Lords Sitting of 19 July 1949

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers
  SALFORD CORPORATION BILL
  Read 2*, and committed.
SOUTHAMPTON HARBOUR BILL
Read 2*, and committed.
LONDON COUNTY COUNCIL (MONEY) BILL
Read 3*, and passed.

JUSTICES OF THE PEACE BILL [H.L.]
2.37 p.m.
THE LORD CHANCELLOR (VISCOUNT JOWITT): My Lords, may I ask your indulgence to make a correction by way of personal explanation? On the Second Reading of the Justices of the Peace Bill I gave some figures which I find are erroneous. I was talking, your Lordships will remember, about the abolition of quarter sessions in non-county boroughs, and I said:
"Hampshire is the other difficult case. Hampshire had 257 cases in 1948. It has two non-county boroughs, Winchester and Andover. Winchester disposed of sixty-seven cases and Andover thirty-one, making a total of ninety-eight. If the ninety-eight are added to the 257, quarter sessions will obviously have to deal with 355 cases. Yet how odd this fact is! There is Southampton, a county borough —and perhaps in due course the Lord Chief Justice will explain something which puzzles me—with a population of 176,000, far greater than Winchester and far greater than Andover. It had one case in 1948, three in 1947, and one in 1946. If you want a trace horse, there you have a county borough at hand with its separate quarter sessions doing absolutely nothing, whereas the work seems to be piling up in Winchester. It seems to me that if this reform is carried through, the County Borough of Southampton ought obviously to give greater relief."
My figures were erroneous and for this I naturally take full responsibility, and express my humble apologies. The figures I gave for Southampton, which should have been one in 1946, three in 1947 and
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three in 1948, were merely the figures committed from the County for trial at the Borough Sessions. By error, I included in the 257 cases tried by the County Quarter Sessions, a number of cases which arose in the County Borough of Southampton and which were, in fact tried by the Borough Sessions. I therefore attributed to the citizens of Southampton a much better standard of behavious than in fact was their due. I also did an injustice to the Recorder of the Borough of Southampton and to those assisting him in suggesting that they were making a very small contribution in regard to the trial of criminals. The correct figures for the year 1948 should therefore have been: for the Hampshire County Sessions, 175; for the Southampton Sessions 96, of which latter total 93 arose within the Borough and three had been committed from the County for trial within the Borough.
I express my regret to everyone concerned and take this, the earliest, opportunity of putting the matter right.

AIRWAYS CORPORATIONS BILL
Brought from the Commons; read 1*; and to be printed.

COLONIAL DEVELOPMENT AND WELFARE BILL
2.40 p.m.
Order of the Day for the Second Reading read.
THE MINISTER OF STATE FOR COLONIAL AFFAIRS (THE EARL OF LISTOWEL): My Lords, I hope and believe that this Bill will give rise to less controversy and to less protracted discussion than some of the Bills to which your Lordships have recently been directing your attention. It sets out to achieve two main objects. It seeks, in the first place, to raise the annual ceiling of expenditure on research schemes from £1,000,000, which is the limit under existing legislation, to £2,500,000; and, in the second place, to raise the total annual expenditure permissible on all schemes under the Colonial Development and Welfare Acts from £17,500,000 to £20,000,000. These are the two objects of the Bill and I think I can clearly express them each in a single sentence. The reasons why we are recommending

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Parliament to authorise these changes in the administration of funds provided by these Acts arise from events which could not have been foreseen at the time this legislation was enacted.
In the first place, expenditure on all schemes since the last Colonial Development and Welfare Act came into force in 1926 has been much slower than was expected, chiefly owing to shortage of materials and technical staff. Expenditure on research schemes, however, I am thankful to say, has proceeded recently with much increased momentum, and during the current financial year expenditure to the order of £1,500,000 has been forecast. This level of expenditure is likely to be exceeded during the following years, provided, of course, that Parliament sanctions so doing. The importance of research work in the development of Colonial territories needs no emphasis from me. Your Lordships must often have reflected on the ravages of animal, plant and human diseases, and we are convinced from our knowledge of this subject that this work should not be impeded by such a low annual ceiling as £1,000,000.
The second main reason for these proposals is that expenditure on development schemes of every sort is gradually increasing, if not at such a rapid rate as that on research schemes. It is true that the present annual total of £17,500,000 permitted under the 1945 Act is not likely to be reached in the immediate future. But unless this annual total is raised from £17,500,000 to £20,000,000, it will be quite impossible in time to come, owing to the under-expenditure that has prevailed until now, for the whole sum of £120,000,000 provided by Parliament to be spent by March, 1956. That, of course, is the date when the present Act expires. We are therefore anxious to raise the overall annual ceiling of expenditure under the Colonial Development and Welfare Acts at the same time as the annual expenditure on research. This will also ensure that we shall not have to go to Parliament later on for piecemeal legislation to authorise a higher ceiling of annual expenditure. In that way I think we shall be doing a good service both to the next Government and to the next Parliament when the time comes for them to meet.
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I should perhaps say that the present Bill involves no commitment to increase the total sum of £120, 000,000 provided under the 1945 Act. In view of the importance of expenditure at the present time, it is right that that fact should be made perfectly plain. I feel sure that your Lordships will approve these adjustments, which are required in the light of experience since 1945—which has been rather different from w gat we expected—in the authorised flow of expenditure on welfare and development schemes in our colonial territories. I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2*.—(The Earl of Listowel.)
2.45 p.m.
LORD TWEEDSMUIR: My Lords, the noble Earl who introduced this Bill has done so very briefly, which I think is a great tribute to the understanding and intelligence of your Lordships. It was introduced in the other place to the tune of a great many columns of Hansard. I shall quote one or two figures which the noble Earl did not bring out, and I would like him to pay particular attention to them, and tell me whether or not they are right. Whenever I think of this Bill I cannot help thinking of the circumstances in which its first edition was passed. It was the very darkest time of our fortunes in 1940, when the German armed forces had scattered our Allies, and many people who were devoted to our cause all over the world wondered whether or not we were finished. In that dark hour the Parliament of this country, mindful of their responsibilities, and absolutely certain of eventual victory, passed this far-reaching Act, which has been called by some a milestone and by others a great act of faith —indeed, it is both.
The present edition to which we are addressing ourselves this afternoon, as the noble Earl has said, dates from 1945, and has a ceiling of £12,000,000. The noble Earl has given us the figures—namely, £17,500,000 in any one year, and £1,000,000 in any one year on research. This is rather like an annual general meeting of a company where one reviews the period that has passed and considers the recommendations of the directors for the future. I would very much like to know from the noble Earl how many

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schemes put forward by Colonial Governments have in fact been approved, because sometimes the noble Earl and his right honourable friend do not quite agree on the subject of figures. The noble Earl told us in the Colonial debate in this House on April 13 that twenty-four schemes had been approved; but his right honourable friend the Secretary of State, speaking on May 27, gave the total as only twenty-one. Are we to understand that in five weeks three approved schemes suddenly became disapproved?
THE EARL OF LISTOWEL: I do not want to interrupt the noble Lord, but I am sure he would wish his meaning to be plain. When he uses the word "schemes" is he referring to the ten-year plans of the Colonial Governments?
LORD TWEEDSMUIR: Yes. I trust that there is no mistake in the millions of pounds, because in this project we are, willy-nilly, all shareholders. I understand that these ten-year plans call for an expenditure of about £200,000,000, met in the following way: £64,000,000-odd under the 1945 Act; the same sum of £64,000,000 by local Colonial loans; and £71,000,000 from local Colonial revenues. That, with the loose change, makes up nigh upon £200,000,000. I gathered from the few words with which the noble Earl introduced this Bill that the object of it is not a change of policy, but merely a change of emphasis—to accelerate the tempo and step up the £17,500,000 to £20,000,000 a year, and the £1,000,000 on research to £2,500,000 a year. Voting the money is the easy part of all these schemes; it is how the money is spent that matters. Welfare, as we all agree, waits on development. The social services of this country are as a house built on sand unless they have the solid basis of economic security. We could plan to-morrow to build a thousand hospitals and ten thousand schools in the Colonies, but most of them might well be closed the following year for lack of funds to maintain them. Though education, health, housing and such like, are economic expenses in every sense of the word, they must at the same time be founded on the base of the pyramid, which is economic security. If he can, I would like the noble Earl to say a word on what proportions of this expenditure are going directly to productive activities
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or to public utilities or to social services. My understanding of the proposals in that order is something like one-half to productive activities, one-third to public utilities and about one-sixth to social services.
The noble Earl commented on the fact that for the first five years or so of this scheme the tempo had been extremely slow. He warmed our hearts by telling us that material and capital goods would come forward in rather greater supply. We were once a rich, proud and powerful nation. We are still proud and still powerful, but we are no longer rich. The Colonial territories have not asked for us to be their continuing financial support, nor could we continually support them thus. This Bill, and other measures like it, are designed surely to be a springboard for their own future progress, a future progress in the design of a great partnership. One of the reasons, I think, why the East African ground-nuts scheme has not been a shining success is that His Majesty's Government have failed to make it plain what exactly are the functions in these schemes of Government investment and private investment. Some projects are suitable for Government investment alone, and some for private investment alone, while many more are suitable for a joinder of the two. I wish the Government could see their way to making this quite plain.
As regards research, upon which the noble Earl said a few words, I think my noble friends on this side of the House will rejoice with me that the ceiling for the research grants has been raised. It is doubtful to my mind whether there should be a ceiling year by year. After all, research proceeds with the momentum of one discovery to another. I do not think it should have any confining influence or limitation, and if it has I hope the noble Earl will come quickly back to Parliament and ask for the limitation to be raised. For what millions would it not be worth if by research we mastered the rinderpest in Africa, the swollen-shoot disease in West Africa and the banana disease which has decimated banana crops in the West Indies! One of the criticisms of the ground-nuts scheme is that there was not enough research. Research is not always an easy thing to define. After all, research shades into the pilot scheme; the pilot scheme shades into the final project.

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As I have said, voting large sums by itself is the easiest part, but I am prepared to bet that every ten-year plan put up and approved by every Colony is seriously hampered by lack not only of materials but also of men. I believe that a great deal of the capital goods and materials which we have exported in the last few years to foreign countries—some, indeed, behind the Iron Curtain—might well have gone with greater advantage to the Colonies themselves. After all, they earn 200,000,000 dollars a year in the aggregate. I believe that if we could increase that element it would he greatly to our mutual benefit.
Last of all, apart from the question of money, machinery, concrete and steel, there is the question of the investment of our human capital. To my mind, the Colonial Service has not the inducements it had when I had the honour to serve in it fifteen years ago. We must always see that those inducements exist, and that we always attract the best people. We must do whatever we can from all sources to attract those experts whom we need to participate with us in this great task. I have avoided making a full-scale Colonial debate upon this issue—indeed, they are having such a debate to-morrow in another place. I think my colleagues on this side of the House will join with me in welcoming this Bill and wishing it every possible success.
2.55 p.m.
LORD STRABOLGI: My Lords, until the last sentence of the noble Lord's very interesting speech, I was not sure whether he was supporting or opposing the Bill—blessing it or damning it—but I certainly missed any word of praise from him, and I propose to supply that omission. I think His Majesty's Government are much to be congratulated on spending more on these admittedly vital and essential services, especially on scientific research in the Colonial Empire, than any previous Government. As for what the noble Lord said about our being poor and impoverished, it is not a question of money at all. Anything we can do in the way of scientific research to develop this vast and almost virginal state—I am thinking particularly of East Indian territories now, who are crying out for help—will be repaid to us many times over in a few years.
LORD TWEEDSMUIR: If I may interrupt the noble Lord, I did not suggest by anything I said that that particular expenditure was a waste of money.
LORD STRABOLGI: No. The noble Lord spoke of our poverty, and I am pointing out that however poor we may be this is a lucrative investment. I agree with him about the undesirability of having a limited scientific research, but I imagine that my noble friend and my right honourable friend in another place, if they find that there is urgent need for more money for some particularly promising project, can always ask for a supplementary estimate, and I do not think any Party in another place will oppose it. ft is all very well to talk about the ground-nuts scheme as not having been properly planned in advance, but at the time it was initiated everyone praised it; and I gather that when certain initial difficulties are overcome it will be a most valuable project. Certainly it is something on the right lines, which is better than our sitting back and saying that we cannot afford to buy in certain markets because the currencies are too hard or are against us. Here we are really trying to develop from hitherto unused lands the necessary fats which we require. Whatever mistakes have been made in that scheme, I am sure that the project itself was good and that eventually the results will be satisfactory.
I had intended to ask my noble friend one or two specific questions about research into the elimination of certain pests, but I do not think it is fair to do that without notice, and if I may I will reserve those remarks to a later stage of the Bill. I cannot imagine anyone who knows the situation in our Colonies being prepared to oppose this Bill, and I was very glad of the concluding remarks of the noble Lord who speaks for the Opposition.
2.58 p.m.
LORD HANKEY: My Lords, I did not come with the intention of speaking in this debate, and I am therefore speaking without preparation; but I would like to say a word on the aspect of Colonial research. I happen to be concerned in that because I am chairman of one of the sub-committees of the Colonial Research Council, and in that capacity I

