Lords Sitting of 16 February 1954

Preamble
The House met at half past two of the clock, The EARL OF DROGHEDA on the Woolsack.
Prayers

STRATEGIC EXPORTS TO RUSSIA AND CHINA
2.35 p.m.
VISCOUNT ELIBANK: My Lords, I beg to ask the first Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether, with reference to the British trade mission now in Moscow, if any items on the strategic list are permitted in the future to be exported to Russia they will, seeing that it is common knowledge that Russian support of various natures was accorded to China during hostilities in Korea, take any step necessary to bring about circumstances in which similar items will be permitted to be exported to China.]
LORD MANCROFT: My Lords, if the noble Viscount, Lord Elibank, will forgive me for saying so, his Question is, at the moment, a purely hypothetical one, and I can therefore do no more than remind him, as I have done on numerous occasions during the past twelve months, that the embargo on strategic exports to China is applied in discharge of our obligations under the United Nations Resolution of May, 1951; and, in the view of Her Majesty's Government, reconsideration of the embargo, in concert with the other members of the United Nations, must depend on the more favourable development of events in the Far East.
VISCOUNT ELIBANK: My Lords, in thanking the noble Lord for his answer, may I ask, in view of the trade mission in Moscow, in what manner the strategic embargo is to be operated?
LORD MANCROFT: My Lords, if I may say so, with even greater respect, that supplementary seems to me even more hypothetical than the question out of which, ex hypothesi, it arose. I think it would be far better to await the return
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and the views of these business gentlemen after their visit to Moscow.
VISCOUNT ELIBANK: With great respect, is it hypothetical to ask the noble Lord whether he is aware that, according to The Times and my information, three British firms in Moscow have obtained contracts, or orders, for machine tools which are on the strategic list? Have they been pursuing a wild goose chase in Moscow, or will they be able to execute their export orders?
LORD MANCROFT: My Lords, I think it far better that we should wait until these business men come back, and then study what orders they have obtained and consider the matter in the whole light of their visit, rather than take some individual order and answer a hypothetical question about it.
LORD OGMORE: Is the Minister aware that on television last night returning members of the trade mission to which he has referred said that the Russians hoped to order more than £400 million worth of goods from this country? If that is so, is not my noble friend's question entirely relevant to this particular point?
LORD MANCROFT: My Lords, I heard rumours of this television programme, but until one knows whether the £400 million worth of orders refer to this or that type of goods, I think it would be most unwise to try to answer questions about the matter.
VISCOUNT STANSGATE: Is the noble Lord aware that the commercial world is very concerned about this point? May I ask him a plain question? It is: Would the Government be prepared to give a permit for the export to Russia of the goods which are not permitted to be exported to China?
LORD MANCROFT: I am, of course, aware that the commercial world is worried about this matter. But I am also aware that the two lists, the Russia embargo list and the China embargo list, are totally different lists.
VISCOUNT STANSGATE: If they are different—and the noble Lord must know about both—he can answer my question: Is it permissible to export to Russia goods which are not permitted to be exported to China?
LORD MANCROFT: It depends upon the goods—and, if I may say so with respect to the noble Viscount, Lord Stansgate, it depends upon the Question which is on the Order Paper; and that is not the Question.
VISCOUNT STANSGATE: I would ask the noble Lord to remember that these constant evasions on a perfectly plain issue will create the worst possible impression in the commercial world.
LORD MANCROFT: With the greatest respect to the noble Viscount, I do not accept that remark.
VISCOUNT EUBANK: My Lords, may I, with the permission of the House, ask the noble Lord this question on what he just said? Is he aware that—at any rate, so far as I know—no notification has ever been given to Parliament of the circumstances, or the statutory regulations, under which an embargo has been placed on Russia? Can he inform the House under what statutory regulation the embargo is being operated?
LORD MANCROFT: That is a very important question, and not, I think, one which should be raised as the fifth or sixth supplementary question, as this is If the noble Viscount will put that Question down on the Order Paper, I will do my best to see that he has a satisfactory answer.
VISCOUNT ELIBANK: I am grateful to the noble Lord; will place a Question on the Order Paper.

RUBBER EXPORTS TO CHINA
2.40 p.m.
VISCOUNT ELIBANK: My Lords, I beg to ask the second Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they are aware that in January Japan removed rubber and rubber lined goods from the list of commodities which must not be exported to China, and whether, in these circumstances, they will take steps to make it clear that similar goods may now be exported to China by British traders.]
LORD MANCROFT: My Lords, Her Majesty's Government are aware that Japan has recently removed certain rubber products from her China embargo list. These items, however, have never been on our own embargo list, and may be exported to China from this country. Raw rubber, on the other hand, is subject: to embargo both by the United Kingdom and Japan.
VISCOUNT EUBANK: My Lords, may I ask the noble Lord for an explanation of this point? According to the Financial Times, Japan has definitely removed rubber, which is presumably raw rubber, from the list. Does it mean that in C.O.C.O.M., which sits in Paris, a recommendation was made that raw rubber should be placed on the list and that Japan has disregarded the recommendation?
LORD MANCROFT: My Lords, there has, I know, been some very slight misunderstanding concerning the Japanese translation, but Her Majesty's Government are satisfied that: the Japanese have not removed the embargo upon raw rubber.
LORD OGMORE: My Lords, I think the House is left in a rather unsatisfactory position over this matter. Do I understand from the noble Lord that the Japanese list was exactly the same as ours, and that we could always export to China the goods which are now being exported by Japan? Is that the present position?
LORD MANCROFT: The Japanese list, I think, I am right in saying, was more stringent than ours, but it has now been modified very slightly to come into line with ours.
VISCOUNT ELIBANK: Does it mean this: that Japan is now exporting raw rubber and that we are not allowed to do so?
LORD MANCROFT: My Lords, I am at a loss to know how on earth the noble Viscount manages to understand that from the five replies I have just given. Exactly the contrary was the impression I intended to convey.

FOOD AND DRUGS AMENDMENT BILL [H.L.]
2.41 p.m.
Order of the Day for receiving the Report of Amendments read.
THE CHANCELLOR OF THE DUCHY OF LANCASTER (VISCOUNT WOOLTON): My Lords, before I move the Amendments standing in my name on the Paper, may I crave the indulgence of the House for a moment in order that I may make an explanation? The Bill which we are discussing is not in any sense a Party Bill. It is, as your Lordships are aware, an amendment of the Act of 1938, and both sides of the House are anxious to see it pass into legislation at the earliest possible moment. I would remind your Lordships that my right honourable friend the Minister of Food, in February, 1953, appointed an inter-Departmental Committee to prepare a plan for the siting of slaughterhouses, under a policy of moderate concentration. In December, 1953, the Minister extended the terms of reference of this Committee to include the question of the provision of slaughterhouse capacity to meet the requirements of the period when the rationing and allocation of meat was brought to an end, in the middle of 1954.
The inter-Departmental Committee have prepared an Interim Report (Command Paper 9060), which is now available in the Printed Paper Office, containing recommendations dealing with the provision and licensing of slaughterhouses. It is very important, I think, that the substance of the recommendations of this Report should be included in this Bill or in some other legislation, and there were one or two courses that we might have taken in the matter. We might have introduced, in one House or the other, an entirely new Bill. It would have been a very small Bill, of about five clauses, and, of course, there would have been some delay. Another method would have been to allow the present Bill to go through this House and then to move Amendments in another place which would have had to be brought back to this House. Both of these processes would have involved a certain expenditure of time, and delay in the Bill's becoming an Act. Therefore, if your Lordships will be good enough to give me permission, I propose, after we have
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finished the Report stage to-day, to ask your leave to move that the Bill be recommitted, so that these four or five clauses (I will not bind myself as to the exact number, but it is very small) may be submitted to you as Amendments. Of course I will see to it that your Lordships have plenty of time to see the Amendments before I ask you once again to go into Committee on the Bill, to add these Amendments, and subsequently to allow the Bill to go through, if you approve, in its complete form.
I apologise to your Lordships for the fact that this was not done earlier, but perhaps you will regard it as a sufficient explanation when I say that the Committee have only just reported and it was only last Friday that my colleagues considered their decisions. Perhaps it will be convenient if, at the end of this afternoon's discussion on the Report stage, I move my Motion that the Bill be recommitted to a Committee of the Whole House. That will give your Lordships an opportunity, in the event of disagreement, to say so. I ought to add that I have made this proposal after consultation with the Acting Leader of the Opposition, who has expressed his entire approval of it. I beg to move that the Report be now received.
Moved, That the Report be now received.—(Viscount Woolton.)
On Question, Motion agreed to.
Clause 1:
Offences in connection with preparation anti sale of injurious foods and adulterated drugs.
(5) In determining for the purposes of the principal Act and this Act whether an article of food is injurious to health, regard shall be had not only to the probable effect of the consumption of that article by a person of normal health but also to the probable cumulative effect of the consumption by such a person of articles of substantially the same composition in ordinary quantities.
VISCOUNT WOOLTON VISCOUNT WOOLTON moved, in subsection (5), to omit all words from "effect" down to and including "normal health" and to insert:
"of that article on the health of a person consuming it."
The noble Viscount said: My Lords, this Amendment is one that arises from the speech of the noble Lord, Lord Douglas of Barloch, on the Committee stage of this

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Bill. Your Lordships will remember that Lord Douglas of Barloch then had some doubt as to the meaning of the expression "in normal health." I was convinced by the arguments that he put forward, and the Amendment which I now submit to your Lordships is meant to meet the point that he then made. I hope the noble Lord will consider that I have in fact met him. I beg to move.
Amendment moved—
Page 2, line 8, leave out from ("effect") to ("but") in line 9, and insert ("of that article on the health of a person consuming it'').—(Viscount Woolion.)
2.49 p.m.
LORD DOUGLAS OF BARLOCH: My Lords, I should like to say in one sentence that I think the noble Viscount has met my point completely.
On Question, Amendment agreed to.
VISCOUNT WOOLTON: My Lords, this Amendment is consequential. I beg to move.
Amendment moved—
Page 2, line 10, leave out from (" effect") to the end of line 10,—(Viscount Woolton.)
On Question, Amendment agreed to.
VISCOUNT WOOLTON: My Lords, this Amendment is consequential. I beg to move.
Amendment moved—
Page 2, line 11, after ("composition") insert ("on the health of a person consuming such articles").—(Viscount Woolton.)
On Question, Amendment agreed to.
LORD DOUGLAS OF BARLOCH LORD DOUGLAS OF BARLOCH moved, after Clause 1, to insert the following new clause:
"2. No person shall abstract from any food any constituent thereof so as to affect injuriously the nature, substance or quality of the food with intent that it may be sold in its altered state."
The noble Lord said: My Lords, this Bill repeals Section 2 of the Food and Drugs Act, 1938, and re-enacts in Clause 1 a considerable part of what appeared in Section 2 of the Act of 1938; but, for some reason which is not at present apparent, it leaves out a provision which appears to he useful and valuable. Section 2 of the previous Act provided that:
"No person shall abstract … from any food any constituent thereof so as to affect injuriously the nature, substance or quality of the food."
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The present Bill provides in Clause 1 only that abstraction is prohibited where the food is rendered injurious to health. It is still nevertheless the case that the substance or quality of the food may be affected and its nutritive value may be diminished, although it is not rendered positively injurious to health. The purpose of my Amendment is to restore the effect of that provision in the previous Act and to prohibit the abstraction of valuable elements out of food so as to impair its value to the consumer. I do not think that this proposed new clause requires any elaborate explanation. It speaks for itself, and therefore I beg to move.
Amendment moved—
After Clause 1, insert the said new clause,—(Lord Douglas of Barloch.)
LORD TEVIOT: My Lords, I desire to support the noble Lord in his proposed new clause. The only doubt I feel is about the meaning of the words "any food." As your Lordships are aware, I look upon 100 per cent. extraction flour as food, and I can see that without this proposed new clause such flour would be detrimentally interfered with, and is now being detrimentally interfered with, by the abstraction from it of various foods such as bemax and various others. In my view, and in the view of a great many other people, that is detrimental to the nutritional value of the flour. It is detrimental to the general health of the people who consume this flour which has been affected by the abstraction of these various articles contained therein. Of course, these articles are sold in an unaltered condition, very much to the benefit of those who deal in, them. As I said in your Lordships' House some time ago, there are people, too many people, making a lot of money by tampering with the food, and there are far too many people making a great deal of money trying to cure the evil that is being done. I heartily support the suggestion in my noble friend's Amendment.
VISCOUNT WOOLTON: My Lords, I was not sure whether my noble friend Lord Teviot was supporting the noble Lord or not, because he said that he did not know what was meant by "any food," We must be practical. If my noble friend will forgive my saying so, we know his views. He was good enough to instruct me considerably on the subject when I

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was Minister of Food. But we are also legislating for the people of this country. In spite of the eloquence of my noble friend over all these years, he has not yet convinced them on this subject of 100 per cent. extraction.
LORD TEVIOT: May I, with great respect, interrupt my noble friend at this point? Does the noble Viscount realise that there is an enormous increase in the demand all over the country for the particular bread that I have mentioned? The difficulty is that the people have to get up very early in the morning to obtain it because the bakers bake only a limited amount. There is no doubt that there is an enormous increase in the demand for this particular bread.
VISCOUNT WOOLTON: I am sure that what the noble Lord says is right. It is probably due to the fact that I have a strong objection to getting up early in the morning that I have never been able to get hold of the sort of bread that he wants me to. However, there is no reason why, under the Bill as it stands, people should not have the sort of bread that the noble Lord wants them to have. That is a matter which they have to settle with the bakers.
The noble Lord, Lord Douglas of Barloch, is on a different wicket altogether. I have done my best to meet him in the course of this Bill, and I have no hesitation in paying tribute to the improvements that he has made in it. But I cannot go with him over this fence. I think he is going a great deal too far. In the first place, if he will look at Clause 1, he will see that it says:
"No person shall add any substance to food, use any substance as an ingredient in the preparation of food, abstract any constituent from food …"
and so on. That is the substance of what he has put in his Amendment. I think his point is already sufficiently covered. I looked up what the noble Lord said in the Committee stage of the Bill on January 20, when he went back to Section 2 of the 1938 Act. The position is that, if he had his way, there would be no defence. Section 3 of the 1938 Act, as amended by this Bill, would have the defence which your Lordships will find if you look at Clause 2 of the Bill, which is a little more onerous than that of Section 2 of the 1938 Act to which the
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noble Lord referred, inasmuch as it obliges the defence to prove absence of fraudulent intent as well as the fixing of the appropriate label or notice. I think that, having gone that far, it is as far as your Lordships ought to consider going. I greatly regret that I cannot accept the noble Lord's Amendment.
LORD DOUGLAS OF BARLOCH: My Lords, I too very much regret it, and I am still unable to understand, for no explanation of this has been vouchsafed to us, why the provision of the 1938 Act is repealed and nothing is put in its place. There may be a good reason for it, but up to the present moment it has not appeared in any explanation which the noble Viscount has given to the House. Read in conjunction with Clause 2 of this Bill, the new clause which I am proposing does not make it impossible to take certain constituents out of food provided that it is done without any fraudulent intent and provided that the consumer is given notice. Surely, as a general matter of principle, there is no reason why it should not be stated in our law, as it has been for quite a long time past—so far as I am aware, without any inconvenience or detriment—that it is not right to take valuable constituents out of food. We know that it is done, and also that articles continue to be sold under names by which they have been traditionally known although, in fact, their quality has been altered. With all respect to the noble Viscount, I have not yet seen the reason for proposing to remove what has been part of our law for a good many years.
On Question, Amendment negatived.
Clause 2:
Defences available in proceedings under s, 3 of principal Act
(3) Paragraphs (1) to (3) of section four of the principal Act, and section five of that Act, shall cease to have effect; and any reference in that Act to the said section four shall be construed as including a reference to this section.
VISCOUNT WOOLTON: My Lords, this is a drafting point, to make rather better English of the sentence. I beg to move.
Amendment moved—
Page 2, line 30, leave out ("either")—(Viscount Woolton.)
On Question, Amendment agreed to.
3.3 p.m.
LORD AMULREE LORD AMULREE moved, in subsection (3), after the words, "Paragraphs (1) to (3)" to insert, "and paragraph (5)." The noble Lord said: My Lords, this Amendment is designed to take away the power which exists at present for a person to plead, as a defence for supplying something which was not pure, that the drug supplied was a proprietary medicine and was supplied in accordance with the demand of the purchaser. I think there are several objections to this particular defence. The first is that the food and drugs authorities feel that they cannot bring prosecutions under Section 3 of the Food and Drugs Act, because there is at the present time that definite loophole in the law, whereby the defendant may say that it is a proprietary medicine and therefore no charge will lie. Secondly, I think it is dangerous in that one can sell some kind of inferior drug and avoid prosecution for not complying with the requirements of the British Pharmacopœa, by pleading that the article concerned is a proprietary medicine, and that therefore no charge would lie. Thirdly, I would ask: is it necessary to give this protection to retail pharmacists when it is not given to other retailers who sell prepared things in their shops? The fourth reason is that the defence under that particular paragraph of Section 4 is redundant, because its only purpose was to prevent prosecutions in cases where the consumer was not prejudiced. My Lords, having put forward the four reasons why I think my Amendment is a good one, I bee to move.
Amendment moved—
Page 2, line 42, after ("(3)") insert ("and paragraph (5).")—(Lord Amulree.)
LORD BURDEN: My Lords, I am sure that every Member of your Lordships' House listens with the greatest respect to the noble Lord, Lord Amulree, on these subjects, and I will not say that I do not agree with him. Remembering, as no doubt he remembers, what was published about the time of the First World War in regard to explaining the contents of patent medicines, one has a good deal of sympathy with him on this matter. But I think the noble Lord will realise that his Amendment makes a very important change in the law as it exists today; and it is usual, rightly or wrongly, for negotiations to take place in regard to a vital
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change like this, particularly as manufacturers and shopkeepers and others have for many years been working under a certain code. If that code is now to be changed, it had better be changed after full consultation, otherwise it may inflict grievous loss on manufacturers and shopkeepers who, up till now, have acted within the ambit of the law. If the Government are inclined to accept this Amendment, perhaps it would be better for it to be withdrawn now and for negotiations to take place with the trade and other interested parties. I have no knowledge of the Government's mind on this matter, but in view of all that is involved, I think it would be quite wrong for this change of the law, which would so vitally hit a number of manufacturers and shopkeepers, to take place without these consultations.
LORD WALER AN: My Lords, I should like to support the noble Lord who has just spoken. This Amendment, which repeals Section 4, makes a great change. It has been Put in at very short notice, and if the noble Lord would withdraw it it could be considered and possibly could be adopted in another place.
THE JOINT PARIAAMENTARY SECRETARY, MINISTRY OF AGRICULTURE AND FISHERIES (LORD CARRINGTON): My Lords, I must confess that I had not realised that any of your Lordships would object to this Amendment, and I was quite prepared to accept what the noble Lord, Lord Amulree, said, and to accept his Amendment. The reasons why I was prepared to do that were that, as he has said, the paragraph which he wants to delete provides that it shall be a defence for the defendant to prove that the article supplied was a proprietary medicine and was supplied in response to a demand for that medicine. The retention of that defence has been criticised in various quarters, on the ground that it prevents the taking of proceedings where somebody buys a medicine and obtains the medicine he asks for, but in point of fact the medicine is defective. That person would be prejudiced and could not take proceedings. It is the case that as regards proprietary foods such a defence is not allowed, and it seems sensible that there should not be any particular difference between proprietary foods and proprietary medicines

