Lords Sitting of 25 March 1943

Preamble
The House met, The LORD CHANCELLOR on the Woolsack.
WAR DAMAGE (AMENDMENT) BILL.
Returned from the Commons, with the Amendments agreed to.

BUSINESS OF THE HOUSE.
THE LORD PRIVY SEAL (VISCOUNT CRANBORNE) (Lord Cecil): My Lords, I beg to move the Motion standing in my name. I think it might be for the convenience of the House if the Consolidated Fund (No. 2) Bill, to which the Motion refers, were given precedence over the Committee stage of the Settled Land and Trustee Acts (Court's General Powers) Bill, in order that a Royal Commission may take place before the remainder of the business on the Paper is taken. If your Lordships agree, it is necessary under Standing Order No. XXI that the noble and learned Viscount on the Woolsack, who is in charge of the Settled Land and Trustee Acts (Court's General Powers) Bill, should consent to the postponement fiat Bill until after the House has dealt with the Consolidated Fund (No. 2) Bill. I am given to understand that he agrees to this course. I beg to move.
Moved, That Standing Order No. XXXIX be considered in order to its being dispensed with for this day's sitting for the purpose of taking the Consolidated Fund (No. 2) Bill through its remaining stages.—(Viscount Cranborne.)
On Question, Motion agreed to, and ordered accordingly.

CONSOLIDATED FUND (No. 2) BILL.
Order of the Day for the Second Reading read.
LORD TEMPLEMORE: My Lords, I beg to move that this Bill be now read a second time.
Moved, That the Bill he now read 2a.—(Lord Templemore).
On Question, Bill read 2a: Committee negatived.
Then, Standing Order No. XXXIX having been suspended, Bill read 3a, and passed.

ROYAL COMMISSION.
The Royal Assent was given to the following Bills:
Consolidated Fund (No. 2).
War Damage (Amendment).

SETTLED LAND AND TRUSTEE ACTS (COURT'S GENERAL POWERS) 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.—(The Lord Chancellor).
On Question, Motion agreed to.
House in Committee accordingly:
[The EARL OF ONSLOW in the Chair].
Clause 1.
Extension of powers under 15 Geo. 5. c. 18 s. 64 and c. 19 s. 57.
(2) The said circumstances are that the Court is satisfied—

(a) that the action taken or proposed was or would be for the benefit of the persons entitled under the settlement, or under the trust for sale, as the case may be, generally; and either

(b) that the available income from all sources of a person who, as being beneficially entitled to possession or receipt of rents and profits of the land or to reside in a house comprised therein, ought otherwise to have borne the expense of the action taken or proposed has been so reduced by reason of circumstances arising out of war conditions as to render him unable to bear the expense thereof, or unable to bear it without undue hardship; or

(c) in a case in which there is no such person as aforesaid, that the income available for meeting that expense has become insufficient by reason of circumstances so arising.

(3) In determining whether to make such an order as aforesaid the Court shall, as respects the matters referred to in paragraph (b) of the last preceding subsection, have regard to the extent of the obligations, whether legally enforceable or not and whether or not relating to the land, of the person in question, and shall not except for special reason make the order if his available income has been reduced by action taken by him for avoidance of liability to Income Tax, and shall have regard to the extent to which other persons entitled under the settlement or trust for sale are likely to benefit from the action taken or proposed or from the relief which would accrue to that person from the making of the order, and to the extent to which the making of the order would be likely to involve a loss to any other person so entitled without his receiving any corresponding benefit.
(6) No order shall be made by virtue of this section after the expiration of the Emergency Powers (Defence) Act, 1939.
THE LORD CHANCELLOR (VISCOUNT SIMON)THE LORD CHANCELLOR (VISCOUNT SIMON) moved, in paragraph (b) of subsection (2), to leave out "ought otherwise to have borne" and insert "might otherwise have been expected to bear." The noble and learned Viscount said: I pointed out on the Second Reading that; generally speaking, a tenant for life cannot be compelled to effect the repairs and maintenance which would naturally fall to his charge, and my noble and learned friend Lord Maugham emphasized that the word "ought," which had been inserted in the Bill, might be understood to refer to a positive legal obligation. I feel the force of that criticism, and am grateful to my noble and learned friend. I am proposing, therefore, that the words "might otherwise have been expected to bear" should be inserted, as having a more neutral implication, while quite clearly pointing out, I think, what is intended in the clause.
Amendment moved—
Page 2, line 4, leave out ("ought otherwise to have borne") and insert ("might otherwise have been expected to bear").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in subsection (3), to leave out the words "as respects the matters referred to in paragraph (b) of the last preceding subsection." The noble and learned Viscount said: This is an Amendment of more importance, and I must briefly state the effect of it. An inspection of the Order Paper does not at once lead to a clear understanding of what is involved, but I think that I can deal with it in this way. I wish to delete from Clause 1 (3) any specific reference to an arrangement for the avoidance of liability to Income Tax. This is also a point on which my noble and learned friend Lord Maugham animadverted on the Second Reading. For my own part I do think it is a pity if, for instance, a tenant for life has made highly elaborate and artificial arrangements to receive what he spends in the form of capital instead of income (as can be done by appropriate devices), that he should simply come forward and say: "I have not got any income and so I must ask for some relief under this Bill." On the other hand, if this were made the
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specific subject of inquiry it would involve in some cases very elaborate investigation which would greatly increase the expense and would throw a great burden on the Chancery Judge. I am satisfied on further reflection that it is better not to insert that provision of the Bill.
The subsection as I propose it should run is one which would require the Chancery Judge to consider all the circumstances. I think the best way to make my proposal quite plain is to read to the Committee subsection (3) as it would run if my Amendment were adopted. It would then run this way:
"In determining whether to make such an order as aforesaid the Court shall have regard to all the circumstances of the case, including the extent of the obligations, whether legally enforceable or not and whether or not relating to the land, of the person referred to in paragraph (b) of the last preceding subsection, the extent to which other persons entitled under the settlement or trust for sale are likely to benefit from the action taken or proposed or from the relief which would accrue to that person from the making of the order, and the extent to which the making of the order would be likely to involve a loss to any other person so entitled without his receiving any corresponding benefit."
Your Lordships will notice therefore that there is no specific reference to the question as to what arrangements had been made which might avoid liability to tax.
I must point out one other matter on which at an earlier stage of the Bill there was some difference of opinion, though I hope there is not now. I do take the view, and I hope your Lordships will support me in this, that it is right that we should in this new Bill call for the action of a Judge. That will particularly arise on an Amendment which is on the Paper in the name of my noble friend Lord Maugham a little later on. But I further take the view that the Bill is correctly drawn in saying that the judge shall examine the whole extent of the income of the applicant, and not merely that bit of income which he is drawing from the particular settlement. It appears to me that if a very rich man—if, indeed, in these days anybody can be so described—has also the position of tenant for life under a settlement of land, the question whether he should get additional power to use capital for the purpose of the present maintenance of the property ought in part to depend on what is the total extent of his resources. Because, of course, if we give him such power the result is that the

