Lords Sitting of 12 December 1950

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

  CHILDREN OF DIVORCED PARENTS
  2.35 p.m.
  VISCOUNT ST. DAVIDS: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
  [The Question was as follows:
  To ask His Majesty's Government whether, in view of the small number of cases where the services of a court welfare officer is used by Divorce Judges to investigate the affairs of the children involved, they will consider whether they can go further and require that in all such cases an investigation shall be made.]
  THE LORD CHANCELLOR (VIS-COUNT JOWITT): My Lords, I do not think it would be either useful or practicable to require that an investigation should be made in all cases. In many cases where there is a dispute about custody or access, the Judge is able to decide what is the best solution in the interests of the children without calling on the court welfare officer, and no purpose would be served by making an inquiry compulsory in such cases. I need hardly remind the noble Lord that the Judges of the Divorce Division, in dealing with questions of custody and access, treat the welfare of the children as the paramount consideration. Perhaps, however, I should add that the Judges are fully aware of the desirability that the Judge who has seen the parties and dealt with controversial issues at the trial should deal also with questions relating to the children of the marriage.
  VISCOUNT ST. DAVIDS: My Lords, I thank the noble and learned Viscount for his answer, but will he bear in mind that there are a number of noble Lords who would like to take this matter further, along the lines recommended by the Denning Committee? Will the noble and learned Viscount consider what further action he can take in the direction the
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  Committee recommended? Possibly we may have a debate on the subject after the Christmas Recess.
  THE LORD CHANCELLOR: My Lords, I should welcome a debate on this subject. It is obviously a matter of importance and public interest. If time can be found for a debate, I shall raise no objection to it.

  PARLIAMENT SQUARE MEMORIAL FOUNTAIN
  2.38 p.m.
  LORD NOEL-BUXTON: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
  [The Question was as follows:
  To ask His Majesty's Government whether it is their present intention to re-erect in Parliament Square the Memorial Fountain to the abolitionists of slavery, which was taken down during the improvements to the Square; and, further, whether they will consider an alternative suggestion—the fountain being ugly and out of keeping with its surroundings—namely, that a plinth of Portland stone, keeping the old inscription, or alternatively a statue of an, African boy, be placed in the West enclosure outside the Middlesex Guild-hall, between the statues of Lincoln and Canning, and thus as near as possible to the old position of the fountain.]
  THE PARLIAMENTARY SECRE-TARY, MINISTRY OF WORKS (LORD MORRISON): My Lords, I am informed by my right honourable friend the Minister of Works that no decision has yet been reached as to an alternative site for the Memorial Fountain which, under the Parliament Square (Improvements) Act, 1949, will have to be re-erected either in Parliament Square or on an alternative site approved by both Houses of Parliament. My right honourable friend shares the noble Lord's view that it would be inappropriate to re-erect the Fountain in the Square as now laid out. It would be difficult, if only for reasons of scale, to adopt the noble Lord's suggestion of another statue, but my right honourable friend the Minister of Works will consider how best to record the fact that the Memorial Fountain once stood in Parliament Square and the great act of liberation which it commemorated.
  LORD NOEL-BUXTON: My Lords, in thanking the noble Lord for his under-standing and helpful reply, I would ask him whether he will further consider my suggestion for a monolith of Portland stone on the West side of the Square to commemorate the abolition of slavery. It seems to me very important that there should remain in the Square some kind of memorial to the great people who brought about that reform.
  VISCOUNT SIMON: My Lords, may I put this question arising out of what has been said by the noble Lord, Lord Morrison? Whether or not the suggestion made in the Question of the noble Lord, Lord Noel-Buxton, should be approved is possibly, a matter for further consideration, but I should like to ask the noble Lord, Lord Morrison, for an assurance that the Government and his right honourable friend the Minister of Works have fully in mind the appropriateness and importance of having in this precinct a record of the great men who, as a result of a whole generation of Parliamentary effort, secured the abolition of the slave trade and the abolition of slavery under the British flag. I submit that to omit such a record from Parliament Square or the immediate precincts would show a grave disregard for one of the greatest Parliamentary achievements, and one of which we are all proud.
  LORD MORRISON: My Lords, if the noble Lords would allow me to answer both supplementary questions together, I would say that in view of the uncertainty about what is desired in order to carry out the intention of the noble and learned Viscount and the noble Lord, Lord Noel-Buxton, with which my right honourable friend and I entirely concur, I feel that the best I can do is to suggest that all parties concerned should give further consideration to the solution of the problem. With the agreement of Lord Noel-Buxton and the noble and learned Viscount, I am prepared to arrange further consultation, in order to try to agree upon some permanent record of the great act to which the noble Viscount has referred being placed in Parliament Square or in the near vicinity—one which will be in keeping with the rest of the Square.
  VISCOUNT SIMON: My Lords, may I ask this further question, though I realise it is not for the noble Lord himself to
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  answer? Will he convey to his right honourable friend the Minister of Works the desire of some of us, at a moment convenient to the Minister but as soon as possible, to come in deputation to him, when perhaps he will be good enough to discuss the matter with us with a view to arriving at an agreed conclusion?
  LORD MORRISON: Yes, I will cer-tainly convey that request to the Minister.

  PUBLIC WORKS LOANS BILL
  2.43 p.m.
  House in Committee (according to Order): Bill reported without amendment.
  Then, Standing Order No. XXXIX having been suspended (pursuant to the Resolution of December 7), Bill read 3a, and passed.

  SOLICITORS BILL
  Read 3a (according to Order), and passed.
  DANGEROUS DRUGS (AMENDMENT) BILL
  Read 3a (according to Order), and passed.
  EUROPEAN PAYMENTS UNION (FINANCIAL PROVISIONS) BILL
  Read 3a (according to Order), and passed.

  REINSTATEMENT IN CIVIL EMPLOYMENT BILL
  2.45 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.—(Viscount Hall.)
  On Question, Motion agreed to.
  House in Committee accordingly:
  [The EARL OF DROGHEDA in the Chair]
  Clause 1 [Reinstatement rights of reserves called up for whole-time service]:
  THE FIRST LORD OF THE ADMIRALTY (VISCOUNT HALL)THE FIRST LORD OF THE ADMIRALTY (VISCOUNT HALL) moved, after sub-paragraph (c) to insert:
  "(d) in pursuance of any enlistment for a period not exceeding eighteen months with a view to service in Korea."
  The noble Viscount said: This Amendment is one of several which together implement an undertaking given in another place. The Amendments give effect to an Opposition Amendment designed to confer reinstatement rights on men who have voluntarily undertaken a period of whole-time service, with a view to service in Korea. There are in all about 1,100 of these men. They may be regarded as having undertaken a "duration of hostilities" engagement, rather than an ordinary engagement for a fixed period, and it is clearly difficult, especially in present circumstances in Korea, to deny them reinstatement rights. This Amendment covers other ranks who accept a War Office Type "K" engagement for eighteen months' service with the Colours, provided that their services are required for so long. These comprise men from civil life possessing the qualifications specified by the War Office for this engagement and National Service men who had not completed their periods of whole-time service. I beg to move.
  Amendment moved—
  Page 2, line 8, at end insert the said sub-paragraph.—(Viscount Hall.)
  VISCOUNT BRIDGEMAN: AS the noble Viscount has said, this Amendment fulfils an undertaking given in another place, and we welcome it.
  On Question, Amendment agreed to.
  LORD HADEN-GUEST LORD HADEN-GUEST moved to add to the clause:
  "For the purposes of this Act. no person shall be deemed to have entered upon such service until he has been examined by a medical officer of the branch of the service in which he will serve and been passed medically fit for that service in an appropriate category."
  The noble Lord said: The purpose of this Amendment is to improve the present procedure in respect of the medical examination of men called up for service in the Armed Forces, in order to secure that, so far as possible, unfit men are not admitted to the Forces. The actual terms of the Amendment on the Paper do not refer to reinstatement, and it would appear that this omission might prejudice re-instatement. That difficulty can be over-come quite easily, however, by the addition of a few words, to the effect that nothing in the above-mentioned clause shall prejudice a man's right to reinstatement. Something of that nature would
  854
  have to be inserted, I think. Reinstatement is, of course, the purpose of this Bill, but I venture to think that it is worth while considering how to restrict the number of unfit people who get into the Services. Let me say at once that, in placing this Amendment on the Order Paper I nave no intension of doing any-thing which would detract from my feeling of the greatest admiration of the work done, especially in the last twelve months, by both the Ministry of Labour medical boards and the Service boards, in bringing the whole question of examination to a more perfect condition than it was be-fore. Many noble Lords will already know the book that I have here, the book of the Pulheens; it came out during the war period and led to very great advances being made in the question of medical examination, as a result of which large numbers of unfit people were not admitted to the Services at all.
  I wish to lay stress upon what I have just said, that very great improvements have been made in the methods of examination of men called up for service in the last twelve months. and I have no doubt whatsoever that even greater improvements will be made in the future. It is with the object of getting those improvements made that I am raising the matter this afternoon, because I think there is a definite possibility of further improvement. May I be allowed to de-scribe quite shortly the two main medical examinations which a man called up for service undergoes, and why I think they could be improved? The first examination—and I am speaking here of National Service recruits—is that carried out by the Ministry of Labour medical boards when the person reaches the age of recruitment. After this examination, the man returns to his ordinary civilian occupation. If he could remain in that occupation and be examined during the carrying out of that occupation by a Service medical board, there would be no question of this Amendment appearing on the Paper, because it would mean that the man would be examined from both the Ministry of Labour and the Service point of view before he was actually posted, ft is the letter of posting which goes from the Ministry of Labour to the man—which is sometimes sent two months or longer after his initial examination—which chanses him from a civilian into a member of His Majesty's Forces. I know that

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  a certain number of recruits at the present time are discharged from the Service by the Service medical boards immediately they appear before them. The number is decreasing, because of the greater co-operation between the boards of the Ministry of Labour and the Service boards, and be-cause of the increasing scientific exactitude of the methods of examination. But a certain number of cases, notably of men suffering from tuberculosis, get through the net, and they have to have treatment. For instance, a man may spend one week in the Army or any other Service, and may then be diagnosed as suffering from tuberculosis. He has to be kept in hospital and treated for eight months or more, and thus becomes a liability upon the Army, instead of on the National Health Service, as he should have been. That situation occurs also with other things— for instance, a number of psychiatric misfits also get through because they are more difficult to spot.
  It is desirable for several reasons to avoid having unfit men in the Services. It is undesirable, first, for the sake of the man himself, because he is unsuited to service life; secondly, for the sake of the Service, which needs fit men and, thirdly, and by no means the least important, for the sake of the adequate and proper functioning of the medical branch of the Services. The medical service has to face not only what I think is rather humorously described as "warfare by means of conventional weapons," but also in the future, if we should get into another war, chemical warfare—gas warfare, biological warfare (including bacteriological warfare) and atomic warfare. Therefore, in any future war the medical branch, which, unfortunately, is understaffed at the present time, must have a tremendous burden placed upon it, not only for the Service it is looking after but also for all the civilian population in the area in which it happens to be stationed. It is for those reasons that I wish to bring forward this Amendment. If it were passed, it would obviate loading the strength of the Service with a number of ineffectives, and loading the medical service with tuberculosis and psychiatric cases with a considerable hospital clientele.
  The Minister may say that the plan itself would involve other complications.
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  If that is to be the answer, may I suggest that the question of a closer rapprochement between the Ministry of Labour medical boards and the Service medical boards should be considered? In the last twelve months there has been considerable rapprochement between those boards— unprecedented, as a matter of fact, in the medical organisation—and sergeant testers have carried out tests of mental efficiency on recruits to assist the National Service boards. I believe that something on those lines would take at any rate a good many steps in the direction which I am urging upon your Lordships this afternoon. Organisation on these lines has already resulted in a big decrease in the intake of unfit men into the Service. I think that further organisation on the lines I have suggested would decrease the number of unfit men still further, and I believe that it would be of great advantage to keep as many unfit men out of the Service as possible. It is for that reason that I beg to move this Amendment this afternoon.
  Amendment moved—
  Page 2, line 32 at end insert the said words. —(Lord Haden-Guest.)
  VISCOUNT HALL: My Lords, my noble friend has raised a very important point, and one which has given the Ministry of Labour and the Service Ministries a good deal of thought, but it does not quite come under this Bill. I can assure him, however, that every care is being taken with persons who are called up for service at the present time. I myself, with my Service colleagues, will take note of what my noble friend has said and will certainly consult him in relation to this matter, in which he has had a long and valuable experience during the course of the last four or five years. I would ask him to withdraw his Amendment and to take any opportunity which may present itself to introduce legislation to deal with the points which he has put before your Lordships this afternoon.
  LORD HADEN-GUEST: My Lords, in response to my noble friend's request, and in view of the assurance which he has given me, I beg leave to withdraw my Amendment.
  Amendment, by leave, withdrawn.
  Clause 1, as amended, agreed to.
  3.0 p.m.
  Clause 2:
  Reinstatement rights of persons voluntarily extending their service under Part I of National Service Act, 1948
  2. Where any person whose term of whole-time service under Part I of the National Service Act, 1948, was due to end on or after the fifteenth day of July, nineteen hundred and fifty, and before the first day of October, nineteen hundred and fifty, voluntarily under-took to serve whole-time in or with the regular forces for a further period not exceeding six months immediately after the time when the said term would have ended, his term of whole-time service under Part I of the said Act shall be deemed, for the purposes of Part II thereof, to have been extended so as to comprise that further period of service.
  VISCOUNT BRIDGEMAN VISCOUNT BRIDGEMAN moved to omit "and before the first day of October, nineteen hundred and fifty." The noble Viscount said: The two Amendments which stand in my name are consequential one upon the other; therefore, with the leave of the House, I will speak about them together. These Amendments deal with the case of the few thousand airmen who, in response to a request by the Air Ministry, extended their period of National Service for one year for service in Korea. At the present time they are excluded from the operation of this Bill, and we drew attention to that matter on Second Reading. Attention was also drawn to it in another place. I am not pretending that this is an easy matter, because if ever there was a borderline case, this is one.
  The facts of the matter are these. These men were National Service men; they were called up as National Service men and, therefore, for the purposes of this Act, I think they should be regarded as National Service men. When they completed what was at that time, I believe, their twelve months' service, they were asked whether they would volunteer for another year. I understand they were given very good terms upon which to volunteer for that extra year—terms with which no one could quarrel at all, except for one fact: that no one seems to have told them at that time that if they volunteered for the extra year they would lose their rights of reinstatement under the Act. The Air Ministry have complicated the matter still further by introducing a class of airman who enlists for three years—the same period as will be served by these National Service men
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  —but who will no. nave done any National Service. Therefore, there are the two classes existing side by side, one class doing three years' service, none of which is National Service and with no right to reinstatement, and the other having done two years of National Service extended by one year but with a loss of their right to reinstatement.
  One comment I have to make at this stage is that the Air Ministry, when they made what might be called "fancy" terms of service, did not give all the attention they might have given to the effects of those terms of service upon reinstatement. I would venture the suggestion that if this Bill becomes an Act, and if Service Departments ever devise terms of service for the future, they should take great care to see what the terms of reinstatement are under this Act and the original Act. In the meantime, I am inclined to think that the class of person I have mentioned should come within the terms of this Bill, because in my view, they are essentially National Service men. Whether that will raise insuperable difficulties I do not know—perhaps the noble Viscount will tell us in a moment. In any case, whatever happens to this Amendment, this class of airmen obviously deserve well of their country, and it would be most deplorable if they were allowed to fall between two legislative stools. I beg to move.
  Amendment moved —
  Page 2, leave out line 36.—(Viscount Bridgeman.)
  VISCOUNT HALL: The noble Lord raised this point on the Second Reading of the Bill, and he has repeated to-day the arguments which he then advanced. The position is very largely that which has been stated by him—other than this. The Royal Air Force has introduced this new scheme of a three-year engagement mainly in order that men, who would be called up for National Service, can come into the Service direct from civil life for three years, during which period they serve their National Service, but their Reserve period is reduced by one year. So it does mean that they give a three-years' full-time service and a two-and-a-half-years' Reserve service, instead of two years' full-time service and three and a half years' Reserve service. That is the position as it applies at the present time.