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I am told that there have been informal discussions with the trade associations concerned with this particular Amendment, and that they will accept it. I do not know what "informal" means, because I did not deal with this point before the Report stage started, but I am told that there have been discussions. I do not know whether that would satisfy the noble Lord, Lord Burden, and the noble Lord, Lord Waleran, but I think there is substance in this Amendment; I think it is sense and I should like to accept it.
LORD SILKIN: My Lords, no doubt the noble Lord is well advised to accept it, but there is another stage here and there is another place. Is there any urgency about this matter? In view of the doubts that have been expressed, would it not be wiser to hold the matter over and make quite sure that these consultations really have been taking place, and that this Amendment is acceptable to those who are involved?
LORD CARRINGTON: My Lords, I can definitely say that the Amendment is acceptable to those who have been consulted. The trade has been consulted. I did not think that the noble Lord, Lord Burden, or my noble friend behind me, had any objection to the principle of the Amendment. What they were worried about was whether people had been consulted, and I can give them the assurance that they have.
LORD WALERAN: My Lords, if your Lordships would permit me to speak for a second time on this matter I could give your Lordships a second example.
VISCOUNT WOOLTON: I am afraid the noble Lord cannot speak a second time.
On Question, Amendment agreed to.
LORD DOUGLAS OF BARLOCH LORD DOUGLAS OF BARLOCH moved, after Clause 2 to insert the following new clause:
"3.—(1) No person shall sell or offer for sale for human consumption any article of food to which any synthetically produced chemical has been added unless such article has attached thereto a notice of adequate size distinctly and legibly printed and conspicuously visible clearly stating the ingredients contained therein.
(2) A person who contravenes this section shall be guilty of an offence."
The noble Lord said: My Lords, I beg to move this Amendment, the purpose
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of which is to require that when an article of food is sold or offered for sale and it contains some synthetic chemical, it shall be clearly labelled so as to disclose to the purchaser that that is the case. One has discovered during the course of these discussions that it is impossible to convince the Government that the addition of chemicals to foodstuffs ought to be completely prohibited, but I submit to the House that it is highly desirable that the consumer should have notice of what the constituents of an article of food are if additions of that kind have been made to it.
This practice has now become extremely widespread, and numerous articles of food, including many of those most commonly consumed, are liable to have various chemical products added to them. The bakery trade provides an example. It has already become quite common to use fat substitutes instead of lard or other natural fats. Surface wetting agents and things of that kind are added in order to preserve the moisture and to make the article look tender and fresh although, in fact, it is stale and many kinds of synthetic flavouring and colouring matters also are used. The consumer has not at present the faintest idea that anything of that kind has been done, and most of them assume subconsciously that articles such as cakes continue to be made out of the traditional ingredients, though that is far from being the case, therefore the consumer ought to have the opportunity of knowing what it is that is being sold to him, especially when it is something which is not a natural article of food.
It is, of course, quite common to find a food which is merely a mixture of natural articles of food; such foods have been used now for a very long time and are perfectly acceptable. But when things like poloxyethylene stearates are used instead of natural fats a totally different state of affairs arises, and it is in the interest of public health that it should at any rate be known what it is that is contained in the food. It is doubly important, because one has to remember that people may be eating a number of different articles of food each of which has been treated with some kind of chemical substance, and although one of those individually might not be deleterious it is quite conceivable that the combination might be. Moreover,

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there is not, in ray opinion, sufficient knowledge yet available to the public health authorities of what is being put into food, and therefore some obligation ought to be imposed upon manufacturers so that the public health authorities may be alert to consider what is being done and to make inquiries as to whether or not the additions made to foodstuffs in that way are likely to be injurious to health.
This matter has, as we know, reached a stage at which many synthetic chemicals are being used. Some have been used for long periods although they have ultimately been found to be injurious to health. Quite recently an order has been made prohibiting the use of all sweetening agents except saccharin, a belated acknowledgment of the fact that a number of synthetic sweetening agents are in fact injurious. Even in the case of this permitted ingredient, is there any reason why the consumer should not be informed that his food has been sweetened with saccharin and not with sugar? It may be that saccharin is not injurious, put even if it is not, nobody contends that it has any nutritive value whatsoever: and the public are entitled to know if something which is nutritive, such as sugar, has been replaced by something which has no food value whatsoever. I do not want to detain the House. I think I have outlined the principal reasons why a provision of this kind is not only desirable but necessary.
Amendment moved—
After Clause 2, insert the said new clause.—(Lord Douglas of Barloch.)
LORD TEVIOT: My Lords, I wish to support the noble Lord, Lord Douglas of Barloch, in this Amendment, and I do so for the simple reason that I think fiat every endeavour should be made immediately to ensure that people know what they are buying and what they are going to eat. If we do not provide for something of that kind we shall go on having these appalling experiences of food poisoning. I heard only at lunch to-day of another case where there was throughout a school poisoning of a very violent nature. It seems to me that there is every reason why we should inform the public as much as we can of the constituents of any foods they buy. I entirely agree with what Lord Amulree said in dealing with his Amendment: that what
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was applied in the Pharmacy Act when I was in the House of Commons should apply to made-up and special foods that are sold to the public to-day. I beg to support the Amendment.
3.20 p.m.
VISCOUNT WOOLTON: My Lords, I am sorry to have to adopt this perhaps slightly Russian attitude of saying "No" in every case to the noble Lord. One thing which the noble Lord said was a profound truth. He said it was impossible to convince the Government that chemicals should not be added to food. I agree with him there. I am glad to agree with him in something, but I am afraid I cannot agree with him in anything else that he said, in so far as I understood it, because his scientific knowledge is so much greater than mire that he left me completely at the post. My noble friend Lord Teviot must not assume—indeed, I am sure he does not—that because there was food poisoning in a school it was due to the addition to the food of some synthetically produced chemical. With the greatest respect—which I always show to him—I thought his speech had no particular reference to the Amendment which Lord Douglas of Barloch has moved. This Amendment is quite impracticable. Of course synthetically produced chemicals are added to food. If it were not so, what would our cakes taste like? The noble Lord, Lord Douglas of Barloch, has great scientific knowledge but I should say that he has not much knowledge of baking. If there were no bicarbonate of soda or baking powder to be put into cakes, I think they would be rather worse than they are.
LORD SILKEN: I should like to ask what is the objection to stating that an article contains these things.
VISCOUNT WOOLTON: I will tell the noble Lord that if he will be good enough to wait a moment. We are talking about a cake, and according to this Amendment it would have to bear a label "distinctly and legibly printed." The noble Lord says it must be "distinctly and legibly printed and conspicuously visible," and it has to state clearly what the ingredients are. Would the noble Lord really recommend that that should go into the legislation of the country? I am sorry; I do not want to spend any more time upon I this; but I cannot accept the Amendment

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as part of the Bill. But I will say this, and I hope that it will afford some satisfaction to noble Lords: where we are dealing with specific articles, we can do things by regulations in cases in which it is possible to state their ingredients clearly on a label. That can be enforced by regulations in the case of specific articles. But I cannot accept an Amendment which covers everything in the manner in which the noble Lord's Amendment does. I regret, therefore, that we cannot consent to the noble Lord's Amendment.
LORD DOUGLAS OF BARLOCH: The noble Lord has drawn particular attention to the phrase in my Amendment about
"a notice of adequate size distinctly and legibly printed and conspicuously visible."
That formula I have derived from Clause 2 of the Bill. I am entirely indebted to the noble Viscount himself for it. It was phrased in such admirable words that I thought I could not possibly do better than use them. So I do not think any objection can be taken upon that ground. If this system is to apply to one thing, there is no reason why it should not apply to another. I am equally surprised to hear the noble Viscount's statement that it is impossible to make cakes without the addition of all the numerous things which in commercial practice are put into them at the present time. In my household, at any rate, we find it possible to do so, using the traditional ingredients of flour, eggs, sugar and so on. We do not need to use any mono- or di-glycerides or anything of that kind in order to achieve a result which most people regard as more agreeable in every way than many of the products which are obtained by the commercial process. The commercial substitutes no doubt are cheaper than the traditional nutritive ingredients which used to be put into the bakery products, and there is, therefore, a great temptation to use them. My Amendment does not say that they shall not be used. On that point, as I said, the Government are impervious to argument. But I am surprised that they should be impervious to argument upon a plea that the consumer should be given an opportunity of knowing what it is that he is being invited to consume. That, I think, is extremely regrettable. I hope that before this Bill reaches the end of
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its legislative journey the Ministers will yet see the advisability of accepting a proposal of this nature.
On Question, Amendment negatived.
3.28 p.m.
LORD SEMPILL LORD SEMPILL moved, after Clause 2, to insert the following new clause:
"3. No person shall sell or offer for sale any article of food which has been processed by means of any substance which is not in itself a food stuff unless such article has attached thereto a label stating clearly and legibly the nature of the process and the substance used."
The noble Lord said: My Lords, I beg to move the Amendment standing in my name, and I will explain to your Lordships as briefly as possible the process of thought that has brought me to submit it. As your Lordships will all agree, the importance of the treatment of food, during production and processing, by chemical substances foreign to the body, should always receive the closest attention. I suggest that whatever is done to our food should be governed by its effect on human health, and that the dominant voice should be that of medical science, speaking through the Minister of Health, and not that of the chemists, generally called "food scientists," speaking through the Minister of Food.
As your Lordships will remember, there are many instances in which chemicals used in food, and thought to be harmless, when approval for their use was first given, have subsequently proved the reverse. Records show that the authorities in the United States move with greater despatch than our own in banning a harmful ingredient, and in one notable instance such action by the United States authorities was taken as the result of conclusions reached by the Medical Research Council, following a lengthy investigation by the then Secretary, Sir Edward Mellanby. This fact, I feel sure, will have given great satisfaction to your Lordships since, as has often been stressed by members of the Medical Research Council, we owe so much to the highly developed laboratory and examining mechanism in the United States as expressing itself through the Food and Drug Administration. Until recently—and it may still be so—we had often to rely on the decisions arrived at in the United States before a policy or action could be determined. The action taken

897
by the United States authorities to which I have referred relates, as your Lordships will remember, to bread, and led to the banning of agene in that country. The apparent official complacency over this, and the wider problem of food manipulation is very disturbing. As another illustration of delay in official action, I would refer to dulcin, a synthetic sweetener which was prohibited as a poisonous substance in the United States in January, 1950, since it inhibited growth and produced liver tumours. We followed suit in September, 1953.
The addition of substances foreign to the food to which they are added may disguise the natural smell, which is, of course, one way the housewife has of knowing whether food is fresh or stale, as well as alter its appearance and taste. So the words of that great artiste, Marie Lloyd:
"A little of what you fancy does you good"
does not apply in these days of food manipulation. The reverse, indeed, is not unlikely. Leading medical scientists have been pointing out for years that the increase in disease over a wide range is due to errors of living, introduced or greatly increased in modern times, and that the ingestion of food treated by unnatural chemical substances may well be one of these errors of living. They produce some alarming results. For example, some thirty years back the annual number of deaths in this country from heart disease was about 65,000, and the figure did not vary very much during the preceding ten or twenty years. But by 1926 the number had risen to 87,000; by 1931 to 125,000, and by 1947 to 167,000. And to-day, I believe, it stands at around 250,000.
I am anxious to persuade your Lordships, if I can, that a halt should be called to the chemical manipulation of food. I believe, however, that, as matters now stand, this desired end is being achieved not by legislation but by the advance of medical science, which shows with increasing force the dangers that come from the ingestion of these foreign bodies, and also by the process of "natural selection" which is exercised by the housewife, who is becoming ever more food conscious and insists upon knowing just what she is buying. Naturally, she wants to buy jam and fruit juice free from sulphur dioxide, kippers free
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from dye, whole wheat bread, and even cornflour free from the dye which turns it yellow and gives it another but entirely misleading name. When the housewife looks at most of the labels, she is confused, and eventually annoyed. The straightforward labelling of foodstuffs is not difficult. With your Lordships' permission, I should like to pass to my noble friend, Lord Woolton, a sheet of labels taken from a number of foods that my family of three young children consume daily. I know your Lordships will agree that we can never pay sufficient tribute to what we owe to our womenfolk. It is they who have borne, and. bear, the heat and burden of the day, and since the feeding of the future generation is exclusively in their hands, I submit not only that it is right but that it is your Lordships' bounden duty to help them. I beg your Lordships to join with me in persuading the noble Viscount, Lord Woolton, to think again; to agree that all foodstuffs should be clearly labelled, and, by so doing, to maintain at its height his position as the "national sugar daddy" by again taking the housewives, who loved him so much in the days of the war, into his confidence by telling them frankly just what they are eating. I beg to move.
Amendment moved—
After Clause 2, insert the said new clause.—(Lord Sempill.)
LORD CARRINGTON: My Lords, I am not the "national sugar daddy," and I do not know what the noble Lord, Lord Sempill, would call me, but I am afraid that I am no more convinced by his argument than is my noble friend Lord Woolton. I do not suppose the noble Lord is greatly surprised, since his speech, in essence, is the same as that of the noble Lord, Lord Douglas of Barloch; and the reasons why Her Majesty's Government cannot accept this Amendment are exactly the same as those which my noble friend Lord Woolton gave to the noble Lord, Lord Douglas of Barloch, on the last Amendment. All that is necessary is covered in the Bill as it stands. As the noble Lord, Lord Sempill, will see, Clause 5 is an enabling clause, under which the Minister can make regulations for the labelling of food when he thinks it necessary. If the noble Lord will look at Clause 3 (1) (a), (b) and (c) he will see that there again this point can be

