Lords Sitting of 29 July 1947

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers.

  PARCELS FROM GIBRALTAR.
  EARL MANVERS: My Lords, I beg to ask the question which stands in my name.
  [The question was as follows:
  To ask His Majesty's Government whether they are aware that parcels posted in Gibraltar are (probably owing to Custom House detention) taking over two months to reach destinations in this country; and whether anything can be done to prevent such delay which gives rise to fear of theft.]
  THE SECRETARY OF STATE FOR INDIA AND BURMA (THE EARL OF LISTOWEL): My Lords, the dispatches of mail from Gibraltar are made at irregular intervals, and there have been occasions during the past three months when the interval has been as much as thirteen to seventeen days. The time of transit, which depends on the speed of the ship, has varied in the same period from six to twenty-five days. There has, in addition, been some unavoidable delay in clearing the parcels through the Customs. The latest returns, however, show a distinct improvement in the service, with an average time between posting and delivery of three to four weeks.
  EARL HOWE: May I ask the noble Earl whether I am to understand from his answer that it really takes a matter of twenty-five days for a ship to steam 1,600 miles?
  THE EARL OF LISTOWEL: That was not exactly what I said. What I said was that the time varied, according to the speed of the ship, between six days and twenty-five days; that is to say, under a week or just over three weeks.
  EARL MANVERS: Do I understand the noble Earl to say that there has been no delay in the Custom House?
  THE EARL OF LISTOWEL: No. I am afraid it may have been difficult for the noble Earl to hear my reply clearly. There was a certain amount of movement in the Chamber when I began speaking, and possibly parts of what I said were inaudible to him. I did say that there has been some unavoidable delay owing to shortage of manpower—which I am sure the noble Earl appreciates—in clearing parcels through the Customs. I can assure the noble Earl that every effort will be made by the Post Office to minimize the interval between dispatch and delivery.
  EARL HOWE: Does it really take twenty-one days for a ship to steam the 1,600 miles from Gibraltar? If it does, then surely there must be something wrong with the ship?
  LORD GIFFORD: On a quick calculation its average speed would be about three knots.
  EARL MANVERS: I should like to thank the noble Earl very much for his courteous reply.

PASSENGER SERVICE FROM JAMAICA.
2.35 p.m.
LORD LYLE OF WESTBOURNE: My Lords, I beg to ask His Majesty's Government the question which stands in my name.
[The question was as follows:
To ask His Majesty's Government, whether they are aware that whereas there continues to be very limited passenger accommodation on ships sailing from Jamaica to the United Kingdom, 50 per cent. of the available passages are still reserved for military personnel, and whether His Majesty's Government consider this reasonable in present circumstances, especially in view of the small force now maintained in the Colony.]
LORD WALKDEN: My Lords, in each passenger ship sailing from Jamaica to the United Kingdom, 50 per cent. of the berths is reserved initially for Service requirements. There is a proviso that, in exceptional circumstances, all the available berths on any sailing should be placed at the disposal of the military authorities. These arrangements are necessary for the fulfilment of the policy of His Majesty's

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Government that passages to the United Kingdom shall, whenever possible, be available for Service personnel as they become due for release. Over the past six months the proportion of berths actually taken up for Service personnel averaged 22 per cent., the remaining berths being available for civilian passengers. A reduction in the percentages reserved for Service personnel will be made as soon as circumstances permit.
LORD LYLE OF WESTBOURNE: My Lords, while thanking the noble Lord for his reply, may I ask him, further, why if in fact the military do not take up more than 22 per cent. of the berths they should continue to reserve 5o per cent. of them. Is not this just another example of the War Office and the Ministry of Transport hanging on to wartime controls at the expense of the civilian population? With regard to the matter of demobilization, is it not a fact that the arguments advanced by the noble Lord about demobilization will not in fact hold water at all, because the troops in Jamaica are all young men? It is not a question of demobilization. Nobody would object to reservations of as much as 70 per cent. of the berths if it was for demobilized men. The troops out there are young men and they only amount to a battalion.
LORD AMMON: My Lords, may I call the noble Lord's attention to the fact that it is not usual to make a speech upon a reply to a starred question?
VISCOUNT SWINTON: My Lords, cannot the supplementary question be answered?
LORD LYLE OF WESTBOURNE: My Lords, with great respect I am asking a question the whole time—in another place I was taught to do that—I am not making a speech. I am asking whether the Government will not very kindly consider the case of the civilian population, many members of which have done excellent work on the estates out there and in many other ways. They are sadly in need of leave in a great number of cases. Many of them have not been home for as long a period as ten years.
LORD WALKDEN: My Lords, I am not sure that I can answer now all the supplementary questions which the noble Lord has put to me, but I will do my best
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to obtain the information for which he has asked and let him have it. I trim informed that the arrangement that now stands was arrived at locally between the civilian Government in Jamaica, the local agents of the steamship companies, arid the Service chiefs. The agreement wm made locally in Jamaica, and it has been found necessary to maintain it because when there is a flow of men released, naturally it is desired to get them away as soon as possible. I believe your Lordships would desire that all men liberated from military service should be allowed to go home as soon as may he practicable. There is provision so that any spare accommodation may be taken up by civilians. The agreement to which I have referred provides that 50 per cent. of lie available accommodation is reserved for Service requirements up to fourteen days before the sailing date. If, seven days before the 'sailing date, it is found that the Service authorities do not want it all, then arrangements are made to switch over the unwanted accommodation, and to make it known in the towns that there will be vacant berths available for civilians. The best that can be done locally appears to be done to give everyone a fair chance, but the principle is that the Serviceman shall have priority. I am rather inclined to think your Lordships will desire that that principle should be maintained.
VISCOUNT SWINTON: May I ask the noble Lord two questions. As regards the supplementary information he is gong to give the House, as there is a great interest in all quarters of the House on facilities between one part of the Commonwealth and another, will he undertake to arrange that it will be given in answer to a written question, so that we can all have the benefit? Everybody, I think, would want to give Servicemen priority, but there are also a great many others who were doing war work and have not been able to visit their homeland for, may be, eight or nine years, and they are entitled to consideration. Would the noble Lord, with the appropriate Ministers, consider whether more notice can be given when passages are thrown up? Is it not more likely that the military, who have to control only one battalion and can know quite a long time in advance whether they are going to use passages or not, are able to throw up passages early? It is very difficult for civilans

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at seven days' notice, much less forty-eight hours, to be able to be ready to leave on a ship.
LORD WALKDEN: I fully appreciate the noble Viscount's points and certainly will raise the matter with the Minister. I would be very happy to reply either in a written answer or an oral answer if the noble Lord would be kind enough to put down on the Order Paper the separate points.
LORD LYLE OF WESTBOURNE: I thank the noble Lord for his courtesy; he is always very courteous in answering questions. May I ask him when the arrangement to which he referred was made? I think it would have been made in war-time between the shipping companies. I want to make it clear that I was not discussing the question of demobilization. I think everybody is agreed about demobilization. What I asked about was the one battalion which is over there composed entirely of young soldiers.
LORD WALKDEN: I have no information as to the date of the agreement to which I have referred. I imagine it was made soon after the end of the war, when the men were to be brought home.

COLONIAL REAFFORESTATION.
2.43 p.m.
LORD FARINGDON: My Lords, I beg to put the question standing in my name on the Order Paper.
[The question was as follows:
To ask His Majesty's Government, what measures of reafforestation are being undertaken in view of the increased production of timber in the Colonies, and in particular in British Guiana, the Gold Coast and Nigeria?]
THE FIRST LORD OF THE ADMIRALTY (VISCOUNT HALL): My Lords, the Governments of Colonies possessing significant forest resources are including in their development programmes provision for development and reafforestation. In particular, the Governments of British Guiana, the Gold Coast and Nigeria are taking all possible steps to ensure the regeneration of their forests. Provisions to this end are being included in timber concessions granted in British Guiana and
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Nigeria. In the Gold Coast the position is more difficult owing to the fact that the grant of concessions is entirely in the hands of the African Chiefs, but the Government are doing everything possible to encourage them to adopt a sound forest policy.
LORD FARINGDON: My Lords, I thank the noble Lord for his extremely satisfactory reply, and express the hope that so far as the Gold Coast is concerned some method will be found of making a sound forestry policy effective there, too.

PAISLEY CORPORATION ORDER CONFIRMATION BILL. [H.L.]
Presented and read 1a; to be printed, and (pursuant to the Private Legislation (Scotland) Procedure Act, 1936) deemed to have been read 2a and to have been reported from the Committee.
NATIONAL TRUST FOR SCOTLAND ORDER CONFIRMATION BILL. [H.L.]
Presented and read 1a; to be printed, and (pursuant to the Private Legislation (Scotland) Procedure Act, 1936) deemed to have been read 2a and to have been reported from the Committee.
COMPANIES BILL. [H.L.]
Returned from the Commons, agreed to, with Amendments; the said Amendments to be printed.
MINISTRY OF HEALTH PROVISIONAL ORDER (GLOUCESTER) BILL.
Read 3a (according to Order) and passed.
MINISTRY OF HEALTH PROVISIONAL ORDER (TUNBRIDGE WELLS) BILL.
Read 3a (according to Order) and passed.
MINISTRY OF HEALTH PROVISIONAL ORDER (LEEDS) BILL.
Read 3a (according to Order) and passed.
MINISTRY OF HEALTH PROVISIONAL ORDER (TORQUAY) BILL.
Read 3a (according to Order) and passed.
BRIGHTON CORPORATION (TROLLEY VEHICLES) PROVISIONAL ORDER BILL.
Read 3a (according to Order) and passed.
MEXBOROUGH AND SWINTON TRACTION (TROLLEY VEHICLES) PROVISIONAL ORDER BILL.
Read 3a (according to Order) and passed.

SUNDAY ENTERTAINMENTS ACT, 1932.
CITY OF STOKE-ON-TRENT ORDER.
BOROUGH OF BURY ST. EDMUNDS ORDER.
BOROUGH OF CREWE ORDER.
URBAN DISTRICT OF ALDRIDGE ORDER.
URBAN DISTRICT OF GAINSBOROUGH ORDER.
URBAN DISTRICT OF WILLENHALL ORDER.
LORD WALKEN: My Lords, I beg to move that these Orders be approved.
Moved, That the Orders made under the Act by the Secretary of State for the Home Department, for extending Section one of the Act to the said areas, he approved.—(Lord Walkden.)
On Question, Motion agreed to.

ELECTRICITY BILL.
2.48 p.m.
Amendments reported (according to Order).
Clause 1
Main functions of Electricity Boards.
(6) In exercising and performing their functions the Electricity Boards shall, subject to anti in accordance with any directions given by the Minister or Secretary of State under this Part of this Act—

(a) promoted the use of all economical methods of generating, transmitting and distributing electricity;

(b) secure, so far as practicable, the development, extension to rural areas and cheapening of supplies of electricity;

(c) avoid undue preference in the provision of such supplies;

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(d) promote the simplification and standardisation of methods of charge for such supplies;

(e) promote the standardisation of systems of supply and types of electrical fittings;

and shall also promote the welfare, health and safety of persons in the employment of the Boards.
VISCOUNT SWINTON VISCOUNT SWINTON moved, in subsection (6), to insert after paragraph (b):
"(c) minimize and where practicable void payment of contributions to the cost of electric lines from persons requiring supplies provided such persons enter into agreements to consume or pay for definite amount: of electricity on reasonable terms."
The noble Viscount said: My Lords, this is a very short and modest Amendment which I hope the Government will see their way to accept. The noble and learned Viscount, the Lord Chancellor, told us in a very frank speech the importance which the Government attached to developing electricity in rural areas, a view shared by all sides of the House. Your Lordships will remember we all agreed that we should put into the Bill a provision that in constituting the area boards the Minister should have regard to persons with agricultural knowledge. Your Lordships may say that these general clauses are rather in the nature of a pious aspiration of what these great nationalized undertakings are going to do. Of course they are not going to give us cheap and abundant electricity. That was only in the Election manifesto. The Lord Chancellor has made it plain that that is now out of date, and electricity in future will be neither cheap nor abundant.
There are a certain number of what I suppose we ought to call exhortatory provisions, which exhort the Central Authority and the boards to do certain things, but we do not say a lot about agriculture, and I would like in these exhortatory provisions to insert these words:
"Minimize and where practicable avoid payment of contributions to the cost of electric lines from persons requiring supplies provided such persons enter into agreements to consume or pay for definite amounts of electricity on reasonable terms."
That leaves a pretty wide latitude, but I think it would be wise to put this in, because one of the things which in the past has handicapped the rural areas, whether in electricity or telephones, is the connexion charge. I am not saying you can get rid of it all at once. The thing must vary with the different areas; it is

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more practical in some than in others. It may interest your Lordships to know that the words I have put down are, I think I am right in saying, exactly the same as the agreement entered into between the electricity companies and the farmers in this country. They were quite agreeable on both sides—and it seemed to me a very fair thing—that they should all go forward with this, not only as a sort of gentleman's agreement, but as set out in the concordat. I do not think the nationalized undertaking ought to do less for agriculture than free enterprise (or controlled enterprise, as it was in electricity) was prepared to do. I beg to move.
Amendment moved—
Page 3, line 18, at end insert the said new paragraph.—(Viscount Swinton.)
THE LORD CHANCELLOR (VISCOUNT JOWITT): My Lords, let me make it quite plain at the outset that I have never said that electricity may not become cheaper, and that electricity may not become abundant. But not having the gift of prophecy, I refuse to prophesy that either of these happy events will happen. All I do say is that if you pass this Bill there is a good chance of electricity being cheaper and more abundant than it otherwise would have been. Whatever system of electrical supplies you have you will have a rise in the cost of coal, and I think we must all face up to the fact that, whatever Party is in power, and whatever the system may be, there will never again be cheap coal if it means sweated labour in the mines. All you can do is to produce your coal as scientifically as you can, and that is the desire of all of us.
Then there is this question about putting in these words. I say at once that I think this is an imaginative and up-to-date approach to this problem. It has been tried, as your Lordships know, in Dumfriesshire; it has been pressed by the National Farmers' Union; and it is at the present time, I believe, the subject matter of an inquiry by the Electricity Commissioners. I think there is much to be said for it. But, after all, this is typically a matter which we ought to leave to those bodies—the Central Authority and the area boards—with whom we are charging this task. If they think this is a practicable way of dealing with it, no one will be more pleased than I shall. If they
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think it is not practicable at the present time, or not practicable at all, then it is for them to decide. It seems to me that this is a typical illustration of a matter of good business management. I have no doubt that the up-to-date companies to-day—and there are many of them—have been considering this sort of thing. This must be considered now by the bodies which we have, for better or for worse, put in charge of this industry. If I may say so, I do not think it is for us to lay down this principle. I think it is for us rather to trust these bodies, with full authority, to do what they think best; and I sincerely hope that in considering what line they should pursue they will look favourably at the suggestion in this Amendment. At the same time, I do feel it is for them and not for us, and I think it would be a mistake to put it in the Bill.
LORD HARLECH: My Lords, I would like to say a word or two on this Amendment. I am sorry that the noble and learned Viscount thinks that this would be out of place in the Bill. Once you get a board with a large staff, and a whole series of priority duties, those are the things which engage the very busy people who are on a new corporation like this, and they forget all these pious undertakings in Parliament unless they are in black and white in the Bill along with the other things. I am sorry that the noble and learned Viscount cannot agree to some form of words in this respect. There is no doubt that one of the major grievances of the agricultural industry is not only the introduction of double summer time but also the ordinary summer time. The milking in the dark is prolonged for weeks and weeks all through the winter into the spring, which is a terrible hardship and, incidentally, causes great difficulty in all those larger dairy farms which have not got electric light, and the rest of it.
Speaking as a milk producer, I want to say that we in this country are still far behind Canada and Switzerland, and some other countries, in the eradication of diseases conveyed by milk. Some progress has been made, and is being made, but I am satisfied that we shall never get milk, particularly in the hot summer months, free from bacillus, and all the rest of it, unless the bigger dairy farms of the country are properly electrified. In the interests of health, and in the interests of farming, that should be very high on the priority

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list before this new electricity corporation. I am very sorry that words cannot be inserted in this Bill, if only in a tentative form, to make that one of the premier targets to be aimed at.
On Question, Amendment negatived.
Clause 3:
Constitution of Central Authority and Area Boards.
(3) Every area board shall be constituted as follows—

(a) the chairman and not less than five or more than seven other members shall be appointed by the Minister from amongst persons appearing to the Minister to be qualified as having had experience of, and having shown capacity in, electricity supply, local government, industrial, commercial, agricultural or financial matters, applied science, administration, or the organisation of workers; and

(b) there shall be one other member who shall be the person for the time being holding the office of chairman of the consultative council established under the following provisions of this Part of this Act for the area of the area board:

Provided that, until the consultative council has been established, an area board shall be deemed to be properly constituted notwithstanding that the Board does not include the member referred to in paragraph (b) of this subsection.
(4) A person shall be disqualified for being appointed or being a member of the Central Authority or any area board so long as he is a member of the Commons House of Parliament.
(5) The Minister shall appoint one or more of the members of the Central Authority to be deputy chairman or deputy chairmen of that Authority, and shall appoint one of the members of each of the area boards to be deputy chairman of that Board.
3.0 p.m.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in paragraph (a) of subsection (3), after "Minister," to insert "after consultation with the Central Authority." The noble and learned Viscount said: My Lords, may I say this, and this only? I have never pretended that the area boards are perfectly free. On the contrary, it is quite obvious to anybody who studies this Bill that there is a very severe limitation placed upon them by the Central Authority. But that fact seems to me to be no reason whatever why we should place them still further under the control of the Central Authority, and therefore I suggested to your Lordships that if it is a question between the Central Authority and the Minister it is much better to
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have the Minister. Your Lordships did not think so, and I suggested a compromise, which was that it should be the Minister who appoints, but he appoints after consultation with the Central Authority. I think that idea commended itself to your Lordships. I beg to move.
Amendment moved—
Page 6, line 27, after ("Minister") insert ("after consultation with the Central Authority").—(The Lord Chancellor.)
VISCOUNT SWINTON: My Lords, I think the noble and learned Viscount has completely carried out the pledge he gave.
On Question, Amendment agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved to insert at the end of subsection (3): "and, during any period before the vesting date, an area board shall be deemed to be properly constituted if the chairman and three other members have been appointed." The noble and learned Viscount said: My Lords, in Committee the Government accepted an Amendment to provide for the vesting date to be not less than three months after the establishment of all the area boards and the definition of their areas. It was finally included in an Amendment to Clause 14, but on consideration we found that that provision might cause difficulties. For instance, supposing there were one appointment still to be made to only one area board, the vesting date would have to be postponed, and that really would be unreasonable. The minimum number of members of an area board will eventually be seven, including the chairman of the consultative council. The chairman of the consultative council is not required to be appointed by the vesting date. But even if the chairman of the consultative council is not counted it would be necessary to make 84 appointments—that is six times fourteen—by a date three months before the vesting date, and if there had been only 83 appointments the vesting date would have to be postponed.
Since it is the intention that the regulations relating to the quorum of area b cards shall provide for the area board quorum being fixed at four members, it seems reasonable to provide, as is done in this Amendment, for the area board to be considered as sufficiently established before the vesting date if it consists of four members--namely, the chairman and three other members. The Amendment only covers the period up to the vesting

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date, and it will be incumbent on the Minister to fill the remaining vacancies on any area board up to the minimum number of the chairman and not less than five other members before the vesting date. I beg to move.
Amendment moved—
Page 6, line 41, at end insert the said words.—(The Lord Chancellor.)
On Question, Amendment agreed to.
LORD HAWKE LORD HAWKE had an Amendment on the Paper, to insert, after the second "shall" in subsection (5), ("after consultation with the Minister"). The noble Lord said: My Lords, a clerical error has crept into this Amendment, which as it stands is meaningless. The words should be "after consultation with the Central Authority," and with your Lordships' permission I would move the Amendment in that form. The Minister now appoints the area board in consultation with the Central Authority; he appoints the chairman in consultation with the Central Authority, and I am proposing what I think is reasonable, that in appointing the deputy chairman he should also consult the Central Authority. I beg to move.
Amendment moved—
Page 6, line 46, after ("shall") insert ("after consultation with the Central Authority").—(Lord Hawke.)
THE LORD CHANCELLOR: I am afraid I am not able to accept this Amendment now. I confess that in the very few minutes I had to look at this Amendment I was very puzzled by it as it appeared on the Paper. It obviously had no meaning, and therefore was quite unworthy of the noble Lord. Whether or not I shall be given any instructions to look kindly towards this Amendment if the words "Central Authority" are substituted I really do not know, but at the present moment I have no instructions about that aspect of the matter. If the noble Lord will withdraw his Amendment now I will find out what view those who control me have about it, and I will communicate with him.
VISCOUNT SWINTON: My Lords, I quite agree that the Amendment ought now to be withdrawn, but I hope that my noble friend will put it down on Third Reading in the right form. I am sure the Lord Chancellor will agree that we all
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came to an understanding that the Minister should appoint after consultation. The whole idea is that they should work as a team and work together, and if they are to consult as to who shall be chairman they must consult as to the deputy chairman. I should have thought this Amendment would have been accepted out of hand.
LORD HAWKE: I apologize to the noble and learned Viscount for having puzzled him, and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 9:
Compulsory purchase of land.
>9.—(1) 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 (except Section two thereof), shall apply, in relation to any such compulsory purchase. as if the Board were a local authority within the meaning of that Act and as if this Act had been in force immediately before the commencement of that Act.
3.7 p.m.
VISCOUNT MAUGHAM VISCOUNT MAUGHAM moved to insert in subsection (1):
"Provided that nothing in this section shall authorize the compulsory purchase of any land which, at the date of the first notice for the purposes of the compulsory purchase of such land, is used or authorized to be used by any gas or water undertakers for the purposes of their undertaking."
The noble and learned Viscount said: My Lords, at the outset I should apologize to the Lord Chancellor. An Amendment somewhat similar to this but not, I think, quite so accurate, was put down in my name at an earlier stage and my noble friend Lord Simon moved the Amendment, eliciting from the Lord Chancellor a somewhat elaborate reason why, in his opinion, the Amendment was not well founded and ought not to proceed. The reason why I wish to apologize to the noble and learned Viscount is that closer examination of the speech he made to your Lordships on the subject has shown what is not really surprising, having regard to the great complexity of the subject, two errors of some importance. I had intended to visit the Lord Chancellor personally and state to him what happened, but on the occasions I have tried I ascertained he

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was so busy with other matters that he would not welcome any expenditure of half an hour or thereabouts in being informed from a legal point of view of this very troublesome matter. Therefore, if he should say—as I can quite understand he may say—that he wishes to look into it further I shall at once give way, because I do not think it is fair to discuss before your Lordships at length at this stage of the proceedings a very very troublesome point of law.
At any rate, I should explain exactly what it is, which I think I can do in a very few words. The noble and learned Viscount, the Lord Chancellor, on the information given to him, no doubt, was of the opinion that the present position was that compulsory purchase of land was permissible even though the land should belong to gas or water undertakings without statutory authority. I am very anxious that gas and water undertakers, whether statutory or not, should not be within this general clause. The Lord Chancellor rightly pointed out that these statutory undertakers were already outside the clause, and he told us that non-statutory gas or water undertakers were, at present, not protected by any provision in any existing Statute; and that, I think, was a mistake. Those undertakers under the existing law are free from compulsory purchase by Section 24 of the Electric Lighting Act, 1909, which is, in fact, repealed (your Lordships will find it, I think, on page 121 of the present Bill.) Section 24 is the one which at present protects gas and electricity undertakings from compulsory purchase although they have no statutory authority. They are ruled by statutory orders of various kinds; some of them are to be utility undertakings, and they are, at the moment, protected.
The noble and learned Viscount made one other slip, if he will allow me to say so—it is the easiest thing to do; I have made many myself—he suggested that Provisional Order procedure was as extinct as the dodo as the result of the Acquisition of Land (Authorisation Procedure) Act, 1946. But that cannot be absolutely accurate, for it was a dodo that by subsequent orders could be revived and allowed to flap its wings; and the Provisional Order, in fact, can be used by Section 26 of the Act of 1919, which empowered the Electricity Commissioners
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to exercise, by special order. the power of the Board of Trade to authorize by Provisional Order, the compulsory purchase of land. That left alive the restriction in Section 24 of the Icon Act; and that is the reason why it to be repealed by the existing Bill.
I would urge upon the noble and learned Viscount that he might consider the matter further. The gas undertakings of this country are in some danger unless the Amendment before your Lordships' House is accepted. Some of the water undertakings in Scotland, I am told, and practically all the gas undertakings in the land, are undertakings that have no statutory authority. And that is also true of a large number of gas undertakings in this country. For the m the position is that electricity undertakers (who have often settled down alongside the works of the gas undertaking) might very well want to extend their powers by acquiring the adjoining land, and that is a thing of which certain gas undertakings are very much afraid. I should imagine the same thing is true of water undertakings. Therefore there is an overwhelming reason why gas and water undertakings who, by accident, do not happen to have statutory authority, because they could get all they wanted without statutory authority, ought to be protected every bit as much as those who have statutory authority.
Whether the Lord Chancellor wants me to argue the whole point now, or prefers to consider whether what I have said with reference to the law is correct, is a matter which he must decide. The law is one which prohibits compulsory acquisition of land, of gas and water undertakings, whether with statutory authority or not, and that is not to he changed. I would strongly urge that, as a matter of protection, it is far better to keep that provision in force. Commercial concerns are customers of the electricity supply authorities, whoever they may be, but gas and water undertakings are competitors with these electricity authorities who will, in future, be the Electricity Commissioners, and therefore they ought: to be protected. I shall certainly urge noble Lords to vote in favour of the Amendment, which simply retains the status quo. I beg to move.
Amendment moved—
Page 14, line 38, at end, insert the said new words.—(Viscount Maugham.)
THE LORD CHANCELLOR: My Lords, if I ask for time to consider this matter it is only because if I have made any error in my law I should naturally like to put it right. I am very conscious of the fact that I may have made some such error, and I am glad that the noble Viscount, Lord Maugham, says he is in the same boat. I very often do make errors of law, and if I have done so now I shall be the first to acknowledge it. On the other hand, I think the principle behind this is quite plain and is one which makes it impossible for me to accept this Amendment, either now or on any subsequent occasion. The noble Viscount is quite right in his description of the Act of 1909. Section I of that Act conferred certain powers to make Provisional Orders, and by, I think, Section 24, a limitation was put upon the generality of the powers conferred by Clause I. In particular it said that nothing therein should enable any Provisional Order to be made adversely affecting any gas or water undertaking. Your Lordships will observe that those words are wide enough to cover both statutory and non-statutory undertakings. It is really rather ancient wording because it is now quite certainly a fact—I hope this is not an error of law—that, so far as a local authority is concerned, by reason of the Act of 1946 they are empowered—.there was an Amendment made in the Act of 1946 to the Act of 1909—now compulsorily to acquire gas and electricity undertakings by the procedure which is now appropriate, that is to say the Authorisation Procedure Act. So that we have now got to this position: a local authority, notwithstanding the provisions of the Act of 1909 restricting the making of Provisional Orders, can under the Act of 1946 compulsorily acquire land of gas or water undertakings. That is so far.
The position as I see it to-day is this: so far as you are dealing with a statutory undertaker, they can insist on the special Parliamentary procedure and, without going at length into that, your Lordships know that it is something not unlike a private Bill. That is what they contend. So far as the non-statutory owners of gas and water undertakings are concerned, they have the protection,
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no more and no less, which every landowner has if his land is going to be taken—namely, they can insist on a local inquiry and they can insist on their objections being taken into account. If, notwithstanding, the Minister decides to approve the suggested order, then the order has to go; so there is no absolute protection. But, on the other hand, although there is no absolute protection, before approving an order in regard to the land which is actually being utilized by a gas undertaking—and usefully utilized for the benefit of the public—can one conceive that the Minister in his right mind would approve such an order if the effect of it would be to put a gas or water undertaking out of business?
But, when you are dealing with land which a gas or water company is authorized to take but have not yet taken, or perhaps never will take, it seems to me impossible to say that an electricity authority cannot with Ministerial approval have the right compulsorily to acquire that land. I cannot see why the Central Authority or the area board should be in any worse position than any local authority; any local authority can acquire it compulsorily. Why on earth should you put the Electricity Authority or the area boards in a worse position there? To that I have no answer. Although I am very sorry if I have misstated the law, yet I am quite satisfied that the essence of this thing is that you must trust these bodies and the Minister not to act in a stupid way and, for instance, let an electricity authority come and nestle against a gas undertaking and thereupon compulsorily acquire all their gasometers. That would be ridiculous and no Minister would approve it. There should be no absolute bar any more than there is for a local authority and, accordingly, I am unable to accept this Amendment.
VISCOUNT SWINTON: My Lords, I hesitate to intervene, and in fact I will not intervene at all on the matter of law, because it would be a pure impertinence for a very ex-junior counsel to put himself between these two most eminent jurists. But on the practical side of what will happen here, I am bound to say, speaking for myself, that I do not think the danger is great enough for us to wish to divide the House, although

