Lords Sitting of 30 July 1953

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

  MESSAGES FROM THE QUEEN
  2.35 p.m.
  THE EARL OF SCARBROUGH: My Lords, I have the honour to present to your Lordships three Messages from Her Majesty the Queen, signed by her own hand. The first Message is in these terms:
  "I have received your Address praying that the Transfer of Functions (Ministry of Civil Aviation) Order, 1953, be made in the form of the draft laid before Parliament. I will comply with your request"
  The next Message is in these terms:
  "I have received your Address praying that the Federation of Rhodesia and Nyasaland (Constitution) Order in Council, 1953, be made in the form of the draft laid before Parliament. I will comply with your request."
  The third Message is as follows:
  "I have received your Address praying that the International Organisations (Immunities and Privileges of the International Wheat Council) Order, 1953, be made in the form of the draft laid before Parliament. I will comply with your request."

  KOREA: MR. DULLES'S STATEMENT
  LORD SILKIN: My Lords, I beg to ask the Government the following Question, of which I have given them private notice: Whether Her Majesty's Government were consulted on the statements made by Mr. Dulles at his Press Conference, as reported in The Times of yesterday, July 29, and what are their views on these statements?
  THE LORD PRESIDENT OF THE COUNCIL (THE MARQUESS OF SALISBURY): My Lords, the answer to the first part of the noble Lord's Question is quite
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  simple. It is: No; there is no reason why Mr. Dulles should have done so, since by long custom every Government has the right to make its views known as it thinks proper. The position of Her Majesty's Government is clear. Our policy is firmly based on the United Nations, and we intend to work through the machinery of the United Nations. I have already explained to the House in detail yesterday how Her Majesty's Government hoped events would develop in the forthcoming Session of the General Assembly and in the Korean political conference. Furthermore, I should tell the House that I have sent instructions to Her Majesty's Ambassador in Washington which are designed to remove any possibility of doubt as to our attitude on all these questions. In doing so, I have urged the United States Government to make every endeavour to induce President Syngman Rhee to abide loyally by the policy of the United Nations both at the forthcoming Session of the General Assembly and at the political Conference.
  LORD SILKIN: My Lords, I should like to thank the noble Marquess for his reply. Of course, one must agree that every Government is entitled to explain its own policy. But would not the noble Marquess agree that many of the statements made in the Press Reports are in marked conflict with the White Paper and with the speech which the noble Marquess himself made yesterday.
  THE MARQUESS OF SALISBURY: My Lords, my answer to that supplementary would be: No, not on basic objectives. We are both of us in favour of peace; we are both of us in favour of the United Nations. The main broad aims of policy, I should have thought, were identical in both cases. Of course—and nobody seeks to dispute this—there are always individual issues on which we may not see eye to eye. But it is really, if I may say so, far more profitable to us and the world to concentrate on our points of agreement, rather than merely to emphasise points of difference.
  LORD STRABOLGI: My Lords, would that not be a good thing with the Russians, too?
  LORD SILKIN: My Lords, of course we are in agreement when we deal with generalities. But when you bring these generalities into practical terms, it does

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  look as if the purposes are not ad idem. I should like to mention one point in particular. Mr. Dulles is reported to have said that he has offered his terms and there can be no concessions, whereas the noble Marquess gave us to understand that the position has been kept absolutely open.
  THE MARQUESS OF SALISBURY: With regard to what?
  LORD SILKIN: With regard to the political negotiations that are to follow the truce.
  THE MARQUESS OF SALISBURY: I do not quite understand the meaning of the noble Lord's question. I think the position with regard to the negotiations following the truce is perfectly clear. A Political Conference is to be set up, and the countries concerned at that Conference are to negotiate for a permanent settlement for Korea, or if they cannot get immediately a permanent settlement, at any rate a temporary settlement in Korea agreeable to all Parties. I think that is common ground between me and Mr. Dulles and our Governments.
  LORD SILKIN: This is my last supplementary—perhaps I have not made myself clear. In his statement Mr. Dulles is reported to have said that the Communists have got to accept the American terms, and that if they do not then there will be no peace, whereas the noble Marquess gave us to understand that these terms would be freely negotiated and questions which are in dispute—and there are a good many—are open and would be subject to ordinary discussion.
  THE MARQUESS OF SALISBURY: My Lords, I understood Mr. Dulles to say that if, within ninety days, a settlement had not been reached, in that case he reserved the right not to continue the negotiations any longer. I may be wrong, but I cannot believe that he actually said that the Communists have to agree to the American terms without more ado. For my view, I would say this to the noble Lord. He is judging entirely from newspaper reports, and newspaper reports, though I do not say they are in the least inaccurate, are often truncated, and to that extent they do not give a full account of all that was said. I
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  cannot answer for Mr. Dulles; it is not possible for me to do that. But so far as Her Majesty's Government are concerned, I stand by what we have said in the past. If we go into negotiations we do so with a view to getting an agreed settlement.
  LORD HENDERSON: In the communiqué it is said that the Governments agree that they will proceed with their common policies vis-à-vis China, pending a further conference or further discussions. It is well known that the two Governments have a different position as regards the entry of China into the United Nations, or the Pekin Government taking the China seat in the United Nations. Mr. Dulles has stated the position of the American Government on that particular issue. He has not waited for any conference. He has declared now what is the position of the American Government, and for a long time ahead. Is there any reason why Her Majesty's Government should not tell us and the world now what is their position as regards the entry of the Pekin Government to the China seat in the United Nations.
  THE MARQUESS OF SALISBURY: On that point I would say this; and it has particular relevance to what I said earlier. I do not believe that the newspaper report—from accounts I have heard later—was completely accurate on that point. I think the point of the question which was put to Mr. Dulles, as I understand it, was: would it be competent for the United States to use the veto for this purpose; and he said it would be competent. But I think he made it clear that he would be extremely reluctant to do so. The effect given by the first newspaper report was a definite statement that if it was put forward they would veto it. Perhaps I should make that more clear. If the proposal were put forward that the People's Government of China should become a member of the United Nations they would veto it. I think what I have told your Lordships puts rather a different slant on it from that. If noble Lords want the policy of Her Majesty's Government, I would refer them to a statement which was made by my right honourable friend the Foreign Secretary on June 18, of last year. He was speaking in answer to a question and he said (OFFICIAL REPORT, Commons, Vol. 502, Col. 1183):
  "As to the wider question"—

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  that is the question of general policy—
  "I am in complete agreement with my predecessor's observations of last June, which I may, perhaps, quote: 'His Majesty's Government' "—
  it was at that time "His Majesty's Government"—
  " '…believe that…the Central People's Government should represent China in the United Nations. In view, however, of that Government's persistence in behaviour which is inconsistent with the purposes and principles of the Charter, it appears to His Majesty's Government that consideration of this question should be postponed.' "
  Her Majesty's Government have not in any way gone back on that declaration: but I would just make this proviso, which I think it is only right that I should do—and I did it yesterday. I said that the three Powers in Washington recently agreed that it would be premature, and indeed quite impracticable, that there should be any immediate automatic change of policy and I elaborated that by saying that the situation was still very uncertain and it was for that reason that it was premature. But I added that the situation was being kept absolutely open and that we reserved the right to raise the matter if we thought a proper time had come. If the noble Lord will allow me to repeat that, we stand by the statement of the Foreign Secretary, with the proviso which I added—and I believe that is the only attitude one can take up at the present stage. The Armistice is about three days old, and the Political Conference has not begun to sit. Obviously, there must be a breathing space, in order to see how the situation is going to develop. With that proviso I would assure the House again that we stand by the statements that have been made.
  LORD HENDERSON: I am much obliged to the noble Marquess for that reply. Of course, since the statement to which he has referred was made, there has been the Armistice, and I agree that it is only of short duration so far. But it may be that at the United Nations Assembly next month this question may be raised. Should I be right in understanding that, if it is raised, in the light of the new situation Her Majesty's Government would support the sitting of the Pekin Government in the seat for China in the United Nations?
  THE MARQUESS OF SALISBURY: The noble Lord would only be right in assuming that we should judge for ourselves of the state of the circumstances, when the subject was raised. I am certainly not going to tie Her Majesty's Government here and now to go any further than that. But as will have been seen from the Foreign Secretary's own statement, Her Majesty's Government's view is that the People's Government of China should represent China in the United Nations when the time is ripe for them to do so. That is our view and we must be left to judge whether that moment has arrived. For me to say now, three days after the Armistice, the time that on the 16th, 17th or 18th of August the time will have arrived, would be quite improper, and impossible for me to do. But we shall certainly judge the matter with a completely open mind when the time comes.
  LORD HENDERSON: The only point I wish to emphasise—and I hope the noble Marquess will allow me to do so—is this. Whatever the circumstances may be when the matter comes up, if it does come up, at New York (I do not question the position adopted by the noble Marquess as regards the consideration that should be given to it then by Her Majesty's Government), the difference is that the United States Government has declared a ready that it will not agree; and that, I think, shows a very serious division of opinion between the two Governments, and a division of opinion that must show itself if the matter is raised at New York during the Assembly in August.
  THE MARQUESS OF SALISBURY: The United States Government are entitled to take whatever positron they like. The purpose of foreign policy and diplomacy and negotiations between countries is to ease off those differences and try to obtain the policy that one wants. I cannot say that at any given moment the United States Government would be willing to do this or that. It would be improper for me to try. I have described the policy which is to be followed by Her Majesty's Government and no doubt it will be our policy to try to persuade every other Government to follow the same policy.
  VISCOUNT ELIBANK: What does the noble Marquess mean by "when the time is ripe"? Does not the qualification he

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  has introduced undermine the position which, as I understand it. Her Majesty's Government and the country have taken up: that China has a right to a seat in the United Nations? Does not the qualification now introduced mean that the situation is going to be dependent upon China's behaviour?
  THE MARQUESS OF SALISBURY: The noble Lord might as well say that Her Majesty's Government were to do it when the time was unripe. I do not admit that. The whole essence of foreign policy is timing: to do a thing at the right time, neither too soon nor too late.
  VISCOUNT ELIBANK: What I asked the noble Marquess was whether his qualification does not undermine that situation in which China has a right to a seat in the United Nations. That was my main question. If it does not do that, it is all right.
  VISCOUNT STANSGATE: My Lords, there are two points. One is the position of China—and the Security Council covers both peace in the Pacific and our trade.
  We want to know what instructions he has given to our delegates. We are not cross-examining him about Mr. Dulles—he can give what instructions he likes. But the point is what instructions the noble Marquess has given. He talks vaguely about China's "behaviour." What behaviour? What conditions? Is the charge against China that she was an aggressor in Korea? Yes. If the aggression ceases, do our objections cease? The noble Marquess has left us completely in doubt, and to show how dangerous the doubt is, I would refer to M. Bidault's speech this morning, in which he said he cannot recognise China until she does something different from what she is doing in Indo-China. What instructions is the noble Marquess giving to our delegates for August 17 and, in particular, what conditions do Her Majesty's Government lay down for recognition of China's indubitable international right to sit on the Security Council?
  THE MARQUESS OF SALISBURY: I have already spoken about the position of China in the United Nations, and I cannot add to what I have said. With regard to instructions given to the British delegation, it would be contrary to the custom
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  and practice of every Government to come down to tell the House, before an international conference, the detailed instructions given to their representatives. These representatives represent the Government of the day; and if Parliament disagrees with the action of the Government it is always open to Parliament to turn the Government out. That is the proper constitutional position. Certainly I am not going to be responsible for giving the House the detailed instructions which are to be delivered to this delegation.
  So far as trade is concerned—I think the noble Viscount mentioned trade—we all want to see trade renewed between Britain and China at the proper time. At present there are only controls and embargoes against trade in strategic materials. These are to remain on for the time being. The noble Viscount says there has been an Armistice and asks why the controls cannot be taken off. The Armistice is only an Armistice, and the position is very uncertain. What the noble Viscount must recognise is that only a week ago China was fighting this country; they had armies in the field against our troops—and he expects us to remove the embargoes within three or four days. That is unreasonable. What I said yesterday was that the subject would be reviewed in the light of further developments, I think that is the only wise and patriotic attitude to take.
  LORD STRABOLGI: My Lords, I am reluctant to continue this, but, after all, we are parting, reluctantly, from the noble Marquess now for many weeks, and this is our last opportunity. This meeting on August 17 of the United Nations in New York is going to be of outstanding importance. Who is it intended should represent Her Majesty's Government there? In particular, has the Acting Foreign Secretary himself any idea of repeating his triumphs in Washington by going to New York?
  THE MARQUESS OF SALISBURY: My Lords, the noble Lord will perhaps be glad to hear that that is not the proposal at present. The proposal is that my right honourable friend the Minister of State should lead the British delegation.
  VISCOUNT STANSGATE: Since this is the last day on which there will be an opportunity, I should like to ask the

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  noble Marquess another question. Mr. Dulles has announced that after thirty days—
  A NOBLE LORD: Ninety days.
  VISCOUNT STANSGATE: —ninety days, it is possible that, in the event of certain behaviour on the part of the Chinese, he will walk out of the Armistice Conference. Mr. Syngman Rhee has announced that he will take further steps of an active kind. All we have from the Government on this point is that, in case of aggression by Mr. Syngman Rhee, we are entirely uncommitted; but we say that in the event of aggression by the Communists, the old rule stands and we are prepared to take up arms. What I want to ask the noble Marquess, because I am not at all clear about this, is what the situation is. Supposing you have the Conference and the United States delegate walks out, and Syngman Rhee walks out in a pugnacious mood. Do we stay there? It is very dangerous if we are left alone, if we stay there on the undertaking that we begin the war again—because that is what the New York Times seems to think is likely?
  THE MARQUESS OF SALISBURY: I think that is a fair and an important question. I have already indicated to the United States Government that, if such a situation should arise, in which the United States were proposing to walk out, they should take us into consultation first.
  VISCOUNT STANSGATE: That is very satisfactory.

  BRITISH TRANSPORT COMMIS SION (COMPENSATION TO EMPLOYEES) REGULATIONS, 1953
  2.58 p.m.
  THE EARL OF SELKIRK THE EARL OF SELKIRK rose to move, That the British Transport Commission (Compensation to Employees) Regulations, 1953, reported from the Special Orders Committee on Thursday the 16th instant, be approved. The noble Earl said: My Lords, may I bring you down to a much more parochial subject? I rise to move this Motion, the object of which is to enable the Minister of Transport to make regulations to pay compensation in certain cases which arise under the Act. These regulations have
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  accordingly been submitted for the approval of both Houses. They are intended to meet the requirements of employees who suffer loss of employment or loss or diminution of emoluments arising from one of three causes: first, the disposal of property held by the Road Haulage undertaking; secondly, modifications of the functions of the Commission, such as the Commission's reduced responsibility in regard to the ports and harbours of this country; and thirdly, the reorganisation of the railways.
  These regulations follow generally the pattern which has been set up in the past and, of course, in particular, the regulations of 1948 and 1950, affecting respectively railwaymen and persons employed on road haulage. The Minister undertook to put these regulations before Parliament before disposal begins, and secondly, to do so after consultation with the trade union organisations concerned. Both these undertakings have been fulfilled, and I think I can say that it is both a matter for satisfaction and, indeed, of something of an achievement for the Department, that the regulations have come forward for approval within three months of the passing of the Act.
  If it is convenient to the House I will explain generally the manner in which these compensation regulations will operate, and I will note some of the differences from previous regulations. Afterwards, I will endeavour to answer any questions that your Lordships may wish to ask. So far as the railwaymen are concerned, in the first place these regulations follow very closely those of 1948. There are, however, one or two minor, though still significant, improvements, which I will mention shortly. First of all, the claimants may go straight to the tribunal, instead of going through the Commission. Secondly, ill computing interim payments only two-thirds of the earnings are to be set off, instead of the whole of the earnings. Thirdly, in setting off unemployment or insurance benefits no account would be taken of dependants' and wife's allowance. So far as road haulage is concerned, there are very material improvements in the conditions. Under the 1950 regulations, in order to get long-term compensation a man had to show expectation of compensation to retiring age in the event of discharge. This requirement has, in fact, proved

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  almost an insurmountable barrier to the claimants. I am told that there are not more than six who have been able to establish a claim at all. These regulations are, therefore, put on a different basis, and the basis we have put it at is that a man must be able to show settled employment for a period of eight years, either with the Commission or with the previous employer whose business the Commission has taken over. These conditions are considerably easier for road haulage employees than those the previous regulations laid down.
  The terms of compensation fall broadly under two heads—resettlement payment, which is to enable a man to get settled in his new job, and long-term compensation. Resettlement payment is payable to anyone who has been three years in the service of the Commission or, in any case, has held a permanent appointment since the beginning of 1952. I should like to compare this with the short-term compensation of the previous regulations which required a minimum of eight years in order to qualify at all. It will be payable for thirteen weeks plus an additional week for every year of age over forty-five up to a maximum of twenty-six weeks, and this is one of the examples among others in which the regulations are weighted in favour of the older people. The rate of payment will be at two-thirds of the loss, calculated on the current net emoluments at the time when the loss occurred. This will, of course, include anyone who is holding acting rank at that time.
  Long-term compensation will be payable for those who can show eight years' continuous service. Continuous service will not be considered to have been broken by periods of National Service. It will be calculated at one-sixtieth of the current rate of emoluments for every year of service, and two-sixtieths for every year of service over the age of forty-five, again weighting the regulations in favour of the older men. Interim payments may be made pending the settlement of long-term compensation, but a decision on the matter must be reached within thirteen weeks. Any appeals can be made to a tribunal set up under the Ministry of Labour.
  Paragraph 16 of the Second Schedule deals with pension rights in one particu-
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  lar sphere. It makes it possible for the Commission to add an additional year of pensionable service for every year of service over the age of forty. This means, in effect, that any man who has served for thirteen years over the age of forty will be assured of almost his full pension rights on reaching the age of sixty-five—that is, in accordance with the length of the service which he has given. I might further mention that the general regulations for pensions under Section 27, which deals with pensions, are in an advanced stage of preparation, and are now being considered by the trade union organisations.
  We are confident that the changeover under this Bill will be smooth and, accordingly, that few people will need to fall back on these regulations. At the same time, I can say in recommending them to the House that so far as the railwaymen are concerned they are as good as, and, if possible, slightly better than, those at the time of nationalisation. With regard to the road haulage employees, they are very much more favourable, and in asking the House to approve these regulations I suggest that they go as far as is reasonably possible to meet cases of hardship arising from the changes. I beg to move.
  Moved, That the British Transport Commission (Compensation to Employees) Regulations, 1953, reported from the Special Orders Committee on Thursday the 16th instant, be approved.—(The Earl of Selkirk.)
  LORD BURDEN: My Lords, I should like to thank the noble Earl for his usual careful exposition of the matter before your Lordships' House and also to acknowledge that the Minister of Transport has done his best, I think, to secure the largest measure of agreement with the trade unions concerned. It is a little unfortunate that full agreement was not reached, as it might easily have been by the concession of one or two minor points which I shall venture to submit to your Lordships in a few moments. Before I do so, however, I should make it perfectly clear that compensation for loss of office directly as a consequence of legislative action has a very long history in this country. It goes back for nearly a hundred years. The Civil Service Superannuation Act of 1859 in Section 7 conceded the principle. Again, it was conceded in the Local Government Act of

