Lords Sitting of 11 February 1958

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

  PARKING OF MOTOR VEHICLES
  2.35 p.m.
  EARL HOWE: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
  [The Question was as follows:
  To ask Her Majesty's Government whether they have been able to examine the French plan for the institution of a "blue zone" for the control of parked motor vehicles, and, if so, whether it offers a cheaper and more efficient method of dealing with the problem than the institution of parkins, meters; and, if so, whether the institution of parking meters can be deferred for further consideration, and so save the country a considerable amount of unnecessary expense.]
  THE MINISTER WITHOUT PORTFOLIO (LORD MANCROFT): My Lords, my right honourable friend the Minister of Transport and Civil Aviation has received a detailed report of this French system of parking control from Mr. Alex Samuels. Chairman of the London and Home Counties Traffic Advisory Committee, and a small group of experts who at the Minister's request recently visited Paris to make a special study of the so-called "blue zone" and of this disc parking device. In spite of its apparent success in Paris, Her Majesty's Government consider that it would be less effective than parking meters as a method of parking control in the different conditions which exist in this country, particularly in London. The French disc system does nothing to control where parking may take place; nor, since it makes no direct charge for parking, does it do anything to regulate the demand. The system is more readily evaded, and it is estimated that it would take three times as
  564
  many people to enforce adequately compared with parking meters. Her Majesty's Government do not therefore believe that the system provides any reason for deferring the experiment with parking meters, which, as has already been announced they have decided to authorise.
  EARL HOWE: My Lords, while thanking the noble Lord for that Answer, I should like to ask him whether he is aware that the so-called experiment of decorating certain areas of the West End with parking meters is likely to cost about £90,000? I have in my hand the French equivalent of the parking meter, which costs exactly nothing. In these circumstances, ought not the Minister of Transport and Civil Aviation to think again? Why spend £90,000 when you can have something that is practically the same for nothing?
  LORD MANCROFT: My Lords, I too have a copy in my hand; and I agree that it costs nothing. But surely we have to set against the cost the efficacy of the scheme, and in our opinion parking meters will be much more efficient than this French scheme.
  LORD DERWENT: My Lords, may I ask my noble friend whether we could not also have, in the same area, in conjunction with the parking meters, an experimental "blue zone" for that part of the area in which parking meters will not be put up?
  LORD MANCROFT: My Lords, I think that that would lead to total chaos. I think that it would be preferable to try our scheme first and see how it works.

  WATER BILL [H.L.]
  LORD MANCROFT: My Lords, I beg leave to introduce a Bill to confer powers to meet deficiencies in the supply of water due to exceptional shortage of rain and to revoke, with savings, Defence Regulations 50A and 56. I beg to move that the Bill be now read a first time.
  Moved, That the Bill he now read 1a.—(Lord Mancroft.)
  On Question, Bill read 1a; and to be printed.

NEW TOWNS BILL
2.39 p.m.
Order of the Day for the Second Reading read.
THE MINISTER OF STATE, SCOTTISH OFFICE (LORD STRATHCLYDE): My Lords, I rise to move that this Bill be now read a second time. Your Lordships will recollect that we had a debate on new towns, on a Motion introduced by the noble Lord, Lord Silkin, on November 20, 1957, in the course of which there was a general review of progress in new towns. The noble Lord referred in his speech to the fact that a Bill for additional finance for new towns was coming along, and suggested that that might be the occasion for a discussion on the general finances of the new towns. That seems the convenient course, and I propose to deal primarily with financial aspects of new towns, rather than with their general progress.
The Bill itself is simple enough. Clause 1 allows an increase in the total money which may be issued from the Consolidated Fund to meet the capital expenditure of the development corporations. The New Towns Act, 1946, provided £50 million for this purpose, and this sum has been successively increased, as will be seen from the Explanatory Memorandum, to £100 million by the New Towns Act, 1952; £150 million by the New Towns Act, 1953; and £250 million by the New Towns Act, 1955. We now propose to increase the aggregate amount, by a further £50 million, to a total of £300 million. As the Explanatory Memorandum to the Bill explains, expenditure of about £225 million has already been approved, mainly for housing, and a substantial part of the £25 million which can be issued under the present law will be needed during this Session of Parliament. We estimate that, at the present rate of progress, the additional £50 million will provide for commitments up to the end of 1959.
Clause 2 of the Bill removes a duplication in the presentation to Parliament of the annual accounts of the development corporations. Previously, copies of the development corporations' annual accounts have been presented twice each year to Parliament, once with the corporations' annual reports, which naturally
566
include their accounts, and a second time by the Comptroller and Auditor General, with his Report on the accounts of issues from the Consolidated Fund and advances to the corporations. The result has been a duplication of some 300 pages of print. Clause 2 amends the 1946 Act so as to require the corporations to include the accounts in their annual reports. At present they are not statutorily obliged to do this, though, as I have said, in practice they all do. Conversely, the clause relieves the Comptroller and Auditor General of his obligation to include the accounts with his Report. He will, of course, continue to present to Parliament annually a report on the corporations' accounts, but he will do this after the corporations' annual reports containing these accounts have been made available and are in print.
That deals with the subject matter of the Bill, and I should now like to turn for a moment or two to the general question of the financing of the development corporations. Advances to meet their capital expenditure are made by the Minister of Housing and Local Government, and by the Secretary of State for Scotland, from issues which are made to them for that purpose from the Consolidated Fund; the corporations have no power to borrow from other sources. These advances are repaid by equal annual instalments of principal and interest over sixty years. The rate of interest now current is 6 per cent. Until September last the corporations were charged the same rate as local authorities are charged by the Public Works Loan Board, but the Government have recently decided that as development corporations are financed by the Exchequer it is appropriate that they should pay the rate for Government credit.
Before I speak of the financial position of the new towns, I should like to explain to your Lordships that their accounts consist of a balance sheet, a general revenue account and a number of schedules which include an ancillary revenue account. This ancillary revenue account shows the revenue costs of services of a. kind which are normally the responsibility of local authorities or statutory undertakings: that is, sewers and sewage disposal works, water, main roads and in some cases parks and open spaces. All other revenue income and expenditure is shown in the general revenue account.

