TRANSPORT BILL.

HL Deb 16 June 1947 vol 148 cc733-822

4.5 P.m.

Order of the Day for the House to be put into Committee read.

THE SECRETARY OF STATE FOR DOMINION AFFAIRS (VISCOUNT ADDISON)

My Lords, in moving that the House resolves itself into Committee to recommence our discussion on this Bill, perhaps I may be allowed, seeing that we have not the advantage of having the whole of the report of the proceedings of Thursday last, to suggest how we shall proceed. The noble Earl, Lord Radnor, was about to speak in continuation of the discussion on the Amendment of the noble Earl, Lord Dudley, which we had under discussion, and it might be convenient to your Lordships, so far as any further members of your Lordships' House wish to speak on the general question of the Amendment, that we should discuss that at the beginning of our proceedings; we might conclude the general discussion on compensation without prejudice to individual points which may be raised by later Amendments. I suggest that we should. confine ourselves to the point raised in the Amendment, having had the general discussion. I hope that will meet with your Lordships' convenience. I beg to move that we go into Committee.

Moved, That the House do now resolve itself into Committee.—(Viscount Addison.)

THE MARQUESS OF SALISBURY

If I may say so, I agree with the proposal of the noble Viscount, the Leader of the House. After all, we had already begun a general discussion on the Amendment, and I think it would be better to continue, and finish, that discussion on the particular Amendment; then we can come to the Amendment of the noble Lord, Lord Beveridge. We can discuss the specific point raised in it. I understand that there is one other Amendment which deals with the matter of compensation, but that it is on a different line. That is the Amendment of the noble Lord, Lord Balfour of Burleigh, after Clause 89, which, I think, is rather apart from the rest of he subject. I suggest that that might well be left over until it Es read in course of the Bill.

May I deal with one other point? I have a complaint from a noble Lord—a very reasonable complaint—about the OFFICIAL REPORT. A noble Lord who has taken, and intends to take, a prominent part in the discussion will not receive a copy of Hansard for Thursday evening until Tuesday morning. That seems to me very unsatisfactory. It is quite obvious that when we sit late the printers of the OFFICIAL REPORT cannot be expected to send the Report by the next morning, but I would have thought it ought to be possible for it to be in the hands of noble Lords by Saturday morning. I would like to make that point so that it may be looked into.

VISCOUNT ADDISON

I agree with the noble Marquess that we can discuss separately the point in regard to Lord Balfour of Burleigh's Amendment. With regard to the delivery of the OFFICIAL REPORT, steps have already been taken in that direction. I entirely agree with the noble Marquess in what he says, and I hope the difficulty will be overcome in future.

On Question, Motion agreed to. House in Committee accordingly.

[THE EARL OF DROGHEDA in the Chair.]

Clause 16 [Compensation]:

Debate resumed on the Amendment moved by the EARL OF DUDLEY on Thursday last, to insert in subsection (3) after "issue" the words "to the holders of the securities of the body in question."

THE EARL OF RADNOR

It is quite true that I was speaking at the end of our debate on Thursday. I did not say very much because the House resumed. I do not think any apology is needed for a fairly considerable discussion on this Amendment, especially in the general terns suggested, because the question of compensation to the railway stock holders is one which affects a large number of people, all of whom will be very hard hit, so far as their income is concerned, by the terms laid down by His Majesty's Government. I would remind the House that in this connexion His Majesty's Government are the beneficiary, so to speak, if they can get the stock cheaply, and they are dictating the terms upon which they will acquire the undertakings comprised in the Bill. A further reason why it needs a full discussion in your Lordships' house is that this particular question was, as I understand it, guillotined on the Committee stage in an-other place, and there was only a brief discussion on the Report stage.

I do not propose, if I can avoid it, to traverse ground which has already been covered in the discussion, but I think the noble Lord, Lord Nathan, when he was replying on Thursday evening, rather missed the point, that one of the fundamental things behind this Amendment is what we consider the definite unfairness to the railway stock holders. I do not wish to speak at length on it, but I would like to put before your Lordships exactly what will be the effect of the Amendment of my noble friend the Earl of Dudley. Under the Bill as it was drawn two dates were given, and the figures for compensation were based on whichever date the Stock Exchange quotation was the higher. In practically every case, I think I am right in saying, November, 1946, was one of the selected dates, and I would ask your Lordships to realize that November, 1946, was more than a year after the General Election, and therefore there had been ample time for nationalization, or the contemplation of nationalization to have its effect upon the Stock Exchange.

At the same time, the Chancellor of the Exchequer's cheap money policy had had the effect of raising capital values generally while lowering rates of interest. Rates of interest fell approximately from a 3 per cent. basis to a 2½ per cent. basis. So far as railway stocks were concerned, although there was a certain rise in capital values it was not comparable with that for other forms of seourities, in that the threat of nationalization over the railway undertakings checked any rise which the cheap money policy might have brought about. There was a rise sufficient to bring about the fact that in November, 1946, prices were higher than pre-Election prices. But there is a lower rate of interest with a certain higher capital value, and this is inherent in the Government's proposals in this Bill.

In the Amendment put forward by my noble friend the Earl of Dudley, the proposal is that pre-Election figures should be taken, with pre-Election rates of interest: That is to say, comparing like with like. I think that is a reasonable and entirely logical proposition. As it is now, you are taking November, 1946, prices for capital value, and you are to give interest rates at whatever the interest rate is on the date of issue. Whatever the interest rate may be—it may be higher than to-clay or lower—it is not in any case comparable with the date when the capital value is taken. The suggestion here is that the pre-Election rate of interest and pre-Election prices should prevail. That will mean that railway stock holders will receive rather less in capital value, and His Majesty's Government, or the Treasury, will he saved that amount of capital. At the same time, the railway stock holder will receive a slightly greater rate of interest, and will, therefore, not actually lose as much income as is budgetted for in this Bill. I think I am right in saying that, if the arrangements in this Bill go through, on the average, railway stock holders will lose 42 per cent. of their income. If the Amendment is accepted, they will lose 35½ per cent. of the income. The point I put is that this is a suggestion which is not only logical and fairer than the Government's proposal, but is unassailable.

It means, it is true, that the transport undertakings, so far as railways are concerned, will have to bear a slightly heavier interest charge than is contemplated in the Bill. The contemplated interest charge is very much lower than the railways have had to carry all along. In fact, it may be said that His Majesty's Government, by their proposals, are getting a very good bargain out of the Bill, even if they accept this Amendment. I hope that His Majesty's Government will consider this with great care. I assure them that there are a very large number of people who will suffer. It will not be only individual railway shareholders who will suffer. The actual numbers of railway shareholders of all classes, I think, total something in the neighbourhood of 800,000. But a very large proportion of the stockholders are trusts and trustees. The noble Lord, Lord Nathan, said that trust stocks are merely the safeguard of the trustee against unforeseen events. That probably is true in law, and I do not doubt it. On the other hand, trustees are not thinking only about their own skins; they are thinking of the people for whom they hold their funds, the people who are to benefit. I do wish His Majesty's Government would realize that there are a large number of people who will suffer, and suffer very considerably. In many cases they are people with very small fixed incomes, and they will suffer by reason of the lower incomes which will result from the operation of this Bill when it becomes law. If this Amendment is accepted, whilst the suffering will not be entirely removed, it will, at least, be slightly mitigated.

THE MINISTER OF CIVIL AVIATION (LORD NATHAN)

I have listened with great care and sympathy to the observation of the noble Earl who has just sat down, and I need scarcely tell your Lordships that the terms of compensation were the subject of most careful consideration by His Majesty's Government before they were incorporated into legislative form. The considerations which have been advanced by the noble Earl, Lord Dudley, by the noble Earl, Lord Radnor, and by other speakers in your Lordships' House, have been borne fully in mind. The amount of compensation the Government believe, presents a figure which is wholly reasonable and fair, so far as the capital amount is concerned. It is perfectly true, as has been said, that if the global figure, the over-all figure, of income be taken on the basis of Government stock at 2½ per cent., the income will be much less over-all than the income which has hitherto been paid during the past few years under the Government guarantee. Apart from the Government guarantee, it will be less than the figure of £36,000,000 when was the average for the pre-war years 1935–1937. But it would be rash to assume that the figure of £36,000,000 much less the figure of £38,000,000 to £40,000,000 which prevailed during the war, would continue in the period upon which we are now entering.

THE EARL OF DUDLEY

May I be allowed to interrupt here? Is that because the Government will fail in their policy of full employment? If they do not, the railways, obviously, will not suffer in the same way as before the war.

LORD NATHAN

The position at the present moment is that the payment of £38,000,000, as a fixed sum, involves the Government in finding money out of their own pocket in order to make up that payment. It might well be that unless there were a substantial increase in charges the over-all figure for income, if the railways were to continue without a Government guarantee, would be less than the sum which would accrue to the stockholders on the footing of British Transport stock. It would be rash to assume otherwise. In view of all those circumstances, and after giving—as the Government have given—most serious, prolonged and sympathetic consideration to the various points raised in this debate and outside this House, I find myself, on behalf of the Government, quite unable to accept the Amendment put forward by the noble Earl, Lord Dudley, supported as it is by the arguments of the noble Earl, Lord Radnor, to-day and those which were advanced in the debate of Thursday.

THE EARL OF DUDLEY

I find myself at a slight disadvantage in replying to Lord Nathan, because I have not a copy of the report of what he said on Thursday night. It is rather difficult to remember over the days which have intervened what was in the noble Lord's mind at that time, but, so far is I can remember, one of the arguments which he adduced against this Amendment was that the railway shareholders, or, at any rate, those who owned junior stock, would be very much better off by receiving in exchange Government stock, which presumably would be issued at 2½ per cent. It is perfectly true they will get a greater measure of security from Government stock, which is guaranteed in regard to both interest and capital, but the loss of income will be no less than 6o per cent. That is really not a fair exchange, and you cannot get away from it.

I think he referred, also, to railway debenture stocks, and I understood him to say that it was a good bargain to receive Government stock in exchange for railway debenture stock. In the case of railway debenture stock, the loss of income was 23 per cent. Can anyone really say that that is fair? I think those two instances show us the unfairness of the situation and the fallacy of the noble Lord's argument. The noble Lord, Lord Nathan, put forward a rather unsound argument when he argued that if the railways were to remain in private hands they would not be able to make the money that they were able to make in the years 1935 to 1938. If the country is again to be plunged into the difficulties which confronted the railways at that time, what hope is there, in any case, for the railways? As I said in my rather impertinent interruption, if the Government do not succeed in their policy of full employment, obviously that will react on the railways.

I would like to remind the noble Lord of the advantages that will accrue to the railways under the agreement now made with the road transport hauliers. In the days to which the noble Lord referred, there was no road-rail agreement, and that fact acted very severely on the railways. But now we have an agreement, something which the Government did not get. They have to beat the wretched road hauliers over the head to get their agreement. We have obtained a voluntary agreement which, if the railways had remained in private hands, would have reacted very much to their advantage. I think the noble Lord said in his argument against this Amendment that there was no precedent for making a Government issue at rates of interest which were current three years previously, which is what we are asking him to do. That may be so; but there is no objection to creating such a precedent. There is no precedent whatsoever for making a forced sale based on values of three years previously. We are merely asking "like for like." The noble Lord cannot say that I am asking for something unreasonable, when the Government are doing the unreasonable thing. As the noble Earl, Lord Radnor, said, there should be like for like, or a greater degree of fair play in this exchange which the Government are now forcing on the railway stockholders.

LORD BALFOUR OF BURLEIGH

My Lords, before we leave this Amendment may I impress on the Government one point which I think is the crux of the argument. Two alternative options were offered to the holders of railway stock; they concern the prices, first, at the pre-Election date and, secondly, at the post-Election date. Between those two dates there was a general rise in the price of securities, due to the fall of the rate of interest on Government securities. I do not pause to discuss the reason for that fall in the rate of interest, nor its merits, but between the two dates there was a rise in the prices, not only of Government securities but of many of those railway securities which are closely connected with the value of money. It is a matter of common fairness, if you are going to take the reduced yield due to the rise in securities at the second date, that you should consider giving to the shareholders the yield they would have obtained on Government securities had the option taken place at the first date. The rise in the value of securities has nothing to do with railway stockholders and was a fortuitous circumstance. I speak on the basis that I am convinced the Government want to be fair. I do not accuse them of deliberate unfairness, and if they want to be fair, this is a point to which they must give consideration.

THE EARL OF SELKIRK

My Lords, I should like to press the noble Lord on the point of trustee securities, to which he has not given an answer which is justified in the circumstances. If I remember rightly, he said last Thursday that the duty of the Trustee Act was only to exonerate trustees from responsibility. That is a very small part of the Trustee Act. If the intention of Parliament in passing the Trustee Act was simply to name a number of securities in which trustees could invest without being liable, they would have done so; but that is not what the Trustee Act does. It limits the investments in which trustees can invest. For that reason I contend that Parliament has towards trustee securities special obligations which do not exist to other securities.

I would like to give a comparison of that obligation. I will take the example, fairly well known in law, of the duties of proprietors of land to people who come on to that land. If a proprietor invites someone to come on to his land he has absolutely the duty to protect him against any danger. I do not say that the Trustee Act constitutes such a protection so far as guaranteed stock are concerned, but it would be a fair comparison. When a proprietor has permitted a person to come on the land—that is, not invited him but not prevented him from coming on to the land—he has a definite duty to protect such a person against injury by any hidden danger; and it includes the obligation that the proprietor shall not, by any action of his own, injure the person. I contend that trustee stock holders are injured in this case, by the action of the proprietor himself, in view of the fact that trustees are forbidden to go outside a particular list of securities. I beg the noble Lord to give further consideration to this before coming to a decision.

4.30 p.m.

VISCOUNT RIDLEY

I think this difficulty arises from the adoption of Stock Exchange prices as a basis of valuation. Once that is settled and becomes the method of calculation, there is always a discrepancy as to what prices will be from time to time, and what will be the relative values of gilt edged and various industrial stocks, Here we have a real difficulty arising from that point. I feel, as the noble Lord, Lord Balfour of Burleigh, felt, that there is apparently no intention of the Government to be unfair to the people who are being relieved of their holdings. It seems to me quite clear, with the change of yield on Government stocks from the time of the Election until now, that there is an obvious discrepancy between the price of these stocks which are to be nationalized. I cannot but think that some consideration might lead to an adjustment such as that suggested by the Amendment of the noble Earl, Lord Dudley.

THE MARQUESS OF SALISBURY

I think that the greater part of the noble Lords who wish to speak on this issue have now spoken their mind, and I want to say only one or two words in conclusion. I listened to the speech of the noble Lord, Lord Nathan, with a slight sense of shock. He seemed to be entirely unaware of the hardship which was being inflicted. He said, rather complacently, that the Government assessment of the capital value was quite a fair one. He admitted that the income would be lower, but he said it was not reasonable for holders to expect to receive the same income as they had received before. But this is not a case where we are dealing with willing sellers who are getting out of one security in order to invest in another for what they think good reasons. They are unwilling sellers. They are willing to go on as before, and now, quite suddenly, as a result of the political policy in which the Government are engaged, they are forced to exchange their shares for shares which produce a very much lower income than before. I would have thought there was an obligation on any Government to see that these unhappy people do not suffer.

The noble Lord, Lord Nathan, said that the Government would have to pay out of their own pockets. I thought that a rather strange phrase, and I drew a mental picture of the noble Viscount the Leader of the House and the noble Lord, Lord Nathan, forking, out millions and millions of pounds to the holders of these securities. Of course it is not the Government who have to pay; it is the community who have to pay. It is not only noble Lords opposite, but noble Lords on this side as well. We all have to do it, and I should think that the community might well consider, and would have considered if they had had the chance to consider the matter at all, that there was a moral obligation upon them, even at some sacrifice, to see that these members of the community, many of whom are extremely hard hit, should have a fair deal. In a matter of this kind this House can take no effective action to make the Government accept their views, but I would like, on behalf of noble Lords on this side—I am sure I speak for many members of the Liberal Party as well as the Conservative Party—to make a very strong protest at the severe injury which is being inflicted upon a very large number of people who can ill afford it.

I had a case the other day of a country vicar, a man with a large rambling vicarage, who has to keep up a decent appearance, who has to pay subscriptions and give as liberally as he can to many local funds. Now he finds his income is reduced from £500 a year to £300 a year. The sum of £6 a week is not an adequate amount to enable him to fulfil his obligations, even in a modest way. That seems to me a mean thing for any Government to have done to people who include the most highly respectable members of the population. In addition to trustees, there are colleges, trade unions, and friendly societies who have taken contributions from poor people; and these poor people may well have expected to have the benefit of their contributions in their hour of need. These things have been ruthlessly cut. I hope that the Government realize, in addition to these matters, that they are creating very great hardship by the basis of compensation upon which they have agreed. If they do not realize it now, I am quite sure they soon will.

On Question, Amendment negatived.

Amendment moved— Page 20, line 9, leave out from ("stock") to end of line Jo and insert ("of such amount as will yield interest on the values of the securities arrived at in accordance with the provisions of the next succeeding section at a rate equal to the average of the mean of the interest yield obtainable on reasonably comparable Government securities on the dates specified in subsection (1) of that section").—(The Earl of Dudley.)

On Question, Amendment negatived.

LORD BEVERIDGE moved, at the end of the proviso to subsection (3) to insert: Provided also that at any time before the 1st day of January nineteen hundred and fifty-seven any person to whom compensation is paid by issue of transport stock as aforesaid may by notice in writing given to the Commission require that the Commission shall purchase such stock from him at par.

The noble Lord said: I rise to move the Amendment standing in my name and in the names of the noble Viscount, Lord Wimborne, and the noble Lord, Lord Rea. It is to add a proviso to line 17 on page 20, at the end of Clause 16. The effect of this proviso is to give to every recipient of transport stock under the Bill the right for ten years to demand cash at par. The argument of the Government is that in taking over railway under- takings under this Bill they are paying for these undertakings the sums that have been determined by an impartial market as the fair value of these undertakings, being what the holder would get if the holder sold freely. I am not going over the question, which was exhaustively debated, but in the view of those who sit on these Benches and of those on this side of this House that argument from single free transactions to wholesale compulsion is most utterly unjustified.

What I am here to argue is that the Government are not even doing what the impartial market would do, because a sale in an impartial market is always a sale for money, and they are paying with stock, not money. They are doing that with nothing laid down as to the rate of interest of the stock, as to the date of the stock, or any of these other conditions which are likely to determine the value of the stock in future. All that is a secret kept in Government hands. The only thing that is quite certain from these transactions is that if nothing else is done, if the position is left as it is in the Bill at present, there will be in this stock the seeds of depression, of strong pressure (particularly at the beginning, and perhaps a continuing pressure) to sell; because it is common ground that what we are doing in this transaction is to reduce incomes by something like 40 per cent. People live by incomes, and many of those people who are suffering this reduction depend upon that income. It is of vital importance to them, and they will suffer a widespread loss. There will be a pressure to sell in order to see if they can get out of the stock and maintain that income. Many will be unable to do so, but all who can will try.