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  1888 which set up the county councils, but it was not until 1933, after nearly a quarter of a century's hard work, that a code was included in the 1933 Act for local government officers.
  I refer to that deliberately because I should like to refer to a personal contact I had with compensation regulations more than thirty years ago when I was a member of the executive committee of the trade union principally concerned. I refer to the fight which was put up in a Committee Room of another place when the Railways Act, 1921, was being considered upstairs. I well remember the work which was put in by the right honourable William Graham, Member of Parliament for Central Edinburgh—or, as he was affectionately known to us, Willie Graham. I am bound to admit, as the noble Earl has, that that code was to some extent worsened in the compensation arrangements included in the nationalisation Acts of the Labour Government from 1945 to 1950. Again, it would be quite wrong if I did not admit readily that these regulations are in a few details an improvement on what was included in those compensation clauses in the nationalisation Acts.
  In considering that aspect of the matter I would submit that these regulations deal with an entirely novel set of circumstances. Let me make this perfectly clear. Over a fairly long experience of compensation regulations I have never had much regard for what I may call the money value aspect of compensation. Compensation provisions, both in the Railways Acts and in other Acts, have always acted as a deterrent against indiscriminate dismissals in the changeover from one form of administration to another, because if compensation flowed from dismissal obviously every reasonable effort would be made to organise the business to prevent dismissal. Clearly, no employer, whether it is the State or a local government body, would pay two-thirds of a man's salary by way of compensation if by some slight reorganisation of the business, the slowing up of recruitment or something like that, they could find a place for him. Therefore, broadly speaking, compensation provisions prevented people from being ruthlessly dismissed to suffer unemployment.
  But in the main these compensation provisions arise front the handing back
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  for private profit—the working under private enterprise, if you like—of the nation's assets in road transport, which I have heard people refer to as a rare and refreshing fruit resulting from the Tory victory at the last Election. The people acquiring the physical assets of the nationalised road transport would not care a brass farthing about those whom they do not want to employ. They are not paying the compensation. That is the distinct difference as between compensation under the old Acts and compensation under these regulations. I know that the compensation is to be paid out of the transport levy. But who is paying the transport levy?—only the road operators. The levy has also to provide for other things than the payment of compensation, as the noble Earl well knows. Therefore, I venture to say that while I readily admit that these regulations are an improvement, obviously they would be very wicked indeed if they were not an improvement, because of the changed set: of circumstances. They are dealing with a position in reverse as compared with the other compensation regulations.
  I think the noble Earl is already aware of the points which I should like to put to him. First, we think that the period of thirteen weeks which might reach twenty-six weeks is not long enough, and that there should be a maximum of fifty-two weeks. Then we feel, as do the trade unions, that the date should be brought forward a little and that the compensation provisions should apply as from May 1, the date of the Government White Paper, when it was first made clear what the Government's policy should be. I venture to think that that will not mean very much in hard cash or compensation of any kind, but it would be a fair deal. My final point has already been touched on briefly by the noble Earl. I may be wrong, but, as I understood him, he said that the compensation would be based upon the rate of pay or the salary at the time. That would cover, shall I say, only acting appointments which are in operation, where the difference between the old and the new salary was carried as a difference of ray. That would apply, broadly speaking, to the whole, and not only to road transport, because there may be a difference in pay regulations so far as the railway side of the industry is concerned.

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  I suppose that if we took the Explanatory Memorandum, we might discuss this afternoon the broad position flowing from the announcement of the Minister of Transport that he was dispensing with all the Executives except the London Transport Executive; but in an atmosphere such as we have this afternoon, and just as the House is rising, and as these regulations will come into operation before the House resumes, I think it would be far easier to postpone comment on that action until we can have a set debate on the question. As is the normal practice in your Lordships' House, it is not our intention to press our objection to these regulations to a Division, but we feel that we should voice here what those objections are. If they had been put right they would have carried the good will of the trade unions concerned.
  3.18 p.m.
  THE EARL OF SELKIRK: My Lords, I should like to thank the noble Lord, Lord Burden, for so frankly acknowledging that these are the most advantageous conditions of compensation which have ever been presented to Parliament.
  LORD BURDEN: I would ask the noble Earl to quote me accurately. What I said was that they were an improvement on the worst code—which was a very different thing.
  THE EARL OF SELKIRK: They are an improvement on anything which any Socialist Government has ever presented to Parliament: there is no doubt about that. Whether the noble Lord agrees or not I do not mind, but that is a fact. I am grateful to him for drawing attention to it and I think we all appreciate it very much. I do not want to detain your Lordships by explaining the advantages in detail, but, as I have said, there are one or two small but still significant improvements throughout the whole range of these regulations.
  The noble Lord mentioned three points particularly on which he would like some further information and with which I should like to deal. First, he has suggested that the resettlement period should be fifty-two weeks. In examining that, one must remember that there has never previously been a comparable period of
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  resettlement. The 1950 regulations required a period of eight years' service before a person qualified for short-term compensation. He can now get short-term compensation after a period of two years' service. It is much more easy to get than it was at an earlier date. If the noble Lord's suggestion for fifty-two weeks' payment were adopted and a man were unemployed for that time, it is conceivable that someone would get a year's compensation after two years' work, which, I must say, is pressing the point a little far when we are dealing with public money. I think it would be over generous—certainly much more generous than any Government has ever attempted to be before. This is meant only to be a period of resettlement, and I suggest that for people under forty-five years of age thirteen weeks is quite a reasonable period, while for those above that age the period is up to twenty-six weeks—approximately six months. I think that this is a reasonable method and it is in line with previous regulations.
  The noble Lord also said that he would like the period of qualification to run from May, 1952, instead of from January, 1952. I admit that that is a fairly short period, and for that very reason I wonder why the noble Lord makes so much fuss about it. It is not a long period. There was no doubt at all of the position after the present Government took office, after the King's Speech in the autumn of 1951, in which it was laid down quite clearly what was going to happen. I will read the passage. It is as follows (OFFICIAL REPORT, Vol. 174, Col. 8):
  "Proposals will be made to facilitate the extension of private road haulage activities."
  The Home Secretary said (OFFICIAL REPORT, Commons, Vol. 493, Col. 720):
  "Whatever else honourable Members opposite may have doubt about, they cannot have any doubt about our intentions in this matter. They are set out quite clearly in our election documents, and our intention is, as it has always been, to diminish the monopolistic powers of the British Road Transport Commission…"
  Anyone who after that went into the Road Haulage undertaking of the Transport Commission must have done so with the knowledge that there was a measure of uncertainty with regard to its future. We have taken a date after these speeches—that is to say after the King's Speech and after the debate on the Address—and put it at the end of December, 1951.

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  I think it is a very reasonable date from which eligibility for compensation should run.
  The third point which the noble Lord raised was the question of "acting pay." I have dealt with that already, and I think that what I have said covers the matter. Compensation applies to the current rate of emoluments at the time the loss occurs. All that is taken off are additional payments, perhaps for travelling, subsistence allowances, or anything of that kind. The current rate of pay at the time when the loss occurred is the effective basis. I hope that that meets the point which the noble Lord raised. The noble Lord says he would like the full agreement of the trade union organisations to have been obtained. I wonder whether the trade unions realty would like to be in a position to say that they got full agreement—to say that they had not asked for anything more than they had got. They are born negotiators, and they want to get as much as they possibly can for their members. That is only human nature. I think we can assume that the trade unions in this matter are not ill-satisfied with the outcome of the negotiations which they have conducted.
  On Question, Motion agreed to.

  MERCHANDISE MARKS BILL [H.L.]
  3.24 p.m.
  Order of the Day for the consideration of the Commons Amendments read.
  LORD MANCROFT: My Lords, I beg to move that the Commons Amendments be now considered.
  Moved, That the Commons Amendments be now considered,—(Lord Mancroft.)
  On Question, Motion agreed to.

  COMMONS AMENDMENT
  [The references are to Bill No. 57 as first printed for the House of Commons]
  In the Title. Line 5, leave out ("increase certain penalties under those Acts.") and insert ("amend the Merchandise Marks Act, 1887, in relation to offences.")
  LORD MANCROFT: My Lords, this Amendment and the fourth Amendment on the Order Paper—that is, the one to put in a new clause after Clause 3—are really only drafting Amendments. They
  1166
  merely make apparent on the face of subsection (2) of Section 2 of the Act of 1887 the construction which the courts have frequently placed upon it, but which traders have from time to time failed to appreciate. This first Amendment is quite uncontroversial and I hope your Lordships will agree to it. I beg to move.
  Moved, That this House do agree with the Commons in the said Amendment.—(Lord Mancroft.)
  On Question, Motion agreed to.

  COMMONS AMENDMENT
  Clause 1, page 1, line 11, leave out ("quality") and insert ("standard of quality of any goods, according to a classification commonly used or recognised in the trade; or (ab) as to the")
  LORD MANCROFT: My Lords, this Amendment is not quite so simple. The Bill extends the trade descriptions to which the Acts will apply, to include, amongst others, the characteristic of quality. Your Lordships may remember that when this Bill was last before the House criticism was expressed, particularly by my noble friend, Lord Llewellin, that the term "quality" by itself was toe wide and would probably catch a genuine trade "puff," such as "Beer is best" or "Guinness is good for you"—to quote two examples used at that stage in our debates. The noble Lord, Lord Lucas, also criticised the word on the ground that it was so vague that prosecutions would be discouraged by the difficulty of defining what the characteristic of quality was. Lord Lucas wanted to know by what form of comparison the accuracy of the description "first-grade quality "when applied to, say, fruit or food such as jam, or to boots and shoes and so on, was to be tested, and he suggested as more precise terms the substitution of the words "physically ascertainable and definable characteristic."
  This seemed to Her Majesty's Government to deprive the Bill of a word which, as it were, sets the tone of the Bill, and to enlarge unduly the field of "trade description"; but Lord Lucas's reference to "first-grade quality" provides an example of just the sort of description as to quality which we wee trying to cover in this Bill—namely, that which indicates an accepted gradation of quality. I endeavoured, I am afraid without success, to find a formula which would indicate more apparently that what we had in

  1167
  mind was gradation of quality. During the Committee stage in another place, however, the Amendment, in which I am now inviting your Lordships to concur, was put forward. This was accepted by Her Majesty's Government because it retained the essential word "quality" on which we placed such value, while restricting its sense to gradation of quality commonly used or recognised. It also made clear that the genuine trade "puff" would not be affected. I hope that this Amendment will meet with the approval of the House and will satisfactorily conclude the protracted discussions which we have had on this interesting subject. I beg to move.
  Moved, That this House do agree with the Commons in the said Amendment.—(Lord Mancroft.)
  3.28 p.m.
  LORD SILKIN: My Lords, I do not rise to disagree with the Commons in this Amendment, but to comment, as I think Lord Lucas would have done had he been here, on the way in which this particular matter has been handled by Her Majesty's Government. Lord Mancroft has dealt very gently with events that took place here and in another place, but the fact is that the Government to-day, and the noble Lord in particular, are asking this House to agree substantially to an Amendment which they have refused to Lord Lucas. The words are not exactly the same as those of Lord Lucas's Amendment, but in substance the two Amendments are exactly the same. It is a great pity, I think, that if such an Amendment is to be approved that of Lord Lucas was not accepted in the first instance.
  I know that the noble Lord gave an undertaking on the Committee stage that he would consider the matter between then and the Report stage. On the Report stage, he said that he would not be able to agree to what we wanted. But what we are now being asked to agree to is almost exactly the same thing. I do not want to hit a man when he is down—
  LORD MANCROFT: I am not down.
  LORD SILKIN: —but I hope that more attention will be paid to Amendments when put forward in this House. Having been refused them here, we should not be left in the humiliating position of
  1168
  having to accept them, perhaps dressed up a little, when they come from another place.
  On Question, Motion agreed to.

  POST OFFICE STAFF ASSOCIATIONS
  3.30 p.m.
  THE POSTMASTER GENERAL (EARL DE LA WARR): My Lords, with your Lordships' permission, I should like to make a Statement to the House. Your Lordships may remember that I deferred any immediate decision on the Terrington Report in the hope that it might still be possible to bring the recognised and unrecognised Post Office Associations together. In one case a settlement has been reached—that of the National Guild of Motor Engineers, which has agreed with the Post Office Engineering Union to amalgamate on terms which give the motor transport staff in the Post Office more voice in their affairs. I congratulate both parties on the good sense and statesmanship the) have shown.
  I will now deal with the case of the Engineering Officers (Telecommunications) Association and the Post Office Engineering Union. It is not disputed that on the basis of numbers E.O.(T.)A. was entitled to the consideration which one of my predecessors had promised. Consideration, however, is a very different thing from automatic recognition. The consideration that was promised has certainly been given in full measure. Since this matter was first raised, the situation has changed in several respects. I have had the benefit of the advice of an independent Committee, under the chairmanship of Lord Terrington. I have also had the advantage of the opinion of a man with wide experience in labour relations, Sir Richard Lloyd-Roberts, whose appointment was agreeable to both sides and who attempted conciliation between them. The advice tendered in each case was the same—that E.O.(T.)A. should not be recognised.
  I will give some of the facts which have impressed me and of which your Lordships may not be fully aware. As pointed out by the Terrington Committee, out of 60,000 engineers, the grade of technical officer for which E.O.(T).A. claim recognition comprises some 14,000, but members of this grade hold sixteen

  1169
  out of twenty-three places on the executive of the Post Office Engineering Union. This grade also has ample representation at lower levels in the P.O.E.U. structure. Moreover, each separate section has its own separate conference, and although the national executive council has ultimate power to override the sectional bodies, this power is rarely, if ever, used. In addition, the Post Office Engineering Union, during the recent negotiations, made an offer, in my view almost unprecedented, to alter their rules so as to provide that no recommendation by a sectional committee could be overruled by the executive council without a two-thirds or even higher majority. As I have already said, the grades which E.O.(T).A. seek to represent already possess a majority of at least two-third son the executive council. All these facts lead me to the inevitable conclusion that the interests of the staff whom E.O.(T).A. claim to represent are already fully safeguarded, and that no injustice is being done or is likely to be done to that staff. While, therefore, I honour the persistence and sincerity with which they have fought their case, I am afraid that there are no valid grounds, as things are now, for acceding to their claim for recognition.
  There remain two other cases with which I must deal. First, the National Association of Postal and Telegraph Officers (N.A.P.T.O.) and the Union of Post Office Workers (U.P.W.). N.A.P.T.O. claim to represent a grade numbering 21,900: only 2,600, or about 12 per cent., are in N.A.P.T.O., the rest being in U.P.W. On figures, N.A.P.T.O. do not qualify even for consideration: on merits, their case is not strong either. I should mention that U.P.W., like P.O.E.U., have shown their willingness to facilitate a friendly settlement by amending their rules. I am afraid that N.A.P.T.O. have
  1170
  not made their case and for this reason I am unable to grant them recognition, although I appreciate the sincerity of their aims. In the case of the National Association of Telephone Supervising Officers (N.A.T.S.O.) and the Association of Controlling Officers (A.C.O.), both Associations have agreed to the appointment of Sir Richard Lloyd-Roberts as conciliator, and I am now considering his Report.
  In has, of course, for long been accepted that the departmental classes of the Post Office are not typical of the rest of the Civil Service, and I should therefore make it clear that what I have said does not apply to the Civil Service generally. In particular, nothing I have said in any way invalidates the undertakings given in 1951 to the Staff Side of the Civil Service National Whitley Council, that the findings of the Terrington Committee would not result in any change being made in the system in operation for General Service classes. I have tried to give a complete picture of the main recognition disputes in the Post Office. It would, however, in my view, be unwise to lay down any hard and fast rules for the future, and I shall continue to consider any future claims on their merits.
  LORD SHEPHERD: My Lords, I am sorry that I was unaware that such a statement was to be made this afternoon, otherwise I would have been here prepared to speak or would have arranged for some other noble Lord to speak on our behalf. From what I have heard, I think I can say that we appreciate the decisions which the Postmaster General has reached. We do not desire to enter into a discussion to-day, but we will give serious consideration to the material he has put before your Lordships when we read the OFFICIAL REPORT, and if we find it necessary to raise any question we will do so later in the year.

  MERCHANDISE MARKS BILL [H.L.]
  3.38 p.m.
  Further consideration of Commons Amendments.

  COMMONS AMENDMENT
  Clause 1, page 1, line 11, leave out ("accuracy")
  LORD MANCROFT: My Lords, this Amendment was accepted in another place on the general ground that the word "accuracy," which this Amendment seeks to leave out, had rather a limited value unless it was qualified. For example, the accuracy of a thermometer must be far greater in a laboratory than in the oven of a domestic cooker, or so I am informed. The requirements of both are already safeguarded in the Bill by the expressions "fitness for purpose" and "performance or behaviour." I think that the Bill would be improved by the omission of this word, which may give some ground for doubt or hesitancy. Therefore, I recommend that your Lordships should accept this Amendment. I beg to move that this House do agree with the Commons in the said Amendment.
  Moved, That this House do agree with the Commons in the said Amendment.—(Lord Mancroft.)
  On Question, Motion agreed to.

