Lords Sitting of 16 May 1957

Preamble
The House met at three of the clock, The, LORD CHANCELLOR on the Woolsack.
Prayers

TYNE IMPROVEMENT BILL [H.L.]
Read 2a.

REVENUE DIRECTIONS ON PROFIT DISTRIBUTION
3.5 p.m.
LORD GRANTCHESTER: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government, how many directions of availability of profits for distribution against the advice and wishes of the directors of the companies concerned have been given or threatened by the Special Commissioners of Inland Revenue during the past two years, and how such action is reconcilable with repeated requests from Chancellors of the Exchequer for restraint in dividend distribution and for saving for expansion.]
THE MINISTER OF EDUCATION (VISCOUNT HAILSHAM): My Lords, I assume that the noble Lord's Question relates to directions in respect of the income of trading companies under Section 245 of the Income Tax Act, 1952. During the two years 1955–56 and 1956–57 the number of preliminary notices requiring such companies to supply information for consideration under that section were respectively 251 and 338, and the numbers of directions actually given were 132 and 137.
I would remind the noble Lord that by the terms of the legislation the Special Commissioners have to have regard to the company's requirements for the future maintenance and development of its business; reasonable saving for expansion need not, therefore, be hampered. So far as dividend restraint is concerned, it is the Special Commissioners' established
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practice, confirmed by successive Chancellors of the Exchequer, to make no direction in a bona fide case where the level of distribution is the same as that which they have accepted as reasonable in previous periods, even though the company's profits have increased. This, of course, applies only so long as there are no avoidance devices, such as the withdrawal of money from the company in the guise of capital. I am sending the noble Lord a copy of a Question and Answer of July 22, 1948, in which the then Chancellor of the Exchequer described this practice.
LORD GRANTCHESTER: My Lords, I should like to thank the noble Viscount for his comprehensive Answer. But apart from the inconsistency to which the Question draws attention, does not the noble Viscount think it a bad principle for the tax authorities to intervene and eliminate, for instance, provision against depreciation of assets which in these days become rapidly out of date? That point is not covered, I think, by the Answer the noble Viscount gave.
VISCOUNT HAILSHAM: My Lords, I think the noble Lord has, in a sense, "the wrong end of the stick" here. This is a section with an ancient history. In fact, I think it was invented by my father in 1922, when he was Attorney-General; or it may have been by his predecessor. It was designed to prevent people from avoiding sur-tax to which they would otherwise be liable by the manipulation of one-man companies. That is how it is used to this day, and I do not think these wider issues necessarily arise.
LORD LUCAS OF CHILWORTH: My Lords, I would add my thanks to the noble Viscount for the fullness of his reply, but he will admit, I think—if I have properly understood his rather lengthy explanation, which I shall read with great interest—that even now the Inland Revenue are the judges of what a company, up to a five-man company, require for their capital development.
VISCOUNT HAILSHAM: My Lords, I rather think the noble Lord is right, but before committing myself I should like a little notice of that question.
LORD GRANTCHESTER: And also the amount that is put to depreciation.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I thought depreciation had long since been settled in law, subject to any announcements of special items from year to year. I hope that that will not be interfered with. I was glad to hear the reply of the noble and learned Viscount. I feel strongly that as all amounts that now go to reserve pay the ordinary rate of tax—that is settled—if there is any further attempt to avoid taxation, any Government must, in protecting the Revenue, take the necessary precautions.
VISCOUNT HAILSHAM: My Lords, I do not wish to be drawn into a general discussion on taxation. I think it was clear from my Answer that the Treasury are continuing a practice which has been followed for quite a number of years under Governments of different complexions.

BUSINESS OF THE HOUSE
THE SECRETARY OF STATE FOR COMMONWEALTH RELATIONS AND LORD PRESIDENT OF THE COUNCIL (THE EARL OF HOME): My Lords, I beg to move the Motion which stands in my name on the Order Paper.
Moved, That Standing Order No. 41 be considered in order to its being dispensed with for the purpose of passing the Shops Bill through its remaining stages.—(The Earl of Home.)
On Question, Motion agreed to, and ordered accordingly.

SHOPS BILL [H.L.]
3.11 p.m.
Amendments reported (according to Order).
Clause 9:
Special provisions with respect to the sale of certain refreshments for off-consumption and of mineral waters, sweets, etc.
9.—(1) Notwithstanding anything in section one of this Act a shop which is registered under this section may—
(a) on any weekday, be open at any time
(ii) for the sale of mineral waters or other non-intoxicating drinks, sweets, chocolates or other sugar confectionery, ice cream (with or without edible containers), tobacco or smokers' requisites;
VISCOUNT HAILSHAM: My Lords, I beg to move the first Amendment standing in my name. It is so nearly a drafting Amendment that I will not detain your Lordships on it, unless there is any particular point which your Lordships desire to discuss. It is designed to avoid an anomaly. Apparently, under the Bill as drafted, the sale of a cornet would be all right but that of a wafer would not.
Amendment moved—
Page 7, line 14, after (" without ") insert (" wafers or ")—(Viscount Hailsham.)
On Question, Amendment agreed to.
Clause 10 [Restriction on carrying on, on weekdays, of retail trade or business otherwise than in shops]:
VISCOUNT HAILSHAM: My Lords, this Amendmend is consequential on the last. I beg to move.
Amendment moved—
Page 9, line 4, after (" without ") insert (" wafers or ").—(Viscount Hailsham.)
On Question, Amendment agreed to.
Clause 16 [Sunday closing of shops]:
VISCOUNT HAILSHAM: My Lords, this is a minor drafting Amendment to correct an inadvertent omission from the words which were inserted in the Bill as a result of an Amendment moved by my noble friend Lord Derwent during the second Committee stage. I beg to move.
Amendment moved—
Page 11, line 7, after (" (ii) ") insert (" for ").—(Viscount Hailsham.)
On Question, Amendment agreed to.
VISCOUNT HAILSHAM: My Lords, this Amendment also is consequential. I beg to move.
Amendment moved—
Page 11, line 9, after (" without ") insert (" wafers or ").—(Viscount Hailsham.)
On Question, Amendment agreed to.
Clause 17 [Exception for sale of food on Sundays at registered food shops]:
VISCOUNT HAILSHAM: My Lords, this Amendment to leave out Clause 17 carries out an undertaking I gave to my noble friend Lord Derwent. In the second Committee stage he argued that this clause was of very little use as a result of the changes in the law which were being effected. I accepted the Amendment in principle but persuaded

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my noble friend to withdraw it so that consideration should be given to the consequential Amendments which would be necessitated by the deletion of the clause. Those consequential Amendments now appear in my name and will be moved in due course. I beg to move.
Amendment moved—
Leave out Clause 17.—(Viscount Hailsham.)
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I do not want to debate this matter—it has been gone over before. I would only say that the withdrawal of this clause which was making specific limitations on this class of Sunday trading and the Amendments which have been put in place of it have the net result of an overall increase in Sunday trading. From that point of view, I do not agree with it.
On Question, Amendment agreed to.
Clause 18 [Power of local authority, in sea-fishing centres and holiday resorts, to authorise Sunday opening for certain purposes]:
VISCOUNT HAILSHAM: My Lords, this Amendment and the following three Amendments are all drafting and consequential on the last Amendment. I beg to move Amendment No. 6.
Amendment moved—
Page 12, line 24, leave out (" the foregoing provisions of this Part ") and insert (" section sixteen ").—(Viscount Hailsham.)
On Question, Amendment agreed to.
VISCOUNT HAILSHAM: My Lords, I beg to move Amendment No. 7.
Amendment moved—
Page 12, line 33, leave out (" the foregoing provisions of this Part ") and insert (" section sixteen ").—(Viscount Hailsham.)
On Question, Amendment agreed to.
VISCOUNT HAILSHAM: My Lords, I beg to move Amendment No. 8.
Amendment moved—
Page 12, line 42, leave out (" the foregoing provisions of this Part ") and insert (" section sixteen ").—(Viscount Hailsham.)
On Question, Amendment agreed to.
VISCOUNT HAILSHAM: My Lords, I beg to move Amendment No. 9.
Amendment moved—
Page 13, leave out lines 5 to 10 and insert (" means any article used as food or drink
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for human consumption, other than drugs or water, and includes—

(a) any substance which is intended for use in the composition or preparation of food;

(b) any flavouring matter or condiment; and

(c) any colouring matter intended for use in food ").—(Viscount Hailsham.)