The Government themselves have used the arguments that if you feel you are not going to get enough income you can sell and buy an annuity and keep up your income. This has gone out from Government sources to individuals. If you do that, in the process of selling you will use selling pressure which will depreciate the value of the stock. It is the case that practically all the stocks are now below the taking-over value, and there are already signs of that pressure to sell. Of course, when the Government come to reveal the secret of the terms on which they are taking everybody's property forcibly, by Act of Parliament, practically without discussion, it is possible that the terms will be such as to maintain the value of the stocks. But we have no security for that.

I am bound to say, listening to the arguments that have been advanced by the spokesmen of the Government to this House on this compensation question, that it is difficult to see any sense of security or sense of justice in this matter. I do not want to go over again all the arguments—which I venture to say, with great respect, are bad arguments—used by the noble Lord, Lord Nathan, on this subject, but I do want to mention one as being typical. The noble Lord actually used the argument that under these proposals a certain number of people who have had no dividends for some years past will now get some dividends. May I suggest to the noble Lord that it is no justification for taking one pound from Peter to say that you are going to give one shilling back to Paul? That is the argument, and there is no justice in it. It may be social justice, as understood by the noble Lord, Lord Nathan, but it is not justice. Therefore, we on these Benches do not think the railway stock holders ought, in addition to having their property taken over on these very ungenerous and unjust terms, to be subjected to the liability of further loss being inflicted on them by the depreciation of their stock. This Amendment gives them an opportunity for ten years to demand cash in place of stock.

I never know all that the Government will say, but I think I may assume that here they will say it is impossible for them to contemplate undertaking a liability to produce cash instead of stock; that, in fact, on all these acquisition proposals the Government pay by stock and not by cash. To that argument there are two simple answers, both of them, I venture to say, decisive and in themselves unanswerable. The first is This. If the Government take the line that you cannot ask them, when making these big purchases, to borrow the money and to pay cash, then they should have thought of that before they adopted the method of fixing the amount of that debt which assumes a payment in cash and not in stock. If they had taken the normal procedure of going to an arbitration tribunal, they could have put to the arbitration tribunal the question: What, in all the circumstances, is it fair to give in new transport stock for these undertakings? That takes account of all that may happen in future. But the impartial market of the Stock Exchange, to which they have gone in preference to the arbitration tribunal knows only money; it does not value one stock against another. That is one answer. The other answer I would give is this. This Amendment does not, in practice, compel the Government to borrow money to pay cash. All it does is to put the Government under pressure to maintain the value of the stock that they issue. There is no doubt that if the Government car maintain the value of the stock they issue, and if they keep it up to par, or thereabout, there will not be a pressure to sell.

The Amendment, it accepted, compels the Government to fix fair terms for the stock. If it is rejected, like other Amendments, it means that the Government will insist on paying their debts under this Bill in a way for which I, personally, know of only one precedent in British history. That is the precedent of Henry VIII, when he owed money to his troops in Ireland, and the Government of that day solemnly resolved to coin a large amount of money, consisting almost entirely of lead, which was then used for paying the troops in Ireland. That depreciated in value. The Government, if this Bill stands as at present, will be issuing stock which has in it a seed of depreciation as surely as that money of Henry VIII had in it a seed of depreciation and corruption. I urge the Government to consider this most seriously. If they pay in the way they propos?, they will not be doing anything that approaches justice. It will, I venture to say—although I do not like to use strong words—approach near to highway robbery I beg to move.

Amendment moved— Page 20, line 17, at end, insert the said proviso.—(Lord Beveridge.)

VISCOUNT MAUGHAM

I wish to add only a few words to the cogent speech which my noble friend has just delivered. I believe that never in the history of the world has there been a case of sale and purchase—or, at any rate, a case of sale and purchase where any large substance is at stake—in which what the vendor got is an article of unknown value which may, at the will of the purchaser, become practically worthless. In this case we are not told—unless some such Amendment as that which the noble Lord has put forward is passed—what this stock will be worth at the date when it is transferred. For my part, I think by far the best method of ensuring that it is at least worth par at the time it is delivered is by some such addition to the Bill as the noble Lord suggests. It is perfectly true that it can be done with something less than the precise terms of the noble Lord's Amendment.

I do not know that I would want to insist on a ten year period during which the Government ought to pay par for the stock in question; I should be content with something much milder. But I do protest in the strongest possible way against this enormous transaction of purchase and sale going through without the holders of railway stock and debentures having any guarantee that what they are to get is worth par at the time they get it. I think something ought to be done to prevent that being effected. I can quite understand that it is not the intention of the Government to give the railway stock holders a rate of interest so small that nothing like par will be obtained. But, after all, this is to be an Act of Parliament, and I do not know of any case in which the Government have played a confidence trick on the people by saying: "You must trust us to give you something that will be at the value of par." I strongly object to the Government leaving us in the dark in that way, and being unwilling to state the rate of interest, or in any way to promise, even for a short time, to redeem this stock at par if they are called upon to do so.

4.50 p.m.

VISCOUNT SWINTON

Before the Government reply I would like to reinforce the appeal that has been made to them. I would beg of them not just to ride over this Amendment with destructive criticism of its terms. If the Government do not like the Amendment, either in principle or in detail, I would ask them to tell us what they are prepared to do in order to give something approaching a square deal to the people who are to be compulsorily bought out. The proposals which are now made are wry good examples of what happens when well established principles are departed from, and a basis of compensation which is demonstrably unfair is settled and is forced. I do not think this last Amendment is at all unreasonable. Certainly when one comes to irredeemable deben- tures—to put it at its lowest—no one could pretend that the Government proposal is not grossly unfair. No one would dream of taking those terms. The people who have deliberately bought trustee stocks, such as charitable trusts—whom the Government protect and have always protected by a freedom from Income Tax—have, of course, bought that kind of security because it is irredeemable and because they believe that they will go on enjoying their income practically in perpetuity. Let your Lordships observe that this Amendment, whatever may be the criticism of its details, is not a proposal to increase the amount of compensation which is payable. It accepts the grossly unjust and unfair measure of compensation which the Government are forcing through in this Bill. What it does say is: "By this means, or by some better means if you can suggest it, give some security to the people who are having their property confiscated that they will receive and retain what you are purporting to give them in payment for it."

I would appeal to the noble Lord,' Lord Nathan, who. delivered a long, if not wholly convincing speech before we adjourned last time—I have not the Hansard report because it is in the part which we shall not receive until to-morrow morning. But in my recollection—and the House will certainly correct me if I am wrong—what the noble Lord said was this: "The natural way, the normal way, and the right way, when you are buying people out compulsorily, is to give them cash, and that is what would ordinarily be done. We cannot give them cash on this occasion because to give £900,000,000 or £1,000,000,000 in cash, when production in the country is so low, would mean further inflation; and therefore we must pay in stock" —I am not at all misrepresenting the noble Lord's argument. Therefore, this is really a payment of a stock which is intended to put the recipient in exactly the same position, or as nearly as possible in the same position, as if you paid him out in cash. "But," say the Government, "for our advantage, in order that our policy and the national policy may not be prejudiced by further inflation, we want the holder of this stock to continue to hold it." Well, of course, you can, I suppose, in a slave State ultimately say, "Nobody is to be allowed to sell anything and you must stay where you are." But in any decent community, surely the right and fair thing to do, if you want the man to hold the stock—in your interest and not in his—is to say to him, "I am going to see that that stock retains its value."

Observe again that everything in this matter is in the Government's hands, and the wretched stockholder has no means of affecting the market. The man who can control the market, and who does in fact control the gilt-edged market to-day is the Chancellor of the Exchequer. If he wishes to make the stock hold its value there is one way of doing it which is perfectly well known, and that is to go in and support the market. The fact that be has not been doing it lately must make people all the more anxious as to what they are going to get, and certainly leaves us with the right to be informed by the Government what they are going to get. I do not know, but the noble Lord will tell us when he replies. He said that the assumption has always been that this will be on a 2½ per cent. basis. I understand that stock—I am not quite sure, because one gets mixed up between this Bill and the Electricity Bill—is to Lave a term of redeemability in the year 2,000. Is that not right?

LORD BEVERIDGE

There is nothing said at all.

VISCOUNT SWINTON

Then it may not even be the year 2,000. Though that is a good way ahead, and this Government will have passed away. The noble Lord, Lord Beveridge, corrects me and says that we have not even this millennium to look forward to. Let us look a little nearer. What do Consols stand at to-day? I have not looked at the list, but I should think it is 95 or a little under 95. The noble Lord, Lord Walkden, is always so well informed. He is very optimistic, and he told me last time that everything was going to go up and up. I have been making some investigations as to the extraordinary story he told us last time as to what was going to happen, but we will come to that later on. What is going to be done to these unhappy people? At what rate is this stock going to be issued? Again, we come back to the "scheme hereafter to be revealed.' Perhaps the noble Lord likes a more modern metaphor: If ever there was a case of buying a pig in a poke, this is one. It is grossly unfair.

The Chancellor of the Exchequer no doubt wishes to make good terms for him- self in regard to the rate at which this stock is going to be issued. What is a fair deal on an appointed day—some arbitrarily fixed day—on which it will he decided at what price these people are to have stock issued, which, incidentally, they probably will not receive for two years, but which they will deal in as an option? The Chancellor of the Exchequer can make the Act wholly artificial if he likes to go in with all the resources of the Government Departments behind him, and all the money they have clawed away from the banks on Deposit Receipts or raised on short term borrowings. If he likes to go in before the appointed clay, fixed not by an independent arbitrator, some wise accountant or someone sitting with somebody like Lord Greene, the Chancellor of the Exchequer can perfectly well go in and "support the market"—I use the most anodyne term (I could use a stronger one) in describing what such a transaction would be. Suppose he goes in and supports the market, as he perfectly well can. He then issues this £1,000,000,000 of new 2½ per cent. stock. He then lets the market flop, and the wretched people who may have been issued with 2½ per cent. stock at 99 find that in a few days the price has fallen to 95.

The noble Lord, in defending this Bill and his compensation provisions, said "Of course you ought to take much lower rates of interest than you have had in the past on investments in railways; of course you would not get the rates of interest on your money you had then." I do not know why. I am not sure, when it comes to the higher preference stocks and the debentures, that either in my private capacity or as a charitable trustee I would not prefer to invest in railway debentures rather than in the Chancellor of the Exchequer's gilt edged issues at the present moment.

The noble Lord, Lord Nathan, said last time, "You must be content to take a lower rate of interest; railway interests would have been very uncertain; what we are giving you to compensate you for taking the lower rate of interest is this invaluable security that you are going to get—the security of the Government." Do not let us bemuse ourselves with terms. If that security means anything it means that you, who are paying these people out against their will, are to maintain the value of what you give them in return. There is only one way of doing that, and it is well within your capacity to do it. You say you arc promising security. The question is whether you are not making a fraudulent offer to these people whose possessions you are to take over or if it is not a fraudulent offer, it is an offer which no business man would accept, and which no trustee would be justified in accepting in the discharge of his trust. I will put it like that. I ask the Government not to come in just to criticize the noble Lord, Lord Beveridge. Ten years may be too long. You may say that everyone should not throw his stock on the market. The answer is: Maintain the market at par or slightly above par, and then there would be an inducement to people not to. What we are entitled to ask from the Government, here and now, is: What are you going to do to maintain your own credit and redeem your own pledge?

LORD NATHAN

The noble Viscount quite accurately represented me when he said that an argument advanced on an earlier occasion, in regard to compensation, was that cash should not be paid for the reasons that he indicated—the inflationary results that would ensue. The Amendment moved by the noble Lord, Lord Beveridge, is tantamount to requiring the payment in cash if it gives to the holder of stock an option at any time within ten years to call for payment at par. This, of course, is a unilateral option; it is also an option which would involve holding in terrorem over the Commission, over a period of ten years, the possibility of being called upon on the moment to find a sum of anything up to £1,000,000,000 or even more. It would have many of the results of making payment in cash.

The noble Viscount, Lord Swinton, and also the noble and learned Viscount, Lord Maugham, asked for some particulars regarding the stock that would be issued. If noble Lords will refer to Clause 89 of the Bill, subsection (2), they will find these words: The British Transport stock which is to be created and issued … in satisfaction of a claim to compensation … shall subject to the provisions of the Fifth Schedule to this Act be such stock as is, in the opinion of the Treasury, equal in value at the date of the issue to that amount, regard being had to the market value of government securities at that date. There is the provision as to how in principle the amount of the compensation is to be ascertained— "regard being had to the market value of Government securities at that date."

VISCOUNT SWINTON

I had read that clause, several times. That is not in the least an answer to what I asked. The whole gravamen of my argument was that you are to issue stock at a price which the Chancellor of the Exchequer thinks bears a fair relation to Government stocks at the date. Will the noble Lord deal with the point I made, that the Chancellor of the Exchequer controls gilt edged and that he could come in and support the market for a week, a fortnight, or a month, before the issue and put the stocks up four or five points and then leave the market—and back the prices sag.

LORD NATHAN

In justice I would reply that in a matter of this importance, involving such amounts and so many people, the noble Viscount may safely leave it to the Chancellor of the Exchequer and the Government to have a sense of propriety and justice in carrying out the provisions set out in the Statute. Another point I wish to make is this. I said that this was a unilateral option. There has been no suggestion on the part of the noble Lord, Lord Beveridge, that should Government credit improve so much that these securities attain a premium above the issue price, the stockholders should make a payment to the Government. An arrangement put forward along these lines might be in accordance with a not unusual practice in business. But I cannot regard as being either good or sound business the proposal contained in this Amendment, which, for that reason, I am unable to accept.

5.10 p.m.

LORD BEVERIDGE

I am going to ask leave in a moment to withdraw this Amendment, though not because I am satisfied by the argument of the noble Lord who has just sat down. May I suggest to him that he has not touched the point at all, that the Government have fixed their liabilities under this Bill in terms which assume the demand of cash, and that the only conceivable justification is that they give the market value. They will not accept the liability to keep their stock up to its cash value. Therefore his argument has not touched my argument at all; nor if I may say so, has he touched the argument that the Government would not have to pay cash if they kept the value of the stock up to par, or above it. I shall not ask leave to withdraw this Amendment because I am convinced by anything whatever in that answer by the Government, but because we all realize that this is a matter in which the decision ultimately rests with the Government, and can only rest with the Government. It is a question of money. On Thursday night it was quite clear that if we had gone to a vote the Amendment which I moved then would have been carried by a very large majority; and that would have been not a mechanical majority but a majority of conviction. That would have been unfortunate because it would have raised a large number of hopes in people who are in grave unhappiness. Those hopes would have lifted them out of their unhappiness. Because it touches money it is a matter in which the decision is in the hands of the Government, to do justice not on behalf of the Government but on the behalf of the community as a whole.

Before I sit down, speaking from these Benches, as one who supports the principle of nationalization, and who realizes that for many noble Lords opposite this Bill is the end of a great crusade on which they have been engaged for many years, may I appeal not to the noble Lord who has had the thankless task of trying to defend an indefensible position, but to those who really make the policy of the Labour Government, to consider—and there is still time to consider—whether it is necessary for them to do this grave injustice, to inflict this widespread hardship upon tens of thousands of helpless people? I would ask them to consider whether they must end their crusade by inflicting this immense and certain hardship. There is no question about that, and I think it is equally certain that posterity will condemn what they are proposing to do at the present as unjust I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Clause 16 agreed to.

Clause 17:

Valuation of securities for compensation purposes.

(3) The values of the securities specified in Part II of the said Fourth Schedule shall be such as may be determined, on the application of the Commission (which shall be made as soon as may be after the passing of this Act) by the arbitration tribunal established under Part VIII of this Act, after giving to the holders of the securities in question an opportunity of being heard:

Provided that— (c) the holder of any securities of a body may appoint the directors of the body to act as his representatives for the purpose of being heard in any proceedings with respect to those securities before the arbitration tribunal; and where Each an appointment is made the arbitration tribunal shall hear the directors instead of that holder.

THE EARL OF DUDLEY

moved, in subsection (3) (c) to leave out "appoint." The noble Earl said: May I speak on the next four Amendments standing in my name? When this Bill was originally drafted and deposited no machinery was embodied in it for valuing the unquoted railway stocks set out in Part II of the Fourth Schedule. And when the Bill reached the Committee stage in another place machinery was set up for sending these unquoted stocks to a tribunal for valuation. Then, when it came to the Report stage, an Amendment was inserted by the Government allowing the owners of such stocks to get the directors of the railway to represent them before the tribunal, when the hearing came before the tribunal for the valuation of those stocks. That was a welcome addition to the machinery of the Bill. It is not quite clear from the paragraph as it now stands whether the holders of those unquoted securities have the right to appoint the directors to represent them on their behalf at the tribunal, irrespective of whether the directors are willing or not to act for them. There might be cases in which it would be undesirable for the directors to represent certain holders of stocks—where their demands are unreasonable, where they were not very good characters, or for any other reason. Of course, it should not be that the directors must represent them, regardless of whether their demand was a sound one or not, and therefore the object of the first three of my Amendments is to see to it that the directors do not have to represent the undesirable applicants if they are not the right persons.

The last Amendment asks that reasonable costs should be borne, in cases where costs have been incurred in respect of these arbitration proceedings, by the Commission. It is obviously unfair that the costs should fall on to the shoulders of the stockholders and that they should be put into a worse position than the holders of the quoted stocks. Of course, it is equally unfair that such burden should be placed upon the shoulders of the directors, and therefore it is obviously right that reasonable costs should be borne by the Commission. I hope that the Government will accept this Amendment so that we can get on to the next business. I beg to move.

Amendment moved— Page 21, line 37, leave out ("appoint").—(The Earl of Dudley.)

LORD NATHAN

There is really no difference between the noble Earl and myself. It is obviously necessary that the stock holders should have a representative to carry through these negotiations or transactions before the arbitral tribunal, and I understand that duty is accepted in general by the directors. It is merely a question of re-phrasing. Therefore I have pleasure in accepting the Amendment. I gather that the noble Earl at the same time is moving the Amendment on the Order Paper at line 43. I do not think I can accept it quite in the terms in which it is printed, but if the noble Earl would agree to some slight modification I will readily accept it. The words which I would suggest to him are these: "The reasonable costs incurred by the directors as such representatives in connexion…," and so on, as on the Paper. If the noble Earl could move the Amendment in those terms I would willingly accept it.

THE EARL OF DUDLEY

I am much obliged to the noble Lord for accepting this Amendment. The variation which he proposes suffices very well indeed. I am most grateful.

On Question, Amendment agreed to.

Amendment moved— Page 21, line 37, after ("may") insert ("with the consent of").—(The Earl of Dudley.)

On Question, Amendment agreed to.

Amendment moved— Page 21, line 38, after ("body") insert ("appoint them.").—"(The Earl of Dudley.)

On Question, Amendment agreed to.

Amendment moved— Page 21, line 43, at end insert: (" (d) The reasonable costs incurred by the directors as such representatives in connexion with any proceedings before the Arbitration Tribunal under the provisions of this subsection shall be paid by the Commission.")—(The Earl of Dudley.)