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I think it is very desirable that the matter should have been raised and explained as fully as it has been.
The Act of 1946, whether we like it or not, has made a difference in this matter, but I agree that even though we passed the Act of 1946, if we were running into great danger here or going to do something obviously unfair, we ought not to be prevented, by something we did in 1946 advertently or inadvertently, from doing something better here. Is there a real element of danger here? On this I would carry Viscount Maugham with me. So far as land is just land which is not being used for the public purpose, it seems to me that a non-statutory undertaking ought to be treated like any others who are landowners; I do not really see why they should have a special protection. On the other hand, where, of course, they are, so to speak, servants of the public—not that all good landlords are not servants of the public—and where they are concerned in providing gas or water, then obviously we must be very careful that we do not risk a public service.
But in fact, I do not think there is any danger of that here, because any Minister, whatever his political complexion—even a Communist Minister, if we ever have one!—if for instance he is the Minister of Health will, I suppose, still have the function of looking after water supplies and being their guardian and trustee. If the Minister is concerned with something else, he will still have to look after, for instance, gas, and so on. He is going to look after that, or he will get into great trouble, local and general. He is going to look after it whether the undertaking which is providing is technically statutory or non-statutory, and therefore, in reality, I would have thought that we were not running into great danger. After the extremely sound legal arguments we have heard here, I thought we might not have to divide.
VISCOUNT MAUGHAM: My Lords, I am sure that the gas and water undertakings will be by no means satisfied with the explanation given by the noble and learned Viscount, but, in all the circumstances, I think I cannot do otherwise than withdraw the Amendment.
Amendment, by leave, withdrawn.
3.27 p.m.
Clause 13 [Bodies to whom Part II of Act applies]:
THE LORD CHANCELLOR THE LORD CHANCELLOR moved to insert in subsection (1):
"Provided that any company who are not authorized undertakers, a power station company or an electricity holding company but who hold securities of, or rights in respect of monies owed by, authorized undertakers or power station companies amounting to a substantial proportion of the assets of the first mentioned company, may serve on the Minister, not later than two months after the passing of this Act, a notice stating that they wish to be treated as an electricity holding company, and the Minister may, on the service of such notice, if he thinks fit, by order direct that this Act is to have effect, and be deemed always to have had effect, as if the company were an electricity holding company, and the Act shall have effect accordingly.
The noble and learned Viscount said: My Lords, this Amendment gives a company the option to come in. So generous, will you please observe, are the terms which we are offering that we have been approached by at least one company which is not technically a holding company because they do not own 75 per cent.—it is something rather smaller; they have asked us: "Please may we come in?" Therefore, I move this proviso in order that such a company may serve a notice and may come in and get this rare and refreshing fruit which we are proposing to offer. It is purely optional; they may serve a notice if they are so minded; whether they would be wise to be so minded or not is for them to decide. I beg to move.
Amendment moved—
Page 16, line 35, at end insert the said proviso.—(The Lord Chancellor.)
VISCOUNT SWINTON: My Lords, I must congratulate the Lord Chancellor that there is joy in the Cabinet over one capitalist coming into their camp. There must be a great many others who have gone into the other camp.
On Question, Amendment agreed to.
VISCOUNT SWINTON VISCOUNT SWINTON moved, after Clause 13, to insert the following new clause:
Special provision for electricity holding companies.
.—(1) This section applies to any electricity holding company who shall, not later than three months after the passing of this Act serve on the Minister notice in writing stating that they wish this section to apply to then by reason of the fact that they were, at the

627
date of the last audited balance sheet of the company, before the first day of July, nineteen hundred and forty-seven, either directly or indirectly, the beneficial owners of extraneous assets specified in general terms in such notice and being property situate outside Great Britain, or being property situate within Great Britain which is not reasonably required for the efficient and economical administration or operation of the undertaking of any authorised undertakers or power station company:
Provided that no such notice as aforesaid shall have effect unless accompanied by a certificate signed by the auditor of the company and stating that the company was at such date as aforesaid the beneficial owner of the extraneous assets specified in the notice.
(2) Every company to which this section applies shall be deemed not to be an electricity holding company for the purposes of the provisions of this Act.
(3) If, not later than three months after any company to which this section applies shall have served a notice under subsection (1) of this section, the Central Authority shall, by notice in writing to the company, require that all such, if any, of the property of the company as is reasonably required for the efficient and economical administration or operation of the undertaking of any authorised undertakers or power station company shall vest in the Central Authority, then the beneficial interest of the company in all such property shall, on the vesting date or one month after the date of such notice, whichever shall be the later, vest, by virtue of this Act and without further assurance, in the Central Authority.
(4) There shall be paid by the Central Authority to the company by way of compensation for the property vested in accordance with the last preceding subsection such sum as may be agreed between the Central Authority and the company or, in default of agreement, as shall be determined by arbitration under this Act as the fair market value of the beneficial interest of the company in such property.
(5) Not later than two months after any company to which this section applies shall have served a notice under subsection (1) of this section, either the Central Authority, or any person employed by the company wholly or mainly in the administration or operation of any one or more authorised undertakers of power station companies, may serve upon the other and upon the company a notice in writing requiring that any agreement for personal services made between the company and such person, and in force at the vesting date, shall apply and have effect as though such person had been employed by an electricity holding company, and thereupon the employment of such person by the company shall, for the purposes of the provisions of this Act, be deemed to be employment by an electricity holding company.
(6) Any question arising under this section as to whether any property is reasonably required for the efficient and economical administration or operation of any authorised undertakers or power station company, or as
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to whether any person was employed wholly or mainly in the administration or operation of any one or more authorised undertakers or power station companies, shall be determined, in default of agreement, by the Minister."
The noble Viscount said: My Lords, I hope the Lord Chancellor will be in an equally accommodating mood upon this clause. If he does not take instructions but consults his own good sense and his own fairness and judgment, I am quite sure that he will be equally accommodating. I am not going again through all the very long discussion which we had on a previous occasion when the whole case for the holding companies was deployed. I undertook then to try to find a simpler solution which would obviate all the very complicated chain of Amendments which my noble friends and I had put upon the Paper, and I have succeeded in this one single simple clause. Your Lordships will see that there are no consequential Amendments to it anywhere in the Bill.
This is a simple solution. It is fair to everybody; it has none of the complications of the original Amendment and, if I may say so, it has none of the injustices which I am sure the Lord Chancellor himself intensely disliked but felt bound to defend because he could not see a convenient alternative. Here is a convenient alternative, and I am sure that he would admit that his own original proposal—the proposal in the Bill—is inconvenient as well as unjust. That it is inconvenient nobody could possible deny. In the first place the Minister is made to acquire a number of assets which he does not in the least want to acquire. In the second place, the shareholders would have to go out and create a new entity, register a new company, and buy back the assets they never wanted to part with, and which the Minister never desired to acquire.
As we proceeded through the Bill and reached, I think, Clause 30, we discovered that there were more difficulties in the way. As the Lord Chancellor explained to us, foreign courts and, indeed, Commonwealth courts, would not recognize the title given by this Act of Parliament, and all these assets might become, in foreign or Commonwealth countries, bona vacantia; nobody could claim them—the Minister would not get them, the company had to part with them, and the Minister had to direct them to be sold. It was a very cumbersome and stupid business, we all agreed—the Chancellor no less than others of your Lordships. It was

629
unfair, too, because nobody has ever denied that the company would have to buy back a, proportion of its assets, with which it should never have parted, at a higher price than the Government gave for the part which they had bought.
The new clause on the Paper has been very carefully vetted and I understand that, so far as it goes, everybody is agreed that it gives the Minister exactly what he wants. It transfers to him what he wants, at the price which the Government themselves have laid down in the Bill. We are all agreed what ought to be taken over, and about what are called extraneous assets. What ought to be taken over are the electricity assets in the United Kingdom—that is, the authorized undertakings and the power stations and anything else which is reasonably required for the generation and distribution of electricity in this country, and the operation of that business. The rest are extraneous. Let us see, just for a moment or two, how effectively that simple operation is achieved by this clause, for which I thank and pay tribute to a much more ingenious and skilful draftsman than myself. Subsection (1) gives the holding companies the right to claim the retention of extraneous assets. The onus is on them. They have to say, "We have these extraneous assets and we wish to claim them and to carry on." Your Lordships will see that we have safeguarded that further by saying that their notice must be accompanied by a certificate from an auditor.
Then the very simple little subsection (2) has this effect: it means that the company will not be treated as a holding company, but will be treated like anybody else who holds electricity assets; that is to say, the Central Authority or the area boards will get them exactly as the Bill lays down—every one of them. It will get the quoted assets at the Stock Exchange quotation and it will get any assets that are unquoted at the price the Bill lays down—namely, an agreed price or a price to be settled by arbitration, on the rather odd formula "as near to what they would have been if they had been quoted." The Government has the right under subsection (3), to claim any ancillary assets. There cannot be many that fall between the two stools, but if they say: "There is something else which we would like to take over," they can give
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notice that they want to take it over. If your Lordships will look at subsection (6), you will see how fair we are to the Government. There may be a dispute as to whether something is an ancillary asset or not. I must admit that the ordinary course would be to put up an independent arbitrator, but we have been content here to leave it to the Minister, and to say that, if there is a dispute as to whether a thing is reasonably ancillary or not, the Minister can take the decision himself. Then the price of these ancillary assets—and there may not be many of them, I understand—is an agreed price or a price settled by arbitration as being the far market value, which, as the Lord Chancellor said, is what you would have to pay if you had sold the assets and were buying them back again.
Lastly, in regard to subsection (5), your Lordships will remember that really the Lord Chancellor last time did not defend this curious transaction on any ground except that he had to have it in order to get the staff. Any people who are the staff of the subsidiary companies, a power company or an authorized undertaking, of course, will go over, and the benefit of the contract of service will go over, and it was for that reason that the Lord Chancellor advanced this extraordinary proposition last time. If I may call it so, here in subsection (5) is the David and Uriah subsection. The contracts of service with the holding companies can be assigned subject, of course, to whatever rights the individuals have. We must not override those. That relieves the Lord Chancellor of the last vestige of an excuse for rejecting this clause and it also relieves him—and it must be a great relief to the House and to himself—of this disagreeable necessity, if necessity it was, of emulating the late King David in one of the most disreputable episodes of his career. I think this is a simple, a practical and a fair proposal. I beg to move.
Amendment moved—
After Clause 13 insert the said new clause.—(Viscount Swinton.)
THE EARL OF LYTTON: My Lords, may I say a word in support of the Amendment which has been moved? When we were discussing this measure in Committee, the Lord Chancellor took exception to my description of the offer which he had made to meet the case which we had put to the Committee. I

631
think I had described it as amounting to little more than a suggestion that holding companies with non-electrical assets might save the Minister the trouble of finding a purchaser hereafter for those assets which he did not want, by selling them before the vesting date, and the purchase price which they obtained would then vest with the Central Authority. The Lord Chancellor accused me of wishing, not only to be compensated for my assets, these extraneous assets, but desiring also to keep them in my possession. Of course, that was not my suggestion at all, and I think the difference between us arose from the Lord Chancellor's contention that the purchase of shares at Stock Exchange values represented full payment for these extraneous assets. Our contention is that it is nothing of the sort.
Let me make plain to your Lordships just what it is for which the holding companies are asking. In so far as they possess any electrical assets they want the Central Authority to take all of them. It is their desire that anything that the Central Authority may require for the purpose of generating or distributing electricity they shall be at liberty to take. The holding companies do not wish to withhold anything that may be needed for the purposes of this Bill. But in regard to the extraneous assets which are not wanted, which, as the noble and learned Viscount, the Lord Chancellor, has told us over and over again, are not needed, and which, if taken over the Central Authority would be obliged subsequently to sell, the holding companies wish to have the option of retaining them. That wish was not met by the suggestion made by the noble and learned Viscount during the Committee stage, and it has not been met by any suggestion put forward by the Government at any time during the discussions on this Bill, either here or in another place. We do not want to part with the assets which the Minister or the Central Authority would not want. We wish to keep them and keep them without payment. There is no suggestion that we should, first of all, receive payment, and then keep the assets.
It is quite possible, as the Amendment provides, to distinguish between these two electrical assets—those which are wanted and will be handed over, and the non-electrical assets which are not wanted
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and which will be retained, and compensation will be paid only for what is taken. Nothing will be paid for what is left. This Amendment seems to me to give the Government all that they want, and to leave the holding companies all that they, in their turn, wish to retain. For that reason I give my full support to the Amendment.
LORD RENNELL: My Lords, I too, would like to support the Amendment. I think that it has the merit of simplicity, and that it does get the Minister and the Government out of a great difficulty of having to do something which they admit themselves that they do not wish to do—that is to take over assets which they do not want. The Amendment has the further merit, which perhaps may not be so popular, of taking over the assets which the Board do want for the value of those assets instead of taking over the whole holding company, including those assets, for something that is probably less than the total value of the assets of the holding company, and then selling the assets which are not wanted. If that is the real reason it is a discreditable reason, and I would not expect the noble and learned Viscount, the Lord Chancellor, to refuse to accept this Amendment for the insertion of this clause on such grounds.
But I think that the grounds on which this Amendment are valid and good are grounds which have appealed to others in another place, for I see that in the course of a debate which took place in another place on this subject of holding companies Mr. Gaitskell himself expressed considerable doubt—or perhaps I should just say doubt; for I do not wish to exaggerate—of the wisdom of taking over holding companies. I think that he added that, if sufficiently cogent arguments could be put forward for maintaining the holding companies while taking those assets which the Central Authority do want, he, speaking for His Majesty's Government, might be open to persuasion. It is because of the very cogent arguments put forward here in your Lordships' House by the noble Viscount who has moved the Amendment that I ask the noble and learned Viscount, the Lord Chancellor, to consider whether this is not a solution of the difficulties, and if it will not obviate the Government being involved in the accusation which is bound to be made that the real purpose of taking over holding

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companies and acquiring things which the Board do not want, is for the purpose of obtaining things which the Board want at a cheaper price than is justified.
THE LORD CHANCELLOR: My Lords, if I may say so, your Lordships have been very good in that you have not repeated all the arguments relating to this matter which we had at such very great length on the last occasion. I propose to follow the good example which has been set, and to treat the arguments which were put forward on the last occasion, if I may do so, as having been here restated and repeated. I am sorry to say that I cannot accept this Amendment. I did not know until quite a few minutes ago what form this Amendment was likely to take, though, of course, I knew that there was likely to be such an Amendment. I understand that representatives of the holding companies have had discussions with officials of the Minister. That was very much wiser than having them with me because the Minister's officials were able to speak authoritatively. On the other hand, it puts me in a slight difficulty in that I do not fully appreciate the arguments which the representatives of the holding companies advanced. But I can only say that so far as I am concerned the Amendment is quite impossible.
I know that your Lordships attach importance to it. I appreciate, as I always do, to the full, the strength and cogency of the arguments advanced by the noble Viscount, Lord Swinton, both on the last occasion and on this. If you regard the system of taking over on Stock Exchange valuation as a bad system, then, of course, this Amendment must commend itself to you, because the effect of the Amendment is to get rid of the Stock Exchange basis of valuation, root and branch. You have only to say that you have got a hat or a dog, or whatever it may be, which is not necessary for the purpose of the electricity part of your business, serve a notice, and, thereupon, the Stock Exchange method of valuation ceases to apply, and you have got to have arbitration. On the last occasion when we discussed this, I ventured to suggest that, having regard to difficulties of the franchise and that sort of thing, these arbitrations were almost impracticable, and that you could not arrive with
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any sort of approach to scientific accuracy at a figure. The Amendment gets rid of the Stock Exchange valuation basis. Whether, for that reason, it endears itself to some noble Lords, I do not know. I rather gathered from the noble Lord, Lord Rennell—who I think, to a certain extent, let the cat out of the bag—that that was the reason why he liked it so much. That is the reason why we do not think it is a good Amendment.
The substance of the thing is this: There are, substantially, eleven holding companies who will be caught under the terms of the Bill—there is one other that wants to come in though it is not caught. The amounts involved of these extraneous assets, whether they be foreign securities or internal assets, are really quite small. They are not substantial at all having regard to the value of the electricity undertakings, and most of them, oddly enough, consist of some sort of transport undertakings which of course will be taken over under the Transport Bill. And there remains very little else—some foreign securities which are quoted and valued and therefore can be assessed quite easily, but very little else. We feel that we must maintain the clause as we have it. We believe that this Stock Exchange method is a fair method of taking over. We are, therefore, not prepared to accept an Amendment which knocks that method on the head and substitutes an entirely different method. of valuation, and does it for the reason, ostensibly, that there are some extraneous assets involved, which are quite small really. We say the right thing is to accept our Stock Exchange method. Then if you want to get your extraneous assets, the Minister has said he is willing to help you, by means of a sale, or anything of that sort. I do not wish to waste your Lordships' time by saying anything more upon this—always provided, of course, that your Lordships do not think that I am treating the Amendment with any disrespect—because the arguments were put forward at great length, and dealt with, on the last occasion. I merely say I regret that we cannot accept this Amendment.
THE MARQUESS OF SALISBURY: My Lords, I am extremely sorry to hear he speech of the noble and learned Viscount. He said he did not wish us to think that

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he and the Government are treating this Amendment with disrespect, but I do not think they have given it what I call objective consideration. One thing is agreed, that these holding companies represent assets some of which the Government require under this Bill and some of which they do not require. It seems a perfectly simple process to put these securities into two categories, those representing the assets the Government want and those representing the assets they do not want. The extraneous assets should not come within the purview of this measure at all. Then we are left with those assets they want and those quoted on the Stock Exchange are to receive Stock Exchange valuation, but those not quoted on the Stock Exchange are to be calculated on an arbitration.
THE LORD CHANCELLOR: Will the noble Marquess forgive me, on a point of accuracy? This Amendment means that if there are any extraneous assets, the Stock Exchange valuation principle goes by the board for all assets.
THE MARQUESS OF SALISBURY: I do not speak with great authority on these subjects, but I cannot see that. I frankly
Resolved in the affirmative and Amendment agreed to accordingly.
cannot see that. Certain securities represent the assets which are not required by the Government and that does not in the least affect those other securities which represent assets required by the Government. The assets which are not quoted on the Stock Exchange are to be taken on arbitrated value. The Lord Chancellor said it is quite impossible to get an arbitrated value. I do not agree at all. It is something which is constantly done. The Lord Chancellor poured scorn on the noble Lord, Lord Rennell, because he said the only reason for refusing this Amendment was that the Government wanted to get all the assets. The Lord Chancellor said that might be true and that was the reason the Government refused this Amendment. I thought that a very cynical remark. We are trying in this country to give value for money and the Government ought to do that, and to say that this method was a method of getting something below market price is not a very reputable thing to do. I am afraid this must be taken to a Division.
On Question, Whether the proposed new clause shall be there inserted?
Their Lordships divided: Contents, 65; Not-Contents, 14.

CONTENTS.

Elibank, V.

Gifford, L.

Aberdeen and Temair, M.

Long, V.

Gisborough, L.

Cholmondeley, M.

Maugham, V.

Grenfell, L. [Teller.]

Reading, M.

Mersey, V.

Hampton, L.

Salisbury, M.

Monsell, V.

Harlech, L.

Willingdon, M.

Ridley, V.

Hawke, L.

Samuel, V.

Hazelrigg, L.

Airlie, E.

Simon, V.

Kenilworth, L.

De La Warr, E.

Swinton, V.

Llewellin, L.

Doncaster, E. (D. Buccleuch and Queensberry.)

Wimborne, V.

Lloyd, L.

O'Hagan, L.

Fortescue, E. [Teller.]

Ashton of Hyde, L.

Polwarth, L.

Grey, E.

Balfour of Inchrye, L.

Rennell, L.

Howe, E.

Barnby, L.

Rochdale, L.

Iddesleigh, E.

Braye, L.

Rushcliffe, L.

Lindsay, E.

Broadbridge, L.

Selsdon, L.

Lucan, E.

Broughshane, L.

Sinha, L.

Lytton, E.

Butler of Mount Juliet, L. (E. Carrick.)

Soulbury, L.

Manvers, E.

Stanmore, L.

Perth, E.

Cherwell, L.

Teynham, L.

Rothes, E.

Courthope, L.

Tweedsmuir, L.

Selkirk, E.

Denham, L.

Windlesham, L.

Fairfax of Cameron, L.

Wolverton, L.

Bledisloe, V.

Fairlie, L. (E. Glasgow.)

NOT-CONTENTS.

Jowitt, V. (L. Chancellor.)

Hare, L. (E. Listowel.)

Lucas of Chilworth, L.

Henderson, L. [Teller.]

Marley, L.

Addison, V.

Holden, L.

Morrison, L.

Kershaw, L.

Nathan. L.

Ammon, L.

Lindsay of Birker, L.

Walkden, L. [Teller.]

Chorley, L.

3.59 p.m.
Clause 14:
Vesting of assets of electricity undertakings.
The vesting date shall be not less than six months after the establishment of the Central Authority and not less than three months after the establishment of all the area boards and the definition by order made under Part I of this Act of all the areas for which those Boards are established.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, at the end of subsection (1), to insert "and shall not be earlier than the first day of April, nineteen hundred and forty-eight." The noble and learned Viscount said: My Lords, I beg to move the insertion of the words, "and shall not be earlier than the first day of April, 1948." This carries out an undertaking I gave. I had hoped I might be able to go one better, but I have not been able to do so. I may tell your Lordships, that, unless something stupendous happens, we expect the vesting date to be some time in the month of April, 1948.
Amendment moved—
Page 18, line 21, at end, insert the said words.—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: My Lords, the next is a drafting Amendment. I beg to move.
Amendment moved—
Page 22, line 30, after ("section") insert ("and Section seventeen of this Act").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 15 [Provisions as to undertakings of local authorities]:
THE LORD CHANCELLOR: My Lords, this is a drafting Amendment. I beg to move.
Amendment moved—
Page 23, line 7, leave out ("which vests") and insert ("rights, liabilities and obligations which vest").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: My Lords, this also is a drafting Amendment. I beg to move.
Amendment moved—
Page 23, line 9, leave out ("held or used") and insert ("rights, liabilities or obligations
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held, used, acquired or incurred").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 17 [Composite companies]:
THE LORD CHANCELLOR: My Lords, this Amendment is little mare than drafting. It is necessary in order to make it clear that questions arising under Clause 15 (2), which is applied by Clause 17 (4) to composite companies, should be decided by arbitration. I beg to move.
Amendment moved—
Page 27, line 31, after ("Minister") insert ("and any question whether any property is or was (for the purposes of the said subsection (2) as so applied) held or used partly in the said capacity and partly in other capacities shall, in default of agreement, be determined by arbitration under this Act "—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 18:
Disclaimer of agreements and leases.
18.—(1) Where any Electricity Board in whom are vested the rights, liabilities and obligations of any body to whom this Part of this Act applies, being rights, liabilities and obligations under an agreement made or varied on or after the nineteenth day of November, nineteen hundred and forty-five, are of opinion that the making or the variation of that agreement was not reasonably necessary for the purposes of the activities of the said body or that the agreement was made or varied with an unreasonable lack of prudence on the part of the said body, the Board may, by notice in writing given to the other parties to the agreement before the expiration of three months from the vesting date, disclaim the agreement:
VISCOUNT MAUGHAM VISCOUNT MAUGHAM moved, in subsection (1), after "not," to insert "expedient or." The noble and learned Viscount said: My Lords, it is my fate in connexion with these nationalization Bills to be constantly moving Amendments at the request of nervous people who are afraid that the words of the Bill may bear a meaning which would be very adverse to common sense. On some occasions I have been perfectly right, and I have succeeded in getting words added which have made tine matter clear. This is an example—it is quite simple, and is not a legal question at all—and I appeal to your Lordships to realize what I am going to say. The notion of the Government was that after November 19, 1945, certain persons