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  There are something like 10,000 men serving under this scheme. Of these 10,000 men, 7,500 have accepted service direct from civil life, and large numbers are continuing to do so—indeed, they are coming in at the rate of something like 500 a week. Only 2,500 of the 10,000 men have transferred to the engagement after starting their National Service, and only 500 of those want their National Service to count. It must be remembered that, as the noble Viscount, Lord Bridgeman, rightly said, all men on this engagement receive very good conditions, because they get the full Regular rates of pay, instead of the pay given to National Service men. Therefore, it is clear that, from the day they accept the Royal Air Force engagements, they become essentially Regulars and, as such, are outside the scope of the Bill. If we made the con-cession now asked it would be very difficult to refuse to give reinstatement rights to men who voluntarily enlist for the three-year Regular engagement in the Army, or for certain posts in the Royal Navy. There are some Regular engagements in the Army which are even shorter than the three years, so your Lordships will see how difficult it is to discriminate between the one and the other.
  For us to accept this Amendment would be to abandon the principle on which reinstatement has been based. We think it better to stick to the principle upon which we have worked—namely, that when the State compels a man to leave his civilian job and enter the Service, he is entitled to have his job back when his compulsory period of service is finished; but when he volunteers for a Regular engagement, then he has left his civilian job and chosen the Service as a career, whether it be for a short or a long period. It should be remembered that the success of the reinstatement scheme which has been in operation for a very long time has been largely due to the good will of the employers, who have been most helpful in this matter. If we require them to take back men who voluntarily leave their service in favour of the Forces, then we should, I think, lose their good will in this matter. It must also be noted that it would be unfair to those who have to give up their jobs to make way for these men. We think that the result would be that the whole scheme of reinstatement would be jeopardised.
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  Except for the odd cases, none of these men will come out of the Royal Air Force before March of next year, and the great bulk of them will not come out until about March, 1953. It will be quite possible to identify them readily from their release documents, and steps can then be taken to ascertain how many of them find any difficulty in securing employment with their former employers or, if they prefer it, with other employers. I can give the noble Viscount the assurance that my right honourable friend will be ready to arrange for any of these men who is in any difficulty in securing employment to be given every assistance by the Ministry of Labour and, in particular, that the Ministry will be pre-pared in appropriate cases to make special approaches to their former employers about reinstating them. Should these steps not meet the situation, the Minister would be prepared to consider further whether something more is necessary, and possibly would consider statutory reinstatement rights in this matter. Here I would like the Committee to know that the scheme of reinstatement of Regulars, based upon the experience of last year, indicates that the Ministry of Labour are taking a very active interest in this matter, for, notwithstanding the fact that over 40,000 men were discharged from the Services during the course of last year, only 419-a fraction over 1 per cent.—were registered at the local offices as unemployed. That is an indication of the interest which the Minister of Labour is taking in this matter. I think that the noble Viscount can safely leave this matter where I suggest it should be left, and I trust that he will withdraw his Amendment.
  VISCOUNT BRIDGEMAN: I am most grateful to the noble Viscount opposite for what he has said, and particularly for the assurances that he has just given us. We all want this Bill to pass into law, and in the light of his assurances I think that the arguments are far too evenly balanced to make me wish to do otherwise than withdraw my Amendment. Before I do so, there is one last word to be said. I think there are two morals to this story for the Service Departments. One is that it is not desirable to have a large variety of special terms of service, and if they can be avoided so much the better. Secondly, whenever special terms of service are devised which involve conversion

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  from National Service into some form of Regular Service, I do hope it will be clearly explained, in the proper instructions, at what point a man loses his rights under the reinstatement procedure. If that can be done, there will be no doubts and no disappointments. Then, as the noble Viscount has said, we can come back to the reinstatement procedure if any of these 6,000 or 7,000 men turns out to be in difficulties about employment in the future. I shall not be moving the following Amendment, and I beg leave to withdraw this Amendment.
  Amendment, by leave, withdrawn.
  Clause 2 agreed to.
  Clause 3 [Reinstatement rights of per-sons who accept commissions]:
  VISCOUNT HALL VISCOUNT HALL moved, after sub-section (1) to insert as a new subsection:
  "() Where any person serving whole-time as a commissioned officer under any such arrangements as aforesaid has undertaken, with a view to service in Korea, to serve whole-time as a commissioned officer for a further period not exceeding twelve months immediately after the time when his service under the said arrangements would have ended, any further period of such service in pursuance of that undertaking shall he deemed, for the purposes of subsection (1) or, as the case may be, subsection (2) of this section, to be comprised in his period of whole-time service under the said arrangements."
  The noble Viscount said: This Amendment is complementary to the Amendment to Clause 1, which confers reinstatement rights on other ranks who undertook a period of service with a view to service in Korea. It covers National Service men who have been awarded commissions during their whole-time service and men who, under special arrangements, had accepted commissions for a period equal to the period of whole-time service they would otherwise have been required to perform—especially doctors and dentists who have accepted commissions in the R.A.M.C. and the R.A.D.C—who have undertaken a further period of whole-time service with a view to serving in Korea. The reference in the Amendment to twelve months is explained by the fact that it was a condition of service in Korea that they should have at least a year to serve after disembarkation overseas. In order to satisfy this condition, they were given the opportunity of taking advantage of standing arrangements under which National Service officers can extend their periods of whole-time service for up to twelve months. Emergency commissioned
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  officers who volunteered for a period of service in Korea and were accepted, were put into the Regular Army Reserve of Officers and are already covered by Clause 1 of the Bill, as it now stands. I beg to move.
  Amendment moved—
  Page 3, line 20, at end insert the said new subsection.—(Viscount Hall.)
  VISCOUNT BRIDGEMAN: I take it that this Amendment does in fact cover the case of all officers, apart from serving Regulars, who are serving or likely to be affected. If that is so, then we shall be ready to accept this Amendment.
  VISCOUNT HALL: Yes, that is so.
  On Question, Amendment agreed to.
  Clause 3, as amended, agreed to.
  Clause 4 [Special provisions in case of persons serving for two periods]:
  VISCOUNT HALL: This Amendment is consequential on the Amendment to Clause 1. I beg to move.
  Amendment moved—
  Page 3, line 45, leave out ("or paragraph (c)") and insert ("paragraph (c) or paragraph (d)"),—(Viscount Hall.)
  On Question, Amendment agreed to.
  Clause 4, as amended, agreed to.
  Clause 5 [Adaptation of various sections of National Service Act, 1948]:
  VISCOUNT HALL VISCOUNT HALL moved at the commencement of the clause to insert:
  "(1) Section thirty-six of the National Ser-vice Act, 1948 (which relates to the time for making applications for reinstatement) shall have effect, in relation to any period of whole-time service which consists of or ends with a period of whole-time service entered upon in the circumstances mentioned in section one of this Act or such a further period of whole-time service as is mentioned in subsection (3) of section three of this Act, as if for the words 'second Monday' in subsection (2) of the said section thirty-six there were substituted the words 'third Monday'; and section thirty-seven of the said Act (which relates to the duty of an applicant to state availability for employment) shall have effect, in relation to any such period of whole-time service, as if for the words 'fourteen days' wherever they occur there were substituted the words 'twenty-one days'."
  The noble Viscount said: This Amendment also implements a promise given in another place to give partial effect to an Opposition Amendment designed to give the men covered by Clause 1 of the Bill rather longer than National Service

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  men within which to apply for reinstatement and notify their availability for work. The extensions of time are from the second to the third Monday after release in which to apply for reinstatement, and twenty-one days instead of fourteen days thereafter within which the applicant may notify when, within this period, he will be available for employment. The extension of time has been given to the officers, by the inclusion of the reference to Section 3 (3), and men who have volunteered for a period of service in Korea as well as to those covered by Clause 1 as it stands at present. I beg to move.
  Amendment moved—
  Page 4, line 26, at beginning insert the said new subsection.—(Viscount Hall.)
  VISCOUNT BRIDGEMAN: Once again we are grateful to the noble Viscount for meeting us in this way.
  On Question, Amendment agreed to.
  Clause 5, as amended, agreed to.
  Clause 6 agreed to.
  Clause 7 [Application of Act to persons whose service ended before the commencement thereof]:
  VISCOUNT HALL: These two Amendments provide that the retrospective provisions of this clause shall apply to National Service officers who have voluntarily undertaken a period of whole-time service with a view to serving in Korea. If any of these officers should already have returned to civil life, he will be able to exercise his reinstatement rights as from the passing of this Bill. I beg to move.
  Amendments moved—
  Page 5, line 23, after ("two") insert ("or subsection (3) of section three");
  Page 5, line 36, after ("Act") insert ("(other than a period extended by subsection (3) of that section)").—(Viscount Hall.)
  On Question, Amendments agreed to.
  Clause 7, as amended, agreed to.
  Remaining clauses agreed to.
  Then, Standing Order No. XXXIX having been suspended (pursuant to the Resolution of December 7), the Amendments reported; Bill read 3a, with the Amendments, and passed, and returned to the Commons.

  ADMINISTRATION OF JUSTICE (PENSIONS) BILL
  3.20 p.m.
  Brought from the Commons.
  LORD SHEPHERD: My Lords, I beg to move that the Administration of Justice (Pensions) Bill be now read a first time.
  Moved, That the Bill be now read la.— (Lord Shepherd.)
  VISCOUNT SIMON: My Lords, before the Motion for the First Reading of this Bill is accepted, may I be allowed to ask a question which I think it is convenient to put at once, as I hope, for reasons which I need not elaborate, that the Second Reading of the Bill will be taken very promptly? If your Lordships will look at the text of the Bill as it passed through another place you will find that its actual results in figures are not easy to appreciate, because the Bill is drawn in a form which speaks of fractions which have to be worked out. In the Commons, however, the Attorney-General provided, in a Written Answer, a schedule which set out in respect of each class involved the actual salary, the present pension, the proposed reduced pension, the widow's pension, and so on. From this schedule it was quite easy to appreciate what effect the Bill would have. The question which I venture to ask—and I apologise for doing it at this moment—is whether it would be possible for us, either by a Paper from the Printed Paper Office or, peradventure, by something printed in front of the Bill as soon as it is circulated, to have this table before us. I am sure that it is only by a process of that kind that one will be enabled to appreciate the effects of the Bill. I do not say this with the slightest desire to oppose the Bill, but rather with a view to ensuring it an easier and a prompt passage.
  THE LORD CHANCELLOR: My Lords, I am grateful to the noble and learned Viscount for his suggestion, with which I fully agree. I think it is desirable that your Lordships should see the figures, and I have made arrangements to have the necessary columns of figures attached to the front of the Bill so that—I will not say he who runs may read, but he who delves into it may see what it is all about. I hope that this will meet with the convenience of everyone.
  VISCOUNT SIMON: I am much obliged to the noble and learned Viscount.
  On Question, Bill read 1a; and to be printed.

  FESTIVAL OF BRITAIN (SUNDAY OPENING) BILL
  3.23 p.m.
  Brought from the Commons; read la; and to be printed.

  DUNDEE HARBOUR AND TAY FERRIES ORDER CONFIRMA-TION BILL
    INVERNESS COUNTY COUNCIL (ARMADALE PIER AND HAR-BOUR, &c.) ORDER CONFIRMA-TION BILL
      >ROSS AND CROMARTY COUNTY COUNCIL (KYLE OF LOCHALSH FISHERY PIER) ORDER CON-FIRMATION BILL
      Brought from the Commons; read la; to be printed; and (pursuant to the Private Legislation Procedure (Scotland) Act, 1936) deemed to have been read 2a and reported from the Committee.