  COMMONS AMENDMENT
  After Clause 3, page 4, line 4, at end insert the following new clause—
  Clarification of s. 2 (2) of Merchandise Marks Act, 1887
  (" . Section two of the Merchandise Marks Act, 1887, shall be amended by the deletion of subsection (2) thereof and the insertion of the following subsection:
  '(2) Every person who sells, or exposes for, or has in his possession for, sale, or any purpose of trade or manufacture, any goods or things to which any forged trade mark or false trade description is applied, or to which any trade mark or mark so nearly resembling a trade mark as to be calculated to deceive is falsely applied, as the case may be, shall, unless he proves either—

  (a) that, having taken all reasonable precautions against committing an offence against this Act, he had, at the time of the commission of the alleged offence, no reason to suspect the genuineness of the trade mark, mark or trade description, and that, on demand made by or on behalf of the prosecutor, he gave all the information in his power with respect to the persons from whom he obtained such goods or things; or

  1172

  (b) that otherwise he had acted innocently;

  be guilty of an offence against this Act.' ")
  LORD MANCROFT: My Lords, this Amendment is purely consequential. I beg to move that this House do agree with the Commons in the said Amendment.
  Moved, That this House do agree with the Commons in the said Amendment.—(Lord Mancroft.)
  On Question, Motion agreed to.

  COMMONS AMENDMENTS
  Clause 4, page 4, line 8, leave out ("fifty") and insert ("one hundred")
  Clause 4, page 4, line 9, leave out ("one hundred") and insert ("two hundred and fifty")
  LORD MANCROFT: My Lords, as the noble and learned Lord the Lord Chancellor has indicated, these two Amendments follow one another. The maximum fines on summary conviction in the Act of 1887 were £20 for the first offence and £50 for the second or any subsequent offence. Clause 4 of this Bill, as it was introduced into your Lordships' House, provided for these figures to be increased to £50 for the first offence and £100 for a second or any subsequent offence.
  One or two of your Lordships, in particular, I think, my noble friend Lord Balfour of Inchrye, thought that these were not high enough. But no Amendment was actually moved in your Lordships' House. As amended by the Committee of another place, the Bill now provides for these figures to be increased to £100 for the first offence and £250 for the second or any subsequent offence. The general feeling in another place was that the figures of £50 and £100 did not reflect adequately the fall in the value of money since the year 1887, and that the increase to £100 and £250 was moderate and provided a sufficient deterrent. I think that those feelings reflected the sentiments which were expressed on Second Reading and at the Committee stage in your Lordships' House, and I therefore hope that these Amendments will also find favour. I beg to move.
  Moved, That this House do agree with the Commons in the said Amendments.—(Lord Mancroft.)
  On Question, Motion agreed to.

  HISTORIC BUILDINGS AND ANCIENT MONUMENTS BILL
  3.41 p.m.
  Order of the Day for the House to be put into Committee read
  THE PARLIAMENTARY UNDER-SECRETARY OF STATE FOR THE COLONIES (THE EARL OF MUNSTER): My Lords, I beg to move that the House do resolve itself into Committee on this Bill. Before the noble and learned Lord, the Lord Chancellor, puts the Question, I should like to make some brief observations. In the debate on the Second Reading of this Bill the noble Lord, Lord Faringdon, and the noble Lord, Lard Methuen, raised one matter which I promised to look into. It concerned the preparation of photographs and measured drawings of historic buildings which had to be demolished. The noble Lords suggested that it might be wise if the Government took powers to make the preparation of such records a condition of agreement to demolish. The automatic imposition of such a duty would reduce the value of a building, and might mean the loss of money to an owner who had been striving to maintain it, but who, through no fault of his own, was forced to give it up. We are, however, willing to give an assurance that will ensure that adequate records are prepared before any important building is demolished. The Ministry of Housing has powers of entry under Section 103 of the Town and Country Planning Act for survey purposes, and they are satisfied that they could use these powers to enable proper records to be made before demolition, even if the owner did not give his consent. I hope that answers the question of the two noble Lords.
  The noble Lord, Lord Faringdon, raised another complicated question—namely, as to the use of settled funds for endowment of the National Trust. Under Section 3 of the National Trust Act, 1939, the National Trust are permitted, in certain circumstances, to accept a building, and also an endowment out of settled funds if these go with the building. But if the settled funds do not go with the building, or if somebody wishes to make endowments towards the upkeep of a building out of settled funds which are separate from the building itself, these projects would not be covered
  1174
  by the National Trust Act. It seems likely that these cases would arise only rarely, but I have been advised that if the National Trust want such a provision as this it should be properly made in a Bill amending the National Trust Act. If such a provision were included in a Public Bill, it would, in fact, turn it into a Hybrid Bill.
  There were two other brief points. The noble Lord, Lord Methuen, asked that, when a grant was made for an historic house, the Minister should either supervise or have the work done to his satisfaction. The answer is: Yes, certainly, either one or the other. Secondly, he asked whether, if a house which had a preservation order served on it had some very fine paneling, the owner of that house would be able to dispose of the paneling. The answer to that is that the building preservation order could be made to prevent its removal from the old and historic house.
  LORD METHUEN: My Lords, I thank the noble Earl for these answers.
  THE EARL OF MUNSTER: My Lords, I now beg to move that the House do resolve itself into Committee on the Bill.
  Moved, That the House do now resolve itself into Committee.—(The Earl of Munster.)
  On Question, Motion agreed to.
  House in Committee accordingly.
  [The EARL OF DROGHEDA in the Chair]
  Clause 1:
  Historic Buildings Council for England
  1.—(1) There shall be established a Council, to be called "the Historic Buildings Council of England", for the purpose of advising the Minister of Works (hereafter in this Act referred to as "the Minister") on the exercise, in relation to England, of his powers under this Part of this Act.
  (2) The said Council shall consist of a chairman appointed by the Minister and such number of other members so appointed as the Minister may from time to time determine, and the chairman and other members of the Council shall hold and vacate office in accordance with the terms of their appointments.
  LORD SILKIN LORD SILKIN had given notice of several Amendments relating to the appointment of the Historic Buildings Council, the first being to add to subsection (1):
  "and of advising the Minister of Housing and Local Government on the exercise, in relation

  1175
  to England, of his powers under sections twenty-nine and thirty of the Town and Country Planning Act, 1947."
  The noble Lord said: I beg to move the first Amendment standing in my name. The Committee will be relieved to hear that this formidable list of Amendments appearing in my name really resolves itself into three (I hope) short points, and that if the first Amendment falls, or is not accepted by the Government, then a great many of the others will fall by the wayside.
  I must confess that I rather hope the Government will not accept any of these Amendments, although I am moving them, because I fear that if any of them is accepted it will mean this Bill going back to another place, and there will be no time to get it passed before the Recess. Much as I should like to see the Bill improved, I feel that a bird in hand is better than one in October, and I would prefer that the Bill be passed and receive the Royal Assent to-morrow in its unimproved form. Nevertheless, I feel it is desirable to have a short discussion on the principles set out in these Amendments, and it is for that purpose that I have put them down. I feel that I should make one other confession. These are not my Amendments. They are Amendments which have been prepared by a group known as the Georgian Group, who naturally feel sincerely about these matters and feel strongly that they ought to be discussed in your Lordships' House. I believe that they even went so far as to say that they would rather take the chance of the Bill being postponed until October. I myself am not prepared to take that chance, but I think it right that the Amendments should be discussed.
  With that unusual introduction, let me turn to the first Amendment. The Committee will appreciate that the Bill provides for the setting up of three Historic Buildings Councils, one for England, one for Wales and one for Scotland. The object of those Councils is to advise the Minister of Works on the performance of his functions under the Bill. Those functions will be, broadly, to make grants, either capital or maintenance, for buildings of historic interest and architectural beauty. There is in existence, under the Town and Country Planning Act, a Committee which has the duty of advising the Minister of Housing and
  1176
  Local Government on preservation orders, and of preparing lists of buildings which should be included as historic buildings and made the subject of preservation orders. The purpose of this Amendment is to try to combine the functions of the Historic Buildings Council and the functions of the Committee under the Town and Country Planning Act, which are regarded as somewhat analogous.
  I mention in particular Sections 29 and 30 of the Town and Country Planning Act. Section 29 (3), which is the relevant subsection, provides for the confirmation of preservation orders which have been made by local authorities. It reads:
  "A building preservation order shall not take effect"—
  that is, the order made by the local authority for the preservation of a historic building"—
  "until it is confirmed by the Minister, and the Minister may confirm any such Order either without modification or subject to such modifications as he considers expedient.
  The Amendment would place upon the Minister of Housing and Local Government the obligation to seek the advice of the Historic Buildings Council before be exercised his duties under Section 29 (3). Section 30 of the Town and Country Planning Act is the section which requires lists of historic buildings to be prepared, and a Committee set up by the Minister of Housing and Local Government is engaged in preparing these lists. It is thought that the work of this Committee is analogous to the work which will have to be done by the Historic Buildings Council under this Bill, and that there is no reason for the continued existence of two separate bodies. The purpose of this Amendment is to set up one Committee which will have the purpose both of preparing the lists and of carrying out the functions under this Bill, and which will, in addition, advise the Minister of Housing and Local Government on the making of preservations orders. I think this would be a simplification, but I should be glad if the noble Earl could tell us whether or not this could be done administratively, without an Amendment to the Bill. As I have said, I am not encouraging the noble Earl to accept this Amendment. It may well be that it cannot be done administratively, and I

  1177
  should be satisfied if the noble Earl would give me an assurance either that this will be done administratively or, at any rate, that it will be seriously considered.
  There is one difficulty which I see in this; namely, that the Committee making a list of historic buildings is of necessity a temporary body. Once they have made their list the Committee would automatically go out of action; there would be nothing more for them to do. Furthermore, under Section 30 (5) of the Town Aid Country Planning Act the persons who are qualified to form the Committee to make the lists are set out. They are
  "…such persons or bodies of persons as appear to him"—
  that is the Minister—
  "appropriate as having special knowledge of or interest in buildings of architectural and historic interest."
  Therefore, what you have is a Committee of specialists preparing a list, and the Historic Buildings Councils which are to be set up under this Bill. I should welcome the noble Earl's view on whether it would be appropriate, or whether it is in the mind of the Minister for the purposes of the Historic Buildings Council, to have a Committee of experts, or a Committee of men and women who can take a broad view of an application for a grant—possibly with some general building experience, with an understanding of estimates and repairs, and so on—and who are able to form a judgment upon whether an application for a grant should be made. In other words, they would be people who, while not necessarily experts, would be able to weigh up the opinion of experts and form a sound judgment of their own. If that is the view of the Minister, then it would hardly be consistent that the Committee of technical people who are preparing the lists should be the same body as the people who are going to form the Historic Buildings Council.
  That is one of the difficulties that I foresee in this Amendment, which is asking that they should consist of the same people. In other words, I am raising this Amendment for the purpose of a discussion, rather than for t he purpose of pressing it to a Division or insisting upon its acceptance. My own view is that it would not be easy to combine the functions under Sections 29 and 30 of the Town
  1178
  and Country Planning Act with the functions which are required to be carried out by the Historic Buildings Council under this Bill. I do not think it would be easy for the same body of people to do the job. It may. however, be possible w combine them in some form and to have one Committee, comprising people of expert qualities, as laid down in Section 29 of the Town and Country Planning Act, and the kind of people that I have in mind, and I believe the Minister has in mind, for the purpose of carrying out the functions under this Bill. At any rate, I should welcome the views of the noble Earl on this matter, and for that purpose beg to move this Amendment.
  Amendment moved—
  Page 1, line 12, at end insert the said words—(Lord Silkin.)
  THE EARL OF MUNSTER: I would not in any way quarrel with the explanation that the noble Lord has made on the Amendment which he has moved, for he says quite correctly that its object is to provide that the Historic Buildings Council for England and Wales should replace the Minister of Housing's Advisory Council on buildings of special architectural or historical interest, which is, as the noble Lord knows, more commonly described as the Holford Committee. That Committee is primarily æsthetic and it deals with a large range of houses. As the noble Lord quite rightly said, the work of the Historic Buildings Council will be primarily financial, and they are likely to be dealing with only a small number of cases. If we joined these two bodies together it would have this effect: that in future the Historic Buildings Council for England and Wales would be appointed jointly by the Minister of Works and by the Minister of Housing. They would then advise the Minister of Works upon matters which would arise under Part I of the Bill, and the Minister of Housing on matters dealing with historic buildings which arise under the Town and Country Planning Act, 1947.
  As the noble Lord will know full well, proposals similar to this were made during the Committee stage in another place. A proposal was put forward to amalgamate the Holford Committee and the Historic Buildings Councils, but the idea was ultimately withdrawn in favour of a further proposal to amalgamate all the powers into the hands of the Minister

  1179
  of Works. My right honourable friend pointed out that, in his opinion, a single body advising two separate Ministers was an unfortunate half-way house, but he nevertheless promised to consult with the Minister of Housing about the transfer of his powers. The noble Lord who moved the Amendment asked me whether, if a decision is made, it can be carried out administratively, whether there will have to be an Amendment of the Bill or whether it can be done by an Order in Council. I think it would be advisable to wait until the discussions of the two Ministers have taken place and the results have been announced before I endeavoured to guess as to which might be the most appropriate method, if it were so decided to amalgamate these two bodies.
  The Historic Buildings Councils will be composed of a variety of people who are not necessarily experts in any one particular line, but they will certainly be in a position to advise my right honourable friend whether grants should be made for the upkeep of a house of historic interest. I would not say more to-day as these conversations are taking place between the two Ministers, but I have no doubt that, on the completion of their inquiry, one or other of my right honourable friends will take an opportunity of letting another place or, indeed, this House, know what has been decided about the future of these two Committees. In view of what I have said, I hope that the noble Lord will be prepared to withdraw his Amendment.
  4.3 p.m.
  LORD SILKIN: As the noble Earl rightly says, a number of proposals were made in another place, and the one that I am moving was one of them. There was the other proposal to transfer the relevant powers of the Minister of Housing to the Minister of Works. In fact, this particular proposal was never discussed at all in another place. The Minister described it as "a half-way house," and the whole of the discussion took place on the proposal to transfer functions. I therefore thought it was right to put down this Amendment in order that we might get the views of the Minister. From what the noble Earl has said, may I take it that the Minister has definitely rejected this method of dealing
  1180
  with the matter and of having a single Committee which will be answerable to both Ministers, and that the only matter which is being considered is the question of the transfer of functions?
  THE EARL OF MUNSTER: Yes, I think that is correct.
  LORD SILKIN: I have very little confidence in the transfer of functions; I do not think that will "come off." The question I want to ask before withdrawing this Amendment is whether, if he finds, as I believe he will, that it is not practical politics to transfer the functions because of the immense repercussions that would be involved, he will consider the possibility of simplifying the machinery, which I think he can do administratively, either by way of having one Committee or possibly by way of having one Committee and a sub-committee? I think it can be done like that. If he can give me an assurance that that will be considered, I shall be prepared to withdraw my Amendment.
  THE EARL OF MUNSTER: Yes, I can certainly give the noble Lord that assurance. I can go further and say that I am certain that my right honourable friend the Minister of Works is only too anxious to find some method whereby the machinery can be simplified.
  LORD SILKIN: In view of that, I beg leave to withdraw my Amendment.
  Amendment, by leave, withdrawn.
  On Question, Whether Clause 1 shall stand part of the Bill?
  VISCOUNT GAGE: I am not rising to move any Amendment, even for the purpose of getting it rejected, but I want to ask one question as this Bill has not been considered very deeply in detail. The Bill gives the Minister considerable powers. They are rather vaguely expressed and a good deal depends on how they are administered. I wonder whether my noble friend could indicate what is going to be the position of the Historic Buildings Councils in relation to owners. Will it be possible for owners to communicate directly with these Councils and for the Councils to correspond directly with owners, or shall we be told that an official edict will prevent any communication except with the Secretary

  1181
  at the Ministry of Works? Personally, I hope that there will be the freest contact between owners and Councils. I concede that it might result in correspondence which would be lengthy and, indeed, tedious, but I believe that a great deal will be gained if the Councils have direct experience, and if they know directly what the owners' problems are and do not have to rely entirely on the views of other experts.
  LORD CHORLEY: I should like to draw attention to subsection (6) of this clause and to express the hope that the Minister will take a wide view of the report which this subsection requires. It is the clause under which the Councils have to prepare a report in respect of the matters on which they have advised the Minister during the year. I felt inclined to put down an Amendment also, but my proposal was such a reasonable one that I thought the Government might well accept it. Like the noble Lord, Lord Silkin I am most anxious that we should have this Bill at once, bur I think that, with a certain amount of administrative elasticity, if the noble Earl would bring the matter to the attention of the Minister, what I want to achieve may in fact be achieved. What I should like is for this report to be widely drawn and, so far as possible, present every year to the nation a conspectus of the situation in respect of these historic buildings. I think everybody agrees that the work of the Gowers Committee has been of the highest value and certainly has disturbed the nation as a whole. In that way, I think it has brought enough pressure to bear on the Government to lead to the introduction of this Bill. It would be extraordinarily valuable if the Historic Buildings Councils could, during the course of their work, take a general view of the situation in respect of these historic buildings up and down the country. Such a report would be of very great value.
  During my speech on Second Reading the other day, I drew attention to the condition of two of our most important buildings which are, in fact, in the custody of the Government—namely, Hampton Court and Kensington Palace. I have reason to believe that the state of both these buildings is deplorable, and that among knowledgeable people in the country there is a great deal of disquiet about their condition, and, indeed, about
  1182
  the condition of other buildings of little less importance. I think it would be most valuable, if these Historic Buildings Councils are to be composed of really knowledgeable people, that they should be instructed by the Minister to take a very wide view of the whole of the transfer of these buildings, which are of such inestimable importance to the country, and should be encouraged to prepare a report which presents a wider view than that which they are required to give under the terms of this Bill.
  THE EARL OF MUNSTER: My noble friend Lord Gage asked me whether the relationship between the Historic Buildings Councils for England, Wales and Scotland, would be cordial as regards owners. I have no doubt whatsoever in my mind that the relationship between the two must be very close at all times, and I have no doubt at all that in the course of a very short time these Historic Buildings Councils will find out the views of the owners of historic buildings. The obvious way for an owner to try to obtain assistance through this Bill is for him to get into direct touch with the Historic Buildings Councils. He can, if he so desires, write direct to the Minister, but undoubtedly the Minister would submit his application to the Historic Buildings Council. The noble Lord, Lord Chorley, suggested that the report of each council which has got to be submitted annually to Parliament should be drawn in the widest possible terms, because the report would be of great interest to a large number of people. I am quite certain that my right honourable friend would not dissent from the views which the noble Lord has expressed, and I will certainly convey to him the suggestion which the noble Lord made: that the reports should be drawn as widely as possible, in keeping with the powers of the Council under the Act.
  LORD CHORLEY: I am very grateful to the noble Earl for his undertaking.
  Clause 1 agreed to.
  Clauses 2 and 3 agreed to.
  Clause 4 [Grants for preservation of historic buildings]:
  4.12 p.m.
  LORD METHUEN LORD METHUEN moved, after subsection (3) to insert:
  "(4) Any repairs towards the cost of which the Minister makes a grant shall be carried

