Lords Sitting of 6 July 1949

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers
The Earl Vane (M. Londonderry) —Sat first in Parliament after the death of his father.

PRESS AGENCIES AND DIPLOMATIC IMMUNITY
2.35 p.m.
LORD VANSITTART: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask His Majesty's Government whether the claim for diplomatic immunity for Press agencies is put forward by all Powers or only by the Soviet Government.]
THE LORD CHANCELLOR (VISCOUNT JOWITT): My Lords, the Soviet claim for immunity from suit for Tass Agency, to which I presume the noble Lord refers, was based on a statement by the Soviet Ambassador that it "constitutes a department of the Soviet State" and is "the central information organ of the U.S.S.R." The immunity from suit of foreign States, their Governments and Government departments rests upon an established principle of international law. No previous case has ever occurred in this country in which a Press agency has been claimed to be a department of a foreign State, and the whole position is now receiving consideration.
LORD VANSITTART: I thank the noble and learned Viscount for his answer; I appreciate that in present circumstances he could say no more. I understand from his reply, however, that this claim is quite an unprecedented one.

NUREMBERG TRIALS
2.37 p.m.
THE LORD BISHOP OF CHICHESTER: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask His Majesty's Government whether the Government of the United Kingdom of Great Britain and Northern Ireland have had any responsibility for the proceedings for the trial of German war criminals at Nuremberg subsequent to the conclusion in October, 1946, of the International Military Tribunal for the trial of German major war criminals; and whether the statement contained in an article published by the New York Herald Tribune on May 23, 1949, that "the Nuremberg trials were conducted by Great Britain and U.S.A." is correct.]
THE PARLIAMENTARY UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (LORD HENDERSON): My Lords, His Majesty's Government have always approved of the policy that Germans alleged to have committed war crimes should be brought to trial. His Majesty's Government have, however, had no responsibility whatsoever for the trials which have been taking place at Nuremberg since the conclusion in October, 1946, of the International Military Tribunal which tried the German major war criminals.
THE LORD BISHOP OF CHICHESTER: I thank the noble Lord for his answer.

INDIAN SERVICES PENSIONS
2.38 p.m.
EARL WAVELL EARL WAVELL rose to move to resolve, That this House, while welcoming the decision of the India and Pakistan Governments to grant the right to proportionate pension to British members of the non-Secretary of State Services who retire after November 18, 1948, regrets that this right was not made retrospective to August 15, 1947, to cover those members who were compelled by circumstances to retire between this date and November 18, 1948; and in view of the unwillingness of the Governments of India and Pakistan to make further concessions, calls on His Majesty's Government to provide these pensions for men who have given long and valuable service to their country. The noble and gallant Earl said: My Lords, I must apologise for again addressing your Lordships on a matter which has already been brought to your notice on several occasions in

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the last year or so by other noble Lords and myself. We would not again have troubled your Lordships had not our efforts, continued over some eighteen months, failed to secure an appropriate measure of justice for the men whose claims we represent. I will try to be as brief as possible. We believe that we have an unanswerable case, but I feel that I should state it in sufficient detail for your Lordships to act as judges and record your votes accordingly.
First of all, the men whose claims we represent are the British personnel of the Services through whom we administered and governed India other than the so-called Secretary of State Services—that is other than the Indian Civil Service and the officers of the Indian police. They are, in fact, the rank and file of which the Secretary of State Services were the officers. They are the sergeants and inspectors of police, the British personnel on the railways, the clerks at Army headquarters and other offices, and other British personnel performing analogous duties. The proposition on which our whole case rests, and which we ask your Lordships to accept and support, is simply this: that the rank and file are entitled to similar treatment to their officers. That, we submit, is in accordance with British tradition, with common humanity, and, I should add, with those principles of democracy which the present Government claim specially to represent.
If your Lordships accept that principle, it is for us to show that there has been discrimination and that it is unjustified. I must therefore give you a summary of what has occurred up to date. Early in 1947 when the changeover of Viceroys took place, the question of compensation and pensions for the Secretary of State Services was already under discussion with the Home Government and was not making much headway. I accordingly advised my successor, Lord Mountbatten, to get the matter settled before he came out to India. He did so. I certainly thought and intended that the whole of the British Services in India should be covered, but I am afraid I did not realise at the time the difference in the legal status between the Secretary of State Services and the non-Secretary of State Services, and I did not explain it sufficiently to Lord Mountbatten.
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Advantage was taken of that technical difference in their legal status—and I am sure your Lordships will agree that it was a technical difference only and that the moral obligation rests on us to give similar terms to all the British who served us so well in India. That technical difference in legal status was used to deny to the non-Secretary of State Services the just and generous terms that the Secretary of State Services and the British officers of the Indian Army received.
When Lord Mountbatten arrived in India and found that the non-Secretary of State Services were not covered, he at once made every effort to try to get them included and to obtain for them the same right to proportionate pensions and compensation where appropriate. When he failed, he informed me and I took up the matter here at home. After some rather unsatisfactory correspondence with the Chancellor of the Exchequer and the Secretary of State for Commonwealth Relations, I first brought the matter to your Lordships' attention by a Question which I asked in this House in January, 1948—that is, eighteen months ago. The noble Viscount the Leader of the House then said that the matter had not yet been raised with the Governments of India and Pakistan, but in his reply he made a statement of which I will ask your Lordships to take note. He said:
"The United Kingdom Government are of opinion that proportionate pensions ought to be granted to officers of the classes concerned, if their conditions of service are materially changed to their disadvantage."
I ask your Lordships to compare that statement with one that had previously been made by His Majesty's Government on April 30, 1947, to justify the granting of pensions and compensation to the Secretary of State Services. It was then said:
"They"—
that is, His Majesty's Government—
"feel that there is a radical difference in the effect which the transfer of power will have upon the position of European and Indian officers respectively. The former will no longer be serving under the ultimate control of the Parliament of their own country and it cannot be maintained that their prospects will be the same as in the past."
Why should that principle not be applied equally to the non-Secretary of State Services? If His Majesty's Government considered that conditions had changed

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sufficiently to justify the granting of proportionate pension to the Secretary of State Services, there seems to be no reason why the rank and file should not also have received them, and from the same date.
After some three months had passed, as apparently nothing was being done, no result anywhere was visible, and we were continuing to receive letters from personnel concerned showing that they were in a state of anxiety and often of hardship, I moved for Papers in this House early in April, 1948. The Government again said that they would consider the matter, and the spokesman for the Government, the noble Earl, Lord Listowel, made this statement:
"It remains the considered view of His Majesty's Government that proportionate pension ought to be granted to officers whose conditions of service are materially and substantially changed to their disadvantage."
Another three months passed, and again no result was visible. We accordingly took a deputation to see the Secretary of State for Commonwealth Relations, to impress upon him not only the justice of the claims of these men to proportionate pension, but also the urgency of the matter, since we continued to receive through all these months stories of hardship, anxiety and uncertainty from the men affected. When I tell your Lordships that the deputation included four ex-Viceroys, two ex-Commanders-in-Chief, a number of ex-Provincial Governors of India and several other high-powered officers, you will realise that there was a considerable weight of informed opinion behind it. Two noble Lords who are ex-Viceroys and who were members of that delegation would have spoken today but are unfortunately prevented by other business from being present, and they have asked me to state that they warmly support this motion. They are the noble Earl, Lord Halifax, and the noble Marquess, Lord Linlithgow.
The Secretary of State for Commonwealth Relations again promised that the matter would be considered, but three months later, towards the end of September, 1948—I ask your Lordships to take note of these dates and the time that elapsed between any steps that were taken —the noble Lord, Lord Clydesmuir, asked a question in this House as to what progress had been made, and was informed that the matter was still under discussion. It was not until almost the
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end of November, 1948—that is to say, eighteen months after the terms for the Secretary of State Services had been announced and some fifteen months after the transfer of power —that an announcement was made that the Governments of India and Pakistan had agreed to grant the right to proportionate pension to men of the non-Secretary of State Services who retired after that date. But the grant was not made retrospective, and those who had been forced by circumstances to retire during the fifteen months immediately following the transfer of power received nothing at all. I submit, therefore, that there is definite discrimination. The change in conditions, which the Government admit, occurred as from the date of the transfer of power and not from this arbitrary date in November—a date which has no logic in it at all, and which simply represented the date by which His Majesty's Government had, after long delays, taken that action with the Governments of India and Pakistan which they should have taken by themselves long before. I should like to make it clear to your Lordships at this stage that we are not accusing the Governments of India and Pakistan of responsibility for the injustice that has occurred. These are our own people, who have given long, invaluable and honourable service in India, and they look to their own people and Government to see that their services are honoured and are not overlooked.
To continue the story, the noble Viscount the Leader of the House, when he made the announcement in November, said that the cases of the men who had already retired would be considered. I have always found the noble Viscount the Leader of the House most sympathetic in this matter; I believe he himself recognises the justice of these men's claims. But sympathy is not enough. Accordingly, we wrote a letter to the Leader of the House, I think in February of this year, setting forth the claims of the men who had already retired for the grant of pensions to be made retrospective. The noble Viscount passed that letter on to the Secretary of State for Commonwealth Relations who, after several reminders, replied on May 11—that is another three months' delay—with what I am afraid we can regard only as a most unsympathetic and ungenerous letter. He now made the accusation that these men who had retired since the date of transfer of power must

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be regarded as having "walked out" on the Governments of India and Pakistan and, therefore, as having no right whatever to proportionate pension.
Noble Lords who are to speak later will give your Lordships some instances of the circumstances and conditions which caused these men to retire. I will only say that, if such an argument is to be used, it applies with far greater force to the Secretary of State's Services, by far the greater proportion of whom retired immediately after the transfer of power, when their pensions and compensation had been secured. There has been no suggestion that because they left immediately after the transfer of power they forfeited their right to proportionate pension. I hope that I have said enough to convince your Lordships that here is a definite case of discrimination and injustice which ought to be remedied.
I feel that I should say a few words on the question of financial responsibility, because it may be urged by the Government that the Governments of India and Pakistan cannot be asked to go further in the matter of compensation or pensions. As I have already said, these are our own people, and the responsibility for their welfare is ours. If the Governments of India and Pakistan do not accept any further financial liability, we should thank them for what they have already done and we should assume that responsibility ourselves. I would remind your Lordships that there is a precedent for this in the Judges' Pensions (India and Burma) Act which your Lordships passed last December. In that Act, as I said at the time, three principles were established: first, that those who have served in India, other than in the Secretary of State Services, could receive pensions from moneys provided by Parliament, and not by the Governments of India and Pakistan; secondly, that those awards of pension could be made retrospective to August 15, 1947, the date of the transfer of power; and thirdly, that compensation was admissible. I am not going to say much on the compensation issue, except that there are certain cases of very definite hardship, where pensions are either inadmissible or insufficient, which warrant compensation. Noble Lords who will speak hereafter in this
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debate may give instances of that sort of case.
I feel that I have not put forward with sufficient eloquence the case of these men. But eloquence is not in me. If it were, I might have impressed on your Lordships the long and invaluable services which these men have rendered to this country as well as to India; I might have been able to make clear how they have borne the heat and burden of the day—frequently in the face of dangers; I might have enlarged on the anxiety and definite hardship that has been caused to them by long delay and the uncertainty of waiting. I might have said, finally, that a feeling of injustice, of unworthy treatment from the country to which they have given the best years of their lives and which they have trusted to reward those services, is perhaps a very hard thing for them to bear patiently. Here is a definite case of injustice which ought to be remedied, and I leave it in your Lordships' hands. I beg to move.
Moved to resolve, That this House, while welcoming the decision of the India and Pakistan Governments to grant the right to proportionate pension to British members of the non-Secretary of State Services who retire after November 18, 1948, regrets that this right was not made retrospective to August 15, 1947, to cover those members who were compelled by circumstances to retire between this date and November 18, 1948; and in view of the unwillingness of the Governments of India and Pakistan to make further concessions, calls on His Majesty's Government to provide these pensions for men who have given long and valuable service to their country.—(Earl Wavell.)
3.2 p.m.
LORD ISMAY: My Lords, I have not much to add to the arguments which have been so ably deployed by the noble and gallant Earl, Lord Wavell, but I feel that I might be considered a bad friend to some of the colleagues who were with me during the last days of British rule in India if I did not come out openly and unreservedly in support of this Resolution. I recollect clearly the receipt of the telegram to which the noble and gallant Earl referred, the telegram which he sent to his successor, Lord Mountbatten, strongly advising him to get this