  TRANSPORT (AMENDMENT) BILL [H.L.]
  3.25 p.m.
  Order of the Day for the House to be put into Committee read.
  LORD TEYNHAM: My Lords, I beg to move that at the House do now resolve itself into Committee on the said Bill. In doing so, I hope that His Majesty's Government will not resist the Motion, for reasons which I hope to make clear to your Lordships. During the Second Reading of the Bill, the noble Lord who replied for His Majesty's Government made a number of complaints about omissions from the Bill, and it is in order to remedy some of those omissions that: the Amendments on the Marshalled List have been set down. In the first place, the noble Lord complained that, as the Bill was drafted, the licensing authority would have the responsibility of deciding whether or not the British Transport Commission should be licensed to run both inside and outside the sixty miles' radius. This point we have now met by an Amendment which I hope later
  866
  to be able to explain to your Lordships more fully. There was a further com-plaint by the noble Lord who replied on behalf of His Majesty's Government, and I quote his words. He said:
  "Right the way through this Bill there is not one word about any statutory obligation being placed upon the independent haulier."
  We have met this point by setting down an Amendment which will provide that "A" and "B" licence holders, when given permits to go outside the sixty miles' limit, must conform to the charges scheme, if and when that is produced and comes into force.
  The noble Lord further said during the Second Reading that the Commission had purchased a monopoly with the taxpayers' £70,000,000. I say, on the contrary, that neither singly nor collectively did the undertakings now acquired by the Trans-port Commission have a monopoly. Therefore, the Commission have not purchased one. On the other hand, I should like to make it quite clear again that we have no intention that this Bill should interfere in any way with the Transport Commission in their monopoly field of long-distance transport, but we do intend to make it possible for reasonable com-petition to exist between the nationalised industry and free enterprise. I think it was mentioned during the Second Reading of the Bill that the noble Lord, Lord Lindsay of Birker, had said during a recent debate that one of the great difficulties in a nationalised industry was to obtain a yardstick to measure the efficiency. I say that unless we have this reasonable competition we shall not obtain that yardstick which, I suggest, is badly needed at the present time in the transport industry. I ask your Lordships, both on the grounds of justice to the independent haulier and the Transport Commission and in the national interest, to support my Motion hat this Bill should go into Committee.
  Moved, That the House do now resolve itself into Committee.—(Lord Teynham.)
  3.29 p.m.
  THE LORD PRIVY SEAL (VISCOUNT ADDISON): My Lords, we are grateful to the noble Lord for his second and third thoughts as indicated in the Amendments which he proposes to move, but I am afraid that it is evident to us, after giving the matter the most careful consideration,

  867
  that if this Bill were placed on the Statute Book it would not be possible for the Transport Commission, with the Transport Act unrepealed and with the duties cast upon the Commission whilst it is on the Statute Book, to carry out their statutory duties. We, too, considered very care-fully whether it would be feasible to devise Amendments to the noble Lord's Bill which would make it possible for it to go on the Statute Book without rendering completely impossible the working of the Transport Act. I am afraid that, after I have received the best advice that I can obtain, my reply is quite definitely in the negative. We have, therefore, not put down any Amendments to the noble Lord's Bill, and I am glad he himself has thought of a few which, to some extent, may mitigate the absurdity of the present clauses. I am bound to put it that way. I welcome his further thoughts on the subject. Further, we shall certainly not desire to obstruct the noble Lord in his dealing with the Bill. I think one can say that with the inspiration of the noble Marquess opposite in the many difficult, long and contentious Bills we have had in the last six years in this House, we have set a good example of Parliamentary procedure. We shall certainly not break it on this occasion by doing anything which might smack of obstruction.
  On the Motions that the different operative clauses (which really are the first three) shall stand part of the Bill, my noble friend, Lord Lucas, the Under-secretary of the Ministry of Transport, will briefly state the issues which emerge and which will, in fact, make it impossible for the Transport Commission to do their business. That will be done quite briefly and with no obstructive purpose whatever. I am bound to say, having thought this matter over very carefully and with the utmost good will, that, so far as I know from my some-what long Parliamentary experience, this is the first time that it has been sought to put upon the Statute Book an Act which makes the working of another Act still on the Statute Book quite impossible. That is the unique position with which we are confronted. Therefore, I must ask those who think the same as I do to vote with me against the Motion "That the House do now go into Committee," so that we shall not trouble your Lordships with further hostile Divisions
  868
  but shall accept the situation as we know it to be. All I have to say in conclusion is that I hope this unfortunate example will not be copied in the future.
  3.31 p.m.
  THE MARQUESS OF SALISBURY: My Lords, I thank the noble Viscount the Leader of the House for giving us his views. I am afraid we were all sorry to hear what he had to say as to the attitude of the Government to the Bill. Of course, we recognise that there are differences of view. The Government apparently regard the Bill as a deliberate attempt to sabotage the Act of 1947. I would assure them that is not the case. Our only object in bringing forward this Bill is to protect certain persons in the transport industry who were not intended to come within the provisions of that Act and whose position is now seriously impaired. On behalf of the Government, Lord Lucas frankly stated on the Second Reading that the Act of 1947 created a monopoly, and no doubt it does so with regard to long-range transport. But it was what I may call a limited monopoly; the Act did not create a monopoly with regard to shorter types of transport. It seems to us that there are people who come within that category who are at present being seriously injured by the results of the Act and who are entitled to the protection of Parliament. If the Government had any objection to the detailed provisions, I think they should have put down Amendments, and then we would certainly have been ready to consider them. I cannot believe it is true —though I am sure the noble Viscount said it in all good faith—that it is impossible to frame Amendments to a Bill of this kind.
  VISCOUNT ADDISON: I did not say that. I said it was impossible to frame Amendments to the Bill which would make it and the Transport Act workable at the same time.
  THE MARQUESS OF SALISBURY: That is, in effect, the same thing. You cannot carry out the Transport Act without impairing the position of these unhappy people, and that is the one thing we will not accept. I wish even now the Government would agree to the course I suggest. Apparently, they cannot; but if they cannot, or if they will not, we have no option but to press the matter to a Division.
  3.33 p.m.
  VISCOUNT SAMUEL: My Lords, I should like to make a few observations to your Lordships on the question of procedure that arises as a result of the determination of the Government to divide upon this Motion. I do not recollect any cases, though there may have been some, of Bills which have passed the Second Reading in your Lordships' House but which have been denied a Committee stage. It seems to me rather surprising that, your Lordships having decided on a Second Reading that this Bill deserves your consideration, the Government should vote against the Bill proceeding to a Committee stage. I should have thought it followed almost as a matter of course that a Bill worth a Second Reading was entitled to be considered clause by clause, and that any Amendment that might be presented to the House should be considered. Therefore, for my own part, without expressing any view at this moment on the merits of the Bill, the Bill, not being merely a finance Bill and it having passed its Second Reading, I shall certainly support the Motion that it proceed to the Committee stage.
  VISCOUNT ADDISON: My Lords, all I have to say is that that is the Motion before the House and the House is en-titled to express its views upon it. The course I propose is to serve the convenience of the House. We do not want to impose upon your Lordships a number of separate Divisions, and I think it will be much more convenient to the House to express our views on this one occasion rather than to have a series of Divisions upon different subjects later on.
  VISCOUNT SAMUEL: My Lords, I submit that the right course for the noble Viscount to take if he wishes to avoid a series of Divisions, is to state the view of the Government on the first Amendment, divide upon it, if it is so wished, and say that in view of the decision of the House the Government will not proceed to further Divisions. On the question of procedure, there may be other precedents, but I think it would be unfortunate if a precedent were now to be set and if this present Parliament were to resolve that a Bill which has been passed on Second Reading might legitimately be denied a Committee stage,
  LORD MERTHYR: My Lords, may I say in a few words why, having voted against the Second Reading of the Bill, I shall most certainly vote for the Motion? It seems to me, if I may say so with respect to the noble Viscount the Leader of the House, that those who want to oppose the Bill should vote against it on Third Reading and not on this Motion. I have always understood that the Committee stage does not strike at the roots of a Bill and is designed to improve it. Surely, if the opponents of the Bill think it could possibly be improved, or even if they do not think it could be improved, there could be no harm, from their point of view, in having a Committee stage. It is always possible that the Bill may be improved in Committee. There is still the Third Reading and the Motion "That the Bill do now pass" on which those who oppose it can vote.
  VISCOUNT SIMON: My Lords, may I mention another consideration? There is, of course, one case in which after a Second Reading the Question put from the Chair "That the House do now resolve itself into Committee on the said Bill" is negatived, and that is when the Bill is of such a character that this House would never dream of altering its terms in Committee; therefore, to save time, we omit the Committee stage altogether and move straight on to the subsequent stages of the Bill and get it agreed by general consent. Speaking from a not very long experience of this House, I should have thought that when it was really the case that the contents of a Bill were controversial, it was unheard of here to say: "The House has passed the Second Reading but we are now going to block the Bill at the Committee stage." If any analogy is to be drawn from another place, those of us who remember what took place there (as the noble Viscount, the Leader of the House does) know that the Committee stage follows automatically and necessarily, once the Second Reading has been passed. Our procedure is not exactly the same, but the principle in both Houses of Parliament is that the general proposition involved in a Bill is considered on Second Reading, when it is decided whether it is the wish that the Bill shall go further; and a vote in favour of the

  871
  Second Reading of a Bill necessarily implies that a Committee stage will follow unless something intervenes—there might be a Dissolution, or something of that kind. As the noble and learned Viscount who sits on the Woolsack will remember, there are occasions when we deliberately omit a Committee stage, but I respectfully suggest that that is never done when we are dealing with something which it is still within the power of this House to regard, in Committee, as a matter of controversy.
  Resolved in the affirmative: House in Committee accordingly.
  [The LORD HOLDEN in the Chair]
  Clause 1 [Increase of road hauliers' radius of operation]:
  On Question, Whether Clause 1 shall stand part of the Bill?
  VISCOUNT ADDISON: My Lords, I have nothing to add to what I have said. I agree that this is a very exceptional procedure, but I have taken this step deliberately because I have never known an example of this kind of legislation in the whole of my Parliamentary experience.
  On Question, Whether the House shall now resolve itself into Committee?
  Their Lordships divided: Contents, 84; Not-Contents, 28.

  CONTENTS

  Wellington, D.

  Aberconway, L.

  Hawke, L.

  Altrincham, L.

  Hayter, L.

  Cholmondeley, M.

  Balfour of Inchrye, L.

  Hindlip, L.

  Reading, M.

  Belstead, L.

  Howard of Glossop, L.

  Salisbury, M.

  Carrington, L. [Teller.]

  Kenilworth, L.

  Cawley, L.

  Kinnaird, L.

  Albemarle, E.

  Cherwell, L.

  Layton, L.

  Brooke and Warwick, E.

  Clanwilliam, L. (E. Clanwilliam.)

  Lloyd, L.

  De La Warr, E.

  Lyle of Westbourne, L.

  Fortescue, E. [Teller.]

  Courtauld-Thomson, L.

  Mancroft, L.

  Halifax, E.

  Courthope, L.

  Mendip, L. (V. Clifden.)

  Howe, E.

  Cozens-Hardy, L.

  Merthyr, L.

  Iveagh, E.

  Cranworth, L.

  Milverton, L.

  Lindsay, E.

  De L'Isle and Dudley, L.

  Monkswell, L.

  Munster, E.

  Denman, L.

  Montagu of Beaulieu, L.

  Onslow, E.

  Derwent, L.

  Moyne, L.

  Perth, E.

  Digby, L.

  O'Hagan, L.

  Rothes, E.

  Dorchester, L.

  Palmer, L.

  Vane, E. (M. Londonderry.)

  Ellenborough, L.

  Rea, L.

  Fairfax of Cameron, L.

  Rennell, L.

  Allenby, V.

  Gage, L. (V. Gage.)

  Rochdale, L.

  Bridgeman, V.

  Gifford, L.

  Roche, L.

  Buckmaster, V.

  Grantley, L.

  Sandhurst. L.

  FitzAlan of Derwent, V.

  Greville, L.

  Sandys. L.

  Long, V.

  Hacking, L.

  Schuster. L.

  Maugham. V.

  Hampton, L.

  Strathcona and Mount Royal. L.

  Mersey, V.

  Harlech, L.

  Teviot, L.

  Samuel, V.

  Harris, L.

  Teynham, L.

  Simon, V.

  Hatherton, L.

  Tweedsmuir, L.

  Wolverton, L.

  NOT-CONTENTS

  Jowitt, V. (L. Chancellor.)

  Bingham. L. (E. Lucan) [Teller.]

  Marley, L.

  Burden, L. [Teller.]

  Morrison, L.

  Addison, V. (L. Privy Seal.)

  Chorley, L.

  Mountevans, L.

  Greenhill, L.

  Pakenham, L.

  Huntingdon, E.

  Haden-Guest, L.

  Pethick-Lawrence, L.

  Hare, L. (E. Listowel.)

  Quibell, L.

  Hall, V.

  Henderson, L.

  Rochester, L.

  St. Davids, V.

  Holden, L.

  Shepherd, L.

  Kershaw, L.

  Silkin, L.

  Amwell, L.

  Lawson, L.

  Strabolgi. L.

  Archibald, L.

  Lucas of Chilworth, L.