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whose rights were probably going to be acquired as the result of a future Bill—meaning this Bill—would try to get benefit by making agreements, or varying agreements, which agreements or variations were not really necessary for the purposes of the activities of the undertaking, whatever it was. To take an example, a director of a company might make an agreement with a relative under which the relative was to get some benefit which the director would not ordinarily have given him but for the notion that the undertaking was going to be taken over by the Government. Or, again, properties might be paid for at exorbitant prices.
The words chosen are these. The Bill refers to the Board being of opinion that the making or variation of the agreement in question
"was not reasonably necessary for the purposes of the activities of the said body or that the agreement was made or varied with an unreasonable lack of prudence."
This is the difficulty. What do the words "not reasonably necessary" mean? Take the case of an electric lighting company which in the ordinary course of business acquired some adjoining property for the purposes of extension of their business, or acquired land for a factory for the workmen, or did any one of the numerous things that an electric lighting company might do in complete good faith, having an eye to the future, and in particular to the future of their undertaking. Are those things that are reasonably necessary? It will be said: "They are not necessary, because it was not necessary for you to extend your undertaking, or to make the calculation that property, contracts, or so forth, ought to be made having regard to the future. Strictly those things are not necessary. You could go on with your undertaking." It might also be said: "It would not hurt the existing activities of your body not to have done these things, and it was not reasonably necessary for you to do anything of the kind." I have not attempted to give all the illustrations which will occur to many of your Lordships who are accustomed to business concerns, and I do not think I need take up your Lordships' time in considering them.
The word which I suggest will remove the doubt which I know exists in the minds
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of a good many companies at the present moment, is simply the word "expedient." I do not in the least object to people who are managing a business of this sort having to establish that an agreement was either expedient or that it was not in the least degree owing to lack of prudence—in other words, that it was both expedient and prudent. I do not think an ordinary director or manager of a company would object to having to prove that, but if before this Bill comes into force—and, after all, we do not know when it will actually become law—one of these companies is offered a very good deal of some sort, I am told that the directors will not touch it if it is in the least degree one which involves a considerable amount of money and some risk. All your Lordships will know that to take risks is of the essence of successful trading, and that you cannot be certain, if you are buying property, that it will turn out just what you hope, or that a contract will necessarily be a contract which six months later you will be glad to have made. Prices may have gone up, but, on the other hand, they may have gone down. You have to take the risk.
In those circumstances, I do not think it is fair that these companies should be exposed to the serious risk of the Electricity Board saying ex poste facto, in the light of the then known facts, that the agreement made or the variation of it was not reasonably necessary for the purposes of the said body—which is one of the things which will make the companies liable—or that the agreement was made or varied with an unreasonable lack of prudence. I am not worrying about the second alternative; it is the first that I am worrying about. Therefore, I suggest that the word "expedient," if I may steal the words from the Bill, is reasonably necessary to prevent injustice. I beg to move.
Amendment moved—
Page 28, line 40, after ("not") insert ("expedient or")—(Viscount Maugham.)
LORD HAWKE: My Lords, I hope that the noble and learned Viscount may be able to accept the Amendment of my noble friend. I hope that he will not give us the same answer that he gave in the Committee stage when we were dealing with a similar clause in connexion with the dissipation of assets. I have looked back in horror in my mind, on

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second thoughts, at the answer he gave there. He said that development must go on, and it is, therefore, of the utmost importance that people should take their problems round to the Minister. They would he frightened to act in these matters—at least I should be—and I do hope a solution for all these things is not going to be for the board to have a cosy chat with the Minister, because I am convinced that the Minister and his senior officials will simply not have the time to give the necessary decisions, or perhaps absolutions, to the board. Wording such as my noble friend has suggested might help boards to make up their own minds, without going round to the Minister.
VISCOUNT RIDLEY: My Lords, I would like to say a word in support of this Amendment, because I believe there is some real doubt in the minds of those who are concerned with this. I would briefly refer to Clause 29, which the noble Lord has mentioned. In that case the Lord Chancellor's answer was that the Minister could give his blessing to any such transaction, but in this clause he is not mentioned in that connexion. I think the difference is, first of all, that there is a question of the earlier date—that is to say it refers to an agreement or a lease made before the Bill itself was published. I think it also involves a third party, who may be quite an innocent third party, in proceedings before the Tribunal. In the same way as in Clause 29, referring to dissipation of assets, one cannot but agree that there should be something to prevent wilful misbehaviour by those so inclined; nevertheless I think we must agree that this clause should be drawn in such a way as to allow proper business enterprize to go on for the time being. I feel that the latter part of Clause 29 may have something to do with Clause 18, because Clause 29 (4) refers to disclaimer of leases. True, that is only leases made after the later date of publication of the Bill. I do hope that this Amendment will be accepted to make clearer the intention that it is only to catch people who wish to do something which is harmful to the industry.
THE LORD CHANCELLOR: My Lords, I confess that I should have thought these words were quite clear enough as they stood. The word is not "necessary", it is "reasonably necessary",
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and it is linked up with the phrase "or that the agreement was made or varied with an unreasonable lack of prudence". It is quite obvious, is it not, that what you are hitting at there is an unreasonable agreement, and "reasonably necessary" I should have thought was quite wide enough. Why I object to this additional word is that these words have become almost common form. They were put in the Coal Act without the word "expedient"; they are in the Transport Bill without the word "expedient", and if I put in here the words "or expedient"—which, in my view, are wholly unnecessary—I shall get some ingenious counsel getting up in court and saying: "Ah! when Parliament wanted to say 'expedient' it put in the word, and therefore in the Transport Act and the Coal Act you must not give any such construction at all." To adopt a form of words in this Bill which differs from the Coal Act and the Transport Bill might give rise to the ingenious form of argument I have just mentioned to your Lordships. Therefore, I regret that I cannot accept this Amendment.
VISCOUNT SWINTON: My Lords, I can understand the Lord Chancellor's difficulty, but on the other hand I can tell him without any doubt that business is actually being held up. I would Lot make that statement if I did not know that it was true. He has said that "reasonably necessary" ought to cover everything, but the phrase is "reasonably necessary for the purposes of the activities of the said body ". But observe that the date which is put in here is rot the date of the introduction of this Bill; it is the date when some responsible Minister said that this particular industry was going to be nationalized. I think it was said that the gas industry was going to be nationalized. I do not know whether it is or is not, but I know that people in the gas industry are being held up from doing things because of the words in this Bill. There have been a lot of conflicting statements about iron and steel, and I am certainly not going to probe them now, but what is in these Bills undoubtedly has an effect upon other industries which are expecting that they may come within the ambit. Let us leave out iron and steel but take gas, about which a definite announcement has been made.

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I know of a company which had made some extremely successful laboratory experiments for a particular process of manufacture which has hitherto been conducted entirely in the United States; they found the experiments going on quite successfully and decided to set up a factory. That was well within their Articles of Association, but it is not "reasonably necessary" for conducting the business of a gas undertaking. They therefore decided that this was a chance they had better not take, and that project is not being pursued. Inevitably, when you engage in these things this sort of legislation will have a stopping effect, and I hope the noble and learned Viscount will consider what he can do to make the further, and what I may call the secondary, damaging effects of this legislation as little as possible at a time when we are all trying to get together to improve the productive output of this country and, in particular, to produce things which will be paid for in dollars.
VISCOUNT MAUGHAM: My Lords, I should like to say a word with reference to the contention put forward by the noble and learned Viscount, the Lord Chancellor, as to the problem of making these words "reasonably necessary" clear to the intelligence of the ordinary human being. In my opinion, the contention was not well founded in law. It is not a good argument to say that because in other Acts of Parliament, with other contexts dealing with other circumstances, the phrase used is "reasonably necessary," we should use the phrase here in this connexion. Of course, the noble and learned Viscount is guessing when he says that in the other Acts the words have a well-known meaning. They have not. It may well be that in the other Acts some contracts will be invalidated, on the ground of their not being "reasonably necessary" in such a case as that which the noble Viscount, Lord Swinton, has just mentioned. How can we tell what they will say with regard to the meaning of the words in the other Acts, unless we can say that there is no foundation for the view that "reasonably necessary" is an equivalent to "expedient"?
I am willing to express the opinion quite definitely that "expedient" is not the same as "reasonably necessary"; and that there are cases in which the circumstances
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would be treated by a tribunal as "expedient" when they were unable to say that it was "reasonably necessary." A thing has to be necessary as well as reasonable, or the word "necessary" would not be there. I cannot help thinking that this notion of slavish adherence to words used in another Act is unprecedented and unsound as a matter of law. I would strongly urge your Lordships to take the view that with this Bill before us we should make this important clause clear and intelligible so that he who runs may read. This is not the case at present.
On Question, Amendment negatived.
Clause 20:
Compensation to holders of securities of bodies other than local authorities.
(2) For the purposes of this section the value of any securities of any such body which were quoted in the Stock Exchange Official Daily List on all six of the following dates, that is to say, the first, fourth, fifth, sixth, seventh and eighth days of November, nineteen hundred and forty-six, shall, subject as hereinafter provided, be deemed to be the average of the mean of the quotations therefor appearing in the said list on those dates, such addition, if any, being made to that average as is necessary to make it a complete multiple of one penny:
Provided that where—
(b) the average mentioned in the foregoing provisions of this subsection is less than the average of the mean of the quotations for the securities appearing in the said list on all the alternative dates on which a quotation therefor so appeared;
the value of the securities for the purposes of this section shall be deemed to be the average of the mean of the quotations therefor appearing in the said list on the alternative dates.
4.24 p.m.
THE LORD CHANCELLOR: My Lords, I am grateful to the noble Lord, Lord Rennell, for calling attention to what I think was a defect in the drafting, and I have put down this Amendment to put the matter right. I beg to move.
Amendment moved—
Page 31, line 45, after ("shall") insert ("if redeemable").—(The Lord Chancellor.)
LORD RENNELL: I am much obliged to the noble and learned Viscount for his Amendment.
On Question, Amendment agreed to.
THE LORD CHANCELLOR: My Lords, I beg to move this Amendment.
Amendment moved—
Page 32, line 1, leave out from ("redeemed") to ("and") in line 2, and insert ("in the same manner and at the same times").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE EARL OF LYTTON THE EARL OF LYTTON moved to add to the proviso in subsection (2):
"And provided also that if it shall be proved to the arbitration tribunal that owing to circumstances arising out of the late war the valuation of the securities or any class of the securities of any body to whom this part of the Act applies on the basis of the said quotations on either of the said dates or the alternative dates would be inequitable the arbitration tribunal may fix such other dates as they may think just and any date or dates so fixed by the arbitration tribunal shall be substituted for the said dates and alternative dates."
The noble Earl said: My Lords, when the Lord Chancellor was answering an Amendment which I moved to Clause 26 of this Bill he was good enough to exonerate me from any suspicion of trying to seek an advantage for the companies in which I was interested. I hope he will not consider it improper or have occasion to revise the opinion he then expressed if I seek by this Amendment to ensure that certain classes of undertakers who may have already suffered loss of income by reason of their sacrifices in the war, should not also lose part of their capital by being bought out under this Bill at a date when their Stock Exchange quotations still reflected the losses imposed upon the company by their war sacrifices. I mentioned cases when we were in Committee and the Lord Chancellor agreed to look into the matter; but as he has not put down any Amendment to deal with it, I have put down this one to bring the point once more before your Lordships.
The dates selected in this clause for Stock Exchange quotations are all either in the year 1945 or 1946, and those are years when the Stock Exchange quotations reflected either gains or losses which might have been incurred during the preceding years of war. Some of the quotations would have been increased by reason of war gains, and some of them may have been diminished by reason of war losses. I pointed out in Committee that there were cases where companies have suffered very severe war damage at the hands of the enemy, and in consequence have been obliged to reduce their dividends, to raid their sinking funds, and to adopt other expedients—with the approval of the Electricity Commissioners
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—and the result was still reflected in the price at which their shares were quoted in 1945 and 1946.
I was rather shocked when the noble and learned Viscount, the Lord Chancel or, speaking of this clause in Committee, said that it was obviously true that they were paying too much in some cases and too little in others, but that there was no alternative. Does he really think it just to take one roan's property and pay him less than its value if at the same time you are taking property from someone else and paying more than its value? That is what this clause means. I am not concerned here with whether Stock Exchange quotations represent the fair value of shares or not. I am not concerned with whether it is just to take assets and pay for shares. We have expressed our opinions on that matter already and, if need be, we shall have another opportunity on the Third Reading of saying mare about it; but that is not involved in this Amendment. All that this Amendment seeks to do is to give the right to anybody to whom this Bill applies—and that includes also the Minister—to represent to the arbitration tribunal that if quotations on the dates selected in this Bill reflect either war gains or war losses and therefore not the values which represent the normal trading conditions of the company, then the arbitration tribunal may fix other dates. In other words, it seeks to correct the very inequality which the Lord Chancellor admitted was inevitable under the scheme in this Bill but for which he could find no remedy. I beg to move.
Amendment moved—
Page 32, line 30, after ("dates") insert the said further proviso.—(The Earl of Lytton.)
THE LORD CHANCELLOR: My Lords, I have not been able to find whir: I said on the last occasion, but I think that the gist of my remarks was this: that whatever system you devise, it not: being possible to arrive with complete scientific accuracy at the rates of payment, it is inevitable that you must pay some people too much and you must pay other people too little. It is no good deploring the fact; it is inherent in the fallibility of human justice. When you are dealing with a thing that you cannot assess with precision, that is bound to result. I cannot accept this Amendment and I do rot think I should be asked to.

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If you assume that the Stock Exchange valuation is a fair basis to take, that is a matter of argument which we have had before. There is no suggestion, I think, that these dates are not fairly selected. I am not one of those who believe for one moment that the price at which securities are quoted on the Stock Exchange reflects merely the dividends they pay. I am quite satisfied that the very intelligent people who invest and advise on investing in shares study the balance sheets and reports of these companies with meticulous care. They know perfectly well whether these concerns are following a conservative policy, whether they are building up reserves, and that sort of thing. To suggest that those great trust companies who largely invest in these shares do not follow these matters is really to insult them. They understand perfectly well that the story of the dividend that is paid is only one factor, and by no means the most important factor, in the strength and stability of a company. Therefore, I cannot accept that we should take any other dates than these which we have already specified.
There is one further element which I would like to point out. By the Amendment which your Lordships have made to-day, you have said that a holding company which holds any extraneous asset at all—as I said before, it has only to be a coat and hat—can be deemed under your clause to be not a holding company and, that being so, that company is washed out. Thereupon you have to assess the value. In the vast majority of cases, those undertakings are not quoted on the Stock Exchange; consequently, you have to provide for arbitration. I would most respectfully say to the noble Earl that, having put that clause upon us, he ought not to have it the other way as well and select further dates so that, if it suits him, he may resort to the method of Stock Exchange valuation. For these reasons and for other reasons which we discussed before, I regret I am unable to accept this Amendment.
THE EARL OF LYTTON: My Lords, with regard to the matter of the dates which the noble and learned Viscount has raised, this Amendment, with all respect to the noble and learned Viscount, is not concerned with Stock Exchange values. Does the noble and learned Viscount really think that during the war
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years, if one company was making large profits and one company was incurring losses, the Stock Exchange quotations on those two companies in no way reflected the gains or losses which were the result of the war? It is obvious that they did. If some companies were making large profits as a result of the war, the value of the shares of those companies went up, and, in another case, where a company was making losses in consequence of war sacrifices, the price of those shares went down. By choosing a date which does not reflect the normal procedure and policy of the company—or, as the Lord Chancellor said, the relative conservative and wise or rash and speculative policies—those factors are not involved at all. By choosing a date in 1945 or 1946, when the effects of the recent war were still felt in Stock Exchange quotations, you are making shareholders who suffered temporary war losses suffer permanently by taking their shares at a price which reflects those losses, and you are enabling those companies which made war gains to enjoy a permanent benefit by taking their shares at an inflated value due to their war gains. That has nothing to do with the Amendment which we have just been discussing, which has nothing to do with Stock Exchange values, I have tried to remedy the point by means of this Amendment. I do not think the Lord Chancellor has answered the case.
THE LORD CHANCELLOR: I am sorry the noble Earl does not think that I have answered the question. The only way in which you want to value securities instead of valuing assets is by availing Yourself of the Stock Exchange method; otherwise, there is no point in valuing securities. Therefore, it is not accurate for the noble Earl to say that this clause does not deal with the Stock Exchange basis. It can only be addressed by that method.
On Question, Amendment negatived.
Clause 22:
(5) Any payment made by the Central Authority or the local authority under the foregoing provisions of this section which would, but for this Act, have been debited or credited as a capital payment, shall be deemed to be a capital payment, and any other such payment shall be deemed to be an annual payment.
LORD O'HAGAN LORD O'HAGAN moved in subsection (5), after "payment" where that word occurs a second time, to insert "or any

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payment made in respect of the liability for the redemption of a loan or the repayment of an advance." The noble Lord said: My Lords, in rising to move this Amendment, I think the House will probably appreciate that this is a matter of vital concern to the urban district councils, of whom there are well over 100 whose electricity undertakings will, under the Bill, be vested in the proposed electricity boards. Clause 22 makes provision for the repayment by the electricity boards of sums which the urban district councils will have to continue to disburse out of their rates in respect of sinking fund charges on outstanding electricity loans.
I think perhaps I may most easily make the case that has been put before mc by taking a simple example. If a local authority, for instance, have borrowed, say, £100,000 for the purpose of their undertaking for a period of years, they will continue to be liable for the payment for some years to come of, say, £6,000 per annum in respect of the repayment of principal of the loan and, say, £3,000 per annum in respect of interest. In the Bill as it was introduced in another place, arid even as it passed the Committee of that other place, it was expressly provided that the payments to be made by the Central Authority, so far as they represented( principal, should be by way of capital payment. It was necessary so to provide as regards net interest, as Income Tax was in the ordinary course to be deducted from the payment of interest and the local authority would pay the amount net. Therefore, under the Bill as introduced, taking what I have said above as an example, the Central Authority would pay to the local authority £6,000 net in respect of the principal and £3,000, less Income Tax, in respect of interest.
That is as matters stood after the Bill passed through the Committee in another place. The Bill, however, was re-committed in another place, and these subsections (2) and (5) of Clause 22—the clause to which this Amendment is proposed—were added. The words that I have already quoted "by way of capital payments" do not appear in the new clause, but instead the words "capital payments" have been related to the conditions which will apply before the transfer of the undertaking. Therefore, I think it is clear that Clause 22 must be read as distinguishing between payments
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which at the present moment are (a) debited as capital payments in the books of the local authority, and (b) other payments, such as payments of interest, which, in the books of the local authority, are debited as annual payments. No question arises as to these latter "other payments" but, as regards the first matter, I am advised—and I hope I am wrongly advised—that it is quite clear that repayments of principal by a local authority annually or half-yearly are debited as annual payments and not as capital payments.
Therefore the position would seem to be that, if the Bill is passed in its present form, the Central Authority will be entitled to deduct Income Tax, not only on the interest of the hypothetical figure of £3,000 which I mentioned but also for instalments of the principal of £6,000 per annum. This will mean that the local authorities, instead of being properly compensated in respect of the loss of the undertaking, will suffer in respect of serious financial loss by having to pay instalments of principal gross, and only receiving from the Central Authority such amounts less tax. I trust that the noble and learned Viscount will be able to give us an assurance on this matter. because this point has only been appreciated at a comparatively late stage, and. I hope very much that this argument which has been put forward really will be answered by the noble and learned Viscount. I beg to move.
Amendment moved—
Page 37, line 10, after the first ("payment") insert ("or any payment made in respect of the liability for the redemption a loan or the repayment of an advance")—(Lord 0'Hagan.)
THE LORD CHANCELLOR: My Lords, I have had a strange experience. I looked at this Amendment before I came here, and I thought it was a bad one. I look at my instructions, and my instructions are that I am to oppose it. However, I must say, having heard the noble Lord's argument, that I confess he has converted me. I think there is substance in what he has said, and I will take it upon myself to accept it.
LORD O'HAGAN: I would like to thank the noble and learned Viscount, if I may.
On Question, Amendment agreed to.
4.43 p.m.
Clause 25:
Compensation to composite companies.
25.—(1) Every composite company shall be entitled to be paid by the Central Authority, by way of compensation for the vesting in that Authority or in any other Electricity Board of property and rights of the company, and in lieu of any other compensation in respect of that vesting, an amount calculated as follows:—
(c) the amount of the compensation shall be an amount bearing to the aggregate value of the said securities the same proportion as the said average net revenue of the electricity undertaking bears to the said average net revenue of the company's undertaking as a whole.
LORD CHORLEY LORD CHORLEY moved, in paragraph (c) of subsection (1), after "be," to insert:
"the aggregate of the following amounts—(i)."
The noble Lord said: My Lords, this is an Amendment which has been tabled to comply with an undertaking given by my noble and learned friend in answer to an Amendment moved in Committee by Lord Wolverton, to pay companies compensation for severance as assessed by arbitration. The Amendment now proposed will give the companies compensation at the fiat rate of 5s. per thousand units of electricity sold in 1946, that is to say a payment as related to the size of electricity undertaking itself. This flat rate is the equivalent of the global sum of £5,000,000 to be given to local authorities, and a global sum itself would not be possible here as the option given under Clause 17, subsection (1), makes it uncertain how many companies will actually be affected. I hope that your Lordships will agree that this Amendment substantially meets the point which was raised by the noble Lord, and that it is acceptable. I beg to move.
Amendment moved—
Page 38, line 17, after ("be") insert ("the aggregate of the following amounts—
(i)").—(Lord Chorley.)
LORD WOLVERTON: I thank the noble Lord for this Amendment. It brings it in line, I understand, with the local authority compensation.
On Question, Amendment agreed to.
LORD CHORLEY: The next Amendment is consequential. I beg to move.
Amendment moved—
Page 38, line 22, at end insert—
("(ii) an amount, by way of compensation in respect of the severance of the electricity undertaking from the remainder of the company's undertaking, consisting of a sum of five shillings for each complete one thousand of the units of electricity which, in accordance with the figures accepted by the Electricity Commissioners for the purposes of Section seven of the Electricity (Supply) Act, 1922, were sold (within the meaning of that section) by the company during the year nineteen hundred and forty-six.").—(Lord Chorley.)
On Question, Amendment agreed to.
Clause 26 [Control of dividends, interest and other Payments]:
LORD CHORLEY: My Lords, there are several Amendments here which, with your Lordships' consent, I should like to take together. First of all there is the one which has been called, then the one at line 16, the one at line 20, and also in Clause 27 on page 45, line 2, and also on page 45 at line 4. This group of Amendments deals with net revenue, and it has been tabled with a view to fulfilling a promise which was made by my noble and learned friend in Committee. I do not think I need explain them in detail. I just beg to move.
Amendment moved—
Page 40, line 15, leave out ("with the approval of the Minister").—(Lord Chorley.)
VISCOUNT SWINTON: My Lords, I think I suggested the words "in accordance with the normal practice." I am much obliged to the noble Lord.
On Question, Amendment agreed to.
Amendments moved—
Page 40, line 16, after ("applicable") insert ("in accordance with the normal practice"').
Page 40, line 20, leave out ("with the approval of the Minister").—(Lord Chorley.)
Clause 27 [Final payments of dividends and interest]:
LORD CHORLEY: My Lords, I have already mentioned the two Amendments to this clause, which I now beg to move.
Amendments moved—
Page 45, line 2, after ("applicable") insert ("in accordance with the normal practice").
Page 45, line 4, leave out ("if the Minister authorises them to do so").—(Lord Chorley.)
On Question, Amendments agreed to.
4.48 p.m.
Clause 29:
Re-opening of transactions resulting in dissipation of assets.
29.—(1) This section shall apply in any case where on or after the tenth day of January, nineteen hundred and forty-seven, any body to whom this Part of this Act applies, being a company have—
(a) made any payment to any person without consideration or for an inadequate consideration;
and the payment, sale, disposal, acquisition, agreement or variation thereof, or other transaction was not reasonably necessary for the purposes of the body or was made with an unreasonable lack of prudence on the part of the body:
Provided that this section shall not apply:

(i) to any payment or other transaction to which Section twenty-six of this Act applies;

(ii) to any payment or other transaction made or entered into for any charitable purpose; or

LORD RENNELL LORD RENNELL moved to insert in the proviso to subsection (1):
"(iii) to any payment or other transaction made or entered into in connexion with a submission to arbitration under this Act or any proceedings before any tribunal established by regulations made under this Act."
The noble Lord said: My Lords, this raises a point which was discussed in Committee arid provides for payments which may be made, and to which Clause 29 will not apply. In connexion with the submitting of a question to arbitration, it has been pointed out that, when a matter is submitted to arbitration, it would obviously be considered reasonable—and the Lord Chancellor said that would be so—that the expenses during the arbitration should be met. But there also arose the question of expenses in anticipation of an arbitration, and, in order to make sure that this should be considered proper, I beg to move the insertion of the paragraph which is printed on the Order Paper. I do not think I need elaborate that. There was a good deal of discussion on it in Committee, but I think it only right and reasonable to all concerned that the obtaining of expert opinion and legal assistance in anticipation of an arbitration would be right and proper payment to exclude by the Amendment. I beg to move.
Amendment moved—
Page 48, line 38, at end insert the said paragraph.—(Lord Rennell.)
LORD CHORLEY: My Lords, as the noble Lord has said, we undertook to look into this matter after there had been tome discussion about it on the Committee stage. That has been done and we are advised that these words are really quite unnecessary. In order to reopen a transaction under the clause the matter would not only have to be brought under one or other of the heads (a) to (e), but it w mid also have to be shown that the transaction "was not reasonably necessary for the purposes of the body or was made with an unreasonable lack of prudence on the part of the body." Expenses in connesxion with and preliminary to arbitration an all part of arbitration, and are allowed in taxation of costs as being part of the whole process of securing an arbitral award. It seems quite beyond question that the authority could hardly claim that they were in fact not necessary for the purpose of the body, and even more difficult to maintain that they were made with an unreasonable lack of prudence on the part of the body. I do not think it would be possible to discharge the burden of getting them out of the part of the clause before (e), because there again it is necessary to show that there was excessive consideration or that the transactions were of an onerous nature, or something of that kind. I hope that in the circumstances the noble Lord will not desire to press this Amendment.
LORD RENNELL: My Lords, I car riot say that I am quite happy about the reply. I am not disputing the wording of the part of the clause preceding the proviso. We had considerable argument about that, and I expect that wording is sufficient to cover most ordinary payments. I would like to point out—and I think I am right in saying this—that by the time the transaction has to be reopened, the company, in fact, will have ceased to exist. There will not, therefore, at that point be any assets out of which to pay expenses except those which are properly payable by directors who are being accused of doing something which they ought not to have done. Obviously, a company, after it has ceased to exist, will not have any assets to pay for arbitration. But I can visualize many cases which might arise before the company has been wound up and taken over. The directors who are in doubt about the result of certain actions and decisions on their part ex abundanti cautela might take technical

