Lords Sitting of 24 July 1947

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers.
  LONDON COUNTY COUNCIL (IMPROVEMENTS) BILL.
  Read 2a.
NEWHAVEN AND SEAFORD SEA DEFENCES BILL, TYNEMOUTH CORPORATION BILL.
Reported with Amendments:

MINISTRY OF HEALTH PROVISIONAL ORDER (GLOUCESTER) BILL,
MINISTRY OF HEALTH PROVISIONAL ORDER (TUNBRIDGE WELLS) BILL,
MINISTRY OF HEALTH PROVISIONAL ORDER (LEEDS) BILL,
MINISTRY OF HEALTH PROVISIONAL ORDER (TORQUAY) BILL,
BRIGHTON CORPORATION (TROLLEY VEHICLES) PROVISIONAL ORDER BILL,
MEXBOROUGH AND SWINTON TRACTION (TROLLEY VEHICLES) PROVISIONAL ORDER BILL.
Reported without amendment, and recommitted to a Committee of the Whole House.

TRANSPORT BILL.
Returned from the Commons with several of the Amendments agreed to; several others disagreed to, but Amendments made in lieu thereof; and several others disagreed to with Reasons for such disagreement: The said Amendments and Reasons to be printed.

BURMA.
2.34 p.m.
THE SECRETARY OF STATE FOR INDIA AND BURMA (THE EARL OF LISTOWEL): With your Lordships' permission, I will make a statement about Burma. The conversations between His Majesty's Government and the Burma Goodwill Mission, led by Thakin Nu, President of the Burma Constituent Assembly and now Deputy Chairman of the Governor's Executive Council, ended on July 2. The conversations turned principally on the arrangements for the transfer of power in Burma and the future relations between Burma and His Majesty's Government. It has been agreed that immediate steps shall be taken by the exchange of Missions between Burma and this country to examine and if possible reach provisional agreement on various matters such as defence, finance, nationality, commercial relations, and contractual obligations arising out of the transfer of power. The common objective of His Majesty's Government and the Government of Burma will be if possible to reach provisional conclusions on those matters by the date on which the Constituent Assembly completes the drafting of a new Constitution for Burma.
His Majesty's Government have given the Mission an assurance that they intend to introduce legislation at the beginning of the next Session of Parliament in the autumn to give effect to the transfer of power to the Burmese Government under the Constitution which is to be set up by the Constituent Assembly which is now sitting. His Majesty's Government will do their utmost to carry the necessary Bill through Parliament as quickly as possible.
As regards the future relations between Burma and His Majesty's Government it has been agreed that should the final decision of the Constituent Assembly be that Burma is to become an independent State outside the British Commonwealth, the object of both countries will be to maintain the most cordial relations and that all steps that are practicable should be taken to this end.
The Mission have represented that it is desirable that, for the period between now and the achievement by Burma of her full independence, the Interim Government set up under the Government of

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Burma (Temporary Provisions) Order, 1945, is recognized as the Provisional Government of Burma. In order to make clear their sincere desire to help Burma to achieve her full independence as early as possible His Majesty's Government agree that the present Interim Government as so constituted shall become the Provisional Government of Burma until the transfer of power is completed. The senior member of the Cabinet will by convention be designated as Prime Minister, and the other members as Ministers.
I should inform the House that the agreement which I have just read was communicated by the Burma Goodwill Mission under Thakin Nu to the late U Aung San and his colleagues in the Executive Council and that I am informed by the Governor that it received their approval. That approval was given almost immediately before the lamentable outrage of Saturday last.
THE EARL OF MUNSTER: My Lords, I wonder if I may ask the Secretary of State for India to make one thing perfectly clear, although the general principle of this statement naturally will require our consideration at a future date. I understand him to say that there will be an exchange of Missions. I do not know whether he can inform us when this exchange is likely to take place. And may I ask him this? If Burma should elect to go outside the British Empire, some treaty will be necessary between His Majesty's Government and the Government of Burma. I should like to know whether he contemplates a treaty of that sort, because it was not indicated in the course of the remarks he made to the House just now.
VISCOUNT SAMUEL: My Lords, I would like to thank the Government for the statement made on Burma which, as the noble Earl, Lord Munster, has just said, in principle is a matter for later consideration. I cannot, however, refrain from saying that, if the decision of the Burmese Constituent Assembly should be that Burma should remain outside the Commonwealth, it would be received with much regret by members in all quarters of your Lordships' House. Let me end by saying that the House would desire to express their sympathy to the Burmese Government and people on the terrible tragedy and outrage which has lately taken place there.
THE EARL OF LISTOWEL: My Lords, might I say first how deeply grateful I am to the noble Viscount, Lord Samuel, for expressing, I am sure on behalf of fie whole House, the sympathy that is felt with the victims of the dastardly outrage in Burma and their relatives, and the sympathy that is also felt for Burma generally on account of the loss of leadership which that country has sustained?
I should also like to answer quite to briefly the two questions addressed to me by the noble Earl, Lord Munster. The Missions which I mentioned in my statement are under consideration by the two Governments at this moment. We hope that the exchange will take place at be earliest possible moment and that the terms of reference will cover the whole field which will have to be dealt with before the final provisions of a Treaty are drawn up. The two things, as the noble Earl will observe, are linked together and, as he rightly said, there will be a Treaty or other agreement between Burma and this country arising out of matters connected with the transfer of power.

DUNDEE CORPORATION ORDER CONFIRMATION BILL.
Read 3a (according to Order), and passed.
INVERNESS BURGH ORDER CONFIRMATION BILL.
Read 3a (according to Order), and passed.

TOWN AND COUNTRY PLANNING BILL.
2.40 p.m.
Order of the Day for the Third Reading read.
THE LORD CHANCELLOR (VISCOUNT JOWITT): My Lords, in rising to move this Bill be read a third time, I have it in command from His Majesty to signify to the House that His Majesty, having been informed of the purpose of the Town and Country Planning Bill, has been pleased to place at the disposal of Parliament the interests of the Crown in so far as they are affected by the said Bill. I beg to move.
Moved, That the Bill be now read 3a—(The Lord Chancellor.)
On Question, Bill read 3a, with the Amendments.
Clause 2 [The Central Land Board]:
LORD HENDERSON LORD HENDERSON moved to insert after subsection (5):
"(6) The validity of any proceeding of the Board shall not be affected by any vacancy amongst the members thereof, or by any defect in the appointment of a member thereof."
The noble Lord said: My Lords, this Amendment is a common form provision to ensure that the proceedings of the Central Land Board are not invalid because of a vacancy in the membership, or because of some technical flaw in the formal appointment. Broadly speaking, all Acts setting up bodies of this sort either contain a provision on the lines of this Amendment, or enable regulations to be made about the proceedings. The Bill as brought from another place contained a power for the Minister to make regulations on the point, but the Bill as now amended leaves the Board to regulate its own procedure. Hence the need for this Amendment. I beg to move.
Amendment moved—
Page 2, line 34, at end insert the said subsection.—(Lord Henderson.)
LORD LLEWELLIN: My Lords, we have no objection whatever to this Amendment. I think it is partly consequential on my Amendment which was accepted during the Committee stage, whereby we left much more power to the Board itself to regulate its own proceedings—to appoint its own secretary, and so forth. This provision, whether or not it was necessary before, certainly becomes necessary now.
On Question, Amendment agreed to.
Clause 3 [General provisions as to functions of Central Land Board]:
LORD HENDERSON: My Lords, Clause 3 (2) enables the Minister to instruct the Central Land Board to withhold publication in their annual report of any directions he has given them if, in his opinion, it would be against the national interest to make them public. This Amendment replaces the words, "national interest"—which are somewhat vague and capable of different interpretations—by the more precise and possibly more limited words "interests of national security." A similar Amendment has been accepted in the Electricity Bill, I beg to move.
Amendment moved—
Page 3, line 5, leave out ("national interest") and insert ("interests of national security").—(Lord Henderson.)
LORD LLEWELLIN: My Lords, these words are obviously preferable from our point of view and, I should think, from the point of view of the whole House. We want these reports that are made every year to be public, so that everything may be, as it were, above board, which is very necessary in the functioning of a Board which will have such wide powers as this one will have under this measure. I prefer the words "in the interests of national security" to the words "in the national interest." They are much more precise. None of us want any disclosures made that would in any way affect national security, and I congratulate the Government on having found a very apt set of words.
On Question, Amendment agreed to.
Clause i4:
Applications to local planning authorities for permission.
(4) Without prejudice to any provisions included in the development order by virtue of the last foregoing subsection for restricting the grant of permission by local planning authorities, an application to the local planning authority for permission to develop land by the erection thereon of an industrial building of any class prescribed by regulations made for the purposes of this subsection by the Board of Trade shall be of no effect unless it is certified by the Board that the development in question can be carried out consistently with the proper distribution of industry, and a copy of the certificate is furnished to the local planning authority together with the application:
Provided that—
(a) no such certificate as aforesaid shall be required in respect of the erection of any industrial building if the building does not cover an area of more than five thousand square feet; and
LORD HENDERSON LORD HENDERSON moved, in proviso (a) of subsection (4), to leave out "if the building does not cover an area of more than" and insert "which will have an aggregate floor space not exceeding." The noble Lord said: My Lords, it will be recalled that an Amendment was moved on the Report stage exempting a proposed industrial building of less than 5,000 square feet from the need to get a certificate from the Board of Trade that the proposed development was consistent

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with the proper distribution of industry. I regret to say that, by mistake, the Amendment was drafted in terms of 5,000 square feet ground cover, instead of in terms of 5,000 square feet floor space. Floor space is the test for Section 9 (1) of the Distribution of Industry Act, 1945, and it was intended that this Amendment should follow the same lines. It was the noble Lord, Lord Llewellin, who drew attention to the defect by pointing out that if a person is building a factory three storeys high it means an exemption for 15,000 square feet. The noble Lord, Lord Llewellin, thanked the Lord Chancellor for being unexpectedly generous. I think I should say that the noble and learned Viscount was accidentally overgenerous. It is my duty to request the noble Lord to accept this Amendment, which brings the concession strictly into line with what it was intended to he. I beg to move.
Amendment moved—
Page. 28, line 13, leave out from ("building") to ("five") in line 24, and insert ("which will have an aggregate floor space not exceeding").—(Lord Henderson.)
LORD LLEWELLIN: My Lords, on this measure we have had such generous treatment both from the noble and learned Viscount and from the noble Lord, Lord Henderson, that I am sorry the noble Lord, Lord Henderson, should have to rise and be less generous than the Lord Chancellor was on a previous stage of this Bill. As a matter of fact, the assurance we were given when we discussed this matter on the Committee stage was exactly in line with the Amendment the Government are now proposing One learns by one's mistakes. I gather that if I had not made the speech which I did make on the Report stage we might have secured 15,000 square feet instead of 5,000 square feet, because, as I understand it, the mistake had not been spotted in any of the Government Departments concerned. I must curb my words a little in future. But let me say at once that there is no going back on any promise on this Amendment. The promise made to us by the noble and learned Viscount, the Lord Chancellor, on the Committee stage is now carried out by the Government Amendment. I thanked him last time, not only for implementing a promise, but also for implementing that promise rather more fully than was
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expected. I still thank him for the original concession.
On Question, Amendment agreed to.
Clause 41 [Power to acquire buildings of special architectural or historic interest]:
LORD HENDERSON: My Lords, the next three Amendments are purely drafting Amendments, consequential on a manuscript Amendment accepted on the Report stage. I beg to move.
Amendments moved—
Page 50, line 16, leave out ("maintaining") and insert ("preserving")
Page 50, line 26, leave out ("maintaining") and insert ("preserving")
Page 55, line 6, leave out ("maintaining") and insert ("preserving").—(Lord Henderson.)
LORD LLEWELLIN: My Lords, fiat is, of course, what these Amendments do. We found a form of words that suited us all by inserting the word "preserving" instead of the word "maintaining." There were several other Amendments on the Order Paper, and these present Amendments are consequential so that the word "preserving" shall appear in other parts of the same clause in the same way.
On Question. Amendments agreed to.
Clause 43 [Acquisition of Land by Central Land Board]:
LORD HENDERSON LORD HENDERSON moved to add to the clause:
"(6) Provision may be made by regulations under this Act for requiring the Central Land Board to keep a register containing such particulars as may be prescribed by the regulations of land acquired and disposed of under this section, and for the inspection of any such register by the public on payment of such reasonable fee, if any, as may be so prescribed."
The noble Lord said: My Lords, on the Report stage the noble and learned Viscount the Lord Chancellor resisted an Amendment by the noble Earl, Lord Radnor, requiring the Central Land Board to give to anybody who asked, information about the person to whom land had been disposed of, and the price paid. The noble and learned Viscount promised instead that "the Minister would endeavour to see that a register is kept and open to public inspection." The noble Earl, Lord Radnor, agreed that this was a much better suggestion than its own, and asked that it should be put into the Bill so that it should receive "greater

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publicity than would result from a mere assurance." This Amendment gives effect to the noble Earl's request. I beg to move.
Amendment moved—
Page 53, line 11, at end, insert the said subsection.—(Lord Henderson.)
THE EARL OF RADNOR: My Lords, I should like to thank the noble Lord, Lord Henderson, and the noble and learned Viscount the Lord Chancellor for putting down this Amendment which fulfils the purpose I had in mind.
As I said on the Report stage, it is better than I anticipated. I had an idea that it was intended to put it into the regulations, but putting it into the Bill in this way is really very much better and I am very grateful.
VISCOUNT MAUGHAM: My Lords, as an old conveyancer I should like to add that I think this Amendment is exceedingly valuable and will save a lot of trouble in connexion with transfers of land which are subject to the charge.
On Question, Amendment agreed to.
2.51 p.m.
Clause 73:
Variation of determinations and repayment of development charges in certain cases.
73.—(1) The Central Land Board may at any time, on application made to them in that behalf in accordance with regulations under this Act by the person entitled to an interest in land to which a determination under this Part of this Act relates, vary their determination in such manner as appears to them to be appropriate having regard to any change of circumstances since the determination was made, and may amend, discharge or release any covenants or charges made or given in respect of the determination, or repay any sums previously paid thereunder, so far as may be required in order to give effect to the variation:
Provided that, except in a case where application is made to them to confirm a previous determination on the transfer or creation of any interest in land, the Board shall not have power to vary any determination under this Part of this Act so as to increase the amount of the development charge payable thereunder.
LORD HENDERSON LORD HENDERSON moved, in subsection (1), after "determination was made," to insert "including the development, after the determination, of adjacent land in accordance with planning permission granted otherwise than in accordance with the provisions of the development plan." The noble Lord said: My Lords,
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this Amendment follows an undertaking which I gave on the Report stage, when Clause 14 was being considered, that a Government Amendment would be put down to meet the point raised by the noble Lord, Lord Savile. The noble Lord's object was to ensure that compensation would be payable to developers whose development charge had been determined on the assumption that development would he allowed only in accordance with the development plan when subsequently, as a result of departure from the plan, they suffered any worsement. The present Amendment makes it clear that, in the circumstances the noble Lord envisaged, the Central Land Board will have power to vary their determination of a development charge and make a repayment where appropriate. I beg to move.
Amendment moved—
Page 86, line 25, after ("made") insert the said words.—(Lord Henderson.)
LORD LLEWELLIN: My Lords, this does meet another point which we pressed quite strongly. If your Lordships remember, the original answer was that this had never been done in the past. I then pointed out to the Government that they had never had a development charge in the past. The case that I had in mind was where somebody had paid a development charge to develop a certain stretch of land under one set of plans, and then the plans were changed and something quite obnoxious was put up which completely altered the value. I said that that case ought to be met. The Government have met it in this Amendment and I thank them for doing so.
On Question, Amendment agreed to.
Clause 85:
Land held for charitable purposes.
85.—(1) This section applies to land an interest in which is held for ecclesiastical or other charitable purposes of any description if the land, as distinct from the rents and profits thereof, is used in any manner (including use in a manner involving the beneficial occupation of the land by any person) for or in connection with the purposes for which the said interest is held, and not otherwise, or if the land would be so used but for the occurrence of war damage or but for the fact that the land is for the time being requisitioned land.
LORD LLEWELLIN LORD LLEWELLIN moved, in subsection (1), after "held," where that word first occurs, to insert "on charitable trusts or." The noble Lord said: My

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Lords, this Amendment arises on the new clause for the introduction of which we are obliged to the Lord Chancellor. When this Bill originally came before this House the opening words of the clause read as they will read if my Amendment is adopted. They read then as follows:
"This section applies to land an interest in which is held on charitable trusts or for ecclesiastical or other charitable purposes."
Then there was a second draft on the Older Paper in the form of the new clause,. and the noble and learned Viscount on the Woolsack altered the opening words to meet a point which had been raised by my noble friend Lord Simon. Therefore, in the course of the discussion upon this clause we had three different sets of words. Now since our new clause has appeared and has been read by various trustees—certainly those who look after the interests of the hospitals and some other trusts—they are extremely doubtful whether the words which are at present in this clause will cover anything which is not ejusdem generis with ecclesiastical purposes.
The whole discussion centred very largely on the universities, when we had the longish discussions on this new clause and the clause proposed by the noble and learned Viscount, Lord Samuel, on the Report stage. All I am aiming to do—and if my words are unnecessary I do not want to do it—is to make it absolutely certain beyond peradventure that these words cover institutions such as universities, schools and other charitable trusts which we all mean to be covered by Clause 85, although there may be differences between us as to whether the coverage should go so far as Clause 86 goes. At any rate, we are all quite determined that it should be covered under Clause 85. If they are covered by the present words, and everybody will say that that is beyond a shadow of doubt, then leave the words as they are. But my words are, after all, only going back to the earlier words which were in the Government draft, which for some reasons unknown to me were omitted front the new clause and which, by their very omission, now raise a doubt as to whether the terms are as wide as the objects we all want to cover.
I am always very doubtful myself about this ejusdem generis rule. I never know whether, if you only mention one thing before it, everything else is to be ejusdem generis with that one thing or
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not. But we have a wealth of legal talent in this House to which I shall bow on anything like that. All I say is, let us have words in the Bill by which there can be no possibility of any litigation or anything of that sort, just because we have not made quite clear what it is we want to cover. I know we all want to cover such things as universities or hospitals, but there is some doubt at the present moment whether they are covered by the present words. I beg to move.
Amendment moved—
Page 104, line 14, after ("held") insert ("on charitable trusts or").—(Lord Llewellin.)
VISCOUNT MAUGHAM: My Lords, may I mention that I have three Amendments on the Paper designed to achieve the object at which my noble friend Lord Llewellin aims by the present Amendment, and I have naturally given great attention not only to my Amendments, but to his. First of all I would say that I do not think there is anything in this suggested trouble about the ejusdem generis rule, which would not apply in this case at all. On the other hand, I have had the same experience as my noble friend. People have come to me and expressed the greatest anxiety about the effect of the words which have found their way into the clause as it now stands. I am strongly in favour of making the thing quite clear so that people in the country, people in charge of schools, and people connected with universities should feel no anxiety on the subject at all. Therefore, I wish to say that I am quite content with the Amendment proposed by my noble friend which we are now considering and which goes back to the form of the original Government draft. I am satisfied that in that form there will be no trouble such as seems to have been anticipated. Accordingly, if this Amendment is accepted I shall not move the three Amendments which stand in my name.
LORD HENDERSON: My Lords, perhaps I can short-circuit the discussion. There is no disagreement amongst us at all upon this point. The Amendment which was accepted on Committee or Report, and which is now in the Bill, was intended to cover exactly the same hind of ground which the Amendment replaced. I am not a lawyer, but if am advised that the ejusdem generis rule would not in fact

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limit the construction of the words as they now stand in the Bill. However, to remove any doubts, I have pleasure in restoring the original words and in accepting the Amendment.
VISCOUNT SIMON: My Lords, I have no doubt that the advice which Lord Henderson has received is perfectly correct. I speak subject to correction from the Lord Chancellor, but I should expect him to agree that there is in fact nothing in the anxiety which has been expressed. But in an Act of Parliament we ought to relieve people from anxieties even if the anxieties are not well founded. I have no doubt that what was proposed was not cutting down the width of the clause. But it is true to say that some people are anxious about it and it is very sensible, if I may say so, that the Government have recognized that and put back the words which after all were the words in the Bill at the time of the Second Reading.
LORD LLEWELLIN: May I just say "Thank you" to the noble Lord? All I wanted to do was to make it quite sure that nobody had any doubts.
THE LORD CHANCELLOR: I completely agree with the observations of the noble Viscounts, Lord Maugham and Lord Simon.
On Question, Amendment agreed to.
LORD LLEWELLIN: My Lords, I beg to move the next Amendment standing in my name on the Paper.
Amendment moved—
Page 105, line 11, after ("day") insert ("on charitable trusts or").—(Lord Llewellin.)
On Question, Amendment agreed to.
LORD LLEWELLIN: My Lords, I beg to move the next Amendment standing in my name on the Paper.
Amendment moved—
Page 105, line 26, after ("held") insert ("on charitable trusts or").—(Lord Llewellin.)
On Question, Amendment agreed to.
Clause 86 [Investment land held for charitable purposes]:
LORD LLEWELLIN: My Lords, I beg to move the next Amendment standing in my name on the Paper.
Amendment moved—
Page 105, line 35, after ("held") insert ("on charitable trusts or—(Lord Llewellin.)
On Question, Amendment agreed to.
3.5 p.m.
Clause 120 [Interpretation]:
"minerals" includes all minerals and substances in or under land of a kind ordinarily worked for removal by underground or by surface working;
LORD LLEWELLIN LORD LLEWELLIN moved to add to the definition of "minerals," the words "provided that it shall not include peat cut for purposes other than sale." The noble Lord said: We have a Scottish Town and Country Planning Bill, and some of us are therefore in some little difficulty. As the timetable is at present arranged, this Bill will complete all its stages in your Lordships' House before the Scottish Bill is taken in Committee here. Therefore, if we do not want to see Scotland "get away with" something we have not got in the English Bill, we have got to be up and doing now. The case has arisen of the definition of "minerals," which is extremely wide. I do not know of anybody who would apply the definition of "minerals" to peat. I certainly should not do so myself; I should have thought it was entirely a vegetable! But if one looks at the definition on page 137 of this Bill, it includes
"all minerals and substances in or under land of a kind ordinarily worked for removal by underground or by surface working."
Peat, I suppose, is a substance which is "ordinarily worked by surface working" and so is within the purview of the Bill as drafted.
That means that anybody on Dartmoor or Exmoor or in one of the Western Isles has got to get planning permission before he cuts a bit of peat to burn on his fire. The crofters and a large number of other people have always cut peat beside their crofts and used it. It has been so always in the past and it is all the more necessary now. It hardly seems to me that cutting bits of peat should involve getting planning permission, the possibility of paying a development charge, and all the rest, if I may so put it, of the paraphernalia of this Bill. I think the Government have put

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down an Amendment to meet this point, but I much prefer my own Amendment. There is a difference between taking a bit of peat for use and taking it for sale. Big commercial peat cuttings would he in a different category from the kind of thing that we want to deal with. I hope the Government will be able to accept the Amendment, because it does not seem to me that you ought to have to get planning permission to cut these bits of peat. The definition of the Government is somewhat too narrow.
Take an ordinary sheep farm. There it is not necessarily the farmer himself who will go out cutting the peat, it may well be the odd man who does various jobs on the farm who does it—and it is quite proper that the farmer should be doing the more skilled jobs in the general conduct of the farm. So that the Government's Amendment for the domestic requirements of that person do not in my view go far enough. There are many cases where people will want to cut peat for domestic requirements and where the person who is cutting it is not necessarily the person who is going to use it. In fact if this were strictly followed, the housewife who wants peat for her kitchen fire would have to go out and cut it herself. So I think my words are better ones.
Or take a person living in the middle of moorland. Out there in the depths of the moors he will have to apply to some county planning authority before he can cut a bit of peat for his cottage fire. It becomes a little absurd. For limited pur-purposes, not for sale but for ordinary domestic purposes I want that to be taken outside the purview of this Bill. I would, therefore, ask the Government to have a quick change of mind and accept my Amendment, which I am quite certain is rather better for the purposes that they themselves want than their wording is. With those few words, I beg to move.
Amendment moved—
Page 137, line 27, at end insert ("provided that it shall not include peat cut for purposes other than sale;").—(Lord Llewellin.)
LORD HENDERSON: My Lords, I am very grateful to the noble Lord for extending his exposition of his Amendment in order to enable me to go into consultation. As a result, it has produced the quick change of mind which the noble
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Lord desires. I will accept the Amendment.
On Question, Amendment agreed to.
Tenth Schedule [Transitory provisions and provisions consequential on repeals]:
LORD HENDERSON LORD HENDERSON moved, after paragraph 10, to insert the following new paragraph:
"11. Where any such agreement as is mentioned in the last foregoing paragraph is modified or rescinded (whether by agreement or by virtue of the exercise of any powers conferred by sub-paragraph (b) or (c) of the proviso to that paragraph) at any time within three years after the appointed day, then if it appears to the Minister that it is reasonable so to do having regard to the terms on which the agreement was made and to cry loss or damage sustained by any person having an interest in land affected by the agreement by reason of the provisions of this Act or of anything done thereunder, he may direct that the development value of that interest in the land, or in any part thereof, shall be calculated for the purposes of Part VI of this Act Ls if the agreement had been so modified or rescinded immediately before the appointed clay."
The noble Lord said: My Lords, both on Committee stage and Report stage, Lori Gage urged that if an agreement made under Section 34 of the 1932 Act was overridden for planning reasons, so that a local authority "not only removed the advantages he had but also prejudiced him," then that owner ought to be able to claim against the 300,000,000 as if the agreement had not been made. Examples he gave were of an authority wanting to take land restricted by an agreement against development, for the purpose of a sewage disposal works or a council housing estate; and on Report stage he stressed that he intended his proposal to relate solely to people who will be damaged by the Bill, and to people who lad made some sacrifice in order to be public spirited. The Lord Chancellor promised to do his best to introduce an Amendment on Third Reading dealing with that point. The Amendment is now on the Order Paper and we think that it meets, satisfactorily, the point of substance which the noble Lord raised, and will enable the Minister to avoid any hardship or appearance of hardship and any appearance of breach of faith. It will be observed that the Amendment can operate in cases where an agreement is completely rescinded as well as where it is partially overridden. It can also operate where all