567
During the year 1956–57, the last for which accounts are available, six of the English corporations and the Welsh corporation had a surplus on general revenue account, and the remaining five had losses, the net result being a surplus of nearly £36,000. On the other hand, all but three had substantial deficits on their ancillary revenue accounts totalling £751,000. During the same year the three Scottish corporations had deficits on general revenue account totalling £307,105 and only a small deficit of £630 on ancillary revenue account. The accumulated deficits of all new towns is at this moment nearly £4½ million.
The figures reveal fairly substantial losses on both the English and Welsh new towns and the Scottish ones but the reasons are entirely different. In the case of the English and Welsh new towns, the deficits are mainly due to the provision of sewerage services. Normally, as I have said, sewerage is a responsibility of the local authority, and in the Scottish new towns the local authorities provide this service; but in England and Wales, because of the scale of the development and the heavy cost it was necessary in most cases for the development corporation to undertake the work. There are exceptions. These are Corby, Welwyn and Hatfield, where there was already a substantial township in being and the local authority was prepared to undertake the work.
Since sewerage facilities have to be provided considerably in advance of the building of houses, shops and factories which in the long run pay for the service, through the sewerage rate, the cost has to be borne by the corporation rather than the present ratepayers. The local authorities make a contribution to the corporations out of the rates, but a considerable share of the total cost of sewerage is left on the corporations' shoulders. What the local authorities' contributions should be is a matter for negotiations between them and the corporations, subject to the determination of the Minister where they are unable to agree. So far, I am glad to say, it has been possible for agreement to be reached, but determinations have been made in three cases.
The development of the new towns has now progressed to the point where, with rapidly increasing rateable value and the revenue from rates that goes with it, the
568
local authorities ought to be asked to take over the works constructed by the corporation and assume their normal responsibility for these services. My right honourable friend the Minister accordingly proposes to invite the corporations to consider with the local authorities for their areas the terms on which the latter should take over main sewers and sewage disposal works built by the corporations.
The provision of water services has also, for similar reasons, been a heavy burden on the three corporations—that is, Harlow, Crawley and Stevenage—which undertook that service. In the case of Harlow, the corporation has been able to dispose of its works to the water undertaking in whose area it lies. Negotiations for transfer are in progress at Crawley but have not so far commenced at Stevenage.
The main reason for the heavy deficits of the Scottish corporations was the impossibility of keeping housing revenue accounts in balance under the old rating system. As your Lordships are aware, changes in the Scottish rating system were introduced by the Valuation and Rating (Scotland) Act, 1956, and these changes are expected to take full effect in 1960–61. These changes, coupled with the prospect of more rent income being available to the corporations, which we are now discussing with them, should, we feel, result in a healthier picture in the Scottish corporations' accounts before very long.
The English and Welsh new towns do not suffer from such rating difficulties. The policy (originally laid down by Lord Silkin when he was Minister) has always been that housing, with the aid of the normal subsidies, should balance; and, broadly speaking, this has been achieved, although a few of the corporations are finding it difficult during the present period of high interest rates and have run into deficit on housing. Recovery from these deficits will necessarily take a little while, but the steps taken by the Government to stop inflation will help by stabilising costs, and when the economic situation has improved sufficiently to enable some relief from the present high interest rates it should be possible to restore the balance.
The overall position revealed by the accounts for 1956–57 is somewhat