  THE PARLIAMENTARY SECRE-TARY, MINISTRY OF TRANSPORT (LORD LUCAS OF CHILWORTH): Before the Committee gives assent to Clause 1 standing part of the Bill, I should like to ask the noble Lord, Lord Teynham, one or two questions, for the purpose of clarification and in order to ascertain his intentions in the Bill. The Transport Act,

  873
  1947, was based upon the principle that the British Transport Commission should have a monopoly of long-distance road haulage for hire or reward. The noble Lord slightly misquoted me. On Second Reading 1 said that the British Transport Commission were compelled by Statute to set up a monopoly, and had to pay for it. That is true, because to establish this monopoly the British Transport Commission had to purchase the goodwill and assets of those predominantly engaged in this business. The sum paid, or to be paid, is in the region of £70,000,000, which is guaranteed both in principal and interest by the taxpayer; and nothing in this Bill can reduce that liability. I should like to ask the noble Lord: Is it intended that new entry and continuance is to be allowed to upward of 51,000 operators without compensation being paid to the British Transport Commission for the breaking up of a monopoly which they were required by Statute to"set up, and to pay for? If it is intended to pay compensation, by whom will it be paid, and by what method?
  The second question I should like to ask is this: Is it proposed at any stage in this Bill to relieve the British Transport Commission of their statutory obligation under the Transport Act to balance revenue and expenditure, and to create proper reserves? All the provisions of the Transport Act must be taken as a whole. The British Transport Commission, surely, cannot be obliged to pay their way if the means of doing so provided by the Act are diminished. That would be the effect of this Bill, because it would enable the independent haulier to take the cream of the traffic. If, how-ever, the Commission's obligation to pay their way is modified, as it would have to be if this Bill were passed, from what source is the deficiency to be made up? Is it the view of noble Lords opposite that a State subsidy should come to the rescue? If so, the beneficiaries would be the independent hauliers, who would cream the traffic, and the providers of the benefit would be the taxpayers.
  The last question I should like to address to the noble Lord on this clause is this. The organisation of British Road Services has been built up out of the acquired undertakings, including staffs taken over. The British Transport Com-mission did not start an entirely new fleet in competition with the independent
  874
  hauliers, but merely took over a section of the independent hauliers and reorganised them for a particular job. Provision was made in the Transport Act for compensation to be paid to all those who were in previous; employment and who could not be found a job upon acquisition, and this matter is being dealt with. There is no provision in this clause to pay compensation to those who will now become redundant, and who may lose their jobs by this fundamental change in the Act. Is it intended that such compensation shall be paid? If so, by whom is it to be paid, and by what method? There is no provision whatever in the Bill to deal with any of these matters, and I should like to know what is proposed.
  LORD TEYNHAM: I am sure the Committee would not wish me to make a Second Reading speech in reply to the noble Lord. However, there is one point to which I should like to draw his particular attention—namely, the figure of £70,000,000. I understand that the figure is round about £25,003,000. As to the difference between the cost of voluntary acquisition and compulsory acquisition, we do not know. With regard to the other points raised by the noble Lord, surely they are points he could have dealt with by an Amendment to this Bill.
  Clause 1 agreed to.
  3.53 p.m.
  Clause 2 [Transfer to the licensing authority of certain powers of the Com-mission with respect to permits]:
  On Question, Whether Clause 2 shall stand part of the Bill?
  LORD LUCAS OF CHILWORTH: I have a few other questions to ask, to which 1 may be more fortunate in obtaining a reply. Having given every haulier a free run up to sixty miles from their operating centre in Clause 1, and thereby broken up that part of the statutory monopoly, Clause 2 proceeds to abolish the statutory monopoly of the Commission in respect of traffic beyond this limit. This clause would transfer from the Commission to the licensing authorities the power to issue permits. This is a departure from the fundamental principles of the Transport Act, and not a mere change of issuing authority. The Commission were intended to establish a monopoly of long-distance traffic for the ultimate purpose of

  875
  integration. In accordance with this intention, it should—and, indeed, I think it will be agreed that it must—be in the absolute discretion of the Commission whether, and to what extent, they issue permits to other persons to carry traffic which they cannot or do not themselves wish to carry.
  If, through the issue of permits by an outside authority, private hauliers are able to abstract an undefined part of long-distance road haulage, the possibility of integration will have gone, and the Com-mission can no longer have imposed upon them the obligation of securing it. There is nothing in this clause, or in the Bill, to relieve the Commission of that obligation. Is it proposed that such relief shall be given? Nothing is said in the Bill as to the circumstances which the licensing authorities should have in mind in dealing with such applications. The Bill gives no instructions as to whether applications for permits are to be advertised; whether opportunity is to be given to object, or whether there will be a hearing of the objections. In fact, the operation of this part of the Bill is left in the air. Nor is anything said upon the question of payment of expenses of the licensing authorities in dealing with permits. The licensing system, as the noble Lord will know, is covered by fees at the present time. Is the provision of permits to become a charge on the general body of licence holders or on the taxpayer, or who is to pay? Perhaps the noble Lord will be good enough to give me an answer.
  LORD TEYNHAM: My short answer to all those points is that we maintain that the Commission should not be judge in their own cause. Therefore, we suggest that the licensing authority shall have power to modify or revoke any of the permits which it may be required to issue. I shall have something more to say on that matter when I deal with the Amend-ment to a later clause.
  THE MARQUESS OF SALISBURY: May I say one word, not on the substance of the Amendment, but on the attitude taken by the Government? When we have had before us various Bills dealing with nationalisation schemes introduced by the Government, the honest object of this House—and the Government have acknowledged this—has been to improve
  876
  the Bill. We have done that by putting down Amendments to make it more work-able. We have not liked the nationalisation Bills, and we have never concealed our objection to them. But having allowed them to go through Second Read-ing, we have done our best to improve them. The attitude of the noble Lord, Lord Lucas, is purely obstructive. He has asked a number of questions, and made no suggestions to improve the Bill. The Amendments put down by us were designed to meet objections raised by him. If he thinks that these Amendments are not adequate and do not cover the ground, it would be perfectly open to the noble Lord to put down a number of other Amendments. All he has done is to ask a number of questions designed to sabotage the Bill. That, I think, will not create a good impression, either upon your Lordships or outside.
  VISCOUNT ADDISON: May I say a word on that? This point was most carefully considered. The particular clause with which we are now dealing enables the licensing authority to issue these permits. Under the Transport Act that is the business of the Transport Commission, who are entitled to a monopoly of this service. Now, with the best will in the world, it is not possible to reconcile those two duties: they are mutually destructive one of the other. I hope the noble Marquess will not take umbrage. We had a look at this Bill to see whether it was possible, without destroying the Bill, to amend it in order to make it workable in accordance with the Transport Act. Frankly, it is not possible to do it, and that is why we have adopted this procedure.
  Clause 2 agreed to.
  4.4 p.m.
  LORD ROCHDALE LORD ROCHDALE moved, after Clause 2 to insert the following new clause:
  "—. If it shall appear to the Transport Tribunal that the provisions of a Charges Scheme confirmed under Part V of the principal Act and for the time being in force with respect to the road haulage services of the Commission should apply in whole or in part, either with or without alteration, to haulage services provided by the holders (other than the Com-mission) of A or B licences for goods vehicles under a permit granted by the Licensing Authority for a distance of more than 60 miles from the operating centre of such vehicles, the Transport Tribunal may make such order

  877
  as they think, fit applying the Scheme in whole or in part and either with or without alteration to such services."
  The noble Lord said: The noble Lord, Lord Luca, has already said a good deal this afternoon about the importance of integration. I have never disputed the need for some measure of integration between long-distance road haulage and the railways. That is, of course, essential for the very survival of the railways— and I said as much during the Second Reading of the Bill in your Lordships' House. But I have never conceded the point that for short-distance haulage any integration is either necessary or practical and that for long-distance haulage before an integrated charges scheme could be effective, joint ownership of road and rail was necessarily essential. That, to my mind, implies that in certain circumstances integration for long-distance work is possible, even though there are independent hauliers working alongside the Commission's vehicles. This new clause which I am moving seeks to alter one of the circumstances which would make integration possible.
  The Bill, as it now stands, consider-ably enlarges the area within which the independent hauliers can operate. It. seems to us only right that outside that area, on long-distance haulage—where I think we have all agreed that the Com-mission have a right to a measure of monopoly—there should be no question of the independent haulier being allowed to undercut the Commission. This is a very important point, not only for the benefit of the Commission, and in particular, of course, for long-distance railway work, but also for the users. It could otherwise be argued that for fear that the rates charged by the Commission might be too seriously undercut, and their charges scheme—which I agree is a statutory obligation laid upon them by the principal Act—made non-effective, the issue of permits to the independent hauliers allowing them to operate out-side the sixty-mile limit ought on principle to be restricted even beyond the point that the requirement of the users justified. That would not only be unfair to the independent haulier asking for permits, but would also be a serious handicap to potential users. With this new clause there is no reason whatever why the issue or revocation of these permits should not be based solely on the merits of each
  878
  individual case. That is why I move to insert this new clause in the Bill.
  Briefly, the clause seeks to enable the Transport Tribunal to require that any independent haulier carrying traffic on permit beyond the sixty miles from his operating centre shall comply with any charges scheme which may at any time be in force in respect of the haulage services of the Commission. Your Lord-ships will remember that the procedure for bringing a charges scheme into force is clearly set out in Sections 76 to 81 of the Transport Act, and I do not propose to read any of them. I should just like to remind your Lordships that that procedure allows for alterations to be made in the scheme from lime to time, and there is also the safeguard that if any objections to a scheme, or to an alteration to a scheme, are raised, they can be heard at a public inquiry. I would emphasise that the clause itself is entirely permissive; and it is le:.i to the Transport Tribunal to decide whether the Commission's charges scheme should be made to apply either in whole or in part to independent hauliers.
  I should also like to draw your Lord-ships' attention to the fact that the charges scheme can be applied "with or without alteration" to those independent hauliers. The importance of the words "with or without alterations"is this. We realise that otherwise it might be difficult, for technical reasons, to apply to independent hauliers, without modification, an existing scheme designed for the Commission. I believe that this clause should go some way to countering what the noble Lord, Lord Lucas, said on the Second Reading, and again, in effect, to-day—that those who have no stake in long-distance haulage can march in and grab it, free, gratis and for nothing. I do not agree with that suggestion. I should like to add just one point. If your Lordships agree to this new clause, independent hauliers, in order to retain their permits will have to conform to the charges scheme, while to retain their customers they will still have to offer that personal attention and efficiency which has been such an important feature in the development of their services.
  Amendment moved —
  After Clause 2, insert: he said new clause.— (Lord Rochdale.)
  4.10 p.m.
  LORD TEYNHAM: I should like to add my support to the Amendment which has been so clearly moved by the noble Lord, Lord Rochdale. I do not think there is much I can say which he has not already put forward before your Lordships' House, but I should like to emphasise that this Amendment was set down because it was desired that the Bill should not be unfair in any way to the Transport Commission, and to meet the complaint of the noble Lord, Lord Lucas of Chilworth, of the difficulty of obtaining an integrated charges scheme for long-distance haulage by road and rail. I suggest that this clause entirely meets the noble Lord's point. I cannot believe there is any reason why His Majesty's Government should not accept this Amendment.
  LORD FAIRFAX OF CAMERON: I also wish to support this Amendment. In rising to do so, I should like to say that I cannot really understand why some provision of the sort contained in this Amendment was not included in the original Transport Act. If the Government intended, as they have said on numerous occasions, that the Act should provide for the integration of charges between road and rail, it seems to me that the provisions contained in this Bill make such an integration as complete as it can be. The noble Lord, Lord Lucas, in his speech on Second Reading, stated that certain fears were present to his mind. He feared that this Bill would completely upset the relationship between the road and rail charges schemes as worked out in the nationalisation Act. He thought that more traffic would be attracted from the railways to the roads, and so the status quo before nationalisation would be restored. He also thought that if this particular Bill were passed into law, the private haulier would be in a position to undercut the Commission and take away the cream of the traffic. It seems to me that this particular Amendment completely meets his argument, because it removes any possibility of the long-distance private haulier being able to undercut the Commission. It places both the long-distance private haulier and the Commission on a completely equal basis, and gives no unfair advantage to the private haulier. Such competition obviously has considerable advantages
  880
  because, if we cannot have such a cheap road service as we had before, at least we can have an efficient one, which I think many people would agree we have not now got.
  There is one other aspect of the matter. To my mind, this clause gives a new lease of life to the small long-distance private haulier, the person who has one truck or two trucks, who performs a very special function which cannot be carried out by other people. He serves a few local customers and knows what their needs are. This new clause will enable such small long-distance hauliers to stay on the roads when, as things are, they look very much like being pushed off, and if they were pushed off a great service would be taken away from the community. I beg to support the Amendment.
  4.15 p.m.
  LORD LUCAS OF CHILWORTH: While this Amendment admits the wide-spread damage which this Bill will do to the British Transport Commission, it really does nothing to remedy it, and I would say that it is completely unworkable. I wonder whether the noble Lord realises (I gather he does) that if any integrated charges scheme applying to road and rail is to mean anything, it must embrace the whole—or if not exactly the whole, at least the vast majority—of the road services of the British Transport Commission. The noble Lord's Amendment confines the application of any charges scheme to those hauliers operating outside sixty miles, whereas the integrated charges scheme will apply to the Commission's road haulage operating both outside and inside sixty miles: so there is at once a rate war there. Your Lord-ships will appreciate that one side are. if I may use the expression that I used on Second Reading, muzzled, while the other side are free.
  Anyone who has been connected in any way with road haulage organisation knows what cut rates are. How are you to find out whether the private haulier is going to cut the rates? The beneficiary of the cut rates, the customer, is not going to complain. Do not forget that this must be taken into consideration: that any integrated charges scheme which the Transport Commission propose must balance the charges between what I might call the unremunerative traffics on the one hand, and on the other hand what is called "the

  881
  cream." The independent haulier with no statutory obligation on him to provide services will, of course, always pick the cream. What is going to happen? This Amendment really does nothing because it leaves untouched the traffic within the sixty miles, and that represents approximately 80 Per cent. of the traffic of the country that is hauled by road. So 80 per cent. of the traffic that is hauled by road is outside the application of the charges scheme proposed by the noble Lord, and the application to the other 20 per cent. is obsolutely inoperative. That is why this proposal will not work. It is a myth. It looks very nice. It looks like a gesture of fair play, but it is just the reverse.
  LORD ROCHDALE: The noble Lord who has just spoken has made two essential points. He asked how there is to be integration if there is no integration on the short distances. But we have never agreed that there should be integration within the short distances. We have agreed only that integration was correct on the long distances.
  LORD LUCAS OF CHILWORTH: I am sure the noble Lord will forgive my intervening. Is he aware that sixty miles cannot really be called a short distance, because anybody operating on a range of sixty miles from the town of Sheffield could cover almost the whole of the north-east of England? You need only about eleven circles of sixty miles' radius to cover the whole of the country. How can you say that sixty miles is a short distance? You may argue that twenty-five miles is a very short distance—
  SEVERAL NOBLE LORDS: Hear, hear!
  LORD LUCAS OF CHILWORTH: — but I certainly argue that sixty miles is a very long distance in an Island of this size.
  THE MARQUESS OF SALISBURY: Do we understand that the noble Lord would like to suggest a compromise between the twenty-five miles and the sixty miles? He agrees that twenty-five miles is a very short distance and says that sixty miles is a very long distance. Would the Government like to suggest a compromise? If not, why not?
  On Question, Amendment agreed to.
  VISCOUNT ADDISON: My Lords, may I at this stage intervene to ask whether it would be convenient that the House should resume, in order that I may repeat here the statement that the Prime Minister has made in another place?
  House resumed.

