arrangement at some future date when conditions may have materially changed or when experience may have indicated that they require modification. On that account I am afraid I cannot accept these Amendments.
THE MARQUESS OF ABERDEEN AND TEMAIR: I am rather disappointed by the noble Lord's reply because as things are at present the whole negotiations for wages take place between masters and employees—amicably, too. Here you take away the possibility of that continuing. It seems to me very desirable that there should be a definite undertaking that members of the committee shall be farmers in actual practice and employees in actual practice also. You do not want an outside influence on these committees. If you confine the committee to these two classes, who already arrange what the terms shall be, you will be continuing the practice which has been so successful in the past. It seems to me a great mistake to depart from what has been a very friendly arrangement every year for married men and every six months for unmarried men. I hope the noble Lord will find some means by which this friendly arrangement may be allowed to subsist in the new procedure which the Bill proposes. Quite frankly, I think the present procedure is far better than that proposed, but if you are going to change it I do ask that you should try and maintain what has been a very friendly arrangement between the parties concerned.
It is of the utmost importance in agriculture, especially when it is so liable to depression, that there shall be amicable relations between all the parties con-corned. To bring in an outside influence to decide what wages shall be paid is the way to upset the mutual good feeling which exists at the present time. Therefore I stress very strongly that it shall be laid down by regulation that the members of the committee shall be genuinely either employers actually working farms or employees actually working on farms. You do not want outside people at all. I should like to say one further word on the question of the Farm Servants' Union. As was pointed out in the Second

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Reading debate that Union only represents 15 per cent. of the farm servants in Scotland. It would be quite unfair to give 15 per cent. of the men a representative on the committee and give other people with no organisation no representation at all. It would be far better to leave it out altogether than to introduce a foreign element. If, however, you do bring in a foreign element, then it might well be suggested that the National farmers' Union should have a special representative on each committee, or, as my noble friend Lord Saltoun proposed, that an organisation which is not the Farm Servants' Union should be allowed to have a representative I hope that the noble Lord will bear these representations in mind and try to meet us in the matter.
LORD SALTOUN: As the noble Lord, Lord Strathcona, touched on my next Amendment, perhaps; I might be allowed to intervene at this stage. The whole point is that we are being asked to give the Government a blank cheque and that we are never going to see how it is filled up. If these committees are to be appointed it is most important to know how they are to be appointed. It is essential to see that they are properly appointed, and nobody is better able than your Lordships to judge of the formation of such committees. If I understood the noble Lord rightly, he said that there would be negotiations with the Farm Servants' Union and that he could not tell us anything about the Amendment until they had consented. It is stated in the Departmental Committee's Report that the Farm Servants' Union has a membership of 15 per cent. of the farm servants, but I said in the Second Reading debate, and I still maintain, that it is doubtful if the membership is 5 per cent. in Aberdeenshire. If any society has a membership of 15 per cent. in Aberdeenshire then let it have a member on the local committee, but do not let it be laid down that no one else shall have representation on the committee. If your Lordships will look at Appendix 9 of the Report you will see that the scheme set out was one giving the Farm Servants' Union a representation on the local committee. I do not feel that I ought to accept the noble Lord's statement if the matter is to be left to a decision arrived at by negotiations between the Department and the Farm Servants' Union.
THE EARL OF ELGIN AND KINCARDINE: The noble Lord in his sympathetic reply got so near to saying that the matter would receive the Government's reconsideration, that I felt a little disappointed when in his peroration he said merely and bluntly that he was unable to accept any of the Amendments. I would like to stress the important point made by the noble Marquess, Lord Aberdeen, with reference to the members of these committees being drawn from those actually engaged in the industry. That is important. Another important point, stressed by my noble friend Lord Saltoun, is that these committees should really represent the locality from which they are elected. If he would give us an assurance that, after further discussion with the bodies officially representing different parts of the industry, he will at a further stage of this Bill introduce some words to give effect to what I think we all desire, I should as far as I am concerned be prepared to withdraw my Amendment—but we have not yet reached it.
LORD STRATHCONA AND MOUNT ROYAL: I feel that I ought to apologise to your Lordships to a certain extent. I thought it would be to the convenience of all if I gave a general answer to the three Amendments, which all deal with this portion of the Schedule. I entirely agree with the sentiments expressed by the noble Marquess, Lord Aberdeen, and it is, I am sure, the object of the Government and of all members of your Lordships' House to do all we can to ensure that the widest and the wisest distribution is made in securing representatives for these committees. I will point out to your Lordships that what we are discussing at the moment on this Schedule is paragraph 2:
"The representative members shall be nominated or elected in the manner prescribed by regulations made under this Schedule."
As I have already told your Lordships, negotiations are taking place almost immediately. The Government are consulting others besides these organisations, and I very much hope that before the next stage of this Bill I shall be able to give your Lordships some indication of the lines upon which those Regulations are likely to be framed. Obviously more than that I cannot do at this stage today, and I cannot therefore accept the Amendment.
LORD SALTOUN: If I may raise the matter on a later stage, I shall beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
THE MARQUESS OF ABERDEEN AND TEMAIR THE MARQUESS OF ABERDEEN AND TEMAIR moved, in paragraph 3, to leave out "annually." The noble Marquess said: This is quite a different point. It would be a great mistake, if you got a good man to serve on the committee, to insist that he should retire at the end of one year. Although I am not quite sure, I understand that the idea is to appoint these committees for three years. It would obviously be much wiser, if you got a good man, that he should be chairman during the period for which the committee is set up; or, if one-third of the members are to retire each year, then it would still be advantageous for a chairman, if you could get a good one, to be chairman for three years, because that would give confidence to those who came before the committee. You would also probably get a very much better chairman if he knew that he was going to have responsibility for three years. Again, the annual appointment of a chairman might quite easily lead to unpleasant competition between members when the year was beginning to come to an end as to who should be the next chairman. I think it would be very much sounder to allow the chairman to be more or less permanent, or, at any rate, to leave out the word "annually," so as to enable him to continue in office for longer than one year without having to seek re-election. It is sounder in every sense of the word to have permanency, and therefore that a committee should have a settled policy to follow in its delicate work. I beg to move.
Amendment moved—
Page 12, line 16, leave out ("annually").—(The Marquess of Aberdeen and Temair.)
LORD STRATHCONA AND MOUNT ROYAL: These two Amendments in the name of the noble Marquess are concerned with the period of office of the chairman. The proposal that the period should be one year follows the practice in England. There is, of course, nothing to prevent the re-election of the chairman for a succession of periods. A great deal of responsibility will rest on the chairman, particularly in cases where it may prove impracticable to add to the committee the two independent members whom the
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Department of Agriculture may appoint under paragraph 1 of the Schedule. The appointment of a chairman is normally to be made by the committee itself, and it therefore seems reasonable that the committee should decide how long the chairman should remain in office. The detailed procedure in regard to the tenure of office of representative members of the committees is not yet settled, and is a further matter for discussion with the interests concerned. If, however, the English model is followed, one-third of tie representative members will be due for retirement each year. If different persons are in fact appointed, it may quite well be that, in the third year at any rate, the chairman, unless appointed annually, may have ceased to be persona grata with the committee. This Amendment is therefore not necessary, and I am not prepared to accept it.
THE EARL OF STAIR: May I ask the noble Lord how you get a third of ten members?
LORD STRATHCONA AND MOUNT ROYAL: I am not very good at arithmetic, but I imagine that you would take the nearest third in every case.
On Question, Amendment negatived.
THE MARQUESS OF ABERDEEN AND TEMAIR THE MARQUESS OF ABERDEEN AND TEMAIR moved, in paragraph 3, after "by the committee," to insert "and shall hold office for a period of three years." The noble Marquess said: I still hold that this would be a good thing do. It would give some permanency to the committee. The committee would learn much in its first year, and it would certainly be a mistake to have the committee for one year only. I am still of the opinion that it would command more respect from those who came before it if they knew that it had some permanency and followed some policy on which they could rely. Quite frankly I do not quite see why, because it is annual in England, it should be annual in Scotland. It is an entirely different system in Scotland, and I am still of opinion that a three-year period of office, certainly for the first three years, is very desirable in every sense of the word.
Amendment moved—
Page 12, line 17, after the first ("committee") insert ("and shall hold office for a period of three years").—(The Marquess of Aberdeen and Temair.)
LORD STRATHCONA AND MOUNT ROYAL: I have already explained to the noble Lord the reason why I think it is undesirable to adopt his procedure, and I hope therefore that he will not press it.
Amendment, by leave, withdrawn.
LORD SALTOUN LORD SALTOUN moved, in paragraph 3, to leave out "Department" and insert "Sheriff of the district." The noble Lord said: The Schedule provides that if the two parties on the committee are unable to agree on the chairman, the chairman shall be appointed by the Department. The object of my Amendment is to make the chairman appointable by the Sheriff of the county. All through the Bill I notice an unwillingness to make use of the Sheriff, though there is nobody in the ordinary Scottish sheriffdom who is better able to make the appointment than the Sheriff. He knows the character, the reputation and the capacity of almost everybody of any note at all living within the borders of the county, and I suggest that he is a far more suitable person to make this appointment than the Department itself. After all, the Department's knowledge of the county is not nearly so intimate or so accurate as that which the Sheriff must necessarily possess, and I think it would be more satisfactory, even for the Department itself, to leave this appointment in the hands of the Sheriff. I beg to move.
Amendment moved—
Page 12, line 19, leave out ("Department") and insert ("Sheriff of the district").—(Lord Saltoun.)
LORD STRATHCONA AND MOUNT ROYAL: The authority proposed in this instance for the Department to appoint the chairman follows the English practice, and the Government see no reason for relegating the duty to the Sheriff, who really has no particular standing in this matter. Of course, before making such an appointment the Department will no doubt consult suitable persons in the district, but I think your Lordships will see that in this case the Sheriff is not necessarily the suitable person, and I hope the noble Lord will not press his Amendment. I have already met him once this afternoon on the question of the Sheriff, and I am afraid I cannot meet him in this instance.
LORD SALTOUN: Though I still think it would be the best way of getting the
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best men, I do not wish to press this Amendment.
Amendment, by leave, withdrawn.
Schedule agreed to.

