Lords Sitting of 8 December 1958

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

EXPORTS OF BOOKS
2.35 p.m.
LORD STONHAM: My Lrds, 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 if their attention has been drawn to the reference in the report of the British Council to the great disparity between British exports of books and those of Russia and U.S.A. and to the fact that Russia is spending on English language publications sent outside Russia twenty times as much as our English language exports, and what action they contemplate to remedy this situation.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE MARQUESS OF LANSDOWNE): My Lords, the attention of Her Majesty's Government has been drawn to that section of the British Council's report which deals with the export of books. Her Majesty's Government are fully aware of the need to increase these exports and are giving consideration to the measures which are needed to promote this. It is hoped to make a further statement in the New Year.
LORD STONHAM: My Lords, while thanking the noble Marquess for that encouraging Answer, can I ask him, in having regard to the considerations which are being given to this matter, whether he is aware that the Russians are selling Tolstoy to paint a false picture of modern Russia and Dickens to paint a false picture of modern Britain, and that the effect is greatest in those countries where sterling difficulties preclude the ordinary commercial sale of books? Would it be possible to follow the American method of getting over these sterling difficulties and so make cheap books and periodicals available to the poor but progressive youngsters who may one day be running their countries, and thus give them a true picture of the strength, variety and freedom of modern Britain?
THE MARQUESS OF LANSDOWNE: My Lords, I thank the noble Lord for this valuable suggestion and can assure him that all the points he has raised are being given most careful consideration.
VISCOUNT ELIBANK: My Lords, if it is proposed to devote more money to the British Council for this purpose, may I ask the noble Marquess whether he will bear in mind the needs of the Arts Council which were adumbrated in this House last week?
THE MARQUESS OF LANSDOWNE: My Lords, I am afraid I must call the attention of the noble Viscount to the fact that the Question does not apply to the Arts Council.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I have taken note of that fact and therefore did not

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put such a question. That does not mean that we shall not return to that subject again. I feel that my noble friend has done a service by raising this point. I am concerned about the general lack of scope for the British Council in such matters, because they are still so restricted in funds in relation to the work that remains to be done at the present time if we are to regain something of the initiative that we, in our national position, ought to hold in countries which are now the centres of activity diplomatically.
THE MARQUESS OF LANSDOWNE: My Lords, I thank the noble Viscount the Leader of the Opposition for his intervention. I can assure him that what he has said will certainly be taken to heart by Her Majesty's Government.
LORD STONHAM: My Lords, with regard to the reference to the British Council, will the noble Marquess bear in mind the fact that the Council are doing their gallant best with an annual expenditure of some £160,000 on periodicals, which, spread over sixty-five countries, means only £50 per week per country and is barely enough for serious students. And will he have regard to places like Kuwait, where almost every teacher is an Egyptian, purveying history according to Nasser? Cannot we act in the same way as Russia is acting in believing that trade and influence follow the printed word, so that people shall know us as we are instead of as we are painted by our enemies?
THE MARQUESS OF LANSDOWNE: My Lords, I did my best to answer these questions in my original reply, and at this moment I cannot go further than assure the noble Lord that it is our hope that in the New Year we shall be able to make a further statement which will be satisfactory to the noble Lord.

SOCIETY IN SCOTLAND FOR PROPAGATING CHRISTIAN KNOWLEDGE ORDER CON FIRMATION BILL
Brought from the Commons; read 1ª, and (pursuant to the Private Legislation Procedure (Scotland) Act, 1936) deemed to have been read 2ª and reported from the Committee.

PROVINCIAL POLICE FORCES
2.42 p.m.
EARL WINTERTON EARL WINTERTON rose to call attention to the need for the appointment of a Committee to inquire whether the statutory control of certain local authorities over provincial police forces is being properly exercised, whether the powers of the Home Office Inspector of Constabulary need to be strengthened, and whether, in the interests of efficiency, it is desirable to amalgamate some of the smaller police forces with other larger forces; and to move for Papers. The noble Earl said: my Lords, I am setting myself a formidable task in compressing within the period that is properly considered suitable for a Motion of this kind all the difficult and intricate questions which are comprised in the subject matter of my Motion. I may not succeed in my task; I may succeed merely in boring your Lordships or confusing the issue, in which case I ask in advance to be excused. I should like to say what I do not propose to do: I do not wish to embarrass Her Majesty's Government, who are in a position of some difficulty with regard to the provincial police forces because of the system of control. I do not want to attack the most valuable system, which has now been in existence for more than 100 years, of police autonomy in the provinces. I want to make no strictures upon the provincial police forces as a whole. What I do want to do is to call attention to what I believe to be certain weaknesses in what I might call the fabric or structure of provincial police administration, and I think I have abundant reason for doing so.
There have been one or two disquieting events in the provincial police forces in recent years; and there have also been other questions, one of which was referred to by the noble Viscount the Leader of the Opposition in his speech on the Address. There has been singularly little discussion on these matters in the public Press, but there has been in a Sunday newspaper a valuable series of articles on the subject by a very competent journalist, Mr. Philpotts. I owe to him, and also to certain Members of another place and to others with whom I have been in touch, some of the information I propose to give to your Lordships. It is also, I think, advisable and reasonable that your Lordships'

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House should discuss this matter because, as former Members of another place in your Lordships' House will know, it is almost impossible under the rules of another place to have a discussion of the character for which this Motion provides.
My equipment for my task is not great. I was a magistrate in my younger days, and for a short time in the 'thirties I served at the Home Office as an assistant Minister, though, since I was mainly concerned with prison administration in preparation for the Criminal Justice Bill, did not have much to do with police administration. Nevertheless, I had a very interesting and valuable experience when I was a Regional Commissioner during the General Strike—I apologise for having to refer to unhappy events of far-off days, but it is necessary for the purpose of my argument. These Commissioners were entrusted with wide powers to ensure that the food supply of the country was safeguarded and that national services were carried on so far as possible. I had a very competent police adviser on my staff then—I will not mention his name, because it might embarrass him; I believe he is still alive, though he retired long ago. He told me, "You will find, Commissioner, when you go about the four counties which are within your district, that there is a very wide variation between the efficiency of the various police forces. Some of the smaller ones are not, in my opinion, efficient, and will probably not be able to cope with this very difficult and unique situation; some of the larger ones are as good as the Metropolitan Police."
He also told me: "You will also find other things. You will find that there is not the amount of liaison and of cooperation between some of these forces, especially between some of the smaller forces and the bigger ones, that is desirable. You will find that some of my brother chief constables will not much like seeing me going around with you, because I was originally a police constable promoted from the ranks to be chief constable, and most of the chief constables in the areas are ex-Army or ex-Naval officers." And he further added—and I hope that noble Lords opposite will not regard this as a reflection on their Party, for I am quoting what he said: "You will find in one or two police districts, where there is a strong
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Labour majority exercising influence over the watch committee, that they will be very hesitant to take the action that may be required to secure food supplies and to ensure that those who are carrying on the essential services of the country are properly protected." I found all those things to be true; and in one district, which I will not mention, I had considerable difficulty because, in my opinion, the police were not carrying out their duties with sufficient ardour, and there was there a strong Labour majority.
I should say that I have reason to fear, from the investigations which have been made, both by the journalist to whom I have referred, and by others, including honourable Members in another place, that those disadvantages to which I have referred, or some of them, are still extant. Let me refer first to the question of the big and small police districts—or, rather, to put it more accurately, the multiplicity of police areas. The criminal to-day is more mobile than he has ever been. What might he called the first-grade criminal, the really dangerous man who robs banks and gets off, unfortunately, only too often, with anything from £5,000 to £50,000, is usually exceedingly mobile. He either steals a car or has a car of his own, and his confederates have other cars which are at his disposal, so that he can flit from one police district to another. Noble Lords may say: "Does that really matter very much?" It matters, I think, in this way: that there is inevitably a delay if you get, as you sometimes do—for example, in Lancashire—three or four borough police forces whose areas are contiguous. There must, clearly, be a delay when the chief constable of one district has to communicate with the adjoining district to say that a dangerous criminal has just crossed their border in a car.
But that is not the end of the story. Investigations show that some of these smaller police forces are not fully equipped with the various modern inventions—such as radio cars, walkie-talkie apparatus, and other things—which are needed to catch, or to try to catch, the criminal. I should like to give one or two examples of what I mean. I am told that there is in Lancashire, in the county police force, one of the most efficient police forces not only in this country but in the world. I am told that

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in morale, in the prestige which it enjoys, and in the efficiency of its methods, it is equal to the Metropolitan Police. But there are in the same county a large number of small borough police forces which are not, of course, always up to the same standard. I imagine that it is true to say that the county police force is to some extent hampered in its work by the existence of these forces.
There are a great many anomalies brought about by the "set-up" (if I may use a vulgar term) of these county police forces. Take the case of the county in which I live, West Sussex. We have a large, growing population. We have along the sea coast, in my old constituency, Worthing, Shoreham, Lancing and Sompting—one continuous urban area, with a population of between 70,000 and 80,000 people. We have the New Town of Crawley, with some 45,000 to 55,000 people, and we have a very large agricultural area. We have one police force. I am perhaps biased by local patriotism, but I think it is a very efficient one. But if you go from Shoreham to Brighton, what do you find? The distance from Shoreham to the outskirts of Brighton is five miles, and in travelling that distance you pass through four police districts. In Shoreham you are in West Sussex. When you cross the boundary at Portslade, you are within the East Sussex Constabulary area. Then you come to Hove, where you are within the area of the Hove Constabulary, which is the force under the Watch Committee at Hove. Then, when you come to Brighton, you are under the Brighton police authority. In addition, there are a large number of other police forces in East Sussex. There seems to me to be an anomaly there. I would venture to urge the Government—although it is probably not necessary to do so, because they are working along those lines: and I hope and think that here no Party issue arises—to continue with their policy of persuasion, which it largely is (although I believe that they have, in the last resort, the use of compulsory powers) to see that there is an amalgamation of those forces which are too small to be efficient.
Now I come to the next matter, which is a delicate one and one on which the noble Lords opposite will probably not agree: that is, the relationship between chief constables and the authorities under
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whom they serve—the standing joint committees and watch committees. Frankly, I do not think that all is well there. There are two schools of opinion among investigators into the matter. One school of opinion says that the chief constable has too much power. No one—not even the Home Office—can order him to prosecute a person if he does not want to do so, or, on the other hand, can prevent him from making use of some old and possibly obsolete Act of Parliament to carry out a prosecution. The other school of opinion says that the boot is on the other foot and that watch committees have too much power: that some of them, at any rate, have a semblance of political views on the duties of the police, and, therefore, should not be allowed to be the authority (which I believe they are) for sanctioning promotions, because political patronage might creep in. This school of opinion goes on to say that if a chief constable does not work with a watch committee or standing joint committee the committee can make it difficult for him by refusing him money for necessary equipment, for new police stations, for new housing for police officers, and especially for equipment which he needs to catch the modern criminal.
My Lords, let me attempt to put for ward such evidence as there is—and it is not very conclusive—on these points. There was, I think, a very disturbing contrast last year between the attitude of certain provincial police forces and the attitude of the Metropolitan Police in respect of strikes. Your Lordships will recollect that last year there was a provincial bus strike which coincided with a strike at a certain London market. We read in the Press that during the provincial bus strike there were some very serious incidents. In one place a bus driver was struck on the chest with a crowbar, and in another the windows of a bus were broken. Women and children were in that bus, and the children, it was said, were taken screaming in terror from it. There were numerous incidents where damage was done to buses, and again and again there were reports that certain men who wished to carry on with their work (I suppose they might be described as "strike-breakers") were being prevented from doing so by howling mobs, who shouted and yelled at them and prevented them from getting into their places of work. I do not know whether the Press

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reports were accurate, although I presume they were. If so, then the police were not carrying out properly their duty of seeing that the law in regard to picketing as it is laid down was obeyed—that there must be only peaceful picketing. It cannot be peaceful picketing for a howling mob to use force and physical action to prevent people from getting into the place where they work.
Let me contrast that with what happened in London. In London, the particular market to which I have referred was kept open. The strikers endeavoured to prevent certain lorries from entering it, and the police prevented the strikers from doing so. They did not act with any degree of unnecessary force, and there was no complaint that they were in any way brutal. They arrested a few people for obstructing the police, or for assaulting them, and those people, very properly, were fined. In fact, the police carried out their duties. Noble Lords opposite will be quite entitled to say, "The noble Earl has no right to ascribe political pressure upon the provincial police force because of what he states happened in this provincial bus strike." That may be so. I do not know whether it is or not, and I merely call attention to tile matter because I think it should be called attention to.
Another point where no question of political pressure could. I think, come in, is what appears to me to be the striking contrast between what happened in Nottingham and what happened in Notting Hill during the so-called racial riots. In Nottingham, on the first day of the riot a number of people were grievously injured—I think seven or eight were taken to hospital. The police did not arrive until after this had occurred, which was not their fault because the whole thing arose suddenly. In consequence, no arrests were made. But according to the Press reports, for something like eighty minutes after the first incident when these persons were injured there was fighting in the street between coloured and white people, although the police were present in force. As your Lordships will remember the next day there was a recurrence of the rioting. Then some arrests were made.
The Chief Constable, in a statement which he issued, said that the police did not have to use their batons. He seemed to think that that was, if I may use a
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vulgarism, a "bull" point for the police, but I am not sure that it was. Some of your Lordships who belong to my generation will remember the religious riots that used to take place in the old days in Liverpool and Glasgow. When the Liverpool and Glasgow police were confronted with riots such as those with which the Nottingham police were confronted, they never hesitated to make a baton charge. Even if a few people did get broken, heads, it was better than that others should be seriously injured or the public peace endangered. Now let us contrast that with what happened in Notting Hill, where there was just as serious a riot but one which, I suggest, was dealt with far more efficiently by the Metropolitan Police than the other by the Nottingham Police. A number of people were arrested and the troubles came to an end. There may be an answer to this. I have brought it up, and no doubt publicity will be given to this debate; and the Chief Constable of Nottingham may have a perfectly satisfactory answer. I am talking only about what appears on the face of it.
I should mention (although it is a comparatively small matter, I think it has some bearing on the attitude of the police towards violence) something which occurred at Woking in the spring of this year. We were told in the Press of some fifty young soldiers who were apparently engaged in looking after the targets at Bisley and who, in the evening of a spring day held up a train, did considerable damage to the carriages, frightened a lot of passengers and caused a delay in the service—in fact, they disrupted the service. There was a strange statement in the Press to the effect that the Woking Police felt themselves unable to cope with the situation. That seems to me extraordinary. There is a large constabulary force in Surrey, and surely the Woking Police could have telephoned for reinforcements and either arrested these young soldiers or told them to behave themselves. Instead of that, according to Press reports they telephoned to Aldershot for the Military Police. The Military Police arrived and got hold of these fifty young soldiers. We were not told what happened to them—whether they were court martialled or whether they were brought up before their commanding officers.
I suggest that two serious issues, on what might seem to be a comparatively unimportant incident, arise there. In the

