Lords Sitting of 24 October 1946

Preamble
The House met at four of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers.

COINAGE BILL.
Order of the Day for the Second Reading read.
THE SECRETARY OF STATE FOR INDIA AND BURMA (LORD PETHICK-LAWRENCE): My Lords, I rise to move the Second Reading of the Coinage Bill. The purpose of this Bill is to effect the removal from the currency of that element of silver which it now contains. The principal reason for the Bill is the need for repaying the United States of America the loan of 88,000,000 ounces of silver which was made during the war and which we are under contract to repay in silver during the next five years. The Bill provides for a coinage of a cupro-nickel alloy to take the place of the existing currency. I propose to say a few very brief words on each one of these topics.
It is a very long time since the intrinsic value of our silver coinage has corresponded with its face value. At any time during the last 130 years if you were to melt down, say, what was called the silver shilling the value of the silver which you would have got as a result would have been substantially less than one shilling's worth. This means that the silver coinage has been essentially a token coinage; that is to say, it depended for its value not upon its intrinsic material but upon the fact that it was to be accepted in certain circumstances as legal tender. As token coinage it did not differ in essence from the paper currency except that, whereas the paper currency is of course intrinsically worth hardly anything at all, the intrinsic value of the coinage we have had has varied from a few pence up to very nearly its face value, and I think even more than that at one time. Up to 1920, except at a time some centuries ago, the silver coinage consisted of a very large proportion of silver. But in 1920 the value of the silver in the silver coinage,
672
owing to the rise in the price of silver, had become so great that for a brief period the intrinsic value of the silver was actually greater than the face value. That being so, Mr. Austen Chamberlain, as he then was, who was the Chancellor of the Exchequer at the time, decided that it was necessary to reduce the amount of silver in the currency, otherwise there would be a tendency for people to melt down the coinage in order to get the greater value the metal had over the face value imprinted on it. He reduced the amount of silver in currency to fifty per cent., and at that figure it has remained ever since, so that the shillings and half-crowns and sixpences which we have today are not silver coins, they are coins made of an alloy of which silver is exactly half. The purpose of this Bill is to change that alloy from a silver alloy to a cupronickel alloy, as I shall describe more particularly a little later on.
Why is it desired by the Government to make this change? The first reason is that silver is becoming steadily dearer at the present time, and as we have to keep on purchasing metal for our expanding so-called silver currency it is a considerable expense to us at the enhanced price to go on buying silver. Broadly speaking, silver, which was 2s, an ounce in 1939, is now 4s. 7½d. or thereabouts per ounce, which you will see is a very considerable rise, and it may well be that the price of silver will go on still further rising above what it is at the present time.
That in itself would be a considerable reason but, as I stated earlier, a more important reason still is the fact that during the war we borrowed 88,000,000 ounces of silver from the United States of America. We entered into contract to repay them during the next five years, and that repayment has now become due. I may add that the Government of India have a similar liability for an even larger amount. If we were to buy all this silver in the open market in order to repay the American loan, in the first place we should have to pay a very considerable price, and it may be an increasing price, because of our increased demand which might well send up the price far above its present figure. In addition to that we should be taking silver away from use in industry, which I understand is a growing one at the present time. I think in those circumstances your Lordships will agree that there is no object in

673
making use of our very limited foreign exchange in order to buy silver and that, much as we may regret it from a sentimental point of view—and I suppose none of us do not regret it—it is a sound proposition for us to get rid of the silver from our currency and make use of an inferior alloy. So silver will go the way of gold and no longer find itself jingling in our pockets or residing in our purses.
So far, I imagine, I shall have, with perhaps one or two exceptions, the general consent and agreement of your Lordships. I now come to a point which, judging by the debates in another place, may give rise to some difference of opinion. I refer to the question as to with what we shall replace the silver alloy which has hitherto formed the substance of our silver currency. As your Lordships know, the proposition in the Bill is that for the present alloy there shall be substituted an alloy which is called cupro-nickel and which consists of three parts of copper and one part of nickel. I want to say straight away that this alloy is a white metal eminently suited for coinage and that the Mint are in a position to set about producing those coins immediately. They cannot come into direct use by the public quite so soon because a little interval will elapse, but as far as the Mint are concerned the minting of those coins can proceed at once and will in fact proceed directly this Bill has been carried into law.
Some criticism has been made of this alloy and it is argued that pure nickel should be used instead. I have no inherent objection to a nickel coinage, but I should explain to your Lordships first of all what difference there is between nickel and cupro-nickel coinage for practical purposes and then give the reasons why the Government have come down for the moment on the side of cupronickel. It is argued by people who have not seen these alloys made into coins that the cupro-nickel alloy is unsuitable for coinage for several reasons. In the first place, it is said that it is dirty and possibly a yellow or a drab colour. That is quite a misunderstanding; the appearance of a cupro-nickel coin is in every way as white and as bright as pure nickel, and in fact the two coins are indistinguishable unless they are very carefully examined one against the other. It is perhaps not generally known that on the other side of the Atlantic the so-called nickel in the United States of America is cupro-nickel.
674
The so-called nickel in Canada, on the other hand, is pure nickel. The United States nickel, which is cupro-nickel, has been in currency ever since 1870 and, so far as I am aware at any rate, there has been no criticism of the United States coin or any suggestion that it is in any way inferior to the Canadian pure nickel coin. I think probably the idea that cupronickel is a yellowish substance exists in the public's mind because they imagine that that is the alloy from which our present twelve-sided threepenny bit is made. That, of course, is entirely incorrect; our twelve-sided threepenny bit is not made of cupro-nickel but of nickel-brass, in which nickel, I think, plays a very small part. As I have already said, cupro-nickel is almost indistinguishable from pure nickel.
It is also said that cupro-nickel is soft and can lose its shape. That is quite untrue. It may not be quite as hard as pure nickel but it is very hard indeed and it is quite impossible to bend it out of shape. It is said that it is easily counterfeited because it melts at a low temperature. That also is quite incorrect. It is true that it melts at a lower temperature than pure nickel but it melts at a temperature 200 degrees above the alloy which forms our present silver currency. It is said that it becomes discoloured and pitted after a time, but there is no evidence whatever of that. As a matter of fact in several countries of the world—notably, as I have mentioned, in the United States—it has been in existence for a long time.
That I think disposes of nearly all the objections which have been raised against the use of cupronickel, but, as I have said, I am not out to defend cupronickel as a better substance than pure nickel from which to make coinage. Why is it then, that the Government are asking in this Bill that in the first instance at any rate cupronickel shall be used? The answer is that we want to get this operation proceeding at once and we could not do that if it were decided to change over to pure nickel. Nickel, as I have already said, requires a higher melting point, and I understand that the present furnaces and the present set-up in the Mint would not be able to produce the disc from which the currency would have to be stamped if nickel were used. If nickel coins were to be used, the only alternatives would be that private firms should be asked to produce them or that, with considerable

675
delay, the furnaces and the other apparatus should be got together and installed, if it were possible, in the present premises, and if that were not possible some additional premises would have to be found. Taking one thing and another, it is exceedingly likely that at least a year's delay would take place before a new nickel coinage could be made.
There is another point to bear in mind. Nickel is harder than cupronickel. The designs which enable the present currency to be cast are of a relief which will suffice for the stamping of cupronickel coins but would not be correct for the stamping of pure nickel. Nickel being so much harder, it is not possible to have so deep a relief and therefore it would be necessary to have new designs in order to provide the lower relief which alone could be efficacious in the case of pure nickel. For those reasons there will be considerable delay. Therefore, the Government have decided, as is stated in this Bill, that cupronickel shall be the coinage which shall immediately replace, or begin to replace, the so-called silver coinage. I hope I need not go into the precise significance of the individual clauses. If there is any point on them it can of course be raised in the course of the discussion or in Committee, if it is thought fit to have a Committee stage.
There is just one clause to which I think I should call attention, and that is Clause 3. In that clause it is proposed that by proclamation it will be possible to vary the material from which the coins will be made. It may be that in years to come use may be made of that clause, which will mean that it will not be necessary to come back to Parliament to obtain sanction for a change. On the other hand, I would remind your Lordships tint that proclamation will be open to what I think is known as a negative Resolution. In other words, a Prayer can be put down against it, and if there should be any reason to disapprove of it and in the opinion of the House that is so, the proclamation will not take effect. With those few words I commend this Bill to your Lordships' House.
Moved, That the Bill be now read 2a.—(Lord Pethick-Lawrence.)
4.23 p.m.
LORD BALFOUR OF INCHRYE: My Lords, I am sure the whole House is grateful
676
to the noble Lord for the way he has explained this Bill. We on this side of the House admit that in the circumstances the measure is necessary, and therefore we do not oppose its introduction. Notwithstanding that, it is worth thinking a moment that this is indeed a melancholy occasion, because the Government have virtually invited us in this House to go, as it were, to an All-Party funeral for silver. I am sure there are mourners on all sides and in all quarters of the House at the disappearance of silver from our coinage. Although in principle we do not oppose this measure, nevertheless whether the Government's proposals are the best, and whether what the Government propose is the only way to do what they wish, are matters of some difference, some comment, and some question, from myself and other noble Lords on this side of the House.
Although, naturally, the noble Lord as a member of the Administration responsible for the change did not say so, we must admit that this is a warning regarding the state of our finances at the present time. The Bill is a measure indicating the straitened circumstances in which this country is carrying on at the present time. The coinage of this country has in the past been a token of its stability and respectability. It was rather like a well-cut, well-preserved suit in which somebody goes out to do business. We are now donning—and there is no question about it—what is really a shoddy garment of, I am afraid, dubious wearing quality, and it seems to me that it marks one more step towards that utility life into which we are all being led at the present time. We have got utility furniture, we have got utility radios, we have got utility this and utility that, and now we are to have rather a drab, dreary, utility coinage. It is, of course, true that in the technical sense our credit is unimpaired by the change in this coinage, but it must have a bad effect on the ordinary citizens in the other countries of the world with which we are doing our trade. There must be a bad psychological effect as the result of this bad substitution for our age-long silver coinage.
I want to ask the noble Lord if the Government would consider taking particular care to brief our commercial secretaries and our trade representatives in foreign countries as to the true need of this measure, what it is and why we

677
have to introduce it, in order that any bad psychological effect upon the credit of this country may be offset. No one disputes the need to save, nor indeed do we dispute the merit of saving. The Chancellor of the Exchequer said in another place, and the noble Lord has repeated to-day to your Lordships, that the main reason why the Government have introduced this measure is that we have an obligation to repay 88,000,000 ounces of silver to the United States over the next five years; and there is also our reluctance to buy silver at the present enhanced price in order to continue silver in our coinage. We have been compelled, therefore, to take the step with which noble Lords on this side of the House do not disagree.
But I want to question whether we are really doing the best for this country by the substitution of cupro-nickel. The noble Lord said that we are doing this for the present time and that the Government have come down for the moment on the side of cupro-nickel. He also said that he was not out to defend cupronickel, but nevertheless he put up a very good defence for that particular alloy. The noble Lord put up a certain line of defence but, if you will allow me to say so, I think it is arguable whether that defence was either sufficient or really correct in certain respects. It has been generally argued that nickel would, if it could be used, be a more satisfactory material for our coinage than cupro-nickel. Indeed, in another place the Financial Secretary of the Treasury said he very much regretted that the Mint could not cope with the work at the present time, if in fact nickel is the better material. I hope that what I will call the "escape clause"—the noble Lord referred to it twice in his speech, saying "for the present cupro-nickel," and that he had come down on the side of cupro-nickel "for the moment"—means that the Government have not closed their minds to the possibilities of abandoning cupro-nickel as soon as circumstances allow, for a coinage of nickel, which has generally been admitted—and no Government spokesman has tried to deny this—is a more desirable metal.
There are three reasons given for what I will call this second-class decision to which the Government have had to come. The chief reason is the difficulty of minting. Many of us have read the debates
678
in another place, and I would summarize the reason for the difficulties of minting under three headings. Firstly, they have not got adequate building space to put in new machinery; secondly, they have not got the new machinery; and thirdly, if they had the new machinery I understand that the foundations of the building would need modification. The noble Lord said that the Government have to take this step of introducing oupro-nickel at once, and therefore they could not wait for those remedies required for the Mint to be brought into operation. I put it to your Lordships that that explanation is not really enough. The Government have now been in office some eighteen months. As soon as Lease-Lend ended they must have known of the call which was likely to be made on us to repay the 88,000,000 ounces of silver, and surely in a year to a year and a half the Mint, with Government support, might have got the machinery required, and the buildings might have been enlarged or the Mint removed to a more suitable place. Also the foundations might have been put right to such an extent as to allow of putting in such machinery as it might have been possible to install.
It does seem to me that it is a peculiar position with respect to a nationally operated industry that, after eighteen months, when a Government pledged to the maximum degree of nationalization are asked to cope with a particular situation, they declare themselves unable to do so because the industry has not got the fittings, the plant or the necessary foundations. Of course, the Mint has been operated—with great credit, I am sure, to those who have been conducting the operations—under State ownership for a large number of years under various Administrations, some of those being Administrations not so fond of State ownership and nationalization as the present Government are. But it does seem to me to be poor testimony to the policy of industrial nationalization if the present Socialist Government after eighteen months have to admit that their own plant is inadequate to meet a position which they should have foreseen a year ago.
It is due to this delay that there is only one step open to the Government as an alternative to the step which is now to be carried out, and that would be to seek the aid of private enterprise. It is

679
understandable that there would be a certain amount of reluctance on the part of the Government to go to private enterprise, when nationalization appears to have failed, to make arrangements for the production of a nickel coinage, instead of one of cupro-nickel. But the introduction of nickel coinage, instead of cupro-nickel, could be brought about now and the technical difficulties with which the nationalized industry cannot cope could be overcome by going to private enterprise. I cannot help feeling that the circumstances of the present time fit in somewhat conveniently with the Socialist theories of Government ownership and their feeling that in no circumstances would they go to private enterprise. Lord Pethick-Lawrence said that this alloy, cupro-nickel, is just as attractive to look at as nickel, and he made out a case regarding its wearing qualities which I think was rather overdone. I have here two coins which I shall be glad to pass to the noble Lord provided he returns them to me. One of them is of cupro-nickel and was made in 1946. The other is of nickel and was made in 1928. I am quite sure that Lord Pethick-Lawrence or any other noble Lord who looks at these coins will find no difficulty in deciding which of the two is much the better, cleaner, brighter and nicer-looking. It is the coin made in 1928.
Then there is the question of counterfeiting on which the noble Lord touched very lightly. He said that cupro-nickel was really no more likely to be made the subject of counterfeiting than nickel. My information is somewhat to the contrary. I am not a great expert—I do not suppose any of your Lordships are—in this technical business of counterfeiting. But I have taken some trouble to look up the subject—it is always good to be prepared for future possibilities in the years to come when perhaps our currency has been so reduced that it is virtually useless. In the case of coinage made from silver alloys, counterfeits are made in zinc or lead, and they are easily detected. Therefore, the traffic in them is restricted as they can be passed only in limited quantities. Now cupro-scrap, I understand, is fairly easy to obtain and fairly cheap, therefore we can look forward to the possibility of something happening here such as now happens in India.
680
In India, I am informed, counterfeiting is regarded as a comparatively popular profession into which to put a young man. There is, I am told, a regular black market in counterfeit coinage, the average price being somewhere around 40 per cent, of the value of genuine coinage. Counterfeit cupro-nickel coins are difficult to detect, whereas counterfeits of nickel coinage can be easily detected by the aid of a magnet. I am not suggesting that every citizen should carry a magnet around with him in order to decide what coins that pass through his hands are counterfeit. But it would be quite easy by means of this test for any one in business to find out the genuineness or otherwise of coins if we used nickel coinage. That is a safeguard which we shall not have when we use cupro-nickel coins.
There is another aspect of this upon which the noble Lord did not touch, and that is the aspect relating to Imperial trade. Nickel is an Empire product, and I am informed that approximately a further 12,000 tons of Empire-produced nickel would be absorbed if we had a pure nickel coinage instead of one of cupro-nickel. But I believe that more important than this actual absorption of 12,000 tons of nickel is the possible effect of the Government decision in influencing other countries that are at present on nickel to go on to cupro-nickel, with a consequent bad effect upon an Empire primary product. Another point upon which the noble Lord did not touch was this. There is, I understand, only one refinery for nickel in this country. That refinery is located in South Wales and is at present working to only 50 per cent, of its capacity. Could not the Government have weighed the possibility of giving further employment to this refinery, before coming to their present decision, and so assisting South Wales where the spectre of unemployment is already beginning to show itself? If they had decided in favour of nickel it would have given a substantial measure of assistance to that particular area.
I repeat that we regret this measure but we do not oppose it. Nevertheless we do offer some criticism and before we give this Bill a Second Reading it is of interest to think for a moment just how far along the road we have travelled to a make-believe world or, to use what I believe is