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have recently become a member of the Colonial Research Council. The Council of which I am chairman is called the Colonial Products Research Council and, as the title explains, it is a scientific committee. They are all scientists except myself, and we work in an attempt to find new uses for Colonial products, especially in the industrial sphere, though by our terms of reference we are not strictly limited to that. We have to be careful, however, not to overlap too much into the medical and agricultural research work, for which special provision is made, and all of which is co-ordinated by the Colonial Research Council itself.
A year ago I was in the West Indies, opening at Trinidad a micro-biological institute. The Americans have done a great deal of work in micro-biology, and it seems to hold out great prospects, especially in the field of Colonial research. But this is the first British establishment, so far as I know, which is working entirely on micro-biology. Now it is of first importance, and I hope it will always be kept in mind in all this research, that there should not be too insistent a demand for immediate results. Results follow from pure research, but they often have to lag some way behind. A good deal of pure research remains to be done, and I think that is the first consideration. But we do achieve results in this body to which I belong—for example, we have a promising substitute for linseed oil.
As your Lordships know, linseed oil is very much used in the paint industry and in other industries, as well as for cricket bats. It has been very scarce, and its price has been high. Most of it comes, I believe, from the Argentine Republic. But there is a weed in West Africa from which a group of Liverpool scientists have produced a very valuable oil known as conophor oil, which has great promise. It has not been finally approved, I believe, and it must be remembered that because it is possible to produce an oil from a weed it does not necessarily follow that that weed can be grown as a crop. That matter is being actively pursued under Colonial Office direction, and according to the latest information I have, I think it is extremely promising. There is also a promising rubber seed oil which would be a by-product of the
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rubber growing industry. This has been proved out scientifically—and more than scientifically, proved out, like the conophor oil, by the skill of the user. Unfortunately, however, it has been held up in development by the unsettled conditions in Malaya.
Speaking of results, some wonderful work has been done in sugar. It is extraordinary the promise that sugar research shows. The actual accomplishments vary from a substitute for blood plasma (which has been used up to 50 per cent. in certain hospitals) to antifreeze mixture. When we started on sugar research a few years ago we were hoping that sugar would become once again a cheap commodity—indeed, we thought there might he a glut. But, as your Lordships well know, there is no glut, so that prices have remained high. However, I do not think there is the slightest doubt that the price of sugar will come down one of these days; and the hope is, of course, that from these discoveries there will be new markets for our Colonial sugar. I will not detain your Lordships any longer but I thought it might be of interest to you to hear these facts. I should like to say how grateful the world of science, so far as I know it, is to the Colonial Office for the help which they have given and the initiative which they have shown in this subject. This is a matter in which all Governments have done their utmost. We have to remember that when such research is started it has to be developed gradually; it is necessary to spend your money to the best advantage by finding out where the research most needs help. As a matter or fact, however, that work has been improving steadily under each Government, and I think the present Government have done their duty very fully.
3.6 p.m.
EARL HOWE: My Lords, like the last noble Lord who spoke, I had not come here with the idea of making a speech. I should, however, like to ask a question. Statements have appeared in the Press lately to the effect that the West Indies are anxious to make a sugar agreement with this country. Well, my Lords, this country, as we all know, is very short of sugar, and I think we all agree that anything we can do which will help the sugar supply from the sterling area should be

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done. This is a point of the greatest interest to the Government and the people. Can the noble Earl who is to reply tell us what steps, if any, have been or are being taken to try to develop the production of sugar in Jamaica, for instance, as opposed to sugar coming from Cuba and other places? I should be interested if the noble Earl could give us an idea of the prospects and whether it is a fact, as has been stated in the Press, that we are contemplating making a ten-year agreement with the sugar growers of Jamiaca. If we did that, would not sugar become more plentiful for our people? If, on the other hand, the Government have turned down this idea, or are going to do so, could they tell us the arguments for or against it?
LORD HAWKE: I, too, should like to ask the noble Lord a question—on the subject of British Somaliland. In 1944 it was pointed out to His Majesty's Government that British Somaliland was in a fair way to becoming a howling wilderness, because of over-grazing and lack of proper water for the beasts there. What progress, if any, has been made in arresting that trend?
3.8 p.m.
LORD MILVERTON: My Lords, I. too came here this afternoon without any intention of either speaking or asking a question. I assumed, and I think I was right in assuming, that every noble Lord here was in favour of the terms of this Bill; and although the noble Lord, Lord Strabolgi, appears to have been in some doubt as to the meaning of the comments of the noble Lord, Lord Tweedsmuir, I suffered under no such apprehension. I took it for granted that he was—as he is—strongly in favour of the terms of this Bill. Had the matter been left at that I should have remained silent. Nobody who knows anything about the Colonial Empire, or who is interested in it, would consider him as not supporting the terms whereby a larger sum is made available every year and, in particular, where a larger sum can be devoted to research.
The noble Lord, Lord Strabolgi, took the opportunity of claiming for this Government all the credit for the amount of money which is now to be spent on this scheme of development and welfare in the Colonial Empire. I want
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to go into the question, with great self-restraint, of how much of the credit for this is due to His Majesty's present Government. If we enter into a balance of accounts of this kind one must remember that in this Colonial Empire of ours it is not only financial considerations which matter. It is totally useless to spend any quantity of money and to make any number of millions of pounds available for development and welfare schemes if, throughout the Colonel Empire, there is a feeling of uncertainly and doubt about our intentions. If the question of whether we mean to govern or to get out is still left uncertain, and if the Colonial Service is left not knowing what its future is to be, owing to the lack of a perfectly definite statement of policy and of intention to adhere to that policy, then all the money which is to be spent under Bills of this sort will be entirely wasted. I do say that during the last few years that feeling of uncertainty has been prevalent throughout the Colonial Service.
I happen to be in a position to know and to be asked constantly by the parents of young men in the Colonial Service, what is the future for their sons in a Service where apparently the Government are prepared to give way to pressure and to give not and disorder what they have previously, and only recently, denied to reasonable representation. That consideration has to be taken into account; if you do not wish to waste the money of the nation, it is necessary to have a firm policy. Recently, I was privileged to read the comments of a distinguished foreigner who has recently been touring and studying the Governments and the conditions in our West African Colonies. His comment at the end of it all was that he called it "government by dissent." He pointed out how our professions are not being carried out in practice, how apparently we are not pursuing a definite policy but are slipping and sliding slowly into chaos. He concluded his comments and criticisms of what has been happening recently in the lack of decision on the part of His Majesty's 'Government in the West African Colonies by saying: "This may be magnificent, but it is not government." I suggest that we cannot afford this magnificent uncertainty, this

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attitude of the open mind in matters of government. If one is to govern, and if one is to bring backward people to a stage where they are fit to govern themselves, one must display openly to them an example of what real government means.
3.13 p.m.
THE EARL OF LISTOWEL: My Lords, I want first to say that I am most grateful to the House and to all the noble Lords who have taken part in this debate. We have had five speakers. Noble Lords have spoken from the Conservative and the Liberal Benches and also from the Independent Bench, and not one word of disapproval of the present Bill has been expressed by any speaker. In reply to noble Lords—and I must confess now that I cannot answer all their questions; I am sure they would not expect me so to do without previous notice—may I say a few words on some of the points that have been raised? I am much obliged to the noble Lord, Lord Hankey, for his remarks. I should like to tell him how much we value the work he is doing, as Chairman of the Colonial Products Research Council, and how much we appreciate the work of his committee, which is one of the many bodies working in association with the Colonial Office on this problem of research into matters affecting the welfare and development of the Colonies. I can assure the noble Lord that we shall not expect immediate results. We know quite well that scientists take a long time to work out their schemes. We certainly do not want to hurry his work and produce incomplete or ineffective results.
In reply to the noble Earl, Lord Howe, I should like to say that we appreciate just as much as he does the importance of buying sugar from the sterling area. That is one of the reasons why it is particularly desirable that we should be in a position to buy our sugar from the West Indies. We also realise how much Jamaica and other Colonies in the West Indies depend for the maintenance of their standard of living, of their social services and of their general prosperity upon the condition of this basic industry. I can assure the noble Lord that any discussions that may take place between us and the sugar producers in the West Indies will take place between people
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who fully realise these facts. The noble Lord, Lord Hawke, asked me a question about British Somaliland. We appreciate the value of meat production in British Somaliland and the importance to the Somalis of a flourishing pastoral industry. I cannot answer the question that he has put to me, but I shall be pleased to communicate with him as soon as I have had an opportunity of consulting with my advisers. The noble Lord, Lord Milverton, spoke as though there were some doubt or uncertainty about our policy in regard to the political development and future of the Colonies. Honestly, I do not think that there is any such doubt. Our policy for the Colonies and for all our dependent territories is that they should achieve ultimate self-government. That is the policy which is approved by every Party in the State, including the Party to which the noble Lord, Lord Milverton, belongs.
I should like now to answer two or three points that were made by the noble Lord, Lord Tweedsmuir. I think he reproached me, in his usual polite and mild manner, for the brevity of my introductory speech. If he did not do so, it was a false impression that I received, but we should be delighted, at any moment when a member of the House considers it convenient or desirable, to discuss far more fully the economic policy in relation to the Colonies and the whole past and present economic development of these territories. I thought that on this occasion I would be complying with the wishes of the House if I limited myself narrowly to the terms of the Bill. I was glad to observe that the noble Lord spoke with approval of our ten-year plans for the Colonies. I am glad that the noble Lord opposite and his Party support the policy of planning in this field, because it is most important that these plans should be carried out continuously, without interruption, whatever Party may be in power in this country. These plans achieve two things which I think no piecemeal economic development could hope to bring about. They co-ordinate the efforts of Government, of private enterprise and of the public corporations within the different territories; they make co-ordinated economic development possible for the first time. They also enable development to take place, striking a proper balance between

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the different aspects of the economic resources and the social services which ought to advance together in any particular Colony. They enable a proper ratio to he struck between the expenditure on communications, agriculture and industry, and expenditure directly on social services and this can be planned over a period of years for the first time.
The noble Lord asked me a question about investments in the Colonies. I should like to make it plain—and I am sure everyone will agree—that the great need with the Colonies is for more capital investment. One of the greatest evils from which the Colonies suffer is acute poverty, and the more capital resources, in brains, skill and materials, which can be invested in the Colonies, the sooner the standard of living there will be improved and the sooner we shall benefit from their progress. We welcome the co-operation of private enterprise in the Colonies with Government agencies and with the Colonial Development Corporation. These three economic agencies, we hope, will advance side by side with complete co-operation and co-ordination in the common effort to improve the welfare of the local inhabitants. I must apologise for not covering the wider field without notice, but I can assure noble Lords whose points I have not replied to, that I will try to do so on another occasion or by communicating with them directly.
On Question, Bill read 2*; Committee negatived.
Then, Standing Order No. XXXIX having been suspended (pursuant to the Resolution of July 13), Bill read 3*; and passed.

COLONIAL LOANS BILL
3.21 p.m.
Order of the Day for the Second Reading read.
THE EARL OF LISTOWEL: My Lords, I will again limit my remarks rather narrowly to the terms of the Bill, in order to explain the theory of it to your Lordships and to enable your Lordships to offer any comments you may wish to make with full knowledge of the facts. Like the Bill that I have just introduced to the House, this measure is quite an uncontroversial money Bill. It is designed
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to enable the Treasury to guarantee loans made by the International Bank for Reconstruction and Development to Colonial Governments. It is in the power of the International Bank to make loans to Colonial Governments, but in accordance with the Bank Statute this can be done only on the guarantee of His Majesty's Government in the United Kingdom, which is the member Government responsible for British and Colonial territories.
The effect of the Bill will be to make available to Colonial Governments a new and important source of finance, if and when required, for the economic development of Colonial territories. Although the main obstacle to rapid economic progress in the Colonial field is at present a shortage of technical staff—and to a lesser extent materials and equipment—rather than of finance, we have nevertheless a duty to ensure that sufficient finance is available and can be drawn on when required. It is our responsibility to see that funds can be raised from external sources, as well as from within the Colonial territories.
The present sources from which Colonial loans are drawn, internal and external, are these. In the first place Colonial territories can goat their own internal loans, and they are already contributing as fully as possible out of their own surplus revenues and capital towards development; and that is not going to be a source of sufficient finance in the near future. Secondly, with the authority of Parliament, this country is providing £120,000,000 under the Colonial Development and Welfare Act of 1945. Thirdly, there is a limited programme of investment on the London it market which may be undertaken by Colonial Governments if other resources are not available. Finally, there is the further possibility that loans may be forthcoming from the European Co-operation Administration. Those are the four existing sources or new sources of loans.
It is true that no request has yet been received from Colonial Governments to borrow from the International Bank, and that there is no immediate prospect of any such request. Nevertheless, loans from the International Bank represent important potential sources of hard currency finance, and we must ensure that these