On Question, Amendment agreed to.
Clause 19 [Restriction on carrying on, on Sunday, of retail trade or business otherwise than in shops]:
VISCOUNT HAILSHAM: My Lords, Amendment No. 10 is also consequential on the omission of Clause 17. I beg to move.
Amendment moved—
Page 13, line 25, leave out (" section seventeen of this Act or ").—(Viscount Hailsham.)
On Question, Amendment agreed to.
VISCOUNT HAILSHAM: My Lords, this Amendment is consequential on the Amendment to Clause 9. I beg to move.
Amendment moved—
Page 13, line 47, after (" without ") insert (" wafers or ").—(Viscount Hailsham.)
VISCOUNT HAILSHAM: My Lords, this is consequential on the Amendment to omit Clause 17. I beg to move.
Amendment moved—
Page 14, line 2, leave out (" subsection (9) of section seventeen of this Act ") and insert (" subsection (4) of the last foregoing section ").—(Viscount Hailsham.)
On Question, Amendment agreed to.
Clause 29 [Provisions to have effect in lieu of s. 10 in case of persons registered under Part III]:
VISCOUNT HATLSHAM: My Lords, this Amendment is consequential on the Amendment to Clause 9. I beg to move.
Amendment moved—
Page 26, line 35, after (" without ") insert (" wafers or ").—(Viscount Hailsham.)
On Question, Amendment agreed to.
Clause 57 [False statements, etc.]:
VISCOUNT HAILSHAM: My Lords, this Amendment is also drafting and consequential on the omission of Clause 17. I beg to move.
Amendment moved—
Page 43, line 25, leave out (" seventeen ").—(Viscount Hailsham.)
On Question, Amendment agreed to.
Clause 72 [Provisions relating to Scotland]:
THE MINISTER OF STATE, SCOTTISH OFFICE (LORD STRATHCLYDE): My Lords, this Amendment is the Scottish equivalent of the Amendments to be moved to paragraph 9 of the Second Schedule. Those are Amendments Nos. 20 and 21 on the Marshalled List which are, naturally, in English terms. The Amendment is the best translation that we can devise of either of these two Amendments, and it should have much the same effect. I beg to move.
Amendment moved—
Page 51, line 17, at end insert—
(" (h) in paragraph 9 of the Second Schedule for sub-paragraph (c) there shall be substituted the following sub-paragraph—
' (c) at any park, garden or recreation ground for the regulation of which by-laws may be made under any enactment by a county, town or district council; ' ").—(Lord Strathclyde.)
THE EARL OF LISTOWEL: My Lords, I should like to make just this comment: lucky Scotland! I think the noble Lord was going rather far when he said it was the equivalent of the Amendments that will be moved in a moment by the noble Viscount as regards England and Wales. I will reserve my reasons for making that statement until the noble Viscount's Amendment is moved.
LORD STRATHCLYDE: My Lords, I prefaced my remarks by saying it was the Scottish equivalent.
THE EARL OF LISTOWEL: I am delighted that this is being done for Scotland.
On Question, Amendment agreed to.
Second Schedule:
TRANSACTIONS PERMISSIBLE IN GREAT BRITAIN AT ANY TIME ON WEEKDAYS AND IN ENGLAND AND WALES AT ANY TIME ON SUNDAYS
1. The sale—
(b) in a vessel, railway train, omnibus or aircraft, for consumption therein;
of meals (including tobacco supplied therewith for immediate consumption) or refreshments, mineral waters or other non-intoxicating drinks, sweets, chocolates or other sugar confectionery or ice-cream (with or without wafers or edible containers).
9. The sale of guide-books, reproductions of works or art, picture postcards, photographs, photographic films or photographic plates or souvenirs—
(a) at a museum or art gallery; or
3.20 p.m.
LORD GIFFORD LORD GIFFORD moved, in paragraph 1 (b), after "omnibus" to insert "coach". The noble Lord said: My Lords, on a previous stage of the Bill I moved a somewhat similar Amendment, to substitute the words "public service vehicle" for "omnibus". This created rather a light-hearted debate on the question whether one could eat a sandwich in a trolley-bus or a tramcar, but not in an omnibus. I am now leaving out the sandwich, the trolley-bus and the tramcar, but I feel that this and the two following Amendments make for clarity by including "coach" after "omnibus". That, I think, is really the intention of the Bill. I beg to move the first Amendment.
Amendment moved—
Page 52, line 27, after ("omnibus") insert (",coach").—(Lord Gifford.)
VISCOUNT HAILSHAM: My Lords, I am advised that it is proper for me to accept this Amendment, and I am happy to do so.
On Question, Amendment agreed to.
LORD GIFFORD: My Lords, this Amendment is consequential. I beg to move.
Amendment moved—
Page 52, line 29, after (" omnibus ") insert (" or coach ").—(Lord Gifford.)
On Question, Amendment agreed to.
LORD GIFFORD: My Lords, this, too, is consequential. I am most grateful to the noble Viscount for accepting three coaches, as well as three omnibuses. I beg to move.
Amendment moved—
Page 52, line 30, after (" omnibus ") insert (", coach ").—(Lord Gifford.)
On Question, Amendment agreed to.
LORD GIFFORD LORD GIFFORD moved, after paragraph 7 to insert:
" 8. The sale at a railway station, omnibus or coach station or airport, of timetables; "
The noble Lord said: My Lords, I think this is a comparatively simple Amendment upon which I need not dilate at

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any great length. Under the Bill, the sale of theatre programmes and the like is allowed, and it is felt that the sale of timetables ought to be permitted at any time. That is the purpose of this Amendment. I hope that the noble Viscount will be good enough to accept it. I beg to move.
Amendment moved—
Page 53, line 15, at end insert the said paragraph.—(Lord Gifford.)
VISCOUNT HAILSHAM: My Lords, I understood that my noble friend had transferred this Amendment to the Second Schedule and was going to move it there. If he does so I will accept it. Here, I cannot.
LORD GIFFORD: My Lords, I beg to state that I have already transferred this Amendment to the Second Schedule. We are now on the Second Schedule.
VISCOUNT HAILSHAM: Are we? Then I am happy to accept the Amendment.
On Question, Amendment agreed to.
VISCOUNT HAILSHAM VISCOUNT HAILSHAM moved, in paragraph 9, after sub-paragraph (b) to insert:
" (c) at an open space (within the meaning of the Open Spaces Act, 1906) for the regulation of which by-laws may be made under section fifteen of that Act; or "
The noble Viscount said: My Lords, this Amendment is designed to meet the wishes of the noble Earl, Lord Listowel. I am sorry to learn from his intervention on Lord Strathclyde's Amendment, that he is looking this particular gift horse in the mouth. His desire was to allow at any time the sale of guide books, reproductions and similar articles in public parks and gardens under the control of local authorities. He moved an Amendment about this subject during the second Committee stage, but withdrew it on my undertaking to consider achieving the desired effect in different words. My information is that the Government's Amendment is the simplest way of getting round the drafting difficulty into which both he and I fell on the former occasion.
This difficulty was caused by the reference in terms to a "local authority", which term in this Bill has a limited meaning, owing to the provisions of Clause 47. The effect of the Amendment which I am now moving is that the sales
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in question will be allowed at any time in any open space in or over which a local authority have acquired any estate interest or control under the Open Spaces Act, 1906. For the purpose of that Act a local authority means the council of any county, of any municipal or metropolitan borough or of any district; the Common Council of the City of London, or any parish council invested with the powers of the 1906 Act. My information is that this meets the noble Earl's point. I am afraid that in the time available we have not had full consultation, either with the noble Earl or with some of the local authorities who have been in touch with him; but if he or anyone else feels that the terms of this Amendment do not for any reason meet the case, the Government will be glad to consider anything that might be said, either publicly or privately, to them about it. I beg to move.
Amendment moved—
Page 53, line 31, at end insert the said subparagraph.—(Viscount Hailsham.)
THE EARL OF LISTOWEL: My Lords, I am happy to think that this is a quarrel about words, because such quarrels usually end in friendship. But I should like to explain to the noble Viscount why his effort to meet the requirements, at any rate of London, has not met with success. It is a matter of drafting, but he, as a lawyer, will appreciate that the only local authorities who can take advantage of this provision are those who have acquired a control or other interest in the parks with which we are dealing, which are open spaces under the Open Spaces Act, 1906. Unfortunately, in London a large number of the most important parks were not acquired under that Act. To give the noble Viscount examples which will obviously, I think, strike him as important examples—Hampstead Health, Finsbury Park and Battersea Park, and Victoria Park in the East of London, were all acquired under a London Act, and therefore would not be covered by the noble Viscount's Amendment, and the London County Council would not be able to sell guide books on Sundays or after closing hours on weekdays.
I shall be perfectly content if the noble Viscount would be good enough to give me an undertaking that his draftsmen, together perhaps with the officials of the