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question of pensions and compensation settled before he left England. I also have a clear recollection—and, if I may say so, a very grateful recollection—of the promptitude, the realism and the generosity with which His Majesty's Government in the United Kingdom settled that question.
The fact that it was possible to make the announcement of those terms shortly after Lord Mountbatten arrived in India, together with the assurance that, in the last resort, His Majesty's Government would hold themselves responsible for the payment of pensions and compensation, had a most profound effect on large numbers of our countrymen still in the Indian Services, who had for some considerable time been racked with anxiety about their future. The noble and gallant Earl has said that he did not know that there was a technical difference between the status of the Secretary of State Services and the non-Secretary of State Services. I freely admit that neither Lord Mountbatten nor I, who went out as his Chief of Staff, had any idea of that difference. It was not until the terms had been published that we realised that the non-Secretary of State Services had been left out in the cold. Lord Mountbatten at once made representations on the matter, but not altogether successfully; and here we are, nearly two years later, with the matter still not satisfactorily resolved.
I mention that point only because I want to make it clear that the misfortune which these poor countrymen of ours have suffered is due to accident rather than design, because I am sure that if Lord Mountbatten had known of this technical difference the whole matter would have been settled satisfactorily to all concerned before he left for India in March, 1947. I feel that your Lordships must be shocked at the suggestion that the men who retired between August 15, 1947, and November 18, 1948, are not to have any of the benefits which the Governments of India and Pakistan have conceded; that they are to be regarded as having "walked out," and that their "crime" is made worse because they were advised not to take precipitate action. It is easy to give smug advice of that kind when one's own comfort, security and future are not at stake, but it is less likely to be convincing to these men, many of whom witnessed in those
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days scenes which they will never forget. They are men who have witnessed murder, arson, loot and lawlessness; men who have seen most of their countrymen embark, or about to embark, for England; men who were extremely apprehensive, and not without reason, about their own official futures and about the welfare of their wives and families. I beg your Lordships to believe me when I say that I do not want to dwell on the unhappy past, but I do not think it is right for people who did not witness those scenes to sit in judgment on the actions of men who were there. To me the wonder is not that so many resigned but that so many remained.
I am frankly bewildered at the attitude of His Majesty's Government in this matter. It is in such complete contrast to their generous and prompt action in regard to the Secretary of State Services that feel there must be something behind it which we do not understand. His Majesty's Government must know that there is not one of us with recent experience of India who does not think that an injustice has been done. His Majesty's Government must know that the very powerful deputation which waited upon the Secretary of State for Commonwealth Relations last June did not do so out of sentiment. They did not do so out of any desire to embarrass His Majesty's Government. They did so out of a genuine desire to see justice done. It is so easy to remedy. I do most sincerely hope that His Majesty's Government—that same Government who, nearly two years ago, swallowed a very large camel without the slightest hesitation, and with singularly beneficial results to everybody—will cease to strain at this tiny little gnat.
3.8 p.m.
LORD CLYDESMUIR: My Lords, I rise to support the Resolution moved by my noble and gallant friend, and my claim to do so is that I saw this problem from the Indian end while I served under the noble Earl, Lord Wavell, when he was Viceroy, and also under his successor, Lord Mountbatten. I can bear out what the noble and gallant Field Marshal said about the development of this problem. Your Lordships will recollect and appreciate that the noble Earl has consistently championed the cause of these men, and championed it with some

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success, for his tenacious advocacy has played no small part in the success which has been gained up to this time.
As your Lordships have been reminded, the Governments of India and Pakistan have agreed, following representations from His Majesty's Government, to proportionate pensions from November of last year. But there is this unhappy hiatus with regard to the men who were left out. We really come down to-day to what is a comparatively small and yet a very important point, because these few men (I am not in a position to give the number; His Majesty's Government alone can do that, but I should estimate it at 100 or so at the most) are, in general, men of humbler circumstances and with fewer resources than their colleagues in the Secretary of State Services. Yet their work and their service was absolutely essential to the success of our administration in India—the success for which the Secretary of State Services rightly gained the credit, but which they could not have achieved without the support of these men.
Of course, the transfer of power was an immense operation, and in an operation of such magnitude it is perhaps inevitable that some ends are left loose; but let us see whether, even now, we cannot tie these ends up. I wish—and I am sure the noble Viscount, Lord Addison wishes—that it had been possible at the time for His Majesty's Government to urge the case of these men with the same vigour and firmness as they did that of the Secretary of State Services. If they had done so this situation would not have arisen. It may be that technically these men were the servants of the Provincial Governments and therefore not statutorily protected. But I have no doubt that each and all of them felt they were ultimately serving—as indeed they were—the Government of this country, with whom during our time in India responsibility for the maintenance of law and order rested.
I would remind your Lordships that under the 1935 India Act the Governors of Provinces were individually charged to look after the police; and they could not pass on this responsibility even if they wanted to do so, to their ministries. It was a reserved subject. The maintenance
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of law and order and the care of the police was a charge laid personally on the Governors by Parliament. Therefore these men of whom we are speaking were definitely protected and upheld in their work (even if they came into head-on collision with political Parties) by the Government. I therefore claim that morally, if not legally, His Majesty's Government are entitled to uphold them now, and to settle this unhappy question for these few men who are surely entitled to justice. I would remind your Lordships that only recently the Government were recruiting these men from the Army. As recently as 1945, Army Orders (India) called for recruits—precisely this type of men—coming out of the Army or the police force, and under Section 56 of the 1935 Act the Governor of a Province was, in his individual judgment, responsible for the recruitment of police services. I therefore claim that these men were indirectly, at any rate, recruited through the Secretary of State, who should retain his responsibility for them at this time.
I need not stress their gallant conduct. Many of them are holders of the King's Police Medal, and some hold medals for service in the Army before that. I have a note of six instances of men who have resigned. The length of their service between the Army and the police was respectively twenty-four, twenty, eighteen-and-a-half, eighteen, eighteen, and twenty-two years. That is a long period of service for one's country, and a certain feeling of bitterness that they have not been quite fairly dealt with is understandable. Incidentally, some of the men appearing in this list have now found employment, through the thought and care of His Majesty's Government and the High Commissioner's Office, and the only question that now arises in their case is whether their service years can be made to count for pension. I know that His Majesty's Government are considering that question.
I do not think it can be seriously contended—I am sure His Majesty's Government will not do so—that there was no change in the nature and terms of the service conditions of these men after the transfer of power. From my own experience I have no doubt that all the officers of this class under my care in Bombay were convinced that there was such a change. I will illustrate what I

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mean. I have a letter issued by the Bombay Government in September, 1947, a time when I was still there. Some of your Lordships may possibly remember that I was asked to stay on as a constitutional Governor in the new Dominion. I accepted with pleasure, but I no longer had direct responsibility for the police force; I was a constitutional Governor, acting on advice in the fullest sense. What I am about to read is a letter which I received at about that time. Even if I had had responsibility I should have found it difficult to dissent, for reasons which I will explain to your Lordships. This letter, on the subject of the Indianisation of the Cadre of Sergeants, said:
"Government has carefully considered the question of granting compensation and proportionate pension to European officers who do not wish to serve this Government any longer and has come to the conclusion that no case exists for the concession. Government desires that all European officers in the Police Department should be informed of this decision. These officers should also be informed that they will be treated equally with the corresponding Indian officers and that there will be no discrimination against them. The recent orders of Government have only removed the discrimination that was made in the past in their favour at the cost of Indian officers and such discrimination cannot, obviously, be revived."
I will now give two examples to illustrate what this decision meant. First, on the question of quarters, European sergeants were formerly provided with Government quarters, or hired quarters, the rent of which was paid from a contingency fund. This was stopped, and they were made subject to the same rules with regard to residential accommodation as Indian sub-inspectors. I understand that it was natural that an Indian Government, taking over, should be reluctant to preserve a discrimination in favour of a class of Europeans serving in their forces. But the fact was serious from the point of view of these European sergeants, and I have personal knowledge of several cases where great anxiety was caused, leading in some cases to resignation, through the search for suitable accommodation. Formerly these men were usually employed in the cities, which offered reasonable facilities for their families, for the education of their children—for example, in mission or other schools. And one can imagine the
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difficulties of a man with a salary of, say, 200 rupees per month, who cannot afford to keep up a double establishment, if he is posted to a small country district where there is difficulty in obtaining European food and no opportunity for the education of his children, or for Christian worship for himself and his family.
Let me quote from a letter from one man. The point I am trying to make is that this was not a thoughtless walking out by the man but a case of walking out after anxious and careful thought. The letter says:
"After ten years in the Army and sixteen in the police force … I decided to take whatever leave was due to me and get my wife and two sons to my own country. … It has not been easy; my life savings and all I could realise from the sale of my home have all gone in paying our passages home and providing us with warm clothing for this country."
The loss of pension and the laying out of his entire capital could not but have been the result of long and anxious contemplation.
I turn now to the question of promotion. Formerly these men, termed "sergeants," were members of a small cadre, restricted to European sergeants. Promotion was within the cadre, and was therefore rapid. I recognise the reason that caused the Provincial Governments to make these men sub-inspectors on terms of equality with all other Indian sub-inspectors, and so to remove the discrimination in favour of the European; but in the result promotion was very much affected. I have heard of one case of a sergeant who was fourth on the list in the old cadre of sergeants and who dropped to 204th on the new amalgamated list of sub-inspectors. It cannot be contended that his circumstances were quite the same. It is true, of course, that not by any means all the officers were placed in difficulties or were adversely affected regarding accommodation. I do not think there was any deliberate set against them. It was just the result of the changes that were made. They were not all placed in such difficulties, but it is our claim to-day that these officers, who found it necessary to resign should not suffer for their action when their circumstances were changed by events quite outside their control.