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parties concerned agree that the agreement should be rescinded or modified and is not necessarily dependent, therefore, on a formal Ministerial direction or a formal arbitration under paragraph To of the Tenth Schedule. Further, it can operate to ignore not only restrictions which have been overridden but also other provisions in an agreement which it is found necessary to sweep away on planning grounds. I beg to move.
Amendment moved—
Page 175, line 51, at end insert the said new paragraph.—(Lord Henderson.)
VISCOUNT GAGE: My Lords, I am very grateful to the Government for all the trouble they have taken to meet this point, but, at the same time, I must confess that I am surprised that so much trouble has been necessary. The simple proposition I put forward was that it did not seem right that a man should be damaged solely because he had at some previous stage entered into an agreement. It seems to me that the Government have accepted that principle, for which I am very grateful, but they have now put in a kind of double check; they say that not only must the Central Land Board decide that there is hardship, but the Minister must also decide that there is hardship. I should have thought that the Central Land Board, who are going to distribute the whole of the £300,000,000 on a hardship basis, would be quite well qualified to decide whether there had been hardship or not on the rescinded agreements. But if the Government think that the Minister must also come into it, then I must accept it. I am grateful, though my gratitude is mixed with a certain amount of mystification.
On Question, Amendment agreed to.
3.16 p.m.
THE LORD CHANCELLOR: My Lords, I beg to move that this Bill do now pass. The process we have gone through in this Bill has been rather long because the Bill is highly technical and, in some respects, controversial, but I venture to think that our time has been very well spent. First of all, I want to express to all of your Lordships my gratitude for the co-operation you have given me in a very difficult task. I think many of your Lordships who have had intimate concern with this Bill have realized what a tower of strength I have had in the
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noble Lord, Lord Henderson, who has given throughout this Bill his most enthusiastic and most unselfish support in everything I have had to do. Many of your Lordships have had great practical experience in this matter, and I appreciate the constructive suggestions which have been made; even though I have not in all respects been able to meet the noble Viscount, Lord Gage, I am very grateful for the part which he has played. I am particularly grateful to those of your Lordships who have given of your time to come round and see me and to see my experts on this matter. The noble Marquess, the Leader of the Opposition, and Lord Llewellin, in particular, have spent many hours discussing this matter and doing that work behind the scenes which has enabled us to get to the bottom of these problems, to define the issues in this Bill. I am beginning to get rather a large experience. I have always done this: I have always put my cards completely on the table and I have never found that any single word which I have used in discussion has ever got outside the room in which it has been spoken.
I asked your Lordships, at a much earlier stage, to give this Bill careful consideration and scrutiny, if only because it has been subject to the guillotine procedure in another place, and you have certainly done so. It is interesting to tell your Lordships that we have had, in all, nearly boo Amendments and they are about equally divided between the Government and the Opposition. That is to say in the Committee and Report stage, my statistical experts tell me that that is some four or five Amendments for each clause or Schedule of the Bill. I said, at an earlier stage, that I would do my best to meet reasoned argument with reasoned argument. I hope I have done so; but the noble Lord, Lord Llewellin asked me to do something better—namely, to meet reasoned argument with reasoned concession. I am glad to tell you this, that out of 171 Amendments actually moved by the Opposition, I have been able to accept 42 as they stood and, in addition, a very large number of the Amendments which have been moved by my noble friends and by myself have dealt with points raised in Amendments which were moved from the other side of the House and which, in consequence, have been withdrawn, or not moved, on the assurance that we would meet them.

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For example, I think we have met four of the main points made by Lord Llewellin in his Second Reading speech and repeated in Committee. By moving Amendments we have been able to meet, to some extent, at any rate, those four points. We have exempted from development charge the extension of small houses; we have dealt equally with the conversion of houses into flats; we have exempted small factories from the necessity of getting the Board of Trade certificate; and we have gone a long way, I think, to protecting the owner of designated land, especially agricultural land. In these and in many other respects, I would readily acknowlege that the Bill has been very much improved by the suggestions which your Lordships in all quarters of the House have made, and, let me add, by the moral support which the Back Benchers on my own side have given me, which has been all the more welcome because they have kept comparatively silent.
There is one other criticism that I would like to deal with, and that concerns the position of houses built for farm workers. We agree that there should be no development charge so long as the house is occupied by a genuine farm worker, and, as I explained to your Lordships on Report, the problem is the policing of the scheme to find out when the farm worker moves out and the weekender moves in. That applies particularly as regards houses which do not attract the subsidy under the Act of 1946. We have looked at this point again since the Report stage, and we have followed up a hint which was dropped by the noble Viscount, Lord Gage. We now propose to exempt any house erected with a planning permission granted, subject to a condition to the effect that the house may be occupied only by members of the agricultural population. The exemption will last so long as the condition is complied with, and we shall ask the local authority to check the compliance with the condition, just as they do in regard to other conditions which they attach to planning permission. The details of the scheme, which would extend also to houses built by local authorities, has still to be worked out, but I thought your Lordships might be interested to know what we have in mind.
I claim that this shows that we have done our best to meet the points which
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have been raised. There were some which we could not meet and which your Lordships, in your wisdom, felt you must press to a Division. There were four point: on which we disagreed, but I think that this is a small number considering the wide scope of the Bill and its controversial aspect in regard to some of its provisions. There was a question as to whether there should be a right of arbitration on the amount of the development charge; there was a question as to whether the definition of dead ripe land should be widened and whether there should be some further concession made for minerals actually being worked; and another as to what should be done for the investment land held by charities. All those are questions of principle on which we felt we had to stand firm. But we had a long and, I think I may say, an instructive discussion on each of them, and your Lordships reached your conclusions. I feel quite certain that those conclusions, and the arguments which led up to them, will receive, as they undoubtedly merit, the most careful consideration by those in another place. I desire to say nothing whatever about them now except, if I may adopt the phraseology of the old-fashioned charge to the jury in criminal cases, I would say "God send you a good deliverance."
It is clear to me, from the care which your Lordships have taken in studying the Bill, and in making suggestions for its improvement, that you recognize its importance for the life of the community, and I should like to pay my tribute to its principal author, the Minister of Town and Country Planning, who has been responsible for the enormous volume of preliminary work before ever these proposals could be cast in legislative form. The subject is very near to his heart, and he has given ungrudgingly of his time and energy.
I believe, as I said, that this is an historic Bill. It is a planning Bill, Out it is quite different in kind from all the planning Bills which your Lordships have passed before. From 1909 onwards we have established planning authorities and vested them with planning powers. It became clear in the administration of these Acts that planning powers are not in themselves sufficient to promote effective planning. Despite the impressive edifice of statutory powers, social benefits which should have come

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from planning were not achieved. In my firm belief, the main reason for that was this compensation and betterment difficulty with which we are now all painfully familiar; and that difficulty, in its turn, was inherent in our present system of land ownership, and could only be removed by a change in that system.
The present system permits the owner of land, broadly, to use his land as he wishes. This is the fact of the matter, despite the power to impose planning restrictions, because the fear of compensation has in practice prevented the restrictions being imposed. It is, quite naturally, in the interest of each owner to put his land to the most profitable use, but the use which is most profitable to him need not necessarily be the use which is most beneficial to the community. Hence there arose a conflict of interest between owner and community that has done so much to frustrate planning up to now. This Bill removes that conflict once and for all. From now on, although the landowner is free to go on using his land in the way in which he is using it at present—I have not got the agricultural provisions in my mind at the present time—he is required to obtain permission before he puts it to a different use, and he is liable to pay a development charge for so doing. The result is that the decision whether land is to be developed, and how it is to be developed, will in future be taken by reference to the interest of the community as a whole, and no longer by reference to the financial interest of individuals.
I believe that to be a very great change. I called it "revolutionary" the other day, and I believe that to have been no exaggeration. But it is a change to which all Parties are committed, because all are agreed that it is the only way to make planning effective, and that is why there has been broad agreement with the aims of the Bill, and with the general lines of its approach to the problem. Among the many advantages resulting from this change there is one in particular which I should like to mention, because it concerns a somewhat topical subject. The Bill, by removing the burden of compensation from local authorities, ensures that there will be effective control over development in areas which may become national parks. On this subject I might
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perhaps mention that the question of the type of organization which is appropriate for the administration of a national park is, of course, still unsettled, but I cannot see that the question will be prejudiced if, on the passing of the Bill, the Minister decides, on general planning grounds, to establish a Joint Planning Board which includes an area covered by a potential national park.
A Bill that makes such a change in the system of land tenure is bound to be highly technical. I confess I found this the most difficult Bill of all I have had to master, and I am grateful to all your Lordships for having taken such trouble to master its complexities. Apart from our differences on these four important points, each of which is a point on which I fully realize different views may be held, I feel that this Bill, as it leaves your Lordships' House, is a Bill of which your Lordships may be justly proud. I know of course that its success will depend on administration, and that that will be in the hands of the Minister and his Department and the local authorities. They have a wry difficult task, but they also have an opportunity which town planners have never had before in this country, and have probably never had in any country in the world. By passing this Bill your Lordships will be giving them that opportunity, for you are passing a Bill that is unique in the history of town planning, a Bill which in the words of the most reverend Primate, the Archbishop of York, "will be by far the greatest thing> of its nature which has ever been passed in this country." I beg to move.
Moved, That the Bill do pass.—(The Lord Chancellor.)
3.30 p.m.
LORD LLEWELLIN: My Lords, I think we are all indebted to the noble and learned Viscount, the Lord Chancellor, for the speech which he has just made. As he has said, this is a Bill that came to us from another place with large sections which had never been discussed at all. Therefore it was our duty to go into the measure very carefully, line by line and word by word, because nothing brings the rule of Law and the Legislature into greater disrespect than for hastily considered legislation to be thrust upon the country. I think that we can say, and say in respect of the House as a whole,

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irrespective of Party, that we have taken considerable trouble to improve this measure while it has been passing through its various stages in this House. Here I should like not only to thank the noble and learned Viscount, the Lord Chancellor, for his kind remarks about myself and some of my colleagues, but also to express our appreciation to him and to the noble Lord, Lord Henderson, for the very reasonable attitude which they have displayed throughout, and the immense trouble which they have taken in trying to meet us when we put up a reasonable case.
The technique that was adopted—the Lord Chancellor has already referred to this—of a number of us spending some hours in his room was, I think, a good one. I work it out that I spent over fourteen hours in that room. At any rate, one can say that quite a good Bill, and I think a greatly improved Bill, has come out of those discussions and of the discussions which we have had in your Lordships' House. The two noble Lords to whom I have referred have considered the Amendments which we put forward in exactly the same spirit as that in which we put them forward—that is, they have approached them purely on the ground of whether they would make this Bill a better and more workable measure.
There are, of course, some things in this Bill, and in its general structure, which we do not altogether like, and quite a number of them we never took to a Division at all. I will mention two. We doubt whether it is right that the proper planning of our countryside should form the basis—as it is evidently going to do—of revenue for the Chancellor of the Exchequer; and we still believe that if you are going to deal with shifting values in. this kind of way you should only collect the amount of development charges necessary to pay for the compensation that you pay out to persons because they are no longer able to develop their land. We also believe that if you are taking away the rights that landowners have had for centuries, and on which indeed they have paid Death Duties, you ought to pay them full compensation for those rights which you are taking away.
We are grateful to the Government particularly for accepting one of the points which we put forward—namely that we should have full disclosure of the amounts
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of these claims for development rights. An assurance was given that before the Treasury scheme came to be considered we should have a White Paper setting out the full facts. When we see that, we shall see who is right. We shall see whether: or not the £300,000,000 is enough, and what proportion it bears to the total claims. The second point on which we feel strongly is the question of minerals. The clause which deals with minerals was not very thoroughly thought out—to put it mildly—before the Bill came to this House, and a lot of the question—indeed practically the whole of it—is left to be dealt with by subsequent regulation. I have considerable doubt whether a large number of those who have to administer these schemes know even to-e ay exactly how they are going to handle this problem of minerals. What I am afraid of is that unless the machinery for facilitating the getting of permission, especially in the case of minerals, acts extremely well, there may be, under this Bill, considerable delay in the further exploitation of the raw materials for some of our most essential industries. However, the Opposition in this House did not seek to interfere in these respects and on the general basic matters of the Bill. Whatever may be said of the later stages of this Bill's progress through another place, nobody can say that ample and usual time was not given for its Second Reading when its main principles were approved by another place.
As the noble and learned Viscount has said there were only the four matters on which, in a Bill of some 207 pages as it has now become, with most complicated clauses and schedules, we had to take any difference between us to a Division. Two of those occasions seem to me to fall into the category of trying to see that justice shall be done. I think it is only just that there should be some kind of appeal from decisions of the Central Land Board. One of the extraordinary things that is happening to-day—and it is indeed odd to think of it—is that although our forefathers struggled through the days of the Stuarts to get rid of the over-strong central Executive with no appeals to the courts now in these modern times, we are turning; right back to the years before the Statute of Monopolies in 1623. If our Amendment is not accepted, there will he no appeal from the decision of the Central Lane Board any more than there was for a man

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arraigned before Charles I's most treasured tribunal, the Star Chamber. that is the way things are tending to go back in this country. It gives one most interesting food for thought when one considers what tremendous struggles our forefathers waged against this very kind of thing.
The other matter which I think comes under the category of trying to see that justice shall be done is the question of the investment lands of charities. We had a long discussion on that point and I only hope that some accommodation may be come to in another place as the result of which it will be possible to let those institutions, which have done so much for the cultural and social life of this country, go on unhindered in their work. As to the other two Amendments, there was one seeking to ascertain the definition of ripe land. Somebody thought out the definition and was absolutely keen on sticking to it all the way through. The land which would come within the definition of my Amendment is, to any man of common sense and ordinary intelligence, just as ripe as any land in a town. That is some of the first land that ought to be used for housing. If you take it into the category of ripe land, it need not go through all this survey by the Central Land Board or anyone else, and there would be no delay. If you put it into this machine, you will hold up the finding of sites wanted for your housing programme.
We have no minerals exemption in the Bill as it comes before us. I sincerely hope here that the Government will think again, because a time when we need more production unless we are going to perish as a great nation, does not seem to me the time to throw all these agreements and mining leases, on which so much industry is worked, into the melting pot. There will be an unfortunate effect on the production of iron ore, cement, bricks, tiles, pipes and pottery. All these depend on these leases and on people being able to work ahead. Do not let us do anything, merely to gain a few extra thousands for the Treasury, that may set back our industrial recovery.
I do not want to spend much time on the points on which we have disagreed. The wonderful thing about this Bill is that there are so many points on which we are agreed, and I am grateful to the
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noble and learned Viscount the Lord Chancellor, for the reference he made to that. We find ourselves in this House getting a lot of publicity the moment we take anything to a Division. I should like to see those occasions written up when we settle things, as this House should settle things, by reasoned argument and by convincing one another that the argument is right, so that matters need not be pressed to a Division or so that the Government should give way. After all there are so many more of those occasions. They happen so often and they are so valuable in getting good legislation on the Statute Book, that I hope in future they will receive more attention than they have had hitherto. I am not going to go through all the agreements we reached because there are very many of them. Apart from the forty-two which the noble and learned Viscount mentioned, which were our Amendments he accepted as they were drawn, I think there were about forty occasions where the Government Amendments were put down either on seeing ours or to carry out what we wanted to do.
I would personally like to thank the Government for meeting the four main points I made on my Second Reading Speech. I am certain we are quite right not in any way to hamper the proper housing of our agricultural workers. That has been met by allowing the improvement of small dwellings up to 7,500 cubic feet and by allowing new houses which are built for them not to attract a development charge so long as they are used by bona-fide persons working on the land. I am also much obliged to the Government for meeting us, as they said they would do, in the putting up of reasonable sheds and greenhouses for our market gardeners, whom, if the food scarcity of these days is to get any better, we want to encourage by every possible means. Again, it was correct to allow the conversion of houses into two or more dwellings so as to help with our housing problem. I think we have improved matters by not cluttering up the Government machine, by not giving more work to people in offices of industrial undertakings in having to appeal to the Board of Trade even for quite a small extension of a small new factory. I think it was a wise provision to allow the Board of

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Trade to give a blanket permission for factories to go up on places like the Slough Trading Estate and Trafford Park, which are being developed for industrial purposes. I think, too, the Government have met us extremely well in regard to forestry. There will be no development charge on forestry, as there is none on agriculture. It is a very sensible thing to allow a person to get chalk, as he always has done, from his own estate, to spread on his own farm, or gravel for the estate roads, without having to pay development charges or getting planning permission.
Despite the differences we had on the clause relating to charities, I would like to return my thanks, as I had not an opportunity of doing that day, for the greatly improved Clause 85 which the noble and learned Viscount brought back to us. I am certain it would not work the way we want it to if it only applied to land adjacent or contiguous to a charitable institution. The noble Lord, Lord Lindsay, will know that all the playing fields of the Oxford colleges cannot be near the colleges. My old college and his cannot possibly have a playing field on the High. Of course we used to but things have changed, I am told, since those days. But at any rate it is quite right that our colleges should be treated like a college such as Magdalene which has a playing field near its college although some hundreds of yards separate them. It is right that where an extension is planned they have not to pledge themselves to put up the buildings immediately but within a period of twenty years because you cannot do that with any certainty these days.
In many other ways we have been able to improve this Bill as it passed through this House. I think it was right to put some limitation on the time in which a local authority can keep land designated and say that if they do not use it within a period of twelve years, in the case of urban land, and eight years in the case of agricultural, they must either buy it or take off the designation—whatever the correct phrase is for that operation. It is wise that we have made provision for the widest publicity. There is not only the White Paper to which I have referred, but the register of all the Central Land Boards dealings in land which will be kept at the Central Land Board, can be seen by anybody, so that any rumours
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as to who has got it, or had it, or dealt with it, can immediately be quashed by the truth being made known. I think it is a good thing, also, that the development plan should be advertised in the London Gazette and in local newspapers.
This is my final word. Again we have done something about rights of appeal. I have referred already to the right of appeal from the Central Land Board, and I will not refer to it again. But we have got it accepted that it is for the High Court ultimately to determine what is a charity and what is not; there is now an appeal to local courts if a compulsory purchase order is made, and on failure to comply with a building preservation order; and in case of dispute as to development value payments you can take it to an arbitrator or to a special tribunal. Sc we shall not go quite as far back as we might otherwise have gone—to the old Stuart times. Let me once more say that we are obliged to the noble Lords who have led for the Government on this Measure for their friendly co-operation the reasonable way in which they have met us. I believe they think we put up reasoned arguments, and all I can say is that they have met us with reasonable concessions. As my plea on the Second Reading has been so well lint, I think we can send this Bill back to another place with the feeling that, although there may be many Amendments for them to consider, those Amendments have been carefully thought out, and the Bill is now an improved Measure. We all hope it will work well once it becomes law.
3.52 p.m.
VISCOUNT SAMUEL: My Lords, before making a few observations on the Bill as, a whole, I would ask your Lordships' leave to refer to three particular points, of which the first two need only detain your Lordships' attention for a very few minutes. The first was dealt with by the noble and learned Viscount on the Woolsack towards the end of his observations on the Motion now before your Lordships' House. It relates to the fact that the forthcoming National Parks legislation, and this Bill which we are now passing, must in some degree overlap. I have been asked to draw your Lordships' attention to this matter by the National Parks Committee (of which I have been for some years a member) which has been

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promoting the establishment of National Parks for a long time in this country. The point is this. The Report of the Hobhouse Committee, which has just appeared, recognizes that there should be established as the supreme authority dealing with National Parks a National Parks Commission, and that in each individual area there should be a parks committee which should act, so to speak, as their agent.
The present National Parks Committee—which is a voluntary society—think that that is the right proposal. But it must necessarily involve a certain adjustment between these local parks committees to be established to conduct the actual management of the parks, and the planning authorities of those areas. That matter might be a rather delicate one. It is proposed by the Hobhouse Committee that the local planning authorities—that is, as a rule, the county councils—should nominate half the members of these parks committees, but whatever arrangement is to be made will, as I say, have to be very carefully adjusted. Clause 4 of this Bill which is now leaving your Lordships' House, and the First Schedule, give power to the Minister of Town and Country Planning to create anywhere where he thinks it necessary a united district, consisting of representatives of the county authorities and a joint planning board.
Before any new National Parks legislation comes into operation, some time must necessarily elapse. A Statute has to be passed—for my own part, I hope it will be introduced at a very early date—areas must be designated and authorities constituted. Meanwhile, some provision must be made for the protection of those areas. What we have been anxious to obtain (and I wrote on this subject to the noble and learned Viscount the Lord Chancellor) was some assurance that in any future National Park area the establishment of a parks committee under, the National Parks Act, when it is passed, shall not have been prejudiced by action taken under the present Bill in the establishment of a joint planning board. That is a short point, which I hope I have made clear. I am glad to say that the noble and learned Viscount on the Woolsack has been kind enough to give this assurance and, if it is effectively and sympathetically interpreted, I feel sure it
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will relieve the minds of all those who are specially concerned with this subject from considerable anxiety.
The second point is simply this. My noble friend Viscount Esher moved an Amendment in Committee asking that the lands of the National Trust should be exempted from development charge. That has been done on the Report stage by an Amendment of the Government on Clause 85. My noble friend Viscount Esher—who is unfortunately unable to be here to-day, as he was also unable to be present on the Report stage—has asked me specially to express the very warm gratitude of the National Trust for this valuable concession in the Bill.
The third point brings me back to the vexed question of the so-called charity lands. Here my observations may perhaps be described as "bitter sweet." in the first place, I have to thank the Government as the noble Lord, Lord Llewellin, has done, for the revised form in which they put the original clause, now Clause 85. In a number of minor particulars that is a valuable recognition of the moral claims of the universities, the colleges, the hospitals and the other bodies which are technically charities for the purposes of these discussions. But that clause did not deal, and did not purport to deal, in any degree with the major claim that has been put forward. I do not propose to spend a moment's time in covering again the old ground that was so fully traversed in the debates on the Committee stage, which were somewhat brief, and also on the Report stage, where the discussion was a full one. At the end of the latter debate the noble and learned Viscount, the Lord Chancellor, made a reply technically on Clause 85 to which I had no opportunity of answer, because Clause 86, on which I moved, was taken without debate.
Your Lordships will realize that, as this may possibly be a matter of some controversy in another place, it is really important that the whole subject should be clearly laid before the Government, and also before those members in another place who propose to take an interest in the matter. Therefore, I would venture to ask your Lordships' forgiveness if I attempt a reply to the observations made by the noble and learned Viscount on that occasion. After all, this is only a hang-over speech from the