On Question, Amendment agreed to.

LORD RANKEILLOUR

On a point of Order, may I say that I handed in a manuscript Amendment for a new clause at this point, but as it has not been circulated, and can quite well fit in at a late, stage, I will postpone it until after Clause 28.

Clause 17, as amended, agreed to.

Clause 18:

Suspension of dividend payments, etc.

(3) If any interest is paid, or any dividend declared or paid, or any repayment or distribution of capital is made in contravention of this section by any body, all the directors of the body shall be jointly and severally liable to make good to the Commission any damage which the Commission suffer by reason of the declaration or payment.

VISCOUNT MAUGHAM

rose to speak on an Amendment of which notice had been given, to insert at the end of subsection (3): provided that no such person shall be liable under the provisions of this subsection if he shows that he had reasonable grounds to believe and did believe that a competent and reliable person was charged with the duty of seeing that the provisions were complied with and was in a position to discharge that duty. The noble and learned Viscount said: I have been asked to put forward this Amendment, and I ask leave of the Committee slightly to alter its form. The substance of it is this. Directors are prohibited, in effect, from making certain interest payments or declaring dividends contrary to the provisions of Clause 18. If you read this carefully, you will see at once that there may be some question as to whether, in fact, a particular payment of interest or of dividend is within the subsection or is not caught by it. The liability that is imposed on the directors if the interest is paid or dividend declared contrary to the subsection is that all the directors of the body shall be jointly and severally liable to make good to the Commission any damage which the Commission suffer by reason of the declaration or payment.

When the Companies Bill was before the Committee I had occasion to explain the very great difficulties that followed from imposing on directors a liability to see that accounts or matters of finance and so on were in a particular form and complied with particular directions. I did so for these and many other reasons. Although this subsection makes all directors jointly and severally liable, some may be abroad, some may not be present when the payment in question is resolved upon, and some may have no knowledge whatever of the details of finance which would justify their expressing an opinion on the matter of declaration of dividend or anything of that kind. As I pointed out when the Companies Bill was being considered, there may be technical directors appointed to look after some particular branch, such as salesmanship, or the construction of machines, or things of that sort. Accordingly, this Committee was fully convinced, on the Companies Bill being considered, that it was necessary, in effect, to so word the relevant provision that a director who acted honestly and reasonably on the authority and advice given by a competent and reliable person whose duty it was to see that the provisions were complied with, was to be freed from blame. A great deal of consideration was given as to the form of it. The noble and learned Viscount, the Lord Chancellor, took part in this consideration and I had a number of interviews with various people whom I am not sure it is right to mention now. In the end, we decided to insert a provision in the Companies Act such as it is now sought to insert in this Bill in somewhat similar circumstances.

LORD NATHAN

I am very unwilling to interrupt the noble and learned Viscount but it would he a great convenience to me, and perhaps to other noble Lords, if the noble and learned Viscount would mention the context in the Companies' Bill to which the Amendment referred which is the subject of his observations.

VISCOUNT MAUGHAM

I will, if I can do it accurately without having the documents before me. The context was this. The Bill largely increased the prohibitions on making certain payments in connexion with dividends, and insisted on the necessity of inserting in the accounts of the companies a large number of details that were not requisite under the previous law. Most of those provisions had been suggested by the departmental Committee that sat under Lord Justice Cohen, as he now is. That Committee had recommended that these alterations should be made in the accounts. Then there was a clause which made directors prima facie liable if they did not comply with those somewhat complex provisions. It was upon that that a number of people intimately connected with the working of companies said: "We cannot possibly say whether provisions of that sort are being complied with, because we leave that to the accountants." In some cases it was pointed out that it would take many clays for a director to satisfy himself that there was no contravention of the subsections that were proposed to be inserted in the new Bill. I hope that that is sufficient for the Committee.

In this Bill, the things that are prohibited are, of course, more of a temporary nature. Indeed, I think that they are entirely of a temporary nature. They refer to suspension of dividend payments in certain circumstances and repayment and distribution of capital after the passing of the Act. Now it is there, I think that some provision is needed for the protection of directors. This is the clause I propose to amend, subject to the consent of the Committee. The substance of the alteration is simply this: that directors who rely on competent and reliable persons charged with the duty of looking into the matter (who will generally be professional accountants) and act on their advice, will be free from blame. The Amendment as drafted suggested that if a director had reasonable ground to believe a competent and reliable person—which in the natural way would mean the ordinary auditor of the company—was charged with the duty, that was all that was necessary. But I do not think that is quite what the clause in the Companies Bill effected. I would suggest that this is the form which it should follow: Page 23, line 3, at end insert "provided that no such person shall be liable under the provisions of this subsection if he shows that he had reasonable grounds to believe and did believe"— and here I insert the words "on the advice of"— on the advice of a competent and reliable person charged with the duty of seeing that the provisions were complied with and was in a position to discharge that duty that the same were complied with"— in other words, that it was, reasonable to believe and the director did believe on such advice that the provisions of the subsection were complied with. That is exactly what is necessary, I think, to relieve an honest director acting on the advice of an auditor whom he believes to be competent and reliable. I offer the Amendment, with some confidence, for the consideration of the noble Lord who replies for the Government.

Amendment moved— Page 23, line 3, at end insert ("provided that no such person shall be liable under the provisions of this subsection if he shows that he had reasonable grounds to believe and did believe on the advice of a competent and reliable person charged with the duty of seeing that the provisions were complied with and was in a position to discharge that duty, that the same were complied with.").—(Viscount Maugham.)

VISCOUNT SIMON

I thank the noble Viscount, Lord Maugham, for being good enough to undertake to move this Amendment. He is more familiar with what was done in the Companies Bill than I am. He has very clearly explained the point. The noble Lord who is to deal with this will observe that Clause i8 begins with a prohibition but follows with a qualification of that provision. If you come within proviso (a) then the main prohibition at the beginning of the clause is not applied to you. I think you will agree that it is a very hard measure to say that any and every director of the body in question shall be jointly and severally liable, because the noble Lord knows and I know that everyone is liable to pay the full amount. To work the clause fairly, I would suggest, on the analogy of the Companies Bill, that it would be reasonable to give protection to directors who are perfectly honest in the matter and who act on the advice of company advisers. I do not doubt the noble Lord will look at the matter sympathetically.

LORD NATHAN

I have been reading the Amendment as it appears with the modifications suggested by the noble and learned Viscount, Lord Maugham, which, if I understand it correctly, would mean, to take the example which he gave, that if the accountant or auditor of a company were to give certain advice as to the actions of the directors not in consonance with the provisions of the Bill, the directors would be excused from liability even if it were ultimately to appear that action was taken on a mistaken view of the Bill.

VISCOUNT SIMON

Of the facts.

LORD NATHAN

Of the facts. In other words, it seems to me by this Amendment the responsibility would be shifted from the directors of a company, who are the officers of the company, to the auditor or accountant, who is a professional man employed by the company and who owes to the company no greater duty than to give his best and most competent professional advice. The relations of director to a company and auditor to a company are by no means the same thing.

VISCOUNT MAUGHAM

Though I said the adviser would be the auditor I did not mean to say he was the only person. The sort of instance I would like the noble Lord to deal with is this. The first thing which is not prevented is the payment of any sum which becomes due and payable before the passing of this Bill. Suppose there is such a sum—the ordinary director. does not know; that is not his business. If some responsible person does know and tells him, he is justified in accepting his advice.

LORD NATHAN

That would seem to one to involve an entirely new doctrine: that a director of a company is able to shift his duties and obligations to the company under a Statute on to another person. The noble and learned Viscount may say that was done by virtue of an Amendment to the Companies Bill. If my recollection is correct, and I am grateful to the noble Viscount for reminding me of the context, there was in the Companies Bill a penal provision, in the case of default involving a prosecution—a very different matter from this. Moreover, the Companies Bill referred to particulars that should appear in the accounts of a company. This relates to the suspension of dividend payments.

VISCOUNT MAUGHAM

Not only that.

LORD NATHAN

This relates to matters which are within the responsibility of directors and within the responsibility of no one but directors, a responsibility which, if I understand it, a director can by no means delegate. If you take these provisions as a whole or individually they are all matters on which the directors must pronounce and on which no one else can pronounce before any action is taken. If it is a question of declaring a dividend, this is a matter which can only be done at all events following on a resolution of the directors. The question of distribution of capital is scarcely a matter which could be dealt with otherwise than on the authority of the directors.

There are also in the proviso certain qualifications, and then in Clause 19 of this Bill there are exceptions to the generality of the provisions contained in Clause 18. But no payments there authorized can be made except by and under the authority of the directors acting as such, and it does not seem to me, as at present advised, that a director who makes or is a party to the making of such payments as I mentioned, where wrongfully made, can possibly shift his own responsibility on to the shoulders either of an employee or a professional adviser. Moreover, be it noted that under the provision in Clause 18 no penal obligation arises in the nature of a prosecution; it is a financial obligation which may arise following upon a failure to comply with the provisions. I cannot myself think that directors would be able or wish to shift their responsibility in matters of this kind on to the shoulders of others. It is a novel proposal to me.

VISCOUNT SIMON

I quite appreciate that the matter may need to be looked into, but the sort of instance which occurs to me, merely reading the words, is this—and we shall not get anywhere if we speak only in general terms. The noble Lord will have observed that the proviso is in regard to the payment of interest. I assume that boards of directors know when a dividends declared. The result is that dividend warrants are sent out, and there is no actual payment of the dividend to a particular shareholder until in fact he receives and cashes the dividend warrant. The proviso is that there is to be nothing wrong with it, even if the dividend has been previously declared, if the only reason why payment was not made before the passing of the Act was: that there had not been sufficient time for the making of the payment or that it had not been possible to discover the person entitled thereto, or that the title to the payment had not been established or that a cheque or warrant issued for the purpose of effecting the payment had not been encashed. We will assume the Act has passed. The general provision of Clause 18 is that from that moment no interest shall be paid, and no dividend shall be paid. Therefore, anyone who acts to the contrary would be wrong. But there is a proviso, in the nature of an exception, that if the reason is that the cheque or warrant has not been cashed, or that the particular person cannot be traced, then no wrong is done. But is it reasonable to say the burden for finding that out ought, in common sense, to fall upon any and every director? I cannot believe it; it is essentially one of those matters inside the administration of the company, and it would be wrong to make the directors, who are straightforward and honest people, answerable because such an accident has happened. I am not asking the noble Lord to accept the Amendment now, because obviously he feels doubtful. But I suggest that it is worthy of consideration, and I am sure my noble friends on this side of the House, like those responsible for the Bill on the other side, desire only to have the Bill in a perfectly proper form.

VISCOUNT MAUGHAM

May I also say a word again on this? I do so with this excuse—that this is the sort of matter on which I have spent about twenty years of my life, and I think that the noble Lord has not quite appreciated the nature of the case which lies behind this Amendment. The clause prohibits any interest being "paid or payable … after the passing of this Act on or in respect of any of the securities of that body." The next thing is that no dividend shall be declared or paid, but with a proviso that "any dividend duly declared before, but not payable till after the passing of this Act" can be paid. Then there is the provision that no payment or distribution of capital shall be made after the passing of the Act.

There are, in the case of many companies, thousands of debts paid every day, and no director of whom I have ever heard goes through the debts to find out when they were due and payable. The question of whether a vast amount of debts of the ordinary commercial kind do become so payable before a certain date is not a question for the directors to determine; it is left to an accountant, or, it may be, a first-rate or some of the officials of the company, to find out what debts do become due and payable. It might involve looking into the nature of the contract, or looking up a hundred documents. No director ought to be asked to do that, or ought to be personally liable if debts were paid which were due and payable the day after the Act became law, instead of the day before. Take the question of the distribution of capital after the passing of the Act. That might involve questions of law which directors are not supposed or intended to know, and they have to be advised. A solicitor or a barrister has constantly to advise people whether a payment is one of interest or capital, and those who have sat in the ultimate Court of Appeal have had to determine the most difficult questions as to what is interest and what is capital.

There are other matters of that sort, which, I venture to think, are matters of detail. I have mentioned the strongest, but there are also other matters of detail upon which directors cannot be expected to find out the facts for themselves. Suppose a list of payments is put before a director with a statement that the sums have not been paid because it has been impossible to discover the person entitled thereto until the day after the Act became law. A director is not bound to look into that sort of matter; he leaves that to the secretary of the company, or, if the matter is difficult, somebody asks the solicitor of the company to advise. It is inconceivable to me that the directors of a company can be expected, for the purposes of this Bill, to go into an infinity of matters, which may take them weeks finally to resolve, when the ordinary practice of companies all over the world has been to act upon advice. That is the only way in which they can do their duty. I was surprised to hear the noble Lord say that, so far as he knew, there was no authority for directors handing over their responsibility to others. But the books are full of cases in which directors, before the recent Companies Bill, have been held to be absolved from any liability because they acted upon the advice of reasonable people.

There is the great judgment of the first Lord Halsbury, in which he pointed out that business cannot be done if directors of companies which own £1,000,000 capital were not entitled to rely upon the advice of people who were concerned with the working of the company, and who were supposed to be acting honestly and to be decent honest people themselves. The great case in which he decided that was the Walsh Bank case, a case which anybody connected with Company Law ought to remember. The directors in this case were being charged with the payment of an enormous sum out of capital when they had no business to make such a payment. They were absolved in the House of Lords, in a decision, overriding, if my memory serves me, a decision of the Court of Appeal. They were absolved on the ground that an auditor who was supposed to be honest and competent had advised them that the sum was a proper one. That was a justification for the action of the directors, and it has been held to be the law ever since that people in the position of directors, doing their best for the interest of the company, are always entitled, unless they have some reason to think to the contrary, to rely upon the advice of honest and decent people—whether they are auditors, solicitors, or I will add, barristers and secretaries of the company. It is the only way in which business can be done.

I therefore urge the noble Lord to reconsider this matter. We are told that a similar clause was agreed to in the Companies Bill, which fortunately, owing to somebody's courtesy, I have had put into my hands. The clause in the Companies Bill, as it is now, is Clause 19. It is a general provision as to the liability of directors for defective accounts—accounts for which, after all, the directors have had the responsibility of putting before the shareholders; and they, or some of them, have signed the accounts. Yet they are freed from liability if they have reasonable grounds to believe, and do believe, that a competent and reliable person was charged with the duty of seeing that that provision was complied with, and was in a position to discharge that duty. Those words are inserted, in substance, in the present Amendment, and I earnestly urge His Majesty's Government to reconsider the matter. If they are not willing to do that, I confess that I should be very much inclined to insist on a Division, because I am perfectly confident that this clause, or a clause to the same effect, is necessary to make sense of this part of the Bill.

LORD NATHAN

I am obliged to the noble and learned Viscount for speaking a little more specifically upon the subject matter of the clause in the Companies Bill, because it makes it quite clear that the subject matter then discussed was entirely different from the subject matter now under discussion. The arguments, which seem to me to have been well directed to the Amendment in the Companies Bill, do not seem to me to apply with the same force to the situation with which we are dealing to-day. I think the noble and learned Viscount, Lord Maugham, was under the impression that this clause covered a wider field than in fact is the case. It does not deal with the generality of the liabilities of a company, so that a director would be under obligation to see whether this or that debt should or should not be paid. This is a warning signal to directors, to disregard it at their peril; it is a, warning signal as regards certain particular and specified matters which, on my understanding, fall within the responsibility of the directors but do not fall within that kind of discretion to which the noble and learned Viscount referred—that is, in regard to professional advisers and the exoneration of directors from such responsibility when taking such advice. On the other hand—though that is the view which I hold on behalf of His Majesty's Government—I must recognize the fact that in saving that, I am speaking contrary to the opinion expressed by two noble and learned Viscounts, both of whom have occupied the high position of Lord Chancellor and who have spoken on matters which definitely have a legal bearing. In those circumstances, if the noble and learned Viscount will—as I am sure he will—withdraw his Amendment, I, for my part, will consider with my advisers whether anything is required to be modified in this case.

VISCOUNT SIMON

I think that is the reasonable thing to do, if I may respectfully say so. I accept that suggestion, and I shall be glad if the noble Lord will look into the matter.

Amendment, by leave, withdrawn.

Clause 18 agreed to.

5.55 p.m.

Clause 19:

Exception as to certain interest and certain payments.

19.—(I) Subsection (I) of the last preceding section shall not apply— (d) to payments, in respect of securities of a body mentioned in Part I of the Third Schedule to this Act carrying a right to cumulative interest or cumulative dividends at a fixed rate, of interest or dividends at that rate, being in any case payments becoming due and payable after the passing of this Act.

(3) The said subsection (I) shall also not apply to payments of interest or dividend on any securities of a body if the payment becomes due and payable after the passing of this Act and either it is required by any guarantee by one body of the securities of another body (whether that body is still in existence or not) or it is made by one body wholly or partly out of moneys provided by another body in pursuance of a guarantee of interest or dividends on those securities.

VISCOUNT FALMOUTH had given notice to move, in subsection (I) (d), to leave out "Part I of" The noble Lord said: I beg to move the Amendment standing in my name. I should like the leave of the House to alter the wording of the Amendment, because I understand it is considered that it will read better in the Bill; there is no difference in the object. The Amendment will now read: "Page 23, line 12, leave -out from 'securities' to the end of line 13." The object of this Amendment is to place certain canal companies, which are in Part II of the Third Schedule, in exactly the same position as the railway companies which are dealt with in Part I think it must be an oversight that these companies were omitted. I beg to move.

Amendment moved— Page 23, line 12, leave out from ("Securities") to the end of line 13.—(Viscount Falmouth.)

LORD NATHAN

I have pleasure in accepting this Amendment.

Question, Amendment agreed to.

LORD NATHAN

The next Amendment is designed to deal with the position as regards certain railway and canal stocks which carry cumulative dividend rights. In a few cases the dividends paid on these stocks in recent years have been above the nominal rate, the excess representing the gradual payment off of long-standing arrears. The Amendment is designed to permit the payment for the final year at the level for the previous year, without permitting an unduly large dividend to be paid to the detriment of the assets which will pass to the Commission. I beg to move.

Amendment moved— Page 23, line 16, leave out ("that rate") and insert ("at the same rate as was paid at the corresponding time in the year ending with the passing of this Act").—(Lord Nathan.)

On Question, Amendment agreed to.

LORD NATHAN

The next Amendment is a drafting Amendment. I beg to move.

Amendment moved— Page 23, line 18, at end insert ("and shall not apply to the declaration of any dividend the payment whereof is permitted by virtue of paragraph (d) of this subsection").—(Lord Nathan.)

On Question, Amendment agreed to.

LORD NATHAN

The next Amendment is also a drafting Amendment. I beg to move.

Amendment moved— Page 23, line 34 at end insert ("and the said subsection (I) shall also not apply to the declaration of any dividend the payment of which is permitted by this subsection")—(Lord Nathan.)

On Question, Amendment agreed to.

Clause 19, as amended, agreed to.