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first place, the Armed Forces of this country have not got any special privilege which prevents them from being dealt with by the civilian police. In fact, it is one of the bulwarks of our liberty that people in uniform have to obey the ordinary law like the rest of us. It was surely the duty of the civilian police to deal with this situation. The second point is that if these men did this damage and were presumably guilty of disorderly conduct, they should have been dealt with in an ordinary court, and not by the military authorities. I mention those things because I think they are relevant.
I come now to a much more difficult and delicate matter but one which I think needs ventilation. There have been at least two very disturbing incidents in the provincial police in the last year. The fact that they have occurred is no reflection on the provincial police force as a whole, and it is only fair to them to say that there have been in the past somewhat similar instances, though not of quite so grave a nature, in the Metropolitan Police. The first of these incidents occurred at Brighton. No doubt the noble Lord who is to reply will hesitate to confirm or otherwise what I am saying, but I was told quite properly—not through official, but through other channels—that the serious corruption in the Brighton police came to light only because the members of the C.I.D. investigated another case, that of Dr. Adams, and came across certain facts, or apparent facts, which made them suspicious of some of the senior members of the Brighton police force.
Now it would be a gross abuse of your Lordships' privilege if I were to suggest—which I do not for a moment—that the Chief Constable was guilty of the offences of which he was found not guilty. I am sure that the decision of the Court was right. But what was obvious was that he had not done his duty as Chief Constable. He should have known what was going on. There was also evidence to show that he was the friend and associate of crooks and criminals, and his answer that he had to do that for the purpose of finding out what they were doing seems insufficient. But here is the serious thing: this conduct had been going on for a long time. I should be the last person to want to attack the Brighton Corporation or its Watch Committee. I have a great
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liking for Brighton. I have been a friend to many of the former councillors, and it happens that two of the former Mayors of Brighton were comrades of mine in the Yeomanry. I have no reason to suppose that there was anything wrong with the Watch Committee except that they appeared to be wholly ignorant of what was going on under their noses.
One of the most astonishing things about this case was what happened at the disreputable night club which, your Lordships will remember, was known as the "Bucket of Blood." According to the evidence, which was not denied, there were nightly scenes of a most disgusting character at this place. People were carried out dead drunk and others were hit over the head and had to receive medical attention. I understand that this particular club is in a fairly prominent place in Brighton. There must have been dozens of people passing who heard what was going on. The police on patrol duty must have known, and yet apparently not a word of it reached the Watch Committee. I hope and believe that there is no real resemblance between the situation, but when I considered the matter I could not help remembering what some of my American friends have said to me. For example, when I was in America about six years ago on a lecture tour I would be told, "You will be very shocked. When you come to such and such a town on the surface everything is all right, but I am sorry to tell you there is an enormous amount of police corruption, and fellowship between the police and the gangsters." I would ask my friend why he did not do something about it, and the answer I usually received was something like this: "It really does not nay a respectable citizen in my occupation and position to interfere in these matters. It is dangerous. If you do you will either he framed by the 'cops' or 'thugged' by the gangsters. It is mach better to leave it alone." I do not know whether there is any real resemblance, but it is a serious matter that the behaviour at this club and this corruption should have gone on for several years.
There was another disturbing thing about the evidence at the trial. One man who gave evidence said (though he was a former criminal and may not have been speaking the truth) that one of the police officers, a man who I think is now in

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prison, had told him that he would put it all right by having a word with the clerk to the magistrates before his case came up. I do not know the clerk to the magistrates, and I have no reason to suppose that he is other than a respectable man; but after this evidence I was astonished that he did not immediately issue a statement to the effect that the evidence was not true and that he never discussed with the magistrates in advance what sentence should be given to a man about to be brought before them. I think that your Lordships, irrespective of Party, will be in agreement that nothing could be more improper than for the clerk to the magistrates to discuss in advance with the magistrates what sentence is going to be given.
I should have mentioned one other case which I thought disturbing—that is, the case of the former chief constable of Worcestershire, who is now in prison for having stolen money from a police fund. In his evidence, he said that he had really carried on the system which his predecessor, who was retired, had carried on in his day. The predecessor issued what was to me an extraordinary statement. He began by denying that he had done anything wrong, then went on to say that when he retired he had repaid to the police fund a sum of £500-odd, which was what he owed to it. What he meant by that obscure statement, I do not know.
I hope that there will be no more cases like those I have mentioned. Of one thing I am convinced—and here I hope that there will be no Party differences of opinion. Without in any way interfering with the autonomy of police authorities, there should be a strengthening of the constabulary inspectorate system. I understand that at the present time there are only a few inspectors, and that they are not provided with staff. If they had a trained staff of a few former C.I.D. men, Scotland Yard-trained detectives, they could, where they had reason to suppose that there was maladministration or corruption, of the type that occurred in Brighton, make their own individual inquiries, in the same way as Scotland Yard did in the case of Brighton. Your Lordships will remember that at the beginning of the investigations the Brighton police authorities and watch committee knew nothing about the presence of the members of the C.I.D. who
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were investigating the case. Therefore, I would submit that it is worth considering a strengthening of the inspectorate on the lines I have suggested.
My last point is this. I would call attention to a strange situation, one for which it is difficult to find a remedy. A friend of mine, an honourable Member of another place, happens to have a constituency which is partly in the Metropolitan Police Area and partly in that of a provincial (I use the generic term) police authority. If any of his constituents in the Metropolitan Police Area has any grievance against the police, or any police constable has any grievance against his superior, my friend has a perfect right to approach the Home Secretary, as noble Lords who like myself sat in another place will know. If not satisfied, he has a right to put down a Question in another place and raise the matter on the Adjournment, if he is fortunate in getting a place for an Adjournment Motion. But in the case of a constituent who lives in the provincial police area, none of these courses is open to him.
Under the Rules of another place, with which, of course, I must riot quarrel—no doubt they are right—a Member cannot ask a Question about the actions of a provincial police authority or about any grievance which any citizen or constable in that area may have. It is out of order. Not long ago my friend attempted to raise a certain matter, and the Home Secretary said that he had no responsibility for provincial police forces. No doubt that is true, in a sense, but he has some indirect responsibilty, because, as I have pointed out, he can bring pressure to bear on provincial police forces to amalgamate; he can refuse to allow the appointment of a chief constable, and he has his inspectorate system. If a person in a provincial police area feels aggrieved by any actions of the police, he can communicate with his representative on his local council, the county council or the borough council, but almost invariably he will be met with the reply that the matter has been referred to the chairman of the watch committee and the chief constable and that they find there is nothing in the complaint. That is all an aggrieved person can do. There is no publicity as there is when a grievance against the Metropolitan Police is brought up in Parliament.
This is the puzzle: How, whilst retaining the proper authority and automony of provincial police authorities, whether standing joint committee or watch committee, can the public be given more rights than they have at the moment to query the action of these authorities. An ingenious plan, which I put forward to your Lordships but do not necessarily commend, of how to get over this difficulty has been suggested to me by a person who has given great attention to this subject. He proposes that there should be an area council, to be called the Police Authority Council, or whatever one likes to call it, composed of representatives of the standing joint committees and watch committees in the particular area—it might be that of a county or two counties. In addition, there would be independent members, preferably Queen's Counsel. That body would be empowered to hear the following complaints: a complaint by a chief constable against the watch committee that his duties had been improperly interfered with by that committee; a complaint by a watch committee against the chief constable that he had failed to carry out his duties properly, though he had kept within the law, and that he was non-co-operative; a complaint by a member of the public alleging some fault of omission or commission by the police force in the district in which he lived; and lastly, a complaint by a police constable that he had not been properly treated.
I ought to have said earlier in my speech that in some of the smaller police forces there is evidence of serious feeling of dissatisfaction at the system of promotion. It will be appreciated by your Lordships that in a small police force the chances of becoming a sergeant, and a fortiori a superintendent, are very thin; and it is alleged that promotion invariably goes by seniority. The decision of this proposed new body, which I have put forward because it was suggested to me for consideration, would be final, subject only to this: that the aggrieved party to any dispute—that is to say, the person or body against whom the decision of the authority went—would have the right to appeal to the Home Secretary, whose decision would be binding. Then, and only then, would it be possible to challenge the matter either in your Lordships' House or in another place,
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because the Home Secretary would have been brought directly into the matter. So the plan would not mean (and this, I think, is its merit) that there would be undue interference with the autonomy of local authorities, yet it would give to aggrieved persons the opportunity which they do not possess to-day.
My Lords, I want to end on this note. There has been, I hope, nothing in my speech to give the impression that the provincial police forces are not, as a whole, sound. We still have, as I am sure all your Lordships will agree, the fairest and most honest police force in the world—and, I think, a most efficient one. But to repeat what I said at the beginning of my speech, I believe that the fabric of its administration needs to be repaired and brought up to date. We pride ourselves in this country, I think rightly, despite what some of our enemies say, in being modern and up to date; we deny that, because we have got such a long history, we are necessarily wedded to things of the past. And that is true, of course. But in a country like ours there is a danger that a particular institution which has rightly earned the praise of its fellow-countrymen and countrywomen, as the British police force has done, may be regarded as sacrosanct, so that there should be no change in its formation or in the way it is controlled. That, I think, would be a bad thing for the police, and it is for that reason that I have brought forward my Motion. I hope that it is not improper for me to say that I greatly appreciate the excellent attendance which we have in your Lordships' House and the manner in which your Lordships have listened to my points of view. I have tried to avoid being unduly controversial. I beg to move for Papers.
3.26 p.m.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I am sure the whole House must feel grateful to the noble Earl, Lord Winterton, for having put this Motion on the Paper. I would say this to him, as a very old friend and one who was far senior to me in the other place, where he became the Father of the House. He has quite stolen a march on me, probably unwittingly, in that, although I raised the matter on the gracious Speech, he has managed to get in first with his Motion. I would also say

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that I have rarely heard him to better advantage, from the point of view of reciting, extempore, in a great deal of detail, but without being too long, what was in his mind, and covering such a wide field on matters which are delicate and, whatever he may say, and whatever his endeavour has been not to be controversial, which must in themselves remain controversial.
I would start off by saying a word or two about almost the last sentences of his speech. I looked round at the Liberal Benches and wondered whether we should have the advantage to-day of the attendance of that great veteran and very well-informed Member of your Lordships' House on all matters connected with the Home Office, the noble Viscount, Lord Samuel, because one remembers that in 1937, in dealing with the subject of the police, he said:
"The police are one of our British institutions in which as a nation we take most pride, and on the whole"—
and I think this puts the noble Viscount in line with the noble Earl, Lord Winterton—
"we can claim that our police force yields to none and is, we believe, superior to all in efficiency and in what is the first condition of efficiency, honesty."
I think that is a great claim and, on the whole, it is exemplified day to day by almost the complete forces in the country. There are certain exceptions which break out, but one of the great tributes to British justice is that, sooner or later, if there is anything going wrong, somehow or other, British justice gets hold of it; and if it comes up against somebody who is in authority in these matters, the courts of our land are as severe as is required by the circumstances in their dealing with the matter. On the other hand, there is no doubt that the events of the last few years, not at all unconnected with a point to which the noble Earl. Lord Winterton, referred, the increasing mobility of the criminal and the improvement of his various accoutrements, spreading the range of them, at any rate, have made it much more difficult, under the organisation of the police forces as they exist to-day, for the police to get on the track of the criminal quickly enough—in all cases, that is: they are quick enough in some cases—to be effective.
I have been interested in the police force since I was a boy in a working-class
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home, because an uncle of mine was at that time a deputy chief constable of Bristol. That is a long time ago. I had another uncle who was much less exalted—he was an ordinary constable in the Bristol police force. I have a nephew who is at present an ordinary member of the criminal investigation department of a provincial force. I have always been intensely interested in their work, and I do not suppose that in all my travelling round the world—I have been round the world at least twice, and have visited a great many countries—I have ever experienced such courtesy and helpfulness from police forces as one experiences in one's own country.
Nevertheless all through my life I have from time to time seen a recognition of the need for change. Anybody from the West Country, for example, will remember that although there were at one time separate police forces, chief constables and watch committees in boroughs with a lower population than 10,000, they have long since been absorbed in their county forces. Certainly that was the case in the counties of Somerset and of Devonshire, and I believe that efficiency has greatly improved through adopting one or two of the points that were so notably made by the noble Earl. I should say that what he has said to-day with regard to a far better integration of the modern equipment of police forces, the modern training of police forces resulting in quickness of action after the criminal, really supports to the hilt the general case he makes for an inquiry to be held.
I have not been able to consult every member of my Party, but I am quite sure that, on the basis of getting a clarification of the position and having a general inquiry into the needs of the moment, in our country, the whole of the Opposition would be greatly in favour if the Government would agree to set up an inquiry into the best steps to be taken to improve the general administration and the general efficiency of the police; and, if necessary, arising front those two things, to secure proper integration of the varied police forces in the country. In view of the nature of the noble Earl's statements about cases which have given rise to great interest in the country, such as those of Brighton and Worcester—although these two cases are not alone—I do not propose to say anything further about them. We know that they have been recorded in the

19
Press, and of course a great deal of the information that the noble Lord has proffered to the House this afternoon has had to be absorbed by him in his thinking either from what he has read in the Press, which is never really full, or by word of mouth, which varies—sometimes it is reliable, and at other times it may not be quite so reliable. All he has been able to do is to make his own judgment on what was available to him.
If one were to expect the Government to act merely upon that kind of thing it would be unreasonable. I think it absolutely essential to remember that the real point of the noble Earl's Motion is that there is an urgent case for an inquiry to be made. He was most courteous to the Opposition with regard to some of his controversial points—for example, with regard to what could happen in a general strike in the case of a particular local authority having a Labour majority; or what could happen to food supplies and the like. I would only say that I should think that to-day the police have no less loyal support in their general task of keeping the peace and securing justice through the country, which has now such a large number of local authorities with Labour majorities, than they have ever had at any time in their history. Nor if I delved into history, would it be difficult to find cases of corruption, even in the higher ranges of the constabulary, in cases where there was no Labour majority. I have not learned that there was a Labour majority, for example, in the Councils of either Worcester or of Brighton.
The noble Lord has been perfectly fair in his use of instances from which to quote. I would say, however, as a member of the Government all the way through the war, from 1940 onwards, that I do not think I came across a single case—there may have been some; I would not say there were not—where effective action had to be taken with regard to favouritism by this, that or the other political member of any Party in a local authority, with regard to food supplies and the like. I do not remember any; therefore, I put that point on one side altogether. But on the noble Earl's point with regard to the possible influence of watch committee members in general—if you take them in general and not from a Party point of view—in appointments,
20
in promotions and matters of that kind I agree that there might well be examples that could be dug out by a real inquiry which would lead the Government perhaps to consider that some change might be required in the system.
I gather that in many places, although the watch committee have, of course, full right to appoint constables of any kind, and, I think, are subject to correction by Home Office representation or by the noble and learned Viscount on the Woolsack only in the case of the appointment of a chief constable, nevertheless the promotions, apart from the promotion at the very top, are usually made by the chief constable. I am told that it is often felt that these promotions are not sufficiently vetted by the local police authority. It seems to me that we might find, in order to prevent any particular favouritism by any individual political pressure, that we need some method of ensuring that the watch committee or standing joint committee members all have full information about all possible candidates for promotion, and on what grounds they are supposed to have been promoted. I think that the case on that point would again lead me to support the idea of a general inquiry.
But the other point that again and again comes before me from conversations that I have had in the matter is that there is perhaps even more need for an inquiry, so that one would know how best to act whatever Government was in power, into what is the general function of each member of the watch committee, or of the standing joint committee. What can they do as individuals while working as a team in their meetings and in arriving at their decisions, to prevent the outstanding cases here and there where matters go wrong? That seems to be the feeling among members of watch committees and standing joint committees. They feel that they have practically no power to bring any pressure to bear at the right time and in the right place. One can so easily get into dangerous legal positions by expressing in some cases even a suspicion.
I very much doubt whether I could give general approval to the noble Earl's suggestion of some kind of Appeal Board arrangement, with an area council, Queen's counsel and all that set-up, to inquire into almost any matter. I could