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London County Council on the legal side, would consult in order to agree about a suitable formula which could be introduced as a Government Amendment when this Bill goes to another place. We shall not have another opportunity of amending the Bill here because the Third Reading will be moved immediately after this stage of the Bill, so that any undertaking the noble Viscount may be good enough to give would have to apply to the Government's handling of the Bill in another place. We often get undertakings given by the Government in another place which are honoured here. I am sure there is no objection to the same thing happening in reverse. I shall be greatly obliged if the noble Viscount could answer me on this Amendment; it would save a great deal of trouble in regard to my Amendment which follows his.
VISCOUNT HAILSHAM: My Lords, I think I can comply with the noble Earl's very reasonably phrased request. His own Amendment would not have done because that would not have covered the case of all local authorities other than the London County Council, for various reasons, into which, in view of the undertaking I am going to give, I need not go, and also because the term "open space" in the Amendment would have been too wide. But I think that the noble Earl and I are at one as to the object we wish to achieve, and I agree with him that the best way of achieving that object is for the draftsmen of the London County Council and of my right honourable friend to meet in solemn conclave and resolve their differences. If he will take that as an undertaking, we will introduce what I hope will be an agreed Amendment in another place at a later stage. I hope that the noble Earl will be satisfied with that undertaking.
On Question, Amendment agreed to.
THE EARL OF LISTOWEL THE EARL OF LISTOWEL had given notice of an Amendment to add to paragraph 9:
" or
(e) at any open space under the control of an authority which is a local authority for the purposes of the Local Government Act, 1933, or the London Government Act, 1939. "
The noble Earl said: My Lords, I merely take advantage of the procedure of the House, which allows me to speak on my Amendment, to say
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that I accept the noble and learned Viscount's offer with gratitude. On that understanding I will not move the Amendment that has been placed on the Order Paper in my name.
Then, Standing Order No. 41 having been dispensed with (pursuant to Resolution):
VISCOUNT HAILSHAM: My Lords we now come to the Third Reading of this Bill. I understand that it will be for the convenience of the House if I move it formally. If noble Lords wish to raise any point I can, by leave of the House, answer their questions. I therefore formally beg to move that the Bill be read a third time.
Moved, That the Bill be now read 3a.—(Viscount Hailsham.)
3.32 p.m.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, before speaking to this Third Reading I should like to say that the House, and especially the Opposition, are grateful to the noble and learned Viscount for the majority of the efforts he has made upon this Bill. We have not always been satisfied, for he has not given us what we wanted; but, by and large, he has resisted a great many attempts to make this Bill much worse even than it is at the present time. From that point of view we are grateful to him, as we are grateful for his unfailing courtesy during the debates.
The Bill itself has been long overdue. We are now glad that it is passing in some form, and we hope that it will be amended to better purpose when it reaches another place. It is now ten years since the Gowers Committee reported, and when the Bill came to us it was substantially in accordance with the recommendations of that Committee. Though it is no longer as near to their recommendations as some of us would desire, the noble and learned Viscount, on the whole, seems satisfied that he has not departed very far from it. There is, however, considerable concern in certain parts of the country, particularly where Sunday closing is looked at with very great care, and among the Churches, that there is in this legislation a tendency to extend, rather than to restrict, general Sunday trading. I hope that when this Bill comes to be considered in another

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place this matter may be taken up more adequately, perhaps, than it has been in this House.
It is particularly regrettable to me that public opinion on the question of Sunday trading, especially in Scotland, has not been better organised—especially from the Churches. I have never been able to find serious attention given to the question at all, except by the Presbytery at Glasgow, who seem to be very anxious for the Bill to be passed for England and Wales, as being generally a good thing, while not wanting it applied to Scotland. It is in Scotland most of all that legislation is required, for Sunday trading is undoubtedly increasing there, particularly on housing estates. I hope that when this Bill gets to another place some attention will be given to that point.
We have had our debates and we on this side have substantially lost on the Amendments we have moved, especially those to Clause 1. We have not, therefore, been able to obtain the assent of the House to the very reasonable amendment of trading hours proposed, I believe, by the trade unions, strongly supported by the whole of the co-operative societies in this country, and by certain sections of organised distributive traders who did not want any general regulation of shops' opening hours which went much beyond that which, in practice, applies to the majority of shops to-day. It is a fact that more than 60 per cent. of retail shops in this country, covering all classes of trade, will continue their existing practice of opening for shorter hours than are now laid down in this Bill. Considering that the Gowers Committee Report was ten years old it would have been far better, in securing the proper effect all the way round, if a progressive Government had brought the matter up to date and brought all these things into line.
I have no intention of speaking at any great length and the only other point of substance is what I might call the "retreat" of Her Majesty's Government, though I do not know whether that is quite the right word. I will put it the other way round and speak of the acquiesence of Her Majesty's Government in reducing the powers of local authorities who, under war-time legislation, and that which has continued in practice since, if their view was confirmed by the majority of local traders, have been able, by local order, to prescribe
866
shorter local opening hours than those laid down in the Statute. This Bill is a severe blow to local option of that kind, and I believe that it will rightly be resented by local government associations. I hope that this matter too, will receive some attention when the Bill goes to another place.
Though I am certainly not claiming to speak on this point for a mass Party, I believe that the extensions which have been granted, through the lips and actions of the noble and learned Viscount, with regard to still later hours of opening for tobacco and confectionery sales are not at present justified. I had thought that the noble Lord, Lord Mackintosh of Halifax, would be in his place to-day, but unfortunately he is not here. I must say that perhaps the best evidence of the flourishing state of the sugar confectionery industry is the last balance sheet issued by John Mackintosh & Sons, which showed a wonderful increase of dividends. There is, therefore, very good evidence of how unnecessary it is to keep shops open longer in order to get better results on sugar confectionery. I hope that some attention will be given to that matter also in another place.
The last point to which I want to call special attention, and which I hope will receive consideration in another place, is the matter on which, as the noble and learned Viscount will remember, we failed to get our point on the Second Schedule, with regard to the widening of powers for chemists to sell on Sundays all kinds of articles. We believe that this is probably likely to interfere with the present chemists' rota under the National Health Service. I hope that when this legislation goes through our fear may, in practice, be found to be wrong. But there should be general attention paid in another place to the fact that the widening of the powers of chemists to open for the sale of a number of articles, rather than restricting them to the making-up of prescriptions, appears to be a very retrograde step and one to which the other place might well give attention. In conclusion I would only say that while I point these criticisms I am glad that we are to have a piece of clearing-up legislation which, imperfect as we think it is, is in some parts at least much nearer to the practice that ought to obtain rather than that which would have obtained had