  1183
  out in a manner approved by the Minister and, if he shall think fit, under the supervision of such person or persons as he shall appoint."
  The noble Lord said: I was rather surprised that as a matter of routine some such subsection as I suggest in my Amendment has not been inserted into the Bill. I think that every continental nation has some scheme for preserving its monuments, and where money has been granted by the State, there is provision that the Minister concerned must have a direct say in how it is spent. That may be through his personal supervision or through the work being done by his own Department, or being done to his satisfaction by the owner of the house or building. I do not want to press this Amendment, as I understand that the Minister will assume these powers. But, if I may say so, it is rather unwise for the Minister to assume universal power and for us to take it for granted that this will be done. I think it is in the public interest that such a power should be specifically mentioned in the Bill. I beg to move.
  Amendment moved—
  Page 3, line 37, at end insert the said subsection.—(Lord Methuen.)
  THE EARL OF MUNSTER: Subsection (3) of Clause 4 already gives the Minister of Works power to impose conditions when making a grant. If the noble Lord will turn to that subsection he will see that
  "A grant under this section may be made subject to conditions imposed by the Minister for the purpose of securing public access to the whole or part of the property to which the grant relates, or for other purposes, as the Minister may think fit."
  In point of fact, therefore, the Minister would specify the methods to be adopted in every case, and would subject each grant to conditions of control and inspection. If I accepted this Amendment—I sincerely trust the noble Lord will see his way to withdraw it after my explanation—it would make it mandatory upon the Minister to stipulate exactly how the work on any variety of ancient building was to be done. That would, in my view, be unfortunate, and my right honourable friend would rather the matter was left flexible so that he can subject every grant which he makes to adequate conditions and control. I can certainly, and most readily do, give the noble Lord an
  1184
  assurance in those terms. Of course, the noble Lord will remember that under the first three clauses of the Bill the Historic Buildings Councils are to be consulted about the grants and, indeed, about conditions. I hope that, with that explanation, the noble Lord will see fit to withdraw this Amendment.
  LORD METHUEN: I thank the noble Earl for his explanation. My point was simply that abroad it is a matter of routine to specify what I have suggested, and I am sorry that it is not laid down in the Bill. However, I ask permission to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Clause 4 agreed to.
  Clauses 5 to 17 agreed to.
  4.19 p.m.
  LORD SILKIN LORD SILKIN moved, after Clause 17, to insert the following new clause:
  Amendment of s. 12 of the Ancient Monuments Act, 1913
  " . Subsection (1) of section twelve of the Ancient Monuments Act, 1913, shall be amended by the insertion of the words 'properly to be described as ancient' after the words 'such monument' and again after the words 'such other monument' and by the insertion at the end thereof of the words 'and may likewise at any time amend any list prepared or published under this section'."
  The noble Lord said: On the Second Reading of the Bill I drew attention to the fact that there was not in existence a satisfactory definition of an ancient monument. I indicated the respects in which I thought the existing situation was unsatisfactory and anomalous. There was no clear distinction between ancient monuments and historic buildings. We have managed to get on very well in the past without an exact definition of an ancient monument, but while we are dealing with ancient monuments in this Bill it seemed to me that it would be a good thing if we could get a clearer definition of the term. At the moment, it really boils down to a building or structure which the Minister says is an ancient building; and there are many examples of historic buildings which could come into the definition of ancient monument, and vice versa. I have tried to produce a definition of "ancient monument," which no doubt the noble Earl will regard as wholly unsatisfactory. If he does think so, I will withdraw it, but I should like his view as to this question of a defini-

  1185
  tion, because a good many people attach importance to it.
  There is one practical point to which I referred last time and to which the noble Earl was not able to reply to then—it arises on Amendment No. 16. If we could get a clear definition of "ancient monument," it might well be that the body of people who are at present engaged in listing ancient monuments could also be engaged in listing historic buildings. The two functions are very similar, and it seemed to me there was a possibility of dovetailing the two functions with their respective organisations. That is really the purpose of Amendment 16, which I may be out of order in referring to at this stage, though it really covers the same subject matter. So I should be grateful if the noble Earl could tell me whether he agrees that the existing definition is unsatisfactory. Whilst I do not ask that the Amendment be accepted if it is considered unsatisfactory, I should like the noble Earl to tell me what it is he proposes to do about it and whether it is possible, by administrative measures, to dovetail the work of the Ancient Monuments Board and the Committee dealing with the listing of historic buildings. I think both are likely to go on their way for many years to come, though the listing of historic buildings must come to an end one day. But it is a slow business, and if the two bodies could be merged into one, so much the better, because there would be some saving in expense and trouble. I beg to move.
  Amendment moved—
  After Clause 17, insert the said new clause—(Lord silkin.)
  THE EARL OF MUNSTER: I hope it will be convenient to the Committee if I follow the noble Lord in dealing with this and the next Amendment together. As he said, they are closely related. I have been at some pains to find out the existing definition of "monument" and "ancient monument," and so far as I have understood them they are very wide. They have left a considerable latitude to the Ancient Monuments Board and, indeed, to the Minister. As the noble Lord pointed out, we have got on very well so far, and the Act has been in operation for some forty years.
  LORD SILKIN: Has the noble Lord not found that since the passing of the
  1186
  1947 Act there is some confusion as to what is an historic building and what is an ancient monument?
  THE EARL OF MUNSTER: I was coming to that very point. A "monument," in the definition of the Acts, has always been taken to include any man-made structure, with the exception of churches which are in use. An "ancient monument" has always been taken to mean any structure of some historical or archæological interest, the preservation of which is in the public interest.
  LORD METHUEN: May I suggest that the term "historic monument" covers the whole lot, and that it is of universal application, except in this country.
  THE EARL OF MUNSTER: I would disagree with the noble Lord. One is a monument and another is an ancient monument. If the noble Lord followed my explanation, what I was endeavouring to convey was this: these definitions do not exclude buildings which are occupied as dwelling-houses. The Minister of Works has power to list ancient monuments, to make preservation orders, to accept guardianship or to make grants which specifically exclude inhabited dwelling-houses. I have been advised by those who have many years of experience in this matter that the existing scheme has worked reasonably well, and they are not aware that there is any sound reason at the present time for a change. The raw material of the list of ancient monuments and of the lists published by the Ministry of Housing under Section 30 of the Town and Country Planning Act, 1947, does, in fact, overlap, but it is not possible for the same structure to be protected under both, since the Town and Country Planning Act excludes ancient monuments from the scope of its lists. But by administrative action in the Ministry, the fields of the two lists have, in point of fact, been kept separate. In my view it would be unwise at the present time, for the reasons I have already given, to insert this Amendment here. As I have said, we know that a certain amount of overlapping does occur, but administratively we have been able to sort the two out.
  May I come now to the other point which the noble Lord made on the next Amendment, which seeks to amalgamate

  1187
  the Ancient Monuments Board and the Historic Buildings Council. Here I am in a difficulty. I believe that amalgamation would be very unfortunate, and I should differ entirely from the noble Lord if he tried to amalgamate the two—and for this reason. The individual who is going to deal with ancient monuments is someone who, presumably, is well acquainted with earth works, ruins, bridges, and, indeed, with any building which is not in daily use. But the individuals who will be invited to serve on the Historic Buildings Council will be people who may have to deal with Georgian and other period architecture, but who certainly will not be fully qualified to deal with ancient monuments. I should have thought there was a valid difference between these two. The close liaison between the Board and the Council will, nevertheless, be maintained, inasmuch as both Board and Council will be dealt with by the same administrative branch of the Ministry of Works, and will be served by the same professional advisers in the Ministry.
  LORD SILKIN: As I have said, I have no desire whatever to press these Amendments. I think the noble Earl's explanation on the first Amendment is not unreasonable, and I am prepared to accept it. On the second Amendment I should be grateful if he would give an undertaking to look into this question. I am not at all satisfied that the qualifications required for listing ancient monuments are so very different from those required for listing buildings of architectural and historic interest. I want an amalgamation of members of the Ancient Monuments Board and the people who prepare lists of historic buildings. If the noble Earl would just look at the qualifications that are required—
  THE EARL OF MUNSTER: The noble Lord is referring to the Holford Committee.
  LORD SILKIN: Yes. Professor Holford is a great friend of mine, if I may say so. I should think that he is perfectly capable of playing a part in the work of listing ancient monuments. I should certainly be prepared to entrust any ancient monument to him and feel assured that he would recognise it. I should be grateful if the noble Earl would
  1188
  give us an assurance that he will look at that matter and see whether these two groups of people can be amalgamated, of course, with their attendant administrative organisation. If we can get one Board to do the same job it would be a substantial saving. If the noble Earl can give me that assurance I shall be grateful, and I shall be prepared to withdraw the Amendment.
  THE EARL OF MUNSTER: I can assure the noble Lord that my right honourable friend is only too anxious to introduce any machinery which will simplify the machinery at present in use. I will convey to him the views expressed by the noble Lord, and will ask him to give them careful consideration.
  LORD SILKIN: On that assurance, I beg leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Remaining clauses and Schedule agreed to. Bill reported without amendment.
  Then, Standing Order No. XXXIX having been suspended (pursuant to the Resolution of July 28), Bill read 3ª, and passed.

  TREATY WITH LIBYA
  4.33 p.m.
  THE PARLIAMENTARY UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE MARQUESS OF READING): My Lords, with the permission of the House I desire to make a statement on the Treaty of Friendship and Alliance just signed between this country and Libya. Just over ten years after the liberation of Cyrenaica, Tripolitania and the Fezzan during the Second World War, it is a great pleasure to inform the House of the signature yesterday at Benghazi of a Treaty and the related Military and Financial Agreements, between this country and the United Kingdom of Libya. The texts of these Instruments have to-day been laid before the House in a White Paper. Ever since His Majesty, King Idris (then Amir of Cyrenaica) became our ally in the recent war, the relationship between the two countries has been close, and it was during our administration of Cyrenaica and Tripolitania that Libyan independence was achieved at the end of 1951, in accordance with United Nations Resolutions.

  1189
  The Treaty provides that Libya will afford us military facilities, and that the United Kingdom will furnish financial assistance in order to help Libya to enjoy financial stability and orderly economic development. The military facilities are set out in a Military Agreement whereby we are permitted to station British armed forces in Libya under conditions agreeable to both parties. For our part, we have undertaken in the Financial Agreement to provide financial aid for twenty years, the period of all three Instruments, and have agreed to pay during each of the first five years £1million for economic development and £2,750,000 as assistance towards the Libyan Budget. A reassessment will take place at the end of each five-year period. Provision for the necessary funds will be made annually in the Foreign Office Grants and Services Estimate which will, of course, be subject to Parliamentary approval. Her Majesty's Government propose to ratify the Treaty and Military and Financial Agreements after they have lain before the House for the customary period. Her Majesty's Government believe that this settlement will form a sound basis for continuing and fruitful collaboration between the two countries. It is an arrangement fully consonant with the independence of Libya, consistent with the principles of the United Nations Charter, and, as I firmly believe, a contribution to the peace and security of the area.

  EMERGENCY LAWS (MISCEL LANEOUS PROVISIONS) BILL [H.L.]
  4.37 p.m.
  Returned from the Commons with the consequential Amendment made by the Lords agreed to.

  COLONIAL DEVELOPMENT CORPORATION
  4.38 p.m.
  LORD WINSTER LORD WINSTER rose to ask Her Majesty's Government whether they have formulated any views on the last Report of the Colonial Development Corporation; and to move for Papers. The noble Lord said. My Lords, I have to begin with a short apology. I have been having some trouble with my throat, and if I consulted my own wishes I think I would have wanted to postpone my Motion. But
  1190
  I felt it would not be right to disrupt the Business of the Horse or to put to inconvenience those noble Lords who are proposing to take part in the debate. I hope, therefore, that if I get into difficulties, or cause difficulties in hearing, I may have the indulgence of the House. I have no wish to raise the temperature in this matter by anything I may say, or to indulge in any harsh criticism. On the contrary, I think that the noble Lord, Lord Reith, and his colleagues who serve with him on this Corporation have an extremely complicated and difficult task to perform and no possible criticism of neglect or lack of energy in its pursuit could possibly attach to them.
  Nevertheless, it would be useless to deny; that very grave misgivings exist about this Corporation. It was founded by the Act of 1948, but it had, in fact, begun to function in 1947. The Secretary o State for the Colonies is responsible for the Corporation, and with his approval the Corporation may borrow up to £100 million with Treasury consent, and another £10 million in temporary loans or overdraft. But the Corporation is required by the Act to balance its revenue with the charges on revenue, and in the course of its existence it has never done so. It had invested up to March 31, 1953—the end of the financial year, 1952–53—some £44,500,000 in Colonial industries, but by the end of the financial year 1951–52 its consolidated loss was over £8,250,000. And of those losses, £3,500,000 are represented by losses on abandoned projects. In his Report for 1951, the noble Lord, Lord Reith, expressed the hope that the year would be the worst in the history of the Corporation. But—and it must have been very distressing and a great mortification to him—he had to agree that the year 1952 had turned out to be even worse. That year eight more projects were abandoned, and the accumulated deficiency rose by over £3,750,000. I feel that, on those figures, we must conclude that more than two years of new outlook and financial discipline are required to shake off the effects of an unsuccessful start. If that is not the case, the alternative conclusion is that the work of the Corporation is more difficult than Lord Reith believed on taking office.
  As the result of these unfortunate figures, many voices are raised in favour

  1191
  of the liquidation of the Corporation. My opinion is that the Corporation ought to be given a longer chance, but I shall have something to say later as regards my view on whether an inquiry into the work of the Corporation may not be necessary. I shall suggest that as a well wisher of the Corporation, because it seems to me beyond doubt that if losses are to continue on the scale which I have quoted, they can only lead to disaster for the Corporation. I would mention here that in view of these losses I think the reports on the 57 projects which the Corporation are operating, given in their Annual Report, are too brief to give adequate information.
  Other points which have aroused my attention refer to the board of directors. The Secretary of State may appoint up to ten directors from persons who have had experience in and show capacity in
  "primary production, industry or trade, finance, science, administration and the organisation of workers or welfare."
  Further, it is laid down that experience should be available to the board "from directors who had obtained their experience in Colonial territories." I do not think there have ever been more than two out of the ten directors with such Colonial experience, and at times there has been only one, so that it is quite clear that the intentions of Parliament, as laid down in the Act, have been disregarded in relation to the board of directors. In the quotation I have just read, "primary production" was given priority amongst the qualifications required for the directors. For eighteen months Sir Frank Stockdale was Vice-Chairman. He died in August, 1949, and since then there has not been an agriculturist on the board although many, if not most, of these projects are bound to he agricultural in character. If this goes on, it will look like the end of agricultural settlement schemes. As State enterprise and private enterprise are often contrasted in this matter, I must say that I do not see private enterprise raising the standards of agriculture in Africa. These facts about the Board being so, I think the Secretary of State ought to pay more heed than he appears to do to the intentions of Parliament as laid down in the Act. The board has consisted of men from many walks of life—science, finance,
  1192
  administration and the organisation of workers—but they have not been men with Colonial experience, and, except for Sir Frank Stockdale, certainly not with experience of tropical agriculture. I cannot help feeling that in these facts possibly lies an explanation of many of the failures which lie at the door of the Corporation.
  The matter goes further, because the Act also enjoins co-operation with people in the Colonial territories. There was to be the appointment of committees to study and keep the Corporation informed of the circumstances and requirements of the territories where the Corporation proposed to operate. When they were set up, these committees were to be guided by persons with experience of the territories in question. I beg to ask the Minister who is going to reply if any such committees have been set up by the Corporation during their years of existence. If not, we would have to say that the Corporation have ignored the law framed for their guidance I have one last word to say on the board. A good deal of attention has been given to the resignation of Professor Lewis. I was rather surprised by his resignation. The statement has been made that he was not dismissed, but I understand that he asked that he be retained. I do not know if Professor Lewis was asked to resign, but I know he was anxious to remain a member of the board.
  I want to say a word about welfare, since it was laid down that one member of the board at least should be someone experienced in the organisation of workers or welfare. I see from the Report that these fifty-seven projects employ some 19,000 workers, of whom only four per thousand are trade unionists. Only twelve of these projects have joint machinery for the discussion of labour and welfare problems. Twelve employ part-time labour and welfare officers. There are five full-time doctors employed, thirty-seven projects have housing schemes and four of them have hospitals. I should think that there is room for an extension of workers' organisation and of welfare organisation, but I will not stress that point because I am not acquainted with all the facts and circumstances involved. I call attention to it, nevertheless.
  Voices are raised in criticism of the Corporation to say that the State cannot