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Governments are free to act promptly if and when occasion arises.
The chief difficulty that is likely to prevent Colonial Governments taking advantage of the opportunity they will have under this Bill is the relatively high charges made by the Bank on their loans. These amount to about 4½ per cent., made up of about 3 per cent. interest and between 1 per cent. and 1½ per cent. statutory commission. Another difficulty is the small dollar requirements of a Colony in relation to a particular project, which would make it worth their while to go to the Bank only if they could borrow simultaneously for a number of different projects. Nevertheless, we feel that no obstacle should be allowed to stand in the way of the economic development in the Colonies, and this Bill will certainly remove a potential obstacle to the financing of development in the Colonies.
I will gladly run through the clauses if your Lordships wish me to do so, but as this is a financial Bill and there is not likely to be much detailed discussion on the clauses I do not think it is necessary to go' through them now. I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2*. —(The Earl of Listowel.)
3.27 p.m.
LORD TWEEDSMUIR: My Lords, just to clear up any misapprehension in regard to this Bill, I would like to say that we on this side of the House welcome it, as indeed we welcomed the last one. I suppose, being a Scotsman, I am somewhat economic with my praise. I think this Bill, short as it appears, is an instrument that may be of the greatest help to all our Colonial territories if we use it right. If we do not, it will be just one more round of what I have heard called "shove million." This Bill has had a very slow passage. Its Second Reading in another place was on November 19. So do not let us, in this House, do anything further to delay its passage. When it was debated in another place on November 19 the whole dollar horizon was different from that which we see today, and I would like the noble Earl in his reply to inform the House whether any of the recent happenings in the dollar world will have any bearing or effect on the operation of this Bill.
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The noble Earl ran through the various available sources of finance for the Colonies: finances from Colonial revenues and the Colonial Development and Welfare Act, possible loans from E.C.A. and flotations such as the Trinidad Loan. I do not know how many of your Lordships are aware of what happened when the Trinidad Loan was floated. A sum of £3,000,000 was sought; £80,000,000 was subscribed, and the list closed in just under one minute. I believe, although I speak subject to correction, that it is the policy of His Majesty's Government so far as possible to keep the Colonies off the London market. If that is so, I wonder whether the noble Earl could say a word on it in reply.
I repeat, we welcome this Bill because it opens a very valuable potential channel to Colonial financing. The Bank charge of 4½ per cent. is rather high. To use fashionable Parliamentary parlance, one can hardly call it "cheap money." The noble Earl dwelt on the fact that rather few Colonies had extensive dollar purchases to make in the future; but still we are prepared. I think that we all agree that the Colonial Empire needs as much capital as it can possibly obtain, and although the International Bank for Reconstruction and Development contains something like 95 per cent. of American money it is, in fact, an international body under international control; and in the building up of the Colonial Empire we shall be all the stronger if we can have the sympathy and support of world opinion as a whole. But if, in the course of the next few years, we have a series of successful dollar transactions by the International Bank, I believe that it may well attract the American private investor who will realise for the first time that the British Colonial Empire is a rich field for enterprising capital; and the benefit will be mutual.
Before I sit down, I would like to ask the noble Earl one question. Banks are banks, whether they are great international banks or small private ones, and they have an awkward way of wanting their money back, and seeking to be paid interest that is owed to them. I take it that the International Bank is no exception, so I imagine that the projects which seek loans from the International Bank will probably be those projects which

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deal with immediately productive enterprise, and that long-range projects which need a great deal of research will probably remain the province of the Colonial Development and Welfare Act. Perhaps the noble Lord will be kind enough to enlighten me on those two points. Again, for the benefit of the noble Lord, Lord Strabolgi, may I say once more that we on this side of the House welcome this Bill?
3.31 p.m.
THE EARL OF LISTOWEL: My Lords, I am obliged to the noble Lord opposite for giving his support to this Bill, and I also greatly appreciate the way in which it seems to be possible to carry Colonial legislation through this House with unanimity. The noble Lord was good enough to give me notice of one question which he intended to ask—namely, that relating to the raising of loans by Colonies in the London market. He was anxious that these loans should be facilitated. The difficulty—and I am sure it is one which the noble Lord will appreciate—about allowing Colonies to raise loans in the London market, is that in that way finance is diverted from this country; and we must keep in mind the overall economic position of the country and the situation with regard to the balance of payments. Until the beginning of the present year, the general position which the Government here were forced to take up was that owing to the acute balance of payments crisis the raising of London loans by Colonial Governments could not be contemplated for some time. That was what we told Colonial Governments at that time. Although we have made some concessions since then, I must emphasise that this situation has not fundamentally altered.
I am sure your Lordships will agree that the economic situation is not fundamentally different now from what it was a year or two years ago. The balance of payments problem is still with us, and it is still necessary that the productive capacity of the United Kingdom should be directed towards only the most essential needs, with a view to the earliest possible restoration of the balance of payments position in the sterling area. In these circumstances, calls by Colonial Governments on the London market, inasmuch as they involve additional claims upon the United Kingdom productive
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capacity must still be kept to an absolute minimum. On the other hand, we recognise that in certain circumstances Colonies should be authorised to borrow in London. Such an authorisation was given in the case of Trinidad. It has also been given in the cases 3f Malaya and Northern Rhodesia. I can assure the noble Lord that any application by a Colonial Government for a loan in London would be considered most sympathetically. We shall do our best within the limits of the overall economic situation to meet their requirements.
The noble Lord asked whether the dollar position would influence the future of the Bill. Of course, no one can tell what the dollar position will be in the future, but I can assure the noble Lord that the present dollar position will not prevent Colonial Governments from using the authority which they will receive from the Bill, when it becomes an Act, to apply to the International Bank. The Bill is only an enabling Bill, and it is up to a Colonial Government to say whether they wish to have a loan on these terms from that source. There will be nothing to prevent a Colonial Government doing this, in spite of the dollar shortage which, of course, we all realise is a continuing problem. I am grateful to the House for its reception of the Bill, and I hope that your Lordships mill now give it a Second Reading.
On Question, Bill read 2*; Committee negatived.
Then, Standing Order No. XXXIX having been suspended (pursuant to the Resolution of July 13) Bill read 3*, and passed.

LEGAL AID AND ADVICE BILL
3.36 p.m.
Order of the Day for the Third Reading read.
THE LORD CHANCELLOR: My Lords, I beg to move that this Bill be now read a third time. I have very little to say to-day because, fortunately, the controversy on the Bill has been exceedingly limited. I count it great good fortune to myself that it has fallen to my lot to introduce the Bill. It has been a long time since Lord Rushcliffe's Committee reported, and it has not been altogether easy to get the Bill as far as

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this stage. But we have succeeded. It is a great experiment, and I devoutly hope that it is going to be a great success —as, indeed, I believe it is.
I count myself very happy that in introducing this Bill I have been able to introduce it with, I believe, the complete good will of both branches of the profession in this country, in spite of the fact that the Bill confers on the Lord Chancellor very wide rule-making powers. Somehow or other, people do not seem to be disturbed by my having these wide powers. I recognise that that has nothing to do with myself, but the more I see of these things, the more I think there is something to be said for this rather illogical office of Lord Chancellor. Whether or not Scotland would be equally happy if the Secretary of State had the same powers as I am given, I am not sure. But illogical though my office may be—and certainly is—the fact that I have two capacities—I am both judge and politician—and that I try to separate myself into two and have the appropriate half available on the appropriate occasions, does, I think, make the office one of some value. I say quite frankly that I shall be very sorry if I live to see a day come when the Lord Chancellor is supplanted on the ground of logic and good sense and gives place to a Minister of Justice.
For the rest, we had some little talk about emergency certificates. With regard to the magistrates, what I propose to do is to promulgate regulations which will enable certain officials of local committees, chairmen and vice-chairmen and so on, to grant emergency certificates for legal aid, so that in urgent cases the aid may be given straight away. In particular, that will be so where a magistrate who is hearing a case recommends that legal aid should be granted. He will be able, if necessary, in a proper case, to telephone one of these officials and get an emergency certificate. It will not follow that a certificate is given as a complete rubber stamp. Something may be known of the marl concerned: his name may have previously come to the notice of the committee; he may be a notorious litigant, who may have to be restrained in the matter of his litigation. All sorts
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of things may happen, but in normal circumstances I anticipate that if a magistrate says that it is an urgent case in which legal aid ought to be granted, steps will be taken to see that the man is properly represented within the limits for which legal aid is available.
There is only one other matter about which I wish to speak. As I said to the right reverend Prelate, the Lord Bishop of Norwich, I am anxious that probation officers should come in at a very early stage, particularly in matrimonial cases. If the applicant first goes to the magistrate, he will find that the magistrate has available to him, and will continue to have available to him, the services of a probation officer; but it may be that in some cases, before going to the magistrate, the applicant will go to the local committee for legal aid, and it may well be useful that they also should have at their disposal the services of a probation officer, so that in proper cases they can adjourn the case in order that the probation officer may make inquiries and see what he can do. That we can do by extending the rules governing the duties of probation officers. My right honourable friend the Home Secretary intends to make the necessary rules so that where a local committee think it necessary they can avail themselves of the services of a probation officer.
I have nothing more to say except that both branches of the profession are determined to do everything they can to make this scheme a success. We are not so foolish, of course, as to think that it can be a success unless it benefits the public, and not merely the profession: benefit to the profession is wholly secondary to benefit to the public. I have a sufficiently high regard of the profession to which I have the honour to belong to believe that they are determined to try to make this legal aid scheme a success—not in order that they can feather their own nests or make money out of the scheme, but in order to do everything they can to see that even the humblest of His Majesty's lieges have proper access to the courts of the land.
On Question, Bill read 3*, and passed.

LEGAL AID AND SOLICITORS (SCOTLAND) BILL
3.43 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 Morrison.)
On Question, Motion agreed to.
House in Committee accordingly:
[The VISCOUNT MERSEY in the Chair]
Clause 1:
Scope and general conditions of legal aid
(6) A person shall not be given legal aid in connection with any civil proceedings or in connection with any criminal proceedings by way of appeal against conviction or sentence (whether in summary proceedings or in proceedings on indictment) unless he shows that he has a probabilis causa litigandi, and may also he refused legal aid if it appears unreasonable that he should receive it in the particular circumstances of the case.
THE EARL OF SELKIRK THE EARL OF SELKIRK moved, in subsection (6) to leave out "may also be refused" and to insert:
"the committee, on probabilis causa litigandi may also refuse."
The noble Earl said: I wish that I could say, as the noble and learned Viscount the Lord Chancellor has just said of another measure, that this Bill has been received with the complete good will of both sides of the profession and that, in spite of the wide powers it gives, no objections have been taken to it. Unfortunately, that is not the case. Accordingly, I am moving one or two Amendments, largely to ascertain the views of the Government and how they propose to use the powers given to them under the Bill. This Amendment refers to the conditions under which legal aid can be given. In Clause 1, subsection (6) it states that legal aid may be refused "if it appears unreasonable." The important thing is to ascertain to whom it is unreasonable, because "unreasonable" has a different interpretation with different people and unless one knows who is the arbiter who is to decide, the word can have almost any meaning one cares to put to it. For that reason I suggest that it should be left to the committee who are to decide on the probabilis causa or prima facie case which the applicant has to make. I do not think that is
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implied in the drafting of the clause as it stands. I should have thought that in the scheme, which is to be made later, almost anyone could decide what is reasonable or not. I should like the noble Lord to state who is to decide and whether under the scheme anyone can make the decision in regard to a case being unreasonable.
Amendment moved—
Page 2, line 26, leave out ("may also be refused") and insert the said new words.— (The Earl of Selkirk.)
LORD MORRISON: Perhaps the House will forgive me if before embarking on my task to-day, I remind your Lordships that I am bill poorly equipped for the purely legal work of your Lordships' House, having, much to my regret, never had the good fortune to receive any education in ordinary law, to say nothing of the more ancient and more complex law of Scotland. But, despite this handicap, I propose to do my best to answer the various points put to me by the noble Earl opposite, having, indeed, anticipated to some extent the provisions of this Bill and applied for free legal aid, which has been readily forthcoming to me in a form in which I have full confidence. I mention this personal matter at the outset only so that your Lordships may, as I am sure you will, understand that my replies to the Amendments to-day will be strictly accurate, as indeed I hope they always will be, and in accordance with the best legal advice. Having given my replies, some of which may perchance not be entirely satisfactory to all your Lordships, I shall not be so easily persuaded as I may be on other Bills to change, my mind, think again and make promises. After all, I am sure your Lordships, particularly those who are learned of the law, will have but a poor opinion of my intelligence if, having been legally advised on this somewhat intricate Bill, I were to depart from my brief, throw over my advisers and strike out on a line of my own. I should then find myself in danger of being refused further legal aid on the ground that I had misused the aid I had already received. I apologise to the noble Earl, Lord Selkirk, for delaying my reply to his Amendment in order to make this statement, but from the many courtesies I have received from him during previous Scottish debates, I know