21
not do so without a great deal more consideration, and certainly I should not like to consider it in detail unless there had been an inquiry of the kind which is being sought by the noble Earl in the Motion before your Lordships' House. But some of the cases which have been brought to the notice of the public were of such character that if a member of a watch committee or standing joint committee had any real inkling of the position and there was no opportunity for him to act locally, he should surely, especially as a magistrate, have the right to communicate with the Government. I should have thought that something of that kind could be done.
At any rate, the general position seems to be, as I dared to say in speaking to your Lordships on the Address in reply to the gracious Speech, that the functions of the members of these bodies are placed at too low a level, and that these people ought to have greater individual responsibility in their conception of the local or national administration of justice. The other point is how far it is desirable that members of these bodies should be wholly or only partially members of the magistrates' bench. The watch committee of a borough or city would in some cases, I dare say, strongly object to the idea that every member of a watch committee must be a magistrate. I cannot quite recollect whether, in my experience, all the members of our standing joint committee in Somerset a long time ago were magistrates, but certainly some of them were exceedingly experienced and, although they were not practising lawyers, were quite capable of taking the chair very effectively at, say, quarter sessions.
It seems to me that if there is not a prima facie case for having more magistrates upon these bodies there at least ought to be some way in which we can get better co-operation between the considered views of magistrates' councils, advisory committees, or whatever they may be called, and those who actually deal with the administration of the police forces in the county and borough areas. I should very much like that to come before whatever form of inquiry Her Majesty's Government may see fit to set up—and which I hope they will see fit to set up.
I could say a great deal more, but I do not think it is really necessary to deal with any other point except the question
22
of inspection and whether, in some cases, the powers of a chief constable need to be increased, as I had rather gathered was the view of the noble Earl. In many places that would certainly be a very controversial subject. I should certainly have thought that in view of the fact that the State makes, I believe, a 50 per cent. grant towards the maintenance of every local police force, there ought to be a system of check and inspection which surely could not be confined to one of the members of the Home Office Inspectorate of Constabulary. I believe that comprises one woman and three or four men, and they have a great many police forces with which to deal. One can easily imagine that the inspection may consist of nice talk, plus perhaps a parade of such constables as may be available to be paraded on the day in question, so that what takes place is pretty cursory, having little to do with a check on the system of administration that is operating and what preventives are included in that administration against anything going wrong with the police forces themselves. From that point of view, whilst I cannot say that I would accept what the noble Earl has said about the increased powers of the constabulary or the inspectorate, I believe that by what he has had to say about it he has made out a very strong case again in favour of an inquiry. I hope, therefore, that in the rest of the debate, as it goes forward, some of the points with which I have not dealt as widely as the noble Earl but which have been put very fully before your Lordships will have further light thrown upon them. If it were possible I should like to have a unanimous vote of your Lordships' House in favour of the general principle in the Motion, that there should be an inquiry into the whole business.
3.47 p.m.
LORD MILNER OF LEEDS: My Lords, I regret that owing to the late arrival of my train I was able to hear only a portion of the noble Earl's speech. I hope he will not think it impertinent of me, as an old friend, if I say how pleased I was, as I am sure were many other of his friends, to know that, notwithstanding his indisposition from time to time and the difficulties under which he has suffered in that direction, he has still preserved in very large degree his old form

23
and many of those characteristics which for so long earned him the respect and indeed the affection of Members of another place.
The matters raised by the noble Earl are important and very much in the public mind at the present time, and I am sure that your Lordships' House is grateful to the noble Earl for raising them. I have had some experience in these matters, though it was some time ago on a local authority and, of course, also in my professional capacity, and I venture to submit to your Lordships a few observations on the noble Earl's Motion. The first question raised by the Motion is as to the effectiveness of the statutory control which standing joint committees or watch committees, as the case may be, exercise over a police force. It was said by one of Her Majesty's Inspectors in evidence before the Select Committee on Estimates of another place a little time ago, that he had found that watch committees (and he probably included standing joint committees) were doing their job extremely well; and I have no doubt that in the great majority of cases that is true.
However, I also have the feeling which I believe most of your Lordships must have and which has been reinforced by what has been said by the noble Earl and by my noble Leader, Lord Alexander of Hillsborough, that there are cases where the police authority is a mere "rubber stamp", approving the action or recommendation of the chief constable as a matter of course and without very much inquiry—perhaps without any in some cases—into the details of what is being done or recommended. If that was not the case—I do not want to go into details—it is difficult to see how some of the recent happenings to which the noble Lord has referred could have taken place.
I think one should be clear that the local police authorities have no control over the actual enforcement of the law. I need not tell your Lordships that that is a long-standing constitutional principle in order to ensure the independence of the police and the absence of all pressure from any quarter. The chief constable being the authority in regard to the enforcement of the law, the standing joint committee or the watch committee, as the case may be. have no power in those
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matters. That is obviously a very important principle and a safeguard against the creation of a Police State; and it should, of course, be retained in full force.
Watch committees are, however, responsible under police regulations and the Police Act for the establishment and organisation of the police and for promotions and appointments. They have power to suspend or dismiss any constable or to dismiss or suspend a chief constable with, in the latter case, the approval of the Home Office. They must, therefore, be presumed to have full powers of inquiry. I venture to doubt whether all watch committees, or police authorities, as I shall call them, fully appreciate or exercise those powers. There is a good deal of complacency and conservatism (in the non-political sense) among some of them, which the inquiry which has been suggested would probably disclose. The ideal is, I would submit, partnership among the police authority, the standing joint committee or watch committee, and the executive official, the chief constable. Perhaps a suitable analogy is that of a board of directors and the managing director, where the managing director makes proposals or recommendations which are gone into in detail by the board of directors and are approved or disapproved, as the case may be. If I may refer to it, in my own city of Leeds there is such a relationship, and I know that there the watch committee take a very close and personal interest in all those organisational details.
I was a little surprised to hear my noble friend Lord Alexander of Hillsborough imply—he is very probably right—that some watch committees appear to think they have no power to go into those details. Undoubtedly they have the power and should exercise that power to go, item by item, through recommendations as to appointments, promotions and so on, to find the reasons for them and to ensure that there is no favouritism and that merit counts. If that is not being done, that is one of the matters which, again, an inquiry would disclose and. one hopes, put right in the future.
One essential in a well-conducted police force is a frequent review of all the details of area or territorial organisation. In these days in particular, populations and their distribution change in some cases

25
almost year by year. Slum clearance results, of course, in the movement of large sections of the population from one part of a city to another; boundaries of cities and councils alter; and frequently questions of right distribution or better distribution or more efficient distribution of the police force arise. All those require constant review, and I very much doubt whether they are constantly reviewed to the extent that is necessary in some police forces. I would remind your Lordships that the cost of a constable nowadays is over £1,000 a year, if one takes into account his pension rights and so forth—a very expensive item. It is possible, as I know from my own experience, that even where areas or cities have increased in size, as in Leeds, a mere increase in the police force is not necessarily the right solution. Undoubtedly a great deal of economy can be exercised by the employment in appropriate cases, for non-police duties or duties which are not strictly those of policemen, of civilian clerical staff, who, of course, would not cost the authority or the taxpayer or the ratepayer, as the case may be, the amount required for police constables. No doubt all nose propositions are common form in many places, but bow far are they carried out in all?
This brings me to the second point raised by the noble Earl's Motion; that is, the position of Her Majesty's inspectors. There were, I believe, four and there are now five of those inspectors to cover the whole country. They are under a statutory obligation to make at least one visit a year to every police force. Although it is true that they make, I believe, other occasional visits, their main visit as inspectors is made at a pre-indicated time and date of which ample notice is given. I need not tell your Lordships, most of whom at one time or another have served in the Armed Forces, what happens when one has an indication that an inspecting officer is coming round a week next Thursday, or whatever the day may be, at twelve noon. There is a great deal of furbishing up and spit and polish "and that sort of thing; and that must take place in those circumstances in our police forces. That seems to me quite wrong arid quite inadequate. One day's inspection is not sufficient in which to make the detailed inspection and inquiry that should really he necessary. Had there
26
been a more thoroughgoing system of inspection, some of those recent happenings to which the noble Earl has referred would possibly not have taken place. I am not suggesting that inspectors should go in for snooping or anything of that sort, but they should go in for a more detailed and thoroughgoing inquiry than they do at present; and that, I think cannot be disputed. I suggest that, whilst no doubt there are ample powers set out in the regulations and the number of inspectors is insufficient, the visits should on occasion be without notice and should be of a more detailed and thoroughgoing character.
In this matter of inspectors another question arises, and to this I should like to have an answer from the noble Lord, Lord Chesham. I understand that Her Majesty's Inspectors of the Constabulary make a report to the Home Office, but no copy of that report is sent either to the standing joint committee or the watch committee or to the chief constable. If that is the case—and I am sure that the noble Lord will correct me if I am wrong—surely those reports are quite useless. Surely the contents should be known to the local police authority and to the chief constable. If that is not the case, I shall be glad to know why that is not done. I may say that there is a tendency, it is thought in some quarters, for the Home Office to assume too much authority, and I submit that nothing should be done to diminish the sense of responsibility of the local authority in matters of the administration of the police force. For that reason, if for no other, the local authorities should be given full information as to the findings of Her Majesty's inspectors.
Then on the third question raised by the noble Earl as to amalgamation, I would point out that the Select Committee on Estimates had that matter also before them and they came to the conclusion that there were small police forces which might well be joined up together or be joined up to a larger force. That was a view which was presumably expressed by the Select Committee on Estimates on financial grounds in the main. I am not aware that any evidence was adduced to support the contention that efficiency has any relation to size. I have, however, no doubt that there is scope for inquiry on the point, as in

27
these days much must depend on technical equipment and it is presumably not possible for the smaller forces to have all the technical equipment which is required.
Finally, on the subject of an inquiry, I may say that there is a strong body of opinion, amongst whom the Association of Municipal Corporations is included, that there is nothing wrong with the individual police officer or man or with the powers which the local authorities have. There is, however, strong doubt whether those powers are sufficiently and efficiently exercised in all cases. There is certainly room for improvement in the matter of inspection and, I think, for a general "shake-up" in some cases of the administration of police authorities. For these reasons I am of the opinion that an appropriate inquiry would be valuable, and I hope that the Government will see fit to set up such an inquiry.
4.0 p.m.
LORD BURDEN: My Lords, notwithstanding the most interesting speech of the noble Earl, to which my noble Leader, Lord Alexander of Hillsborough, has paid tribute, I venture to think that the terms of the Motion which the noble Earl has moved—and that is what we have to consider—challenge the principles which have governed the organisation of the police since Sir Robert Peel's Act of 1829—that is, for nearly 130 years. These principles are simple, they have stood the test of time, and they have given this country and Scotland a police force unique in character. The first principle is that, with the exception of the Metropolitan Police in London, the police are not servants of the Crown; that is to say, of the Government of the day. In point of fact, if an official of the Government attempted to do something illegal he would be restrained by the police. Secondly, a policeman must not exceed his lawful authority, such as to search a house without a warrant. Thirdly, the police forces are administered not from Whitehall but by their respective local authorities. The police force in many cities and boroughs are highly esteemed. For example, I happen to know from my own experience that the city police in Sheffield are a matter of civic pride.
This organisation of the police forces in this country received a striking com-
28
mendation in the Desborough Report of 1919. It said:
"The adoption of direct central control of the police would be foreign to the constitutional principle to which we have referred in para. 6, by which the preservation of law and order in this country is primarily the function of the proper local authorities. It would alter the whole basis of the police system, and in particular would prejudice the intimate relations between the police and the localities where they serve which many experienced witnesses have regarded as one of the most desirable characteristics of the present system, and to which they attribute in great measure the happy relations which have existed between the police and the general public in this country."
I am, of course, aware that a number of tiny police forces were amalgamated by the Police Act, 1946. I seem to recollect that I was chairman of the Standing Committee which dealt with that Bill in another place. If I charge my memory, I believe I am right in saying that there were some seven police forces with an establishment of twenty-five and under (and three of them were county constabularies), and one, I think, had a force of ten. No one can contend, I think, that a police force of fewer than fifty could hope to give all the services necessary to-day.
EARL WINTERTON: My Lords, I wonder whether the noble Lord would allow me to interrupt for a moment. He made a reference to me in which he said that I have challenged the principle of the original Police Act. I have been waiting to hear in what respect I challenge it. I made it clear again and again that I did not attack local police autonomy: I merely wish to make it more effective. Perhaps he would be good enough to tell your Lordships in what respect I have challenged that principle.
LORD BURDEN: I readily accept that the noble Earl has made no attack at all on the principle of the original Police Act. In fact, I referred to his speech as a most interesting one—but I have gone back to the terms of his Motion. That is what I am considering now, and not the most interesting speech of the noble Earl.
But even that Act of 1946 prescribed a limit to the size of a police force which could be merged, and also provided other adequate safeguards (and this is the point I really wish to make to the noble

29
Earl) against the development of a regional or national police force. I believe there are some 132 separate police forces in England and Wales and forty-five in Scotland, varying in size from the Metropolitan Police, with an establishment of about 20,000, to forces of about seventy. I say immediately that I agree with the noble Earl that there is no magic in the figure of fifty as against seventy, or anything of that kind, and I would not quarrel with what my noble Leader has said as to an inquiry; but it is the terms of the Motion which I feel are somewhat dangerous.
These police forces fall within three categories: the city and borough police, the county constabularies, and the Metropolitan Police. Here we come to a point which was made by the noble Earl. The supervision of these forces other than the Metropolitan Police is exercised by four senior, experienced police officers and one woman inspector who of course deals mainly with the women. The duty of these officers is to see that the local forces are properly run, and any serious irregularity would be reported to Whitehall. But their advice and their wide experience is of great assistance to, and is readily welcomed by, the local officers. As this number of inspectors divides into about 200, it means that, if necessary, they could spend a week with each force, leaving on one side time for holidays. Whether that is sufficient or not is a matter for debate.
Then I come to another important factor. The Home Secretary makes regulations to cover government, material aid, pay, allowances, pensions, clothing, expenses and conditions of service of all police forces. As has already been pointed out, the approval of the Home Secretary is required for appointment to the post of chief constable, and it may be recalled that in 1947 the Home Secretary refused to approve the appointment of a chief constable by an important county borough—I believe a borough with a Labour majority. Ultimately the council had to give way when the Home Secretary threatened to withhold the police grant. I am not sure—I cannot tax my memory on this point—whether it would be possible for him to withhold the police grant under the block grant system. That would require looking into, but I dare say that there would be other
30
ways and means of dealing with the situation financially.
As noble Lords are aware, cities and boroughs administer the police forces through their watch committees, and counties act through their standing joint committees, on which the justices of the peace are represented. The police authorities of both counties and boroughs are organised, the county authorities by the police committee of the County Councils Association and the watch committees by the Association of Municipal Corporations. Here may I suggest to the noble Earl that these committees, meeting regularly to deal with day-to-clay problems of the police forces, and having at their command the service of the most experienced people in the police forces in the country, have always available a wide knowledge and experience, whenever the Home Office wishes to consult them. That is why I feel that the terms of the noble Earl's Motion today are too wide, though I am sure that a proposal to have an inquiry after prior consultation with the bodies I have mentioned would receive the support of both sides of your Lordships' House.
I have just one further word, and I venture to quote from a book entitled Crime and the Police, which was published a few years ago, with a Foreword by Mr. R. M. Howe, C.V.O., M.C., Assistant Commissioner, New Scotland Yard. This is what the book says.
"If the powers of local authorities were slowly whittled away, if, for apparently excellent administrative reasons, a large number of police forces were merged together under single control, if the police were gradually to become servants of the Government rather than protectors of their fellow citizens, if the police became a 'national' rather than a 'local' institution, then it would indeed be possible for Britain to be turned into a Police State.
The traditions of the British police forces are exceptionally strong and almost every policeman in the country is aware and proud of his civilian status. If there is any danger, it is not from the police but from politicians who, either from ignorance or from malice aforethought, might one day try to tidy up the apparent muddle of the many forces and the many organisations."
It is because the terms of the Motion, notwithstanding what the noble Earl said in his admirable speech, seem to point us to that perilous path, that I hope the Motion will not commend itself to your Lordships.
4.16 p.m.
LORD PAKENHAM: My Lords, in the absence of the noble Viscount, my revered Leader, I feel to some extent inhibited, as I should like to get a ruling about the Party line, following the closing remarks of my very dear friend Lord Burden. If your Lordships will allow me to say so, pending any reconsideration of policy on this side I would follow the general line adopted by my revered leader, and I hope that I shall not be out of order in so doing. My noble Leader made a strong submission that an inquiry of the kind suggested by the noble Earl, Lord Winterton, was highly desirable and should be embarked upon without further delay; and that is my own attitude to the matter.
I should like to pay my tribute to the noble Earl and to all those who have supported him. After listening to the noble Earl, I feel that it may be we should all benefit by being compelled to speak without notes. I am not sure what the result would be like. We have not all the noble Earl's excellent gift of thinking on his feet, though, of course, my noble friend Lord Stansgate does it, and no doubt we could all learn in time. But I think that we should all wish to congratulate the noble Earl on a remarkable Parliamentary performance. I agree with him that attendance to-day has been satisfactory, considering that it is a Monday. The number of speakers has been rather small, and drawn mainly from one side of the House. I do not know whether one should read anything into that—maybe the subject was too difficult for noble Lords opposite. I do not altogether blame them, because discussing the police is rather like walking in a dark room with bare feet with pieces of glass scattered about the floor. It is hardly possible to lay down a general proposition about how the police are organised without making a slip, and still harder to recommend, here and now, a desirable change.
If I am supporting an inquiry, it is because I think that the whole position should be immensely clarified. I am bound to say, with great respect, that I disagree with my old friend Lord Burden, because I think the argument that it is a sign of malice or ignorance to try to clear up the apparent muddle is one that would be more often found in the police officer than in a statesman; and perhaps it is not a surprising one to come from
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a most able detective. This is a difficult subject. So far as one can judge, we have the finest police force in the world; but as I have said, it is not easy to judge. Once I said the same thing about our Civil Service, and the noble Viscount, Lord Samuel, asked how I knew; and, of course, it is impossible to prove such a statement. But I think that we all realise that we have a force, by and large, to be proud of.
In the most recent book on the subject that has come my way, by Mr. Charles Reith, we find this considered estimate:
"the truth is that in our desire and efforts to avoid having a national police force under central administrative, and possibly individual ministerial, control. we have allowed police organisation and administration to degenerate into a confusion of muddled authority which is creating dangers for us no less menacing than any that in the course of a century we have been at pains to avoid."
The police themselves apparently, to judge from what the noble Lord, Lord Burden, said, recognise that there is a state of apparent muddle. The only question is whether it is apparent or actual; and there are some in this House, at any rate, who feel that that question should be cleared up by an inquiry.
I do not think that anyone has come to the House to-day to recommend the abolition of what I might call the whole provincial system—to recommend, in fact, a nationalised police force. But I do not think the fact that we are going to stick to the main lines of the system should prohibit us from saying whether or not that system is perfect. In addition to the ordinary problem of central versus local control, that desire to draw as much of local interest as one can into the matter, and at the same time to secure central co-ordination (and that side of it has been well stressed in earlier speeches), one has another difficult problem. One does not want to give any one Minister the right to call himself Minister of Police, for fear that the police would become militarised, and at the same time one is nervous of allowing any body of local politicians to interfere with a function that in some cases has a strongly legal character. The result of that in my opinion is that the chief constable is, in effect, responsible to nobody. At any rate, his allegiance is far less clear than that of any other important official in our constitutional system.