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war-time and post-war arrangements been completely wiped out, with a general return to the conditions of the original Shops Act. I think that would have been a disaster; this Bill has considerably reduced the possibility of that disaster.
3.40 p.m.
VISCOUNT HAILSHAM: My Lords, perhaps I might add one or two points, quite shortly. I should like to thank the noble Viscount, in particular, for his kind references to myself. As I believe I told the House on the occasion of the first Committee stage, it is the first experience I have had in either House of Parliament of piloting legislation through a House—at any rate on behalf of the Government. For me, though it has been a somewhat lengthy experience it has also been a very pleasant one, owing to the kindness with which I have been treated.
I do not think that the noble Viscount, Lord Alexander of Hillsborough, is right in what he says as to the kind of reception that this Bill has had in the country. All through the course of the Bill the pressure has not been to make it more rigorous, as the noble Viscount has desired and as, indeed, certain organised bodies of opinion have also desired, but to liberalise or to reject it altogether as being restrictive in effect. Personally, I would not plead guilty to either set of criticisms—either that of the noble Viscount or those of the Press, which I thought were singularly ungenerous and regardless of the actual provisions of the Bill, especially as they have emerged from Committee.
I think it should be realised that anyone who now criticises the Bill criticises a Bill which enlarges the power of holiday resorts to grant later shopping hours, which gives shopkeepers a choice of two days for early closing which tidies up an enormous amount of confusion and inconsistency in the present law relating to early closing and Bank Holidays, and which clarifies the law relating to Sunday trading. In passing, I must say that those who advise me inform me that the noble Viscount is not right in saying that the effect of the Bill is to enlarge the scope of Sunday trading; there are entries on both sides of the ledger and it is difficult to say in advance what the net effect will be. Furthermore, this is a Bill which brings up to date and renders
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workable provisions of the Shops Act relating to employment. I cannot but feel that such a measure is both liberalising and advantageous to those for whom it is designed.
I think that the noble Viscount, though he has levelled a certain number of criticisms at us for a variety of reasons, on the whole accepts the measure. I would not accept the noble Viscount's view that local authorities have anything to complain of regarding the removal of local option. Their present option is to curtail the hours from 8 to 7, and as the universal hour under the Bill is 7 that option becomes unnecessary. For these reasons I hope that the House will give the Bill a Third Reading.
VISCOUNT ALEXANDER OF HILLSBOROUGH: The option is not unnecessary, because the existing practice in the majority of cases is to have the closing hour at 6 with one night at 7.
VISCOUNT HAILSHAM: I was only saying that the noble Viscount's complaint was that we were taking away the local option to reduce the hour to 7. As the hour is now universally to be 7, local option to reduce the hour to 7 is no longer necessary.
On Question, Bill read 3a; Amendments (privilege) made. Bill passed, and sent to the Commons.

NATIONAL INSURANCE BILL
3.45 p.m.
Order of the Day for the Second Reading read.
THE FIRST LORD OF THE ADMIRALTY (THE EARL OF SELKIRK): My Lords, one of the consequences of a universal insurance system is that it necessarily has to meet the many varied situations which occur in family life in this country. To meet such conditions the provisions, I am afraid, necessarily have to be rather complicated. I regret to say that this Bill is no exception and I think that a number of the provisions are not easy to understand on first reading. I can, however, reassure the House by saying that in every case except one the Bill has followed the recommendations of the National Insurance Advisory Committee. Under the 1946 Insurance Act it was laid down that there

869
should be a quinquennial review. This was initiated by my noble friend Lord Ingleby, and I think it is proper to repeat what my right honourable friend the Minister of Pensions and National Insurance said in another place, and what I think is generally known, that this very intricate subject benefited greatly by the care and skill which the noble Lord devoted to it over a number of years. I think it is also proper to express our gratitude to the members of the Advisory Committee who have given so much time and trouble to examining with great care the questions which we have to consider in the Bill. I should particularly like to mention Sir Will Spens, who has retired from the chairmanship after ten years.
I now turn to Clause 1. This clause enables pensioners (men under 70 and women under 65) to de-retire. That word may perhaps be rather unattractive, but I think its meaning is clear. It means that the person concerned can resume paying full contributions, which is possible only if he or she resumes regular work. If a man pays the necessary contributions, when he retires again or reaches the age of 70 he will get the enhanced pension, which will normally be something rather less than the 90s. payable to a married man who postpones retirement for the full period.
LORD LUCAS OF CHILWORTH: Does he re-de-retire then?
THE EARL OF SELKIRK: I think the right way to put it would be that he then retires a second time. I think this is really in the national interest, because it encourages people to stay longer at work. These provisions are controlled by regulations, and it is proposed at the present time to cover only the case of a single de-retirement. If experience shows that provision for a second de-retirement is necessary, that matter will be fully considered by my right honourable friend the Minister of Pensions and National Insurance. In the case of a married couple both receiving pensions on the husband's insurance, de-retirement requires to be a joint act of husband and wife. The Bill, however, envisages the possibility that a wife may withhold her agreement unreasonably, and in such cases the matter can be referred to the independent statutory authorities.
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Clause 2 enables a widow pensioner to gain a higher pension by postponing her retirement until the age of 65. This puts her, if I may so express it, on all fours with other pensioners. I am sure that this is right, and it is perhaps surprising that this is not already the situation. Clause 3 is the most beneficial clause. If I may put it shortly, it means this: in the case of a husband who is drawing benefit—say, unemployment benefit—the earnings of his wife which can be disregarded are now increased from 20s. to 40s. This benefit will affect an appreciable number of people. A further provision of this clause enables a retirement pensioner to receive an increased benefit in respect of a woman who has the care of his or her children. Clause 5 affects only a limited number of cases. It originated from a recommendation of the Royal Commission on Marriage and Divorce and is also supported by the Advisory Committee. In the case of a woman whose marriage has been dissolved and who is receiving maintenance payments from her ex-husband in respect of her children, in the event of his death she would be left with no support for her children. In such cases payments will be made for the maintenance of the children at the same rate as that paid by the husband, up to 16s. 6d. for the first child and 8s. 6d. for younger children. That is an important innovation.
Clause 6 extends the scope of benefits for children. For instance, under subsection (1), guardian's allowance can be paid although step-parents are still living. If a further explanation is required of this clause, I shall be very glad to give it later. Subsection (4) of Clause 6 deals with the case of anyone who is receiving a benefit in respect of a child who is not living with him. In such cases the person must contribute to the child's maintenance not less than the amount of such benefit. Clause 7 deals with the death grant and seems to me to make obvious provisions. It ensures that the death grant is paid to the people who really bear the cost of the funeral expenses; but where there has been no expense, as may happen in some cases, the death grant is paid to the executors or next-of-kin.
Now I am going to turn to Clause 4, which I know has been a matter of a little controversy and which deals with