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Report stage which I was unable to deliver then. The noble and learned Viscount's first point was to combat the argument we advanced that, while agreeing that the community has a right to unearned increment, we urged that these bodies were rendering a communal service. The noble and learned Viscount poured scorn upon that argument, and I will quote his words. He said:
"That argument applies to the future just as much as to the past, and everybody agrees that it is utterly wrong to make this extension apply to anything except land existing at the critical date. It cannot apply to the future."
The noble and learned Viscount is there using the future to cover two quite different things. The question of the future development value of existing land owned by the universities and other bodies is what we have in mind; what he is referring to as being agreed by everyone should not be done is to allow these bodies to buy fresh land, after this Bill has been passed, in the hope that they may reap further unearned increment in the future. That was indeed included in the Amendment originally moved in another place in Committee on behalf of the charities. But it was realized that the objections to that were very strong, and that was not included in our Amendments in this House. We claim that before the State came into the field these bodies were really acting on behalf of the community, but now that the State has come into the field we recognize that these bodies should not be allowed to go on purchasing other land in the hope of further future increment which is not allowed to anybody else. That is no reason for confiscating a large part of the future development value of land which is already in the hands of the universities.
Therefore, in our view this argument of the noble and learned Viscount with regard to the future is misconceived. His main point was that it would be better, if anything has to be done, to take these lands out of the compensation scheme altogether, not to require them to pay development charge, not to allow them in any circumstances to receive compensation from the fund, and that the clause as it now stands would allow the charities, so-called, to make the best, as he said, of both worlds. I suggest with respect
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that that argument also does not hold. because here again there are two different matters in question. The more one goes into this very difficult and technical subject the more complicated it becomes. We have been discussing this matter on the basis that there are two classes of land to be considered—namely, those which the Lord Chancellor designated operational land, which belongs and is actually used by the charities themselves for their own buildings and so forth, and the lands which were investment lands.
In point of fact, however, there are three categories which must be regarded differently, operational land and two classes of investment land, because some of the charities have land which is not likely to have any future development value at all. For example, in the Green Belt the land is sterilized and they had to abandon any hope of reaping the full value. It is hard upon them, but it is their misfortune that their land happens to be zoned in that way, and they must suffer like other people from planning laws. Rut that land which is building land, which will have a great deal of future value and which has been bought by these bodies with the approval of Government Departments precisely for that reason, stands on a different footing. The former are entitled, in the same way as other people, to have compensation, and they do not ask to be left alone because they have no value of any future increment. Surely they are entitled to be treated like otter people and not to be deprived of such compensation as they might receive. Whether or not it is only a small fraction of what they consider they are entitled to get, they are surely in justice entitled to have that money.
Assume that property is owned in the neighbourhood of Epping Forest in tie Green Belt of London. Some other charity, on the other hand, has land in Holborn, which has been ripening for a number of years, which will soon be rebuilt and where it is claimed that they ought to receive that exemption cm development charge as privileged charities—namely, as charities working for the public. Consequently, there are not two worlds in question but three. It is legitimate to ask why, because special arrangements are made on the one hand for the college or hospital which owns land in Holborn, the other college which owns I land in the neighbourhood of Epping is

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to have nothing at all and is to be deprived of the little they might get from this Bill as it stands. That is our answer to the noble and learned Viscount's claim under that head.
The noble and learned Viscount's third and last point was that there was a better course to take than to press an Amendment of the character of that previously before your Lordships' House. I will quote his words. He said this:
"If so, may I suggest to your Lordships that a much more hopeful way of trying to achieve that which you want is to hold your hand until the scheme has to be presented for the division of the £300,000,000, and try then to get yourself into the preference class of shareholders?"
He went on to say:
"As a matter of principle, there can be no noble Lords on either side of the House who can say that it is fair that you should get full compensation out of the £300,000,000, and also over and above that have this concession."
But that is not the desire. In the first place, in what the Lord Chancellor said there is no assurance that these charities would be included in the preference class of shareholders and would receive full compensation of the actual value. If there were such an assurance, no doubt from the financial point of view that might come forward for consideration. But it has not come forward, and indeed the noble and learned Viscount could not be in a position to give such an assurance.
The main contention in this regard is that the Lord Chancellor is not suggesting that any addition should be made to the £300,000,000 in order to provide for this contingency. If his advice were taken it would mean that whatever preference was given to the charities the ordinary shareholder so to speak, the ordinary private landowner, would get less than he otherwise would under this Bill. I cannot see that such a proposal would be at all attractive to the ordinary landowner. This proposal, if it were adopted by the charities and universities, would merely divide the forces which, in the main, have hitherto acted together, and would lead those who spoke on behalf of the landlords to say that they were being treated most unjustly in order that these charitable investors should have privilege.
That is the only point upon which I myself have any divergence from the noble
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and learned Viscount, and I am sorry that in the conduct of this and other measures we should have been brought into controversy over this one matter. Let me take this opportunity of saying how deeply the whole House appreciates—as has been stated by the noble Lord, Lord Llewellin—the manner in which the noble and learned Viscount has conducted these Government Bills. They are a series of massive Statutes, probably unprecedented in bulk and complexity in a single Session of Parliament in modern times. The very large share that he has taken in so many of them has involved an intellectual and physical effort that must he almost unprecedented. He has, as has been said, received valuable assistance from the noble Lord, Lord Henderson, and from other members of the Government Bench in some other Bills, but at the same time the main burden has fallen upon him. Considering the political composition of this House, and the nature of the controversies which have arisen, these Bills might well have aroused a great degree of animosity and somewhat bitter debate.
For my own part, I have watched, at very close, quarters, with ever-growing admiration, the noble and learned Viscount's handling of the Government's business in your Lordships' House. He has sometimes reminded me of a lion-tamer, standing all alone in a cage full of lions and tactfully persuading them to jump through their hoops and group themselves into pyramids. Fortunately, the lions are all elderly and experienced, and really very kind-hearted. Occasionally one might hear a sort of perfunctory growl, which was intended to signify that they were capable of a ferocious roar if occasion required; and sometimes there was a gentle gesture of a paw, to indicate that they could, of course, tear their tamer to pieces if they were provoked too far. But that was for the benefit of the audience, and everyone knew that such things were not going to happen.
Some of my noble friends on these Benches have rendered considerable service to your Lordships' House in the discussions on this and other Bills. And I must pay testimony, and it is an impartial one, to the work done by the Front Opposition Bench, on whom the burden has chiefly fallen, and, particularly in this Bill, to Lord Llewellin; and with regard to the Transport, the Companies, and

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other Bills, to the noble Viscount, Lord Swinton. They and many of their colleagues have rendered great service to this House. The industry, the care, and not least the readiness to discuss and the willingness to arrive at agreement that they have displayed: all this has contributed greatly to the efficiency and therefore to the prestige of your Lordships' House as a revising Chamber.
This Bill is a really momentous addition to the Statute Book. It is one which, of all the legislation proposed by the present Government, I regard as the most urgent and, in the main, the one which in the long run is likely to be the most beneficial. In the matter of town buildings it will go very far indeed to undo the harm done to this country by nineteenth-century laissez-faire. It has long been recognized that a measure more or less on these lines was essential, but as the noble and learned Viscount the Lord Chancellor has said to-day, the road was blocked by the vexed question of compensation and betterment. The Coalition Government failed completely to arrive at any solution of that matter. It has been left really to the Uthwatt Committee to find a way, and those of us who are deeply interested in this question must say a word of heartfelt gratitude to Lord Uthwatt and his colleagues for having found a solution to that problem.
I would add that I am exceedingly happy that the clause relating to the control of advertisements has passed through with universal support. Ever since I had a hand in passing the first Bill for the control of advertisements, forty years ago, I have been interested in this matter of the part which the degradation of our cities and countryside by advertisement has played on the outward appearance of our civilisation. I hope that this clause will be strictly administered and that our cities and countryside will in the future be free from that defect. As to the clause dealing with universities and colleges, I am well content with the Bill as it stands. I hope that it may so remain and reach the Statute Book. So far as the main purpose of the Bill is concerned—the principle of rational planning of land use—this enactment is a measure of the highest importance and of outstanding value.
4.15 p.m.
VISCOUNT GAGE: My Lords, I do not wish to make any comments on the Bill
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except to suggest that a very large number of questions will be asked in the future to which answers may or may not be forthcoming. There is one question, however, which I should like to refer to the noble and learned Viscount the Lord Chancellor. I wonder if he can say anything about the appointed date on which this Bill is likely to commence. If not, perhaps he could tell us the date on which we shall be loll when that appointed date will be. From the obscurity of the Back Benches I also should like to thank the noble and learned Viscount and his associates for the consideration he has always given to the humblest of us, and also the noble Lord, Lord Llewellin, for making many of our suggestions appear a great deal more reasonable than they otherwise might have been made to appear.
THE LORD CHANCELLOR: The date is not fixed. We hope it will be early in the New Year.
4.18 p.m.
THE EARL OF RADNOR: My Lords, as one of the lions, I do not propose to roar; but I would like to thank the noble and learned Viscount the Lord Chancellor for his kindly reference to the small effort; II have made to improve this Bill. I think we all agree that in its progress the Bill has been improved, but perhaps it has not been improved nearly so much as we hoped at one time it would be. Perhaps we pitched our hopes too high, and they have not been realized to the full. A large number of Amendments have been put into the Bill, the bulk of them by reasonable agreement, and they have made a considerable difference to the picture presented by the Bill.
I speak as one who was more actively interested in the measure from the point of view of the general landowner. We take a Bill of this nature in a purely nonpolitical way. We set out really to try to improve the Bill from our own knowledge from the countryside. I think that the bulk of the Amendments put forward in this House, whether they have been agreed to or not, have been largely of a non-political nature. Where there has been conflict it has, in my belief, been largely a conflict between a theoretical belief and the knowledge derived from practice, often from the practice of generations. I believe that His Majesty's Government would be wise to pay rather more

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attention than they have in the past to that knowledge which comes from practice in the holding of land. We have had a very close examination of the Bill, but even after that close examination I defy anyone to say how the Bill will work. A great deal in the Bill is still left to regulations. Those regulations are going to be the machinery by which the Bill will work, and until we see how those regulations work in practice we must not praise the Bill too much or pride ourselves that we have introduced the last word in town and country planning legislation.
The Lord Chancellor, in his admirable speech at the beginning of this debate, pointed out the undoubted fact that in this Bill the Gordian knot of compensation and betterment has been cut, and that the conflict between the interests of the owner of land and the interests of the community have disappeared, and the interests of the community have been made paramount. I know that the noble and learned Viscount thinks that that is an excellent idea. I am not quite so certain that he is right. It is true that the interests of the community should be paramount, but I very much doubt whether the agents of the community on the whole have in the past done very much better for the community than that selfish person, the owner of the land, has done. Owners of land are not all bad, by any means. Sometimes they have done things for their own selfish ends, but very often their own selfish ends are what the community needs. They have done things for the community in the past and they have done them better than any public authority can do them or is likely to be able to do them, because the owner of land, when he has his own unfettered discretion, can act swiftly, whereas no public authority under this Bill, or under any other Bill for that matter, is able to move quickly, swiftly, or very surely.
That is one point. In the removal of that conflict there is another feature of the Bill on which I must express certain fears, and that is that the incentive to the owner of land to develop his land has been removed. You are removing one agent for development almost out of existence because he has no incentive whatsoever, and it is going to place an increasing burden upon public authorities generally, which again, I think, will result
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in perhaps a slowing up of development. I am afraid that, under the provisions of the Bill, which are very complicated indeed, those public authorities which will have to do the development will not be able to do it very quickly. That is a fear which I express and which I think ought to be expressed, because I believe that, in practice, while the Bill may make development more orderly on the whole, it will also make it a much slower process than it is now, and that at a time when certain forms of development are very desirable and are required quickly.
I have said all I wanted to say with the exception of one point, and that is that the Minister of Town and Country Planning, I think, is very much an optimist. County planning authorities have to get their plans out in three years. They will need a lot of assistance of a technical nature. The owners whose land is going to be planned will also need a lot of assistance of a technical nature. Trained men are not available, and I suggest to the noble and learned Viscount that it would be wise to face the fact that those plans cannot be ready in three years' time—I think it is almost physically impossible, because of the lack of the necessary trained manpower, to do it. If you are going to obtain the necessary trained manpower for the planning authorities to carry out the terms of the Bill, you are going to denude many other activities which require exactly the same kind of trained men. I hope that when this Bill goes to another place the Amendments that have been made will be treated on their merits, without any political questions arising, because certainly, so far as my Amendments are concerned, they were put forward without any political implication whatsoever.
On Question, Bill passed and returned to the Commons.

NORTHERN IRELAND BILL.
Order of the Day for the Third Reading read.
THE LORD CHANCELLOR: My Lords, in rising to move that this Bill be read a Third time, I must inform your Lordships that I have it in command from His Majesty to signify to the House that His Majesty, having been informed of the

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purpose of the Northern Ireland Bill, gives his consent so far as His Majesty's interest is concerned on behalf of the Crown, that the House may do therein as they think fit. I beg to move that this Bill be read a Third time.
Moved, That the Bill be now read 3a.—(The Lord Chancellor.)
On Question, Bill read 3a, and passed.

PROBATION OFFICERS (SUPERANNUATION) BILL.
Read 3a (according to Order), and passed.

FIRE SERVICES BILL.
4.25 p.m.
Read 3a (according to Order) with the Amendments.
Clause 13 [Transitional Provisions]:
LORD WALKDEN LORD WALKDEN moved to leave out Clause 13. The noble Lord said: My Lords, before asking for your consent to the passing of this Amendment, I would draw your Lordships' attention to the fact that we have found it necessary to bring in a further page of Amendments in order to make it what is sometimes called a good and perfect Act of Parliament. I would explain that the need for these further Amendments has arisen from two or three causes.
The first Amendment is rather large but quite simple. The noble Lord, Lord Addington, suggested during the Report stage that Clause 13, which contains all the provisions for the transitional arrangements and which runs to a good many pages, would be better put at the end of the Bill as a Schedule, because it will only be of temporary value, and it would be better and more shapely to have it at the end. Therefore, my first Amendment will be to annul Clause 13, and later I shall move to provide a new Fifth Schedule. Then there are several further smaller Amendments which Lord Morrison will move. They are chiefly designed to include reference to Scottish Acts of Parliament which have been passed only this year and which should be referred to in this Bill. I now beg to move that we leave out Clause 13.
Amendment moved—
Leave out Clause 13.—(Lord Walliden.)
LORD LLEWELLIN: My Lords, there is one question I should like to ask on this. I have not read all through the new Schedule which is to come in after the Fourth Schedule. Do I understand that that is verbatim the same as the clause which the noble Lord is moving to leave out?
LORD WALKDEIN: Substantially, it is the same, but there have been a few minor improvements in the drafting and one reference under which, if there are disputes about pensions and a question is unsettled, it can be settled by the Secretary of State. That is, I am informed, all the new matter contained in the revised Schedule.
On Question, Amendment agreed to Clause 37 [Application to Scotland]:
LORD MORRISON: My Lords, his Amendment, and the next seven, are drafting Amendments to Clause 37 and as the noble Lord has just explained, they are all drafting Amendments consequential on the passing of the Local Government (Scotland) Act, and the Acquisition of Land (Authorisation Procedure) (Scotland) Act. I beg to move.
Amendment moved—
Page 35, line 34, leave out from ("Act") to ("and") in line 35 and insert ("1947 —(Lord Morrison.)
LORD LLEWELLIN: My Lords, in our great friendship, would not it be better if the Scottish Office looked rather earlier at what the Home Office is doing and could get the Amendment to us before Third Reading?
LORD MORRISON: I will certainly convey that to the Scottish Office.
On Question, Amendment agreed to.
Amendment moved—
Page 35, line 39, leave out from ("subsection") to the second ("the") and insert ("(1) of section one hundred and eighteen of the last mentioned Act,")—(Lord Morrison.)
On Question, Amendment agreed to.
Amendment moved—
Page 35, line 42, leave out ("Act of 1929") and insert ("last mentioned Act").—(Lord Morrison.)
On Question, Amendment agreed to.
Amendment moved—
Page 36, line 7, after ("thereto") insert ("for any reference to the acquisition of Land (Authorisation Procedure) Act, 1946 there shall

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be substituted a reference to the Acquisition of Land (Authorisation Procedure) (Scotland) Act, 1947").—(Lord Morrison.)
On Question, Amendment agreed to.
Amendment moved—
Page 39, line 10, leave out subsection (10).—(Lord Morrison.)
On Question, Amendment agreed to.
Amendment moved—
Page 39, line 19, leave out from the second ("of") to ("borrow") in line 20, and insert ("Part XII of the Local Government (Scotland) Act, 1947").—(Lord Morrison.)
On Question, Amendment agreed to.
Amendment moved—
Page 39, leave out lines 28 to 30.—(Lord Morrison.)
On Question, Amendment agreed to.
Amendment moved—
Page 41, line 31, leave out ("1929") and insert ("1947").—(Lord Morrison.)
On Question, Amendment agreed to.
Clause 40 [Short title, extent, repeals and savings]:
LORD WALKDEN: This Amendment is consequential and drafting. I beg to move.
Amendment moved—
Page 43, line 27, at end insert:
("(3) The transitional provisions specified in the Fifth Schedule to this Act shall have effect in relation to the matters specified in that Schedule.")—(Lord Walkden.)
On Question, Amendment agreed to.
LORD WALKDEN: This is another consequential and drafting Amendment. I beg to move.
Amendment moved—
Page 43, line 33, leave out from ("repeals") to ("shall") in line 34 and insert ("save as provided in the Fifth Schedule to this Act, nothing in this Act").—(Lord Walkden.)
On Question, Amendment agreed to.
LORD WALKDEN LORD WALKDEN moved, after the Fourth Schedule to insert the following new Schedule:

FIFTH SCHEDULE.

  TRANSITIONAL PROVISIONS.
  Provisions relating to period between passing of Act and appointed day.
  1. For the purposes of the Fire Services (Emergency Provisions) Act, 1941, the expression 'the period of the present emergency' (being the expression) which designates the period for which under that Act the National
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  Fire Service is established) shall mean the period beginning as provided in that Act and ending immediately before the appointed day.
  2. Subsection (2) of section four of the Emergency Laws (Transitional Provisions) Act, 1946 (which continues the Personal Injuries (Emergency Provisions) Act, 1939 in operation as respects war service injuries, as defined in that Act, sustained by members of the National Fire Service during the period during which the said section four is in force) shall have effect as if the said section four continued in force until the beginning of the appointed day.
  General provisions arising out of transfer of functions to fire authorities.
  3.—(1) The Secretary of State may by regulation make such transitional provisions as appear to him expedient in consequence of the transfer to fire authorities of functions relating to fire services of the Secretary of State and of authorities which were fire authorities for the purposes of the Fire Brigades Act, 1938.
  (2) Nothing in the following provisions of this Schedule shall be construed as limiting the generality of the provisions of the last foregoing sub-paragraph.
  (3) In the following provisions of this Schedule the expression 'regulations' means regulations made by the Secretary of State.
  Transfer of persons employed in connection with National Fire Service.
  4. Regulations may provide for the transfer on the prescribed terms, to the prescribed fire brigade maintained in pursuance of this Act or to such other service under such fire authority as may be prescribed, of persons who immediately before the appointed day were serving in the National Fire Service.
  5.—(1) Regulations may provide for the retention in the service of the Crown, on the prescribed terms, of persons to whom this paragraph applies who immediately before the appointed day were employed (whether as members of the National Fire Service or otherwise) for the purposes of the Fire Services (Emergency Provisions) Act, 1941.
  (2) The persons to whom this paragraph applies are persons in whose case the Secretary of State with the approval of the Treasury determines that it is expedient that they should be retained as aforesaid for the purpose of enabling him to perform his functions under this Act or for administrative purposes pending the bringing into operation by fire authorities of arrangements for the performance of their functions under this Act.
  6. Regulations may provide for the employment in the service of the Crown, on such terms and for such period as may be prescribed, of persons transferred to a fire brigade under paragraph 4 of this Schedule where the Secretary of State determines with the approval of the Treasury that it is expedient so to do for the purpose of enabling him to perform his functions under this Act and the fire authority and person concerned consent to that person's being employed as aforesaid.
  Transfer of property, rights and liabilities.
  7. Regulations may provide for the transfer to fire authorities of property, rights and liabilities vested, enjoyed or incurred on behalf of His Majesty for the purposes of the National Fire Service, and for the carrying on by fire authorities of arrangements (including arrangements for the making of payments) entered into on behalf of the Crown for those purposes.
  8.—(1) Regulations may provide for the vesting in fire authorities of property used on behalf of His Majesty for the purposes of the National Fire Service but vested in an authority being a fire authority for the purposes of the Fire Brigades Act, 1938, or for the use of such property by a fire authority on such ferns (including terms as to payments) as may be agreed between the authorities or in default of agreement as may be determined by the Secretary of State.
  (2) Where property is to be vested under the last foregoing sub-paragraph and it is agreed or determined as aforesaid that the property cannot conveniently be severed from other property, whether or not forming part of the same building, the other property shall also be vested in the fire authority, subject to such rights of the authority for the purposes of the said Act of 1938 to use the other property, on such terms (including terms as to payments), as may be agreed or determined as aforesaid.
  9.—(1) subject to the provisions of the next following sub-paragraph, regulations may provide that where an authority for the purposes of the said Act of 1938 which does not on the appointed clay become a fire authority is on or after the appointed day liable to make payments in respect of interest and redemption charges on moneys borrowed for fire-fighting purposes, the fire authority for the area including the area of the first-mentioned authority shall reimburse to that authority the amount of the payments.
  (2) Regulations having effect by virtue of the last foregoing sub-paragraph shall not apply in relation to moneys borrowed by the authority for the purposes of the said Act of 1938 in connection with property retained by that authority, but may be made to apply in relation to moneys borrowed in connection with property vested under sub-paragraph (2) of the last foregoing paragraph notwithstanding that the money was not borrowed for firefighting purposes.
  (3) Any question arising under this paragraph or regulations made thereunder shall be determined by the Minister of Health.
  Provisions as to pensions.
  10.—(1) The liabilities of any authority for pensions, allowances and gratuities in respect of members of a transferred fire brigade retiring or dying at any time before the appointed day, and the functions of that authority in relation thereto, shall on the appointed day be transferred to the fire authority.
  (2) In the last foregoing sub-paragraph the expression 'transferred fire brigade' means a fire brigade maintained in pursuance of the File Brigades Act, 1938, by an authority which
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  does not on the appointed day become a firs authority, and the expression the fire authority in relation to any such brigade means the fire authority for the area including the area for which the brigade was maintained.
  11.—(1) Regulations may provide for payments by a former pension authority, in respect of pension liabilities of a fire authority accrued at the appointed day, of such amounts at such times as may be prescribed, and if the regulations so provide out of such funds as may be prescribed.
  (2) Regulations made under this paragraph may provide for the determination by the Secretary of State of questions arising under the regulations.
  (3) In this paragraph the following expressions have the meaning hereby assigned to them respectively, that is to say:—
  Pension liabilities of a fire authority accrued at the appointed day means, in relation to any fire authority,—

  (a) any liabilities for pensions, allowances and gratuities in respect of members of a fire brigade retiring or dying at any time before the appointed day, being liabilities which either were liabilities of the authority immediately before the appointed day or were transferred under the last foregoing paragraph, and

  (b) any liabilities of the authority under the Firemen's Pension Scheme in respect of employment or service before the appointed day which under that scheme is treated as employment in the fire brigade maintained by the authority;

  'former pension authority' means—

  (a) in relation to liabilities specified is paragraph (a) of the last foregoing definition, the authority which immediately before the appointed day was liable to meet them;

  (b) in relation to liabilities specified in paragraph (b) of the last foregoing definition, the authority liable immediately before the appointed day for meeting liabilities, whether vested or contingent, for pensions, allowances or gratuities in respect of such employment or service as is specified in the said paragraph (b).

  12.—(1) The liabilities of fire authorities for such pensions, allowances and gratuities as are specified in sub-paragraph (1) of paragraph 10 of this Schedule shall, if regulations so provide, be defrayed out of funds established for defraying liabilities under the Firemen's Pension Scheme.
  (2) Payments under sub-paragraph (1) of the last foregoing paragraph shall, if regulations so provide, be carried into funds established as aforesaid.
  13. Where by virtue of this Act or a combination scheme an authority which maintained a fire brigade in pursuance of the Tire Brigades Act, 1938, ceases to maintain a fire brigade, the Police and Firemen (War Service) Acts, 1939 and 1944, shall, in the case of former members of the brigade to whom section one of the Police and Firemen (War Service) Act, 1939, applies, have effect with such modification of references to the fire brigade to

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  which they belonged, and to the authority maintaining that brigade, as may be prescribed.
  Compensation for loss of emoluments or employment.
  14.—(1) Regulations made with the approval of the Treasury may provide for authorising or requiring the appropriate authority to pay compensation in respect of loss of emoluments or pension—

  (a) to members of police forces and persons employed by local authorities, not being in either case persons who were transferred to the National Fire Service, as to whom the Secretary of State is satisfied that by reason of the National Fire Service (General) Regulation, 1941, they suffered a loss of emoluments;

  (b) to persons who, having been members of the National Fire Service immediately before the appointed day, become on that day members of a fire brigade maintained in pursuance of this Act and suffer a reduction of emoluments in comparison with the emoluments determined by the regulations to be appropriate to their former employment in connection with the provision of fire services;

  (c) to persons who immediately before the eighteenth day of August, nineteen hundred and forty-one, were employed by a local authority, or were engaged in war service within the meaning of the Local Government Staffs (War Service) Act, 1939, having left employment with the local authority to undertake such service, and immediately before the appointed day were employed for the purposes of the Fire Services (Emergency Provisions) Act, 1941, otherwise than as members of the National Fire Service, and who either․

  (a) become employed on the appointed day by a local authority and suffer a reduction in emoluments in comparison with the emoluments determined by the regulations to be appropriate as aforesaid, or

  (b) do not on the appointed day become employed by a local authority.