  PRIME MINISTER'S VISIT TO AMERICA
  4.20 p.m.
  VISCOUNT ADDISON: My Lords, I am sorry for the delay that has occurred (unfortunately it could not be avoided) in my making to the House the statement which the Prime Minister made in another place a short time ago on the subject of his visit to President Truman. This is the statement:
  "With your permission, Mr. Speaker, I wish to make a statement. I arrived back from my visit to Washington, New York and Ottawa this morning. I understand that the House desires to have a full debate on Thursday, and it will not therefore be appropriate for me to make a long statement to-day. Further the House will have seen the comprehensive communiqué issued after my talks with President Truman in Washington. I should wish my statement this afternoon to be read in con-junction with that document.
  I should like to take this opportunity of expressing my warm gratitude to President Truman for agreeing so readily to see me at very short notice; for devoting so much time to our conversations; and for the very cordial re-ception which he and all his colleagues gave me. As I was greeted on arrival by the President, I felt glad that our meeting was one more in the series of meetings held between the President of the United States and the Prime Minister of Great Britain. I also felt how important it was to maintain this continuity, for I believe that such meetings serve not only our mutual interests but the interests of the whole world.
  The atmosphere of our meetings was both frank and friendly. I was given a very full account of the military situation at our first meeting by General Bradley, and this was supplemented later by General Collins, who had just returned from Korea. I have good

  883
  hopes that the forces of the United Nations will maintain themselves in Korea. We covered a wide range of topics, political, military and economic, and I believe we made progress on all of them. I had no hesitation in stating the position of His Majesty's Government on all these matters with the utmost frankness. I was greatly assisted throughout the talks by the Chief of the Imperial General Staff and the officials who accompanied me. They had meetings with the United States representatives on particular aspects of the problems under consideration. It was not our purpose, and indeed it would not have been appropriate for us, to try to enter into specific agreements. Our object was to reach the greatest possible degree of identity of view in our approach, and this we achieved in very large measure. The particular matters which were the object of some concern in this House in the debate at the end of November were fully covered.
  On Korea and the Far East we were agreed on the immediate course which our representatives at the United Nations should follow. We were agreed that aggression must be halted, but we were equally certain that every effort should be made to prevent the extension of the conflict. Our long-range objective is to reach a stable position in the Far East. The House will realise that this is essentially a matter for the United Nations. Action is proceeding there on which I should prefer not to comment at present. We had a frank discussion on the matter concerned with the campaign in Korea. It is clear that the general directives of the United Nations have been followed, and we gave consideration to the procedure by which the United Nations Commander received his instructions.
  The House will have noticed that there is one point of difference recorded in the communiqué—the difference between the attitude of our two Governments to recognition of China and Chinese representation in the United Nations. We did not expect that this difference could be resolved in talks lasting only a few days; and we did not attempt to avoid this issue in our talks, nor to gloss it over in the communique. But this point of difference
  884
  only serves to emphasise the underlying unity of our objectives in world affairs as a whole.
  The United States Government share our view that, despite the gravity of the issue facing us in the Far East, we have to keep in mind the urgency of building up the strength of the whole free world. In particular, the defence of the West remains the first task of all the members of the Atlantic community. Here the way is now open for the very early appointment of a Supreme Commander of the European integrated force, and I am convinced that in present circumstances no other single step can do more to accelerate progress in strengthening Western defence. But the President and I recognised that co-ordinating planning in the military field would fail in its purpose if it were not matched equally by co-operation in economic affairs. We discussed in particular the difficulties which have arisen in the supply of raw materials, and we had a valuable exchange of views as to the methods by which such difficulties might be dealt with in the common interest.
  As far as the use of the atomic weapon is concerned, I can tell the House that I was completely satisfied by my talk on this question with the President. I would ask the House to accept my assurance that there is no difference of opinion between us on this vital matter. I would add that I believe my talks with the President will prove to be of service in all these fields, not only to our two countries but also to the countries with whom we are associated in the Commonwealth and the North Atlantic Treaty Organisation. In all these matters our overriding purpose has been to prevent war, and we stand ready at any time to seek a real settlement of our differences with others, if they are also ready to enter into genuine discussions.
  In Washington I kept in close touch with the diplomatic representatives of other Commonwealth Governments, and in New York I had the pleasure of a full discussion with the heads of the Commonwealth delegations to the United Nations. At the invitation of Mr. St. Laurent, I subsequently visited Ottawa, where I had discussions with him and his colleagues. I found that

  885
  we were in close agreement with them on all the matters which were under consideration. We reviewed the results of my talks in Washington, and gave particular attention to the economic aspects of the present situation, including the difficulties in the supply of raw materials. These talks were extremely friendly and harmonious and also, I think, most helpful to both of us."
  4.29 p.m.
  THE MARQUESS OF SALISBURY: My Lords, I should like to thank the Leader of the House for the statement he has made. No doubt there are some questions upon which we shall require further elucidation, but I understand that an opportunity will be given for that when we debate this subject, which I hope may be possible the day after to-morrow, if that is convenient to the Leader of the House. In the meantime, I will say no more.
  VISCOUNT ADDISON: I think the course mentioned by the noble Marquess will be convenient to the whole House. If that is so, I hope your Lordships will be willing to depart from our usual practice of meeting at 4 o'clock on a Thursday, and will be willing to assemble at 2.30 p.m. The form of the initial Motion can be arranged in the usual way.
  VISCOUNT SAMUEL: My Lords, before the House passes from this subject, I feel sure that it will desire that there should be transmitted to the Prime Minister some general expression of its opinion that we owe him our deepest gratitude for the service which he has rendered to the nation, to the Common-wealth and to the world.

  TRANSPORT (AMENDMENT) BILL [H.L.]
  4.31 p.m.
  House again in Committee.
  Clause 3:
  Licences required for goods vehicles of Commission.
  3—(1) Section fifty-nine (Application of Road and Rail Traffic Act, 1933, to Commission) of the principal Act shall cease to have effect and section one (Licensing of goods vehicles) of the Act of 1933 shall apply to the Commission in the same manner and to the same extent as it applies to other persons using goods vehicles on roads for the carriage of goods and sections two to twenty-one of the
  886
  said Act of 1933 shall apply to the Commission and be binding on them, to the same extent as those sections apply to and are binding on other persons using goods vehicles on roads for the carriage of goods:
  Provided that an A licence shall be deemed to have been granted by the licensing authority under the powers of the Act of 1933 to the Commission on the second day of November, nineteen hundred and fifty for each goods vehicle owned by the Commission at that date for the carriage of goods for hire or reward.
  LORD TEYNHAM LORD TEYNHAM moved, in sub-section (1) to omit all words from the beginning of the subsection down to "apply," where that word first occurs, and to insert:
  "(1) Section fifty-nine of the principal Act (which provides that a licence under the Act of 1933 shall not be required for any goods vehicle of the Commission) shall cease to have effect in respect of the vehicles to which this section applies and section one (licensing of goods vehicles) of the Act of 1933 shall in relation to those vehicles "
  The noble Lord said: For the convenience of the Committee, may I suggest that this Amendment and the two following ones, which are really consequential upon it, should be considered together? In moving this Amendment, I should again like to make it clear that it was the intention of this Bill to ensure that the short-distance hauliers should have fair treatment in their short-distance areas, and that, at the same time, the Transport Commission should be protected in the monopoly field of long distance. As the Bill is drawn, it provides that licences shall be required for all goods vehicles owned by the Transport Commission, irrespective of whether they are operating in the sixty miles' limit or in their own monopoly field. This Amendment is designed to provide that licences shall be required for Transport Commission vehicles only when operating in the short-distance area. We agree that it would be wrong for the Transport Com-mission in their own monopoly area to be required to obtain a licence for their vehicles from the licensing authority. This Amendment has been set down to put the matter right.
  We are not entirely wedded to the wording of the Amendment, and should His Majesty's Government feel that another form of wording would better meet the case, we hope that they will consider putting something down at the Report stage. I would point out that

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  the Amendment at page 2, line 36, which we are also considering, covers vehicles used for the carriage of excluded traffic such as liquids in bulk or ordinary furniture removal. We think it right that the Transport Commission should require from the licensing authority licences for vehicles which are used in this traffic, because they are, in fact, in direct competition with the excluded traffics carried on by the independent hauliers and which, of course, also come under the licensing authority. I beg to move.
  Amendment moved—
  Page 2, line 21, leave out from the beginning of line 21 to ("apply") in line 24, and insert the said new subsection.
  LORD LUCAS OF CHILWORTH: I now run the risk of being accused by the noble Lord, Lord Teynham, of being helpful. I should like to ask him whether his explanation of this Amendment is correct. Perhaps it is I who am wrong, but I consider his Amendment means exactly the opposite of what he has said. Am I not right in suggesting that the effect of the third Amendment is to say to which vehicles this section applies? Now it applies to all vehicles operating within a sixty-miles' radius, and all vehicles carrying the excluded traffics. So if the noble Lord's second Amendment is carried, do we not, in effect, get this?:
  "Provided that an A licence shall be deemed to have been granted by the licensing authority under the powers of the Act of 1933 to the Commission on the second day of November, nineteen hundred and fifty for each goods vehicle to which this section applies."
  That is what the noble Lord's second Amendment would effect. What the noble Lord has done is the very thing which he does not want to do. He has ensured that for all vehicles of the Commission which are operated within a sixty-miles' radius and for those carrying excluded traffics there shall be deemed to have been granted on November 2, 1950, A licences by the licensing authority. Therefore, it means that all the Commission's vehicles operating within the sixty miles now have a licence. That is my interpretation. Perhaps the noble Lord will tell me if I am right.
  VISCOUNT BRIDGEMAN: I should like to say, in reply to the noble Lord, Lord Lucas of Chilworth, that we are advised that the drafting of this clause does carry out the intention which my
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  noble friend. Lord Teynham, has just expressed. If for any reason the noble Lord, Lord Lucas of Chilworth, thinks that another form of drafting would carry out the intention better than the present drafting, perhaps he will tell us, and we shall be only too glad to meet him. In the meantime, our contention is that the Bill as drafted does carry out the intention which my noble friend, Lord Teynham, expressed in moving the Amendment.
  LORD LUCAS OF CHILWORTH: I am trying only to be helpful. If the noble Viscount is correct, very well, but my interpretation, as I have said, is that this Amendment does exactly the opposite to what Lord Teynham has said it is desired to do. Lord Teynham said that this Amendment seeks to give to the vehicles of the Commission outside the sixty miles' radius the right to run without any licence at all. I think the noble Lord will see that what he has done is just the reverse. The effect of this Amendment is to say that all the Commission's vehicles within the sixty miles' radius shall be free of the necessity of applying for a licence. If. however, the noble Lord is satisfied with his drafting and says that I am wrong, then I accept the position.
  LORD BALFOUR OF INCHRYE: It seems to me that there is a direct conflict of opinion on the technical drafting of this part of the Bill. We who desire to have this Amendment inserted have our advisers; the noble Lord, Lord Lucas of Chilworth, has his advisers. He has confidence in his advisers and we have confidence in ours. When the noble Lord says that he wants to be helpful, I am sure he means it. Let us. for the moment, put aside the issue as to what is and what is not right in the drafting, and get to the intention of the Amendment, which is that the Commission's vehicles running within the sixty miles' radius shall have to be licensed. The noble Lord wants to be helpful. Will he tell us that—leaving aside this dispute as to drafting—if we get together before a later stage of this Bill and endeavour to compose something that gives a clear interpretation of what we are seeking in this Amendment, we can have not only his co-operation but his support?
  LORD LUCAS OF CHILWORTH: I am grateful for what the noble Lord. Lord Balfour of Inchrye, has just said.

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  I have been wondering which noble Lord opposite would suddenly wake up to the fact that the whole Bill is absolutely unworkable. I am glad that the noble Lord, Lord Balfour of Inchrye, is the one to have this dawn of enlightenment thrust upon him.
  LORD BALFOUR OF INCHRYE: Will you answer?
  On Question, Amendment agreed to.
  LORD TEYNHAM: The next Amend-ment is consequential. I beg to move.
  Amendment moved—
  Page 2, line 34, leave out from ("' vehicle ") to end of line 36 and insert (" to which this section applies ").—(Lord Teynham.)
  On Question, Amendment agreed to.
  LORD TEYNHAM: This is another consequential Amendment. I beg to move.
  Amendment moved—
  Page 2, line 36, at end insert—
  "(2) The goods vehicles of the Commission to which this section applies are—

  (a) any vehicle used by the Commission wholly or partly for the carriage of goods for a distance not exceeding 60 miles from its operating centre, and

  ((b)) any vehicle used by the Commission of a description referred to in paragraph 5 (a), (b), or (c) of the proviso to subsection (1) of section fifly-two of the principal Act and any vehicle used by the Commission for the purposes and under the conditions referred to in those paragraphs."—(Lord Teynham.)

  On Question, Amendment agreed to.
  Clause 3, as amended, agreed to.
  Clause 4 [Commission to make and keep register of Road Haulage Vehicles]:
  LORD FAIRFAX OF CAMERON: This is really a drafting Amendment, and is consequential upon the proposed transfer to the licensing authority of the power to grant licences and permits. Under this Bill the licensing authority will have power over the granting of permits, as well as over licences, and the clause requires the Commission to keep a register of both licences and permits for each of the areas involved. Therefore the limitation at the beginning of Clause 4 of the Bill is not required. I do not want to weary your Lordships further, but I would reiterate what has already been
  890
  said, I think on other occasions—that is, that before the nationalisation Act came into force, the licensing authority had all the facts that it required for the carrying out of its function. Since the nationalisation Act was passed, however, it no longer has all the information. This Bill restores to the authority all the information required to carry out its functions under this Bill. This particular Amendment to Clause 4 ensures that that in-formation will be complete. I beg to move.
  Amendment moved—
  Page 2, line 40, leave out from the beginning to ("the") in line 42.— (Lord Fairfax of Cameron.)
  LORD GIFFORD: The noble Lord, Lord Fairfax, said that this clause seeks to impose on the Commission the duty to make a register of permits and licences; actually it is to keep a register of vehicles. On that point I think the noble Lord slipped up. We think it desirable that this list of vehicles should be kept by the Commission, and the purpose of this Amendment to leave out the first few words of the clause is to make it clear that it is to facilitate not only applications for licences, but also applications for permits, and for anything else that may transpire. The difficulty caused by the fact that the Commission do not keep a list of vehicles has already arisen in one or two cases before the Transport Appeal Tribunal. There was the particular case of Charles Stenner, where statements were made by the Appeal Tribunal that it was very unfortunate that they could not get the true picture in their minds because the Transport Commission did not supply proper particulars of the vehicles which were on the particular routes concerned. I therefore beg to support this Amendment.
  LORD TEYNHAM: I should like to say one word on the Amendment, in giving it my support. The point is that under subsection (1) of Clause 4, as at present drawn, the first three lines might be deemed to indicate that the licensing authority would require a register to be kept only for the purpose of issuing licences; in fact they also require a register for the purpose of modifying or revoking "A" and "B" licences to operate outside the sixty mile limit. This

  891
  Amendment would facilitate the work of the licensing authority, and I commend it to your Lordships.
  On Question, Amendment agreed to.
  Clause 4, as amended, agreed to.
  Clause 5 agreed to.
  Clause 6 [Short title and extent]:
  LORD TEYNHAM: This is a drafting Amendment. I beg to move.
  Amendment moved—
  Page 3, line 35, leave out ("1950") and insert ("1951").—(Lord Teynham.)
  On Question, Amendment agreed to.
  LORD TEYNHAM: This also is a drafting Amendment. I beg to move.
  Amendment moved—
  Page 3, line 35, at end insert ("and shall be construed as one with the principal Act"). —(Lord Teynham.)
  On Question, Motion agreed to.
  Clause 6, as amended, agreed to.
  The Schedule:
  LORD TEYNHAM: These again are drafting Amendments. I beg to move.
  Amendments moved—
  Page 5, line 18, leave out ("Act");
  Page 9, line 21, leave out ("Act").—(Lord Teynham.)
  On Question, Amendments agreed to.
  Schedule, as amended, agreed to.
  House resumed.