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I have little more to say, except a personal word. I speak for myself only now, but I feel bound to say this. Having served in India during the critical period of transfer of power, I have been cheered and encouraged to note the great growing and unmistakable signs of friendship in that country towards us here. I have not dissented from His Majesty's Government's handling of the question of Indian membership of the Commonwealth, because I have felt that the important thing was to lay this foundation of friendship upon which we can build. To-day we are discussing a small point, but it is a point that affects the feelings of some of our good countrymen who served in India. It is about their service in India that they are unhappy. They do not know whom to blame. Perhaps they are inclined to blame their Governors who should have protected them; perhaps they are inclined to blame their senior commissioned officers in the police who got their pensions and went away; perhaps they are blaming His Majesty's Government or perhaps the Indian Government. I cannot say whom they are blaming. But one thing is sure: only His Majesty's Government can put this situation right. Therefore I earnestly ask them to-day not to spoil this good ship for a "ha'porth of tar."
3.22 p.m.
LORD HAILEY: My Lords, those who have been connected with the Indian Services will appreciate the great advantage that we have had in the fact that this Motion has been brought forward by the noble Earl, Lord Wavell—and for two reasons. It is not merely the fact that his advocacy must carry great weight and great authority; it is the fact that he has been able to explain the circumstances in which he himself advocated in India the case for proportionate pensions and compensation for officers whose services were being terminated owing to the transfer. When your Lordships discussed this matter—and it was discussed at some length—on a Motion brought forward by the noble and learned Viscount, Lord Simon, in February, 1947, it was not known publicly in this country that the noble Earl, Lord Wavell, as Viceroy, was pressing His Majesty's Government, and pressing with great earnestness, for an early disposal of this question. I know
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that all who have been connected with the Indian Services will now appreciate the steps he then took, and feel grateful to him and to those associated with him at the time.
If I may refer to the debate of February, 1947, there is one point which seems to me to require some explanation, and it is relevant to the case which the noble Earl, Lord Wavell, has put forward to your Lordships. The Motion of the noble and learned Viscount, Lord Simon, dealt exclusively with the question of compensation to covenanted officers, a term which has been already explained to your Lordships. It made no reference at all to the large class of officers whose case the noble Earl, Lord Wavell, has now put forward —namely, the uncovenanted Services, Services which did not enjoy the same guarantees as could be claimed by members of the covenanted Services. I fear that many members of the uncovenanted Services must have felt keenly at the time —and may feel still—the fact that those who spoke in support of Lord Simon's Motion concentrated all their attention on the claims of the covenanted Services. I regret that they should have had this feeling, and I regret that, as one of those who supported the noble and learned Viscount's Motion, I did not myself call attention, and prominent attention, to the position of the uncovenanted Services. But we were arguing a case based on special grounds, which applied only to the Secretary of State Services. It was an open secret that Indian leaders were at the time opposing the grant of compensation to members of any of the Services who were retiring from India. As they said at the time, they were prepared to re-engage those officers in their own service. We ourselves were convinced that that offer, at all events so far as regards what is now the Dominion of India, was not really serious; and events have proved that we were right. But it was on the strength of that statement that the Indian leaders at the time claimed that since officers could re-engage with the new Indian Government they were not entitled to any form of compensation.
We, on our part, speaking in that debate, took our stand on the point that the British Government were under a binding obligation, based on commitments made by their Ministers and on past

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legislation, to secure or to guarantee compensation at all events to one class of officers—namely, the officers of the covenanted Services. It was in those circumstances that the case put forward by the noble and learned Viscount, Lord Simon, was advisedly—perhaps unfortunately, but none the less advisedly—confined to the case of the covenanted officers. That claim secured the support of His Majesty's Government, with results for which the British members of the Secretary of State Services have every reason to feel grateful, as they have more than once publicly said. We, the British members of those Services, have not ceased to regret that His Majesty's Government did not secure equal treatment for our Indian colleagues in those Services, but we shall always feel even greater regret if fair treatment is not accorded to the British members of the non-covenanted Services whose case the noble Earl, Lord Wavell, has put before your Lordships this afternoon.
Let me turn to their position. As the noble Earl, Lord Wavell, has explained, his efforts, and the efforts of those who supported him, have secured that those who retired after November 18, 1948, shall receive proportionate pensions. We welcome the support given by His Majesty's Government to that claim, but it has left without any similar benefit those officers who retired during the one-and-a-quarter years which elapsed between that date and August, 1947, when the members of the Secretary of State Services were withdrawn from India. What can be the logic of this? Clearly, the argument on which the members of the covenanted Services were given compensation—namely, that the whole conditions of their service were radically changed—applies with equal force to these men. Clearly, as the noble Earl, Lord Wavell, has pointed out, it is not possible to maintain that those who retired during that period "walked out" on India, for that argument would apply equally to the members of the covenanted Services who received their compensation. Mark this fact—and it is a fact to which the noble Lord, Lord Ismay, has already referred, and it is one of great significance: so little did His Majesty's Government feel that that argument applied to the members of the covenanted Services that they made them-
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selves responsible for the payment of compensation to them should India fail to foot the bill. Your Lordships will find a clear statement to this effect in the White Paper dealing with the subject of compensation which was published in April, 1947.
Of course, there is no logic in this position, but there is a reason. It is, of course, that the case of these men was not pressed in time, or with sufficient vigour, by His Majesty's Government. I am not reproaching them with this. There may have been difficult negotiations afoot which made it hard for them to approach that particular question. I am not reproaching them, but I am using the fact as an argument —and I think it is a valid argument—for urging that they should now accept the liability for giving proportionate pensions to these men.
Sonic of their cases have been very hard. We have heard of a number of them. I will not go into great detail for Lord Clydesmuir has already given your Lordships sonic pertinent and telling details on this subject. But we know that there were men in the police force who were aware that directly the British Administration withdrew they would be the object of attack, owing to the part they had taken in quelling communal disturbances or the subversive movement which attempted to sabotage our war effort at one stage of the last war. They had been warned of this, in statements made by men holding responsible posts in India. There were others who saw their authority over their subordinates diminish and their capacity for good work destroyed by orders issued direct to their subordinates, contrary to every previously accepted canon of British administration. There were other men who saw that the promotion to which they could legitimately look forward must inevitably be denied them because Indians would necessarily be given preference. There were others who were transferred to stations where there was no accommodation for British officers, and no possibility of education for their children.
But why should we be asked to prove individual hardship or special circumstances in each of these cases? No such proof was required in the case of the covenanted Services. We are told now

939
that we must accept the position that the two Indian Governments can go no further than they have already gone, and that they will not give proportionate pensions to those who retired between August, 1947, and November, 1948. If that is so, we must accept the fact, for certainly we have no power to compel them to do so. But surely it is not unreasonable to ask that the British Government, which was at one time prepared to undertake the heavy liability involved in providing compensation for the covenanted servants in the event of India refusing to do so, should meet the relatively small liability involved in providing proportionate pensions in these comparatively few cases.
My Lords, these men served the British Government faithfully, in activities which were every bit as essential to the purposes of Parliament as were those of the covenanted servants, and often, as I can testify myself from my memories of the past, in circumstances which placed a great strain on their physical and moral powers. If they had not the same guarantees in a technical sense as had been given by Ministers of the Crown to the covenanted servants, the difference was mainly technical, and His Majesty's Government and the British people have the same moral obligation to them as to those others. I venture to say that if that case were put to the British public at large it is not an obligation that they would hesitate to accept.
3.35 p.m.
THE EARL OF SCARBROUGH: My Lords, the case in regard to these few men has already been made with great weight and authority and I do not wish to delay your Lordships by repeating what has already been said. But we still have to convince His Majesty's Government about our case, and there are, I think, a few further arguments which might be used. I expect that all of us in this House, no matter in what quarter we sit, would wish to be guided by a principle in this matter, and that principle would be that when the prospects and conditions of service of Government servants have been affected by a great political change such as that which took place in India, arrangements should be made to meet the difficulties to which those servants are exposed because of that change, and to meet them in a spirit
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which is fair to them. I would go just a little further and say that I think they ought to be met in a spirit which, if it errs at all, errs on the side of generosity, because a great upheaval of government such as that does mean a great upheaval in the lives of individual Government servants.
That principle has been followed for the great majority of the European servants of government who served in India. As has already been said, arrangements have been made in regard to the Secretary of State Services, the officers of the Indian Army and the Judges of the High Court. Arrangements have been made for them by the present Government, and those arrangements are not ungenerous. But so far His Majesty's Government have not been willing to do the same for these few men of whom we are speaking to-day. What are the reasons which might make His Majesty's Government hesitate to do this? I would like to examine them. In the first place I would ask, is it denied that the conditions of service of these non-covenanted servants of government have changed? My noble friends Lord Clydesmuir and Lord Hailey have given instances which, to my mind, prove that the conditions of service have changed beyond all recognition.
I would add one or two further points. My noble friend, Lord Clydesmuir, spoke about the sergeants of police in the provincial areas. I feel rather specially concerned about them because some of those men about whom we are speaking to-day were recruited at my urgent request. They were recruited because it was felt necessary by the régime of those days that British sergeants of police should fill certain posts—posts connected with the war, posts in great cities like Bombay, and posts in other towns where there were cantonments of British troops. Therefore they were recruited because they were wanted. Under the new régime obviously there is a change. The policy is—and no one will quarrel with it—full Indianisation. Therefore these British sergeants of police are not wanted, and that, to my mind, is the main reason for the drastic change in the conditions which they face.
Let me give your Lordships one other example of the change which took place when the transfer of power was made. It is the case of a technical supervisor

941
in what was the security printing press in India. This individual was aged 35. He had spent all his working life in that press. He would normally have had twenty more years to serve, and he would have had every prospect of rising to become an assistant master of the press, or possibly deputy master. But all prospects of further promotion of that kind vanished when the change came, because two Indian officers, formerly of the Indian Army, were appointed as assistant masters under training, with the specific and very understandable object of training them up to fill those higher posts. Therefore, that ladder of promotion for these European servants of government was at once blocked. Moreover, in this particular case, these men had lived all their working lives where there were British troops always in cantonments. Those troops all left, and with them went facilities for the education of children and for attending religious services, and—although this may seem strange, it is true —bread and meat became unobtainable. In fact, the whole of what we might call their social conditions changed overnight, and, with the change in his prospects, is it surprising that a man with a wife and children to think of should at that time, having no encouragement to believe that a Government of India which he then served was going to be persuaded to give him a proportionate pension, have decided to leave?
There can be no doubt whatever that the conditions of service changed with the change of régime in every one of these cases. But what other reasons are there which might make the Government hesitate to meet this claim? There is one which I have heard used in this connection; I will pass it over very briefly and I hope never to hear it again. It has been said that these non-covenanted servants of the Provincial Governments and Government of India joined their Services with their eyes open because they must have known that changes would take Place. Of course, it was true that for two generations constitutional evolution was going on in India, and no one could tell exactly where or when British rule would end. But of this I am certain, no one in a responsible position in India in those days ever thought or dreamt that those whom they were asking to do difficult and sometimes unpleasant duties would be abandoned and nothing settled
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for them. On the contrary, there was, in those days, a steady faith that His Majesty's Government would see them through, if difficulties arose when the final change came. Meanwhile, until that change did come, they continued to do their duty according to the will of Parliament.
What other reasons are there? There is one which has already been mentioned by the noble and gallant Earl, Lord Wavell—that is, that it is said that the men of whom we are speaking "walked out" on the Governments of India and Pakistan. Who dares to make that charge? It was the will of Parliament that British rule should walk out of India, and it was the decision of the British Government that officers in the Indian Army and officers in the higher Services of Government were justified in Laving at that time because their conditions would be so drastically changed. What is more, it was intimated that if they felt that they should leave they would be adequately and not ungenerously compensated. That being so, how can anyone say, in a tone of censure, that a sergeant g police, bearing the whole burden and heat of the day in the bazaars of the great cities, ought not to leave? I believe it is true that shortly after the transfer of power there was not a single British higher police officer left in the Province of Bombay. If the officers left and were justified in leaving, and were compensated when they left, how can anyone say to a sergeant that he should never have left and that by doing so he would be "walking out"?
There is one other reason which may be urged for not taking this step—namely, that this is really an obligation of the Governments of India and Pakistan. It would certainly have been a happy and generous solution if those Governments had been persuaded to assume this burden. But if they do not do so—and, certainly, I can understand that they could advance arguments why they should not—what is to happen? Is there no moral obligation on the Government of our own country? These non-covenanted men served the same Governments, they carried out the same policies as members of the Indian Civil Service and the other high Services. Their conditions of service, their whole lives, have been changed in exactly the same way as those of the Secretary of State Services have been changed. It is, in