BRITISH SHIPPING (CONTINUANCE OF SUBSIDY) BILL.
Order of the Day for the Second Reading read.
THE EARL OF MUNSTER: My Lords, owing to the unavoidable absence of my noble friend Lord Templemore through illness, it falls to my lot to ask your Lordships to approve of the two Bills which stand in his name for Second Reading this afternoon. It was in the autumn of last year that the tramp shipping industry requested the Government to renew the subsidy for a further period. After consideration, the Government decided to ask Parliament to make provision in 1937 for a sum not exceeding £2,000,000, but at the same time they warned the shipowners that this subsidy could not be renewed at the end of this year. Although conditions in this industry are distinctly brighter than they have been for some years, and the index for freight rates for the last few months has been above the average for 1929, it will be within the recollection of most noble Lords in this House who take an interest in shipping that during the years of depression the losses for the tramp shipping industry were very serious indeed, and it must accordingly take longer than merely a few months of comparatively favourable conditions of prosperity to repair the damage to the financial structure of the industry.
Moreover, during the last two years nothing approaching a sufficient sum of money has been set aside for the depreciation of ships, and in the fourth Report of the Tramp Shipping Administration Committee the arrears for depreciation are placed at a figure of some £10,500,000. I might mention, as your Lordships are probably aware, that the subsidy is based entirely on freight and if the average level rises above 92 per cent. of the average level for 1929 the amount of subsidy will be reduced, no subsidy being payable if that level is attained. On the other hand, if the average rate of freight is below the 1929 level then in the opinion of His Majesty's Government financial assistance will be necessary for

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the industry, and the subsidy will automatically become payable. I think the policy that the Government have pursued in granting this subsidy to the industry has been highly successful, for both the subsidy and the organised cooperation that have resulted from the subsidy have achieved all the results which we hoped for. The rates of freight have been maintained and improved. British vessels have been placed on a footing to compete on equal terms with those of foreign competitors. The British tramp ships in commission on December 31 last year were about 285,000 gross tons more than in April, 1935. The policy of subsidy has furthermore reduced to normal proportions the sale of British tramp tonnage to foreigners. The number of foreign-going tramps owned in the United Kingdom has started to increase after a long and continuous period of decline. Lastly, the wages and conditions of employment, both for officers and seamen, has been improved and I am advised that the unemployment among seamen, more especially white British seamen, has been' substantially diminished by the better conditions prevailing in the industry.
With these results obtained from two years of the grant of this subsidy, I think it would appear to be foolish in the extreme if we were now to jeopardise all the good that has been done by deciding not to renew the subsidy at the first signs of improvement in the industry. It should also be remembered that the industry is in no condition to face a serious setback, and there is a great deal of lost ground still to be recovered. British tramp shipping is a vital element in our national prosperity in peace time, and it is essentially part of the blood-stream of the life of the people in the event of war. Perhaps I may now briefly refer to the clauses of the Bill. Clause 1 extends the period in respect of which subsidies are payable to the end of this year, and subsection (2) provides that sums necessary for payment of subsidies and other expenses may be defrayed out of moneys provided by Parliament. That is the Bill that I present on behalf of my noble friend for Second Reading, and in his absence I shall be happy to endeavour to reply to any queries that may be addressed to me. I beg to move.
Moved, That the Bill be now read 2a.—(The Earl of Munster.)
LORD STRABOLGI: My Lords, I am sure your Lordships regret the absence of the noble Lord, Lord Templemore, and I hope the reports about him are good, but I should like to congratulate the noble Earl on avoiding the danger of running on the rocks when venturing into strange seas, and on his explanation of the terms of this rather complicated measure. In fact I think he steered a very good course. I do not rise on behalf of my noble friends to oppose this Bill, because we think just as strongly as the noble Earl and His Majesty's Government that the continued prosperity and success, and also the quantity, of British shipping form a most important national interest. But I wanted to ask one or two questions, and I am glad to see the noble Lord, Lord Essendon, present. If I can draw him into making some useful addition to your Lordships' knowledge I shall be Very happy, for I am sure no one in your Lordships' House has a greater knowledge of, or interest in, shipping than the noble Lord. If I make a few mild criticisms I want the noble Lord, Lord Essendon, to understand that they are not aimed at him or at the great companies with which he is connected.
I did not understand from the noble Earl whether the effect of the subsidy after the first two years has been to arrest the reduction of British tonnage. In other words, has the effect been to arrest this gradual melting away of the mighty British Mercantile Marine? That is the ultimate test of the success of this experiment. Secondly, is the noble Earl and the Department of Government concerned satisfied that the undertaking given—namely, that when a subsidy was given National Maritime Board conditions would be observed—has been, in fact, implemented? In that connection my information is that there are isolated cases where the Joint Maritime Board agreed rates and regulations have not been observed. I Would like to deal with a particular matter which affects the noble Marquess, the Secretary of State for India, as well as the noble Earl, Lord Munster—the employment of Lascar seamen in ships receiving the subsidy. The Party for which I am speaking has nothing but good will and comradeship towards the Lascar seamen,