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unemployment benefit. I think that it is proper to remember that the payment of unemployment benefit comes from the National Insurance funds, in which all contributors are interested. This is not part of the "bottomless pit" of the Treasury. The question is the circumstances in which a man on short-time work is entitled to draw unemployment benefit. At the present time, if a man is normally working six days a week, he must be unemployed for two days out of six to draw benefit. If, however, he is working five days, he draws benefit if he loses work on one day. That means that he can get two days' benefit for one day's work lost in six. I do not think that anyone can say that that is of itself a very fair arrangement between the two parties concerned. The Advisory Committee was asked in 1953 to review this question. They went fully into the matter and found themselves equally divided in regard to any change in these provisions. I tell your Lordships this quite frankly. They admitted the anomalies and made no recommendation. Accordingly, it falls to Parliament to make up its mind.
This Bill proposes that unemployment benefit can be drawn only in the event of two working days in six (other than Sunday) being lost. The rules about waiting days remain entirely unchanged. If a man loses two days in any week, he will always be able to get unemployment benefit for those days. If he is unemployed for the full normal working week, he will always get six days' benefit. This rule, however, will not apply in cases where employment is terminated; and for this purpose suspension for twelve days will be considered as termination. Power is taken under this clause to make regulations to deal with difficulties which might arise in exceptional cases. I am fully aware that there may be different opinions expressed as to whether this is the right way to handle this problem. I do not think that the Government could have left it unchanged, and I consider that, if it is looked at carefully, it will be recognised that it is a fair, reasonable and proper provision.
I think I can claim that, taken as a whole, this Bill, though very limited in scope, constitutes a number of improvements to the insurance scheme. It is estimated that it will benefit something
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like a quarter-of-a-million people in the course of a year. Clause 3, which increases the earnings disregarded for a dependent wife, will be brought into operation within a week or two after the grant of the Royal Assent. The remaining provisions, which are dependent on regulations which have to be submitted to the Advisory Committee, will take a little longer; but it is hoped that they will be brought in without any undue delay. I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a.—(The Earl of Selkirk.)
3.55 p.m.
LORD BURDEN: My Lords, I am sure that the House will agree that the noble Earl has explained the somewhat complicated problems of this Bill with his usual luminous clarity. While it is true that there are one or two clauses to which we feel that objection could be taken, in particular Clause 4, to which the noble Earl made reference, I am glad to say, on behalf of my noble friends on these Benches, that we give the Bill a welcome. With regard to Clause 4, all I need say is that that clause was debated at some length in another place, and for that reason we find that it is not necessary for us to do anything further in regard to it. I understand that the timetable makes it necessary that this Bill should receive the Royal Assent before Whitsuntide, in order that the necessary regulations should be prepared and the benefits become payable at the earliest possible moment. In these circumstances, we do not propose to impede the passage of the Bill through all its stages, and we hope that it will have a speedy and safe journey to the Statute Book.
May I say a word about Clause 7, to which the noble Earl made reference and which widens the ways in which funeral benefit may be paid? Those of us who have had experience of working-class life will know with what horror a pauper burial is regarded by working people. The words, which I am sure your Lordships will know,
" Rattle his bones over the stones—
It's only a pauper that nobody owns "
have bitten deeply into the minds and consciousness of the working people. I am glad that this Bill widens the scope of the payment of funeral benefit, and I hope that it will make anything in the

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nature of a pauper funeral a thing of the past.
I am glad that the noble Earl has paid tribute to the work of the National Insurance Advisory Committee. As he has said, it is due, in a large measure, to the labours of that Committee and the reports which they have submitted that this Bill comes before us, and I join with the noble Earl in the tribute he paid to that body. I welcome the Bill for these and for other personal reasons which I do not propose to develop. I shall say nothing more now, except to wish the Bill a speedy passage through your Lordships' House and to thank the noble Earl for the manner in which he has presented it to your Lordships.
THE EARL OF SELKIRK: My Lords, I do not think that I can do more than thank the noble Lord, Lord Burden, for the welcome that he has given this Bill and for re-echoing what I said in regard to the Advisory Committee's work. It is very complicated and detailed work, not always easy to understand, and I was glad to hear the warm words of tribute which the noble Lord has expressed to-day.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

NEW STREETS ACT, 1951 (AMENDMENT) BILL
4.0 p.m.
Order of the Day for the Second Reading read.
LORD MILVERTON: My Lords, in rising to move the Second Reading of this Bill, I should perhaps remind your Lordships that it is a Private Member's Bill which was promoted by Mr. Martin Maddan in another place. A considerable number of Amendments were moved to the Bill there, in Standing Committee and on Third Reading, with the result, as I think, that it has been greatly improved. The purpose and effect of the Bill is to amend in certain particulars the New Streets Act, 1951, but without altering in any way the main principles of the Act. Nor does the Bill affect the general principle of private streets legislation—the Public Health Act, 1875, and the Private Street Works Act, 1892—that liability for the repair of private streets
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rests with the frontagers; that is to say, the owners of property in such streets.
As its Long Title shows, it is a Bill "to amend the New Streets Act, 1951", and that is all it professes to be. Responsibility for the repair of private streets has always rested with the frontagers, and local authorities have power, under the Public Health Act, 1875, or the Private Street Works Act, 1892, to make up private streets and to charge the cost to the frontagers before "adopting" them; that is, before assuming responsibility for maintaining them at public expense. The object of the 1951 Act is to have this liability met in advance of building, in so far as it can be estimated at the time, instead of leaving it to fall on the frontagers at some later date when the local authority ultimately decide to take up and adopt the road.
It will be appreciated that the Act itself does not require the making up of private streets, but indirectly it facilitates their making up. It does this in several ways: first, by providing funds to meet the cost of street works in advance, and thereby reducing the amount which has to be recovered from the frontagers when the works are, in fact, carried out later on; secondly, by giving builders an inducement to make up streets while the building is in progress, by agreement with the local authority under Section 146 of the Public Health Act, 1875 (the 1951 Act expressly provides that no sum need be deposited or secured under the Act if such an agreement is entered into) and; thirdly, by Section 6 of the 1951 Act, which enables a majority of frontagers in a street to require the local authority to make it up, provided that at least one of them has paid a deposit under the Act. The present Bill, then, may be regarded as a useful measure which should facilitate the administration of the 1951 Act and remove a number of minor anomalies and practical difficulties which are liable to occur under the law as it stands.
Originally—if I may look briefly at the history of private streets—the responsibility for repairing public highways was with the "inhabitants of the parish at large". That was all very well when highways were principally a means of getting from one place to another, but with the growth of urban communities the number of streets multiplied to such an extent as to impose an intolerable burden

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upon the parish authorities. A series of Acts of Parliament was passed, the first being the Highway Act, 1835, which provided that the highway authority should not become liable for maintaining and repairing new streets unless they were constructed in accordance with plans approved by the local authority. Further Acts followed, but the main advance was in 1875, when, by Section 150 of the Public Health Act, 1875, local authorities were authorised to require the owner of a property fronting, adjoining or abutting on a private street to carry out work in that street, and in default of his doing so (which was almost always the case in practice), the local authority could themselves do the work and recover the cost from the owner. When the works were done, the local authority, if satisfied with them, could voluntarily take over the street or, after the passing of the 1951 Act, they could be made to take it over at the instance of more than half the frontagers.
Section 150 of the 1875 Act is still used by many local authorities, but others have adopted a later Act, the Private Street Works Act, 1892, whereby a local authority may resolve to make up a private street and have power to contribute towards the cost of the work, with more flexible power of assessing the expense to the frontagers than was given them under the earlier Act. I would point out that under both these codes the initiative in making up the street rests with the local authority. Prior to 1951, there was no way in which a frontager could compel the local authority to take action.
The advent of the speculative builder, who sold houses built by him "free of street charges" without, in fact, providing protection to purchasers against future charges, and then perhaps disappearing from the scene before the time came for the street to be made up, was a direct factor in the introduction in 1951 of the Bill which became the New Streets Act. This Act requires builders to pay or secure the payment of the estimated cost of making up a "new street" to the satisfaction of the local authority before they are permitted to put up any building with a frontage to that street. The Act does this by preventing any work until the landowner has paid to the local authority, or has secured the payment to the local authority of, the estimated cost
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of making up that part of the street which will run in front of the proposed building. Experience of operating this Act has revealed a number of defects which the present Bill aims at putting right.
Clause 1 of the Bill has two purposes. First, it covers the case where frontagers themselves do work to the street between the time the builder has paid a deposit or given security to the local authority and the time when the local authority come to make up the street. If, during this period, any work is done by the frontager (perhaps the most usual work so done is to make a concrete or other substantial carriage way which it is believed will comply with the requirements of the local authority), then, if that work is of permanent value, the local authority are empowered under the first part of Clause 1 to pay to the person who does the work all the money deposited, or such part as they think represents the value of the work done, and consequently represents the reduction in the outstanding liability of the owner of the land for street works charges. If the person who did the work is no longer the owner of the land, then the owner must be given notice of the local authority's intention to make the payment or to release the security; and the owner is to be allowed to make representations to the local authority on this point. The second part of Clause 1 provides for a fair division of the liability where land in respect of which a deposit has been made, or security has been given, is divided into separate ownerships.
Clause 2 was added at the Report stage in another place, and relates to the adoption of a street where work has been done otherwise than at the expense of the local authority. Under certain of the private street works codes it is not possible for a local authority conveniently to adopt a private street as a highway repairable by the inhabitants at large, unless they have themselves carried out the private street works therein. The object of this clause is to enable a street to be taken over by the local authority as a public street where action has been taken under the Act of 1951 and any street works are subsequently carried out to the satisfaction of the local authority. It will be at the discretion of the local authority, though not at their expense, whether or