Clause 20 [Payments by Commission in respect of profits for period preceding date of transfer]:

LORD NATHAN

moved, after subsection (6) to insert: (7) In addition to any sums payable under the preceding provisions of this section, the Commission shall pay—

1. (a) to the bodies specified in the next succeeding subsection the sums therein specified; and
2. (b) to any other body, being such a body as is specified in subsection (I) of this section, such sums, if any, as the Minister may direct, being sums which—
1. (i) could properly have been brought into account as net revenue (or as an appropriation in aid thereof) by the body in question in the final period if they had followed the same accounting practice as in the base period, or, where the base period is more than one year, in the last year of the base period, applicable to the body in question for the purposes of the relevant agreement mentioned in the said subsection (I), not being amounts appropriated from reserve; and
2. (ii) do not arise in respect of any ownership of, or interest in, any part of the body's undertaking which is an excluded undertaking within the meaning of the said agreement; and
3. (iii) are not required to be brought into account in the net revenue account of the body under and for the purposes of the said agreement.

(8) The payments which the Commission are by paragraph (a) of the last preceding subsection required to make are—

1. (a) to the Great Western Railway Company, the sum of five hundred and seventy-four thousand pounds;
2. (b) to the London and North Eastern Railway Company, the sum of one hundred and fifty thousand pounds;
3. (c) to the London Midland and Scottish Railway Company, the sum of seven hundred and ninety-nine thousand pounds.
4. (d) to the Southern Railway Company the sum of two hundred and twenty-seven thousand pounds;
5. (e) to the London Passenger Transport Board the sum of sixty-three thousand pounds."

The noble Lord said: This Amendment is designed to clear up certain questions which have arisen, and which have been the subject of discussion and negotiation between my right honourable friend the Minister and the railway companies.

There is conceded by the Bill a final period, and representations were made in another place that a strict application of the provisions as they appear in the Bill would prevent the inclusion of certain amounts that the companies would have brought into their net revenue in accordance with their normal practice. My right honourable friend the Financial Secretary to the Treasury gave an undertaking that if there were monies which might be allowed to be included in the net revenue account, the Minister would be prepared to consider them with his advisers. Consideration has been given, with the result that this Amendment is put on the Paper. Its result will be that the figures which have been agreed with the accountants of the main line railway companies, and with the controller of the London Passenger Transport Board, are as follows. They are additions, if you care to put it so, to compensation. The Great Western Railway Company receive the sum of £574,000; the London North Eastern Railway Company, £150,000; the London, Midland and Scottish Railway Company, £799,000; the Southern Railway, £227,000, and the London Passenger Transport Board, £63,000, making a total of £1,813,000. The Government Amendment, as drafted, allows for these sums to accrue to the benefit of the companies to which I have referred and extends the principle of the concession to the other minor railway companies and to the canals. As this is an addition, I do not think your Lordships will desire me to present an extended argument in support. I beg to move.

Amendment moved— Page 26, line 27, at end, insert the said subsections.—(Lord Nathan.)

On Question, Amendment agreed to.

Clause 20, as amended, agreed to.

Clause 21 [Application of sums received from Commission under last preceding section]:

VISCOUNT FALMOUTH

This Amendment is similar to the one I have just moved in Clause 19, but again I should Eke to ask the leave of the House to move it in another form. The Amendment should read: "Page 27, line 21, leave out from ("that") to ("may") in line 22 and insert ("the body"). This again seeks to put certain canal companies in the same position as the railway companies. I beg to move.

Amendment moved— Page 27, line 21, leave out from ("that") to ("may") in line 22, and insert ("the body").—(Viscount Falmouth.)

LORD NATHAN

I am glad to be able to accept this Amendment.

On Question, Amendment agreed to.

Clause 21, as amended, agreed to.

Clauses 22 and 23 agreed to.

Clause 24 [Winding up of railway and canal undertakers]:

LORD NATHAN

This next Amendment is a drafting Amendment. I beg to move.

Amendment moved— Page 32, line 5, leave out (" to that effect") and insert ("that there is no reason for the continued existence of the body").—(Lord Nathan.)

On Question, Amendment agreed to.

Clause 24, as amended, agreed to.

Clause 25:

Application of preceding provisions to local authorities.

(3) Where, but for the vesting of the undertaking in the Commission, an amount would, on or after the date of transfer, have properly fallen to be debited or credited in the accounts of the undertaking and credited or, as the case may be, debited in some other account of the authority, the Commission shall be liable to pay that amount to the authority or, as the case may be, entitled to receive that amount from the authority, at the date on which, but for the transfer, it would have fallen to be so debited or, as the case may be, so credited. Any question arising as to whether any and if so what amount would have properly fallen to be debited and credited or credited and debited as aforesaid or as to the date on which it would have fallen to be so debited or so credited shall be determined by the Minister of Health.

(4) The Commission shall not, by virtue of any of the preceding provisions of this Part of this Act, come under any liability, or have any rights or powers, in respect of any securities of the local authority, but the Commission shall, as consideration for the vesting in them of the undertaking and (subject to the provisions of section one hundred and thirteen of this Act) in lieu of any other compensation in respect of the vesting—

LORD WALKDEN moved to leave out subsection (3). The noble Lord said: This next Amendment, and those printed lower down on the page, appear rather extensive in range but they meet the desires and requirements of local authorities. It was hoped that Clause 25 as drafted would meet their position, but since it was drafted the Ministry have had representations from some of the local authorities—in particular from the Association of Municipal Corporations. The Ministry have conferred with them at great length, and very carefully indeed, and the words which now appear on the Marshalled List are to be substituted for those previously in the Bill.

There are various kinds of undertakings to be taken over—trams, buses, docks and harbours—and in one case there is a canal. The financing of those enterprises, particularly in regard to the capital accounts, vary a good deal; they are all properly done, but they have different methods. I think we have met them quite effectively in this Bill with the revised wording we have entered for your Lordships' approval. I may say that the Ministry feel very grateful to the Association of Municipal Corporations for the great help they have given. They are a very experienced body and have frequently helped the Government, whatever Government it may be, on any matters which touch upon their work. Then we have conferred with Nottingham Corporation and we have had to make provision for their financial arrangements so far as the canal is concerned. In some cases the money for these municipal enterprises has been raised by way of stock, and in other cases by loans from local citizens or other people such as friendly societies, and so on. Various methods are adopted for redeeming those debts. We have arranged improved wording which meets all the various methods. As they are quite satisfied with this, and as it is fully agreed with all concerned, I will ask your Lordships to consider the whole of these Amendments together and ask that you give your approval to them. I beg to move.

Amendment moved— Page 33, line 37, leave out subsection (3).—(Lord Walkden.)

THE EARL OF SELKIRK

May I ask a question? I am afraid I have not followed the application of this, and I would be grateful if the noble Lord could tell me the position in regard to reserves of municipal authorities' transport organizations which may be taken over. Your Lordships know that there are a large number of municipal transport organizations which may be taken over. I am referring particularly, of course, to Part IV of the Bill. These have been built up, and in many cases the Ministry of Transport have taken them over on very favourable terms. Besides that, these organizations also have substantial reserves, and what I feel most of the local authorities would like is some assurance that the reserves are to be used for the benefit of those who contributed to building them up. I am not actually clear whether that is included in this point.

LORD WALKDEN

Reserves which have been built up for redemption of stock will remain under the Bill. Regular payments at fixed intervals will be made to the authorities to enable them to go on with redemption, either in the sinking fund or by loans of money. The other reserves—what you might call free reserves—will not be interfered with by this, in so far as there may be a certain measure of consideration which is desirable and fair. There is some provision made later in the Bill, under which a certain amount of money will be available to assist them to overcome whatever local difficulties they have in losing control of this enterprise. It has all been agreed and I think you will find it suits them very well.

THE EARL OF SELKIRK

Do I understand that the reserves, in so far as they are free, will not be taken over with the transport organization?

LORD WALKDEN

Certainly.

On Question, Amendment agreed to.

Amendment moved— Page 34, line 9, after ("authority") insert ("or any sinking fund established for the redemption of any such securities").—(Lord Walkden.)

On Question, Amendment agreed to.

Amendment moved—

Page 34, line 14, leave out from beginning to end of line 27 on page 35, and insert: "make to the authority the payments mentioned in the next two succeeding subsections. (5) Where the authority have, by the issue of securities, raised money wholly or partly for the purposes of the undertaking or have advanced money for those purposes out of any consolidated loans fund or mortgage loans pool established by them or out of any other moneys held by them, and, in pursuance of the arrangements in force immediately before the date of transfer for the redemption of the loan and the payment of interest thereon or, as the case may be, for the repayment of the advance and the payment of interest thereon, any amounts would, but for the vesting of the undertaking in the Commission, have fallen, on or after the date of transfer, to be debited in the accounts of the undertaking and credited in some other account (including any sinking fund) of the authority, the Commission shall, subject to the provisions of this section, pay those amounts to the authority at the times at which, but for the vesting, those amounts would have fallen to be debited in the accounts of the undertaking. (6) Where the authority have before the date of transfer made arrangements for the making of financial adjustments, as between the accounts of the undertaking and any other account kept by the authority, in respect of any other transaction or matter affecting both the undertaking and other activities of the authority, and in pursuance of those arrangements any amounts would, but for the vesting of the undertaking in the Commission, have fallen, on or after the date of transfer, to be debited or credited in the accounts of the undertaking and credited, or, as the case may be, debited in some other account of the authority, the Commission shall, subject to the provisions of this Section, pay those amounts to the authority or be entitled to receive those amounts from the authority, as the case may be, at the times at which, but for the vesting, those amounts would have fallen to be debited or credited in the accounts of the undertaking: Provided that this subsection shall not apply in relation to any apportionment of the establishment charges of the authority between the accounts of the undertaking and other accounts of the authority. (7) The Commission and the authority may agree or the Minister of Health may, on the application of the Commission or the authority in default of such agreement, determine that, having regard to the circumstances in which any such arrangements were made and the circumstances arising under this Act, the last preceding Subsection shall not apply to those arrangements or shall apply thereto with such modifications as to the payments to be made by the Commission or the authority as may be so agreed or determined, and the said subsection shall have effect subject to any such agreement or determination. Any other question arising under either of the two last preceding subsections as to the payments to be made thereunder shall, in default of agreement, be determined by the Minister of Health. (8) Any payment made by the Commission or the authority under the preceding provisions of this section which would, but for the vesting of the undertaking in the Commission, 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, (9) Notwithstanding anything in any statutory provision, the authority shall not be entitled to any profit or be required to bear any loss arising in the carrying on by the Commission on or after the date of transfer of the part of the Commission's undertaking corresponding to the undertaking of the authority.")—(Lord Walkden.)

On Question, Amendment agreed to.

Clause 25, as amended, agreed to.

6.10 p.m.

Clause 26 [Carrying on of undertakings till date of transfer]:

LORD WALKDEN

This little Amendment has been put down so that the present State control of all the railways may be brought to a proper legal conclusion at the end of the year. There are two tiny railways linked up which the Commission will not take over. They are very local and will not be needed, but they will be free from control and that is why this clause has been put in. It will be sufficient to take over the big railways. I beg to move.

Amendment moved— Page 35, line 44, after ("undertakings") insert ("or portions of undertakings wholly owned by, leased to or operated by one or more").—(Lord Walkden.)

THE EARL OF SELBORNE

Can the noble Lord tell us which those two are?

LORD WALKDEN

One is Fishguard and Rosslare. It does not, of course, go across from Fishguard to Rosslare. Then there is the Salisbury market railway. I suppose that is something at the back of Salisbury market.

THE EARL OF SELBORNE

I presume the noble Lord is not in a position to tell us the mileage or the traffic they carry.

LORD WALKDEN

I am afraid not.

On Question, Amendment agreed to.

Clause 26, as amended, agreed to.

Clause 27 [Closing of accounts under control agreement]:

LORD WALKDEN

moved, at the end of subsection (2), to insert "Provided that this subsection shall not apply in relation to any agreement made with a local authority." The noble Lord said: This is just a formal Amendment, further to safeguard the Nottingham Corporation. I beg to move.

Amendment moved— Page 37, line 16, at end insert the said proviso.—(Lord Walkden.)

On Question, Amendment agreed to.

Clause 27, as amended, agreed to.

Clause 28 agreed to.

LORD RANKEILLOUR moved, after Clause 28 to insert the following new clause: The proceeds of the sale of any British Transport Stock issued to trustees under this part of the Act, may be invested by them in any securities which may be authorized by the Treasury by Order from time to time. Provided that every such Order shall lie for forty days on the table of both Houses of Parliament and may be negatived by resolution of either House within that period. Provided also that the Treasury may make regulations for securing that every such investment shall be limited to the moneys in the hands of the trustees resulting from such sale.

The noble Lord said: I apologize for inflicting a manuscript Amendment on your Lordships' House. I felt, in view of the discussion on Clause 16, that it was incumbent on anybody who thought about it to offer some sugestion which might mitigate the hardship which that clause must inevitably cause. I think the clause is fairly simple and I hope that by reading it your Lordships may be able to apprehend its purport. I am perfectly conscious of the inconvenience of amending the present Acts in this way, but, on the other hand, it would be quite impossible to make a general amendment of the Trustee Acts in this connexion and it would be equally impossible to devise a schedule setting out the securities in which the proceeds should be invested. I only want to mitigate the hardship which the owners must feel through the operation of the Trustee Act coming on the top of Clause 16, now passed; and the proposed clause confines the amendment of the Trustee Act to re- lieving the hardship of those particular stockholders.

I am not generally anxious to give the Treasury power to operate by Order, but I have provided that "every such Order shall lie for forty days on the table of both Houses of Parliament." That maintains Parliamentary control. Also, to prevent the perhaps unconscious infraction of this rule, I have provided that the Treasury may make Regulations for securing that the trustees shall not be able to invest other funds under cover of this particular Amendment. I need not again go over the ground covered on Clause 16, but I think that something may be done in this way to lessen the really appalling effects it may have on a considerable number of stockholders. I see no other way to do it but by something of this kind, and that is why I put forward this suggestion. In any case, I think the Trustee Acts at present work very unequally, and that is no more clearly brought out than in the debates on the present Bill. The Acts exclude some securities and admit others. We cannot amend the Trustee Acts generally but we can do so in this particular. I beg to move.

Amendment moved— After Clause 17 insert the said new clause.—(Lord Rankeillour.)

LORD NATHAN

It would, of course, be impossible, in the case of a manuscript Amendment, for me to direct myself to the actual detail or phraseology of the Amendment, and I will direct my mind, therefore, to its purport. I do not know whether the noble Lord, Lord Rankeillour has referred to Paragraph 5 of the Fifth Schedule of the Bill on Page 137. Broadly speaking, the effect of that provision is that British Transport Stock is to be deemed to be trustee stock. It becomes an authorized investment on the same terms as any other investment, so that if there is an investment specified in a trustee settlement or Will or anything of that kind, this British Transport stock is to be deemed to be in probate; and if trustee securities are specified in the settlement, or whatever it may be, as being the only authorized investments, then British Transport stock becomes trustee stock for the purposes of that settlement.

If the noble Lord has in mind, as I rather gathered from his concluding remarks, to extend the whole field and scope of the Trustee Act, then I would suggest to him that the Transport Bill is scarcely the appropriate Statute in which to do so, and that the Amendment should be made rather to the Trustee Act, when no doubt other considerations would apply. If the object of the noble Lord is to receive an assurance that British Transport stock is to be deemed, where trustee securities are specified, a trustee security, then I think an assurance will be found in Paragraph 5 of the Fifth Schedule.

THE EARL OF SELBORNE

I have no doubt the noble Lord is right in laying stress on the inconvenience of attempting to modify the law in regard to trustee stock, when dealing with a Transport Bill, but we must remember that the effect of the Transport Bill is tremendous enough to amount to an emergency for a very considerable portion of the investing public and of charities. Therefore I think we are indebted to my noble friend for making this ingenious suggestion in endeavouring to mitigate the very great hardship that, as a result of passing the Bill in its present form, would fall on people who own railway stocks and who are confined by their trust deeds to certain stocks. As the noble Lord, Lord Nathan, himself said, the Bill does touch on the subject in its Fifth Schedule, but of course the only effect of that Schedule is to put the new Transport stock in the position of the old railway stock. That is exactly what will so much injure the incomes of the present holders of certain of the railway stocks; and the hardships which will be inflicted on them and upon which my noble friend dwelt so eloquently a few days ago, will remain.

The Amendment has the advantage over the proposal in the Bill in that it does open the door to enabling these unfortunate people to invest their money in some security that gives them a little better yield. I confess I cannot hold very great hopes from the course proposed, but I hope the noble Lord will be able to reassure me on this point. It seems to me that if it is left entirely to the Treasury to say in what stocks trustees may invest, they will certainly, so long as the present Chancellor of the Exchequer has anything to do with Treasury policy, try to guide all the money they can into Government stocks, in order to maintain the rate of 2½ per cent.—a task which I think may prove increasingly difficult in the near future. Therefore I do not know that my noble friend' 's proposal is really going to be of very much benefit to the holders of trustee stocks. But perhaps he can tell us what stocks he has in mind that can suitably form part of an Order in Council by the Treasury under his new clause. I was very much discouraged the other day when, in response to appeals from all sides of the House on behalf of these unfortunate people, we were met not with argument from the Front Bench, but with complete silence. They have made no attempt to answer the case that has been made in this House and in another place about the grievous injury which will be inflicted on so many people by this Bill.

LORD RANKEILLOUR

I am afraid I was more obscure than I feared because, of course, I did not wish to make Transport stock trustee stock. I wished to open the door to trustees who are bound to abide by the present definition of trustee Mock, and I thought that some opening might be made for them. It is quite true, as my noble friend says, that this would have to depend on the Treasury. After all, I suppose the Treasury may sometimes be open to reason; they may, on occasion, see that some relief may be given to those who need it most. But of course, it is a matter of great difficulty partially to amend a long settled general Act in order that another and special Act may be mitigated in its effects. If this Amendment cannot he accepted, however, I seriously think that it really is the duty of the Government to look through the present Trustee Act and see if some Amendment can be made in the near future, before this Bill becomes law, to deal with the rather large question which I have ventured to broach.

On Question, Amendment negatived.

Clauses 29 to 34 agreed to.

Clause 35 [Commission's licensing powers as to inland waterways]:

LORD ROCHDALE moved, after subsection (4) to insert: (5) For the purpose of this section—

1. (a) the carriage of goods of a holding company by a subsidiary thereof, or the carriage of goods of such a subsidiary by another such subsidiary or by the holding company; or
2. (b) the delivery or collection by a person of goods sold or used in the course of a trade or business carried on by him, or
778
3. (c) the delivery or collection by a person of goods which have been, or are to be, subjected to a process or treatment in the course of a trade or business carried on by him,

shall not be deemed to be the carriage of goods for reward. In this subsection, the expression 'holding company' means a company which is the beneficial owner of not less than ninety per cent. of the issued share capital of another company, and the expression 'subsidiary' in relation to a holding company, means a company not less than ninety per cent. of the issued share capital of which is in the beneficial ownership of the holding company. Where a subsidiary (as hereinbefore defined) is the beneficial owner of any shares of another company, these shares shall be treated for the purposes of the foregoing definitions as if they were in the beneficial ownership of the holding company.