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and legal opinion, which would involve the company in considerable expense, against such time as the transaction might be reopened after the company ceases to exist. I want it to be quite clear that expenses of that kind will be considered reasonable even if there is no arbitration, or if no reopening of the transactions is to take place. Therefore, I am not quite happy about it being understood in the preamble to which the noble Lord has referred.
LORD CHORLEY: The whole of this clause is of course concerned only with the reopening of transactions. Only on that basis can the matter arise at all.
VISCOUNT SWINTON: My Lords, surely, the point is this. I had hoped that it was covered by the noble Lord when he said that you ought to be able to take counsel's opinion before the company is wound up. Clearly, a board have to consider what the position is to be under the Bill—whether they can come to an agreement or whether they should go to arbitration. To do that they may have to decide whether they have extraneous assets, and whether that matter is to be dealt with in the way which the Lord Chancellor proposes or in the way which the House has now laid down. As things are now, all sorts of boards of directors—as well as the Government—are sitting down to consider the position under the Bill. Wretched people who are conducting these businesses find themselves in great difficulty and in need of advice. Sometimes they come to me to ask for advice—not that that is worth very much.
Of course, they have to take the best advice they can. They have to take the advice of actuaries, of counsel—generally speaking, of the best authority to deal with their problem. I suggest that either there ought to be words in the Bill or there ought to be a most emphatic statement from the Government which obviously will be binding upon Ministers that in respect of everything which the companies do now—I do not of course mean starting new businesses—for ascertaining and securing their position under the Bill, they may not only have authority to do it, but they shall be told: "The right thing for you to do, in the interests of your shareholders, is to consult the proper authorities, legal and actuarial."
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We ought to have that stated in quite clear language. Arc we not entitled to have an answer upon this? We can divide upon it of course, but I suggest that it is not treating the House with decency if we are not given an answer now.
LORD CHORLEY: I am afraid that I made rather a blunder in speaking twice. I can, of course, speak only once unless I have leave of the House to speak again. If I may have leave of the House I will add a few words.
VISCOUNT SWINTON: You may take it that you have it.
LORD CHORLEY: I thought that I had in fact covered the point which the noble Viscount has made. It does seem to me that it would be quite impossible to say that expenditure of the kind to which he has referred was not reasonably necessary to the body. But I shall certainly be very glad to look at this again, and I hope that with that assurance the noble Lord, Lord Rennell, will withdraw his Amendment.
LORD RENNELL: I shall be glad to withdraw my Amendment on the assurance that this will be looked into again. I think that there is a very considerable gap in the case of companies who to-day take steps to provide themselves against an emergency which might happen in the future, and in future might have the expense of that disallowed, and the full amount charged against the directors. In the circumstances, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in subsection (2), after "shall" insert "unless the tribunal otherwise directs." The noble and learned Viscount said: My Lords, this Amendment has been put down following a suggestion made by the noble and learned Viscount, Lord Maugham. It was a question as to whether or not all directors would have to be parties to the application. It occurred to me that whilst not leaving it to the discretion of the Central Authority we might leave the tribunal with some discretion in this matter. I think that this will go a long way towards meeting the noble and learned Viscount's point. I beg to move.
Amendment moved—
Page 49, line 5, after ("shall") insert ("unless the tribunal otherwise directs").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 30:
Provisions as to foreign investments.
(3) If any such body contravene or fail to comply with the provisions of this section or any regulation made thereunder, all persons who were directors of the body at the time when the contravention or failure occurred shall be jointly and severally liable to make good any loss suffered by the Central Authority in consequence of the contravention or failure.
4.58 p.m.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in subsection (3), to leave out "be jointly and severally" and insert "subject to the next following subsection, be." The noble and learned Viscount said: My Lords, this Amendment goes with the next at page 50, line 19. These two Amendments go together and they give effect to a promise made to the noble and learned Viscount, Lord Maugham, on the Committee stage. I promised to cover the substance of the long Amendment which he then moved and I think that I have here done it. Accordingly, I beg to move.
Amendment moved—
Page 50, line 17, leave out ("be jointly and severally") and insert ("subject to the next following subsection, be").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: My Lords, I beg to move the next Amendment to which I have just referred.
Amendment moved—
Page 50, line 19, at end insert—
"(4) Any claim under this section by the Central Authority against the directors of any such body shall be made before the expiration of a period of twelve months beginning with the vesting date and shall be determined by arbitration under this Act, and all persons who were directors of the body at the time when the alleged contravention or failure occurred shall, unless the arbitration tribunal otherwise directs, be made parties to the proceedings, and, if the arbitration tribunal decides the claim in favour of the Central Authority, it shall make such orders against all or any of the said directors in respect of their liability under this section as it thinks just. having regard to all the circumstances."—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 37 [Fixing and variation of tariffs:
THE LORD CHANCELLOR THE LORD CHANCELLOR moved after subsection (1) to insert the following new subsection:
"(2) The tariffs fixed under the last fore-going subsection shall be so framed as to show the methods by which and the principles on which the charges are to be made as well as the prices which are to be charged, and shall be published in such manner as in the opinion of the Central Authority will secure adequate publicity for them."
The noble and learned Viscount said: My Lords, the object of this Amendment is to give effect to an undertaking I give to the noble Viscount, Lord Swinton He was anxious that the tariffs should show the principle on which they are framed. I was a little ignorant at the time and did not know if I could do that. I am with him in his desire for publicity, and I hope he will think that this drafting has made good my promise. I beg to move.
Amendment moved—
Page 56, line 33, at end insert the said subsection.—(The Lord Chancellor.)
VISCOUNT SWINTON: It is entirely satisfactory.
VISCOUNT RIDLEY: As I moved the Amendment concerned, I also wish to say that I think this meets it admirably.
On Question, Amendment agreed to.
THE LORD CHANCELLOR: My Lords, this is the same point again. I beg to move.
Amendment moved—
Page 56, line 39, leave out from ("the") to the end of line 40 and insert ("methods by which and the principles on which the charges are to be made as well as the prices which are to be charged, and shall be published in such manner as in the opinion of the area board will secure adequate publicity for them").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 46 [Accounts and audit of Central Authority and Area Boards]:
LORD DEL'ISLE AND DUDLEY LORD DEL'ISLE AND DUDLEY moved to add at the end of subsection (3) the following proviso:
"Provided that no person shall be qualified to be so appointed unless he is a member of one or more of the following bodies:
The Institute of Chartered Accountants in England and Wales;

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The Society of Incorporated Accountants and Auditors;
The Society of Accountants in Edinburgh;
The Institute of Accountants and Actuaries in Glasgow;
The Society of Accountants in Aberdeen;
The Association of Certified and Corporate Accountants, Limited."
The noble Lord said The noble Lord said: My Lords, the House may recollect that in Committee stage I moved an Amendment to ensure that persons employed to audit the Central Authority and area board accounts should be properly qualified persons. The Amendment as set down at that stage apparently did not find favour with His Majesty's Government. I understand there is a precedent for this Amendment which I now move, and I hope, therefore, that it will be commendable to the Government. I beg to move.
Amendment moved—
Page 63, line 35, at end insert the said proviso.—(Lord DeL'Isle and Dudley.)
THE LORD CHANCELLOR: Although not a member of the profession which the noble Lord adorns, I am at one with him in thinking that it is of the utmost importance to British industry that the accountancy profession should be recognized for what it is and raised in status, and that the accounts of all important companies should be audited and looked after by properly qualified accountants. I have much pleasure in accepting this Amendment.
On Question, Amendment agreed to.
Clause 48 [Acquisition of non-statutory undertakings]:
THE LORD CHANCELLOR: My Lords, this is a drafting Amendment. The clause relating to local authorities refers to the capacity of a local authority as authorized undertakers and other capacities of the authority, and the corresponding phraseology for non-statutory companies is to refer to the purposes of the electricity undertaking and other purposes. I beg to move.
Amendment moved—
Page 67, line 38, after ("undertaking") insert ("for references to other capacities of the local authority there shall be substituted references to other purposes of the company").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: My Lords, this is a drafting Amendment
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similar to the drafting Amendment we have already made.
The same problem arises in the case of non-statutory undertakers as arose in the case of composite companies, and a similar Amendment is therefore required. I beg to move.
Amendment moved—
Page 67, line 42, at end insert ("and any question whether any property is or was (for the purposes of the said subsection (2) as so applied) held or used partly for the purposes of the electricity undertaking and partly for other purposes shall, in default of agreement, be determined by arbitration under this Act").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 54:
(3) Regulations made under this section shall not be invalid by reason that in fact they do not secure that persons having pension rights are not placed in any worse position by reason of any such amendment, repeal, revocation, transfer, extinguishment or winding up as is mentioned in the last foregoing subsection, but if the Minister and the Secretary of State are satisfied or it is determined as hereinafter mentioned that any such regulations have failed to secure that result, the Minister and the Secretary of State shall as soon as possible make the necessary amending regulations.
Any dispute arising as to whether or not the said result has been secured by any regulations made under this section shall be referred to a referee or board of referees appointed by the Minister of Labour and National Service for his or their determination thereon.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved in subsection (3), after "Service" to insert "after consultation with the Lord Chancellor or, where the proceedings are to be held in Scotland, after consultation with the Secretary of State". The noble and learned Viscount said: My Lords, this Amendment is similar to that which was made in the Transport Bill by the other place when they disagreed with our Amendment. It drags me into the thing, perhaps unfortunately for me, but it may be as well that I should be able to keep my finger on the pulse of arbitration and find out how it is going. When I was asked to agree to this I raised no objection, and I hope it will give your Lordships—it sounds rather conceited—some satisfaction about the methods of arbitration and the arbitrator.
Amendment moved—
Page 74, line 2o, after ("Service") insert the said words.—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: My Lords, this is a drafting Amendment to bring the drafting of this subsection into line with Clause 55 (5) and also the new subsection (5) to be inserted in Clause 54 by the next Government Amendment. There is no reason for any distinction between the three cases. It might be said that the provision stating that the decision of the referee or board is to be final is no longer necessary in view of the Government Amendment we are coming to. That may be so, but the provision is a common one and makes the position a good deal clearer to the ordinary man. The best course, therefore, seems to be to add these words rather than leave them out in the other two places.
Amendment moved—
Page 74, line 21, at end, insert "and the decision of that referee or board shall be final."—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, after subsection (4) to insert:
"(5) Subject to any regulations made under this section, the provisions of this Act which vest liabilities and obligations of a body to whom Part II of this Act applies in an Electricity Board shall apply in relation to customary obligations of the body in respect of pensions, notwithstanding that the body was under no legal obligation in respect of those pensions, and if any question arises as to the existence or extent of any such customary obligation the question shall, in default of agreement, be referred to a referee or board of referees appointed by the Minister of Labour and National Service, after consultation with the Lord Chancellor, or where the proceedings are to be held in Scotland, after consultation with the Secretary of State and the decision of that referee or board shall be final, and the Electricity Board shall give effect to that decision."
The noble and learned Viscount said: My Lords, this Amendment is submitted to give effect to a promise I made to the noble Lords, Lord Teynham, Lord Hawke and Lord Rochdale, who had an Amendment down with regard to what I may describe as customary rather than legal obligations. I hope the noble Lords will think I have fully met their desire and carried out my promise. I beg to move.
Amendment moved—
Page 74, line 33, at end, insert the said new subsection.—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 55 [Compensation to office's in connection with transfers]:
THE LORD CHANCELLOR: My Lords, this Amendment is similar to the previous Amendment which has been agreed to. I beg to move.
Amendment moved—
Page 76, line 23, at end insert ("after consultation with the Lord Chancellor or where the proceedings are to be held in Scotland, after consultation with the Secretary of State").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, after Cause 55 to insert the following new clause—
"Arbitration Act not to apply to proceedings before referees or boards of referees.
Nothing in the Arbitration Acts, 1889 to 1934, shall be construed as applying to any proceedings before a referee or board of referees appointed under either of the two last foregoing sections by the Minister of Labour and National Service."
The noble and learned Viscount said: My Lords, we had a long discussion about this. The question was as to whether we should insist on strict and more legal methods or whether we should content ourselves with the Ministry of Labour referee. On the whole your Lordships thought it wiser not to insist on the legal method because people did not want it. It might be foolish, but if they did not want it, you were not going to insist. We must not leave it ambiguous but must state it clearly. By this Amendment the Arbitration Acts do not any longer apply, aril it is to clear up what might be an ambiguity that I move this new clause.
Amendment moved—
After Clause 55 insert the said new Clause.—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 56 [Application, amendment and repeal of enactments relating to electricity supply]:
THE LORD CHANCELLOR: My Lords, this is a drafting Amendment, made necessary because we accepted the Amendment moved by the noble Viscount, Lord Maugham, to insert "being adaptations and modifications required in consequence of the provisions of this Act." When we accepted that we did not realize that this Amendment would be necessary. I beg to move.
Amendment moved—
Page 77, line 44, at end insert ("(including the foregoing provisions of this section) or of the Act of 1943").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 59:
Setting up of Electricity Appeal Tribunal
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 any undue preference or undue discrimination by an Electricity Board;

(b) any representation in regard to the matters specified in the preceding paragraph which may be 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.
(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.
5.10 p.m.
VISCOUNT SWINTON VISCOUNT SWINTON moved, in subsection (1), to leave out "Electricity," where that word last occurs, and insert "Area." The noble Viscount said: My Lords, I would like to explain in a sentence or two the next three Amendments. The first and the third are purely drafting Amendments. The other Amendment, which looks formidable, is really quite simple. Your Lordships passed an Amendment on Committee stage to set up this arbitration tribunal, and there were three matters left over for further consideration. We asked the noble and learned Viscount, the Lord Chancellor, to give us his advice as to whether the tribunal ought to deal with discrimination
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and undue preference, or whether that should be a matter for the court. He advised us that under the Bill as it stands it was already a matter for the court, and that we would be wise to leave it there. We have taken that advice, and have cut out "discrimination and undue preference."
There was then the question of the price to the railways. We have already dealt with that in the Bill, and we have agreed that the price must be one which will not show a loss. The railway price—although it was always, and is still, subject to approval by the Electricity Commissioners—we can leave, as it is provided for in the Bill. I have recast subsection (3) in order to make it more intelligible, and to bring it more into line with the existing practice. That is the matter of individual appeal. I have inserted the local authority, who have a right of appeal to the Commissioners to-day. I propose to provide that the application on behalf of an individual has to be made on behalf of twenty people. That is the practice to-day, and it has been found convenient in cutting out one tiresome purpose. The third case, which seems to be obviously right, is where there is a genuine application by a trade or industry. I think that recasting definitely improves the clause as your Lordships passed it, and I beg to move.
Amendment moved—
Page 81, line 1, leave out ("Electricity") insert ("Area").
THE LORD CHANCELLOR: My Lords, if I follow the noble Viscount aright—he will correct me if I am wrong—these are Amendments to the new clause which he inserted on the Committee stage as a result of the Division.
VISCOUNT SWINTON: That is right.
THE LORD CHANCELLOR: That being so, it is his child, and he has the right to dress up his child as he thinks makes her look most attractive. It is not my child, and I take no responsibility for the dress the child wears. I must reserve the right in due course to object to the whole "caboodle"—the child, the dress and all. Meantime, as it is the noble Viscount's child, I do not think I shall serve any useful purpose in resisting any Amendments which he makes to the clause. It is probably better that when it is considered in another place it should

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be put forward in what he considers to be the most attractive dress. I will not now resist this Amendment, or any other Amendment to the clause, but it must be understood that in not resisting the Amendments I am in no way committing myself to any sort of acceptance of the clause.
On Question, Amendment agreed to.
VISCOUNT SWINTON: My Lords, I beg to move this Amendment.
Amendment moved—
Page 81, line 4, leave out subsections (2) and (3) and insert the following new subsections:
("(2) It shall be the duty of each area board to submit to the Electricity Appeal Tribunal the tariffs from time to time fixed by them and the Tribunal after such enquiry as they think fit may either refuse to confirm any tariff or may confirm it with such alterations if any as they think fit and no such tariff shall come into force until it has been confirmed by the Tribunal.
(3) It shall be the duty of the Electricity Appeal Tribunal to consider—
(a) any representation from—

(i) any local authority having jurisdiction in the area of any area board;

(ii) such number of consumers not being less than twenty as the Tribunal think sufficient having regard to the population of the area;

(iii)any consumers who in the opinion of the Tribunal sufficiently represent any particular trade business or interest in the area

with respect to the prices charged for the supply of electricity by the Central Authority or any area board;
>(b) any representation in regard to the matters specified in the preceding paragraph which may be 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.
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").—(Viscount Swinton.)
On Question, Amendment agreed to.
VISCOUNT SWINTON: My Lords, I beg to move this Amendment.
Amendment moved—
Page 82, line 1, leave out ("the Central Authority") and, insert ("every Electricity Board").—(Viscount Swinton.)
On Question, Amendment agreed to.
Clause 62:
Provisions as to prosecutions and as to offences by corporations.
(2) Where an offence under the last foregoing section or any regulation made under this Act has been committed by a body corporate, every person who at the time of the commission of the offence was a director, general manager, secretary or other similar officer of the body corporate, or was purporting to act in any such capacity, shall be deemed to be guilty of that offence unless he proves that the offence was committed without his consent or connivance and that he exercised all such diligence to prevent the commission of the offence as he ought to have exercised having regard to the nature of his functions in that capacity and to all the circumstances.
VISCOUNT SWINTON VISCOUNT SWINTON moved to leave out subsection (2). The noble Viscount said: My Lords, this is a point upon which I think the noble and learned Viscount, the Lord Chancellor, can advise us. The subsection which it is proposed to leave out begins by saying that: "Where an offence under the last foregoing section" (or any offence) has been committed, and then says: "shall be deemed to be guilty." The noble and learned Viscount will remember that there was a good deal of "to-ing" and "fro-ing" on a similar clause in the Transport Bill. It is difficult to follow the different provisions of the Transport Bill. The experts who have been advising me have been at it, and they assure me that in the Transport Bill, as it will come back to us with the approval of the other place to the Amendments we made here, the peccant section is omitted. If that is so, it ought not to be in here. I beg to move.
Amendment moved—
Page 83, line 6, leave out subsection (2).—(Viscount Swinton.)
THE LORD CHANCELLOR: Lords, like the noble Viscount, Lord Swinton, I am in a complete state of confusion as to what the Transport Bill does or does not contain at the present time. I think all I can do on this occasion is to read out what I am told by those advising me. I am told that a similar Amendment was moved on Report in the other place; and was rejected after the Amendment had been pressed to a Division. That may be on this Bill. Similar provisions to this clause also occur in the Transport Bill (Clause 121), tie Civil Aviation Act, 1946 (Section 47), the

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Exchange Control Act, 1947 (Fifth Schedule, Part II, paragraph 1 (2)), and other Acts of this Session. It is now the settled practice to insert this provision in all Bills which make corporations subject to criminal proceedings. There is no question of upsetting a fundamental principle of English justice, because the offence must be proved by the prosecution to have been committed by the corporation, and only then are the directors in peril. There are many Bills passed by Conservative Governments which contain provisions in a similar form—that is to say, placing the onus on directors—the Dentists Act, the Betting and Lotteries Act, the Public Health Act, 1936, the Building Societies Act, 1939, and others. For that reason, your Lordships will see that I cannot, as at present advised, accept this Amendment.
VISCOUNT SWINTON: My Lords, with the leave of the House perhaps I might add one word. My feeling about this is that if we put this in the Transport Bill it ought to be in here. On the other hand, if we have left it out in the Transport Bill, it ought to be left out here. Our instructors do not seem to be in agreement. I do not know about the Betting and Lotteries Act.
LORD HENDERSON: It is in the Transport Bill.
VISCOUNT SWINTON: That is what I thought, but I was assured that it was not. The noble and learned Viscount has said that we can look at it between now and Third Reading, and I will withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 64 [Provisions as to regulations and orders]:
THE LORD CHANCELLOR: This is a drafting Amendment. I beg to move.
Amendment moved—
Page 84, line 20, after ("orders") insert ("or regulations").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 67 [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
668
of assets or for renewal of assets, but not including provision for interest on debentures and debenture stock;
"securities", in relation to a body corporate, means any shares, stock, debentures and debenture stock of the body corporate, and "holder of securities", in relation to any body to whom Part II of this Act applies, means, except in the provisions relating to the appointment of the stockholders' representative, a person who, immediately before the vesting date, was the holder of securities of that body, or his successor in title;
5.19 p.m.
LORD RENNELL LORD RENNELL moved, in the interpretation of "net revenue," after "capital" to insert "in pursuance of any obligation to make such provision." The noble Lord said: My Lords, the noble and learned Viscount, the Lord Chancellor, was good enough to give me an analogous Amendment earlier on about irredeemable debentures. I think it appropriate to insert a similar Amendment here for the same purpose. In the course of the discussion on the Committee stage, the noble Lord answering for the Government said that the words "proper provision for redemption of capital" covered the cases where debentures were not redeemable, or where a certain part of the capital had no redemption. All the same, it seems to me to be very much clearer if instead of saying "proper provisions for the redemption of capital," the words of my Amendment, "in pursuance of any obligation to make such provision" are inserted. I beg to move.
Amendment moved—
Page 87, line 42, after ("capital") insert ("in pursuance of any obligation to make such provision").—(Lord Rennell.)
THE LORD CHANCELLOR: My Lords, I do not think I ought to accept this Amendment, and I do not share the noble Lord's view that this is on all fours with the previous Amendment. Here we have to consider the words "proper provision for the redemption of capital." If you make a provision for redeeming something which is not redeemable I cannot regard that as proper, and I can only consider the words "proper provision for the redemption of capital" as meaning proper provision for the redemption of capital which is redeemable. I do not think that the Amendment would have the effect which the noble Lord wants. It seems to me that it is restricting and

669
narrowing. The proper provision for the redemption of capital is obviously wider than the proper provision for the redemption of capital sub modo. It seems to me the noble Lord is narrowing the clause in a way I do not think he intends to do, and I think we had better leave the words as they are.
LORD RENNELL: I would not venture to cross swords with the noble and learned Viscount on the interpretation of a drafting point. If he says it is so, it is the third time it has been said in your Lordships' House; and, as in the case of Mohammedan divorce, when it has been said three times it is absolute. I suppose in the circumstances this is absolute, and I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in the definition of "securities", after "corporate" to insert:
"and also includes any mortgages of the body which were quoted in the Stock Exchange Official Daily List (within the meaning of section twenty of this Act) on all six of the dates first mentioned in subsection (2) of that section.
"The noble and learned Viscount said: My Lords, we have found that there is one company which has an issue of 5 per cent. mortgages, so-called, which is dealt in and quoted on the London Stock Exchange in just the same way as debenture stocks. The Amendment extends the definition of "securities" to cover this particular issue without, however, bringing in the generality of mortgages which are to be recognized by the new boards as liabilities to be discharged. I beg to move.
Amendment moved—
Page 88, line 39, after ("corporate") insert the said words.—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 68 [Application to Scotland]:
LORD MORRISON LORD MORRISON moved to add to subsection (2):
"and for any reference to the Acquisition of Land (Authorisation Procedure) Act, 1946, there shall be substituted a reference to the Acquisition of Land (Authorisation Procedure) (Scotland) Act, 1947."
The noble Lord said: My Lords, Clause 9 of the Bill applies the Acquisition of Land (Authorisation Procedure) Act, 1946, except Section 2, to the compulsory purchase of land by an electricity board
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which is authorized by the Minister or the Secretary of State as the case may be, This is a formal Amendment to provide that the new Scottish Act, corresponding to the 1946 Act, which it will replace when the Bill now before Parliament becomes law, shall apply in the case of the compulsory purchase of land by electricity boards in Scotland. I beg to move.
Amendment moved—
Page 89, line 21, at end insert the said words.—(Lord Morrison.)
On Question, Amendment agreed to.
First Schedule [Area electricity boards]:
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in the provision defining the area of the London Electricity Board, after "Kent" to insert "Middlesex." The noble and learned Viscount said: My Lords, I would like to move this Amendment in manuscript form in order to avoid doing it on Third Reading. The Electricity Commissioners have just discovered that the area of supply of a certain undertaking which will be comprised in the South Eastern area just creeps over the Middlesex border. It would be a great pity to have to split the undertaking between two areas, and this is the right course to adopt to enable the South Eastern area to include this little bit in Middlesex. I beg to move.
Amendment moved—
Page 91, line 8, after ("Kent") insert ("Middlesex").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Fourth Schedule [Adaptations end modifications of enactments: Part II—The Hydro-Electric Development (Scotland) Act, 1943]:
LORD MORRISON: My Lords, in Committee Clause 46 (2) of the Bill—which relates to the form of the accounts of the Central Authority and the area boards—was amended by the addition at the end of the words now proposed to be inserted in the Fourth Schedule. The effect of the Amendment now proposed is to apply the same provision to the accounts of the North of Scotland Board. I beg to move.
Amendment moved—
Page 113, line 37, after ("Board") insert ("and to show as far as may be the financial. and operating results bf each such activity")—(Lord Morrison.)
On Question, Amendment agreed to.

TRANSPORT BILL.
5.25 p.m.
Order of the Day read for the Consideration of Commons Amendments in lieu of certain Lords Amendments and Commons Reasons for disagreeing to Lords Amendments.
THE SECRETARY OF STATE FOR COMMONWEALTH RELATIONS (VISCOUNT ADDISON): My Lords, I beg to move that the Commons Amendments be now considered.
Moved, That the Commons Amendments in lieu of certain Lords Amendments and Commons Reasons for disagreeing to certain Lords Amendments be now considered.—(Viscount Addison.)
THE MARQUESS OF SALISBURY: My Lords, before we proceed to the examination in detail of the Reasons advanced by His Majesty's Government for rejecting practically all the Amendments which were sent down by your Lordships for further consideration in another place, I feel it may be proper that I, who have the privilege of leading the Opposition here, should say a few words of regret, and indeed of modified but most sincere whole-hearted protest, at the course which they have seen fit to adopt. As the House and, I think, the country know, your Lordships have devoted immense time and trouble to this Bill. We are fortunate to include among our ranks a number of Peers who have long personal experience of all aspects of transport and it has throughout been the object of these noble Lords in particular, and indeed of the House as a whole, to examine the provisions of the Bill, not with the object of destroying the measure, but with the object of amending and improving it and making it a more workable proposition.
It should not be forgotten that this Bill came to us in a singularly undigested form. There were various clauses—a great many of them—which had not received what we consider proper consideration in another place, and there were quite a number which had received no consideration at all and had not even been discussed. They had been passed often without debate by the ruthless use of the guillotine. It was, therefore, a Bill which clearly needed considerable alteration to make it an efficient operative measure. Indeed, as your Lordships will
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remember, a considerable number of Amendments were introduced by the Government themselves, and there were many others which were adopted by general agreement in all parts of the House. There remain, however, a residue, a relatively small number, upon which it had been found impossible to obtain agreement between the Government and the Opposition. There was the Amendment relating to the appointment of Executives; there was the Amendment relating to the radius of operation of small-range hauliers who should be exempted from the scope of the Bill, and there was the Amendment which placed the onus of proof as to whether an operator was to be taken over under a scheme upon the Government and not upon the operator himself. There were one or two others, and there were a few consequential Amendments on those main propositions.
I do not for a moment suggest that these Amendments were not Amendments of substance; of course they were. They raised many important principles, but no one could say they were intended to wreck the Bill. Indeed, on several occasions we studiously avoided wrecking Amendments. Moreover, the House made no attempt to modify the compensation provisions—though we all felt that they were thoroughly inequitable—as we regarded this part of the Bill as a matter, perhaps, of Privilege under the Parliament Act. I think, therefore, it will be agreed by all—equally by noble Lords opposite—that we could not have acted with more moderation than we have, in the circumstances in which we were placed. The noble Viscount, the Leader of the House himself, on the occasion of the Third Reading, was good enough to pay a tribute to the spirit in which your Lordships tackled your task.
And, indeed, there was a wide measure of approval outside Parliament for the particular Amendments which have now received such cavalier treatment in another place. The Times, in a leading article on Wednesday of last week—and The Times has not been universally in favour of the Opposition—said:
"It is greatly to be regretted that the Minister proposes—with possibly a few minor exceptions—to reject all the Amendments which were not immediately accepted by the Government during the Lords' proceedings."