681
now considered the more correct technical term, "a phoney world." This is where we have arrived. If any of your Lordships go to a racecourse—as perhaps some of you sometimes do—you will read on your race programme, possibly, that a race is being run for 2,000 sovereigns—that is to say horses are supposed to be racing for a prize of 2,000 sovereigns. Those sovereigns do not exist. If you search your pockets you may perhaps find a £1 note which bears inscribed upon it a promise that upon presentation £1 will be paid for it. But it is worth only a fraction of £1 to-day. Now we are having a coinage in which shillings and half-crowns will have no silver in them. It is not unnatural that we on the Opposition Benches here should sometimes think of things from the political angle. My only crumb of political comfort in view of the misgivings which we feel lies in the thought that we critics may well be shown to be correct in the years to come and that the repellent aspect of old "cupro" will be a constant reminder to succeeding generations of the Administration that introduced this measure.
4.38 p.m.
LORD RENNELL: My Lords, may I add my lamentations to those of Lord Bantu of Inchrye for I think that this marks a very serious and sad moment in the history of our currency. It is one that we all regret, but in one way, I suppose we must all realize that the step is inevitable in the circumstances to which Lord Pethick-Lawrence has referred. But let us pause for a moment to think at the same time what this means, not only to our people but to other peoples who have regarded our currency as they should, that is as one of the oldest sound currencies in the world. Credit may remain but the currency is gone. That is not a thing which can be without its significance, either here or elsewhere. I hope it does not mean that that sequence of events to which the preacher referred in the book, with which you are probably familiar, must continue. You will remember that about fifteen years ago in this country the golden bowl was broken, when we went off the gold standard; rightly or wrongly—I do not know, and it is irrelevant here. Now, the silver cord is loosed, too. We hope that the sound of the mills will not diminish unduly, or that singing will cease to be heard in the land. But whatever sentimental
682
regrets we may have, we also feel that a decision of this sort has to be taken, together with many others which arise from the position in which we find ourselves as a result of the war.
It is particularly sad to me, having for many years past—and notably during the war years—had a very great deal to do with currencies of all sorts, good, bad and indifferent, and including—among many varieties which were created—currencies referred to by the British Army as "funny money." I also had to deal with one currency which will always be a very happy recollection to me; and this is relevant in this context. I had through my hands what I believe was at the time virtually the only silver reserve possessed by His Majesty's Government, in the form of Maria Thérésa dollars which were held in a currency reserve of which I had charge. It was the last intrinsically valuable silver coin in the world—certainly one of the most beautiful—and one which was minted, shipped and created for war purposes without debasement and without any alteration in value or silver content as compared with what it was when the Maria Thérésa dollar was first made. We felt that in view of the purposes for which we were going to use that coin we were not entitled to cheat anybody of the value which they thought they were receiving. Accordingly, we gave them the full value to which they had been always accustomed.
There is no question here of cheating anybody of value, except that little value which our silver coinage may be said to possess. There are, however, certain areas, and one in particular, where the question of intrinsic value still has a bearing. Some of your Lordships may be aware that the English shilling and two-shilling piece are in current use, and are legal tender, in the Sudan. Moreover, substantial quantities of this coinage were shipped to the Sudan to increase circulation there, which was then very short, owing to our troops and their activity in that part of the world. Is that currency to remain, or are the population of the Sudan also to receive, in place of their shillings and two-shilling pieces, cupronickel or some other alloy? If they are, have steps been taken to prepare them for this change? If not, it will come as a shock, and in any event I fear that it cannot be well received.

683
I will not enter into the relative merits of cupro-nickel and nickel—a subject with which I am not at all familiar—nor possibly would it be entirely desirable for me to do so, owing to certain business connexions which I have with nickel producers. But I would put in a plea, not so much for nickel, as against cupronickel or experimenting in alloys. Certain institutions in this country have acquired a public reverence which makes it, if not blasphemy then almost blasphemy, to refer to them in disrespectful terms. These institutions are well known to your Lordships—the Royal Mint, the Astronomer Royal, the Brethren of Trinity House. With their long tradition, and past history, they stand for certain standards of production and everything else to which we are accustomed in this country. Can we continue to have the confidence that we should have in the Mint, and its experimentations in alloys for coinage, when some of us have had experience of where those experiments have led?
The use of alloys, other than silver, for coins of a shilling and over, is not new in the British Empire. It will probably be within your Lordships' recollection that after the first Great War it was decided to withdraw the silver shilling from circulation in British West Africa, and to replace it with an alloy coin of about the same size. This was to be a great new coin, cheap to produce and suitable for West African circulation. It was alleged, when it came out, that it would keep its colour and its attractive appearance—an appearance so attractive that some cynics suggested that its shiny brass colour was intended to deceive the West African population into thinking that it was made of gold. That coin might have had that effect, if the alloy had lived up to expectations. But those of your Lordships who have been in West Africa will know how within a very short space of time that coin, even in its improved alloy, loses its colour in the West African climate within—I was going to say a few weeks, but I think a few days would be more correct. No one will know that better than two recent Ministers of State in West Africa.
Apart from this, those of your Lordships who have circulated perhaps a little nearer to the ground than might become
684
your Lordships' dignified positions may also have noticed that that particular alloy discolours in a variety of shades and hues which can only be attributed to the diet of the wearer. Are we certain, my Lords, that this alloy which is to take the place of our silver coinage is guaranteed proof against discoloration from the diet to which we are subject in this country? Do we know that a coin which has been worn in Scotland will have the same colour after a year as a coin worn in Wales? We have the unfortunate experience of having little confidence in these experiments in alloys perpetrated by the finance authorities in this country.
If the example which I have quoted is not sufficient, may I invite your Lordships' attention to the alloy used for making the East African shilling—a very remarkable alloy? I am no metallurgist, and I do not know what the coin is made of, but having dealt with many tons of the currency I know that it has one very peculiar property, apart from discolouration—also, I think, according to the diet of the wearer. That is, that a coin which has been passed as sound and shipped—"having the proper ring" is the technical term, I think—loses that ring by a process which I believe has mystified a number of people. Therefore a coin which has been in circulation for a certain time, although perfectly genuine and perfectly all right in every other way, acquires a dumb sound which makes it, in many respects, indistinguishable from a counterfeit. I had a good deal of trouble with that coin myself in some of my currency transactions for His Majesty's Government. I was told on inquiry that the coins which I had received, which had this property and which had been shipped to me, were no less authentic and no less carefully made than those which preserved their note, and it was not possible to find a reason for the change.
I have given you those two examples. May I give you a third? I think I am right in saving that when shortly after the last war the change in the silver content of our coinage in this country was made, to which the noble Lords, Lord Balfour of Inchrye and Lord Pethick-Lawrence, have referred, an alloy was used which produced a coin looking very like silver when new or in mint condition, but which acquired a yellowish tinge on account of the alloy or the base metal content. I think I am also right in saying that that

685
alloy was subsequently changed for another, which is the one in current use today, and which does preserve a more or less silver colour without getting yellow. Here we have three examples of the use of alloys in British coinage, all of which can only be qualified as wholly unsatisfactory and not creditable to the authorities in this country responsible for their introduction.
On the face of those examples, and with the criticism which has been made in another place, in the Press and in your Lordships' House this afternoon, is it right, so quickly and so definitely, to decide on the use of a cupro-nickel coinage, when the vast majority of other countries which have adopted metal other than silver for their coins have used nickel rather than cupro-nickel, and those who have used cupro-nickel have in certain well-known instances turned to nickel? I know it is no use appealing on sentimental grounds to the flint-hearted, armour plated officials in the Treasury, who feel they have to raise silver to repay this loan. Any appeal on those grounds would obviously be a waste of time and breath. But I appeal for further consideration, even if only for a few weeks or months, before deciding on a step which may be as unsatisfactory as those to which I have referred, and which may have far more unsatisfactory consequences in that the experiment will be made in this country with our silver coinage, and not in the rather more remote parts of the British Colonial Empire.
I cannot help feeling that this decision, brought to your Lordships' House, as it has been, at the end of a Session of Parliament, with only a few days to go, savours a little of some indecent hurry to get a Bill passed before people have had time to organize their opposition to this particular alloy, or have had time to think about better alternatives. My friends—and I know I am speaking for them—would not and could not oppose the grounds on which this Bill has been presented, but, on my own behalf and on behalf of those of your Lordships who feel as I do on this rather important issue, I trust that the Government will give further consideration to the alloy out of which our coinage is to be made, and not now decide on cupro-nickel.
4.55 p.m.
LORD TWEEDSMUIR: My Lords, I shall be extremely brief. In putting the
686
case for pure nickel as against cupronickel, I suppose I must make the usual disclaimer that I have no financial interest in any nickel concern, nor am I ever likely to possess an abundant supply of any coins whatever their content. Noble Lords on the other side of the House have too much good sense, I know, to believe that those who disagree with them must automatically be led to their beliefs by vested interests or by moral corruption or by mere inaccessibility to reason, although I think that some of their sympathizers outside the House incline to that view.
This whole issue has been launched on the country as if there were a sudden emergency. In actual fact, as the noble Lord, Lord Balfour of Inchrye, has pointed out, the Government have had well over one year to consider it. The noble Lord, Lord Pethick-Lawrence, went in great detail into the difficulties of the Royal Mint in making a pure nickel coinage. If he really considers those obstacles so insuperable, is he giving a very good testimonial to the initiative and flexibility of a State-run enterprise? The noble Lord, Lord Pethick-Lawrence, has made his case for the Bill and it was slightly different from that of his colleagues in another place, who did not hesitate to say that pure nickel was essentially a better material for coinage than cupro-nickel.
There is, however, a wider aspect of this matter. As your Lordships are well aware, some ninety per cent, of the world's nickel supplies, by special dispensation of fortune, is to be found in the Dominion of Canada. In peace-time the nickel industry forms a vital part of the whole of Canadian industry. In war, its use to the Empire as a whole is beyond all compare and beyond all price. Therefore anything that benefits the nickel industry benefits Canada, and if nickel in war-time is a vital Imperial interest, surely the maintenance of that industry in peace-time is equally vital? This country had good reason in the war years to be thankful for Canadian nickel, and none of your Lordships in this House today will deny the indebtedness of Britain, and indeed of the Empire as a whole, to the Dominion of Canada: not only to the prowess of her Armed Forces in the common cause, but also to her boundless generosity which continues to this day.

687
Would it not then have been a very practical and appropriate gesture of gratitude to select a nickel coinage, whose superiority over the present cupro-nickel no one seriously disputes?
It has been argued that, if this were done, the amount of nickel that would be used would not materially affect this Canadian industry. I would remind your Lordships that Britain still sets an example in this world in many fields of human activity. Many other countries may be changing their coinage in the near future, and Britain's example would materially affect their choice. The cumulative result of that would confer a very substantial benefit on Canadian industry. It has also been argued that, because the Canadian Government have made no official representation to His Majesty's Government on this matter, Canada is indifferent to this issue. The Canadian Government have a right to believe that Britain will regard her interests without Governmental representation or any official prompting.
This country is famous for quality; our genius is for quality and not quantity. We are famous for the quality of our men, our institutions, and our merchandise. If we embark upon anything that is second-rate, as this cupro-nickel coinage will be second-rate, we appreciably diminish that prestige. Before I sit down I would like most cordially to support the noble Lord, Lord Rennell, that this measure should receive further consideration, and that before we take this step we should review the possibility of using a pure nickel coinage which will give us a coinage of which we can be proud and which will be undimmed not only by the discolouration of a base metal but by any possible implication of ingratitude.
5.01 p.m.
LORD HAWKE: My Lords, may I add to the tale of lamentation we have heard to-night from all quarters? I approach this Bill with very great regret. I deplore this further breach with our tradition, which seems to me just another step from the position we once held as the financial centre of the world. A first-class people should have a first-class coinage. We were once a first-class people, a people of substance, and we had a coinage of substance,
688
a first-class coinage. Now, though we are still a first-class people, a second-class coinage is being imposed upon us by a Government that some think has a second-class record.
I wonder whether this step would really be necessary if the Government were to approach the United States of America for a postponement of this repayment of silver. Surely it cannot be to the interests of the silver bloc in the United States that Britain should demonetize silver in this way. Surely if they knew this step was inevitable if there were no postponement, they would press the Administration to allow a postponement until the price of silver was on a more reasonable basis, as it certainly will be one day. There is another point. We are still a great Oriental power, and it is both our interest and our duty to protect in every way the interests of the teeming millions of the Orient. As your Lordships are aware, the traditional savings of the Orient are in precious metals—gold and silver ornaments: gold for those who can afford it and silver for the rest. Surely nobody can deny that by divorcing ourselves from the silver market for our monetary purposes we are withdrawing a support from that market and thus our support for the value of their savings.
I know the pundits disapprove of investment in precious metals. They call it hoarding—an opprobrious term wonder whether over the last forty years they could have shown these teeming millions a practical investment which would have turned out so well as these hoards of gold and silver have turned out to-day. I do not think so.
Another point we must remember is that it was the sale of hundreds of millions of pounds worth of bullion by the peasants of India which enabled us to maintain the value of the pound in the early 1930's. Members of the Socialist Party on public platforms are particularly prone to perpetrate platitudes on the subject of the raising of the standard of living of the Oriental masses. It is left to a Socialist Chancellor to be the first to pull one prop from under the value of the savings of those same people.
5.6 p.m.
VISCOUNT SWINTON: My Lords, before the noble Lord replies I would like to make an appeal to him and to reinforce