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remainder-men—it may be the children—have so much less, because a portion of the capital is going to be spent by the tenant for life. I think I have explained the nature of the Amendment sufficiently, and I beg to move flat this Amendment be made. It will carry with it the other Amendments on the Paper which are associated with it.
Amendment moved—
Page 2, line 14, leave out from ("shall") to ("have") in line 15.—(The Lord Chancellor.)
VISCOUNT MAUGHAN: I am extremely grateful to the Lord Chancellor for his consideration of the points I urged on Second Reading, in particular the one which deals with the question whether the Judge shall have regard to action taken by the tenant for life for avoidance of liability to Income Tax at some previous date. I mentioned them, perhaps wrongly, on Second Reaching, simply because—and I think on the whole it is not a bad practice in his House that one should take that course—simply because I was so desirous to have the Government's consideration of the objections I had to the Bill at an early stage, in order that the Lord Chancellor should consider, and if possible endeavour to meet, such objections as I as a lawyer took to various points which arose on the Bill as it was presented to the House. As I say, I am extremely grateful to the Lord Chancellor, and I am very glad that those words which relate to avoidance of liability to Income Tax have now been deleted.
I must say I maintain my opinion as to the impropriety of these words going into this measure, and I do not quite take the view that a Lord Chancellor who has long been a distinguished Chancellor of the Exchequer may quite naturally take on the subject of avoidance of Income Tax. I take the view, which Lord Chancellors before the noble and learned Viscount have more than once expressed, that your liability to Income Tax is that which is effected by legislation, and that there is nothing to prevent a man taking steps to avoid corning within the real terms and the real meaning of the legislation which deals with the subject. In saying that, I entirely agree that a man who in time of war seeks to diminish his liability to Income Tax is worthy of reprobation. I agree that in times of peace I take the old view that you are bound by what the law has provided, and you are
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not doing anything wrong if you turn yourself or your property into a private limited company, or do something of that kind for the purpose of avoiding tax. In peace-time I think that is not wrong. It may not be noble, in fact, we may admit it is not noble; but I cannot see anything wrong, and I should very strongly object to clauses of this sort having the effect ex post facto of imposing on a man a liability which the law had not previously imposed. So much for that matter.
As regards the other matter which my noble friend referred to—namely, the question whether, when the matter goes to the Court, the Judge should regard all the available income from all sources of a tenant for life—though that does not arise on any Amendment which is before the Committee—I can conceive arguments in favour of it, and I myself am not inclined to deal with that matter at all. I am not, therefore, satisfied that, in some cases, it will result in justice, but I am not sufficiently concerned with the matter to wish to say anything about it. The net result is that, so far as the Amendment before the Committee is concerned, I am very happy to accept it. It will have the effect that the first Amendment I have on the Paper will not be moved.
On Question, Amendment agreed to.
THE LORD CHANCELLOR: I beg to move this consequential Amendment.
Amendment moved—
Page 2, line 15, after ("have regard to") insert ("all the circumstances of the case, including").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: I move the next Amendment.
Amendment moved—
Page 2, line 17, leave out ("in question") and insert ("referred to in paragraph (b) of the last preceding subsection").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: I move the next Amendment.
Amendment moved—
Page 2, line 17, leave out from ("question") to the first ("the") in line 21.—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: I move the next Amendment on the Paper.
VISCOUNT MAUGHAM: One very small point, so small I hardly dare mention it. Does not the word "to" occur twice in line 24? The point is so trivial that I dare say the draftsman would see to it.
THE LORD CHANCELLOR: The noble Viscount is quite right, and I shall amend the Amendment so that it will read to leave out the first "to" in line 24.
Amendment moved—
Page 2, line 24, leave out the first ("to").—(The Lord Chancellor.)
On Question, Amendment agreed to.
VISCOUNT MAUGHAM VISCOUNT MAUGHAM moved to insert after subsection (4):
"(5) During the continuance of this Act, Part I of the Third Schedule to the Settled Land Act, 1925, shall be treated as amended by the addition of the following words:
(xxvi) Repairs not being merely of a decorative character to the principal mansion house or other residential houses the repair of which is already authorized under the said Act, provided that the total sum to be applied under this head shall not exceed the sum of five hundred pounds."
The noble and learned Viscount said: This is an Amendment the nature of which I endeavoured to explain on the Second Reading. I do not propose to weary your Lordships with a repetition of what I said on the last occasion. It is to be found in, I hope, fairly lucid language in the Official Report. I shall only say this. I am strongly of the opinion that with regard to the small repairs I have mentioned here, which are limited to the total sum of £500 and which relate to matters which are as much in the interests of the remainder-men, who are generally the children, as in the interests of the tenant for life, it is a great pity that advantage was not taken by this Bill to enable the sums in question to be provided for out of capital moneys without going to Court. If the sum involved is £100 or £200 or something like that, it is very regrettable that, in order to get that paid for the purposes of repairing the mansion house, it should be necessary for the tenant for life to involve himself in a somewhat expensive proceeding of affidavits and all sorts of red tape before he can get the amount paid out of capital money. It is for that reason that I have put down this Amendment. As your Lordships will see, it relates to a comparatively small matter, and I must admit it is not quite so important as it was when I first put the Amendment down, because the difficulties of the Court,
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and the expenses incurred in going to the Court, are not so great now that the Lord Chancellor has moved the Amendment which results in the omission of the provision about previous acts of the tenant for life to evade Income Tax.
The substance of my Amendment is that if the sum is small, the tenant for life is unfortunately in this position that he knows, in order to obtain the money out of capital, he has to incur expenses of a legal character which may double the expense that will fall on capital moneys. Thus he may have to spend £100 or £150 in costs in order to mend a roof to the extent of £100 or £150. Thus he will double the cost of doing the repairs which, it may be, in the present state of the world and the present enormous increase of Income Tax and Super Tax, he may be quite unable to bear out of his own funds. I have to admit that the Lord Chancellor has, to some extent, met me, and I also have to accept the view that it is unlikely I can persuade a sufficient number of people to follow me into the Lobby in support of an Amendment the justice of which, perhaps not unnaturally, I still maintain. Accordingly, unless some other supporter arises, I am prepared to accept the view that the Amendment should be negatived. I do not withdraw it, because it is quite possible that in another place a favourable view will be taken of it, but I am content on this occasion, to save your Lordships' time, unless some other noble Lord wishes to address the Committee on the subject, that the Amendment should be negatived.
Amendment moved—
Page 2, line 33, at end insert the new subsection.—(Viscount Maugham.)
LORD GREENE: My excuse for making one or two observations must be the fact that I have made a very particular study of this Bill. The Amendment that was last moved by the noble and learned Viscount, Lord Maugham, was one on which, if it had been submitted to a vote, I should have been compelled to differ. It seems to me that it goes against the whole principle of the Bill, for this reason. It has always been the policy of the Legislature to leave tenants for life to bear the cost of repairs out of ordinary income. That has been the policy of the Legislature for close on one hundred years. This Bill departs

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from this policy for a very good reason—that in present circumstances it may be a hardship on tenants for life to leave them to bear the expense of these repairs out of a very much diminished income. The policy of the Bill quite clearly is that if the tenant for life is to be entitled to dip into capital which belongs to somebody else for the purpose of paying for repairs which normally ought to fall upon him, he should only be allowed to do so in special circumstances of hardship and after he has satisfied the Court that the expenditure is one which ought fairly to be allowed him.
Now the effect of the Amendment would have been to allow the tenant for life, without any reference to hardship, without any examination of anybody as to whether or not he might fairly be expected to defray the expense out of what is left of his income, to go to somebody else's property—namely, the remainder-man's property—and pay out of that property, without any control at all, every single running repair to the house which forms part of the settlement. If your Lordships have looked at the main part of the Bill you will see that it is only in cases where hardship can be shown that the Court is given power to intervene. Under this Amendment no such power of the Court would be interposed between the tenant for life and the remainder-men who are to be so substantially affected. For these reasons, which have briefly endeavoured to explain, I should have opposed this Amendment.
I do not know whether I should be in order in adding perhaps two sentences on another point which the noble and learned Viscount, Lord Maugham, referred to, and that is the provision with regard to avoidance of taxation. I apprehend that that appeared in the Bill for this reason, that if the tenant for life is seeking to put upon the shoulders of the remainder-man something which normally would be an income charge, he ought not to be entitled to get that relief if he has in fact so arranged his affairs that he is not getting any income at all in the true sense because, as the Lord Chancellor pointed out, we are all of us, at any rate in the law, familiar with cases where a person has so arranged his affairs that he receives no income but receives instalments of capital. I do not share the rather moderate views of those expedients which the noble and learned Viscount has just expressed.
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Personally I venture to take a rather stronger view about them. Apparently it certainly did seem to the framers of this Bill that a person who had done that should not be entitled to come to the Court and say: "It will be a great hardship on me because I have not got enough income left to pay for the repairs of my house." That was the object of it. I must ask the kind indulgence of the Committee for having spoken and I thank your Lordships for the way you have listened to me on this the first occasion on which I have had the honour of addressing you.
THE LORD CHANCELLOR: I will say only just a word as my noble friend is not pressing the Amendment he has moved. Had he persisted in it those of us who hold strong views on this particular matter would have voted against it. The views of those who are opposed to the Amendment are those which have just been expressed in the speech that we have all been very glad to listen to, on the first occasion when the Master of the Rolls has taken part in our discussions. I put the same point in another way. It seems to me that the principle of this Bill involves two propositions. The first is that when the available income from all sources of the tenant for life is insufficient to do what he would normally do, he may properly apply to diminish the capital to the prejudice of those who come after him. The second principle is that the expenditure in question must be for the benefit of the persons entitled under the settlement generally. I cannot help thinking that it would be very difficult, even in a case involving no more than £500, to administer those principles correctly unless you took the ordinary process of applying to the Judge for the purpose of getting an order. There is no reason why such an application should be expensive. In a straightforward case it certainly would not be. I myself have much less knowledge of this matter than either of my noble friends has, but I am quite satisfied that it would be wrong to allow this to be done without the intervention of any judicial authority.
VISCOUNT MAUGHAM: I told your Lordships before that I was not going to take up more time on this. I rise now for two purposes only. The first is to express the pleasure with which I heard the speech of my noble friend the present Master of the Rolls, who, if I may be