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Take the position of the chief constable. The noble Lord, Lord Burden, said that police officers are not servants of the Crown. Yet in fact it is a rather doubtful point whether the chief constable (and I am speaking of the chief constable in the provinces) would or would not be rightly called a servant of the Crown; and if so, in what sense? If one looks at the evidence given to the Select Committee, which the noble Lord, Lord Milner of Leeds, mentioned earlier, in his most effective speech, one finds that those who gave evidence on behalf of the Association of Municipal Corporations were disturbed about the difficulty of saying whether the chief constable was or was not a servant of the Crown.
Alderman Hoye, who gave evidence on behalf of the Association said:
"I am one of those people who say that the chief constable is as much the servant of the local authority as he is the servant of the Crown."
He was trying to stake a claim for a local authority having at least a half-share in the police constable, while leaving the other half to the Crown. Another gentleman who gave evidence on behalf of the Association of Municipal Corporations had this story to tell. He said:
"Some time ago I had experience of a then chief constable who, on the strength of his view of the Fisher v. Oldham judgment declined to attend meetings of chief officers"—
that meant meetings of other local government officers—
"which were held regularly in an attempt to bring about co-ordination, on the ground that he was not a chief officer of the corporation but an officer of the Crown."
This chief constable took the view that he was an officer of the Crown. The gentleman who was giving evidence was asked by the Select Committee:
"Did he get away with that?",
and the answer was:
"Yes, he just did not come."—
that is to say, he did not go to these meetings.
At the risk of being autobiographical, I cannot help recalling that over twenty years ago I was involved in a fracas in a certain town which shall be nameless, and following on it complaints were made against the police. I discussed the matter with the chief constable who was a friend of mine, and I remember his telling me that he regarded himself as a servant of the Crown. I was sure of that, but my
34
recollection is fortified by the evidence given before the Select Committee when a chief constable is quoted as having said he was a servant of the Crown. That being so, one or two of us went to see the then Home Secretary, Sir John Simon (as he then was). We had a most agreeable interview, but we got no change out of him. The ball was passed back to the watch committee and we got no change out of them. I am not saying whether we were right or wrong, but I formed a strong opinion then that a chief constable had a privileged position in the British Constitution and I do not think that has altered in the years. I feel that one of the most important things to be cleared up by an inquiry is how a chief constable stands at the present time. But that purely constitutional issue is perhaps academic and less important in one sense, and what we really want is to bring him under the right sort of control. I hope that this inquiry would make recommendations to the Government and that a much more satisfactory position would ensue.
I would make one other point before drawing to a close. Whatever the difficulties, ambiguities and uncertainties of the general constitutional position touching the police, I think we must all feel that the position of the inspectorate should be greatly strengthened without delay. The noble Earl, Lord Winterton, explained that and was followed by the noble Lord, Lord Milner of Leeds. Like the noble Lord, Lord Milner of Leeds, I have been studying the evidence given before the Select Committee, and the facts are, as has been explained to the House, that there are four inspectors who have to cover the country, and one woman assistant inspector. They are assisted by two staff officers. It is their duty to report to the Home Secretary on the efficiency of the various police forces with the exception of the Metropolitan Police. On the face of it, that task is fantastic. I think we must all feel that the position has been allowed to continue too long.
The Select Committee it seems to me, were rather dominated by a desire for economy and perhaps did not take the widest possible view of this matter. But even this economy-minded Committee recommended that a Chief Inspector of Constabulary be appointed. The Government, in their observations on the Report

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of the Select Committee, published on July 30 of this year, made this comment:
"The Secretary of State has considered this recommendation, and while he has not felt able to propose the appointment of a Chief Inspector of Constabulary he is considering other measures for strengthening the Inspectorate."
I hope that the noble Lord, Lord Chesham, will be able to tell us that other measures will now be put into force. I hope, too, that they will be large measures, because to trifle with the subject at this stage would, I think (though it would not be the fault of the noble Lord, Lord Chesham), earn the censure of all who have listened to or taken part in this debate. I support my noble Leader when he says that the noble Earl, Lord Winterton, made out a powerful and, indeed, an overwhelming case for an inquiry, and I hope that the Government, through the noble Lord, Lord Chesham, who I am glad is going to reply—he is always very courteous—will tell us that they will increase the Inspectorate forthwith and that they are ready to accept this inquiry.
4.29 p.m.
LORD CHESHAM: My Lords, by a happy coincidence I am able to start with a somewhat similar approach to the noble Earl who so ably opened this debate to-day, in the course of which he told us that he was a justice of the peace in the 'twenties until he had to retire and was for a short time assistant Minister at the Home Office. I, too, was a J.P. until I had to retire, and if I am not exactly a Minister at the Home Office, at least I am engaged in acquiring some experience of that position. If, by purely fortuitous date of birth, my experience as a justice of the peace is a little more recent than that of the noble Earl, that leaves him, I think, in the advantageous position that he has had the opportunity to learn wisdom, while I can only hope that perhaps it may come to me quite soon. His Motion has enabled us to have a most interesting debate. It has been welcomed by more than one of your Lordships, and I should like to add my voice to theirs. It is welcome because we have had a chance of discussing some of these important problems of police administration. They do not lack importance because they are not always easily understood by those with experience in public affairs. It is all the more useful that we should have a
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debate in order to make these matters clearer to the public and perhaps, if I may venture to say so, even to some of your Lordships.
The noble Earl raised a goodly number of questions in his speech, and some in considerable detail. I feel he would not expect me to follow him at this stage or, indeed, perhaps at any other, into all the details of all the points which he raised, because he raised a number of general matters which were of great public interest upon which I should like to concentrate and deal with as best I can. They alone will perhaps take more than enough of the time of the House. Before I begin I should like to make a brief and passing reference to two points of detail which the noble Earl made. They refer to the incident at Woking station. I mention this in passing only because I know that he would be the last person who would wish to give any misleading impression to your Lordships, and I feel it justifiable to say this. In regard to that particular incident of the soldiers in the train at Woking, the military police were not sent for by the civilian police because they could not cope; they were summoned by the railway authorities at the same time as they summoned the civil police. The train was held up principally while they turned all the offenders out on to the platform and got rid of them.
With regard to Nottingham, the suggestion that it was eighty minutes before the police took any action does not seem to me to be completely right to reflect credit where credit is due, because the information I have is that within about an hour from the first intimation to the police that trouble had broken out they had dealt with the whole situation and had dispersed speedily and effectively the large crowd which by then had collected. I make those two points in order to avoid any undue misunderstanding, and the noble Earl will forgive me for being detailed.
The noble Earl's first point, and that of other noble Lords, concerned the disparity between the sizes of different police areas and police forces. The noble Earl gave us some interesting recollections of the time when he himself was exercising special powers at a time of crisis. I think I ought to say that there have been a number of changes since those days. The biggest was that made by the Police Act, 1946, under which all non-county

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borough police forces were abolished. There is therefore no police force maintained in these days by an authority which has not at least the status of a county borough. This means that the very small police forces no longer exist. Before any noble Lord informs me that that is not true because Cambridge is not a county borough, I would say that I knew that, and there are special reasons why it has its own force.
In this connection, the noble Earl and other noble Lords mentioned the powers which my right honourable friend has in respect of amalgamation, deriving from the Act of 1946. I ought perhaps to say a word to make it clear that these powers are strictly limited by the Act. The point is that the compulsory power can be used only where one of the counties or county boroughs concerned has a population of less than 100,000. But my right honourable friend—and it would be true to say successive occupants of the office of Home Secretary—have never taken the view that there should be amalgamation for the sake of amalgamation. Local authorities are naturally jealous of their independence, and the view has been taken, I think rightly, that their police forces should not be amalgamated against their wishes unless there is a clear case for doing so on the grounds of public interest. That is not an empty statement, and I think it is important briefly to indicate that those powers are used in the circumstances I mentioned. There has recently been the case of the amalgamation of the Carmarthenshire and Cardiganshire forces. They were combined by order of my right honourable friend, although that was the first use of his powers for several years. Since 1946, however, there have been ten amalgamations of forces, of which four were compulsory.
The noble Earl was good enough to give me notice in advance of the majority of the points he was going to make in great detail, so that not only am I extremely grateful to him but I should like to acid my voice in wonder at his expertise in being able to give them to us so splendidly. He enabled me thereby to make some inquiries on the particular point I am coming to, and to obtain some expert advice about it. He cited Lancashire as an example—if I have got it right—of an area in which he thought police amalgamations would increase
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efficiency. It has been said before this afternoon that it is not reasonable to assume that because a force is small it is automatically less efficient than a larger one. There are cases where it may eventually turn out that art amalgamation would increase efficiency, but I should like to say, with some emphasis, that my right honourable friend has no reason to believe that amalgamations are required in Lancashire at the present time because of any inefficiency.
In that county there are one county police force and sixteen city and borough forces. Those borough police forces are of good quality, and they are attracting a very good standard of policeman. It may be true, in a sense, to say that opportunities for promotion in smaller services are less than they are in a large one; but there is also the point that, the number of senior posts being smaller, so is the number of candidates. However, there is the rather important fact that to-day as good men are coming into the borough forces as go into the county forces. Her Majesty's Inspector of Constabulary takes the view that in the matter of efficiency the borough forces in Lancashire have nothing to suffer by comparison with the county force, and that the police in Lancashire, taken as a whole, are quite properly efficient.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, could I be clear about the case of Lancashire? Is each one of the boroughs affected now a county borough, with its own police force, or are there any boroughs left which are not county boroughs in Lancashire which are still in possession of a police force?
LORD CHESHAM: My understanding of the matter is that the answer to that is that there are none.
If I may now turn to the question of co-ordination, or suspected lack of it, I should like to dispel any doubts here. Perhaps the first aspect which would occur to anyone is the question of the detection side of it, or rather the detective work. It might indeed seem to anyone not familiar with the great developments of recent years in the aids to detective work, that a large number of separate police forces in one area would work against good detective work. But that is not so. To start with, all detectives

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nowadays are trained on standard training courses at one of a number of training schools in different parts of the country, and throughout the country they use a standardised form of records. Naturally, co-operation is not confined only to detective work. There is, for instance, machinery which provides for regular consultations between chief constables. They have district conferences, which were established many years ago, at which they discuss matters of common concern and arrangements are made for co-ordinated action. Each district conference sends a representative to a central conference, which considers matters requiring action at the national level. There are also in the various districts conferences of specialist officers, such as the detectives and traffic officers and so on.
The noble Earl and the noble Viscount, Lord Alexander of Hillsborough, expressed themselves as being unhappy about the increased mobility of the criminal. Surely that must be more than matched by the increased mobility of the police, and the vastly improved communications, both by direct line and by radio. Practically every force in the country now has all-round cover of its area by radio, and it is a widespread practice that each area maintains a link, either by direct line or by radio, or both, with its neighbours; so that there is really little, if any, hold-up between areas in co-operating together. There is another point which I thought might have been touched upon, and it is one worth mentioning—namely, that the forensic science laboratories, the cost of which is shared between all police forces and the Exchequer, make available to every force, without any individual charge in any case, the whole resources of science, so that in this respect a small force is just as well placed as a large one.
EARL WINTERTON: My Lords, may I ask my noble friend one question on this subject of mobility? If a serious crime occurs in one police district and the gangsters get away in a stolen car, or some other fast car, and go into a contiguous police district, have the police in the first district the right to pursue them into the adjoining police district?
LORD CHESHAM: My Lords, they have the right to pursue them from John o'Groats to Land's End and arrest them.
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But the point I should like to make, arising out of the noble Earl's question, is that, with the communications I have mentioned, it is much more likely that the fleeing gangster in his fast car will be picked up by one of the cars of the adjoining district than caught by the one from which he is fleeing. What has shown the most marked improvement is the technique of co-operation between the forces. The standard which has now been reached enabled Her Majesty's Inspector (I think I am right in saying that he was speaking particularly of Lancashire at the time, and after all, he is well qualified to speak about it) to tell us that boundaries count for nothing in the pursuit and detection of the criminal.
My Lords, I think this would be a good moment to talk about inspectors, because not only are they referred to in the Motion but they have been referred to by almost every noble Lord who has spoken. In referring to them, the noble Earl, I think, used the words, "mild and slender inspection"; and the noble Viscount, Viscount Alexander of Hillsborough, used the word "cursory." I do not believe that those would be the words used by chief constables of forces being inspected. I think they would take a different view; and, knowing just a little about it, I should myself. These inspections are of a searching character, and the reports made to my right honourable friend are most detailed. They show that it is unlikely that deficiencies in a police force would escape the vigilance of Her Majesty's inspectors.
LORD PAKENHAM: My Lords, may I intervene. I am sorry to do so, but this is such an important point that it surely seems difficult to let it go by, if it is to go by, with an ipse dixit, even from the Minister. One of the inspectors, giving evidence before the Select Committee, said that the inspection lasts, perhaps, a day, or two or three days. That is what he actually said, although the noble Lord, Lord Milner of Leeds, said that they had possibly one inspection a year. He went on to explain that in Cheshire, for example, not more than one-third of the division is visited in any one year. So, to take Cheshire as an example, that means that the division is visited once every three years. and the visit may occupy one, two or three days. That is the actual position as revealed