689
what was said by the noble Lord, Lord Rennell, in his extraordinarily interesting speech. I have recently had some responsibility in West Africa and I can assure Lord Pethick-Lawrence that, from the point of view of counterfeiting, he is completely misinformed, at least unless the intelligence of the people of this country is far below the intelligence of the people of West Africa, because counterfeiting in West Africa is one of the staple industries, and it is practised with the most incredible success—in the counterfeiting of these alloys to which my noble friend Lord Rennell has referred. As to the disgusting character of the coin, anybody who has seen it can bear complete witness.
I am not going to reinforce or to repeat all the arguments which have been used—practical, æsthetic, and Imperial. I do not think that the noble Lord himself would wish to deny the force of any one of them. I am sure he is as disgusted at having to introduce this Bill as we are at having to pass it. Now assume that something has to be done here and now, and assume that we have got to avoid the expenditure of buying whatever is the amount of silver that would be required month by month. I understand we are to do this by the process of issuing the new coinage, or replacing the silver coinage by the alloy, by a gradual process. We shall save whatever it is—a million or two dollars—if we make a start on this as soon as possible. But I believe that everybody wishes, if it could be done, that we could have a nickel coinage. I do not want to keep to a silver coinage myself. I have not got that sentiment which I think I should have if I had such a distinguished city connexion as Lord Rennell, and such a rewarding one. I am not going to say keep silver, but I do want to reinforce the plea for nickel on every possible ground.
Why should not we do that? I know the Government really would like to do this just as much as we should. No defence has really been put forward for cupro-nickel as against nickel. If the Mint could do the nickel to-morrow, the Bill would be a Bill to introduce a nickel coinage. Why should the Government not reconsider it, and use private enterprise? I understand that you can get the nickel coinage made by private industry in this country to-morrow. The plant is there; certainly the nickel is there. If that be
690
so, have not the nickel refineries, to which my noble friend refers, in South Wales ample capacity? At any rate, let us be definitely informed whether this is not a possibility. What would it cost us in dollars if we postponed the conversion until such time as either in a private factory or in the Mint nickel coinage could be introduced? We really cannot have the great national industry of the Mint going on as an incompetent institution indefinitely. It ought to be able to do this. Let it be put in a position to do it as soon as may be. In the meantime, let private enterprise make the coinage which is necessary until the Royal Mint can undertake it. Then we should have a coinage which would still be worthy of this country and would fulfil all the desires which everybody in every quarter of the House has expressed.
I would add just this. Having had some experience, if not so wide an experience as the noble Lord, Lord Rennet, I am sure that not only are we going to be disgusted with this thing as the years go on, but that on both practical and aesthetic grounds we shall change and come—and come too late—to a nickel coinage. Then we shall be spending twice over, and spending in the long run a great deal more public money than we should if we now postponed the transaction for a while. I do ask the noble Lord, who I know does not like this any more than we do, whether he cannot give further consideration to the suggestions which have been made from all parts of the House.
5.11 p.m.
LORD PETHICK-LAWRENCE: My Lords, I speak again with the consent of the House, as an answer has been asked for. If facilities for producing nickel coins were identical at the present time with those for producing cupro-nickel I think there is every reason to suppose that it would have been contained in this Bill. We are not taking some terrible step in the dark by proposing to make the coinage of cupro-nickel, and I really do not find any justification for the pessimistic suggestions that have been put forward by the noble Lords who have addressed the House on this Bill.
To take up the point which was made by the noble Viscount who has just sat down, as to whether we could not get a private firm to produce nickel coins, and whether we could not put our pride

691
in our pocket for a little while, the answer is that we could not get a private firm to produce coins that were equally accurate in weight and every particular. They have not got the machinery for doing it with the same accuracy that the Mint can do it, and it would not be a reliable way of going to work. The noble Viscount spoke of the incompetency of the Mint. I do not think that he could have meant that. What I think he was really pursuing was a point made by the noble Lord, Lord Balfour of Inchrye, that the Mint was unable to produce these particular coins at this particular moment. That can hardly be regarded as incompetency. It has been highly competent in the job it has had to undertake up to now. It is just not in a position to do something now which it did not expect to be called upon to do.
VISCOUNT SWINTON: I do not desire at all to cast reflection on the people who run the Mint. Perhaps I should have spoken of the incompetence of the Government. Quite frankly, I do not think it is competence in business if you are not in a position to do the thing which you might be required to do. Whoever is responsible, I do not think they have acted competently. It has been known for a long time, ever since the agreement was made about repaying this silver, that we should have to come on to an alternative currency. Then whoever was responsible should have seen that the Mint had the machinery to give us the coinage which we all want to have. If the noble Lord prefers it, I will say there was incompetence and lack of foresight on the part of the people who should have given those directions to the Mint.
LORD PETHICK-LAWRENCE: I gave way again to the noble Viscount, but I think he will appreciate that he has now come round to the case put by the noble Lord, Lord Balfour of Inchrye. With regard to that I do not agree at all. To begin to produce nickel coins now we would have had to get the apparatus and would have had to deal with all these things. It is not at all correct to say that had this Government, when formed, regarded as a matter of prime importance the production of these nickel coins, we would have got them successfully delivered at the present time. I cannot accept the accusation levelled against us.
692
With regard to what was said by the noble Lord, Lord Rennell, who quoted a large number of instances where he said coins had gone wrong and were not satisfactory, I cannot, of course, follow all the cases, but with regard to two that have been put forward, the question of Africa—I am not quite sure whether the noble Lord quoted East Africa—
LORD RENNELL: I did, both.
LORD PETHICK-LAWRENCE: Well, East Africa has not got cupro-nickel coinage. I understand that in East Africa there is a retentional quota of silver.
LORD RENNELL: I did not say it was cupro-nickel. I was quoting the cases of three alloys that as alloys for coinage were unsuccessful.
LORD PETHICK-LAWRENCE: That may be true, but I think the impression produced on the House was that the attack of the noble Lord was against cupro-nickel. I am pointing out that a great many of the cases to which he referred are not cupro-nickel at all. When you come to West Africa, which I think was also quoted by one noble Lord, that is not cupro-nickel but nickel-brass. The Government have gone into this matter and have satisfied themselves that cupro-nickel is much more successful than has been suggested. I gave the illustration of what is called the "nickel" in the United States of America, where ever since the year 1870, that is seventy-six years ago, they have continued to make their coins of cupro-nickel. I should have thought that seventy-six years was a pretty good period for experiment. While I retain the position with which I started, that it is quite open to us if in time to come we find it would be better to change over to nickel to take that course, and the Mint can if it is thought desirable at the appropriate time proceed to make this machinery capable of producing nickel coins, for the practical purposes of this Bill, which is getting the silver out of the currency in order to pay back the silver to America, that does not really meet the case at all. I am afraid I cannot agree to hold up the Bill and change over to the production of nickel, which noble Lords seem to think is a practical proposition.
I would only add this one thing in regard to the question of the noble Lord, Lord Balfour of Inchrye, as to whether

693
it is possible to brief representatives abroad, as it were. The first point is that they are in regular receipt of our Hansard, The Times newspaper and various documents which cover the case, and no doubt on a matter of this importance they will acquaint themselves with the position. However, the Foreign Office will consider whether anything special should be done in addition to that so that there shall be no question of the position not being understood.
Lastly, I would make this point. I hope that nothing the noble Lord said will produce in the minds of the outside world the impression that the value of the currency is being depreciated in any way. Whether the pound sterling is able to buy as much as it could buy, or in what proportion its buying value has fallen, has nothing whatever to do with the character of the currency as such. In the step that was taken in going off gold and on to paper, the change was not due to the fact that it was paper instead of gold; it was due to the fact that the paper had not got a gold basis as it had in the days gone by. Precisely the same is true here. No alteration of the metal alloy of which the silver coinage is made has any effect whatever in depreciating or lowering the purchasing power of what is called the silver subsidiary coinage that we have. I think it is important that nothing shall go out from this House that will convey any different impression.
THE MARQUESS OF ABERDEEN AND TEMAIR: Will not the noble Lord say something about the appeals to Canada?
LORD PETHICK-LAWRENCE: We have not been approached by the Canadian Government on this point. After all, what we are doing in this Bill is to increase the use of nickel and what the noble Lords opposite want is for that process to continue on a still greater scale. I do not see that we are doing anything which is offensive in that respect.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

PUBLIC WORKS LOANS (NO. 2) BILL.
5.23 p.m.
Order of the Day for the Second Reading read.
THE MINISTER OF CIVIL AVIATION (LORD NATHAN): My Lords, it is now about six months since the Public Works Loans Bill was passed and the Royal Assent given to it. That Bill provided for the Public Works Commissioners to be entitled to make loans to the extent of £100,000,000, and it was contemplated at that time that that sum would suffice for a period of about a year. Actually since that date the Commissioners have, up to the end of last month, made advances to the amount of about £33,000,000. If the normal procedure were all that had to be taken into account, there would be no need to trouble your Lordships' House with the Bill now under consideration. There is, however, a situation to be taken into account which arises out of the Local Authorities Loans Act of 1945.
Under that Act, local authorities were, broadly speaking, placed under the compulsion of seeking loans from no source save the Public Works Loans Board. The procedure is for the Commissioners to give their approval in principle to prospective loans when the projects are put forward by the authorities requiring to raise money for them at a particular time in the future. Doubts were raised as to the power of the Commissioners to enter into commitments towards the local authorities in regard to their future projects if the maturing of the commitments would cause them to extend the limit for actual advances tinder the current Public Works Loans Act. The Law Officers, who were consulted upon this matter, advised that the Commissioners could not lawfully commit themselves finally to making loans in excess of the amount placed at their disposal by the current Act, although they could enter into provisional commitments subject to Parliamentary sanction in due course.
The whole position was reviewed in the light of that advice and it became apparent that the lending powers of the Commissioners would nearly be exhausted by the end of this month, for in addition to the £33,000,000 actual advances since the Act became law the Commissioners had, by the end of September, entered into unconditional commitments amounting to about £100,000,000 and, as a temporary expedient, had given provisional undertakings as regards a further £22,000,000—those provisional undertakings

695
being subject, of course, to Parliament making the moneys available in due course. Obviously it would be most unsatisfactory to local authorities if as a matter of regular practice the Commissioners were only able to enter into provisional commitments and if to that extent the local authorities were left in the air as regards the moneys coming to them for the financing of their projects. The Government therefore concluded that the right course was to ask Parliament to authorize a further issue to the Commissioners as a matter of urgency and to take steps to clarify the position for the future.
It is for that reason that Clause 1 of the present Bill proposes a new limit of £250,000,000 for the actual advances to be made by the Commissioners before a further Bill is introduced. It is difficult to estimate the rate at which local authorities will call on the Loans Fund during the next year or so, but clearly their demands for capital expenditure will be considerable. Clause 2 of the Bill is designed to reconcile the statutory position with the procedure for administering the Local Authorities Loans Act of 1945, to which I have already referred. The clause empowers the Commissioners to enter into commitments provided that at no time during the currency of the Bill do their live commitments when added to the actual cash advances exceed £500,000,000. Although this figure is large, the Commissioners will start the period with some £130,000,000 of commitments already incurred and they should be equipped with adequate powers to enable them to cope with the great capital schemes now in course of preparation.
In Clause 3 advantage is taken of this Bill to remove an anomaly. In 1935 the general provisions as to the minimum rate of interest on loans from the Local Loans Fund were abolished, but specific restrictions in the case of loans to housing associations and certain other borrowers under the Housing Acts remained in force. The general trend of interest rates has rendered a minimum rate of 3⅛ per cent, inappropriate and the removal of this minimum will make it possible for all borrowers from the Local Loans Fund to share the benefits of the cheaper rates now prevailing. The Bill is urgently needed to ensure the continued smooth
696
flow of funds to local authorities for the great capital schemes entrusted to them. Of the projects put forward in terms of the money required, some 90 per cent, are in relation to housing and electricity In view of the urgency of this Bill and in order to remove as soon as maybe an anomaly which has disclosed itself, I ask your Lordships to give this Bill a Second Reading.
Moved, That this Bill be now read 2a.—(Lord Nathan.)
5.30 p.m.
VISCOUNT SWINTON: My Lords, I agree that this is a Bill to which your Lordships should give a Second Reading. I shall have only one or two words to say upon it. I find it a little difficult to reconcile all that was said by the noble Lord in introducing this Bill with the reasons given for the Bill in another place. As I understand it, this Bill is needed for two purposes. First of all because the Law Officers have held that the Commissioners have no power to make an undertaking for a future advance unless they have, so to speak, a sum in the till which will cover it. Now if the Treasury and the Commissioners have entered into illicit commitments, quite obviously we have got to make honest women of them, and pass this Bill. I have every sympathy with that, because I recollect that many years ago the Law Officers discovered that I had been doing certain things which everybody considered quite proper, but which were wholly illegal. I was personally liable for a few million pounds because what I had done could only be done by the Board of Trade, and not by the President. No Board of Trade had existed for a hundred years. In these circumstances, I would hasten to give my support to this whitewashing and legitimizing measure.
I understand it is also required for another purpose and on that I do want to say a word. Of course, the whole system under which the local authorities do not go on the market themselves but come to the Commissioners is obviously a very sensible and right one. It was introduced by the National Government, so of course it is right. Obviously it would also be quite out of date to have any figure of interest put in. Years ago, I think it was three and one-eighths. This measure should have the advantage of whatever is the lowest money rate possible at the

697
time. When the earlier Bill, giving authority for the year was introduced, the Financial Secretary to the Treasury said that he thought £150,000,000 would be all that would be required for the year. Now it is said that that estimating was not very good, and indeed it was not. What is going to be required, not as coverage for the Commissioners' future undertakings, but for actual advances, is not going to be £150,000,000 but £250,000,000. I do not think the House should part with this Bill without placing on record its view, and its very definite view, that estimating should not be of that loose character.
The Treasury has a very great reputation, and always has had, for accurate estimating. It is a most extraordinary thing how year after year, as the Budgets come round, even astronomical figures are estimated by the Treasury. But it really is rather alarming how hundreds of millions of pounds change hands to-day, and unless we have at least six ciphers at the end of a figure, it does not seem to be worth talking about. I do not think we should just pass without a single word an estimate which is wrong by £100,000,000. It may be quite right that more demands have come in since which have been authorized, and if indeed some more expenditure is required for housing than the mere modest estimate which was expected—if a hit more money is going out for housing than they thought was necessary—and that is going to mean more houses coming more quickly, then certainly nobody in this House is going to refrain from giving it the fullest possible authority and encouragement.
But with great respect—and I am sure the Secretary of State for India will confirm this with all his old Treasury knowledge—there is no political controversy between us over this measure. Careful estimating is very important, and it is all wrong that the Government should come with some round figure and say, "I want an omnibus authority for £250,000,000 because I may spend somewhere nearly up to that." That is not good enough. It is not the way estimates are presented to the House of Commons. Expenditure should be accurately estimated, and if the Government find that they are going to spend more then they should come back to Parliament just as they do for a supplementary estimate from the spending department. In the same way, when it comes to this borrowing
698
and lending they should present us with accurate estimates of what is going to be required If they find that an estimate is likely to be exceeded then they should come back to Parliament. It will not take long. I do make that point very definitely, and I am sure that the noble Lord who is leading the House will endorse it, because it is a very very important principle.
5.36 p.m.
LORD PETHICK-LAWRENCE: My Lords, I think there has been a slight misunderstanding in the mind of the noble Viscount on this point. In the first place, I do not agree that you can give accurate estimates in a Bill of this kind. This is a sum which has always been in excess of the amount required in a given time. Very strict care is taken by the Commissioners of Inland Revenue who deal with the matter. There are two points in which the noble Viscount was mistaken. In the first place, he said early in his speech that this is a Bill to put straight something which has been done wrong. That is not the case.
VISCOUNTS SWINTON: They were on the verge of doing wrong.
LORD PETHICK-LAWRENCE: They were on the verge of so doing, and before they overstepped the line the matter is being put right by this Bill. The second point with regard to which the noble Lord was mistaken is that the dates are different, and that is what he does not appreciate. In the original Bill the period envisaged was a year from that date, that is, from last March, and it would still almost certainly be true that the charges thrown upon this Fund by the decisions of the Commissioners will not exceed the £150,000,000 before the end of the period. Each Local Loans Bill ends with the start of the new Bill, and the estimate needed is that for a year from to-day, which carries on for twelve months from now, and the amount sufficient to allow for the actual expenditure will be £250,000,000. It is not in place of the £150,000,000, but in place of the unfinished part that would have been used, which is about £120,000,000, plus whatever may be paid out in addition over the following year when the original year comes to an end up to a year from now. I hope I have made that clear.
VISCOUNT SWINTON: I am obliged to the noble Lord, because it was certainly not at all clear when it came from another place. We were left under exactly the opposite impression.
LORD PETHICK-LAWRENCE: Estimates cannot be of the hard order, but at the same time these Bills are designed for a certain period, and Parliament is informed how long the sum is expected to last. I do not think there was any misinformation in the original case. Now that a new Bill is necessary a new figure is forthcoming, and in addition to that there are the amounts which are put forward without the money actually being required. I hope the noble Viscount will be satisfied with that explanation.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