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and any one who knows what Lascar seamen did in the Great War in face of the very atrocious attacks upon peaceful merchant seamen cannot but be grateful to them. But we have this criticism to make, that they are paid less than the wages for equivalent work by white seamen. We do not think it is right that the subsidy should be given to vessels manned by Lascar seamen receiving less than the Maritime Board rates of pay. The next question I would like to raise with the noble Earl is why we have not yet had particulars of the subsidy paid in 1936. That complaint was made in another place and the information, I understand, is still not available. We ought to have that information before this Bill passes through all its stages in both Houses of Parliament.
I want also to raise a very important matter, partly at the request of my noble friend Lord Lloyd. He and I in many matters affecting shipping see eye to eye, and in this particular matter I certainly see eye to eye with Lord Lloyd. Is the noble Earl—I am sorry I have not given him notice of this question—in a position to say whether the Government have taken any further decisions with regard to British shipping in the Pacific? Since this matter has been ventilated in your Lordships' House one British line has been extinguished and the remainder are threatened—I believe the noble Lord, Lord Essendon, would bear me out in this—and the situation is; serious and of great Imperial concern. What is happening? I am glad to see Lord Bledisloe in his place, and I am sure he is equally alarmed at this threat to the British Mercantile Marine in the Pacific. Are the Government doing anything? I hope the noble Marquess the Secretary of State for India is not going to leave the House for at least one moment. I apologise for calling him back, but this is a matter which affects him and is also of concern to the noble Viscount the Leader of the House. Are the Government doing anything about shipping in the Pacific, particularly between India and Japan? My information is that Japanese com petition is worse, if anything, rather than lighter, and that at the present time about 80 per cent. of the regular shipping between India and Japan is Japanese, whereas a few years ago 80 per cent. of it was British. This is due, I am told, to very unfair Japanese com-
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petition. I am sure that the two noble Lords I have mentioned—the Leader of the House and the Secretary of State for India—are just as concerned as Lord Lloyd and I are about this particular matter.
Finally, I must take the opportunity of once more stating that we on this side are opposed to subsidies in principle to any private enterprise unless they are accompanied by a measure of State control. Nevertheless, in the peculiar circumstances of the present Government in office, we cannot expect that. Therefore, in a wider national interest we do not oppose this particular subsidy being renewed for another year, and I hope with the noble Earl that the rates will be such that very little of it will be required.
LORD ESSENDON: My Lords, I intervene in this debate with a certain amount of hesitation because I happen to be interested in the industry which is to benefit under this particular Bill. On the other hand, with few exceptions, I am only associated with vessels of the liner type, both cargo and passenger, and consequently have little direct interest in the tramp shipping subsidy. But I am interested in seeing that the industry in which I have worked all my commercial career, and which I consider is so vital to the interests of this country, is not placed in the position of not being able to exist. It occurred to me that I might be able to make some observations to your Lordships and to give you some information that would help you in coming to some conclusion on this important matter. I am very much obliged to the noble Lord opposite for the very polite way in which he spoke about me. I gather that he and his friends are not going to take this Bill to a Division. If they did so, I would not feel entitled to vote in the particular circumstances.
The real test of this Bill is whether or not it has achieved its object. The object was to save the tramp section of the shipping industry from disaster, and the Government in introducing the Bill very wisely made certain reservations to improve conditions and to minimise domestic competition within the industry in order that the subsidy might not be dissipated. I venture to suggest that the subsidy has justified itself by freeing the tramp section of the industry from col-

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lapse, by restoring confidence, by promoting increased employment amongst British ships, by increasing rates of freight, and in setting the industry on the road to recovery, and incidentally by giving increased employment to officers and men. In considering this matter we have to remember that the basic economic facts which made this subsidy necessary in the first instance have not very materially altered. The shipping industry cannot prosper without world trade. There has been a very considerable improvement in that respect since the year 1932, but we are still 14 per cent. below the amount of world trade that prevailed in the year 1929. The improvement in tramp freights that has taken place during the last year has been to some extent due to the failure of the grain crops on the Continent of Europe and the consequent heavy purchases which have been made by Continental countries, necessitating grain being carried from great distances—from Australia, America, the Pacific Coast, and Canada—but the rates of freight that prevailed at the beginning of the year have not been maintained. In the early days of the year, from the River Plate, the rate was 34s. 6d. per ton; to-day it is about 26s. 6d. per ton. From Australia at the beginning of the year it was about 46s. 3d. per ton; to-day it is about 38s. 6d.
That is one of the causes of the improvement, but I suggest to your Lordships that the principal cause has been the organisation of the Tramp Committee which has instituted a system of minimum rates of freight, which has worked very satisfactorily. In fact, the existence of the subsidy has made the working of the Committee not only possible but practicable, because, as your Lordships will understand from what was stated last year, no shipowner can get the benefit of any subsidy if he opposes and does not work in conjunction with this scheme. If and when the subsidy ceases, I think it is very important that this Tramp Committee organisation should be continued, and I see no reason why it should not be, because it is only fair to say that foreign tramp shipowners have cooperated with the Tramp Shipping Committee in the most admirable manner possible. There are about 250 tramp shipping companies in this country, and the Chamber of Shipping received reports a
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little while ago from 176 of those companies in regard to last year's trading. Those particular companies required 5 per cent. depreciation, which would represent £2,096,000. The actual profits from the voyages were £1,216,000, so that there was a deficiency of some £800,000. The noble Earl in introducing this Bill also informed us of the amount of depreciation for the six years from 1929 to 1935, which was £18,000,000, and only £8,000,000 was earned, leaving a deficiency of £10,000,000. Any further depreciation that was provided in the accounts of the shipping companies came either out of reserve or out of returns from investments.
I am sure your Lordships will appreciate that six months of cumulative prosperity in the industry does not compensate for six years of ruinous depression. During those six years the industry has had to contend with shrinkage in world trade, aggravated by the uneconomic nationalism of other countries, which has resulted in their fleets being very considerably increased, chiefly by subsidy allowances. One satisfactory feature of the whole matter, which I am sure will please the noble Lord opposite, is that the cuts which were instituted in 1932 to masters and men have now been entirely restored, and, in addition, a Superannuation Bill has been brought in for the masters and the officers and the engineers. And these advantages apply not only to the subsidised section of the industry, but to the whole of the industry. The unemployment of masters and officers has been very materially reduced. So far as the sailors are concerned, the noble Earl, in introducing this Bill said, I think, that their unemployment had been very much diminished. I think I will go further and say that unemployment amongst the white sailors has been entirely eliminated. In fact there is likely to be a shortage both of trained engineers and seamen which threatens to become acute. That is the position as it is to-day.
One point I would like to refer to, and that is the safeguarding clause in the Bill under which, if freights get down to 92 per cent. of the 1929 level, then there is an automatic reduction in the subsidy. If they get down to the 1929 level the subsidy ceases altogether. I am not going to predict whether that is likely to be achieved, but certainly there have been periods during the past few