943
fact, not possible for His Majesty's Government to wash their hands of them. This matter has been pressed on His Majesty's Government as urgent for the past eighteen months. We have in support of it the testimony of the two former Viceroys who were mainly concerned, and we know now that His Majesty's Government have tried and have not succeeded in persuading the Governments of India and Pakistan to assume the burden. It seems to me that there is now a quite inescapable moral obligation on His Majesty's Government to accept this burden. It is not a large one. To refuse to accept it will be to leave a stain on the arrangements for winding up our affairs in India, a stain which none of us believed could ever be left. From what has been said in this debate, surely it is clear that these men were overlooked at the time of the transfer of power. I beg His Majesty's Government not to stand on any technicalities but to treat them as other servants of India have been treated.
3.48 p.m.
THE MARQUESS OF SALISBURY: My Lords, for obvious reasons I feel hardly qualified to intervene on this question, but I have been, as I am sure many other of your Lordships have been, so profoundly convinced of the justice of the case that has been so eloquently put by the noble and gallant Earl, Lord Wavell, and those who have followed him, that I would like to add my voice, very briefly, to the moving appeals which they have made to the Government this afternoon. As so often happens in this House, the debate to which we have just listened has been extremely impressive in character. It would be difficult, I imagine, to find anywhere in this country a body of speakers better qualified by their eminence and experience, to deal with this subject. We have heard one former Viceroy, Lord Wavell, who spoke also for two other former Viceroys, the noble Earl, Lord Halifax, and the noble Marquess, Lord Linlithgow. We have heard three Governors of some of the most important and illustrious provinces of India, men highly respected both there and here. We have heard the noble Lord, Lord Ismay, who speaks with a lifelong experience of Indian affairs and who was in that country only recently at the time
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of the transference of power. I think it is typical of the British tradition, and I think we may proudly say so, that all these men have come here to champion with the weight of their experience the cause of those public servants to whom this Motion relates. No doubt they are comparatively few in number. They are, as it were, left over from the general settlement. But though they are few, that does not make them less deserving of justice. Indeed, I believe that for that very reason, they are more deserving of the protection of Parliament.
It is not for me, who speaks with far less authority than the others, to traverse the ground that has already been covered by the noble Lords who have spoken. I submit to your Lordships that the case they have made is unanswerable. I would remind the House that this is not a case of men who are asking for compensation for hardship. This is a case of men who have given a large part of their lives to the service of their country and who claim an undeniable right to a pension in respect of that service, a right which has already been granted to the members of the Secretary of State Services. It is true, and it may be argued, that they have now retired from their employment. Is that surprising? They had no knowledge at all that they would receive a pension. They waited and waited. Nothing happened, and they had their wives and families to look after. Some of them have no doubt suffered more and others less, but that is really irrelevant. What matters, as the noble Earl, Lord Wavell, himself said in his opening speech, is that these are men who (I quote his words) have given long, invaluable and honourable service to their country—men who have, in fact, run considerable risks for their country, and who now claim from their country what they feel, and what I feel, they have a definite right to receive.
It seems to me that we have a definite duty in this House to see that they do not suffer as a result of events over which, after all, they themselves had no control. Therefore I urge most sincerely on the Government that they should be generous, if anything over-generous, to this small body of public servants who trust in Parliament to protect them. If the Governments of India and Pakistan do not feel able to go further in this matter

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—and I do not say that in any spirit of criticism—let the Government recognise that that obligation has now been transferred to us and that it is an obligation of which we cannot divest ourselves. Any other attitude, it seems to me, would be quite unworthy of that good name in which we pride ourselves so much. I know that the noble Viscount the Leader of the House is always sympathetic in cases like this, and I feel sure that he himself will be sympathetic on this occasion. I beg him to give us a favourable reply this afternoon.
3.54 p.m.
THE LORD PRIVY SEAL (VISCOUNT ADDISON): My Lords, as the noble Marquess who has just spoken said, this has been an exceptional debate in so far as the speakers have included the eminent men whom he has mentioned and by the fact that preceding this discussion I received a letter on the subject signed by no fewer than three ex-Viceroys—a letter which I have here and which I shall be disposed to retain as a very special paper. It is fair to say that all the noble Lords who have spoken, with first-hand knowledge, have referred to the case as one of great urgency, but I think in some respects they have overlooked some of the causes with which it has been so difficult to deal. I am afraid that some of the observations of the noble Earl, Lord Wavell, were not quite so fair as I should normally have expected from him. This is not a question of discrimination between the rank and file and others. It is not that at all. There is no class discrimination in any sense. It is not a question of treating one body of men differently from another body of men because of their rank. I am sure that this Government, at least, might reasonably expect to be acquitted of the charge of discrimination of that kind. Really, observations of that sort do not help.
In this case, after considerable negotiation, the Governments of India and Pakistan did an act of exceptional generosity, which we ought to acknowledge. A large number of public servants, whom they could ill spare, had not served the full term which they normally would have been expected to serve for pension. Notwithstanding that, at the date mentioned in 1948 they were paid a pension in proportion to what they had earned,
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and satisfactory terms of compensation which, as noble Lords have said, were generous, were arranged. We have to remember that the Governments of India and Pakistan were seriously inconvenienced in the carrying on of many public services by the sudden departure of a considerable number of experienced officers. I do not think it would be right if we allowed the occasion to pass without making a most complete acknowledgment, as some noble Lords who have spoken have done, of the generous way in which these two Governments eventually dealt with this matter.
But there were a certain number of people left out. Maybe, as the noble Lord, Lord Ismay, has said, there was some "overlooking"—I do not know; I was not there. But it is a fact that a certain number of men retired of their own accord before the given date. They may have had good reasons, and I am not criticising their reasons. The noble Lords, Lord Scarbrough and Lord Clydesmuir, gave some poignant cases, and I am not disputing their accuracy at all. The fact is that between the dates in 1947 and 1948 these men, for various reasons, retired of their own accord before the full scheme had been agreed upon and brought into operation, and the Governments of India and Pakistan did not recognise, where they had lost the services of these men of their own volition, that they should be made responsible for the payment of pension; and I do not think in common fairness that we could claim that they were responsible.
This matter has been the subject of considerable delays, I frankly admit—not intentional delays. But at all events we recognise that it is right that these men, notwithstanding the fact that they came away of their own accord and before the appointed date, often did so for real reasons, such as those the noble Earl, Lord Scarbrough, and other noble Lords have mentioned, and we ought to recognise that that places a responsibility upon us. We are prepared to accept that responsibility and try to make some fair arrangement. I have here a statement of a proposal which we are prepared to make, and do make, and which I hope noble Lords who have been responsible for this Motion will receive in the spirit in which it is hoped it will be received. As the Speaker says in the House of Commons when he possesses himself of

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the King's Speech, "For the purposes of accuracy I will read it."
We recognise that, among those who quitted the Service between the transfer of power and November 17, 1948, there are some who were obliged to leave owing to a marked deterioration in the conditions under which they were serving. Those have been mentioned. Such men, we realise, would suffer real hardship if they lost altogether the pensionary expectations that had so far accrued to them. There are considerable practical difficulties—and I assure noble Lords that we have gone into this matter with great patience and goodwill—in deciding in individual cases whether this criterion is satisfied. If, however, the noble Earl is willing to co-operate in the manner in which I will shortly indicate, the Commonwealth Relations Office will be ready to receive applications from any who regard themselves as falling within this description; and if a case has been reasonably made out His Majesty's Government will be prepared to pay from United Kingdom revenues a lump sum as a contribution towards their loss of pension. Those men who served on "contributory provident fund" terms will receive comparable treatment.
For this purpose we should wish to avail ourselves of the help of the noble Earl, and of the other noble Lords who have been associated with him in taking an interest in this matter. We will consult them upon each case, in whatever manner is found mutually convenient; and I am prepared now—this is an answer —to give an assurance that we will accept their recommendation as to whether a grant is justified. I am sure that the noble Earl will be glad to take an early opportunity of consulting with my right honourable friend the Secretary of State for Commonwealth Relations as to the best method by which this cooperation can be achieved.
4.3 p.m.
EARL WAVELL: My Lords, I thank the noble Viscount for the way in which he has met us. I certainly am prepared to accept what he proposes and to bring forward these cases. I am sure he will realise that it will be necessary to deal with them with a promptitude which has not been evident up to date. At present they might well say with a certain
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character in Shakespeare, that they have:
"borne, and borne, and borne, and have been fobbed off, and fobbed off, and fobbed off, from this day to that day, that it is a shame to be thought on. There is no honesty in such dealing."
I hope that their cases will be dealt with both generously and promptly. On that understanding, and with the proviso that I reserve the liberty to raise the matter again if they do not receive what we consider generous treatment, I am prepared to withdraw my Motion.
VISCOUNT ADDISON: My Lords, may I assure the noble Earl that the arrangements on our side have already been put in order, and if he will communicate with those with whom I will tell him to communicate at the Commonwealth Relations Office to-morrow morning, he will find that that is so.
Motion, by leave, withdrawn.
4.6 p.m.