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he will understand that the circumstances of this debate are somewhat different from those surrounding an ordinary Bill.
From this declaration I now turn to the noble Earl's Amendment to page 2, line 26. The object of this subsection is to prevent frivolous proceedings at the public expense. The Amendment is perhaps based on a misunderstanding. Its purpose seems to be to secure that the question whether or not the grant of legal aid is reasonable is considered by the same committee as considers the question of probable cause. I am advised that under the Bill as it stands this will be the position. Both questions will be determined, in accordance with the scheme made by the Law Society under Clause 8 (1), by local committees consisting of members of the profession, or by a sub-committee, or in less populous areas by a local representative of such a committee. The procedure contemplated is described in paragraphs 26 and 27 of the White Paper which was published at the same time as this Bill was published. Therefore, I am advised that the Amendment is unnecessary. My last point may or may not appeal to the noble Earl, and I use it with some hesitation; if it does not appeal to him perhaps he will forget it. It is that the corresponding provision in the English Bill is in exactly the same terms.
LORD SALTOUN: I was greatly charmed by the noble Lord's disclaimer of special knowledge but, having yielded to that charm, it seems to me that he is saying that we who are here, all of us so deeply devoted to the law of our country and hopeful of making it better, have simply to accept his dictum, whatever arguments we bring against it. To my mind, that would be very unfortunate. I would like the noble Lord to make the position a little clearer, because, as I understood it, the reasonableness or not of the litigation is to be determined by a local committee of people appointed by local agents. That may well be dangerous, because most poor people who get involved in litigation do so with their neighbours. It may well be that in a small community the people who have to decide this point are very likely to be people who are to be employed on the other side.
LORD MORRISON: I am sorry if I expressed myself so badly that the noble Lord understood I was endeavouring to establish a position in which there was nothing further to be said. What I said was that, in view of the intricate character of this Bill, which the noble Lord appreciates as well as I do, I should not have the same amount of elasticity as one generally has; and, therefore, if the noble Lord feels strongly on a particular Amendment, I should have to do what I have already done—namely, seek further legal advice before I can change my mind.
LORD SALTOUN: I beg the noble Lord's pardon. I did misunderstand him.
THE EARL OF SELKIRK: I thank the noble Lord for his reply, but I think that what he has said has justified my moving this Amendment. If I understand it aright, under the scheme anyone—which means that it could be the executive—could declare a case unreasonable. I am sure that no one here would wish the executive to make that decision. I am glad to know that that is not the intention. I beg leave to withdraw the Amendment.
LORD MORRISON: Before the noble Earl withdraws the Amendment, may I say that there will be a right of appeal from the local committee to the central committee?
LORD SALTOUN: The point is that the possible adversary may know all about it before he comes to take up the case.
Amendment, by leave, withdrawn.
THE EARL OF SELKIRK THE EARL OF SELKIRK moved, in subsection (6) after "and," where that word occurs a second time, to insert: "in any such proceedings as aforesaid." The noble Earl said: This is a more serious Amendment. It appears to me that in an Amendment in another place the whole purpose of the last sentence of the subsection has been changed. If your Lordships will read subsection (6), you will see that it there says:
"A person shall not be given legal aid in connection with any civil proceedings or in connection with criminal proceedings by way of appeal against conviction or sentence…"
From that it is clear that criminal cases are included. It has been the law in Scotland for a long time that anyone charged with a criminal offence is entitled to be defended. When I was an advocate it was clearly my duty to defend anybody

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who asked for my services, as I think it is the duty of every member of the Faculty when he becomes a member. It appears to be essential, therefore, that certain words should be put in to make it clear that it does not apply to criminal cases. I do not think the Government intend that it should, but that interpretation is possible. The words I have suggested—namely, "in any such proceedings as aforesaid"—that is to say, civil cases and criminal cases on appeal—will exclude criminal cases in the first instance. I beg to move.
Amendment moved—
Page 2, line 26, after ("aid") insert ("in any such proceedings as aforesaid").—(The Earl of Selkirk.)
LORD MORRISON: I am obliged to the noble Earl for putting down this Amendment. Its effect is to make it clear that a person can be refused legal aid on the ground that it appears unreasonable that he should have it only in the case of civil proceedings, or of criminal proceedings by way of appeal. In initial criminal proceedings, the accused will be entitled to legal aid without examination of the merits by the local committee, the presumption of innocence supplying his probable cause. In these circumstances, I have pleasure in accepting the Amendment.
On Question, Amendment agreed to.
Clause 1, as amended, agreed to.
Clause 2:
Financial conditions of legal aid.
(3) Where a person receives legal aid in connection with any proceedings—

(a) the expenses incurred in connection with the proceedings, so far as they would ordinarily be paid in the first instance by or on behalf of the solicitor acting for him, shall be so paid;

(b) his solicitor and counsel shall not take any payment in respect of the legal aid except such payment as is directed by this Part of this Act to be made out of the legal aid fund;

(c) he may be required to make a contribution to the legal aid fund in respect of the sums payable thereout on his account;

(d) any sums recovered by virtue of an award of expenses or of an agreement as to expenses in his favour with respect to the proceedings shall be paid to the legal aid fund;

(e) his liability by virtue of an award of expenses against him with respect to the proceedings shall not exceed the amount (if
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any) which in the opinion of the court or tribunal making the award is a reasonable one for him to pay having regard to all the circumstances, including the means and the conduct in connection with the dispute of all parties.

(5) For the purpose of any inquiry under this section as to the means of a person who has been found liable in expenses, his dwelling-house, wearing apparel and household furniture and the tools and implements of his trade or profession shall be left out of account except in such cases and to such extent as may he prescribed and except as aforesaid, shall not, in any part of the United Kingdom, be subject to diligence in execution of the award.
THE EARL OF SELKIRK THE EARL OF SELKIRK moved, in subsection (3) (b) after the first word "payment" to insert "or contribution." The noble Earl said: This is a short point and relates to the payment which may be made by one receiving legal aid to his own solicitor. I propose in this Amendment to substitute "or contribution" for "payment," because I want to emphasise that at no time should it be the duty of a solicitor to sue his own client for payments which are due on account of the action itself. It appears to me—indeed, it is clear from the following paragraph—that in some cases it is possible for one receiving legal aid to make payment by contribution or by instalments. It is conceivable that he might he late in his instalments. If that is the case, who is to compel payment by instalments? My purpose in moving this Amendment is that it should he clear that in no case should the instalments be enforced by the solicitor acting on behalf of the client receiving legal aid, but that in each case it should he enforced by the Legal Aid Society. I beg to Move.
Amendment moved—
Page 3, line 13, after ("payment") insert ("or contribution").—(The Earl of Selkirk.)
LORD MORRISON: I am obliged to the noble Earl for so briefly and clearly explaining this point. I would venture for the second time to use the argument, to which the noble Earl did not respond the last time, that this, is the same language as is used in the English Bill. I previously said I hesitated to use that argument because I was not sure whether it would make it more or less presentable to the noble Earl. The noble Earl proposes in this Amendment to substitute for the word "payment" the words "or

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contribution." The draftsman has satisfied me that this is quite unnecessary to achieve the purpose of the provision. Enforcement of the payment of instalments will be by the Law Society. I can only say that, as I am advised by those whose business it is to understand these things that the Bill in its present form carries out what the noble Earl desires, it appears that the Amendment is unnecessary.
LORD SALTOUN: Will the noble Lord consider between now and the next stage of the Bill the substitution of the word "consideration" for the word "payment"? Payment is necessarily in cash, and a chicken or a lobster is a consideration, even though you cannot quite afford the payment!
LORD MORRISON: I am quite willing to bring that to the notice of the draftsman.
THE EARL OF SELKIRK: I thank the noble Lord, and beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
4.0 p.m.
LORD REID LORD REID moved, in subsection (3), to add to paragraph (c):
"but that contribution shall be available to meet any award of expenses made against him in the course of the proceedings."
The noble and learned Lord said: In moving this Amendment I would like to draw the Committee's attention to one of the difficulties under this Bill which I think has not been fully appreciated. I refer to the position in which it leaves a person of moderate means who is outside the scope of the Bill—someone who has just too much income or too much capital to qualify for aid under the Bill. In certain circumstances, not only does the Bill not help persons in that position but it leaves them considerably worse off than they were. The object of my Amendment is to suggest one method by which this difficulty may be alleviated, because I appreciate that it cannot be entirely removed.
One of the reasons why I suggest to your Lordships that alleviation is highly desirable is this. I feel sure that no one wishes to have the financial limit in this Bill raised. I do not think anyone wants to see legal aid made universal for every-
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body, irrespective of his means. But if the people who are just above the financial limit are left considerably worse off than those just below, then I think you will almost certainly find that there will be an immediate demand for raising that limit. It may be that if, owing to the provisions of this Bill, considerable hardship is done to those who are just over the limit the demand to raise the limit may prove extremely hard to resist. It is with a view to avoiding that difficulty, among others, that I venture to suggest that this Bill could be improved. I am not tied to the words which are on the Marshalled List, and if some other method could be found I should be perfectly content. Indeed, I realise that the method which I have suggested has certain disadvantages. I have not thought of any method which has fewer disadvantages, but I think the disadvantages of leaving the Bill as it is are perhaps even greater than the disadvantages of a possible Amendment.
If it is convenient to your Lordships, although only moving the first Amendment, I would desire to discuss both my Amendments together, because I think they raise similar points and in that way I think I can make my general position clearer than I otherwise could. Let me suppose that there is a litigation between two persons of moderate means, one of whom comes within the scheme and is assisted or subsidised, and the other of whom does not. A litigation of that character is extremely uncommon at present, because both parties have too much to lose. One of the reasons for this Bill is that it is difficult for a person of moderate means to start an action of some magnitude, because if he loses—and perhaps even if he wins—he will be left in a very precarious financial position. In future that will not apply to the person who is to receive legal assistance. Subject to a point to which I will come in a moment, he will go to the limit of his liability, and he may see fit to proceed against someone in a financial position not much better than his own, in an action which he would certainly never dream of raising under the law as it stands to-day. Therefore, you may find people of moderate means who have actions brought against them in circumstances which would not have occurred had it not been for the passing of this Bill.
It often happens—indeed I would say that it generally happens in actions that come before the courts—that both parties have a prima facie case. It is not usual for an action to be fought where one party has nothing to say for himself. Very often both parties have a great deal to say for themselves, and a great deal of right on their side. It is the difficult business of a court to decide between them. Let me suppose that the subsidised person raises an action against the unsubsidised person, and let me contrast their positions. If the unsubsidised person wins, then he does not get very much out of it. As the Bill stands at present although the subsidised person may be fairly well off—he may have quite a large income, or he may have several hundreds of pounds' worth of capital— the contribution which he is required to give to the fund may be very heavy. If the provisions with regard to the contribution in this Bill are enforced to anything like their full extent, he may have to pay a contribution of several hundred pounds to the fund.
It is true that if he loses, the court is entitled to award expenses against him, but as the Bill stands that award does not touch the contribution; the contribution goes to the legal aid fund in priority to the expenses award in favour of the successful party. The court is not allowed to award a larger sum than is reasonable and, accordingly, the sum available to the successful party, after the contribution has been paid into the legal aid fund, may be extremely small indeed. Although he has won his case—and won a case which would never have been brought if this Bill had not been passed—he may be left several hundred pounds out of pocket. That does not seem to me to be entirely satisfactory. Let me take the other possibility, that the unsubsidised person loses. Then he is bound to the uttermost farthing to pay the expenses awarded against him. The subsidised person has, so to speak, a cushion. The court has to award against him only a sum which is reasonable, but against his opponent the award may be much heavier. Accordingly, the opponent may be left bankrupt, or on the verge of bankruptcy, because there would be power to make him bankrupt under an award of expenses—although, as I say, the other party could never have been
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made bankrupt if he had lost. That does not seem wholly satisfactory either.
Therefore we have this position. If the unsubsidised person wins the action, he is inevitably heavily out of pocket, and he has almost no recourse against anybody for his expense;, although the legal aid fund which has financed the unsuccessful litigant against him may be in pocket to the extent of £300 or £400. But if the unsubsidised person loses, then he may be brought down to bankruptcy or something; very near it. My proposals are designed to avoid the harshness of those two things, and to make sure that something a little more like even-handed justice is done between the two litigants. If such proposals cannot be accepted then, as I said at the beginning, the stability of the financial element in the scheme—I do not say the stability of the scheme that would be putting it too high—will be seriously imperilled. Therefore, I do ask the Government, if they cannot accept the proposal which I make, at least to try to devise some method of avoiding hardship to persons wile are not much above the financial limit in the Bill. Unless that is done there will be a series of hard cases. It may be said that hard cases make bad law, but they do often make law, and I think it would be a bad law if we were forced to raise the limit. It may well be that a series of hard cases could be avoided if something on the lines of what I suggest were done. If such a series of had cases were to take place, then I think we should find that undesirable developments of the scheme might be forced upon us. It is for that reason that I venture to ask your Lordships to look favourably on this Amendment. I beg to move.
Amendment moved—
Page 3, line 19, at end insert ("but that contribution shall be available to meet any award of expenses made against him in the course of the proceedings")—(Lord Reid.)
4.10 p.m.
LORD MORRISON: I think I had better say straight away that I am instructed that in no circumstances can I accept the interesting Amendment of the noble and learned Lord, because, in the opinion of the Government it goes beyond the scope and Title of the Bill. Clause 2, subsection (3), paragraph (c), provides that a person who receives legal