569
weeks when the 1929 level has been attained. Personally I hope the day will soon come when the subsidy will have to be abolished altogether. In any case, the Government are keeping back the payments until the end of the year, when it will be seen whether the 1929 freights will have been attained or not, so that it is quite possible no payment may be made under this Bill at all.
I would like to point out that tramps running costs have risen something like 20 per cent. within the last few months. This does not in any way affect the subsidy payment, because the subsidy is based on gross freight levels. But another and a very serious factor is the increased cost of building owing to the recent rise in prices, and I am afraid that the replacement of ships by British shipping companies for some time to come is going to be a very difficult matter. That is a very serious question because British shipping has already been reduced from one half of the world's tonnage to one third of the world's tonnage. An even more serious factor is the fact that in the event of war we only have now for the importation of our foodstuffs and of our raw materials and the carrying of troops an effective tonnage of 14,000,000 as compared with 17,500,000 when the last War broke out. Or, to put it another way, there are nearly two thousand vessels less on the British Register than there were at that time. And the shortage, I think, applies most particularly to 3,000 ton and 4,000 ton vessels that were particularly suitable for carrying iron ore into this country. The effect of all this is that we shall be much more dependent on neutral tonnage than we were before the last War, and we do not know that, in the event of another conflict there will be any neutral tonnage available. We do not know who our allies or our enemies will be, but, even under the best conditions in war time, it is certain that neutral tonnage will cost us a vast sum of money if we ever have to enter into a contract to use it. That is why I regret the falling off in British tonnage, and particularly the increasing prices at the present time, when it will be so difficult to rebuild and reconstruct the fleets.
Now to return to my original theme as to whether or not this subsidy has been justified. I suggest that it has been justified, and at a very low cost, a cost
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of £4,000,000 for two years. Many industrial experiments have cost a great deal more than £4,000,000. Without a Mercantile Marine adequate for both civilian and military requirements the vast expenditure which is now being incurred for armaments quite possibly might be rendered useless. In the event of any emergency arising, and in the event of our being unprepared, the Government would naturally be asked why they had allowed such an important link in defence as the Mercantile Marine to fall below the adequate requirements of the country. I suggest that £2,000,000 a year is not an abnormal sum for the rescuing and reviving of an industry which is of such value to the country as the shipping industry, and I hope your Lordships will agree that this Bill shall be renewed for what, I trust, will only be a convalescent stage, and it is quite possible that the money will not be required from the State at all.
THE EARL OF CORK AND ORRERY: My Lords, I rise to support this Bill, but I do so with a minimum of enthusiasm, because I venture to think it does not go nearly far enough. I support it on the principle that half a loaf is better than no bread. Your Lordships will remember that the President of the Board of Trade, in announcing his intention to continue the subsidy for 1937, warned the shipping industry that "its plans should be laid on the definite assumption that the tramp shipping subsidy will cease at the end of 1937." In the forefront of the Administrative Committee's Report a tribute is paid to the benefits that tramp shipping has received from the payment of this subsidy. The Report states that it "has succeeded in saving the British tramp shipping industry from certain ruin." It is further mentioned that when the original Act was passed the tramp shipping industry was "on the brink of catastrophe." Owing, however, to the improvement in world trade, and to the steps taken by the Committee during the past year, shipowners have been able to meet expenses and, latterly, to put something by for the renewal of their fleets.
The Report further states:
"It should not, however, be lightly assumed that because of rising shipping values, and the advance of freight rates since the Committee began its work, that the industry is now set on an even keel

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again and needs no further care or assistance."
As we were reminded the depreciation now stands at £10,500,000. That Report was published in January last. Lord Essendon has pointed out that since then ship-building prices have risen, are rising and that there is every prospect that they will continue to rise. To quote the Report once again:
"It is impossible 'to secure a Mercantile Marine adequate to the needs of the country' unless existing British shipping is put upon a sound financial basis."
Your Lordships will remember that "to secure a Mercantile Marine adequate to the needs of the country" were the words used in the King's speech last November to declare Government policy in regard to British shipping.
The Chairman of the Tramp Shipping Administrative Committee is Sir Vernon Thompson, and as such he has recently been the recipient of several eulogistic compliments from representatives of the Government upon the value of the advice he has rendered and the assistance he has given. Why not follow that advice a little further and make sure that existing British shipping is on a sound financial basis before you even consider abolishing the subsidy? If the present improvement in the freight market continues it seems probable that no subsidy will be paid under this Bill for 1937. So long as tramp shipping is holding its own, no expense to the country will be involved. Before ending the subsidy, might it not be considered worth while to use the money to build up a fund to assist British shipping in the future when and where it seems desirable to do so, without all the publicity of having to bring in another Bill and the inevitable delay which is caused thereby? The knowledge that the Government had this money and power to act, and were ready to use both, would give a sense of security to shipowners and enable them to face the future with more confidence. They could plan ahead and on broader lines instead of living from hand to mouth in an atmosphere of uncertainty.
Further, the declaration of the Government that it intended and was ready to come to the assistance of British shipping when and where required would have a salutary effect abroad and would do something to implement the proud
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boast of the Chancellor of the Exchequer that "we are not going to see the British Mercantile Marine swept off the seas." I may be told that the subsidy justifies that statement, and that it has had the desired effect. In this respect the title of the Bill is misleading. It does not deal with a subsidy for British shipping as a whole but with one section only—although it is a very important section. Liners and cargo liners are not affected except indirectly and coastal shipping not at all. As regards the cargo liners, the noble Lord, Lord Essendon, has pointed out in speeches here and elsewhere that it is just the class of ship which foreign countries are subsidising, and the process of sweeping British cargo liners off the seas still continues. No assistance is going to the coastal vessels, tramp or liner, or to the ships engaged in the short sea trades, although these small vessels have to face an intensive competition and they cost ton for ton more to run than the larger ships.
It cannot be said therefore that British shipping is being subsidised, and yet that is the impression that some people get from the title of this Bill. Coastal owners are not asking for a subsidy and they do not ask that foreign ships should be excluded from the trade of our coasts, but they ask that that trade should be carried on on equal terms and they hope and expect to get the support and assistance of their countrymen. I am not advocating the handing over of large sums of money to the shipping industry. I have no financial interest in the shipping industry and I approach this question simply as a student of national security. That security is based upon an adequate Mercantile Marine. It is for the safety of that Mercantile Marine in war that we go to the expense of maintaining a strong Navy. It is the Mercantile Marine that is all important, not the Navy. If the Mercantile Marine fails in its function a Navy treble the strength we visualise would not save us.
Appeals for any form of assistance are sometimes met by the argument that the shipping industry has no more claim upon the public than any other industry. Shipping, however, is essentially a national industry. It is more; it is the foundation of our national defence and of our national prosperity. It is quite astonishing to read statements by members of the Government taking credit