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allowed to say so, was associated so long with me in the same chambers in Lincoln's Inn. It is a most pleasant thing to hear him even if he opposes some of my views. The other thing I want to say is this. I feel that this matter may be discussed in another place, and I say quite shortly that I cannot myself appreciate some of the arguments which have fallen both from my noble and learned friend and from the noble Viscount the Lord Chancellor. It seems to me they have entirely omitted to see that the old view of the Settled Land Act, as it was passed in 1882, was altered when Lord Birkenhead's Act of 1925 came on to the Statute Book. Owing to the enormous increase in Income Tax the Legislature then thought fit to insert a long list of twenty-five matters, called improvements, which the tenant for life by his own motion could procure to be paid for out of capital moneys on the certificate of a surveyor and without approach to the Court. I gave a list of those matters.
I mention only this one at the present moment. There may be repairs of all sorts of things which ordinarily a tenant for life would pay for, such as repairs to a farmhouse, and there is actually included in the twenty-fifth head the rebuilding of the principal mansion house on the settled land without going to the Court at all. It does seem to me extraordinary to make what I cannot but describe as a sort of song and dance over the suggestion that a total of £500 should be expended in repairing the roof of the mansion house for which any ordinary tenant for life would, of course, pay out of his own money. You must not suppose that a tenant for life is hostile to his children. He will do everything he can to keep the property going for their benefit, and it does seem to me that the arguments in favour of this being allowed at a date when many tenants for life have practically no income at all left after their families have been supported are wise. There I must leave it, and submit to have the Amendment negatived.
On Question, Amendment negatived.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in subsection (6), after "section," to insert "in respect of any action taken or proposed to be taken." The noble and learned Viscount said: The noble Earl,
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Lord Warwick, on the Second Reading, called attention to this point and I am endeavouring in this Amendment to meet him to some extent. He pointed out that the Bill was limited in this part of the clause so that it would not operate after the expiration of the Emergency Powers (Defence) Act, 1939. I agree that rather more latitude is needed, but I would prefer not to go further than I do in this Amendment because I think we had better see how this legislation works out. If it works satisfactorily it may be that nearer the end of the war we shall want to prolong its operation. The point is that the Bill authorizes application to the Court not only in respect of things that have already been done, but things that are proposed to be done, provided that no order should be made by virtue of this clause after the expiration of the Emergency Powers (Defence) Act. The effect of the Amendment is that no order can be made in respect of any action taken or proposed to be executed after the expiration of that Act, which is a different thing. It does not go as far as the noble Earl suggested. He pointed out, and I think pointed out very truly, that many tenants for life were away fighting, that they cannot attend to their properties now, and that they may not be in a position to formulate plans for going to the Court until after the war. That must be borne in mind, but still I think it would be better to treat this at present as a war measure, a temporary measure, and see how it works out in practice.
Amendment moved—
Page 2, line 44, after ("section") insert ("in respect of any action taken or proposed to be taken.")—(The Lord Chancellor.)
VISCOUNT MAUGHAM: The noble Earl, Lord Warwick, cannot be here to-day, but I think I may say that he would probably be content to accept the Amendment. To my mind it seems to be in all the circumstances of the case quite satisfactory.
On Question, Amendment agreed to.
LORD HUTCHISON OF MONTROSE: May I claim indulgence to ask the noble and learned Viscount a question with reference to this clause? I have some experience in dealing as a trustee with things that are dealt with by the first clause of the Bill There is undoubted hardship to the holder of a liferent in certain properties when he is expected to pay for

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certain things out of income which has been drastically curtailed by taxation. It seems right and proper that this amending Bill should operate in such cases, just as legislation was passed to alleviate the situation in cases where individuals had been left annuities free of Income Tax but where, as the result of taxation, the estate was not large enough to pay those sums. What I want to ask is this. We in Scotland unfortunately have to bear the burden of the Finance Act, and I should like the noble and learned Viscount to explain to me how the burden on the person who receives a liferent in Scotland can be alleviated. I think it would be a great injustice if an Act like this were passed for England and Wales but Scotland was left out.
THE LORD CHANCELLOR: It is always a satisfaction to Englishmen to learn that Scotsmen want to live under English law. Notwithstanding the Act of Union in the time of Queen Anne, there are down to this living day Scotsmen who maintain that not only have they a different land system, as they undoubtedly have, but that it is a system which is much better than ours. Certainly it uses language and expressions which I should be very slow to interpret. The Bill now before your Lordships is essentially an English and Welsh Bill because the Settled Land Act, 1925, and the Trustee Act, 1925, are both Acts which do not apply to Scotland at all. Scotland has a different system which, according to the part of the country in which one lives, is regarded as better or worse. The answer to my noble friend therefore is that we Southerners notice with interest the information he give us that Scotsmen, too, sometimes object to paying—and I can well understand it. He also truly says that the burden of taxation applies to us all alike. The only way in which relief could be framed would be by a separate Bill applying to Scotland. I will willingly consult the Scottish authorities to ascertain whether they are moved by the same considerations which have caused me to introduce this Bill. If that is the case it may be that we shall find some way of meeting the difficulty. I regret to say that in the present Bill it is quite impossible.
LORD HUTCHISON OF MONTROSE: I should like to be allowed to thank my noble and learned friend for his very kind
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answer, and to say that I will make it my business to draw the attention of the Secretary of State for Scotland to the present situation.
Clause 1, as amended, agreed to.
Remaining clauses agreed to.

COURTS (EMERGENCY POWERS) BILL. [H.L.]
House in Committee (according to Order) on re-commitment of the Bill: Bill reported without amendment.

REFORM OF THE FOREIGN SERVICE.
THE EARL OF PERTH THE EARL OF PERTH had given Notice that he would call attention to the proposals for the reform of the Foreign Service; and move for Papers.
VISCOUNT CRANBORNE: My Lords, before the House proceeds to the discussion of the Motion standing in the name of the noble Earl, Lord Perth, there is one matter concerning the business of the House on which I would like to consult your Lordships. This Motion is one of considerable importance, not only on account of its subject, but on account of the qualifications of those proposing to take part in the debate. I have already nine names of noble Lords who wish to intervene, without including the mover of the Motion and the Government spokesman at the end of the debate. It seems to me very improbable that we shall get through that list during this sitting if we are to finish at a reasonable hour. I would suggest for the consideration of your Lordships that if this proves to be the case you might think it better to adjourn the discussion at an hour sufficiently early to allow time for the consideration of other matters on the Paper and that the discussion should be resumed at the first of the next series of sittings. We are fortunately in a position that there is not much business down for that sitting. I think there is only a Motion in the name of the most reverend Prelate the Archbishop of York, which should not take very long. I do not wish the House to come to a conclusion immediately, because it is possible that the debate on the noble Earl's Motion to-day may go faster than looks probable at the moment. But should it turn out that we are still far from the goal near

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the usual hour of adjournment, I suggest that the House should agree to adjourn the debate and continue it on the first sitting day of the next sittings.
LORD ADDISON: My Lords, might I make a suggestion to the noble Viscount? He will have in mind what has quite recently occurred when discussions which were thought likely to be prolonged, or possibly go over to a second day, were unexpectedly curtailed. The cause of the curtailment was, I think it is fair to say, that noble Lords who had proposed to speak, and who wished to speak, felt that the time was driving on and that there would really be no opportunity for a proper discussion. The consequence was that they withdrew altogether. I think, therefore, in view of the long list of speakers—a copy of which I have before me also—which includes very distinguished members of this House who have a very intimate knowledge of the subject, and whom I think it would be advantageous to hear, it would be better to decide at once to adjourn at a certain time so that noble Lords may fully understand the position.
VISCOUNT CRANBORNE: My Lords, I am, of course, entirely in the hands of the House in this matter. If that is the view of noble Lords I shall be very ready to agree to it. We can take it, therefore, I assume, that it is the decision of the House that this debate shall be adjourned this afternoon and resumed in the next series of sittings.
NOBLE LORDS: Agreed.
THE EARL OF PERTH: My Lords, you may remember that early in July last year, as a result of the statement made by the Secretary of State for Foreign Affairs in another place, the noble Lord, Lord Ponsonby, called attention to certain projected changes in the organization of the Diplomatic Service and moved for Papers. The Secretary of State for Foreign Affairs has now presented to Parliament in a White Paper reforms which he proposes should be introduced into the Diplomatic Service, the Consular Service and the Foreign Office. We are therefore in a position to discuss these problems far more concretely than we were last year. I think your Lordships would wish me first of all to express
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appreciation of the statement recently made by the Under-Secretary of State for Foreign Affairs, in another place, when he said that he felt sure that the Secretary of State would pay great attention to any suggestions which might be made to him by your Lordships' House, where there was a particular wealth of experience in diplomatic matters and in foreign affairs. That is, of course, true. There are three noble Lords in this House who have held the high, responsible position of Permanent Under-Secretary in the Foreign Office. I could have wished that we could have had the benefit to-day of the wisdom and experience of Lord Hardinge, who, I know, takes great interest in these reforms, but unfortunately he is not sufficiently recovered from the effects of his accident to enable him to take part in this debate. Let us hope that he will be able to come here again very soon.
The White Paper can be divided into two parts: firstly, the Introduction and the Conclusion; and secondly, the Summary of Proposed Reforms. But there is a sin of omission. There ought to have been a third part referring to the central organization of our foreign policy in London. The noble Lord, Lord Ponsonby, in his speech last year, touched on this issue, and shortly afterwards Sir Walford Selby wrote an article for the Spectator expressing his views on the necessity for reform in this direction. That article was largely supported by the Editor of the paper. I myself look upon this problem as one of transcendent importance and I propose to deal with it at the end of my speech. I must confess that I was considerably irritated when I read certain passages in the Introduction and Conclusion of the White Paper. I greatly appreciated paragraph 3 which contains an admirable summary of the functions of the Diplomatic Service and of a diplomat, until I came to the last sentence of that paragraph. I am going to quote:
"The success or failure of our foreign policy should not therefore he attributed to the Diplomatic Service alone."
Now if I have any understanding of the English language this sentence surely implies that the success or failure of our foreign policy is largely attributable to the Diplomatic Service. Such a presentation of the case is utterly misleading. The