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aid may be required to make a contribution to the legal aid fund in respect of the sums which have to be paid out of the funds on his account. The effect of the noble and learned Lord's Amendment would be to make that contribution available to meet any award of expenses made against the assisted litigant. This would appear to be going beyond the scope and long Title of the Bill, as I have already stated. This Bill has been introduced to provide in Part I for making legal aid and advice more readily available for persons of small or moderate means. To provide, as the Amendment would, for the payment at the expense of the Exchequer of expenses awarded to an unassisted person would be to go beyond the purposes defined in the long Title.
The contribution payable by the assisted litigant towards the cost of legal aid must not exceed a maximum assessed according to his means by the National Assistance Board. In some cases the contribution required to cover the cost of legal aid will be below the maximum, and in these cases, if an award of expenses is made against the assisted litigant, the court will no doubt take this fact into account in determining what is a reasonable amount for him to pay. In other cases—perhaps a majority—the cost of legal aid will equal or exceed the maximum contribution. If the noble Lord's Amendment were made, the successful opponent of an assisted litigant would have the first claim on the contribution made by the litigant to the legal aid fund and the cost of the legal aid scheme, and the burden on the Exchequer would thus be increased by an indefinite amount. This additional burden could not possibly be accepted. I can understand that the noble Lord is anxious to ensure that the opponent of an assisted litigant shall not be unduly prejudiced by the fact that proceedings have been taken against him, or that an action brought by him has been opposed with help from public funds. Where the other party is himself an assisted litigant, any additional expenses which he might recover under the Amendment might go in whole or in part to the legal aid fund, and Peter would have been robbed to pay Paul. Where he is not an assisted litigant, sympathy
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may be felt for the point of view expressed by the noble and learned Lord, but the Treasury could hardly be expected to accept the indefinite obligation which the Amendment would put on them, and, in effect, to subsidise litigants who will not come within the scope of the scheme.
If I have not persuaded the noble Lord up till now not to press his Amendment unduly I think my final point will make perhaps as strong an appeal to him as it did to his colleagues in another place. It is that the Amendment would in any event involve a new financial Resolution, even if it could be brought within the scope of the Bill, and that, of course, makes it doubly impossible for me to accept it.
THE EARL OF SELKIRK: I think the noble and learned Lord, Lord Reid, has raised an extremely important point. He has brought out the fact that the upward limit of legal aid is uncertain. For instance an assisted litigant with £420 a year disposable income, with a house, clothes and, perhaps, a motor car, can bring an action against a man who has £200 a year—less than half his own income—and £501 of capital. That is the position as it stands. That means there will be pressure put upon the Treasury to raise the limit of assisted litigation. That pressure will be constant. What Lord Reid's Amendment seeks to do is to equate the top limit. I think we must agree with that. The Treasury will certainly object to any raising of the limit. But if the edge is very uncertain and, as it were, jagged, there will undoubtedly be great pressure. This matter should be treated with extreme care, otherwise the limit will go up and up as experience is gained of the working of the scheme.
LORD REID: The noble Lord who speaks for the Government says that the Treasury could not agree to this extra burden. I am a little afraid that the net result will be that a still heavier burden will come upon the Treasury later—a burden which could have been avoided if the matter had been tackled in time. But, of course, I recognise that if "No" is the answer and I persist with this Amendment, I may imperil the passing of this Bill in good time; and that is the last thing I desire. Therefore, I do not think there is any other course open to

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me than to ask your Lordships' leave to withdraw this Amendment.
Amendment, by leave, withdrawn.
THE EARL OF SELKIRK THE EARL OF SELKIRK moved, in subsection (3) (d) to leave out "recovered" and insert due." The noble Earl said: Perhaps I may be allowed to take this and the next Amendment together. The position as I understand it is that in the event of an award of expenses being given in favour of an assisted litigant, that is recoverable by the solicitor and thereafter paid to the legal aid fund. I am suggesting here (and I feel that noble Lords opposite should all be on my side because they have spoken in, favour of the Treasury; and, after all, this is the Treasury's money, and the Treasury therefore must be interested) that it is the responsibility of the legal aid fund itself to pursue any award of expenses. I am making this Amendment, not in the interests of the Treasury; I am interested because I consider it very undesirable that an assisted litigant should be able to proceed to sequestrate or make bankrupt an opponent who is unassisted. I think it is thoroughly undesirable that public money should be used for that purpose; and if it is used for that purpose it should he only with the full consideration of the Law Society, who cannot be said to have any undue bias in the matter. I am not clear, as the Bill is now drafted, as to how an award can in fact be pursued. If my Amendments are accepted, the paragraph will read:
"any sums due by virtue of an award of expenses or of an agreement as to expenses in his favour in respect to the proceedings shall be recoverable by the Law Society and shall be paid to the legal aid fund."
I beg to move.
Amendment moved—
Page 3, line 20,leave out ("recovered") and insert t("due").—(The Earl of Selkirk.)
LORD MORRISON: I note that the noble Earl wishes this Amendment and the next one to be taken together. I will endeavour to explain to him what I am advised is likely to be the course of action which will be followed if, as a result of a successful action, expenses are awarded to an assisted litigant. In that case, the proper person to recover the expenses is the solicitor who has conducted the action, as in the case of an
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unassisted litigant. At the conclusion of the action, the solicitor will recover any expenses clue and will forward the sums recovered along with his account of expenses of the Law Society, who will then pay the sums recovered into the legal aid fund, pay the solicitor's account and transmit the balance, if any, to the assisted litigant.
As a safeguard for the legal aid fund, it is proposed that the scheme to be prepared under Clause 8 will provide that the local committee will satisfy themselves that the solicitor has taken all proper steps to recover expenses on behalf of an assisted person before paying his account. Further, Clause 13 (1) (d) expressly empowers the court to make provision for the enforcement for the benefit of the legal aid fund of any award of expenses or any agreement as to expenses in favour of a person who has received legal aid; and for making a solicitor's right to payment out of the fund dependent on his performance of any duties imposed on him under such a provision. In view of this explanation, I hope that the noble Lord may not he disposed to press his Amendment further.
THE EARL OF SELKIRK: The position, then, is exactly as I anticipated: that the solicitor will be responsible for recovering expenses. In effect, these expenses are public money, because they are paid to the legal aid fund. When he is pressing for the payment of his expenses, for whom is the, solicitor acting? Is he acting for his client, who is not interested in the expenses, or is he acting for the Legal Aid Society? I know that the noble Lord finds it difficult to answer the question, bat it is important. In the carrying into execution of this scheme, will the solicitor he acting as the representative of the legal aid fund, or will he be acting on behalf of the assisted client, who may have no interest in the expenses? In fact, the only people interested in the expenses are the Exchequer. The noble Lord said that all these things are in the English Bill. I think that England has swallowed something in the nature of a whale, but England is lucky to have in the Lord Chancellor a good whale-tamer! I beg leave to withdraw my Amendment
LORD MORRISON: In reply, all I can say is that I am advised that the Amendment is unnecessary.
Amendment, by leave, withdrawn.
THE EARL OF SELKIRK THE EARL OF SELKIRK moved, in subsection (5) to leave out "in such cases and." The noble Earl said: This is a short point. In subsection (5) there is a limitation in the event of an assisted litigant being found liable for expenses. There is a limitation to the means which will be taken into consideration which includes
"his dwelling-house, wearing apparel and household furniture and the tools and implements of his trade or profession…."
A limit is imposed, and I do not think that is unreasonable. But there are also the words "except in such cases and to such extent." It appears to me that, by using the words "in such cases," certain items can be completely removed by regulation—that is to say, wearing apparel, household furniture or tools of the trade can, in a body, be taken right out of the limitation. I suggest that that is going too far. I hope the noble Lord will agree to the Amendment which removes the words "in such cases and." I beg to move.
Amendment moved—
Page 3, line 44, leave out ("in such cases and").—(The Earl of Selkirk.)
LORD MORRISON: It is the intention that a person's dwelling-house, wearing apparel, et cetera, should normally be disregarded, but there may be circumstances —for example, where a litigant owns an unencumbered house—where it would not be reasonable to leave all these items wholly out of account. It is not, however, expected that cases will arise where any of the items specified in the subsection will be taken into account in their entirety. For example, in the case of a litigant with an unusually extensive wardrobe, it would be reasonable to take certain items of wearing apparel into account, but not the whole wardrobe. In all the circumstances, however, I am authorised to accept the noble Earl's Amendment. I think it improves the Bill slightly.
THE EARL OF SELKIRK: I beg to thank the noble Lord.
On Question, Amendment agreed to.
Clause 2, as amended, agreed to.
Clause 3 agreed to.
Clause 4:
Assessment of disposable capital and income and of maximum contribution
(6) Subject to the provisions of this section, a person's disposable income and disposable capital, and the maximum amount of his contribution to the legal aid fund in respect of any proceedings, shall be determined by the National Assistance Board, and the Board may call attention to any special circumstances affecting the maximum amount of the lump sum and periodical payments which he could reasonably make on account of any contribution.
4.27 p.m.
THE EARL OF SELKIRK THE EARL OF SELKIRK moved to add to subsection (6):
"a determination under this subsection shall precede any determination whether the person has a probabilis causa litigandi."
The noble Earl said: This Amendment is proposed to deal with the order of events when legal aid is to be granted. I understand that in the White Paper (although there is nothing in the Bill that makes the point clear) it is proposed that the first decision should be whether it is in fact a prima facie case of law to be decided. Thereafter, the litigant proceeds to the National Assistance Board to find out whether he comes within the financial category of those who may be assisted. He then goes back to the Legal Aid Society to ascertain what deductions have to be made from his income to the legal aid fund. Thereafter, he is free to proceed in his action or in any other course that he wishes. I am proposing that the first thing that a man should do is ascertain whether he comes within the financial provisions of this Bill. I suggest that that is the first step that should be taken. Thereafter, he can decide the question whether or not there is a prima facie case to be decided. I suggest that, as a matter of simplicity, that is desirable.
I would like to ask this question of the noble Lord opposite, if he can answer it. What happens if I go to the committee and put the question: "Can I take certain action?"—perhaps divorce, or some other action as may be necessary. The Legal Aid Society may reply: "You have a prima facie case." I say: "Thank you very much. Now I have had legal advice, I will go away," possibly knowing full well that the National

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Assistance Board will find that my income is above the level which allows of financial assistance. I ask the noble Lord that question because it appears to me that by far the best way of administering this system is, first, to see whether the person in question comes within the category of a person of small or moderate means, and thereafter the legal question can be decided on its merits. I think that is in the interests of the Bill. It has been the normal practice, and it is the recommendation of the Cameron Committee. Therefore, I beg to move this Amendment.
Amendment moved—
Page 5, line 32, at end insert the said words. —(The Earl of Selkirk.)
LORD NORMAND: I hope that the timetable will be considered by the Government before a final decision about this Amendment is reached. There are cases where there will be extreme urgency—for example, in a case where there has been a summary conviction after which the convicted person wants to appeal in forma pauperis. There are only a few days in which he must make up his mind, and in that short space of time he will first of all have to be passed as coming within the requisite limit of means and secondly, as having a probabilis causa. If some rigid method of arriving at these two results is imposed by the Bill, there is great danger that the appeal may be out of time, and I hope that no answer will be given which will preclude further consideration of the timetable in this and other similar cases.
LORD MORRISON: As the noble and learned Lord has just said, this is a subject which is likely to provide considerable discussion and in fact has been discussed at considerable length. It is matter in which it is very difficult to know on which side to come down. There seems to be plenty of room for difference of opinion whether the investigation of means or the investigation of the merits of an application for legal aid should 'be taken first. The noble Earl opposite said that the Cameron Committee came down on the one side, but the Rushcliffe Committee came down on the other.
THE EARL OF SELKIRK: Did the Rushcliffe Committee take any evidence at all from Scotland?
LORD MORRISON: I could not answer that. off-hand.
THE EARL OF SELKIRK: They did not.
LORD MORRISON: I know that on this particular point the Committees arrived at different decisions. The Rushcliffe Committee recommended that the investigations of the probable cause should precede examination of financial resources, and the Cameron Committee recommended the reverse process. After careful consideration it I as been thought right as a matter of principle that in both countries the first step be completed should be the consideration of a probable cause. When the applicant for legal aid first consults a solicitor he will give a rough statement of means from which it should be possible to say whether or not he is eligible, and roughly what his contribution might be. Subject to this preliminary examination of means, it seems desirable that the applicant's case should next be considered by the local committee. It is much more difficult to forecast whether, after taking all the individual aspects of the case into consideration, the local committee will decide that there are grounds for action and that legal aid should be given, than for the National Assistance Board to carry out the straight forward assessment of disposable income and disposable capital. It would not be desirable to refer the applicant for investigation by the Nat oval Assistance Board if there were any doubt about his being granted legal aid by the local committee. I would like to emphasise that, whatever the sequence, the two tests will be carried out independently, and on merits the case for pro siding that consideration of the probable cause should precede investigation of means seems to be strong.
May I add this—perhaps it is known to the noble and learned Lord—that I am advised that this whole question was discussed by the Lord Advocate with representatives of the local authorities. It was generally agreed that no question of principle is involved and that the balance of advantage is in favour of settling whether a litigant has a probable cause before proceeding to a detailed investigation of his means. I would add that the matter is deal: with in paragraphs 27 and 28 of the White Paper on

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the Bill. The noble and learned Lord, Lord Normand, referred to cases where there was very little time available to decide whether legal aid should be given on appeal. Perhaps he has overlooked the fact that under Clause 12, subsection 3 (b) regulations can be made to meet cases of special urgency, and I should think the cases which the noble and learned Lord had in mind would be dealt with by means of that procedure.
LORD SALTOUN: I would like to add one point. I think it is very rare, however poor the client, for a solicitor to go into his means first. That is probably the last thing they discuss; and I should think it probable they first discuss the case.
THE EARL OF SELKIRK: I do not propose to press this point but I would like to ask this question. Does the Bill as drafted leave this open so that the scheme can take whatever course it thinks fit, or is this matter closed in any way by the Statute? As I read it, it is probably open.
LORD MORRISON: The reply is that it is open.
THE EARL OF SELKIRK: I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 4 agreed to.
Clause 5:
Legal aid in matters not involving litigation
5.—This section provides for, and (except for subsection (6)) relates only to, legal aid in taking steps to assert or dispute a claim where—

(a) the question of taking, defending or being a party to proceedings before a court or tribunal does not arise or has not yet arisen; but

(b) if it did arise, the proceedings would, or might properly, be such that legal aid could be given in connection therewith under section one of this Act.