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by the inspector to the Select Committee. I think it should be on record for the benefit of the House.
LORD CHESHAM: My Lords, perhaps I may say to the noble Lord, with great friendliness, that if I may continue just a little longer with what I was going to say (to say nothing of the sentence upon which I was interrupted at the time) my remarks will perhaps be a little more to his taste. I do not know whether I can add anything of value as to the amount of time that the inspectors spend on this work. May I put it this way? They start their inspection by obtaining from the chief constable concerned a vast mass of material, covering details of every sort. They then go carefully through it, and pick from it any and every point they wish to touch upon at their inspection. They then go right through that part of the force concerned with a fine tooth-comb. If that is not a reasonable method of inspection, I do not know what could be. I do not think it is a question of measuring in terms of hours and days how long an inspector takes: the important part is whether his inspection is thorough or not, and I am saying to your Lordships that it is. I do not know whether the noble Lord is more satisfied now or whether he is not?
LORD PAKENHAM: My Lords, the answer is, No. I was not going to interrupt the noble Lord again, but since he has asked me the question, my answer is, No; I am not in any way more satisfied.
LORD MILNER OF LEEDS: Neither am I.
LORD CHESHAM: We shall remain at variance on this matter, and I do not see that there is much more that I can do about it.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: Come! Be persuaded.
LORD CHESHAM: Frankly, no.
LORD MILNER OF LEEDS: Do the inspectors visit the local police station?
LORD CHESHAM: The inspectors come on formal inspections, and they also come at fairly frequent intervals, sometimes with notice and sometimes without. That is a point I was coming on to in a moment, but in view of what the noble Lord has said I may as well make it now.
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The noble Lord, Lord Milner of Leeds, raised a question on the reports made by inspectors which go to my right honourable friend the Home Secretary, and wanted to know whether they should have wider circulation. It must be remembered, however, that the primary function of the inspectors is to advise my right honourable friend whether the forces are efficiently maintained, so that they can qualify for the Exchequer grant in aid of the police authority's expenditure. I should like to add here that, although only my right honourable friend gets the report, the inspectors do call the attention of a chief constable or police authority to any point arising from their report about which they feel the chief constable or the police authority should know.
LORD MILNER OF LEEDS: My Lords, can the noble Lord say whether that is done in writing or in the course of the inspection?
LORD CHESHAM: My Lords, I cannot answer the noble Lord's question off-hand, but I will find out and let him know.
The noble Lord, Lord Burden, asked what would happen under the block grant. The position is that the police will continue with their own grant. Her Majesty's inspectors spend a great deal of their time with the forces in their areas and with the chief constables, and offer them advice on improvements, where such advice is needed. They enjoy a position with the forces whereby that advice is readily sought and accepted. I am afraid, therefore, that to give effect to the suggestion of the noble Earl that the inspectors should be provided with a small force of secret detectives—which in itself I find a rather unattractive kind of suggestion—would destroy in almost every respect the usefulness they have, for if they had such a force they would not enjoy the confidence and reliance which is placed on them at present. I can only ask the noble Lord: Quis custodiet ipsos custodes? which always has been a difficult question to answer. I feel that where we are so bound up with honour and honesty, as with the police, I can only answer by saying
"Big fleas have little fleas
Upon their backs to bite 'em.
And little fleas have lesser fleas,
And so ad infinitum."

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Those being the only two pieces of Latin I know, I thought that I should take the chance of working them in. In any case it is not the function of Her Majesty's inspectors to act as detectives. Although the noble Earl used a word which I should hesitate to use—"snoopers"—it is not their function. Their position is rather different, as I hope I have shown.
EARL WINTERTON: My Lords, may I ask the noble Lord a question on that? Was it, or was it not their function to have discovered (which they did not do) that for several years gross corruption had been going on in the Brighton police force?
LORD CHESHAM: My Lords, the proper answer to that is: No, it was not. But I should like to explain that a little. Their function is to see whether the force is an efficient one—
EARL WINTERTON: It could not be efficient if it was corrupt.
LORD CHESHAM: My Lords, bribery and all forms of corruption of that kind are, by their very nature, secret, and usually come to the attention of those whose duty it is to enfoce the law only when somebody who has had something to do with it feels that it is in his interest to bring it to light. I admit that there is nothing peculiar to Brighton about that, but I believe it is unreasonable to suggest that Her Majestys' inspector should have unearthed the particular corruption that was going on in Brighton, because, as I have said, it was not one of his responsibilities to do so.
I feel that what we want to learn from Brighton is that there is effective machinery for dealing with this kind of evil when the police are the evildoers, and that that machinery will be and can be properly used. I do not think your Lordships would want me to go into the history of the whole of the Brighton case now, but when suspicion was first aroused it was, in fact, to Her Majesty's inspector that an approach was made. The Director of Public Prosecutions was called in, and the result, as we know, led to the Old Bailey. This refers to a point made by the noble Viscount, Lord Alexander of Hillsborough, that no citizen need fear that the authorities will be reluctant to act where there is ground for doing so; but we must also remem-
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ber that it is his duty to help by bringing suspicious facts to the notice of somebody.
While we are talking of Brighton, I may say that that applies, incidentally, to what was said by the noble Earl about the "Bucket of Blood." I find it very strange and difficult to understand why, if things such as he described went on, as appears to be the fact, local people took no action, and how the watch committee remained in ignorance; because I should have thought that, even if the chief constable was taking no action, local people would have stirred up a clamour that he should do so.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, that was one of the things which was worrying me when I was speaking. The question is: How does an individual begin to bring this to light? Does he have to run the risk of an action under the law of libel every time he has something brought to his particular notice, perhaps by somebody else, in order to get it properly investigated? That is a very difficult position. If we take the case quoted by my noble friend Lord Pakenham, we seem to be in danger of having another form of eternal triangle as between the person asking for an inquiry, the chief constable and the Watch Committee combined, and the Home Office saying that "everything in the garden is all right" and that there is nothing more to be done about it.
Are there any means by which people who give information which they believe to be true can communicate it in such a way that it will be properly investigated through the proper channels? Where do we want the local individuals to send information—direct to the Home Office? And will it then receive only the same treatment as before, and the same prescription—a reference to the chief constable who says, "Everything in the garden is lovely"? Is there not something to be done about it? I understood that, on the Report of the Select Committee, it was said that the Secretary of State had considered the recommendation and that, while he did not feel able to appoint such a Committee as was suggested, he was considering other measures for strengthening the Inspectorate. Could we perhaps hear how that might affect the situation?
LORD CHESHAM: My Lords, I was about to come on to that point. However, the noble Viscount has raised the question of what should the citizen do—which seems to me the most important part of what he has said. It cannot be right for the citizen to do nothing. He has a perfect right to go to the chief constable and say, "This is scandalous." He has a perfect right to go to the watch committee and say, "Things are not right in this town." Surely no self-respecting watch committee is going to have citizens coming and making allegations of most scandalous and obnoxious behaviour in their town without doing something about it. If watch committees are really convinced that Something is going wrong in a sphere over which they have no control—that is, enforcement of the law—they can always call the attention of Her Majesty's inspector to it. His job is to find out things which affect the efficiency of a force.
I was about to say that one cannot expect Her Majesty's inspector to know of all these kinds of occurrences that are going on in every spot in his whole area. He needs to know them, I quite agree, but he cannot be expected to know them all himself unless they come to his attention by one means or another. Certainly if any major complaint of failure of law enforcement which went to the root of the efficiency of one of the forces he was supposed to inspect came to his notice he would naturally take it into account. But he really cannot be expected to set himself up as a sort of private-detective force. There are reasons against that which I have already mentioned, and I think it would be impossible. These must remain primarily matters of local knowledge which should have local attention.
On the subject of inspectors, it has been said that they were an inadequate number; but one has recently been added to that number, making five for England and Wales. There is another one in Scotland. As the noble Lord, Lord Burden, said, there is a woman assistant inspector to cover the women police of the whole country. My right honourable friend is satisfied that this number (that is, with the addition of the one extra inspector recently appointed) enables them to perform properly their duties of examining
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and reporting to him on the efficiency of the police forces.
I should like now to go on to another matter which has been mentioned by the noble Earl and other noble Lords, and that is the relationship between police authorities and the chief constable. As your Lordships know, in the boroughs the watch committee is the police authority; in the counties it is the standing joint committee. And, just for the sake of clarity on a point mentioned earlier, I might add that the standing joint committees are appointed half by the county council and the other half by quarter sessions, while watch committees normally contain a number of magistrates. The noble Earl was quite right in saying that in the boroughs the legal responsibility for making promotions and for discipline rests with the watch committee. In counties it is the chief constable who has the authority for both promotion and discipline. I am going to spend, if I may, just a minute dealing with watch committees, because the noble Viscount, Lord Alexander of Hillsborough, went into this matter in some detail, and I believe that it is a quite important one.
I should have expected that a responsible watch committee would be guided by their chief constable in the selection of men for promotion. He is, after all, in much closer contact with the daily work of the members of his force, and he must be expected to have a better knowledge than the watch committee of their suitability for promotion. A watch committee who take it on themselves to interview men for promotion from among a number of candidates must not be surprised if they create the impression that irrelevant, and even improper, considerations might enter into the matter and if the efficiency of their force is called into question. I should like to quote some words—and I think they are appropriate to what the noble Lord. Lord Milner of Leeds, said about watch committees—which one of Her Majesty's inspectors used when addressing representatives of police authorities on this subject. I think that they express very well what I am trying to say. He said:
"If you have a good chief constable, trust his judgment and advice. I am not suggesting that you should what is called 'rubber stamp' his recommendations, but bear in mind he is answerable to you for the standards of his

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officers and his sole object must be to get the best men available under him in the various ranks."
It is necessary at the same time to say something else—and I would ask the noble Earl, Lord Winterton, to remember this fact in advancing his interesting suggestion of a local police council. What I wish to emphasise (it has been said, but I say it again) is that no police authority or anyone else has any authority to interfere in relation to the enforcement of the law by the police. Naturally, there is normally good co-operation between the police authority and their chief constable, but the full responsibility for enforcement is a matter which is reserved entirely to the chief officer of police. In the exercise of this responsibility he is answerable to the law alone, and not to any public authority. That is the position both in the counties and in the boroughs. I think it is generally recognised to be such to-day, whatever may have happened in the past. And, my Lords, I can say, too, that if any improper attempt were made, no matter by whom, to influence a chief constable in the enforcement of the law he would find he would have solid support in resisting that influence.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I am not questioning that side of the matter at all, though I am very glad to have that statement from the noble Lord. What I do question is this: it is assumed always that a chief constable must have full control of promotion, because otherwise there might be local influence brought to bear; whereas, as a matter of fact, if there were sufficient information supplied by the chief constable, not only on service but on all other reasons for promotion, very often the members of a watch committee would be able to prevent someone from being appointed by a chief constable for his own particular purpose, as seems to have been the case in one or two examples that have had to be brought before the courts.
LORD CHESHAM: My Lords, I should have thought that an arrangement like that between the chief constable and the authority would have been the normal arrangement.
LORD MILNER OF LEEDS: My Lords, is it not in fact laid down in the precept and in Police Regulations that
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appointments and promotions are the specific function of watch committees and standing joint committees, and are not a matter for chief constables alone?
LORD CHESHAM: My Lords, I have already said that. In the case of watch committees, they are the authority for discipline and promotion. It is different in county forces, where the chief constable alone is responsible. But I should have thought that, in the case of watch committees, chief constables would normally be the best people to advise the committees, who actually make the promotions, on whom to promote, because they are in the best position to know their men. I should have thought that the normal procedure would be a good working arrangement between the two.
VISCOUNT ALEXANDER OF HILLSBOROUGH: Why does the same principle not operate in the case of standing joint committees?
LORD CHESHAM: Because standing joint committees are not the authority on matters concerning discipline or promotion.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I do not see how we are going to get the right people to serve on these bodies if they have not at least equality in power when exercising what is the same proper function. The watch committees have this power, but apparently a standing joint committee is put into an inferior position in that matter. Why?
LORD CHESHAM: My Lords, I think the answer to that question is one that I should not take up now. I have got a lot to say, if I may, and I should like to get on with it.
VISCOUNT ALEXANDER OF HILLSBOROUGH: Let us have the inquiry.
LORD CHESHAM: Before we come to that, I have one or two more points which I feel I must touch on, in view of what has been said. One concerns the power of chief constables, although this perhaps applies more particularly in the case of county chief constables than in the case of borough force chief constables. At least, I think that that is what noble Lords had in mind when mentioning it. That power has perhaps been represented as something rather undesirable, but we

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must remember that the police is a disciplined service and that the officers in command of the police must be able to exercise their powers of command. There are safeguards provided by the law, and there is elaborate provision in regulations made by the Home Secretary for the exercise of disciplinary authority and for the conduct of disciplinary proceedings. Those provisions include the fact—which may or may not be generally known—that every policeman has a right of appeal to the Home Secretary against all but minor disciplinary awards.
The noble Earl brought out in his speech, very properly, I thought, the fact that there are two sorts of complaint about the powers of chief constables. He said that on the one hand it is said that they have too much power and on the other that they have not enough—and I think this conflict of view itself would suggest my answer. I think it is important, my Lords, in a matter so vital to our liberties as the maintenance of an efficient and incorrupt police service, that too much power should not rest in the hands of any one person or authority. The noble Lord, Lord Pakenham, made this paint; and I believe it is most important to keep it this way. In fact, the police administration is a system of balance in which the chief constable, the police authority, and the Home Secretary, all have their part to play, each one limited by the rights and duties of the others. To sum up this aspect, I believe that, considering the difficulties of the problems which have to be tackled, this system works well, and we should be very reluctant to put anything in its place unless there was some great deterioriation in it.
My Lords, I must turn for a moment to the fact, mentioned more than once, that the Home Secretary can be questioned in another place about the Metropolitan Police when he cannot be so questioned about the provincial forces. It seems the opinion that there is something anomalous about that. I do not think I can quite accept the picture of the state of affairs in the provinces which the noble Earl painted for us. Members of local police authorities are surely people with a real regard for proper administration, and I do not see why it should be assumed that they are not just as ready to consider representations from their constituents about matters of police
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administration as they are about any other matter, or that they are less willing to put right things which need to be amended.
EARL WINTERTON: I am sorry to interrupt the noble Lord again, and I apologise for doing so; but that really was not my point. I was not suggesting that there should be applied to the provinces the system as regards Questions in Parliament which applies to the Metropolitan Police. My point is this: the ultimate sanction in regard to the Home Secretary and the Commissioner of Police is that there is a public discussion in Parliament, and of course in the Press. Could the noble Lord quote me any case where a man has made a complaint about the behaviour of the local police force, of the chief constable, or of the watch committee, where there has been any public discussion at all?
LORD BURDEN: Following that, might I ask the noble Earl this question? Is his remedy to bring the whole of the police force under the control of the Home Secretary?
EARL WINTERTON: No. I said it was not. The noble Lord did not listen to what I said.
LORD CHESHAM: My Lords, I think I am quite aware of what was the point made by the noble Earl originally, and if he will bear with me for a moment or two I shall come on to answer it. Certainly, things being what they are—as I am explaining, and as I intend to finish explaining—I cannot quote the noble Earl any such instance as that for which he asks; but may I ask him to bear with me a moment or two more?
EARL WINTERTON: Of course.
LORD CHESHAM: The other thing I was going to say was that chief constables also, I should have thought, are naturally very concerned over any complaint about bad police work, and surely they must be as anxious as anyone that anything complained of should be investigated and put right. I do not really understand why it is assumed that the only useful way of raising questions relating to police administration is to ask Questions in Parliament. I do not really think that that is quite what the noble Earl had in mind. He wanted the ultimate appeal, so to speak. But I have every reason to