  1193
  develop such projects successfully, and inevitably groundnuts are immediately quoted in support of that statement. The groundnuts scheme certainly failed, but a case cannot be established on one instance. Private enterprise has also frequently failed in Colonial territories. In Nigeria you will see a large tannery decaying. In East Africa various mining enterprises have failed. In Trinidad a large bamboo plantation was established hut its products were never used. In British Honduras projects by private enterprise to use the cohune nut and the cassava starch failed. In British Guiana mining enterprises, sawmills and earning plants have all failed. I could quote many more instances. So that if State enterprise has had its failures, undoubtedly private enterprise has had some very startling failures, too.
  As against the failure of the groundnuts scheme, I should like to quote a State enterprise which has succeeded, I think I may almost use the adjective, brilliantly: that is, the Cameroons Development Corporation, which was formed to take over the German banana plantations. They were bought for £850,000. The Corporation now has 75,000 acres under bananas, rubber and oil palm. In 1950, it made a working profit of £472,000—I am quoting round figures—and in 1951 of over £623,000. That Corporation pays export and income tax; it has contributed as much as £50,000 in one year to local welfare schemes; it pays 3½ per cent. on a borrowed capital of £1½ million, and the profits are retained to benefit the indigenous people of the area where it works. There we find, on examining that story of success, that the first chairman was Mr. F. E. V. Smith, who had long Colonial experience to his record, and there were also directors with much experience, such as Mr. G. R. R. Sharp, from Jamaica. There we find directors of great Colonial experience, evidently pursuing good methods in their administration; and they have achieved success. I feel that the facts and figures about the Cameroons Development Corporation would well repay study by the Colonial Development Corporation; and I may say, too, that I believe useful experience would be gained from the facts and figures about certain corporations in Porto Rico must repeat that I hope something will be done to strengthen the
  1194
  board of the Colonial Development Corporation in regard to having directors with more Colonial experience. I could mention several names of men with that experience who would be well qualified to serve on that Board, but who do not seem to have attracted the attention of the Secretary of State.
  I spoke about the brevity of some of the information which is given. In this Report of the Corporation for 1952, the fifty-seven projects I have mentioned in operation, exclusive of eight which have been abandoned, are covered in sixty pages; that is to say, just a trifle over one page per project. That is all the information the taxpayer gets as to the expenditure of his money. I think information about the projects which have been abandoned is particularly scanty. There are many flings one would like to know. Why was the cocoa-growing in British Honduras abandoned? After all, the cocoa plant originated in that neighbourhood. After the Corporation decided to try to develop cocoa production in British Honduras the Governor of Trinidad advertised 25,000 disease-resisting cocoa plants for sale. These plants had been bred by the Trinidad Department of Agriculture. Of those 25,000 disease-resisting cocoa plants Dutch Guiana bought 4,000, Ecuador bought 21,000, and the Colonial Development Corporation bought none. I wonder why they felt there was no attraction for them in that advertisement. Again, one would like more information about the Seychelles Fisheries. Then there is the project at Andros in the Bahamas to grow market garden produce. I should have thought that those islands have emerged far too recently in geological time for adequate soil to have formed there; indeed, it has been found that sea-water seepage renders the soil there infertile. I think that was a misguided project. The only question I should like to ask about it is: What expert advice was obtained before that project was embarked upon?
  There is no getting away from the fact that many of these projects seem to call for examination and comment. There is the Fort George Hotel in British Honduras, with forty bedrooms, built at a cost of £260,000. That sum has now been written down to £150,000, and we are told that it should show a reasonable

  1195
  profit on a reduced capital. If you reduce your capital, and keep on reducing it, probably you can show a profit; but it is not good finance. However, good judges tell me that they see little prospect of that hotel ever functioning at a profit. The history of the hotel is interesting. The building of that hotel was, I understand, recommended by the Evans Commission; they recommended the building of an hotel costing not £260,000, but £50,000; and they recommended its erection for housing the staffs of the industries which the Commission had recommended should be established in British Honduras. Those industries were recommended, but they were not established; but an hotel to accommodate their staffs was erected, as I say, at a cost of £260,000. I am told that the normal traffic in British Honduras would never justify a hotel of that accommodation. So the Fort George Hotel does not seem to have been a great success. On the other hand, the Corporation had a successful hotel in Uganda, which apparently was making a profit, but they have sold it. It seems to me that they sold the wrong hotel. The prices charged by the Fort George Hotel are extremely high, being some £3 a day, and £1 for the trip out to the airport. That is far too expensive to attract people to the hotel.
  Other things have been happening in British Honduras, and we do not seem to have been very lucky there. I hear, on good authority, that some Texan ranchers who were negotiating with the Government in British Honduras called attention to some failures of the Colonial Development Corporation, and they specially mentioned this project of the stock farm; an expenditure of 200,000 British Honduras dollars on a farm with forty-five head of cattle and an aeroplane. In connection with that project, machinery was bought abroad, and shipped to Britain, where it paid customs dues of thousands of pounds; and, being for tropical use, would have to be shipped out again. I should have thought that that machinery would have been held in bond for re-export; but apparently large sums were paid in customs dues. The aeroplane was bought for communications with the site of this stock farm, the Great Mountain Pine Ridge. But as there is apparently perfectly good road
  1196
  communication with Pine Ridge, I am riot sure for what purpose this aeroplane was bought—and whether it has been used or not, I do not know.
  Then there was another scheme there, a banana scheme that failed because the plants were planted in a locality known as the Stand Creek Valley, where the United Fruit Company had failed thirty years previously. The valley happens to be quite suitable for citrus fruit, but not for bananas. The Evans Commission, to which I have made reference, made a recommendation for planting bananas in the Toledo district, where the banana industry was started some way back in the 'eighties. Sir Charles Evans, the Chairman of the Commission, had been Chairman of the College of Tropical Agriculture in Trinidad for many years, and those who planted bananas where failure had previously been recorded by private enterprise ignored his advice and went ahead, with the failure which has been recorded.
  I do not wish to tell a tale of unmitigated woe, and in all fairness I want to say that, of course, there are many projects which have a good story attached to them, projects which are hopeful—the Palm Oil Estate and Building Society in Malaya, the ore mines in Kenya and the goldfields in British Guiana. I have not enumerated them all, but those are projects of which one may fairly say that good hopes can be entertained. As I have spoken about these abandoned projects and failures, I should like to call attention to what I think is possibly the most important point which I shall raise in the course of my remarks. Under the constitution of the Corporation it cannot write off its losses. I do not feel that the Corporation ought to have to use its successful projects to finance the unsuccessful, to pay interest and repay its losses. I think I am right in saying that the position about interest has been met—that the Government are now waiving the interest. I believe that is so. But it is my firm and considered opinion that the Corporation should now be allowed to write off the losses themselves. instead of these losses remaining, like the albatross round the Ancient Mariner's neck, to cripple and hamper its operations. I would beg the Minister, if he would be so kind, to bring to the notice of his right honourable friend the strong

  1197
  opinion which I have ventured to express: that the Corporation should be given powers to write off these accumulated losses.
  Having said that, I should like to look for a moment at the Secretary of State's views on the subject of the rules which should guide the Corporation in embarking upon its enterprises. The Secretary of State says that the Corporation
  "…should go into enterprises and incur great risks, but always where there is a prima facie possibility of making a profit."
  That seems to me rather like having the best of both worlds. He goes on:
  "We should not permit development of projects on which we know there is likely to be a loss."
  He added:
  "We cannot promote Colonial development by a series of losses."
  I interpret those statements of the Secretary of State only as saying that profitability is to be the test of the work of this Corporation: the Corporation must makes schemes pay; it must recoup itself for past losses, and it must work in association with private enterprise. Profit is to be the test. I do not believe that, wren the idea of this Corporation germinated, "Safety first" was ever intended to be its working motto. But that, apparently, is what the Secretary of State now thinks. It is to go into these projects which we know are likely to result in a loss, yet there must be a possibility of making a profit. I would say that what the Secretary of State is saying to the Chairman of the Corporation is what the old lady said in the nursery rhyme:
  " 'Mother, may I go out to swim?'
  'Yes, my little daughter,
  But hang your clothes on a hickory limb,
  And don't go near the water' "
  That is really the Secretary of State's advice to the Corporation.
  THE EARL OF MUNSTER: May I interrupt the noble Lord—only to ask him if he will clarify or expand the remark which he has just made. He said that he did not think the Corporation was ever set up to work on a "Safety first" basis. Is he advocating that the Corporation should enter into schemes of all sorts and all kinds, with complete disregard of whether the scheme should pay and of the fact that the taxpayer is finding the money?
  LORD WINSTER: I was on the point of answering that question, but I was going to answer it in the words of the noble Lord, Lord Reith, the Chairman of the Corporation. I repeat what I said, that I am sure "Safety first" was not the original idea when this Corporation was established, and I think that projects of the kind which the Corporation was set up to put forward must inevitably be risky. But I think the noble Lord, Lord Reith, was far nearer the original idea when he said:
  "The Corporation should be able to finance projects of great value but unlikely to be profitable such investment; should be recorded separately and judged on another than a profit basis."
  I am quite willing to answer the noble Earl's question in those words used by the noble Lord, Lord Reith. In using them, I think he has pot near the original idea.
  The Corporation was undoubtedly intended to pioneer, and not merely to invest money against good security. As one reads the Act, the Corporation must try things that have not been tried before, or try things which have been tried before but try them in a different way. It must also take long views about profits. It must do speculative things if it is to comply with the original intention. It must tackle things which, for one reason or another, private enterprise has been unwilling to tackle. It must initiate pilot schemes, and must provide technical assistance and training in areas where otherwise, without the Corporation, such assistance and training are unlikely ever to he provided. Possibly the noble Earl and many other noble Lords do not agree with me, but those are my views, and I think what I regard as the real duties and functions of the Corporation are really incompatible with insistence on showing a profit on every project. I believe that the prospects of the Colonial Development Corporation cannot be rosy unless it has the good fortune to function under Secretaries of State who have faith in it, and who intend to back it with their faith. I must confess that sometimes I am not quite sure that Mr. Oliver Lyttelton has that faith in the Corporation. If he has not, then that lack of faith must militate very strongly against the prospects of success.
  I wish to touch briefly upon one other matter. Of course, there has been criti-

  1199
  cism about the fact that Lord Reith has been given permission to take other directorships. I do not wish to express an opinion about that; I think it is too personal a matter. It is an affair of conscience whether the Chairman of the Corporation feels that he can take other directorships or not. To my mind, that is an affair of conscience for the Chairman; and, if he will allow me to say so, I believe the noble Lord, Lord Reith, to be a conscientious man. I leave it there. I must say that I thought the sense of timing was bad which allowed the unfortunate announcement of the heavy losses incurred by the Corporation in the last financial year to come out at the same time as the permission granted by the Secretary of State to Lord Reith. I felt that perhaps it might surprise some of the staff who are contending with great difficulties in the field to pull the affairs of the Corporation round: I felt that they might have thought it rather surprising that the work of the Corporation is not regarded as a full-time job. But there is one thing about which I want to express an opinion. I see that any criticism of the Secretary of State for having given this permission has always been met with the reply, "But the previous Government allowed Lord Trefgarne to take other directorships." There is one good reply to that; it can be expressed in the words of the Chinaman who said to his wife: "Two Wongs do not make a a White." I think that if it is considered wrong that Lord Trefgarne could take other directorships it is, perhaps, no different in the present instance; you cannot have it both ways. It is no answer to these criticisms to say that Lord Trefgarne also held other directorships.
  Reviewing it all, I feel that the main lesson we have learned is that the Corporation spread its wings too far afield in the beginning, instead of concentrating, as I think would have been wiser, on creating a solid nucleus somewhere and then working outwards. Because of that diffusion of energy in the early years, during the last two years the board's energies have, I feel sure, been almost completely absorbed in a cleaning-up process which is taking them longer, perhaps, than they anticipated when they embarked upon it two years ago. It is very dull to spend your time clearing up
  1200
  other people's mistakes and never having the fun of making your own. Probably that is a feeling which is very widespread among the members of the Board: that their time and energy have been almost completely absorbed by this cleaning-up process. But it will come to an end, and we must not repine about the past; rather must we look forward to the future.
  I said something at the beginning of my speech about opinions which are put forward about an inquiry into the working of the Corporations. I said that I thought the Corporation ought to have a longer term yet. Under its new board and Chairman it should have a longer run, to show what it can do. If these losses were to continue, and more projects were to be abandoned, the call for an inquiry into the administration would undoubtedly grow stronger; and in certain circumstances I think it might be very difficult to resist such an inquiry. After six years, the overall picture is certainly one of failure; and it might be found by inquiry that the methods of administration need to be improved. I myself am quite willing to leave that question for some time yet, in order to see whether, one of these years, perhaps soon, we may get a more satisfactory, a happier, picture of the work of the Corporation. Certainly I think that lessons are to be learnt from the Cameroons Development Corporation. The method of appointing the directors should be carefully inquired into, as I have already said, in the hope of getting men with more Colonial experience on to the Board.
  But the final conclusion to which I have come, after the inquiries and study which I have undertaken—I hope that I have been accurate in what I have said: I have certainly spoken in complete good faith, and given what I believe to be accurate figures—is this. Capital investment in the Colonies is about £2 per head. In highly developed parts of the world it is £500 per head. My mind goes back to something which Sir Stafford Cripps said in 1947. He said:
  "The whole future of the sterling group and its ability to survive depends upon quick and extensive development of our African resources."
  It is with that statement in mind, and against that background, that we should look at and consider the work of this Corporation, for it is a Corporation which

  1201
  has possibilities of forwarding that work which Sir Stafford Cripps in my opinion so correctly diagnosed as work of the highest importance, not only in the Colonies themselves but, as he said, in the sterling area. It may be that the possibilities have been exaggerated, and that certain assumptions have proved unsound; but the experiment of establishing that Corporation has, I consider, proved justifiable. And when more experience has been gained, I think the results that it will have to show may be very satisfactory indeed. I am sure of this: that the noble Lord, Lord Reith, and his board can rely upon the encouragement and support of this House in the very worrying but also very important task which they have in their hands. I beg to move for Papers.
  5.17 p.m.
  LORD BALFOUR OF INCHRYE: My Lords, I am sure we are all indebted to the noble Lord, Lord Winster, who, in spite of his vocal disability, has given us a broad review of the Colonial Development Corporation. Ashe said, this is a House of well-wishers to the Corporation. Though our criticisms may be varied and wide we all have one purpose in mind, which is to help forward the work of this Corporation. Therefore perhaps I may be allowed to make one criticism at the outset of my remarks. Before doing so I, too, should like to echo the tribute paid by Lord Winster to the great work and public service that the noble Lord, Lord Reith, has performed and is performing.
  My complaint is as to the form of expression of this Report. It is not only—and I agree in this with Lord Winster—too brief in its explanation of previous losses. It is also unusual and irritating in its form of expression. The staccato sentences, the constant references to "Corporation does this," the omission of the verb, the omission of the article, and sometimes of the pronoun, do not lend any weight to the value of the document. We all know men who wear exaggerated clothes, extra high collars, extra sloppy collars, or flowing ties—always in order to create an impression that they are something which they hope the world will accept them to be. Unfortunately, the world does not always do so; and it is the same with this Report, in its desire to portray to
  1202
  the world a picture of a dynamic efficiency and a highly organised body. I always understood that Government publications should be models of English, so far as they can be made so. This Report is far from that. I suggest, for greater clarity, a message, in the form of the Report, which I hope may be conveyed to the Board. This is the message:
  "Advise cease next year attempt impression ceaseless efficiency typified clipped sentences."
  Let us have something a little more normal next year, and it will not meet such a critical reception in that form as this Report has met with in the Press here and elsewhere.
  I want to say one word about a matter upon which the noble Lord, Lord Winster, touched—that is, about the acceptance by the Chairman of outside directorships. I was not going to say anything about it except that I am at issue rather with the noble Lord. He said it was a matter of conscience. I do not think much of that idea. If it were a matter of conscience, then I would agree wholeheartedly with the noble Lord that Lord Reith was free to accept any directorship, because we know he is a man of high integrity. I think it is a matter of administration and organisation and structure. I entirely support the idea that a Chairman should not he tied absolutely to executive work. I am glad to see the Chairman has outside interests, and he can decentralise his executive responsibilities to his senior executives in order that he may be the fountain of thinking on policy matters. So I come to the same conclusion as the noble Lord, Lord Winster, but I cannot agree that it is entirely a matter of conscience. The Secretary of State is right to make it an organisational matter.
  The Colonial Development Corporation is, as I see it, part of the general picture of the civilised world-wide responsibility for upraising the standards of backward peoples; and in particular it is part of our Colonial development policy. I agree with the Secretary of State that he is right to confine the Colonial Development Corporation to its proper rôle of embarking upon enterprises that have, if not an immediate, at any rate an eventual, prospect of profitability. I did not agree with the noble Lord, Lord Winster, when he read out the definition of the Colonial Development Corporation's purposes

  1203
  according to, I believe, Lord Reith. I prefer the Secretary of State's definition, because there are other organisations that must be considered at the same time that we consider the Corporation. There are the United Nations Agencies; the Colombo Plan; the Commonwealth Investment Corporation; the Overseas Food Corporation and the Colonial Development and Welfare Fund. Each of those has its particular function, and I believe that the Colonial Development Corporation's job is not to support socially desirable but permanently uneconomic projects.
  Of course, the Corporation must accept losses and I think it is right, provided there is some eventual prospect of economic independence for the particular project. For instance, there is mentioned in the Report—I gather from the Report that the matter is still under consideration—the question of communications in the British West Indies. I should be entirely in favour of the giving by the Corporation, if necessary, of some form of subsidy for a period of years in order to prime the pump, in order to stimulate the development of communications which are both necessary and which will in the long run be economically sound. What I should be against would be the giving by the Corporation of a subsidy for a period of years for some project which should rightly be done by one of the other Agencies I have enumerated.
  If the Corporation fits into the picture, as I submit to your Lordships it does, of our Colonial development, so also do I look at the Corporation as part of the economic development of Britain and of our Colonial Empire. I regard the Corporation as an important instrument in our economic planning, for two reasons. First, it can be the means of saving dollars for Britain. If we go more and more for dollar savers, we shall go some way towards relieving this country of our present dangerous dependence upon American economy. At present a small recession in American economy will have a disproportionate effect on the imports that America will accept from this country. The Corporation's list includes tobacco and cotton. I ask Her Majesty's Government whether they will be so good as to consider giving a direction to the Corporation that, on economic grounds, they
  1204
  should give a preference, wherever possible, to dollar-saving enterprises.
  The second point I should like to mention about the Corporation as an instrument of our economic planning is that, as the Secretary of State said in another place when speaking about Tanganyikan coal, it is no good producing goods unless there are markets able to absorb the products. It is no good building new industries in our Colonial Empire if we are unable to help those industries to find markets for what they are making. Hence, I think the Corporation's prospects are inevitably tied up with the question of reserved and preserved markets in this country for Empire goods and, contra-wise, the preserved and reserved markets for British goods in Empire markets. So long as we are tied—I do not want to argue it in detail, but I must bring this out—to the General Agreement on Tariffs and Trade in its present form, the Colonial Development Corporation can assist the production of some article in some Colony, but we are unable in this country to give that article any preference over a corresponding article produced in Japan or a corresponding article produced in Germany.
  There is going to be a session of G.A.A.T. at Geneva in September. I believe that the Secretary of State for the Colonies and his Under-Secretary ought to be assassins of G.A.A.T. if they are going to serve rightly the interests of the Colonial Development Corporation. You cannot divorce the future of the Corporation from the hamstrung position from which Britain is suffering under the present provisions of G.A.A.T. So long as they exist, for just so long we cannot guarantee preferential markets for the production which we have stimulated. Those are all the remarks I wish to make to your Lordships this afternoon and, having made one criticism and two suggestions, I would only say that I hope next year's Report will show us that the cleaning-up process has been accomplished and that the Corporation is embarking upon the road to that success which it is the wish of noble Lords on all sides of the House that it should eventually achieve.
  5.29 p.m.
  THE EARL OF LISTOWEL: My Lords, I should like to associate myself with what the noble Lord, Lord Balfour, said