UNEMPLOYMENT INSURANCE (EIRE VOLUNTEERS) BILL.
5.40 p.m.
Order of the Day for the Second Reading read.
LORD CHORLEY: My Lords, I count it as particularly good fortune that the first occasion upon which I move a Second Reading in your Lordships' House should be the Second Reading of this Bill, a Bill which will benefit those gallant men the volunteers from Eire who served in His Majesty's Forces with us during the war. It is only fitting that now that we have returned to conditions of peace, some attempt should be made to show our appreciation of the work which these volunteers have done and the gallant service which they have rendered. What has happened to these volunteers since the cessation of hostilities? Some, of course, may still be serving with His Majesty's Forces. Others have already been demobilized, and many of these have, no doubt, returned home, where they have to settle down again into the conditions existing in Eire.
It may well be that numbers of them are already finding it difficult to obtain work. Obviously they are, from a number of points of view, in a rather difficult position to obtain work. One has to realize that, very naturally, the Government of Eire have given precedence to those men who have been serving with
700
their own Forces, and, in the meantime, the men of whom I am speaking have lost benefits which they would otherwise have had under the Eire Unemployment Insurance Acts. Their rights there will have lapsed because, of course, they have not been making the contributions which are required under those Statutes. This means that if the man is unemployed (as I have suggested there is very considerable likelihood of his being for a time), he will not be able to claim unemployment benefit under the scheme which prevails in his own country, nor has he the same benefits as a man who has been discharged from the Eire Defence Forces, because, in the case of that man, his period of service counts towards the qualifications for benefit under Eire Unemployment Insurance Acts.
In this country, the position under the unemployment insurance scheme is that every person (with the exception of regular officers) who is discharged from service in His Majesty's Forces is credited with contributions for the period of his service, and therefore if he is unemployed after his discharge he may qualify for unemployment benefit. But the benefit is payable only in this country, and so it happens that the Eire volunteer who has returned home and is unable to obtain work is not able to avail himself of the benefit of the contributions which have been made on his behalf under the unemployment insurance scheme and which he would otherwise obtain. We have been seeking, for some time, to rectify this situation. Your Lordships will recall that on several occasions the attention of this House has been focused by the noble Earl, Lord Cork and Orrery in particular, upon the need, and, indeed, the sad plight, of many of these Eire volunteers, and I am sure that you would wish me to pay tribute to the unremitting way in which the noble Earl has kept this important matter before us.
Your Lordships have been made aware of the sympathy of His Majesty's Government in the United Kingdom for the hardships suffered by these ex-Service men and ex-Service women too, and earlier this year we were able to report to your Lordships that His Majesty's Government had put forward proposals to form the basis of discussions between the Government of Eire and ourselves. There followed meetings between officials of the

701
Eire Government and the Ministry of National Insurance, I am now in the happy position, this afternoon, of being able to say that His Majesty's Government and the Eire Government have agreed upon arrangements for bringing into operation this scheme under which unemployment benefit can be paid at our rate to these Eire volunteers. In these arrangements, I am glad to be able to say, the agreement of the Government of Northern Ireland has been obtained.
The Bill which is before your Lordships' House to-day will enable this scheme to be put into operation. It is proposed that under this scheme the Eire volunteers shall be able to qualify for up to thirty weeks of unemployment benefit at our rates and subject to our contribution conditions. They must also satisfy the other conditions in force in Eire for the receipt of unemployment benefit. But those conditions are substantially the same as our own, and these men will be eligible for increase in benefit for their dependants. They will not receive allowances for more than two dependent children, because the third child and subsequent children are already covered by the Eire family allowances scheme. Our rate of benefit, of course, as your Lordships are aware, is: for an adult man, 24s, a week, for a dependent wife 16s, a week and for the first two children 5s, a week each.
With regard to the number of Eire volunteers who may qualify under these proposals—the number that is who have served in His Majesty's Forces during the war—it is not possible to make an exact statement, but they are estimated as totalling something like 40,000. Again it is estimated that some 10,000 of these have given a home address in Eire on demobilization, and may well have already returned there. The cost of the benefits to be paid under this arrangement will be defrayed out of the Unemployment Fund in this country. The three Service Departments and the Treasury, as no doubt your Lordships are aware, pay contributions into this fund to enable ex-Service men and women to qualify for unemployment benefit on their discharge. Should they become unemployed, their period of service is treated as if it had been a period of insured employment.
I pass now to the Bill. There are few points, I think, which I need bring to the attention of your Lordships. Clause 1
702
provides that the arrangement will operate from a date which will be laid down by Order in Council, and it will last for a period of two years. This period may be extended by mutual arrangement between the two Governments. The scheme will apply to Eire volunteers discharged from His Majesty's Forces, who were ordinarily resident in Eire before they joined the Forces. In addition to the Armed Forces, it will cover the Auxiliary Services, including the women's services, the nurses, and the medical and dental services. To qualify for benefit, such ex-Servicemen and women must have had not less than thirty weeks' service with His Majesty's Forces during the two years before their claim. Under Clause 4, which is of some importance, the Minister is empowered to make regulations to put into effect any adaptations which may be necessary when the National Insurance Act comes fully into operation. As your Lordships appreciate that Act has not yet come into operation. When it does, on the appointed date, it will enable the necessary arrangement to be, so to speak, transferred.
In conclusion, I should like to say a word about the future. The National Insurance Act makes provision for reciprocal arrangements to be made between this country and other countries. It is very much to be hoped that the arrangement which is now being made by this Bill will be the forerunner of reciprocal arrangements under the National Insurance Act. Of course, this is not itself a reciprocal arrangement at all. It may, nevertheless, be the forerunner of some future scheme of reciprocity of insurance between the two countries, under the wider powers provided in the Act. We have long had this object in view but under the current Act it has not yet proved possible to effect such agreements. Whether they be secured or not, this Bill does at any rate give us the opportunity of introducing a scheme under which practical expression can be given to the very real debt of gratitude which we in this country feel to these gallant men who served us so faithfully in His Majesty's Forces during the war. There is nothing at all in this Bill, I think, which can be in any way contentious, and I ask that it be given a Second Reading.
Moved, That the Bill be now read 2a.—(Lord Chorley.)
5.54 p.m.
VISCOUNT SWINTON: My Lords, I am glad that we have now come to a Bill to which we can all give an unreserved and enthusiastic welcome. The noble Lord is fortunate that his début in charge of a Bill, which he made so agreeably, is on such an auspicious occasion. The excellent way that he has discharged his task shows that he will be equally competent in a more controversial field—and I have no doubt that there will be plenty of those, in which he will be abe to show his talents. In all quarters of this House we are delighted that this Bill has come to us, and we shall speed it on its way. It enables us to pay our tribute, and indeed something of our debt, to these men who came from Eire. They were all volunteers, and they certainly had no encouragement from the authorities of their own country; in fact, I have no doubt that many of them came in the face of difficulty and discouragement.
There were at least 40,000 of these men, who rallied to the cause of freedom and fought with great gallantry. Many of them earned distinctions, some of them the highest distinctions which can be won for valour. We shall not forget them, and we rejoice to be able to pay this debt. I hope that we shall give them not only unemployment benefit but also employment in this country. There is plenty of need for man-power here to-day, and if any of those who fought so gallantly for us in the war are willing to come and work with us in this country in the peace, I am sure that the Government will give them every opportunity and every welcome. In the meantime, we do what we can in this Bill to give them, as nearly as possible, those benefits which they would have had if they had been soldiers resident in this country.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

PARLIAMENTARY ELECTORS (WAR- TIME REGISTRATION) ACT, 1944
5.57 p.m.
LORD NATHAN LORD NATHAN moved to resolve, That the date of expiration of Section one of the Parliamentary Electors (War-Time Registration) Act, 1944, be postponed to
704
the thirty-first day of December, nineteen hundred and forty-seven. The noble Lord said: My Lords, my noble and learned friend the Lord Chancellor is, unfortunately, unable to be here for the purpose of moving this Resolution personally, and I therefore do so in his name. The purpose of the Resolution is to prolong the operation of Section 1 of the Parliamentary Electors (War-Time Administration) Act, 1944, for a further year; that is, to the end of 1947. The 1944 Act provided an alternative to the machinery of registration prescribed under Section 5, subsection (1) of the Parliament (Elections and Meeting) Act, 1943. The administrative and clerical operations necessary under that Act had been found to be too intricate to be put into operation, with the staff of electoral registration officers who were then available, who were neither experienced nor sufficiently numerous. Consequently, the 1944 Act provided that a person should be registered in the electoral register for the address at which he had registered in the national register as residing on a qualifying date. The Act of 1944 was to expire at the end of 1945, unless renewed by Resolution of both Houses. It was renewed last year, but the practical difficulty which registration officers would have in operating the complex procedure of that Act is still extremely formidable, and His Majesty's Government are satisfied that the right course is to continue the Act of 1944 for a further year. I beg to move accordingly.
Moved to resolve, That the date of expiration of Section One of the Parliamentary Electors (War-Time Registration) Act, 1944, be postponed to the 31st day of December, nineteen hundred and fortyseven.—(Lord Nathan.)
LORD SALTOUN: Is it not under this Act that a great many local government electors are deprived of their franchise, in places where they have considerable property interests?
LORD NATHAN: I do not think so. As I understand it, the purpose of the 1944 Act, broadly speaking, is to substitute a qualifying date for a qualifying period.
LORD SALTOUN: I see. Thank you.
On Question, Motion agreed to.

HILL FARMING BILL.
6.0 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(The Earl of Huntingdon.)
On Question, Motion agreed to.
House in Committee accordingly:
[The EARL OF DROGHEDA in the Chair.]
Clause 1:
Grants under schemes for improvement of hill farming land.
(3) In this Act
the expression "hill farming purposes" means the maintenance of sheep of a hardy kind and the keeping and management thereof in accordance with the recognized practices of hill sheep farming, and includes other activities carried on in connexion therewith; and
LORD POLWARTH LORD POLWARTH moved, in subsection (3), after "includes", to insert "wintering or" The noble Lord said: My noble friend the Duke of Montrose has asked me to apologize for his unavoidable absence to-night and to speak to this Amendment in his name. On a great many hill farms it is the normal practice in the winter for the farmer to send his hoggs down to better and lower ground for feeding and to bring them back again in the spring. On the Second Reading my noble friend asked for an assurance that the ground used for this purpose of wintering would rank for improvement grants just as hill land, and the noble Earl who spoke for the Government gave that assurance provided, of course, that the farmers in question had hill land in addition to the low ground. The object of this Amendment is merely to ensure that this provision is included in the Bill for all to see. I beg to move.
Amendment moved—
Page 2, line 19, after ("includes") insert ("wintering or").—(Lord Polwarth.)
THE JOINT PARLIAMENTARY SECRETARY OF THE MINISTRY OF AGRICULTURE AND FISHERIES (THE EARL OF HUNTINGDON): I appreciate the intention behind this Amendment, but I think that your Lordships will agree that the great object we all have in drafting a Bill is to make it as brief as possible and
706
to cut out any redundant phrases or words. In fact, I think it has been my experience with draftsmen that the more words you put in the more you limit the intention of the clause. In this particular case I would like to call the attention of the noble Lord, Lord Polwarth, to Clause 1 (1) of the Bill, which says that
"the appropriate Minister may approve schemes duly submitted to him within five years from the commencement of this Act providing for the making of improvements for the benefit of such land or of other land suitable for use therewith for hill farming purposes."
I can assure the noble Lord that this obviously does include wintering. Wintering is a fundamental part of hill farming, therefore it is already included in the Bill. I hope that the noble Lord will accept that assurance and withdraw his Amendment.
LORD POLWARTH: I thank the noble Earl for his assurance and beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
Clauses 2 to 9 agreed to.
Clause 10:
Attachment of conditions as to letting, etc., of new and improved cottages.
10.—(1) Regulations shall be made by the appropriate Minister—
(a) for securing that, where an improvement grant has been made in respect of cost of work done for the erection, improvement or reconditioning of a cottage, conditions with repect to the occupation and maintenance thereof shall apply to the cottage for such period from the date on which it first becomes fit for occupation after the completion of the work (not being longer than twenty years) as may be specified in the regulations, including (without prejudice to the generality of this subsection) a condition prohibiting the occupation of the cottage otherwise than by the owner or a tenant thereof; and
6.5 p.m.
LORD POLWARTH LORD POLWARTH moved, in subsection (1) (a), after "made" to insert "under this Act." The noble Lord said: The object of this Amendment is not to try to alter what I am sure is the intention of the Government, but merely to try to make it indisputably clear. As this clause stands, it seems to me that it is just possible that the regulations to be made by the Minister under this clause could be made to apply to cottages in