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believe that ii Members of Parliament—or anyone else who was dissatisfied—were to approach their local police authority or their chief constable with the grievances of themselves or of their constituents, they would receive attention and action. In fact, I know that they regularly do so.
I should not have thought that this ability to raise Questions in Parliament was so very necessary, because surely public authorities and chief constables are as amenable to public opinion as anyone else. And I have never noticed any reluctance on the part of citizens of this country to ventilate their grievances about anything, either in the Press or elsewhere. I do not think it is taking a very wide view to think that, in order to achieve success in this field, they must be able to discuss these local matters in Parliament. We have the fact that outside London the police forces of this country are locally controlled. There is very strong support in another place for the view that they should continue to be locally controlled, even if that means that honourable Members cannot ask Questions about their administration. My right honourable friend does not direct the workings of local police forces, and it would be—and is—unreasonable and unconstitutional to expect him, in the circumstances, to answer Questions in Parliament about such details.
The noble Earl suggested that the position was very different in London because the Home Secretary can be questioned in Parliament about the Metropolitan Police, since he is the police authority. I fancy that the noble Earl over-exaggerates the importance of this fact. My right honourable friend and his predecessors in office have always made it clear that they would not interfere with the Commissioner of Police in the enforcement of the law, or in the details of administration, and my right honourable friend has no intention of departing from that attitude.
Before I finish on that point, may I emphasise again that in the enforcement of the law the police must remain independent of public authorities, whether local or national. Any and every police officer is subject to the law in all that he does. If he over-steps his legal powers and duties, he is liable to an action brought against him by aggrieved citizens.
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If he is thought not to be doing his duty, the police have no monopoly of powers of prosecution, and a citizen can himself, prosecute, if he thinks he has grounds to do so. Similarly, a police officer has his own remedy at law, if he feels that he is aggrieved. In the case of what is thought to be oppressive action by the police, the arbiter is not the Home Secretary but the courts of law. And my right honourable friend will continue to do his best to protect the police from any pressure which would interfere with the impartial administration of the law, no matter from where it may come.
I have endeavoured to cover the main general points which have been raised in the debate, and I come now to the Motion itself, which calls attention to the need for the appointment of a Committee to inquire into the matters we have been discussing. Some noble Lords argued that there should be an inquiry, others thought not. For my part, I hope that what I have said to your Lordships will persuade you that our system of police administration works pretty well and that the appointment of a Committee is not a matter that ought to be pressed.
In opening the debate, the noble Earl, Lord Winterton, referred to instances in which the conduct of the police is said to be at fault. Naturally, the affairs of Brighton and Worcester must cause considerable disquiet, but they cause equal disquiet in the police service itself. I should be the last person to minimise them. I agree that even a few cases in which police officers succumb to the many temptations which beset them give a serious shock to the confidence of the public. The noble Earl gave us instances of what was said to be bad conduct, but I could go on for days giving instances of good conduct. We must not forget the great majority of our police who, in town or in country, are serving their fellow citizens well and who make their service, as my right honourable friend described it recently, the "envy of the world."
When the country is faced with a serious increase in crime, no one can afford to be complacent. The noble Earl has given us a chance to take stock and to consider whether the system which has gradually been built up over the years is one which is best calculated to serve our interests. Despite criticism which has been directed against particular episodes—and I do not want to be taken as

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implying that I accept that criticism—I believe that we have a police system which serves us well. I hope that what I have said will make it clear that the police service has been developing all the time within its traditional framework to meet the challenge of modern times. My right honourable friend, on whom the ministerial responsibility falls, is closely in touch with these developments through his advisers and Her Majesty's inspectors, and he and his Department will continue to discharge their duties in the most active way to see that we have an efficient police service.
5.25 p.m.
EARL WINTERTON: My Lords, I always think that it is not fair to your Lordships that those exercising the privilege of the mover of a Motion of replying should speak for more than a few moments. In asking leave to withdraw the Motion, I want only to put the matter in a truncated form. In the first place, I am deeply grateful to noble Lords on both sides of the House for the very friendly—I think, far too friendly—things they have said about my speech and about me. I want to apologise to the noble Lord, Lord Chesham, if I interrupted him rather often. I ask leave to withdraw my Motion rather reluctantly.
NOBLE LORDS: Hear, hear!
EARL WINTERTON: I told the noble Lord privately that I was not going to press this matter to a Division, but I do not regard the Answer that he has given, through no fault of his own but through the fault of the Government, as wholly satisfactory, and I want to put in tabloid form why I do not think so.
From my point of view, he dealt satisfactorily with the question of the large number of local police authorities. He reassured me on that and made it clear that the mobility of the criminal is now matched by the mobility of the local police forces. He certainly did not convince me on the inspectorate, and I am in complete doubt about what the inspectors are for. He said that they were there to see that the police were efficient. But they did not see that the Brighton police were efficient. Surely it is not efficient to be corrupt. I do not understand what they are there for, if they do not find out what is going on in the police force. That is why I suggest that they should be strengthened.
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There is an obvious and great anomaly, which in itself would almost justify an inquiry, in the fact brought out by the noble Viscount the Leader of the Opposition, of the complete difference of functions between the standing joint committees and the watch committees. Why? Surely there should be an inquiry into that matter.
Then there is the position of chief constables. Here again the position is obscure. Some chief constables regard themselves as servants of the Crown: others say that the Crown has nothing to do with them; that they are sui generis servants of the public or of themselves. The noble Lord said that chief constables will always answer a complaint by Members of another place. I know a Member who, having attempted to get some redress for a constituent from the Home Secretary, and having been told that it had nothing to do with the Home Secretary and was a matter for the chief constable, wrote to the chief constable and received a pompous reply saying that he was not responsible to the Home Secretary and therefore a fortiori not responsible to a Member of Parliament. This is the sort of thing that goes on.
Despite the efforts of his colleagues and mine, the noble Lord, Lord Burden, seems to have a completely wrong idea about the point which his colleagues and I were making. We are not advocating taking away the right of local authorities to control the police. We merely want to make that control more efficient and more democratic. I repeat that, whereas in the case of the Metropolitan police it is possible to get a discussion in Parliament, there is no means of getting a discussion of any grievances that citizens of provincial police areas may have against their police authority or chief constable. I did not say that there should be a like discussion in Parliament—the noble Lord, Lord Pakenham, is right here, and I entirely agree with him. What I did say was that there should be some method by which grievances could be publicly discussed. The practice might grow up, for instance, of local authorities discussing in open council grievances of this kind. As it is, there is no means whatever of getting any public discussion. The chief constable is in an astonishing position: it is practically impossible to challenge his actions.

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My last point is this. The noble Lord, Lord Chesham, said that it would be quite wrong to give anyone power to compel a chief constable to carry out the enforcement of the law, and that he was responsible to the law. But in fact he is not responsible to the law. If he chooses not to prosecute a certain type of case, the law courts are not going to do anything about it unless, as the noble Lord admitted, a citizen brings an action. The chief constable is not, in fact, responsible to anyone, but can do what he pleases: he is sui generis. I do not think that is a satisfactory position. What I am really seeking—and I am entirely at one with noble Lords opposite—is a more democratic system of control than exists at the present time. I am bound to say that it is with some reluctance that I ask your Lordships' permission to withdraw the Motion.
VISCOUNT ALEXANDER OF HILLSBOROUGH: You ought to divide on it.
Motion for Papers, by leave, withdrawn.

BEARER SHARES IN INDUSTRY
5.32 p.m.
LORD GRENFELL LORD GRENFELL rose to ask Her Majesty's Government as to their policy on bearer shares in industry; and to move for Papers. The noble Lord said: My Lords, I should first like to thank your Lordships, as the noble Earl, Lord Winterton, did, for being in your places to-night; and I should like to do so especially because, although I have spoken in your Lordships' House several times in the last years, this is the first time that I have had the privilege of initiating a debate. I want to draw attention this evening to a subject which is vital not merely for the future prosperity of the nation but, to my mind, for the maintenance of our existing standard of living. There is no doubt whatever that we are at the beginning of a new industrial revolution in which the impact of the increasing spread of automation and the startling development of nuclear power for industrial purposes are bound to be dominating factors. We are again engaged in a hectic race for the international trading markets of the world, and it is obvious that unless we make full use of the new industrial techniques which are bound up with automation and
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with atomic power, far from being able to enhance our position as a major commercial nation, we shall not be able to maintain the level which has to-day been achieved; nor shall we be able to contribute our appropriate share to the improvement of the underdeveloped areas in the world, upon which the real struggle between East and West ultimately depends.
I believe that we shall be able to find the managers, scientists, technicians and skilled workers, all of whom must play an essential part in our industrial progress. I am not so sure, however, that we shall be able to make the best use of our capital resources. It is these which we must regard as the lubricating force which will allow our national industrial machine to function with the required smoothness and efficiency. It is to these that we must look to provide the tools by which our managers, our scientists, our technicians and our skilled workmen will keep us in the van of the trading nations of the world.
I have said that I doubt whether we are going to make the best use of our capital. Let me explain to your Lordships what I mean. It appears to me that far too much of the capital attracted to British industry to-day is institutional, and because of its very character it is unsuitable for the risk-taking which must be a major part of any future development of British industry. It appears to me to be essential that, while nothing should be done to disturb the present institutional investment in industry, every effort should be made to attract to industry as great a part as possible of the individual savings of our community. Believe me, my Lords, industry will need all the capital it can possibly attract in the foreseeable future. That, from the point of view of the economics of the nation, is why we should commend any attempt to attract the savings of the ordinary man and woman of Britain to industrial investment, and we should do all in our power, for this reason alone, to encourage any carefully considered plan—and this plan has been carefully considered over two years—to bring this about.
But there is more to it than that. The problem of the wide dispersion of industrial investment throughout the whole of our community is not merely a problem of economics; it is also a social problem.

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There is something hopelessly wrong in a system which, while being theoretically just, produces a practical barrier against the equal use of money by different sections of our society. It is true that in theory industrial investment is free to all who have the money and the inclination, but, in practice, that is not the truth. To by far the greater part of our nation industrial investment is a mysterious jungle which only the boldest of spirits dares to penetrate; and even to those who dare, if they are normally employed in industry their chances, because of their hours of work, of making contact either with a stockbroker or a banker are very limited. That is why we in this House should welcome in no uncertain terms the bold and imaginative plan produced in recent days by some enlightened industrialists through which that social barrier to which I have referred will once and for all be torn down.
The essence of this plan produced by Aims of Industry is to make a special kind of bearer share available to the ordinary industrial worker of the country. He will be able to buy or sell his share for cash in a shop set up specifically for the purpose in his own factory and in that shop in his own factory he will be able to buy shares of this kind not merely in his own firm but also in many other firms. In this way, the vast majority of workers in this country will be able to enjoy not merely the rights but also the responsibilities of ownership. This splendid conception has received general and spontaneous approval. Naturally, the bearer shares would be of companies whose shares are quoted on the Stock Exchange and who are willing to enter into the scheme.
I hold here a pamphlet which explains in detail, by question and answer, how the scheme would work, but I should like to give your Lordships the main details quite shortly. A company deciding to take advantage of this scheme would notify the Treasury, who would, after due consideration, give permission for a quota of its ordinary shares to be converted into bearer form. The company would then set up within its factory a private company called a shop company, which would always be prepared to buy from and sell to the employees its own shares and also the shares of other companies who had entered the scheme.
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All shares would be sold and redeemed at the middle price reigning on that day and dividends would be dealt with by coupon and exchanges over the counter for cash.
Some may say that in advancing this scheme we are opening wide the door to the working man to dissipate his savings in a gamble on stocks and shares. Let us not be deluded over this matter. There are many ways in which any citizen can gamble—I need mention only football pools, horse racing, dog racing and—dare I suggest?—premium bonds. But there is at the moment little chance that the working man will invest his money with the company in which he is employed, or other companies in which he may be interested, and hence become a part owner in the great industrial expansion which is heralded by the new atomic age. I appeal to the Government to give this matter favourable consideration, and I look to industry not only to consider this scheme but to enter into it with enthusiasm. This is a child newly born of free enterprise and of common sense. I trust and believe that this child will flourish and bring our nation even closer together in our determination to meet the great challenge of the future. I beg to move for Papers.
5.40 p.m.
LORD PETHICK-LAWRENCE: My Lords, I have listened with great interest to the speech of the noble Lord. Of course, I had some knowledge of the scheme before he spoke, but I am bound to say that I am not very clear precisely how it is going to work and I should not like to commit myself for or against it until I know a little more about it. To my way of thinking, there are a good many dangers in the scheme which the noble Lord has propounded, and I feel that they ought to be taken into full consideration. In the first place I would ask: has this scheme any great advantage? There are unit trusts of all kinds in the country, and I should have thought that a person who had only a small amount to invest would be much safer investing it in a unit trust than in the kind of bearer bonds to which the noble Lord has referred.
Do I understand that these bonds will not be registered in any way whatever—that there will not be any name attached to them? I understand that they will be transferable from hand to hand. It seems

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to me quite possible that there might be a trade in these bonds which it would be extremely difficult to control. The noble Lord seems to assume that the person who buys a bond for the first time is going to keep it until he dies. But he may want a little money and sell it to somebody else. You will have a miscellaneous market in these bits of paper which I should have thought was a very risky proceeding.
In the second place, I can understand a workman's having the opportunity of buying shares in the company in which he works. He knows something about it, and probably he knows whether it is a good deal or not. But if these companies are going to be set up to sell shares of other companies who like to subscribe, what is there to prevent a lot of bogus companies of a most undesirable kind from getting a place in a shop where these things are going to be sold and palming off on to working people a lot of unsatisfactory pieces of paper which will be practically worthless? I am speaking only from what I understand. It may be that all these point have been taken into account. If they have, I think we ought to be told what safeguards there are going to be to prevent the working man from being cheated, as I think he is liable to be unless we take great care in this matter.
I look at it from the point of view of the Government. I think it will add great difficulties to those of the Government in securing the proper running of taxation. One of our great safeguards at the present time is that investments are properly registered and the Government have some control over them. But if a miscellaneous number of people all over the country are going to have bits of paper which presumably are going to enable them to obtain small dividends, I should have thought the Government would lose control over the income of the people of the country to a degree which might, if it were extensive, seriously affect the revenue.
Finally with regard to that point, it seems to me that the Government will have little control over the export of these articles to overseas, which again may be a dangerous thing and prevent the Government from controlling the reserves. Until all those points are carefully considered and provided for, I consider that this is a most adventurous and dangerous
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proposal to adopt. The noble Lord did not explain how these people were going to get their dividends. As I understand it there is no register.
LORD GRENFELL: My Lords, may I interrupt the noble Lord? I did say that they would get their dividends by coupon over the counter.
LORD PETHICK-LAWRENCE: I remember the case of some bearer bonds that my guardian had. There was a big sheet, and one cut off little coupons on each quarter day. Is that what the noble Lord is proposing? That is a very complicated thing. It is all right when you have a great number, but if you are going to have just a few, as the noble Lord contemplates, it seems to me a most difficult procedure. You have to cut off these little coupons and take them along to the bank. If you have a bank account you can hand them over the counter in your own bank, who will go to the bank of issue and cash them. But I do not think it is going to be a great advantage for a working man to have a bit of paper. Suppose he buys £10 worth, and suppose the dividend is 5 per cent. so that he gets 2½ per cent, half yearly. He will have to get this little bit of paper, take it to his bank and cash it, and it will bring him in about 10s. or something of that kind. I cannot think that that is a great advantage to the working man. If he is going to invest £50 or £100, then there is no reason why he should not use the more authorised and better organised means of investing his money.
I think we want to know a great deal more about this scheme before accepting it. Nothing the noble Lord has said to-day has suggested to me that these grave difficulties have been thought out and provided against, and until that is so my instinct is entirely to reject. I hope the Government will show that if they are at all inclined to consider the matter, they will not do so until much greater safeguards are brought forward.
5.47 p.m.
LORD AMWELL: My Lords, I think the answer to some of the questions raised by the noble Lord, Lord Pethick-Lawrence, can be found in the pamphlet referred to by the noble Lord, Lord Grenfell, but I agree with the noble Lord, Lord Pethick-Lawrence, on his question as to the exchange of bearer