THE ECONOMIC POSITION
VISCOUNT ADDISON: My Lords, I must ask leave to intervene before the next Business is taken, as it is right that your Lordships should be acquainted with the terms of a Statement which has been made this afternoon in another place by my right honourable friend the Chancellor of the Exchequer. He said:
"The usual quarterly statement on the balance of payments and its effect on our reserves of gold and dollars is now due and the figures are being published to-day. For reasons of which the House will be aware—and to which I have referred more than once in recent weeks—it is desirable for me to make a short explanation of the facts set out.
During recent months there has been a decline of business activity in many parts of the world. Instead of a sellers' market we now have a buyers' market. As we all know, the most difficult problem with which the sterling area has been faced is in its balance of trade and payments with the dollar area. This has been well demonstrated by the critical effect of the dollar shortage upon our sterling economy over the last few years. The decline in demand from the dollar area for sterling area goods naturally brings with it

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important consequences. As has already been pointed out on more than one occasion, this change in the financial and commercial climate has meant that the shortage of dollars in the sterling area has become even more marked. As the House is aware from the April and May figures of overseas trade, there has been a considerable falling off in our sales to the U.S.A., and this has reduced our dollar earnings. This decline has been even more marked in the case of other parts of the sterling area, particularly those selling primary commodities to the U.S.A., where both quantities and prices have moved sharply downwards.
It is good to know that our sales to Canada were well maintained in the month of May and that in that month they were very nearly an all-time record. We hope that these exports will be increased still further, especially as a result of action taken by industry and by the Government following the visit of my right honourable friend the President of the Board of Trade to Canada. We are also hopeful that our exports to the United States of America will resume their upward tendency. It cannot be emphasised too often that this is by far the most urgent and important task of all those concerned with exports. Success in that task does, of course, also depend on the willingness of the United States and Canada to accept our exports and to continue to purchase the raw materials which the sterling area can supply.
As a result of the decline in demand that I have mentioned, our dollar gap has widened again, and a new and unfavourable position has developed. While awaiting the figures for the second quarter of 1949 to make its usual quarterly announcement, the Government, in the course of its normal review of the situation, has already taken certain preliminary steps to deal with this situation. The figures of our dollar deficit, before taking account of E.R.P. assistance, of the Canadian credit, or of drawings on the International Monetary, Fund, were in the four quarters of 1948: £147,000,000, £107,000,000, £76,000,000 and £93,000,000. In the first quarter of 1949 the corresponding figure was £82,000,000. The Economic Survey gave an estimate of £195,000,000 for
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the first half of 1949, which would have allowed for a dollar deficit of £113,000,000 for the second quarter, as expenditure was expected to increase temporarily in line with our E.R.P. Programme. In the event, however, the dollar deficit for the three months to June 30 has risen to £157,000,000.
There were no drawings during the quarter from the International Monetary Fund, but after taking account of £85,000,000 for E.R.P. reimbursement and £7,000,000 from the Canadian credit, the reserves of the Sterling Area fell from £471,000,000 as at March 31 last to £406,000,000 at June 30. There is also a sum of about £20,000,000 owing to us under E.R.P. for goods for which we have already paid. In addition, part of the E.R.P. allocation made to us in respect of the first fifteen months of E.R.P. aid is designed to cover supplies which will not come forward, or be paid for, until a later date. Though this fall in our reserves is a serious development, yet any comparison with the events of July and August, 1947, would be entirely misleading. In 1947, though our own recovery was under way, we were still in the middle of the process of re-conversion and re-deployment, which had itself been checked by the fuel crisis in February of that year. In Western Europe as a whole, the economic recovery had made little headway, and the political situation was marked by weakness and uncertainty.
To-day, as a result of the conclusion of the Brussels Pact, the establishment of the O.E.E.C., and the signature of the Atlantic Pact, our own position and that of the other countries concerned have been immeasurably strengthened. We have behind us in the United Kingdom two years of expenditure on capital goods on an unprecedented scale, and of uninterrupted economic progress. We have taken a variety of measures to deal with the inflationary situation with which in 1947 we were threatened. Our production is at a record level in the whole of our history, and our exports are as high as they have ever been, and half as high again as in mid-1947. We have practically reached a state of overall balance in our overseas trade. All this has been made possible by the great efforts of

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our own people and by the generous help of the United States and Canada, especially through the European Recovery Programme which is so large a factor in the progress that is being made, and will, I hope, enable us to expand European Trade in the way that I explained to the House on Monday. Productive power is the foundation of a country's economic strength, and ours has grown to such an extent in the past two years as to give us confidence that we can deal effectively with the present unfavourable turn in our affairs. But a drain upon our reserves at the present rate calls for immediate corrective action, as well as for longer term and more fundamental measures.
His Majesty's Government, therefore, acted at once in pursuance of what must remain the major objective of our financial policy, the safeguarding of the reserves of the sterling area. Before the middle of June we had, much to our regret, been compelled by events to give instructions to all our purchasing departments that they were to postpone new dollar purchases to the maximum extent practicable. That stand-still arrangement will be continued for at least three months and until after the discussions to which I am about to refer. Existing contracts and commitments will remain in force, but specific authority will be required for any new dollar purchases and will only be given where a clear case of urgent national interest is established. Dollar expenditure, other than on imports, will be permitted only where essential, and then at a reduced rate.
Unless the sterling area succeeds in restoring the volume of its sales to the dollar area, these restrictions upon dollar expenditure will have to be continued. As soon as the distribution of E.R.P. aid for the coming year has taken place and the new intra-European payments scheme has come into operation, we shall get out a new import programme in the light of the circumstances which then exist. We hope to have such a programme completed in September next. Before the discussions to which I will refer in a moment, we do not intend to make any immediate adjustments in the
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amount of dollar goods released for consumption; but as soon as they are over we shall have to reconsider the situation in the light of any decisions reached, and it may then become necessary to reduce consumption of certain selected foodstuffs which are primarily drawn from the dollar area and of certain raw materials.
I must make it clear that, just as it took some time for the position which I have outlined to declare itself, so this stand-still will have little immediate effect in reducing the drain on our reserves. Unless contracts already entered into were to be broken and the flow of imports for which firm arrangements have already been made was to be stopped, there could be no large degree of relief from the present measures until towards the end of the third quarter.
But a stand-still on dollar expenditure, though absolutely essential, is no solution for our difficulties. The effect upon our trade relations with the dollar area of the change from an expanding to a contracting volume of world trade demonstrates the need for positive long-term policies. In the meanwhile, His Majesty's Government will press on with every practicable method of increasing our export trade—above all, the sale of goods and services for dollars. And for this it is fundamental that industry itself must quickly achieve a reduction in costs and prices by improved productivity, and give preference wherever possible to exports to dollar markets. Any inability to hold our own in world markets must deprive us of essential supplies and our standards of life will suffer. This creates the imperative necessity for new directives to be given to all those in industry who are concerned with costing and securing contracts, that they must increase dollar exports. We must get our export prices down to a point which enables us to improve our position in these markets, and the rather easy methods resulting from the unlimited demand of the last ten years must go.
The Government and the nation are pledged to a policy of maintaining full employment and protecting our present standard of living. To that end our efforts will be directed, but no demo-

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cratic Government can do this alone. If a nation is to achieve these generally accepted aims there must be complete co-operation. While we have no desire to see wages cut, we must and can cut down costs, and this we can do if we increase our efficiency of production. There should therefore be, throughout the Government services and every other public service, and throughout all industry, a resolute aim to achieve the utmost efficiency. In addition we must avoid waste in materials and in every other way, so as to get the best possible results from what we import. Above all, it is quite certain that our existing policy on personal incomes, costs and prices will have to be vigorously pursued. I must warn the House and the country that any attempt at this stage to force up personal incomes can have only the most adverse effect upon our situation, since it will raise prices and thereby make it even more difficult for us to earn dollars or other hard currencies with our exports. This in its turn must lead to a diminution of our general standard of living. If our money is to buy us less in goods, an increase in money earnings is of no value. It is of crucial importance that in meeting the present situation we should not aggravate it either by demands for increases of personal incomes or by delays and stoppages in our industry which increase costs and reduce our dollar earnings.
This continuation and intensification of the policies we have been pursuing, though vitally important, will not in itself be enough to remedy our situation. The problem of the relationship between the sterling and the dollar worlds is not one to which the United Kingdom alone can find a remedy. It is a problem in which our friends and partners in the United States and the Commonwealth are especially involved. Just as we have in this postwar period concerted together short-term economic solutions to our difficulties and together laid the basis for our long-term political association, so now we must seek together a long-term remedy for the stubborn problems of the balance of trade between the Western Hemisphere and the rest of the world, of which the sterling area forms so important a part.
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As soon, therefore, as the facts of this greater stringency of dollars became evident, and its effect upon the whole of the sterling area, we invited Commonwealth Finance Ministers to attend a meeting in London. This meeting will begin on July 13, and its purpose is to discuss the situation as it now exists, and to devise mutual co-operative measures to deal with it. We are taking the opportunity of the visit of Mr. Snyder, the Secretary of the United States Treasury, who will be visiting London this week, to initiate discussions with the United States Government on the whole matter; Mr. Abbott, the Canadian Minister of Finance, will take part in these talks, as well as in those of the Commonwealth Finance Ministers.
Arrangements have thus been made for prompt discussion of the whole position at a high level. The House will realise that until these talks—which will undoubtedly take some weeks—have been concluded, it will not be possible for the Government to formulate and lay before them the full policy which we intend to pursue, in association, we hope, with our American friends and with the other members of the Commonwealth. In the meantime, we shall in the course of these consultations and in concert with others take whatever further steps may be necessary to deal with the immediate situation of the sterling area. I would warn the House and the country that a thorough-going solution of this sterling-dollar problem will take some time; and, just as in dealing with every other great national problem following the upheaval caused by two world wars, we shall need, while exercising patience, to be prepared to take resolute action.
The United Kingdom carries a great burden of responsibility in this matter, not only as the central country of the sterling area but also because it is so large a contributor to world trade. We have indeed fully recognised this responsibility in the assistance which we have provided since the war to stimulate world trade and to help forward world recovery. As the House is aware, we have devoted over £900,000,000 to this cause.
We are convinced that the present circumstances offer a real opportunity

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for a long-term solution of the difficulties between the dollar area and the rest of the world. Our recovery and that of Europe has, with American and Canadian Governmental help, which cannot be expected to continue indefinitely, gone far enough to enable us now to look for a way out of these difficulties. If we are to have in the future the convertibility of currencies and the multilateral form of trade which we have sought ever since the end of the war and are now seeking, we and others must begin to build the permanent policies that will make these desirable objectives possible of attainment.
It is, therefore, in a spirit of constructive determination that we approach the solution of our present difficulties; and if we must pass through a further period of restraint and restrictions in order to brine about a more permanent solution of our problems, I am confident that in so doing we can rely upon the help and support of all our people, thus safeguarding that basic policy of full employment to which we, in common with all other countries of the world, are so deeply pledged, and at the same time preserving the principle of `fair shares' to which our nation is committed."
4.28 p.m.
THE MARQUESS OF SALISBURY: My Lords, there have been, during the last few days, evidences that the Statement which was to be made by the Chancellor of the Exchequer would be of a somewhat formidable character; and I am afraid that that is borne out by the Statement which the noble Viscount the Leader of the House has just read to us. It would obviously be unwise, and I think improper, for us to attempt at this stage to make any comment on what we have heard, and I therefore propose to say nothing. The question of a debate, of course, arises, and I should be glad to discuss that with the noble Viscount the Leader of the House at the proper time.
VISCOUNT SAMUEL: My Lords, the statement that has just been made discloses a situation which is serious and indeed sombre; but we need not jump to the conclusion that, grave as it is, it is therefore catastrophic or beyond recovery. Like the noble Marquess, I
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should be interested to know what steps the Government will take to meet what I am sure will be the wishes of the whole House: that the economic situation in its entirety should receive full discussion here, when we could examine together what steps we think could be taken by the Government, by Parliament, by industry and by the nation at large in order to restore the situation. In view of the impending conversations with the members of the Commonwealth and also with other countries, especially the United States, it may be thought impracticable to hold an immediate debate. The view of your Lordships would probably depend upon the course that is taken in another place. Certainly, I feel sure that we all desire that there should be a debate before Parliament rises for the Recess. If the debate cannot be immediate, the Second Reading of the Finance Bill might offer a convenient opportunity. I feel certain that we could not contemplate an adjournment for some weeks or months without the matter being fully explored in your Lordships' House.