899
covered. In an enormous trade like the food trade, I think his Amendment would put too much on the manufacturers, and it would be impracticable to use such a wide power as the noble Lord wants us to take. Like the previous Amendment, this Amendment would create an absolute offence where Section 3 of the 1938 Act creates an offence only if the purchaser has been prejudiced. I assure the noble Lord of what I think he already knows, because we have had a number of debates on this subject: that the Government have very much in mind the sort of suggestions he has made, but as the Bill stands we have sufficient power to deal with this point.
LORD CALVERLEY: My Lords, the noble Lord, Lord Carrington, tells the House that in the Bill there is an enabling clause, but what I think the noble Lord who moved the Amendment is asking is this: Will that clause allow the enablers to give us jam, for instance, with the knowledge that this noxious drug is going to be in it? The noble Lord, Lord Carrington, does not give any assurance at all. I think the noble Lord, Lord Sempill, has made out an irresistible case for pure food. He has given us the statistics, and figures can never lie—though I know that remark can be turned round. I wish that the noble Lord would go on a crusade to tell the housewives not to use a tin opener or to buy jam with sulphur dioxide in It I refuse to buy English jam if I can buy Australian jam, because I know that it is pure. The noble Lord, Lord Carrington, represents a new generation. I only wish that he would use the same eloquence he used a minute or two ago to persuade the younger generation of housewives to do a bit of baking and make their own cakes.
LORD WEBB-JOHNSON: Hear, hear!
LORD CALVERLEY: I think the noble Lord, who said "Hear, hear," with his great experience as a former President of the Royal College of Surgeons, knows that his job would become obsolete if that were done. There would be fewer operations for appendicitis and a dozen other ailments from which modern man suffers, owing to the obstinacy of the noble Lord, Lord Carrington, in this
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matter. I am a conservative in household affairs. I believe in knowing what our food is made of. I wish the noble Lord, Lord Carrington, with his sympathetic nature, could perhaps be persuaded—sometimes we can be non-Party, and this is not a Party issue—to accept this Amendment and so allow us to go a step further to see that our people are not poisoned more and more from day to day.
LORD DOUGLAS OF BARLOCH: My Lords, I should like to say a few words in support of the Amendment moved by my noble friend Lord Sempill. It deals particularly with the processing of food by means of artificial substances. This is an extensive practice. There are the examples which the noble Lord has given of the use of sulphur dioxide, a bleaching agent, which is commonly applied not only to jam, but to other foodstuffs as well, to act as a preservative. It is said that when the food is boiled the residue of sulphur dioxide is boiled out of it—and that is perfectly true. But before that has happened a chemical reaction has taken place between some of the sulphur dioxide and the ingredients of the food, and the effects of it are visible in the bleaching which has taken place, one of the results of which, naturally, is that the jam manufacturer then proceeds to conceal what has happened by dyeing the fruit.
But there are many other examples. There is the example, with which no doubt the noble Lord, Lord Carrington, is familiar, used in agriculture: potatoes are treated with a synthetic hormone called tuberite, for the purpose of preventing them from sprouting. Only a few weeks ago I noticed that a new anti-sprouting chemical had been invented. which is sprayed on to the potatoes, is absorbed by the leaves and stored in the tubers. I do not know whether anybody has discovered what the effect of eating potatoes so treated may be, especially if they are consumed over a lifetime. All one can say about potatoes at the present time is that the quality of those which are normally procurable in London, for example, is deplorably bad. Whether that is due to the treatment they have received, or to other causes, I do not know. Let me give your Lordships one further example. Not long ago I bought some dried beans from an ex-

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tremely reputable London store. When these beans were put into water, in order to sprout them, it became evident that they had been treated with some chemical; and instead of sprouting, they began to ferment, and gave off a most unpleasant odour. Since then my inclination to eat beans has been greatly diminished. When I made inquiries, I found that the beans had been treated in a foreign country, where they had been grown before they were imported to this country. That merely emphasises the necessity for having regulations which are stringent, in order to disclose what processing articles of food have been subjected to. The suppliers were unable to say with what these beans had been treated. Since then, however, I have discovered that this is a common practice, That is only one illustration out of many, but it indicates that something ought to be done about this.
If I understood the noble Lord, Lord Carrington, correctly, he indicated that the Government have it in mind, under other provisions in the Bill, to make some regulations which would deal with this matter. It will be interesting for your Lordships to know whether those regulations are likely to be co-extensive with the amount of evil which is known to exist. If, in fact, they were so extensive as to effect, in practice, the purpose covered by the Amendment moved by my noble friend, that would give us all a great deal of consolation and hope for the future: but if the regulations are to he used only sporadically and occasionally, in a very small field, that does not hold out much hope to the consumer.
LORD WEBB-JOHNSON: My Lords, I find it somewhat difficult to follow the course of the arguments on this Amendment. Apparently the noble Lord, Lord Douglas of Barloch, disapproves of all synthetic substances, whereas I was under the impression that it was by synthesis that we had produced some of the most valuable chemicals known to man. It is not only synthetic chemicals to which the noble Lord objects, however, because I recollect that on a recent occasion he was attacking the addition of pure elements to food and water supplies. There is no limit, apparently, to what people with fixed ideas, and terribly fixed fears about the preparation of food,
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imagine might happen if something is added. We have my noble friend Lord Teviot putting food poisoning down to synthetic chemicals.
LORD TEVIOT: If I may interrupt the noble Lord, I did not say definitely that it was a cause. But, as the noble Lord knows full well, in the last year we have had many instances of food poisoning. I want to find out the reason for that, and I think this might be a way of doing so.
LORD WEBB-JOHNSON: The noble Lord, surely, knows that certain viruses and bacilli and organic substances produced by these organisms are concerned in food poisoning. But this is not a suitable arena for a debate on the causes of food poisoning. After the last debate on iodine and fluorine, because American publications had been referred to, I looked up the literature, and found it stated that Communism was caused by adding fluorine to the water supply. We have had cancer, and every possible disease paraded, but if Communism is to be dragged in, then we really must he most careful. I would urge that this Bill should not be impeded by debates on items of this sort when there is ample power in the Bill for the Government of the day to deal by regulation with anything that arises.
On Question, Amendment negatived.
Clause 3:
Regulations as to composition of food, etc.
—(1) The Ministers may, so far as appears to them to be necessary or expedient in the interests of the public health, or otherwise for the protection of the public, make regulations for any of the following purposes:

(a) for requiring, prohibiting or regulating the addition of any specified substance, or any substance of soy specified class, to food intended for sale for human consumption or any class of such food, or the use of any such substance as an ingredient in the preparation of such food, and generally for regulating the composition of such food;

(b) for requiring, prohibiting or regulating the use of any process or treatment in the preparation of any food intended for sale for human consumption, or any class of such food;

3.50 p.m.
LORD DOUGLAS OF BARLOCH LORD DOUGLAS OF BARLOCH moved, in paragraph (a) of subsection (1) to omit "requiring." The noble Lord said: My Lords, may I refer to Amendments 8 and 9 together, because they are

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identical and are for the purpose of leaving out the word "requiring" which, as it stands, would enable the Government to oblige manufacturers of foodstuffs to introduce into them anything that the Government please. That is a rather strong power and one which is going very far indeed. It may be proper that regulations should be made for the other purposes which are contained in this clause, and that people should be prevented from doing things which are injurious to the food supply of the country. But when it comes to requiring people to add things to food or to use certain methods of processing, then one would like to know what it is that is envisaged in this connection. Is this intended to be a means, for example, of obliging us to have iodine in our salt, whether we want it or not, or to oblige us to have agenetreated flour, whether we want it or not? This kind of power could be used for purposes which undoubtedly would be obnoxious to a considerable number of the population and, perhaps, to all the population, if they understood what was being done. I should like to know at least what the case for including these words in the Bill is, and what purpose it is that the Government have in view in inserting them. I beg to move.
Amendment moved—
Page 3, line 5, leave out ("requiring")—(Lord Douglas of Barloch.)
LORD CARRINGTON: My Lords, I hope the noble Lord, Lord Douglas of Barloch, will not think me discourteous if I do not take long in answering this Amendment. May I remind him that about a fortnight ago we spent an entire afternoon discussing this subject in a debate he raised on whether mass medication was desirable or not. I told him at the end of the debate, in specific terms, exactly on what principles Her Majesty's Government were going to proceed on this question of adding chemicals to foods. The power under which Her Majesty's Government have hitherto done this has been in the Defence Regulations. When these Defence Regulations lapse it will be necessary in some cases—for instance, in the case which he has mentioned, of the addition of chalk to flour—to continue to add it; and it will be necessary to take the powers which are now in the Bill. But I can give him the assurance that when there are any pro-
904
posals to add any of these substances, full publicity will be given to the matter and I am prepared to wager that the first person who will get to hear of it will be the noble Lord, Lord Douglas of Barloch. The second thing I am prepared to tell the noble Lord is that, of course, all organisations who are interested will be consulted.
LORD DOUGLAS OF BARLOCH: M Lords, I am sorry to hear the reply which the noble Lord has given. It confirms suspicions which one had about this provision. In fact, it is intended to be a means of compulsory mass medication, and I am extremely surprised to find that that is the ground upon which it is defended. I had hoped that there might have been some other and better reason given for it. It will certainly cause a great deal of anxiety among the people of this country when they get to know that that is the policy of the Government and that that is what is contained in this Bill.
On Question, Amendment negatived.
Amendment moved—
Page 3, line 12, leave out ("requiring").—(Lord Douglas of Barloch.)
On Question, Amendment negatived.
3.54 p.m.
LORD TEVIOT LORD TEVIOT had given notice of his intention to move to add to subsection (1):
"(e) for publishing lists of chemicals and other ingredients which may be added to any article of food."
The noble Lord said: My Lords, as the Government do not appear to wish to give information which has been asked for in various Amendments, I do not see much object in wasting the time of the House in moving my Amendment, because I am asking again for publicity in regard to what I consider an important matter. In view of the attitude already adopted, I will not move my Amendment.
VISCOUNT WOOLTON: My Lords, let me assure the noble Lord that this is one of the occasions on which he might have moved his Amendment. I am sure it embarrasses him to know that. The Minister will proceed here by regulations, and the regulations will be published. I believe the noble Lord has everything he wants without moving his Amendment, but I am obliged to him for not moving I it.
Clause 7 [Amendment of s. 14 of principal Act]:
LORD CARRINGTON: My Lords, this Amendment is to meet an undertaking which I gave to the noble Lord, Lord Balfour of Inchrye, and, I think, to the noble Lord, Lord Burden, on the Committee stage. They were worried that conditions could be imposed which were other than for the use of the Food and Drugs Act. This Amendment makes it perfectly clear that that cannot he done. I beg to move.
Amendment moved—
Page 8, line 13, after ("unsuitable") insert ("(having regard to their situation, constructs an or condition, or to any activities carried an therein)").—(Lord Carrington.)
On Question, Amendment agreed to.
Clause 9 [Imitation cream]:
VISCOUNT WOOLTON VISCOUNT WOOLTON moved to leave out Clause 9. The noble Viscount said: My Lords, the House will remember that when the noble Earl, Lord St. Aldwyn, moved some Amendments on the Committee stage, as then advised I acepted them, which I was very glad to do. I still accept the sense of them bat the Parliamentary draftsmen have assured me that it would serve the purpose of the Bill and of the noble Earl if the language was altered somewhat. The purpose of the three sub-sections which I am moving is to carry out the undertaking that I gave and, at the same time, to put the Bill into what the legal people tell me is the right form. I hope the noble Earl will find them acceptable. I beg to move.
Amendment moved—
Page 9, line 35, leave out Clause 9.—(Viscount Woolton.)
EARL ST. ALDWYN: My Lords, the noble Viscount, Lord Woolton, was good enough to inform me that be intended to move this Amendment, and he wrote and assured me that it would make no difference whatever to the import of the Amendment which I moved at the Committee stage. With that assurance, I readily accept this Amendment.
On Question, Amendment agreed to.
Clause 11:
Provisions relating to milk
11.—(1) Milk and Dairies Regulations made under section one of the 1950 Act may provide (subject to such exceptions as may be allowed by or under the regulations)—
(b) for prohibiting the sale for human consumption of milk obtained from cows milked in any market or other place where cattle are collected for the purposes of sate or showing, whether or not the market or place is registered under that Act as a dairy farm;
3.59 p.m.
LORD MERTHYR LORD MERTHYR moved, in subsection (1), to leave out paragraph (b). The noble Lord said: My Lords, from the point of view of public health I have no objection whatever to the paragraph in this Bill that I seek to leave out; but, in my submission, if it is included it will have an unfortunate result. It will, I think, increase cruelty in markets—the cruelty of over-stocking cows which now takes place in considerable volume. If anticipate that this paragraph will make the milking of cows in these markets less profitable. If it is less profitable it will not be done as often as it now is, and if that result occurs then the cruelty will increase. Of course, from my point of view what I should like is some Amendment put in to make the milking of the, cows before the market begins compulsory. I anticipate that the noble Lord would say that that had nothing to do with this Bill—apparently I anticipate rightly. But if he can think about this point and see whether he can meet it in any way I shall be greatly obliged. I think the House will agree that the overstocking of cows in markets is a real and serious menace. I am satisfied that its volume is considerable and that we should be apprehensive—if only for the sake of public health—in putting something in this Bill which will, I have very little doubt, increase it. I beg to move.
Amendment moved—
Page 11, line 11, leave out paragraph (b).—(Lord Merthyr.)
LORD CARRINGTON: My Lords, my noble friend started his remarks by saying that he had nothing against this particular paragraph from the public health point of view. He will no doubt realise that if his Amendment were carried it would make it impossible for the Government to prohibit the sale for human consumption of milk produced at a market which is registered as a dairy farm under this Bill. I think we all have great sympathy with what the noble Lord has said about cruelty to animals, but this seems to me to be one of those difficult

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cases where we have to balance both sides—the advantage or disadvantage of selling unhygienic, or unhygienically produced, milk to the public, as against any possible cruelty to animals. My noble friend will realise that there is nothing positive in the Bill which prohibits the milking of animals in a market. He says that this will make in very likely that they are not milked. In that case, the owner may be proceeded against under the Protection of Animals Act, as my noble friend is aware. In addition, I can give him the assurance that the Ministry of Agriculture veterinary surgeons are well aware of the needs, and of the difficulties of milking cows in the market; and they will be most willing to co-operate in any way they can with any of the welfare societies which deal with this matter. In view of that undertaking, I hope the noble Lord will see fit to withdraw his Amendment.
LORD MERTHYR: I thank the noble Lord, and beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
VISCOUNT WOOLTON VISCOUNT WOOLTON moved, after Clause 11 to insert the following new clause:
"—(1) Throughout the 1950 Act and the principal Act, for the words 'artificial cream,' wherever those words occur (including the definitions of that expression in those Acts, hut except in section thirty-eight of the 1950 Act, which provides for the citation of that Act), there shall be substituted the words reconstituted cream.
(2) Section twenty-nine of the 1950 Act (which, as amended by the foregoing subsection, regulates the sale of reconstituted cream) shall apply with the necessary modifications in relation to imitation cream as it applies in relation to reconstituted cream.
(3) For the purposes of this section imitation cream' means an article of food which, not being cream or reconstituted cream resembles cream and is produced by emulsifying edible oils or fats with water, with or without other substances."
The noble Viscount said: My Lords, this Amendment is consequential on the Amendment to omit Clause 9. I beg to move.
Amendment moved—
After Clause 11, insert the said new clause.—(Viscount Woolton.)
On Question, Amendment agreed to.
Clause 14 [Enforcement of certain enactments and regulations]:
VISCOUNT WOOLTON: My Lords, this Amendment is moved to implement an undertaking which I gave to the noble Lord, Lord Balfour of Inchrye. The purpose of the Amendment is to make it clear that notifications of intention to institute proceedings on labelling offences shall give a full account of the case, and not merely state that the prosecuting authority considers that an offence has been committed. Noble Lords may remember that Lord Balfour of Inchrye said that he thought some explanation ought to be made, and these words are intended to meet what seems to me a very reasonable case. I beg to move.
Amendment moved—
Page 15, line 34, leave out ("their reasons for so doing") and insert ("the facts upon which the charges are founded").—(Viscount Woolton.)
Clause 16:
Repeal of certain administrative provisions of 1950 Act
16. The following provisions of the 1950 Act shall cease to have effect, that is to say—
(a) sections five and sixteen (which require that Milk and Dairies Regulations shall provide for the constitution of a central committee and county committees to review the working of those regulations and of Milk (Special Designation), Regulations); and
4.4 p.m.
LORD BURDEN LORD BURDEN moved to leave out paragraph (a). The noble Lord said: My Lords, I beg to move the Amendment standing in my name on the Marshalled List. This Amendment is moved in order that I may obtain, as I hope I shall obtain, an assurance from the Minister in regard to procedure. The noble Viscount will be aware that both the 1944 Act and the 1950 Act provided for the setting up of committees in county areas. The present Minister of Agriculture (I am not criticising him) suggested that these committees should not be set up because the county agricultural committees, which were set up under the 1947 Agriculture Act, have power to appoint sub-committees; and I believe that most of them have, in fact, appointed milk sub-committees. The Minister of Agriculture has power to delegate some of his responsibility to the county agricultural committees, and clearly that power, or