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for having rescued our tamp shipping when it was on the "brink of catastrophe." I should like to ask how members of the Government reconcile their duty to the nation with having allowed that part of the industry to get into that state. Having taken four years to obtain it, it seems that the subsidy is to be wiped out at the end of three years, in spite of the warning of Sir Vernon Thompson that financial assistance and care are still required and that we have a lot of leeway to make up if we are to have a Mercantile Marine adequate to the needs of the country.
Recent speeches by prominent leaders in the shipping world have not been very optimistic. I do not think Lord Essendon sounded very optimistic. An examination of the recently published report of the Chamber of Shipping points out that we have now two thousand fewer passenger and cargo vessels than we had at the outbreak of the late War! We know that we had not enough then and that under modern conditions we shall want more. It has been stated that we shall want at least seven hundred more ships. How is the deficiency to be made good? It certainly cannot be left to the shipowners to make it. It would not be reasonable or fair to expect them to build more ships or employ more men than will enable them to conduct their industry with efficiency and with due regard to the shareholders and the well being of those who serve them. Over and above this, the provision of men and ships becomes a national concern and just as much a part of the rearmament programme as is the building of cruisers and other warships to protect our dwindling merchant fleet.
There are many other matters that want looking into in the conditions of the Mercantile Marine and I, like Lord Strabolgi, do not attack the big concerns but a great number of mushroom companies that spring up when there is money to be made and fade away afterwards. The conditions of service have been improved greatly of late but all at the expense of the owners. It does reduce the possibility of their adding to their fleet and helping to make up this deficiency. There is the training too. The Mercantile Marine does not want as many officers in peace time as are required in war time. You cannot expect them to engage more officers than they need, but at the same time they have got to be there and I
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submit that the excess should also become a national concern. We want more ships. Those in excess of the needs of the Mercantile Marine to carry on their business should, when they cannot be employed profitably, be laid up and when trade improves they could be chartered, used by their original owners or chartered to others. Latterly I have been receiving several letters from Mercantile Marine officers as a result of some remarks I made at a meeting. They all point to the difference of treatment in some companies and in others. Some are mentioned with praise; with others it is quite the reverse. If one third of the stories I have heard are true I submit that an examination should be made of this matter in the interests of owners and officers alike. It has been said that merchant service officers are not an isolated class of the community and must be considered in relation to other bodies of employees. I contend that they are a class apart. They are indispensable and in reality they are national servants. If every shipping office closed to-morrow, the Government would have to take over all ships and officers and men and run the ships themselves.
I fully realise that I have touched on a big question, so big that I am convinced that what must come in the near future, and I hope in the term of the present Government, is a Ministry of Shipping presided over by a Cabinet Minister. That Ministry should have its budget and should have its estimates approved by Parliament, so that we should be able to secure the maintenance of a Mercantile Marine adequate to the needs of the nation. I do not propose that such a Ministry should interfere in any way with the normal business of shipping. It would, however, be able to make arrangements to keep a larger fleet in being than is actually required by business and be able to keep a sufficient number of officers to man it over and above what the needs of the shipping industry required. It would look after the interests of those who serve in the Mercantile Marine and in fact treat the Merchant Navy as what it is—an indispensable national service in peace and war. It would initiate a long-term shipping policy which would at least let everyone concerned know exactly where they were and inform the world that British shipping and its welfare would henceforth be supported by all the re-

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sources of the nation. Meanwhile, I suggest in conclusion to the Government that the warning of the President of the Board of Trade as to the definite withdrawal of the subsidy should be retracted, and that the subsidy should be kept alive as a ready weapon in the hands of the President of the Board of Trade to allow him to come swiftly into action in any part of the world wherever British shipping wanted help in the national interests.
LORD LLOYD: My Lords, in the few remarks I am going to make I should like to join with the noble Lord, Lord Strabolgi, in congratulating my noble friend who introduced the Bill both on the pleasant facility with which he did it and the prudent brevity with which he economised his arguments. I could not help feeling a certain gratification when I heard him make the same speech in favour of a tramp shipping subsidy as I had been making for months and years before the Government was persuaded to take it up. The noble Earl, Lord Cork, mentioned the phrase which Government spokesmen have used about saving tramp shipping from disaster. It really is a very grave thing that the Government, in face of constant and repeated warnings, should have allowed such a situation to grow up in the prime industry of this country, and after two or three years' warning to make so humble a claim that they have just saved it from extinction. It is not very satisfying to some of us, especially in view of the remarks of the noble Lord, Lord Essendon, when he reminded your Lordships of the terrible danger—that is no exaggeration—in which this country exists to-day for lack of shipping to carry the food supplies of the country. I can only echo what Mr. Winston Churchill said the other day in another place. I am amazed at the complacency of Parliament, amazed that at the most critical period probably in the whole of our history we should not be more interested in or more concerned at the depletion in our shipping. In that connection I should like to ask the noble Earl if he could give us some quite definite information, because some of us feel that we make speeches in this House time after time asking for information and are very often not supplied with it.
I would venture to ask the noble Earl—I do not think he can claim that it
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is not in the public interest to do so—whether he can tell us what the Government are going to do with regard to two main questions in relation to our shipping. The first is in relation to the Pacific shipping question which I have ventured to put before your Lordships on several occasions. It is two years ago now since first I raised the question of the probable extinction of at any rate one and of possibly our two lines in the Pacific. I do not think the Government paid very much heed at first when I suggested that there was every possibility that the British line competing with the Matson Line would be completely extinguished if the Government did not go to its aid. I remember reminding your Lordships of the speeches amongst others, of Mr. Neville Chamberlain and Mr. Runciman, saying that British shipping would not be allowed under a National Government to be swept off the seas. Nevertheless, the New Zealand Line no longer exists. This question was referred to the Shipping Committee. Very tardily the Shipping Committee has reported. We are now waiting to know the result of the negotiations taking place with the Dominions. Time goes on, month after month, year after year, and the situation is grave. I hope therefore that the noble Earl will be able to tell us to-day exactly when he hopes that some definite action will be taken to restore the line between San Francisco and New Zealand, and when something can be done, and what can be done, to give that essential help to the Northern Line which has been requested and for which a case has been made out.
The second question I would like to ask is whether he can give us any information as to the Government's decision as to the aid that must be given to our shipping in the Far East. I reminded your Lordships some few weeks ago of the terrible stress which has overtaken our shipping, at the hands mainly of Japanese competition, between Japan and India and elsewhere. I have not the figures with me at the moment, but I think I am understating and not overstating the case when I say that whereas only a dozen years or so ago the main bulk of the shipping between India and Japan was under the British flag, to-day at least 80 per cent, of it at both ends is under the Japanese flag. What is the Government doing about it? There is not time for these matters endlessly to be