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not they take action under this clause, and it is accordingly a desirable addition to the Bill.
Clause 3 is intended to remove the doubt which at present exists as to whether, once some steps have been taken with a view to having a street made up under the New Streets Act, 1951—for instance, the payment of a deposit—it remains possible for the local authority to make an agreement with the builder to have the street made up at the builder's expense, without having to follow the rest of the procedure under the 1951 Act. It has always been possible for such an agreement to be made, because Section 146 of the Public Health Act, 1875, provides that a local authority may agree with any person for the making up of a street at that person's expense, with the intention that, when made up, the street shall become a public highway. It is very desirable to keep this power under which both parties can make an agreement, but if a deposit is made or a security is given under the 1951 Act, doubt at present exists as to whether any such agreement can subsequently be made. This doubt will be removed by the enactment of Clause 3.
Clause 4 is intended for the protection of purchasers of land in respect of which he New Streets Act, 1951, has been brought into operation. At first sight, it would appear that what is done under the 1951 Act creates an obligation only as respects the owner of the land when the plan is deposited in accordance with the building by-laws and the local authority give notice under Section 2 of the sum to be deposited or secured before the building is commenced. If this were strictly the case, there would be no need for an entry in the local land charges register, which is primarily a register of continuing liability. It must be remembered, however, that a building plan may be deposited and approval secured by one owner of a piece of land, and the benefit may be transferred with the land and the building actually erected by some successor in title. In these circumstances, the liability to make the deposit or give the security passes with the benefit of the building consent.
Normally, the approval of a local authority under building by-laws remains operative for three years, by the end of which the building must have been commenced. Land can, however, change
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hands several times in a period of three years, and in view of the provisions which this Bill is making for the refund of deposits and the release of securities, it is important that purchasers should know the state of the account as regards the plot which they are buying. They will want to know whether the local authority have passed a resolution exempting the plot from the provisions of the 1951 Act, and, if not, the amount required by the local authority's determination under Section 2 of that Act. They will want to know whether any money has been put down or any security has been given, and whether any part of it has been repaid or released. That is the information which they may expect to find in the local land charges register. This clause will enable them to find it there.
To pass to Clause 5, under the 1951 Act, when a sum of money was deposited by a builder with a local authority, interest on that deposit, at 3 per cent. per annum, was payable by the local authority. Clause 5 of this Bill does two things. It provides that where part of a deposited sum of money is repaid, the local authority have only to continue paying interest on the balance they retain. It also provides that the rate of 3 per cent. shall vary from time to time to correspond with the rate charged by the Public Works Loan Board for the time being.
Clause 6 covers a number of points, and is not so complicated as at first it may appear. The first objective, dealt with in subsection (1), is to enable a local authority to exempt proposed buildings from the provisions of the 1951 Act where the street in which the buildings are to be put up is in so satisfactory a state that the local authority would not feel justified in making up that street in advance of others of greater need in that area. At present, the 1951 Act has sometimes to be put into operation in respect of streets where, because the street is in a satisfactory condition, it is unlikely that work to the street itself will be carried out for a long time. This means that builders or landowners find that they have money or securities tied up for an indefinite period.
The second objective is to cover the case of what I may call the trading estate, which is found throughout the

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country, where, clearly, there will never be any occasion for the local authority to take over certain streets because the firms concerned invariably make up the streets themselves. Subsection (1) of this clause would empower a local authority in such cases to exempt these streets on industrial estates from the provisions of the 1951 Act.
The third point with which Clause 6 seeks to deal is to enable a local authority, having once served a notice under the 1951 Act requiring a builder to deposit a sum or give security to a certain amount, to serve a further notice at any time varying that sum or the amount of that security if the local authority feel that the original demand was excessive. Subsection (2) seeks to effect this. The subsection also provides that the subsequent notice may be served on the owner of the land and not necessarily on the same person on whom the original notice was served. This meets the case where the owner has sold out, or is dead.
Subsection (2) of Clause 6 covers a further point. It gives to an owner served with an amended notice varying the amount of the deposit the same time limit for appealing as he already has for appealing against the original notice. Subsections (3) to (5) of Clause 6 are consequential on other provisions in the Bill, and I need not trouble the House with the points, which are merely consequential amendments of the principal Act. Subsection (6) of Clause 6 empowers local authorities to require information as to the ownership of premises in order to enable them properly to serve notices under the Act. There is already power under Section 277 of the Public Health Act, 1936, for a local authority to obtain information as to ownership of land to enable them to serve notices under the Public Health code, and it may reasonably be said, I think, that the 1951 Act in a general way forms part of that code, so that local authorities ought to be able to exercise their powers to obtain information in relation also to the 1951 Act. This subsection (6) of Clause 6 proposes to do.
Subsection (7) of Clause 6 concerns the application of the 1951 Act to rural
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districts. That Act empowers the Minister, on application by a county council, and after consulting the rural district councils concerned, to apply the Act to a rural district council. This subsection will enable the Act to be applied to a part of a rural district if that be thought to be desirable. There is, I think, only one other subsection I need mention and that is subsection (8) of Clause 6, which provides for the extension of the 1951 Act to land proposed to be laid out as a street in the future. The 1951 Act at present does not cover the case where a plan is deposited for the building of a house on a defined plot in a field but no plan has been deposited for the street on which that house is to front or abut. Subsection (8) would make the Act apply in such a case. In other words, projected streets will be covered as well as existing ones. Clause 8 (3) provides that the Bill shall come into force three months after the date of its passing. This Bill, my Lords, will protect the interests of the householder and will help the local authorities in the efficient performance of their public duties. I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Lord Milverton.)
4.26 p.m.
THE MINISTER WITHOUT PORTFOLIO (THE EARL OF MUNSTER): My Lords, I would only add on the Second Reading of this Bill that my right honourable friend the Minister thinks it would be advisable that your Lordships should give this measure a Second Reading. My noble friend behind me has explained the Bill in great detail, and I think there is nothing else for me to add at the present stage of the proceedings.
LORD LUCAS OF CHILWORTH: My Lords, so far as we on this side are concerned, we thought it was a simple little Bill which would make a very worthwhile amendment to the principal Act. We shall not impede its progress on to the Statute Book.
On Question Bill read 2a; and committed to a Committee of the Whole House.

EXPORT GUARANTEES BILL
4.27 p.m.
Order of the Day for the Second Reading read.
LORD CHESHAM: My Lords in asking your Lordships to-day to give a Second Reading to the Export Guarantees Bill, which, although it is a small Bill, and a certified Money Bill at that, is one of considerable importance, I am sorry to say that it is also one that is somewhat complex and technical in nature. I will do my best to be clear and brief at the same time. As your Lordships know, the Government have been actively engaged in the field of credit insurance for some forty years and the Export Credits Guarantee Department has been a separate Department for twenty-seven of those years. I shall a little later on call your Lordships' attention to how successful it has been.
I think your Lordships would wish me to give some indication of the methods by which the Department operates, and indeed I think it is most important that I should do so as clearly as possible as it has a direct bearing on the Bill that we are discussing to-day. If I seem rather to stress this explanation, it is because, as your Lordships will see, it is very necessary to obtain a proper understanding. The statutory authority for the Department's operations is the Exports Guarantees Acts, 1949, 1951 and 1952, of which the Act of 1949 is the main one. It provides for two classes of guarantee: the commercial guarantees given under Section 1 and the special guarantees given under Section 2.
The Section 1 guarantees, as I have said, are the commercial ones and are given in connection with the export of goods, services and so on, to encourage the export trade. We are not in fact concerned to-day with this section, which is operating happily, but it was necessary for me to mention it in order to mark the difference between it and Section 2. Section 2, with its special guarantees, is really subdivided into two parts. Its purpose is, first, to encourage the export trade with places outside the United Kingdom in a similar way to Section 1 but where the desirability of conducting a particular operation is dictated more by considerations of the national interest than by purely commercial factors. In other
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words, there may well be cases where the Advisory Council would not wish to recommend that they should be undertaken on a strictly commercial basis although the cover of such business would be very much to this country's advantage.
The second subdivision of Section 2 is the rendering of economic assistance to other countries. I think I must clearly qualify this way of putting it because I do not mean that the Department has a kind of philanthropic function; I mean that it is intended to enable other countries to buy British goods and services when they need to. At the present time the maximum liability which the Department may incur under Section 2 is £150 million. At April 30 this year the liability actually incurred was £72 million, but—and this is the important part—there are contingent liabilities of £65 million. It is quite clear, therefore, that if these contingent liabilities were all taken up the Department would be very close to its statutory limit, and therefore I can now come on to Clause 1 of the Bill which applies to this aspect. It simply proposes that the limit under Section 2 should be raised from £150 million to £250 million. I think it is perhaps unlikely that all the contingent liabilities I mentioned will be taken up, but it is most essential that we should safeguard the position to avoid the risk of bringing the Department's operations under Section 2 completely to a standstill.
If this were to happen the effects might be very serious, because, for instance, at the present time only very limited cover is being offered for exports to certain Middle East countries, but we might easily wish in the near future to pave the way for considerable increases in this way. There is also the possibility of large dollar orders which, for one reason or another, may not come under Section 1 of the Act and which we might run the risk of losing if the Department were no longer able to work under Section 2. I must make it clear that the Department is not asking for permission to spend money but only to incur liabilities. There would be an expenditure of money only if the transaction resulted in loss to the exporter and the guarantee had to be implemented. I should like to stress that in the eight years since the special Guarantee Scheme was introduced, the Department has more than covered its claims by the premiums it has earned and