909
some of it, should be delegated to the milk sub-committees. The assurance that I hope to obtain from the Minister is that the milk sub-committees will devote their attention to the production of milk on farms, and will not enter into the province of distribution, which up to now has been the province of the local authorities.
There is no reason at all why any county agricultural committee should not do its own work. I believe that these committees are doing their work very effectively indeed, so far as the farm is concerned, but I do not see why they should pass into the sphere of distribution, which I suggest is a field quite outside their normal sphere of operation. I hope that the Minister will be able to assure me that these milk sub-committees and the county agricultural committees will be kept out of the sphere of distribution, and that the local authorities will continue to be responsible for distribution. I believe I am correct in saying that there are no representatives of local authorities on the agricultural committees, with the exception of the medical officer of health, who may be on some of these committees. But he is there, perhaps in a different capacity. If it is the Minister's intention to widen the scope of activity of the milk sub-committees of the county agricultural committees, then I suggest that it would be right and proper that their membership should be widened to include direct representatives of the local authorities. That is the case I wish to present. I beg to move.
Amendment moved—
Page 15, line 43, leave out paragraph (a).—(Lord Burden.)
LORD CARRINGTON: My Lords, the noble Lord is quite right in saying that it was in the 1944 Act that the original power to appoint these committees was given, because at that time it was contemplated that the Milk and Dairies regulations would be operated by officials of the Ministry. It turned out otherwise, as the noble Lord has said. Since then, the agricultural executive committees have been set up, each with a milk subcommittee, and therefore the Minister does not find it necessary to appoint other committees, because all they would be doing would be to duplicate the functions which are being perfectly adequately performed at the present time. I can give the noble Lord the assurance he wants.
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He may like to know the terms of reference of the committees. They are:
"To advise the agricultural executive committee on the discharge of such of the functions of the Minister of Agriculture and Fisheries in the Milk and Dairies Regulations and the Milk (Special Designation) (Raw Milk) Regulations as have been delegated to it: to exercise such, of those functions as may be delegated to the sub-committee by the executive committee; and generally to advise on methods designed to achieve an improvement in the hygienic quality of milk."
The noble Lord will see that those terms of reference do not include any reference to distribution or, for instance, to heat-treated milk. That will continue to be the province of the local authority. I hope that, with that assurance, the noble Lord will withdraw his Amendment.
LORD BURDEN: My Lords, I thank the noble Lord for his assurance. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 18 [Disposed of samples taken for analysis]:
LORD CARRINGTON LORD CARRINGTON moved, in subsection (2) (c) (i) to leave out "effectively closed and sealed and." The noble Lord said: My Lords, this; Amendment is to carry out an undertaking that I gave to the noble Earl, Lord St. Aldwyn, on the question of samples of milk which had bean taken—that one sample which had been taken would be sent to the producer of that milk. The effect of this Amendment will be that part of a sample taken of milk in a churn or in a bottle with the name of the producer on it will be sent to the producer. I must confess that I am not altogether happy about the Amendment. I know exactly what the noble Earl and I want to do, but I am not altogether happy that my Amendment does it. However, as the noble Viscount, Lord Woolton, has said, there will be another opportunity in this House of discussing the Bill. I should like to give notice that it may be necessary, to achieve what both of us have in mind, to move either another Amendment or perhaps some consequential Amendments to the one I now beg to move.
Amendment moved—
Page 17, line 14, leave out ("effectively closed and sealed and'').—(Lord Carrington.)
EARL ST. ALDWYN: My Lords, the noble Lord has some doubts about this Amendment and I must admit that I

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share them. As we shall have another chance of moving Amendments at the next stage, if he and I could discuss this point I am sure we could produce a satisfactory solution.
On Question, Amendment agreed to.
LORD WALERAN LORD WALERAN moved to insert the following subsection:
"(4) If it appears to a sampling officer that any food, drug or substance of which he has procured a sample was manufactured, or put into its wrapper or container by a person (not being a person to whom one part of the sample is required to be given under this section) having his name and an address in the United Kingdom displayed on the wrapper or container, the officer shall within three days of procuring the sample send to that person a notice informing him that the sample has been procured by the officer and where the sample was taken, or, as the case may be, from whom it was purchased."
The noble Lord said: My Lords, your Lordships will recollect that at the Committee stage I put down an Amendment which, roughly, asked that whenever a sampling officer took samples, four samples instead of three should be taken. I also said that, if Her Majesty's Government could not accept that Amendment I would agree to the sending to the manufacturer of a rapid notification that samples had been taken. The noble Viscount, Lord Woolton, was kind enough to say that if we found some agreed form of words, I should put down another Amendment. Although this Amendment does not go so far as I should like, I am grateful to the noble Viscount, Lord Woolton, and I beg to move the Amendment.
Amendment moved—
Page 17, line 41, at end insert the said subsection.—(Lord Waleran.)
VISCOUNT WOOLTON: My Lords, I shall be glad to accept the Amendment.
On Question, Amendment agreed to.
LORD WALERAN: My Lords, this Amendment is consequential. I beg to move.
Amendment moved—
Page 18, line 15, after ("section") insert ("(except subsection (4))")—(Lord Waleran.)
On Question, Amendment agreed to.
Clause 23 [Commencement of proceedings]:
LORD CARRINGTON: This Amendment and the one which follows are designed to make it quite plain that the period of time which may be allowed to elapse before the commencement of proceedings includes the day on which the sample has been taken. I beg to move.
Amendment moved—
Page 21, line 10, after ("days") insert ("from the time when").—(Lord Carrington.)
On Question, Amendment agreed to.
LORD CARRINGTON: My Lords, this Amendment is consequential. I beg to move.
Amendment moved—
Page 21, line 11, after ("months") insert ("beginning with the date on which").—(Lord Carrington.)
On Question, Amendment agreed to.
Clause 24. [Penalties and offences by corporations]:
LORD CARRINGTON: My Lords, this Amendment and also Amendments Nos. 33, 35, 37 and 38 are little more than drafting, in that they are necessary in order to bring the penalties for certain milk offences into line with the general penalties provided in Clause 24. The way in which it was done originally in the Bill was unsatisfactory. I beg to move.
Amendment moved—
Page 21, line 22, leave out lines 22 and 23.—(Lord Carrington.)
On Question, Amendment agreed to.
LORD CARRINGTON: My Lords, I beg to move this Amendment.
Amendment moved—
Page 21, line 26, leave out from ("consumption") to the end of line 31 and insert ("shall cease to have effect").—(Lord Carrington.)
On Question, Amendment agreed to.
Clause 32 [Minor and consequential amendments, repeals and savings]:
VISCOUNT WOOLTON VISCOUNT WOOLTON moved to leave out subsection (2). The noble Viscount said: My Lords, this is part of the Amendments made to Clause 9 and after Clause 11. It ensures that the alteration of the definition of the substance known as "artificial cream" shall precede the introduction of the new definition of "imitation cream". I beg to move.
Amendment moved—
Page 27, line I, leave out subsection (20).—(Viscount Woolton.)
On Question, Amendment agreed to.
Second Schedule [Minor and consequential amendments]:
The Food and Drugs Act, 1938 (1 & 2 Geo. 6. c. 56).
Section 100
In subsection (1), at the end of the definition of "animal" there shall be added the words "or fish"; it paragraph (c) of the proviso to the definition of "authorised officer", after the words "a sanitary inspector" there shall he inserted the words "a person having such qualifications as may be prescribed by regulations made by the Minister of Food and the Minister of Health acting jointly"; in the definition of "container", for the words "a package" there stall be substituted the words any basket, pail, tray, package."
LORD CARRINGTON: My Lords, this Amendment is designed to make it quite plain that a person other than a sampling officer who is submitting a sample for analysis is authorised only to send substances which are connected with food. As the Bill stands at the present time, it is not only limited to food. I beg to move.
Amendment moved—
Page 33, line 9, leave out ("and in subsection (2)").—(Lord Carrington.)
On Question, Amendment agreed to.
LORD CARRINGTON: My Lords, this is consequential. I beg to move.
Amendment moved—
Page 33, line 10, at end insert—
("In subsection (2) after the words 'food or drug' there shall be inserted the words 'or substance capable of being used in the preparation of food'.")—(Lord Carrington.)
On Question, Amendment agreed to.
LORD CARRINGTON: My Lords, it might well be that some public analysts might not have the necessary equipment to carry out certain of their functions. What this Amendment does is to make it plain that, if the equipment is not in the possession of the analyst, he is enabled to make use of the better facilities in another laboratory. I beg to move.
Amendment moved—
Page 33, line 12, at end insert—
("In subsection (4), after the word 'vacant' there shall he inserted the words 'or if the
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public analyst for that area is for any reason unable to perform an effective analysis'.")—(Lord Carrington.)
On Question, Amendment agreed to.
LORD CAR RTNGTON: My Lords, this Amendment and Amendments Numbers 29, 30, 32 and 34 all give effect to an undertaking I gave to the noble Lord, Lord Balfour of Inchrye, on the question of consultation with organisations and other bodies. This Amendment is on the lines which he suggested, but the disadvantage of his Amendment was that it made particular mention of trade organisations but not of professional or local authority organisations. This Amendment takes care of that point. I beg to move.
Amendment moved—
Page 34, line 33, leave out ("subsections (2) and (4)") and insert ("subsection (2) in paragraph (f)").—(Lord Carrington.)
On Question, Amendment agreed to.
LORD CARRINGTON: My Lords, this Amendment is consequential. I beg to move.
Amendment moved—
Page 34, line 35, leave out from ("jointly") to the end of line 36.—(Lord Carrington.)
On Question, Amendment agreed to.
LORD CARRINGTON: My Lords, this Amendment is consequential. I beg to move.
Amendment moved—
Page 34, line 48, at end insert—
(" For subsection (4) there shall be substituted the following subsection:—
'(4) Before making the regulations the Minister of Food and the Minister of Health shall consult with such organisations as appear to them to be representative of interests substantially affected by the regulations.'")—(Lord Carrington.)
On Question, Amendment agreed to.
4.20 p.m.
LORD BURDEN LORD BURDEN moved, in the proposed amendment of Section 100 of the Food and Drugs Act, 1938, to omit all words beginning "in paragraph (c)" down to and including "jointly." The noble Lord said: My Lords, I venture to think that this is an Amendment of some substance, and I hope your Lordships will forgive me if I take a moment or two in order to make clear what it is intended

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to do. The inter-Departmental Committee on Meat Inspection recommended —I quote:
"That a course of theoretical and practical training should be provided to enable candidates from the butchery trade to qualify as meat inspectors; and that the Food and Drugs Act should be amended to enable such persons to act as authorised officers for the examination and seizure of meat."
I concede that right away, because it seems to me that under the words which I am seeking to delete from the Bill, the Minister would have power to appoint persons of that kind if he were satisfied in other directions. The first point I should like to deal with is this. What is covered by the words "a knowledge of the butchery trade?" Do the words refer to that admirable person who whips the Sunday joint on to the scales, makes a lightning calculation and whips it off again, or do they refer to those who, as the noble Viscount, Lord Woolton, will well know, were made redundant at the outbreak of war, the people engaged in the wholesale and importing trade—the people who have cost us, I believe, no doubt quite rightly, something like £3 million a year since 1940? If not, what do the words include?
I suggest to your Lordships that only approximately one per cent. of people engaged in the butchery trade—they would he the people who have been or are employed in slaughterhouses—would be the right and proper persons to discharge the functions which are necessary in regard to the inspection and seizure of diseased meat. How, for example, could a man who had only been weighing up joints have any knowledge of where to look for tubercular glands, or things of that kind, in a beast? I suggest that we must be very careful indeed so far as this matter is concerned. Meat and food inspection must be regarded as essentially a public health service. The officers who perform that work must have been, or should be, properly trained and equipped for their work, and should have acquired a sound public health background during their training. The task of meat inspection must be viewed from the public health angle and not from a narrow trade point of view. Most of the meat in this country is inspected by sanitary inspectors who are first trained to perform general
916
public health functions and then, as is noted in this Report of the inter-Departmental Committee, have to undergo special training in meat and food inspection. I want to make that point quite clear. There is, first of all, general public health training in environmental hygiene, and then the specific and special training in food and meat inspection. In this way they not only acquire the required professional skill, but develop the right attitude and approach to the work.
I do not want to say anything more about these animal salesmen, but I expect that everybody who, during the war period and subsequently, has had to buy meat from a butcher's shop has been aware of the attitude of salesmen, which has been, largely, one of "take it or leave it." That is not an attitude that one should attempt in carrying out public health functions. I suggest that these professionally trained people are the right people to carry out this important work. Anybody who has been in a slaughterhouse and seen a beast that has just been killed will not wonder why people should leave such a job. I am sure that, having seen it once, anybody who has a queasy stomach would not want to go again to see an operation like that. But as I say, only 1 per cent. of those people, and it may he some other admirable people, can qualify. I suggest that there ought not to be a short cut to this work that the people should have proper training, the same as other people engaged in this vital work of protecting the public. I submit to your Lordships that it would be quite wrong, and would be a retrograde step, to lower the professional standards and qualifications of those engaged in this most important work of safeguarding the health of the public. I most seriously hope, therefore, that the Minister will be able to accept this Amendment. If he is unable to do so, if he thinks it is too narrow or limiting, I hope he will give us some sort of assurance that it will not be only on a narrow, limited sort of curriculum that these people will be able to qualify for an appointment in this work, but that they will have the broad general training of other inspectors carrying out this vital work of food inspection in the interests of the general public. I beg to move.
Amendment moved—
Page 35, line 6, leave out from ("fish'') to ("in") m line 10.—(Lord Burden.)
VISCOUNT WOOLTON: My Lords, there is here no difference of intention between Her Majesty's Government and what the noble Lord, Lord Burden, has just said. If he will forgive me for saying so, he has been most moderate in the request that he has made of us.
LORD BURDEN: I hope that that is not a back-handed compliment—that sometimes I am not.
VISCOUNT WOOLTON: I should never have dreamed of suggesting that the noble Lord was other than moderate at all times. The noble Lord has quoted the inter-Departmental Committee; I am going to quote it to him in reply. I am sure that he and your Lordships will forgive me if I just repeat what is said there—namely,
"That a course of theoretical and practical training should be provided to enable candidates from the butchery trade to qualify as meat inspectors."
I should like to assure the noble Lord that this is not just a question of selecting some butchers and, so to speak, rushing them through in order to meet a present need. I assure the noble Lord (although I do not think he needs any assurance from me) that all Governments are most anxious to retain the very high standard of sanitary inspection that we enjoy in this country from a body of professional people who are rendering great service, and I should be the last to suggest that, by some process of rapid dilution, we should reduce that standard. But we are faced with another problem—namely, the immediate problem. For the purpose of meat inspection we may have to face this issue: Are we to have a special body trained or are we to have no inspection? It would be fatal to have no inspection, and therefore the Ministers have decided that they will give special training, both theoretical and practical, to a body of people from a selected trade, who already know something about the subject, in order that they may become qualified to pass an examination so as to ensure that they are able to do the work that needs to be done. Regulations will be made prescribing the qualifications necessary.
I should not be frank if I did not say that these regulations will not be so wide
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as those that have been in force for sanitary inspectors, who obtain a general qualification and cover a very wide sphere of sanitary inspection. These people will be trained for a special job. But I would appeal to the noble Lord, Lord Burden, not to press this Amendment. I am assures by the Ministers that there will not be a particular problem. There will have to be an extended number of slaughterhouses, and consequently there will have to be an extended number of inspectors. I hope that the noble Lord will be prepared to withdraw his Amendment, after what I think are the very definite assurances that I have endeavoured to give him, that the Minister will have full regard to public safety and public health in the matter. I am sorry to have dept your Lordships rather a long time on this matter, but it is a very important one.
LORD MILNER OF LEEDS: My Lords, may I ask the noble Viscount whether the appropriate associations, including the Sanitary Inspectors' Association, will be consulted before the regulations are made? I think that would be a factor in my noble friend's mind.
VISCOUNT WOOLTON: I have no authority in the matter, but I am sure the Minister would want to do that.
LORD CALVERLEY: My Lords, I speak from actual experience. I had the privilege for some years of serving on a committee which dealt with the training of butchers for this very job. We found that we had an answer in not only taking the practical butcher or slaughterman but also giving him theoretical training, so that he could understand what should be sold and what should not be sold. I can speak for many municipal authorities in the north, because I had the advantage of serving on a body which covered Lancashire, Derbyshire, Cumberland, Northumberland, Yorkshire and Durham. We were all striving for the very same end about which the noble Viscount, Lord Woolton, has been talking. This system has been operating for some time, and now that we have the prospect, perhaps, of having more English beef, then it is right that we should have inspectors who are recruited from the trade, if they have that additional knowledge which the noble Viscount, Lord Woolton, so much emphasises. It must be twenty years or more since I say this system actually