569
gloomy, but the prospect for the future is brighter. The corporations are at present in mid-stream. The very large capital expenditure of over £172 million of all corporations necessarily includes a substantial amount—about 15 per cent.—which is not yet remunerative. This proportion of unremunerative expenditure will fall as development proceeds and housing, shops and industry catch up with the advance provision of main sewers, roads, and so on. There is, accordingly, a reasonable hope that in due course the revenue account will come out on the right side. In the very long term when the advances have been wholly repaid after sixty years, there will, of course. be a clear gain because much of the development will still have years of useful life.
Financial success is, of course, not the sole criterion. New towns were not ventured on as a purely financial investment: they were primarily a large-scale planning operation forming one of the most significant social developments of the present century—an experiment which has attracted, and indeed is still attracting, the attention and admiration of experts in planning from many parts of the world. The provisions of the Bill will enable this excellent work to be carried forward, and I therefore commend it to your Lordships' House. I beg to move.
Moved, That the Bill be now read 2a—(Lord Strathclyde.)
2.55 p.m.
LORD SILKIN: My Lords, I am glad that the noble Lord, in introducing his Bill, finished his speech on a much more cheerful note than when he began. Whether that is a form of art in which he kept our expectations up to the end, or whether, as he went along, he became more enthusiastic about new towns, perhaps only he can say. He told us that if one looked at the picture at this moment it was gloomy but that the prospect for the future was much brighter. I would remind the noble Lord that if he went on to any building site in the early stages he would find it an awful mess, but that would be no indication of what: that site is going to be like when the job is finished; and this job, in the case of a number of the new towns, is likely to be finished in the course of the next few years. Indeed, one of the
570
remarkable things about the new towns is that, by and large, they have kept up to the original programme. It was contemplated that they would be substantially completed within ten to fifteen years, and the fact is that most of them will have been completed within that period from the time they were started.
I would invite the noble Lord to look at the picture as it is likely to be at the time when they are virtually completed, and I think he will go away in a much more cheerful financial mood than would appear from the picture he gave to us this afternoon. I fully agree with him that the case for new towns does not rest primarily, or solely, on finances, but these new towns have got to justify themselves financially as well as socially, and I believe that that is exactly what they are doing.
The noble Lord gave us a number of figures, but there is one figure which I wish it would have been possible for him to give us, because it would, in my view, have provided a realistic picture of what has been achieved. Would it not be possible to get a valuation of the capital that has been invested in each of the new towns? When we take new towns that are fairly well advanced—such as Crawley, Harlow, Hemel Hempstead, Stevenage—it is to-day possible to value the property that has actually been completed; and from all the inquiries I have made the view is widely held by people in a position to know that already the value of the assets of the new towns is higher than the amount of capital expenditure. In other words, if the assets of the new towns were valued, they would already show a surplus.
I leave out housing, because that is a social service which would have had to be provided in any case, if not in the new towns then in the towns from which population has been exported. And may I say, in passing, that if that had been the case, in many instances the cost of building those houses in the old towns would have been very much higher than the cost of building them in the new towns. They would have been built to a considerable extent in the form of flats, and everybody knows how much more costly it is to build flats on expensive sites in the towns than to build houses on relatively cheap sites in the new towns. But leaving housing out of account