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referred to Committees, with the same delay that occurred in the case of the Pacific question, because the extinction of our trade between Japan and India would be almost fatal. Would the noble Earl tell us quite definitely what steps the Government are taking to meet this competition and to equip our shipping lines with the necessary powers to face that competition? Those are the only two questions that I want to ask, but I do hope that the noble Earl will give us clear and quite definite replies to them.
THE EARL OF MUNSTER: My Lords, the debate which has taken place on this Bill has ranged over a very wide field. I will endeavour to do my best to reply to some of the questions raised although some of the points made, especially by the noble Earl, Lord Cork, and the noble Lord, Lord Lloyd, were not really germane to the problem under discussion. My noble friend Lord Lloyd was good enough to give me notice that he proposed to ask these questions and I shall endeavour to reply to him.
The noble Lord, Lord Strabolgi, asked one or two questions. He first asked me whether the reduction of British tonnage had been arrested. My reply to that is that undoubtedly this subsidy has arrested the reduction in tonnage. The figure generally shows an increase, and it is expected that this will be shown when it is published at, I think, the end of June this year. He also asked me about the conditions of employment for seamen and officers under the Tramp Shipping Subsidy Committee. Applicants for subsidy are required to satisfy that Committee on various points in relation to each voyage in respect of which the subsidy is claimed. The members of the crew, including the officers, must be paid rates of wages in accordance with the appropriate National Maritime Board Agreement. In the course of 1936 the new rates of wages and increases were brought into effect in the National Maritime Board Agreement, and the undertaking required to be given to the Committee covers these increases as well. At the same time, the number of deck officers carried must be in accordance with the operative agreement which is in existence at the present time.
Then my noble friend asked me a question concerning the employment of Lascar seamen on British ships. Some vessels
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carry these Lascar crews signed on under a Lascar agreement made in accordance with the requirements of the Government of India, and I think probably the noble Lord knows that the agreement is signed before an official of the appropriate Government Department in that country. These seamen are engaged in the East, and they are therefore outside the scope of the National Maritime Board Agreement. Since there is no National Maritime Board relating to the rates of wages applicable in such cases, the Tramp Shipping Subsidy Committee's requirement that the rate of pay must be in accordance with the appropriate National Board Agreement does not operate in respect of the crews. That is to say, the practice of employing Lascar crews, especially in vessels in India, is one of very long standing, and the employment under the Lascar agreement cannot, therefore, afford any grounds for withholding this subsidy. I hope I have made that point clear; I know it was raised continually during the discussions in another place. The subsidy for T936 has not yet been completed; payments have not yet been finally adjusted. I cannot give the noble Lord any definite date, but I am assured that a White Paper will be issued in the course of a short time setting out the full facts of where and how the subsidy was paid during last year.
Perhaps now I might turn to the question which was raised both by the noble Lord, Lord Strabolgi, and by the noble Lord, Lord Lloyd, concerning British shipping in the Pacific. My noble friend stated quite correctly that the Committee had examined the question of British shipping in the Pacific and that it had issued a Report. Perhaps my noble friend recollects that on previous occasions he has asked why this problem was not referred to the Imperial Shipping Committee until the spring of 1936. My noble friend has said that it should have been referred to that Committee at least two years before that date.
LORD LLOYD: If at all.
THE EARL OF MUNSTER: The policy to be followed up to that time had been discussed between the Governments of Australia, New Zealand and the United Kingdom, but no definite scheme had been put forward by the shipping com-

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panies on behalf of the Canadian-Australasian Line for its future running, nor was there, apparently, any agreement among the Dominions concerned as to the course to be followed. My noble friend will know perfectly well that this Committee has now reported, and its Report is being examined by the Dominion Governments. At the same time, His Majesty's Government in this country are ready to take their share in these deliberations, and in order to facilitate a solution they have formulated certain proposals as to the course of action which have been forwarded to these other Dominion Governments for their consideration. I am not yet in a position to make any further statement on what agreement will finally be reached, but I can assure my noble friend that His Majesty's Government realise the necessity for reaching a decision as soon as possible.
LORD LLOYD: Might I interrupt the noble Earl, if he will forgive me? I would not interrupt my noble friend if we had not had this over and over again. My noble friend is merely giving me the same answer that my noble friend Viscount Halifax gave me over a year ago when he said that the Government could not take a lead in the matter. I asked him then why the Government could not take a lead in the matter. I should like to know why the Government could not take a lead in the matter, and why they cannot now. I never got a reply; that is what I want to know.
THE EARL OF MUNSTER: My Lords, I thought I had made it clear. After this Committee reported, the Report was sent to the Dominion Governments, and His Majesty's Government in this country have made definite proposals which are now being considered by the respective Dominion Governments. I cannot give the noble Lord what he asks for, because I know of no further remarks which I can make that would satisfy the noble Lord. On the question of Japanese shipping, however, I think I have something which will satisfy him. We are already aware that Japanese competition is making itself very severely felt throughout the whole British Empire, and the Government are
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doing all they can to assist British interests and British industry to meet that competition. As regards shipping, Japanese competition is to-day very strong in Far Eastern waters and, moreover, is lively, under the new arrangements which the Japanese Government propose to make to assist their shipping, to become even more severe. The Imperial Shipping Committee have therefore been invited to inquire into the position of British shipping in the Far East. The reason, here again, why reference was not made at an earlier date to the Imperial Shipping Committee is that it is only within the last few months that definite requests in this respect have teen made by British shipowners to the Government. My noble friend will be satisfied, I hope, but he will certainly be gratified to hear that this Committee have agreed to carry out this inquiry. Their first meeting to hear evidence is being held this afternoon, while this very debate is in progress. I hope that will give my noble friend a sufficient reply to the two points which he has made and which are not really germane to the matter we are now discussing.
The noble Earl, Lord Cork and Orrery, asked me a question concerning the continuation of the subsidy. As he will recollect, the President of the Board of Trade, in informing the industry that the Government would be prepared to continue the subsidy for another year, warned it that after that time he would not be in a position to guarantee that the subsidy would be renewed. I am in no position to add anything to that letter which was sent by my right honourable friend to the President of the Chamber of Shipping. I think I can say this though, that the industry must now make its plans on the assumption that this subsidy will not be renewed at the end of this year. On the other questions which the noble Lord raised I apologise to him, but I have absolutely no information. A large number of them, again, were not germane to this Bill. At any future date I shall certainly be happy to answer the questions which the noble Lord should see fit to address to me.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