  GOVERNMENT ACCOUNTS
  4.47 p.m.
  LORD RENNELL LORD RENNELL rose to call attention to the Final Report of the Committee on the Form of Government Accounts (Cmd. 7969) presented by the Chancellor of the Exchequer in June, 1950; to inquire what steps have been taken to implement the recommendations of the Committee; and to move for Papers. The noble Lord said: I cannot flatter myself that the Motion before your Lordships' House is one of such thrilling interest that it is likely to provoke a long debate, but the subject matter, nevertheless, is one that is of considerable interest to a number of professional people and persons who try to follow the finances of the United Kingdom. The Motion arises out of a Report which appeared in June of this
  892
  year, known colloquially, I believe, as the Crick Report, on the form of Government Accounts, which was preceded by two Interim Reports of the Committee in the course of its very long sessions which started in 1947.
  The first point that I should like to make, because I think it is one that appeals to nearly all laymen—and I hasten to say that I am not an accountant myself and therefore am expressing the views only of a layman—is that in Recommendation No. 23, at page 58 of the Report, the Committee recommend that:
  "An annual work of reference to the documents issued on Government finance should be published."
  That, I think, is sufficient justification not only for the appointment of the Committee which sat, but also for raising the matter to-day. Those of the public who try to follow accounts, not only have experienced great difficulty in following Government accounts but, indeed, in following the places and documents in which the accounts are published. The Commission evidently recognise that the number of documents on the subject is so voluminous and they are scattered over the calendar year to such an extent that it is extremely difficult for anybody to get the whole collection at any time, or. having got the collection, to obtain a complete picture. That, to my mind, is the most important of all the recommendations made, and I hope it will be carried out in the near future.
  I suppose one of the main reasons for the appointment of the Committee was on the rather controversial issue—controversial in professional circles—of whether a major amendment should be made in the form in which Government accounts were published. Roughly speaking, the Budget accounts in this country are cash accounts, and take no account of revenue and expenditure which may be expected, but only of the actual cash received within the financial year. The effect of that is to present an account which is totally unfamiliar to those who are normally concerned with accounting in the commercial and every-day world in which accounts are used. I think there is no example in commercial practice of a pure cash account with-out a profit and loss or revenue and expenditure account and without a balance sheet.
  The Committee and the witnesses who gave evidence spent a great part of their time in examining the issue of whether the public accounts should be modified so substantially as to use the revenue and expenditure system instead of the cash system. The Committee came down definitely on the side of continuing the general accounting system in its present form. I will not trouble your Lordships with reference to this in the Report. But I should like to say, from what experience of Government accounting I have had, and I have had a little, that the arguments in favour of continuing the present system seem to me to be quite unanswerable. There is no analogy to be drawn between accounting for a commercial concern, which has to have a balance sheet, and accounting for a Government, which, as 1 think, by the nature of things cannot have a balance sheet. It is materially impossible to assess Government assets anywhere at any time. A great many suggestions made to the Committee for modifications of the system are totally inapplicable and show practically no comprehension of what Government accounts are.
  A good story is told about the Committee—the noble Lord will not wish me to quote my authority for it. When the Committee were examining a witness who was a protagonist of the adoption by Governments of the commercial type of accounting, and who suggested that assets of the Government should be brought into account and proper depreciation applied to them, the witness was asked whether such an asset as the Tower of London would be included. He replied that it most certainly would include the Tower of London. When asked on what basis the Tower should be brought into the account, he said with very little hesitation that it would be put on the basis of contractor's replacement value. The picture of some eminent contractor being asked to quote for the Tower of London is one that leads to amusing thoughts not, perhaps, germane to this discussion. The Committee felt that with the modern developments in Government activity and administration there were certain directions in which commercial procedure and form could be adopted with advantage. These are, not-ably, in connection with the Departments which are traders or merchants in goods —for example, the Ministry of Food, the
  894
  Board of Trade and the Ministry of Supply—where the mere cash results of their activities in a given year are no sort of guide, and are indeed misleading, if brought into the Budget without further explanation.
  One can discuss Government accounts for a long time, and legitimate differences of view are possible. What I have to say should not be regarded as contentious or critical. There are great differences about how certain accounts ought to be established, and it does not by any manner of means follow that, because I have certain views, I am right or that other people are necessarily wrong. But, starting at the beginning, one has to be fairly clear about what Government accounts are meant to do. It seems to me that Government accounts have two different purposes. One is to establish an accurate record of what has happened, and the cash accounts we have do establish that, even if the results when published do not convey to the public what they convey to the people who are keeping the records. The second —and this, perhaps, so far as the general public is concerned, is the proper purpose of the accounts—is to enable the public to follow what is happening to our finances and to our economic and financial situation. These are two quite different aspects of Government accounts. The first, the complete record, is on the whole of little interest, except to bodies like the Public Accounts Committee and to people who wish to examine particular expenditures for particular reasons.
  From my point of view and for the purposes of this Motion, the publication of accounts as a guide to the public in general is infinitely more important. If that is the real purpose of many of the Papers, notably the Financial Statement which usually coincides with the Budget debate in another place, they should be drawn in a form in which all relevant information can be found in one document, or at least in a very few documents, instead of in a large number. The corollary to that is to publish a document containing a statsment—a list of where all the information may be found. Those accounts which lend themselves to commercial treatment, or which are misleading if they continue to be published in the present form—I do not mean misleading because they are wrong, but misleading because a wrong interpretation may be placed upon them—should

  895
  be modified in form. That applies not-ably to the trading accounts to which I have referred.
  The third category of accounts, those which are intended to be informative, and for which there is often a statutory authority for publication, are often found not to be informative and require almost immediate attention. If I may, I will take one or two examples which no doubt will be known to the noble Lord. Lord Pakenham, as they are known to the many people who try to follow these things. The first, to which reference is made in the Committee's Report, is the Paper published annually on the Post Office Savings Bank. That Paper contains two statements, if a whole column can be regarded as one of them. Let me say, frankly, that in the form in which the Paper is published, it is entirely misleading. This statement is entitled, "Statement showing the aggregate amount of liabilities of the Government to depositors in Post Office Savings Banks on December 31"—in this case of the year 1949-"and the nature and nominal amount of securities held by the National Debt Commissioners to meet these liabilities."
  On the left hand side there is one heading only, "Balance due to depositors on December 31," with a statement of the amount, which was £1,947,000,000. On the other side is the statement of the assets held. That statement of the assets held is made up of the nominal amounts of various Government securities held, without any relation to the price at which they were bought, the book price at which they are held in the books, or what the aggregate value of those assets is. Nevertheless, one or two of those holdings consist of stocks which to-day stand very considerably below par. The statement of the nominal amount held, without the statement of the value of that security, or indeed of the securities as a whole, means absolutely nothing. For instance, we have a large holding there of 2½ per cent. Consols. To-day, they stand somewhere in the neighbourhood of about 70. They might stand in the books at 50 or 55, at which figure they did stand for many years, or they might stand in the 90's, where they have stood in recent years. Frankly, I regard that statement of the position of the Post
  896
  Office Savings Bank not only as valueless but almost as misleading.
  Another example of the same sort is to be found in the Paper dealing with the nature and nominal amount of securities held by the National Debt Commissioners in respect of the National Insurance Fund and the National Insurance Existing Pensioners' Fund. The same procedure has been adopted here, except that the liability of the Funds is not stated in this particular Paper. The securities again are given by their nature and the nominal amount, without any regard to their value. Quite frankly, this Paper also means nothing. While on the subject of the National Insurance Fund holdings, I may remind your Lordships that there were published in May of this year the accounts showing the operation of the National Insurance Act and the position of the Fund. That is, in itself, a full, interesting and entirely satisfactory document, but it referred in May of this year to the position as at March, 1949. In other words, it came out some fourteen or fifteen months after the close of the account. I have not the account for the period 1949–50, and if the same delay is experienced, I presume that it will not be out until about May, 1951.
  The Committee recommended (and this is a particular point to which I hope the noble Lord will be able to reply) that interim statements of the position of the National Insurance Fund should be made from time to time. It would be much more helpful, and certainly less misleading, if interim statements could be made, and if statements or nominal holdings were omitted in the future. The National Insurance Funds are, to my mind, particularly important, owing to the very large surpluses which have been accumulated in these days of full employment. The Economic White Paper of this year showed, I think, that approximately £190,000,000 had been accumulated as a surplus, and had been invested in Government securities. In other words, that amount of the debt of this country has been taken up by a Government or a quasi-Government fund.
  That brings me to the second point on this particular issue, on which the noble Lord may be able to say something. In the innovation recently introduced by the Chancellor of the Exchequer, he has

  897
  developed a statement in the financial figures by the inclusion of certain items in the so-called "below the line" account. That innovation is of great value, and is one for which everyone, not only in this country but also abroad, is grateful, I will come back to that in a moment. I should like to raise one point there about whether it would not fee desirable —and, if not, why not—for the receipts and surpluses of the National Insurance Fund to be included in the below-the-line statements. The contributions for national insurance are statutory contributions. Therefore, they are not in the same category as voluntary pension funds, or the pension fund contributions of, for instance, the great nationalised corporations. These contributions are required to be made by law, and as such they are a statutory demand on the private revenues of the people. I do not know why they should not come into the below-the-line account, especially having regard to the very large surplus, which seems to me to be a true below-the-line surplus, in view of the way those funds are used —namely, by the purchase of debt, and by its at any rate temporary sterilisation outside the market.
  While I am on the issue of the below-the-line accounts, I should like to say how much everybody appreciates the changes which were introduced in the Financial Statement of this year, compared with that issued last year. A great many of these changes are, I believe, the outcome of the recommendations of the Crick Committee. Moreover, there is this extremely interesting attempt in the Financial Statement to provide for what they call alternative classifications in certain items of revenue and expenditure. They are placed in this year's Financial Statement on page 27. So far as I can see, a great many of the Committee's recommendations have been incorporated, both in the conventional form of accounts and in the alternative classification.
  That brings me to what is perhaps the most important point I desire to raise— namely, the question of dates. The financial year in this country for a long time past ended annually on March 31. Nevertheless, certain accounts, notably the Post Office Savings Bank Account, to which I referred just now—if it is an account—are dated to December 31. It seems to me essential, first of all, that
  898
  there should be a unity of date. There-fore, it is wrong, and in many respects in commercial practice would be considered grossly improper, to have Government accounts, or any accounts, terminating on different dates, without a reconciliation between them. The effect of that, naturally, is to make it almost impossible to follow what is happening. This difficulty of the financial year and the calendar year is one which comes out strongly in the Economic White Paper and the balance of payment Papers. In point of fact, it has been found necessary, apparently, to try to reconcile the Budget figures to the calendar year in order to get a balance of payment figure, which means, practically speaking, that in some way or another two sets of accounts are being kept, one for the financial year and one for the calendar year. That must be a gross inconvenience to everybody concerned, and must also involve a great deal of expense. I would hesitate to step in where I believe even angels would fear to tread, which is to wonder whether the ending of the financial year on March 31 is really right and ought to be perpetuated for ever and aye. As a matter of fact, I believe that historically it is rather an accident that we chose March 31 instead of December 31.
  LORD PETHICK-LAWRENCE: I think it is April 5 for some purposes.
  LORD RENNELL: I agree with the noble Lord, but it is only a matter of four or five days. I wonder if it is worth considering whether it would not be simpler to think again and relate all our accounts to December 31. The calendar year is suitable because trade and navigation figures, and so on, are published to December 31, and it is more readily understood abroad in the reconciliation of our economic movements with those which take place in other countries. It would, of course, have the effect of obviating the difficulty of preparing two sets of accounts or of trying to estimate from a financial year's returns what are the results for the calendar year. If that is not possible—and there are, of course, many financial difficulties involved in changing the year; it would mean, among other things, probably changing the tax period and things like that—the alternative seems to me to have a Budget account (in other words, the accounts which appear in the Financial Statement)