  1205
  about the gratitude we all share to the noble Lord, Lord Winster, for giving us another opportunity of discussing the Annual Report of the Colonial Development Corporation. We discussed the Annual Report last year, and I hope we may soon be in a position in which such a discussion will become an annual event. I think it is particularly fortunate this year because, when this matter was dealt with in another place last week, it was associated with a discussion on the Colombo Plan. Quite naturally, the other place gave the lion's share of their attention to the Colombo Plan, and the Report of the Colonial Development Corporation did not receive very detailed consideration. Before I go any further, I should like to say that we on this side regret the absence, owing to ill-health, of the noble Lord, Lord Ogmore. He had special responsibility for the Corporation when he was at the Colonial Office and he therefore speaks with special authority on that subject.
  I feel, looking at the Report as a whole, that the Corporation can claim a very creditable record in regard to its work in the past year and considering that it has been asked to make bricks with very little straw. I feel—and I hope this view is shared by other noble Lords who have studied the Report—that the Board and its servants, both in London and overseas, have done the utmost that can be expected of them in extremely difficult circumstances. It is greatly to their credit that they have not been discouraged and have not attempted to relax their efforts, but have continued to do their best to dispose of an extremely awkward inheritance and to undertake fresh constructive work.
  The noble Lord, Lord Winster, touched on the question of whether or not the Chairman of the Corporation should take outside work. I think this is a matter which has caught the attention of the public, and it is a matter which ought to be frankly discussed. I agree with him that fundamentally it is a matter of conscience for the Chairman. I would be absurd to try to frame any general rule for the Chairman's action in this regard. One cannot say that in no circumstances should the Chairman of the Colonial Development Corporation accept any outside work. After all, it depends entirely on the particular circumstances, and the only person who can interpret those cir-
  1206
  cumstances is the Chairman himself, in the light of his conscience. I am quite certain that any Chairman of the Colonial Development Corporation would always leave time and mental energy for two things—first, to think out high policy in Whitehall, and secondly (and I am not sure whether this may not be equally important), to visit the Corporation's projects in our Territories overseas. I know from my own experience what an immense difference it makes to the morale of the people who are working for the Colonial Development Corporation if they receive a visit from the Chairman, and this can be translated into terms of added production.
  My Lords, having said that, I hope that I shall be allowed to make one or two criticisms. These criticisms I make in the spirit of the candid friend. After all, a friend is always more serviceable to us when he is criticising than when he is praising us, because we all know our virtues but we are occasionally inclined to overlook our shortcomings. I should like to start by a rather slight criticism of the form of the Report. I use the word "form" in quite a different sense from the noble Lord, Lord Balfour, and I will try to explain the difference in a moment. Of course, this Report is intended for people who are possibly as ignorant of the affairs of the Corporation as I am myself—for Members of Parliament, for the uninstructed layman and for the general public. What I think the ordinary person wants to know is, whether the Corporation is making progress from year to year, and for this purpose to compare one year with another. It would therefore be helpful, I think, if, in essentials, the form of the Report varied as little as possible in each Annual Report. I do not mean the style of the Report—we all prefer literature to White Papers; and if a Government publication happens to have a literary style, it is all the better for that. I find that White Papers are apt to he extremely dull, and part of their dullness is due to the fact that they are very diffuse. If one can criticise the style of the Report, it is that it is elliptical. The fact that it has not a style like an ordinary White Paper seems to be something in its favour. I have said that because I wanted to show that I do not agree with Lord Balfour's criticism of the form of the Report.

  1207
  Let me give one example of what I mean by my criticism. The 1951 Report, the last Report but one, states that ten new undertakings were started during the year, of which some were investigations. But it does not say in the Report which were the undertakings that were not investigations. Nor does it say how many were investigations, or what type of thing was done which was an undertaking but not an investment. These other projects were probably mostly loans, but we do not know that from reading the Report. It is impossible, therefore, from reading this Report, to know whether, in fact, the Corporation started any new development work in 1951. Yet that is the sort of question that any ordinary person would ask. On the other hand, in the latest Report, which we are discussing to-day, it is clearly stated that nine new projects were started. I feel that the word "project" is perhaps better than "undertaking." I noticed that the noble Lord, Lord Winster, used it, and I hope that that will be one of the respects in which the Reports may become standardised in form. The Report states that of the nine new projects started during the year, five were investigations and the rest were loans. That is extremely important. It is quite plain from that information that no new development work was begun in the course of the year 1952. I hope that this improvement in the form of the Report, as compared with the preceding year's Report, may be standardised, so that we can have this very vital information every year from now on.
  Now, my Lords, let me say quite frankly what was my main conclusion from reading the Report. In a sense, it is a depressing conclusion, but not really depressing because it reflects on the work of the Corporation. As I have said, I think the Corporation has done its best in difficult circumstances. But what I think emerges from the Report is that the Corporation is unable, not through its own fault, to do the work for which it was set up by Parliament in the Overseas Development Act. It was intended in the Act, and certainly intended in the minds of those who adopted the policy of which the Act was an expression, that the Corporation should operate in
  1208
  the field of marginal profitability. Private enterprise was to continue to handle profitable and highly profitable development. Of course, if private enterprise had undertaken to develop this marginal field, there would have been no reason to set up the Colonial Development Corporation. The reason for the setting up of the Corporation was that this important field of development in the Colonies had been neglected by private enterprise.
  Then there is a third field, besides the marginal field and the profitable field; namely, the field of unprofitable development—the social services, public utilities, roads, railways, harbours and so on. These were to be financed by the Colonial Governments out of public funds. The C.D.C. was not to go into this field. This was just as different from the specific task of the C.D.C. as was ordinary profit development, which it was intended should be left to private enterprise. Therefore, the specific task of the Corporation was to develop the productive resources of the Colonies in the narrow field between the highly profitable and the wholly unremunerative. I think we all recognise that the largest potential increase in production in the Colonies lies in this field. What has happened in practice is that the Corporation is now competing with private enterprise in the field of commercial profits. That was not intended, but that is what is happening.
  I wonder whether the Corporation would be able today to look at any scheme with a profit margin of less than 12 per cent. I should like to ask the noble Earl, Lord Munster—because all the Corporation's schemes have now to be sanctioned by the Secretary of State—whether his Ministerial colleague and he himself would sanction a profit margin of less than this figure. It depends, of course, a little on the character of the risk, but, broadly speaking, I imagine that the line has to be drawn somewhere; and I should be very much surprised if it were drawn at less than 12 per cent. Looking at the pages of the Report it is clear that the least profitable schemes have already been abandoned. Eight undertakings were wound up in 1952 and five the year before, so the field of operation into which the Corporation has been obliged to go is quite clear. The result is that it is able to do very little new development work. For about two years the Corporation has been unable

  1209
  to start a single large-scale development scheme. That fact emerges from the last two Annual Reports of the Corporation.
  Look at the last Annual Report. They show that, of the nine new projects, live were investigations and four were loans to private companies. Investigations are not development schemes; they are preliminary work on which development schemes may later be based. Similarly, loans are just a means of helping to finance private companies already operating in the Colony. This is a development which, although good in its way, is deflecting the Corporation from the purpose for which it was founded. I was glad to know that the Secretary of State for the Colonies has said that the function of the Corporation is not to lend money but to carry out development. One of the consequences of inhibiting development work by considerations of profit, forcing the Corporation into fields of high profitability, is that the Corporation is becoming increasingly a money-lending agency. That is inevitable. Like the banks, it puts money into the soundest schemes, and those responsible are glad to get a loan at a reasonable rate of interest.
  I do not blame any Government (this is not a Party criticism) and least of all the Corporation itself, for this failure to develop the marginal resources of the Colonial Territories, which was the purpose for which the Corporation was set up. But I suggest that the time has now come, after the Corporation has been in operation for about five years, for a review by Her Majesty's Government—I am not talking about a review by the Corporation or an inquiry—of financial policy in relation to Colonial Development, and also of the terms of Overseas Development Act. I think it will be found that a more generous financial policy is essential if this development work is to go forward. I think it will also be found that the changes which are needed are so far-reaching that they will entail an amendment of the Overseas Development Act. That Act was passed by the Labour Government, and I am not in the least ashamed to say we all learn in the light of experience, and that if we were to find that the Corporation was unable to do its work because the provisions of the Act had not given it the instrument it required for its task, then
  1210
  I am quite certain we should be ready to support any proposal that might be made for the amendment of the Act. All I am saying at the moment is that the time has come, not for an inquiry into the administration of the Corporation—that would embarrass the Corporation and hold up its work—but for a review to be undertaken, at a high Ministerial level, of broad financial policy and of the terms of the original Act.
  May I now make two remarks about financial policy. I hope the Government will consider immediately two ways in which the burden of the Corporation may be lightened. The first suggestion I have to make has already been made by the noble Lord, Lord Winster, and I should like cordially to endorse what he said on this subject. The fact is the Corporation has to repay in forty years all the capital lost on unsuccessful projects. This liability naturally increases from year to year, as projects have to be written off as failures or as unremunerative, and it restricts more and more the number of new schemes that can be undertaken. The noble Lord, Lord Winster, has pointed out that the Treasury has waived its claim for interest on this capital loss. The Corporation regards its obligation to repay capital as a very heavy burden, and in one of its recommendations it says:
  "The Corporation hopes that those capital sums can be written off, as would seem logical and equitable."
  I hope that that point will be dealt with, and dealt with quickly, because it is difficult to see how the Corporation can get forward into the field of economic development work until this financial millstone is removed.
  Another suggestion in the Report which I think would be highly useful to the Corporation is that it might be permitted to undertake schemes which are not likely to be profitable, but which are of great social importance. An example given is agricultural settlements. We all know that the most vital need for improving the standard of living in the Colonies is an improvement in the standard and technique of local agriculture—thegrowing of rice and the cultivation of vegetables and so on, which is done by the ordinary inhabitants of the Colonies. Agricultural settlement schemes which are given as an example of what

  1211
  can be done in a local setting will obviously not be profitable, but they have an immense social value. I think it would be very right and proper if the Colonial Development Corporation were authorised to undertake that sort of scheme. I was glad to see a recommendation in the Report that,
  "to an extent approved, it should be able to finance projects that are of great value but unlikely to be profitable: that such investments should be separately recorded in the accounts and the results judged on other than a profit basis."
  It may be objected that unremunerative development, such as the provision of social services, housing, schools, and so on, should be financed by public authorities out of local funds, or from the Colonial Development and Welfare Fund. That is the general rule and practice, and in most cases it works quite satisfactorily; but there are certain cases where the costs of these services must be shared between the Corporation and the Colonial Governments. And in those cases where Colonial Governments are unable to contribute towards these schemes, highly useful development is quite frequently prevented. The prospect of the cost of this development makes it impossible for the Corporation to do the work.
  Just a word, in conclusion, about one other matter where I think the Government could help the Corporation to do even more useful work—that is, in the field of scientific research. There is, I am sure, a need for more co-operation and better co-ordination between Colonial Governments and local projects of the Corporation in the sphere of practical research—I am not talking about pure or theoretical research; I do not mean laboratory work, but field work of one kind or another: soil surveys, crop demonstrations, and so on. The snag about this is that it is completely unremunerative. I know of cases in which the Corporation has had to give up promising projects because it has been unable to afford the cost of this preliminary research work. If Colonial Governments had been able to assist with a little money from the Colonial Development and Welfare allocation this work could have been done. I understand that what happens now (I imagine that the procedure is the same as it was when I was at the Colonial Office) is that the
  1212
  Colonial Government approve a research scheme and submit it to the Colonial Office for approval. If the scheme is approved, it gets a grant from the Colonial Development and Welfare Fund.
  Here, I have a suggestion to make, which I think would be an improvement it the procedure and would bring in the Corporation. In those Territories where the Colonial Development Corporation has one or more development projects, why should not local representatives be consulted and brought in by Colonial Governments at the stage of drafting their research schemes? They might help to determine the character of the schemes, which are often apt to be a little too theoretical, and if a joint scheme emerged from the discussions they might also be able to agree about sharing the cost of the scheme when it was put into operation. This would have the advantage of preventing research being too much in the air, as it sometimes is now, and of ensuring that it is directed to the economic development of the resources of the particular Territory in which work is being done. My Lords, I am afraid that I have been critical rather than laudatory in what I have said. My reason is that I am a staunch friend of the Colonial Development Corporation, and I hope that the criticisms I have ventured to make have been such as may be of assistance to it in its work.
  5.52 p.m.
  LORD RENNELL: My Lords, the points which have been referred to by the noble Earl, Lord Listowel, are points I should very much like to take up before going on to the main subject of the Report. In the first place, may 1 say that when he spoke about the form of the Report, using the word in the sense which he used it, I find myself in very considerable agreement with him. I think the actual presentation of the affairs of the Corporation in this Report could be improved by segregating the financial schedules, which are necessary and must be published, into a separate document, and having a report of the activities of the Corporation rather in the form of a chairman's extended speech on the affairs of an ordinary commercial corporation. It is not sufficient just to give a number of notes upon what has

  1213
  happened to each particular project, without putting in also the information which the noble Lord, Lord Reith, certainly has about the sort of development that has been going on, the effects that economic changes in the world have had on the value of a scheme, and comments on the policy which is being pursued in adopting or turning down new schemes. I think that that would eliminate a good deal of detail in the descriptions of the projects, which is, perhaps, not entirely necessary, and would give a much better overall picture of what the Corporation was doing or trying to do.
  It would also obviate—though I think we are all in favour of brevity—some of the unduly brief references to projects or affairs in certain of those places—references which, I think, leave a good deal to be desired. I will give only one instance. On page 55 in Section 73 (which deals with West African fisheries) we are told that:
  "in February, 1953, one trawler sank in Lagos Harbour."
  How did it sink? Did someone pull out the bung? Did someone run into it? Did it turn over? I think there is a slight over-economy of description at that point and in several other places. The fact is that we want to know more—and in saying that, I think I am probably expressing the views of all noble Lords in the House. We want to know in what direction the Colonial Corporation is going. What is it trying to do? If you read the Report very carefully you will see that there are certain indications, and they have come into debates in your Lordships' House and into debates in another place in previous years.
  I should like now to touch upon something which is clearly in line with what Lord Listowel has just been speaking about. On page 5, under the heading "Association," we find this:
  "The Secretary of State endorsed Corporation policy in his public reference to association with private enterprise and local knowledge combined where possible with financial participation—governmental or other; indeed made such association a normal requirement for capital sanction."
  We have had a good deal of discussion on that subject in this House. I think that on more than one occasion I myself have advocated the bringing together of the Corporation and local interest or local government as a method of ensuring that
  1214
  those projects should not be fathered by the Corporation, as they have been in the past, because persons in this country or elsewhere have shown themselves totally unwilling to participate themselves or to put up any money. I regard that association as absolutely essential. Reading on a little further we find—and perhaps it is not altogether surprising—that there has been
  "reluctance to invest scarce funds in the kind of risks which Corporation normally undertakes."
  This, it says, is understood. The Report also goes on to damn Colonial Governments with, I think, lather faint praise. It says:
  "Colonial governments are substantial financial partners in some projects; in general they have been helpful."
  That seems to point very clearly to one thing: the Corporation has encountered great difficulties in pursuing this policy of association with people in either management or development who might be expected to know more about a particular project than the Corporation could ever get to know. There are one or two outstanding examples where this association has been successful.
  It is clear that if the Corporation has encountered these difficulties in getting this association even from Colonial interests for developments in their own countries, there is some good reason for it. To my mind that good reason is clearly that many of the projects on which the Corporation has embarked—and no doubt some of those which are being put up to it at the present time—are such as a wise, foreseeing and sensible person would not invest money in. That brings us to the point which has been raised already by the noble Lord, Lord Winster, and the noble Earl, Lord Listowel. What is, in fact, the purpose of the Corporation? I do not share what appeared rather to be Lord Listowel's view, that the Corporation should indulge in projects that, on the whole, are more likely to lose money than to make it.
  THE EARL OF LISTOWEL: My Lords, may I make clear what I meant? I am afraid I did not make it clear when I spoke before, and naturally, the noble Lord could have misunderstood what I said. I said that I thought the Corporation could operate in the field of marginal profitability, say between zero and 6 per