4.36 p.m.
THE EARL OF SELKIRK THE EARL OF SELKIRK moved, in subsection (1) to omit "but (b) if it did arise." and to insert "or (b)." The noble Earl said: This clause was put in at a late stage in another place and I move this Amendment merely to ascertain what it means. I should be grateful to the noble Lord if he could give an explana
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tion in due course. It appears to me that this is an intermediate stage between Clause 7 and Clause 1 by which certain legal aid of a limited nature can be given. I have moved this Amendment to extend the sphere in which legal aid can be given because it appears to me that the usefulness of this clause is substantially reduced by the limited sphere in which it can operate. As I understand it, paragraph (a) of subsection (1) is entirely restricted by paragraph (b), so that, in fact, nothing can be considered under Clause 5 which is not applicable to Clause 1. I suggest that there are a large number of subjects which are left out which could usefully be discussed. In fact, I should almost suggest that most of the small matters of daily life are omitted on which advice not leading to legal action could be discussed. There are the questions of pensions, industrial insurance and furnished rooms; and I should imagine cases might arise where people would qualify for war damage, which I do not think would be covered by Clause 1. I should be grateful to the noble Lord if he would give an explanation of what the clause means. I beg to move.
Amendment moved—
Page 5, line 43, leave out from ("arisen") to ("the") in line 44, and insert ("or (b)").— (The Earl of Selkirk.)
LORD MORRISON: I will endeavour to remove the noble Earl's doubts to the best of my ability. This subsection provides for intermediate legal aid where, (a), the question of proceedings has not arisen, but, (b), if it did arise the proceedings would be such as to qualify for legal aid proper under Clause 1. The effect of the Amendment would be to allow of intermediate legal aid where the question of proceedings has not arisen, without any qualification; that is, intermediate legal aid might be given in questions of the kind referred to in Part II of the First Schedule to the Act, though if the question of proceedings did arise, no legal aid proper could be given. The ordinary legal advice is covered by Clause 7 and not covered by this clause at all.
THE EARL OF SELKIRK: I do not propose to press this point. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 5 agreed to.
Clause 6:
Solicitors and counsel
6.—(1) Lists of solicitors and advocates willing to act for persons receiving legal aid shall be prepared and maintained, and there may be separate lists for different purposes, for different courts and for different districts.
THE EARL OF SELKIRK THE EARL OF SELKIRK moved to add to subsection (1):
"provided that the scheme made by the Law Society may provide that a solicitor who is not on any list may be entitled to give legal aid to his own clients."
The noble Earl said: This section has been highly controversial from the very beginning, and I am bound to say I am not at all clear why it should have been permitted to be as controversial as it is. Frankly, I think that there rests upon His Majesty's Government a big share of responsibility for the fact that the ideas behind this clause were not more readily accepted than they have been. A proposal which I know is widely supported —and I think it is supported with some justice—is that the whole structure of this provision should have been left to the scheme. Such matters as the exact form which lists should take, how and where work should be allocated, general organisation, and so on, are all matters strictly of administration, and they need not have appeared in the Bill at all. If the course which I have suggested had been followed, I believe that this Bill would have received much warmer and fuller acceptance than it has received.
With regard to this Amendment, I may say that there are really two points but I am bringing up only one on which objection has been taken. The objection which is raised is that in the event of a person who has been for some time the client of a solicitor, coming within the category of those permitted to have legal aid, unless his solicitor, his agent, is on one of these lists, then that agent will not be able to give him assistance in carrying through litigation as provided for under Clause 1 or Clause 5. Surely there must be many men who would be affected when the salary limit is in the neighbourhood of £700 gross. It is quite possible that men of such financial standing will have been accustomed to having their own agents and it would be right and proper that they should have to act for them under this measure the agents whom
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they have been accustomed to employ in the past.
In moving the Amendment, I recognise that it may not be possible or desirable to operate this regulation from the outset. I am suggesting that the Bill should be so drafted that it would he possible at a later date to revise the scheme so as to include cases in which a man can have the services of the agent whom he has formerly been accustomed to have to act for him. There is nothing in the Amendment to suggest that it should be immediately applicable. On the other hand, it can be included in the scheme at any later date. I beg to move.
Amendment moved—
Page 6, line 36, at end insert the said words. —(The Earl of Selkirk.)
LORD MORRISON: As the noble Earl has said, there lids been some controversy over this matter and it may be desirable that, in the circumstances, I should make a fairly lengthy reply. The Amendment of the noble Earl proposes a proviso to the effect that the scheme may provide that a solicitor who is not on any list may nevertheless act for his clients under the scheme. There is nothing in the Bill to prevent a solicitor whose name is on one of the lists front giving legal aid to his clients if the clients are eligible, but the proposal that a solicitor should, without having his name on any list, be able to give legal aid to his own clients is unacceptable.
The provisions of the Bill already allow solicitors a very extensive freedom of choice. Clause 6 provides for the preparation and maintenance of lists of solicitors willing to act for persons receiving legal aid. It is also provided that there may be different lists for different purposes, for different courts and for different districts, so that no solicitor will be called upon to act in any case outwith his normal professional experience. A person applying for legal aid normally go to the office of the local committee and will be at liberty to select a solicitor to act for him from the appropriate list. There is thus freedom of choice on both sides; the solicitor may choose to volunteer to come into the scheme and the applicant may choose the solicitor to act for him.
It may be observed that this voluntary scheme provides for greater freedom than already exists or was recommended by

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the Cameron Committee. The sheriff at present has power to nominate agents for the poor if the local practitioners do not nominate a sufficient number. The Cameron Committee recommended (in paragraph 22) that area committees should have power to nominate in the event of insufficient volunteers being forthcoming. The Bill does not contain any power of nomination, and it will be entirely a matter for the individual solicitor to say whether or not he wishes to volunteer. If solicitors were to be able to act under the legal aid scheme only for their own clients, and without entering their names on the lists, this would operate most unfairly, I suggest, on the solicitors who volunteer to have their names on the lists and on whom the successful working of the scheme will depend. The solicitors who volunteer might then be confined to the less attractive and perhaps less remunerative cases, and would be discouraged from volunteering. Furthermore, the individual applicant, if rejected by a number of solicitors who were prepared to act only for their own existing clients, might have no means at all of obtaining legal aid. This difficulty might arise most commonly in the country areas.
In the Government's view each of these consequences would be most undesirable and at variance with the general principles of the Bill. If solicitors who acted only for their own clients were able to take the pick, so that the numbers of solicitors willing to act in all cases under the scheme became insufficient, it is obvious that the Law Society might find it necessary to employ salaried legal officers in order to carry out their obligations to provide legal aid. In short, the list system affords the best machinery for making the scheme work in the interests of the public, and it is left to the profession to prepare the lists and to operate the scheme. It is open to any individual solicitor to choose whether he is prepared to put his name on any list or not. In these circumstances, the Amendment cannot be accepted.
4.44 p.m.
LORD SALTOUN: I beg the noble Lord, Lord Morrison, to think again about this most important matter. I appreciate the anxiety of the Government in respect of the country districts. That
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is most important. But in order to deal in the right way with the country districts, I suggest, it is necessary to have more confidence in the profession than the Government are at present showing. In the first place I have no knowledge—and I know something about how solicitors work in the the country districts—of any case hitherto in which a man, however poor, has been refused by a solicitor on the grounds of poverty. I do not know of any reason why this very honourable profession should suddenly change its conduct on the passage of this Bill. It is true that by rejecting Lord Selkirk's Amendment to Clause 2, at page 3, line 22, the Government have done a lot to deter solicitors from joining the panels. What solicitor is going to join a panel when the first duty he may have to perform may be to pursue his own client, issue a distress and perhaps even distrain upon his own client? That is a thing which rarely occurs north of the Border.
I wish the noble Lord, Lord Morrison, could have accepted the Amendment. I understand the anxiety that is felt that the lists in the country shall be tilled, and I am confident that if the Government accept this Amendment they will be filled. But the danger is this. Every profession has its black sheep, and in filling your panels you may get in black sheep —in fact you are certain to do so. The best solicitors nearly all have their hands full of work. Remember that in the country districts of Scotland practically no man, woman or child, however poor, is without an agent. It is in the cities of Edinburgh and Glasgow, where people are without agents, that the need of this Bill is felt. I ask the Government to realise that by rejecting this Amendment they are interfering to an extraordinary degree with the ordinary social life and practice of the people of Scotland. I hope they will consider this very carefully in the light of what is going on, and has gone on up till to-day, in Scotland as a normal part of the life of the people.
THE EARL OF SELKIRK: I do not propose to press this Amendment. The noble Lord said that no one who is on the list will be compelled to do any work outwith normal professional limits. If that is the case, no solicitor is going to object. What solicitors are anxious about is being pushed into work which they do not want to do. I suggest that this

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Amendment would make the clause more flexible and therefore more easily adjustable. The noble Lord, Lord Morrison, also said that the Law Society might have to provide salaried legal officers in order to meet their obligation to provide legal aid. But I believe that there is no obligation in this Bill on the Law Society to provide legal aid. They have to make a scheme, but they have no obligation. Personally, I should like to see that obligation placed squarely on the Law Society, and I think the great body of the profession share that view. But under Clause 8 of the Bill, although they are obliged to make a scheme, and to make it work, they have no direct obligation to provide legal aid as such.
THE MARQUESS OF ABERDEEN AND TEMAIR: May I, as a layman, confirm what has just been said—namely, that everybody in Scotland, especially in country districts, has his legal adviser? If we are going to prevent them from using their own man to advise them on legal matters, we shall simply upset the whole custom of Scotland; I am sure the noble Lord, who has a long record of public service behind him, is the last person to desire to do that We pride ourselves that Scottish law cannot be beaten. I would ask the noble Lord opposite what is the objection to allowing anybody who wishes to use the services of his own solicitor.
LORD MORRISON: There is no objection at all to a person using his own solicitor, provided that his own solicitor volunteers to place his name on the list. If he has not volunteered to put his name on the list and remains outside, the only way a man can get to his own solicitor is outside the provisions of this Bill. But the solicitor may still act as the man's legal adviser. If the man's own solicitor is on the list, there is nothing to prevent him from using his own solicitor, and he will probably be encouraged to do so.
THE MARQUESS OF ABERDEEN AND TEMAIR: It does not follow that because an individual wants advice from his legal adviser, he will be involved in a law suit. I presume from what the noble Lord has said that there is no objection to every solicitor in Scotland joining the scheme?
LORD MORRISON: No objection at all; it is open to every solicitor in Scotland to have his name on the panel
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With regard to the point raised by the noble Earl, Lord Selkirk, may I add that it is the duty of the Law Society, under Clause 8, to make arrangements for securing that legal aid and advice are available? That is the justification for the statement I made that, if the situation arose in which there were not enough solicitors to work the scheme, it would be the duty of the Law Society under Clause 8 to make these arrangements.
THE EARL OF SELKIRK: I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 6 agreed to.
Clause 7:
Right to and nature of legal advice
(8) Provision may be made by regulations for further defining or restricting the questions (whether of Scots or any other law) on which legal advice may be give n.
(9) A person seeking legal advice may be required—
(a) to satisfy such person as may be designated for the purpose under the scheme made under section eight of this Act that he cannot afford to obtain it in the ordinary way; and
4.57 p.m.
THE EARL OF SELKIRK THE EARL OF SELKIRK moved to omit subsection (8). The noble Earl said: I move this Amendment to ascertain from the Government what is intended by these regulations, which can apparently either restrict or define the limits of Clause 7 to any extent. The clause provides for legal advice and it appears that what ca mot be given by way of legal advice for the price of 2s. 6d., can be laid down to an unlimited extent by regulations If it is intended to use this power extensively, I think we are entitled to know how these regulations are to be used.
Amendment moved—
Page 8, line 38, leave put subsection (8).—(The Earl of Selkirk.)
LORD MORRISON: I readily respond to the noble Earl's request to give him such advice as is in my possession with regard to subsection (8). The provision in the Bill as it stands is required for two purposes. First, it may be necessary, in the light of experience, to set out in regulations, for purposes of clarity, the kinds of cases on which legal advice may be given. The Bill has been