  (2) Regulations may authorise or require the payment by the appropriate authority of emoluments, and of pensions, gratuities or allowances, of such amounts and subject to such conditions as may be prescribed in the case of persons who, having at any time before the appointed day been chief officers of fire brigades maintained in pursuance of the Fire Brigades Act, 1938, do not on or after the appointed day become chief officers of fire brigades maintained in pursuance of this Act.
  (3) In this paragraph the expression "appropriate authority" in relation to the whole or any part of any payment, means a fire authority or the Secretary of State, as may be prescribed.
  (4) Regulations under this paragraph may make provision as to the determination of questions arising under the regulations.
  Special provisions as to police-firemen
  15.—(1) The provisions of the Police Act, 1946 as to the transfer of property, rights and liabilities from the council of an area ceasing to be a separate police area to the council of a county or to a combined police authority shall apply, and be deemed always to have applied, to property, rights and liabilities of the first-mentioned council held or incurred in connection with pensions, allowances or gratuities—

  (a) in respect of whole-time service for fire-fighting purposes in the police force of the said area, and

  (b) in respect of service for such purposes (whether before or after the said area ceased to be a separate police area) falling by virtue of regulations made under the Fire Services (Emergency Provisions) Act, 1941, to be treated for the purposes of the Police Pensions Act, 1921, as service in the said police force.

  (2) The said provisions of the Police Act, 1946, shall not apply, and shall be deemed never to have applied, to any other property, rights or liabilities held or incurred in connection with the provision of fire services.
  (3) Without prejudice to the generality of sub-paragraph (1) of this paragraph, the provisions of sub-paragraph (1) of paragraph 3 of the Third Schedule to the said Act of 1946 as to the treatment of pensions, allowances and gratuities granted before the date of transfer in respect of members of a transferred force shall apply, and be deemed always to have applied, to pensions, allowances and gratuities granted before that date to members of the National Fire Service whose service therein fell by virtue of regulations made under the said Act of 1941 to be treated as service in the transferred force.
  16.—(1) Where section one of the Police and Firemen (War Service) Act, 1939, applied to a constable by reason of his having ceased to serve as a member of a fire brigade maintained in pursuance of the Fire Brigades Act, 1938—

  (a) engagement in service in the National Fire Service, whether before or after the passing of this Act, shall be treated for the purposes of the Police and Firemen (War Service) Acts, 1939 and 1944, as resumption of service as a constable;

  (b) if he is, or was before the passing of this Act, prevented as mentioned in those Acts from engaging in service in the National Fire Service or a fire brigade maintained in pursuance of this Act, he shall be treated for the purposes of those Acts as having been so prevented from resuming service as a constable.

  (2) Nothing in the last foregoing sub-paragraph shall be construed as prejudicing the power of the Secretary of State under subsection (3) of section six of the Police and Firemen (War Service) Act, 1944, to declare what during the existence of the National Fire Service is to be treated for the purposes of the said Acts of 1939 and 1944 as resuming service as a fireman.
  17.․(1) Regulations may provide for authorising the taking before the appointed day by councils of counties and county boroughs and other authorities which on the appointed clay will become fire authorities of such steps as appear to the Secretary of State to be requisite for the purpose of enabling fire authorities to perform their functions under this Act on or after that day.
  (2) Without prejudice to the provisions of the last foregoing paragraph, a combination scheme may be made before the appointed day, but so as to come into operation on or after that day or, if the scheme is made by virtue of section ten of this Act, on or after the appointed day or the date mentioned in that section, whichever is the later.
  (3) In relation to a combination scheme made by virtue of the last foregoing sub-paragraph references in sections five, six, nine and. ten of this Act to fire authorities (other than references to the fire authority constituted by the scheme) shall be construed as references to authorities which apart from the scheme would on the appointed clay become fire authorities.
  (4) Notwithstanding anything in the provisions of the last foregoing sub-paragraph or in section ten of this Act, a combination scheme made by virtue thereof may come into operation earlier than would be permissible under those provisions, in so far as is requisite for the purposes of sub-paragraph (r) of this paragraph.
  18.—The provisions of Part VIII of the Requisitioned Land and War Works Act, 1945 (which provides for adjustments of compensation on the acquisition of land in certain cases for the purpose of eliminating changes in Value (which to the exercise of emergency powers) shall have effect in relation to any purchase of land by a fire authority under subsection (5.) of section three of this Act as if the expression "war period" in the said Act of 1945 included any period during which the Supplies and Services (Transitional Powers) Act, 1945, is in force.
  Provisions as to regulations.
  19—(1) Regulations shall be made after consultation with such associations representing local authorities as appear to the Secretary of State to be concerned.
  (2) In this Schedule the expression "prescribed" means prescribed by or under regulations.
  (3) Regulations may be made either generally or so as to apply in such circumstances as may be prescribed, and may make different provisions for different cases."
  The noble Lord said: I beg to move that we adopt the new Fifth Schedule which, as I explained a few minutes ago, takes the place of Clause 13 in the Bill. It covers all the arrangements, the transfer of property and liabilities, and so on, and everything appertaining to fire services, and also the transfer of employees who are to be taken into the service of the new authority to. be established under this
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  Bill. I do not think that I can add anything useful, because we passed whole substance of this schedule on the last occasion under Clause 13. Therefore, I beg to move the new Fifth Schedule.
  Amendment moved—
  After the Fourth Schedule insert the said new schedule.—(Lord Walkden.)
  On Question, Amendment agreed to.
  Bill passed and returned to the Commons.

FINANCE BILL.
4.34 p.m.
Order of the Day for the Second Reading read.
THE MINISTER OF CIVIL AVIATION (LORD NATHAN): My Lords, the Finance Bill, the Second Reading of which I now have to move, is designed to crystallize in legislative form, as far as may be necessary, the provisions of the Budget: introduced by the Chancellor of the Exchequer last April. This is the first occasion since 1939 that it has been possible for the Chancellor to aim at a balanced Budget. The reason for this is, of course, the obvious one that the national expenditure which, in the previous year, reached £3,910,000,000, is estimated for 1947–48, the current year, at £3,181,000,000. That is a reduction of £729,000,000, or about 19 per cent. It is worth noticing, I think, that all this reduction, and indeed somewhat more, is expected in the expenditure on defence. That is the source from which the reduction is derived. On the other hand, more money will be spent in the present year than last year on education, housing, family allowances, and a number of other items which benefit great sections of the community. The Budget will not, therefore, be balanced at the expense of social services.
The position, then, is that the Government have to meet a reduced. bill of £3,181,000,000, but I should make clear that, although they aim at balancing tie Budget this year, it is not the purpose of this Government to aim at a balanced Budget year by year. It is felt by His is Majesty's Government that Budgets ought to be balanced over a period A years, but that in any particular year the economic situation of the country in the wider sense must be studied and taken into account, and the Budget planned on

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the long-term view. This year, with all its inflationary possibilities, is a good year to budget for a surplus. And the revenue for 1947–48, on the basis of the proposals embodied in the Budget and, as far as may be, in this Bill, is estimated at £3,451,000,000, or £269,000,000 more than the estimated expenditure. The surplus, therefore, in round figures would be £270,000,000. It has been suggested in some quarters that this surplus is unreal, that it is a "phoney" surplus, because, as is indeed the fact, it is largely derived from non-recurring items, such as the recovery from paymasters and quartermasters all over the world of moneys representing unspent balances of votes of credit voted in previous years. That is true, but such items have always been sent to revenue account and, although much money is coming back in that way, the surplus is none the less real for that.
The taxation proposals of the Government offer a modest measure of relief to large numbers of the population. Included amongst the reliefs proposed this year are the abolition of the duty on artificial silk, and on fuel oil and gas oil, and the reduction of purchase tax on such varied articles as sports gear, linoleum and other floor coverings, toothpicks, mirrors, and hot water bottles. In the field of Income Tax, the earned income relief is to be increased from one-eighth to one-sixth, with the maximum relief under this heading increased from £150 to £250. This will benefit millions of our people. The child allowance is to be increased from £50 to £60, and additional relief is also proposed in respect of the dependent relative allowance.
There is one particular provision in Clause 27 of this Bill which will, I know, give especial satisfaction to some noble Lords who, like myself, have been taking a particular interest in the recruitment of the Territorial Army and other forces akin to that force, because Clause 27 provides for exemption from Income Tax of the training expenses allowances and the annual efficiency bounty for the Territorial Army and kindred services. It is a small matter, and I mention it because I know that a number of your Lordships have taken an interest in it as having an important and indirect effect on matters lying outside the field of finance.
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Your Lordships will recollect that some months ago my noble friend Lord Lucas initiated in your Lordships' House a debate on the subject of the taxation of motor cars, and I promised, speaking for those Ministers who sit upon these Benches, that I would represent to the Chancellor of the Exchequer what had been stated by my noble friend and what had indeed been spoken on by members of your Lordships' House in all quarters of the House. I am sure that it must be a matter of satisfaction to my noble friend to find incorporated in the Bill the provision that the mechanically propelled vehicles duty on all motor cars licensed after January 1947, will be reduced to the flat rate of £10.
Now as to increases in taxation. Increases are proposed as regards legacy and succession duties and on stamp duties. A profits tax is to be introduced, or rather a new version given to an existing profits tax whereby, in effect, undistributed profits will bear a 5 per cent. tax, and distributed profits will bear a 12½ per cent. tax. There is also to be a taxation of bonus issues, whether a bonus be a pure bonus, or whether there be a bonus element, or whether it be just a variation of bonus. A purchase tax is to be imposed on such things as immersion water heaters and instantaneous water heaters, which can be prodigal in their use of fuel. They are to be taxed at 66⅔ per cent. and motor cars costing more than £1,000, retail, exclusive of tax, will also be taxed at the 66⅔ rate. This latter charge is to balance out the loss of revenue on the adoption of the flat rate motor vehicle duty. There is also provision to deal with certain devices which have been carried into practice under which sums that really represent remuneration appear in the form of capital sums not liable for tax, and steps are taken in this Bill to safeguard the revenue.
From some points of view, perhaps the most important increase in taxation introduced by the Chancellor of the Exchequer is the increase in the duty on tobacco by 50 per cent. The whole country realizes that this increase is aimed solely at producing, not an increase in revenue but a reduction in consumption, with a consequential saving of dollars. Much has been said in another place about the effect of this increase on old age pensioners and the Bill contains a clause empowering the Treasury to make

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regulations to provide old people with two ounces of tobacco a week, or its equivalent in cigarettes or snuff, at pre-Budget prices. Every effort will be made to produce the regulations and to bring them into force at the earliest possible moment. Then there is another clause in this Bill which aims at saving dollars. That is the clause which enables an ad valorem duty to be imposed on imported films in substitution for the present duty of 5d. a foot. The clause provides for films to be valued for this purpose in relation to their earnings in this country. This is only an enabling clause, and will only be used if circumstances demand it. But, if an increase in duty is imposed, steps will be taken by the Board of Trade to see that the increase is not passed on to the cinema proprietors or to the cinema-going public. The increased duty will, in effect, be a tax on the foreign owners of imported films, and will thus save foreign exchange and dollars in particular.
The Bill contains the usual items in regard to the management of the National Debt. The only other item to which I think I need make special reference is that which provides that any income deficiencies that may be incurred on the Post Office Savings Bank Fund and the Trustee Savings Bank Fund, should be met out of the Consolidated Fund. Thus, despite the Government's cheap money policy, which restricts the earning power of these funds, investors in the Post Office Savings Bank and the Trustee Savings Bank will get their 2½ per cent. interest.
In a word, the Bill implements the policy of the Government in securing a balanced Budget, cushioned by a handsome surplus. It gives relief in taxation to a limited extent to practically every home in the country. It increases taxation in a limited field, except where tobacco is concerned, and here it is hoped that consumption will be reduced, so that no one will spend more on tobacco than he did last year. The Bill aims, generally, at putting the country on the road to prosperity which it so richly deserves to travel. I have dealt with the whole question of the broad economic issues which provide a background for this Budget and for this Bill, or which require to be taken into account in the deliberations of your Lordships' House in considering the state of the nation. I know that my noble friend
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Lord Brand is proposing to address your Lordships upon the broader economic issues to-clay, because he will be unable to be here on the occasion which has been set apart in your Lordships' House for a. debate upon this particular subject. I know that he will appreciate that an answer to his observations will be given, en not upon this occasion, but on that. I have confined myself to-day to the pedestrian process of bringing this Bill to your Lordships' notice, so that in broad outline the provisions of this Bill may be before you. I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Lord Nathan.)
4.46 p.m.
VISCOUNT SIMON: My Lords, the House will be grateful to the noble Lord, Lord Nathan, for his exposition of the contents of this Finance Bill. He has very justly observed in his closing sentences that the has confined himself to that, and has not entered upon the larger economic issues which I think not only lie behind, but which ought to be the governing consideration in dealing with the finances of this country at this time. I do not say that he is not justified in taking so limited a view of his duty, for, of course, your Lordships are not entitled to take part in framing a Money Bill. I may further note that you are not entitled to cast a vote in determining who shall be the members of the other place who do frame and carry a Money Bill. Our function is a limited, but, I hope, useful one. Our privilege is to pay the taxes thus impose d so far as they apply to us. But we have one other privilege which I, at any rate, hope we value and shall maintain—namely, to take the opportunity afforded by the Second Reading of the Bill to take a rather wider view of the situation which really governs our judgment on the whole of the financial processes of the Government.
I appreciate that there is going to be a further debate on this later, but I hope that I shall be forgiven if I say something about those wider issues now. Up to this moment, we, of course, have hear nothing from the noble Lord which suggests that we are passing through extremely anxious times, anxious enough if you confine yourselves to our domestic finance, but doubly anxious if you consider the still more serious situation of our

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financial position internationally and abroad. In what we have heard, if I may say so with respect, the voice is the voice of Nathan but, of course, the hand is the hand of the Chancellor of the Exchequer, and one is not, therefore, very much surprised that the tone that is set is one of complacency, whereas I hold that the prevailing feeling when we receive the Finance Bill ought to be one of most intense, anxiety.
I propose, if you will permit me, to make a brief survey of the financial situation both internal and external, for I agree at once with what the Chancellor of the Exchequer has emphasized in another place, that our overseas deficit is the thing which is still a greater cause for anxiety than the situation, which I think is anxious, in our domestic finances. And I will endeavour to show that in fact the treatment of our internal finance actually tends to aggravate our external difficulties. First then, as to our internal financial situation. The noble Lord very agreeably put before us the view that we should rejoice together because we are not only having a balanced Budget but we have a large surplus. He qualified that claim by what I think was a very just observation—that it was made up largely of nonrecurring items—and that their inclusion is not peculiar to any particular Government but goes back in practice for a very long period.
The truth is, of course, that the annual accounts of the nation are not drawn up on commercial principles at all. We put non-recurring items, sometimes the proceeds of the sale of capital assets, into the revenue side of our national accounts and, if we are so disposed, we can be exceedingly happy by subtracting one side from another and finding our surplus. Of course, if any commercial firm treated as receipts of the year the proceeds of the sale of capital assets, as is done in this very Budget, no chartered accountant would ever be prepared to certify that the statement showed a correct conclusion as to the company's position and indeed a commercial firm that keeps its accounts in that way is very likely to find in the end that its directors would be in the Old Bailey.
This is no criticism of the present Government. It has been done by every Government even in the days of the greatest of our Chancellors of the
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Exchequer. The truth is, we keep our national accounts on quite a different principle and in this present Budget, and for the purpose of putting out this fortunate balance and happy surplus, there are things which cannot possibly and strictly be regarded as revenue at all. What has happened, and it has happened many times before—I am not criticizing one holder of the office of Chancellor of the Exchequer in contrast with others—is that by a series of financial devices and what I think almost amounts to juggling with items above and below the line, you get the figures which the noble Lord opposite has just called to our attention.
I give two instances. In this surplus the Chancellor of the Exchequer includes the proceeds of capital assets left over from the war, even though they were bought with borrowed money. Of course, no commercial firm would dare to do that for a moment. I give an instance even more surprising when you consider the way in which our accounts are set up. This is not a criticism of Dr. Dalton but of the general system, which has its good points as well as its bad points. Take Excess Profits Tax. Your Lordships know it often produces very large amounts but by the rules of working it out there are also very often most substantial returns of tax, because it depends on future working and averages. It is a remarkable chance that in this very Budget, so far as there is money received from the taxpayer under the head of Excess Profits Tax, it is included in the revenue of the year; but so far as there has been a paying back of the amounts which have been found to have been charged redundantly and therefore have to be returned to the taxpayer, they are put below the line and are treated as amounts which are quite properly borrowed and not regarded as a liability here at all. Such is some of the ingenious mystery of our methods of stating the public finance and it has been so for a long time.
I must say that during the period I was Chancellor of the Exchequer I wondered if everybody understood the basis on which these accounts were made up and therefore I cannot really honestly rejoice in this ballyhoo about the Budget being balanced and having a large surplus until the matter is a little more closely examined. But much more important than that is this figure which was

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mentioned by the noble Lord. It is really essential to study at what figure is the Budget balanced. It is balanced at a figure of £3,200,000,000. That is to say, two years after the end of the war, the amount being raised by taxation in this country is over £3,000,000,000. In the year before the war, though we were putting on immense increases of taxation to prepare for what might be the terrible time that was coming, the figure had not quite reached £1,000,000,000. I do ask your Lordships for a moment to consider seriously what is meant by maintaining a total of taxation amounting to over £3,000,000,000 in a year.
I find it very difficult two years after the war ceased to throw up my hat and be contented with these results when that is the figure which stares me in the face. What is the total national income? A figure which is commonly taken to-day is £9,000,000,000. Taking that, it means that one-third of the whole national income of the country is taken, this year at any rate, by the taxgatherer and paid into the national fund. An income tax of 9s., rising with Sur-tax in the top slice—it is only the top slice, that is often mistaken—of biggest incomes to 19s. 6d. in the pound, is not the way to promote recovery of trade. Surely anyone who reflects on it, without being a technical expert, can see that it really is a terrible obstacle and drag to enterprise.
Let me give one or two illustrations which must be known to your Lordships. Here you have the Government carrying through these immense schemes of nationalization. Whatever else they are doing, they are calling for the most expert, experienced, and competent management. Nobody suggests that the Ministers in this or any other Government are capable of managing such things. Of course not. They have got to do everything they can to get the very best people to undertake these extremely responsible jobs. What is the experience? Anybody who has looked into it will confirm this. During the war, when we had the one common purpose of beating the enemy, whatever it cost, the very best commercial brains in this country were willingly offered and freely used for the purpose (and it was really much simpler than the present task) of organizing the whole economic, commercial energy of the country so that it was directed to that single purpose. What makes it much
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more difficult now is that there are a hundred purposes to be served, instead of only one. Whereas in the war we had to do the best we could without an export trade, we now have the most pressing necessity of increasing in every possible way our export trade.
What is happening is that a great number of these people, who would not hesitate to give their services, whatever it cost, for the united purpose of trying to beat the Germans, when they are asked to undertake this terrific job involving enormous responsibility and great risk to their reputations—with very doubtful consequences, as many of them think, to the ultimate benefit of the country—will not take it. And the reason why they will not take it is as plain as it could possibly be. What is the good of offering a man £10,000 a year salary if, after you have paid it, practically all of it is taken back by the present system of taxation? Exactly the same thing is happening in the case of filling new directorships. Many a capable man is being asked to undertake a new directorship, which in ordinary times he would be willing to accept; he would feel happy to be thus employed, and to be paid for it. But what is the good of undertaking such a position if what looks like a large remuneration dwindles to nothing at all?
Even in the profession I used to know best—the Bar—there is now happening what I may say never happened in my time. In this my noble and learned friend opposite will bear me out. To-day if a solicitor takes a big brief to a counsel who is already making a reasonable income (I am assuming a first-class firm of solicitors, and a counsel who feels fully capable of doing the job) that counsel looks twice at the figure marked on the brief. He says: "Why should I sit up all night with a wet towel round my head learning all these details, nine-tenths of which are of no interest to me or anyone else once the case is over, if the tax gatherer is to come in when it is finished and say: How much Income Tax on that brief?" In the professions, as well as in business, there is a strong tendency to say that this is not good enough.
It has the result, amongst other things, I fear, that there is great difficulty in the commercial world in arranging the payment for the higher executives—the men who are, after all, some of the principal

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and most important parts of the machinery. This is operating all through our commercial life to-day, and it is caused directly by maintaining, two years after the war is over, a rate of Income Tax—and Sur-tax if you reach it—which is intolerable and, what is more, which is quite inconsistent with promoting those efforts of energy and spurring on everybody to do their best. So many people feel themselves completely excluded from any useful effort into which they can throw themselves, inasmuch as in the end Income Tax will take its toll of the salary. So high a rate of tax as exists to-day, I submit to the House, is a discouragement to the use of brains and initiative just where it is needed most; that is, in enterprise connected with the export trade. That is one consideration.
Let me put another consideration, if your Lordships will be kind enough to attend to me about this for a moment or two. Our friends, the enthusiastic crusaders of Socialism, may say what they will to please the mob, but the fact is that more money is not to be obtained by "soaking" the rich. The social services to which the noble Lord, Lord Nathan, referred (and I know he will be the first to confirm me on this) did not begin with the Socialist Party. They began with Parties of another sort, and they have since been gradually improved and extended. But, in fact, social services today are not provided free to the poorer classes. If they think so they are under a delusion. The services are really financed to an ever-increasing extent out of the pockets of the people who receive them.
I have here the latest White Paper on the National Income and Expenditure of the United Kingdom. It is well worth a moment's examination because, while I do not think figures prove everything, none the less they do sometimes correct our ideas and illuminate our comprehension. If your Lordships look at the last page of this document (Command Paper 7099) you will see that out of the whole population of this country 825,000 people alone have an income of £500 a year after paying Income Tax. Our population is between 40,000,000 and 50,000,000 and only 825,000 people, once Income Tax is paid, have as much as £500 a year. Those 825,000 individuals who, after
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taxation, have £500 a year income or over, represent only 2 per cent. of the population. It can be shown, by looking at other figures in this Command Paper, that they already account for between one-third and one-half of the whole expenditure of the £3,000,000,000. The whole of the rest has to be borne by the poorer classes because, however you try, you will find that you cannot obtain substantially more from the higher income earners.
It may be that the Government consider that they can spend the money of the working classes and the wage-earning classes better than the workers can spend it themselves; but what is quite certain is that the Government are not financing these social services without making the working classes pay for them. What happens is that wages buy less; that there is a demand, quite natural in itself, that wages should be increased. We know that that demand is going right through the country. The demand is often enforced, sometimes by agreement, sometimes by strike, and the result is that prices rise. There you have this vicious circle of inflation in incipient operation. And there is a further circumstance which your Lordships may not have noticed, but which is quite plain if one looks at the figures: it is that this rise in prices and this enormous expenditure are accompanied by decreased savings. No one has been more determined than the present Chancellor of the Exchequer to insist upon the immense importance of a high rate of saving. Indeed, I recall that in his Budget speech he said that we must set as a target a saving of £1,000,000 a day, £366,000,000 in the year—I forget whether it was leap year, but anyhow call it £1,000,000 a day. That was his target. What has happened? In the twelve weeks since Budget day, which was April 15, savings have come nowhere near up to that target. In fact, since the middle of May last there has been what may be called, and is technically called, a net dis-saving; that is to say, people are taking more money out of the Post Office Savings Bank, or realizing other small forms of saving, than they are putting in. That is one of the reasons why I submit to your Lordships that really we cannot regard the situation disclosed by this Budget with any sort of complacency. In fact a most dangerous situation is revealed, and the inflationary pressure from various quarters is going on all the time.