  1215
  cent., with variations on both sides. I meant profitability.
  LORD RENNELL: To that I would say that if any Corporation will operate by preference on low margins of profitability, say zero to 6 per cent., it is inevitable that that Corporation will over a period of years lose money, go on losing money and never make any. "Marginal" is a word which has acquired a new meaning in the English language. That is especially true in regard to farming. In farming, when applied to land it means land which you would not farm if you could get anything better. Marginal projects of this sort seem to me to fall into very much the same category. They are projects which no sensible person would invest in if he could help it, and the suggestion seems to be that he ought to be pushed into it by a Corporation like this. I personally am doubtful whether that is the right way to develop any country.
  I think this policy needs restatement more clearly than it has been stated in another place, either this year or in previous years, by Secretaries of State for the Colonies, because it is not consistent to say that, where possible, the Corporation shall obtain partners in the form of Governments or private enterprise, and, when they report that they cannot do that, to say at the same time that they ought to go ahead on projects which other people will not follow them into, which means that they have to go into projects on which they make losses. It is only right to say that if we have this policy (I do not say it is right and I disagree with it myself), we have used this £100 million for investment in the Colonies and do not expect to see it again. That is what is meant by "invested continuously only in marginal products." In past years—I am not speaking of present policy and present direction—the Corporation had some seventy examples of precisely that policy of going into projects which other people would not touch with the end of a bargepole.
  In spite of two years' clearing up by Lord Reith, we find figures which I frankly consider very disquieting. I do not share the more optimistic, the more sanguine, views of the noble Lords, Lord Winster, and Lord Listowel. On looking at the financial statements at the begin-
  1216
  ning of this White Paper, I find that the accumulated loss is about £80 million, which is getting on for about half more than the loss last year. In other words, the rate of loss is piling up by geometrical progression. If it is the policy to spend £100 million and see no return, judging by the balance sheets of these companies that policy is being actively and satisfactorily pursued; but I do not believe that policy is the right one. I am inclined to doubt some of the figures, and from what I can see by reading between the lines I think that next year will not show any substantial improvement in the appalling rate of loss. As the noble Lord, Lord Winster, pointed out himself, on £40 million-odd invested an accumulated loss of £8 million has already taken place. I would add that nearly half of that, some £3,500,000, is loss on this last year's operations.
  If noble Lords would turn to the balance sheet on pages 10 and 12, they will see an item of investments of £5,500,000 represented by shares in associated companies, debentures and secured loans. I should like the noble Earl, Lord Munster, in his reply, to tell us, if he can, whether those investments have been written down and, if so, by how much, because on looking through the comments on the balance sheet, I see that the provisions—otherwise reserves—which are made, and which are more particularly referred to on page 4, refer, in the main, to losses already incurred—in other words, losses written off. About half way down page 4, your Lordships will see that the board write that a reassessment has been made, and £3,965,000 has been provided under three headings—namely, so much for abandoned projects, so much for continuing projects (specific) and so much for continuing projects (general). The appended note says:
  "first two are money losses; third the best possible estimate of possible losses on doubtful projects."
  As I read it, that means that there is a current reserve of £1,375,000 carried against the assets of the company which include (on page 11) £5,500,000 of investments. From the experience of the Corporation in past years, it seems to me that this reserve is very small compared even with the item of investments, and I

  1217
  should deduce from that, without being unduly pessimistic, that next year's loss will probably be of the same order as that shown in the present balance sheet.
  We are not considering a Corporation which takes the good with the bad, he profit with the loss, and will eventually pay back any of the £100 million which has been provided. We must face the fact that £100 million has been granted by Parliament in this country for projects on which the money is going to be lost. It is going to be expended in the same way as the annual provision made under the Colonial Development and Welfare Act, under which grants are made to meet deficits and the money is written off. Do not let us "kid" ourselves into thinking that this is an undertaking which is going either to repay the capital or the interest or to produce a profit, if it is to be conducted in this way. I do not think this is the right way to do it, and I do not agree with the gist of what the noble Earl, Lord Listowel, said.
  As I have said before, I believe strongly that the functions of the Colonial Development Corporation ought to be to provide funds for other people to use, to associate with Governments and enterprises and provide money on loan, and not to go into management itself. The whole curse of the activities of the past years has been precisely that the Corporation has tried to go into management. It has embarked on seventy-five or eighty projects, dotted about all over the world, in all sorts of different fields which no Corporation and no board and no chairman of any board, with all respect to the noble Lord, Lord Reith, can possibly be expected to undertake. The alternative is to use the Corporation as the machinery for finding money. It should divorce itself from management as far as possible and leave the management either in the hands of local governments or of the commercial enterprises desirous of being associated with it.
  The fact of the matter is that I do not think there is a clear policy even yet in the minds of the Corporation, of the Colonial Governments or of certain noble Lords in this House. I base that remark on a consideration of the projects enumerated on page 1. May I take investigation projects first? These seem to me to fall into two distinct categories,
  1218
  and the distinction is not made clear here. An investigation project may be for the purpose of embarking on that project either oneself or on behalf of a third party. We have examples of both here. We have very good examples in the Tanganyika iron investigation and the earlier investigation in the Tanganyika coalfields. I do not think that it is contemplated—at least, I have never heard it suggested—that if either of these two projects proves to be commercially feasible the Corporation should embark on the development of either iron or coal in Tanganyika. Indeed, so far as the coal project is concerned, it was made clear last year, if not the year before, that the investigation into the coalfields was being carried out on behalf of the Tanganyika Government. I held the view then, and I still hold it, that it is not the function of the Corporation to undertake exploratory work and investigations, more particularly in a field where there are people better qualified and who are engaged is doing it for the Government all over the world at the present time. There is no point in the Colonial Development Corporation's putting up money to bore holes to see whether there is coal there, and then handing over a report to the Government of Tanganyika, receiving the payment of expenses, plus a small fee.
  The other types of investigation—namely, those which might lead to a project being developed by the Corporation itself—fall into a different category. But we have no guidance in the Report about which sort of investigation is which. It is because that is not there that I claim there is a certain confusion of thought in people's minds as to what the Corporation is really trying to do. To recapitulate, I do not think that the Corporation ought to go into projects which everybody else has condemned and for which nobody is going to put up any money. I do not think the Corporation should go in and do exploratory mining and development work in order to hand the enterprise over for somebody else to develop after payment of a small fee. Finally, I do not think the Corporation ought to embark on mining ventures. I believe there is plenty of risk capital of this sort in the world to go and do any mining which looks at all profitable anywhere in the world. It is not for the Development Corporation to embark on that with funds provided by the taxpayer.

  1219
  The real objection at the back of people's minds when the Corporation started—and it is still prevalent here to-day—was to the idea that this was a method of providing what the noble Lord, Lord Shepherd, referred to a few days ago as adequate, cheap, risk capital. Risk capital ought never to be cheap. By the nature of things it must not be cheap, but must be capital that can earn a sufficient remuneration to write off the losses incurred on other enterprises of the same sort. It is idle to suggest that there can be any form of solvency, either local or national, in an enterprise that will put up money at cheap rates for enterprises that the ordinary commercial institution will not look at.
  I feel that there should be—and I join entirely with the noble Lord, Lord Winster, on this—an inquiry into the activities of the Development Corporation. I want to be careful in what I say here. I do not mean an inquiry into the conduct of the Corporation to-day, or into the conduct of the Corporation in past years, but I feel that there should be an inquiry to try to clear up in people's minds what it is that the Government really expect the Colonial Development Corporation to do, in the light of what it is doing and in the light of possible developments in the future. Then let there come out, perhaps (as I should hope) that the emphasis should be on the development of communications in special cases where Governments are unable to foster it; the development of agriculture by the provision of irrigation or water, as was done by the Sudan Cotton Plantation Syndicate and the Sudan Government jointly; and the provision of certain necessary, what I might call quasi public utility institutions, such as the hotel at Belise. I have no objection to that. I think it is necessary to have the hotel as part of the development of Belise—it is what I might call a quasi public utility development. It must be clear that those are projects on which a small rate of return ought to be expected; and they could be, and I think, perhaps, ought to be, guaranteed by local authorities and by local enterprises. That return will be the remuneration of the capital of the Colonial Development Corporation—the money which they have borrowed from the Treasury. Then let us by all means start with a clean sheet,
  1220
  having written off as irrecoverable the losses which have been incurred, and not keep them as a purely fictitious, evaporated asset hung round the neck of the unfortunate Lord Reith.
  6.16 p.m.
  LORD MILVERTON: My Lords, if I may take up the debate where the noble Lord, Lord Rennell, has left it, on the subject of an inquiry, not into the executive activities of the Corporation, as he has said, but into the aims and objects of it, I suggest that there is nothing very fruitful in that proposal, because who would be better qualified to offer an opinion on that subject than the present board of the Corporation itself? They have considerable experience of the difficulties they have encountered under their present terms of reference; and they have given clear indications of where their difficulties have arisen owing to those terms. If they are not qualified to offer the best opinion, I really cannot visualise any body better qualified likely to be appointed. If it were to be a high-level political inquiry, one could immediately foresee that there would never be any agreement, because many noble Lords on the other side of the House obviously have fundamentally different views on what should be the aims and objects of such a Corporation. It would merely succeed in plunging the affairs once more into the political arena, which would be deplorable.
  At first sight, on reading the wording of this Motion, one might almost have thought that it was confined—as it asks a definite question—to speculation as to the views which the Government have formed on this Report. I should never have the temerity to attempt so precarious a task as the diagnosis of the Government's mind. But in the circumstances, and encouraged by the apparently quite irrelevant speeches of all noble Lords who have spoken in this debate, perhaps I may be allowed to add one more irrelevancy in putting forward the views I have formulated on this Report. However, before doing so, lest I should forget, I should like to mention one or two points to which noble Lords have referred and on which I profoundly disagree with them.
  To begin with, the noble Lord, Lord Winster, drew the analogy of the wonderfully successful Cameroons Development

  1221
  Corporation and cited it as an example to the Colonial Development Corporation. I suggest that there is no analogy whatever between the two organisations. I happen to have been responsible for the foundation of the Cameroons Development Corporation, so perhaps I can speak with a certain amount of authority. Where is the analogy? The Cameroons Development Corporation were handled over ex-enemy assets, planted by the Germans—banana plantations, rubber, oil palm, and so forth—and the job they had to do was a totally different one, their chief initial difficulty being the obtaining of working capital. They had to face none of the difficulties of deciding whether it was suitable to grow bananas, or whatever it might be: they were already there, and had been proved successful. There is, if I may say so to the noble Lord, no real analogy whatever in the problems which face this Corporation.
  As it has been mentioned, I should like, in passing, to refer to what I regard as the deplorable references made to the fact that Professor Lewis left the Corporation on the expiration of his term of appointment. As an ex-member of the Corporation myself, I cannot for the life of me think why, when a member's turn of appointment expires, it should be made a subject of invidious questions as to the reason for it. No such questions were asked in the case of half a dozen other members in similar circumstances. They were content, and so was everybody else: and I consider it deplorable to select this one instance—for what purpose I do not pretend to know.
  Another matter on which I profoundly disagree with the noble Lord, Lord Balfour, is his criticism of the style of this Report. To me it is extremely refreshing for once to get away from the diffuse "Whitehall-ese" in which such Reports are normally written. Again, I think it would be deplorable to stand by this craving for uniformity which now seems to attack all sides of this House, and try to stamp out any symptom of individuality which we may find in such Reports. It is also refreshing that the Report has been written by the Chairman himself and has not been left to the staff in his office.
  LORD BALFOUR OF INCHRYE: All the more deplorable.
  LORD MILVERTON: I have some remarks to make on that, but they will come in the course of giving my views about the emphasis which has been laid on the profit motive. I think that generalities about whether profit motives are good or bad are quite irrelevant. The fact is that the Corporation is working under certain terms of reference. They may be good or they may be bad, but it is no use flinging at the head of the Corporation beautiful thoughts about how it ought to work, if those thoughts involve breaking some of the terms under which the Corporation has been authorised to work.
  I suggest that a proper appreciation of this Report needs a reference to its background of the past. In the early days, five or six years ago, we all talked a great deal of any nonsense about Colonial development. We all talked nobly and generously about the great field of endeavour that lay waiting for exploitation. Everything we willed then seemed destined to be ours. To-day, we are sadder and, I hope, wiser men. That vast field of endeavour waiting for exploitation is just a mirage. Experience has taught us that it is much narrower and smaller than ever one would have dreamed from the way in which we all spoke. We have learned in an expensive school, and the history of the Overseas Food Corporation, as well as that of some of the worst disasters of the Colonial Development Corporation, has shown the danger of assuming that money can do anything. Economic and sociological facts, climatic possibilities, communications, markets and businesslike management, political stability, and a score of other factors have to be studied and co-ordinated into a picture which shows whether any given scheme is a reasonable risk or not.
  Now to come to the Corporation's Report for 1952, which is the subject of our debate. I regard this as the lineal descendant of the two Reports which preceded it, and. as I see it, the present Chairman took over an organisation which was hopelessly top-heavy, in which the Chairman was also chief executive. Control of a wide range of activities, agricultural, mineral, commercial and social, including also forestry, fishing and public works, scattered over the whole wide world, was

  1223
  heavily centralised in London. I do not want to stray into any detail, because it would take far too long. I am merely trying to sketch in a bold way the overall picture. As I read it, the Report before us reveals the steady development of what I may call a two-pronged policy, internal and external. May I take the internal aspect first? If I may say so with respect, many noble Lords who comment on this and suggest what should be done, do not seem to have analysed what is the actual present policy of the board, and much of the advice being tendered to the board is what they are already struggling, in the midst of a prevailing ignorance, to do. The Chairman and his board have been steadily cutting down inflated headquarters staff and have been decentralising authority.
  Your Lordships will remember that the basic principles of the Tennessee Valley Authority, and the principle which contributed most to its great success, was just this—the devolution of executive authority to the lowest possible levels, while retaining on top a broad overall control of policy. The present Board is paying something more than mere lip service to the idea of partnership with Colonial Governments, with statutory bodies and with private enterprise, and, at the same time, is building an efficient executive machine which can function without submerging the Chairman and his board in a mass of detail and, incidentally, without the Chairman's ceaseless personal attention. It is surely an entirely wrong conception, though a popular one in certain quarters, that the Chairman must have his hand on every lever and, as it were, be on duty for twenty-four hours a day.
  After all, indispensability in this sense is not efficiency. If I may draw an analogy from my own experience, even in the confines of one Colony a Governor who concentrated all control in his own hands would be a disaster—and often has been in our Colonial history while one who organised the machine of government so as to give the utmost possible authority to others, not only obtained better results and wider popular understanding and support but also left himself free to travel, to think and to acquire those outside contacts which are so necessary to efficiency in any walk of life. Criticisms of the
  1224
  permission given to the present Chairman to undertake other work, in addition to his Chairmanship, are, I suggest, based on nothing more than a complete misapprehension and misunderstanding of the proper functions of the chairman of an organisation in which it is not desirable that he should also be the chief executive. I do not think it is a matter of conscience or anything of the sort; I think it is a matter of administrative practice—and may I add that it is a matter of very common administrative practice.
  May I now give a brief sketch of the external aspects of the board's policy as I understand it to be from a perusal of this Report and its predecessors. It seems to me to have four points. First, disengagement from ventures with no commercial prospects—for instance, the abandonment of the British Honduras fruit scheme and the West African Fisheries; also the handing over to the Government of certain schemes as development schemes, for instance, the Gambia Rice Farm. Then, secondly, a reasonable investment in loans, under guarantee, to give a steady net income towards covering overheads, investigations and abortive pilot schemes. Thirdly, in regard to existing projects, the board aims at finding commercial associates for management and also for financial participation. Fourthly, in regard to new projects the board seems to me to be aiming at virtual restriction to those offering the possibility of association with private enterprise partners and/or with Government or statutory bodies like the development boards.
  It is clear that in working with local development boards or Governments, the Corporation can provide certain marked advantages—finance, access to London contacts, private enterprise, experience and knowledge. Moreover (and this is quite an important factor, too), it can be a mediating force, on the one hand allaying suspicion of business exploitation, and, on the other, reassuring commercial interests and safeguarding them from bureaucratic gaucherie. One gathers that the Corporation's object in such partnership is not majority control but to achieve a balance. For instance, a participation of Corporation 40 per cent., commercial enterprise 40 per cent., and Colonial Government or statutory body 20 per cent., would ensure both due

  1225
  consideration of Colonial development needs and also unimpeded employment of proper technical procedures. The board seems to have a natural preference for association with local development boards wherever they exist, as in Uganda.
  Lastly, one cannot but sympathise with the board's desire to be allowed to write off the burden of "dead" capital, and also to be allowed to segregate, and have special accounting for, projects that are developmentally valuable but unlikely to he profitable. As our experience has grown, one has been tempted by some of the initial disasters to say that the Corporation should be restricted, either to the provision of finance or to operation through established local development hoards and such bodies; but probably, none the less, it would be better to try to maintain, within approved policy limits, the maximum flexibility of operation. In passing, I would say that there is a case to be made, in my opinion, for the Corporation operating in that no-man's-land which lies between the profitable private enterprise and the Colonial Development and Welfare sphere. There are schemes which could be of great development value, which would not necessarily end in a loss but which would certainly not produce the profit which would be necessary under a strict interpretation of the terms of reference of the Corporation.
  My Lords, I have tried to give the picture as I see it. Personally, I am entirely in agreement with the policy of the board as exemplified in this Report. The gloriously amateur days of three or four years ago have gone for ever. The glad, confident morning of its birth has faded into the light of common day. As the Secretary of State for the Colonies has indicated, it is rendering no service, either to this country or to the Colonies, to initiate and run at a loss schemes which never had in them the ingredients of success. There is no intrinsic merit in commercial failures or in managerial inadequacy; and the Colonial Development Corporation would surely be failing in its duty if it regarded sterile expenditure of the overtaxed British taxpayer's money as a meritorious performance. I hope that the noble Earl, when he comes to reply, will he able to say that Her Majesty's Government endorse the policy of the Corporation, as exemplified in this
  1226
  Report, and also its requests for certain relaxations of its terms of reference, and that, in fact, they will give their blessing to the Report as it stands.
  6.36 p.m.
  THE EARL OF MUNSTER: My Lords, I feel the whole House will agree that we have had a very interesting and illuminating discussion this afternoon on the whole field of the Colonial Development Corporation. I feel sure, at the same time, that the House will have been glad to notice that the noble Lord, Lord Winster, who moved this Motion to-day, seems fully to have recovered his vocal chords. I fear that in replying to this debate I shall have to weary the House for some time in answering the many important questions which have been raised. I apologise for so doing, more especially as the House has heard sufficient of me in the course of this week; but if I now inflict a long speech upon the House, there is ample opportunity during the long Recess for noble Lords to recuperate.
  The House will recall that in May of last year we had an important debate on this Corporation; and in replying for Her Majesty's Government I made a somewhat lengthy statement on our policy towards this body. Whilst I have no desire to repeat that statement, I would remind the House of the policy which I then announced would be followed in the future. I do so briefly for this reason: that it has much bearing on what we have been discussing this afternoon. Subject to this the primary duty and principal purpose of the Corporation was to remain unchanged. Her Majesty's Government have never felt that it is their responsibility to supervise the detailed carrying out of each individual scheme undertaken by the Corporation, or at the same time to usurp its function of judging the commercial soundness of any scheme. However, as I said then and as I repeat to-day with equal emphasis, as so much of the taxpayer's money must inevitably be involved in every single one of these schemes, we feel that we must have a say in the choice of schemes and the final decision whether any particular one should he pursued or not.
  Of course, it is the duty of the Government to facilitate in every possible way the work which the Corporation is undertaking; and my right honourable friend is