  899
  published in two forms: the March 31 form, in which it is now, and the December 31 form. I know that that would involve a good deal of work, but it would be a matter of great convenience to people trying to follow what was happening and the movements of the National Debt. That is the third point upon which the noble Lord might express an opinion.
  I come lastly to what I think is the most important reform advocated by the Committee, and I wish to inquire how far it is proposed to go along the lines recommended by the Committee in setting up trading funds for those Ministries which indulge in trade, such as the Ministry of Food. I am aware that there are trading accounts published, but that is not exactly what the Committee means in its recommendations. Moreover, the actual trading accounts are not easy to find; those accounts which bear on the trade activities of Ministries are buried in the Appropriation Accounts and are singularly uninformative. If I may direct the noble Lord's attention to an example, I have here the Civil Appropriation Accounts for 1948–49. I take the trading activities of the Board of Trade in respect of raw materials, as shown at page 304. It is a Class VI Vote. I shall be happy to pass the copy to the noble Lord in a moment, if he has not one with him. The outturn of the Board of Trade's trading activities is shown to be a net excess of £8,775,035. There are various assessments in respect of surrenders, and things like that, later on. Of course, there is no indication whatsoever in this table whether the stocks of raw material held by the Board of Trade and traded by the Board of Trade have either increased or decreased, and the outturn in the Budget eventually is only the cash result, without any account being taken (I am not talking about profit or loss on the stock) of whether the stocks are greater or less. In fact, we know that we might have a Budget surplus on current account in one year as a result of cash having come in from running down stocks. That would be a wholly fictitious result, and one which would be very misleading.
  The same remarks apply to the Ministry of Food trading accounts which appear in Class X Votes in the Appropriation Accounts at page 24, though they are shown in a slightly different form. It
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  seems to me that, in order to get over the difficulties occasioned by our cash accountancy—I repeat again that I have no objection in any way to the Budget— it is essential that we should have as soon as possible a revenue and expenditure and profit and loss account for the trading activities of the various Ministries. I am therefore inquiring now from the noble Lord whether those recommendations of the Crick Committee—and notably those contained in the Appendix B of their recommendations—are to be implemented, and when.
  I do not wish to detain your Lordships on this extremely dull subject any longer, except to say two things. One is to ex-press a hope that the work done by this Committee—even if it did not receive as full and as helpful support as it might have expected from the commercial community, as is made very clear in certain paragraphs of the Report—will receive its due recognition. This Report on an extremely complicated and difficult subject is one of the most eminently read-able Reports of its kind that I have ever come across. It is beautifully and clearly expressed, with the exception of one or two regrettable words in it—notably on page 17, where I think the word "factual-ness" is rather a blot upon an otherwise very pleasant document. It should not only receive its recognition, but also have a proper outcome. In other words, the recommendations which we all recognise cannot possibly be brought into force at once should be brought into force gradually, and there should be somewhere—in the Treasury, I presume—an officer or officers charged to see that as and when these recommendations can be brought in they will progressively be brought in: and that in so far as they have been brought in—as for instance in the Financial Statement—suitable publicity or something of the sort should be given to these reforms, so that the public may know that something is being done along the lines of the Committee's recommendations.
  I should like to say here, lest anything I may have said is interpreted as critical of the Government Accounts—and my criticism is only in what I have already said, plus the fact that the accounts are so voluminous and the Papers in which they are published are so numerous that it is very difficult to follow them—that

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  our accounts as a whole have been, and rightly so, the envy of a great many countries abroad. I have had it said to me only quite recently by a distinguished and competent professional American friend of mine that he wished that the American Government accounts were as accessible to the public as are ours in this country.
  I think it is in order at this point to say that one of the most remarkable of all the productions in the accounting world anywhere is the production annually, within a few days of the close of the financial year, of a financial statement of the cash outcome of the revenue and expenditure of this country, on the scale on which it is done and in the detail in which it is submitted. Without exception, it is a most extraordinary feat of organisation to which too little recognition has been given.
  That does not mean that there are not improvements possible even in the Financial Statement, or that some unnecessary detail in it and in the Finance Accounts of the United Kingdom might not with advantage be omitted. The Finance Accounts of the United Kingdom are in themselves one of the most interesting and historic documents I believe one could wish to have in one's hands, but perhaps some of the detail there might be cut down. To have in one document items dealing with the total issues and redemptions, and to find, for instance, Treasury Bills, which in the course of the year run into many thousands of millions of pounds, finding a place with little items like salaries charged to the Consolidated Account—for example, £2 14s. 4d. to the Master and Fellows of Gonville and Caius College, Cambridge—shows a lack of proportion in the finance accounts. With that, I close by saying that I hope that the subject of reform will be kept constantly under review, and that the noble Lord, who has had proper notice of the few questions I have raised, will be able to reply to them. I beg to move for Papers.
  5.22 p.m.
  LORD PETHICK-LAWRENCE: My Lords, I should like to say to the noble Lord who has just spoken that at least one of his listeners certainly did not regard his speech, or the subject with which he was dealing, as dull. I thought he gave a most interesting account, and that
  902
  he dealt with the points and properly ventilated them so that we could understand them. I should like to join in paying tribute to successive Chancellors of the Exchequer who have developed the Public Accounts. When I first entered political life, I always objected to the fact that the Chancellor of the Exchequer seemed to regard it as his duty to deal solely with that portion of the national finances which was actually expended by the Government, whereas I always considered, and frequently stated, that I regarded the Chancellor of the Exchequer as being a Finance Minister of the nation. I felt that he ought to bring within his purview not merely the actual money spent by the Government but the whole economic expenditure of the country, and ought to devote his views and assistance to both matters. When, therefore, the noble Lord, Lord Rennell, describes the below-the-line account as one of the valuable additions to the Financial Statement I would add that 1 welcome still more the wide survey of the whole economic position and financial position of the nation which was introduced originally in the days of Sir Kingsley Wood and which—as I am sure we in this House, or those who take an interest in the subject, all know—was largely the work of Lord Keynes, who was for so long an ornament of this House.
  Having said that, I want to say one or two things with regard to the actual subject matter which the noble Lord, Lord Rennell, has raised. In the first place, he raised the. question that comes up from 'time to time as to whether the main account which is presented to us in the Budget should take its historic form, or whether it should be altered into a profit and loss account. I entirely agree with him and with the Committee's Report in regarding it as quite impossible to change over the form of our main accounts from the cash receipts and payments to anything in the nature of a profit and loss account. The noble Lord, Lord Renneli, said that he did not believe there was any other body in the country which kept its accounts precisely in our way. That may be true, but I think that a large number of charities and political bodies and movements which exist for certain objects (not necessarily for many years) are in much the same position as the State as to their accounts. Nearly all of them present a balance sheet, but it is there rather to

  903
  fulfil a certain purpose of indicating stability; and as a matter of fact it is the receipts and payments account which is their proper account. It was certainly so in the case of one large organisation with which I had to deal. To have an account purely along the lines of a profit and loss account for bodies like those would be quite a farce.
  There are two other matters upon which I want to touch. Of course, I fully agree with the noble Lord, Lord Rennell. and with the practice of the Government, that a profit and loss account should be put out wherever possible with regard to all those things which are strictly trading accounts. But I want to remind the noble Lord, Lord Rennell, that even if a profit and loss account is set out, it cannot be in precisely the same form as that of an ordinary enterprise, because it necessarily follows in a great many cases, and particularly in the Post Office, that a large part of the items are not factual but notional. I do not think that fact can be escaped. A great many of the services which the Post Office render are not paid for, but they must be taken account of, and they can be taken account of only in a notional way. Therefore, even in those trading concerns, principally the Post Office, in which the Government take a hand, their accounts cannot be in the precise form of the ordinary profit and loss account.
  Another matter which affects nearly all the Government trading services is that there are no shareholders. In a very few cases there may be a sort of capital account and a sort of notional payment of interest; but in the great majority of cases what happens is that the State pays out large capital sums, and for those years this enterprise appears in the Budget as a loss. Later on it does not have to pay interest on account of those sums which have been paid out, and in that respect again it differs essentially from the ordinary private enterprise in which the amount of money paid out takes the form of debentures or shares on which interest is paid, either in the form of fixed interest or in the form of profits, and the whole profit of the enterprise is subjected to these various payments to share and debenture holders. You do not get that kind of position in the case of a national enterprise and you cannot get it. For these reasons, not only are our cash
  904
  receipts and payments different from those of commercial concerns, but even when we do come to trading concerns our profit and loss account is necessarily different from theirs.
  The third point on which I wish to say a few words is one that is really partly a matter of policy but it is also a matter of accounting and, therefore, I think it belongs here. The noble Lord, Lord Pakenham, of course appreciates that there are payments by the Government which take two distinct forms. There are those payments which are estimated for the year and which, if not expended during the year, become what is called a saving; and the actual payment which appears in the Budget figures is the amount actually expended by the Department, whatever it may be. On the other hand, there are items paid by the Treasury which often take the form of a grant in aid, and when the amount budgeted for is not expended by the institution during the period, they are not bound to surrender the balance but are able to keep it and spend it in a future year. That is often an accounting point which is very confusing to the lay-man. I remember very well that in the House of Commons some project would be embarked upon by the Government, and an estimate, say of £300,000, was put down. When the year came to an end it would be found that they had progressed very slowly with the work, and instead of spending the £300,000 they had spent, say, only £3,000. This was heralded by some people as a saving of £297,000. Of course, it was nothing of the kind. It merely meant that the Government had been very slack in getting to work, and as a result we had to go through the whole process in the next year, of re-voting the money that had not been spent in the previous year. To a large number of people that was a very confusing process, and I wonder whether in his reply Lord Pakenham would care to say something about that point. But that is not really the main point that I wanted to reach.
  When we come to money supplied by the Government to an outside body, I am inclined to think that the necessity of surrendering the whole of the unexpended balance at the end of the year may be a very bad thing, and that it may be much better to allow this body (as I believe is being done more and more) to take the money in the form of a grant in aid which

  905
  is not liable to surrender. I am thinking in particular of moneys which are given to municipal authorities, perhaps to spend on health or other things. The fact that they have to surrender what they do not spend tends to make them spend all the money that they can while they have it— in other words, while the going is good— and that leads to extravagance; whereas if they know that by not spending too much in one year they will have the remainder to spend in future years, I think they may be more careful in order to save up for a rainy day and have the money to spend then. That is perhaps more a question of policy than of strict accounting, but accounting does come into it. My noble friend may not want to say anything about it to-day, but perhaps he will turn it over in his mind. I believe that it has been an increasing practice of the Government to allow bodies to which money has been given, not to surrender it but to keep it for the future; and I venture to suggest, as a matter both of policy and of accounting, that it would be an advantage if, subject to strict scrutiny and superintendence, bodies to whom money was allocated were allowed to keep it for a longer period than the single year.
  5.34 p.m.
  THE MINISTER OF CIVIL AVIA-TION (LORD PAKENHAM): My Lords, I am sure that I ought to congratulate noble Lords who have had the wisdom and hardihood to endure the rigours of this subject, and, in particular, the noble Lord, Lord Henderson, who has allowed himself to be seduced from the international scene on purpose to listen to this topic, of all topics. I feel that all have been rewarded by a delightful exposition by the noble Lord, Lord Rennell, and by some very experienced reflections from the noble Lord, Lord Pethick-Lawrence. As Lord Pethick-Lawrence pointed out, he has not been able to give me notice of his suggestions; therefore he will forgive me if I simply tell him that, of course, they will be carefully examined. The noble Lord, Lord Rennell, has given me notice of most of his points and I shall be able to say a good deal on some of them, but for a number of reasons he will not expect me to be completely definite to-day. The noble Lord, Lord Rennell, is earning a well established reputation as one who can take some horrible subject and present it in a most attractive form. He can seize the ugly duckling and
  906
  add a permanent wave to its hair, manicure its nails, give it some new teeth, and the latest model dress, and generally woo your Lordships with his debutante daughter—and that is what he has done again to-day, because I think, apart from his particularly charming exposition, few members of the House would agree that this was a subject capable of public discussion.
  I should like to reiterate the gratitude of the Government to the Chairman and members of the Crick Committee. As has been stated already by the noble Lord, thanks have been officially extended by my right honourable friend the Chancellor of the Exchequer, or the former Chancellor of the Exchequer; but I certainly take this opportunity of assuring that Committee that the Government appreciate what they have done. I hope these words will be as widely reported as the noble Lord would wish. The Committee was set up in November, 1947, and its Report was finally signed on February 24, 1950. The members of that Committee, who included, apart from Mr. Crick himself, two highly distinguished professional accountants, have-spared no pains in examining this subject in all its detail, and they have undoubtedly produced a most informative and valuable Report which, I have no doubt, will be a landmark in the history of the subject. With the general tenor of the Committee's Report and, indeed, with many of its detailed recommendations, the Government find themselves entirely in agreement. As I have indicated, this was not a Committee composed entirely of civil servants; indeed, it included strong independent representation. This fact lends particular weight to the Committee's main conclusion, already alluded to by the noble Lord, Lord Rennell, which is a unanimous verdict in favour of maintaining the traditional cash basis of Government accounts.
  I suppose that there are noble Lords present with us to-day and people who will read my words who may require some refreshing of their specialised knowledge on that particular aspect of things. Therefore, may I illustrate briefly what is involved in that conclusion, though, of course, it is perfectly familiar to the noble Lord, Lord Rennell, and perhaps to most of your Lordships? The existing system of Government accounts is simply