707
respect of which grants had been made under the late lamented Housing (Rural Workers) Act, under which so much good work was done before the war. I know in Clause 1 there is a passage which says:
"the appropriate Minister may … subject to and in accordance with the provisions of this Act make out of moneys provided by Parliament grants (in this Act referred to as 'improvement grants')…"
It is possible that this phrase "improvement grants" in Clause 10 refers only to grants under this Bill. I am not entirely happy about that and I therefore feel that the words that I propose should be inserted in the Bill.
Amendment moved—
Page 8, line 37, after ("made") insert ("under this Act.")—(Lord Polwarth.)
THE EARL OF HUNTINGDON: Again I can assure the noble Lord that, according to legal advice, very definitely any grants made under this Act would refer only to schemes which have been prepared under this Act. I think that there is no possible cause for misapprehension. I do hope that in view of that the noble Lord will withdraw his Amendment.
LORD POLWARTH: In deference to the legal experts, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
THE DUKE OF BUCCLEUCH AND QUEENSBERRY THE DUKE OF BUCCLEUCH AND QUEENSBERRY moved, in subsection (1) (a), after "thereof", where that word occurs a second time, to insert "or any of his farm servants." The noble Duke said: In view of the unavoidable absence of the noble Duke, the Duke of Montrose, I hope that it is appropriate to speak to this Amendment on his behalf. Your Lordships will be aware that the agricultural executive committees and the farmers generally are already much concerned about the prospects of labour for farm work and production next year. This will apply also to shepherds on hill farms; it will apply especially in the sense that modernized houses are not available, and it will apply even more so in the case of labour and houses wanted for farm servants working on important schemes.
As the noble Earl, Lord Huntingdon, said on Second Reading, there is a generous grant towards the building of a new non-tied house, but that is not likely
708
to meet the serious position which exists. I think that the noble Duke who put down this Amendment wanted it made perfectly plain that the cottages referred to shall be available for the shepherds and for any farm workers on the farms, and that the farmer will be assured of his labour. I expect this conflicts with the policy with regard to the tied house, and it may therefore be difficult to secure all that is asked for. I do hope, however, that the Government will realize that there is considerable anxiety, which we think it necessary to record, and will reconsider their attitude at the earliest possible date. We would, of course, like them to accept this Amendment.
Amendment moved—
Page 8, line 46, after ("thereof") insert ("or any of his farm servants").—(The Duke of Buccleuch and Queensberry.)
THE EARL OF AIRLIE: I consider this is a very important Amendment because it deals with the controversial subject of the tied house. To my mind it strikes at the very root of the main trouble, or one of the main troubles, in agriculture to-day; and that is housing. It is well known that the shortage of labour is to a very great extent due to housing shortage. I do not think it unreasonable to suggest that it is very hard to expect a landlord, even with this generous grant of 50 per cent., to build or recondition a house in respect of which at the end of twenty years there is a very good chance that he will not be able to use it for his own farm servants. There seems to be a great deal of difficulty in the mind of His Majesty's Government in differentiating between what I call urban rural housing and rural housing—or to use a horrible expression, truly rural housing. Might I suggest that those of us who do live in these districts realize what a tremendous problem there is? Your truly rural house is sometimes the best part of eighteen to twenty miles away from the station, and completely in the wilds.
All the legislation up to now has really been against helping to bring modern conditions in some measure, even temporarily, to the people in these glens, where houses which we all know are not entirely satisfactory have to fill in the gap until such time as new houses can be built. That time is likely to be some time hence, because there is a great lag to make up and we must try to develop a larger percentage than at present of

709
agricultural housing, in conjunction with urban housing, if we are to keep this country sound and economically balanced. The Government are not doing this. A landlord does not care to take the risk, even with this generous grant of 50 per cent, of building a new house or reconditioning an old house where he is unlikely to be able to get the use of it after twenty years.
To my mind, there are three main difficulties at present in the case of these far-flung parts of the country. The first is that you cannot build a house for £1,700; it takes the best part of £1,700 to £1,800 to build a house in those districts. The second difficulty is this: What local authority are going to build a house at that distance, with all their heavy urban rural housing schemes? Finally, how can you expect a landlord to build without any security of tenure under the Bill? I suggest that the whole concept of the housing policy of His Majesty's Government is entirely out of touch with rural conditions as they are to-day in Scotland. You must, in my humble opinion, do what you can to provide conditions for these rural people which will make it worth their while to settle in those areas now. Yet these uplands are the absolute key to breeding in this country, whether it be of stock or of potatoes. If you have a weak stock you go and get a bull or a tup from the uplands. You cross it with the softer stuff and thereby get a more virile product. The same with potatoes: if you want a seed free from disease you go to the uplands to get it. You cannot afford to neglect these uplands, which are the key to the whole of your policy for farming.
You must do everything to fill in the housing gap by giving us back the rural housing grants for reconditioning houses. Do anything you like, but get on with that somehow and produce conditions, even of a temporary nature, which will allow us to keep the labour where we must have it. If we are to keep these people in the glens, I suggest that we must stop living on ideals and fetishes. We know our own people up there, and we know what they require. We are fully cognizant of the fact that this is entirely a temporary measure. But you must encourage the landlords to go on with what they can do until the country is again on its feet and can tackle the
710
larger problem of agricultural housing. Then, if you like, tighten up the regulations as vigorously as you can. In the meantime, however, you must encourage and not discourage everyone to meet the need for improved housing, if we are to keep the people in those parts of the country. You are doing exactly the opposite under this Bill as it stands. If this clause is not amended you will have created exactly the situation which you do not wish to create, and it will be entirely due, I think, to the violent antagonism of His Majesty's Government to the existence of tied houses.
LORD SALTOUN: My Lords, I cannot help feeling that I would like to add a few words on the more general question. Scotland is a country which looks very much like England, but is rather different, and one of the very great differences is that even their shortest communications are very often completely cut off by snow. What His Majesty's Government are trying to do is to charge the entire social system, and they are trying to do it too quickly. I am very glad to see my noble friend Lord Westwood here, because he will know the absolute truth of what I am saying. In the past all farm workers on the land who are married have been engaged on May 28, and they go into houses and their contract has been for one year. That has been the protection of the Scottish farm servant because, whatever happened, that man could never be put out of his house except at a time when he knew that other houses were open to his occupation and other engagements ready for the married man. That was his protection, and that is a very vital point. When you put the farm servant on a monthly engagement, as very many farmers I know have long wanted to do, you put him at the mercy of the farmer.
Another point is that because of the great difficulty in getting about it is much more important for the farmer to have his staff on the farm, and living on the farm. I know there has been a great drive to get the Scottish farm servant into villages. When you go through Scotland you do see a lot of places which look like English villages, but they are totally different. They house a great many people whose occupations are ancillary to country life, but very seldom in Scotland—certainly not in any part of Scotland

711
that I know well—do you get an English village inhabited chiefly by workers on the land. Even if you wish to put Scottish farm servants into villages you have not got the houses there to put them into. If you did put them into these villages they could not carry out their work on the land. I do beg His Majesty's Government in this matter to go a little slowly. Whatever change you want to introduce into Scottish country life we will do our best to make it a good social life and help it as well as we can, but at this particular moment I submit that it is not a case for hurrying but rather for going slowly. It is not merely a great change of system you are introducing, but you are interfering with a very ancient and long-established system.
VISCOUNT BRIDGEMAN: My Lords, I would like to say I agree with every word that my noble friend Lord Airlie and the noble friend who has just sat down said, but this problem is not entirely confined to Scotland which is the impression that may be got. It applies in not quite the same degree to the whole of Wales and the Welsh border from which I come. The distances, I admit, are not quite so long but they are quite long enough to make it absolutely impossible to run the hill farm unless you have accommodation for such shepherds and stockmen as the farmer engages.
THE EARL OF HUNTINGDON: I am afraid that with this Amendment we come on to rather controversial grounds. I do sympathize with what the noble Lords have said, particularly with the remarks of the noble Earl, Lord Airlie, and we obviously do recognize the difficulties of the hill farmer. This recognition, of course, underlies the intention of this Bill. It is a step towards helping the hill sheep farmer and the owner of hill sheep land to get on their feet and to try and improve the general condition of their properties, of the land, and of the houses. Here we get to the very controversial issue of the tied cottage, but I would like to try and clear up what I think may be one misunderstanding on this subject. I am not certain if I heard the noble Earl, Lord Airlie, aright, but he seemed to think that at the end of twenty years he would not be able to control his cottage. I should like to point out again that the object of this Bill is to prevent
712
cottages in respect of which grants are made from becoming "tied" cottages for a period of twenty years. We are trying to ensure that for that period of twenty years they shall not be "tied" cottages in the sense of becoming service tenancies.
EARL DE LA WARR: And they can be tied after twenty years?
THE EARL OF HUNTINGDON: I would not like to give an assurance one way or the other. This Act does not prescribe what is to happen after twenty years.
THE EARL OF AIRLIE: I am not clear. As I understand it at the end of twenty years you might not be able to have your own farm servant in there. I will give an instance. Suppose you had a disagreement with a man who was in that cottage and you engaged another man, or wished to engage another man at the end of twenty years, you could not turn him out and put in the man you had engaged.
THE EARL OF HUNTINGDON: The answer is that they may be tied in twenty years' time but possibly by that time further legislation will have been brought in which will alter the situation. After all, this Bill only provides for a period of five years. Under this Bill there will be nothing to prevent cottages being tied after twenty years, but we want to ensure that for that period they will not be subject to a service tenancy. We do appreciate very much the difficulties of these remote cottages. It is an exceptional problem in hill farming, but at the same time all that this clause is designed to do is to bring these cottages within the Rent Restrictions Acts. There will still be the same machinery if, for instance, a worker leaves or is discharged. The farmer or whoever it may be, can ask for a certificate in respect of his cottage and he can then, if necessary, apply to the Courts. The only thing is that it cannot become a tied cottage in the way of a service cottage; in other words, that the man receives his cottage as part of his employment remuneration.
I think noble Lords will appreciate the feeling that exists on this subject of tied cottages. It is a great political issue at the present time and I do not think the noble Duke who moved this Amendment can really expect that we can go back and accept an Amendment which would

713
completely nullify the intention of this clause. On the other hand, I would like to point out that obviously a shepherd or a workman in a cottage of that kind would be a tenant. All this clause would do is to limit the tenancy so that it comes within the scope of the Rent Restrictions Acts. I do hope I have made myself clear, and I would beg the noble Duke to withdraw the Amendment in view of the issues involved.
VISCOUNT ELIBANK: I frankly cannot understand, although I have tried hard to do so, what the noble Earl has explained to us. Are we to understand that these cottages come under the Rent Restrictions Acts, or do they not come under the Rent Restrictions Acts? If they do come under the Acts, then the farmer or proprietor will not be in a position, if a shepherd is moved who does not want to move, to turn him out in order to put another shepherd in his place. That sets up an absolutely impossible position. The noble Earl says that this is a political issue. Are we not to measure up the conditions which exist in the country which we are trying to improve? Are we on an issue of this kind to be governed entirely by politics? That seems to me to be the line which the Government are taking over this matter, and I think it is a very poor admission inded to say that we must do this thing because it involves a political issue.
Does the noble Earl or the Government think that in fifteen or twenty years, whichever it may be, the glens are going to change, that the hills are going to change, and the places where our sheep are reared are going to change? They cannot change. You cannot change the configuration of the land unless you have an earthquake, or something of that kind. Twenty years hence these hills and glens will be exactly as they are to-day; sheep will be grazing on them as they are to-day and, if the other part of the Government's Act is successful, more sheep we hope. But it will not change the conditions so far as the shepherds are concerned, who will have to live amongst their sheep in order to be able to herd them and keep their flocks together. I suppose we have to accept the Government's decision in this matter, but I can assure the Government that it is done with the very greatest reluctance, because they are flying in the face of the whole conditions which exist in Scotland in this matter, and those, as my
714
noble friend Lord Bridgeman has said, which exist in Wales. And not only in Scotland and Wales. I can conceive that there are places in the West of England, and other parts of England where you get similar conditions. Consequently, in this case we are being entirely turned down as an industry for political reasons.
EARL DE LA WARR: I think there is only one point upon which any of us feel that we can congratulate noble Lords opposite in the handling of this rather sorry question. We can congratulate them on the skill with which they have kept the noble Lord, Lord Quibell, off their Benches both today and the other day when we were discussing this subject. They know full well that the noble Lord, Lord Quibell, is a countryman. He knows the conditions of the country; he knows the conditions under which farms are run, and he knows perfectly well that, as the noble Viscount, Lord Bridgeman, has already said, you cannot run a stock farm, certainly not in these remote fastnesses., unless you have proper provision for your labour.
I do not think the noble Lord, Lord Quibell, would have smiled as I noticed two or three noble Lords opposite smiling when the noble Earl, Lord Airlie, reminded us—and this is so—that these hill farms are at least one of the essential keys to the future of the agricultural industry. It may well be that in a few years' time when we want to rebuild the livestock of this country, not merely in the interests of agriculture but because we have got to feed ourselves, that the Government will bitterly regret this blow they are dealing at the attempt that has been made—and, admittedly, theoretically they are making it; it is their Bill—to rebuild the hill farms. As the noble Earl has already told us, this matter is not being decided on its merits at all but as a political issue. I can only say that we on this side of the House—we are not an elected body—are not going to advise our friends to divide on this issue, but we do want to make it abundantly clear where the responsibility is going to lie if, as we prophesy, the progress under this Bill is not as great as the interests of the country demand.
All we want to ensure is that the country receives the maximum benefit from the maximum development of the areas. Not only are these houes needed for the shepherds, but, as the noble Duke who has

715
already spoken on this matter has said, the houses are going to be needed for the works that are to be initiated under this Bill. Unless the labour is there, this Bill is a dead letter, and I cannot see how the labour is going to be there unless the houses are built. Can you imagine that a landowner is going to undertake an expenditure of £1,600—or, as the noble Earl has said, anything between £1,700 and £1,800—on putting up a cottage in these remote fastnesses of Scotland, England and Wales if the moment there is any change of employment—if he loses his shepherd—that cottage is at least going to lie under the risk of there being nobody whatsoever in it who is engaged in the running of the farm?
What I would ask the noble Earl is this. If by putting a provision of this character into this Bill he is going to make it virtually impossible to get cottages built in these hills by landowners, are the Government prepared to undertake that task? The rural district councils are now the people who are looked to for houses, and are those rural district councils going to be encouraged to go up five, ten, fifteen or twenty miles into the hills and build their council cottages there? I think that is a very fair question and a very fair challenge for me to put to the Government. If the landowner is not going to be able to perform what we believe to be his duty, are the Government prepared to take that duty off his shoulders and perform that function themselves?
One last word. We know that this is an old, old controversy, with its history away back in the past, when, as I think all of us on this side of the House as well as on the other would be prepared to admit, social customs and social ideas were quite different from now. It may well be—and I am certainly not going to say it is not—that the feelings we are really discussing to-day are justified by certain realities from the past. We recognize that, but cannot we make an appeal to the noble Earl to take this back to his colleagues? Whatever be the facts of the situation in the lowlands—and I think we all know the very considerable difficuties there are going to be if there are no tied cottages in the lowlands—cannot we differentiate in the case of these hill farms? If noble Lords opposite feel that their Party must adhere to its principles
716
with regard to loans for tied cottages, cannot we get them to realize that here is an exceptional case? After all, there are those exceptions that I ventured to mention on the Second Reading. The policy of the Government is to have tied cottages for the employees of the Forestry Commission, they allow tied cottages for school teachers and police, and I am not sure whether the noble and learned Lord Chancellor is going to be allowed to stay in his flat after he loses his job. There are many exceptions. Could not they say with regard to hill farms that they are prepared to consider making exceptions? Whilst not asking my friends on these Benches to divide against the noble Earl, I do ask him once more to try for a serious reconsideration of this part of the Bill with special reference to the special problems of the hills.
THE EARL OF HUNTINGDON: I have listened with great attention to the eloquent speech of the noble Earl, Lord De La Warr. I think, if I may say so, that this question has been a little exaggerated—not as to the difficulties of hill farming but the difficulty of getting rid of one workman from a cottage and getting another in. I would like to make clear to the noble Viscount, Lord Elibank, the procedure to which these houses would be subject. They would come within the provisions of the Rent Restrictions Acts and in the event of the farmer or landowner wishing to get rid of his workman if he was a bad workman or in the event of the workman leaving the landowner's employment and not wishing to leave his cottage, the landowner could apply to the local committee for a certificate to be given to him—in practice it is usually given to him if the need is genuine—showing that the cottage was necessary for his farm. In that event, if the inhabitant of the cottage still refused to leave, the farmer or landowner would have the right to go to the courts and apply for the tenant to be evicted. What we are trying to stop is the old-fashioned service tenancy by which a man can be turned out at a moment's notice—his job is terminated and in the next moment he can be turned out on to the road. We are seeking to avoid that sort of tied cottage and that sort of eviction.
VISCOUNT ELIBANK: I am sorry to interrupt the noble Earl, but actually the procedure which he has outlined may take