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And the article added:
"Several of the changes would almost certainly improve the measure, either by making for a more coherent administrative organization or by establishing better principles of democratic control."
Clearly, therefore, these Amendments were not frivolous and not offensive They were serious and well-intentioned. And one had hoped that they would at least have been given the sympathetic attention which was clearly their due, even though all were not accepted.
But it seems that the Government recommended that practically all of them should be rejected root and branch; and no discretion was in fact given to the Government majority in the other place to consider these Amendments on their merits at all. Therefore many of us on these Benches cannot help being driven to the conclusion that the course was adopted merely because the Amendments came from this House; that it was part of a deliberate policy on the part of the Government to reject any Amendment from the Second Chamber; and that the same policy is only too likely to be adopted with other Bills as they come before the other place. This conclusion is, I am afraid, fortified by recent speeches of Ministers, and notably the Minister of Health, who spoke, if he will allow me to say so, in a rather undignified manner, to the effect that he hoped your Lordships would "behave like good boys" He talked of the necessity of giving us "toys to play with," and so forth. That really is hardly the way to speak of a body which contains some of the greatest experts in the country, men of lifelong eminence and discretion, men who have worked for many days and nights in order to improve this Bill, without any financial reward and entirely in the interests of the country. That is not the way to speak of this House, and I am bound to register a protest.
I can well understand, if I may say for the first time something slightly controversial, the desire of the Minister to try to draw a red herring to divert the attention of the public from the more embarrassing aspects of the conduct of affairs by the present Administration and, in particular, from his own personal failure in the sphere of housing and health. It is not uncommon for Ministers and Governments to take a course of this kind, and especially Ministers who are ambitious and who perhaps have not produced
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all the results which were expected of them. But if the result of these rather shady Party manoeuvres by him and other Ministers is to deprive the country of valuable improvements in legislation, I cannot help thinking that the result for the country will be very unfortunate. We in your Lordships' House need not worry. It is not our prestige which is going to be injured by this type of thing. It is the prestige of the Government majority in another place. But it does make rather a travesty of Parliamentary government as it has grown up in this country over many centuries, and it really approximates very nearly to Single-Chamber government in a rather veiled form.
Our course in your Lordships' House is perfectly clear. We shall continue to try to amend and improve legislation to the best of our ability, and we believe that by doing so we shall gain the respect and support of all the more reputable sections of the community. In the present case it is not our intention to insist on Amendments which have already been rejected in another place. That would be merely to start a sterile wrangle which would not be very dignified and which would be unlikely to lead to fruitful results. We do, however, propose to send back to the other place a limited number of Amendments in lieu, which are moderate, which have been carefully considered, and which are genuinely designed to meet objections raised in the debates in another place. We believe that these Amendments should afford a legitimate ground for compromise, and they are intended for that purpose. I am certain that if the Government can see their way to accept them they will strengthen and improve the Bill. I hope they will receive in the other place better and more courteous treatment than the earlier Amendments received.
I have done my utmost in what I have said to-day to avoid an offensive or controversial tone. I do not want to exacerbate feelings. We want to obtain results beneficial to the country. But the present attitude of the Government in the other place, and what one might describe as the unmerited abuse which has accompanied it, will not only injure the Government's own position—I do not very much mind that—but it will have the effect of impairing the authority of Parliament, and that is a matter of concern for all of us, in whatever part of the House we sit. I

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therefore beg the Government to consider very carefully before they reject these Amendments, which cannot interfere with the underlying principle of nationalization, and which are genuinely designed to improve the working of the machine and to secure justice for the small man, for whom Parliament above all is trustee.
5.38 p.m.
VISCOUNT ADDISON: My Lords, I was not aware that the noble Marquess was going to speak on this topic in this way. If so perhaps I might have fortified myself with some observations before he did so. But I cannot help thinking that he has been rather led away by some of his ill-informed advisers as to the facts. I would myself like to pay tribute to the standard of our discussions. As the noble Marquess knows, I objected to certain Amendments because in my view they were calculated to defeat the main purpose of the Bill, and where that was the case we never hid our opinion and frequently we found ourselves in a minority in the Lobby. But there were not very many cases of that kind, ten or a dozen perhaps. I was sorry to hear the noble Marquess say that he was verging on the slightly controversial; I must say that he was giving what might be called a manifestation of the "slightly controversial" which was interesting and to me unique. However, I will accept the noble Marquess' description.
He said that practically all the Amendments were rejected root and branch. What are the facts?—the facts are the important things. As your Lordships are aware—and if any noble Lord would wish to refresh his memory I would recommend him to read the speech which the noble Viscount, Lord Swinton, made on the Third Reading of the Bill, in which he reviewed the Amendments in an exceedingly compact and informative review—a very large number of Amendments were the result of negotiations between the two sides. It is no secret to say that the conferences which took place in my room in trying to arrive at agreement between the two sides were both numerous and prolonged. That is a true statement. We made great efforts and succeeded, in a very large number of cases, in arriving at agreements on Amendments. Some of them were of an extremely far-reaching character. For example, there was a series of Amendments
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relating to the limitation of the power of the Commission or the Executives to engage in manufacture; that question occupied our attention for a great many hours at different times. I was apprised of the views of the Opposition on these matters—and I would like to pay tribute to the help that I received from the noble Marquess and the noble Viscount, Lord Swinton—and we discussed them with the Ministry and the Ministry discussed them with the industry at considerable length, as a result of which a series of exceedingly complex Amendments was introduced into the Bill by agreement. They were not rejected root and branch by the other side; they were accepted
THE MARQUESS OF SALISBURY: I did say all this.
VISCOUNT ADDISON: No.
THE MARQUESS OF SALISBURY: Yes, I did. I can repeat my words. I said that there were three categories of Amendments; the Government Amendments, a large number of Amendments which were agreed by general agreement of the House, and I think I said there was "a small residue" which remained—I think those were the words which I used. I was not complaining of the consideration which the Government had given the Bill in this House, which I think was perfectly fair, but I was complaining of the fact that in another place the Government did not intend the remaining subjects of disagreement to have fair consideration at all. I am not complaining of what was done in this House. We owe to the Leader of the House a great debt for his constant courtesy.
VISCOUNT ADDISON: I thank the noble Marquess for that; I knew that that was the view between us, but I still must hark back, I am afraid, to my theme that the noble Marquess said it was "practically all rejected root and branch." I am quite sure that any person reading that in the papers or even listening to the noble Marquess's speech would receive the impression that the other place had rejected practically all our Amendments "root and branch." I exclude, of course, the Amendments that were introduced by the Government; they should be excluded in a review of this kind. But the point I am seeking to make in reply to the noble Marquess is,

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that the number of Amendments initiated by the Opposition, sometimes withdrawn, sometimes modified, sometimes the subject of negotiation, was a very large number indeed, and none of them was rejected—I repeat, none of them was rejected.
When you come down to figures, I had a sort of thought beforehand—it is just my general political sagacity—that this kind of point might be raised, though I did not quite think it would be raised in this exceedingly important way. However, I find this: there were 210 Amendments inserted by this House. A very large number of them, quite half, were Amendments agreed between us from the kind of process which I have described, and 173 Amendments out of the 210 have been accepted by the other place. That is the actual figure—173 out of 210. The noble Marquess is a fair-minded man and he and I have exchanged words across this Table many times. I am sure he would not wish to misrepresent the situation, but, with the greatest possible respect, I must say to him that I think he has seriously misrepresented the situation here. Of the Amendments that we sent down 173 were agreed to completely. The number disagreed to was 37, and there were 173 accepted. I must say that I think it is fair to say that to put that correctly is not to suggest that "practically all our Amendments were rejected root and branch." Certain Amendments, which we knew and which we said at the time we felt quite sure would not be accepted, were rejected, and, if the noble Marquess will really look through the list, a large number of those Amendments which figured on the List were consequential on the major Amendments and, of course, were just accepted and put into the Bill in the ordinary way. Even so, they make a modest total of only 37 out of 210; so that really I do think that the noble Marquess is not being quite fair.
THE MARQUESS OF SALISBURY: I would not like that to be said by the Leader of the House. It was certainly not my intention to create that impression. If he reads what I said in Hansard, he will see that I put the position entirely fairly. I said there were a large number of Amendments moved by the Government; I said a large number were passed by agreement and I said that there was a "small residue
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left"; it was of the "small residue left" that I was talking. That residue, which comprised, all or many of them, important Amendments, have not received the consideration which they ought to h lye received, and I still think that. If the noble Viscount thought I was misrepresenting the situation, I do not think that is so, because I say that there were a number of Amendments which mere agreed to in this House, and which m ere said by a large number of people to be a series of considerable Amendments, which have not received consideration at all.
VISCOUNT ADDISON: We shall be judged by the facts, and the noble Marquess knows perfectly well that I am the last man in the world to wish to misrepresent the situation. That is certainly the impression I gained from listening to his speech, and I think it would be the impression received by most people reading it. The facts are as I have stated them. In conclusion let us come to the other part of the proceedings. I myself have had, and so has the noble Marquess, a very long experience of observing Amendments to Bills in Parliament, both in the other place and, to some extent, though not so extensively, in this Hot se. I think it is fair to say that I cannot remember a Bill of a very controversial character (which is admitted) in which a greater number of important agreed Amendments were inserted than in this Bill. I think that is a fair statement. I pay tribute to noble Lords opposite, and to those who helped us in arriving at agreement, but there were some exceedingly important Amendments dealing with the most important character and parts of the Bill which, as a result of much negotiation and friendly interchange of comments, became agreed Amendments. They are in the body of the Bill, and not one of them has been altered. I think that tact should be borne in mind. However, I am sorry that the noble Marquess takes the view of it that he does. For my part, I think that we have got to bear in mind—and nobody bears it in mind more acutely than he does—that the position of this House is a very exceptional one--I put it no higher than that. But every one of us, I am sure, on both sides of the House, has a keen regard for the interests of our Parliamentary institutions in the test sense, and would be very loth to do anything to damage it. That is the spirit in which we tried to conduct our discussions

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on this Bill. I am quite sure that in many vital respects it was much improved by common consent. That is a true statement, and I feel certain that that spirit will govern the rest of our deliberations.
On Question, Motion agreed to.
5.51 p.m.

LORDS AMENDMENT.
[The references are to Bill No. 65 as first printed in the House of Lords.]
Clause 4, page 6, line 30, at end insert—
("Provided that the Minister shall not give to the Commission a direction in relation to any matter the effect of which, taking one year with another, will be or will be likely to be, that the revenue of the Commission will be less than sufficient for the meeting of charges properly chargeable to revenue, unless the Minister shall at the time of the giving of such direction notify the Commission that it is given in the interests of national security.")
The Commons disagreed to this Amendment for the following Reason:
Because the said Amendment might unduly restrict the powers of the Minister in an emergency
VISCOUNT ADDISON: My Lords, with regard to the first Amendment on the Paper, might I suggest for your Lordships' convenience that when we come to some other Amendments—for example, the one that follows, where the noble Marquess has an Amendment to the Amendment, perhaps it would be more agreeable to your Lordships if I move, as it is my duty to move, that we do not insist, and then leave it to the noble Lord opposite, who has an Amendment to the Amendment, to intervene. The first Amendment in the name of the noble Marquess is: "That the House do not insist on the Amendment, but propose to move the following Amendment in lieu thereof." That would be the Amendment in Clause 5, page 7, line 36. What I was suggesting—
VISCOUNT SWINTON: That when we come to an Amendment in lieu we should move that we do not insist? That would be quite convenient.
VISCOUNT ADDISON: That is what I was proposing to do. I move that this House do not insist.
Moved, That the House do not insist on the Amendment to which the Commons have disagreed.—(Viscount Addison.)
VISCOUNT SWINTON: My Lords, I would say only one word on this, because I think the issue is extraordinarily narrow
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here. I said so on the Third Reading, and it is important that the country should know what the position is going to be. There is no question here—it is common ground and, indeed, as I understand it, the best lawyers consider it is laid down in fact in the Bill, that this Commission has got to pay its way and that, broadly and largely, the Minister would be breaking, if not the letter of the law, certainly the spirit of the law, if he gave the Commission any instructions which were ontrary to that. The only issue that this narrows down to—and I do not think there is much difference between us—is that there might be an emergency of a national character in which it was necessary for the Minister to give some instruction which might create a temporary deficit. We have always treated national emergencies as matters in which the Government of the day, subject, of course, to the approval of Parliament, have to take special action. I really do not believe there is anything between us on this.
On Question, Motion agreed to.

LORDS AMENDMENT.
Clause 5, page 7, line 36, leave out from ("be") to ("but") in line 37 and insert ("decided by the Commission").
The Commons disagreed to this Amendment and seventeen others for the following Reason:
Because the said Amendments would lessen the control of Parliament over these matters through removing the Minister's responsibility for them.
VISCOUNT SWINTON: My Lords, I gather that the Government will certainly agree to the Amendment which we are proposing in lieu. That would make this Bill entirely in line with what we all agree that we should do upon the Electricity Bill; that is to say, that the appointment of these Executives, the equivalent, so to speak, of the area boards in electricity, will be by the Minister in consultation with the Commission, which, of course, he appoints. I beg to move that this House do not insist on its Amendment.
Moved, That this House do not insist on the Amendment to which the Commons have disagreed.—(Viscount Swinton.)
On Question, Motion agreed to.
VISCOUNT SWINTON: My Lords, then I beg to move an Amendment in lieu of the proposed Amendment at page 7, line 37.
Amendment moved—
Page 7, line 37, after ("Minister") insert ("after consultation with the Commission").—(Viscount Swinton.)
VISCOUNT ADDISON: My Lords, we think that this is in keeping with the other principles, that the Minister certainly would consult the Commission on these matters, and we are quite willing to accept the Amendment.
THE MARQUESS OF SALISBURY: I am very grateful to the Leader of the House for what he has said. I think this Amendment is one which would give general satisfaction and would meet the point that we all have in mind.
On Question, Amendment agreed to.

LORDS AMENDMENT.
Clause 5, page 7, line 37, leave out ("other provision is made by such an order") and insert ("determined otherwise by the Commission").
VISCOUNT ADDISON: My Lords, this Amendment, and a long series which follow from it, are verbal Amendments and are consequential upon the Amendment which I moved that this House do not insist on, that the Commission rather than the Minister should appoint the Executives. The other place disagreed with that Amendment, and I move that we do not insist. All the group of other Amendments on the next page are merely verbal and consequential. I move that we do not insist on the first one, and perhaps I might move the others collectively afterwards.
Moved, That this House do not insist on the Amendment to which the Commons have disagreed.—(Viscount Addison.)
On Question, Motion agreed to.

LORDS AMENDMENTS.
Clause 5, page 9, line 13, leave out from ("where") to ("abolish") in line 14, and insert ("the Commission")
Clause 98, page 106, line 23, leave out ("the Minister and")
Clause 99, page 107, line 37, leave out ("the Minister and")
Second Schedule, page 129, line 25, leave out from ("by") to ("the") in line 26.
Second Schedule, page 129, line 27, leave out ("Minister") and insert ("Commission")
Second Schedule, page 129, line 34, leave out ("the Minister and").
Second Schedule, page 130, line 5, leave out ("Minister") and insert ("Commission")
Second Schedule, page 130, line 5, leave out ("himself") and insert ("themselves")
Second Schedule, page 130, line 8, leave out ("Minister") and insert ("Commission")
Second Schedule, page 130, line 8, leave out ("himself") and insert ("themselves")
Second Schedule, page 130, line 10, leave out ("Minister") and insert ("Commission")
Second Schedule, page 130, line 11, leave out ("Minister") and insert ("Commission")
Second Schedule, page 130, line 12, leave out ("him") and insert ("them")
Second Schedule, page 130, line 12, leave out ("Minister") and insert ("Commission")
Second Schedule, page 130, line 13, leave out ("Minister") and insert ("Commission")
Second Schedule, page 130, line 13, leave out ("his") and insert ("their")
The Commons disagreed to these Amendments for the following Reason:
Because the said Amendments would lessen the control of Parliament over these matters through removing the Minister's responsibility for them.
VISCOUNT ADDISON: My Lords, perhaps I might be allowed to move all this group of Amendments. They are entirely verbal and consequential. I move that we do not insist.
Moved, That this House do not insist on the Amendments to which the Commons have disagreed.—(Viscount Addison.)
On Question, Motion agreed to.

LORDS AMENDMENT.
Clause 5, page 7, line 40, after the second ("Executive") insert ("the Scottish Transport Executive").
The Commons disagreed to this Amendment for the following Reason:
Because the said Amendment would cause difficulties in the transitional period, while the Purposes of the said Amendment can be secured if it is later found desirable under the provisions of the Bill without the said Amendment.
5.58 p.m.
VISCOUNT ADDISON: My Lords, I move that we do riot insist on Ibis Amendment. This was the subject of prolonged and repeated discussion in which we all revealed our views, and I feel that we should not proceed with them any further.
Moved, That this House do not insist on the Amendment to which the Commons have disagreed.—(Viscount Addison.)
THE EARL OF SELKIRK: My Lords, I would like to say a word on this, because I think there is an element of principle

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here, quite apart from the details. First of all, I would like to make it clear what the effect of this is, that all the municipal transport undertakings in Scotland, all the private passenger road transport, and all the hauliers will in fact come under the direction of London. These, at the present time, are run by responsible organizations which control them entirely in their own locality. The second point I would like to make is, that this is in fact the right Amendment, and I would draw your Lordships' attention to Clause 5, subsection (9) (b), which says that the Executives will be the employers. It lays down that all persons under the Commission will in fact be employed by the Executive. I will say, further, that nobody at any time in the discussion has questioned that this Amendment is desired by the great body of people who live in Scotland. At no period of the discussion has that been questioned.
I would be the first to acknowledge that popularity is not necessarily a basis of legislation. I am sure that His Majesty's Government would agree that good government is the first duty of any Government. Whether a measure is popular or not has only a limited bearing on whether it is conducive to good government. When one comes to examine the reasons which have been given for disagreement with this Amendment, I think one may take it that the Minister's reasons are twofold. The first is that it is anomalous, and that it would cut Scottish transport away from the rest of the United Kingdom. With great respect I submit that that is completely misrepresenting this Amendment. It would not cut off Scottish transport. It would leave it still subject to the Transport Commission and subject to whatever is delegated to it. Further, the Amendment is not anomalous. It can be quite clearly seen from the wording of Clause 5 that any powers whatsoever can be delegated to any Executive. I challenge the noble Viscount the Leader of the House to deny that if this were simply a Road Passenger Executive it would be 100 per cent. on all fours with the London Passenger Transport Executive. It is, therefore, a complete misrepresentation to say that this is anomalous. It lies geographically in exactly the
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same line as the London Passenger Transport Executive.
Another reason which the Minister mentioned—and I think that this was his real reason—was that he wished to promote integration and co-ordination. What does integration and co-ordination mean in practice? I am going to submit that in practice—and we have seen this in many other Bills which have passed through this House—it means placing very large powers under a narrow oligarchy in London. This I suggest is characteristic of a very large number of Acts which have gone forward. The desire for power, the lust for power, is a very human feeling. Extremely few people who have had the opportunity have not taken power when they could. There is no doubt that His Majesty's Government are anxious to keep as much power in the hands of a small number of people as they can. And that is what is happening now.
I submit that this Amendment embodies an element of decentralization, a process which I feel is gaining great popularity, and the importance of which is gradually being realized in all sections of this House and outside. One notes that, in this connexion, there has already been a very big change from the view which was taken twelve months ago. I mean by decentralization broadening the sphere for individuals to do creative work—making it wider and wider for more people who can do it. It also means, in my view, diffusing responsibility as widely as possible. If I may, I would like to draw an immediate example in this respect from this House. In this House our procedure is the responsibility of every noble Lord present, and it is a curious thing but we very rarely get into procedural difficulties. Our procedure runs exceedingly smoothly, I think, and diffusion of responsibility is not unconnected with it, I consider that it is a pity, whilst we recognize that some measure of diffusion of responsibility is necessary, His Majesty's Government, so far, have seen no means of carrying it out, and, so far, have given no reason for not doing so.
It is clear that there is no point in pressing this Amendment. We know that a Transport Executive can be abolished under Clause 5 at any time. Equally, however, I think it is right for the members of this House to express their views

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on this matter .as they have done, with great clarity. I would like to take the opportunity of thanking noble Lords in all parts of the House for the support which they gave me in moving this Amendment.
6.4 p.m.
THE EARL OF AIRLIE: My Lords, I have no desire to detain you for more than a very few moments. I would like to join with my noble friend the Earl of Selkirk in expressing gratitude to those noble Lords who were good enough to support us before in your Lordships' House. Now that this Amendment has been sent back from another place we would not of course expect support in making this a constitutional issue. But I believe that the contentions which we have put forward in respect of this particular matter will prove to be right in the end, and that at no very distant date. Nevertheless I wish to repeat what the noble Earl, Lord Selkirk, has said, which is that we roust emphasize that the feeling in Scotland is very strong about this. Those noble Lords who come from north of the Border feel extremely strong about it, because as a result of bitter experience—if I may be allowed so to term it—we believe that the system which is to be achieved under this Bill will not work.
I can, I think, give your Lordships an example indicating how this is likely to work out by referring to your Lordships' House and the work which is being done in it to-day. If the noble Earl, Lord Selkirk, will allow me to do so, I would especially refer to his case. At the same time I would like also to pay a tribute to the great work which he has done on behalf of Scotland this summer. May I say that not only has he added lustre to his own name, but that he has enhanced the reputation of your Lordships' House by the excellent work that he has done. He is an example, and an outstanding one, that may be quoted in connexion with this matter. He has been obliged to stay in London most of his time to do this work, and he has admitted to me that, inevitably, as a result of doing so, he has lost: touch to a certain extent with Scottish affairs. There are other noble Lords, including myself, who are sometimes called the "thousand league booters," who spend a great deal of our time travelling the hundreds of miles between here and Scotland. We find it
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extremely difficult, and I admit for my own part that I do not always do my duty properly. I spent three nights in the train last week, and if I were going to do my duty properly this week l should probably have to spend three nights in the train again. But it is too much to expect one to carry on in that strenuous fashion. I am not an old tram but neither am I a young one. I am over fifty and I cannot continue in that way. Now I think you will find that this sort of thing will apply in respect of these boards. You will not get the best work on behalf of the board and on behalf of Scotland.
With regard to the reasons which have been given for rejecting the Amendment in another place, may I say that we do not think very much of them? I that without rancour or bitterness. I maintain—sorry though I am to say it—that the record of His Majesty's Government has been one of putting Party first and country second—shibboleths have come first and practical politics have had to take a second place. In view of that tendency we, in Scotland, most strongly feel that we should get a delegation of control of our domestic affairs. I thought: I sensed—though perhaps I was a little too quick in doing so—a slight awakening in His Majesty's Government to this pressure from the North, in the words which fell from the lips of my noble friend Lord Morrison.
For what it is worth may I say that, in my view, His Majesty's Government should realize that this is an issue that is going to face them in the future? It is not only from Scotland but also from the North of England—as I think was mentioned in your Lordships' House by the noble Viscount, Lord Ridley—that this present will come. It is going to come from the North of England, from Wales and from other parts. I suggest that His Majesty's Government should without delay take steps either to set up a Royal Commission, or something of that nature, to try to go into this matter and to see how they can best meet this difficult situation. His Majesty's Government have got to face the position sooner or later. If you proceed to delegate to the people of Scotland a measure of what is their rightful business you will find that you will hold Scotland instead of losing her—if you have not lost her already. If you stick to

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the other way you merely have an unwilling, stubborn and unhappy partner. Surely you do not want that.
If I may perhaps make use of a simile may I say that what you have done in India—which is, of course, a far bigger issue—will, I believe, result in something very big coming back? I believe that you will find that when you get unity in India—as I believe and hope that you will—it will be clear that you have performed one of the greatest acts of statesmanship, probably, in the history of this country. The action that you took was in effect a throwing off of the ropes rather than trying to bind India tighter. In a similar way, with regard to my own small country of Scotland we believe that if you act on similar lines great good will come of it. I have no wish to be unkind, but I cannot help feeling that perhaps you threw off the ropes in the case of India because you did not know what else to do. In other words you have pursued a policy of living from hand to mouth and from day to day and, not through any particular act of vision, you have stumbled on a treasure that might prove very valuable to us for our future conduct with other small States. And if we found the way rather by luck than by good management, could you not pursue that course?
On Question, Motion agreed to.
6.0 p.m.

LORDS AMENDMENT.
Clause 5, page 9, line 19, leave out from ("Commission") to end of clause and insert ("the scheme shall include, or, where there is no such scheme, the Minister shall by Order make such transitional provisions as to the parties by and against whom, legal proceedings are to be instituted or continued, and such other transitional provisions, if any, as appear to the Commission and the Minister to be expedient").
The Commons disagreed to this Amendment, but proposed the following Amendment, in lieu thereof, to the words so restored to the Bill:
Page 9, leave out lines 20 to 24, and insert ("shall include such transitional provisions as to the parties by and against whom legal proceedings are to be instituted or continued, and such other transitional provisions, if any, as appear to the Minister, or to the Commission and the Minister, as the case may be, to be expedient.")
VISCOUNT ADDISON: My Lords, I beg to move that this House do not insist on our Amendment and agree to the Commons Amendment in lieu thereof.
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This is another example of an Amendment made to the Bill as a result of representations from noble Lords opposite. This was a case in which the noble Viscount, Lord Simon, asked us to secure provision for legal proceedings where an Executive was set up, and I am informed that it has been considered carefully with a view to improving it. The proposed new words effect in a clearer and better way your Lordships' wishes than the Amendment in its original form. I beg to move.
Moved, That this House do not insist on the Amendment to which the Commons have disagreed and agree to the Commons Amendment in lieu thereof.—(Viscount Addison.)
On Question, Motion agreed to.