The noble Lord said: Clause 35 as it now stands provides that the Commission may authorize private owners of barges to ply on inland waterways. There are certain businesses who own subsidiary limited companies, which subsidiary companies operate barges on behalf of the parent company, carrying goods in the barges of that parent company. That might well be interpretA as meaning that they were operating those barges for hire or reward; in other words, that they would be liable to be stopped unless they applied for and received a licence from the Commission. The purpose of this Amendment, therefore, is to make it possible for them to continue to operate without licence, providing that the goods that they are carrying are confined to the goods that belong to the parent company. The Amendment goes further than that, in order further to interpret the words "for reward." Where a firm owning private barges use them to convey goods which are not their own produce, either to bring them into their own factories for processing or for delivering to their own customers, then again it is not to be interpreted that they are carrying those goods "for reward" and therefore require a licence, but that, on the contrary, they can do so without any reference to the Commission. This matter was raised in another place. and the Amendment was withdrawn on the understanding that the Minister would look carefully into it, and possibly, on examination, he may now be able to accept it. I very much hope that he will. I beg to move.

Amendment moved— Page 43, line 35, at end, insert the said subsection.—(Lord Rochdale.)

LORD WALKDEN

I am pleased to say that His Majesty's Government are prepared to accept this Amendment.

On Question, Amendment agreed to.

Clause 35, as amended, agreed to.

Clauses 36 and 37 agreed to.

Clause 38 [Schemes as to Railway Clearing House]:

LORD RENNELL moved, in subsection (5), at the end, to insert and all sums payable by the Commission for interest or repayment of principal or into any sinking fund for repayment of principal in respect of the Rebates Stock shall be paid out of the revenue of the Commission and shall have the same priority as payment of rates over other payments thereout to the extent of any relief from rates provided for by any Act. The noble Lord said: The Amendment on the Marshalled List is a slight modification of the Amendment I originally put down. I have reason to believe that the Amendment in its present form will be acceptable to His Majesty's Government, and, in the circumstances, I do not propose to adduce any arguments. I beg to move.

Amendment moved— Page 47, line 44, at end, insert the said words.—(Lord Rennell.)

LORD NATHAN

I am glad to be able to say that His Majesty's Government are prepared to accept this Amendment.

LORD RENNELL

I am much obliged to the noble Lord. There will be a consequential Amendment at Clause 87 which I shall have pleasure in putting before the Committee.

On Question, Amendment agreed to.

Clause 38, as amended, agreed to.

Clause 39:

Certain road transport undertakings to be acquired by Commission.

39.—(1) Where the Commission are of opinion with respect to an undertaking the activities of which consist wholly or partly of the operation of any vehicles authorized to be used under any A licence or B licence— (b) that the activities of the undertaking in that year, so far as they consisted in the carriage of goods in goods vehicles (being vehicles with respect to which a licence, of whatever class, was in force), consisted to a predominant extent in ordinary long distance carriage for hire or reward, it shall be the duty of the Commission to give, in accordance with the subsequent provisions of this Part of this Act, a notice of acquisition with respect to the undertaking.

(2) In this Part of this Act, the expression "ordinary long distance carriage" means, in relation to an undertaking, the carriage of goods by the person carrying on the undertaking for a distance of forty miles or upwards in one goods vehicle or a succession of goods vehicles, in such circumstances that the vehicle, or, as the case may be, one or more of the vehicles, is, at some time during the carriage, more than twenty-five miles from its operating centre:

Provided that the carriage of liquids carried in bulk in a tank permanently fixed to the vehicle, or in a tank not so fixed of which the capacity is not less than five hundred gallons, ordinary furniture removals, the carriage of meat, the carriage of livestock and any carriage effected wholly in vehicles specially constructed to carry abnormal indivisible loads shall not be treated as ordinary long distance carriage.

(3) The distance of forty miles mentioned in subsection (2) of this section shall, notwithstanding anything in Section thirty-four of the Interpretation Act, 1889, be measured along the route actually taken by the vehicle or vehicles in question.

THE LORD CHANCELLOR (VISCOUNT JOWITT)

Now we come to the part of the Bill for which I am, no doubt, to receive bouquets or brickbats, as the case may be. I think that on this first Amendment I shall receive neither, however, because it is a mere drafting Amendment. I beg to move.

Amendment moved— Page 48, line 13, leave out the first ("in") and insert ("of").—(The Lord Chancellor.)

VISCOUNT SWINTON

And we on this side are happy to accept the noble and learned Viscount's Amendment. We shall also, I have no doubt, accept his next.

On Question, Amendment agreed to.

THE LORD CHANCELLOR

The next Amendment is also drafting. I beg to move.

Amendment moved— Page 48, line 16, leave out ("in") and insert ("of").—(The Lord Chancellor.)

On Question, Amendment agreed to.

LORD TEYNHAM moved, in subsection (2), to leave out "forty" and insert "eighty." The noble Lord said: For the convenience of the Committee I would suggest that this Amendment and the next one at line 27 should be considered together. The second Amendment is really consequential on the first.

THE LORD CHANCELLOR

I think that the course which the noble Lord suggests would be very convenient.

LORD TEYNHAM

Both these Amendments seek to increase the limit of distance within which road haulage operators will be allowed to continue in business. Subsection (2) of this clause endeavours to define the expression "ordinary long distance carriage," but it is certainly a most extraordinary piece of draftsmanship, and it might easily be construed to mean several alternatives. If the radius of the circle from the operating centre is to be 25 miles, then the diameter of the circle must be 50 miles. Yet, as the clause is drafted, the limit of distance for the carriage of goods from point to point is 40 miles. Why not 50 miles? In any case, whatever these distances may mean, I suggest that they are far too small to enable short distance traffic to give proper and efficient service, and they will be bound to have a hampering effect on trade and industry.

Look at Liverpool, for instance. That city will be severed from Manchester; and Glasgow from Edinburgh. Many other important centres will be affected in the same manner. In fact, it would not be possible, I believe, to operate from one side of Greater London to the other. Is it really intended that operators should be induced to change their centres, and to move their garages to, perhaps, a point midway between the cities I have mentioned, in order to be inside this limit, and that they should do this at a time when unnecessary building reconstruction should be discouraged? Even if these operators should wish, for example, to continue their short-distance service between Liverpool and Manchester, and they did move their centre to a mid-way point, that would be bound to create wasteful transport, owing to the fact of the run-in of empties to the point of collection. How do His Majesty's Government propose to control and regulate short-distance traffic which is left in the hands of private enterprises? Will there be an army of "snoopers" to watch each driver of a vehicle to see if he has exceeded, or intends to exceed, the limit of distance? I think it will be extremely difficult to establish from the records of road haulage operators the double qualification of radius and point-to-point distance.

There seems to be no valid reason for including both these limitations in the Bill, after it was found unnecessary dur ing the war period to do so. I think it will be no argument for the Government to say that permits will be granted to operators between important centres, because those can be withdrawn at the will and convenience of the Commission, whenever that body wishes to take over any fresh section of traffic. The Minister of Transport, in another place, was unable to give any real justification for the particular limits of distance laid down in this clause. He merely said that it was a sensible middle position. I venture to suggest that a sensible middle position would be as I have set down in these Amendments—that is to say, a radius of 50 miles and a point-to-point distance of 80 miles, a distance which is well understood in the transport: world to be a short distance haul. I do hope that His Majesty's Government will, on this occasion, take clue heed of the experts in this industry. I beg to move.

Amendment moved— Page 48, line 24, leave out ("forty") and insert ("eighty").—(Lord Teynham.)

VISCOUNT LONG

As I rise to support my noble friend on this Amendment, the Committee may recall that I have more than once pressed His Majesty's Government to state what they meant by "long distance." Now, again, I ask His Majesty's Government first of all that question; and secondly who gave them the advice to fix these particular distances which are set out in the Bill? It may be said that the Minister of Transport asked the road transport industry to come in and give him their advice. But I venture to suggest that that is rather like saying to a man who is to be hanged: "Come and look at your gallows." It is more than could be expected of any great industry such is this, that they should take it upon themselves to advise the Minister.

I repeat my question: Who fixed these distances? In the war we had the most extraordinary position: the distance was fixed by the Minister of Transport, not from the base but from a point of collection to a point of delivery. So, in any case, you had a far greater distance for short distance hauliers as a whole. His Majesty's Government anticipate that, under this Bill they will bring into the net only some 2,500 operators. But that is on the basis of the 60 miles. I suggest that they will bring in a great many more under the present idea, as expressed in this clause. I suggest that many firms who are not within that figure of 2,500 will also be drawn in; and many hundreds of firms will be so mutilated, if these limits of distances are imposed (though I feel sure that on reflection His Majesty's Government will see the wisdom of altering them) that they will have to come and ask the Minister of Transport, to let them be taken in. Trade is bound to be hampered.

May I give your Lordships an example of what is likely to happen under the operation of this clause—especially the imposition of the 25-mile limit? I live 29 miles from the city of Bristol. If I want to have goods delivered, or if the people of my village or my parish want them, we can now get them along within 12 hours.

Under this Bill that will be quite impossible. The Commission will have to fill in forms, and have questions answered, and the whole trade will be completely ruined. It will be too late probably to turn round and say, "If we had only thought of this before!" Of course, under the Bill, the Minister says the Commission will issue permits. Of course they will—so long as it suits them; but when we come to the rend of four years and they find that these licence holders are taking the trade of the great Government monopoly they will not hesitate to take away the licences. There is another curious point I cannot understand. Great tribute has been paid to the wages tribunal of the transport industry. It is remarkable, but true, that the distance they fixed for the purposes of wages for short distance was 70 miles, not 25; and that was agreed to by employees as well as employers. One feels completely out of water that the Government, in face of these facts, are still trying to enforce the 25-mile limit.

The noble Lord, Lord Teynham, has said that cities will be divided. Unless you have a base at Warrington, and so can get over this, your trade between Liverpool and Manchester will be hampered. What is the Government's reply to this? I thought they were doing their best to encourage everybody to work and produce; in this Bill they are severing city after city. Take Glasgow and Edinburgh: they will be severed. I will leave my noble friend the Earl of Selkirk, to deal with this, but I hope, in view of what the noble Lord has said, and the facts I have tried to place before you, that the Government will reconsider the matter. If this Bill goes through in the form it is now it will bring nothing but chaos and disaster to the industry of this country at the one moment we want to revive it.

THE EARL OF SELKIRK

There is not worked out in this Bill a full plan of the manner in which it is to be carried into operation; there is only a theory. I am glad to see that the noble and learned Viscount, the Lord Chancellor, is to reply, because we shall listen with interest to what theory he will advance as to the base on which this clause is drafted. Obviously the distinction is the minimum distance for which the railway can be conveniently used. This may be 50 to 80 miles; for anything short of that it is not suitable to use the railway—certainly not for 25 miles. The next point is the change from petrol to diesel fuel. Of that I know nothing personally, but I am informed that from somewhere in the neighbourhood of 80 to 100 miles it becomes no longer economical to use petrol and becomes economical to use diesel oil.

Then there is planning. One might have thought that the Report of the noble Lord, Lord Reith, which advises that the minimum distance of the new towns from London should be 25 miles, would have been considered. Obviously this Bill is not drafted after consideration of that Report. We shall listen with interest to what the noble and learned Viscount, the Lord Chancellor, has to say to justify the theory behind this clause. As a matter of fact, we have a fair indication from the Minister that it is arbitrary. Whatever is decided should be made as clear as possible, and I submit that that could be done. This clause could be made clear-cut by sound and simple logic, by taking the vehicles which, in fact, do the long distance—say, over seven tons road weight. It is a perfectly logical division to take the big and leave the small, instead of this hotch-potch arrangement you have here.

Let us examine exactly what the clause will do, and what the Minister will have to do to put it into operation. There are 48,000 "A" and "B" licence holders holding between them 138,000 vehicles. In calculating the vehicles which will come into this it will be necessary to bring in a certain number of "C" licences, because under Clause 31, in calculating the long distance vehicles, it will be necessary, in some circumstances, to bring "C" licences into the calculation. Allowing a certain number, that brings the total up to 150,000. Every one has to be calculated on every trip it did during 1946. Suppose those vehicles did 300,000 trips each. The Government will have to examine something in the neighbourhood of 50,000,000 separate journeys. The calculation of each of these 50,000,000 separate journeys is not easy. It has then to be calculated with reference to a distance of 40 miles, and whether or not it is within 25 miles from its centre. It can do more than 40 miles provided it is within its centre. This course of 40 miles has to be taken round corners, so that the winding British roads have to be followed and calculated for the exact length of the journeys. When that calculation has been completed on 50,000,000 journeys it is necessary to weight the journeys, according to the load which is carried and to the receipts every journey brings in. When calculated by long distance journeys it has to be balanced against short distance journeys.

This is not easy, and is extremely difficult when there are no records at all. It is the normal practice of road hauliers, I understand, to destroy their records three months after they have been finished. How many records remain of road hauliers as they stand? I doubt very much if any records remain for 1946. Whatever records there are, it will be quite impossible for an accountant to find an answer to this question without the assistance of the proprietor and his own staff. It means that the proprietor must tell the Minister of Transport what is his position. I submit that that is quite an impossible position. No one has the slightest idea what will be the result of these 50,000,000 calculations. The Government have said that it would affect about 20,000 vehicles. I think that is an answer made without knowledge, because the Road Hauliers' Association does not know the answer; I do not think the Government know it either. This will create an enormous disturbance, involving a large number of personnel.

May I use these words, now becoming famous: "The test is the public interest." Where is it? It is inevitable, under this Bill as drafted, that the public service will deteriorate. But I do not say that on the simple ground that the Commission will necessarily provide a worse service—there are many of us who think they will —but for this reason: if the Commission provide as good a service it will be just as ruinous for the railways as the present service. It is in the nature of circumstances that the Commission must provide a worse service. That is not simply a question of fares; what the railways want is more traffic. It is not a question simply of reducing the fares, the railways have to take a heavier traffic. The economics of the question is that the railways carry a 60 per cent. standing charge, whereas road traffic carries only 10 per cent. Therefore, it is essential for the railways to cover their standing charge by as large a traffic as they can. I think I have submitted a case to the noble and learned Viscount the Lord Chancellor that, in the first place, we have no plan; in the second place, we have no theory; in the third place, no certainty of results; and in the fourth place we are arbitrarily compelling the public to choose the kind of conveyance they would not themselves choose.

LORD BEVERIDGE

I would like to support this Amendment, at the same time making it clear that, as I understand it, in Clause 39 we are concerned only with what undertakings shall be taken over. The question of what freedom is to remain to the undertakings which escape the net of the provision does not arise on Clause 39 at all; it arises on Clause 52. In fact, there is no necessity for what is in Clause 39 to be the same as what is in Clause 52; indeed they are not the same. In Clause 39 we are concerned with what undertakings shall be taken over; it is also clear that the question is that of taking over the whole of an undertaking, If, at the end of the 50,000,000 puzzles, or a share of these 50,000,000 puzzles, a particular undertaking is taken over, then both the vehicles which have been engaged in long distance and those engaged on short distance work will be taken over by the Commission. If, on the other hand, the undertaking is not taken over, it retains, for the moment, its long distance and its short distance vehicles. That, I think, is clearly the effect of this clause.

We ought to be quite clear about the effect of this clause, because I am not sure that one or two of the words of the noble Lord, Lord Teynham, correctly put the point. I hope the noble and learned Viscount, the Lord Chancellor, will agree with me that under subsection (2) of Clause 39, in order that one of these 50,000,000 voyages shall count as long distance, two conditions have to be satisfied. The voyage must be more than 40 miles, carrying goods, but it does not matter how long it is if the vehicle is empty. (The Government are apparently quite in favour of empty vehicles.) On the other hand, the vehicle must go outside the 25 miles radius to become long distance. It can go round and round in circles within the 25 miles radius and still count as short distance. It can go 39 miles full, and 50 miles empty, outside the radius, and also count as short distance. I want to reinforce what has been said, particularly by the noble Earl who has just spoken, that the kind of puzzles to be dealt with are very difficult indeed. They involve a study of all points, because a journey of 39 miles out, with a return empty, if it goes outside the circle, will count as a short distance; but if the vehicle takes some goods for two or three miles on the return journey, that will count as long distance because it is carrying goods for more than 40 miles. That is the kind of puzzle you have to study. You will get a large number of other puzzles when you begin to deal with the problems of these excepted industries.

I gave an illustration when speaking on a previous Amendment. If you are carrying meat, that is a short distance; but if you carry a sack of potatoes with that meat or livestock, it may become long distance. Thus, records have to be studied by all these 48,000 firms, and each journey has to be evaluated in distance and in receipts—for both distance and receipts have to be brought in. I suggest that is a fearsome undertaking, and I suggest that it will take much longer than the kind of inquiry I suggested earlier. Moreover, a decision as to whether or not an undertaking is to be taken over will depend largely upon chance as to the precise spot in which it has its operating centre; and the undertakings cannot move their operating centre, because this deals with what happened in 1946. If an undertaking has its operating centre in Liverpool and is dealing with Manchester it may be taken over. But if it is half-way between it may escape. There is no sense in these distinctions. Some are treated as long distance and some as short distance, just by the accident of where the undertakings have their operating centre, and just by accident whether they run empty on their way back or take some goods on their way back.

Finally, I suggest that when you begin to apply these tests, not only in London and the south, but in Scotland where distances mean something quite different, you will find still more absurdity. I agree with what was said at an earlier stage by the noble Viscount, the Leader of the House, that problems will remain whether you take a 5 mile limit or 50 miles. That is true; they will remain; and that is the most serious criticism of the whole scheme of the Bill. But the Euclid problems will become less serious, and there will be fewer of them, if your area is enlarged. For that reason, in order to simplify the task and in order to have some certainty as to what will be taken over I strongly support this Amendment. Reduce your puzzles and shorten your time by increasing the limits in Clause 39 (I am saying nothing of this point about Clause 52) and you will all the sooner settle the state of this industry.

[The sitting was suspended at seven o'clock and resumed at half past eight.]

LORD SALTOUN

Before the noble and learned Viscount replies to the very strong case which has been made by my noble friends on this side of the House, there are two points which I would like to emphasize and illustrate. I live in a county which is not very well served by railways. It takes the best part of the day to go by rail to a certain place about twenty-five miles distant, and I believe it takes even longer to go to another place which is a little nearer. In our county, if we have goods to bring from a distant part of the county, we have a practice of ringing up the local carrier and asking when he is likely to have a vehicle in the neighbourhood of that place; and we arrange for him to go out of his way on some day convenient to himself and to collect those goods. After what has been said, your Lordships will realize that under this Bill the difficulties will be immeasurably in- creased for people living in country places.