717
about three months. What is going to happen if, say, at Whitsuntide you change your shepherd and your former shepherd will not go? You must apply to the courts and go through all the procedure which the noble Earl has outlined. That will probably take three months. What are you going to do with your sheep in the meantime? There will be nobody to look after them.
THE EARL OF HUNTINGDON: I admit that there may be cases in which it takes a long time, but I would like to draw the noble Viscount's attention to the fact that they are exceptional cases. As a rule, the shepherd either wishes to leave his job or, alternatively, if he is not a good shepherd he is given notice to quit. In any event he will want to leave his cottage if he finds work somwhere else; he will not want to stay on in a distant cottage in quite a different part of the country from that in which he gets his new job. I think you will find that this applies only to these very exceptional cases where, either because there are two contiguous farms involved or for some other reason, the man still stays in his cottage. Therefore this clause will apply only to what we hope will be exceptional and rare cases. We are obviously trying to help the private landowner in this case by giving him a very big grant—50 per cent.—to build these cottages. That, I think noble Lords must recognize, is a very generous grant in this respect.
I would like to mention one other point, which is that this clause affects only cottages which do receive a grant; we are not trying to affect by this Bill cottages which do not receive a grant. The cottage that is a tied cottage remains a tied cottage. What we want to ensure is that money given by the Government for this purpose shall not be used to create tied cottages. That really is the substance of this clause. I hope noble Lords will recognize that although on this occasion we cannot yield to this Amendment, we have the interests of the hill farmers at heart. We do want to help this industry. For that reason I should like to urge the noble Duke, if he can see his way to do so, to withdraw his Amendment.
LORD SALTOUN: I do not agree with the noble Earl that this is necessarily an exceptional case; but at any rate, who is going to lay down a lot of money now, while there is the risk that, in the type of case which is perhaps not so rare as the
718
noble Earl says, in twenty years' time he may suddenly be ruined?
THE DUKE OF BUCCLEUCH AND QUEENSBERRY: My Lords, I hope this House will always endeavour, so far as possible, to treat agriculture on a non-Party basis. The Government have asked for co-operation in agriculture and in housing, including rural housing, and I feel that this is a matter in which closer co-operation and a more practical approach would be very helpful. I trust that the Government and their supporters will in the course of time see their way to granting this concession. Meanwhile, I thank the noble Earl for his explanation and ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 10 agreed to.
Remaining clauses agreed to.
6.40 p.m.
First Schedule [Improvements which may be included in schemes for rehabilitation of hill farming land]:
LORD POLWARTH LORD POLWARTH moved at the end of the Schedule to insert "24. Connexion to the public telephone." The noble Lord said: This Schedule gives a very comprehensive and generous list of improvement; that should be eligible for grants, but it seems to me there is one very important omission—namely, the installation of the telephone. Surely there is no other improvement, with the possible exception of the supply of electricity, which could be of greater benefit to the occupants of the very outlying hill farms with which the Bill is concerned. In the first place, the farmer is a business man just as much as the man in the City, and what occupant of a City office would think of dispensing with his telephone? It is indeed an essential part of his equipment. Secondly, there is the case of illness, when a doctor has to be summoned, and also the case of disease or injury to stock when the veterinary surgeon has to be sent for. There is seldom time for the farmer to make his way to the nearest public telephone, which may be ten or fifteen miles away.
I know that on the Second Reading the noble Earl who spoke for the Government pointed out that the Post Office will install a telephone in any premises within three miles of an exchange for the sum of £4 a year. Now that is all very well, but

719
the majority of these hill farms are a great deal more than three miles from an exchange, and in some cases the cost of bringing the telephone to these places may be very considerable. The noble Earl also said that the Post Office at the moment are hard pressed. I know they are short of labour and material, but then they are not unique in that respect. After all, if we applied the same principle to all the other improvements which are included in this Schedule, we should find that at present a great many of them could not be carried out owing to shortages of labour and material, and we should be left with a very thin looking Bill indeed.
Take, for instance, the case of electricity. The electrical industry is, I should think, every bit as hard pressed at the moment as the Post Office. They are just as short of poles and wire and the labour to put them up. By the time the schemes come through under this Bill surely things will be beginning to become much easier. After all, the Post Office starts with an advantage in that it is already nationalized, whereas the electrical industry is still awaiting the great benefits which are going to come from this process. I am not asking the noble Earl, the Postmaster-General, to do a favour to one section of one industry in the country. That would be too much to ask, but I am asking the Government to help the hill farmer to pay the bill for the installation of a telephone, a bill which may be very much increased owing to the remoteness of the place where he has to carry on his business. If it would make my Amendment any more palatable, I should be very glad to accept the limitation of the grant in those cases where the farm is outside the limit for connexion at a standard rate, and to limit the amount of the grant to the additional cost above the standard rate. I am sure that no hill farmer would grudge paying the ordinary cost of connexion. In any case, I do hope that the Government will see their way to accept this Amendment, the good effects of which will be out of all proportion to the sum of money which will be involved. I beg to move.
Amendment moved—
Page 28, line 39, at end insert ("24. Connexion to the public telephone.")—(Lord Polwarth.)
THE EARL OF AIRLIE: Quite briefly, I should like to support this Amendment very strongly. It is no good beating about the bush, but from the way they have been talking I have an idea that His Majesty's Government have got no conception at all of the conditions in these places and I do not believe they care. I am sorry they are such strong words, but I do not believe they care. Most of you just pull a plug or you turn on a tap, but these fellows are living in conditions of which you have absolutely no conception, and this is one of the essentials which they have got to have. I can give you an example of a farmer who is nine miles away from an exchange and who has to pay £25 a year for the use of a telephone. I am glad to see that the Postmaster-General is in his place. That is a pretty good sum to have to pay, apart from installation, and it is absolutely essential for him to carry on his business. I hope the Amendment will be added to the Schedule.
THE EARL OF HUNTINGDON: Again I sympathize very much with this Amendment proposed by the noble Lord, Lord Polwarth. Obviously hill farmers need telephones and probably in many cases more so than people in urban areas. In these remote places it is a necessity, not only for business but for use in an emergency. But there is a difficulty about this. This Bill, as your Lordships have seen, provides for a 50 per cent. grant to be made for various schemes. The present arrangement, as I understand it, is that telephones are provided not on a basis of the payment of a capital sum but on an annual payment to the Post Office. In fact, apart from a purely nominal charge of fifteen shillings, no capital charge is made by the Post Office at all for the provision of a telephone service. Payment takes the form of an annual rental.
THE EARL OF AIRLIE: Which is £25 in the instance I gave.
THE EARL OF HUNTINGDON: I heard what the noble Lord said. The standard rental for business purposes is £5 18s. per annum where the distance from the nearest exchange does not exceed three miles. Above this distance an additional charge is made of £1 per furlong per annum with a reduction in the charge if two or more persons share the line. I

721
think your Lordships will see that in these circumstances it would be quite impracticable to give a 50 per cent, grant towards what is a continuing annual payment. Therefore I do not think we can accept this Amendment or have anything of the kind under this Bill. At the same time His Majesty's Government thoroughly appreciate—and sympathize with—the need of these telephones, and I will consult with my noble friend the Postmaster-General to see what can be done to provide them. I do not think, however, that under this Bill we could accept the Amendment as it stands.
LORD GIFFORD: I know nothing about hill farms, but surely in all kinds of business an interest or annual charge can be capitalized and vice versa. It seems the most extraordinary argument.
THE POSTMASTER-GENERAL (THE EARL OF LISTOWEL): I should like to support the need for telephones in remote parts of the country. We are most anxious that people who live in remote parts should get the telephone service at the earliest possible moment. I know the noble Earl will appreciate the fact that it means employing a very great amount of labour, carrying telegraph poles as a rule over long distances, and the labour is just not available at the moment. I am sure your Lordships appreciate that there is a long waiting list in the towns and that would require less labour to be cleared off. But I do assure noble Lords that we at the Post Office are most vividly aware of the need and we shall meet it just as soon as we possibly can.
LORD GIFFORD: Surely the remedy is to insert a rider that this particular part of the grant shall be delayed until the Post Office can meet the requirements.
THE EARL OF HUNTINGDON: I do not think that would be possible.
LORD POLWARTH: I appreciate that there is this difficulty about the question of capital or annual rental, and, in the circumstances, I see that this Amendment cannot be made to the Bill, but I hope that the noble Earl and the Postmaster-General will do their best to bring about a levelling down of these charges for rental, and will follow the example of another of the services for which the Postmaster-General is responsible—namely,
722
the postal service. After all, a man who happens to live in a remote hill farm does not have to pay extra for having his letters delivered; the cost is spread over the whole community. Therefore, even if it is impossible to make a standard rate for the whole country, I hope that the noble Earl will endeavour to level out the rate to the greatest extent possible, so that those living in the remoter parts of the country are not penalized for the fact that they do so. In the circumstances I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
First Schedule agreed to.
Second Schedule:

SECOND SCHEDULE.
PROVISIONS AS TO VALUATION OF SHEEP STOCKS IN SCOTLAND.
PART I.
Provisions as to a valuation made in respect of a tenancy terminating at Whitsunday.
1. The Land Court or the Arbiter (in Part I and Part II of this Schedule referred to as "the valuer") shall ascertain the number of, and the prices realized far, the ewes and the sold off the hill from the stock under valuation at the autumn sales in each of the three preceding years, and shall determine by inspection the number of shotts present in the stock at the time of the valuation.
6. In making his award the valuer shall value the respective classes of stock in accordance with the following rules, that is to say—
(a) ewes of all ages (including gimmers) shall be valued at the basic ewe value with the addition of fifteen shillings per head;
6.52 p.m.
THE DUKE OF BUCCLEUCH AND QUEENSBERRY THE DUKE OF BUCCLEUCH AND QUEENSBERRY moved, in paragraph 1 of Part I, after "the"—[the ewes]—to insert "draft". The noble Duke said: This Amendment and the definition of "draft ewes" which I have on the Paper at page 31, line 19, are closely related. I am reluctant to speak again, but I feel it is important to say a few words on this very vexed subject of valuations of bound sheep stocks, which has caused deep concern for a great many years, particularly in the Highland areas. It is a complicated problem, and if nothing were said here and no Amendment moved it might be believed that everyone concerned was satisfied and that the position was satisfactory. That, I am afraid, is not so. I am sure that everyone will agree with what the Balfour of Burleigh Committee say in paragraphs

723
89 to 93 of their Report and again in paragraphs 225 to 235. There have been many discussions concerning sheep-stock valuations, and I will not go into details now. I will only quote a few of the opening words of the Report in this connexion. They are as follows:
"Over the past fifty years the system of sheep stock valuations commonly adopted has become increasingly unsatisfactory, and valuations have tended to diverge more and more from real values. From time to time there have been various cases of exaggeration which are indicative of the faults underlying the general run of valuations."
This is a statement of fact from which we cannot get away.
There is nothing wrong with the principle of valuing the ewe and the lamb, but unfortunately the additions have become most excessive. The Committee rightly say that
"…what is wanted in place of the present system is a practical method of assessing the real commercial worth of a bound sheep stock as a going concern."
I feel sure your Lordships will all agree that what is wanted is a valuation which is fair to everyone. The thanks of Parliament are due to the Balfour of Burleigh Committee for the immense trouble which they have taken over the matter of these sheep stock valuations. They have endeavoured to find and to suggest a formula, and everyone hopes that this formula will be a great improvement on anything that has gone before. But I am afraid it is doubtful whether that will be so, and that it is perhaps even more doubtful if it is possible, by legislation, to find a solution of this problem. I am sure that everyone hopes that in return for the assistance to the industry a big effort is being made by the Government to put valuations on a more satisfactory basis.
We are moving this Amendment because we are doubtful whether the formula will achieve the purpose which it is desired to achieve. I am afraid that references to loopholes are being made quite openly in discussions among farmers. I hope that the Amendment can be accepted as strengthening the expression of the intention of the Government. It is difficult to know what objection there can be, but if the Amendment is objected to because the definition is not satisfactory, then I am sure a more satisfactory wording can be found. Again, if the
724
objection is that this might not be agreed upon, I feel that there would be more agreement than there is at present if the words were incorporated. If the Government are not willing to accept the Amendment, can they give any assurance that they will watch the position very carefully?
I feel that it is necessary to give a friendly warning on this subject. On this occasion, curiously enough, it is the members of the Government who are safeguarding the interests of the landowners, the proprietors, who are, principally, the Department of Agriculture and the Forestry Commission. They are the chief sufferers. Apart from any personal losses, either to individuals or to the taxpayers, the harm to the industry is considerable, especially when it is realized that good men willing to go into these farms are discouraged from doing so by not knowing what high prices they may have to pay for the valuation on going in. In consequence, many of these farms are not tenanted by people who would otherwise take them on, and they have to remain in the hands of the proprietors.
Since the Committee stage in another place, last summer, there have been many conversations in Scotland about these valuations, and I am afraid that it is the case that one commonly hears expressed among knowledgeable valuers and farmers the view that there is a serious danger of Parliament encouraging and legalizing a form of robbery. I hope that that is not correct, but I am very anxious about it. If this happens I would like to know what the Government intend to do; if they will watch the matter and take further action. I hope that this Amendment will be accepted, but if it is not, I trust that the Government will consider in what way they can best strengthen the position before the Report stage and the Third Reading.
Amendment moved—
Page 29, line 1, after the second ("the") insert ("draft").—(The Duke of Buccleuch and Queensberry.)
VISCOUNT ELIBANK: I understand that the Amendment which my noble friend has just moved is to insert the word "draft" before "ewes and the lambs" in the first line of page 29. I have got two Amendments later on to lines 5 and 6 which really affect the same point. I suggest that the word "cast"