919
operating in several of our great municipal areas. We have already tried to go a long way. I am therefore not so pessimistic as, perhaps, is my noble friend on the Front Bench.
I think this job should not be given to the plumber or the plumber's mate. That is where sanitary inspectors are recruited from; they have been uplifted from that body of men. We are doing the same with butchers. If the honourable Member for Salford were present with us this afternoon, he would be able to assure your Lordships that the Butchers' Association is largely reactionary, because its members belong to the Party opposite. But I will say this for them: that they are doing a jolly good job in this regard. Therefore, I think we can rest assured that what the noble Viscount, Lord Woolton, has told us will, in fact, be carried out, and that we can look forward, not to cheaper beef but to better beef; and also, perhaps, to dearer mutton, though something which we know is mutton.
LORD BURDEN: My Lords, with the consent of the House, I should like to respond to the conciliatory appeal made by the noble Viscount, Lord Woolton. If the House will allow me, I would say, in reply to my noble friend Lord Calverley, that I did consult the honourable Member for Salford before I made some of the remarks in my speech; but I should be the last one to endeavour to hamper or frustrate in any way the noble Viscount's desire to give us more "good red meat." But I am concerned, and so I am sure is the noble Viscount, that we should not lower the standards in public service. We should always try to raise, if possible, the standards in the public service. On the understanding which the noble Viscount has been good enough to give, that these regulations will be discussed with the appropriate associations. I have pleasure in asking the leave of the House to withdraw the Amendment.
VISCOUNT WOOLTON: I am obliged to the noble Lord.
Amendment, by leave, withdrawn.
LORD CARRINGTON: My Lords, this Amendment is consequential on Amendment No. 28. I beg to move.
Amendment moved—
Page 35, line 24, at end insert—
920
("Section 4
For subsection (2) there shall be substituted the following subsection—
'(2) The Ministers before making the regulations shall consult with such organisations as appear to them to be representative of interests substantially affected by the regulations.'").—(Lord Carrington.)
On Question, Amendment agreed to.
LORD CARRINGTON: My Lords, I beg to move this Amendment.
Amendment moved—
Page 35, line 26, at beginning insert—
("In subsection (5), for the words from the following to the end of the subsection there shall be substituted the words those specified in subsection (1) of section twenty-four of the, Food and Drugs Amendment Act, 1954.").—(Lord Carrington.)
On Question, Amendment agreed to.
LORD CARRINGTON: My Lords, I beg to move this Amendment.
Amendment moved—
Page 35, line 33, at end insert—
("Section 15
For subsection (2) there shall be substituted the following subsection:—
'(2) The Ministers before making such regulations shall consult with such organisations as appear to them to be representative of interests substantially affected by the regulations.").—(Lord Carrington.)
On Question, Amendment agreed to.
LORD CARRINGTON: My Lords, I beg to move this Amendment.
Amendment moved—
Page 35, line 39, at end insert—
("In subsection (3), for the words from the following to the end of the subsection there shall be substituted the words those specified in subsection (1) of section twenty-four of the Food and Drugs Amendment Act, 1954 '.").—(Lord Carrington.)
On Question, Amendment agreed to.
VISCOUNT WOOLTON: My Lords, I beg to move this Amendment.
Amendment moved—
Page 36, line 2, at beginning insert—
("In subsection (1) after the word cream in the third and fifth places where that word occurs, there shall be inserted the words or imitation cream and for the word artificial at the end of the subsection there shall be substituted the words '"reconstituted" or "imitation" as the case may be.
In subsection (2), after the word cream in the first and second places where that word occurs, there shall be inserted the words or imitation cream and after that word in the third place where it occurs there shall be inserted the words or "imitation cream", as the case may be'.").—(Viscount Woolton.)
On Question, Amendment agreed to
Third Schedule [Repeals]:
LORD CARRINGTON: My Lords, I beg to move this Amendment, which is part of the Amendment to Clause 9 and the insertion after Clause 11 seeking to ensure that the definition of "artificial cream" should precede the definition of "imitation cream." It brings imitation cream within Section 29 of the 1950 Act, which provides that all vessels containing imitation cream shall be labelled accordingly.
Amendment moved—
Page 38, line 6, column 3, leave out Tires 6 to 9.—(Lord Carrington.)
On Question, Amendment agreed to.
LORD CARRINGTON: My Lords, beg to move this Amendment.
Amendment moved—
Page 38, line 16, column 3, leave out fines 16 to 19.—(Lord Carrington.)
On Question, Amendment agreed to.
VISCOUNT WOOLTON: My Lords, I now beg to move, that the Bill be recommitted to a Committee of the Whole House.
Moved, That the Bill be re-committed to a Committee of the Whole House.—(Viscount Woolton.)
On Question, Motion agreed to: Bill re-committed to a Committee of the Whole House accordingly.
House adjourned during pleasure and resumed by the Lord Chancellor.

DEVELOPMENT OF INVENTIONS BILL
4.39 p.m.
Order of the Day for the Second Reading read.
LORD MANCROFT: My Lords, this Bill amends the Development of Inventions Act, 1948, which set up the National Research Development Corporation. The main objects of the Bill are to extend the time during which the Corporation may finance themselves by borrowing from public funds and to widen the powers of the Corporation slightly in connection with research. The Corporation have a rather unusual and, to my way of thinking, an interesting job. They receive inventions, develop them if necessary, and pass them out again for use in industry.
922
Their purpose, broadly, is to help to get the results of the country's research and inventive activities applied in industry as quickly as possible. The Government are now responsible for a tremendous volume of research, mostly for defence, and that produces as a by-product many inventions of real potential importance to industry. Although most inventions of any value coming from private sources are readily taken up by industry, now and then the odd one falls by the wayside. For example, there was Perkin's discovery in the year 1856 of the aniline dye, which, unfortunately, through some neglect in this country, was allowed to go abroad and form the basis of the formidable German dyestuff industry. Again, the synthetic production of Vitamin D—I do not know whether that should be pronounced "Vit-amin" or "Vi-tamin" there seems, to be no agreement upon it—to the discovery of which British researchers largely contributed, also, unfortunately, slipped through our fingers, and became the basis of an industry in America.
The Corporation are enjoined by the parent Act to:
"secure, where the public interest so requires, the development and exploitation of inventions resulting from publicly financed research."
For this purpose, they receive rights in non-secret Government inventions of potential commercial value. They may also develop and exploit other inventions, such as those produced by private firms or individuals, if these appear to be worth while and are in danger of neglect. They secure by negotiation the privately-owned rights of inventions brought to their notice by the inventor, or make other arrangements acceptable to the owners for development and exploitation in the public interest. The Corporation exploit the rights they hold by granting licences to firms wishing to use the inventions, and they have established wide and friendly contacts with industry in the four and a half years of their existence. Many of the Corporation's inventions can be licensed immediately. For instance, the Bailey Bridge which, after a most distinguished war career, came to them from the Ministry of Supply was taken up by a go-ahead engineer and is now bringing a substantial return to the country from exports and overseas licensing.

923
A few inventions, however, require heavy expenditure to bring them into an industrially useful form, and industry may not be prepared to invest money in them at this early stage. It is an important function of the Corporation, in these cases, to sponsor any experimentation, engineering design, economic studies, or large-scale trials which may be necessary to bring the inventions to the stage at which their value can be appreciated and firms are willing to manufacture the product or use the process under licence. In such cases, the Corporation's work relieves the licensee of further substantial development expenditure.
I think I ought to make it clear to your Lordships that the Corporation do not, themselves, conduct research and development. They are a managerial body of industrial, technical and patent experts, and they operate through private firms, research organisations, universities and so on, with whom they make contracts to do the research and development work. The managing director of the Corporation is a Member of your Lordships' House, the noble Earl, Lord Halsbury, whom I am glad to see in his place to-day. I am certain that your Lordships would wish me, on your behalf, to congratulate him and his staff on the fine job of work which they have done. The noble Earl, as a distinguished industrial scientist, is bringing fresh lustre to a name which is already held in high repute in other fields. The chairman of the Corporation, Sir Percy Mills, and the other members give their services part-time, a number of them without remuneration. All have been appointed for some special knowledge and experience which they can contribute, and together they form, if I may say so, a most competent team.
The existing Act empowers the Board of Trade to advance to the Corporation sums up to a maximum of £5 million outstanding at any one time during the Corporation's first five years. The advances made up to the end of 1953 amounted to about £750,000. Your Lordships will appreciate that the Corporation have used so far only a fraction of the funds which it was envisaged they would need. The explanation, of course, is that five years is a short time to a body
924
engaged in developing inventions. The early stages of development, when the invention is still in the laboratory, or on the drawing-board, are, obviously, comparatively inexpensive. It may take several years of experiment and trial before the time comes for building full-scale prototypes, and then the expenditure may increase ten or even a hundred times. The Corporation have yet to reach the stage of their heaviest expenditure on many of their projects, and more are constantly coming forward. The expenditure to date, therefore, is not a full measure of what it may ultimately be.
The Corporation's revenue comes from the royalties and other payments made by firms using their inventions. At present, they are comparatively small, but they are increasing. They have grown from £3,000 in the first year to £23,000 in the fourth, and they are likely to be about twice this amount in the current year. Royalty revenue, however, is necessarily slow in coming in, since royalties are paid only after development has been completed, licences negotiated and the goods actually made. The Corporation's revenue, therefore, cannot be expected to be very significant for some years to come, though there is good reason to hope that by the end of the period covered by this Bill—that is ten years from the Corporation's first formation—they may be approaching, if indeed they have not reached, the stage at which their income and expenditure will be in balance. Indeed, there is even a prospect that they may have entered the realms of political controversy and be making a profit. In the meantime, your Lordships will not be surprised to know that there is need for them still to be financed from public funds.
If one comes before your Lordships and asks for your support for an organisation such as this, I think it is only right to try to justify the reasons why that support is being asked. Before passing on to the actual provisions of the Bill, therefore, I think I should say something about the details of the Corporation's achievements. Figures given in their Fourth Annual Report, which lies on the Table of your Lordships' House, show that they now hold some 500 patents at home and 227 overseas, and they have

925
filed applications for nearly 1,500 more. They have issued or have had assigned to them by Departments over 250 licences—
LORD LUCAS OF CHILWORTH: Will the noble Lord forgive rile? He said that we could find copies of the Corporation's Report on the Fable of the House. I should like to know where. I cannot see a copy.
LORD MANCROFT: I am extremely sorry. I saw the noble Lord's eye passing towards that side of the Table. Copies of the Report were there just after the House met, because I asked for them to be put there, but I am afraid noble Lords have been greedier than I expected, for the copies have all gone. However, if the noble Lord wishes for a copy I can easily get one for him.
I was saying that the Corporation have issued or have had assigned to them by Departments over 250 licences, and more, of course, are under negotiation. The fact that only 77 licences are as yet earning revenue is an indication of the increase in income which may be expected during the next few years. The Corporation's Fourth Annual Report describes a number of projects which they have on hand and illustrates strikingly, I think, the wide range of technology which they cover. The most important of them is the electronic digital computer, which is more familiarly known as, the electronic brain. This astonishing machine can be used in the determination of the action of the waves on the hull of a ship; and can do the accounting of a big commercial engineering concern in five minutes—a task that would take normally something like twelve months. It can do pretty well everything that I can understand, except make a Second Reading speech. It could be turned on to the task of securing an even and rapid flow of traffic in Oxford Street by instantaneously measuring and controlling all traffic for half a mile around. But it only requires the purchase of a twopenny bus ticket to convince any of your Lordships that this task is not yet completed. The Corporation's contribution to the development of these electronic brains has helped materially to strengthen the competitive position of the British firms who make them.
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Another case is that of the light steam engine and boiler which has been developed by the Corporation in cooperation with Sir Harry Ricardo. This is a simple power unit, burning almost any low-grade fuel, and which is likely to be of great value to village communities in under-developed areas, such as India, for pumping water or driving a light corn mill or loom. Then there is the aural microscope, a microscope which can be used by a surgeon while he is operating inside the ear, which has also been developed and sold—your Lordships can believe it or not—as an instrument for determining the sex of day-old chicks. Altogether, I think your Lordships will agree that the Corporation already have some solid achievements for which they can take credit.
If there are any noble Lords who are of an inventive frame of mind, may I make this offer to them? British Railways lose 3 million cups a year through breakages. A cup costs sixpence to replace. It does not require an electronic computator to realise that 3 million cups at sixpence a time is an expensive bill for the taxpayer to meet. British Railways have tried to substitute cups made of paper. That has not met with the approval of the public, as the paper cups are not proof against the heat of any hot drink. They have tried some form of plastic cup. That has not met with public approval either, as it stains unpleasantly after about ten days' use. Here is an opening for anyone who can invent some means of saving British Railways 3 million cups a year through breakages. Perhaps the noble Earl, Lord Halsbury, would be grateful to receive any suggestions.
I have already explained that although to date the Corporation have drawn on only a fraction of the funds made available to them, they will need to borrow a good deal more in the next few years, since it will be some time before their revenue reaches a significant level. The existing Act, however, permits the Corporation to borrow from public funds only during their first five years, which expire on June 28 of this year. Subsection (1) of Clause 1 of the Bill, therefore, extends this period for a further five years. Subsection (2) of Clause 1 provides for a similar extension of the period during which interest due on advances

927
made to the Corporation may be waived. It is clear that the one provision is consequential to the other. Clause (2) concerns the powers of the Corporation in relation to research. Subsection (1) merely clarifies the existing Act. It is a declaratory statement of the powers of the Corporation to promote and assist research in connection with existing inventions, and I understand it has been inserted since discussions had revealed that some doubt was felt as to whether the Corporation possessed such powers.
But it is quite clear that the Corporation cannot at present promote or assist research except in the furtherance of an existing invention, and this leads me on to subsections (2) to (5). In July of last year, the Advisory Council on Scientific Policy published a report in which they recommended that the Government should consider assisting the modernisation of civilian industry and its exploitation of scientific discoveries by placing research and development contracts. The Council mentioned the Corporation as a body which might help in this way, but pointed out that their powers did not enable them to seek applications for scientific discoveries or to initiate research. It has been agreed, therefore, that the Corporation could be more useful in implementing the Advisory Council's report if they were given powers provided by subsections (2) and (3). In the circumstances of which the Advisory Council were thinking, it may be well known that a particular need of an industry—for example, for a new process or a piece of machinery or plant—could be satisfied if some research were done. Or research already carried out may have resulted in a discovery which could be put to good account in industry if more research on its applications were carried out. In both cases, until the research has been completed there will be no invention, and therefore at present, under existing powers, the Corporation are powerless to help. Subsections (2) and (3) have accordingly been included in the Bill to give the Corporation powers to promote or assist research in these circumstances.
It is not intended that the Corporation shall themselves undertake research. Extensive facilities for this exist already within the Government organisation and in industry, and in most cases one of the
928
existing bodies will be able to do the necessary work. But there may be occasional cases in which the Corporation could more conveniently serve, either as manager or paymaster, in connection with a proposed research—for example, when the subject does not fall wholly within the province of a single research association or where the field of technology concerned is one in which the Corporation already have considerable experience. To avoid overlapping in function between the Corporation and Government and industrial research bodies, subsections (4) and (5) provide that the powers given to the Corporation by subsections (2) and (3) shall be exercised only with the specific or general approval of the Lord President of the Council and of the President of the Board of Trade.
This is a small Bill, and I hope it will be as welcome as was its predecessor five years ago. I am sure we are all agreed that this country cannot survive unless every resource of wit, ingenuity and intelligence is used to the utmost. The Corporation are already making a real contribution to the achievement of that aim. Without this Bill their work will finish in June. None of us would wish this venture, so hopefully started and so bright with promise for the future, to come to so untimely an end. I hope the House will smile upon this Bill more favourably than it did on me when we last discussed the topic of inventions: and, with confidence. I beg to move that the Bill be read a second time.
Moved, That the Bill be now read 2ª.—(Lord Mancroft.)
4.58 p.m.
LORD LUCAS OF CHTLWORTH: My Lords, the noble Lord, Lord Mancroft, may rest assured that noble Lords on this side welcome this Bill and will do everything they can to expedite its passage through your Lordships' House. The one criticism which I can find is that it does not go far enouch. The noble Lord has said that the Bill is to assist the translation into practice of the results of scientific research and invention. I regret that the noble Marquess the Leader of the House, who is so intimately connected with this, is not in the House. I make no complaint, because the noble Marquess is meticulous in the courtesy he shows to your Lordships, and it would be churlish for me to say that his absence

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is due to anything other than more important business. But I hope that my noble friend Lord Mancroft will convey the purport of my remarks to the noble Marquess.
When the noble Lord, Lord Mancroft, said that it was one of the functions of this Bill to shorten the dreadful time-lag between theory and practice, he put his finger upon one of the major faults of British industry. It is not a new fault. Many of your Lordships have been as surprised as I am at the amount of thought, time and money that is spent upon research, in all spheres of the industrial and economic life of this country. We wait and wait for the practical application to the economic life of the country of the results of that research. But we wait in vain. There never was such a time as the present when it was necessary for us to seek new prod acts and new industries, to supplement and take the place of those that we are fast losing. I was hoping, when I read this Bill, that Clause 2 would enable us to make rapid strides. My complaint is that, as the noble Lord has said, this is a very modest Bill. I was reading the Sixth Annual Report of the Advisory Council on Scientific Policy. There is an amazing statement in this Report. Dealing with the year 1952, attention is drawn to the need for an increase in the practical application of research and technology. The Report states:
"Last year only £34 million, out of a total of £2,500 million of overseas exports, represented goods which were unknown before the war."
That is a striking fact. I sometimes wonder whether a great deal of the thought and money that is being expended on some of the industries of this country, whose optimum contribution to our exports will never reach what it was in the past, might not be directed to this specific purpose. I do not think it would be an exaggeration to say that herein lies the salvation of Lancashire.
I was talking only the other day to an industrial friend of mine, who is head of one of the largest engineering concerns in this country. He told me that about twelve months ago he had a visit from a Japanese manufacturer, who brought with him not only his sons, who were graduates of American universities, but also four eminent scientists, to see and
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study everything they could in this country so as to equip themselves better for the competitive nature of the world of the future. After they had gone through this country, they were going on to America. We have sent study groups, quite a number of working parties and industrial teams to America. But when they come back we spend our time in disproving what they say, on the ground that conditions in this country are totally different from those in America. I join with the noble Lord, Lord Mancroft, in paying my tribute to the noble Earl, Lord Halsbury, and his colleagues for the work they have done. But to conceive is one thing and to deliver is another. That is where we fail in our industry to-day. I feel that if this Bill goes only one small stop in the direction we desire, it will be a useful measure that should commend itself to all your Lordships. It commends itself to noble Lords on this side of the House; we agree to its Second Reading, and we shall do everything we can to expedite its passage through your Lordships' House.
5.5 p.m.
THE EARL OF HALSBURY: My Lords, in rising to speak on the Motion before your Lordships this afternoon, I am fully mindful of the wise tradition which inhibits members of public corporations who are also Members of your Lordships' House from speaking upon controversial matters which may arise from time to time. There are, however, two topics upon which I Feel I may speak, with your Lordships' approval, notwithstanding my personal connection with the Corporation whose future is being provided for this afternoon. In the first place, I should like to express my gratitude for the pleasing terms in which the work upon which my colleagues and I have been engaged for the last four years has been referred to in your Lordships' House today. This recognition was most graciously expressed by the noble Lord, Lord Mancroft, and also by the President of the Board of Trade in another place. I need hardly say that I am grateful to both of them for their kindness.
Secondly, I am sure your Lordships would wish me to take this opportunity to pay my tribute to the large number of helpers, without whose assistance—quite often, voluntary assistancez—it would not