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Take this fact. Dr. Dalton really added to this inflationary pressure himself last year by a deliberate policy of credit creation on a large scale in order to force down rates of interest unnaturally rapidly. The proof of it is as simple as possible. He issued 2½ per cent. irredeemable Savings Bonds, and many a trustee and many a patriotic man invested in them. What do they stand at now? They stand at 90. Dr. Dalton is hack where he started. His attempt to get money at so cheap a rate is failing, and at this moment he is putting vast numbers of people—trustees and others—in the unhappy position which is equivalent really to losing four years of interest, and there is no reason that I know of to suppose that that particular issue at 90 is likely to rise again to par. Therefore, I venture to say that we must look even at our internal financial position with a great deal of anxiety. The index of wholesale prices is a good indication of how inflation is going. The index of wholesale prices, issued monthly by the Board of Trade, is rising Recent wage increases are not in the least linked with increased output or production, and unless output is increased proportionately with an increase of wages this may set off a further trail of inflationary consequences.
Let me make quite plain what is my complaint about the Government in this matter. It would be quite unfair to treat them as responsible for the position with which they had to deal when they came into office at the end of the war. That situation would have arisen anyhow, and it does not matter what Government were in power these difficulties would undoubtedly have faced us. That is not the point at all. My respectful criticism, in respect of this internal financial problem, is that they are boasting about their management of finance, and generally giving the impression among all their supporters that, thanks to the magnificent work of His Majesty's Ministers, there is no particular reason why anybody should feel that unless he works much harder he may suffer a terrible time. They have not explained to the people—not even to their own followers—the danger of spending at the present rate: £3,200,000,000 of taxes in a year. They have not pointed out the danger of taking from the people of this country a total of taxation which is one-third of the whole national income. What
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they should do, I suggest, is to make it their main effort to get the majority of electors to realize that large social benefits must come out of their wages, with the result that unless there is a corresponding increase in output they have less purchasing power in their pockets.
Instead of this we have orations every Sunday or Saturday—I read them in the Sunday papers, so they must be made on Saturday—on a whole variety of topics, widely different from one another, except that in every case the Minister lets you know that at any rate his Department is going perfectly splendidly, and even the others are not too bad. We have Mr. Aneurin Bevan, of all people in the world, delivering a week-end lecture on what should be the proper behaviour of your Lordships' House! The thought of Mr. Aneurin Bevan as the master of deportment, as the Mr. Turveydrop of this administration, is one which has is comical side. But I cannot say that it is limited to gentlemen whose charge is not finance. If you want a good example—some of your Lordships may remember it—take the jaunty speech which was made by Dr. Dalton in the broadcast from the B.B.C. on the evening of the day when he produced his Budget. I am glad that I have obtained a copy of that moving pronouncement, and I will read one or two sentences to your Lordships' House in order that we may see how much the people of this country were exhorted to realize that they were in a most perilous position and must work very, very hand to get out of it.
This is not Dr. Dalton in his pontifical style, you understand; it is Dr. Dalton, one might say, in his "matey" style, his condescending style. Listen to this:
"This time, I am glad to say, I was able to show a surplus; and that, I am sure yen will all feel, is a sign that we have been managing our financial affairs pretty well. Et is one up to the Labour Government, don't you think?"
That is the way in which the successor of Mr. Gladstone and of Sir Robert Peel addressed the largest audience which can be collected in the world. I would observe, on the chance that Dr. Dalton. does not play the game on which he based his analogy, that it is a dangerous thing for a golfer to pride himself because the is "one up." It is what happens at the end that matters. Many a man has come

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to grief because he has been a little too happy about a temporary success.
Here is a further extract from Dr. Dalton's address:
"And yet in spite of this expenditure I"—
there are a lot of I's in this address—
"am looking forward to a surplus of £270,000,000. Not too bad, is it?"
There is one passage which is so surprising that I hope I may be excused for reading it. It is about the proposed taxation of bonus shares. I listened with much attention to what the noble Lord, Lord Nathan, said on this subject, because I believe he knows what a bonus share really is. But does the Chancellor of the Exchequer? Listen to this:
"I have imposed a special new stamp duty of 10 per cent. on bonus shares. I wonder if you know what those are? Those of you who don't know will, I expect, feel like me, a bit suspicious about them; and those of you who do know won't really object to sharing with the long-suffering taxpayer some of the gay advantages of this game which they play, I am told, in the City."
When I listened to that I wondered whether the Chancellor of the Exchequer knew what a bonus share is. I was unwilling to think that he did not. But since then I am afraid my suspicions have been confirmed, because I notice that he made this remark about bonus shares, in another place, on June 12:
"Take the cotton industry… . I would much prefer to find companies in the cotton industry with up-to-date plant. Surely it would be much better to have a firm in the cotton industry that had spent money on getting good up-to-date plant, rather than putting a lot of money into reserve and distributing bonuses to shareholders? "
I really think he must have confused the bonuses of the Co-operative Society with bonus shares. The noble Lord opposite will agree with me, I am sure, that bonus shares arise if the company has made a profit; and only then. The profit, of course, is subject to Income Tax, whether it is distributed or not. If it is distributed by way of dividend to the shareholders the shareholders have it to spend, and they can do what they like with it. If on the other hand the profit is struck, as the company in general meeting may strike it, with the character of capital, it is ploughed into the business; it is not reserved at all. It is used for the very purpose of buying new machinery or whatever it may be; and the capital being
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increased the shareholders hold shares in proportion to their respective holdings. When the company is wound up it does not make any difference, for their proportions remain exactly the same.
I want to pass very briefly to what I think is a much more serious matter than our internal position: and that is our external financial position. It is only right and just to say that Dr. Dalton himself recognizes that. I have here part of a sentence from his Budget speech with which I am sure we shall all agree:
"Our internal finance presents difficult problems, but they are all easy, relatively speaking, compared to the external problem of our balance of payments on overseas trading account."
Of course, he is quite right; and here it seems to me that His Majesty's Government are exposed to an even more serious charge. Again, it would be quite unfair to treat the matter as though these troubles have come upon us simply because a Socialist Government are in power. I do not suggest anything of the kind. But what I do say is that though the situation would be there anyhow, everything depends on how it is handled and how much the attention of the country, as well as of the Government, is concentrated upon it. To inform the public of the real nature of this trouble is, in a democracy, half the battle. You cannot expect people to realize the terrible situation which is threatening if you do not explain to them what it is, although I agree that it is not easy.
Consider for a moment what is the fundamental cause of our financial difficulties overseas. It is this. There was a time, in the youth of some of us, when a large part of our purchases of food and raw material from abroad, a good deal of which had to be paid for in dollars, was met out of our invisible exports: that is to say, out of the payments which foreigners made for our services in shipping, in banking, in insurance, and by what we earned from British investments abroad. The situation in that respect, unhappily, has fundamentally changed in the last generation. Let me give three figures to illustrate the point. I may say that they are most admirably expanded and explained in a broadcast made recently by the noble Lord, Lord Brand, and published in The Listener. I am glad to know that Lord Brand is going to take this matter up and deal with it

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with greater knowlege and in more detail than I can.
In 1913, the last year before the 1914 war, our imports, which of course we had to pay for, amounted to about £770,000,000. Our invisible exports, earned as I have explained, were no less than £340,000,000, which is nearly half; so that nearly half our imports of goods and raw material could be paid for out of our invisible exports without our actually manufacturing and exporting anything at all. That was a wonderful position. But just pass on and take the last year before the last war, 1938. In 1938 our imports were over £900,000,000. What were our invisible exports? They had dropped and were something over £300,000,000. In other words, only one-third of our imports were paid for by these invisible exports, and we depended more than ever on actual manufactures, and on coal, which we were able to sell overseas.
Take the third figure. In 1946 our imports cost us, I think, £1,300,000,000. Prices rose. The figures I am giving are figures which include c.i.f. Our invisible exports had sunk to between £200,000,000 and £250,000,000 and they paid for only one-sixth of our imports. As I understand it, that is the fundamental reason why there is such an overwhelming need for exports from this country to-day and as yet—I wish to speak fairly of all men—I do not see any sign that what we are exporting will fill, or promise soon to fill, anything like the gap which has to be filled. There is one thing quite certain, and that is that you will not be able to import what you must import from foreign countries unless in one way or another you are able to pay for it. Meanwhile; we have the American loan of dollars, the equivalent in sterling of something like £937,000,000, and to that you must add that greatly valued and most treasured loan and contribution made by Canada. We have spent one half of the loan already. The current rate of expenditure of these credits is about £800,000,000 per annum, and that means that they will be exhausted by the end of the year.
It seems to me, my Lords, that two questions then arise which I really think the Government should consider. First of all, have the Government made plans for the situation that would arise if no further dollar assistance were forthcoming, or are we to have the situation of the coal muddle
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over again, when it was quite obvious the t the Government made no plans at all and merely hoped for the best until the trouble was upon us? Have they made any plats as to how they mean to deal with this? Have they devoted themselves with any more foresight than they did before to preparing for a possible dollar crisis? Even if we are successful, as we all hope we may be, in obtaining further dollar assistance, what will happen if that dollar assistance is delayed?—for the Americans Constitution is a very elaborate piece of mechanism. Have the Government mad: plans as to the situation which we might have to face if that delay, apart from ultimate promises, exposes us to these dangers before relief comes?
I know that the Government are attaching great importance to the Marshall offer. May I make one observation on it? I need hardly say I am not doubting the value of the offer, but I say this in order that we may be careful as to who: is the nature of the bargain that we make Surely we must be very careful what arrangements are made under the play. that is now being discussed. The supplies, to Europe, including to ourselves, should be adjusted to real, proved needs and not just to stated requirements. This is a point that my noble friend Lord Cherwell has made more than once, and it is profoundly true. If there is going to be a series of claims made on a fund by a series of countries, there is always a natural temptation to put one's individual claim rather high. After all, there is only so much to go round, and if you say that your need is so much maybe you will get a percentage at least of what you ask. That has not been our habit and the Government are to be congratulated upon it. They have not tried to put our needs higher than what we know them to be in stating what our real situation is. I am all for honesty, but the honest and unexaggerated statement is a very poor form of claim if it is grouped up with a lot of other claims by other countries which in fact are exaggerated. Therefore, I do most earnestly beg, in no carping spirit, that when the Government come to negotiate more closely in connexion with this great offer, they should bear this in mind.
There is one other point about it, perhaps even more important. Above all, we must be sure that we do not undertake

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to supply large amounts of goods to various countries in return for soft currencies or promises to pay, while we have to borrow dollars to meet our own necessities. That is what happened at the end of the last war. We cannot afford, as we did to a certain extent after the First World War, to have all debts to us written down or repudiated while we are left owing vast sums in dollars to the United States. I hope I have made this plain. This is not in the least said in a carping or grudging spirit. It merely seems to me, and to the Government I trust, that those are two considerations of the greatest importance, and we must not allow ourselves to be involved in arrangements which do not satisfy those two conditions.
I have occupied longer than I meant. I have finished what I wanted to say but perhaps I may add this much in conclusion. It is a very difficult thing to explain to the ordinary man and woman what is the real gravity of our international financial position. It is not at all an easy thing—you are sometimes tempted to do it in elementary terms—to explain what invisible exports are or why they have such a fundamental effect upon our financial position abroad, but I do most respectfully say that the Government are failing in their duty unless they really devote themselves to explaining this to the people of the country. One or two trade union leaders, as I think, have played a very manful part in this and have demanded that explanations should be given in order that the real gravity of our position may be understood. I am inclined to think in all honesty—I ought to except Sir Stafford Cripps—that it is not true as yet that any sustained effort is being made by the Government or its supporters to show the country what is the nature of the danger which is impending but which we all hope we can overcome. It is not easy to see what will happen to us if we do not.
My criticism is not, of course, that the Government have caused these troubles. They have not caused them at all; the troubles were the outcome of war conditions. My criticism is that the Government have exhausted themselves in preparing and carrying through a series of ill-prepared nationalizing proposals which have nothing to do with the real problem
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that is facing us—nothing at all. Transport monopoly cannot produce dollars. Coal nationalization, up to date at any rate, has produced less coal than in 1941; indeed, the British people at the moment are under the humiliation that, instead of exporting coal, the one really valuable natural product which we have in this island, we are importing it from foreign countries. The only way in which this recovery may be secured is by promoting a great increase in exports and by realizing that nationalization is of no assistance in attaining this objective, whatever may be the other arguments in favour of that particular course. It seems to me really that nationalization discourages enterprise and effort. I do not see any real indication that the Government realize the danger that is threatening us or, at any rate, if they do realize it, that they are prepared to tell the people the truth about it—which is extremely alarming—and to prepare them to recognize it and to face it, as Britain has always faced danger when she has been wisely and courageously led.
5.40 p.m.
LORD RENNELL: My Lords, we probably all want to hear what my noble friend Lord Brand has to say, and we regret that he will not be able to take part in the debate after Bank Holiday. I therefore propose to confine myself entirely to the Finance Bill and, in particular, to two groups of clauses—namely, Clauses 19 to 23, dealing with retirement pensions, and Clauses 60 to 62, dealing with bonus issues of securities, and so on. I take these two groups of clauses, not so much for the purpose of criticizing their contents or the methods behind them as to draw attention to the fact that the existence of these two sets of clauses appears to me to be opposed to the policy which has been advocated by His Majesty's Government in other connexions, and to draw attention to what I have already referred to on another occasion—namely, a significant discordance in policy between various Departments of His Majesty's Government.
The pension clauses are Clauses 19 to 23, and they make certain modifications in the assessment and provision of what are known as ex gratia pensions, or pensions which are not derived from an approved fund. I have no doubt that the

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Chancellor of the Exchequer had very good reason for inserting those clauses, and I dare say the possibility of the improper use of facilities extended to other Bills was gone into. But the effect of these clauses is to make the granting of ex gratia pensions to officials of corporations, and also directors and officials of companies, extremely difficult and onerous, both in regard to the companies and the individuals themselves. The effect can be only to discourage the retirement of officers of corporations, and of directors of companies, and must have the effect of their being kept on, out of kindness or out of gratitude for their services, beyond the ages at which they normally ought to retire. It is no retort to say that they ought to have participated in an approved fund, because there are a great many cases where there would be no possibility of making an approved fund and, in cases of small corporations, the burden would be far too onerous.
We regard this group of clauses, therefore, as being opposed in their effect to the principles which were accepted when we discussed the Companies Bill—namely, that retirement ages should be fixed at sixty-five, seventy or whatever the age group may be, so as to allow younger people to take over. The clauses will have the opposite effect, in my opinion and that of a great many others with whom I have discussed the matter. I have consequently come to the conclusion that the provisions of the Finance Bill in this respect do not accord with the policy which was advocated by spokesmen of His Majesty's Government, both here and in another place, speaking for the Board of Trade.
In regard to the second group of clauses I have mentioned, I do not propose to criticize the tax which is imposed in them. It may be a good tax or a bad tax. I do not wish to take up your Lordships' time in expressing any views about that. I have very definite views, but they arc: not germane to what I am going to say. It has been common ground, not only in your Lordships' House but generally in all accepted practice in the management and direction of corporations, that those persons who are entitled to benefit in the first instance by the issue of additional securities are the shareholders and the corporations themselves, and not the general public. I am quite
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sure that the noble Lord who moved the Second Reading will be the first to agree that that is a principle which every corporation would advocate. It is certainly a principle which was strongly advocated by the noble and learned Viscount in the course of the Companies Bill. It is implicit in that group of clauses in the Companies Bill, and on all sides of the House we tried to make that as much obligation as it was practicable to do.
The effect of this set of clauses is very remarkable. Where a company issues shares to its shareholders on what may be described as bonus terms, it has to pay a tax; but where the company issues new shares to persons other than its own shareholders, it escapes tax. Can there be any other conclusion than that here after every incentive will be given to companies to issue shares to the general public, and not to the companies shareholders? I ask again if that is consistent with what was said in your Lordships' House by the Lord Chancellor, and what must have been, to his knowledge, the practice of all well conducted corporations for many years past.
I have, however, one small point in connexion with that which I would like to raise, and it is in regard to Clause 61, on page 58. I draw his attention in particular to subsection (3) of that clause which purports to provide, and which, I am advised, does not provide, for the method of assessing how much the bonus is, and, therefore, what the tax shall be. I will not take up your Lordships' time by going into the clause in detail, but in my view, and if I am properly advise on the wording, owing to a misconception of what a letter of right is it will not be possible to collect this tax at all. If the noble Lord should wish to ascertain my reasons for making that statement, I shall be very glad to give them to him. It suggests to me, if I am right—and I stand open to correction—that the conception of what is a bonus is one which has, perhaps, been not entirely realized by the Chancellor of the Exchequer. I am inclined to concur with the noble and learned Viscount who has just sat down that the Chancellor of the Exchequer doe; not realize what a bonus is.
However, whether I am right in that or not, I wish to repeat that here we have examples where the policy followed is an

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variance with the policy which has been attempted to be followed in other Bills, and is completely at variance with statements that have been made by various members of His Majesty's Government. I do not intend to go into the implications of this Bill, because I do not wish to keep your Lordships from hearing what the noble Lord, Lord Brand, has to say. I cannot, however, refrain from commenting on the somewhat, shall we say, Bohemian manner in which the Chancellor of the Exchequer has arrived at a surplus. Perhaps "Bohemian" is an understatement. It is not a method which would commend itself in the best commercial practice.
5.49 p.m.
LORD BRAND: My Lords, for the reasons that the noble Lord, Lord Nathan, has given, I am asking the indulgence of your Lordships to make a few remarks on this occasion, and not in the economic debate as I should have preferred, because by that time I shall be in the United States. I am going to devote my main attention to what is the most immediate and by far the gravest problem before the country, which is our balance of payments. There are, of course, other very serious problems, one being our external indebtedness. As your Lordships know, in 1951 we have to begin the service of our American and Canadian loans, and we also have sterling debts amounting still to about £3,500,000,000. These latter, from our point of view, are war debts, and perhaps might be regarded as war debts by those nations who, so to speak, own them, if they really feel themselves members of the United Nations, and are glad that we won the war. I have always held, and still hold, the view that war debts and reparations should not be paid and cannot properly be paid without doing a great deal of damage to the world. Nevertheless, I should like to say that, while I still take that view, I am entirely against unilateral repudiation of these sterling debts. At present, by far the most important question, so far as they are concerned, is what is the annual payment we make in connexion with them. These payments must be very modest while we are in our present condition and, in my opinion, we can well wait as regards the main question of the total capital amount
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of these debts till a later period when, no doubt, they will have to be adjusted.
I now come back to the question of our balance of payments. The latest figures, I think, are those given by the Lord President in another place. He said that the deficit for the year 1947–48 was estimated at £450,000,000. This was on the supposition that exports had reached 140 per cent. of the 1938 total by the middle of 1948. That figure is, therefore, based on the expectation of a very large increase in exports. At the present export rate, the deficit is running, I think, at about £600,000,000 to £700,000,000 a year. Of course, the deficit in dollars may be greater than £450,000,000 because we earn a great many inconvertible currencies which we cannot convert, and we have to pay for most of our imports from North America in dollars without exports to North America, to help us to pay for them.
One cannot understand the position unless one knows why it is that this great deficit exists. Therefore, I will venture to give your Lordships some figures which will not contradict at all the figures which have been given by the noble and learned Viscount, Lord Simon, but which are put in a slightly different way. In volume, our imports are now only from 80 to 85 per cent. of what they were in 1938. In volume, our exports are now 100 per cent. of 1938. Therefore, as regards volume of imports and exports, we are better off than in 1938, and if everything else were equal one would think that we would be all right. But this is far from being so, although I think that what I have just said indicates a very considerable achievement on our part. The main difficulties, and the main differences from 1938, are that our invisible exports are down by about £100,000,000; our Government expenditure is up by £175,000,000, making £275,000,000 in all; and, still more important, there has been, particularly recently, an enormous rise in the prices of imports and exports, but particularly of imports.
In 1946, our imports on an f.o.b. basis (the noble and learned Viscount, Lord Simon, quoted them on a c.i.f. basis) cost £1,100,000,000. The imports for 1947–48 on the same basis are estimated

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to cost £1,700,000.000 for only 15 per cent. more volume. Therefore, between 1946 and the year 1947–48 there has been an increase in the cost of imports by £600,000,000 for 15 per cent. more volume. Of course, there has been a great increase in export prices, too—how much I cannot say, but perhaps in the last six months the net increase in our total deficit owing to these price rises may be as much as £150,000,000 to £200,000,000. Probably, for the whole year 1947–48 it may be considerably more. The Chancellor of the Exchequer gave some indication of this the other day, when he stated that the United States loan had really been reduced in value by 28 per cent. because of these rises in prices. Therefore, I think that the Lord President's balance sheet for 1947–48 may read something like this. On the debit side: imports, £1,700,000,000; Government expenditure abroad, £175,000,000, making a total of £1,875,000,000. On the credit side: exports, £1,300,000,000; invisible exports, £125,000,000. This leaves a deficit of £450,000,000.
I apologize to your Lordships for giving so many figures, but I think they are necessary in order to be clear about the position and to see what can be done. It follows, from the figures that I have given, that we can improve our position in the following ways. We can reduce Government expenditure abroad from £175,000.000 down to a lower figure. We cannot, on financial grounds, afford any of this expenditure. Nevertheless, I, personally, am not in favour of scuttle, and I am not sufficiently acquainted with what can and what cannot be done to suggest what actual reduction should be made or is possible. We can increase, or try to increase, our invisible exports, particularly by increasing shipping freights. Unfortunately, investments abroad we cannot increase at present because we have no surplus, and we shall have to increase very slowly in later years. But beyond these two courses we are left simply with visible exports and imports.
It is here that the rise in prices is so important. I do not think that we can possibly be expected immediately to increase our exports by the hundreds of millions of pounds on the wrong side caused by the extra prices in imports. The terms of trade have been very greatly
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against us in the last year. For this reason, I think that there are good grounds for asking for some relief from the supplying nations who themselves of course, get the advantage of the increased prices. But we have to remember what our views would be if the boot were on the other leg and if the prices of food and raw materials fell very heavily. We should not, I think, feel very strongly that we had to go to the succour of other nations who would then be suffering as we are suffering now. In any case, apart from this question of prices there is bound to remain a very serious deficit, and therefore, apart from that question, we shall have to make every conceivable effort that we can to close the gap.
If we are to be left alone to deal with the deficit, if we get no help from abroad, we shall be faced with making very large cuts of all imports not absolutely essential. Our whole life will be very seriously affected. We must not forget that we are obliged to pay for imports day by thy, either with our own money or with money we have borrowed. If we have no money of our own and are not able to borrow, we shall not get the imports. Day by day they have to be paid for. I think in these circumstances that we could not possibly avoid a very serious crisis. That is true also of other European nations, particularly, I think, France. We must recognize—and here I speak from knowledge of American conditions—that Congress probably may not be in time before the critical moment arrives for us. We ought, therefore, to prepare now, since the main burden in any case must fall on us. We cannot afford to run down either stocks of food or raw materials or our general reserves of dollars or gold below the danger point, so that the time may come when we are absolutely defenceless and simply rest on the succour of other nations without any means whatever of helping ourselves.
This means, in my opinion, that we must restrict imports now, particularly of food, to a minimum required for life and production; but in the long run what is more important is that we must increase output as much as possible both to take the place of imports and to increase exports. All this involves both a negative and a positive policy on the part of the Government. It involves in the first place

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the negative policy of preventing inflation, as the noble Viscount, Lord Simon, said, by every possible means. It involves also positive steps to increase output. I should like to consider these two aspects shortly in turn.
One danger is that this country does not understand what real inflation is like. The continental countries do. I saw a great deal of it after the last war and in my opinion very serious inflation is the worst of plagues, not only from the financial point of view but because it destroys all the most stable classes in the population and leaves the whole community open to attack, as we have seen in Germany, from men like Hitler or some other would-be dictator, without there being any class that can stand up against him because all the classes that might do so are discontented, embittered and ruined. I do not think we shall suffer from that completely uncontrolled inflation here, but even inflation controlled as ours is may be very damaging. Despite all controls, prices will certainly rise. This, of course, immediately acts in hampering exports. It puts up the cost of exports so long as our exchange is held stable and prevents selling abroad in competition with other nations. It also makes all imports more profitable and the pressure of imports therefore would become greater even than now.
On the other hand, if prices are kept down, for instance by subsidies, and purchasing power continues to increase then this purchasing power spreads itself out in undesirable and wasteful ways. If subsidies are diminished, as I think the Chancellor of the Exchequer wishes, then the cost of living goes up and immediately there comes into play the necessity, under contracts under which millions of people work, to raise wages. Therefore you have a very rigid economic system. Wherever you turn you are almost obliged to do the wrong thing.
There are serious dangers of more inflation, in my opinion, for various reasons. The amount of money in the hands of the public in relation to our consumption is, I calculate, about double what it was before the war. In 1946 bank deposits went up by the astonishing figure of £800,000,000. Recently they have been stationary, but yesterday I saw in the papers that in June they increased again by £59,000,000. Therefore, purchasing
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power in the hands of the public is still increasing and in my view, this must be stopped. The second serious danger is the rise of wages and shortening of hours. Under the conditions of full employment that we have now, to raise wages is wholly inflationary. It does not increase output. It simply adds to prices. What is the good of talking about scientific planning if the control of this very central problem is left entirely in the hands of interested parties the employers and the employed, without the Government taking a hand to represent the community?
Another great danger is that we have far greater demands on our capital and labour for capital purposes than we can possibly fulfil. Besides the enormous demands of home consumption and exports, we have the huge depreciation of our capital assets due to the war. We have the necessity to modernize our plant, which I myself should put as the first priority. We have the necessity to extend industrial plant in many directions; for instance, power stations. We propose to spend huge sums of money on our Colonies. And we ought to remember, too, that some time or other we have the service on our external debt to pay. There is nothing like enough savings or enough materials or labour to carry out all these projects at the same time. If, therefore, we do not continue the control of our capital investments, which I much regret, we should have a very great rise of prices and additional inflation.
Lastly, there is the question of the Budget. It is necessary to balance the Budget and if possible to have a surplus. The Chancellor of the Exchequer, I know, fully supports this view, but he seems to me by temperament somewhat too buoyant and optimistic for these sad days. He appears to me to be always wanting to do a record. He did a record with his 2½ per cent, irredeemable stock. But the record has faded. He said, too, at that time that the British Government's credit was at its record height. I am a banter and I am not accustomed, when a customer comes to see me, to think his credit is very high if he is overwhelmed with debt, and if his expenditure is twice that of his income. Therefore, I think that the Chancellor of the Exchequer was putting that record a little high. I fear it may be the same shortly with the record revenue,