883
there has been no net expenditure of public money.
May I now turn to Clause 2 of the Bill? This deals with Section 3 of the Act of 1949. I have not previously mentioned this section because it is not like Sections 1 and 2, which are what I might call the operative sections of the Act. Section 3 provides a method of implementing those two sections, and it is in the sense of its application to Section 2 that it has been brought into the Bill that we are considering. It provides that the Department may acquire securities which it has guaranteed. This power is needed and has been used to give the economic assistance I mentioned to other countries requiring it for the purchase of British goods and services. The procedure is that the Department guarantees and acquires securities, which are usually promissory notes issued by the overseas Government, and the proceeds are then paid into a special account from which the British exporters are themselves paid.
Unfortunately, in connection with the agreement in 1954 with Pakistan, it appeared that the legality of the procedure that the Department was adopting was possibly doubtful. It seemed that the Department was giving its guarantee after it had acquired the promissory notes, and was, therefore, in effect, guaranteeing securities it had acquired rather than acquiring securities that it had guaranteed. A procedure was then devised which would comply with the legal requirements, and, while I can assure your Lordships that what is being done is quite legal, it is an untidy and highly artificial manner of doing it. The answer is in Clause 2, which is purely and simply a matter of procedural straightening up. The clause is so designed as to remove the artificiality of the present procedure and to clarify the Department's power to enter into these economic assistance Agreements which have a double importance from both the political and the export point of view.
I do not think there can be any doubt that the basic intention of Sections 2 and 3 of the Act was to enable the Department to provide such assistance to other countries by making loans tied to purchases of British goods and services. As
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a result of this amendment of procedure, the Department will, in future, simply acquire the security from the issuing Government, and there will therefore be no change in the substance of the procedure, while the acquiring of the security will still be related to an approved export transaction.
If I may go on with Clause 3, I would point out that when the Department operates one of these economic assistance agreements, it borrows money from the Consolidated Fund at a rate which is fixed by the Treasury by reference to current interest rates. It lends it to overseas Governments at another rate, and the difference between the two rates normally represents a small premium for the benefit of the Department. There were agreements with Pakistan and Iran in which the rate to be paid by those countries was fixed at 4 per cent. Since then the rate charged to the Department by the Treasury has risen to 4¾ per cent., and for the next two or three years there will be, on this basis, a deficiency in the particular fund called the "Acquisition of Guaranteed Securities Fund" through which the Department operates the economic assistance agreements. I said that, taken overall, the Department has maintained solvency and there has been no expenditure of public money. But there is, unfortunately, no provision for meeting such a deficiency written into the main Act of 1949. It is, in fact, a most technical point, and it seems that the only solution is that the deficiency should be defrayed out of monies provided by Parliament. This is what is done in Clause 3.
I should again like to make it clear that it is estimated that there will still be no net cost to public funds because of this deficiency. I should also like to say again that this applies only to agreements already entered into, and it is estimated that it will involve the sums of £22,000 in the current financial year and £5,000 in 1958–59, and will have dwindled to nothing in 1959–60. It is, therefore, perhaps not an enormous affair, and it is certainly the intention to avoid any such deficiency in the future by linking the rate of interest in any fresh agreements with any variations that there may be in the rate of interest charged by the Treasury. Clause 4 merely seeks

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to repeal a previously amended subsection which increased the limit on Section 2 guarantees from £100 million to £150 million; and with the new limit increased to £250 million this subsection is no longer needed.
I hope I have said enough, and said it sufficiently clearly, to commend the Second Reading to your Lordships. I hope I have succeeded in making clear the valuable and successful work which the Department has been carrying on and the fact that the Bill provides nothing more than technical measures to assist and further that work. We realise that the Department is not the only pebble on the export beach and that there can be no relaxation in other ways to promote the export drive. The work of the Department is, however, of great value; and if the noble Lord, Lord Lucas of Chilworth, will allow me, I will borrow some words of his when he stood at this Dispatch Box and piloted the Act of 1949 through your Lordships' House. He said it was [OFFICIAL REPORT, Volume 160, col. 1150]:
" … a wonderful record and a great tribute, not only to the officials of the Department but also to the manufacturers and exporters of this country."
I believe that this wonderful record has been maintained and that the sentiments which the noble Lord then expressed can fairly be echoed to-day. So that we may continue that work, I ask your Lordships to give a Second Reading to this Bill. I beg to move that the Bill be read a second time.
Moved, That the Bill be now read 2a.—(Lord Chesham.)
4.41 p.m.
LORD LUCAS OF CHILWORTH: My Lords, surely the noble Lord who has moved the Second Reading of the Bill deserves a word of congratulation on the lucidity and brevity with which he has dealt with a highly complex subject. I would also offer him a word of congratulation on the careful and naive way in which he dodged one or two uncomfortable issues—which shows that in presenting this kind of "covering up" process to your Lordships' House he is acquiring a skill which I must say excites my admiration. First, let me repeat, perhaps in words different from those of mine which the noble Lord quoted from so many years ago, that I think the Export
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Credits Guarantee Department has always deserved the highest possible praise as being a financial and business department which has, perhaps, done more than anything to increase the export trade of this country. Its work is commendable and deserves the highest praise and congratulations.
If the Department has slipped a little from the strait and narrow path now and then, let us say that it was only in its zeal to work for the country's interest, and not with any malice aforethought; because, after all, one little thing that it has had to do, as the noble Lord said with most charming candour, is to have a little retrospective legislation to make an honest woman of itself for the sins it has committed. It should not have done it; but, as the noble Lord has said, it was only a little sin; and in the light of the Department's outstanding success, I am prepared to forgive it.
There is one matter I shall not quite so readily forgive. I hope it may be a lesson to the Treasury and, perhaps, to Her Majesty's Government. An increase in the bank rate has a rather boomerang effect, so that when a Department such as the Export Credits Guarantee Department have to lend money at a lower rate than the Treasury will let them borrow it, then, of course, they have to come to Parliament for the difference to be made good, even though it is quite a trifling amount. Let that be a lesson to the Treasury not to manipulate the currency and the bank rate in that way, for it not only catches industry; in this case it caught the Export Credits Guarantee Department. Those are two minor points.
A major subject on which I should like to say a brief word is that I sincerely hope that the noble Lord will have to be a regular visitor to that Dispatch Box asking for more money, for I am hoping that our exports are going to increase, especially in those countries where, as the noble Lord has said, Section 2 of the original Act affords what is really "political cover"—cover which does not have to go before the Advisory Committee, but which it is necessary to give our industries, let us say, in the national interest. I very much regret that the noble Viscount, Lord Elibank, is not here this afternoon. He might have had a good deal to say about the desirability of