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  a record of money which is actually received or paid out over a given period. I understand that in the business world generally, before the setting up of the Crick Committee there was a good deal of comment to the effect that such a system of Government accounting is obsolete, and that Government accounts should be drawn up in the same sort of way as are commercial accounts; that is to say, on a profit and loss or income and expenditure basis. I will not go over the ground too fully, because those noble Lords who are with us to-night understand these things already, but I would wholeheartedly endorse what was said by the noble Lord, Lord Rennell, about the absurdity of the proposals of those particular business men, whom I will not for a moment describe as representative of the business community.
  The point of the critics' case is that Government Accounts should be drawn up on a basis which would give a picture of the operations of government as though the Government were a gigantic commercial concern. The Committee have gone very thoroughly indeed into this question, and they have little difficulty in showing that the analogy is, in many respects, entirely misleading, as the noble Lord, Lord Rennell, has said and as the noble Lord, Lord Pethick-Lawrence, I know, concurs. I will mention just a few of the main reasons why they reach this conclusion. First of all, while the main concern of private business, and the ultimate test of its efficiency, is the earning of a profit which can be distributed to the proprietors, this picture is wholly irrelevant to large sections of the operations of Government—for example, in education, defence or social services. There, quite a different test must be applied to see whether these services are being provided efficiently, and whether we are getting value for money.
  For this purpose Parliament has set up its own elaborate machinery of investigation, in the examination conducted by the Comptroller and Auditor-General and, subsequently, by the Public Accounts Committee. It follows, I submit, that the whole notion of an income and expenditure account over a large section of Government activities is, as the noble Lord has said, quite meaningless intrinsically. Even if it were possible in theory,
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  however, the practical difficulties in the way of producing accounts of this kind are insuperable. It would be necessary to distinguish fixed capital assets from other assets, and to draw up a balance sheet in which capital assets were given a specific value. The example of the Tower of London taken by the noble Lord was a very brilliant one. Of course one could think of a number of others only slightly less pointed. How can one value a road, a battleship or a museum? Even if you could approach the task at all, on what basis would you provide for depreciation of those assets? Quite apart from this, there is a vast quantity of miscellaneous stores for which, provided that quantity records are kept, no useful purpose would be served by attempting to value them in addition. It would mean a tremendous volume of extra work, and it is quite clear that the Crick Committee felt—and I do not think this can be doubted—that a change to this allegedly more businesslike income and expenditure basis of accounts, far from effecting some reduction in the accounting staff, would bring about the very opposite result. The staff involved would be increased.
  The Government regard as perhaps the more important conclusion of the Report —because eminent figures from the financial world were associated with it— the fact that it seeks to make no fundamental alteration in the structure of Government accounts, That is preeminently a conservative conclusion, and I have no doubt that the long-established Conservatives such as I see opposite, and even fairly recent converts, such as the noble Lord, Lord Rennell, will find themselves heartily in agreement. Of course, in a number of fields the Government's operations are more closely analogous to those of commercial trading concerns—for example, the trading activities of the Board of Trade, the Ministry of Supply and the Ministry of Food. The noble Lord did not give me notice of all the illustrations which he was anxious to take, so I hope that he will forgive me for not following them all up. As he points out, in all these cases the trading Departments already, as the Committee recommend, publish trading accounts which, although the earning of a profit is not the main object of these activities, are drawn up broadly on the lines of ordinary commercial profit and loss accounts.
  LORD RENNELL: My Lords, I think that there is a slight misunderstanding. I am aware that trading accounts are published. The point I was seeking to make is the effect on the cash position in the Budget of running down stores by sales, or of purchasing stores. The particular aspect of the trading accounts to which I called attention were recommendations of the Crick Committee for setting up what they called trading funds which would eliminate that defect.
  LORD PAKENHAM: By a curious chance I am coming to that. Perhaps the noble Lord will allow me to proceed, because he was good enough to give me notice of that particular point. Such trading accounts are published in the Annual Volume of Trading Accounts and Balance Sheets, and are subject to examination by the Public Accounts Committee, in the same way as are the cash appropriation accounts of Departments.
  Having said so much, let me come to at least three of the broad points which the noble Lord was good enough to give me notice that he intended to mention. He has mentioned trading funds. The Committee have made one very important constructive suggestion in the proposal that, both for the Ministry of Food and for any other Department where large and permanent trading operations are under-taken, trading funds should be established by legislation. The Government regard this idea of segregating below-the-line working capital necessary for Government trading operations, leaving only the subsidy element to be provided out of Votes —which is what would be the practical result—as a proposal which certainly can-not be disposed of lightly, either in the affirmative or in the negative sense. The Government wish to examine, among other things, the extent to which it might conceivably weaken Parliamentary control over expenditure by the Ministry. That is one of the points among others which has to be examined. This examination is now taking place.
  But it must be borne in mind that no final decisions have been taken about the permanence or otherwise of the trading operations of the Board of Trade, the Ministry of Supply, and indeed of the various Departments concerned, and that the relevance of the Committee's suggestion in the case of these Departments may be affected to some extent by this fact.
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  The Government's decision has not yet been finally taken. But I can assure your Lordships that this question is regarded as one of high importance, and it is being actively considered with a good deal of sympathy with the main purpose which prompted the Committee's ingenious suggestion. I must not prejudice this issue one way or another. I do not wish to put either myself or the Government in a position which could result in our being reproached in the future for having encouraged hopes which were afterwards not fulfilled. One knows—and I am sure the noble Lord, Lord Rennell, does also —that in promising to examine a proposal one may give the impression that, on balance, perhaps it would have been better if the proposal had not been made; or, again, one may give the impression that the proposal contains important and constructive suggestions which, if only the difficulties could be overcome, one would be glad to carry through.
  I come now to the matter of Post Office Savings Bank securities The noble Lord referred to the Committee's recommendations on the valuation of Post Office Savings Bank securities. There were thirty-two conclusions altogether, and I appeal to the noble Lord not to expect me to deal with them all. But conclusion 27 of the Crick Committee's Report says that:
  "The Annual Statements of liabilities to depositors in the Post Office Savings Bank should show the cost price and current market value of the securities held by the National Debt Commissioners against these liabilities."
  This is, I think, almost the only definite statement of a negative character which I intend to make this afternoon, but we cannot accept this recommendation so far as cost price figures are concerned. There is no simple or direct way of establishing such figures, and to produce them the National Debt Office would have to dig into the past, in some cases for fifty years or more. I beg the noble Lord, when he replies, to exempt us from that particular task at this of all moments. The administrative effort would be very considerable, and the result would not justify it.
  The question of publication of market values is more difficult I think that the noble Lord is perhaps more interested in this part of the recommendations than the one which I have mentioned. The published account of the Post Office Savings

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  Bank shows a precise figure for current liabilities, but in respect of assets only a list of securities held at their nominal values. As the noble Lord has told us—a little contemptuously, perhaps—it would be possible to calculate the current value of the assets from this list. Indeed, the noble Lord, with his great banking experience and the facilities which are available to him, has probably had this performed. We are certainly not standing in his way in this matter. It may be argued, as indeed it has been this afternoon, that it would be tidy accounting to show at least the total current market value in this statement. I am advised, and personally I see the force of it very much, that to publish these figures might encourage misunderstanding and wrongly based criticism whenever the total current market value of the securities happened to be less than the capital liability. It is not the business of the National Debt Commissioners to invest for capital profit, and they are not to be blamed when they fail to secure it or praised when they succeed. They are not a sort of investment trust to be judged by that criterion. The investments are not the security for the deposits, in the sense that the fund might be, or even could be, liquidated in the same way as a commercial concern. I would refer the House, on this point, to the 1902 Report of the Select Committee on Savings Bank Funds. It is a most intricate issue. I am not prejudicing the matter one way or the other this afternoon. We feel that the arguments (to which I could readily refer the House) of the 1902 Select Committee, on which the practice of the last fifty years has been based, cannot be lightly set aside, but we shall go on looking into the whole thing carefully.
  The only other big point of the noble Lord with which I would ask the House to allow me to deal is the question of insurance funds. Most of us, as we proceed in this House, obtain some "King Charles' head." This is one that we are beginning to associate with the noble Lord, Lord Rennell, though that does not prove that it is not a very good piece of mental mechanism. The noble Lord is beginning to make this question of the National Insurance Fund his own, and I do not find any rivals for the possession of it. The point raised by the noble Lord is the suggestion that the National
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  Insurance Fund should be dealt with "below the line" in the Government Accounts. In this case I ought to point out that the Crick Committee, which was for the moment the noble Lord's oracle, made no suggestion that the surplus on the National Insurance Fund should be dealt with "below the line" and brought into the Exchequer, which I understand is the noble Lord's suggestion. The noble Lord has imported his translation into the thinking of the Crick Committee.
  LORD RENNELL: No, I made the suggestion and claim the sole credit, or discredit, for it. I do not want to import it into anybody's Report.
  LORD PAKENHAM: If the noble Lord goes on much longer, I shall begin to harbour the dark suspicion that his point about the Crick Committee is simply an opportunity to bring up this "King Charles' head."
  LORD RENNELL: No.
  LORD PAKENHAM: I withdraw that remark unreservedly: I was only joking when I made it. Let me make it plain that this proposal is not recommended by the Crick Committee. It is something which is on a different footing.
  The Insurance Funds, as we have argued before, are set up by Statute as separate Funds, outside normal Government receipts and payments. The National Insurance schemes are contributory, and it has been the practice since the beginning to pay the contributions into separate Funds, where they are accumulated against future liabilities. If the balances of the Funds were brought into the Finance Accounts each year, this accumulation would be lost, and the main object of setting up the statutory Funds would be vitiated. I beg the noble Lord to forgive me if I have said anything to pain him, because this is an important issue, and I do not want to hurt his feelings. I beg him to consider whether it would not be entirely improper to appropriate these surpluses, which are the property of the Fund and which may be required against future liabilities, for any purpose whatever, governmental or otherwise. I beg him to ask himself that question: whether it would be right for the Government to take these Funds, as it were, for its own purposes, or even to present them as though they could be

  913
  used for its own purposes. At the very least, if the Government were going to use them for its own purposes would it not be giving a false impression and suggesting that the position of the Government in those respects was stronger than it was? I beg the noble Lord to ask himself those questions, because we are quite clear that it would be wrong and against all proper principles to indulge in this practice; and certainly the Crick Committee have not recommended it in any way.
  I recognise the feeling on the part of the House, since I have made no very positive statement about the recommendations of the Report, which has been published for six months, that the Government are perhaps not doing very much about it. But that is a totally misleading view. I would remind your Lordships that the former Chancellor of the Exchequer, in welcoming the Report on June 20, was careful to point out that it dealt with a wide variety of subjects, many of them of a highly technical and complex character. He made it plain at that time, and I think we all appreciated it, that it would be some time before the thorough and prolonged examination which the recommendations deserved could be completed and final decisions taken. I therefore hope that the House will not feel that there has been any undue delay, and I am bound to add that there does not seem to have been any, so far as I can judge. A lot of work has been done and a great deal of progress made.
  Here I strike a rather delicate point and I think the House will agree with me when I say that it would be scarcely appropriate that I should announce in this House alone decisions on the detailed recommendations of the Report. I think most of us would feel that if they were 1:0 be announced here, they should be announced also in another place. I am sure that would be the view taken in another place. I can state in general terms that a considerable number of the recommendations have been accepted, and either have been, or will be, implemented as soon as possible. Examination of the Report has now proceeded so far that I hope it will be possible to announce detailed decisions on a large number of recommendations as soon as Parliament
  914
  reassembles after the Recess. If a Question could be put down in another place at the same time, one would be able to give some definite information at that time.
  I ought to end on a word of caution, but as I have been so cautious throughout I will not elaborate it. We all appreciate that in a general sense the more we can know about the financial activities of the Government and the financial position of the Government the better we are enabled to help with constructive suggestions. On the other hand, there is some limit to the amount of information we can ask for without overloading the official machine. I therefore hope then that, when the final results are known, the House will bear in mind that single point as a possible reason why all the recommendations which appear to be reasonable may not have been accepted. One has always to remember the amount of work some of the Departments already have to carry out. When the announcement is made—and we can say a great deal immediately after Christmas—there will undoubtedly be many recommendations which will have been accepted, either as a whole or with some modification. There will be very few which, for reasons of practicability or for policy reasons, the Government will feel themselves definitely unable to accept. I hope that that gives the general approach of the Government, after a considerable number of months' hard work on the subject. I think we should all be genuinely grateful to the noble Lord, Lord Rennell, for having taken such trouble. I should like to repeat my withdrawal of my lighthearted suggestion that he had any other object in bringing forward this Motion than to enable all of us, whether in Parliament or outside, to appreciate how our country is faring in the financial sphere.
  6.0 p.m.
  LORD RENNELL: My Lords, I am much obliged to the noble Lord for his reply, especially for the latter part. The statement he made that we may expect an announcement about the recommendations of the Crick Report is really what I hoped would be the outcome of this Motion. With your Lordships' permission, there are two points on which I must touch. Some of the noble Lord's remarks about the Post Office Savings Bank, which was the only complete

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  negative I received, were such that, if they had been made by a mere banker, they would certainly have led to a prosecution, or at least to an inquiry by the Board of Trade. Leaving that on one side, the noble Lord said that the securities held against liabilities by the National Debt Commissioners are in a sense irrelevant, to use a rather exaggerated word, because of the liability of the Government to depositors. But in point of fact, the statement is headed "Nature and Nominal Amount of Securities Held by the National Debt Commissioners to meet these liabilities." In other words, these securities are held to meet those liabilities and they ought to balance. If they do not, there ought to be an I.O.U. put in by the Government to make them balance.
  LORD PAKENHAM: With great respect, I would ask the noble Lord to read to-morrow in Hansard what I have said, and he will see that I covered that point in a way which is certainly constitution-ally correct.
  LORD RENNELL: I am sure it is con-stitutionally correct, but the statement here is incorrect.
  LORD PAKENHAM: I doubt it.
  LORD RENNELL: The securities are held to meet certain liabilities, and if they do not, those liabilities cannot be met. The other point is about the National Insurance Fund. It is true that I have raised this matter on previous occasions, and I will not undertake not to raise it again. As to the suggestion of the impropriety (I think that was almost the word used) of taking into the Budget the surplus of the National Insurance Fund, I would point out that the whole surplus accumulated is, if not appropriated, borrowed by the Government from the Fund and used to purchase Government securities, some of them out of the market and others not out of the market. The first item on the statement of the Fund is, "Ways and Means Advances," which are direct loans. Those funds find their way into the Budget in Ways and Means advances and in Treasury Bills, and I there-fore claim that the rest may well do so in a "below the line" account.
  LORD PAKENHAM: The answer is fairly obvious.
  LORD RENNELL: I think so, too; I think it is very obvious—but perhaps from a different point of view. However, I do not want to pursue it because it is a very technical point. There is no question in my mind of appropriation. If there was a deficiency in the Fund, the liability would remain on the Government and the deficiency would have to figure as a Vote in the Budget. There-fore, I can see no reason why the Fund cannot be placed in a "below the line" account. We must continue to differ about that matter. I raised this question of accounts, not in any sense because I was interested in the National Insurance Fund but because I am interested, so far as any layman can be interested, in trying to disentangle some of the obscure parts of Government accounts. I am very much gratified at the announcement of the noble Lord, which is entirely satisfactory. In those circumstances, I beg leave to withdraw my Motion.
  Motion for Papers, by leave, with-drawn.

  BUSINESS OF THE HOUSE
  6.1 p.m.
  LORD SHEPHERD: My Lords, before the House adjourns, I should like with your permission to make a brief statement regarding business. Your Lordships will remember that the noble Marquess, the Leader of the Opposition, put a question to the noble Viscount the Leader of the House about a debate on foreign affairs. I am happy to say that it has now been agreed through the usual channels that this debate shall take place on Thursday. The time of meeting will be at 2.30 p.m., and not at four o'clock as is usually the case on that day. The Motion of the noble Lord, Lord Hawke, which is down on the Order Paper for that day, will be postponed. I should like to say a word about the Administration of Justice (Pensions) Bill. It is urgent that this Bill should be passed through all its stages before the Recess and it has been agreed that it shall be taken to-morrow as the first business and passed through all its stages. If we have the co-operation of your Lordships in that matter, a good purpose will be served.
  House adjourned at three minutes past six o'clock.