SUPERANNUATION BILL
4.31 p.m.
Amendments reported (according to Order).

MERCHANT SHIPPING (SAFETY CONVENTION) BILL
4.32 p.m.
Order of the Day for the Third Reading read.
LORD SHEPHERD: My Lords, in moving that this Bill be read a third time, I desire to make a short statement on the Ice Patrol in the North Atlantic. This Ice Patrol, which was established after the great disaster to the "Titanic" before the First World War, has been a responsibility of contracting Governments since, and it is to continue under the Convention which this Bill seeks to implement. All the contracting parties are responsible for the upkeep of the activities of the Ice Patrol, and under the new conditions, each of the Governments will make a contribution according to the tonnage passing through the danger areas. But, from the beginning, the managerial responsibility for the Ice Patrol has been one for the United States Government. It has been the United

957
States Government, their men and their ships who, through summer and winter, have kept up the patrol. Therefore it seems to His Majesty's Government that it is fit, as this Bill passes through your Lordships' House, that we should give a meed of praise to our colleagues of the American nation for the work that they are now rendering to the mercantile shipping of the various countries who are parties to the Convention, and to the whole world. With those few words, I beg to move that the Bill be read a third time.
Moved, That the Bill be now read 3a. —(Lord Shepherd.)
On Question, Bill read 3a, and passed.

HOUSING BILL
4.34 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Macdonald of Gwaenysgor.)
On Question, Motion agreed to.
House in Committee accordingly:
[The EARL OF DROGHEDA in the Chair]
Clause 1 agreed to.
Clause 2 [Quashing of certain demolition orders]:
On Question, Whether Clause 2 shall stand part of the Bill?
LORD METHUEN: Before we come to deal with the Amendments on the Order Paper, I should like to give notice of an Amendment to Clause 2 to be brought forward on Report stage. Through an oversight this Amendment was not inserted on the Order Paper to-clay. The object of the Amendment, which will be to Clause 2 (a), is to enable a reprieve to be given to a house in respect of which a demolition order has been made in the past but which has since been effectively reconditioned to the satisfaction of the local authorities. This Amendment may be considered redundant, but we think it is an opportunity, though perhaps an afterthought, to insert a provision in that clause whereby a house which has been condemned in the past will still be eligible for reprieve if the owner is prepared to put it in order, and if the plans and specifications have
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been passed to the satisfaction of the local authority.
Clause 2 agreed to.
Clause 3:
Preservation of certain houses unfit for human habitation
3.—(1) Where, apart from this section, a local authority would be under a duty to make a demolition order under Part II of the principal Act with respect to—

(a) a house with respect to which a building preservation order under section twenty-nine of the Town and Country Planning Act, 1947, is in force; or

(b) a house included in a list compiled or approved under section thirty of that Act by the Minister of Town and Country Planning;

they shall, instead, make a closing order prohibiting the use of the house for any purpose other than a purpose approved by them.
THE PAYMASTER-GENERAL (LORD MACDONALD OF GWAENYSGOR): This first Amendment prepares the way for the following Amendment I beg to move.
Amendment moved—
Page 3, line 25, leave out ("or").—(Lord Macdonald of Gwaenysgor.)
THE EARL OF MUNSTER: I think it will be convenient if, on the first Amendment moved by the noble Lord, I mention that we on this side of the House have no objection to any of the Amendments which stand in his name on the Order Paper this afternoon.
On Question, Amendment agreed to.
LORD MACDONALD OF GWAENYSGOR LORD MACDONALD OF GWAENYSGOR moved, in subsection (1) at the end of paragraph (b) to insert:
"or
(c) a house, other than as aforesaid, in respect of which there is for the time being in force a notice given by that Minister to the local authority stating that the architectural or historic interest of the house is sufficient to render it inexpedient that the house should be demolished pending determination of the question whether or not it should be made the subject of such a building preservation order as aforesaid or included in such a list as aforesaid;"
The noble Lord said: This Amendment is more or less a procedural Amendment. Its effect is to close a gap which might otherwise exist in the safeguards provided by the clause against the demolition of houses of special architectural or historic interest. The compilation of the lists under Section 30 of the Town and

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Country Planning Act, 1947, must take a considerable time. In the meantime, some of these houses might be the subject of condemnation. This Amendment is to enable them to be kept standing until a decision is reached as to whether or not they ought to be included in the list. This and the other Amendments to Clause 3 on the Marshalled List have been agreed with the Ministry of Town and Country Planning. Action will be taken administratively to ensure that there is the necessary co-operation between the local housing and planning authorities. I beg to move.
Amendment moved—
Page 3, line 28, at end insert the said words. —(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
LORD MACDONALD OF GWAENYSGOR LORD MACDONALD OF GWAENYSGOR moved to add to subsection (1):
"and shall serve a copy of the order upon every person upon whom they would be required by subsection (1) of section eleven of the principal Act to serve a notice issued by them under that subsection."
The noble Lord said: This again is a matter of procedure. The Amendment applies to the procedure for making closing orders under this clause the provisions relating to the service of notices by the local authority of action taken in the exercise of their power to order the demolition of an insanitary house. These provisions apply to the making of closing orders under Section 12 of the Housing Act, 1936, in respect of parts of buildings. I beg to move.
Amendment moved—
Page 3, line 31, at end insert the said words. —(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
LORD MACDONALD OF GWAENYSGOR LORD MACDONALD OF GWAENYSGOR moved to leave out subsection (2) and insert—
"(2) Where, in the case of a house with respect to which a demolition order made under Part II of the principal Act by a local authority applies (whether or not that order has become operative), either—

(a) a building preservation order under the said section twenty-nine takes effect with respect to the house; or

(b) the house is included in such a list as aforesaid; or

(c) the Minister of Town and Country Planning gives to the local authority such a notice as aforesaid;

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the local authority shall determine the demolition order and make a closing order prohibiting the use of the house for any purpose other than a purpose approved by them, and shall serve notice that the demolition order has been determined and a copy of the closing order upon every such person as aforesaid."
The noble Lord said: This Amendment simply substitutes a new procedure for the one laid down in the Bill as it is drawn to-day. It is thought that this revised procedure is fairer, in that it allows opportunity for appeal against the action taken by the local authority. I beg to move.
Amendment moved—
Page 3, line 32, leave out subsection (2) and insert the said new subsection.—(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
LORD MACDONALD OF GWAENYSGOR: This Amendment and several others which follow are consequential. I beg to move.
Amendment moved—
Page 4, line 7, leave out ("or deemed to have been made").—(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
LORD MACDONALD OF GWAENYSGOR: This Amendment I have already referred to. I beg to move.
Amendment moved—
Page 4, line 22, leave out ("or deemed to have been made").—(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
LORD MACDONALD OF GWAENYSGOR: The effect of this Amendment is to enable any person who feels aggrieved by the withholding by the local authority of approval to the use for some purpose other than human habitation of a house to which a closing order applies to appeal to the county court. I beg to move.
Amendment moved—
Page 4, line 24, after the first ("order") insert ("to a withholding of approval in relation to the use for any purpose of a house to which such an order applies").—(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
LORD MACDONALD OF GWAENYSGOR: This Amendment is consequential on the Amendment which has just been carried. I beg to move.
Amendment moved—
Page 4, line 26, after ("order") insert ("to a withholding of approval in relation to the use for any purpose of a house to which such an order applies").—(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
LORD MACDONALD OF GWAENYSGOR: This and the two following Amendments are consequential on the Amendment at page 3, line 32. I beg to move.
Page 4, line 28, leave out ("or deemed to have been made").—(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
Amendment moved—
Page 4, line 34, leave out ("or deemed to have been made").—(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
Amendment moved—
Page 4, line 39, leave nut ("or deemed to have been made").—(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
Clause 3, as amended, agreed to.
Clauses 4 to 6 agreed to.
Clause 7:
Power of local authorities to provide board and laundry facilities
(2) A local authority may make such reasonable charges for meals and refreshments provided by the authority by virtue of this section and to persons availing themselves of facilities for doing laundry or laundry services so provided as the authority may determine.
4.40 p.m.
THE EARL OF MUNSTER THE EARL OF MUNSTER moved to add to subsection (2):
"Provided that the charges so made for meals and refreshments and in respect of laundry services shall be such as will ensure that the income derived therefrom is sufficient to defray the expenditure of the local authority in respect thereof."
The noble Earl said: On behalf of my noble friend, Lord Llewellin, I move the first Amendment in his name on the Marshalled List. Clause 7 of the Bill empowers local authorities to provide
"such facilities for obtaining meals and refreshments, and such facilities for doing laundry and such laundry services as accord with the needs of those persons"—
for whom accommodation has been provided. My noble friend seeks to ensure that these special facilities shall
962
not be run at a loss or be subsidised by additional rates which will fall on other members of the community who happen to live in the same rateable area. As I understand it, in no circumstances will there be any grant from public funds for these provisions. Nevertheless, he does feel that we should make it quite clear that a rate cannot in fact be levied to subsidise or to defray the expenses of the local authority in regard to the services which are mentioned in the Amendment. Accordingly, I beg to move.
Amendment moved—
Page 7, line 47, at end insert the said proviso. —(The Earl of Munster.)
LORD MACDONALD OF GWAENYSGOR: During the debates on Second Reading and in statements made by the Minister during the Committee stage in another place, it was emphasised and underlined that it is not intended that these facilities shall be a charge on the public funds. It is intended that the whole cost shall be borne by those who participate in the use of them. It is felt that the method suggested by the Amendment is not the best way to deal with it. There are certain matters in regard to laundering and also in regard to refreshments about which it would be difficult to decide during a specified period. In the first place, the local authority has to decide whether they will have a laundry or refreshment room for the housing estate. They consider all the local circumstances and, having reviewed everything, decide, and they know then that the new services must be self-supporting. We feel that if some local authority were to venture forward with deficit after deficit, year after year, there would be trouble from the local ratepayers themselves. In addition, the Minister of Health, in any circular he may issue to local authorities, will certainly emphasise that these services must be self-supporting; and if any local authority runs these services at a loss the Minister will take the necessary action administratively to end those facilities. The local ratepayers will, I am sure, be watching to see that preferential treatment is not given to persons inside the housing estate as against those outside, and I hope, therefore, this Amendment will not be pressed.
THE EARL OF MUNSTER: I am much obliged to the noble Lord. I think my