There is a point I would like to add to the very strong case made by my noble friend Lord Selkirk. I could never quite see how, under this Bill, the Commission were going to get the information on which they would have to act in respect of these country carriers, because I know that they do not preserve their records very well. It seems to me that that will be a matter of investigation in individual cases. There will be so many of these cases, if there are 50,000,000 journeys to examine, that they will have to be done by a large and perhaps not very well qualified staff. it will be done mostly by examination of the owners of these businesses themselves. It will be a very difficult thing to get anything like an accurate picture. I do not see how any official can do it. What will happen is that some man, possibly the last man in the world one would want to get the business, will come in beautifully prepared, with all his answers ready, and will go swimmingly away. But the ordinary average carrier that I know—and I am acquainted with a good many of them—will not be easy to deal with. He will not have his answers all ready, and the result will be that far too great a responsibility will be put on minor officials under this Bill. I do not want to say any more about it than just to point out that difficulty, because the more one considers it the more I think it is to be deplored. Therefore, I hope the Government will be able to accept this Amendment, or something of a very similar kind.

EARL HOWE

I am anxious to know what is really the attitude of the Government with regard to road transport. We are told that the Government are keen on trade recovery—they want to get industry going again, and all that sort of thing. I have listened to a lot of the discussion in this Bill on the railway clauses, and now we come to the road clauses. It would be helpful if only somebody speaking on behalf of the Government would explain exactly how the road clauses in this Bill are designed to help our trade recovery. After all, noble Lords sit on this side of the House, and we are Party men; noble Lords sit behind the Government Front Bench opposite, and they, too, are Party men. But there are many people all over the country, who have no strong Party ties, who are yet profoundly anxious in regard to this Bill. The only thing I can find in the road clauses in this Bill, and to a certain extent in the railway clauses—but particularly the road clauses, and particularly the clause we are considering—is a kind of hampering legislation.

The case could not have been put better than it has been put by the noble Lord, Lord Teynham, the noble Earl, Lord Selkirk, and the noble Viscount, Lord Long. In this clause we are putting an artificial limit upon road transport. By this clause, if you carry it in its present form, you are going to make it more difficult for road transport to pull its weight. We all know what happened during the war, and how this country depended upon road transport. It is true that we are through the war, but we are not yet through the wood, and it seems to me that we want to be tire that road transport. in the future can really pull its weight and make its contribution towards the trade recovery of the country. But here you have a clause which, as has been pointed out by previous speakers, makes it quite impossible for a vehicle to cross the greater London area. Is that really going to help the recovery of industry? It may make it difficult for an operator to work between Liverpool and Manchester, or between Glasgow and Edinburgh. Those are obvious cases but many more cases will occur to everybody.

What I want to hear from the Government is exactly what is the plan behind the figures in this Bill of 40 miles and 25 miles. It has been stated that it is quite all right, so long as the operator does not go outside a radius of 25 miles, and that he can go as far as he likes within that area. But I do not read the Bill in that way. I hope I am wrong, but it seems to me that 40 miles is a total figure and applies whether the man goes inside or outside the 25 mile radius. I appeal to His Majesty's Government to make this point a little clearer. If that really is so, why are we to be tied down to these arbitrary figures of 40 miles and 25 miles? Have those figures been fixed by the Ministry of Transport as a result of advice? If so, who has advised them? All these questions have been put by other speakers. I do submit that His Majesty's Government must give an answer on these particular points.

Another thing which has struck me during this debate is that we have listened to Amendment after Amendment moved from this side of the House, and we have listened to replies from the Government Front Bench, but there has not been a word from noble Lords who sit behind the Government. There are a lot of extinct volcanoes who do not appear—

LORD STRABOLGI

We do not want to waste time.

EARL HOWE

Perhaps the noble Lord is better informed than I am, but at the same time it would be an advantage to all of us on this side of the House if we could hear a little more than the Government case. After all, we do not want to degenerate into an area of totalitarian politics. We do not want to sit here and, merely register figures for the Government Front Bench. We want to hear a little more about the case, and I only wish noble Lords would develop it a little. It does seem to me a real tragedy that just at the moment when agreement had been arrived at between road and rail the whole thing has been torn up, thrown in the melting pot, and we have these artificial restrictions imposed upon us, such as in the clause we are discussing with regard to the 40 miles and 25 miles. I submit that the Government must answer the questions which have been so forcibly put by noble Lords who have preceded me, otherwise I am perfectly certain that in the long run this Bill will do nothing to help road transport, will do nothing to help industry, and will not put one other man in work —I am quite certain it will put a good many out of work. I submit that this is a case which the Government must answer.

VISCOUNT MAUGHAM

May I add a word on the question we are considering and also, in the most reasonable terms I can think of, urge the Government to reconsider the position which arises under this clause and will subsequently arise under Clause 41? First as regards what we are dealing with here: it is, in effect, to endeavour to show what vehicles have been used for ordinary long distance carriage—which vehicles the Government desire not to have competing with their railways. Therefore what would properly be called long-distance carriages are, according to the scheme of the Bill, not unreasonably to be acquired by the Government. I accept their view of what is desirable, for the purposes of my remarks.

We have to some extent been talking as if every vehicle that occasionally travelled long distances would be taken over by the Government, and it is rather important to realize that that is not the case; that what we are really seeking under Clause 39 is to find out what vehicles were used—now, here comes a very curious word—to a "predominant" extent (that is a word which I have never met before in an Act of Parliament) as long distance carriages, which are defined in subsection (2). Subsection (2), as I understand it, means something rather simple but some of my noble friends apparently have not read it in the same way as I have. I, of course, feel bound to give my true opinion as to what subsection (2) means, because it is stated in a rather confusing manner. In my opinion it refers to carriage of a parcel of goods for over 40 miles, some part of the route being beyond the 25 mile limit. That is, I take it, what it really means, and the distance of 40 miles is linked up by the words "in such circumstances" in line 25 of page 48. That means in such circumstances that these two things have to take place. In order that an unhappy vehicle should be a long distance vehicle it has to travel more than 40 miles with a parcel of goods, and it must not at any time, for whatever purpose, travel beyond the 25 mile limit. But in reading this clause you have to remember that it is only if used "to a predominant extent" in that way that the vehicle becomes a long distance vehicle and is caught by the provisions in the Bill.

I would like everybody to understand the practical result of that, because, like my noble friend Earl Howe and other members of this House, I know carriers who have a rather uncertain way of carrying on their business. There are, for instance, carriers who live just a little more than 25 miles out of a big city; for instance, London. I have one in my mind whom I have often employed. If their business has become one in which to a predominant extent they go as far as London, carrying goods from a country village into London, they are now by this Bill not really long distance carriers at all, but they exceed the 25 miles limit.

I am particularly sorry for those carriers who live just outside the 25 mile limit from some part of London. London is a very big area and I cannot say that they live a short distance from the whole of it, but they live a very short distance beyond a reasonable part—we will say, Battersea or Chelsea, or somewhere like that—and they have got a really good business together which takes them just outside the 25 miles limit, and that is their main business. To my mind, it will do the Government's real object no good to catch those people. To my mind, they will have an enormous difficulty in proving their case because of the absence of record which has been referred to more than once.

But let us see the position with regard to the 40 miles. For the benefit of those who do not know the whole of the geography of the neighbourhood of London, let me illustrate the point by taking the dial of a clock. Suppose that the centre of the business (that is a precise phrase: the place which is the operating centre of the business) is the spindle on which the hands revolve (and I will take the radius of the clock as representing 25 miles), the carrier who lives on the spindle can send his goods to any place in any direction within the radius of the clock unless, unfortunately, there is the sea, which stops him in any part. However, I will forget the sea and just imagine him as sending a parcel of goods up to just short of the figure 12; then he is going not 25 miles, but, we will say, 24. Like most of the carriers that I know, he has a van of some kind in Which he carries—sometimes once a week and sometimes more often, but not usually every day—pareels of goods of all sorts, and they go to different parts of the radius of my imaginary clock. He has to send some goods short of the figure 12, and he has also some goods which he wants to send to the figure 8. That cannot be done by the same van, because to go to figure 12 and then to figure 8 will take him more than 40 miles. I have not measured it but, at any rate, if it is not figure 8 it would be close to figure 8 which would take him more than 40 miles. If he has, at the same time, in going from figure 12 to figure 8, to go along a road which takes him out of the 25 mile limit, he is also defeated from the point of view of this rule. With all respect, it does not seem to me to be reasonable to make this the definition which is to be used to take away a man's business. It is quite without common sense that he should not be free to travel about in the circle as much as he likes, whether 40 miles or 100 miles a day, delivering goods in the circle, because I venture to think the limit is much too small.

These people generally have their vans driven by petrol engines, and 25 miles is a very short distance. I cannot help thinking that the whole system is entirely wrong if it is applied to people, who, as I say, live just beyond 25 miles from some populous part of a big city. How, in the name of goodness, will it be possible within a reasonable time to ascertain whether predominantly a particular business has been carried on so as to infringe the provisions of subsection (2)? I am now saying something which I am convinced is in the interests of the Bill. I am certan that the application of this mixture between the radius and the amount of carriage that is done within the radius with a particular parcel, will mean so much difficulty and trouble that the right thing will be somewhat to increase the radius—if do not know how much but I am in favour of the Amendment. If my opinion is worth anything, the radius should be the test; there should be nothing whatever about the amount of work done in it. I say this with the utmost good faith, not in the least intending or meaning in any way to interfere with the arguments that have already been placed before the Committee. But I am convinced that the difficulties of dealing with the matter, as this now stands in the Bill, are such that they are practically insuperable, unless you are prepared for five years or ten years to be finding out people who are engaged predominantly in long distance carriage for hire or reward.

8.55 p.m.

LORD BALFOUR OF BURLEIGH

Before the noble and learned Viscount replies I would like the opportunity of saying a word or two on this clause of the Bill. Of course we approach here something very different from that part of the Bill which we have been talking about hitherto. We now embark on Part III, which is headed "Transport of Goods by Road," and I do not think it is unfair, as we have now the advantage of a new and certainly most authoritative spokesman on the Front Bench, if I return to the question which from time to time I have asked various representatives of the Government—so far without receiving any very convincing reply. The question arises very much on this road transport section, and it is a question to which I greatly desire an answer. If I may put it in a slightly different form it is: Why have the Government rejected the constructive alternative proposal to nationalization which was put before them at the Second Reading and on a subsequent occasion? It is no exaggeration to say that the question has been absolutely passed over in silence. There was a constructive suggestion (I will not repeat it) which very much concerned road transport. We have never been told whether that proposal was considered, and if it was considered why it was turned down.

What are the difficulties? What are the dangers? What were the reasons for the scheme being turned down? And one would like to know why one may not even receive the compliment of attention. I hope the noble and learned Viscount will forgive me for returning to that. He may say it is a Second Reading matter. This part of the Bill deserves a Second Reading debate. In the ordinary way, it would have had a whole Bill to itself. It is obviously a platitude to point out that the road transport question is very different from the railway transport question. We are dealing with a form of transport which has been created especially for the benefit of every individual trade. It is a most extraordinarily individual form of transport, and as the discussion develops and other Amendments are considered, your Lordships will see how extremely individual road transport is. The railways are a much more rigid structure and, perforce, the traders have to adapt themselves to the railways, but road transport adapts itself completely to the needs of the traders.

That leads me to another question I want to put to the Government. Have they considered having an inquiry, which I think is really proved to be necessary when you are considering the integration and co-ordination of transport? A scientific in- quiry was recommended, I think by the Salter Committee, into the proper method of integrating transport. What would be the scientific basis for the carriage of goods, from the point of view of distance or the point of view of classes of goods? That seems to me to be a step which any Government contemplating a reform of the transport system ought to take as a preliminary to bringing in any Bill. We do not know the facts of that. I am quite sure the Government have not taken it or they would have told us. I want an assurance that one of the first things the British Transport Commission will do is to set on foot such an inquiry.

I would like to support what the noble Earl, Lord Howe, said about the importance of transport in trade recovery, because there is nothing so important to the trader as efficient transport. I beg the Government to consider this matter and look at it through traders' eyes, and not merely as theorists embarking on the reform of transport. I am afraid it is true that this Bill is largely theoretical; the theory is that nationalization must be right. But it will not do for road transport because it is so individualist—even though with the railways it was a foregone conclusion. I beg the Government to get away from theory, to look at it from a practical point of view, and to realize the importance to traders of transport individually adapted to the needs of trade. I do not speak as a trader but anyone who knows about trade knows how important to the trader is his own particular transport. The Government's reply will be that they will provide an equally efficient form of transport. I do not believe they can do it. The importance to traders of people who are accustomed to handling their goods is one which cannot be exaggerated. Such points as whose goods are to be first at market is what matters to the trader.

In these days of regulations and control this sort of thing cannot happen, but I believe it is a fact that years ago the sight of a trainload of potatoes outside London was sufficient to affect the price of potatoes in the market. I do not know if the Government will agree with me that competition as sensitive as that is good for the community. It all helps to make an efficient and cheap service, and I should be happy if I could have an assurance from the Government that they think it would be a good thing for the community if, some day, we could hope to return to free markets of that kind. I would like to know if the Government would approve of that—I hope they would, but I am not at all sure that they would.

I want to ask a question of the noble and learned Viscount because I have read this clause and these subsections, and there are many things which I find hard to grasp. I am pretty sure I know the answer to the question I am going to put, but I would like the noble and learned Viscount to answer. It is a question of the forty miles. I suppose it does not mean, by chance, that forty miles is the allowance wholly for one particular parcel of goods. I suppose it means a lorry must not go forty miles with goods of any kind. What I visualize is a haulier based, say, in London, who makes a daily circuit. Suppose he took a circuit of ten or twelve miles distance from the centre. He could have a radius of fifteen miles, and a diameter of thirty miles. That would give him a circuit of about 200 miles. I believe the ordinary run for a commercial goods vehicle in the day is about 180 miles, so it would be conceivable that one could have a business in which the lorries went round this circle. If that is accepted, it is conceivable that a business could be built up within the compass of the clause, if any individual parcel of goods were not carried more than forty miles.

THE LORD CHANCELLOR

It would be within the clause; it would not be long distance.

LORD BALFOUR OF BURLEIGH

It would not be cut out? It would be all right? Now we are coming to an interesting point.

THE LORD CHANCELLOR

It would not be long distance, so long as you are within the radius.

Loran BALFOUR OF BURLEIGH

The noble and learned Viscount is forgetting the forty miles.

THE LORD CHANCELLOR

Oh, no.

LORD BALFOUR OF BURLEIGH

If we can confirm that: it is within the Bill, I think it would help us very much. I did postulate the haulier who established a circle 15 miles from the centre, his lorry running round it for a distance of 180 or 200 miles, and apparently that is all right, provided that he does not take any individual parcel of goods more than 40 miles.

VISCOUNT MAUGHAM

That has nothing to do with it.

LORD BALFOUR OF BURLEIGH

I am glad to have that, and I think it might be of some assistance.

THE LORD CHANCELLOR

I think I had better rise now. The noble Earl, Lord Howe, will be glad to realize that one of the volcanoes is about to erupt Let me at once say that I do not claim that the Minister of Transport has had any divine inspiration in selecting the figure of 40. Wherever you draw the line, it must be a purely arbitrary line. It is asked: Why put 39 in and 41 out? Equally, if the noble Earl will forgive me, I do not think he was divinely inspired in suggesting the figure of 80. I strongly suspect he was following the old game we used to play where one fellow thinks of a number, and the next one doubles it; whereas we said 40, he said 80. And, if he will forgive me for saying so, I think the noble Earl, Lord Selkirk, added on the number he first thought of, and he would like the figure to be so much. There would be no, what is called, "Euclid" to be done at all, because there would be no vehicles to be taken over.

THE EARL OF SELKIRK

The noble and learned Viscount has correctly divined my thoughts.

THE LORD CHANCELLOR

The noble Viscount, Lord Long, made a most moving speech—it almost overcame me—about these goods from Bristol which will have to be put down just one mile from his house, and have to be manhandled for the last mile.

VISCOUNT LONG

On the contrary—four miles.

THE LORD CHANCELLOR

That is even worse. But, wherever you draw the line, these things may happen; and if you draw the line at eighty miles there will be some noble Lord who will say: "That is just too bad: I am eighty-four miles away, and I have got to manhandle the goods for the last four miles." So you have got to draw a line, and it must be an arbitrary line—I readily conceive that. But what should not be arbitrary is what this Bill provides. With regard to that there seems to have been a certain amount of misunderstanding, which I will now, to the best of my ability, clear away. I am grateful to the noble Lord, Lord Beveridge, for pointing out that there are two entirely different conceptions here. I do not think that was present to the mind of the noble Lord, Lord Balfour of Burleigh. There is the Clause 39 conception—the test of what vehicles you take over—

LORD BEVERIDGE

What undertakings.

THE LORD CHANCELLOR

What undertakings you take over, and there is the Clause 52 conception, of what restrictions you impose upon the undertakings which you do not take over. The two conceptions are quite different in the Bill. Unless one starts by realizing that, one cannot begin to understand this part of the Bill at all. Therefore, I would most humbly say to your Lordships: Do let us bear in mind these two different conceptions—that of the undertakings you take over, and that of the restrictions you impose on the undertakings which you do not take over. On the Clause 39 conception (the undertakings which you take over) the test is this—and here I differ from the noble Lord, Lord Beveridge, perhaps in words only. I do not think there are two tests; I think it is one test really—it is a test sub modo, as it were—and that test is forty miles.

We endeavour to differentiate between long distance and short distance traffic. The first test we take is: What is long distance traffic? We say that long distance traffic is traffic over 40 miles. Then we propose to take over an undertaking if it is predominantly concerned in long distance traffic, and we define—I think it is in Clause 41—what we mean by "predominantly concerned." The 40 miles only brings in the undertaking if it is a certain type of 40 miles; that is to say, if it is a distance of 40 miles measured by road which goes out of a circle. That is the position. If it is 40 miles within the circle, we do not take it over; it is not long distance traffic within the definition. Equally, on Clause 52, if you confine yourself to journeying within the circle, no matter how far you go, you are not interfered with at all. With great respect to the noble Viscount, Lord Maugham, who put this clause very clearly—and I agree with him—he said that if from the spindle you first of all journey to 12, and then journey to 8, thereby doing more than 40 miles, you get yourself into trouble.

VISCOUNT MAUGHAM

No. I added that in the meantime, on your way, you go outside the sacred radius, and I gave an illustration.

THE LORD CHANCELLOR

The noble Viscount will see what he said. I think he really meant that. The noble Viscount said that if you journey from the spindle to 12 and then journey to 8, you will get into trouble about it. You will not. That is the test. It must be that you are predominantly concerned in long distance traffic, and long distance traffic is traffic of 40 miles. The test is if you carry a consignment of goods for more than 40 miles, and at some part of that journey you are going outside the radius. That is the test, and I venture to think that that really is simple enough. It may be right, it may be wrong, but that is the test, and it is nothing to do with the Clause 52 position as to what you can do.