931
be possible to direct the affairs of the Corporation. I should begin by referring to the army of inventors, whose ingenious ideas it is the function of the Corporation to develop and exploit. Some of these are members of the general public, and they approach the Corporation in a spirit of self-interest; others are public servants whose service contracts require them to assign their inventions to the Crown. Many, however, are neither public servants, on the one hand, nor members of the public, on the other, though they operate in part, at any rate, and indirectly, with public funds. I refer to the distinguished men of science who are engaged on teaching and research in our centres of learning throughout the country. Very often, their pursuit of knowledge, for its own sake, results in valuable ideas which can be applied to industry; and too often in the past these ideas have passed unnoticed and unprotected. It is to the willingness of these men to cooperate with the Corporation that we owe the possibility of turning some of their inventive output into valuable public assets for the future.
Apart from the inventors, there are a number of other people to whom I should like to pay an appropriate need of tribute. Among these are the large number of experts employed in academic establishments, or in the public service, or in the industrial research associations, or in industry, who act as our assessors and give us the benefit of their expert opinion. Without this we should often be floundering in unfamiliar and highly specialised fields. The greater number of them do their work voluntarily, and for nothing, and I am sure that your Lordships' would wish me to express the gratitude which we feel to them. I am also reminded of the many patent agents employed in the public service, whose endless task it is to screen the large output of Government scientists, for patentable subject matter, and to reduce to the precise and formal English of a patent specification the often nebulous terms in which scientists describe their subjects. It has been truly said that it is the patent agent who makes the invention—the inventor, only thinks of it.
Last, but certainly not least, I should like to express thanks to the staff of the Corporation for their enthusiasm and
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hard work during the course of the last four or five years. However hard I and my colleagues tried to gain the approval of your Lordships' House, it is obvious that we should not succeed in doing so unless the decisions that we were asked to take were prepared for us in a form that we could assimilate, and were then acted upon by an intelligent and skilful staff. So far as my colleagues are concerned—and I think I may include among them the officials in our sponsoring Ministry, The Board of Trade—I am sure that all find the work on which we are engaged extremely interesting. I much look forward to a continued period of association with them during the second five-year period for which provision is being made in this Bill. No doubt in five years' time your Lordships will once more be sitting in judgment upon the Corporation's activities, and I should be a bold man if I attempted to forecast what you will have to say upon that occasion. As the noble Lord, Lord Mancroft, has told you, we have developed a machine which enables us to determine the sex of a chicken before it is reared. But we have not yet heard of an invention which enables us to count the chickens before they have been hatched. Your Lordships will therefore excuse me from making any further predictions upon this matter, though you may rely on us to do our best to continue to merit your approval.
5.12 p.m.
THE LORD PRESIDENT OF THE COUNCIL (THE MARQUESS OF SALISBURY): My Lords, I do not propose to intervene in this debate, first because I think this is a Bill which is entirely non-controversial, and the work which is done by the Corporation is universally valued and recognised, and also because my noble friend Lord Mancroft has, I know, described to the House fully and adequately the purposes for which the Bill is framed. I should, however, as I am the Minister who is directly responsible for the affairs of the Corporation, like to take this opportunity of adding my thanks to those which I am sure have been expressed in all parts of the House, for the admirable work which is done by the Corporation. As noble Lords will have seen from what has been said by the noble Earl, Lord Halsbury, it fulfils a most valuable function, one which would

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not be performed at all if it did not exist. I might almost call it an invention itself which has already proved its value. I have no doubt that it has not been actually patented, but it is still an extremely valuable invention. To no one do we owe a more direct debt of gratitude than to the noble Earl himself, who pilots its activities with such skill and charm. That is all I wish to say this afternoon, but I thought it only right that, as I am the Minister directly responsible for the affairs of the Corporation, I should say, this word in support of the Bill.
On Question, Bid read 2ª, and committed to a Committee of the Whole House.

CINEMATOGRAPH FILM PRODUC- TION (SPECIAL LOANS) BILL
5.14 p.m.
Order of the Day for the Third Reading read.
LORD MANCROFT: My Lords, since there have been placed on the Order Paper several Amendments by the noble, Lord. Lord Lucas in much the same terms as those which he placed on the Order Paper at the time when we had this Bill on the Committee stage, I will, with your Lordships' approval, confine myself at this juncture merely to moving formally that the Bill be now read a third time.
Moved, That the Bill be now read 3ª. —(Lord Mancroft.)
On Question, Big read 3ª.
Clause 2:
Power to enter into arrangements with respect to certain loans
2.—(1) If at any time the Corporation are satisfied with respect to any loan made by them which has fallen due for repayment that, except with harmful consequences to the production of films, the amount of the loan cannot be recovered in accordance with the terms thereof or by means of the remedies available, the Corporation may with the approval of the Board of Trade enter into any financial arrangements with respect to that loan which, in tie judgment of the Corporation, are calculated to lead to the eventual recovery without such harmful consequences as aforesaid of the whole or part of the amount of the loan; and any such arrangements may in particular provide for the waiving by the Corporation of payment of interest or for the acceptance by the Corporation of shares or debentures in any company in or towards repayment of the amount of the loan.
LORD LUCAS OF CHILWORTH LORD LUCAS OF CHILWORTH moved, in subsection (1) after "them" to insert "or the interest thereon". The noble Lord said: My Lords, I followed the example set by the noble Lord, Lord Mancroft, and did not offer any observations upon the Motion that the Bill be now read a third time, because on this side of the House we are in agreement with the principle of this Bill. The only reason why we have put down these Amendments on the Third Reading is because the noble Lord on behalf of Her Majesty's Government, could not see his way to accept them on the Committee stage; and as no Amendment was made there could not be a separate Report stage. These Amendments are put down upon the Order Paper in a sincere attempt by noble Lords on this side of your Lordships' House to allow your Lordships to exercise that, function which, it has been claimed, is the special position of your Lordships' House, that of a Revising Chamber. When, in the Business preceding this, the noble Lord, Lord Mancroft, was speaking in eulogistic terms about the electronic brain, I could not help wondering whether at some time the noble Earl, Lord Halsbury, and his colleagues would turn that invention to the service of Her Majesty's Opposition, in order that they might be clever enough to concoct an Amendment to a Bill which would receive the approbation of Her Majesty's Government.
These are really trivial matters. They are not matters of principle, and we on this side of your Lordships' House could allow opposition to go by default. We do not consider that to be our duty. We consider it our duty to try our utmost to offer Amendments which, in our opinion, will improve the Bill without altering the principle. That is the reason, in simple language, why we have put down these Amendments—to ask your Lordships to express your opinion. I hope to prove to your Lordships that the Amendments do not alter the principle of the Bill at all, but do what was the expressed intention, of the right honourable gentleman the President of the Board of Trade, when he stated in another place (OFFICIAL REPORT, Commons, Vol. 520 (No. 14), col. 2032):
"The object of Clause 2 "—
which these Amendments seek to amend—
"is to … make it possible, either by reorganisation of the capital or something of

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that kind, to deal with the matter in a realistic way and to see what measures could best be taken to safeguard that public money in the future."
That is our sole desire, and we do not claim to be alone in this. We think that the Amendments which we have put down, and which I hope to prove are centred solely on making this a slightly better Bill, carry the desire of the President of the Board of Trade into better effect. Perhaps I should here offer one word of explanation. With your Lordships' permission, and in order to save your Lordships' time, I should like to deal with the first, second, fourth and sixth Amendments together. They all hang together. I withdrew these Amendments on the Committee stage, but after consultation with my colleagues, and after having read carefully what the noble Lord, Lord Mancroft said, as reported in the OFFICIAL REPORT on the Committee stage. I have put them down again on Third Reading.
This is a simple point. The noble Lord, Lord Mancroft, argued that it is not necessary to safeguard the interest as well as the loan: that the greater includes the lesser—that was his argument. When he was asked by my noble friend Lord Silkin whether it was the invariable practice (I am not going to waste your Lordships' time by quoting all this from the OFFICIAL REPORT) to include the interest with the principal, Lord Mancroft said, "not invariable, but usual." He rested his case of not having to safeguard, in the words that I have put down, "interest as well as loan"; that Her Majesty's Government had received from the Film Finance Corporation an assurance that in future they would make it a rule to include the interest and principal together in any debenture loan agreement, or whatever instrument they exercised to safeguard any loan they might make. We on this side do not think it is right for Parliament to accept an assurance from what is, after all, a commercial house. If there is the slightest doubt —and there is a genuine doubt—it is clearly better to make provision in the Bill. I remember that argument being raised by noble Lords opposite when they were on this side of the House. It was always impressed upon me: "If there is any doubt whatsoever, put it in the Bill." There is a genuine doubt here.
I have with me the principal Act. Section 2 of that Act deals with loans and interest made by the Film Finance Corporation, and these words appear in subsection (1):
"Loans by the Corporation shall be for such period not exceeding five years from the date of the making thereof, and shall carry such interest as the Corporation may determine, and the Corporation may require any such security to be given for the repayment thereof,"—
that means the loan—
"together with any sums due in the respect of interest, as may be available."
It was thought insufficient to assume that the recovery of the loan meant at the same time the recovery of interest. Subsection (1) puts the matter into the same words as those which I propose in this and my subsequent Amendments.
There is a genuine doubt in the Department itself, and so I have put down this Amendment to make the matter clear. I hope that noble Lords will agree that there is, as I say, a genuine doubt, and that it would be far better and would be a great safeguard for the taxpayer to have these words in. They would not inconvenience anyone, and would not alter the principle of the Bill. I hope that the noble Lord, Lord Mancroft, will agree with me that these words are necessary, and that he will not argue otherwise. Certainly we on this side regard them as necessary. Therefore I am hoping that on this occasion he will accept my Amendment.
Amendment moved—
Page 2, line 8, after ("them") insert ("or in the interest thereon").—(Lord Lucas of Chilworth.)
LORD MANCROFT: My Lords, this seems to me to be the smallest of differences. I have listened to the noble Lord with care. I thought I had convinced him last time but now he is back to where he was on the Committee stage. In his closing words in a speech on that occasion he said (OFFICIAL REPORT, Vol. 185 (No. 29), col. 605):
"It is a simple legal point. If your Lordships are satisfied to leave the matter where it is. I am and, therefore I beg leave to withdraw my Amendment."
Noble Lords were satisfied. Certainly we agreed to the withdrawal of the Amendment. I hope that I have convinced your Lordships that that point was met—but I have apparently failed to convince

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Lord Lucas, and must now start all over again and try to assure him that the words he wants added to the Bill are quite unnecessary. Any agreement for a loan invariably provides that on failure to pay any sum of interest on the due date the amount due on the loan becomes payable forthwith, and therefore it follows that any new arrangements made could deal equally with both loan and interest. The National Film Finance Corporation have confirmed to me that all their loan agreements have contained this actual safeguard. I assure the noble Lord that, although I could not give the noble Lord, Lord Silkin, the assurance he wanted, every commercial agreement invariably carried this safeguard.
I have been looking up this point in the Library, and I have not found any precedent which did not carry that provision. I have brought with me a copy of the National Film Finance Corporation's standard form, and I should like to read what their charge says. It says:
"The security hereby created shall become enforceable at any time after the happening of any of the following events, namely,

(a) if the company makes default for 14 days in payment of any money which may have become due hereunder or under the loan agreement, or

(b) in payment of any instalment of interest payable hereunder."

That is the form of charge used by the Corporation. From this it will be seen that the effect of the non-payment of any instalment of interest due is not only to render the principal sum due but also to make the security realisable if necessary. I hope that what I have said will convince the noble Lord that the words he proposes are superfluous and are not required in the Bill.
LORD SILKIN: I have listened to the noble Lord with care, as I did on the previous stage of the Bill. The noble Lord has satisfied me as he did then that it is the invariable practice to include such a provision in agreements. I do not remember asking whether it was the invariable practice in all commercial contracts. I think I asked whether it was the invariable practice in these agreements.
LORD MANCROFT: That is so.
LORD SILKIN: Then I do not understand why you should not include the failure to pay interest in the terms of this Bill as a failure which gives rise to the repayment of the principal. I do not know whether in any other single case
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money is advanced on a charge of this kind. I will accept, for the sake of argument, that where a charge is given the charge is given in this form. But it may be that the National Film Finance Corporation may wish to make an advance without taking a charge in this form. In that case these words will be necessary.
I hope noble Lords will appreciate that this point does assume an importance which is perhaps greater than that attaching to these mere words. We on this side of the House feel that we have a duty to examine measures of this kind with a sincere view lo improving them. My noble friend Lord Lucas of Chilworth has given a great deal of time to this measure and has put forward a number of Amendments. He speaks with some experience. He has been a Minister who has had responsibility in matters of this kind in the past. It is most disconcerting and discouraging to Members on this side of the House to feel that none of our efforts is ever rewarded. I am not suggesting that we ought to be thrown a crumb; I am not suggesting that Her Majesty's Government should ever accept an Amendment which they do not believe to be right. Where, however, an Amendment is put down which admittedly can do no harm—the noble Lord does not suggest that the Amendment is wrong; the best he ran say is that it is unnecessary because of the practice, the invariable practice, if you like, of the Corporation—and which could be accepted with, at the worst, an abundance of caution, feel that there would be a justification for the acceptance by Her Majesty's Government of such an Amendment.
I do snot think the world will come to an end if these words are omitted—I must say that frankly—but I think it would be a better Bill if they were included. There may be one possibility in a hundred or one in a thousand where the inclusion of the words would be of public value. It is for those reasons that we feel that we ought to press this Amendment. We hope that even at this late stage Her Majesty's Government may be willing to reconsider the matter. It is the latest, possible stage but, even so, I think it is a matter which merits further consideration.
VISCOUNT BRIDGEMAN: My Lords, this discussion is so legal and technical that I doubt very much whether anybody who, like myself, is not legally qualified, ought to intervene at all. As I see it, however, the position is as follows. First of all, everybody is agreed that we want the Corporation to be secured as to repayment of principal and payment of interest. There is no dispute about that. Secondly, we want to be certain that the Bill as it finishes in this House makes it certain that both are secured. This is the point, if I am not mistaken, where my noble friend in front of me and the noble Lord, Lord Lucas of Chilworth, are not yet agreed. But my noble friend has said, I am sure with the best advice, that he has no doubt that this matter is taken care of. As to the possibility which the noble Lord, Lord Silkin, raised that one contract in a million might go wrong—
LORD SILKIN: I said, "one in a thousand."
VISCOUNT BRIDGEMAN: I stand corrected. Surely, there is not much likelihood that any one contract will go wrong if all the contracts are on the standard contract form which is issued by the Corporation and which is, apparently, legally watertight. Like the noble Lord, Lord Lucas of Chilworth, I have not forgotten how important we found it in earlier days to see things put in a Bill; but another principle which comes into play, and which was enunciated at the time by the noble Lord who was then on these Benches, was that one must not overload a Bill with unnecessary wording. If I thought that there was any doubt that my noble friend was right in regard to seeing that the interest is properly secured to the Corporation, then I should agree with the noble Lord, Lord Lucas of Chilworth; but, in view of what my noble friend has said, on the legal advice which I have no doubt he had, I feel sure that he is right and that the Bill meets the views of noble Lords opposite without the necessity for the Amendment which is proposed.
5.34 p.m.
LORD LUCAS OF CHILWORTH: My Lords, I can speak again only by leave of the House. May I ask the noble Lord, Lord Mancroft, this question? Will he give us an undertaking that the standard contract form will be used by
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the National Film Finance Corporation in respect of all loans issued by the Corporation under this Bill?
LORD MANCROFT: No. of course I cannot give the noble Lord that undertaking. I cannot stand at this Dispatch Box and give an undertaking without consultation with the National Film Finance Corporation, who are in many respects a wholly independent body. But what I can assure him is this: that the National Film Finance Corporation have more than once confirmed to me that it is their invariable practice so to act. I can do no more than that.
LORD ARCHIBALD: May I ask the noble Lord a further question, arising out of that statement? I quite accept that the National Film Finance Corporation do use their standard form on every occasion, and it is unlikely that they would depart from it. It is common knowledge, however, that the particular reason for this clause is not to deal with ordinary, everyday loans, but to deal with the particular case of British Lion. The form of charge in respect of the British Lion loan must have been entered into before the National Film Finance Corporation had been formed, because the loan was made before the Film Finance Company, which preceded the Corporation, was formed. Can we, therefore, have the assurance that the same form of charge was used in that case? If not, I think the words in the Amendment may become very necessary.
LORD GIFFORD: My Lords, is there not one other danger in this matter? If the wording which the noble Lord, Lord Lucas of Chilworth, wishes inserted is put into the Bill, may there not be other Acts where the words are omitted and where the fact that they are omitted may cause some misinterpretation?
LORD MANCROFT: Quite true.
On Question, Amendment negatived.
5.38 p.m.
LORD LUCAS OF CHILWORTH LORD LUCAS OF CHILWORTH moved, in subsection (1), to leave out "except with harmful consequences to the production of films." The noble Lord said: My Lords, this is another Amendment which we argued at some length in Committee, but, having given the matter careful consideration, I really