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success or failure of our foreign policy is due first of all to its elements and ultimately, as the noble Leader of the House has told us, to the military force behind it. But it is not determined by the Diplomatic Service, and indeed the White Paper points out this fact.
The policy is that of the Secretary of State for Foreign Affairs and of the Government. The Secretary of State is primarily responsible for framing a policy, although of course it must have the approval of the Cabinet. The duty of the Diplomatic Service is to report, to keep the Secretary of State informed of all developments which can affect foreign policy; to issue warnings and to make recommendations—but it can do no more. I do not think it has ever failed in this task. I do not believe that even if you had had archangels as heads of our various Missions abroad during the years preceding the war, you would have had any substantial alteration in our foreign policy. I would observe for the benefit of certain people outside your Lordships' House that it is extremely doubtful whether archangels would wear an old school tie. They certainly would not belong to the old gang. The responsibility, and the whole responsibility, for foreign policy must squarely be borne by the Government of the day, and cannot in any degree be placed on the shoulders of the Diplomatic Service. The Under-Secretary of State, in his speech in another place, took the correct view of this matter when he explained that the Foreign Service man was not the principal but the agent of His Majesty's Government. I wish that the Under-Secretary of State had revised certain passages in the Introduction arid Conclusion of the White Paper, because I feel sure that if he had done so they would have been considerably amended.
Your Lordships may think that I am unduly emphasizing this aspect of the case, but those of us who have been in the Diplomatic Service feel very strongly on this subject, because we recognize a tendency in public opinion to lay the blame for international disasters on the Diplomatic Service. In spite of the statement made in another place by the Under-Secretary of State this tendency still seemed to prevail in the minds of some speakers who followed him. I suppose it is rather difficult to relinquish the relief
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and the convenience of a whipping-boy. The White Paper, too, is rather guilty in this respect. Apart from the sentence which I have quoted, there is another in paragraph II, where it is said:
"These reforms will cost money. But the additional expense will be a very small price to pay for a thoroughly efficient Foreign Service"—
and then come the words which I think are rather unhappy in their imputation—
"such as can contribute appreciably to the avoidance of international conflict."
The Foreign Service may be made, and I hope that it will be made, as efficient as is humanly possible, but it will not depend on it whether international conflict is avoided or not.
There are certain other passages in the Introduction which seem to me to be unfortunate. There is a recital of criticisms which have been brought against the Diplomatic Service, but with little or no effort in the White Paper to rebut them. I will give one example, from paragraph 2, where it is stated that the Diplomatic Service "tends to represent the interests of certain sections of the nation rather than those of the country as a whole." It seems to me that the head of a Mission abroad who did not recognize that he represented his country as a whole and not a particular section of it, would be utterly unworthy of his high position. His Majesty's Government must be well aware that that accusation has no foundation whatever, but I find no refutation of it in the White Paper. All this, however, is of the past, and what we are now concerned with is the future, so that I shall not pursue the matter any further. But I note that, according to an answer given in another place, His Majesty's Government are considering the publication of a White Paper giving the main outlines of British foreign policy, diplomatic reports, and so on, between 1929 and 1942. Personally, I have very grave doubts whether it will be wise or feasible to publish such a Paper, but, if it were possible to do so without harming the national interest, I feel sure that the thesis which I have ventured to put before your Lord ships would be thoroughly proved.
I now pass to the proposed reforms themselves. They have been approved by an immense majority in another place, and have been generally welcomed by the Press. I think that on the whole they

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deserve such a welcome. I need hardly analyse them in detail; they are set out very clearly in the White Paper, and many of their aspects have already been discussed in your Lordships' House. The main feature is the constitution of a Foreign Service which is to include the Diplomatic Service, the Consular Service, the Commercial Diplomatic Service and the Foreign Office. This Foreign Service is to be entirely separate from the Home Civil Service, and in this case I think that we can all approve of the divorce. In a debate in your Lordships' House not long ago, I urged that the potential interference of the Head of the Civil Service in Departments other than the Treasury should be abolished. By the constitution of a separate Foreign Service the danger of any such interference as regards the Foreign Office is at an end. I hope that the next step may be the inclusion of the Colonial Office in a Colonial Service. Indeed, this would seem to be the logical sequence, particularly as it is intended to promote closer contact between the Foreign and the Colonial Services. I trust that this particular reform will be extended to cover all the Departments which deal with our great overseas interests, and also the Defence Departments.
The second important reform lies in the power given to the Secretary of State to terminate an appointment on pension before the ordinary age limit of 60. I consider the granting of this power to be of the greatest importance for the welfare of the Foreign Service, and I should like to see the principle extended to the Home Civil Service itself. When I was head of the League of Nations Secretariat at Geneva, we had a contributory scheme, based on actuarial calculations, whereby a pension, or alternatively a lump sum payment, could be granted to an official after a comparatively short period of service. Pensions are really in the nature of deferred pay, and therefore I do not see why some such plan should not be devised to meet cases where, after a certain experience, an individual was found not to be fitted for the higher posts in a Civil Service career.
I have rather more doubt about the advantages to be gained by the amalgamation of the Consular and Commercial Diplomatic Services with the Foreign
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Office and Diplomatic Service. Many members of the new Foreign Service will prove more fitted for Consular than for Diplomatic posts; and vice versa. I understand, however, that in the course of their career officers will gravitate—or "be directed," as the current phrase is—to that side of the Service where they are likely to prove most efficient. I realize that if a separate Foreign Service is to be created—and I think that it is a good thing—then it has to be of adequate size, and therefore this amalgamation was required.
There is, however, one point to which I should like to call the attention of His Majesty's Government. I noticed that Mr. Morrison in a recent speech—which indicated, if I may say so, a very happy realization of the close connexion between our home and our foreign policy—emphasized the importance to our trade of a strengthened Consular Service. The point that I want to make is that a Consular officer who has been for a considerable period in one place becomes a very valuable depository of local knowledge, both as regards the commerce of the region and as regards the personalities who are responsible for that commerce. Changes from one important consular post to another should therefore not be over-frequent. I will not comment on the question of recruitment and training, but it is clearly all to the good that members of the Foreign Service should have a sound knowledge of economic and commercial affairs, and also that the Service should be open to all young men of ability. Matters such as the exact age limits of recruitment, the various periods of time to be allotted to the study of foreign languages, and so on, can probably best be ascertained by a system of trial and error.
One last point about the organization of the Foreign Service—a point on which the White Paper is silent. I assume that the head of a Mission will be the channel through which all information from the country to which he is accredited will be sent home, and that the present conditions under which various Departments of His Majesty's Government, or organizations, closely attached to the Government, have their own more or less independent representatives reporting home direct will come to an end. Lord Davidson, as a result of his experiences in Latin America, in a letter to The Times on the 11th January,

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described the confusion existing there. As the late Lord Stonehaven—whose advice in this debate we miss greatly—told your Lordships last year, "the Ambassador or Minister should be the effective head of whatever British organization "—he referred, of course, to governmental or semi-governmental agencies—" is working in a foreign country."
Now I come to the point to which, as I said earlier, I attach by far the greatest importance. It is not dealt with in the White Paper, and yet I believe it to be the kernel of the whole matter. The proposed reforms may be excellent—I think they are—but they are of a purely administrative nature. They must not be allowed to turn into a cloud of dust to be cast into the eyes of Parliament and of the public in order to obscure the fundamental issue—namely, the organization of our foreign policy in London. The organization of our foreign policy depends largely on the relations between the Foreign Office and other Government Departments, in particular the Board of Trade, the Treasury, the Colonial Office and the Service Departments. The policy pursued by each of these Departments may vitally affect our relations with one or more foreign countries. There is, indeed, a close interaction between our foreign and our domestic policy in economic, financial and even in social matters. In recent years I do not think there has been any adequate realization of this fact in London, though its truth is only too apparent to those abroad who were called upon to deal with our relations with foreign States. Various Departments at home have taken their own lines without considering, or being forced to consider, their repercussions on foreign policy.
A better measure of centralization and co-ordination is required, and the authority of the Secretary of State in all questions relating to foreign policy, which for some time previous to the war had been on the wane, must be restored. It is evident that the economic side of international life has become and will become of more and more importance; it impinges strongly on the political side. This fact has been acknowledged for a long time past by many foreign countries. The Quai d'Orsay, for instance, which I consider to have been one of the best equipped and organized of the Foreign Offices in Europe, had an economic branch under the French Minister for
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Foreign Affairs, of which the staff was, I understand, larger than that of the political branch. I do not say that we should necessarily copy this example, but I believe that there should be in the Foreign Office, and under the authority of the Secretary of State for Foreign Affairs, an expert economic staff which could advise the Secretary of State on the probable effects of economic and financial measures as regards our foreign policy, and also digest and adapt to the best national use the information flowing to the Foreign Office from the reorganized Foreign Service. This expert Department of the Foreign Office might either form an integral part of the Foreign Service or be attached to it, but it must be under the authority of the Foreign Secretary. No doubt it would be desirable that some of its members should be detached from the Board of Trade and the Treasury, or at least nominated by them. But even this reform is insufficient in itself; more is required.
The problem was admirably set out in a series of articles in The Times at the beginning of this year, and whether we agree with the solution advocated by the writer of those articles or not, we ought to be grateful to The Times for drawing attention to the fundamental issue. The remedy suggested was that the Foreign Office should be reduced in rank and grouped with a Ministry of Economic Relations and a Ministry of Foreign Publicity, and that these three Ministries should be presided over by a Minister for Foreign Policy, with high Cabinet rank. I do not altogether like this scheme. I see grave difficulties in the proper co-ordination of three Ministries of equal rank, even if they are presided over by a Cabinet Minister. Further, the plan attaches in my view too high importance to official publicity in peace-time. Surely the function of publicity in peace-time ought to rest mainly with the Press, the telegraphic agencies and broadcasting. It also makes no provision for other Departments, such as the Service Departments, which are vitally concerned in our foreign policy.
An alternative proposal has been put forward by Sir Victor Wellesley, who speaks with great authority, since for many years he has paid particular attention to the organization of our foreign policy, and has drawn attention to the