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drafted to allow the maximum flexibility, and if there were not power to give a more precise definition by regulation, should such a course be required, it might be necessary to set out in the Bill each individual topic on which legal advice might be given. Such a course, I suggest, would not be desirable. Secondly, if there is an excessive demand for legal advice on particular topics, it may also be necessary, as in the case of legal aid, to restrict the scope of legal advice in order to prevent the scheme from being overloaded. It is not intended, for example, that legal advice should include advice on the preparation and revisal of deeds, wills, settlements and documents involved in matrimonial interests. Any regulations which may be made under this subsection to define or restrict the questions on which legal advice may be given will, as I need hardly point out, be subject to negative Resolution by both Houses of Parliament.
THE EARL OF SELKIRK: I thank the noble Lord for his explanation. I am grateful for the information and beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 7 agreed to.
Clauses 8 to 11 agreed to.
Clause 12:
Regulations
(4) The power of the Secretary of State to make regulations shall be exercisable by statutory instrument.
THE EARL OF SELKIRK THE EARL OF SELKIRK moved, in subsection (4) after "regulations" to insert:
"Other than regulations made for the purposes of section (4) of this Act which shall be made by the Secretary of State, and exercisable by statutory instrument, shall be exercised after consultation with the central committee established in accordance with the scheme made under section (8) of this Act and"
The noble Earl said: This Amendment refers to the regulations which may be issued by the Secretary of State for putting into operation various parts of the Bill. When the Bill was originally framed strong objection was taken to the breadth of regulatory powers which the Secretary of State was taking to himself. It is true that the Government, very wisely, have bent in some ways to the
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pressure brought to bear and the regulatory powers are now considerably modified. However, it is still considered that the Secretary of State, who has no direct contact with the profession, has very wide powers indeed. It is felt that he should have a statutory obligation to consider with the obvious legal body dealing with this matter, the central committee set up under Clause 8, before he issues regulations, which he has power to do under Clause 12. I know it has been asked in another place: Why should the Secretary of State confine himself to consulting any one body? He might well want to consider other bodies—for example, the Lord President, the Faculty of Advocates, or even the Law Society itself. That, of course, is true, but this Amendment does not in any way restrict his powers or his ability to consult with anyone whatsoever.
It is common knowledge that the basic difficulty throughout this Bill is that the Rushcliffe Committee made their recommendations around the person of the Lord Chancellor. As we heard earlier, we have no such office in Scotland; whether or not that be an advantage, we have not that office. We have endeavoured to build a similar structure without the keystone of that position. We have tried to build it around the position of the Secretary of State. But the Secretary of State can never view a legal proposition in the same way as anyone holding the office of Lord Chancellor. We feel—and I think quite reasonably—that it is proper, even by Statute, that the Secretary of State should have some official connection with the central committee, which is composed of the Law Society and the Faculty of Advocates, set up for the express purpose of supervising and looking after the provisions of this Bill.
The Lord Chancellor, on Second Reading, emphasised that he was going to lean on the Law Society in England, and in addition—as, indeed, is laid down by Statute—he has his own advisory committee in England. If the Lord Chancellor thinks it necessary to have an advisory committee in England, is it not reasonable that the Secretary of State should, at least, have the obligation to consult the central committee when issuing regulations under Clause 12? I urge the Government to think again about this matter. It is important that the whole profession should have confidence in the

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way in which this scheme is being run. Rightly or wrongly, their confidence has been rather shaken. I submit that by our agreeing to this Amendment a large measure of confidence will be restored. I beg to move.
Amendment moved—
Page 13, line 5, at end insert the said words. —(The Earl of Selkirk.)
LORD MORRISON: In this case the difference between us is very small. I am sure the noble Earl is not suggesting, and will not for one moment suggest, that the Secretary of State would not consult the law committee. The only difference, therefore, is that the noble Earl wants it put in the Statute that he must consult the law committee. I am advised that the effect of that might be to put other bodies which the Secretary of State might wish to consult in a much inferior position, if one body is mentioned as having to be consulted, and the others are not. An assurance has already been given that the Secretary of State will consult the central committee of the Law Society responsible for the operation of the legal aid scheme, before he makes any regulations which concern the profession. The noble Ear] knows better than I do that there are other bodies and persons—for example, the Law Society and the Faculty of Advocates—whom the Secretary of State might wish to consult before making regulations; and there are also cases in which he might wish to consult the Lord President of the Court of Session. In these circumstances, it does not seem desirable to single out the Law Society as the only party which the Secretary of State, as a matter of necessity, must consult, and it would be most exceptional to make in the Bill an express provision of this nature for consultation. For those reasons, I hope the noble Earl will not press this Amendment.
THE EARL OF SELKIRK: I must say I do not think the noble Lord, Lord Morrison, in making that answer, sounded very convincing, even to himself. That it should be undesirable to provide for the necessary consultation, for fear of insulting or putting other societies in an inferior position, is not a very convincing argument. However, the Government have the responsibility for this Bill. They have had the opportunity of doing something to restore the
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confidence which has been lost, and they have refused to take it. I do not propose to press the Amendment, and I beg leave to withdraw it.
Amendment, by leave, withdrawn,
Clause 12 agreed to.
Clause 13:
Rules of Court
(3) The Court may, by act of adjournal or act of sederunt, as the case may be, restrict to such proportion of the fees for the time being applicable as may provided therein the fees to he paid to auditors of court, messengers-at-arms, sheriff officers and shorthand writers in any case where such fees are payable in the first instance by or on behalf of a person receiving legal aid:
Provided that
THE EARL OF SELKIRK THE EARL OF SELKIRK moved, in subsection (3), to omit "messengers-at-arms, sheriff officers and shorthand writers" and to insert "and sheriff officers." The noble lord said: This is a short and a clear point, as to whether the shorthand writer's fees should be docked in courts in Scotland. I submit that it is wholly unreasonable that we should include in a Statute a provision which rather encourages the court under act of sederunt to dock the fees of shorthand writers.
The story of this matter is as follows. The Government came to an agreement with the Law Society in England that solicitors and barristers should have their fees docked in poor cases by 15 per cent. That agreement was then presented to Scotland. No one was ever asked whether they wanted it, or whether they agreed to it; they were just told that it was the decision of the Government. Ye: rightly and properly the legal profession said: "We think there are a lot of other things more serious than fees, and we do not propose to raise any objection." That was the legal profession. But the shorthand writers were never consulted at all. We have had a public statement that the Lord Advocate never entered into discussion with the shorthand writers on any occasion. Why should they have their fees cut in the case of a poor action? Why pick on the shorthand writers? There are many other court officials who might well have their tees cut. What about the ushers? One might almost go

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so far as to say: Why should not the judges themselves have their fees cut when dealing with poor cases?
Shorthand writing, particularly in the courts, is perhaps the highest—I say "perhaps" with respect to others in this Chamber—in the profession. I do not know whether it is higher in Parliament, but shorthand writing in the courts is a very high branch of the profession. The men engaged on that work would have no difficulty in finding employment elsewhere, and if the quality of shorthand writing is reduced it will ultimately affect the quality of justice which the courts can dispense. For those reasons I submit there is a very practical reason why we should not encourage the reduction of fees of the shorthand writers in these cases. It is not purely an academic matter. It may be argued that some shorthand writers do give their services free; but it is very poor encouragement to free service if the next step is to accept a cut rate which, in effect, is what is being imposed here, and which in the long run may either reduce the standard of shorthand writing in the courts or make the numbers of shorthand writers insufficient properly to carry on the work. I beg to move.
Amendment moved—
Page 14, line 11, leave out from ("Messengers-at-arms") to ("in") in line 12 and insert ("and sheriff officers").—(The Earl of Selkirk.)
LORD SALTOUN: I would like to emphasise what the noble Earl has so well said. In the first place, the fees of shorthand writers in Scotland are ridiculously low compared with the fees that have to be paid in England. In the second place there are always too few shorthand writers. I myself was concerned in a case where a Government Department engaged all the available shorthand writers and there was none left for the other parties in the case; and they had to depend on the favour of the public Department for getting portions—and portions only—of the transcript of the proceedings. It is essential for the processes of justice that there should be sufficient shorthand writers for each court. I therefore strongly support what the noble Earl has so well said.
5.10 p.m.
LORD MORRISON: We now come to what the noble Earl, Lord Selkirk, called the short point of the shorthand writers. When I heard the noble Earl suggest that if you ask the shorthand writers to work for less than their ordinary fees why not ask the judge and the ushers, it seemed to me that he was a little confused. We might as well add the policemen. The answer to that is that the judge and ushers are not acting for assisted litigants —they are acting impartially.
THE EARL OF SELKIRK: May I ask whether the shorthand writers are not acting impartially as well? They have to sign an oath that they will carry out their duties properly in court.
LORD MORRISON: At present, though they are not obliged to do so, messengers-at-arms and sheriff officers usually, to their credit, act without charge for persons admitted to the poor's roll, and where one of the parties is on the poor's roll the shorthand writers receive half fees. The proposal to pay fees in such cases, less an abatement to be fixed by the court, is on the lines of the provisions in other cases, and the difference between the full and restricted fees will be offset by the assurance of payment from the legal aid fund. The noble Earl's Amendment seeks to prevent the court restricting the fees payable to shorthand writers, while allowing the court to retain the power to restrict the fees payable to auditors of court, messengers-at-arms and sheriff officers. I am advised that the principle of abatement of fees applies with equal force to all four types of persons mentioned. It will be for the court in each case to prescribe the degree of abatement, and there seems no reason, as the Amendment proposes, to preclude the court from so doing in the isolated instance of the shorthand writers.
My final point is that when the noble Lord, Lord Saltoun, raises the point that these shorthand writers are very valuable people and very scarce—nobody disputes that at all—the inference is that these people will be worse off under this scheme. My advice—and I have taken some trouble to ascertain this—is that there is not the slightest doubt they will all be appreciably better off under this scheme, even with the reduced fees, than

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they are now. The noble lord will therefore see my difficulty. It is accepted that these shorthand writers are concientious people, doing a good job of work. It is said that they will have a hard time because their industry will be rewarded by reduced fees, while I am told that that will not be the effect. I am told that because of the increased amount of employment for the shorthand writers under the Bill there is no doubt that their incomes will he appreciably more than they are at the present time.
THE EARL OF SELKIRK: I do not want to press this Amendment, but the noble Lord is wrong in saying that I do not wish to exclude also sheriff officers and messengers-at-arms who are specialised officers. I would like to see them all removed from this category. I think it is quite an unworthy imposition on them. However, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 13 agreed to.
Clause 14 agreed to.
Clause 15 [Offences]:
THE EARL OF SELKIRK: This is really a saving Amendment which is in fact taken from the English Act. It so happens that there is a slight difference of opinion between the Attorney-General and the Lord Advocate as to the exact meaning which that Act implies. I do not want to elaborate, because I understand that this Amendment is acceptable to His Majesty's Government. I will content myself by moving it.
Amendment moved—
Page 16, line 32, at end insert ("(4) For the avoidance of doubt it is hereby declared that information furnished to counsel or a solicitor as such by or on behalf of a person seeking or receiving legal aid or advice is not information furnished to the Law Society or a person on their behalf.")—(The Earl of Selkirk.)
LORD MORRISON: I am happy to advise the noble Earl that we are all in favour of taking every step to avoid doubt; and therefore the Amendment can be accepted.
On Question, Amendment agreed to.
Cause 15, as amended, agreed to.
Clause 16 agreed to.
Clause 17 [Interpretation, transitional provisions, repeals, and citation of Part I]:
(3) The Act of the Parliament of Scotland, 1424, cap. 24 (which provides for the appointment of counsel for the poor), so much of section (10) of the Act of the Parliament of Scotland, 1587, cap, 57, as provides for the appointment of counsel and solicitors to act for persons accused of crime, the Appeal (Forma Pauperis) Act, 1893, and section fifty-one of, and rules one hundred and fifty-two to one hundred and sixty-nine in the First Schedule to, the Sheriff Courts (Scotland) At, 1907 (which relate to the poor's roll in the Sheriff court) shall cease to have effect.
LORD SALTOUN LORD SALTOUN moved, in subsection (3), to leave out from the beginning to "the Appeal (Forma Pauperis) Act, 1893." The noble Lord said: Now that we have the noble Lord opposite in a good mood, I hope he is going to stay that way. The object of this Amendment is perfectly clear: it is to avoid the repeal of part of the Statute of 1424 and part of the Statute of 1587. The present Statute provides legal aid for certain persons in the cases comprised in Part I of the First Schedule, and for that alone. The Statute of 1424 provides legal aid for poor persons in all cases which may arise. The Statute of 1587 has nothing to do with poor persons at all. Quite incidentally, it provides legal aid for all persons in certain circumstances, but it is far more important as a Statute in providing that persons shall not be accused without knowing of what they art accused, and that they are to hear the accusation. Quite apart from the point I am coming to in a moment, it may be that tie Government feel that they provide under Part I of the First Schedule of this Bill for every possible case which can arise. But they may be wrong, and if they are wrong, why should they deprive poor people of their ancient rights in this respect? It may he said that there are two remedies here proposed. That may be so, but I do not think it is, because this Bill is a Bill purely of machinery, and the people who come under its machinery will probably he directed by the court to avail themselves of it.
The two Acts which it is proposed should he repealed are not Acts of machinery at all; they prescribe certain definite legal principles to be observed in certain cases. Why should the people of Scotland be deprived of their ancient