725
should be used. My noble friend suggests the word "draft." I have no objection to the word "draft," I think that in some parts of the country the word "draft" is used and in other parts the word. "cast" is used, but they amount practically to the same thing. These are sheep that are sold off the hill and not what you might call the breeding animals. They are sheep sold for profit every year off the hill. I have no objection to adopting my noble friend's Amendment to insert the word "draft," and in that case I would not move my Amendment to insert "cast" unless the noble Lord who is to reply says that he prefers my description of "cast" to "draft."
My noble friend has made a fairly full statement us to the reasons why this word should be inserted, and I would like to amplify it a little. If one or other of these words is not included, if we do not refer to "draft" ewes or "cast" ewes, then it will be possible for a dishonest farmer who knows that he is going out of his holding in a year—or three years, under the Bill—to pass out not only his draft ewes, but a certain number of the gimmers and other ewes of higher value during each year, thereby increasing the average value of the whole of the stock which will form the basic value of the property. If the noble Lord tells me that legally this has a certain meaning, my reply is, why should it not be made quite clear? As I understand this Schedule, it is intended that it shall refer to good draft ewes; so why not insert the word "draft," so that there can be no misunderstanding about it? Then we shall all be satisfied. This question does not affect only the proprietor; it affects the incoming farmer as well. I support the noble Duke in his Amendment that the word "draft" be inserted before "ewes" in that line.
LORD WESTWOOD: I. assume that the noble Duke and the noble Viscount, Lord Elibank, wish me to deal with the proposed Amendments together, because there is a similarity between them. The proposal is to calculate the average prices of ewes and lambs sold at autumn sales in the previous five years, instead of three years as provided in the Schedule. The adoption of the three years' average as a clearly defined basis for sheep-stock valuations was one of the recommendations made by the Committee on Hill Sheep Farming in
726
Scotland, of which Lord Balfour of Burleigh was Chairman. As with other recommendations made by the Committee, this was thoroughly discussed with representatives of the main interests concerned, before being incorporated in the Bill. It can be said, therefore, to have been accepted by these interests as a reasonable basis upon which the arbiter can begin to assess the future profitability of the stock under valuation. In any case, a three-year average is no less reliable as a guide to future profit-earning than a five-year average.
VISCOUNT ELIBANK: May I interrupt for a moment? The noble Lord has referred to the Report of the Balfour of Burleigh Committee as supporting the present wording of the Schedule. If the noble Lord will look at Recommendation 236 in the Report he will see that it says:
"For a Whit-Sunday valuation
(a) The valuation shall be based on the averages of the prices obtained for all the cast ewes and all the ewe and wether lambs sold off the hill in the autumn sales in, the previous three years."
The noble Lord will notice that the Committee used the words "cast ewes," but the Bill does not. I am quite prepared to accept "draft ewes" because it means the same thing.
LORD WESTWOOD: But the Balfour Committee dealt with this matter, and the point I raised was one of the recommendations regarding sheep stock valuations. If an arbiter were called upon to distinguish "cast" or "draft" ewes from other ewes he would have to determine what classes of ewes should rightly be regarded as "cast" or "draft," in the light of sound practice as applied to the particular flock he was valuing. There can be no hard-and-fast rule about what ewes can properly be sold out of a particular flock, by an honest and capable farmer, without impairing in any way the balance of the flock and, therewith, its profitability to the new owner.
In practice, however, the arbiter would have a problem still more difficult to solve. Equipped only with sales notes, he would be required to pick out from a list of prices those which he thought had been paid for ewes, other than the cast or draft ewes, which, in his opinion, had properly been sold from that farm. I am advised that he could never do so on that evidence alone. If he were led in any

727
way to consider that the profitability of the flock had been impaired by improper management, he would have only one means of deciding whether his opinion was well or ill-founded—namely, the state of the flock. Similarly, his only method of discounting the extent to which it had been impaired would be to make an appropriate adjustment in terms of paragraph 5 of the Second Schedule. Even if the word "cast" or "draft" were included, the net change would be to leave the procedure essentially the same as it is now.
VISCOUNT ELIBANK: May I ask whose view that is?
LORD WESTWOOD: The view of the Department concerned.
VISCOUNT ELIBANK: As opposed to the Committee. The Department have not accepted the Committee's recommendation, because the Committee specifically said "cast ewes". It seems that in one instance the Department accept the recommendations of the Committee, and in the next they repudiate them.
LORD WESTWOOD: I did not say that the recommendation of the Committee was "draft" or "cast" ewes. The recommendation of the Committee was on a clearly defined basis for sheep-stock valuations.
VISCOUNT ELIBANK: I have read out from the Committee's recommendation. I cannot say more.
THE DUKE OF BUCCLEUCH AND QUEENSBERRY: A rather greater assurance would be welcome on some of these points, but I hope that in the course of the Third Reading the Government will be able to give a satisfactory assurance as to how sheep-stock valuation will work out in practice. Meanwhile I beg leave to withdraw.
Amendment, by leave, withdrawn.
7.10 p.m.
THE DUKE OF BUCCLEUCH AND QUEENSBERRY: I beg to move the next Amendment which stands in my name.
Amendment moved—
Page 29, line 2, leave out ("sales") and insert ("auction sales and at the graded sales of the Ministry of Food").—(The Duke of Buccleuch and Queensberry.)
LORD WESTWOOD: I think the answer which I gave in respect of the first point raised by the noble Duke about the adoption of the three-year average as a clearly defined basis for sheep-stock valuations was the correct answer in dealing with that particular point. I think that the Amendments on page 29, line 2; page 29, line 21, and page 30, line 16, are all similar. The answer is a comprehensive one and covers the point raised.
VISCOUNT SWINTON: Do we understand from that that the Government accept or reject these Amendments?
LORD WESTWOOD: The Government do not accept the Amendment.
VISCOUNT ELIBANK: Which is the Amendment?
LORD WESTWOOD: The one proposed by the noble Duke at page 29, line 2.
THE DUKE OF BUCCLEUCH AND QUEENSBERRY: I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
VISCOUNT ELIBANK VISCOUNT ELIBANK moved, in paragraph (1) of Part I, to leave out "three" and insert "five." The noble Viscount said: I am going to raise an issue now which I hope the noble Lord may be able to consider. Under the Bill it is provided that the basic value shall be worked out on a three-year average. In my humble submission, a three-year average is not long enough, because during those three years it is possible for a dishonest farmer to sell some of his better stock each year, and, consequently, bring up the average at the end of the three years. The life of sheep stock is between five and six years. I suggest that the three years should be increased to five years, for the simple reason that I hear on different sides that there is a movement on foot to try and get three years' notice to quit a farm. Supposing that were to come about, it would be quite within the capacity of a farmer, as I have said, to get his stock increased to such a value that the basic value would be higher than it ought to be. I beg to move.
Amendment moved—
Page 29, line 3, leave out ("three") and insert ("five").—(Viscount Elibank.)
LORD WESTWOOD: The Amendment proposed by the noble Viscount seeks to

729
specify the expression "autumn sales" as "autumn auction sales" and "the graded sales of the Ministry of Food."
VISCOUNT SWINTON: That was the last one. We have passed that one.
LORD WESTWOOD: That is the question dealing with the valuation proposals as a whole, which I think the noble Viscount has raised, and there is a third point, that fifteen shillings is an arbitrary addition to recognize the fact that the basic ewe value, while a good measure of the value of the older age of ewes in the flock—
VISCOUNT ELIBANK: That is not the Amendment.
LORD WESTWOOD: That is the Amendment as I have got it.
VISCOUNT ELIBANK. No.
LORD WESTWOOD: I think I dealt with that in the very early part when I mentioned that we did not see any difference in making it a five-year valuation. A three-year valuation is just as simple as a five-year valuation. The adoption of the three-year average as a clearly defined basis for sheep-stock valuations was one of the recommendations—as I have already mentioned (however much the noble Viscount may differ)—made by the Committee on Hill Sheep Farming in Scotland. As with other recommendations made by the Committee it was thoroughly discussed with representatives of the main interests concerned—that is, the National Farmers' Union, the Land and Property Federation and all the other people involved. It can be said, therefore, to have been accepted by all interests as a reasonable basis on which the arbiter can begin to assess the future profitability of the stock under valuation. In any case, a three-year average is no less reliable as a guide to future profit-earning than a five-year average. We have already stated that.
VISCOUNT ELIBANK: The noble Lord has now answered my Amendment. I cannot agree with him over it, but I beg leave to withdraw it, as there is no other course open to me.
Amendment, by leave, withdrawn.
7.8 p.m.
VISCOUNT ELIBANK VISCOUNT ELIBANK moved, at the end of sub-paragraph (a) of paragraph 6 of Part I, to insert "for acclimatization
730
value when such is payable." The noble Viscount said: This is an Amendment which to some extent is designed to get clarification of what the Bill really means. Paragraph 6 of the Second Schedule says:
"In making his award the valuer shall value the respective classes of stock in accordance with the following rules, that is to say—
(a) ewes of all ages (including gimmers) shall be valued at the basic ewe value with the addition of fifteen shillings per head."
I want to know what that fifteen shillings per head means. Is it, 15s. per head for acclimatization and heftings, or is it 15s. that must be added to the basic value? If your Lordships will refer to paragraph 5 of the Second Schedule you will see that it states:
"The three year average price for ewes shall be subject to adjustment by the valuer within the limits of ten shillings upwards or downwards as he may think proper having regard to the general condition of the stock under valuation.…"
As I see it, the result of this is that: if a sheep is valued at 60s. the valuer may add ten per cent., which is 6s. As it reacts here, he must add another 15s., which would be 21s., and there is no reference at all to acclimatization and heftings, which are today very often valued—I know of a case quite recently—at 22s. 6d. per head. The amount above the basic value would be £2 2s. 6d., a great part of which either the proprietor or the farmer would have to meet.
The first question I want to ask the noble Lord is: Must this 15s. be added? The second question I want to ask is: Is this 15s. the value of the acclimatization and the heftings? The third question is: Why is it that in the whole of this Schedule there is absolutely no mention of acclimatization values and heftings except in paragraph 6 (d), in which reference is made to the valuations of tups having regard to acclimatization? Perhaps the noble Lord can give me an answer to these three questions, and also to my fourth question as to what are the lines upon which the acclimatization and hefting values are to be made by these arbitrators.
LORD WESTWOOD: This proposal is at variance with the underlying conception of the valuation proposals as a whole. Fifteen shillings is an arbitrary addition to recognize the fact that the basic ewe value, while a good measure of the value of the older age of ewes in the flock, is

731
something less than the value of the younger age of ewes. Ewes with two, three, or four more years of breeding life ahead of them are worth proportionately more than the basic value. This 15s. addition in respect of younger ages takes account of that factor. It is a cardinal feature of the new valuation proposals that no recognition shall be made of acclimatization except in so far as it affects the general condition of the flock and its profit-earning capacity. To the extent that acclimatization has a bearing on that position it will, together with other relevant considerations, be taken into account by the valuer on paragraph 5 of the Second Schedule.
VISCOUNT ELIBANK: May I ask the noble Lord if that 15s. is fixed, or is the amount to be varied according to the condition of the stock?
LORD WESTWOOD: Fifteen shillings is an arbitrary addition to recognize the fact that the basic ewe value, while a good measure of the value of the older age of ewes in the flock is something less than the value of the younger age of ewes. It is a fixed amount.
VISCOUNT ELIBANK: I beg to withdraw my Amendment.
Amendment, by leave, withdrawn.
7.25 p.m.
VISCOUNT ELIBANK VISCOUNT ELIBANK moved to add to the Schedule the following new Part:
"Part V,
(1) There shall be established in Scotland a 'Court of Arbitration and Sheep Valuations' which shall be the Court of Appeal against any valuations made under Parts I and II of the Second Schedule.
(2) The Court of Registration and Sheep Valuations shall consist of not more than five members, one of whom shall be of the legal profession, who will be appointed by the Secretary of State for Scotland. They will be remunerated on a scale to be determined by him in consultation with the Treasury.
(3) The Court of Arbitration and Sheep Valuations shall:

(a) have full power to adjudicate upon and adjust in equity and in accordance with the facts, any valuation brought on appeal before that Court;

(b) have full power to require the outgoing and incoming tenants including the proprietor or his factor to attend the Court, and to inform the Court upon any point in dispute and to call for the production of any books, figures or other material which
732
may assist the Court in arriving at an equitable decision. The Court's decision shall be final;

(c) the costs of any appeal shall be borne by the parties in accordance with the decisions of the Court."

The noble Viscount said: I know the hour is getting late but this is an important issue even if the Amendment is not accepted. I wish, in the first instance, to refer to a statement made on hill farming by Lord Balfour of Burleigh. He said this:
"It is commonly said that there are three levels of value, one, the lowest, for an incoming tenant, another, a higher one, when a landlord takes over a stock, and a higher one still when a stock is taken over by a Government Department."
The mere fact that the statement can be made, be it literally true or not, suggests that something is wrong with the system. It is generally understood in Scotland that something is wrong with the system, and in 1937 there was an attempt to improve the system by a Bill which was brought in by the noble Lord, Lord Thankerton. That has not improved the system as results since then have shown.
Now this is a Bill which purports to improve the system and I hope it does improve the system. Still, in spite of that, in this Bill conditions are laid down by the Government upon which the values are to be made. Will the noble Lord give me his attention for a moment? This Bill purports to improve the terms of valuation in Scotland. Certain conditions are laid down upon which the arbitrations of the valuations shall take place. When these were made there was no provision in the event of dissatisfaction with such valuations for an appeal. I am given to understand there may be an appeal to the Court of Session. We all know how cumbersome and how expensive such an appeal would be. My intention in this is to ask the Government whether they will not set up a special Court of Appeal which I have called here a "Court of Arbitration and Sheep Valuations" for the purpose of enabling proprietors and farmers, if they are not satisfied with the valuation that has been laid down under the terms of the new Schedule, to appeal to such a Court—the Court will be so formed as to have a special knowledge and ability—charged with dealing with such appeals.
I feel that if such a Court were established it would give a much greater faith

733
throughout the industry upon the terms which are now presented to them as the terms or conditions by which these valuations will be made. In fact, I would have gone even further if it had been possible—but as the Bill is submitted it would not be possible to do it—to make the Government establish a Court of Arbitration and Sheep Valuations for any of these valuations. Then one could have hoped that one would have got a much fairer valuation than has been the case in the past. I will not say anything more. That more or less seems to be my case. I beg to move the Amendment standing in my name.
Amendment moved—
Page 31, line 19, at end insert the said new Part.—(Viscount Elibank.)
LORD WESTWOOD: In reply to the noble Viscount, the Bill already allows for a substantial alteration in the law as at present with regard to sheep-stock valuations. The arbiter called upon to carry out a valuation under a new lease will no longer be able to make an award without indicating in detail how his calculations are made. He will be required to conform to a strict formula starting from the basic ewe and land values calculated from sales notes available to both parties and variable thereafter at this discretion only within defined limits. Unless he conforms to these requirements his award will be open to be contested in the Courts. Again, in so far as any party has no confidence in a private valuer the Land Court can be called upon to undertake the valuation. The establishment of an additional Court of Appeal is not considered to be necessary.
VISCOUNT ELIBANK: There is nothing very new in what the noble Lord has said. At the present time under the 1937 valuation they have to state exactly how they have made up their valuation. Practically everything that the noble Lord said must be done is already being done. What I am anxious about is lest, in spite of these valuations and certain new conditions—I agree they are new conditions—there should still be wrong valuations. That is why I have advocated an Appeal Court. But the noble Lord says: "If you are not satisfied, go to the Courts in the country." That recourse has always been open to us in the past, but the cumbersomeness of the machinery and the ex-
734
pense involved have always prevented the farmers and the proprietors from using it. I cannot thank the noble Lord for his reply. I can only ask that as time goes on, if it is found that these valuations are not as accurate as is hoped under the Bill, the establishment of an Appeal Court will be considered. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Second Schedule agreed to.
Bill reported without amendment.

COUNTY COUNCILS ASSOCIATION (SCOTLAND) BILL.
7.31 p.m.
Order of the Day for the Second Reading read.
LORD WESTWOOD: My Lords, I beg to move that this Bill be read a Second time.
Moved, That the Bill be now read 2a.—(Lord Westwood.)
On Question, Bill read 2a and committed to a Committee of the Whole House.