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which is due, as other noble Lords have said, partly to our inordinate taxation and inordinate expenditure, partly to inflation, and partly, of course, to the fact that we are borrowing from other countries at the rate of £800,000,000 a year. When our loans are through, and we face great unemployment and difficulties of all kinds, then I fear the Budget surplus, if it exists, will disappear very quickly like snow upon the desert's dusty face.
I now come to the question of positive action for greater output. Many of your Lordships know much more than I do about industrial output, and, therefore, I shall make only a few general remarks. If we as a nation are working very hard we are certainly not doing ourselves justice before the world. We are clearly not doing our best in the coal and building industries. Moreover, shortening of hours is at this moment, in the face of the world, paradoxical, and not the best prelude to borrowing because we say we are too poor. We have to remember that the outside world often sees us more clearly than we see ourselves. I remember that after the last war the French were always blaming the British for appreciating the pound. They did not see that it was the franc that was depreciated, because the franc was something that did not change, so far as they were concerned. Now foreign nations watch us with extreme interest all the time. They watch the pace at which we are expending our loans. They realize that we are like a building held up by scaffolding—controls of all kinds—and they are wondering whether we are really going make the effort ourselves to restore the building before the scaffolding shows signs of weakening.
Apart from controls, our troubles appear to me to come from two causes. The first is the one I have already mentioned, that most people here have too much purchasing power in their pockets in relation to the amount of goods to be purchased. The second is that they have expected too much from the Labour Government. It is a serious defect, to my mind (I speak not as a Party politician, which I am not) that Socialist teaching has always been in favour of the distribution and not of the production of wealth. The distribution of wealth has been taught for many years as the cure and end-all. Now, as the noble and learned Viscount, Lord Simon said, we
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have come to the end of the distribution of wealth; and we find that the mere distribution of wealth, which is desirable if it goes not beyond the point where it destroys initiative, is in itself no cure at all. The cure is in greater production; and there Socialism has hitherto failed, whether in this country, in France or in other countries, either as against capitalism or, even, I think, Communism with its big stick.
Anyone who has lived for some time in the United States realizes with what greater speed they do many things than we do here. Their output of agricultural production, I believe, is about the same per man-hour; their output of industrial production is double or treble. I should like to read to your Lordships a short quotation from the Manchester Guardian from an article written recently by a correspondent in America:
"The British Labour view that the working class can get a fair deal only in a Socialist system is utterly strange to the vast majority of American workers. On the whole they are interested in making the free enterprise system work well and getting the best out of it. That is everywhere recognized by intelligent employers, who are making great efforts to confirm the workers in their co-operative altitude."
It sounds to me almost like a paradise. It would he unfair, however, not to say that our lesser output in this country is due also to the lack of modernization, and possibly to restrictive measures among considerable circles in British industry. But to which side the lack of modernization can be put down—whether to the employers only, or to the employed as well—I would not like to say. I think that there was a combination of both before the war, and that we were seriously at fault so far as the welfare of our country was concerned. The Government, of course, have long been aware of the vital importance of output, but nothing much happens. If nationalization were the answer, I would be in favour of it; but experience proves that it is not. We have plenty of examples already of nationalized industries; we know how good they are, and. how bad they are, compared with private enterprize—some are good, and some are bad.
We know that the Prussian railways were well run, but that the American telephone system is vastly superior to the British telephone system. There is really nothing to show that any nationalization

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scheme will greatly increase the output of wealth, and I take the view which the noble and learned Viscount, Lord Simon, took, that nationalization has nothing whatever to do with the problems that face us so seriously in this country. I remember the dictum of the late Lord Keynes, that, so far as the welfare of the country was concerned, there could be nothing more unimportant than the nationalization of railways. That was said before the war.
I have a short extract here which I would like to read to your Lordships, because it bears on one aspect of this problem. It is taken from the Report of the Bank of International Settlements, the annual reports of which give, in my opinion, a better description of the economic conditions of the world than anything found anywhere else. This passage is from the latest Report:
"The Nationalizations which have taken place in many countries since the war cannot as yet be judged by results, partly because complete data regarding the operation of the national enterprizes are still lacking for the most part. But it is known that in many cases operating losses are being sustained which have to be covered by grants from the public treasuries. When that is the case, the nationalized enterprises not only do not contribute their fair share to the current upkeep of public services, but actually appropriate a part of the nation's savings to cover current costs, and thus slow down progress all round."
I hope it will not prove the case that the nationalized industries here will come on the Budget for any of their expenditure. I would like to express my opinion, however, that if nationalization goes beyond public utilities and extends into the exporting and competitive industries, the result will be very damaging to the country for several reasons, of which I will mention only one. The only way in which we can really build up our invisible exports in the future is by extending our investments in other countries. I do not believe, with the world as it is, that Governments are going to be allowed by ether Governments to invest large sums of money in industries in their countries. I believe, therefore, that our only chance of building up our investments abroad is to do it as we did it in years past, by the enterprise and energy of our private corporations and companies, which would have a great deal more chance of doing so than any Government.
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I naturally support the Marshall Plan as much as anyone who has spoken. It is very desirable from every point of view, particularly from the point of view of increasing international trade (which is essential to us) but we cannot rely upon it. I do not think we shall ever get a loan of the character we got before, which was a very special and exceptional loan given to no other country. We are now, as the Economist said quite rightly the other day, in the queue. In Washington it was our object always during the war—when we succeeded—and even after the war, to maintain that we were not in the queue; that we were one of the chief belligerents and we would not be in the queue and would not stand in with all other nations but required special treatment. The American loan was an example of special treatment, but we are now in the queue. I do not think myself that we could have avoided it. We are in the queue, and we shall have to join up with other European nations; we shall make our case with them and our case must be as good as any of their cases if we are to get the same treatment.
It is obvious that we are in an exceedingly difficult position, partly because of the part we played in the war, and partly because conditions have turned out very unfavourably for us. We shall be called upon for the greatest efforts. We shall solve our problem in time, because every nation has to solve its problems; it cannot live on other nations. In my view we shall not balance without, first, a fall in the price of imports relatively to those of exports; secondly, without a considerable increase in international trade, which we hope the Marshall Plan will help to produce; and thirdly, without much greater efforts and, I fear, much greater sacrifices on our part. We cannot tell how this very difficult position is going to develop in the coming months. I hope myself, if it were clear that conditions were becoming so serious that we must, as in war time, act as a united nation, that we should find the means of doing so.
6.25 p.m.
LORD LUCAS OF CHILWORTH: My Lords, it is indeed a privilege to follow in this debate the noble Lord, Lord Brand, who has once again demonstrated to your Lordships his mastery of this great and complex subject. The noble Lord said

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that he addressed your Lordships as a banker, and I intend, if I may have the indulgence of your Lordships' House, to make some comments upon what the noble Lord has said from the point of view of a working industrialist. Before I do so, I would like to say what a happy circumstance it is for me that my noble friend Lord Nathan is replying to this debate, because it was my noble friend who replied to the Motion which I had the honour to lay before your Lordships' House upon the question of motor vehicle taxation.
When the noble Lord, Lord Llewellin, spoke earlier this afternoon, he said that your Lordships' House had lately gained quite an amount of publicity. I will not do anything to add to that publicity, because if I claimed that it was through the unanimity of your Lordships' House in pressing upon my noble friend the dire need for a change in motor vehicle taxation that the change was made, that might excite jealous comment elsewhere. But I would like to extend to the noble Lord my grateful thanks for the efforts that he made with the Chancellor of the Exchequer. May I also convey my thanks to the noble Lord, Lord Teynham, and his colleagues opposite for the unanimity of the support which they gave me upon that occasion?
Now we have freed one of the greatest industries we have in this country from one of the biggest obstacles it has suffered for twenty-five years, perhaps at last in these dire days we may learn to realize what a great instrument for economic advancement we have in the motor industry. It is at the present time supplying one-third of our exports. It can do even more in future, for at last the British designer is going to be given a free hand to compete in the world's markets. Already it is quite apparent that he is going to do so; the new system of taxation is going to bring that measure of rationalization into this industry which we so sadly need. Already one of our most prominent manufacturers has declared that he will in future build only one model. Another very prominent manufacturer has declared it to be his policy to build only two models. That is the effect of the flat-rate system of taxation, now that we have got away from all the bogies of the past.
But there is one point which my noble friend mentioned in the proposals in this
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Bill relative to motor vehicle taxation which I think deserves some comment; that is, the extent of the increase in the purchase tax on motor cars of over £1,000 in value. There has been adverse comment upon this, and some of it has taken a line which I think is worthy of a reply. The comment is that it will destroy that quality craftsmanship which has been built up in the automobile industry for so many years and which stood us in such good stead during the war. I dissent from that view.
I would like to give your Lordship; one or two facts to show why I think that the criticism is ill-founded. Let us take away the exaggeration that we should never have won the Battle of Britain if it had not been for the existence of one specific make of motor car, and ask ourselves what was the real development of the automobile and internal combustion engine during this war. There is no harm in my mentioning a name which has been mentioned so many times already. It has been said that this increase in purchase tax will kill such firms as Rolls-Royce. It will do nothing of the kind. The production of the Rolls-Royce company before the war never exceeded 1,000 motor cars a year, and about 10 per cent. of those were exported. The production of the Rolls-Royce company to-day is approximately the same, and 45 per cent. are exported. Nobody is really going to argue that the future engineering quality of this country is going to be affected by whether 200 or 300 motor cars of that class are sold or not. But the point I want to impress upon your Lordships is this: that during the war, owing to the rapid advance in production technique, the Rolls-Royce Merlin engine was produced at the Ford plant at Old Trafford with 80 per cent. of unskilled labour. That is an example of the advance in the technique of automobile production which underlines what the noble Lord, Lord Brand, has said. We cannot rely in future upon what is erroneously called our "quality production." There is a fallacy which r Ins right through some sections of British industry that high price and quality go hand in hand. That has been the biggest fallacy in British industry over this last twenty to twenty-five years.
The point, however, is not whether we shall be able to buy £2,000 or £3,000

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motor cars in the next two or three years. The point is whether we shall be able to buy a motor car at all. I am going to suggest to your Lordships that if increasing the purchase tax to 66⅔ per cent. upon what must be called luxury motor cars is going to increase our exports, then it is more than justified. If it is going to decrease the production of luxury motor cars for the home market it is again more than justified, because we cannot afford to waste our assets, whether in man-power or in material, in building this type of motor car. That may sound a sad thing for the builders of these motor cars; but as the noble Lord, Lord Brand, has said—perhaps I may put it more colloquially—you cannot make omelettes without breaking eggs; and we have some very dire priorities facing us.
I want to return to the question of the mechanism of the purchase tax, because after listening to Lord Brand I addressed to myself a remark which I habitually do in such circumstances. The noble Lord gave a masterly exposition of the present position. What are we going to do about it? One of the things we are suffering from to-day in this country is chronic maldistribution of labour. And one of the paradoxes is that those industries where labour is shortest have a more abundant supply of raw material, and where raw material is shortest there is an abundant supply of labour. Take the light engineering industry; through the incidence of war it has attracted far too much labour, and what has happened? It is utilizing that labour, it is utilizing material to produce things of no real value; hence the fact that you can walk into any large London store to-day and see what, without any exaggeration, may be described as a lot of unnecessary junk and trash at very high prices.
When I addressed your Lordships on a similar subject a little time ago I said we were faced with the urgent necessity of suppressing unnecessary industries in this country; and to get labour distribution right that is what we have to do. The noble Lord spoke of a positive and a negative approach. I do not agree with the positive direction of labour; I do not think that in this country we shall ever satisfactorily work conscription of labour in times of peace. What
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we must have is a negative direction of labour, and I would do it through the mechanism of the purchase tax. I would increase the purchase tax on these unnecessary manufactures until it reached the point that, with all their surplus purchasing power, the public could not purchase. I cannot see any other way by which you can do it. If raw material supply and raw material control is being used at the present time to the greatest degree of efficiency I believe there is only one way to achieve the object in view, and that is by the purchase tax mechanism. We have to increase those industries which can contribute most to exports, and if we cannot export these commodities they should not be permitted to be made.
The noble Lord, Lord Brand, also mentioned our imports. It is useless restricting our imports of raw material to stop manufactures for export. It makes for a vicious circle. I think the noble Lord was quite right when he pointed to many luxuries, luxury foods and so on, that could be stopped; but it is no good thinking that we can possibly increase our exports if we decrease our raw material imports and our basic food imports, because if we decrease those our exports would drop. The noble Lord, Lord Brand, also made some comment on the productive power of American industry and our own. As he rightly said, the secret is the horse-power available to the hand of the American worker, which is much greater than the horse-power available to the hand of the British worker. It is useless to deny that we are suffering from those locust years between the wars when we lived, in a fool's paradise, when our productive efficiency and our industrial efficiency went gradually down and down, when we were losing our place as a first-class industrial nation, and it was camouflaged by the dividends we were receiving from our overseas investments—which have now gone. We started after this war with plant in a number of our industries which in America would have found its way to the scrap heap twenty-five years ago. This cannot be put right in five minutes.
If I might make these my concluding remarks, I would attempt to cross swords with the noble Viscount, Lord Simon, if he would give me his attention for one

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moment. Viscount Simon—and the remark was echoed by Lord Brand—had to repeat what has been repeated from those Benches so many times, that of course nationalization "will not earn a dollar"—I think those were the noble Viscount's exact words—and that these nationalization schemes are not necessary. That is where we, on these Benches, fundamentally disagree with him. I will repeat the words of the noble and learned Viscount on the Woolsack when he introduced the Coal Industry Nationalisation Bill into this House. He said:
"The nationalization of the coal mines will never produce another ton of coal, but it is a ore-requisite of any coal being produced at all."
The nationalization of transport in this country is a pre-requisite to making the transport of this country a proper adjunct to industry. The nationalization of the electricity supply of this country is the only way whereby you will increase the horse power at the hands of every worker. I join with the noble Lord if he means that, other than the basic industries, nationalization should be stayed. But, until we do bring the basic industries under public control and take the private profit scramble out of them, we shall never put the economy of this country upon that plane which will allow us to come back as a great industrial nation, because it is owing to that very private profit scramble that our basic industries have fallen to the depths which they have. We cannot do those things that we want to do. We have not the tools.
That is all I wanted to say as a working industrialist as opposed to Lord Brand as a self-confessed banker, and I would repeat what I have said before. It is industry's experience that forces us to see that light, heat, power and transport, the basic industries of Britain's economy, must be brought under public control and used for the good of the public as a whole and not for any particular section of the public. Until that is done we shall never get our economy back again on the lines that the noble Lord desires.
6.43 p.m.
VISCOUNT BRIDGEMAN: My Lords, the noble Lord who moved the Second Reading of this Bill referred to Clause 27—I apologise for not being in the House at the time—that is to say, the clause which exempts from Income Tax training expenses, allowances, and bounties to
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members of reserve and auxiliary forces. I do not think it would be right that that clause should pass without one word of appreciation from those on these Benches who have pressed this course upon His Majesty's Government. We are very glad to see that this concession has been made. What I do want to add is that I hope that this concession will be given the widest publicity in the proper way, so that the news will get down to those quarters from which it has been represented that this concession is necessary.
I would like to add a further word., and that is that this concession is, I think, a new departure in several ways. We shall watch it with very great interest from the point of view of its success in attracting people into the reserve forces. I suggest that we should also watch it from the point of view of seeing whether this experiment in exempting what one might call works of supererogation from Income Tax is not a step to be followed in other places where additional effort is wanted. With those words I give a hearty welcome to this clause.
6.45 p.m.
LORD NATHAN: My Lords, in ray opening observations, I indicated that the representative of the Government standing at this Box to move the Second Reading was confronted with the choice of two courses of action. He might either make a short speech in explanation of the Bill, or he might embark upon a considered statement on the economic situation past, present and prospective, and, indeed, initiate a debate on the state of the nation. I should have thought it discourteous to your Lordships and wrong in our present situation to have confined myself strictly to the Bill as I did, had it not been for the fact that by arrangement a debate en the general economic situation is to lake place in the course of the next ten days or so. I think it would have been superfluous, and perhaps it would have been inconvenient, that I should have attempted to open a discussion on a large scale, when such a discussion is to be initiated in a few days' time for the express purpose of dealing with a larger field. I am anxious that you should not think me either discourteous to your Lordships on this occasion or insensitive of the situation in which we as a nation find ourselves.

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Indeed, the discussion to-day has to but a very slight extent dealt with the actual provisions of the Bill itself. Except for a commendatory observation from Lord Lucas, I think that scarcely any reference was made to the contents of the Bill save by the noble Lord, Lord Rennell.
VISCOUNT SIMON: On Income Tax?
LORD NATHAN: I have great regard for the noble Lord, and for his great practical experience; he will not, I am sure, think that I am trying to score any debating point, because that is very far from my intention, if I deal with a little criticism he made as to the provision of the Bill, not on the virtues of the taxation, in relation to directors' pensions or compensation on the one hand—
LORD RENNELL: And bonuses.
LORD NATHAN: —and bonuses on the other. I would not dissent from the view that there was substance in what the noble Lord said by way of criticism of the actual provision, but the noble Lord had, I think, been studying an earlier text of the Bill and not the Bill which is now actually before your Lordships' House.
LORD RENNELL: Indeed it is; it is the latest version.
LORD NATHAN: If that is so, I must modify a compliment which I was intending to pay to the noble Lord, because the provision of the Bill as it now stands, so far as it relates to pensions and compensation for directors, employees and others, is expressly intended to provide for the payment of those very ex gratia payments which the noble Lord thought were excluded.
LORD RENNELL: I did not suggest that they were excluded; I said the possibility of making these payments was made unduly onerous.
LORD NATHAN: I think that is an altogether undue pessimism. If it becomes bona fide desirable for an ex gratia payment to be made, means will no doubt be found; that is part of the object of the revision of the Bill. On the other point, there comes the question of rights to which the noble Lord referred in relation to the stamp duty upon bonuses. I think, perhaps, that there was some justified criticism
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at one point, but I understand that, as a document, the Bill that is now in your Lordships' hands has been agreed and approved by the Committee of the Stock Exchange as being aptly devised to carry out the intention which is there indicated and that the difficulty to which the noble Lord refers has been dealt with. I am so advised.
Now I indicated in my earlier observations that I should not be able to answer the speech which I knew—for he had been good enough to inform me—was about to be made by the noble Lord, Lord Brand. But I am sure that I shall be reflecting the views of noble Lords in general when I say that that was a speech which contained the fruits of much experience and wisdom, to which respectful attention must, and of course will, be given; and the noble Lord may accept that it will be taken into consideration for the purposes of the debate which is to be held in about a fortnight's time.
The noble and learned Viscount, Lord Simon, made a speech which, if he will allow me to say so, I thought was both interesting and important. He will not expect me to say—and he would not believe me if I did—that I find myself in agreement with every point that he made, or perhaps with some of the decorations with which he adorned his propositions, but I recognize the importance of the speech which he made, and the spirit of serving the public interest with which it was inspired. I will not deal with one or two points which he made in criticism of the Budget arrangements, but I can say this to him: that I do not think too much emphasis can be laid on the urgent necessity and the importance of explaining fully, and getting it understood by the people of this country, what is the state of the nation. We are at one that it is of the first importance that that should be widely and thoroughly understood and its implications appreciated. It is not a simple matter, but the noble Viscount may rest assured that the importance of that is well in the minds of His Majesty's Government, who have devised, and are in the course of devising, methods whereby the situation may become clear to the people of this country, so that they may know the difficulties and dangers that confront us and, at the same time, be prepared to face the remedies to which we shall have to direct our minds and our energies.

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Perhaps, in regard to the wider field that was opened, I might remark that the dollars available under the American and Canadian lines of credit have, of course, proved insufficient to meet our dollar burden. This is not our fault, since we have maintained a standard of austerity in our import policy whereby imports, particularly dollar imports, have been allowed only on a scale required to keep the population reasonably well nourished, and to provide raw materials and machinery to enable them to live and work. But, unfortunately, we have been hampered by the rising price of many of the corn-modifies we must import, and this rise in price amounted, on calculations based on the United States wholesale price indices, to no less than 28 per cent., and has reduced the American credit by about a billion dollars in value since it was negotiated. At the same time, recovery in other parts of the world has been terribly slow, and we are still dependent to an abnormal degree upon the American continents for food supplies and other goods which we might have expected by now to be receiving from other sources.
Our own dollar problem must not be viewed in isolation. All over the world there is a growing shortage of dollars which has become acute in many of the countries of Europe and elsewhere. These include, besides Western Europe in general, such strong economic entities as Sweden, Canada, and the Argentine. This shortage of dollars is the other side of the United States' favourable balance of payments, which is at present running at something like twelve billion dollars a year. My Lords, if the Government have not sought to put the country forthwith on the basis of a siege economy, it is because of the growing realization that the problem must be tackled on a far wider scale. This realization has found expression in the speech of Mr. Marshall at Harvard University, and His Majesty's Government are bending every effort to secure prompt and comprehensive action to respond to that speech. I think I might add this, that the genius and energy of the Foreign Secretary have already advanced matters in a way which is an earnest of the determination of the Government as a whole to achieve success, if it is humanly possible to do so.
On Question, Bill read 2a; Committee negatived.
[The Sitting was suspended at seen o'clock and resumed at half past eight.]

ELECTRICITY BILL.
8.30 p.m.
House again in Committee (according to Order).
[The EARL OF DROGHEDA in the Chair.]
VISCOUNT SWINTON VISCOUNT SWINTON moved, after Clause 57 to insert the following new clause:
"Setting up of Electricity Appeal Tribunal.
(1) Forthwith upon the dissolution of the Electricity Commissioners the Minister shall by order constitute a tribunal (in this Act referred to as the Electricity Appeal Tribunal) which shall consist of a chairman who shall be a barrister or solicitor of not less than seven years' standing appointed by the Lord Chancellor and two other members appointed by the Minister, one of whom shall be a person having experience in the generation and supply of electricity and the other of whom shall have had experience in commercial matters.
No member of the Central Authority or of any Electricity Board and no person employed by them shall be qualified to be a member of the Tribunal.
(2) It shall be the duty of the Electricity Appeal Tribunal to approve the maximum tariff fixed for each area and for the supply of electricity for railways and to consider—

(a) any representation from any person other than an area board with respect to the prices charged for the supply of electricity by the Central Authority or the Electricity Boards and any representation from any person in regard to any allegation as respects undue preference or undue discrimination by an Electricity Board

(b) any representation in regard to the matters specified in the preceding paragraph which may he made to the Electricity Appeal Tribunal by a consultative council either upon the request of any person or otherwise;

(c) any question which may be referred to it for consideration by the Minister or by the Central Authority.