LORDS AMENDMENTS.
Clause 39, page 48, line 24, leave out ("forty") and insert ("eighty")
Clause 39, page 48, line 27, leave out ("twenty-five") and insert ("fifty").
Clause 39, page 48, line 36, leave out ("forty") and insert ("eighty").
The Commons disagreed to these Amendments for the following Reason:
Because the said Amendments would unduly hamper the commission in the adequate performance of their duties under the Bill.
LORD TEYNHAM LORD TEYNHAM had given Notice that he would move, That this House do not insist on the said Amendments but propose the following Amendments in lieu thereof:
Page 48, line 23, leave out from ("undertaking") to ("in") in line 24.
Page 48, Line 27, leave out ("twenty-five") and insert ("forty").
Page 48, line 36, leave out subsection (3).
The noble Lord said: My Lords, I think it will be for the convenience of your Lordships if the next two Amendments are discussed at the same time. I intend to refer very briefly to the application of Clause 39 as it reached this House from the other place, and as it is now. It sets out in formula the basis on which road haulage undertakings would be absorbed by the Transport Commission and which is defined in this clause as ordinary long-distance carriage. During the debate in this House, both during the Second Reading and the Committee stage, the interpretation

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of this clause was widely discussed, and certainly on this side the clause was considered to be very ambiguous. The Government, in my opinion, gave no satisfactory answer or explanation as to the correct interpretation.
As the clause is now drawn there is a double qualification of radius and distance, upon which will be determined whether an undertaking will or will not he absorbed by the Commission. One qualification lays down that an undertaking will be considered ordinary long distance carriage if the vehicle is more than twenty-five miles from its operating centre. There is no difficulty in understanding that qualification, but it is when we come to the second qualification that doubt arises, not only as to its interpretation but, equally important, as to its application. This second qualification lays down that an undertaking will be considered as ordinary long-distance carriage and therefore absorbed by the Commission if goods are carried by one vehicle or a succession of vehicles for a distance of forty miles upwards inside the radius of twenty-five miles from the operating centre. We maintain there is no valid reason for this second qualification. In fact, it is open to doubt whether the interpretation I have given is the correct one. There may be quite a number of interpretations: if we take my interpretation as correct, how can the Government explain how the distance is to be determined in this question of forty miles?
During the debate on this clause on the Committee stage, it was pointed out that many thousands of journeys would have to be examined in order to find out and arrive at a decision which would determine whether an undertaking would be absorbed by the Commission. We maintain that this is an impossible and unnecessary task. The Amendments to line 23 and line 36 seek to strike out this quite unnecessary qualification of distance inside a limited radius. I propose to refer to the first qualification. The Amendment on line 27 seeks to increase the radius from twenty-five to forty miles inside which a vehicle may be excluded from the Commission. The Government have strongly opposed any attempt to increase the radius both in this House and in another place on this particular clause, largely on the grounds that any increase would substantially cut down the number of undertakings and vehicles which would
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be taken over by the Commission, arid that the reduced numbers would be insufficient to set up a good organization properly integrated.
Let us look at this claim a little closer and see what it means. In another place, and I think also in this House, the Government have stated that the number of vehicles which would be absorbed by the Commission based on the radius qualifications of twenty-five miles would be approximately 20,000 with an additional 10,000 railway vehicles. 71-1e whole matter is how these figures have been obtained. The industry is quite unable to determine these figures or any other figures on the basis of Clause 39 as now drafted, and it is equally impossible, I fear, for the Government to do it. I feel sure the figures given by he Government have been obtained from the Government Road Haulage Organization in operation during the war, when be qualification of ordinary long-distance carriage was a distance of sixty miles, and had nothing to do with radius. I wish to stress that this distance is roughly equivalent to the distance a vehicle could operate within forty miles and therefore any argument that this proposed increase of radius would reduce the number of vehicles taken over below the figure desired by the Government, falls completely to the ground. It will be seen if the approximate figures are worked out for a distance of sixty miles. that the radius would be 37½ miles. The Government figures are, therefore, really based on a radius of roughly forty miles and we are asking in our Amendment for this radius. In these circumstances I think we are justified in pressing the Government to accept this Amendment which stands in my name.
Moved, That this House do not insist on the Amendments to which the Commons have disagreed and propose the following; Amendments in lieu thereof:
Page 48, line 23, leave out from ("under taking") to ("in") in line 24
Page 48, line 27, leave out ("twenty-five and insert ("forty")
Page 48, line 36, leave out subsection (3).—(Lord Teynham.)
6.20 p.m.
LORD BEVERIDGE: My Lords, I have only a few words to say and I say them chiefly in order to separate completely the Amendments on Clause 39 from the subsequent Amendment on Clause 52. It is perhaps unnecessary to make that separation

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in this House, but I notice that the other place dealt with these Amendments on Clause 39 and Clause 52 together, which I think is a sign of the confusion which sometimes besets that Assembly, because they have absolutely distinct objectives. Clause 39 is concerned with what undertakings shall be taken over. Clause 52 is not concerned with what undertakings shall be taken over, but with what shall not be done by the undertakings which are not taken over. To lump those two things together, and treat each of them as things to reject—as they have done in the other place—on the ground that it would interfere unduly with the Commission, is, I venture to repeat, a sign of confusion.
I only want to make that point because, whatever happens to this Amendment on Clause 39, I feel that the case for the Amendment to follow, on Clause 52, is much stronger than that on this clause. Even so, I still think the case put up for this Amendment is very strong indeed. I use in defence of it words used by the noble and learned Viscount on the Woolsack when we were discussing this clause before, when he said:
"Our proposition is to take over long-distance haulage, and the test of long-distance haulage is something over forty miles."
Those are the actual words he used. The difference between long-distance haulage and other haulage is that long-distance haulage is over forty miles. This Amendment is simply designed to take those words out of the mouth of the Lord Chancellor and, if possible, to put them into the mouths of members of the other place.
Having spent some time in studying what was said in another place in rejecting all our Amendments, I want to speak in full warning against another argument which was used there: that is, that if the fifty-mile limit which was then proposed were adopted, the Commission would have so few vehicles that it could not manage its business. Actually, the Parliamentary Secretary to the Board of Trade said that on that basis they would have only 8,000 vehicles. That was obviously nonsensical, because in any case they would have the 10,000 vehicles of the railway companies. The real issue is between the 18,000 vehicles, which the Amendment would have given, and the 30,000, which is what the Bill as originally introduced would have given. It seems to me very unreasonable
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to suggest that an undertaking cannot make a success of 18,000 vehicles. There are a large number of private undertakings which could well do that. This is another of the confessions of the failure of Socialism. I suggest that the Government should abandon that line of argument.
As to the question of forty miles or less, I would like to refer—in case any noble Lord from Scotland does not refer to it—to the complete absurdity of forty miles in relation to Scotland. May I also, finally, suggest that the transport industry is, or was, a progressive industry. At one time a speed of twenty miles an hour was a very fast rate for a motor vehicle, and to go fifty miles was a long journey. But to suggest to-day that anything over twenty-five miles is a long journey is absurd. I hope the Government will be able to take the words of their Lord Chancellor and accept this Amendment.
VISCOUNT ADDISON: My Lords, I recognize the ingenuity of the noble Lord. He has suggested that the reduction of 30,000 vehicles—I think that was his figure—down to 18,000 does not matter much.
VISCOUNT SWINTON: 24,000 to 18,000.
VISCOUNT ADDISON: That was the figure given by the noble Lord, and for the purposes of discussion I am assuming that it was correct. I should have thought it made a good deal of difference, supposing it were true. This matter has been the subject of prolonged discussion, and I do not propose to detain your Lordships very long in dealing with it. It is clear that this Amendment, which is limited to extending the radius from the operating centre and does not deal with the other part, means that there would be excluded from the operation of the Transport Commission a greatly augmented number of vehicles. That is the fact, and that is the intention of the Amendment. If the noble Lord says that he does not want the Commission at all, we cannot complain if he wants to whittle it down to the state where there would be substantially nothing left. That is understandable. It is not understandable, however, when he says that while the process is going on it does not matter.

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As the Bill stood originally, a twenty-five mile radius gave the man with a vehicle an operating area of 2,000 square miles, which is a good big area to work in. Within the radius of twenty-five miles it would, in fact, be possible—and, of course, would be a daily occurrence—that along the roads within that radius you would go a good deal more than forty miles. That is not in question. But as soon as you say anything is not long-distance haulage, and you double the radius, you are making a substantial difference to the area of operation which you are excluding from the possibility of the Transport Commission. The area of operation under this Amendment would be 5,000 square miles, instead of 2,000 square miles, which would be excluded from the possibility of the operation of the Commission.
LORD TEYNHAM: If I may interrupt the noble Viscount, it is not a question of the Commission being excluded from operating in any area. The Commission can at any time, and anywhere, operate alongside private enterprise.
VISCOUNT ADDISON: It means that the number of firms they would be able to take over under the definition of long-distance haulage would be reduced. That is really the effect of the Amendment—that they would he excluded from taking them over, and that would pro tanto reduce the number of concerns and vehicles of which the Commission would be authorized to make us. And it would, in fact, increase the excluded area in a radius of 40 miles from 2,000 square miles to 5,000 square miles. My right honourable friends have considered this with the best will in the world, and in their considered opinion, and the considered opinion of their advisers, to accept an Amendment of this sort would undermine the whole scheme of the Bill. I am sorry, but we cannot accept this Amendment.
6.29 p.m.
VISCOUNT SWINTON: My Lords, I must say that I think your Lordships will agree that that was a very unconvincing answer. There are, it is quite true, two issues here, although we are taking them in one for the purpose of debate. There is, first of all, what is to be taken over; secondly, there is, as the noble Lord, Lord Beveridge, said, what is to be the area of operation of the permitted private undertakers who will still be allowed to
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continue. There was really no answer from the Leader of the House on the second point with regard to the facilities to be given to the people who are still to be allowed to operate, and I should very much like to know—and the House would welcome the noble Viscount addressing us again, I am sure—if any concession is going to be made to us cal the area of operations which the no ale Lord, Lord Beveridge, rightly distinguished from the area of take over
Now what are the arguments which he used, and were used in another place, to justify keeping either or both of those within the limitation of 25 miles? Oddly enough, I do not think the Leader of the House mentioned the blessed word "co-ordination" to-night. I missed it if he did. But the whole purpose of this Bill. as we were told by the Lord Chancellor, was that it was co-ordination and not ownership that mattered. Nobody can pretend that ownership is necessary for co-ordination. If their argument really would hold water, then the Government ought to take the lot and not just those which come within the 25-mile limit—a ad no doubt some of the more greedy of their supporters would be very glad to see that happen.
I am not going to waste time over that argument, because it all concentrated on the prejudice which this great Government undertaking would suffer; its inability to discharge its statutory duty to give a decent service unless it took over everything except the 25-mile or less radius, and unless everybody who was permitted to continue was to be confined to his 25-mile radius. Well, really, is that not great nonsense? I will make the noble Lord a present of his figures rather than take the figures of the noble Lord, Lord Beveridge, as to how many thousands of vehicles are to be affected. If we extend the 25 miles to 40 milts, and say that we do not take over those which are within the 40 mile radius, there is still going to be an enormous number—10,000 of the railway vehicles is it? And 8,000 or i8,000 of the others? At any rate, it is a great many thousand vehicles. It is a much bigger undertaking than that of any of the fellows w to are to-day conducting an admirable business. It may need co-ordination, but nobody pretends that they are rot giving the most excellent service, as

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every trader and farmer says they are. Why do the Milk Marketing Board want to keep the business as it is? Because they are getting such excellent service. Those people who are giving that service do not say: "We cannot give this service unless we have 20,000 vehicles or more." This is paranoia; this is megalomania. The noble Viscount ought not to suffer from these diseases; he ought to know much more about them.
The great danger to-day is for businesses to get too big, not for businesses to get too small, and in a business like road transport which serves individual needs, I think anybody who knows will admit that is a real danger. The noble Viscount has forgotten another thing. He talks as if 18,000 was to be a very small undertaking and they could not do the job without them. But he is not necessarily confined to that number. The can go and order as many new lorries as he pleases as soon as the Commission is established, and I have no doubt they will always get priority as against the other unfortunate permitted operator. He can go and place all the orders he likes if he thinks this 18,000 or 28,000—whatever the number of vehicles is which he is going to take over—is too small for his little business; he can go and order another 10,000 immediately. It really is fantastic. Is this the fair chance which the Lord Chancellor said that the Commission must have? What do we mean by fair chance? We may mean a fair field and no favour. Is this great Government undertaking not able to compete unless it has a cartel, a monopoly and all the dice weighted in its favour? I make this claim not only in fairness but in both justice and common sense. Goodness only knows, 25 miles is not the right test to take for long haul—a radius which would prevent a haulier going across Greater London, prevent his going between Liverpool and Manchester and prevent his going between Edinburgh and Glasgow. Can anybody, without the most frightful misuse of words, pretend that operation within those areas is really long distance? Of course it is not. Forty miles is a much fairer distance.
There is one person I was waiting to hear mentioned in all the defence which the Leader of the House put up, and
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indeed in everything which was said in another place, and that was the wretched consumer, the user of the road transport. I never heard him mentioned once. He has some rights. He has the right to be served. What is his interest? His interest is that there should be an efficient Commission and efficient hauliers, and that he should have a reasonable choice between the two to be able to send his goods by one or the other on what is a reasonably short haul. Not only would the haulier not have a fair chance if he is limited to his 25 miles, but the consumer, the farmer, the trader and the manufacturer would be unable to get that service out of the permitted haulier that he can give to-day, that he is only too anxious to give and that the Bill purports to provide should go on.
For all those reasons I say that this is right, in taking the test of what should be taken over. Although 40 miles must be a little arbitrary—during the war you made it 60 miles—if you please, the thing must be arbitrary to some extent; but as between 25 miles and 40 miles I do not believe any man of fairness and common sense would deny that 40 miles is a much fairer test. But when you come to the area in which he is to be permitted to operate, then I say if you refuse to give a radius of operation of 40 miles you are not only doing what is unfair to the haulier, but doing something which is much more serious: you are depriving the whole of the public of a chance of a fair service.
EARL GREY: My Lords, the noble Lord made great play of his calculation of 2,000 square miles as if it was a ridiculous area to give. A great many lorries are based upon the ports all round the country and your 2,000 square miles presumably would be half at sea and half on land. I do not think the noble Lord's calculations are really worth very much.
LORD GIFFORD: Speaking of calculations, I am sure the noble Viscount did not intend it, but he said it is upsetting the whole structure to double the radius. As far as I know 40 miles is not double 25 miles.
VISCOUNT ADDISON: I did not say "doubling the radius." What I said was that the included area in a radius of 25 miles was 2,000 square miles.
EARL GREY: Even if you are based on the shore?
VISCOUNT ADDISON: Of course not.
EARL HOWE: I have attended many hours of discussion, and I have been hoping to hear an explanation from the Leader of the House or from some other Government spokesman as to how the figure of twenty-five miles came to be decided upon. What does it mean? If the noble Viscount can give any really good reason for the figure of twenty-five miles it will have a great deal of effect on many people like myself. But I have not heard any single reason for the figure. On the other hand, the noble Viscount, Lord Swinton, has already pointed out that a twenty-five miles' radius will not enable you to cross the Greater London area. Twenty-five miles seems to have everything wrong with it from the point of view of the road haulier. Forty miles is a reasonable figure; it is the distance, for instance, between Edinburgh and
Resolved in the affirmative and Motion agreed to accordingly.
6.50 p.m.

LORDS AMENDMENT.
Clause 52, page 66, line 8, leave out ("twenty-five") and insert' ("fifty.")
LORD TEYNHAM LORD TEYNHAM moved, That this House do not insist on the Amendment
Glasgow, between Liverpool and Manchester, and so on. I appeal to the noble Viscount the Leader of the House to give us some sort of an idea as to why twenty-five miles was chosen and what it represents.
VISCOUNT ADDISON: I do not think I can add any more. We have discussed this matter at great length. With regard to the point about the Greater London area, the noble Earl must not assume that every operator has the base of his operations on the circumference. Many of them would be inside the area.
EARL HOWE: But why was that figure chosen?
VISCOUNT ADDISON: It was estimated that that was the figure that was necessary in order to have a sufficient basis of operating vehicles.
On Question, Whether the said Motion be agreed to?
Their Lordships divided: Contents, 57; Not-Contents, 12.

CONTENTS.

Aberdeen and Temair, M.

Hailsham, V.

Fairfax of Cameron, L. [Teller.]

Cholmondeley, M.

Maugham, V.

Reading, M.

Portal, V.

Gifford, L.

Salisbury, M.

Ridley, V.

Gisborough, L.

Willingdon, M.

Samuel, V.

Grenfell, L.

Simon, V.

Hawke, L.

Beatty, E.

Swinton, V.

Hazlerigg, L.

De La Warr, E.

Swinton, V.

Kenilworth, L.

Fortescue, E. [Teller.]

Addington, L.

Kinnaird, L.

Grey, E.

Ashton of Hyde, L.

Lyle of Westhourne, L.

Howe, E.

Barnby, L.

O'Hagan, L.

Iddesleigh, E.

Beveridge, L.

Polwarth, L.

Lindsay, E.

Bingley, L.

Remnant, L.

Lucan, E.

Butler of Mount Juliet, L. (E. Carrick.)

Rennell, L.

Munster, E.

Rochdale, L.

Onslow, E.

Cherwell, L.

Soulbury, L.

Radnor, E.

Clanwilliam, L. (E. Clanwilliam.)

Teynham, L.

Rothes, E.

Tweedsmuir, L.

Selkirk, E.

Courthope, L.

Wardington, L.

Craigmyle, L.

Wolverton, L.

Bridgeman, V.

De L'Isle and Dudley, L.

Woolton, L.

NOT-CONTENTS.

Jowitt, V. (L. Chancellor.)

Faringdon, L.

Lucas of Chilworth, L.

Addison, V.

Henderson, L. [Teller.]

Marley, L.

Kershaw, L.

Morrison, L.

Ammon, L.

Lindsay of Birker, L.

Walkden, L.

Chorley, L. [Teller.]

to which the Common; have disagreed, but propose the following Amendment in lieu thereof: Page 66, line 8, leave out "twenty-five." and insert "forty." The noble Lord said: My Lords, I will 13e very brief. I do not propose to repeat all the arguments in favour of an increase in the radius except under one or two of the main headings. We have had a

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declaration from the Minister in another place that the radius of twenty-five miles was merely a nice sensible proposition, and we made it clear during the Committee stage of the Bill that twenty-five miles is far too short a distance for private enterprise to work efficiently, and that trade and industry would thereby suffer. We pointed out that it would not be possible to send goods in one vehicle even across Greater London, and we also raised the difficulty of the distance between such large towns as Edinburgh and Glasgow, Liverpool and Manchester, and so on.
There is a much more important and psychological reason for an increase in radius in Clause 52 as proposed by my Amendment, which I ventured to put before you during the Third Reading of the Bill, and that is the importance of a contented and well-organized private transport industry running alongside that of the Commission. Of course, if it is the intention of His Majesty's Government to ensure that the Commission will eventually drive and swamp the private transport industry out of business, it is an entirely different matter. But I feel that that is not the intention of the Government, and we earnestly ask them to accept this very reasonable Amendment which will provide for a contented private transport industry and will allow it to build itself up alongside the Transport Commission. There is an old nautical saying: "Why spoil the ship for a ha'p'orth of tar?" Perhaps the noble and learned Viscount, the Leader of the House, will take heed of the adage, and accept this Amendment which is put forward in the best interests of transport and of His Majesty's Government. I beg to move.
Moved, That the House do not insist on the said Amendment, but propose the following Amendment in lieu thereof:
Page 66, line 8, leave out ("twenty-five") and insert ("forty").—(Lord Teynham.)
VISCOUNT ADDISON: We need not repeat our arguments. I am interested to know from the noble Lord that this will lead to a contented and well-organized industry, whereas it is only quite a few days ago that we were told that the necessary figure was "fifty"; now we will achieve the same beneficent result by "forty"; that is very gratifying to know.
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I need not repeat my arguments and I am sorry that, for the reason that geometry remains the same, it is a radius of forty miles instead of a radius of twenty-five miles, and that is that. But perhaps I might suggest a matter of convenience to your Lordships which is quite in accordance with your usual practice. You have just moved the same Amendment practically in effect to another clause, to which we have objected, and, of course, we retain our objection to this one too, but, rather than subject your Lordships to wandering through the two Lobbies, I hope it will meet your Lordships' convenience if, when this Amendment is moved, we say either "Not-Content" or "Content" and thus avoid a Division—merely to register our dissent or otherwise.
THE MARQUESS OF SALISBURY: My Lords, I agree that that would be the most practical arrangement; it would save a great deal of time, with the same result.
On Question, Motion agreed to.
VISCOUNT ADDISON: My Lords, there is not much left on the Order Paper and perhaps this would be a convenient moment at which to adjourn.
THE MARQUESS OF SALISBURY: IS it the intention of the Leader of the House that a Division should be taken in the same way as this last one?
VISCOUNT ADDISON: I had not counted on that.
THE MARQUESS OF SALISBURY: It makes a difference about adjourning or not adjourning now. A Division takes ten minutes or so. If there are two Divisions, that will take us twenty minutes unless the noble Lord is willing to let the Amendment go under protest.
VISCOUNT ADDISON: I say at once, without anticipating the arguments, that His Majesty's Government are not able to accept either of the Amendments which are before us. I believe that perhaps your Lordships do wish to state a case on them. As far as I am concerned, I am in your hands and, if that is the case, I suggest that the House do adjourn.
[The Sitting was suspended at three minutes before seven o'clock and resumed at half past eight.]

LORDS AMENDMENT.
Clause 39, page 48, line 29, after ("that") insert ("the carriage of goods in a vehicle

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authorised for use under a licence granted under subsection (1) of Section seven of the Road and Rail Traffic Act, 1933")
The Commons disagreed to this Amendment for the following Reason:
Because there are not sufficient grounds for making the exception granted by the said Amendment.
VISCOUNT ADDISON: My Lords, this is a restrictive Amendment about which we had considerable discussion, and as the other place is not able to accept it I move that we do not insist.
Moved, That this House do not insist on the Amendment to which the Commons have disagreed.—(Viscount Addison.)
On Question, Motion agreed to.

LORDS AMENDMENTS.
Clause 39, page 48, line 32, after ("meat") insert ("the carriage of milk")
Clause 39, page 66, line 19, after ("livestock") insert ("or milk")
Clause 39, line 19, at end, insert—("or
(c) the vehicle is a vehicle authorised for use under a licence granted under subsection (I) of Section seven of the Road and Rail Traffic Act, 1933; or")
The Commons disagreed to these Amendments for the following Reason:
Because there are not sufficient grounds for making exceptions granted by the said Amendments.
VISCOUNT ADDISON: These are all the same type of restrictive Amendment, limiting the materials that a vehicle may carry which was objected to before in the other place. The other place has disagreed, and I move that we do not insist.
Moved, That this House do not insist on the said Amendments to which the Commons have disagreed.—(Viscount Addison.)
On Question, Motion agreed to.

LORDS AMENDMENT,
Clause 40, page 49, line 27, at end insert—
("(6) In any proceeding under this section before the arbitration tribunal established under Part VIII of this Act the burden of proof that an undertaking is such an undertaking as is specified in the last preceding section shall be upon the person contending that the undertaking is such an undertaking")
The Commons disagreed to this Amendment for the following Reason:
Because the said Amendment is inappropriate having regard to the nature of the proceedings in question
THE MARQUESS OF READING THE MARQUESS OF READING moved, that this House do not insist on the said Amendment but propose the following Amendment in lieu thereof:
Page 49, line 27, at end insert the following new subsection
"(6) In any proceeding under this section before the arbitration tribunal established under Part VIII of this Act the obligation of giving to the tribunal all information in his power as to the manner in which the undertaking or the relevant part thereof was carried on during the period mentioned in Clause 39 (1) (a) shall rest on the person on whom the notice of acquisition has been served and provided that such obligation has been duly performed the burden of proof that the undertaking is such an undertaking as is specified in Clause 39 shall be placed upon the person contending that the undertaking is such an undertaking."
The noble Marquess said: My Lords, when this point was originally before your Lordships' House there was a certain amount of discussion as to what was the correct position and what was the correct procedure in a matter of this kind. Your Lordships may remember that the point was put originally by the noble and learned Viscount, Lord Simon. I, amongst others, ventured to support him on that occasion in insisting on, and ultimately carrying to a Division, the point that the. question of the burden of proof was one of very great importance; that in this case there was no ground for taking any other than the normal course and insisting that the burden of proof should lie upon the party alleging a particular series of facts before the tribunal; and that that party should be called upon to appear before the tribunal and prove his case.
In the course of the discussion which took place on that occasion, I think that the noble and learned Viscount on the Woolsack did point: out that difficulties, might arise, owing to the Commission nit being in a position to produce the necessary information without the assistance and co-operation of the individual undertaker. And on further reflection that has, I think, satisfied my noble and learned friends, Viscount Maugham and Viscount Simon, that there was, if I may respectfully say so, virtue in the point that difficulty might well arise if the Commission were called upon to appear before the Tribunal, owing to the fast that they had not in their possession, and therefore could not place before the Tribunal, the necessary information to

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enable the Tribunal to come to a satisfactory conclusion. Having adopted that part of the case put forward by the noble and learned Viscount in originally opposing the then Amendment, it was decided to put it in the terms now before your Lordships on the Order Paper, which your Lordships will see do make a difference by amplifying the original Amendment which we discussed and including in it a provision in regard to the party upon whom is placed the duty to make the necessary disclosure of the relevant facts.
Therefore, as the Amendment is now proposed, it lays it down that in the proceedings which are the subject of this particular part of the Bill, the obligation of giving to the Tribunal the information that is required shall be placed on the persons, on the undertaker, who has to appear before the Tribunal and make his case. That is the primary duty, and until he has done that the Tribunal is not in a position to come to any conclusion. But when he has done that, and the Tribunal being seized of the necessary information, the moment then arrives when the burden of proof is as it was placed in the original Amendment. That is why when he has once performed that duty of disclosure, then the burden of proof is placed upon the person contending that the undertaking is such an undertaking as ought to be taken over—in other words the original Amendment that we submitted. The difference, therefore, is that we have now put forward an Amendment in which disclosure has to be made by the person contesting that he comes within the Act. When he has performed that duty then, as in the original Amendment, the burden rests upon the person claiming that the undertaker comes within the Act to prove his case in the normal way. I beg to move.
Moved, That this House do not insist on the Amendment to which the Commons have disagreed, but propose the following Amendment in lieu thereof:
Page 49, line 27, at end insert new subsection:
("(6) In any proceeding under this section before the arbitration tribunal established under Part VIII of this Act the obligation of giving to the tribunal all information in his power as to the manner in which the undertaking or the relevant part thereof was carried on during the period mentioned in
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Clause 39 (1) (a) shall rest on the person on whom the notice of acquisition has been served and provided that such obligation has been duly performed the burden of proof that the undertaking is such an undertaking as is specified in Clause 39 shall be placed upon the person contending that the undertaking is such an undertaking").—(The Marquess of Reading.)
8.39 p.m.
VISCOUNT SIMON: My Lords, I should like to add a few words to what the noble Marquess has said, though he has, I know, very clearly explained the effect of our substituted proposals. I think that in order to apprehend the force of the new proposals one really has to look at Clauses 39 and 40 and see what the Commission is authorized to do. Clause 39 begins:
"Where the Commission are of opinion with respect to an undertaking the activities of which consist wholly or partly on the operation of any vehicles authorized to be used under any A licence or B licence——"
And then there are two conditions mentioned, first that the undertaking or any part thereof was carried out during the whole or any part of the year 1946, and second, that the activities of the undertaking in that year, so far as they consisted in the carriage of goods in goods vehicles, consisted to a predominant extent in ordinary long-distance carriage for hire or reward; and it shall be the duty of the Commission to give a notice of acquisition to this body. To a large extent, and in many cases, the Commission must be acting on first impressions—I will not say a guess, but it does its best on any information then before it, and it may in those circumstances give notice of acquisition that an undertaking is going to be taken over and is going to be managed by the State agents and it will be a criminal offence for the undertaker any longer to carry it on himself. Observe how it goes on in Clause 40:
"A notice of acquisition given by the Commission with respect to an undertaking shall be in writing and shall be served on the person carrying on the undertaking."
We have now got to the point that the Commission have formed a first impression and served a notice on the undertaker which says in effect, "We are of the opinion that you come within the ambit of the scheme." Then one of two things may happen.