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shares between people outside as an ordinary personal transaction. I think it would be wise if the noble Lord, Lord Grenfell, could put the House right on that point. Do I understand rightly that the shares could not be exchanged except by being realised at the shop?
LORD GRENFELL: My Lords, I am delighted that the noble Lord has put that question to me. That is in fact completely true. When I said a special kind of bearer shares, I meant that these will be bought and sold in the factory in the shop, and they have to be returned to the shop for cashing in. They are not "bits of paper" as the noble Lord has said; they are actual shares in that company, and although they are bearer shares they are still ordinary shares and have voting power. They have to be redeemed in the shop in the factory.
LORD PETHICK-LAWRENCE: In what sense are they bearer shares? They seem to be bearer shares and not bearer shares.
LORD GRENFELL: They are a special kind of bearer share, the object of the scheme being to allow the working man to have an interest in his own factory or his own business. There will be a great deal more information coming out about this proposal soon, but I can assure your Lordships that there is nothing bogus about it whatsoever.
LORD AMWELL: My Lords, what I feel about the question is that it is one which ought to be considered carefully, and that is what the noble Lord, Lord Pethick-Lawrence, has said. I do not turn it down so definitely as he did. I do not want to turn it down at all. I want to know more about it, and I think the public would want to know more about it.
There are one or two points to which I should like to refer. It is recalled in Punch that when Max Beerbohm first heard Henry Wallace's phrase:
"This is the century of the common man"
he remarked:
"Let us therefore be thankful that it is only a century."
My comment is that when the same truth dawned upon Lord Monckton and his committee of clearing house bankers, the answer was, "Let us make him a customer of the bank." Opening a bank
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account by the common man would be an idea if the facilities were equal to the bearer share scheme, and it would, of course, be a thoroughly sound investment practice among the current ideas of—shall we say?—low finance as distinguished from high finance, and calculated to turn unthrifty proletarians into thrifty bourgeoisie. And there is a suggestion about amending the Truck Acts so as to make it possible for wages to be paid by cheque. Proposals of that kind all have the same trend as this one—namely, the accepted desirability of getting capital, not of an institutional character but from the reserves among the vast population of the country which sometimes are encouraged to be used wastefully upon such things as pools, dog racing and I do not know what.
That is all very well, but the basis is one of wage-earner investment. It cannot be much. It may be true that we have some people who can put down more than ten pounds and open a bank account. Of course there are some such people, but they do not represent the majority of the workers of this country. A lot of nonsense is talked about the prosperity of the country in that respect. It is rather an artificial, inflationary prosperity, and it does not apply to all, especially when we consider that much of it is not a basis of prosperity at all but is in the form of fancy wages, awards, bonuses, and so on. In the majority of cases the basic wage of the worker in this country would not allow for the opening of a bank account.
Nevertheless, on the question of wage-earner investment in industry in the form of bearer shares, it is important to realise that the proposal is that it shall not be confined to the company by whom the purchaser is employed. There must be a pretty good reason for that. It will include any other company willing to participate in the scheme. I understand that it is desired to preserve the identity of the investment; that is held to be important. That is why any form of unit trust is ruled out. Shares over the counter will not he confined to those of the firms employing the purchaser, and can range over all participating units. That is the important aspect of this proposal.
In the ordinary way, as the Labour Party pamphlet Industry and Society

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points out, for all its great attractions to wealthy people or to the more wealthy people, the scheme has possible drawbacks for the worker. Shares in any one firm are subject to short-time fluctuations in value. To a man of wealth, who is able to spread his investments over a number of different firms and who may have other assets, such risks are of small consequence. To the worker with few other resources and having the need to sell shares, sometimes at short notice, fluctuations and risk of loss are crucial. This scheme facilitates some spread of small investments for even the humblest individual, and so far does not insist on putting all the eggs into one basket; so this disadvantage may, to some substantial extent, be overcome.
The key advantage of bearer shares, it is alleged, is, first, the ease with which they can be bought and sold, and secondly, freedom from stamp duty on transfer. I see that the Government is making some move in that direction at present. I think it would be useful if we knew from the Government something more about that. Then this is important: that holders have exactly the same rights, with the Board of Trade agreeing (so the promotors point out), including voting rights, as other shareholders, whether shareholders of the sponsoring company or other companies on the list, according to the designation of the shares bought. Thus, the interests of the share-bearers are not limited to the fortunes of the firms that employ these persons. A varied appeal might be desired.
The introduction of bearer shares does not, I understand—I am really putting this in question form—involve the creation of new share capital, but only the conversion or exchange of existing registered shares into bearer form. That is unlike the principle employed in schemes of profit-sharing—namely, the tie-up is not employer-employee. As I have said and as Lord Grenfell has pointed out, there is no compulsion in this matter; the transaction is worker and industry at large. Whether workers should have a financial concern in industry is a large question. How far it will go, and what will be the economic effects, I must leave the experts to decide. This is obviously not a "get-rich-quick" device to benefit workers—you must
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leave that kind of lure to the pools. Nor is it one for stopping strikes. Presuming it is a success, one imagines it should imply an added sense of responsibility so far as it goes.
To sum up, I think it is important that the public should understand that it is really another form of saving rather than an idea to turn workers into capitalists, rentiers, parasites or whatever you may like to call them. It is more like a simplified widening of ordinary shareholding. In that sense I do not see any particular reason for opposing it from the point of view of this side. I notice that it has had an extremely good reception from the Press—a very generous reception, the motives for which I do not altogether understand because I am not an expert upon the subject—but with one notable exception; that is, the Daily Herald. That paper says:
"Our captains of industry have had a smashing idea. The 'Let's all be owners' scheme is beguiling and extremely ingenious. I can tell them that this wonderful idea is dead before it starts."
I do not understand why there should be that emphasis and enthusiasm in the opposition to the bearer share scheme. It is in the category of the hearty proletarian criticism that we should expect from the Daily Herald, but I cannot see what it is that the captains of industry who are running the Daily Herald can fear from their fellow captains of industry.
I am afraid that some sections of Labour suffer frequently from a Freudian complex. Here is a scheme to give every worker "roped in" or "inveigled", whichever way one puts it—because it is voluntary in any case—the right to stand up at any company meeting and to criticise directors until further orders, and to have full voting powers and participation in the management. On that account the Communist Party might think it is a godsend as of value for propaganda purposes. But conspiracy must be scented by the Daily Herald. I have discussed this matter with quite a number of people and I know that there is that old feeling that existed against profit-sharing, the feeling that it is a trick on the part of the capitalist class to fix the chains of slavery still more upon the working class. Conspiracy! Like the implied conspiracy of the Tories and big industrialists to fall down on their job in order to "dish" Labour, of which we

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hear—the wicked against the pure, the goats divided from the sheep.
I do not think that this is a matter which should or need be made a Party matter, certainly not in an ideological way at all. It is really nothing more than a new method of saving with the idea of directing working-class saving into the industrial market. That is practically what it is, and I do not, for the life of me, see any disadvantages in it from the point of view of any fundamental economic principles that I possess. But the Freudian censor is always at hand, although the subconscious urge must be disguised before entering the upper world of consciousness.
Labour, or some sections of it, is sometimes the victim of suppressed class war. It will not accept openly the principle of class war which, of course, is the basis of Communism; but there is just that subconscious, suppressed idea—and we know what suppression does to mind and character. "Shareholdings are dirty things; it is the way workers are robbed; therefore let shareholding be restricted to the robbers." I know that the classic objection to the capitalist system is that of sharing as a matter of fundamental principle, but it is a common objection of mine, not only to the capitalist system but to the whole of modern civilisation; because I do not believe in the trend towards the mechanisation of the human soul or the mechanisation of the economy of any nation, or of the world. But I am not going to discuss that.
This scheme is not going to upset or support the capitalist system. In class-war terminology, the interests of the workers are opposite to the interests of the capitalists; but that, of course, wants interpretation. It is no part of Labour's official policy, as I should like to point out to noble Lords on the Labour Benches who are taking part in this debate, to refuse co-operation, to oppose negotiation or to decline to admit that capitalism must be allowed to work. The real point of criticism—and there may be many radical points of criticism—should be not ideological but practical. But why so readily assume a trick?
Organised labour in one way or another is up to its neck in capital investment. Though I do not want to offend anyone by what I say, I would point out
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that the Co-operative Wholesale Society has quite a portfolio of industrial securities and sinks a vast amount of money in such firms as Tate and Lyle. And Tate and Lyle's workers are not to be allowed to invest for themselves because it might undermine the trade union movement! That is the type of idea that I have met in connection with even this practical little policy of investment for the workers. The Miners' Pension Fund at the end of 1957 had £33 million, of which nearly £26½ million was invested in industrial equities, from banks to tobacco. Why should that investment idea be confined just to organisations and trade unions? Why should it not be extended to the individual worker? There is no sense or logic in regarding this as a trick and advising the workers, as the Daily Herald practically does, to "Get behind me, Satan" for individual investment, and to talk, as it does in a whole pamphlet among the new political pamphlets which were passed at the last Labour Party Conference, of the necessity to find ways and means of directing investment into industry. It is not as if investment, as such, was officially condemned. On the contrary all Parties agree that a higher rate of investment is desirable, just as all accept commercial competition as a guiding principle.
The capitalist machine, in the ironical description of George Schwartz, is a lovely one needing only proper care and maintenance. We must get rid of the old firm and put some new directors there. That is really what it amounts to. The oil of capital investment is more and more essential for Labour; expansion means more and better commercialism—nothing else. Measures to increase our competitive position against the rest of the world are essentially capitalistic and not socialistic at all. I will give your Lordships one or two quotations from the policy of the Labour Party, accepted unanimously at the Party Conference:
"We must plan to achieve higher investment on a basis of full employment, stable prices and a strong balance of payments…first and foremost."
And, most emphatically,
"we must turn our attention to a higher level of investment as central to our hopes of achieving expansion…incentives to industrial investment would have to be used much more vigorously."
Why all the objection? I am not saying that it has been expressed in this

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debate so far, but there is a feeling, as I know—and I have quoted the Daily Herald to that particular effect—that we live in a capitalist world. That is the line I take in this whole matter; and while we do so, it is absurd not to allow the capitalist system to work efficiently. It is accepted, whether we like it or not, that only a successful, high-powered capitalistically-financed industrialism—more successful, of course, than the Tories would contemplate—can sustain a Welfare State and guarantee adequate wages. There is no Socialism in any of that. I am not arguing against it. I am not saying that it is wrong. While we have a capitalist system we should be sensible about it and not just throw sabots or monkey-wrenches into the machinery. Therefore I do not see why we should not, with unbiased minds, consider this proposal of Aims of Industry.
Our system rests on private investment. What is the logic in taking a "holy of holiest" position? I say that it is rubbish to talk about undermining trade unionism and the power of the workers by suborning them, as it were, with this invitation to purchase, with their savings, industrial shares. The question is not an abstract one of whether profit-making by shareholding is moral or immoral: I have my own views about that, but they are views which I should have to discuss at another time. What I criticise is this running with the hare and hunting with the hounds. I cannot see any good reason to oppose the line that the noble Lord, Lord Grenfell, has taken. I am not supporting it, because I cannot profess to be any expert upon the financial and economic expediencies involved, but I say that it is worth careful and non-Party examination.
6.11 p.m.
LORD HAWKE: My Lords, if one is living in a capitalist world, as we in the free world are, we must all agree that it is desirable that everybody should know as much as possible about the details of how it works, because enlightened capitalism has nothing to hide. On the other hand, it is a target for all sorts of misrepresentations and untruths; and though it tries to combat these, it does not succeed very often simply because of the apathy of the people it wants to get at: the people who work in industry. Undoubtedly, if there were investment by
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the workers there would be bound to be more interest in it, and from that point of view investment would, I believe, be desirable. It is absolutely essential, however, that the investment should be suitable and proper for the state of life and finance of the people who are concerned. Some people, of course, might say that they cannot understand this sort of thing; but I think that that is absolute nonsense. The British workman who can work out his most complicated mathematics for football pools is perfectly capable of understanding any form of company finance if he really sets his mind to it and wants to do so.
The question is: what is proper investment? The discussion to-night has revolved around the question of equity shares, ordinary shares; and as the noble Lord, Lord Amwell, has said, most workers' pension funds already have large quantities of these. But the question is the proportion. I am speaking from memory now, but I believe that we of the Church Commissioners hold roughly one-third of our money in fixed-interest securities, one-third in property and one-third in industrial equity shares; and it is on that money that seven-eighths of the stipends of the clergy in the country depend. So one can assume that that proportion is a fair balance between risk and safety. But for the small man I would suggest—and in making this suggestion I have the support of a prominent financial writer—that the first priority is property and fixed interests and the last priority is equities; in other words, his national savings, his house and, after that, equities.
Of course, in this scheme of Aims of Industry no mention has been made of shares or debentures other than ordinary shares. I see no reason why anybody should not own a preference share in industry, or a debenture. I think it would be most unwise to confine such investment to the place of work of the investor, because he stands to be "shot at" both ways if something happens to his particular industry. I do not particularly like the idea of bearer shares. The noble Lord, Lord Pethick-Lawrence, has detailed all sorts of complicated things that might happen to them. I know that there is nothing to prevent their being sold over the counter of any "pub." in the country, and one knows that a man's judgment when he has had one or

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two drinks is not quite so good as when he has not; and I can see the possibility of sonic of these bearer shares being sold at unduly low prices to some sharper citizens.
Another objection to bearer shares is the lack of facilities for their safe custody. The substantial citizen can go to a hank and have his things held by the bank, but the working man's cottage or his house is very prone to burglary, and he has no safe place for these things at all. I have no doubt that some arrangement could be made for these so-called "shops" to hold these securities in safe custody for the buyers, in which case my objection to bearer shares would largely vanish. I do not believe there is anything in the fear of the noble Lord, Lord Pethick-Lawrence, that sonic completely bogus company could enter the ring. I do not think it could happen; the others would not have it in.
The only point I can see in favour of the bearer share is that it dodges the stamp duty of 2 per cent. But the company has to pay 6 per cent. to the Exchequer out of its own pocket to convert its registered stock into bearers, so the Exchequer get a substantial sum in any event. I should have thought that some arrangement could be made whereby ordinary registered stock of this special type, perhaps by payment of a once-and-for-all 6 per cent., could afterwards be dealt in free of stamp duty in these particular "shops", in consideration of the fact that payment had been made equivalent to what would take place at the moment.
Another point one must impress on the citizens who are going to buy these things is that shares go down. Those who do not own shares have a habit of assuming that they always go up; but we all know, to our cost, that they have long periods when they go steadily downwards. It is only too easy to buy them when they are expensive and to see them go steadily down; and if one needs the money suddenly, one has to realise them when they are down and so make a loss. So there must be no undue advertising or that sort of thing. Every man must be fully aware that he is definitely taking a risk.
All the same, I think that this would be tapping a new source of savings. There are many households in this country—I repeat "households"—where a
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very large income is coming in every week, and, because there are very small commitments, it goes mostly on consumer goods of one sort or another—some of which, I suggest, are not necessary. I have heard of a working-class household being persuaded to buy a cocktail cabinet when they have never drunk a cocktail, and that sort of thing. Therefore, if these monies could be drawn into some form of savings it would be a good thing from the national point of view. At the same time it would ensure for these people some security from inflation for at any rate a portion of their savings. If, as I suggest, they had one-third so secured, one-third of their savings would have security against inflation.
Another effect—though it would not occur in the very near future: it would take many years to work out—is that over the course of time a considerable voting power of workers would be built up in the shares of some of these companies, and that voting power could have a decisive influence if used at annual general meetings, and so on. In that event, of course, we should see workers coming a great deal nearer to guiding their own industries than they ever have done through the nationalisation of industry. To sum up, my Lords, I believe that it is a good idea to look into this proposal. I think there are certain defects which could be ironed out, with the help of the Treasury and of the Inland Revenue, and if such a scheme was a success it could be very useful to the country.
6.22 p.m.
LORD CONESFORD: My Lords, if the sole subject of our discussion to-night were the desirability of there being more saving and of the workers putting some of that saving into industry, I think there would be (as indeed there is) a very wide measure of agreement in this House; and I think we are all grateful to my noble friend Lord Grenfell for giving the Government an opportunity of stating their views on this matter. What we are invited to consider, however, is not so much whether men should be encouraged to put their savings into industry but whether the investment should take this new form of bearer shares. Like the noble Lord. Lord Pethick-Lawrence, I desire more information on many of these points, but let me say at Once that I am very much impressed by the fact that Lord Grenfell