MERCHANT SHIPPING BILL.
Order of the Day for the Second Reading read.
THE EARL OF MUNSTER: My Lords, this Bill deals with two questions only; first, it proposes an alteration in the law as regards the overloading of ships, and second, it proposes to amend the law as to life saving appliances carried on fishing vessels so as to carry out the recommendations of the Sea Fish Commission. The proposal to amend the law with regard to overloading arises immediately from the remarks made by Mr. Justice Greaves-Lord at the Central Criminal Court in the prosecution of the registered manager of the steamship "La Crescenta" and one of his employees, who were charged, among other things, under Section 457 of the Merchant Shipping Act, 1894, with sending a British ship to sea in such an unsea-worthy state by reason of overloading that the lives of the persons on board were liable to be thereby endangered. I need not dwell on the facts of the case but your Lordships will remember that the verdict was one of acquittal.
As the law stands at present it is an offence under the Merchant Shipping Act, 1932, punishable by a fine, to overload a British ship. It is not an offence to send a ship to sea overloaded unless, the overloading is of such a nature as to come within the scope of Section 457 of the Merchant Shipping Act, 1894, and to render the ship unsea worthy and likely to endanger human life. Clause 1 of this Bill makes the sending to sea of a British ship which is overloaded an offence punishable by imprisonment. This is logical, for, if it is an offence to overload a ship, it is a more serious offence to take her to sea so overloaded. Subsection (2) of Clause 1 applies the clause to all British ships which are subject to Section 44 of the Merchant Shipping Act, 1932, that is to say, to the ships of most important Colonies. Subsection (3) makes the new law applicable in all territories where Section 44 is in operation. This will give those parts of the Empire in which Section 44 is operative the power to take proceedings for an infringement in their territories of the new provision.
Clause 2 relates to the life saving appliances of fishing vessels. It has been realised for some time that the provisions of the law with regard to life saving appli-
582
ances on fishing vessels are out of date. The Sea Fish Commission recommended in their Report that legislation should be introduced with a view to giving the Board of Trade the same powers to make rules in regard to safety appliances on board fishing vessels as they already possess in respect of cargo vessels. Clause 2 therefore carries out this recommendation by repealing subsection (3) of Section 427 of the Merchant Shipping Act, 1894. The advantage to be gained by such a change of the law will be not only that effective provision can be made with regard to the life saving appliances of fishing vessels, but also that the rules can be kept up to date and can be adapted to the changing conditions of the industry. This is a very small Bill, which was approved in another place without a Division, and I beg to move.
Moved, That the Bill be now read 2a.—(The Earl of Munster.)
LORD STRABOLGI: My Lords, it is always a pleasure to congratulate the Government on bringing in a suitable and useful Bill, and I am very glad to do so on this occasion. The noble Earl describes it as a small Bill, but it is of great importance to the people concerned, and we welcome it. I was particularly glad to hear what he said about the fishing industry. That has changed very much. The modern deep sea going trawler is quite a large vessel, undertaking very extended voyages, with a numerous crew on board, and it is only right that she should carry the same appliances as vessels of her type and size in the ordinary Mercantile Marine.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

CHILDREN AND YOUNG PERSONS (SCOTLAND) BILL. [H.L.]
Order of the Day for the Second Reading read.
LORD STRATHCONA AND MOUNT ROYAL): My Lords, I understand that the normal procedure with Bills like this, which is a purely Consolidation Bill, is that it should be read a second time and then sent up to the Joint Committee on Consolidation Bills. I beg to move.
Moved, That the Bill be now read 2a.—(Lord Strathcona and Mount Royal.)
THE EARL OF ELGIN AND KINCARDINE: My Lords, I believe it is very unusual to say anything on the Second Reading of a Consolidation Bill, but there appear to me to be two reasons why I might ask your Lordships' attention for a few minutes. This Bill has only been in our possession for a very short time, and it is almost impossible for a layman to be sure whether the Bill as now presented to the House is merely a consolidation of the other Acts, or whether there is new matter in it, but it does appear under certain clauses to present new matter. Apart from that, under the Bills which have been operating, particularly the Children and Young Persons (Scotland) Act of 1932, there were provisions for setting up juvenile courts to take over the responsibilities, which had hitherto been responsibilities of the Crown, of judging juvenile cases, and automatically it was suggested, although there was no mention of this in the Act, that the expenses should pass from the taxpayer to the local ratepayer. The provisions of this Bill, partly for that reason, have not been operative in Scotland except in two counties.
Two counties alone have taken the step of forming these juvenile courts, and one of them, the County of Fife, has challenged the position that the expenses automatically follow the transfer of the jurisdiction. That case is now on appeal to your Lordships' House, and therefore the matter is sub judice. From that point of view I think this matter should not have been brought at this stage into a Consolidation Bill and your Lordships asked to consider it. The point which would appear to me to be worthy of consideration is that we are also considering at the same moment the consolidation of the various services of the Scottish Office. All that is being done before a Committee, and it seems to me, therefore, inopportune that at this moment a Consolidation Bill of this kind should be brought before your Lordships' House. As regards the question as to whether or not there is new matter in the Bill, this no doubt will be considered in the Committee upstairs. As regards the other point, I merely represent to your Lordships that it is unfortunate that the matter, having been delayed so long, should now be pressed.
LORD STRATHCONA AND MOUNT ROYAL: My Lords, it was only this
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morning that the noble Earl was good enough to tell me he intended to raise this point. I understand that what is worrying him is the question of the result of this appeal to which he referred; but my information is that, whatever the result of this appeal, it cannot affect the terms of the Consolidation Bill, which must simply reproduce the existing provisions of Part I of the Act of 1932. I want to stress the point that there is very good reason for not delaying the progress of this Consolidation Bill. The English Consolidation Act was passed in 1933, and the present Bill would certainly have been introduced last year but for the fact that the Education (Scotland) Bill contained amendments of the 1932 Act which it was desirable to include in this consolidation. I am informed that even if the decision in the pending appeal did involve further legislation, that would probably take the form of an addition to, rather an amendment of, the existing enactments. I cannot help feeling that all the points to which the noble Earl has drawn attention are just those points which it will be the task of the Joint Committee to examine.
On Question, Bill read 2a.
LORD STRATHCONA AND MOUNT ROYAL: My Lords, I beg to move that this Bill be referred to the Joint Committee on Consolidation Bills.
Moved, That the Bill be referred to the Joint Committee on Consolidation Bills.—(Lord Strathcona and Mount Royal.)
On Question, Motion agreed to, and ordered accordingly.