941
cannot understand the argument of the noble Lord, Lord Mancroft. He said (I am quoting from the OFFICIAL REPORT of your Lordships' House for February 2, column 608) that the Amendment that I put down, the Amendment now under discussion:
"would have the effect of completely reversing the intention of the clause as it is at present drafted."
Then he went on to say that there were three classes of case—I quote again from the same column:
"The first, obviously, is in the case of a debtor who is able to repay his loan, albeit, perhaps, reluctantly. That would certainly not have harmful consequences on his ability to produce films. The second and obviously more difficult set of circumstances, from the point of view of the Corpora ion, as well as, of course, from the point of view of the debtor, is that where a debtor could repay all or part of his loan but only by disposing of all, or most, of his assets and thus ceasing to engage in film production."
The noble Lord then said, further on, in column 609:
"Let us now turn to the third sort of case with which the Corporation may have to deal, the case of the debtor who cannot repay his loan even if the Corporation put him into liquidation."
The noble Lord went on to say:
"The clause as amended by the Amendment of the noble Lord, Lord Lucas of Chilworth, would empower the courts to make special arrangements only in such cases"—
LORD MANCROFT: If I may interrupt the noble Lord, that is a misprint; the word should be "Corporation," not "courts." It is obviously a misprint, and it has been corrected.
LORD LUCAS OF CHILWORTH: Not in the copy that I have. I was going to question how the courts came into this matter. This has given me a most disturbing week-end, and I was really worried about it. I cannot see now that this Amendment reverses the intention of the clause, I cannot see that the omission of these words makes any difference whatsoever. If any of these classes of debtor cannot pay, if they cannot meet the obligations of principal or interest, they go to the Film Finance Corporation and say, "We are very sorry; can we make a better arrangement with you? We are driven too hard." By the deletion of these words the National Film Finance Corporation have a perfectly free hand; they can deal with any case. Surely the
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noble Lord, Lord Mancroft, was wrong I in saying:
"The clause as amended by the Amendment of the noble Lord, Lord Lucas of Chilworth, would empower the company to make special arrangements only in such cases."
I say that if the principal and interest cannot be paid or cannot be met under any of the existing arrangements, the National Film Finance Corporation may, subject to the consent of the Board of Trade, make such other arrangements as will ultimately ensure the payment of both the principal and the interest.
The Film Filance Corporation was set up to help, not to hinder, and as a reasonable Minister, surely the President of the Board of Trade would not give his consent to any burdensome arrangement, unless he was quite convinced that, on balance of argument, it was more in the interests of the taxpayer to save what he could from the wreck, whether or not it damaged the production of films. But with these words left in, I submit that the President of the Board of Trade has no discretion. Surely the noble Lord is not right in saying that my Amendment would completely reverse the intention of the clause. The words which I seek now to remove are just as redundant or superfluous as the noble Lord said mine were last time. Not many of your Lordships, probably, will have with you a copy of the Bill, but if my Amendment to leave out these words is agreed, the Bill will read as follows:
"If at any time the Corporation are satisfied with respect to any loan made by them which has fallen due for repayment that the amount of the loan cannot be recovered in accordance with the terms thereof or by means of the remedies available, the Corporation may with the approval of the Board, of Trade enter into any financial arrangements with respect to that loan, which, in the judgment of the Corpora, lion, are calculated to lead to the eventual recovery …"
I am coming to the other part in a moment. That does not limit the discretion of the President, of the Board of Trade, to saying, "No, you cannot do that; it is too Irksome." If you have a responsible Minister, why fetter or limit him?
Then there conies the second limiting factor—the other one they cannot fulfil—that no new arrangement can be made which is harmful to the production of films. Again, you are tying the hands of the President of the Board of Trade.

943
I do not know whether there is such a thing as an unscrupulous film company, but here there may be a let-out. The debtor may say, "You cannot do that. You cannot press me here; you cannot impose that restriction on me because it is harmful to the production of films. I shall not produce one of these films if you do that. You cannot do it because there is an Act of Parliament which says that you cannot." I have tried very hard to see the noble Lord's argument. When I saw the word "courts" I thought that perhaps the noble Lord had stumbled across something that I had missed. I am much relieved to hear that he had not. This is a clean-cut issue. This Amendment gives the Board of Trade the power that they should have. They are answerable to Parliament, and if they do anything that is damaging to the film industry, or to any concern in the film industry, then they can be called upon to answer to Parliament. But, as I read this clause, the President of the Board of Trade is going to Parliament with his hands tied. I am dealing only with the Amendment relating to the first part of subsection (1), and I hope the noble Lord will accept it. I beg to move.
Amendment moved—
Page 2, line 9, after ("that") leave out ("except with harmful consequences to the production of films.")—(Lord Lucas of Chilworth.)
LORD MANCROFT: My Lords, I must begin by apologising to the noble Lord, Lord Lucas of Chilworth, if an accidental misprint in the speech I made at the Committee stage has spoiled his week-end. If it is any compensation to him, all I can tell him is that even without misprints his speech equally spoiled mine. I am very sorry indeed that I am not able to accept this Amendment. It is a matter of some considerable substance, as I tried to explain to your Lordships when we were considering the Bill in Committee. In my opinion, and in the opinion of those advising me, adoption of the Amendment would have the effect of completely reversing the intention of the clause as it is at present drafted. Having given full consideration over the week-end to all that the noble Lord, Lord Lucas of Chilworth, said on the last occasion, and having listened most carefully to what he has said this afternoon, I cannot for the life of me
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see that he has provided any convincing arguments to persuade the Government to change their minds on this particular point.
As I have said more than once before, the purpose of this clause is to enable the Corporation to come to some arrangement with a debtor who could repay all, or part, of the loan if the Corporation were to put him into liquidation. If such a debtor were to dispose of all or most of his assets, he could repay all or some of the Corporation's loan, but only at the price of ceasing to engage in film production. It is envisaged that in certain circumstances it might be harmful to British film production as a whole for the Corporation to enforce their rights against such a debtor in this way. At the same time, the principal Act gives no indication as to what action the Corporation could, or should, take in such circumstances, and it is in order to put their powers beyond doubt that this clause, as it stands, has been drafted. If I may say so, with respect, the noble Lord does not appear to have grasped the fact that the clause is designed to deal not only with the debtor who cannot pay, even if he is put into liquidation, but also with the debtor who could repay, but whose liquidation may have disastrous consequences for film production. And the noble Lord's Amendment, if I were to ask your Lordships to accept it, would limit the powers of the Corporation to dealing only with the debtor who cannot repay in any circumstances. I do not think I can add any more by way of explanation of this clause. I hope that the noble Lord opposite will read the clause yet again very carefully, with the care that he has given to the whole of this Bill—for which we thank him—and I hope that he will be satisfied that the wishes which he has expressed in relation to the powers of the Corporation are in fact met by the clause as drafted.
On Question, Amendment negatived.
LORD LUCAS OF CHILWORTH LORD LUCAS OF CHILWORTH moved in subsection (1) to leave out the words "without such harmful consequences as aforesaid." The noble Lord said: My Lords, I can shorten the discussion on this matter. My contention is that these words are restrictive. I do not dissent 100 per cent. from the noble Lord, Lord Mancroft, in his first argument. We have the safeguard here that of course

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the first part of this clause is permissive; the Corporation "may" enter into other arrangements. It is, however, mandatory that if they do enter into other arrangements those arrangements must not be harmful to the production of films. My argument in essence is that those words weaken the security of the debenture holder. Suppose that the Corporation did enter into fresh arrangements. They would enter into those arrangements in good faith and would hold a debenture as security for the loan. But the terms of the debenture must not be harmful to the production of films. It is difficult for me to visualise that kind of debenture. Surely the whole essence of a debenture is that it gives prior security to the holder before the ordinary creditors. The only value, surely, that any debenture has is the security that it gives to the holder in that he can foreclose. Under this subsection as it stands he cannot foreclose, because the clause reads now as follows:
"…may with the approval of the Board of Trade enter into any financial arrangements with respect to that loan which, in the judgment of the Corporation, are calculated to lead to the eventual recovery without such harmful consequences as aforesaid."
The "harmful consequences as aforesaid" are harmful consequences to the production of films. Am I right?
THE SECRETARY OF STATE FOR COMMONWEALTH RELATIONS (VISCOUNT SWINTON): Does the noble Lord—I am trying to follow him—want the debentures to be recovered, even if their recovery would be harmful to the production of films?
LORD LUCAS OF CHILWORTH: That is helpful, and I am grateful to the noble Viscount for his intervention. He has a long experience as President of the Board of Trade. Suppose one starts off with the debenture. It is quite correct that one would not foreclose. But then suppose that things go from bad to worse, and that eventually the President of the Board of Trade has to make this decision: "Am I going to get from the wreck as much as I can of the taxpayers' money, by putting the company into liquidation and getting what I can from the sale of its assets, or am I going to lose the taxpayers' money, as I assuredly will if I do not foreclose?" But he cannot do that, because there is no action that he can take under the second arrange-
946
ment that may be harmful to the production of films. He has voluntarily entered into this second arrangement and forgone all the other arrangements because of it. Naturally, the only object of the second arrangement is that it is more advantageous to the debtor.
VISCOUNT SWINTON: If the noble Lord will forgive me, as I read this it is really consequential upon the first. There are two propositions here. One is that you recover your money at all costs. If the Act stood without amendment that would, as I understand it, be the position, and it would be quite easy to put the company into liquidation and recover a certain amount. But then, equally certainly, no films would be produced. I think there was, general agreement in the House that we ought to pass this Bill, about which, I understand, there is in principle no dispute. The whole object of this clause is as follows. If you are looking upon yourself merely as a debenture holder who has to recover the taxpayers' money at all costs, if it is recoverable (which would be the position of an ordinary trustee for the taxpayer), you have by this clause a limitation put upon you that you shall do so only provided that in so doing you do not prejudice the production of films. That is a very portant point of substance which we debated on the noble Lord's first Amendment. Surely, all that this clause does is to say that when you come to make that arrangement it must not contain any terms for the recovery which would prejudice production. It is tautology if you like, but in all these things I have greater faith in the Parliamentary draftsman than in myself; when I know what I want to do, then I take his word for the right way of doing it. In one sense these words are consequential, but the Parliamentary draftsman has presumably included them in order to ensure that when the terms are made under which the loan is to be recovered the major promise that you shall not prejudice the production of films shall be carried out. I think that is the position.
LORD LUCAS OF CHILWORTH: My Lords, I hope I am not wearying the House, because this is rather getting down to Committee level, but I am grateful for the noble Viscount's intervention because, if I interpret it aright, he argues that the limitation is a correct one. He argues that

947
the President of the Board of Trade should be limited and that he should not make any arrangement to recover the taxpayers' money if the arrangement is harmful to the production of films. I hold the other view, that there might come a time when the President of the Board of Trade, as the responsible Minister, should be in a position himself to judge, without any limitation, which on balance is the greater interest—that of the company producing the films or that of the taxpayer. The President of the Board of Trade should be the one to decide. But the noble Viscount, Lord Swinton, says, "No; this envisages quite clearly a limitation."
I hope, my Lords, that I am not going outside the realms of propriety, but the noble Lord, Lord Archibald, mentioned on a previous Amendment—and I frankly agree with him—that this clause concerns British Lion. There is £3 million at stake; £1 million has been put to reserve because in the opinion of the National Film Finance Corporation the assets of British Lion are worth only £2 million. I would hesitate to say that Parliament really intends to say, "You have power to enter into a new arrangement with British Lion, and the British Lion interest is to come before that of the taxpayer, and if it is a question of the production of films by British Lion or the loss of the taxpayers' money the taxpayers must lose their money." I do not think I have exaggerated it, but that, as I see it, is what the noble Lord has said is the limiting factor. He may be right. I do not think so. And I do not think we should put any Minister in the position of having to say: "I am not a free agent, and if they want a fresh arrangement and the National Film Finance Corporation voluntarily enter into this fresh arrangement, that is the principle under which they shall do it." I cannot say more on this point. I find myself in total disagreement with the noble Lord on the principle. My Lords, I beg to move the Amendment.
Amendment moved—
Page 2, line 15, leave out ("without such harmful consequences as aforesaid").—(Lord Lucas of Chilworth.)
6.0 p.m.
EARL WINTERTON: My Lords, I rise only for one moment. I do not do so in order to express agreement with
948
what the noble Lord, Lord Lucas of Chilworth, has said, but I do support him in one point which he made. We have rather been talking this afternoon—indeed, I thought I detected a slight tendency in that direction on the part of my noble friend Lord Swinton—as if we were here dealing with a theoretical case. Of course, we are not dealing with anything of the sort. We are dealing with a fact. I apologise for having to mention it again to the noble Lord, Lord Lucas (he did not seem to like my reference to it last time), but the late Government were in power when the loan was made by this Corporation to British Lion, which now, to say the least of it, seems to be, if I may use the expression without offence, in a very "wonky" position. I think that in justice to the film industry as a whole that should be made clear. We are concerned this afternoon with British Lion. I cannot help thinking that perhaps the proper title of the Bill should be "A Bill to salvage British Lion and help it to get out of its difficulties."
VISCOUNT BRIDGEMAN: My Lords, what my noble friend has just said is, of course, true. You might even say that this Bill would not be here if it were not for the state of British Lion. At the same time, this Bill is not entitled a Bill to do this or that for British Lion: it is a Bill to deal with any situation—whether it be the situation concerning British Lion or any other situation—as it comes up. Therefore, while I agree that we should bear British Lion in mind, I do not think that we ought to bear it so much in mind that we frame this clause so that it applies only to British Lion and not to any other general case.
If I understood Lord Lucas's argument aright, it seems to me that there is one point about which he is not satisfied—and it is this. You have certain cases where you cannot foreclose on a debenture without doing damage to the film industry. The Bill is now drafted so that, in such cases, the Corporation will be entitled to say: "No, it is better to keep this loan outstanding; it is better for the film industry in general to do that, than to use harsh measures in calling it in." You might get another case which I think perhaps the Minister had in mind. Suppose that the Corporation wish to call in a loan, and suppose that

949
the company which has the loan says: "You must not do this because it will do real damage to the film industry." Now suppose that company is composed of men of straw, and that what they say is not true—that it is, in fact, nonsense. I think that what Lord Lucas wanted to do was to make cetrain that in that event the Corporation had power to say: "We do not agree that this would be harmful to the industry. In our opinion, the industry would not be any worse off if this company went into liquidation, and we believe that it is better to put it into liquidation and safeguard the taxpayers' money." If that is the noble Lord's argument, then I feel certain that my noble friends in front can tell him that that position is already safeguarded, and that there is no obligation on the Corporation to accept a plea that their action would damage the future of the film industry, unless they are genuinely convinced that it would do so. If that is really so, I feel that the Bill as it stands meets the noble Lord's case.
LORD ARCHIBALD: My Lords, I suggest that there is a very important difference between this Amendment to leave out these words, and the former Amendment which sought to leave out a similar form of words at an earlier stage of the clause. Here we are dealing, in the first place, with a situation in which a company is unable to repay its loan, and the liquidation of that company is not of material consequence to the British film industry. It is then the duty of the National Film Finance Corporation only to have regard to the taxpayers' money and to put the company into liquidation. If, however, it is a company with large-scale and important production, and it would be harmful to insist on repayment, in that case the Corporation, with the approval of the Board of Trade, enter into such arrangement as in the opinion of the Corporation will lead to the eventual recovery of the money. I suggest that that is where that point should stop. I maintain that the Bill should not bring in again this consideration of the effect on production. It is brought in at that first stage when these new arrangements are made. That is done because to do otherwise would have "harmful consequences "; a new arrangement is made—which may be for debentures, shares, representation on the board, or a new
950
policy by the company. After a period of years, a situation may become apparent in which there is only one thing to do—namely, to close down the company and get the taxpayers' money back. At that second stage, I do not think the Corporation or the President of the Board of Trade should again have to take into consideration this question of the effect on production of closing down the company. I suggest that this is not a case of consequential repetition of the words, but it is a repetition of the words which completely alters the intention which I think both sides of the House have in this matter.
VISCOUNT SWINTON: My Lords, it surely is all one transaction. If yon cut out these words, "without such harmful consequences as aforesaid" at the end, you really would be negativing what you have said at the beginning. I think that is clear. This is not a matter in respect of which recourse should be had to a court of law to find out what is the effect. The people to be the judges are to be the Corporation, with the approval of the Board of Trade. That, I think, is important. They have to judge two things. First they have to decide that the money is in jeopardy. I understand that there is no doubt about that in the sort of case of which we have been speaking. Whether it is the fault of this Government or the last Government, or a succession of Governments, a lot of very doubtful debts seem to have been contracted, and the whole issue before us now is: Are we to go forward and recover the money at all costs? These are very odd types of transactions for Governments to enter into. We set up this Corporation, and we lent it some Government money in order to get films—
EARL WINTERTON: If the noble Viscount will forgive my interrupting him, may I say that he must not do an injustice to Her Majesty's present Government. The fault—if it was one—was purely the fault of the late Government.
VISCOUNT SWINTON: Well, I will say it was what our predecessors did. Here is this Corporation which has made some pretty poor debts. What is it to do? It has either to recover what it can, which, of course, in the ordinary way, means putting debtors into liquidation, to get 5s. in the £, or whatever it:an get. But that

951
is not thought wise in this case. Here, having embarked on this adventure, what we want to do is to try to get back as much money as we can, and to do that without stopping the purpose for which the money was given—namely, the production of British films, the matter being always within the judgment of the Corporation and the Board of Trade. Therefore, where it is a case of recovering the money, the Corporation and the Board of Trade have got to decide whether, first, they have a duty to try to recover the money. Secondly, they have to see whether that can be done without harmful consequences to film production. Then they have, to the best of their ability, to enter into such accommodation or such arrangements as are best calculated to effect their purpose. I think that is correct. First, they will get back as much money as they can, and, secondly, they will not stop this particular body, or any other body, from going on with film production.
It is one single transaction in which we are coming to a new arrangement—an accommodation, I think, would be the right expression. If we do not repeat
the words at the end of subsection (1), that would mean that the Corporation could recover their money, either in whole or in substantial part, without considering whether that would prejudice film production. It would mean that in giving an order to the Corporation and the Board of Trade to do these things, we said that, in carrying out that order, they would have to consider only one thing—namely, the recovery of the money. I do not know whether I have made it clear to your Lordships, but at any rate I have made it clear to myself. Assuming that we are right, in the first place, in saying that the Corporation and the Board of Trade have to combine two things—the recovery of the cash and the continuation of film production—then in the last part of this clause which is putting that into operation, there must equally be the words which tell them to do both these things. That being the purpose of the Bill, I think it is rightly drafted for that end.
On Question, Whether the Amendment shall be agreed to?
Their Lordships divided: Contents, 6: Not-Contents, 52.