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and Aims of Industry have come to the conclusion that this would be a very useful step to take. That, by itself, would incline me to the view that there is prima facie something in it. Further, I was very glad indeed that Lord Amwell made it clear that there was no need, for any Party political reason, for anybody to take an a priori objection to the scheme.
I hope that my noble friend, when he comes to reply for the Government, will remind some of us who may have a little forgotten it what is the present law on the subject. The noble Lord, Lord Pethick-Lawrence, spoke once or twice of bearer bonds; but, of course, the position of bearer bonds is quite different. I think I am right in saying that if we own, or any of us owns, a bearer bond, we are not allowed to keep it ourselves: we must hand it over to our banker or to some other authorised depository. I am quoting from memory, and I may have the actual phrase slightly wrong, but I think that that is the position. That is under the Exchange Control Act. Now, these bearer shares, I understand, are not in that position at all. The owner can hold them himself and can keep them wherever he wishes.
I think that my noble friend Lord Grenfell made one slip, in answering a noble Lord on the other side, when he said that value could be received for one of these bearer shares only from the shop company, as I think it is called. I think that is not so. I think that my noble friend Lord Hawke is right in saying that these shares could quite lawfully be handed over, under any bargain which the owner chooses to make, to anybody outside. It is perfectly true, no doubt, that the obligation of the shop company to give value for it depends entirely on its being presented to them, but I hope that my noble friend, when he comes to reply, will tell me whether I am right in those assumptions. I share many of the views expressed in the last speech by my noble friend Lord Hawke. Though it is entirely legal and possible for these new shares to be held by the man himself or kept in his home, I should have thought it was extraordinarily desirable that he should do nothing of the kind. He should hand them over to the shop company or to some suitable depository.
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That leaves me with two further questions that I should like to put. If it is desirable, for the sake of ease of transfer and ease of holding a small share in a company, that there should be a special form of bearer shares, should they be confined entirely to these shops? Should they not be made more widely available? I do not know. No doubt it may be a good start to do what was advocated by my noble friend Lord Grenfell.
I should like one further matter to be considered. If this scheme is adopted and becomes general, and it becomes possible for the worker in a factory to buy fairly easily shares in his own industry and in various other businesses, would it not be a good idea that he should also be able to buy from the shop company another form of investment? Many noble Lords have spoken about the desirability of spreading risk. Now, I quite see, and sympathise with, the view of the Aims of Industry that such things as the unit trust should not he the sole method of investment in industry by the worker. The worker may well wish to share in the fortunes of a particular business which he himself has chosen. I entirely agree with those noble Lords who have already spoken that it is absurd to adopt this patronising attitude to the ordinary workman, who is able to do what I think a great many of us could not do—namely, understand the conditions of football pools, and the rest of it. The idea that he cannot pick and choose where he wishes to put his money is, I think, insulting to him.
I entirely agree with many of the remarks made from the other side by the noble Lord, Lord Amwell. I think a worker may well wish to put his money into the shares of a particular business—and that is, of course, the object that my noble friend has in mind. But may he not also wish to put some of his money into something that spreads the risk? I have in mind the ordinary stock or shares of investment trusts. I am not now speaking of unit trusts, but of investment trusts. Let me say at once that I have no knowledge at all whether any of these excellent English or Scottish investment trusts would be willing to convert any part of their capital into bearer shares of the kind now suggested, but if they were. I should like my noble friend and others to consider whether, among the bearer shares dealt with, the shop companies could

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not perhaps deal also with some bearer shares in investment trusts. Their investments are so well spread that the risk of the owner would be spread over a great many of the greatest industries in the country and, indeed, in the world.
Like the noble Lord, Lord Pethick-Lawrence, I have sought for further information, but I am convinced that the Government, who desire that there should be more ownership by the ordinary man, will not give a discouraging reply to this debate. I have no doubt that there are various dangers against which the Government must guard, but I think that the noble Lord, Lord Pethick-Lawrence, was wrong in thinking that there was any risk to taxation revenue, because obligation to deduct income tax would exist exactly as if the shares were registered. I think that that particular fear is not a real one. I apologise for the disjointed nature of the questions I have put. So far as this scheme is one for encouraging ordinary workers to save and invest in British industry, I think it is to be encouraged. So far as there may be dangers, I think that they have probably been foreseen and guarded against by those who devised the scheme. But, if they have not, and the Government have any suggestions, I am sure that the Aims of Industry will give them consideration.
LORD RITCHIE OF DUNDEE: My Lords, I wonder if I may intervene to make one point which I do not think was made clear by the noble Lord, Lord Grenfell. If the scheme comes into being, the shares purchased will be shares of companies which are quoted on the Stock Exchange, but I do not think that the noble Lord made it clear that the bearer shares themselves will not be quoted on the Stock Exchange, nor will dealings in them be permitted in any circumstances.
6.32 p.m.
LORD BLACKFORD: My Lords, may I be allowed to say a word or two on this subject before the Minister replies? Opinion is by no means unanimous on the point. The staff association of one of the industries with which I am connected recently approached the managing director and said that the staff would like to invest in the shares of the company but did not know how to set about it, and could he advise them. That shows that in that industry there was a feeling towards taking an equity interest in the
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fortunes of the concern. On the other hand, the staff association of another industry with which I am connected, where there was a staff sharing scheme of many years' duration, came to the general manager and asked that the sharing scheme should be terminated and an appropriate addition should be made to their salaries instead. This shows that staffs are not unanimous on this subject.
I think that the natural saving of a working man is, in the first place, towards the purchase of his home, and, after that or along with it, the purchase of his furniture, then the amenities of a home, like refrigerators and washing machines, and, after those, the luxuries of the home. He is rather inclined to save for these things before turning his mind to stocks and shares, of which he knows nothing at all. He may be clever about football pools and such like calculations, but his mind has been devoted to those from the earliest time. He has not given the same consideration to stocks and shares and has been taught by his political environment to regard them with definite suspicion. Therefore I am doubtful about the wisdom of executives of companies in encouraging the workers to invest in their concerns. I should not think of encouraging the workers in any concern with which I am connected to invest in that concern.
I agree very much with my noble friend Lord Hawke when he said that those who know nothing about stocks and shares are apt to think that they always go up. A great many industries have adverse experiences. Some of our greatest industries have been obliged, or are now obliged, to make some decrease in their dividends, and their shares do not stand at as high a price as they did. Of course, capitalist industry, competitive industry, is always liable to slumps and recessions. So it is not impossible that a working man, if he has been encouraged to invest in a concern in the confident belief that its fortunes will always go up, would suffer a very definite shock if they went down, and might feel a great deal of resentment. Therefore, I am doubtful about the idea of forming a shop company which embodies the idea of encouraging the workers to buy shares. Presumably, the shop company would have some sort of manager who would want his company to be successful and would propagand in favour of his company and

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so forth. That all involves the idea of encouraging the workers.
Even in this debate I have heard phrases like, "We can tap a new source of saving." That sort of phrase denotes the idea of trying to get the workers into this scheme. I am against that. If workers were to come up of their own free will and join any scheme, I would say, "I am pleased to show you how you can do it and I will facilitate your action, if you do it by such and such a means, which can be discussed later; but I do not encourage you to do it. You do it entirely of your own free will, and, if you make a mistake, do not blame me. You will have only yourselves to blame. If, with your eyes open, you wish to invest in my industry in which you are employed, I shall be pleased to help you, but do not say I encouraged you to do it."
6.38 p.m.
THE MINISTER WITHOUT PORTFOLIO (THE EARL OF DUNDEE): My Lords, I have listened with the greatest possible interest to all that has been said by your Lordships in discussing the merits and possible dangers or drawbacks of the scheme which has been explained by the noble Lord, Lord Grenfell, to help small investors to acquire industrial equities by means of issuing bearer shares disposed of through the agency of shop companies. I hope that your Lordships will not think that I am uninterested in the argument if I do not enter into the argument itself but confine myself rather strictly to the primary interest of the Government in this matter, which is that any scheme of this kind should, in general, be in conformity with the Companies Acts, and, in particular, not facilitate the illegal export of capital contrary to the Exchange Control Act.
As your Lordships are aware, there was never any restriction on the issue of bearer shares until 1940. Bearer shares may sometimes be convenient and useful, and sometimes not. But there is not the slightest reason why everybody should not have perfect freedom to issue bearer shares if he wants to do so, except for the special reasons for which bearer shares were prohibited in 1940, and which we all hope may, in the long run, be only temporary. It was during the war, because of our exchange difficulties and war-time needs, that we had to prohibit
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the export of capital; and since bearer bonds and bearer securities are a particularly easy means of enabling money to be illegally exported, their issue was prohibited under the Emergency Powers Act in 1940. After the war, unfortunately, although it was in time of peace, our exchange difficulties continued, and therefore it was necessary to pass the Exchange Control Act, 1947. Under Section 10 of that Act the issue of bearer bonds is prohibited except with Treasury consent; and under succeeding sections—I think Sections 15 and 16, about which my noble friend Lord Conesford asked—if and when the Treasury do consent to the issue of bearer shares, these have to be placed with what is called an "authorised depository", which might be a hank or a finance company or a solicitor, who would be responsible for seeing that the bearer bonds were not illegally exported.
We all hope that exchange difficulties will not last for ever and that these laws which we have passed to safeguard our position will not be necessary for all time. They are necessary now. But we want to relax them as much as possible, consistently with our present necessity of preserving the exchange control which we now have. The Chancellor of the Exchequer was asked in another place on November 13 whether he could relax the present exchange control rules (which the Treasury have power to do under the Act of 1947) in the case of schemes such as have been described by the noble Lord, Lord Grenfell, and he replied [OFFICIAL REPORT, Commons, Vol. 595 (No. 13), col. 62]:
"I think that it would he reasonable to allow a company to convert its registered shares into bearer form if it could show good reason for this, if the hearer share warrants would be of small denomination, and provided that the arrangements would be such as to ensure that capital could not be exported from this country without Treasury consent."
The Treasury have felt it right to impose a double safeguard in allowing the issue of these bearer shares. First they say that they should be of small denominations; and the maximum denomination which will be allowed is £5. So that if they were illegally exported it would still not be possible for a man to take out of the country a very large sum of money on a very small piece of paper. But the other safeguard is a more important one. It is that these bearer shares should be

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marked so that they will not be what is called "good delivery"—that is, not acceptable as good tender—on any stock exchange. That makes it unnecessary for the requirement that they shall be placed with an "authorised depository"; and that is what I think my noble friend Lord Conesford wanted to know. It means that it will not be worth while anybody exporting them illegally, because if they are not legal tender on any stock exchange the man who did so would probably not succeed in getting any money from them when he got abroad.
I do not think that necessarily means that they could not be privately bought and sold outside the shop company, which was another question asked by my noble friend Lord Conesford. I think that perhaps what my noble friend Lord Grenfell meant when he said that they could be dealt with only inside the shop company was that that would be the normal and usual method of doing it. I think that in fact they could be dealt with outside the shop company privately and that there is no legal reason against that. But they could not be quoted and sold to any person on the Stock Exchange; nor could they be profitably exported abroad. It is not really the concern of the Government whether they are sold privately outside the shop company or whether they are only sold within the shop company. The only concern of the Government is to protect our exchange control position: subject to that, we want to allow as much freedom as possible.
The noble Lord, Lord Pethick-Lawrence, raised the question of possible avoidance of income tax on the dividends from these bearer shares. Under Section 234 of the Income Tax Act, 1952, the Special Commissioners of Income Tax have power to require any person or any company through whom bearer shares have been issued to give him a return of all the persons to whom dividends have been paid on the coupons of these bearer shares. That is, I think, a reasonable safeguard against evasion of tax, which in this case of course would be due from people whose identity was not immediately known to the Revenue.
The noble Lord also suggested that these shop companies might be used for fraudulent purposes in order to rob the investors. I suppose that any company of any kind which was run by wicked people might be used for a fraudulent
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purpose, and the safeguard against that, apart from the Common Law, is the Companies Acts and the Prevention of Fraud Act. It seems to me that if the Government were to prohibit people from issuing bearer shares and forming a shop company merely because of the fear that the company might turn out to be fraudulent, it would be rather like prohibiting an ordinary householder from keeping a poker in the fireplace of his living room for fear that he might use it to beat his wife. People sometimes do use pokers to beat their wives, but that is not the proper use of pokers; and fraud is not the proper use of companies.
LORD PETHICK-LAWRENCE: May I put this point to the noble Earl? This particular industrial company opens its room for the sale of all these things and puts in the shop window, as I understand it, all sorts of other shares of all sorts of other companies. To some extent, my point has been met by my being told that they must be quoted on the Stock Exchange. But, even so, a great many securities are quoted on the Stock Exchange in which probably other noble Lords as well as myself would not care to invest. A company—I should not say "bogus" company: that probably overstates the position, but a company whose shares are not very good and are likely to go down, such as the noble Lord, Lord Hawke referred to—comes along to this company which has the shop and says, "Would you mind putting some of my shares on the market for your investors in bearer bonds?" So this company sells a number of these and, as most people expect, they go down a great deal. I think you want some protection against that kind of thing. The only point I rose to ask was: Does the noble Earl think that the Treasury, in sanctioning these shops, as I understand is the intention, will insist upon certain safeguards to prevent the shops from being used improperly for the sale of miscellaneous shares, and ensure that they make no guarantee that the shares are going up and do not give a guarantee that they will not go down.
THE EARL OF DUNDEE: My Lords, I am sure the Treasury will insist that it should comply with the Companies Act, and that it should not act as a bucket shop. I do not think the Treasury or anybody else can prevent people from

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making unwise investments. As the noble Lord, Lord Hawke, and the noble Lord, Lord Blackford, rightly pointed out, some investments sometimes and, indeed, fairly often, go down. Of course, that does not always apply exclusively to equity shares. People who put their money in the Post Office Savings Bank may find that after ten years inflation has halved the value of their money, and people who invested it in Doctor Dalton's Loan find, to their dismay, that they have lost one-third of their nominal capital, and a much larger proportion now, if you allow for inflation.
The Government do not propose to advise people to invest in this particular way, but I think we must, in this modern age, regard the small investor not as a child who has to be looked after and led by the hand, but as a responsible person who is as good a judge as anybody else of the way in which he wishes to invest his own money. Not only the Government but, I am sure, noble Lords in all parts of the House, are strongly in favour of a better distribution of property and a far greater amount of small ownership, and we are also in favour of doing anything we can to increase industrial investment. The Government cannot commit themselves at present to the proposition that this scheme which has been described by the noble Lord, Lord Grenfell, is the best way of doing that. But so long as it does not facilitate—and we think we have taken reasonable precautions against it— the illegal export of money, and so long as it does not defeat our present exchange control system, we see no reason to place any unnecessary obstructions in its way, nor do we see any reason to do other than wish it every success.
6.53 p.m.
LORD GRENFELL: My Lords, I shall say only a few words. First of all, I should like to thank the noble Earl, Lord Dundee, for putting me right on the question of the shop company obligations. What my noble friend Lord Conesford said is absolutely correct. As these shares are not going to be quoted on the Stock Exchange or dealt with on the Stock Exchange, the normal place to which they will find their way back will be the shop
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company, because that will be the easiest place to redeem them.
LORD PETHICK-LAWRENCE: Do I understand that the workman, or the person who has bought one of these shares, can sell it to his lodger or anybody upstairs, and that he can sell it to anybody else? That is what I understood was possible with a bearer bond. I had understood from the noble Lord that that was not possible with these bearer shares, but it seems to me that he has now gone back entirely upon that statement.
LORD GRENFELL: The noble Lord is quite correct, and I apologise to the House for a slip of the tongue. He can sell it to anybody, but as it is not quoted on the Stock Exchange the normal place for it to come back to would be the shop company.
There is nothing much more to say, except that I think we must not delude ourselves that the working man is a person who is completely incapable of looking after himself. That has been hinted at in some places. I am quite sure that the shop company would arrange to retain the custody of the shares if so wished. With regard to the risk of the shares going down, we must also remember that dogs and horses lose races, and it is just a question of whether you would rather have the money going into industry or into football pools or dog racing. Personally, I should like to see the money going into the industries. I am most grateful to noble Lords who have spoken in this debate, and I am most grateful to the Government and the noble Earl, Lord Dundee, for his reply. I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

ADOPTION BILL [H.L.]
Read 3!(according to Order), and passed, and sent to the Commons.

NATIONAL DEBT BILL [H.L.]
Read 3! (according to Order), and passed, and sent to the Commons.
House adjourned at four minutes before seven o'clock.