Now is it going to be so very difficult to perform this function? In a case of dispute, the Tribunal have to put an undertaking in one camp or the other. Some of your Lordships have told me that these undertakings have no books and no records. If that is so, what is happily described as "Euclid" will not have to be done. There is a good deal of information about these undertakings at the present time. They have to get petrol licences and they have to give minute particulars as to their business. They will find that a very great deal of information about the nature and extent of their business is available. No doubt they will be able to give—and they must under this Bill—such information as they can, and in practice we believe that a complicated sum (I agree it must be a complicated sum) will have to be done in a very few cases, but that in the vast majority of cases people will know without the slightest difficulty whether they fall into one category or into the other.

As the noble Viscount, the Leader of the House, pointed out the other day, the difficulty of the "Euclid" or, as I prefer to call it, the arithmetic, is just as acute if you take this Amendment proposing 80 miles as it is if you take 40 miles—which is quite true. The wider you put your limit, the fewer vehicles you take over and the less arithmetic you have to do. It is a fact that if, instead of 80 miles, you had 800 miles, there would be no arithmetic at all; and I cannot help feeling that some of your Lordships would have very much liked to have moved "800" instead of "40." But your Lordships must remember that the cardinal object of this Bill is expressed in Clause 3: It shall be the general duty of the Commission so to exercise their powers under this Act as to provide, or secure or promote the provision of, an efficient, adequate, economical and properly integrated system of public inland transport. If we can do that, well, that is a justification for the Bill, and if we cannot do that, then it is a Second Reading point and the Bill ought not to have had Second Reading. This Bill starts on the assumption that we can do it, and we reassure the noble Viscount, Lord Long, that it really is not a fact that these goods will have to be dumped 40 miles away. On the contrary, they will be delivered promptly and efficiently to the moment in the vans of the Commission.

VISCOUNT LONG

Time will tell.

THE LORD CRANCELLOR

To console the noble Viscount let me add— "plain vans" if necessary. That is the position. We maintain and believe and hope that we shall be able to do that. If we cannot, there is no occasion for this Bill at all, I quite agree. If, on the other hand, we can—and this Bill proceeds on that assumption—I shall not take the opportunity of breaking the rules of order (which, greatly to my surprise, the noble Lord, Lord Balfour of Burleigh, tempted me to do) to embark on a Second Reading speech on this simple Amendment, as to whether the distance should be 40 miles or 80 miles. The Bill proceeds on the assumption and belief that we shall be able to provide an efficient, economical, and altogether excellent transport service.

Having said that, let me come to the question of what the figure should be. We have to draw a line between long distance and short distance traffic, and I would suggest to your Lordships that 40 miles is a fair figure at which to draw the line. I cannot prove it, any more than noble Lords can prove that 80 miles is. It is quite obvious that when you get over 40 miles you get to the point where competition with the rail becomes severe; with the short distances—under 40 miles—it is not so severe. Therefore, we have selected this figure of 40 as being the best, always provided that the 40 miles goes outside that circle which I have indicated to your Lordships.

In the rival view—I think it was the view of the noble Lord, Lord Beveridge—the right thing to do is to have a kind of free-for-all. That means you are going to do away with the present restrictive system, if it is restrictive, and let everybody do exactly what he likes. I strongly suspect the noble Lord, Lord Beveridge, does not try to drive a car along the roads, but if he does will find the roads even more cluttered up with vehicles than they are to-day. Our view is a properly integrated economic system, which this Bill gives a chance of getting. We have taken a limit of 40 miles, and in Clause 39 we have taken the 25 miles from operating centre. There is a great difference between 25 miles and 50. A distance of 25 miles from operating centre would give you an operating area of just under 2,000 square miles—1,900 I think (we can all do [...] r²)—whereas the radius of 50 would give you an area of approximately 8,000; so that your Lordships will see that by increasing your radius from 25 to 50, you increase fourfold your area of operations.

There is one other test as to the number of vehicles which we anticipate we shall take over. There are something like 91,000 vehicles, including the railway vehicles, now operating under "A" licences. If you take the railway vehicles at about 10,000 there are about 81,000 operating under "A" licences; and we anticipate that under this existing test we shall take over rather less than a quarter, that is, about 20,000. Surely, that is pretty moderate. If we were to increase the figures in the way your Lordships desire in this Amendment it would be a very small fraction that we should take over. Of the "B" licence vehicles we anticipate that we shall compulsorily acquire about 2,500 out of a total of 58,000. I agree that those figures, of course, cannot be precise; there will be a margin of error. But, having gone through them with very great care, and a great many of the facts being known, that is the sort of figure which we anticipate will be the result.

In those circumstances, I am frankly astounded at my own moderation in saying that we should fix the distance at 40 miles; to double it, to increase it at all, is to do something which we cannot possibly accept. We believe that we have gone as far as we possibly can. We have stretched this thing as far as we possibly can; perhaps we have gone too far. I am not seeking to go back on it, but we certainly cannot go further, and I ask your Lordships to say that if we are to be able to run this properly integrated and economical system which we all desire, to take over only that comparatively small proportion of the existing vehicles shows that we are acting very reasonably towards the industry. I regret to say—and one can argue this for ever—that I cannot prove that 40 is right; and you, my Lord, cannot prove that 80 is right. You have to draw a line somewhere; we think we have drawn it in about the right place. We think that this 40 miles is the fair test of short distance turning into long distance, and I ask your Lordships to say that in this respect we are right. I know your Lordships attach importance to this, but there is really nothing more to be said. It is an arbitrary line, and for the reasons I have given I ask you to support us in not exceeding the 40 miles.

VISCOUNT SWINTON

Certainly no one will ever accuse the noble and learned Viscount the Lord Chancellor, of being an extinct volcano. Vesuvius is always in eruption when he is intervening, and another attraction in having him intervening in these debates is that we know that everything that can possibly be advanced in support of a Government claim will be advanced in the most charming and most effective manner possible. Therefore, we have now before us everything that can be said for this proposition. Now let us examine it ourselves. I entirely agree with the Lord Chancellor that in all this extraordinary mathematical jungle we are all uncertain—although he is a little more certain than we are—about the data. It is important to see the wood through the trees. The object —I leave out the attractive preface—is to satisfy us all. The people who are concerned in this are the consumers. May I say that they are the people who are really concerned? We must try and do justice to the people who provide the transport, but I hold my brief entirely for the consumers, of whom I am one and for whom, indeed, we are all the trustees; and it is up to us to see that they shall get the most efficient service.

When you come to that preface about providing "cheap and efficient transport" it does not say how it is to be done. That is to be the function of the Commission; it may be done by buying people out or it may be done by co-ordination. May I say in passing that I quite agree that Clause 39 is one clause—it says what are the businesses to be taken over—while Clause 52 is the clause which says what those people who are not taken over shall be allowed to do; but obviously we must look at the two together. It would be extremely unreasonable that we should deal separately with the people who are taken over, and then say that a lot of other people can engage in more extended business if the business they wish to engage in is more extended than that which is now to be taken over.

As the noble and learned Viscount, the Lord Chancellor, himself said in an earlier Debate, what really matters here is not ownership but co-ordination. It is rather interesting, too, that the whole basis of his speech to-night was that what matters was ownership and not co-ordination. No one can pretend—and I am sure he would not think of doing so, because he is always too wise to use wrong arguments—that it is not possible to have co-ordination without change of ownership. It is quite possible, as everyone knows, to achieve co-ordination without any change of ownership. Co-ordination was introduced by the Labour Government in 193o, and was carried on by another Government—the National Government I think it was, but I will not bother about the name now—in 1933. Of course co-ordination can be achieved perfectly well, irrespective of ownership. Indeed, co-ordination has to continue under this Bill. If ownership were an essential to it then the octopus would eat everything. The real test is what should it eat?

The purpose of the Government—and I put this as a challenge, having established that co-ordination can be perfectly well brought about without change of owner- ship—in taking over a great deal of the road transport business is not to ensure co-ordination but to insure the railways which they are taking over. Even assuming that that is a reasonable thing to do, I am not sure that the consumer will do particularly well out of this. But if it is the insurance of the railways that has to be effected then all you can possibly claim to take over is genuine long distance road transport, because that is the only thing that competes effectively with the railways. And that means transport over far longer distances than this 25 mile radius and the 40 mile journey.

I will answer, in a moment, the question regarding the test of 40 miles, which I agree is entirely arbitrary, and I am going to say why 80 miles is not arbitrary at all. If I may be permitted, I am going to develop that. But in order to decide whether it is wise to take over much or to take over little, and remembering always that the matter is one of the consumer's interest, surely it is wise to see whether we can found ourselves on experience. The noble and learned Viscount, the Lord Chancellor, said we are going forward into this brave new world, setting up this great new undertaking, and we shall all find the goods delivered at our doors by cheaper and better transport than ever. But we have had some experience in this respect. It is not as if this experiment had never been made. It was made in 1943 by the Ministry who are to do it now with an equally able Minister, if I may say so, and with (I am sure) a genuine desire to make the scheme work. So we know that we can apply the exact practical test.

May I now commend to the noble and learned Lord Chancellor the Report of the Select Committee on National Expenditure, for the Session 1943–1944? I hope Lord Ammon will come from the obscurity of the back Bench to the place he should properly occupy on the Front Bench, because he was one of the people who made this Report.

THE LORD CHANCELLOR

That is why he is on the Back Bench now!

VISCOUNT SWINTON

I thought that disciplinary rules had been suspended for the time being. If my noble friend has been sent to Coventry, we shall all understand. Let me quote his admirable findings. This scheme is not on forty miles; at any rate they did go farther, and they took sixty. It is really a valuable document. It says: There were widespread complaints … that under … the Ministry of War Transport much valuable time was being lost, there was a heavy mileage of empty running, and far too many journeys were made in which vehicles ran outwards only lightly loaded. The Committee were very fair. They thought this might be just the new machine getting into its stride and having its teething troubles, and as the machine grew so things would get better. But not at all, said Lord Ammon. It was hoped that these were simply what was to be expected in respect of any new organization in its early days; but as time went on, criticisms and complaints increased rather than diminished. Then let us see what they tried to do. These were their laudable objects: No traffics are conveyed by road which should be carried by some other form of transport. That was one time when they thought of helping the railways—but it was necessary in war. Such traffics as are conveyed by road are moved at the lowest possible cost in vehicle miles by the use of the most suitable vehicle for the particular movement. … All vehicles included in the organization are available to meet fluctuating demands and emergencies". That is the pool. It is particularly at the failure to reach any of these important aims that criticisms are levelled. That was the experience. It goes on at paragraph 29 all in the same strain and this is really extraordinarily apposite: The road haulage orgarization is, on paper, well designed to perform the functions for which it is intended. In practice, however, there is every reason to doubt whether the objectives have been attained. We come on to the conclusion: There is much avoidable light loading and empty running … numerous cases where a convoy of empty lorries had been sent long distances while goods were awaiting transport to the very areas to which it was going. … Figures were produced showing the general running expenses and freight charges have in some cases been nearly doubled since the inception of the organization. We were to get cheaper and more efficient transport. Under this very Ministry expenses were doubled.

VISCOUNT ADDISON

The carriage of war material.

VISCOUNT SWINTON

Certainly, but this was the result of seeking economy and efficiency in the carrying of goods when you had everybody you could draw upon: So much time is taken up with filling in the forms required by the Ministry before a vehicle can set out on a journey that marked delay in starting its day's work is occasioned. Not only has this necessitated a large increase of clerical staffs, but it means that a driver when finding himself without a load, is not able to get his instructions by telephone and has to report in person to a control centre. Then they go on to quote what happened in the applicable twelve weeks before this control was set up and the applicable twelve weeks after. An average of 140 lorries carried 4,600 tons, over 124,000 miles, and only 5.13 per cent. represented empty running. They compare that with 172 vehicles that travelled only 68,000 miles and carried 2,900 tons, and the empty wasted capacity was three times what it was before. Then they quote another instance where empty running went up from 67 to 18 per cent.

I venture to quote that because I believe that an ounce of practice is worth a ton of theory, and when you have had exactly that experience for exactly this kind of scheme, under exactly this Ministry, that is the best answer to the splendid idea of the noble and learned Viscount the Lord Chancellor that it is all going to be so very much better now. Then they did not attempt to do this on the forty miles basis; they said that sixty miles was enough for them. I should have thought that practical experience was a good reason for making it sixty miles. I will tell the noble and learned Viscount the Lord Chancellor why eighty miles is the real figure. Eighty miles is the ordinary economic run that a lorry and a man can do in a day. If you ask any haulage company, you will find that forty is a purely arbitrary figure and is a purely foolish one. You cannot go across Greater London; so could anything be more futile? You cannot travel between Liverpool and Manchester, or between Edinburgh and Glasgow. This is a Bill to stifle road transport, not to improve road transport.

The noble Lord says that the arbitrary figure of forty is the happy mean. I should certainly not have called it this. The sacred ibis is safest in the middle, as the schoolboy translated medio tutissimus ibis. The one thing that is going to be saved under this Bill will be the railway, which will be protected by forbidding the consumer to send his goods except as the Commission shall direct. The argument always seems to me to fall between whether you are going to take over so few vehicles that it really is immaterial or that the competition is so important. If it is so few then your case really falls, but if it is so many, then surely the answer is that the more it is (and you really do not know the number) the more the consumer is going to be penalized. The small men —many of them are small men—have met the infinitely varied need of the trader, the manufacturer, and the industrialist. They are employed because they can give at the right moment the service that the occasion needs. Why on earth should they not be allowed to continue—in justice to them it you will, but what concerns me even more than doing justice to them is the interests of the consumer.

There cannot be the least doubt the Government had to give way over the "C" licences. I believe that unless they take "C" licences into their great grandiose scheme the thing will not work. I do not think the Bill is going to work in this matter, but public opinion and public need forced them to give up the "C" licences. The only result of this clause is going to be that almost whenever you put the small man out of business the industrialist and the trader is going to find that he has to invest in a motor vehicle of his own, because of these delays, because of these extra charges, and because of this red tape, which characterized the whole thing when we tried it in 1943, in the stress of war, when the Ministry of Transport admitted that the only effective thing that control had done was to keep traffic off the road. Is that the object of this clause? If the object of this clause is to keep traffic off the road, and to deny the trader and the industrialist the chance of efficient road transport, then I say this clause of the Bill is admirably designed for its purpose. But if it is the object of the Bill that we should have an efficient system of transport to serve the needs of the public, then I say that this House is in duty bound to pass the Amendment which has been proposed.

LORD SHERWOOD

I should like to say a word or two upon this matter. We have certainly had a long distance speech from the noble Viscount, Lord Swinton. It is not an easy subject, but I myself agree with the noble and learned Viscount, the Lord Chancellor, to a certain extent. If you are going to have a boundary at all, you must set one. I do not differ from the noble and learned Viscount on the choice of 40 miles. We have had it in the countries. I have found, in dealing with coal, as a colliery owner, that you cannot go into another county without experiencing trouble. The distance of 40 miles is not an unfair one. I did not agree with the noble and learned Viscount when he suddenly issued a threat about the petrol licences, because I thought that was unnecessary I support the Government on this point, if they mean it; but do not bring in the threat about petrol licences.

THE LORD CHANCELLOR

I think the noble Lord misunderstood me. I did not bring in a threat about petrol licences; I simply said the information about the nature of the business was available.

LORD SHERWOOD

I think the noble and learned Viscount indicated that it was a sort of understood thing.

THE LORD CHANCELLOR

If I said that, I am sorry; I did not mean that.

THE EARL OF SELKIRK

May I ask the noble and learned Viscount, the Lord Chancellor, whether it is his case that information necessary for the Commission under Clause 39 will be available in the applications for petrol licences, and the applications for licences from licensing commissioners? Does the noble and learned Viscount contend that that information is already available?

THE LORD CHANCELLOR

I contend that if records are not available, and records have not been kept—as I think the noble Lord said they had not been kept beyond three months—there is still a great deal of information; and I gave the petrol applications as an instance on which a tribunal would be able to make up its mind.

LORD KENILWORTH

There is one important point which has not been dealt with this evening, and that is the inevitability of the reduced use of motor transport. It appears to be quite clear that these restrictions and the reduction in the use of motor transport is going to do a great injury to the motor industry, which is doing a great work in this country. This should be very carefully considered by His Majesty's Government. Motor transport in many other countries of the world is allowed to expand without any limit at all, and if one travels about one appreciates how valuable this long distance traffic is. It should be encouraged in every way. I think that is a point which deserves consideration.

LORD HAWKE

When the noble and learned Viscount said something which led me to believe that information was going to be available from petrol forms which would ultimately assist in hanging the fillers of those forms, it gave me a profound shock. I was very pleased to hear that such was not his exact meaning. I cannot help feeling that many of the great men of the past, if they had seen this Bill, would have said, "A pox on all these lines", or words to that effect. They would have scrapped this radius business and this distance question, because it seems to me ultimately unworkable to have so many people in the nation counting up distances and so on.

The traders and the road haulage industry have received a great deal of support in your Lordships' House to-night, and the noble Viscount, Lord Swinton, has spoken up for the consumer. I should also like to say a word for the consumer, because that is all I can claim to be in this matter. It seems to me that we consumers have two interests in this Bill. In the first place, we want the railways to be, solvent—we do not want any more shillings charged on our ounce of tobacco to pay for the railways. At the same time, we want a highly competitive and efficient system of transportation, because our cost of living is rising daily and we do not want to see that going up any further. Though we want to see the railways solvent, we do not want them to be over-solvent because we want them to be on their toes the whole time.

The noble Lord, Lord Monkswell, at an earlier stage in this Bill, pointed out the very great improvement in the efficiency of the railways that came as a result of the development of road transport, and we consumer want that to continue. We want the railways to be solvent, but not over-solvent, because we do not want them to turn into another Post Office which is overcharging us very heavily as a tax. The Government will claim that in order to make the railways solvent these lines and circles and things are absolutely essential. I personally do not believe that at all. Every inflation in money is to the advantage of the railways; the new lorry costs a great deal more money, but the track and the station is there already.

The result of this Bill, if the Amendment is rejected, will be a great increase in the number of "C" licences. The noble Lord, Lord Beveridge, has pointed out that any form of restriction—I think he specifically mentioned any increase in the number of "C" licences—automatically means that the chance of a load is lessened and that means that the transport of the country is bound to be used in a less efficient manner than it should be. The solution is perfectly clear—not to take over any of these vehicles at all except those which come with the railways, or possibly some very long distance vehicles. If the railways cannot be made to pay, then tax the road vehicles in such a manner that the railways can pay their way. You would thus, with the existing administrative machine of the Inland Revenue, achieve a purpose that is to be achieved by a perfect host of officials under this Bill.

LORD DE L'ISLE AND DUDLEY

The road transport industry is one of the youngest industries of this country. After the last war a great many people of small means, some with a good deal of ingenuity and some with very little, put their money into this industry. The successful ones survive to-day. We are frequently assured by Government spokesmen that what we require to-day is hard work, initiative and enterprise. You will be dealing a very severe blow to the morale of the country if these sections of our industry, who have shown exceptional zeal and enterprise, see the whole future of their industrial career cut off by this Bill.