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rights? I am not aware that this has been mentioned in the course of the debate upon this Bill. Perhaps it has been mentioned by the Government, but if so I certainly have not seen it. Under this Bill, the only cases which merit legal aid are those comprised in Part I of the First Schedule. Those in Part II are excepted—for example, proceedings in respect of defamation. Well, my Lords, I know something about defamation. There may be cases in which even wealthy people have absolutely no right. For example, if a Minister is given wrong information about anybody and uses it on a privileged occasion, there is no real remedy for that person; the sting lies not in what is said but in the fact that there is no remedy. Why should a poor man's character be of less value than anyone else's? Yet here, under this Bill, the poor man is being deprived of legal aid which he has at the present moment in Scotland. It certainly should be made well known in Scotland that that is the case, because this Bill, so far as that is concerned, is certainly not a boon to the public; it is, in fact, a serious deprivation. The noble Lord may say, "We are giving you so much in this Bill; what does it matter, our taking these things away?" But no one knows the value of a right except the man who has lost it—and he is the person who matters. I beg to move.
Amendment moved—
Page 17, line 29, leave out from the beginning to ("the") in line 33—(Lord Saltoun.)
THE EARL OF SELKIRK: I think we should recognise clearly what we are doing in repealing these Acts. The noble Lord has just said, quite rightly, that the people of Scotland are losing certain things. If the Bill is passed they will, in some respects, be less well off than before. The second point I wish to make is this. Not many weeks ago the Minister of Civil Aviation was speaking, almost with tears in his eyes, about the need for voluntary action. Here we have a sphere where voluntary action has gone on for many centuries, but henceforward, throughout the profession, it will be absolutely dead. It has always been the common practice for every member of the legal profession to take part in voluntary action, but if His Majesty's Govern
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ment desire that service to continue they will have to encourage it instead of doing their best to wipe it out.
LORD MORRISON: I heard about this Amendment only when I was having my lunch to-day. That is no fault of the noble Lord's. My first inclination was simply to ask him to leave it until a later stage; but owing to the efficiency of my legal advice department I have been enabled to obtain legal advice in the meantime. I am sorry to say that the advice is to the effect that it would be quite impossible for the old provisions, dating back to 1424, I believe, in civil cases, and to 1587 in criminal cases, to continue side by side with the new scheme.
The object of the noble Lord's Amendment is, of course, to prevent the repeal of the old Scottish Acts of 1424 (providing for the appointment of counsel for the poor in civil cases) and 1587 (providing for criminal cases). No doubt the intention behind the Amendment is to make it possible for a person who desires legal aid in a type of proceedings which is at present excepted in terms of Part II of the First Schedule to apply for admission to the Poor's Roll under the old procedure. The new arrangements for legal aid provided under the Bill represent a modernisation of the existing system, and it would be most undesirable to leave the old Poor's Roll provisions standing alongside this Bill when it becomes an Act. If those provisions were not repealed, there might be claims that they should be operated, and the court would have no power to say that the applicant must come within the scope of the new scheme. I admit it may be true that, at any rate initially, legal aid will not be available under the new scheme in certain types of case as it was under the old; but the new scheme will be much more comprehensive and must be accepted as a whole, its benefits greatly outweighing any deficiencies.
As an example of these benefits, I would point out that the poor person under the old arrangement was always liable for the solicitor's outlays, such as expenses of witnesses, correspondence, et cetera, while under the new scheme his contribution will be assessed by the local committee, and that will be all he will have to pay towards the cost of the action. It seems quite clear, therefore,

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that the old scheme cannot be left standing in competition with the new arrangements. It should also be emphasised that under the new scheme the accused in criminal proceedings will invariably be entitled to legal aid in the initial proceedings, and hp will therefore be as well off under the new scheme as under the Scottish Act of 1587. In short, the comprehensive arrangements to be made under the Bill will supersede the quaint Scottish practice, and so far as the Government can see there are no reasonable grounds for retaining the original Acts in competition with the new legislation.
LORD SALTOUN: I am not at all satisfied with the noble Lord's reply. The Scottish practices may appear quaint down here, but to us who are familiar with them they are not nearly so quaint; they are the ordinary currency of daily life. The noble Lord drew a fanciful picture of solicitor's expenses to the client hitherto, but if he will inquire into the practice of my country he will find that these never were so exacted. The general fear in the North is that this scheme is going to be much more expensive to the client than the old scheme, in practice, was. But I am not going to press this Amendment since the noble Lord is resisting it. I would ask him, however, to consider between now and the next stage (I am entirely in his hands because I cannot be here at the next stage) whether, before depriving Scotsmen of a right they have had for so long, he will consider some other Amendment such as repealing these Acts in so far only as their place is taken by the Bill now under consideration. If the noble Lord will do that, lie will have gone a long distance to meet me in this matter. I beg leave to withdraw my Amendment.
LORD MORRISON: I should like to apologise to the noble Lord for having used the word "quaint" in connection with his country and mine. What I really meant was "ancient."
LORD SALTOUN: The noble Lord need never apologise to me. I know him far too well and I have received so many kindnesses at his hands.
Amendment, by leave, withdrawn.
Clause 17 agreed to.
Remaining clauses agreed to.
Schedules agreed to.
House resumed.

MARRIED WOMEN (RESTRAINT UPON ANTICIPATION) BILL [H.L.]
5.30 p.m.
An Amendment reported (according to Order).
Then, Standing Order No, XXXIX having been suspended (Pursuant to the Resolution of July 13):
THE LORD CHANCELLOR: My Lords, I beg to move that this Bill be now read a third time.
Moved, That the Bill he now read 3*. —(The Lord Chancellor.)
VISCOUNT SIMON: My Lords, I have no intention at this stage of renewing the lively discussion which we had in Committee when, in place of the provision now contained in the Bill which sweeps away altogether and nullifies the effect of restraint upon anticipation in every existing marriage settlement, without consideration of the circumstances in which it was made in the past, I proposed that such a contract should be modified only by order of the court after considering the particular case, acting upon defined principles but with a wider discretion than the court has at present. My proposal would cover the Mountbatten case, which was the origin of this while matter. My Amendment in Committee was defeated by six votes, and among those who supported it were noble Lords whose names carry great weight in the House and in the country.
Your Lordships may have noticed that in The Times this marring a letter is published from a well-known firm of solicitors who are familiar with the practical working of marriage settlements. In that letter the view is taken which I ventured to submit to your Lordships in Committee. We are now passing the Bill to the other place, where I trust the arguments on either side will be duly weighed. But there is ova thing which I feel it my duty to say before the Bill leaves us. On the Third Reading we are supposed to survey the work of our hands and to consider the consequences of legislation which we propose. I am a former Chancellor of the Exchequer as well as a former Lord Chancellor—an unusual combination—and I am not prepared to remain silent in this House as to the effect upon the Revenue of this

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wholesale cancellation of a provision in past marriage settlements. Public finance is, of course, the more immediate concern of another place, and no doubt the aspect I am about to mention briefly will receive consideration when this Bill reaches that place.
Income tax falls upon the income of individuals and companies alike. Surtax, on the contrary, is charged only on the income of individuals. If the income of an individual is large enough, the topmost slice of it suffers tax from both combined of no less than 19s. 6d. in the pound, and even within lower limits the combined deduction is a swingeing exaction from the gross income. This Bill, in its present form, by removing the restraint upon anticipation, enables the income which has hitherto been so restrained to be transferred as a whole to a company—say, an insurance company. In the hands of the company the income suffers income tax, but it escapes surtax. In the extreme case, income of the gross amount of £1 now brings in 6d. net, and the Revenue takes 19s. 6d. Once this Bill is passed, and the right to the income can be sold in advance to a company, £1 gross becomes worth 11s. net, deducting the income tax of 9s. It is obvious, therefore, that a profitable transaction may be made on these lines, with the result, however, that the Revenue loses the difference. I think we may expect transactions of this sort to be entered into in large numbers if the Bill in its present form reaches the Statute Book.
I am far from saying that there is anything wrong in taking advantage of the opportunity which the legislation we pass offers to avoid surtax by lawful means. I myself think that both surtax and income tax are higher than they ought to be. But, as I heard my noble friend Lord Selkirk say just now on the previous Bill, we should realise what we are doing. I, at any rate, feel that I should be joining almost in a conspiracy of silence if I did not point this out; for although, of course, this cannot be the purpose of the Bill—if it was, the Government would have said so; indeed, I recall that the noble and learned Viscount the Lord Chancellor said last Thursday, "I am not here to protect the rich people"—it is the inevitable effect of the Bill. And
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much as I sympathise with the plight into which surtax puts the richer taxpayer, I sympathise still more with poorer taxpayers who, if the produce of surtax is reduced, will have to fill up the gap out of their own pockets.
5.39 p.m.
THE LORD CHANCELLOR: My Lords, I did not expect that this line of approach would be taken. I want to say just this. I have sent for the speech I made on Second Reading, where I pointed out the effect on the Revenue. But I must point out quite plainly that I think it wholly wrong that, in deciding what is the right thing to do in this matter, we should seek to do something which injures an individual in order to benefit the Revenue. If it is right in the interest of married women to pass this Bill, if it is in their interests to remove restraint, if we are right to break documents and testamentary dispositions of the past—if those things are right, then I cannot think that we should be restrained from doing them merely because it would give the taxpayer certain advantages, as against the Revenue. It is to my mind an absolutely novel doctrine that you must crib, cabin and confine the taxpayer to a certain state of circumstances in order that the Revenue may extract more money out of him. It cannot be right.
If it is right to do this in the interests of the taxpayer, then let us do it. If it is wrong to do this sort of thing, then let us decline to do it, on the grounds which the noble and learned Viscount advanced on the last occasion. But accepting, as he does for the moment in this House, the Resolution of the Committee which passed this form of the Bill, I do not think it is possible to turn round and say, "Well, it may have been quite right. The Committee decided that and decided to remove this restraint. Now we realise that the Revenue may lose some money and, because the Revenue may lose some money, therefore we ought not to do it." In my speech on the Second Reading of this Bill I pointed out that it might have the effect that the Revenue would lose money. But I cannot for one moment think it right to accept the principle that, in deciding in regard to individuals whether we should or should not take a

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certain line, when we come to the conclusion that it is in the interests of and right and fair to these individuals that we should take that line, we should draw back and say "Although we should do that which ex hypothesi is right and fair, since the Revenue will lose some money we will not do it." That seems to me to be an untenable position and I for one reject it.
5.42 p.m.
THE MARQUESS OF SALISBURY: My Lords, this point is a new one. It is no doubt an important one, and to the noble and learned Viscount is a matter of conscience. In order that there may be no misunderstanding, I want to say only that in what I said on the Committee stage of this Bill I was concerned with the other side of this question. I held then, and I still hold, that it is wrong for Parliament by retrospective legislation to break a trust or settlement which has been already created. I think that is wrong. A man might naturally introduce some limitation on the use of capital which he was bequeathing to or settling on someone else, and even though circumstances have since changed, in my view his clearly expressed wishes should be respected. For that reason I supported the Amendment which was moved by my noble and learned friend Lord Simon. I still hold that view and I believe that we have made a mistake. But this other point is, of course, a completely different one. It is quite proper for the noble and learned Viscount to bring it up, but I am more concerned with the other side of the question.
THE LORD CHANCELLOR: My Lords, I now have the OFFICIAL REPORT and may I say, in reference to the "conspiracy of silence," if the noble and learned Viscount would be good enough to read what I said on July 5 at the bottom of Column 901 and in Column 902, he will see that I pointed out that there
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might be this effect on the Revenue. So far as a "conspiracy of silence" is concerned, I have been no party to it.
VISCOUNT SIMON: I did not suggest it for a moment. What I said was that on considering this matter on Third Reading it was my duty to point out that this is the effect. I would be the first to agree that if it is the right thing to do, then nothing else matters. But it has a bearing on the question whether in some cases it is right to do it and in others it is not.
On Question, Bill read 3*, and passed, and sent to the Commons.

GLASGOW CORPORATION ORDER CONFIRMATION BILL
  EDINBURGH AND MIDLOTHIAN WATER ORDER CONFIRMATION BILL
  Bills (pursuant to the Private Legislation Procedure (Scotland) Act, 1936) deemed to have been read 2* and reported from the Committee.
PIER AND HARBOUR PROVISIONAL ORDER (CRARAE) BILL TEESSIDE RAILLESS TRACTION BOARD (ADDITIONAL ROUTES) PROVISONAL ORDER BILL
Reported, without amendment, and re-committed to a Committee of the Whole House.

PIER AND HARBOUR PROVISIONAL ORDER (SOUTHWOLD) BILL
Reported, with Amendments, and recommitted to a Committee of the Whole House.
House adjourned at a quarter before six o'clock.