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dangers inherent in any weakness or gap at the centre. He recommends that a Committee of officials representing the various Government Departments, the Fighting Services and the Bank of England—a Committee on which the Dominion High Commissioners should also sit—should consider and report to the Secretary of State on any measure likely to affect foreign policy. The Chairman under this scheme would be the Permanent Under-Secretary of the Foreign Office. The deliberations of this Inter-Departmental Committee would, before going to the full Cabinet, be referred to a Cabinet Committee consisting of the Ministerial heads of all the Departments concerned, and presided over by the Foreign Secretary. I am afraid I do not consider this proposal to be satisfactory either, though it might well be adopted for minor issues, provided that the Secretary of State for Foreign Affairs, on whom full responsibility must rest, has decided that a particular question should be referred to this Inter-Departmental Committee for advice.
The plan seems to me to be cumbersome, and also to smack overmuch of bureaucracy. I do not think that a Committee of which no Minister is a member is an appropriate body to consider major questions of foreign policy. For such vital questions I believe there should be some organization established on the lines of the Committee of Imperial Defence, which has functioned so admirably in the past. The Secretary of State would preside over the meetings, and the Departments affected would be represented on the Ministerial level. The Secretariat should be located in the Foreign Office. If agreement could not be reached in the Committee, then clearly the matter would have to be referred to the full Cabinet.
The problem is difficult and complicated. I have ventured to put forward a possible solution but probably the question should be examined further and the various proposals which have been made thoroughly investigated. For this purpose I would ask the Government whether they will not appoint a small but strong Committee. If that Committee could be placed under the Chairmanship of Lord Hankey, who has unrivalled knowledge of Government machinery of this kind, then its recommendations would carry the greatest respect. As Sir William Beveridge,
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in regard to other matters, observes in the introduction to his famous Report:
"In all this change and development, each problem has been dealt with separately with little or no reference to allied problems."
I believe it is in the interests of Ministers themselves that a full investigation such as I have suggested should take place. The success of our programme of reform at home must ultimately depend on the establishment of a strong, central organ able to conduct an efficient and successful foreign policy. I offer no excuses for the stress I have laid on this matter. It is assuredly worthy of the closest attention by Parliament as a whole. Although perhaps it is only indirectly related to the proposed reforms of the Foreign Service, it is far more important than they are, if effective safeguards are to be provided "for the avoidance of international conflict," to use the words of the White Paper. I beg to move for Papers.
Moved, That an humble Address be presented to His Majesty for Papers relating to the reform of the Foreign Service.—(The Earl of Perth.)
LORD ADDISON: My Lords, I rise for a few minutes to make some comments on the proposals of the White Paper and in particular to offer—as an outsider (shall I say) and as one who has had long Ministerial experience—some active support for what the noble Earl has just said with regard to what is not in the White Paper and which is of prime importance. Let me first of all say something about the proposals of the Paper itself. It is clear that our overseas services, having special commissions attaching to them, should clearly be specialized, and it is inevitable they should be separate, but I could not avoid noticing that the noble Earl just now made reference to the influence in times past of the Head of the Treasury in deciding appointments. It is all to the good that these Foreign Office Services, the Consular Services, and others should be amalgamated and made separate from the ordinary Civil Service. That appears to be inevitable, but I am not quite satisfied that the influence of the Treasury will be so remote from this arrangement as the noble Earl seems to think. It will be an essential part of the success and maintenance of this separate Service that proper regard should be had to its charges when members are living abroad, to the equipment of our Legations and other establishments, to the question

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of allowances, and many other things of a like nature which are quite foreign to the conditions arising in our Home Civil Service. They constitute good reasons for the separation, but I should like a little more information, if the Government can give it, as to where the Treasury will come in in determining these matters.
So far as I read this Paper, the new combined Foreign Service will be entirely separate from the Home Civil Service and will be treated as a self-contained and distinct Service of the Crown. But it will have to be financed by the taxpayer. It will be paid for by the taxpayer, and somebody therefore will have to be responsible for saying whether or not or how much of the taxpayer's money should be allotted to this Service. What I am exceedingly anxious about is whether we can obtain some assurance that the allowances and other costs of this specialized Service will be determined or advised upon by people who understand it, and not by some Principal Assistant Secretary or somebody else in the Treasury who knows nothing about it. It is absolutely vital to the working of this machine that the financing of it shall be advised upon by people who really understand it. I do not see that that is provided for in the scheme, but it is absolutely fundamental to the success of the new undertaking.
I can fully sympathize with the noble Earl's professional touchiness in some of his opening sentences, being a professional myself in another branch, but he was a little bit over suspicious when he spoke of the words in Paragraph 2. He quoted the words about the Service representing "the interests of certain sections of the nation rather than those of the country as a whole." The noble Earl should have read the words that went before and after. The whole point there was that the Diplomatic Service in the past has been
"recruited from too small a circle, that it tends to represent the interests of certain sections of the nation rather than those of the country as a whole, and that its members lead too sheltered a life.…"
The noble Earl ought to have given us the beginning and the end. That is true on the whole, without any reflection upon the Diplomatic Service. It must be so if men are necessarily drawn from the same kind of class. They cannot but be influenced by the experience of their life and by the particular traditions of those from whom they spring. Quite right that they should
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be; they ought to be; but if that is so, if the channel of recruitment is too narrow, it does mean that there is justice in that contention, and I think there is. That is the reason for the proposals in the White Paper, because you propose to widen the basis of recruitment.
I should like to ask one or two questions about this machinery of recruitment. Seventy-five per cent. of the entrants will be selected by examination and interview, and 25 per cent will be selected by a Board of Selection. We all know that many men will do well on paper, that they will be quite good examinees so far as their papers are concerned, but when you come to talk to them you will find, notwithstanding their intellectual qualities, that they are not perhaps the kind of men who would get on with others and who would not be acceptable for one reason or another for appointment. Such qualities are, of course, exceedingly important in the class of people you are proposing to recruit. I would like to have a little information about the Selection Board. Most of us have had experience of selection boards, and it is a very distasteful and difficult business sometimes to make selections. A great deal depends upon who is going to make the selection, particularly with regard to this 25 per cent. who are going to be chosen from suitable persons
I understand the machinery is that there is to be a Deputy Under-Secretary in charge of all this, that there will be a Personnel Department under him and that there will be Promotion Boards. I think it is of the utmost importance that the Selection Board should contain people from outside. I can trust the noble Earl (the Earl of Perth), but I think it should not be limited to the Diplomatic Service. That is the only point I am making with regard to the Selection Board, that it ought to be composed of people from other Departments, say, from the Board of Trade or the Overseas Trade Department, and that it ought to have upon it people from the world outside, men of experience in affairs outside. It is of the greatest importance that considerations affecting the selections which are not what would be called predominantly Service considerations should be taken full account of. Therefore I think it exceedingly important that we should have a little more information about this Selection Board.
I turn to the other and even more

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important subject to which the noble Earl referred, affecting the quality of the Service. I do not think it is any reflection upon our diplomatists of the past to say that these changes are necessary. I am sure the noble Earl does not need reassuring on that. The world is changing; the things that affect the lives of our people have changed immensely even in our lifetime. Foreign relations are not now determined by autocratic monarchies and by the kind of considerations that prevailed in the time of the Middle Ages. The causes which led to this war—economic, unemployment, financial—were seized on by a man who was a house painter, and it is surely of first-class importance that the amalgamated Consular, Diplomatic and Commercial Service should contain men with a wide knowledge of, and an alert sympathy with, matters relating to trade and industry and unemployment and the social questions which lie at the root of international disturbances.
I have heard some serious reflections, for example, on the staffing of some of our Embassies. They contain, we have been told, practically nobody who is really cognizant at first hand with what might be called the life of the people, and it is very important that that should be remedied. I do not say it because I happen to be a member of his Party, but I do think that Mr. Arthur Henderson was one of the most successful Foreign Secretaries we have had for a long time, and I think that was largely because he brought a new point of view into it. He had been associated with the life of humble folk much more than those who have held high office. I think the noble Earl was right when he spoke of the decline of the authority of the Foreign Office in recent years. I believe it has been a most deplorable event. To me and to all of us it must have been a matter almost of amazement that the negotiations, for example, previous to Munich, were conducted by the Prime Minister and an important official who was not in the Foreign Office at all. I am not blaming anybody; I am only referring to it as illustrating the drift away from direction and considered control which should be the business of the Foreign Office.
I think that brings us to the most important and critical matter of all and it
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is the one that is not mentioned in this Paper. So far as the general character of these proposals is concerned, subject to the criticisms I have made and the questions I have asked, I am sure they will have our whole-hearted support, but it will be a long time before they can come into operation. These young fellows will have to be selected and trained, and then will have to prove their worth. It may be ten years, perhaps even longer, before we shall begin to feel the full benefit, but immediately after the war we shall be confronted with a whole group of economic, industrial, food and other questions affecting peoples everywhere. It is proposed that there should be a special recruitment of people to help in that emergency, but I suggest that we need to go a good deal further.
The Board of Trade has its own set of representatives, often its own negotiations. What the Treasury do in the mysterious realm of money I do not quite know, and I am not sure if they always know themselves. At all events it does not seem to come under the cognizance of the Foreign Office. Then there is the Ministry of Information. Broadcasting will inevitably affect and more and more have influence upon international relations. It is unthinkable that the policy of our broadcasting should be separated from those who are concerned with directing, moulding and advising upon our foreign policy. I could multiply instances of this separateness. I think what we should seek to do is to insist that there should be in this country, at the centre of affairs, what I will call a Diplomatic Staff—it does not matter what you call it—a body of persons who shall be competent to advise upon all matters affecting trade, industry, social conditions, money and so on.
It should be the business of the Foreign Secretary to advise his fellow Ministers and the Cabinet, having himself been advised by an authoritative and highly qualified staff competent to glean information, and to give considered views on trade, labour, social and many other questions which inevitably are parts of our foreign affairs. I support the plea, from experience of government quite different from that of the noble Earl, that we should strengthen the authority of the Foreign Office by bringing into the Foreign Office a competent higher staff which would represent the amalgamated advice