(3) When the Electricity Appeal Tribunal have considered any such representation or question as aforesaid they shall report to the Minister upon their conclusions and shall make such representations to the Minister in connection with those conclusions as they think expedient.
(4) Any order made under this section may contain such incidental and consequential provisions for the payment of remuneration to members of the Tribunal by the Central

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Authority with the approval of the Treasury either by way of annual salary or of fees, and for determining the procedure of the Tribunal as the Minister thinks fit.,
The procedure of the Tribunal shall be such as to secure that a member of the Tribunal shall not have any special interest such as may tend to interfere with his impartial consideration of the representation or question made or referred to them.
(5) The Tribunal shall be furnished by the Central Authority with such accommodation as appears to them to be requisite for the proper discharge of their functions and with such clerks, officers and staff as appear to them with the approval of the Treasury, as to numbers to be requisite for the purpose and the Central Authority shall pay to the clerks, officers and staff of the Tribunal such remuneration as they may, with the approval of the Treasury determine.
(6) The Minister and the Central Authority shall provide the Tribunal with such information and other assistance as the Tribunal think expedient for the purpose of assisting them to discharge their functions.
(7) The Tribunal shall make an annual report to the Minister of their proceedings and the Minister shall lay the report before each House of Parliament together with a statement of any action which has been taken by him in consequence of any recommendation made to him by the Tribunal during the period to which the report relates.
(8) Until such time as an Order is made under this section the powers and duties conferred and imposed by this section upon the Electricity Appeal Tribunal upon its constitution shall by virtue of this provision be exercised and discharged by the Electricity Commissioners."
The noble Viscount said: We are getting near the last clauses of the Bill. That is something on which I think, we may all congratulate ourselves. We may also congratulate one another on the work which we have done. We have done a great deal to the Bill, and we have not yet divided. There is, however, one rather sombre reflection which occurs to me. Although we have reached Clause 57 the Bill has been singularly silent about the interests of the consumer. Where any monopoly is created, whether it is under private enterprise, under a municipality or under a nationalization scheme, whether that monopoly is national or regional, the protection of the consumer is of the utmost importance. And he has always been so protected by Parliament.
Let us see, for a moment, what the position is to-day. In every special Act or order which gives powers to an undertaker to supply electricity over an area,
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big or small, with a franchise, and whether that undertaker be statutory, a limited company or a municipality, Parliament has always fixed a maximum charge. And Parliament has also been careful to lay down that that charge cannot be varied to the detriment of the consumer without express approval—in the old days the approval of the Board of Trade and later, when the Electricity Commissioners came into being, the approval of the Electricity Commissioners. The consumer has always had the right of appeal to the Electricity Commissioners.
He can appeal by way of the local authority, for quite rightly they are given the power to represent the consumers in their area; but also—and this has, I think, been a wise feature of the Electricity Acts, because in some cases the local authority is also the provider of electricity—it has been provided that where twenty consumers are gathered together and wish to complain they shall have a right of access to an impartial tribunal. The fact that there shall be adequate representation is also reasonable, because you do not want a tribunal like the Electricity Commissioners to be troubled with purely vexatious claims. More important than that, however, is to ensure that where there is a genuine claim, that claim should be heard. Where an individual appeals, he appeals in the form to reduce the maximum permitted charge, but in fact there is a completely effective way of challenging whatever charge is made.
Even if a consumer is being charged an amount which he thinks is excessive, but which is within the permitted limit, under the fixed maximum charge he can frame his appeal in the form to reduce the maximum charge and thereby to reduce what is is permissible to charge to what is right in all the circumstances. No undertaker is allowed to increase his maximum charge without the permission of the Electricity Commissioners. That protection of the consumer which has been universally given is equally necessary, perhaps even more necessary, if in place of a number of different authorities with limited franchises—limited in area and limited in time—there is one single monopoly nation-wide and perpetual in its life and power.
This principle of the right of appeal of interested parties has been fully acknowkedged and fully conceded in the Transport Bill. Let me at once pay my tribute to the Government in this. In the Transport Bill it has been conceded not as the result of discussions in this House and agreement on an argument; it was recognised from the start by the Government in presenting the Transport Bill. From the start the Bill laid down that the structure of charges of this nation-wide monopoly should come before the Transport Tribunal, a judicial tribunal such as I propose here, with some person of legal eminence in the chair and practical men to assist him. The Government readily conceded in this House that not only should the Transport Commission have to submit their initial charges scheme and any variation which they might propose to the Transport Tribunal, but that the Minister, who may have to make (as under the Transport Bill I think he will have to make) some interim increases in charges, should not make even those interim increases without going to the Transport Tribunal and taking their advice. Again, I must pay my tribute to the Government, for the Leader of the House was most anxious and meticulous to see that in the right of audience before the Transport Tribunal every possible interest should have the right to appear, and the right to be heard. That is obviously right.
If it is right in transport, surely it is right in electricity, which enters perhaps even more than transport into every industry and into the domestic life of almost every single person. Therefore, we have proposed this Amendment, which combines both the precedent of the Transport Bill and the existing protection of the Electricity Commissioners. As regards the Transport Bill—if it is not irrelevant or out of order for me to refer to this—your Lordships will observe when our Amendments for increasing the jurisdiction of the Transport Tribunal come back to us from another place that the other place has made no variation at all in the great, wide and pervading power of the Transport Tribunal
What we propose in this Amendment is that the right of appeal and jurisdiction shall continue to be exercised by the Electricity Commissioners, who enjoy that power to-day, until such time as the Minister chooses to abolish them. But
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if and when he does abolish them, he must then appoint—and I think he is the right person to appoint—an alternative tribunal (here again I think we follow the precedent of the Transport Tribunal) consisting of a legal chairman and two other members, one a member well versed in the whole of the electricity business—both generation and distribution—and the other a man of general commercial knowledge. The jurisdiction which we propose for this Tribunal is that, first of all, they shall approve the maximum charges of the different area boards, exactly in the way that the Electricity Commissioners to-day have to approve the maximum charges of every distributor in this country, be he commercial or a municipal authority; and also (and this follows the existing procedure) that they shall approve the tariff charge for supply to railway companies. The second area of their jurisdiction is the right to entertain individual complaints, whether of existing charges or of discrimination. Let me be quite fair. I think that discrimination or undue preference to-day is not a matter with which the Electricity Commissioners deal. It is a matter upon which the subject has a right to go to court. I am not quite sure—the Lord Chancellor will enlighten me—as to whether, under the Bill as it stands, there will not be the right to go to court on discrimination or undue preference.
THE LORD CHANCELLOR: There will be.
VISCOUNT SWINTON: I leave it to the much greater wisdom of the Lord Chancellor to advise us as to whether he thinks it better that that jurisdiction should be left in the court or whether, if a tribunal are established, it would be wise to give it to that Tribunal. I would venture to think that it is not unreasonable that it should be the Tribunal, but I think we would wish to be entirely guided by the learned and noble Viscount. But on individual charges, obviously there should be the right of appeal, as there is to-day, to the Electricity Commissioners. The consumer might reasonably say that the Tribunal which we propose should have as complete and absolute a jurisdiction on the fixing of maximum charges as the Electricity Commissioners have at the present time; in that way we would leave the law entirely unchanged. On individual complaints we make a more modest

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claim, and we propose in our Amendment that the Tribunal, having heard a claim, should make their report and make their recommendations to the Minister. The Minister must publish that, and publish what action he has taken upon it.
I have a completely open mind as to whether the jurisdiction of the Tribunal should be absolute or should be qualified in the way of making recommendations. We have put in the more modest claim that they should make a recommendation, because that follows exactly the procedure agreed in this House, and agreed with the Government, under the Civil Aviation Act. There the whole House agreed that there ought to be a right of appeal both about fares and about facilities. It was, your Lordships will observe, a much wider field of claim. It was not only that the charges were excessive, but that the facilities provided were inadequate. That was a very big field, because it meant that a municipality—Manchester for instance—could say, "We are not being adequately served in the matter of aviation services, and we claim that these Government monopolies should provide us with additional service or a new service."
Of course, that might mean a great expense, and I think the House rightly felt on civil aviation that where the claim was so large, and where it depended not only upon whether fares were reasonable but whether there should be additional air-lines, it would be rather a strong thing to give the Arbitration Tribunal the power to order the Government to undertake a completely new air service. We therefore felt that it was right that action should be in the form of a recommendation, and that the Minister must either act upon it or publish it and explain to the country what course he took. Therefore, there were strong reasons in the Civil Aviation Act for limiting the power of the Tribunal to making recommendations and not to give them absolute power.
But perhaps my noble friends and I have been unduly modest in what we are proposing, which is that in an individual claim there shall not be a right to make an absolute order about what is fair, but to make a recommendation. That certainly errs, if at all, on the side of modesty. In the whole of this Bill there are only the Consultative Councils, but no
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one will pretend that they are more than consultative. There are equally in the Transport Bill consultative councils. I hope they will do their work. But in the Transport Bill the Government themselves were convinced that you must have a tribunal with jurisdiction over rates and charges. I submit that that is the very least the consumer has the right to demand and the very least which it is our duty to give him. I beg to move.
Amendment moved—
After Clause 57, insert the said new clause.—(Viscount Swinton.)
LORD RENNELL: I support the inclusion of this additional clause, for the following reasons. The public and the consumers had a right to appeal to a third party at a hearing. That right was enshrined in the orders governing the Electricity Commission. They have now been deprived of those rights because the rights have been transferred by Clause 57 to the Minister, and by a further part of Clause 57 may be transferred by the Minister to the Central Authority. It cannot therefore be properly alleged, as I suspect would have been the reply to this Amendment, that the public is properly protected by the institution of the consultative councils. I think I am right in saying that the powers of the Electricity Commissioners as far as the protection of the public is concerned are not transferred to the consultative councils, but they are transferred to the Minister and from him to the Central Authority.
Those powers were considered to be a necessary safeguard at the time, but it is proposed to do away with them for reasons which have not been stated, and to substitute for those legal safeguards these rather nebulous bodies, the consultative councils. But there is a vast difference between the independent Tribunal for the protection of the public which had its being as far back as the Railway and Canal Commissions, and the consultative council as defined in Clause 7. If, therefore, the powers which the Electricity Commissioners had, which were analogous to those which the Railway and Canal Commission and their successors possessed, are transferred to the Minister, and by him to the Central Authority, it follows that there is no independent body to whom the public can appeal except the consultative councils. Now, in addition to that difference existing and the old safeguard having

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been abolished by the centralization of the power by the Minister and his nominees in the Central Authority, it is also provided in Clause 7 that the consultative council shall consist of a number of persons, of whom not less than half shall be appointed by local. authorities—that is, "not less than" but which may be, in fact, one half—and the other half by persons whom the Minister shall think fit and proper to appoint.
Therefore not only is the power of reference to an independent body removed, but the only thing which has been substituted in its place, which is a very slender and nebulous body, is also composed as to one half appointed by the Minister. It, therefore, follows that all the safeguards which the public had have been transferred from the bodies which did exist, and indeed from the bodies which are proposed, to the person of the Minister himself, and from him by delegation to the Central Authority. On those grounds, I cannot feel that the public has any adequate protection against the will of the Minister except that power which is enshrined in Parliament to tell the Minister that they do not agree with him—a procedure which is sufficiently laborious to be unusable for the purpose of determining tariffs and the facilities which the Central Authority may offer to them. If that is so, and if my reasoning on that point is right, I can see that there is no other course open in justice to the consumer than to safeguard his rights and to reinstitute a Tribunal such as is provided for in the clause which is now before the Committee and which I support.
8.58 p.m.
LORD WOLVERTON: My Lords, I should also like to support this new clause. I think it is one of the most important clauses to come before us during the Committee stage of this Bill. Although I admit that my noble friend Lord Rennell said that the consultative councils are for the protection of the consumer, I do not think that those consultative councils are given adequate powers or are central enough. My meaning is, as the Lord Chancellor said yesterday, that this is to be a national organization and not a regional organization. If it is to be a national organization and not a regional organization I think we ought to have a central body to decide these rates, because, under the Bill as now drafted we have fourteen area
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boards and fourteen consultative councils. These councils will consist of not less than twenty nor more than thirty people, of whom not less than one half will be representatives of local authorities.
Under the Bill as now drafted, they are to be told the plans of the area boards and their general character. So far as I can see, they are not given adequate powers to demand information as to how tariffs are built up, which is very important. I do think that this should be done on a central basis, as it is now by the Electricity Commissioners. In my twelve to fourteen years' experience in the industry, there have been a few ups and downs with the Commissioners, but, on the whole, their deal rigs with the industry have been most lair, and I think they have acted as a fair go-between between the consumers and the industry. I should like to pay my modest tribute to their wonderful work. I personally am very sorry, as the Lord Chancellor has said that he is very sorry, in certain ways that the Minister has taken certain powers to abolish them. I would like to see them preserved.
If that is not to be, the public should have adequate protection against decisions of the Central Authority by a snail Tribunal consisting of a legal chairman, appointed by the Lord Chancellor, technical men experienced in generation and distribution, appointed by the Minister, and also a financial man. That would be a very small Tribunal. Then adequate protection would be given. With regard to the functions of the Tribunal, which are very important, I am sure the noble and learned Viscount would agree that the findings of the Tribunal should be made public, and then it would be up to Parliament, if it thought fit, to challenge the Minister's rights in that regard. With those few words, I should like to support this Amendment to insert what would be one of the most important new clause in the Bill.
LORD LLOYD: I should very much like to support this Amendment, which has been fully deployed by my noble friends. If the Government have a mandate for this Bill, it seems to me it is because they have said that the consumers—the public—are going to be better off as a result of it. I hope, indeed, that the public are going to be better off. But, if that is

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to be the case, and if the public are to be better off, surely we have the right to expect that the public should not have less protection under this Bill than they have to-day. That, it seems to me, is one of the chief points for this Amendment. We are asking only for the protection that the public have to-day. For that reason I would most strongly urge on the noble and learned Viscount that he should meet us on this point. I do not think we are asking for anything unreasonable. We are merely asking that this Bill, which is supposed to give more to the public than ever before, should at least include those things the public already have.
VISCOUNT ELIBANK: I wish to support this Amendment very strongly indeed. I believe that it is a very important Amendment. As the noble and learned Viscount knows, I do not believe in nationalization. I spoke against it on the Second Reading, and I stated exactly what I thought about this Bill and the nationalization of the industry. At the same time, I ended up my speech by saying that, whilst I was against nationalization and against the Bill, I believed that this Chamber, being a chamber of revision, ought to do its best to improve the Bill. It has been improved in another place, but I think we should try to better it in this House. I do want the noble and learned Viscount to believe that I am approaching this subject from that point of view, and not from the point of view of opposition to the Bill.
With considerable experience in the electrical industry and the electrical supply industry, I have viewed this Bill with grave doubts, and on the Second Reading I said exactly what I believed was wrong with it. I believe the greatest blot—if I may so describe it—in the administrative machinery provided by this Bill is the omission of the link which gives the consumer full opportunity of appeal in the event of his having a grievance on the question of charges or on any other question. That right of appeal is not there. The Electricity Commissioners, as my noble friends have said, did supply that link, and, not only did they supply it, but they had an organization which was technical and full of knowledge of the whole industry. When appeals were made to the Electricity Commissioners, at least
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the public knew that they were being considered by people who understood the question, and if they were not satisfied with the result at any rate they knew that the best investigation had been made into the subject.
Now we are told that the Electricity Commissioners are to be abolished. The noble and learned Viscount, the Lord Chancellor, on Second Reading told us that that was the case. I suggest that the only way in which you can make this Bill a good Bill is to fill in the void which is being" left by the abolition of the Electricity Commissioners, and the manner in which my noble friend, Lord Swinton, in this Amendment, has suggested that it should be filled is, I think, the best way in which it can be done, considering all the circumstances. If it is not done, you leave a system under which one body not only have to decide what the tariffs are going to be—and not only the tariffs for bulk supply, but the tariffs for retail supplies and the tariffs for varying supplies when they are required in the various areas—but also have to decide, when an appeal is made to the consultative councils, as to whether their findings are correct or not. That is quite against every ethic of, I was going to say our constitutional system, but I think it better to say our constitutional custom, that has ever been heard of so far as I know.
I submit to the noble and learned Viscount the Lord Chancellor and to the Government that they should fill this void and protect the consumer, for as the Bill stands the consumer will not have the protection which he has to-day, and which perhaps the noble and learned Viscount may say is not as much as it ought to be. But, at any rate, the consumer is left under this Bill, as it stands, without any real protection at all. I ask the noble and learned Viscount seriously to consider this Amendment. As my noble friend Viscount Swinton has said, this principle was agreed to in the discussions on the Transport Bill, and I do not think there is any real reason why the consumer of electricity should be put in a worse position than those who are using or who are going to use transport. The noble and learned Viscount may say that there is no Rates Tribunal in respect of the telephones. Sometimes we wish there were. We sometimes wish also that there were a tribunal in respect of the Post

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Office as well. However, the time for legislation in those connexions has now gone past, and I do not suppose we will ever get anything of the sort now. But this is cutting into the raw, and in cutting into the raw let us, at least, make provision for every circumstance and issue. The whole of this Bill, we have been told by the Government, has been designed in the interests of the consumer and in the interests of the nation. Therefore the interests of the consumer and the interests of the nation ought to be protected. I have great pleasure in supporting this Amendment.
9.10 p.m.
THE LORD CHANCELLOR: None of your Lordships need trouble to explain to me that in moving or supporting this Amendment you are endeavouring to improve the Bill. I know that quite well; I realize it to the full. Nor need any of your Lordships labour to justify the right of this House to put in this Amendment. That is precisely the sort of function which this House can most properly perform. Knowing as I do that your Lordships think this is an important Amendment and that it does give protection to the consumer, it seems to me that your Lordships would be doing less than your duty if you did not press this matter. I equally would be very ready and much happier if I could meet your Lordships; but I cannot. That being so, I must say so quite frankly, and tell your Lordships why. In the first place I think it is difficult to argue from one of these nationalization Bills to another. Circumstances are so different, and the histories are so different, that it by no means follows that what was right and appropriate in one is right and appropriate in another.
Take, for instance, the Transport Bill. For years we have had a Railway Rates Tribunal. Everybody who knows what the book of railway rates is like knows that it is a very bulky thing and would take up more than the four pages allowed for our daily papers. The Transport Bill increases the power of that Tribunal—it calls it by a different name—to extend this rate-fixing machinery to roads, and they have to gear in one with the other, an exceedingly complex and difficult task which requires the highest expert skill and knowledge. It was quite right that there should be such a tribunal, notwith-
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standing that there was something in the nature of consultative councils. In the Civil Aviation Act, from which it is obvious to the reader this clause is closely borrowed, there are no consultative councils, and consequently in that Act it was no doubt quite proper to have this idea of a Tribunal. We have to consider now what is the right course to adopt in the Electricity Bill.
I disclosed my lamentable ignorance of electricity tariffs yesterday, but they are nothing like the complicated and bulky system of railway rates. I conceive that it will be possible in a column of a newspaper to give an intelligent reader an idea of all that the tariff involves him in. If there were any question of publicity in this matter, your Lordships know that I am on wour side completely. I am convinced that full publicity is necessary. But if we are to adopt the procedure or t-lined in this clause, we shall have a hopeless duplication of the work of tie Tribunal and of the consultative councils, so that the consultative councils will be reduced to merely ornamental figures.
VISCOUNT ELIBANK: They are in any case.
THE LORD CHANCELLOR: The noble Viscount says "They are in any case." That is just what I want to avoid. I want to see the consultative councils have a real job of work to do. I am certain, if you set up this Tribunal, which would do the very work they are called on to do, that the consultative councils would lie back and do nothing and be reduced to ornamental figures.
VISCOUNT ELIBANK: I am sorry to interrupt but actually according to the Bill, the consultative councils have in their composition no technical people at all; consequently, when grievances are referred to them, they can deal with then only from the layman's point of view. The Electricity Commissioners are individuals who are all technical and understand how tariffs are built up, and are able to go into it from a technical point of view. The consultative councils, as they are to be established under the Bill, will have none of that technical knowledge and will not he able to consider the issue in the way we desire that it shall be considered by the Tribunal that we desire to see set up.
THE LORD CHANCELLOR: No one knows how the consultative committees will be formed.
VISCOUNT ELIBANK: I am going on what is in the Bill.
THE LORD CHANCELLOR: All I can say is that in Clause 7 it says that half of them are to be appointed from a panel of persons nominated by local authorities—if the local authorities are wise they will nominate people who have a considerable knowledge of electricity—and the other half are to be nominated by the Minister—and, equally, if he is wise, he will appoint people with a good practical knowledge of this subject.
VISCOUNT ELIBANK: It does not say so in the Bill.
THE LORD CHANCELLOR: I cannot give way to the noble Viscount again. It does say so in the Bill. If the noble Viscount will look at Clause 7 (2) he will see set out exactly how the consultative councils are to be appointed. I quite agree with him that there is nothing to guarantee that they will have any expert knowledge.
VISCOUNT ELIBANK: That is my point.
THE LORD CHANCELLOR: The noble Viscount is assuming that they will not have any expert knowledge. All I say is that they are to be appointed, half from a panel of persons nominated by the local authorities and half by the Minister. They may have—and if the local authorities and the Minister are wise they will have—a good working practical knowledge of this subject. At any rate it will be much more than I have; I will not say more than the noble Viscount has, because he has had experience in these matters.
Let us look now at this proposed tribunal. The Chairman is to be a lawyer. I assure your Lordships (I hope your Lordships know it) that if there is to be such a Tribunal I shall find the best lawyer I can, who is completely removed from Party politics on one side or the other. But, quite frankly, I cannot guarantee to find a lawyer who has an expert knowledge of electricity. Some of them have, but they are very few, and most of those who have are busily engaged in other matters and are in great demand.
VISCOUNT SWINTON: I do not want him to have expert knowledge.
THE LORD CHANCELLOR: The noble Viscount says he does not want him to have expert knowledge. If I may say so, I agree with him. I want this Chairman to have a trained mind, but not an electrically trained mind. Let us consider the position of the Central Authority. The important function of the Central Authority, as I see it, is to make both ends meet—taking one year with another, I agree. I think that is in Clause 36. That is their responsibility, and it is a very great responsibility. They are supreme in that matter. They can fix the tariffs of the area boards in this way. If the area boards fix a tariff which does not commend itself to the Central Authority, the Central Authority, if they like, can say, "Change it." I that that is in Clause 37 (5). If the Central Authority are anxious about what the area board are going to do, under subsection (4) they may say: "Before you do anything about this at all you must refer the matter to us." So the Central Authority have a considerable power of control over the area boards.
The Central Authority cannot be controlled, save by the Minister, and then only if the Minister thinks the subject matter is of sufficient national importance. The real control over the Central Authority, as I see it, is public opinion; and public opinion can be focused in two ways. First of all it can be focused by the report which the Central Authority have to make, and, of course, by their accounts, in which they will show whether they are making both ends meet. It is really rather idle to say what the tariff is to be, on the one hand, unless you know what the expenses are to be, on the other. I give you the "one year with another"; you can criticize me on that. But it is fundamental that this concern should pay its way; and the responsibility for seeing that it does pay its way must rest fairly and squarely upon the shoulders of the Central Authority—not upon any Tribunal. There we should put it.
What are the other matters? I am not quite clear whether this Amendment means to deal with the price which the Central Authority charge the area boards,

417
or merely with the tariffs which the area boards charge the public. It is a little defective in drafting, but that can easily be put right. I am not quite certain whether the one or the other is meant. If it is meant to control the price which the Central Authority fix to the area boards, then I say that if by an Act of Parliament you have placed upon the Central Authority the obligation and the duty to make both ends meet, it is unwise to interpose any sort of Tribunal—no matter what its powers may be—to deliberate upon the charges which the Central Authority think fit to charge.
So much for that. For the rest, it is suggested that the Tribunal should consider questions of undue preference. Undue preference is dealt with in two places in this Bill. On page 3, at line 19, you get the statement that no Electricity Board is to allow undue preference. You get it more specifically at page 56, line 39, where it says:
"An area board, in fixing tariffs and making agreements under this section, shall not show undue preference …"
If they do show undue preference, anybody has these two rights. First of all, so far as an area board is concerned, you can carry your complaint to the Central Authority and the Central Authority can give the area board the necessary instructions to stop this undesirable practice. But if you like, in that case—and certainly in the case of the Central Authority—you can go to the courts and get an injunction or declaration to prevent undue preference, which is expressly prohibited in the Bill, being shown. I may be old fashioned in this respect, but I would rather retain the right to go to the courts and let the courts deal with the question of undue preference.
VISCOUNT SWINTON: I say at once that I accept the noble and learned Viscount's view on that.
THE LORD CHANCELLOR: Then we get the question of supply of electricity to railways, upon which this Tribunal is going to act. If your Lordships will look at page 68, line 36, you will see these words:
"The terms and conditions on which electricity is supplied by an Electricity Board to any railway undertakers … shall be determined in accordance with regulations made by the Minister and the Minister of Transport jointly…"
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I say, with the greatest respect, that fiat being there, what on earth is the good of giving this Tribunal the right to decide what shall be charged to the railways? What is this Tribunal? After all is said and done, once this Tribunal have sat and heard arguments and then deliberated, what can they do? According to the. Amendment as drawn, they report to the. Minister; they are merely advisers.
VISCOUNT SWINTON: Not in this matter. If the noble and learned Viscount will look at it he will see that they hove to approve two things: the maxim am tariff for each area and the supply of electricity to railways.
THE LORD CHANCELLOR: This is. the dilemma which I put. If the Tribunal are to be merely advisory I cannot think of an instance where a Tribunal has been set up and had conferred on them merely advisory powers. If they are to have real powers to fix rates and not mealy advisory powers, then I say that right course is to have those provisions in this Bill which leaves it to the Minister. Let us consider for a moment the position of the consultative committees. The consultative committees under this scheme. can consider any individual complain—indeed it is part of their duty. They can bring those individual complaints first all to the area board, and if they do not get satisfaction from the area board they can bring them to the Central Authority. If they do not get satisfaction from the Central Authority they can bring the complaints to the Minister himself. And do your Lordships suppose, in this democratic country of ours, that when all those steps are being taken there is not going to be focused upon this matter-sufficient public attention to enable Parliament to deal with it?
My objection to the Amendment is this. Under the Bill there you will have set up. an elaborate system of consultative councils and local committees to examine complaints about tariffs. You have the power of the Central Authority to examine and. control the tariffs of area boards. You have the Minister, with his power to give directions to the Central Authority. Therefore you have a regular hierarchy in this scheme and you have ample safeguards for that publicity which both and the noble Viscount, Lord Swinton, desire, and which in the long run is cur real safeguard in this matter. To set up,