The noble and learned Viscount, the Lord Chancellor, has admitted to us that the tests for taking over what is called in the Bill long distance transport are purely arbitrary, in the interests of co-ordination. I feel bound to point out that the Government always have two strings to their bow; sometimes they play the theme of co-ordination, and some- times on the growing threat of the monopoly. Tonight the Lord Chancellor has sung in the co-ordination key, while the noble Viscount, Lord Addison, when he answered the noble Lord, Lord Balfour of Burleigh, before we went to Committee, harped on the monopoly theme. I do not think that the monopoly theme holds water, and I have heard nothing in this debate to bear out that road transport is becoming a monopoly. So we are brought to the question of co-ordination. I do not agree that co-ordination means ownership; co-ordination and ownership under Government control, thus creating a monopoly, really means restriction. Restriction is a very old device; the first restrictor recorded, not in history, but in mythology, was Procrustes. He should be sainted in the hagiology of Socialism.

LORD CAWLEY

I plead with the Government, if they cannot accept this Amendment, at least to make some concession. It is said, in quoting figures on density of population, that there are within 40 miles of Manchester 8,000,000 people scattered over that area in a vast number of small towns. A great many of these towns would not be known by name to your Lordships, but they are much larger than some places which most of us know well by name. They are served by a number of small hauliers who arrange to send their vehicles from town to town, with the object of always having as large a part of the load as possible, and it is difficult to conceive how the arrangements which these men make after the manner mentioned earlier in the debate can be carried on by Government-controlled vehicles. In my opinion, only a man or small firm who can give it personal attention can carry on a business like that. The cotton trade itself depends largely on the transport of goods. It is a fact of the cotton trade that the spinning is done in one place, the weaving in another and the dyeing and printing in another. But there it is; and it may be some time before that state of things can be altered. That causes a tremendous amount of traffic among these scattered towns. As I say, it is hard to conceive how that can be carried on so well by any large body as it can be by the small hauliers who at present do the work, with their anxiety always to have a load, or as large a part of a load as they can. I hope the Government will look into it and, if possible, undertake to give us something of what we have asked for by an Amendment at a later stage of the Bill.

VISCOUNT BRIDGEMAN

Listening to the argument from the other side, it struck me, as the noble and learned Viscount's speech went on, that we are getting more and more into the position where we are not saying that there is a need to make this change in order that transport may be more efficient. Gradually, the arguments were sliding into another form. We were saying, "We shall not make transport less efficient if you will agree on these Benches to the radius being 40 miles." Nothing that has been said to-night, so far as I can see, has tended to prove that these restrictions in Clause 39 and Clause 52 of the Bill will do more than impose an additional restriction on road transport. Those of us who have had anything to do with business of any sort during the war will have noticed that gradually, bit by bit, the energies of business people have been diverted from their proper work—the creation of wealth—to what I would call a more improper business, or a less proper business—namely adjusting their business affairs to fit the needs of taxation and Government regulations. If ever there was a clause in any Bill designed to further that object here we have it in Clause 39. It compels every small haulier to draw circles—whether large or small I would not know —to see whether, if he takes an ordinary job which he would accept otherwise in the ordinary course of business, he is infringing the course of the law; whether he can take a load which runs 41 miles if it goes in a straight line, or whether he can take a load only if it follows Mr. Hilaire Belloc's description of the English road—namely "the road made by the rolling English drunkard."

I suggest strongly to your Lordships that we have had enough of the sort of legislation which diverts ordinary commercial people from the business of making profits and creating wealth to the secondary business of seeing to it that they are not infringing some law or another. It has been argued, whether you take it as a proposition of Euclid or not, whether you should have 40 miles or 8o miles or 25 miles or 50 miles; but the point, or one of the points, of the Amendment put forward from these Benches is that if you have the wider scope proposed by this Amendment more ordinary, small, common people, small road haulage proprietors, will be able to go about their business in peace and quietness, and less time will be spent in making dead mileage to avoid prosecutions. I do not think anyone can say that this Amendment is one which strikes at the heart of the Bill as drafted. I do not think anyone can say that the Government, or anyone else, had a mandate for the figure of 40 miles. I feel that the wider figure, if it were agreed to by Parliament would have this effect: It would expose nationalized transport to healthy competition, and then we should see, far better than by arguments in this Committee, whether Clause 3, of the Bill will really prove effective, and whether the promised integration and co-ordination will stand up to the ordinary competition of ordinary small people. That, I think, is why this Amendment should be agreed to.

LORD GIFFORD

I would like to give just one more reason to noble Lords opposite why I think they ought to look favourably upon this Amendment. I honestly feel that their own supporters would really be in favour of it. I knock about a good deal, and I have a lot of friends in every walk of life. If noble Lords opposite asked members of their Party in another place to go back to their own towns, to got in touch with their electorates, to talk to the people generally, and to ask them whether they are in favour of restricting the small haulier in this way, I think they would find that there was a general answer of "No." The small haulier is a very powerful influence in the community. He gets about everywhere, he is usually a very good mixer, a good canvasser, a good ambassador. I think that if the noble Lords opposite insist on ruining him, and cause him to lose his business, they will lose a very large number of their followers. That, I suggest, is a point which they should consider most carefully.

VISCOUNT ELIBANK

I regret that I was not in the House when the Lord Chancellor spoke in reply, but I understand that he made no particular reference to the position with regard to Scotland. Now I suggest that that is a matter which is of considerable importance so far as this Amendment is concerned. It is true that the noble Earl, Lord Selkirk, referred to the question in speaking of the distance between Edinburgh and Glasgow. But that is not the only point connected with Scotland. So far as I can see, if the Bill remains as it now stands, the radius of 40 miles will be absolutely injurious to the whole situation with respect to Scotland. Consider what would happen with regard to Loch Fyne, for instance. If you have got to get from one part of Loch Fyne to the other you will find that 40 miles is no distance at all. You probably have to travel 7o miles to get from one point to the other. Take my part of the country, in Southern Scotland: we are in equally the same position. From Edinburgh to Moffat you probably have to travel, instead of 30 miles across country, 60 to 70 miles. I ask the noble and learned Viscount to look at this issue from the Scottish point of view, quite apart from the English point of view. I suggest that if this Amendment is not accepted it will make the situation absolutely impossible for Scotland, and it will add to the efforts which Scottish noble Lords will make when the question comes up again, so far as the Scottish Transport Executive is concerned, to impress the Government even more with the Scottish point of view than they have already done.

I see that the noble Viscount, Lord Addison, smiles. He always smiles when Scotland is mentioned, because he seems to think that we in Scotland are not serious on these matters. He said so in fact in the debate only two days ago.

VISCOUNT ADDISON

Quite the opposite.

VISCOUNT ELIBANK

If he did not say so, he indicated it. I assure him that Scotland is serious about these things, and Scotland will be hard hit so far as "A" and "B" licences are concerned under this section of the Bill. I suggest to the noble and learned Viscount that he should consider it from the Scottish point of view, and even if he cannot secure for his own countrymen what they desire he will do something for Scotland, and perhaps agree to have an Amendment put down on Report stage.

THE MARQUESS OF SALISBURY

We have had a long and, I thought, extremely interesting—and at times extremely enter- taining—Debate on what is clearly one of the most important provisions of this Bill. I believe the House is ready to reach a decision and I do not propose, in the few words I would like to say, to traverse all the arguments made. The noble and learned Viscount, the Lord Chancellor, speaking with the utmost persuasiveness as usual, attempted to bemuse your Lordships with one of the most casuistical arguments I have ever heard, in this House or anywhere. He said the object of this provision was to produce an efficient and well-regulated transport service, which I can well believe. He said that if we accepted that we ought not to go against this provision. Then he said that if we did not think that, we should have voted against the Second Reading. I confess that at the university I had the misfortune to fail in elementary logic but I think that even I can see the fallacy of that. When all is said and done, that is an argument against any Amendment in any Bill. I have often heard the noble and learned Viscount say that the main function of your Lordships' House is to amend and revise legislation, and that is exactly what he now says is an impossible thing to do.

In spite of what the Lord Chancellor has said, I ask the Government to consider most carefully the effect of this provision and if possible to make some concession to your Lordships. I am certain I represent the great majority in this House. I ask the Government to believe that I am not urging this from a purely Party point of view. I am really concerned with the effect that the present provision will have on the life of the community, which is a matter of vital interest to all of us, to whatever Party we belong. The speeches which have been made on this Amendment have exposed a situation before which I should have thought the stoutest heart might quail. As I understand it, it seems to me that the effect of the present proposal would be that the Commission, or the Commission's servants, in order to decide the character of each individual undertaking, whether or not it is to be taken over by the Government, will have to consider an immense amount of information about each of these undertakings.

The noble Earl, Lord Selkirk, referred to 50,000,000 journeys. I do not think the noble and learned Viscount, the Lord Chancellor, either accepted or denied that in his reply. I do not know whether he would accept that as a fair assessment of the number of journeys which would have to be calculated, but even if the Government do not accept that figure, it is evident that there will be an immense amount of calculation to be done; and a decision will be dependent, not only upon the length of the journey, but the character of goods carried; and other details would have to be weighted in the decision. The noble and learned Viscount, the Lord Chancellor, made an extremely elaborate explanation, and every three or four sentences he said "You see how simple it is." It may have been simple to him, but everything he said made it more difficult to me. I was struck by the fact there were two Lord Chancellors in the House—the noble and learned Viscount, Lord Maugham, and the noble and learned Viscount, the Lord Chancellor—and even they disagreed as to the interpretation of these rules and regulations. If two great legal luminaries of that kind disagree, what is the small official to do who has to interpret these regulations upon which will depend the livelihood of a vast number of people.

Can anyone believe, if he is at all frank with himself, that there will be adequate consideration given to each of these cases? I do not believe the machinery exists, I do not believe that adequate officials exist. The officials who will be there will not all be experienced responsible officials. The great majority of them, inevitably, will be minor officials, with little experience and little elasticity of mind. They will have to decide on what I think the noble and learned Viscount, the Lord Chancellor, will agree will not be complete information. The noble and learned Viscount said that the Government had considerable information from the petrol applications, but I do not think that the petrol applications will give the information needed for this purpose. I do not know; but I do know that one has to give, broadly speaking, the purposes for which one uses the petrol, and for which journeys are made. That is the sort of form most of us have to fill in, but one does not have to say every journey and where one is going. I do not believe that the road hauliers do so either.

They do not have to say what form of goods will be taken, and the Government will not have any of this information. I do not think that the noble and learned Viscount, the Lord Chancellor, or any other member of the Government, can contend that the petrol applications will give the necessary information. I may have been misinformed, and I do not wish to be slanderous, but I have been told that one of the main sources of black market petrol to-day is the coupons which are sold by lorry drivers. If this petrol is calculated as having been used in the service of their masters, it seems to me that their masters may have a very raw deal under this Bill. What will be the inevitable result of this? In the view of practically all who have spoken—and they are people with considerable experience on this subject—it will strike an extremely severe blow at the complex inland transport of this country, which is not susceptible and has never been susceptible to a straitjacket; moreover, the machinery which will decide what is to be taken over and what is not to be taken over, if not completely unworkable, will be extremely unsatisfactory. It will lead to inefficiency, to muddle, and to unfairness and it may well lead to a measure of chaos.

That is something I would have thought that the Government especially would wish to avoid, because that suspicion of unfairness, above all, leads to contempt of the law. By the multiplicity of regulations which are growing up, which are festooning our national life at the present time, and which are hampering and stifling human enterpise, the whole of the respect for the law in this country is being steadily undermined; and it is no good the Government or us concealing that from our minds. This will only be increased, in my view, in the minds of those who are lightly dispossessed on insufficient evidence, Nothing will increase that contempt and resentment more than that. And its infection, if I may say so, is likely to affect also the undertakings which are not taken over by the Government. If you once cause a contempt for the law, that contempt for the law affects everybody. The British people, as we know, are very wise and very experienced, and they will always keep the law if they believe it is sensible and necessary, even at great sacrifice and inconvenience to themselves. But if they think a law is foolish, they treat it with utter contempt. Your Lordships will remember what happened some years ago with regard to the 20 mile Speed limit. Nobody kept it; people thought it was nonsense; and eventually the Government came into line and withdrew it. That is what will happen with regulations of this kind, if they are too rigid and do not represent the commonsense of this country.

It may be said that the Amendment which has now been proposed will not entirely avert that danger. But it will at any rate reduce it; it will be more sensible, and it will reduce that danger considerably. The noble and learned Viscount, the Lord Chancellor, in the speech which he delivered to-night, said that if there are hard cases at 40 miles, there will equally be hard cases if you make the distance 80 miles. Therefore, I understood him to say, it did not make much difference whether you have 40 or 80 miles. That may be very good dialectics, but, surely, it is not common sense. If I said that for 40 miles we should substitute a figure of one mile, does the noble and learned Viscount think it would make no difference? Of course, there would be hard cases in both events, but our contention is that by adopting 80 miles you will remove the great majority of the really hard cases of local

road transport people, who have built up their business, and made up their livelihoods in that business, and who are willing and anxious to continue under an elastic system which enables them to do what they can for the community. Those people rarely go beyond the 80 miles limit; they constantly go beyond the 40 miles limit. That is really our argument for our figure, rather than the Government figure. That is all I have to say to-night. I appeal to the Government, for the reasons which I have expressed, which I hope I have not put in a provocative way, even now—and I use this phrase in a political sense—at this late hour, to reconsider the decision which the noble and learned Viscount, the Lord Chancellor, announced, and to accept this Amendment. If they do not, I am afraid—not for any Party reasons, but in the interests of the industry and the community as a whole—that we shall be obliged to vote for the Amendment.

On Question, Whether the word proposed to be left out shall stand part of the clause?

Their Lordships divided: Contents 21; Not-Contents, 73.

CONTENTS
Jowitt, V. (L. Chancellor.)	Ammon, L.	Marley, L.
	Chorley, L. [Teller.]	Morrison, L.
Huntingdon, E.	Darwen, L.	Mountevans, L.
	Faringdon, L.	Nathan, L.
Addison, V.	Hare, L. (E. Listowel.)	Pakenham, L.
Hall, V.	Henderson, L. [Teller.]	Shepherd, L.
St. Davids, V.	Kershaw, L.	Strabolgi, L.
	Lucas of Chilworth, L.	Walkden, L.
NOT-CONTENTS
Aberdeen and Temair, M.	Bridgeman, V.	Ebbisham, L.
Reading, M.	Elibank, V.	Fairfax of Cameron, L.
Salisbury, M.	Falmouth, V.	Gage, L. (V. Gage.)
Willingdon, M.	Hailsham, V.	Gifford, L.
	Long, V.	Grenfell, L.
Abingdon, E.	Maugham, V.	Hacking, L.
Albemarle, E.	Ridley, V.	Hampton, L.
Beatty, E.	Samuel, V.	Hatherton, L. [Teller.]
Craven, E.	Simon, V.	Hawke, L.
De La Ware, E.	Swinton, V.	Hazlerigg, L.
Doncaster, E. (D. Buccleuch and Queensberry.)	Templewood, V.	Howard of Glossop, L.
	Wimborne, V.	Kenilworth, L.
Drogheda, E.		Llewellin, L.
Dudley, E.	Addington, L.	Lloyd, L.
Fortescue, E. [Teller.]	Balfour of Burleigh, L.	Luke, L.
Grey, E.	Beveridge, L.	Milford, L.
Howe, E.	Cawley, L.	Moyne, L.
Lucan, E.	Clanwilliam, L. (E. Clanwilliam.)	O'Hagan, L.
Munster, E.		Rankeillour, L.
Radnor, E.	Courthope, L.	Rea, L.
Rothes, E.	Cromwell, L.	Remnant, L.
Selborne, E.	De L'Isle and Dudley, L.	Rennell, L.
Selkirk, E.	Deramore, L.	Rochdale, L.
Saltoun, L.	Soulbury, L.	Wardington, L.
Savile, L.	Teynham, L.	Wolverton, L.
Sherwood, L.	Waleran, L.

Resolved in the negative, and Amendment agreed to accordingly.

Amendment moved— Page 48, line 27, leave out ("twenty-five") and insert ("fifty").—(Lord Teynham.)

Resolved in the negative, and Amendment agreed to accordingly.

VISCOUNT ADDISON

I think it might be convenient if I move now that the House do resume. I hope, in doing so, that it will be understood that so far as possible the debates on the different Amendments to-morrow will not be quite so long. Everybody recognizes that the subject of the clause we have just discussed is a vital and an important matter, and everybody expected a long debate on it. We will be dealing with many detailed points, and I know we cannot very well expect general agreement; but I move that the House resume in the hope.

Moved, That the House do now resume. —(Viscount Addison.)

THE MARQUESS OF SALISBURY

The Leader of the House will not say that the House is being unreasonable. We On Question, Whether the word proposed to be left out shall stand part of the clause?

Their Lordships divided: Contents, 21; Not-Contents, 68.

CONTENTS
Jowitt, V. (L. Chancellor.)	Ammon, L.	Marley, L.
	Chorley, L. [Teller.]	Morrison, L.
Huntingdon, E.	Darwen, L.	Mountevans, L.
	Faringdon, L.	Nathan, L.
Addison, V.	Hare, L. (E. Listowel.)	Pakenham, L.
Hall, V.	Henderson, L. [Teller.	Shepherd, L.
St. Davids, V.	Kershaw, L.	Strabolgi, L.
	Lucas of Chilworth, L.	Walkden, L.

NOT-CONTENTS
Aberdeen and Temair, M.	Falmouth, V.	Hampton, L.
Reading, M.	Hailsham, V.	Hatherton, L. [Teller.]
Salisbury, M.	Long, V.	Hawke, L.
Willingdon, M.	Maugham, V.	Howard of Glossop, L.
	Ridley, V.	Kenilworth, L.
Abingdon, E.	Samuel, V.	Llewellin, L.
Albemarle, E.	Simon, V.	Lloyd, L.
Beatty, E.	Swinton, V.	Luke, L.
Craven, E.	Wimborne, V.	Milford, L.
De La Warr, E		Moyne, L.
Doncaster, E. (D. Buccleuch and Queensberry.)	Addington, L.	O'Hagan, L.
	Balfour of Burleigh, L.	Rankeillour, L.
Drogheda, E.	Beveridge, L.	Rea, L.
Dudley, E.	Cawley, L.	Remnant, L.
Fortescue, E. [Teller.]	Courthope, L.	Rennell, L.
Grey, E.	Cromwell, L.	Rochdale, L.
Howe, E.	De L'Isle and Dudley, L.	Saltoun, L.
Radnor, E.	Deramore, L.	Savile, L.
Rothes, E.	Ebbisham, L.	Sherwood, L.
Selborne, E.	Fairfax of Cameron, L.	Soulbury, L.
Selkirk, E.	Gage, L. (V. Gage.)	Teynham, L.
	Gifford, L.	Waleran, L.
Bridgeman, V.	Grenfell, L.	Wardington, L.
Elibank, V.	Hacking, L.	Wolverton, L.

went swimmingly in the earlier part of the afternoon, but the question we have now decided is very controversial.

On Question, Motion agreed to, and House resumed accordingly.