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noble friend will accept the explanation the noble Lord has given. In view of his remarks I shall certainly not press the Amendment. If we can be assured that the Minister, in the circular which he sends to local authorities, will make it abundantly clear that they must meet this expenditure and not expect the ratepayers to subsidise the noble Lord's and other people's washing, I can withdraw this Amendment.
LORD MACDONALD OF GWAENYSGOR: I know that the Minister will see that the circular is issued, thus meeting the point raised by the noble Earl.
Amendment, by leave, withdrawn.
THE EARL OF MUNSTER THE EARL OF MUNSTER moved, after subsection (2), to insert as a new subsection:
"( ) A local authority shall keep an account of their income derived from providing meals and refreshments and laundry services and also of their expenditure in respect thereof in a form to be prescribed by the Minister and if the account shows a deficit in respect of each of three consecutive years the powers to provide meals and refreshments and laundry services under this section shall cease to be exerciseable by that authority at the expiration of six months from the end of the last of those years."
The noble Earl said: This Amendment has some bearing on what we have just discussed, except that here we are seeking to provide that a local authority shall keep an account of their income derived from providing refreshments and laundry services, and also keep an account of their expenditure in a form prescribed by the Minister. Then we go on to say that if at the end of three consecutive years, by reason of their powers to provide meals, refreshments and laundry services they are making a loss, those services shall in fact come to an end. The Committee may recollect that my noble friend inserted an Amendment of this character in the Civic Restaurants Act which was passed through your Lordships' House last year, and we thought it worth while to put down an Amendment at this stage to ascertain whether the noble Lord will include words to this effect in the Bill now before the Committee. I beg to move.
Amendment moved—
Page 7, line 47, at end insert the said subsection.—(The Earl of Munster.)
LORD MACDONALD OF GWAENYSGOR: I would repeat very much what I said of the previous Amendment, just adding that the principle of this Amendment is derived from Section 3 (2) of the Civic Restaurants Act, 1947, but with the omission of the provisos giving the Minister discretion to postpone or exclude the operation of the provision and to restore the power. The powers conferred by Clause 7 are strictly limited and are in no wise comparable with the powers conferred by the Civic Restaurants Act to establish a public restaurant service in direct competition with local traders. This is solely for the people living on the estate. We know that a small deficit in one housing area may be a different thing from a similar deficit in another. We think the point is covered by what I said about the other Amendment, and I hope this Amendment will not be pressed.
THE EARL OF MUNSTER: In those circumstances, subject to what my noble friend may say on the next stage of the Bill, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
THE EARL OF MUNSTER: It was only at short notice that my noble friend asked me to move these Amendments. I am not quite certain of the purpose of the next Amendment, although I think I know what is at the back of his mind. In those circumstances, unless the noble Lord is going to accept the Amendment, I will leave it to the next stage of the Bill so that Lord Llewellin can move it himself.
Clause 7 agreed to.
Clauses 8 and 9 agreed to.
Clause 10 [Revival of power to make byelaws as to number of persons permitted to occupy working-class houses]:
LORD MACDONALD OF GWAENYSGOR: This is a drafting Amendment, its purpose being to make the language of the clause accord with that used in Section 6 of the Housing Act, 1936. I beg to move.
Amendment moved—
Page 9, line 9, leave out ("as") and insert ("in").—(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
Clause 10, as amended, agreed to.
Clause 11 agreed to.
Clause 12:
Liability to maintain certain streets and roads in rural districts
12.—(1) Subsection (2) of section eighty-one of the principal Act (which provides that where housing operations under Part V of that Act have been carried out by a local authority outside their own area, and for the purposes of the operations public streets or roads have been constructed and completed by that local authority, the liability to maintain the streets or roads shall vest in the council of the borough or district in which the operations were carried out unless that council are, or on appeal the Minister is, satisfied that the streets or roads have not been properly constructed in accordance with the plans and specifications approved by the Minister) shall not apply to the liability to maintain a public street or road in a rural district constructed, by a local authority other than the council of the district, for the purposes of housing operations under the said Part V, and completed by them after the commencement of this Act, but that liability shall, unless the council of the county are, or on appeal the Minister is, satisfied that the street or road has not been properly constructed in accordance with the plans and specifications approved by the Minister, vest in the council of the county which comprises the rural district.
VISCOUNT GAGE VISCOUNT GAGE moved, in subsection (1) after "Minister" (where that word occurs a third time) to insert "of Transport." The noble Viscount said: I am moving this Amendment on behalf of the County Councils' Association, and I think their purpose can be best understood by reference to the Explanatory Memorandum which accompanied the original print of this Bill. That Explanatory Memorandum pointed out that the county councils, as highway authorities, were now being saddled with a new liability— namely, to maintain roads constructed by the rural district councils as housing authorities. But according to the Explanatory Memorandum, that liability was to be subject to appropriate safeguards as to the construction and condition of the roads or streets. The County Councils' Association are not very happy about these safeguards. The Minister is not only the authority who lays down what the standards are to be but is also the appellate authority. The County Councils' Association feel that too much power is being invested in the Minister of Health and that there ought to be an appeal to the Minister of Transport. They also point out that the Minister of Health may not be technically equipped to say whether or not the con-
966
struction of roads has been properly carried out. As I have said, the object is to transfer the appeal to the Minister of Transport. I beg to move.
Amendment moved—
Page 9, line 39, after ("Minister") insert ("of Transport").—(Viscount Gage.)
4.50 p.m.
LORD MACDONALD OF GWAENYSGOR: In resisting this Amendment, I must say that I was rather amazed to hear the noble Viscount, Lord Gage, suggest that he was moving it on behalf of the County Councils' Association, because I am advised that the wording of this clause was agreed after long consultation with that body. It, therefore, amazes me that the Association should now raise this issue. In any case, the object, of the clause is merely to correct an anomaly in Section 81 (2) of the Housing Act, 1936, whereby the liability for maintaining roads constructed in connection with housing operations in a rural district by another local authority vests in the rural district council, although under the Local Government Act, 1929, rural district councils ceased to be highway authorities as from April 1, 1930. Subsection (1) of Section 81 of the Housing Act, 1936, provides that where any housing operations under this Act are being carried out by a local authority outside their own area, that authority shall, subject to the approval of the Minister of Health, have power to execute any works which are necessary for the purposes, or are incidental to the carrying out, of the operations. Subsections (3) and (4) of Section 81 also refer to approval by the Minister of Health. It would be inconsistent with that subsection and with subsections (3) and (4), to substitute in this subsection (2) the Minister of Transport for the Minister of Health. Therefore, I regret that I am unable to accept the Amendment.
VISCOUNT GAGE: The noble Lord was good enough to tell me that the point might be raised that the County Councils' Association had agreed the wording of this clause. Though I cannot pretend to have any personal knowledge of this, I have been in touch with the County Councils' Association and they do not accept the argument that they have agreed the whole wording of this clause.

967
But, whatever the understanding or misunderstanding, it seems to me that this is a somewhat small and technical point which might well be considered on its merits. At least the noble Lord has convinced me that the wording of the proposed Amendments, simple as they are, do not seem to cover the point which the County Councils' Association have in mind. I therefore propose to withdraw the Amendment and not to move the Amendments immediately following, though I may return to the matter on the Report stage. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 12 agreed to.
Clauses 13 to 19 agreed to.
Clause 20 [Grants to persons other than local authorities for improvement of housing accommodation]:
On Question, Whether Clause 20 shall stand part of the Bill?
LORD METHUEN: Owing to the absence of Lord Esher, I beg to give notice that an Amendment to Clause 20 will be brought forward on Report stage. It was not included in the present Marshalled List for the reason which I gave the Committee just now. The object of this Amendment will be to put it beyond doubt that a condemned house will not be automatically excluded from a grant. The Amendment will be to add the following words:
"When the local authority approve an application under this Section 20 in respect of a house to which a demolition order under Part II of the principal Act applies, such approval shall be made conditional upon the quashing of the demolition order under the provisions of Section 2 of this Act."
Clause 20 agreed to.
Clauses 21 and 22 agreed to.
Clause 23:
Conditions to be observed with respect to dwellings
23.—(1) In the case of a dwelling in respect of the provision or improvement of which assistance has been given under section twenty of this Act, the following conditions shall, subject to the provisions of this Part of this Act, be observed with respect to the dwelling for a period of twenty years beginning with the day on which it first becomes fit for occupation after the completion of the improvement works, and shall, so long as they are required to be so observed, be deemed to be
968
part of the terms of any lease, agreement for a lease or tenancy of the dwelling, and shall be enforceable accordingly:—

(a) those of a private dwelling-house except with the consent in writing of the local authority and then only for such further purposes and to such extent as may be;

(b) the dwelling shall, at all times at which it is not occupied by the applicant for the improvement grant or a member of his family or a person to whom the interest of the applicant in the dwelling has been devised by him, be let or be kept available for letting at a rent not exceeding the maximum rent that, by virtue of the next following paragraph, may be paid by an occupier of the dwelling;

VISCOUNT GAGE VISCOUNT GAGE moved, in subsection (1) (b) to leave out the first "be" and insert "or" The noble Viscount said: This Amendment with the two which follow, is designed to bring the tied cottage within the scope of the Bill. I have put it down partly because I thought the noble Lord in charge of the Bill here was expecting someone to put it down but also, and principally, in the hope that he will be willing to explain how far and in what way he thinks this Bill will assist the improvement of agricultural cottages, including cottages which are at present tied. I feel that any scheme seriously put forward by His Majesty's Government as a contribution towards the solution of this very old problem, ought to be seriously treated, however likely or unlikely to succeed it may at first glance appear.
I confess that I am a little sceptical about the prospects of success of the scheme, or indeed about the prospects of success of almost any scheme put forward for the improvement of agricultural cottages, because it seems almost impossible to treat this question simply as an administrative matter. It appears to be almost inevitable that whenever this matter is discussed we should have involved political dialectics, with great interchange of debating points, and the display of a great deal of emotion. Thereafter everything goes on exactly as before. I must say, both as an owner of agricultural property and as a member of local authorities, that I am always impressed by the entirely different approach which is apparent when it comes to dealing with the improvement of the accommodation of animals. When we deal with cows, for instance, there do not seem to be all these political complications. As a result, for