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of the different Government Departments responsible for these different branches of national activities. That vital matter is not mentioned in this scheme at all, but I think it would be all to the good that it should be considered and discussed in your Lordships' House.
LORD PONSONBY OF SHULBREDE: My Lords, I was agreeably surprised when I read this White Paper and found that it was not nearly as bad as I expected it would be. In fact with a great deal of it I find myself in cordial agreement. I think we have derived some valuable knowledge from the speech of my noble friend the Earl of Perth, because he has knowledge not only of British diplomats out of foreign diplomats. People are a little liable to think that diplomats are hardly human, that their tricks are so transparent as to make their particular antics most undesirable, and that we should get rid of the lot. If there is a fault in this White Paper it is that, without actually saying so in so many words which would be quotable, it insinuates blame against the diplomatists, against the Ambassadors and. Ministers for the rather deplorable series of mistakes, slips and catastrophes that have happened within the last ten or fifteen years. I think that is very unfair. I do not believe they ought to be blamed at all. In matters of this kind I agree with my noble friend Lord Hankey, who in a former debate, when he said that he was being taunted with wanting an inquiry in some rather remote part of the world, defended himself from that charge by saying that he was not thinking of the people on the spot, that he did not want an inquiry as to what was done daily and that he was looking at the London end. It has become rather a practice here when the London end wants to defend itself to single out some set of officials with disparaging remarks which make you think they are not at all up to the mark. That is what I think has happened over this whole question. Somebody was to blame for consequences which are deplorably bad in many instances and therefore we must single out somebody and say there must be reform, that we must get rid of that lot, have a new lot in and train them.
When you make any report or speech in these days you must always get down to economics. If you do not use the word "economics" nobody will listen to
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you. I really was surprised to hear my noble friend the Earl of Perth talking about economics. I never heard him talk about them before. Another word which is very popular just now is "psychology." I do not think there is quite enough psychology about the White Paper. "Economic" comes in because whoever drafted the White Paper was very frightened of not being up to date. So we are to have economic experts. I do not like experts, and I do not like economic experts, because the trouble about the advice of economists is that they never agree with one another. I think if you train a lot of young men to be expert economists and say "Here is the great new Diplomatic Service" there will be worse catastrophes in the future than we have had in the past. There is not quite the intimate knowledge in this White Paper of somebody who has been in the Service. I have been going round trying to find out about that, because from the day I joined as a clerk in the Foreign Office in 180 up till to-day I have made a special point of trying to see where improvements could be made.
It was rather tough in the old days because Sir Thomas Sanderson, afterwards Lord Sanderson, always fell back on Lord Palmerston as his particular paragon. Therefore we did not get much for'ader. I was an advocate of amalgamation so far as the Diplomatic Service and the Foreign Office are concerned in very early days. It took a long time to persuade people of it, and I worked at it when a clerk in the Foreign Office home from abroad. Most unfortunately at that time I was in a Department where my duties were to make up bags with sealing wax and papers, and I inadvertently sent to Teheran a pair of boots instead of a Treaty. I was immediately told by Sir Thomas Sanderson that that was what came of amalgamating the Diplomatic Service with the Foreign Service. I did not see the exact bearing of his remark, but at any rate the thing was shelved for many years afterwards until Lord Hardinge, who I am sorry is not here to-day, introduced that and many other valuable reforms.
Now we are to have an amalgamation to include the Consular Service. I am a little doubtful about that, not because I have any class prejudice but because it is a specialized Service, a most valuable

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Service, and if you open the doors wide from it into the Diplomatic Service it will bring a new spirit among those in the Consular Service. They will want to compete for positions in the Diplomatic Service. They will turn their attention to social matters instead of strictly to business. Consuls can go into the Diplomatic Service now. There is no difficulty at all. Two of our most notable Ambassadors began their careers in the Consular Service—Sir William White at Constantinople and Sir Ernest Satow in Japan. They were most distinguished Ambassadors. There is no need to say it is a great innovation. We can do it to-morrow with any Consul. I have here a valuable letter which I got from an officer who was in the Foreign Office, in the Diplomatic Service and ended up in the Consular Service as a Consul-General. I regard his testimony as of value because he knows the inside of the three Services and has seen the best of them. With regard to this amalgamation of the Consular Service with the Diplomatic Service he writes:
"A large number of British Consular officers who were highly efficient for all the work that came their way I could not imagine adequately filling diplomatic posts."
That is to say that those people had been experts, experts of very great value, and it was desired to shift them into positions where they thought they would get more kudos, more popularity, and more pay by drafting them into the Diplomatic Service. I do not believe in shifting individuals from quite specialized jobs in order to get a unity between people who happen to live abroad. People who happen to live abroad have a certain unity but it is a very slight one. It is a person's work that unites him to his colleagues; not the locality in which he lives.
I believe that a good feature in the White Paper—and I would like to see it extended very much further—is the proposal for the abolition of written examinations and the substitution of interviews. I think the position of an interviewer is a difficult one, but nevertheless I consider that the abolition of the written examinations ought to be carried out very much more widely in all our educational establishments. No doubt there are people who are frightened by the thought that they have to write against the clock and are at their very worst in a written examination, whereas if an individual of that
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sort could only be in casual and friendly intercourse with somebody in a country house over a week-end the results might be entirely different. The interviewer would find out more about the candidate in a Sunday afternoon talk than he would by looking through twenty papers submitted in an examination. In all our educational systems, I am certain, that will be the process of judging intellects that will be adopted in the very near future. The written examination system is dying; I hope that it will soon be dead.
That part of my noble friend's speech in which he referred to the question of the Foreign Secretary himself and foreign policy was extremely important. We are getting into very deep water there. I am not sure that I entirely envy the new post that has been made for my noble friend Lord Hankey. If he has got to be a director of foreign policy I think he will find it a very stiff job. My theories break down—
THE EARL OF PERTH: My Lords, I did not suggest that Lord Hankey should be a director of foreign policy. I suggested that he should be the head of a Committee to examine this question of the machinery to be set up to deal with that problem.
LORD PONSONBY OF SHULBREDE: I am corrected. Lord Hankey is to be head of the machine that is to produce foreign policy. That I think is going to be a rather onerous task. I may be old-fashioned, and it may be that I contradict myself when I say that the Foreign Secretary should not be hampered. He should have available people who will advise him, and people who will instruct him when he wants instruction. But he should have, in the manipulation of the delicate matter of foreign policy, not only from year to year or even from week to week, but sometimes from hour to hour, an unfettered discretion. And he must be really trusted, and fitted for such a post by his record. But you should not tie him up with a lot of experts—those experts who come in always from the next room and tell you where you have gone wrong. You do not want as Foreign Secretary a person who lives in that atmosphere; you want a person who is free. I believe that the fewer rules and regulations, the fewer checks and the fewer examinations you have the better,