DRAFT UNEMPLOYMENT INSURANCE (ADDITIONAL DAYS AND WAITING PERIOD) ORDER, 1937.
THE PAYMASTER-GENERAL (LORD HUTCHISON OF MONTROSE): My Lords, I have pleasure in moving the Motion that stands in my name. I do not think it is necessary at this late hour for me to give your Lordships a large number of figures, and I am sure that the noble Lord opposite, Lord Strabolgi, will understand that this is really a non-controversial measure which passed in another place without a Division. We are all extremely gratified that the Fund is

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in such a position that it is able to provide this extra relief for those who benefit under the Insurance Acts. The Statutory Committee which was appointed under the Acts of 1934 and 1935 reports from year to year on the financial position of the Fund and makes recommendations. This year it has found there is an estimated accumulated surplus coming along of £39,000,000. That is £6,700,000 more than was estimated last year. The estimated surplus for this year is £12,275,000. The Committee recommend that we should proceed on the basis of 80 per cent. of that potential surplus, which works out at £9,820,000. Add to that the £6,700,000 already realised, and we get a total of approximately £17,000,000, including interest over the period in which this money is to be spent.
The Committee recommend that this sum should be used over a period of eight years, which is known as a "trade cycle" of eight years, and they are devoting this sum to relief in the way they now recommend. They recommend that the waiting days should be reduced from six days to three days, and that those who have long periods of employment to their credit should receive additional days benefit as a result of this surplus. The reduction in the number of waiting days will cost the Fund £1,225,000 per annum, and the additional benefits over the eight years will cost a total sum of £9,700,000. I do not propose to go into the technical jargon to show how these benefits are worked out, but additional days are added to the standard benefit of 156 days which a man, after long employment, is entitled to when his employment ceases. That will cost £1,000,000 per annum, or an amount of £8,000,000 over the whole period. These figures show that the Fund is progressing. There is one other point. The Committee, after examining the Fund, believe that at the end of eight years it will be sufficiently solvent to continue these benefits which have now been given as the result of the surplus of this last year. I beg to move.
Moved, That the Draft Order, as reported from the Special Orders Committee on Wednesday last, be approved.—(Lord Hutchison of Montrose.
On Question, Motion agreed to.
INDIA AND BURMA (TRADE REGULATION) ORDER, 1937.
GOVERNMENT OF BURMA (IMMIGRATION) ORDER, 1937.
INDIA AND BURMA (BURMA MONETARY ARRANGEMENTS)ORDER, 1937.
GOVERNMENT OF BURMA (MISCELLANEOUS FINANCIAL PROVISIONS) ORDER, 1937.
INDIA, BURMA AND ADEN (TRANSITORY PROVISIONS) (TAXATION) ORDER, 37.
GOVERNMENT OF BURMA (COUNSELLORS) ORDER, 1937.
GOVERNMENT OF INDIA (HIGHCOURT JUDGES) ORDER, 1937.
GOVERNMENT OF BURMA (HIGHCOURT JUDGES) ORDER, 1937.
INDIA AND BURMA (TRANSITORY PROVISIONS) ORDER, 1937.
GOVERNMENT OF INDIA (ADAPTATION OF ACTS OF PARLIAMENT)ORDER, 1937.
THE SECRETARY OF STATE FOR INDIA (THE MARQUESS OF ZETLAND): My Lords, I have pleasure in moving the Motion which stands in my name.
Moved, That an humble Address be presented to His Majesty, praying that Orders be made in the form of the drafts approved by the House on Thursday last.—(The Marquess of Zetland).
On Question, Motion agreed to: the said Address to be presented to His Majesty by the Lords with White Staves.
GOVERNMENT OF INDIA (ADAPTATION OF INDIAN LAWS) ORDER, 1937
GOVERNMENT OF BURMA (ADAPTATION OF LAWS) ORDER, 1937.
THE MARQUESS OF ZETLAND: My Lords, I beg to move the Motion that stands in my name.
Moved, That an humble Address be presented to His Majesty, praying that Orders be made in the form of the drafts approved, with Amendments, by the House on Thursday last.—(The Marquess of Zetland.)
On Question, Motion agreed to: the said Address to be presented to His Majesty by the Lords with White Staves.

MERCHANT SHIPPING (SPANISH FRONTIERS OBSERVATION) BILL. [H.L.]
THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR FOREIGN AFFAIRS (THE EARL OF PLYMOUTH): My Lords, I beg leave to introduce a Bill to amend the law relating to merchant shipping for the purpose of enabling effect to be given to an international agreement for establishing a system of observation of the Spanish frontiers, and to move that it be read a first time.
Moved, That the Bill be now read 1a.—(The Earl of Plymouth.)
LORD STRABOLGI: My Lords, may I take advantage of the First Reading to ask when it is proposed to take the Second Reading and whether it is proposed to take all stages in one day, which we are prepared to facilitate? On behalf of my noble friends, I may say that we have consulted together, and if it is desired to take all the stages in one day we are prepared to facilitate that.
THE LORD PRIVY SEAL (VISCOUNT HALIFAX): My Lords, with, regard to the first question that the noble Lord has asked, we propose to take the Second Reading to-morrow. While my noble friend and I greatly appreciate the noble Lord's expression of willingness on his behalf and on behalf of his noble friends
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to facilitate the passage of all stages of this Bill in one day, I am advised that that would not, in fact, have the effect of accelerating the programme as between the two Houses. While therefore being very grateful to the noble Lord for what he has said, I do not think we shall be prepared to take advantage of his offer. As at present advised, we shall take the other stages of the Bill on Thursday.
On Question, Bill read 1a, and to be printed.

BUSINESS OF THE HOUSE.
VISCOUNT HALIFAX: My Lords, I would like to point out that what I have just said will make a change in the order of business for to-morrow, in that this Bill will be down for Second Reading. It may be of interest to your Lordships also to know that Lord Elton has removed his Motion from the Paper and has transferred it to a date after Easter.
LORD STRABOLGI: Does that mean that the Second Reading of this Bill will be the first Order?
VISCOUNT HALIFAX: No, second. The first Order is a Bill standing in the name of my noble friend Lord Gage.
House adjourned at seven o'clock.