969
years now successive Ministers of Agriculture have been able to carry out a continuous policy based on the simple proposition that he who has a good cow-stall or a good cow-house shall be rewarded, and he who has a bad one shall be penalised. That, I believe, has worked greatly to the advantage of the cows.
When we come to human habitations these principles do not seem to apply. At present there seems to be remarkably little incentive or reward for improving agricultural cottages beyond the rather low minimum standard. It is true that a farm equipped with good cottages will in the long run be of greater value than a farm equipped with bad cottages. It would be a more "lettable" proposition, but it is remarkably difficult to measure increased value arising in this way in pounds, shillings and pence. I understand that the noble Lord claims that this Bill will provide a new incentive. I think that anyone who listened to him, might have deduced two things from the quotations he gave from speeches made by the Minister of Health—first, that it was a comparatively simple matter for an owner to untie and improve his cottage, and, secondly, that it would be generally to the advantage of the agricultural community if he did so. I would like to examine both those propositions.
I agree that, as regards the owner-occupier, there is no technical reason why he should not say simply that he proposes to untie his cottage and improve it under this Bill. But if this is to be an option exercisable by an owner surely you cannot expect him to exercise it unless, at least, after the cottage has been improved and untied, it can thereafter be maintained without loss to the owner. It does not seem reasonable to expect the owner to exercise an option so that he will inevitably incur a permanent loss. I do not know whether there have been any calculations on this point, but if one allows for improvements to the value of, say, £300, I cannot see that the eventual rent, if it is to be at all economic, can be less than about 12s. a week. To that rent, I suppose, will have to be added the rates, so the eventual weekly bill that the cottage tenant will have to pay will be somewhere between 15s. and £1.
I grant that that is less than the rent of a council house, but I do not believe
970
we can assume that even a majority of workers will necessarily wish to make that exchange. I believe flat if any did wish to do so, they would be guided almost entirely by the value of the improvements promised and hardly at all by the question of whether the cottage was untied. I do not believe they would be willing to pay much for the privilege of the protection of the Rent Restrictions Acts. But if the attitude of the workers is open to question, I do not think there can be much doubt of the attitude of farm tenants. I feel sure that if I suggested to my own tenants that cottages should be untied and improved under the Bill I should be told that though they would very much appreciate improved cottages, they could not possibly agree to such a radical modification in the terms of their leases unless I could guarantee that they would secure sufficient accommodation in all circumstances to house their workers, which of course I could not do. They might perhaps, as an alternative, ask me to accept a big reduction in rent. That may leave the Government cold, but I do not think they can expect an owner to regard this with great enthusiasm. In view of the protection given to tenancy agreements and leases by the Agriculture Act, 1947, I cannot see how these cottages can possibly be untied without the consent of the farm tenant. My own belief is that this Bill will be used to improve cottages at present tied only in a very few instances.
I may be wrong, and I hope the noble Lord will be able to point out if I am. But if he cannot prove that this Bill will be used on a more extensive scale, I think it is fair to ask what is the Government's policy for the improvement of agricultural housing. I have not national figures by me, but I have some fairly complete figures from one or two rural districts with which I happen to be familiar, and I think they may be typical of others. They at least show the nature of the problem. The figures I have in mind relate to a survey of about 2,600 cottages. Of these, 828 were found to be tied or service cottages. Of the 828, no fewer than 502, in the opinion of the medical officer of health, required either repairs, structural alterations or fairly substantial improvements; and a further 109 were altogether beyond repair.
Up to the present the Government's contribution to rural housing has been in part to maintain some of the provisions of the Coalition Government—such as the Rural Water Supplies and Sewerage Act, 1944, and the Finance Act, 1945, both of which are very useful in certain cases—but their main contribution, they would claim, would be the encouragement of new council houses, of which a small proportion has been now allocated to rural workers. The rural district council to which I have already referred has allocated 65 out of 473 houses to agricultural workers. They are very good cottages, but the rents are between £1 and 22s. and there is always the fear that these rents will go higher. This lack of security about the rents of council houses is having a very disturbing effect on tenants. I would suggest that if the figures I have given are in any way representative of what is happening in other parts of the country, the number of new agricultural cottages hardly makes up for the rate of deterioration of the old cottages. In other words, the general standard of agricultural housing is likely not to improve but to get worse. As I have said before, we can indulge in political dialectics, and talk about Tory misrule, or about the high costs, centralisation and the red tape which is having such an injurious effect on the present Government's housing policy; but if we are to consider this problem in a dispassionate and objective way I feel that we are entitled to ask whether this Bill is the last word the Government have to say about agricultural cottages or whether they have something else to offer in the foreseeable future. I beg to move.
Amendment moved—
Page 17, line 20, leave out the first ("be") and insert ("or").—(Viscount Gage.)
5.5 p.m.
LORD MACDONALD OF GWAENYSGOR: When this matter was before another place the Deputy Speaker said this, and I am sorry that the Lord Chairman is not entrusted with similar powers:
"The general question of tied cottages is not before the House. The question is the conditions under which an improvement grant will be made. I therefore hope that for that reason and others honourable Members will be good enough to be brief and to the point."
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There is only the question raised here: Should a tied cottage enjoy the facilities of this Bill? As I said on the Second Reading, the present Government are not in favour of tied cottages and therefore they are opposed to doing anything which may in any way encourage the continuance of tied cottages. One way to do that is to withhold from the tied cottage the benefits which other cottages will secure from this Bill. I would like to help the noble Viscount when he asks me the way to untie a tied cottage. He seems to suggest that the untying of a cottage might mean placing a financial burden on the cottager. I should say that that would be wrong. If the cottager is receiving £4 a week as a farm labourer, and the farmer is anxious to untie his cottage, all he has to do is to settle the rent to be paid, and to pay that money to the labourer in addition to his £4.
A NOBLE LORD: £4 14s.
LORD MACDONALD OF GWAENYSGOR: I am using a round figure. The farmer could not put a financial burden on a tenant he proposes to untie. I do not think he would want to do that. He would give the cottager the amount of rent agreed upon, in addition to the wages he receives now, and it would be paid back in rent. The transaction is over; but the tenant will enjoy all the privileges of the Rent Restrictions Acts. We could go on at great length on this question, but I do not think it necessary. The Minister of Health, on behalf of the Government, has laid down as a major policy of this Government, rightly or wrongly, that they are prepared to do nothing to encourage the continuance of tied cottages. Therefore, the provisions of the Bill do not apply to tied cottages. The landlord farmer and land owner can take the action necessary to derive benefit from the Bill. Until they do this, its benefits are denied to the cottager. I am sorry I cannot accept the Amendment.
VISCOUNT GAGE: I am very disappointed with the noble Lord's reply. I tried to deal with this matter in no factious way, and I asked the noble Lord to explain how he hoped that these cottages would be untied. He has said nothing about the protection given to tenancy agreements and leases by the Agriculture Act, 1947. From what he said it seems to me that this Bill is not

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put forward in any way as a serious contribution to the improvement of agricultural cottages. I find the greatest difficulty in marrying the moving way in which he spoke on Second Reading about the desirability of improving cottages with what seems to me very cavalier treatment of an Amendment which I had hoped would provide some guidance to the Committee on how the Government intend to work. I am not going to press the Amendment to a Division—I never suggested I would. I feel that I have received a very disappointing reply, and I do not think that agricultural workers can derive any hope at all from the provisions of this Bill. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 23 agreed to.
Clauses 24 to 28 agreed to.
Clause 29 [Power to increase rent fixed under Part II in certain cases]:
LORD MACDONALD OF GWAENYSGOR: The next seven Amendments are drafting Amendments. I beg to move.
Amendment moved—
Page 22, line 42, after ("that") insert (". for the purposes of this Part of this Act,"). —(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
Amendment moved—
Page 22, line 46, leave out ("such").—(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
Amendment moved—
Page 22, line 46, after ("given") insert ("under this section in relation to a dwelling on any occasion").—(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
Amendment moved—
Page 23, line 4, leave out from ("before") to ("the") in line 6 and insert ("a subsequent direction is given under this section in relation to the dwelling or the direction is superseded by reason of").—(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
Amendment moved—
Page 23, line 8, after ("twenty") insert ("(whichever event first occurs)").—(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
Amendment moved—
Page 23, line 13, leave out ("under this section") and insert ("in accordance with the
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direction given on that occasion and with any direction given under this section in relation to the dwelling on a previous occasion which has not been superseded as aforesaid ").—(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
Amendment moved—
Page 23, line 16, leave out ("the").—(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
Clause 29, as amended, agreed to.
Clauses 30 to 42 agreed to.
Clause 43 [Amendment and extension of s. 7 of the Building Materials and Housing Act, 1945]:
LORD MACDONALD OF GWAENYSGOR: The next five Amendments are drafting Amendments. I beg to move.
Amendment moved—
Page 33, line 36, after ("that") insert ("for the purposes of the said section seven,").—(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
Amendment moved—
Page 33, line 39, leave out ("such").—(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
Amendment moved—
Page 33, line 39, after ("given") insert ("under this subsection in relation to a house on any occasion").—(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
Amendment moved—
Page 33, line 44, after ("direction") insert ("and before a subsequent direction is given under this subsection in relation to the house"). —(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
Amendment moved—
Page 33, line 46, after ("direction") insert ("given on that occasion and with any direction given under this subsection in relation to the house on a previous occasion").—(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
Clause 43, as amended, agreed to.
Clause 44 agreed to.
Clause 45 [Power to increase rent fixed under Housing (Rural Workers) Acts in certain cases]:
LORD MACDONALD OF GWAENYSGOR: The next five Amendments are drafting Amendments. I beg to move.
Amendment moved—
Page 35, line 3, after ("that") insert (", for the purposes of those Acts,").—(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
Amendment moved—
Page 35, line 8, leave out ("such").—(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
Amendment moved—
Page 35, line 8, after ("given") insert ("under this section in relation to a dwelling on any occasion").—(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
Amendment moved—
Page 35, line 17, leave out from ("before") to ("be") in line 18, and insert ("a subsequent direction is given under this section in relation to the dwelling.").—(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
Amendment moved—
Page 35, line 20, leave out ("under this section") and insert ("in accordance with the direction given on that occasion and with any direction given under this section in relation to the dwelling on a previous occasion").— (Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
Clause 45, as amended, agreed to.
Remaining clauses agreed to.
First Schedule [Amendments of the Housing Act, 1936, for Purposes of Removal of References to the Working Classes]:
LORD MACDONALD OF GWAENYSGOR: This is a drafting Amendment. I beg to move.
Amendment moved—
Page 42, line 32, after ("In") insert ("subsection (1), in").—(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
First Schedule, as amended, agreed to.
Second Schedule [Adaptations of the Housing Act, 1936, and the Housing (Financial and Miscellaneous Provisions) Act, 1946]:
LORD MACDONALD OF GWAENYSGOR: In moving this Amendment I would mention that Part I of the Bill (which amends the Housing Act, 1936) now contains three provisions
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referring to a house being fit for human habitation—namely, Clause 2 (b), Clause 3 (3) and Clause 4 (2). It is therefore desirable to apply the provision mentioned in the Amendment so that the same tests as to fitness are applicable in all cases.
Amendment moved—
Page 45, line 4, at end insert—
("11. Subsection (4) of section one hundred and eighty-eight of the principal Act (which specifies matters to which regard is to be had in determining for the purposes of that Act whether a house is fit for human habitation) shall have effect as if the reference to that Act included a reference to this Act.")—(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
Second Schedule, as amended, agreed to.
Third Schedule [Enactments Repealed]:
LORD MACDONALD OF GWAENYSGOR: This Amendment is consequential on the drafting Amendment we made at page 42, line 32. I beg to move.
Amendment moved—
Page 47, line 11, after ("twenty-nine") insert ("in subsection (1).")—(Lord Macdonald of Gwaenysgor.)
On Question, Amendment agreed to.
Third Schedule, as amended, agreed to.
House resumed.

BRITISH TRANSPORT COMMISSION BILL
Reported from the Select Committee, with Amendments.

PRIVATE LEGISLATION PROCEDURE (SCOTLAND) ACT, 1936
Report from the Committee of Selection, That the Lords following be proposed to the House as members of the panel of Lords to act as Commissioners under the Act during, the present Session —namely:

E. Mansfield,

V. Caldecote:

Agreed to; and the said Lords appointed accordingly.

CIVIL DEFENCE (GENERAL) REGULATIONS, 1949
CIVIL DEFENCE CORPS REGULATION'S, 1949
CIVIL DEFENCE (GENERAL) SCOTLAND REGULATIONS, 1949
CIVIL DEFENCE CORPS (SCOTLAND) REGULATIONS, 1949
Report from the Special Orders Committee, That they have examined the Special Orders as required by the Standing Orders of the House; That in their
978
opinion the provisions of the Orders raise important questions of policy and principle; That the Orders are not founded on precedent; That in the opinion of the Committee the Orders cannot be passed by the House without special attention, but that no further inquiry is necessary before the House proceeds to a decision on the Resolutions to approve the said Orders: Read, and ordered to lie on the Table.
House adjourned at eighteen minutes past five o'clock.