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developing our trade with Iron Curtain countries, and particularly with China. I hope that when the Government come to their senses and lift the entirely artificial embargo now imposed on trade with China, the Export Credits Guarantee Department will come into its own and be able to advance considerable sums of money under Section 2 of the original Act.
Perhaps it would be trying your Lordships' patience if I went on with a discussion on the unfortunate Chinese embargo, but all we are doing at the present time is to deny a lucrative market to our own exporters, without bringing to bear on the Chinese that pain and pressure which some people feel should be brought on them; because America is just taking our market. I hope the noble Lord will draw the attention of his right honourable friend the President of the Board of Trade to the many protests that have been made in your Lordships' House in recent months. Let us be realists in this. I am not going to say that this embargo is applied at American dictation, or that America persuaded us to stay out of the Chinese market for the express purpose of going in themselves, but what is happening is that our competitors, including America, are going in. To me, that is not very good business. But I will not I go on with that.
There are two other matters on which I should like to comment. Before we came into the House the noble Lord was kind enough to give me an informative pamphlet and I passed a profitable quarter of an hour in reading it. I am delighted to see that the Department will now give cover as high as 95 per cent. on the invoice price, whereas I believe a few months ago there was an 80 per cent. limit. I should like the noble Lord to see whether it can be arranged for the period of cover to be increased. I believe the present limit is ninety days. In the special circumstances, especially as we all want (I think here I echo the wishes of Her Majesty's Government) to increase our trade with Iron Curtain countries, cover up to ninety days is sometimes not as long as is advisable.
I can find nothing more to criticise, for I am wholly in support of the activities of the Export Credits Guarantee Department, and the noble Lord has been so full
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and lucid in his explanation that I am left with nothing more to say, unless perhaps your Lordships will allow me to repeat my thanks to him for the manner in which he presented the Bill to the House. We on this side will have nothing further to say except to expedite the Bill's passage on to the Statute Book.
4.50 p.m.
LORD GREENHILL: My Lords, I, too, should like to congratulate the noble Lord, Lord Chesham, on the clear and full account he has given of this Bill. I should not have intervened but for the fact that within the last few days two matters have been mentioned to me which have a bearing on this Bill and which. I think, are deserving of some notice. I am not now referring to Clause 1, which is the ordinary commercial form of guarantee, whereby a Government Department takes commercial risks in return for a premium and, fortunately, has made a profit as a result.
In the course of this week I have been told of the complaints, if I may so call them, of one of the heads of one of our Commonwealth partners. He said, according to my informant, that he did not understand why other countries could tender for contracts which were being entered into in his particular country—such countries as Germany, France and Italy were prepared to tender—but there were no tenderers from this country. In this particular case, the man to whom I am referring said he would have preferred English tenders because he understood the mentality of Englishmen and their methods of trading. I can understand why, perhaps, there is some hesitation on the part of English contractors to enter into these particular contracts. Therefore, I am rather hoping that the power which is being sought under Clause 2 of the Bill will enable the Government—even, perhaps, where the risks are not commercial risks—to encourage the obtaining of these contracts, even if, perchance, there should ultimately turn out to be a loss.
The other matter I wish to mention is this. Explorations are taking place in different parts of the world for the purpose of locating valuable ores, and the cost of that exploration, as noble Lords will understand, is very high. It may be that, in order to encourage greater exploration for these ores, risks may have to be taken which, although again,

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they may not be quite commercial risks, it is in the national interest should be taken. If the powers sought in this Bill enable the Government to further the commercial interests of the country and to obtain for the country the political advantages which that kind of commercial interest would bring about, I think it is right that the Bill should have every encouragement. I have much pleasure in adding my words of approval, minus criticisms, to those of my noble friend Lord Lucas of Chilworth.
4.53 p.m.
LORD CHESHAM: My Lords, I feel that I must first thank noble Lords opposite for their kind words. In particular, I must thank the noble Lord, Lord Lucas of Chilworth, because to hear such words coming from him gives me the greatest possible personal satisfaction. I think the noble Lord is most kind. I should like also to say how much I appreciate such good-natured forgiveness of only a very small sin. It is, I think I may say, a small sin, but it is one of some long standing during the time of successive Governments. So far as the implied criticism—again genial—of the bank rate policy is concerned, I think this small setback is a very small price to have to pay for a policy which has had such a good effect on the nation's finances. I hope, also, that I, or some other noble Lord, may come back here to seek further increases in the liability, just as noble Lords opposite have said.
It is the intention of Her Majesty's Government and of everyone to lend all possible aid (and to a certain extent this will, I think, cover Lord Greenhill's question) to the promotion of exports, in whatever direction they may go. I think the Department's attitude in this matter has always been quite sufficient to indicate that it will press—I was going to say every possible loophole, but since one cannot press a loophole, perhaps I may say that it will explore every avenue, and so on, in order to increase exports in every way. With regard to the question of China, naturally I join with the noble Lord, Lord Lucas of Chilworth, in regretting the absence of the noble Viscount, Lord Elibank. Lord Lucas of Chilworth said that we should probably have heard a great deal from the noble Viscount on the subject of China if he had been here. No doubt we should. It
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is, of course, a complete digression from the contents of the Bill; it is a matter arising out of the application of the Bill and is in no way concerned with the substance of it. I would assure your Lordships that every effort is being made to increase exports generally. I will certainly convey the words of noble Lords to my right honourable friend, and I hope that progress will be made in all directions—not only that of China.
Lord Lucas of Chilworth asked me two questions. With regard to the increase in cover to 95 per cent., I would point out that it was previously 90 per cent., not 80 per cent. As to the ninety days' cover which the noble Lord mentioned, there is nothing particularly magic about that figure: it can, for instance, be two years if required. It is quite a flexible figure. The ninety days is taken merely as being more or less what is usual in the trade. I have no more to add and I hope that you will now give the Bill a Second Reading.
On Question, Bill read 2a: Committee negatived.

HOUSE OF COMMONS MEMBERS' FUND BILL
Order of the Day for the Second Reading read.
4.59 p.m.
LORD HAWKE: My Lords, this is a small Bill dealing with a domestic matter of the House of Commons. It provides for Treasury assistance to their Members' Fund which provides pensions and grants to ex-Members and their widows in case of distress. I beg to move that the Bill be now given a Second Reading.
Moved, That the Bill be now read 2a.—(Lord Hawke.)
LORD GREENHILL: My Lords, one feels a little uncomfortable in commenting on this Bill, but one has the feeling that if another place were as generous to Members of this place as we apparently are to Members of the other place everything would work much more smoothly.
LORD BURDEN: My Lords, perhaps I may say a word on this Bill. It would be quite indelicate on our part to comment on the private arrangements or arrangements which are being made in this Bill by Members of another place who have passed the Bill. I do not know

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whether it is a Money Bill or not. I gather from the noble Lord that it is not. I cannot say that I have any personal interest in it, though for eight years I contributed to the Fund, and the money I contributed remains there for the benefit of the Fund. Still, I hope that the delicacy, which I am sure your Lordships will observe in regard to this Bill, may be reciprocated at a convenient time by Members of another place.
On Question, Bill read 2a: Committee negatived.

EAST HAM CORPORATION BILL [H.L.]
THE CHAIRMAN OF COMMITTEES THE CHAIRMAN OF COMMITTEES informed the House that the opposition to the Bill was withdrawn: the Order made on the 6th Febuary last discharged, and Bill referred to the Committee on Unopposed Bills.
BP TRADING BILL [H.L.]
THE CHAIRMAN OF COMMITTEES THE CHAIRMAN OF COMMITTEES informed the House that the opposition to the Bill was withdrawn: the Order made on the 6th February last discharged, and Bill referred to the Committee on Unopposed Bills.
LIVERPOOL CORPORATION BILL [H.L.]
The Queen's consent signified, and the Bill reported from the Select Committee, with Amendments.