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for after all, what we are trying to do is to give these people, who serve us in a difficult life in foreign posts, qualities which we know cannot be taught. We want them to have judgment, tact, discretion, and discrimination. We have as yet not known how to find anybody who can teach those things infallibly. Do not let us be a little bit too punctilious in all this machinery that is to be set up. Let us make it our aim to get hold of the right sort of human being. We know the right man when he turns up. He does not turn up often enough, but I believe that he turns up more often in this country than in any other country in the world.
THE CHAIRMAN OF COMMITTEES (THE EARL OF ONSLOW): My Lords, I find myself in agreement with, and I associate myself with, what was said by the noble Earl, Lord Perth, and by my noble friend Lord Ponsonby, in regard to some of the, perhaps, unfortunate expressions contained in the preamble and in the conclusion to this White Paper. But, generally speaking, I think that the White Paper may be accepted by us—and I hope it will be—as a very valuable document containing very valuable suggestions. As Lord Ponsonby has told us, they are not altogether new suggestions because we have heard of Consular officers, such as those he mentioned, having been promoted to the highest offices in the Diplomatic Service and vice versa. So one cannot claim that they are entirely novel. The general amalgamation of the various Services does seem to me to simplify matters, and will, I think, lead to good results. When I entered the Service there were no fewer than five different branches—the Foreign Office, the Diplomatic Service, the Consular Service, the Near Eastern Service and the Far Eastern Service. They were more or less in watertight compartments. Now you are going to have one Foreign Service which a young man may enter, and, as I understand from the White Paper, all new entrants will gain experience in the various branches of the Service. I think that that will be a valuable experience for them. When I was young I should very much have liked to have experience in charge of a vice-consulate, or something of that kind.
When we come to the question of the Commercial Diplomatic Service, however,
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I am a little doubtful about what is proposed. As is very properly stated in the White Paper, we want the men in the Foreign Service to have the widest experience of foreign policy all over the world, but we want something rather different in the Commercial Diplomatic Service. We want a good expert knowledge of British commercial diplomacy in all its branches and all over the world, but the holder of a commercial diplomatic post should, as the noble Earl, Lord Perth, said, know his district thoroughly, and not move about too frequently. When I entered the Service, we went through various phases. There was first of all a Commercial Attaché attached to the Mission, who acted in the same way in regard to commerce as did the Naval and Military Attachés towards the Army and Navy. Then the Commercial Attachés were moved to London, where they were supposed to be in better touch with British commercial interests, making tours of their posts, and a Commercial Secretary was appointed abroad. That was unsatisfactory. I myself was a Commercial Secretary at one time, and I was very conscious of my own inadequacy. I do not think that anyone who is appointed without training to a post of that kind is of any great value. That arrangement, however, did not last long, and the Commercial Diplomatic Service was instituted.
I do not know much from experience about the Commercial Diplomatic Service, because it was introduced after I had left the Service; but I know something of it from the other side. For about twenty years I was Chairman of the British Merchants' Morocco Association. We found that the Commercial Diplomatic Service in Morocco was most helpful, and its members were very courteous, but I am a little doubtful—I do not want to be too critical—whether they were quite as helpful to the merchants as were the merchants' own chambers of commerce and agents generally. I speak only from what I know myself, and others may disagree with me. As I have already said, the commercial diplomatist should be thoroughly well acquainted with his post. He ought to know the vernacular languages thoroughly, and he ought to know the traders and others in the country to which he is accredited. In Morocco, for example, the vernacular languages are French, Spanish and Arabic, and the commercial diplomatist should certainly

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know those languages. In Finland, where the vernacular languages are Swedish and Finnish, the commercial diplomatist should certainly be acquainted with those languages, or he will not be able to pull his weight to the fullest extent. This means that the commercial diplomatist must spend a long time at his post to get the necessary knowledge.
I now come to the question of the numbers of diplomatic and consular posts. I see from the White Paper that it is proposed to increase the numbers of diplomatic posts; that is, to enlarge the staffs. I think that everybody who has served in a Chancery will agree that Chanceries are generally somewhat understaffed. That was admitted the other day by the Under-Secretary of State, when he said that 80 per cent. of the time of the Secretaries in the Diplomatic Service was spent in the Chancery, tied to their desks, going through papers, writing drafts and so on. That is unfortunate; for, as has often been said in your Lordships' House and elsewhere, a large part of the business of the Diplomatic Service lies in presenting the point of view of their own Government—and that applies not only to heads of Missions but also to the junior members of the Service—and in finding out the point of view of the people of the country where they are stationed. That means mixing with members of the public, as my noble friend Lord Addison said, and gaining the knowledge thereby to be acquired; but they cannot do that if they are shut up in an office doing pure office work. That state of affairs may be remedied without a White Paper; the numbers of the Diplomatic Service could be increased with very little trouble. I am glad to see that this is going to be done.
Coming to the question of the Consular Service, if I understand the White Paper correctly, it is proposed to decrease the number of consular posts. I think that that would be of very doubtful advantage. We must have a large number of consular posts. I am speaking of the most important posts, not the small ports and so on where Consuls are needed only to give clearances and deal with small matters. In former times a large number of the occupants of these posts were called unpaid, although they received fees. They were residents of the place where their post was situated, sometimes British but
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far more often foreigners. The practice of appointing to important posts natives of the country concerned is, I think, one to be deprecated. I will give your Lordships the reason. The business which goes through a consular post is largely of a private nature, and discloses the financial position and so forth of British subjects who are resident in the town in which the post is situated. Many of the unpaid Consuls are, or have been, bankers, financiers or people engaged in commerce, and it is undesirable from the point of view of British subjects—I know this to be the case; I have heard it more than once—that their private business should be known to those who may be in rivalry with them in matters of business. I hope, therefore, that this proposed reduction in the number of consular posts will be reconsidered.
Then there is the question of the amalgamation of the Foreign Office and the Diplomatic Service. They have already been amalgamated, I know. I do not want to go into detail here, because that has already been adequately dealt with, but I should like to say that we want to have people in the Foreign Office who are conversant with the countries' departments with which they are concerned, and who are able to present the information which comes from the Missions abroad in a proper manner. They must be able to understand it and put it forward in such a form that the Foreign Secretary and the Cabinet and the Government can really appreciate and understand it. I think that that is a very important point, and I hope and believe that it is being met in this White Paper.
I shall not discuss the methods of entry at any length. On the whole, I think that the two methods and the machinery referred to in the White Paper are quite satisfactory. They are not, of course, static, and doubtless if experience shows that improvement is required it will be made. When I come to the question of studentships, however, I am not altogether in agreement with the White Paper, except in principle. I think that the provision of money to enable young men to go abroad and study languages is excellent. A knowledge of languages is essential for a member of the Foreign Service. To ask a member of the Foreign Service to serve in a foreign post when he does not understand enough languages besides his own to be efficient, is like asking a man to be

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captain of a ship although he knows nothing of navigation.
I am not certain, however, that 23 is not a little too old to begin studying languages; but I will leave that for the moment. I am certain that eighteen months is far too little time to get really proficient in languages, because it is suggested that two languages should be the minimum. That certainly should be only the minimum, and I think three should be aimed at, yet you are only going to give eighteen months in which to learn them, besides other things as well. I think that is too little. I hope very sincerely that the Foreign Office or the Government may reconsider that point and give a longer time for young people to learn the languages of the various countries which are most important. If you do not, one of two results will occur: either the people who are coming up for the first part of the examination, and presumably coming from the universities, will devote themselves entirely, or as much as they can, to learning languages, so that they will all be cast in the same mould, as was the case many years ago when I entered the Service; or you will have to lower your standard of qualifications. Because I do not think it is possible for a man to learn three, or even two, languages in eighteen months. Therefore I hope very much that that point may also be considered.
Now, what languages is it proposed that the candidates should be asked to acquire? I imagine that everybody will agree, in spite of the fact that English is becoming more of a diplomatic language now than it used to be, that French would be the first essential—not that it is spoken in so many countries, but it is the general lingua franca, at any rate all over Europe. Then comes the second language. In my time German was the second language, but I am extremely doubtful whether in the future German will be of sufficient importance comparatively to be made the second language. I have been for a good many years Chairman of the School of Slavonic Studies at London University, and my experience there and also at St. Petersburg, where I was for three years, convinced me that Eastern Europe is now rapidly impinging upon Western Europe. Indeed one knows, and has known for a long time, that Eastern Europeans get a great part of their education in Western
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Europe, and are generally able to speak one or more languages. But how many Englishmen go to Eastern Europe, and how many of them know and understand anything about Russia—not to speak of the other Slavonic countries? I feel that in future, after the war is over, it will be very necessary for our Foreign Service to have a considerable knowledge of Russian and of Eastern European countries. Therefore I would recommend that the second language should be Russian. Also that would be a valuable language for the Far East. That matter is mentioned in the White Paper. If we have a third language what should that be? German certainly would be of great value, but in future we shall draw much closer to the Spanish-speaking countries in South America. Therefore I suggest that the Foreign Office in the case of these studentships should have the right of direction: they should direct some of the young people to learn German, and others to learn Spanish. Possibly you could ask them to learn other languages as well, such as Portuguese and Italian, but the most important languages after the first two I have mentioned seem to me to be Spanish and German.
I would like to say one or two words about the Personnel Department. I think that is an innovation which will be most valuable. In times gone by this work was done, and very thoroughly done I think, by the Private Secretaries, but the whole thing is getting very large now, and I think that a special Department will be of great value. I know the difficulty that Secretaries of State have had in getting to know their men. Some of them live abroad and are very rarely in this country. The two Secretaries of State under whom I served longest, Lord Lansdowne and Viscount Grey of Fallodon, spoke to me of the great desirability of getting to know the younger people. Lord Lansdowne used to send for even junior members of the Service, and Lord Grey said to me, "I wish you would help me to get to know some of the younger fellows in the Service and in the Office." I entirely agree with my noble friend Lord Perth in regard to the desirability of having the power to superannuate those who are not quite fit for the higher posts, and I think the suggestion he made that they should be given a bonus is worthy of consideration. Finally, I come to the paragraph in the White Paper

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which mentions the employment of women in the Service. I am glad that has been postponed until after the war. I hope it will be considered from one point of view only, and that is the point of view of what is best for the Service, and not from any personal or political considerations of those who may desire to enter it.
LORD HANKEY: My Lords, I beg to move that the debate be now adjourned.
Moved, That the debate be now adjourned.—(Lord Hankey.)
On Question, Motion agreed to, and ordered accordingly.