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"If a person on whom a notice has been served by the Commission with respect to an undertaking desires to contend that the undertaking is not such an undertaking … he may by notice in writing served on the Commission require the Commission to withdraw their notice."
It is quite natural that the challenged undertaker should communicate to the Commission the reasons why he thought he was not in the scheme at all. Then the Commission might take one of two courses. They might feel in the light of what is pointed out that the original claim was wrong and withdraw it.
"Where the Commission receives such a. notice as is referred to in subsection (2) . . they shall, if satisfied that the contention of the person carrying on the undertaking is correct, withdraw their notice …"
They can say, "I beg your pardon, we thought you came within the Government scheme. Now we find you do not and we do not make any claim." The alternative is that if the Commission do not feel they should withdraw the notice,
"the question whether or not the notice given by the Commission is to have effect shall, unless the owner of the undertaking withdraws his notice, be determined by the arbitration tribunal established under Part VIII of this Act."
I do not think anybody, lawyer or layman, will dispute that the arbitration tribunal sits as a tribunal to decide a dispute which exists between the Commission on the one hand and an objecting undertaker on the other. The tribunal is, in effect, the judge. There is nothing technical about this. There is no difference between a court of law and any other tribunal of that sort. It is the judge and the two sides appear before it.
When I made these observations on Committee stage, I may be flattering myself, but it appeared to me that what I said carried a good deal of weight in different parts of the House. Frankly it an unfortunate thing that the tribunal can say, "If you want to get out of this, get out of it." The Commission which is claiming to embrace the man within the scheme of the State service should be required to prove it and that was the nature of the Amendment which I moved and which was carried, and which is now subsection (6) of Clause 4o. With that before them, the other place, under the advice of the Solicitor-General, have largely rejected the proposal, as it was quite within their rights to do. I will not criticize the speech of
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the Solicitor-General, although I do not regard it all as quite what I should have thought was good law and good sense. But his main point was a good point. It was: If you leave it like that, and you say the Commission have to prove their case, there may he instances in which the Commission have not got the necessary information to prove their case.
A man who is unwilling to be absorbed into the State system might refuse to give information; or, owing to the fact that his records were destroyed, he might get away with it and keep outside the State scheme merely because he said: "You have got to prove it." I think that is a good point, and I accept it as a good criticism. Therefore, the noble Marquess, Lord Reading, the noble and learned Viscount, Lord Maugham, self and others—I think it is warmly supported by other noble Lords on the Front Bench here—have suggested that. while that is perfectly right, the proper way to get over that difficulty is not to perpetrate what at any rate in my experience—for what that is worth—is an extraordinarily anomalous assertion—that is, for a man to escape on the claim that he is within the State scheme—but that the proper provision is this. I call attention to the words on the Amendment Paper:
"In any proceeding under this section before the arbitration tribunal established under Part VIII of this Act the obligation o giving to the tribunal all information in his power as to the manner in which the under-faking or the relevant Part thereof was carried on during the period mentioned in Clause 39 (1) (a) shall rest on the person on whom the notice of acquisition has been served … "
I think that is right. If I had thought of it in time, I would have put it in. In so far as that was omitted from our original proposal, I venture most respectfully to say that I think the Solicitor-General in another place had a good point: we do not want to encourage anybody to get out of this measure by sitting mum and refusing to give information.
Once you have made that the duty of private undertakers, then I submit to the House the proper principle is what here follows: that it
"shall rest on the person on whom the notice of acquisition has been served and provided that such obligation has been duly performed the burden of proof that the undertaking is such an undertaking as is specified in Claire 39 shall be placed upon the person contending that the undertaking is such an undertaking.

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I really think your Lordships, sitting in any part of the House, will see that I am trying to talk what is reasonable and good sense. It seems to me that once you have put upon the person who is said to be within the State scheme the obligation of disclosing everything ("Put your cards upon the table; show us what your past history is; let us know as much about it as you know about it"), it is a rather monstrous thing, and certainly undesirable and very improper, that you should then say that what is called the burden of proof does not rest on the people who claim that the undertaking is within the scheme of the Act.
Your Lordships must remember that the result of an undertaking being declared to be within the scheme of the Act is not only that the private livelihood of the man carrying it on becomes illegal; he is not allowed to carry it on any longer, and has to take whatever compensation comes his way—which some think is not very much. Not only is it illegal in the sense that it is contrary to these clauses, but it becomes a criminal offence. Surely if a private individual gives you all the information and says: "Those are my records; those are the journeys I have travelled; this is what I have done", it cannot be right to say after that that anybody should be entitled to declare that he is to be deprived of his livelihood and is a criminal breaking the law, liable to be prosecuted in the criminal court, when he has done everything which can be done to disclose the actual facts.
I notice that in another place the Solicitor-General used an argument which, to me at least, is entirely mysterious. I wish to speak with the greatest moderation, because obviously a great responsibility rests upon legal members of the Government in either house who are advising the House at large as to how the matter will stand, and 1 am sure we should recognize that that is the first thing the Lord Chancellor in this House is always most scrupulous to observe. What the Solicitor-General did was this. He said that this inquiry by the Transport Tribunal will be an inquiry which is governed by the Arbitration Acts, and subject to some severe limitations—which do not matter. Then he proceeded to say something which, with great respect, made me doubt whether he was well acquainted with the Arbitration Acts. He said that the Transport Tribunal
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will be in a much better position to find out these facts than the Transport Commission. I speak humbly, but with a considerable knowledge of the way in which the Arbitration Acts work. As a matter of fact, an Arbitration Tribunal does not itself go inquiring into facts at all. It is, of course, a Tribunal consisting, as it happens, of some legally trained person sitting as the President and a couple of others. It does not set about inquiring into facts.
What happens in a case like this, since it is under the Arbitration Acts, is that the Commission, which is one of the claimants, asks for the necessary order for discovery; that is to say, to compel either side to produce anything and everything they have which is relevant, or it may even ask questions, which we call Interrogatories. The Tribunal does not seek to ferret out one side or the other. Either side may ask that an order should be made for all this disclosure. I think it was a little unfortunate that it was suggested in another place that the Tribunal, because it was sitting under the Arbitration Acts, had some function of ferreting out the facts. I never heard of such a thing! After all, I have attended hundreds of arbitrations in my life and it is really quite contrary to what the popular understanding of an Arbitration Tribunal is.
My submission therefore is this. I am quite willing to admit that in the original proposal I made I went too far. I think it was perfectly right that the Amendment as I proposed it—and as others supported it—went too far, because it sought to throw this burden of proof on the Commission at an earlier point than was in common sense and justice proper. It certainly would not do for the undertaking which they seek to get within their scheme to sit mum and say nothing, or say, "Prove it if you can," as a criminal sometimes does in the dock who says, "You accuse me of murder—well, prove it." I am sorry I made that mistake, and if I had realized it I would have protected myself from that in the first instance. I ask the House to support me in making this correction now. The effect of this Amendment is to throw upon the person who denies that he comes within the Government scheme the absolute obligation to disclose the whole of his transactions. Put that upon him as a duty, and do not say that the burden lies on the

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Commission to prove their case unless he discharges that duty. But if he does discharge that duty, and really reveals all that he knows, so that it is possible for the Tribunal to form a just judgment, then I must say I think it is rather astounding that you should still persist that it is the claimant who has got to prove what he asserts.
The Lord Chancellor was good enough, on the last occasion, to say that he did not differ with me on the general principle at all. I felt sure he would agree. It is not a lawyer's point, it is just a common sense point, that if you are going to claim that so-and-so is the fact, normally speaking the person who makes the claim has got to prove the fact. But I realize that I struck too soon in this Amendment. I think the matter has been put right, and I suggest that in the general interests of justice we ought to put before another place this modified proposal. I hope very much that if we do so the other place, which I am sure wants to do the right thing, may be disposed to accept it.
8.57 p.m.
THE LORD CHANCELLOR: My Lords, may I make reference for a moment to the speech of the noble Marquess, Lord Salisbury. He said, in effect, that he wanted another place to show themselves reasonable in considering our Amendments, and so on. I think your Lordships know me well enough to realize that I have devoted a great deal of time and care in trying to get Amendments which seemed to be reasonable accepted in another place. I have been at great pains, and generally I have succeeded. Sometimes I have not succeeded, but more often than not I have. It is only right to say, quite plainly, lest I should be thought to be sheltering myself behind the Minister, that I have not advised him to accept this Amendment. I do not think it right to do so, and I should like to tell your Lordships why.
I got a great deal of advice on the last occasion, particularly from the noble Earl, Lord Selborne, who, perhaps with the traditional knowledge derived from his distinguished grandfather, was good enough to tell me that in a case of murder the onus of proof is upon the prosecution. I was aware of that fact. But here we are dealing with a very different proposition. The noble Viscount, Lord Simon, as one would expect, has made his point
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with perfect correctness. But it would be interesting to go a little further and see what the next clause, No. 41, provides. The test of what is a predominant extent of long-distance carriage is there set up; and the test is either of two things. Either you have to show, to be within the definition of long-distance carriage, that the total weight of the goods which were the subject of ordinary long-distance carriage for hire or reward exceeded half the total weight of all the goods carried in those vehicles; or you have to show that the receipts from the undertaking in respect of those goods exceeded half the total receipts of the undertaking. Your Lordships will observe—and there can be no question whatever about this—that those facts are, in the nature of things, and must he, peculiarly within the knowledge of the man who runs the undertaking. It is a very difficult thing lo determine, and if anybody knows what the answer to this question is, it is surely the man who runs those undertakings.
Conscious that we were faced with this difficulty, we put in a proviso. It begins on the fifth line of page 50. The noble Viscount referred to it on the last occasion and said he thought it was without precedent, and I agree. I have never seen its counterpart. We put it in quite deliberately because we felt this difficulty, and we said in effect: "Provided that, if the tribunal have not enough information"—I am paraphrasing it very crudely—"you must do the best you can on the information you have got." That is, I think, the broad substance of it. There is a principle of law which is well known to all lawyers—we generally have our principle s written for us in well known works and, having got a principle written, we then proceed to explain it away. I have no doubt that this principle in regard to certain aspects of the criminal law is too wide, but it is very well understood and it is written down in what is the classical text book on this subject—Taylor On Evidence. I cite from the Twelfth Edition, paragraph 376.
There is nothing technical about this; I think it is common sense. I will read it to you:
"In several of the instances above given the Legislature has adopted a principle which the Common Law also recognizes, and which may here be noticed as a second exception to the general rule that the burthen of proof lies at the party who substantially alleges the affirmative. The exception is this, that, where the

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subject matter of the allegation lies peculiarly within the knowledge of one of the parties, that party must prove it, whether it be of an affirmative or a negative character, and even though there be a presumption of law in his favour."
That is the proposition. I am not going to say that I accept that proposition in its full width with regard to the criminal law of this country, but I do accept the proposition as a rule of some common sense, and I do say that, where facts are peculiarly within the knowledge of one person, it is not unfair to say that the burden of proof should be cast upon that person in whom rests the knowledge of the facts.
VISCOUNT SIMON: Would the noble and learned Viscount forgive my interrupting, but I merely want to know this? Has his attention been called to the first five lines of the Amendment which I am proposing, because those five lines exactly embody—do they not?—the principles to which the noble and learned Viscount is calling our attention?
THE LORD CHANCELLOR: I am coming to that but, for the moment, I regard that intervention as valuable, because it seems to me that the noble Viscount entirely accepts this proposition which I think, whether or not it is perfectly correct in regard to the criminal law, is a rule of sound common sense. Therefore, as the noble Viscount rightly says, he in his Amendment, I have no doubt, intends to accept that proposition. I am not quite sure that he does it, but he says this:
"In any proceeding under this section before the arbitration tribunal established under Part VIII … the obligation of giving to the tribunal all information in his power as to the manner in which the undertaking or the relevant part thereof was carried on during the period mentioned … shall rest on the person on whom the notice of acquisition has been served."
But that has nothing to do with the onus of proof; that has to do with the obligation to give the information, and the obligation is already there, apart from this Amendment. The obligation is expressly stated, I think, in this Bill, in Clause 51, imposing upon the person that he has to give all information. If he does not give information—
THE EARL OF SELKIRK: He goes to gaol.
THE LORD CHANCELLOR: There is an obligation to give all the information in his power under Clause 51, subsection (2). If he does not give information, that becomes an offence. You will find on Page 121, at Clause 119 (2), that any contravention of the Act subjects the person so contravening to a penalty of, I think, one hundred pounds and a fine of five pounds a day. So that, before ever this Amendment was drafted, you had the plainest obligation that the person must state the relevant facts and, if he does not state the relevant facts, he commits an offence.
Now see what this Amendment does. It does not alter the law already in the Statute, and it does not, as I see it, in any way deal with the onus of proof.
It says: "provided that such obligation has been duly performed." Imagine yourselves, if you will, in the position of this Tribunal. How do you know whether the obligation has been duly performed? That is the point. Take the case of a man whose vehicles we are seeking to take over. The man comes along, and you get an impression, from the way he answers questions, that he is not being, shall I say, so forthcoming as he might be. You suspect that there is some little cupboard in his house in which there is a little book, and if you could only unlock that cupboard and look at that little book you would get a great deal of information. But you cannot prove it. You do not know it. You just get an impression that the man might give you more information than he is giving. What do you do then?
Suppose, to take the two most common cases in recent years—and I have met this sometimes—you get a man whose books you want, and he says "I am awfully sorry but I cannot produce my books. We had a fire and my books were burned." The number of times you find that relevant books have been burned in a most unfortunate fire is truly remarkable. It may have been true, and there may have been a fire—but who lit it one does not like to investigate. There is sometimes a greater refinement, and we get nowadays the man who says: "There is a tremendous demand for waste paper. We have all been asked to contribute, because there is a shortage of paper, and I have contributed all my old records, and I do not remember anything about them." Suppose you have cases of that

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sort, and that you have—I will not put it higher than this—a suspicion in your mind, a strong suspicion, that the man is not being as forthcoming as he might have been: what do you do then? Do you say that the onus has shifted or not? Because, assuming the first part casts the onus on the man, the conditions of the onus have shifted the other way round, because it is "provided that such obligation has been duly performed." That is the whole point. That is what you never know.
In my opinion, as these facts are peculiarly within the knowledge of one party to the arbitration, if you are going to adopt a definite onus of proof you should not have it shifting on an uncertain fact like that. I should put it boldly, fairly and squarely on the shoulders of the man, because he has got the peculiar knowledge. But it was to avoid that very fact which we thought might be hard that we put in this very odd proviso, the like of which the noble and learned Viscount, Lord Simon, and I have never seen before in our long experience, to try to avoid getting to that position. And if it is said to me: "You really must have an onus of proof," then I should say: "Well, do not have an onus of proof which shifts upon the performance of something which you cannot prove has been performed. If you want an onus of proof, put it fairly and squarely on the shoulders of the man who knows the facts."
The Commission here are not claiming anything, they are not asserting a right, they are doing that which the Statute tells them they have to do. If they believe that a man comes within a certain category, Whether they like it or not, they are bound to take the next step and serve what is called a notice of claim. He can serve a counter-notice, and unless they are satisfied that the countor-notice is right they are bound to go on. It is a case of the Commission performing a statutory obligation. I say that this Commission have to perform what I have called a dichotomy of putting these various undertakings into one camp or the other. They must do the best they can. I believe that this question of onus, particularly of shifting onus, is wrong and is undesirable, and would have the result, if people were disposed to try to dodge this Statute, of enabling them by not producing all the relevant documents perhaps to
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get out of the obligation which Parliament intended should be forced upon then. Therefore I say, with great regret, that I cannot, in this case, see my way to assist your Lordships in getting this Amendment accepted.
VISCOUNT SWINTON: My Lords, I should imagine that never in the history of this House has so strange a speech been delivered from that place. I am not going to speak as a lawyer, though a long time ago I was one. I am going to speak merely as a common man, hitherto accustomed in this country to what we have been pleased to call common justice. Just observe what is going to happen here. Stripped of all the nice webs of legal terminology which have been woven around this very simple question, every road haulier, big or small, who I as hitherto been regarded as a decent man giving a decent service, who has not found his way into the law courts, who rendered pretty good service in the war, whether driving lorries, at the Front or through the bombardment from the air, a man who certainly has not been prosecuted more frequently than any of the rest of us, is to be treated by the Government, through the highest legal luminary of the land as their spokesman, as a potential if not as an actual criminal.
I justify the words I have spoken. What did he say: "Documents have a habit of disappearing"—"Curious how many fires there are." When I was a very young man at the Bar, I used to hear that kind of thing said sometimes at the Old Bailey. And I sometimes heard the Judge say: "Mr. So and So I think you are going a little too far." With great respect, my Lord Chancellor, I thick that to-night you have gone a little too far. These men are not criminals. These men are not potential criminals. Way should they be treated as if they were? Stripped of legal verbiage, I think there is only one instance which can be cited—there may be another: I do not know—where the onus of proof is shifted in this way. He is the man popularly known as the "fence," a probable receiver of stolen goods. Where a man is found in possession of stolen goods which have been recently stolen, the British law shifts the onus of proof on him to show why he is in possession of these goods. The ordinary criminal or indicted man is not treated as a criminal until the case is

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proved. These wretched road hauliers are not in possession of recently stolen goods. They are in possession of goods doing a good service which are presently to be taken from them. Upon whom then should lie the onus of proof? I speak again as a common man. I do not care whether it is in Clause 51. I leave aside the miserable suggestion that these men go and burn the evidence. If you can prove that a man has done so there is a perfectly good legal procedure, and that man should he taken by the Public Prosecutor to the Old Bailey.
THE LORD CHANCELLOR: Will the noble Viscount tell me with what offence he can be charged?
VISCOUNT SWINTON: I do not know. THE LORD CHANCELLOR: Nor I.
VISCOUNT SWINTON: I defer to the Lord Chancellor's legal knowledge. understand that deliberate destruction of evidence is an offence. It is not? Be it so. I bow to the Lord Chancellor's greater knowledge, but that does not get the Lord Chancellor out of his insinuation that these honest men are the kind of people who go and destroy evidence. That is not a suggestion—
LORD AMMON: Nonsense.
VISCOUNT SWINTON: Lord Ammon may find it amusing but I do not mind saying that I am hot under the collar. We do feel it a disgusting thing.
THE LORD CHANCELLOR: The noble Viscount accuses me again. I do not intend to stand that sort of language from him. I did not say anything like what he said. I am pointing out that it is quite wrong that the onus of proof should depend on the production of documents, and I gave illustrations of the sort of thing that could happen. I do not suggest for a moment that these people are dishonest men.
VISCOUNT SWINTON: Do not let us mince words. Let us be frank. The noble and learned Viscount and I know one another well enough to be frank.
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He said these were the kind of things that would happen. What was the point of his speech at all?
THE LORD CHANCELLOR: The noble Viscount and I know each other well, and if he were not heated he would see that I have a right to my opinions just as he has to his. He knows that I gave these facts as showing how wrong it is to make the onus of proof depend on the question of whether or not there has been a full production of documents. That is all.
VISCOUNT SWINTON: With great respect, I am extremely glad that the Lord Chancellor has reduced it to that.
LORD CHORLEY: Withdraw.
VISCOUNT SWINTON: If he has withdrawn the suggestion—
THE LORD CHANCELLOR: I withdraw nothing. If the noble Viscount at this time is unable to understand what I say it is not my fault.
VISCOUNT SWINTON: I am in the recollection of the House and will content myself with saying this: either there is a charge that these are the kind of people who would destroy evidence or, if that charge is not made—and I am delighted that it is not—then the whole case the Lord Chancellor advanced falls completely to the ground. What we have done is that we have said that any information which these people have must be brought forward. The law calls it "discovery." Let me use a term better known to noble Lords—what Mr. Bevin called "Cards face up on the table." We ask that this hand should be played with the cards face up on the table; and then we ask that the common principle of English justice shall apply, with the cards on the table, that before an honest man is deprived of his livelihood the onus of proof shall rest on the man who seeks to turn him out.
On Question, Whether the Motion shall be agreed to?
Their Lordships divided:—Contents, 49; Not-Contents, 12.

CONTENTS.

Portland, D.

Hailsham, V.

Digby, L.

Long, V.

Fairfax of Cameron, [Teller.]

Aberdeen and Temair, M.

Portal, V.

Cholmondeley, M.

Ridley, V.

Gifford, L.

Reading, M.

Simon, V.

Gisborough, L.

Salisbury, M.

Swinton, V.

Grenfell, L.

Hawke, I,.

Beatty, E.

Barnby, L.

Hazlerigg. L.

De La Warr, E.

Bingley, L.

Hylton, L.

Fortescue, E. [Teller.]

Butler of Mount Juliet, L. (E. Carrick.)

Kinnaird, L.

Howe, E.

Llewellin, L.

Iddesleigh, E.

Cherwell, L.

Lloyd, L.

Lindsay, E.

Clanwilliam, L. (E. Clanwilliam

O'Hagan, L.

Munster, E.

Remnant, L.

Radnor, E.

Courthope, L.

Rochdale, L.

Rothes, E.

Craigmyle, L.

Teynham, L.

Selkirk, E.

De L'Isle and Dudley, L.

Tweedsmuir, L.

Denham, L.

Wolverton, L.

Briilgeman, V.

Deramore, L.

NOT-CONTENTS.

Jowitt, V. (L. Chancellor.)

Ammon, L.

Lucas of Chilworth, L.

Chorley, L. [Teller.]

Marley, L.

Addison, V.

Kershaw, L.

Morrison, L. [Teller.]

Stansgate, V.

Lindsay of Birker, L.

Quihell, L.

Walkden, L.

Resolved in the affirmative, and Motion agreed to accordingly.
9.25 p.m.

LORDS AMENDMENT.
Clause 58, page 74, line 4, at end insert:
("(c) This section shall not apply to any vehicle used for the carriage of any goods for distances not exceeding eighty miles or for the carriage for any distance of any of the goods specified in provisos (a) and (b of subsection (1) of Section fifty-two.")
The Commons disagreed to this Amendment and three others for the following Reason:
Because the said Amendments are inconsistent with the general scheme and intention of the Bill.
VISCOUNT SWINTON: My Lords, I beg formally to move that the House do not insist upon this Amendment.
Moved, That the House do not insist upon the Amendment to which the Commons have disagreed.—(Viscount Swinton.)
On Question, Motion agreed to.
VISCOUNT SWINTON VISCOUNT SWINTON moved as an Amendment in lieu thereof—
Page 74, line 4, at end insert:
("(c) If on a complaint made by the holders of an A or B licence to the licensing authority that the Commission, in the exercise of their function of providing transport service for the carriage of goods by road, not being ordinary long-distance carriage, are competing unfairly against the aggrieved licence holders by seeking to provide more than a fair proportion of the facilities required, the licensing authority may, if it thinks fit, refer the matter with its report
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and recommendations to the Minister, who may make such order as in all the circumstances he may deem to be just, requiring if necessary the Commission to withdraw or alter such facilities.")
The noble Viscount said: My Lords, I now beg leave to move the Amendment in lieu which your Lordships will see on the Paper. I would remind your Lordships of the principles which this House followed on the two sets of Amendment; with which the other place have disagreed. The first principle was that the law should be the same for the Government corporation and for the permitted operator; that the Government monopoly should be neither outside nor above the law; and that there should be in this country no droit administratif, which has always been a horror to us here.
The second principle was the one to which the noble and learned Viscount, the Lord Chancellor, has appealed, and which we readily accede to: that there should be a fair field for the Government corporation. But we always insisted that this meant a fair field and no undue favour. We understood that it meant that we should put the Commission and the operators who are permitted to operate under this Bill in the same position vis-à-vis the regional licensing authorities; and that we should retain to the licensing authorities their jurisdiction over passengers and goods, subject to any charges scheme approved by the Transport Tribunal or to any road passenger scheme promulgated