419
in addition to all these things, this body, whether it be advisory or whether it be more than advisory, seems to me a complete illustration of "crossing the wires." I believe it would do harm; I believe it would merely remove from the consultative councils and the local committees the obligation which the Statute has placed upon them. They might well say to themselves, "We need not bother about these things, this Tribunal is going to do it." I believe that by multiplying your safeguards, you would weaken them. We have here the elaborate machine of the consultative councils and the local committees, and I think we had much better leave it to these bodies to see that individual cases of hardship are properly dealt with. We shall achieve that better by the method of the Bill than by adopting the method proposed by this new clause.
Therefore I very much regret to say—although I fully appreciate that noble Lords feel strongly about this matter and although I quite realize the case for that which they propose—that I cannot see that by the acceptance of this Amendment we should really increase the safeguards to the consumer. I regret very much that I cannot accept it, and I cannot go any part of the way with noble Lords.
VISCOUNT SWINTON: The Lord Chancellor has answered so fully and frankly and, from his point of view, so fairly, that, feeling very strongly (as he appreciates we do) on this matter, and that it is one on which there is a genuine division of opinion, I would like to say a word or two in answer to what he has said before we take a decision on it. I would not like there to be any misunderstanding when we took our decision. I do not want to detract from the work of the consultative councils. I hope they will do good work under this Bill when it becomes an Act, and I hope they will do good work under the Transport Bill when that becomes an Act. But when the noble and learned Viscount says that you really cannot take into account what is done in one Bill when you come to consider another, the answer is that the whole subject is essentially germane because it is in each case the nationalization of a great monopoly. I am not merely making a dialectical point when I say that if the introduction in the Transport Bill of a Tribunal with complete jurisdiction over
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charges of rail and road transport is not going to interfere with the usefulness and the operation of the consultative councils in transport, how can it be said that the introduction of a Tribunal here is going to interfere with the usefulness of the consultative councils?
The noble and learned Viscount said: "You really ought not to do this because the decision must rest with the Central Authority, because your Lordships have agreed that this business has got to pay its way." All businesses have got to pay their way, whether nationalized businesses or others. If other businesses do not pay their way, they go to Carey Street; if a national undertaking does not pay its way it goes, I suppose, to "Queer Street"—I do not know where else it goes. Every statutory undertaker which has been established in this country has had to pay its way; even a concern like the hydro-electric concern, Of which one noble Lord is both an ornament and a working member, has to pay its way, but that has not prevented the Electricity Commissioners for the last twenty years giving complete satisfaction as between the public and these different undertakers.
The Commissioners have realized, on the one hand, the right of the public to a fair deal and, on the other, the obligation of all those undertakers to pay their way; they have never had the least difficulty in reconciling these two. In the days when the Lord Chancellor practised before the Railway and Canal Commission with great success, and both railway and traders sought to retain his services, the Railway and Canal Commission never had the least difficulty in giving wise decisions, although in those days the railways had to pay their way. Indeed, the whole basis of these Tribunals is that on the one side they should look at what the undertaking has to earn, provided that it is efficiently managed and, on the other, what it is fair that the consumer should be charged. Incidentally, if I remember aright, the Railway Rates Tribunal have always had to see that the railways were efficiently managed. They always had to reconcile what is necessary for the undertaking to pay its way and what it is fair that the consumer should be charged.
The next argument of the Lord Chancellor was that electricity was a very

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complex business, and that it was impossible to find three people who could discharge this duty. One of them is to be a good lawyer. I really do not want him to be an expert in electricity; I would be most happy that any great case that had to come to receive a final judgment in a company in which all my fortune was engaged should come to the highest tribunal of the land, here, with the Lord Chancellor himself sitting on the Woolsack. He would not have a great specialized knowledge—thank God he would not!, because then he would not have any prejudice about the matter. I know nothing worse than to have a Chairman of a Tribunal who knows a bit about the subject; he is a dreadful fellow. Why some of us are sometimes chosen to act as arbitrators—why the Lord Chancellor and Viscount Simon have been very great Judges, is not that they were experts who knew a bit about the matters which they were trying, but because they were great lawyers, men of great good sense and men who could weigh the facts of the case as put before them. That is what you want in the Chairman. You want with him a man who does know about electricity and a man who does know about ordinary practical business.
Now may I reinforce this argument from the Transport Bill itself? The Lord Chancellor—whose argument is usually completely logical, although here, quite frankly, it broke down—told us, on the one hand, "This electricity business is so technical that you ought not to give it to this semi-lay Tribunal to decide; you want a lot of experts." On the other hand, he said, "You do not really need this Tribunal for electricity because an electrical organization is a simple thing compared with a Railway Rates structure; that filled volumes." But observe what he himself has done in dealing with these railway rates. To deal with this much more complex matter, he has set up a Tribunal consisting of one member who shall be a member of legal experience, to be appointed by himself (or by the Lord President in Scotland), and two other members, of whom one shall be a member with experience of business, and one a member with experience of finance. Yet those three people—not one of them in the railways or transport—are to be
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the supreme Tribunal. I. am not saying that it is not a good thing; I think it is a good thing. That, on the Government's own proposal, is to be the Tribunal which have to decide all the questions of charges over railways and over road transport.
May I just deal with one point which the Lord Chancellor raised? He said the Tribunal are only to be consultative. They are not. They are to be consultative in the sense of making a recommendation on the individual appeal, but they are to have absolute jurisdiction over the prices to be charged to railways. I do not attach vital importance to that. It is not a thing to laugh away or just wave away, been se the experience of Parliament has been it at it was wise, even with the Central Electricity Board (which was a semi-Government undertaking and was the bulk distributor—and I think a Labour Government were in power at the time) to decide that the Electricity Commissioners should fix a price which the Central Electricity Board charged railways for their current. But that is not the point to which I attach great importance.
The thing to which I attach great importance is the maximum tariff. The Lord Chancellor did not begin to answer that. It is the maximum tariff which counts, and it is the right to challenge the maximum tariff that matters; and hitherto that has been the ark of the Covenant in these matters. The Electricity Commissioners have had the absolute right to fix the maximum tariff which can be charged, either by a company or by a local authority. It is supremely and utterly wrong that either the Ministry or the Central Authority should have that absolute right. If they have that right, then the consumer has absolutely no protection. From the first days of electricity till now, through every development, there has been one thing to which Parliament has adhered with absolute tenacity; and that is that an independent judical authority shall fix the maximum tariff. That is the essential thing in this Amendment, and by that, my Lords, we must stand.
On Question, Whether the proposed new clause be there inserted?
Their Lordships divided: Contents, 28; Not-Contents, 11

CONTENTS.

Cholmondeley, M.

Elibank, V.

Fairfax of Cameron, L.

Falmouth, V.

Grenfell, L.

Airlie, E.

Simon, V.

Hatherton, L. [Teller.]

De La Warr, E.

Swinton, V.

Hawke, L.

Fortescue, E. [Teller.]

Lloyd, L.

Howe, E.

Ailwyn, L.

O'Hagan, L.

Lytton, E.

Clanwilliam, L. (E. Clanwilliam.

Rennell, L.

Rothes, E.

Rochdale, L.

Selkirk, E.

De L'Isle and Dudley, L.

Teynham, L.

De Saumarez, L.

Wolverton, L.

Bridgeman, V.

Digby, L.

NOT-CONTENTS.

Jowitt, V. (L. Chancellor.)

Ammon, L.

Marley, L.

Chorley, L.

Morrison, L. [Teller.]

Addison, V.

Henderson L. [Teller.]

Piercy, L.

St. Davids, V.

Lucas of Chilworth, L.

Walkden, L.

Resolved in the affirmative, and Amendment agreed to accordingly.
Clauses 58 to 61 agreed to.
9.45 p.m.
Clause 62 [Provisions as to regulations and orders]:
LORD CHORLEY: This is a series of drafting Amendments which, with your Lordships' consent, I will take together. In each case they add "or order" to "regulations" which makes the term rather wider. I beg to move.
Amendments moved—
Page 81, line 20, after the first ("regulations") insert ("or orders")
Page 81, line 20, after the second ("regulations") insert ("or orders")
Page 81, line 22, after ("regulations") insert ("or orders").—(Lord Chorley.)
On Question, Amendments agreed to.
LORD CHORLEY: The next two Amendments deal with rather a different point. Subsection (1) of the clause sets out certain additional matters which may be provided for in regulations in relation to procedure and evidence. As the clause was drafted, it was objected in another place that it was a little too wide. The Solicitor-General gave an undertaking that the matter would be looked at again, and this Amendment was tabled in the light of that undertaking. In place of "as to evidence for that purpose" is inserted "as to the mode of proof of any matters and provision," which your Lordships will appreciate is rather tighter and is possibly safer. I beg to move.
Amendments moved—
Page 81, line 22, leave out ("and as to evidence for that purpose")
Page 81, line 26, after ("provision") insert ("as to the mode of proof of any matters and provision").—(Lord Chorley.)
VISCOUNT SWINTON: We are much obliged. I think this is an improvement.
On Question, Amendments agreed to.
LORD CHORLEY: The next two Amendments are drafting. I beg to move.
Amendments moved—
Page 81, line 33, after ("regulations") insert ("or orders");
Page 81, line 34, after ("regulations") insert ("or orders").—(Lord Chorley.)
On Question, Amendments agreed to.
Clause 62, as amended, agreed to.
Clauses 63 and 64 agreed to.
Clause 65:

Interpretation.
"net revenue," in relation to any body, means the revenue of that body, after deducting there from all charges which are proper to be made, to revenue account, including, in particular, proper provision for the redemption of capital and proper provision for depreciation of assets or for renewal of assets, but not including provision for interest on debentures and debenture stock;
LORD CHORLEY: This is an Amendment consequential on an Amendment made under Clause 17. I beg to move.
Amendment moved—
Page 83, line 12, after ("authority") insert ("or a composite company").—(Lord Chorley.)
On Question, Amendment agreed to.
LORD CHORLEY: This is an Amendment which is becoming familiar to the Committee. I beg to move.
Amendment moved—
Page 84, line 26, leave out ("which") and insert ("whom").—(Lord Chorley.)
On Question, Amendment agreed to.
LORD RENNELL LORD RENNELL moved in the definition of "net revenue", after "capital" to insert "in pursuance of any obligation to make such provision". The noble Lord said: This is a technical Amendment. I think there has been a gap in the drafting in the definition clause under "net revenue" and my Amendment proposes to insert certain words after "redemption of capital" to cover the cases of those securities in which no provision is made for the redemption of capital—namely, irredeemable debentures—so as to safeguard shareholders from being penalized by any provision which would redeem debentures which are irredeemable, and thereby deprive them of their share of the surplus revenue or the surplus net revenue. There is an analogous case to that to which I have already drawn the attention of the noble Lord in Clause 20, at the bottom of page 3o and at the top of page 31, where reference is made to certain securities being payable at the same dates and redeemed at the same dates. There are securities which are not redeemable at any date. The words "redeemed at the same dates" seems to me to be an error in drafting, which I submit is perpetuated in this clause. I beg to move.
Amendment moved—
Page 85, line 18, after ("capital") insert ("in pursuance of any obligation to make such provision").—(Lord Rennell.)
LORD CHORLEY: With respect to the noble Lord, I submit to your Lordships that the clause as drafted at present is preferable to the one which he has tabled. The suggestion he makes, in effect, cuts down the words as they stand at the present time, because they are the words "are proper". The word "proper" covers both a legal obligation and also what is customary in the ordinary way of business. The object here is, in fact, to cover that wider field, to carry out what is a legal obligation, and to do what is the proper thing in business. The words suggested by the noble Lord, "in pursuance of any obligation to make such provision", would cover only the legal obligation, and not what was proper business conduct. I am sure your Lord-
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ships will agree that in this case it is much better to cover the wider field and, in I he circumstances, that the clause should stand as it is and not as the noble Lord suggests.
LORD RENNELL: I am quite willing to meet the noble Lord by permitting the word "proper", if he wishes, or if helps the proprieties of the position. Naturally, I do not wish to press the Amendment, but I would like to suggest that the noble Lord, between now and the Report stage, should look at it and consider it again. I cannot believe that the insertion of the words, "in pursuance of any obligation to make such provision", can restrict the obligation, but must mean, if English means anything, that provision should be made in accordance with the terms on which the obligation was originally made. My remarks about considering the position between now and Report stage apply equally, of course, to the word "redeemed" at the top of page 31. If the noble Lord will look at both those matters between now and the Report stage, I shall be obliged. Obviously there is no policy involved in this; I think we are in agreement. I cannot say that I agree with the noble Lord's contention. that the words inserted make the definition more restrictive.
LORD CHORLEY: I am glad to give the noble Lord the assurance for which he asks. I may say that this is a technical legal matter. As it stands the word is "proper." If you qualify that by saying "proper" as an obligation, then it means "proper" as a legal obligation and it does in fact cut down the meaning of the word. It then means "proper" as a legal obligation and not proper as a means of business. I am quite happy to give the assurance for which the noble Lord asks. We will look at this point, and also the point he raised on Clause 20.
LORD RENNELL: I am much obliged, and beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
LORD CHORLEY: This is an Amendment on which I bat twice. I beg to move.
Amendment moved—
Page 86, line 17, leave out ("which") and insert ("whom").—(Lord Chorley.)
On Question, Amendment agreed to.
LORD CHORLEY: The next is merely a drafting Amendment to make it quite clear that the rights are not confined to the owner whose name is actually inserted on the register, but covers everybody who is in fact an owner. I beg to move.
Amendment moved—
Page 86, line 21, leave out ("entered on the register as holding") and insert ("the holder of").—(Lord Charley.)
On Question, Amendment agreed to.
Clause 65, as amended, agreed to.
Clauses 66 and 67 agreed to.
First Schedule agreed to.
Second Schedule [Authorised undertakers to whom Part II of Act applies]:
9.57 P.m.
LORD MORRISON LORD MORRISON moved, in Part I to leave out "Tobermory Corporation." The noble Lord said: The North of Scotland Board concluded an agreement on July 16 with Tobermory Corporation for the transfer of their electricity undertaking to the Board under Section 18 of the Hydro-Electric Development (Scotland) Act, 1943. The Corporation having ceased to be authorized undertakers, their inclusion in the Second Schedule is no longer appropriate, and the reference to them is accordingly deleted. I beg to move.
Amendment moved—
Page 98, line 42, leave out ("Tobermory Corporation").—(Lord Morrison.)
On Question, Amendment agreed to.
Second Schedule, as amended, agreed to.
Third Schedule [Issue of British Electricity Stock in satisfaction of compensation]:
LORD CHORLEY: I am sure your Lordships will be glad that at this late hour I can score three boundaries with three balls. I beg to move.
Amendments moved—
Page 101, line 13, leave out ("which") and insert ("whom");
Page 101, line 25, leave out ("which") and insert ("whom");
Page 101, line 40 leave out ("which") and insert ("whom").—(Lord Chorley.)
On Question, Amendments agreed to.
Third Schedule, as amended, agreed to.
Fourth Schedule.

PART II.

  THE HYDRO-ELECTRIC DEVELOPMENT (SCOTLAND) ACT, 1943.
  Adaptation or Modification.

  Section. s. 10…

  In subsection (1) for the words "Electricity Commissioners" there shall be substituted where those words occur for the first time the words "Central Authority" and where those words occur for the second time the words "Secretary of State".

  LORD MORRISON LORD MORRISON moved, in the adaptation or modification of Section 10, at the end to insert:
  "for the words 'so however that there shall be substituted the words Provided that

  (i) in determining such prices no undue preference shall be shown to, and no undue discrimination shall be exercised against, any person or class of persons; and

  (ii),

  and for the word 'may' where that word occurs for the first time there shall be substituted the word 'shall'".
  The noble Lord said: Clause 37 (7) of the Bill provides that an area board in fixing tariffs shall not show undue preference to, or discriminate against, any person or class of persons. This provision replaces Sections 19 and 20 of the Electric Lighting Act, 1882—the present safeguards against undue preference—which are repealed by the Fifth Schedule to the Bill. In the case of the North of Scotland Board the prices to be charged by them for electricity supplied are fixed under Section to of the Hydro-Electric Development (Scotland) Act, 1943, in accordance with regulations made by the Secretary of State. This Amendment ensures that in fixing their tariffs the North of Scotland Board, like the area boards, must avoid showing undue preference or discrimination. The substitution of the word "shall" for "may" is a drafting Amendment consequential on the main Amendment. I beg to move.
  Amendment moved—
  Page 110, line 6, column 2, at end insert the said words.—(Lord Morrison.)
  On Question, Amendment agreed to.
  LORD CHORLEY LORD CHORLEY moved, in Part III (Adaptations of the Electric Lighting (Clauses) Act, 1899) to insert:
  "s. 23
  In subsection (1) the words from 'and if the Board of Trade' to the end of the subsection shall be omitted and subsections (2) and (3) shall be omitted."
  The noble Lord said: The object of this Amendment is to resurrect subsection (1) of Section 23 of the Electric Lighting (Clauses) Act, 1899, which is being killed by this Bill, and to resurrect it in a form suitable for application to area boards and also, of course, to the North of Scotland Board. This subsection imposes a penalty on undertakers for failing to lay down distributing mains in accordance with the statutory provisions applying to them. It is obviously right and proper that there should be a similar penalty under this Bill. I beg to move.
  Amendment moved—
  Page 116, line 12, at end, insert the said new paragraph.—(Lord Chorley.)
  VISCOUNT SWINTON: Do I understand that the only provision selected by the Government from the slaughter of the innocents is the one which imposes penalties upon people?
  LORD CHORLEY: I am surd the noble Viscount will be glad to know that there is one innocent saved from the slaughter.
  VISCOUNT SWINTON: No—it is making all the other people guilty. On Question, Amendment agreed to.
  Fourth Schedule, as amended, agreed to.
  Fifth Schedule [Enactments repealed]:
  LORD CHORLEY: This is complementary to the last Amendment I moved.
  Amendment moved—
  Page 118, line 16, leave out ("23").(Lord Chorley.)
  On Question, Amendment agreed to.
  10.3 p.m.
  VISCOUNT SIMON VISCOUNT SIMON moved to omit the reference to Section 24 of the Electric Lighting Act, 1909. The noble Viscount said: In the absence of my noble and learned friend Viscount Maugham I beg to move this Amendment. I make no apology for reading the note with which I am supplied, which no doubt my noble
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  and learned friend would have made much more interesting without any reading; but this is the story.
  Section 24 of the Electric Lighting Act of 1909 provided that there should be protection of the lands of non-statutory gas and water undertakers from a compulsory purchase by their electricity competitors. Unless this is altered, the present Bill would repeal that section, and the protection which the lands of non-statutory gas and water undertakers now enjoy would be removed. The Amendment was, I understand, debated in another place, and the learned Solicitor-General at first claimed that the Acquisition of Lard (Authorisation Procedure) Act gave equal protection, and therefore that this Amendment was not needed. I am sure the learned Solicitor-General made a mistake. On Report stage it was pointed out that this was not true because the Act of 1945 gave no protection to non-statutory gas undertakers, who were at present protected by the Act of 1909, which it was therefore desired to keep alive. Nearly all the Scottish gas companies are non-statutory, and the matter is one of considerable importance in Scotland. There are also many non-statutory undertakings in England.
  The suggested Amendment was rejected by the learned Solicitor-General on a new ground—that it would be meaningless the context because Section 24 provides that nothing is to enable the Board of Trade to authorize the compulsory acquisition of land belonging to a statutory undertaker; they can authorize only the acquisition of such land under Section 1 of the 1909 Act, and Section 1 of that Act is repealed by this Bill. It is pointed out—and no doubt the noble and learned Viscount, Lord Maugham, would point out with some emphasis and knowledge—that this is really incorrect, because Section 24 is not limited to statutory gas or water undertakers; also because all the Electricity Supply Acts are to be read as one, and references to the Board of Trade are to be interpreted as references to the Ministry of Fuel and Power; and, further, on page 103, lines 20 and 25, it is provided that the Bill is to be read as One with those Acts. That seems to be quite a good answer.
  The Solicitor-General was seemingly reduced to silence; he offered no other reason for rejecting the Amendment, and it seems reasonable to Lord Maugham,

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  and as for the moment his mantle has passed to me, I think that the Amendment ought to be made. Accordingly, we ask the Government to think about it again. I rather think there was an indication after that that the Solicitor-General agreed, but I do not know the details. I do not know whether I have made it intelligible to anybody else; I am not sure that I have made it intelligible to myself. I have read what is before me with the greatest candour and I hope the Lord Chancellor, who is very quick at these things, may see that there really is a good reason for retaining this Section 24. I beg to move.
  Amendment moved—
  Page 118, line 22, column 3, leave out ("24").—(Viscount Simon.)
  THE LORD CHANCELLOR: I do not promise to say that the noble and learned Viscount has made it quite plain to me, but I have spent a considerable time, seeing that Viscount Maugham was to move this Amendment, in going into it properly. I confess that it was plain to me before the noble and learned Viscount started, and I am afraid that I am not going to be reduced to silence, as apparently the Solicitor-General was. It is not really difficult. The Electric Lighting Act, 1909, had two sections which are relevant for these purposes—Section 1 and Section 24. Section I gave the Board of Trade a power by provisional order to authorize any electrical undertaking to buy any land. That is the power. That is Section 1. Section 24 limited that power, and it limited it both as regards statutory and non-statutory gas and water undertakings by saying—I am not quoting it exactly—"Notwithstanding the provisions of Section 1 you shall not, under Section 24, acquire compulsorily by provisional order the property of a gas or water concern, be it statutory or non-statutory." The odd thing is this. The power to purchase by provisional order under Section 1 has now gone since that Section is repealed. What is now suggested (for some reason which I am quite unable to understand, because I have not had the advantage of the note), is that the limitation upon the power, the power having gone, should remain.
  It by no means ends there, because provisional orders have gone altogether. Under the Electricity (Supply) Act, 1919,
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  the provisional order became a special order, and now by Clause 9 of this Bill, all land acquisition is to be effected by special order under the Acquisition of Land (Authorisation Procedure) Act, 1946. That your Lordships will find in Clause 9. There you will see it provides:
  "The Minister may authorize any Electricity Board to purchase compulsorily any land which they require for any purpose connected with the discharge of their functions, and the Acquisition of Land (Authorisation Procedure) Act, 1946 … shall apply, in relation to any such compulsory purchase," and so on. That clause having been passed, this procedure by provisional order is quite adequate. The machine we have now is the code set up by Parliament under the Acquisition of Land Act of 1946.
  It is quite true that the 1946 Act does not provide the complete protection for the non-statutory undertaker which was provided by the provisional order machinery of the Act of 1909, but, on the other hand, they have this protection: they have the protection which applies to all the lieges under the Act of 1946—namely, the holding of the inquiry and the making of objections, and all that machinery with which your Lordships are only too painfully familiar since we discussed this Act at length not long ago. The 1946 Act is intended to provide a new modern code of procedure relating to compulsory purchase of land, and if Parliament had intended non-statutory undertakers to have special protection, the Act would have contained it. There is, in fact, no reason why non-statutory undertakers should have greater protection than other members of the public, since they have no statutory duties to perform; they are merely in the same position as other industrial undertakings.
  If we were to accept this Amendment, subject to the fact that one pre-supposes that you still keep Section 1 of the 1909 Act to some extent, though you have repealed it, and supposing you were to accept the provisional order procedure, we should have the anomalous result that certain undertakers would be protected absolutely against compulsory purchase by an Electricity Board, but not against compulsory purchase by other bodies or persons possessing compulsory powers, such as local authorities, or the Transport Commission, or anything of that sort. In fact, a non-statutory water undertaker

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  would receive greater protection against having his land purchased compulsorily by an Electricity Board than a statutory undertaking or an Electricity Board would have against having their land purchased by a local authority; and you really would be in a complete state of muddle.
  The long and short of the matter is this. The old provisional order procedure is as dead as the dodo. The limitation upon that order is, therefore, equally dead. To resurrect the limitation upon the dead dodo would have no effect at all except to create—assuming that you thereupon re-create the dodo for some purpose—immense confusion. It gets away altogether from the simple procedure we have under Clause 9 of this Bill, of having the machinery of the Acquisition of Land Act, 1946, which is to apply to everybody, statutory or non-statutory. For those reasons, I am afraid I cannot accept this Amendment.
  VISCOUNT SIMON: Following the traditional courtesy of the House, I must thank the Lord Chancellor very much for making this so plain. I shall, of course, have the opportunity of studying it in Hansard to-morrow. When I read my note there was a moment when I thought I understood the point, but I am not quite sure that I understand it so clearly now. It was a delightful topic to start on at a quarter past ten, and I gather that the result is that the protection which does at this moment exist over land belonging to a non-statutory gas or water undertaker from compulsory purchase by electricity competitors, in fact, goes; it will not exist under the new Bill. That I gather from what has been said. I
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  appreciate to some extent, dimly and "through a glass darkly," what are the good reasons for that. But it is plain that the Lord Chancellor and those who advise him have looked into this closely, and I must take it that he has reached a quite definite conclusion. In the circumstances, I cannot press the Amendment and I beg leave to withdraw it.
  Amendment, by leave, withdrawn.
  THE LORD CHANCELLOR THE LORD CHANCELLOR moved to insert:

  "23 & 24 Geo. 5. c. 51

  The Local Government Act, 1933.

  In Section two hundred and eighteen, paragraph (a) of the definition of Sanctioning authority'"

  The noble and learned Viscount said: I beg to move this Amendment. It is almost the 200th Amendment which we have had, and it has the great merit of being the last. This provision of the Local Government Act, 1933, lays down that the Electricity Commissioners shall be the sanctioning authority for borrowing by local authorities for the purpose of the Electricity (Supply) Acts, and other electricity legislation. After the vesting date there will be no more borrowing by local authorities for these purposes, and this provision should, therefore, be repealed. I beg to move.
  Amendment moved—
  Page 118, line 40, at end insert the said words.—(The Lord Chancellor.)
  On Question, Amendment agreed to.
  Fifth Schedule, as amended, agreed to.
  House adjourned at sixteen minutes past ten o'clock.