AN AIRCRAFT FIRM'S CAPACITY.
LORD WINSTER: My Lords, I beg to ask the question standing in my name on the Paper.
[The question was as follows:
To ask His Majesty's Government whether the Minister of Aircraft Production has received the report on the aircraft company to which his attention has been called, and, if so, what action he proposes to take.]
LORD SEMPILL: My Lords, before the noble Lord, Lord Sherwood, replies, may I make a few observations in extension of the remarks of my noble friend Lord Winster a few days ago? I was sorry not to be present in your Lordships' House when the question touching the internal affairs of an unnamed aircraft designing and manufacturing firm was asked by my noble friend on February 23. My noble friend has always something interesting to say to your Lordships, and presents his points in a vigorous and compelling manner, but on February 23 the hour was late when he rose to speak, and perhaps for that reason, and on the assumption that he was very fully informed about these matters, he curtailed his remarks. Before Lord Sherwood replies for the Government there are certain further matters that I submit should be again drawn to your Lordships' attention, as without these the situation cannot be accurately appreciated. I know that my noble friend Lord Winster will allow me to add these observations from personal knowledge during thirty years and more of activity in all branches of aeronautics.
On December 17, 1936, I drew attention to some fundamental points in
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regard to the handling of the aircraft industry by the Air Ministry, and made reference to the part it was destined to play in what was then a period of rearmament. Certain important changes were urged at that time, and your Lordships will agree, I think, that events have since, and quite recently, transpired which have shown that the recommendations then submitted to your Lordships were fully justified. There is a society known as the Society of British Aircraft Constructors which, while purporting to represent the aircraft industry as a whole, in fact represents the charmed circle of the elect or what are known as the approved firms. The approved firms alone have a vote in the management of the society's affairs. There are fifteen approved air-frame manufacturing firms, and five aircraft engine manufacturing firms, two of whom are offshoots of air-frame manufacturing firms. There are therefore eighteen firms within the magic circle, and very many—some 225—without, amongst whom was to be found a firm whose name is in the mind of my noble friend Lord Winster.
The policy of the Air Ministry, now followed by the Ministry of Aircraft Production, for reasons fully outlined to your Lordships on December 17, 1936, has been to give preference from the standpoint of design and manufacture to these approved firms, and by so doing to maintain a ring of approved firms. That this policy does, as I have urged before in your Lordships' House, call for revision is well illustrated when we observe that, after three and a half years of war, no fewer than three out of the approved fifteen aircraft designing and manufacturing firms have had Controllers of one kind or another appointed by the present Minister of Aircraft Production, and in one case all the shares of the company have been acquired by His Majesty's Government. The firms outside the ring of approved firms were styled by the Air Ministry as "fringe" firms, and by the Society of British Aircraft Constructors as associate constructor members, but with no voting rights. Two of these "fringe" firms, both allied, withdrew from the Society of British Aircraft Constructors about a year ago in protest against this body's undemocratic proceedings. One of these firms is the subject of the remarks of my noble friend Lord Winster.

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This firm was established some years before the war by a member of your Lordships' House with a view to assisting in the production of military aircraft and air transports for civil purposes. In both directions useful contributions were made. The managing director is a dominant personality, imbued with great vision and an immense vigour in action. He devotes himself to the common task in which we all strive to play our part with a zeal that all may envy and none surpass. He is one of the leading pioneers in aviation. He is a courageous fighter, and has made no secret of his opposition to the principle of the vested interests of the approved firms. He was summoned to appear some time ago before the Select Committee on National Expenditure, to whom he has submitted his views. Such have also been made known to all previous Ministers of Aircraft Production at their request. His company might have been content to remain a small one, and to earn such modest profits as present regulations may allow; but such a course has been spurned and large risks have been taken with no possibility of financial return, but something far more valuable—the supreme satisfaction of knowing that a useful contribution had been made to the war effort.
In November, 1941, in February, 1942, and in June, 1942, the company which is the subject of my noble friend's remarks advised the Ministry of Aircraft Production that the Fairey contract could not be carried out for reasons beyond the control of this unnamed firm. This warning was unheeded, as it was not fashionable to doubt the estimates of one of the approved firms. This has been changed by the present Minister, as your Lordships will be aware, and for this change we are exceedingly grateful. In August of last year a high official in the Ministry of Aircraft Production sent for the Chairman of this anonymous company, of which the individual to whom I have referred is managing director, and stated categorically that this person was deliberately holding up war production. No more serious charge can be made against a man's honour. The Chairman vigorously refuted this charge, classing it as outrageous, but it was repeated to the individual in question when he called on the official at the Ministry to demand an explanation. At that time he urged with great vigour that the matter should be
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fully investigated. An investigation of a sort was held, and at first an attempt was made to justify the charge, but it broke down completely as there was no evidence at all against the individual in question. But what did emerge was the fact that these charges were made as part of an attempt to disguise a very serious official blunder.
While addressing your Lordships I have in my hand correspondence that has passed between the previous Minister of Aircraft Production and the individual against whom this outrageous charge was made, and it is very significant that the individual not only pressed the Minister for a complete and unconditional withdrawal of all charges, but he rejected on two occasions the Minister's half-hearted and ungenerous form of apology as being insufficient. I can only add that the Minister, when pressed further, did make an unconditional and complete apology on September 29 last. As my noble friend has pointed out, the Minister, in answer to a question in another place, on June 10 last year, said: "This firm is up to date in its contracts." This is a most significant statement, for it was only after the failure of the charge that the individual in question was obstructing the war effort that a charge was made by an official in the Ministry of Aircraft Production that the firm was inefficient in its management.
This charge was first made on September 2 of last year to the Chairman of the company. The firm requested an investigation of the charges of mismanagement made by a representative of the Ministry of Aircraft Production, and the Barlow Committee was set up as a result for this purpose. That Committee's findings fully justified the firm's allegation that a certain line of action taken by the Ministry of Aircraft Production's representative against the company's most insistent advice had led to a disastrous state of affairs. The Committee also took note of the personal attack on the individual referred to, and I think your Lordships would like to hear the relevant passage in that Report which was quoted by the late Minister of Aircraft Production in his letter of apology. It reads:
"We are informed that as a result of statements made Mr. — — was accused by an official of the Ministry of Aircraft Production

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of obstruction almost amounting to sabotage of the scheme. We wish to record that we obtained no evidence to support such an accusation, and that it would be best for all concerned for this atmosphere to be cleared at once."
I do not propose to detain your Lordships any further by covering all the ground involved in this matter and commenting in detail on the points raised by my noble friend Lord Winster. I am informed that a full statement has been prepared by the firm in question to the points raised in the last debate, and lodged with the Ministry of Aircraft Production, and I hope my noble friend Lord Sherwood will deal with all these points very fully in his reply. I have been most careful in sumitting these observations to your Lordships not to go outside what exists in written evidence. It is sad indeed to see that such a state of affairs can arise in such an important Ministry, and your Lordships will be sorry that the present Minister, a man imbued with the highest ideals, should have to grapple in his early period of office with so lamentable a state of affairs. The Minister, as we are well aware, is taking strong action in various directions, but I hope that he may be respectfully offered these few words of advice, that the appointment of Controllers in every case of difficulty in the aircraft industry should not be considered a sovereign remedy for all its problems.
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR AIR (LORD SHERWOOD): My Lords, the noble Lord, Lord Winster, on February 23 brought up this case, and asked me what was happening in regard to this company. I then gave him an assurance that the matter was being gone into carefully, that, as has been recounted by the noble Lord, Lord Sempill, someone had been appointed to this company who was making a personal report to the Minister, and that on that personal report, which was going to be submitted in a month's time, the Minister would take action. Therefore it is perfectly proper that Lord Winster should now ask whether that report has been received and what action is being taken. Lord Sempill, I hope, will not think me discourteous if I do not go into all the points he has brought up. We all know in this House that he has immense knowledge of the
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subject, and I can assure him that all the points he has brought forward will be laid before the Minister responsible.
What I am proposing to do to-day is to answer the special point that was put to me by Lord Winster—namely, what is the result of the report which was made to the Minister? On that I would like to say that the report has been received, that it is personal to the Minister, who has considered it, and that, in the light of it, he has taken action by using his powers under Defence Regulations. He has appointed an authorized Controller, and the person he has selected as Controller is Mr. Layton-Bennett who will be provided with the necessary technical advice to assist him in discharging all his duties. I quite agree that this is drastic action that has been taken by the Minister. As has been brought to your Lordships' notice previously, this action has had to be taken in certain cases of aircraft factories which have grown to such an enormous extent during the war. I am not going into the details of this case other than to state that the Minister is fully advised on all these matters, that he has had this inquiry which has taken some time, and that he has come to this definite decision. The noble Lord, Lord Winster, asked me to give him an answer, and that is the answer I give him.
LORD WINSTER: My Lords, I beg to thank the noble Lord for the answer which he has given me.

WAR DAMAGE BILL. [H.L.]
THE LORD CHANCELLOR: My Lords, I ask leave to introduce a Bill to consolidate the War Damage Acts, 1941–1943, and to move that it be read a first time.
Moved, That the Bill be now read 1a.—(The Lord Chancellor.)
On Question, Bill read 1a, and to be printed.

BRITISH NATIONALITY AND STATUS OF ALIENS BILL. [H.L.]
Returned from the Commons, agreed to.
House adjourned.