719
by the Minister and duly approved by Parliament.
As your Lordships will see from the paper, the other place disagreed with these Amendments on the ground that the Amendments are inconsistent with the general scheme and intentions of the Bill. Frankly, I find that reasoning difficult to follow. I think there is an arguable case on passenger road transport, for this reason: that all passenger road transport, to start with, is left as it is; then the Commission have to make a scheme, and that scheme in due course comes before us here. Presumably any scheme that is made will provide for its area of operation, for the facilities to be provided, and for its expansion to meet the public need. But I am sure that there will have to be a devolution in the interests of the public, and I dare wager that when these schemes are produced that necessary devolution will be to the well-proved and well-tried. licensing authorities in the regions. That there is some case that passenger transport should be differently treated, I admit.
As to goods, and the hauliers who are not touched by any scheme of that kind, I cannot see that there is anything inconsistent in our proposal. After all, the Bill, as introduced, has as its general scheme and intention that the Commission and the short hauliers shall both function and both serve the public to the best of their ability, and that the public shall have this limited right of choice. But if you leave the Bill as it stands, what chance have these permitted hauliers to serve the public, or the public to be served by them? Under the Bill, the A and B licensees will have to go to the licensing authority for any additional lorries they want to put on the road. Moreover, they will have to go to these licensing authorities when in two or three years' time the A and B licences have expired. They will have to go for the renewal even of their existing licences, for their existing permitted number of vehicles. But, in the meantime, the Commission are to be free to put all the vehicles they like upon the road.
Something was said about taking the cream of the business, though why the poor, limited number of permitted hauliers, with their limited renewals, should be permitted to take the cream, when the Commission can come in and
720
take what they please passes the wit of man to understand. The people who can take the cream and scoop the pool are the Commission, who can take all the extra facilities; they can do so because, in the first instance, there is no limit upon them under the Bill at all. They could put on so many extra lorries that, when the A and B licensees came to ask for the renewal of their licences, the licensing authorities would be bound to say: "The Commission have put so many vehicles on the road that we cannot even grant you the renewal of the licence to do what the Act allows you to do with your permitted number of vehicles." I ask in all humility, is that a square deal? I should have thought that common sense and common justice would put the Commission and the permitted hauliers on an equality. But we propose now something much more modest. I will not say that we are willing, because I do not think that would be fair, but in our attempt to get at any rate some measure of justice for the wretched trader and for the public, we propose to leave the Commission all their powers and all their privileges under this Bill, and they do not have to go to the authorities at all. We leave the hauliers, subject to the law as it stands to-day and will continue for them, having to go to the licensing authority for any extension, for a single extra lorry, for any renewal. But we propose this: we say—and these are the words of our Amendment:
"If on a complaint made by the holders of an A or B licence"—
and let me repeat to you that the A or B licensee will be a man permitted under this Bill to operate—
"to the licensing authority that the Commission, in the exercise of their functions of providing transport service for the carriage of goods by road, not being ordinary long distance carriage"—
that does not come in at all—
"are competing unfairly against the aggrieved licence holders by seeking to provide more than a fair proportion of the facilities required, the licensing authority may, if it thinks fit"—
they have got to be satisfied that there is a good case—
"refer the matter with its report and recommendations"—
the licensing authority will make its report—
"to the Minister, who may make such order as in all the circumstances he may deem to be just, requiring if necessary the Commission to withdraw or alter such facilities."
Observe how reasonable that is. It leaves the final decision with the Minister. There is a fair hearing on complaint, there is the report to the Minister, and the Minister is the final judge although he is also the owner of the Commission. Can anyone say that that plan is inconsistent with the general scheme and intention of the Bill? Can anyone say that less than that will fail to do justice either to the permitted operator or to the general public? I beg to move.
Amendment moved—
Page 74, line 4, at end insert:
("(c) If on a complaint made by the holders of an A or B licence to the licensing authority that the Commission, in the exercise of their function of providing transport service for the carriage of goods by road, not being ordinary long-distance carriage, are competing unfairly against the aggrieved licence holders by seeking to provide more than a fair proportion of the facilities required, the licensing authority may, if it thinks fit, refer the matter with its report and recommendations to the Minister, who may make such order as in all the circumstances he may deem to be just, requiring if necessary the Commission to withdraw or alter such facilities.")—(Viscount Swinton.)
VISCOUNT ADDISON: When we were discussing the Bill before I thought that with the exercise of much ingenuity and, may I say, of infinite good will, I had gone as far to meet the noble Viscount's claims in respect of this class of haulier as even his utmost ingenuity could suggest. He has now, however, thought of something else. I want to point out what the scheme of the Bill is. There are these services provided by the Commission, or by the Executives with the Commission's authority, and, if you look at the governing conditions in Clause 3, Subsection (3), you will see that the Commission:
"shall so conduct that undertaking and levy such fares, rates, tolls, dues, and other charges, as to secure that the revenue is not less than sufficient for making provision for the meeting of charges properly chargeable to revenue, taking one year with another.—
In other words, the Commission have got to pay their way.
This Amendment, so far as I can understand it, suggests that the Commission will be providing more than a fair proportion of the facilities required; that is to say, I suppose, that they will be providing more vehicles than are required for the traffic. That would be completely inconsistent with the governing condition of the Commission, that the scheme was to pay its way, because if they were providing
722
an unnecessary number of vehicles clearly it would not be an economical proposition. I cannot imagine that any body of men in their senses would go out of their way to do anything of the kind. That is the first supposition. The next is this, that the noble Viscount wishes this matter to come before the licensing authority. We had this battle out before, both on Committee and Report, and the Government object to subjecting the Commission to the licensing authority, because there are specific provisions in the Statue for dealing with all the matters liable to arise, and which properly arise, in this connexion. It cannot be accepted—
VISCOUNT SWINTON: Would the noble Viscount permit me to interrupt, because I would like to know, where is the provision under which the permitted operator can go and complain if he says he is being unfairly treated?
VISCOUNT ADDISON: I am coming to that. I am now on the point of subjecting the Commission to the licensing authority, which is something quite cut-side the scheme of the Bill. The Commission are responsible, and there is a special tribunal provided to deal with the rates, fares and charges and all the rest of it. Perhaps the noble Viscount will remember that I undertook—I think on the Report stage, after a promise given on the Committee stage—that we would try and provide an opportunity for anybody who felt himself aggrieved by the service, to have his case examined. In other words, his case would be examined by the proper body; not by the local licensing authority, but by the tribunal set up under the Bill. And, under Clauses 78, 79 and 80, there is in the Bill now a special provision that I myself, in concert with the noble Viscount, introduced in the Report stage, that arty body representative of any class of persons providing for hire or reward services or facilities similar to or comparable with the services or facilities to which the scheme relates, who desire to contend that the charges provided for in the draft scheme are unduly low may lodge an objection to that effect—
VISCOUNT SWINTON: With great respect the Leader of the House has not read the new Amendment.
VISCOUNT ADDISON: Oh yes, I have.
VISCOUNT SWINTON: All right; but what he is reading now deals with passengers, does it not?
VISCOUNT ADDISON: No.
VISCOUNT SWINTON: Yes it does. It is a passenger road transport scheme.
VISCOUNT ADDISON: If the noble Viscount will look at it he will see that this deals with the charges which are provided under a scheme. There will be schemes of all kinds. Consider the case of a person who feels himself prejudiced in some way by one of these schemes. If he wishes, he can make his complaint through the consultative committee. As a matter of fact, the scheme bristles with opportunities for such people to make their grievances known and get them attended to. Quite honestly, I think it is an impossible suggestion to make that the Commission would deliberately put on the road an unnecessary number of vehicles, which is the supposition of the Amendment. I cannot imagine any body of men in their senses doing such a thing. Certainly if they did they would be infringing their governing instruction in the Bill, which is to make their services a self-supporting proposition. Really, the idea is quite unthinkable.
In any case we could not agree that an outside body, the licensing authority, should be brought in when there are abundant opportunities in the Statute itself for all legitimate complaints to be heard and dealt with. Therefore, I am sorry to say that we cannot possibly accept this Amendment, and I think the finding of the other place was right when it was said that the Amendments "are inconsistent with the general scheme and intention of the Bill." I think that they clearly are, and I am sorry that the noble Viscount has introduced an Amendment of this kind.
9.48 p.m.
THE MARQUESS OF SALISBURY: My Lords I am sorry to hear the speech made by the noble Viscount the Leader of the House. I have no doubt that he has spoken in entirely good faith, as he always does. But he will not have convinced any of us. If I may say so, with great respect, he seems to have quite misunderstood the purpose of the Amendment. First of all he said that no sensible
724
Commission would put too many vehicles on the road because they would not pay their way. But here you have to deal with a situation where a great corporation with infinite funds are opposed to a number of small men with very limited capital. That is the position with which you will be faced for every district, urban and rural, in England. Does the noble Viscount really say that it is impossible for a great corporation to drive these others out of business? I would like to mention the case of the Standard Oil Company—
VISCOUNT ADDISON: May I interject a question? As I have understood him, the noble Marquess has contended all through that private enterprise is so much more efficient than public enterprise that it can hold its own very well in these cases. Is that not so?
THE MARQUESS OF SALISBURY: I agree—when there is fair competition. That has always been the contention of the Party to which I belong, and of the Liberal Party as well. Nobody defends the action of an immense aggregation of capital in driving small men out of business. No one has defended that. The case which I was going to quote was held up in the United States as a scandal. It was the case of the Standard Oil Company of the United States. The accusation against that body was that they bought up small company after small company, persistently undersold, in fact took every means they could to drive them out of business; and in a great number of cases succeeded. I do not think that anyone, however much he might be in favour of private enterprise, would defend proceedings of that kind. The noble Viscount may say that no State enterprise would do a thing of that kind, that they are ordinary decent people and not brigands or robbers. I am, of course, anticipating what he may say if he speaks again. In fact, the Party to which he belongs does not believe in private enterprise; I do not say in competition. They would think it perfectly all right to drive these people out of business.
VISCOUNT ADDISON: No.
THE MARQUESS OF SALISBURY: Certainly there is this difference between us—
VISCOUNT ADDISON: I do not admit to the noble Marquess a better ability to interpret the opinions of my Party than I have. He is quite wrong.
THE MARQUESS OF SALISBURY: Why drive all the long distance road hauliers out of business? That is one of the main purposes of this Bill. Certainly it is. It is gradually being driven home to the country that that is what is happening. We cannot accept the contention that these people are not being driven out of business. If we are wrong, there is not the slightest reason why the Government should not accept this Amendment. They might consider that. The noble Viscount said that in any case the private owner is perfectly protected; he has a Tribunal which deals with fares and rates. The Tribunal does not deal with road hauliers; it deals only with passenger traffic. I am open to correction.
VISCOUNT ADDISON: Our proposal leaves it open to everybody.
VISCOUNT SWINTON: Not on the number of vehicles, only on rates.
THE MARQUESS OF SALISBURY: It deals only with rates. I am not concerned with rates, but with the volume of traffic. What we are asking is that in the case of a private citizen without unbounded resources, who feels he is aggrieved and makes a good case he has the right of appeal to the Minister. That does not seem to me to be a very reactionary proposal. The Minister maintains absolute control of the position. All he does is sit in his office receiving appeals and considering them, but it does give to the private man some feeling of security that there is somebody to
whom he can appeal for the reversal of any decision about traffic and the amount of vehicles run by the Commission in his own area. It is not an extreme, but a very modest proposal. We have been at infinite pains to find something which would satisfy the Government and bring comfort to the road hauliers. We felt that if the Minister was the final arbiter, it would be acceptable to the Government. If it is not acceptable, we have failed in our endeavour to find a compromise. I ask them to believe this. We do feel passionately that we must try and protect these small people and their future. It is not a mere debating point for us. It is something very, very deep-seated. In the last Amendment we tried to make it unnecessary for a man to prove his innocence, at any rate not of a crime but of a potential crime. In this Amendment we try to give him some appeal against this immense machine which will, willy-nilly, whether it be the will of the Government or not, gradually grind him out of existence. It is something we feel strongly about and something the people of this country feel strongly about. We have sought by every means in our power to find a line where we can meet. I am bound to say that many hundreds of thousands of people in this country will be bitterly disappointed with the attitude the Government is taking on these Amendments.
On Question, Whether the said paragraph shall be there inserted?
Their Lordships divided: Contents, 53; Not-Contents, 13.

CONTENTS.

Aberdeen and Temair, M.

Long, V.

Rigby, L.

Chohnondeley, M.

Portal, V.

Fairfax of Cameron, L.

Reading, M.

Ridley, V.

Gifford, L.

Salisbury, M.

Samuel, V.

Gisborough, L.

Swinton, V.

Grenfell, [Teller.]

Beatty, E.

Hawke. L.

De La Warr, E.

Addington, L.

Hazlerigg, L.

Fortescue, E. [Teller.]

Barnby, L.

Hylton, L.

Howe, E.

Bingley, L.

Kinnaird, L.

Iddesleigh, E.

Butler of Mount Juliet, L. (E. Carrick.)

Llewellin, L.

Lindsay, E.

Lloyd, L.

Munster, E.

Cherwell, L.

O'Hagan, L.

Portsmouth, E.

Clanwilliam, L. (E. Clanwilliam.)

Remnant, L.

Radnor, E.

Rennell, L.

Rothes, E.

Courthope, L.

Rochdale, L.

Selkirk, E.

Craigrnyle, L.

Sinha, L.

De L'Isle and Dudley, L.

Teynham, L.

Bridgeman, V.

Denham, L.

Tweedsmuir, L.

Hailsham, V.

Deramore, L.

Wardington, L.

Wolverton, L.

Jowitt, V. (L. Chancellor.)

Ammon, L.

Marley, L.

Chorley, L. [Teller.]

Morrison, L. [Teller.]

Addison, V.

Kershaw, L.

Quibell, L.

Hall, V.

Lindsay of Birker, L.

Walkden, L.

Stansgate, V.

Lucas of Chilworth, L.

On Question, Motion agreed to.

Resolved in the affirmative and Amendment agreed to accordingly.

LORDS AMENDMENT.
Clause 64, page 78, line 41, leave out ("not").
The Commons disagreed to this Amendment for the following Reason:
Because the said Amendment is inconsistent with the general scheme and intention of the Bill.
VISCOUNT ADDISON: My Lords, this Amendment, together with following Amendments, relates to the licensing authorities and was disagreed with by the other place for the same reason as I indicated a few moments ago. I hope your Lordships will not insist upon this Amendment.
Moved, That this House do not insist on the Amendment to which the Commons have disagreed.—(Viscount Addison.)

LORDS AMENDMENT.
Clause 64, page 78, line 45, leave out from ("Commission") to end of line 15 on page 79 and insert ("otherwise than under Part II of this Act provided that the licensing authority shall give effect to the relevant provision of any scheme made under section sixty-three and sixty-four of this Act").
The Commons disagreed to this Amendment for the following Reason:
Because the said Amendment is inconsistent with the general scheme and intention of the Bill.
VISCOUNT ADDISON: My Lords, the same remarks apply to this Amendment. I beg to move.
Moved, That this House do not insist on the Amendment to which the Commons have disagreed.—(Viscount Addison.)

LORDS AMENDMENT.
Clause 80, page 93, line 27, at end insert new Clause:
("Fixing of Fares.
Notwithstanding anything to the contrary contained in this Act the fares to he charged by—

(a) the Commission in respect of passenger road transport services provided by them otherwise than under Part II of this Act, and

728

(b) any person other than the Commission in respect of passenger road transport services provided by him under a scheme under section sixty-two of this Act,

shall be approved by the appropriate licensing authority for public service vehicles, and Sections seventy-two to seventy-six of the Road Traffic Act, 1930, shall apply accordingly:
Provided that the licensing authority shall so far as may be give effect to any relevant charges scheme made under Part V of this Act and relating to such fares, and in respect of operators of passenger road transport services other than the Commission or such person as aforesaid shall have regard to such charges scheme in exercising its powers under paragraph (b) of sub-section (4) of Section seventy-two of the Road Traffic Act, 1930.")
The Commons disagreed to this Amendment for the following Reason:
Because the said Amendment is inconsistent with the general scheme and intention of the Bill.
VISCOUNT ADDISON: I beg to move that we do not insist on this Amendment.
Moved, That this House do not insist on the Amendment to which the Commons have disagreed.—(Viscount Addison.)

LORDS AMENDMENT.
Clause 98, page 106, line 8, leave out from ("for") to end of line 9, and insert ("determination, and such reference shall be deemed to be an arbitration within the meaning of the Arbitration Acts, 1889 to 1934, and the provisions of those Acts relating to statutory arbitration shall apply to such reference and determination").
The Commons disagreed to this Amendment but proposed the following Amendments in lieu thereof:
Page 106, line 8, after ("Service") insert ("after consultation with the Lord Chancellor or, where the proceedings are to be held in Scotland, after consultation with the Secretary of State").
Page 111, line 5, after Clause 103, insert the following new clause:—
Arbitration Acts do not apply to proceedings before referees or boards of referees.
("Nothing in the Arbitration Acts, 1889 to 1934, shall be construed as applying to any proceedings before a referee or board of referees appointed under this Part of this Act by the Minister of Labour and National Service after consultation with the Lord Chancellor or, where the proceedings are held in Scotland, after consultation with the Secretary of State.")
10.4 p.m.
VISCOUNT ADDISON: My Lords, this is in order to clear the way for the compromise Amendment upon which we agreed, and which I propose to move. With regard to this, I beg to move that the House do not insist on the Amendment.
Moved, That this House do not insist on the Amendment to which the Commons have disagreed.—(Viscount Addison.)
VISCOUNT ADDISON VISCOUNT ADDISON moved, That this, House do agree to the first Amendment proposed by the Commons in lieu thereof. The noble Viscount said: My Lords, I beg to move that this House agree with the Amendments printed in italics. I should say, with regard to the second one, that unnecessary words have been introduced. It should end with the words, "Minister of Labour and National Service," because consultation with the Lord Chancellor, as provided elsewhere in the Arbitration Acts, does not apply to Scotland. Therefore the words are unnecessary. I beg to move that the House do agree with the first Amendment.
Moved, That this House do agree with the Commons in the said Amendment.—(Viscount Addison.)
VISCOUNT ADDISON: I beg to move that this House do agree with the Commons in the second Amendment with the proposed Amendment."
Moved, That this House do agree to the Amendment proposed by the Commons in lieu thereof with the following Amendment:
In the new clause proposed to be inserted after Clause 103, leave out from ("Service") to the end of the clause.—(Viscount Addison.)

LORDS AMENDMENT.
Clause 99, page 107, line 12, leave out from ("Service") to ("and") in line 13, and insert ("and such reference shall be deemed to be an arbitration within the meaning of the Arbitration Acts, 1889 to 1934, and the provisions of those Acts relating to statutory arbitrations shall apply to such reference and determination")
The Commons disagreed to this Amendment but proposed the following Amendment in lieu thereof:
Page 107, line 12, after ("Service") insert ("after consultation with the Lord Chancellor or, where the proceedings are to
730
be held in Scotland, after consultation with the Secretary of State").
VISCOUNT ADDISON: I beg to move that this House do not insist on the said Amendment to which the Commons have disagreed.
Moved, That this House do not insist on the Amendment to which the Commons have disagreed.—(Viscount Addison.)
VISCOUNT ADDISON: I beg b move that this House do agree with the Commons in the Amendment proposed in lieu.
Moved, That this House do agree to the Amendment proposed by the Commons in lieu thereof.—(Viscount Addison.)

LORDS AMENDMENT.
Clause 99, page 107, line 13, leave out ("that decision") and insert ("such determination").
The Commons disagreed to this Amendment for the following Reason:
Because the said Amendment is inconsistent with the Amendments proposed by the Commons in. lieu of the Lords Amendment in page 106, line 8.
VISCOUNT ADDISON: I beg to move that this House do not insist on the said Amendment.
Moved, That this House do not insist on the Amendment to which the Commons have disagreed.—(Viscount Addison.)

LORDS AMENDMENT.
Clause not, page 109, line 21, at end insert:
("(3) Any dispute between the Commission and an officer or servant as to whether any or what compensation is payable under this section or any regulation made thereunder shall be referred o a referee or board of referees appointed by the Minister of Labour and National Service for determination and such reference shall be deemed to be an arbitration within the meaning of the Arbitration Acts, 1889 to 1934, and the provisions of those Acts relating to statutory arbitrations shall apply to such reference and determination.")
The Commons disagreed to this Amendment for the following Reason:
Because the said Amendment is inconsistent with the Amendments proposed by the Commons in lieu of the Lords Amendment in page 106, line 8.
VISCOUNT ADDISON: I beg to move that this House do not insist on the said Amendment.
Moved, That this House do not insist on the Amendment to which the Commons have disagreed.—(Viscount Addison.)

LORDS AMENDMENT.
Clause page 109, line 24, leave out from ("compensation") to the end of subsection (3).
The Commons disagreed to this Amendment but proposed the following Amendment, in lieu thereof, to the words so restored to the Bill:
Page 109, line 34, after ("Service") insert ("after consultation with the Lord Chancellor or, where the proceedings are to be held in Scotland, after consultation with the Secretary of State").
VISCOUNT ADDISON: I beg to move that this House do not insist on the said Amendment.
Moved, That this House do not insist on the Amendment to which the Commons have disagreed.—(Viscount Addison.)
VISCOUNT ADDISON: I beg to move that this House do agree with the said Amendment proposed in lieu.
Moved, That this House do agree with the said Amendment proposed in lieu.—(Viscount Addison.)

LORDS AMENDMENT.
Eighth Schedule, page 142, line 52, leave out from ("cause") to end of line 3 on page 143, and insert ("in the case of a scheme under Part IV of this Act, a public local inquiry, or, in any other case, an inquiry, to be held with respect thereto by a person who is not a servant or officer of the Minister").
The Commons disagreed to this Amendment but proposed the following Amendments in lieu thereof:
Page 142, line 52, leave out ("inquiries to be made") and insert ("in the case of a scheme under Part IV of this Act, a public local inquiry, or, in any other case, an inquiry, to be held with respect thereto").
Page 143, line 1, leave out ("result of the inquiries,") and insert ("report of the person by whom the inquiry was held").
VISCOUNT ADDISON: I beg to move that we do not insist on the said Amendment.
Moved, That this House do not insist on the said Amendment to which the Commons have disagreed.—(Viscount Addison.)
VISCOUNT ADDISON: I beg to move that this House do agree with the Commons in their Amendments in lieu thereof. It concerns local inquiries and puts the Amendment in a better form.
Moved, That this House do agree with the Commons in the said Amendments.—(Viscount Addison.)
THE EARL OF SELKIRK: The Amendment as originally moved, sought to do three things. It sought in the first place to ensure an independent inquiry; secondly, to ensure that those who objected to the inquiry should know the case they had to meet; and thirdly that the report of the inquiry should be made public. There will be very big transactions, running into hundreds of millions of pounds in some cases. There will be inquiries dealing with the transfer of municipal undertakings and very large passenger transport undertakings of all kinds, and I submit that the nature of these inquiries is at the present time left open very unreasonably. The noble and learned Viscount, the Lord Chancellor, replied to these questions from a learned book. I subsequently found that he had quoted from a paragraph entitled Limitations to Committee's Recommendations. What he said was diametrically opposite to most of the recommendations in the Committee's Reports, which were very much on the lines of the three points mentioned in the Amendment which we originally agreed to in your Lordships' House.
My second point is this. The reasons given in the reply from the other place are that these inquiries are administrative. I think we are carrying it rather far when we say that the transfer to the Transport Commission of any large municipal undertaking in any part of the country is no more than an administrative act of the Minister of Transport. That is carrying it much too far. This is in fact nothing more nor less than streamlined legislation. This is what one normally finds carried out by an Act of Parliament, but here it is carried out simply by a Minister's fiat and, in fact, with or without an inquiry. I want to emphasize this point: that this business could go through with the most limited form of local public inquiry.
I would like to refer your Lordships to what the noble and learned Viscount, the Lord Chancellor, said when the spoke on

733
June 26, when I moved this Amendment. He said:
"Assuming the objector had a locus standi, he would obviously be entitled to appear either in person or by Counsel. It goes without saying that any witness who does give evidence in chief is subject to cross-examination—of course he is."
Then the Lord Chancellor said:
"Clause 120 of this Bill lays down that the inquiries held under this Bill are to be subject to Section 20 of the Ministry of Transport Act, 1919."
If we look at Clause 120 we find that it is permissive, that there is nothing to ensure that any form of normal judicial procedure would in fact be carried out. If we go to the Act of 1919, we find not one but two permissive conditions. That means to say that, before in fact the conditions which the Lord Chancellor recognizes as necessary can be carried out, there are three permissive stages. Can the noble Viscount the Leader of the House say that in carrying out these very big transactions there really will be a proper inquiry with the proper assurances that are required? I would like to receive the assurances I have mentioned: that there will be an independent inquiry, a case to be met, and publication. If the noble Viscount cannot grant that, will he ensure that any objector is allowed (1) to state his case, and (2), to cross-examine anyone who gives evidence? Those are two points on which I am now asking for positive assurance. If that assurance can be given—it is a late hour at which to discuss this question of assurance, I know—I think it would be some consolation. I submit that this is an important matter in which enormous sums of money are concerned, and the municipal corporations are greatly interested in the manner and way in which this scheme will be carried out.
VISCOUNT ADDISON: I cannot give the noble Earl assurances with regard to the legal procedures, on which I am not an authority, but I confess that I am profoundly disappointed at the noble Earl's speech, because I thought I had been doing something that he liked. I am profoundly shocked that apparently I have not. On the debate on the Report stage we arranged—largely through the insistence of the noble Earl—that the inquiry should be a public inquiry, and the Minister's report and order are to be made public. That question was debated at great length in this House but not as regards
734
the private confidential report of the person to the Minister—certainly not. We are opposed to that, and I should have to disagree with any such Amendment.
We took, I am sure, exhaustive precautions to see that the local inquiry should be public, that the evidence should be heard in public and that the local papers should come before the Minister. There would be a Minister's order on it and report to Parliament and everything would be considered and debated by Parliament. I cannot imagine any other series of procedures better calculated to ensure publicity in everything twat matters. As to how individual witnesses are to be treated, I am afraid I cannot give any assurance, as I really do not know. I suppose it will be in accordance with the practice at these inquiries. It might vary, but I am quite sure that every witness would be treated fairly—and if they were not there would be trouble, I have no doubt. What the precise procedure would be, I cannot say. It would vary, no doubt, according to the character of the inquiry. I am quite sure we have gone a long way, and I thought we had satisfied the noble Earl. We have tried to make the Amendment more explicit and readable. I can only say how disappointed I am that the noble Earl is still not satisfied.

LORDS AMENDMENT.
Eighth Schedule, page 143, line 3, at end, insert:
("(3) The person appointed to hold the inquiry shall make a report thereon in writing to the Minister, containing—

(a) his findings and conclusions as well as the reasons therefor, upon all the material issues of fact, liability or discretion involved in the exercise of the functions in respect of which the inquiry has beer caused to be held; and

(b) his recommendations in regard to the exercise of the said functions;

and copies of such report shall be made available on payment of a reasonable charge therefor, to the persons entitled to attend the inquiry. The Minister may, after considering such report, make the order either in the terms of the draft, or subject to such amendments, additions or modifications as the Minister thinks fit.")
The Commons disagreed to this Amendment for the following Reason:
Because the said Amendment might prejudice the proper performance by persons appointed to hold inquiries and by the Minister of their respective duties under the Bill.
VISCOUNT ADDISON: I move that, for the reasons I have already given, we do not insist.
Moved, That this House do not insist on the Amendment to which the Commons have disagreed.—(Viscount Addison.)

LORDS AMENDMENT.
Eighth Schedule, page 143, line 3, at end, insert:
("(3) The Commission shall appear at any such public local inquiry in favour of the scheme and any objector may appear and tender evidence. Any person appearing in favour of the scheme or any objector appearing at the inquiry shall be subject to cross examination.
(4) For the purpose of this Schedule the person appointed to hold such public local inquiry shall have the same powers as are granted to the Minister by section twenty of the Ministry of Transport Act, 1919.")
The Commons disagreed to this Amendment for the following Reason:
Because the said Amendment imposes an undue rigidity on the procedure to be followed at administrative inquiries.
VISCOUNT ADDISON: I move the same Motion here and for the same reason.
Moved, That this House do not insist on the Amendment to which the Commons have disagreed.—(Viscount Addison.)
THE EARL OF SELKIRK: May I ask the noble and learned Viscount the Lord Chancellor if he can repeat the assurance that he has given, that proper opportunity for cross-examining will in fact be given? This was stated in Hansard and the noble Leader of the House is unable to give that assurance. I think it is reasonable. This principle has been thrown overboard, and I think it is proper that we should take a note of it.
THE LORD CHANCELLOR: The noble Earl has asked for an assurance and quoted what was said on June 26. I wish he had given a little notice of
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his question. I have no doubt that on June 26 I was properly instructed, but I have had this matter brought to my attention only one moment ago, and I have not the least idea what I said on June 26. I can only hope that what I said was accurate and in accordance with the law, but it is quite impossible for me, here and now, to give an assurance as to some proposition with which we were then concerned, and on which on that occasion I was no doubt properly briefed. However, I may say this: that in a very long experience, I have never yet come across a case or a tribunal where a man gave evidence in chief and cross-examination was not allowed. I have never heard of such a thing, and, if it ever has taken place, it has not taken place to my knowledge.
THE EARL OF SELKIRK: May I remind the noble Lord—
VISCOUNT ADDISON: I must ask the noble Earl to obey the rules and orders of the House.
Bill returned to the Commons.

BUSINESS OF THE HOUSE.
VISCOUNT ADDISON: My Lords, before we adjourn, may I remind your Lordships that, owing to certain introductions, the House will meet to-morrow at two o'clock.

SUNDERLAND CORPORATION BILL. [H.L.]
SOUTHEND-ON-SEA CORPORATION BILL. [H.L.]
Returned from the Commons, agreed to, with Amendments: the said Amendments considered and agreed to.
House adjourned at twenty-one minutes after ten o'clock.