  1227
  of the same opinion that the two major conditions which he laid down last year must still be fulfilled before he can sanction any new project. The first of these was that he would require enough information to enable him to judge whether a prima facie case had been made out; and secondly, as I think was mentioned by the noble Lord, Lord Rennell, that someone else besides the Corporation should normally share in the risk, whether it was a local or United Kingdom private enterprise or a Colonial Government. Indeed, the Corporation has itself been working on that basis for some time, and mention is made of the fact in paragraph 4 of the Annual Report. Now I should like to say a word about the Annual Report for 1952 with which noble Lords are fully acquainted, and which we have been discussing to-day. Complaint has been made that the Report is too brief; but that has nothing whatever to do with my right honourable friend the Secretary of State. The only responsibility that he has in any way for the Report is to lay it before Parliament and carry out a particular section of the Act.
  The House will have observed that nine schemes have been started and eight have been abandoned during last year, that there are now fifty-seven projects operating and a further number, which figure I cannot give, are still in the investigation stage. Unhappily, as the noble Lord, Lord Winster, remarked, the Corporation are still showing substantial losses even though it was hoped that the year 1951 constituted the peak of the loss. The greater part of that loss which has been sustained, however, can, I think, be attributed to projects which were begun in the earlier days of the Corporation. It is quite true that the number of new schemes started last year has not been large, but the Corporation has during the past eighteen months concerned itself with overhauling its organisation and steadily weeding out those bad schemes. In fact, during this pause in time, the Corporation has been taking stock of its position and endeavouring to put its house in order. At the same time, it is in the Corporation's own interest, and that of the Colonies as well, to keep all speculative projects down to a minimum and to proceed with any new schemes with caution.
  1228
  I should like now to say a word about the functions of the Colonial Development Corporation and the Colonial Development and Welfare Fund. Mention was made of it to-day in the speech made by my noble friend, Lord Milverton. I do so because I am not certain that the distinction between these two is always fully understood. There is at times much confusion of thought, and it might therefore be useful if I recall the different purposes of the Corporation and the funds provided for the working of Colonial Development and Welfare. The Corporation is, of course, only one of the agencies of Colonial Development. It was set up to deal with commercial type projects which I need not go into now, but which are in fact all enumerated in the first section of the 1948 Act. On the other hand, the Colonial Development and Welfare Fund can provide funds to assist Colonial development in drawing up long-term plans precisely because they are, as I think was pointed out by the noble Earl, Lord Listowel, commercially unremunerative and are usually regarded as a Government responsibility.
  The noble Lord, Lord Winster, and the noble Lord, Lord Milverton, both mentioned the fact that suggestions had been heard that the Colonial Development Corporation should be wound up and liquidated. Frankly, I admit that this is the first time that I have heard this rumour, and indeed it is without foundation. Although both noble Lords were not in favour of the idea of liquidating the Corporation, the noble Lord, Lord Winster, nevertheless suggested that a Committee should be set up to inquire into or to review all the workings of the Corporation. I could not support that proposition. In the first place, if it was intended to close down the Corporation, the responsibility for that action must rest on Her Majesty's Government alone, who always have obtained, and always can obtain, from the Corporation all the information which it is necessary for them to have in order to reach a major decision of that character. In my judgment, there is no necessity for a committee of inquiry into the workings of the Corporation.
  My right honourable friend, as the House will remember, has agreed with the Corporation upon certain conditions which it must fulfil, and he himself as

  1229
  Colonial Secretary is responsible to Parliament for the broad general principles of policy which the Corporation follow. If this was a departmental committee it could, I venture to think, add nothing at all to what is already known; and if it was an outside committee I venture to think it could find out nothing further; and there I would agree with my noble friend the Lord Milverton. There s a close relationship between the Colonial Office and the Corporation, and it is working to mutual satisfaction. But any committee which was set up to inquire into the functions of the Corporation could do no more than report that it was fulfilling the obligations which are written down quite clearly in the first section of the Act.
  I pass front that to deal with another point which was made by the noble Lord, Lord Winster—namely, the regrets which he felt that there were no directors with Colonial experience on the board of directors. In point of fact since the Corporation came into being there have been on the board five individuals with a considerable knowledge of Colonial territories; and, of course, Sir John Hall is still a member of the board. The noble Lord, Lord Winster, attributed some, but not all, of the Corporation's misfortunes to the fact that there has been no expert in tropical agriculture as a member of the board since, I think I am correct in saying, the death of the late Sir Frank Stockdale. It is quite true that to-day there is no member of the board with the necessary agricultural qualifications. But it could be argued—I do not want to rouse the noble Lord now—that the appropriate place for the expert is on the staff and not in fact upon the board.
  The House will be interested to know that the Corporation has recently set up a panel of scientific advisers, almost all of them experts in various branches of agriculture and science, for the special purpose of advising the Corporation upon how it can most effectively use scientific knowledge and experience in application to agricultural projects overseas. I understand from the noble Lord the Chairman of the Corporation that the Corporation consults this panel on the planning and inauguration of new agricultural projects, on problems which arise from existing projects and on the selection of personnel for investigations and for
  1230
  experimental work on projects. My right honourable friend the Secretary of State has told the noble Lord the Chairman of the Corporation that he regards this as an excellent innovation and I think it does meet in substance, though perhaps by a somewhat different method, the point which the noble Lord, Lord Winster, has raised.
  The noble Lord, Lord Winster, also asked me about and drew attention to Section 7 of the 1948 Act, which gives power to the Corporation to set up local committees in any of the territories in which it is likely to function or operate. The section states that the committee will have the duty of keeping the Corporation informed as to the circumstances and requirements of the inhabitants. Since that Act was passed, regional commissioners have come into being, and it is their duty and responsibility to keep the Corporation fully informed of what is occurring in their particular territories. Naturally, I take it (and I am sure that I am correct) that the regional controllers are in almost continuous touch with the local Governments in their regions, and they are fully acquainted with the views which those Governments would express. If the regional commissioners had not been appointed, there might have been considerable merit in having these particular committees functioning. I should mention, in passing, that the section in the Act, in effect, leaves the establishment and the composition of these committees entirely at the discretion of the Corporation. So, if they have not been appointed the Corporation is not in any way breaking any section in an Act of Parliament.
  My Lords, I should now like to answer some other detailed questions which were put to me during the course of this debate. As regards the resignation of Professor Lewis, I regret, with my noble friend Lord Milverton behind me, that this matter is constantly coming up as if there were something sinister or shady behind it. Professor Lewis was neither dismissed nor did he resign; he accepted appointment for two years, and at the end of two years his appointment expired. That is all I can say on that point. I am aware of no question which caused him to be dismissed or to resign.
  I should like now to deal with further important points which came up during this discussion, but I would say in the

  1231
  first place that every one of the schemes which the noble Lord, Lord Winster, referred to, and which have now been abandoned, were in fact founded and started in the days of the late Government. How right Lord Listowel was when he said in the course of his remarks that we all know our virtues, but that we are apt to overlook our shortcomings! The noble Lord, Lord Winster will forgive me if I do not go into all the questions he raised. In point of fact, the aeroplane in British Honduras was purchased for the main purpose of spraying from the air. Colonial Development Corporation employees are, of course, permitted, and I should imagine encouraged, to become members of registered trade unions where they exist. But as the noble Lord, Lord Winster, knows full well, there are not many registered trade unions functioning in the Colonial territories on the basis that we understand. As regards labour welfare, the Corporation is subject, of course to the local labour laws, and the Corporation co-operates, as it must do, with the local labour departments.
  Finally, there is the question of machinery being imported into this country from one project in a Colonial territory, to be sent out again into another. There the position is slightly complicated, but I think I can cover it in these terms: that if the machinery is of British origin no Customs fees or dues are paid. On the other hand, if the machinery has been manufactured in America, and has been supplied to a project direct from the manufacturers in the States, then the Corporation deposits with the Customs a sum based upon the value of the machinery when it is brought into the United Kingdom from the Colony, and that deposit is refunded when the machinery is exported to a fresh field of operations.
  Many noble Lords asked me questions concerning the writing off of capital losses on those projects which have now been abandoned. I told the House last year that we were prepared to relieve the Corporation of liability from interest in respect of capital advances which could properly be regarded as dead. Since then a further undertaking has been given to the Corporation that Her Majesty's Government intend to introduce legislation to permit the writing off of capital losses on schemes which can properly be
  1232
  deemed to have been abandoned. We hope that this legislation will be introduced early next Session.
  Then, my Lords, there was the question raised—I think by the noble Earl, Lord Listowel and by the noble Lord, Lord Winster—about the noble Lord who is Chairman of the Corporation. I feel that I cannot do better than to read to the House the reply which was given in another place by my right honourable friend on the question of Lord Reith and outside directorships. He said this(OFFICIAL REPORT, Commons, Vol. 516, Col. 209):
  "Now that Lord Reith has nearly completed his reorganisation of the Corporation both at headquarters and in the regions, I saw value in a suggestion which he made some time ago, that the Chairman, as in many large commercial organisations, should concentrate upon major questions of policy, leaving the day-to-day administration to be carried out by the strengthened executive. I therefore felt able to agree that the post of Chairman need no longer exclude the acceptance of two or three private directorships. I welcome this move, since it will keep the Chairman in closer touch with the business world outside the Corporation. The reorganisation of the executive will be completed in the autumn and thereafter Lord Reith's salary as Chairman will be £3,500 per annum instead of £5,000. He has assured me that he will still regard the Corporation as having the first claim upon his time and energy."
  In reply to a supplementary question, my right honourable friend said that Lord Reith would continue to give the whole of his time to the affairs of the Colonial Development Corporation, subject to attending one or two board meetings of those companies a month. The House will see at once that, although my noble friend is taking on additional directorships, he is at the same time having a very substantial reduction in his salary.
  Perhaps I may turn now to a criticism which has been made to-day, I think I am correct in saying, by the noble Earl opposite, that the Corporation has not been fulfilling the duties which have been laid upon it by the Act, but on the contrary has invaded the field which should be covered by private enterprise. I can only call to my aid the Act of Parliament which charges the Corporation
  "with the duty of securing the investigation, formulation and carrying out of projects for developing resources of Colonial territories with a view to the expansion of production of foodstuffs and raw materials or for other agricultural, industrial or trade development therein."

  1233
  Surely the development of rubber in Malaya, or sugar in the West Indies, or copper in Northern Rhodesia, is a development of the resources of those territories, and indeed an expansion of the production of their foodstuffs and raw materials. It has been carried out by private enterprise, but is, nevertheless, part of the functions of the Corporation under the Act.
  My Lords, it seems to me that the difference between private enterprise and the work of the Corporation is not so much in the field of their activities as in the instrument used for developing that field. I am supported in this view by the observations which were made by a former Minister of Food, Mr. Strachey, who, when moving the Second Reading of this particular Bill in another place, admitted the part played by private enterprise in the past—and, indeed, particularly mentioned Malayan tin and rubber, and Rhodesian copper. He then went on to say (OFFICIAL REPORT, Commons, Vol. 443, Col. 2016)—and this is what I would ask the noble Earl to bear in mind:
  "This old type of development….has become decreasingly desirable and even decreasingly possible in the case….of many areas. The whole tenor of world Influence to-day in the areas themselves, and generally, is making it less and less possible to rely exclusively on that form of development."
  The right honourable gentleman went on:
  "I am not saying, of course, for one moment that there is no place in the future for private enterprise and profit-seeking in Colonial development. On the contrary, the organisations, the instruments, which the House is being asked to set up this afternoon, will undoubtedly use private firms in many cases in every kind of partnership and contractual relation with themselves."
  I do not, of course, support the views of the right honourable gentleman about the obsolescence of private enterprise, but the important point is that the late Government thought of this as an alternative instrument to private enterprise in developing exactly that field of development which had previously been the exclusive preserve of private enterprise. I really cannot understand why the Corporation can be said to be neglecting its duties. It seems tome, on the contrary, that it is doing precisely what it was originally set up to do; and it is doing it precisely in the way in which the noble Lord's own Party contemplated
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  it should—namely, in partnership with private firms. In view of the criticism that has fallen from noble Lords opposite to-day, I am inclined to ask whether the theory which they support is that good schemes should always be for the field of private enterprise and that bad schemes should always be for the field of the Colonial Development Corporation. That certainly is not what the Corporation was founded to do.
  There is one other matter to which I must refer—and I apologise for taking so long. Mention was made this afternoon of the Corporation's need to be able to spend money on investigations and experiments which were not likely to be of a remunerative nature. I would refer at this stage to the importance of pilot schemes. These two points are often linked together, although in fact they raise a very different set of considerations. I suppose that "pilot scheme" has become a fashionable term, and there is a tendency to think that any, and every, project must be preceded by a pilot scheme. You could not, however, carry out a pilot scheme to see whether it was practicable to dam a river and install a hydro-electric plant. Where pilot schemes are appropriate we should entirely support the view that they should be carried out.
  I wonder what really is meant by some noble Lords who use the term "pilot scheme," or other words to convey the same thing. Many people seem to think that it is an investigation which may, or might, throw up some useful result. But, of course, it is really nothing of the sort. It is a carefully controlled small-scale experiment, designed entirely to establish whether any particular scheme which looks good and workable on paper will work out in practice. For example, you may have a scheme which looks well and would certainly be an economic proposition but which depends on the ability to grow a certain kind of crop in a certain area on a certain basis of cost. It is wise to do it on the smallest scale, provided, of course, that it is big enough to establish evidence. The only way to be certain, naturally, is to try it out. But a general experiment into the agricultural or industrial potential of any area without any particular scheme in mind is obviously not a pilot scheme. Such expenditure may be very necessary, but it

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  does not seem to me to fall within the scope of the Corporation. I should regard this as falling far more within the ordinary responsibility of the Colonial Government, to be financed from their own resources or from allocations which may be made to them under the Colonial Development and Welfare Act.
  I do not deny that there may be cases where the finance of the Corporation and the finance of the local Government may be, and probably are, complementary to one another, and in that connection my right honourable friend, shortly after his appointment, circulated Colonial Governments, and suggested that they should consider the possibility of making a special effort to finance investigations which held the prospect of substantial long-term benefit. He asked all Colonial Governments to consider very closely, in consultation with the Corporation and local representatives, the possibilities of financing investigations which the Corporation itself was unable to undertake without assistance. That, I suggest, is the more appropriate way of using the taxpayers' money than the suggestion which I think was made by the noble Lord, Lord Winster, and indeed was certainly hinted at in the Report of the Corporation itself—namely, that it should have funds set aside for investigations which would be accounted for outside the normal accounts of the Corporation which, as the noble Lord knows, is required to "break even," taking one year with another.
  A number of other questions were addressed to me, but I hope that I have dealt with the principal ones, except, perhaps, one which was asked by the noble Lord, Lord Rennell, who quoted investigation costs, and asked whether they had been written off. I understand that the answer is in the affirmative and that they have been. If I have not answered all the detailed points, I trust that the House will forgive me, for I have kept noble Lords much too long, though the matter is of some importance. We are all directing our thoughts in the same direction, and we hope the day may not be far distant when the Corporation will find a better fortune than that which seems to confront it at present.
  7.7 p.m.
  LORD WINSTER: My Lords, I would make only a few brief remarks at the present hour. I was very struck by what was said by the noble Earl, Lord Listowel, about the possibility of a review of financial policy, and indeed of the very terms of the Act, becoming necessary if things do not go as we all hope. That was what I had in mind when I was speaking on the subject of an inquiry, and I am entirely at one with him: if there is an inquiry it should be along those lines. I am also in agreement with what he said about practical scientific research, and it seemed to me that, in Lord Munster's remarks about panels of experts which the Corporation ought now to set up, there was some measure of acceptance of the view put forward by one noble Lord today.
  There are two brief comments that I should like to make about Lord Milverton's remarks. I notice, from sad personal experience, that he usually knows better than anyone else, but he does not always listen to what other people say. I drew no analogy between the work of the Corporation and the work of the Cameroons Corporation. I was drawing a comparison between private and public enterprise, and I said that if State enterprise has its failures, it also has its successes; and against the failure of the groundnuts, I quoted the great success of the Cameroons Corporation. I was drawing no analogy between the work of the two Corporations. As regards the subject of an inquiry, and what the noble Lord, Lord Milverton, said about the board of the Corporation being the best people to conduct the inquiry, I think that would be a very strange principle to introduce into our legal system. But, in any case, the board, being bound by the Act, cannot express their own opinion. They are really the servants of the Secretary of State, so I should think that they would be most inappropriate people to conduct—in fact they would not be capable of conducting—an inquiry into their own conduct.
  I would not dream of attempting to reply in detail to everything which the noble Earl, Lord Munster, has said in reply to my Motion. I should like, however, to express the very great pleasure with which I listened to what he had to say about the writing

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  off of the losses of the Corporation. I think that is a great step forward. If this debate has served no other purpose, I think that in eliciting that piece of information from the noble Earl it has been well justified. In conclusion, I feel it is my duty to thank the noble Earl most sincerely for what, I think, is one of the fullest and most informative replies I have ever listened to from a Minister in this House. He gave us a wealth of information and endeavoured to reply in detail to the most important of the questions put to him. I should like also to thank noble Lords who have taken part in the debate for their assistance in making it, as I feel the House will agree, a useful one. If the noble Lord, Lord Reith, has had to listen perhaps to criticisms and admonitions this afternoon, I think he will be repaid by also having listened to expressions from every part of the House of determination to support the work of the Corporation and to do everything possible to bring it into a safe haven. And now it only remains for me to beg leave to withdraw my Motion.
  Motion for Papers, by leave, withdrawn.

  BUSINESS OF THE HOUSE
  7.11 p.m.
  EARL FORTESCUE: My Lords, I should like to remind your Lordships that after we have met to-morrow at half-past eleven for the Royal Commission which is to take place at 11.45 a.m. we shall adjourn until Tuesday, October 20. It is expected that Parliament will be prorogued during the Parliamentary
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  week beginning Monday, October 26, and that the new Session will be opened on Tuesday, November 3. A Sessional Order makes it possible to, recall the House earlier, if that should be necessary in the public interest.

  LONDON COUNTY COUNCIL (GENERAL POWERS) BILL
  Returned from the Commons with the Amendments agreed to.