POLICE (SCOTLAND) BILL. [H.L.]
Order of the Day for the consideration of Commons Amendments read.
LORD WESTWOOD: My Lords, I beg to move that these Amendments be now considered.
Moved, That the Commons Amendments be now considered.—(Lord Westwood.)
On Question, Motion agreed to.

COMMONS AMENDMENTS.
[The references are to Bill No. 91.]
Clause 10, page 9, line 26, after ("Treasury") insert ("by order").
Page 19, line 26, at end insert:
("(2) Any order made by the Secretary of State under this section shall be laid before Parliament immediately after it is made; and if either House of Parliament, within the period of forty days beginning with the day on which any such order as aforesaid is laid before it, resolves that the order be annulled, it shall thereupon become void, but without prejudice to the validity of anything previously done thereunder or to the making of a new order.
In reckoning any such period of forty days as aforesaid, no account shall be taken of any time during which Parliament is dissolved

735
or prorogued, or during which both Houses are adjourned for more than four days.")
Clause 11, page 10, line 4, at end insert:
("Provided that Section two of that Act (which confers temporary powers for speedy acquisition of land in urgent cases) shall not apply to any compulsory purchase of land under this section.")
LORD WESTWOOD: My Lords, I beg to move that this House doth agree with the Commons in the said Amendments.
Moved, That the House doth agree with the Commons in the said Amendments.—(Lord Westwood.)
On Question, Motion agreed to.

EDUCATION (SCOTLAND) BILL. [H.L.]
Order of the Day for the consideration of Commons Amendment read.
LORD WESTWOOD: My Lords, I beg to move that this Amendment be now considered.
Moved, That the Commons Amendment be now considered.—(Lord Westwood.)
On Question, Motion agreed to.

COMMONS AMENDMENT.
[The reference is to Bill No. 58.]
Clause 144, page 91, line 28, leave out ("September, nineteen hundred and forty-six") and insert ("January, nineteen hundred and forty-seven").
LORD WESTWOOD: My Lords, I beg to move that this House doth agree with the Commons in the said Amendment.
Moved, That the House doth agree with the Commons in the said Amendment.—(Lord Westwood.)
On Question, Motion agreed to.

INCUMBENTS (DISCIPLINE) MEASURE, 1946.
7.34 p.m.
THE LORD ARCHBISHOP OF CANTERBURY THE LORD ARCHBISHOP OF CANTERBURY moved to resolve, That in accordance with the Church of England Assembly (Powers) Act, 1919, this House do direct that the Incumbents (Discipline) Measure, 1946, be presented to His Majesty for the Royal Assent.
The most reverend Primate said: My Lords, even at this extremely late hour I am afraid I must detain your Lordships for a few minutes on this Measure,
736
because it is an important one. I am not quite sure what the subject matter of the discussions I have recently listened to was. I think it was sheep farming at one time. This deals with another kind of sheep farming, generally called pastoral work. There are in the Church of England some 20,000 clergymen. Their standard of professional conduct in the sacred ministry is, generally speaking, very high indeed; but among that very large number of men there must be occasions, although the occasions are relatively rare, when a clergyman is not suitable for the incumbency that he holds, either because he has become a victim of physical or mental disability or, more rarely, because he has fallen into some kind of negligence or misconduct. As a result, there has been a very long series of what are called Clergy Discipline Acts of Parliament and Measures.
The problem is always complicated by the parsons' freehold. That system has positive advantages; it also has real disadvantages. But, in any case, everybody would agree that the parsons' freehold cannot be allowed to operate so as to inflict serious harm on the spiritual welfare and interests of a parish. In the nineteenth century there was a long series of Acts which I will not now detail. In 1926 the Church Assembly passed a Measure which became law called the Benefices (Ecclesiastical) Duties Measure. That dealt with both disability, by which I mean clergymen who become incapable by mental or physical infirmity, from doing their duty, and also with discipline, by which I mean cases where clergymen had become negligent or fallen into misconduct. The Measure was not successful, partly because it put together in one Measure two utterly distinct things. It is one thing for a man to lose his mental faculties, and that is a thing to be dealt with by itself; it must not be confused with a man who has fallen into misconduct. That Act, partly for that reason, became a dead enactment. In 1931 the clergy themselves of the Church of England in the Church Assembly, zealous for their professional standards, took up the matter again, desiring to get a satisfactory solution of the matter. Ever since 1931 the Church Assembly has been actively concerned about it. That is a very long period of gestation, and after fourteen years something has been done.

737
First of all, in 1945 the Incumbents (Disability, Measure dealing with this mental or physical incapability, was passed by the Assembly and received the Royal Assent and is now law.
This Measure which I now bring to your Lordships deals with discipline. It is necessarily long and complicated, because it is careful at every point, even over-careful, to guard against any possibility of a miscarriage of justice. May I as briefly as I can indicate the substance of the Measure? First, it does not deal at all with any complaints involving questions of doctrine, ritual, ceremonial, social or political opinions. Those are all definitely excluded from the Measure. It deals only with cases—and I quote the words—" of conduct unbecoming the character of a clerk in Holy Orders or of serious, persistent, or continuous neglect of duty." I shall have to come back to that phrase, "conduct unbecoming the character." That is the class of offence that is dealt with.
May I now very briefly tell you the procedure? A complaint may be laid with a Bishop of an incumbent by certain named responsible people. The Bishop may discuss the complaint with the incumbent concerned and decide whether he wishes procedure to be taken under the Measure. If he says it shall be taken the complaint goes to a ministerial committee. That ministerial committee is composed of six clergymen taken from a panel elected from the Diocesan Conference. Out of that panel of six clergymen is formed a ministerial committee, and they consider the complaint. They may, if they will, dismiss the complaint, or by a majority of four out of the six they may agree to take the next step. You will observe that at that point the incumbent against whom a charge is laid is being examined by six of his own brethren, of his own peers.
The next step is that the complainant has to define his charges in a prescribed form for submission to a Special Court. When he has done that, the ministerial committee reads his complaint and may at that point dismiss it again. If they do not, it goes on to the Bishop, who also may dismiss it. If he does not, it goes to the Special Court, That Special Court consists of the Chancellor of the Diocese, two clergymen and two laymen, similarly taken from a panel—two clergymen, quite rightly, since a clergyman is charged, two laymen, also quite rightly,
738
because the laity are as deeply concerned as the clergy in the character of their clergy. The Special Court then gives its judgment and there is an appeal to a Provincial Court, both in the Province of Canterbury and the Province of York. The Special Court gives its judgment on what charges are proved and also—I would emphasize this—gives its opinion as to the gravity or otherwise of the charge proved; in other words, it can say, "This is proved and it is a serious thing," or, "This is proved, but, to tell you the truth, it is not really a very serious misdemeanour."
That is a very careful and elaborate system. After it is concluded, if the man is found guilty, the Bishop then has powers of action. There are three kinds of action he can take. He can censure the clergyman; or he can inhibit the clergyman for three years—he does not take him out of his freehold but he does prevent him from engaging in ministerial work for those three years—or he can vacate the benefice, that is to say, dispossess the incumbent, but only on one condition, and that is that he has to go back to the ministerial committee with whom the whole thing started, and can only vacate the benefice if he has the support of five out of the six members of that committee. I think you will see that the safeguards are quite immense and you will see why I said at: the beginning that the Measure has perhaps been over-careful to prevent any miscarriage of justice.
I must comment on two further points, and for this reason. I must say frankly that there is an association of clergymen—I have no knowledge of their number but I do not think it is very large—who have agitated against this Measure going through, who approached the Ecclesiastical Committee when they were considering it, and who have, I believe, approached some Members of Parliament in this House and the other. As far as I know, their ground of complaint is twofold. First, it is said That the phrase "conduct unbecoming the character of a clerk in Holy Orders" is too vague and may therefore be open to abuse. The choice of language in the Measure was deliberate. It really is impossible to tabulate every kind of conduct which would lead to this result, and if you tried to do it you would thereby give free licence to a man to do anything that

739
was not in the table. Therefore, as I say, the choice of language was deliberate. I think, as I have described the working of the Measure, I have amply proved that nothing can go through that is not really in the minds of clergy, lawyers, Bishops and laymen properly described as "conduct unbecoming the character of a clerk in Holy Orders." I believe in the Army regulations there is a provision that an officer may be cashiered if he behaves in a manner unbecoming the character of an officer and a gentleman. I do feel that it is absurd to say that there is any ground of complaint against the Measure there.
The other ground of complaint is that it is an invasion of the parsons' freehold. My Lords, it is. In the final result a parson can be turned out of his benefice, but is there any reason on earth why, after this elaborate procedure, that result should not follow? In paragraph 2 of its report to Parliament the Ecclesiastical Committee said:
"Any Measure of this nature must necessarily affect the rights of incumbents, but the Ecclesiastical Committee are satisfied that the Measure safeguards their rights so far as it is practicable having regards to its object; indeed the Committee are inclined to think that the safeguards may prove in practice to be so numerous and cumbersome as to impair the efficacy of the Measure."
The Measure received general approval in 1942 without a division. It was then referred to every diocesan conference of the country, receiving general approval from forty of them and disapproval from two. It was then referred to the largest Revision Committee that the Church Assembly has ever appointed—I think sixty members—representing all Houses. It came from that to the Church Assembly once more and so reached final approval.
One complaint is that when it came to final approval in the House of Bishops it passed by the narrow margin of eleven votes to eight out of a total House of forty members. I wish to say here that I greatly regret that so many Bishops were absent from that division, but there is some explanation, I think, in this. Many Bishops felt that they did not want to be imposing a system of discipline on the clergy and they felt that they would not be too anxious to be present at the division for that reason. I think there were
740
others who said to themselves: "This Measure is so hampered with restrictions that we very much doubt if it will do much good. Therefore we are not going to bother to vote." Whichever way it was, I regret that they did not exercise their proper duty in making a decision. In the House of Clergy it passed by 113 votes to 89—a substantial minority but, after all this discussion, a real majority. In the House of Laity—and I would draw your Lordships attention to this—the Measure was passed by 179 votes to 40. That is an 81 per cent, majority, which I think gives an indication of how the Laity wish this for their own protection in these rare but, when they occur, very distressing cases.
With that, I would put the Measure before your Lordships. The Ecclesiastical Committee said that in points of details the Measure is open to criticism, but so, if I may say so with all respect, all too often are the Acts which pass your Lordships' House. They are, however, convinced as a result of their conference with the Legislative Committee that there is a real need for the Measure and that procrastination rather than improvement would be the result of further consideration of its terms by the Church Assembly. I have made it quite clear that I think the Measure is hampered by an excess of care, but it is better than anything we have had hitherto for dealing with these cases and I therefore beg to move the Motion standing in my name.
Moved to resolve, That in accordance with the Church of England Assembly (Powers) Act, 1919, this House do direct that the Incumbents (Discipline) Measure, 1946, be presented to His Majesty for the Royal Assent.—(The Lord Archbishop of Canterbury.)
LORD SALTOUN: My Lords, I would like to say, if I may, with what enormous pleasure I have listened to what the most reverend Primate has said. I would like to ask him what occurs in the second case, when the incumbent is inhibited for three years. How is his flock looked after and does he still enjoy the revenues of his office?
THE LORD ARCHBISHOP OF CANTERBURY: My Lords, I wish I could give an absolutely certain answer. I think the members of the Government generally have somebody, as I gathered just now, to provide them with an answer,

741
right or wrong. I had an official here to brief me but he gave up hours ago! I think I am right in saying that if an incumbent is inhibited he may not officiate. The Bishop appoints someone to take the cure of souls in his place and I think the cost of that falls upon the inhibited clergyman. He draws his income but he has to pay enough to enable the work to be done to the Bishop's satisfaction.
LORD SALTOUN: My Lords, I should like to thank the most reverend Primate and also to express my regret that my contentious friends have kept him waiting so long.
On Question, Motion agreed to.

GERMAN COAL.
7.50 p.m.
LORD SALTOUN: My Lords, I beg to ask the question standing in my name on the Order Paper.
[The question was as follows:
To ask His Majesty's Government the amount of coal exported from the British zone of Germany within the last twelve months, and on what accounts it has been exported, and the extent to which it has been balanced by imports for German consumption.]
LORD WALKDEN: My Lords, the coal exports in the twelve months ended September 30, 1946, amounted to some. 12,660,000 tons of which 2,010,000 tons were sent to Austria and 10,650,000 tons to the countries supplied through the European Coal Organization. The transactions were on a straightforward sale basis except in the case of Switzerland, which has supplied electric power in return. Several of the countries receiving coal are supplying essential imports to the British zone, but their import and export contracts are not linked.
LORD SALTOUN: I am much obliged to the noble Lord.

AIRCRAFT ACCIDENTS.
7.52 p.m.
VISCOUNT SWINTON: My Lords, I beg to ask the question standing in my name.
[The question was as follows:
To ask His Majesty's Government, if they will now arrange for the publication
742
of the reports of investigations into accidents to British civil aircraft which involve loss of life or serious personal injury.]
LORD NATHAN: My Lords, hitherto the general practice has been to publish only the conclusions arrived at by the Chief Inspector of Accidents. In future, however, unless for security or other reasons publication would be contrary to the public interest, I propose to publish the complete reports of his investigations into accidents occurring to British civil aircraft operating scheduled journeys (within the meaning of Section 23 of the Civil Aviation Act, 1946), or engaged on charter in all cases where death or serious personal injury has occurred, or from which I think useful lessons may be learnt in connexion with the practice of flying, technical development or aircraft construction or where other special features are present.. It will be understood that this announcement applies only to British aircraft operating in the United Kingdom or the Colonies, as reports on accidents to Dominion or foreign aircraft in the United Kingdom or the Colonies, or to British aircraft in Dominion or foreign territory, cannot be published without prior arrangements with the Dominion or foreign authority concerned.
VISCOUNT SWINTON: Arising out of that decision, which I am sure is a wise one, I would like to ask the noble Lord two things. First of all, will the inquiries in future be held in public? Secondly, will he do what he can to persuade other countries to follow suit, bearing in mind that it was one of the provisions and certainly the intention of the International Convention that there should be the greatest possible pooling and publication of information, and that the greatest common interest there is in civil aviation is safety?
LORD NATHAN: I am much obliged to the noble Viscount for giving me an opportunity of saying that I shall certainly pursue discussions with other Governments, both foreign and Dominion, with a view to achieving the results to which he refers, believing as I do that safety is of the very first importance to

743
the whole future of civil aviation. As regards the other question the noble Viscount put to me, as to inquiries being held in public, I have given careful consideration to the suggestion which has been made to me from various quarters to that effect. I have reached the conclusion that while I should not be prepared to make a statement that the inquiries should, as a matter of course, and in general, be open to the public, I am prepared to say that inquiries into those accidents which give rise to matters of real public interest, or from which it is likely that benefits may be derived in regard to information as to technical de-
744
fects and development, those inquiries be open to the public.

SUNDAY ENTERTAINMENTS ACT, 1932
Orders made by the Secretary of State for the Home Department extending Section 1 of the Act to the

City of Canterbury;

County Borough of Middlesbrough;

Borough of Wisbech:

Laid before the House (pursuant to Act) for affirmative Resolutions and ordered to lie on the Table.
House adjourned at four minutes before eight o'clock.