CONTENTS

Alexander of Hillsborough, V.

Burden, L. [Teller.]

Lucas of Chilworth, L.

Lawson, L.

Silkin, L.

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

NOT-CONTENTS

Simonds, L. (L. Chancellor.)

Bridgeman, V.

Hawke, L.

Caldecote, V.

Hylton, L.

Salisbury, M. (L. President.)

Falmouth, V.

Layton, L.

Goschen, V.

Lloyd, L.

Cholmondeley, M.

Swinton, V.

Mancroft, L.

Reading, M

Waverley, V.

Merrivale, L.

Woolton, V.

Merthyr, L.

Alexander of Tunis, E.

Rochdale, L.

Bessborough, E.

Brassey of Apethorpe, L.

Rockley, L.

Birkenhead, E.

Burnham, L.

Saltoun, L.

Buckinghamshire, E.

Carrington, L.

Sandhurst, L.

De La Warr, E.

Derwent, L.

Strathcona and Mount Royal, L.

Fortescue, E. [Teller.]

Digby, L.

Lindsay, E.

Ebbisham, L.

Teviot, L.

Munster, E.

Fairfax of Cameron, L.

Teynham, L.

Onslow, E. [Teller.]

Freyberg, L.

Turnour, L. (E. Winterton.)

Rothes, E.

Gage, L. (V. Gage)

Tweedsmuir, L.

St Aldwyn, E.

Gifford, L.

Waleran, L.

Selkirk, E.

Glyn, L.

Wolverton, L.

Resolved in the negative, and Amendment disagreed to accordingly.

6.21 p.m.
LORD LUCAS OF CHILWORTH LORD LUCAS OF CHILWORTH moved to add to subsection (1)
": and may also provide for the appointment of directors to the boards of those companies."
The noble Lord said: My Lords, this is an Amendment which the noble Lord, Lord Mancroft, undertook to look at again. I will go over the argument briefly. Clause 2 of the Bill says:
"and any such arrangement may in particular provide for the waiving by the Corporation of payment of interest or for the acceptance by the Corporation of shares or debentures in any company. …"
That, surely, envisages that the National Film Finance Corporation may, in a new arrangement, take the equity in any company; it may take up ordinary shares and thereby invest the taxpayers' money in risk capital, That may be the right thing to do. But I do say emphatically that if the Corporation do that, then the taxpayers should be represented upon the hoard of directors. Would any noble Lord in your Lordships' House subscribe £3 million of his own money and then say: "Of course, I am not particular about being on the board; I do not even mind not being represented on the board"? This is a vital principle.
VISCOUNT SWINTON: Did the noble Lord include this provision in the Bill he introduced when his Party were in office?
LORD LUCAS OF CHILWORTH: I do not know. Repentance may come late; but if it is right, let it be done now. In the discussion that took place on this matter at the Committee stage, the noble Lord, Lord Mancroft, said (OFFICIAL REPORT, Vol. 185 (No. 29), col. 621):
"I do not think we can count the appointment of directors to the board of a company as a financial arrangement."
I do not know what else it could possibly be. In col. 624, I said:
"…you appoint them to the board to watch financial interests."
The noble Lord, Lord Mancroft, then interjected:
"To protect the taxpayers' money."
Precisely! Is not that a financial interest? My noble friend Lord Silkin agreed that in any financial arrangement where the National Film Finance Corporation held a majority of the ordinary shares they could, perhaps, insist on representation on the board. But the position might be that they had a minority—and a minority
954
interest can represent a substantial sum of money. There is a further provision under this clause: that the Corporation should have power to waive the interest. Again, I have no quarrel with that, if it is prudent so to do. But in all these financial arrangements the taxpayers' money is at stake. As the noble Lord knows, there are plenty of cases where the taxpayers' money has been put into organisations like the National Film Finance Corporation, but the Government have always reserved the right to appoint directors.
I feel sure the noble Lord, Lord Mancroft, will answer me by saying that the Government have power to do so. But there is a genuine doubt. Noble Lords on this side of the House would rather have the power put in the Bill. Surely, there can be no quarrel on the principle that when the taxpayers' money is invested in risk capital the taxpayers should have representatives on the board of the company to see that so far as possible their interests are safeguarded. I have sought to overcome the difficulty of the noble Lord by segregating my Amendment this time from financial arrangements, by inserting a colon, and then adding the words:
"and may also provide for the appointment of directors to the boards of those companies."
This is a simple matter, and I hope the noble Lord will agree with me that, on balance, it is advisable that these words should go into the Bill. Clause 2 of the Bill has been brought into existence for one purpose—namely, to clarify the position and to clear up some doubts that arose in the interpretation of the original Act. I have read the original Act, and I cannot see that there could be any misinterpretation, except on one thing. I do not think that under the original Act there was power to waive the interest on any loan. We on this side of the House feel it is vital that the taxpayers' money should not go into risk capital unless the taxpayer has representation on the board. I beg to move.
Amendment moved—
Page 2, line 20, at end, insert the said words.—(Lord Lucas of Chilworth.)
EARL WINTERTON: My Lords, as this is the last Amendment of the Bill, and as the noble Lord, Lord Lucas of Chilworth, and I have taken part—I from my humble position here, and he in his

955
much more important position—in some controversy, I think it would not be inappropriate if I said a few words. The noble Lord has taken great trouble in this matter, but I do not agree with his Amendment. I rise because an important principle is involved, and I am entirely in support of the Government's attitude in resisting this Amendment. The principle which is involved is important, for two reasons. First, with regard to the general reason, so far as I know, the whole of the film industry on the producing side—and the same would apply to the distributing and exhibiting side—is opposed to State interference in production: that is to say, they are strongly opposed to anything which would look like the State production of ordinary films as opposed to special films. To give power to the Corporation to put directors on a film producing company might look like a step in that direction.
The second reason is an even stronger one. As we have all, I think, agreed on both sides of your Lordships' House in the course of the discussion, this Bill is concerned largely with the difficulties which have arisen over British Lion, and I think the noble Lord who moved the Amendment would not disagree with me when I say that there is a very close tie-up at the moment between the National Film Finance Corporation and British Lion in the shape of the money which has been lent to that company. As I understand it—and I took part in the discussions in another place when this Bill was originally brought forward, when no Party issue arose—the Bill aims as much as anything at encouraging the small producers. It is quite true that a large organisation such as that with which I am connected made use of the facilities: and, of course, British Lion, with which I have no connection, did so to a great extent. But the idea was to encourage the small producers.
I should like to put this point to the noble Lord, Lord Lucas of Chilworth. He will see that if power were given under this Bill to appoint two directors to British Lion—and it is obvious that if any directors are going to be appointed in the circumstances envisaged by the Bill it would be to British Lion—it would cause perturbation among some of the producers, who would suppose that the
956
National Film Finance Corporation would be biased in favour of British Lion and would wish British Lion to be the distributor of the films. I do not think I am giving away any secrets of the trade when I say that the British Film Producers' Association—I think that is the correct term for the trade body, but Lord Archibald will correct me if I am wrong—has had a private talk with the National Film Finance Corporation to endeavour to get the impression removed from the minds of some members of the British Film Producers' Association that there is, in fact, any bias by the National Film Finance Corporation in favour of British Lion in the matter of distribution. For those two reasons, I hope that my noble friend Lord Mancroft will persist in his refusal to accept the Amendment which, on the face of it, has specious arguments for it, but which, for the reasons I have mentioned, I think is dangerous.
6.33 p.m.
LORD MANCROFT: My Lords, I did, indeed, promise the noble Lord, Lord Lucas of Chilworth, that I would look at his Amendment again. I looked at it again, and the more I looked at it the less I liked it. I discovered something which I had not noticed at the time, and I would have mentioned it to him if I had noticed it—namely, that by his then. Amendment we should have been in trouble with the point of excluding certain provisions of the Companies Act—Section 184, for example. That is now an academic worry on my part, because the noble Lord has re-drafted his Amendment, and it now appears, if I may say so with respect, to be even less necessary than it was in its original form. The new words which the noble Lord has put in make it clear that it is not the intention of the noble Lord to give the Corporation the power in all circumstances to demand representation on the boards of companies to whom they lend money. In other words, the noble Lord, Lord Lucas, appears to be content with the Government's intention that representation on the boards shall be a matter of arrangement between the Corporation and the borrowers.
The intention is that the Corporation shall have the rights which flow from the holding of any shares which they acquire in a company, or any other rights which

957
they acquire by negotiation as part of any new financial arrangement. In making those arrangements, the Corporation can always stipulate that they shall have representation on the board of a company, even though their stake in the company does not give them a majority voting power. The question of representation on boards of companies has really nothing to do with Clause 2 of the Bill, except in so far as the right to representation may flow from any shares which the Corporation acquire as a result of the clause. Surely, it has always been within the power of the Corporation to arrange that they should be represented on the board of a borrowing company, and they have had that right at all times since the principal Act established the Corporation. It is, in fact, always the right of any lender to stipulate that he shall have a place on the board, if his position as a lender is strong enough for him to "get away with it." This clause does not affect the Corporation's position in that connection in any way at all, except in so far as it may become a shareholder. I can promise the noble Lord, Lord Lucas, that I have looked at this matter very carefully. I can assure him, that the addition of these words will not achieve any advantage whatever; that the fears which he has, or I think he has, are amply safeguarded against; and that the situation which he wants to bring about can perfectly welt be brought about by the Bill as it stands.
LORD SILKIN: My Lords, I take it from the reply of the noble Lord that he does not really associate himself with the arguments of the noble Earl, Lord Winterton, who spoke a moment ago. I assume that the noble Lord, Lord Mancroft, is saying, "We have the power to put directors on the hoard, and we will not refuse to exercise it in proper cases where we think it desirable."
LORD MANCROFT: Whom does the noble Lord mean by "we"?
LORD SILKIN: The National Film Finance Corporation.
LORD MANCROFT: Not the Government?
LORD SILKIN: No—that they will not refuse, on such grounds as were mentioned by the noble Earl, Lord Winterton, to appoint representatives to the board
958
if they think that that is desirable in. the taxpayers' interest.
EARL WINTERTON: I must, in justice to myself, say that I was dealing with a special case. Perhaps I did not make that quite plain.
LORD SILKIN: The noble Earl made-it quite clear; but this Bill is a general one, and one must assume that there-may be other cases. One cannot rest this Bill on a special case, and if one did, it would have to be differently worded. I think we must treat this Bill as a general measure which will apply to cases in the future. I wanted to bring out quite clearly that Her-Majesty's Government are not associating themselves with the quite understapdable point of view of the noble Earl. I am not quarrelling wilt the point of view he puts forward—I disagree with it, but. I understand the reluctance of any organisation to have strange members on the hoard. I understand that, in particular, in the case of a film-producing company. I take it, however, that the Government do not accept that point of view. If they think it is desirable on financial grounds that the Corporation should have members on the board, they would not refuse, on ideological grounds, to put them on the board.
The only question which remains, therefore, is: Are the words in the clause as it stands sufficient to enable them to do so? This is not an argument as to policy: it is an argument as to whether the Bill, as it stands, does what all of us wish. I hope, however, that in proper cases the Finance Corporation would be able to put members on the board. Teat is what we want to achieve. I am satisfied that they could do so when they had a majority interest. I am not quite certain that they could, do so where they had not a majority interest in the producing company.
LORD MANCROFT: They would not lend the money.
LORD SILKIN: It is not a matter of lending the money. The noble Lord must not get confused about where this clause operates. It does not operate at the point of lending the money. It operates at the point where the, borrower is in default, where he cannot pay and where new arrangements are being made—not

959
under the original arrangement. The question as to whether there will be harmful consequences to film production also comes in. By insisting on retaining the words "harmful consequences to film production" Her Majesty's Government have given a weapon to the borrower to negotiate terms. Supposing, that, in fact, harmful consequences will ensue, then the company are entitled, where the Government have a minority interest, to say that they are not going to have a director on the board. But harmful consequences will ensue if the Government, in spite of that, endeavour to recover their money. I think that in such a case it would be helpful to protect the Government where they have a minority interest. If these words were included, it would make it clear that they are entitled to have directors on the board. Putting it, again, at its worst, is there any objection to saving that they shall get what the noble Lord has already suggested they get? These are not redundant words. There is a genuine doubt.
LORD MANCROFT: There is no doubt, and has never been any doubt since the principal Act was passed.
LORD SILKIN: I think that there is a genuine element of doubt: and I cannot see why the noble Lord and Her Majesty's Government should be so stubborn about making certain that they are really achieving what every section wants them to achieve. I hope now that it may be possible for the noble Lord to have another look at this—I do not know at what stage: I can only suggest between now and the Division—and see whether he can accept this Amendment.
LORD LUCAS OF CHILWORTH: My Lords, as the mover of the Amendment I presume that I may have just another, last word on this matter. I am grateful to the noble Earl, Lord Winterton, for his courtesy. I fully appreciate his argument, but it is an argument with which I cannot agree. My reply to it would be that whilst some of the members of the film industry do not want interference from the taxpayer, they do not mind taking the taxpayer's money. Lord Mancroft does not really appreciate the altered circumstances. This is the first time that the National Film Finance Corporation have been authorised to put up risk capital. The original Act did not let them put up risk capital, but an entirely different set of circumstances has arisen. The original Act gives them the right to lend money, and sets out the terms on which they may lend it. Now they can take risks that no ordinary sensible lender of money would take: they can waive the interest. Does the noble Lord mean to tell me that the Corporation have always had the power to appoint directors? Have they always had the power to take risk capital? On the Second Reading the noble Lord, in his winding-up speech, drew my attention to two proverbs. One was something about "wringing the neck of the bird that laid the golden eggs." May I in turn quote or adapt a proverb?—"The man who pays the piper has some right to call the tune."
On Question, Whether the said Amendment shall be agreed to?
Their Lordships divided:—
Contents. 8: Not-Contents, 41.

CONTENTS

Alexander of Hillsborough, V.

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

Lawson, L.

Stansgate, V.

Lucas of Chilworth, L.

Burden, L. [Teller.]

Silkin, L.

Archibald, L.

NOT-CONTENTS

Simonds, L. (L. Chancellor.)

Lindsay, E.

Brassey of Apethorpe, L.

Munster, E.

Carrington, L.

Salisbury, M. (L. President.)

Onslow, E. [Teller.]

Derwent, L.

Rothes, E.

Digby, L.

Cholmondeley, M.

St. Aldwyn, E.

Ebbisham, L.

Cholmondeley, M.

Selkirk, E.

Fairfax of Cameron, L.

Freyberg, L.

Alexander of Tunis, E.

Gage, L. (V. Gage.)

Buckinghamshire, E.

Goschen, V.

Gifford, L.

De La Warr, E.

Swinton, V.

Glyn, L.

Fortescue, E. [Teller.]

Woolton, V.

Hawke, L.

Hylton, L.

Rockley, L.

Turnour, L. (E. Winterton.)

Lloyd, L.

Saltoun, L.

Tweedsmuir, L.

Mancroft, L.

Sandhurst, L.

Waleran, L.

Merthyr, L.

Teviot, L.

Wolverton, L.

Rochdale, L.

Teynham, L.

Resolved in the negative, and Amendment disagreed to accordingly.

LORD MANCROFT: My Lords, before I ask your Lordships to agree to the passage of this Bill, I wonder whether noble Lords opposite will allow me to tell them that we on this side of the House are most grateful to them for the trouble they have taken over this Bill. We should not like them to go home tonight under the impression that we have not considered all their Amendments most carefully on their merits. It is solely upon the merits of the Amendments that we have been forced to ask the House to reject them. I want to make certain that the noble Lord, Lord Lucas, in particular, is under no illusion upon that particular subject. With those words I beg to move that this Bill do now pass.
Moved, That the Bill do now pass.—(Lord Mancroft.)
On Question, Bill passed.