571
altogether, I would maintain that already a proper valuation would show that there is today a surplus in all the towns where substantial progress has been made. I would ask the noble Lord whether it is not possible to get some kind of valuation in order on a future occasion to give to the House a realistic picture of where we stand.
If these schemes had been carried out by private development, private developers would have certainly anticipated being able by this time to show a profit—and, indeed, proof that the general view is that these towns are profitable is given by the fact that a number of people who are already connected with the existing new towns are very anxious, as a private venture, to start a new town themselves. They certainly would not be doing it—and they are in a position to know—if they did not imagine that there was a substantial profit in the new towns. For these reasons I hope that we shall have these figures at some time in the near future, and I am sure that the noble Lord will then be in a position to present a much more cheerful picture than he gave us this afternoon.
If I am right that already there is a surplus in the case of those towns that are substantially developed, and if the noble Lord is right in saying that he is fairly confident that in the long run they are going to be profitable and that the new towns have achieved all that he says in the way of social development and the betterment of the people who are living in them, better health for the children and better surroundings for the people as a whole, I should like to ask the noble Lord why additional new towns have not been built. The case for them is made out; it is conclusive. Noble Lords opposite claim that they are just as enthusiastic about new towns as we were—at any rate, they no longer allege, as they did at the outset, that these were Utopian ideas. Those ideas actually materialized, and to-day noble Lords opposite are just as keen as we are. If that is so, why have they not designated a single additional new town since the Labour Government designated the last? We designated fifteen, and there are fifteen. I am not sure about one in Scotland. That might have been under consideration at the time, but, if that is so, the noble Lord can have that one. Apart
572
from that, however, not a single one have they designated, and they have gone out of their way to say that it is not their policy to build any further new towns.
If the case for it is justified in the case of the existing ones, then surely there is exactly the same case for additional new towns—namely, the need to disperse populations from the large conurbations, such as Manchester, Liverpool and Birmingham and even Greater London. The six existing new towns are quite inadequate for the purpose. Although there is on the Statute Book the Town Development Act, which is designed to do very much the same kind of thing, in fact little progress has been made with any town development under the Town Development Act. It is a complicated business which requires the agreement of so many local authorities that it has been hardly possible to achieve agreement with any of them, and really the right solution is the new town. So I hope that the noble Lord can tell us why we have not had any more new towns.
The noble Lord has told us (it is the first time that I have heard it) that it is now intended to ask certain local authorities—I do not know whether it is all of them—for a contribution in respect of main sewerage and sewage disposal and water, the cost of which hitherto has been borne to a considerable degree by the new towns. I have not the slightest objection to there being discussions, but I hope there will not be undue and unfair pressure on the local authorities. In a number of cases they have had a heavy burden to bear by reason of the coming of the new towns into their area. They have had to incur considerable expenditure in advance of getting any return from the rates, and while I think it is right that, if they are getting a return from the rates in respect of these works, they should make their contribution, I hope that there will not be undue pressure.
My noble friend, Lord Latham, is going to deal with the subject of interest on rents and I do not propose to say much about it, except that I feel that the Minister should explain why the development corporation should be asked to pay a higher rate of interest than that which is charged by the Public Works Loan Board. But my noble friend will develop that point and no doubt the Minister will have an

573
opportunity of explaining it. As the noble Lord said, we had a debate on November 19 last in which the new towns were fully discussed, and I do not want to detain the House any longer in discussing the financial aspects. I would repeat that, in my view, already there is clearly an indication that the new towns are a financial success, as well as the social success that the noble Lord agrees they are, and, in the light of those facts, I repeat that I hope the Government will in the near future reconsider their decision about starting additional new towns.
3.7 p.m.
LORD LATHAM: My Lords, we have just listened to a wise and compendious speech by my noble friend Lord Silkin, who I think all noble Lords will agree is entitled to feel a proper sense of pride in being what I may describe as the legislative architect of this great social experiment, which has now become an impressive social achievement, The noble Lord, Lord Strathclyde, concisely, if perhaps a little restrictively, explained the purposes of this short Bill. I confess to being a little intrigued that this Bill, which deals with twelve new town corporations of England and Wales and three of Scotland, should have been introduced in the other place by the Joint Under-Secretary of State for Scotland; and in this House by the Minister of State for Scotland. I do not know whether one has to attach any real constitutional significance to that fact—whether it rather indicates that, in the unfolding development of the Commonwealth, England and Wales is likely to become a dependency instead of a protectorate.
The noble Lord said that this—was as indeed it is—a proper occasion to consider certain financial aspects of the new towns, and there are, of course, important financial aspects which have their social repercussions with which the noble Lord did not deal and to which I propose to refer. I shall rely largely upon the published reports of the operations of the twelve new towns of England and Wales up to the end of March, 1957. Those reports together constitute a great and impressive social document, and I shall take the opportunity to quote rather freely from the various reports, seeking so far as possible to quote from the new
574
towns' reports, so to give, as I think, a representative view of the many problems, difficulties and frustrations which they have faced and are still facing.
It is stated in the Memorandum accompanying the Bill, in paragraph 4, that:
"At the present rate of progress the additional £50 million in the Bill will provide for commitments up to the end of 1959."
No doubt that is the case. But, unhappily, this rate of progress is being retarded by the operation of increased costs, principally by the operation of higher rates of interest, and in some cases at the positive instance of the Minister. The Joint Under-Secretary of State for Scotland, introducing this Bill in another place in November last said [OFFICIAL REPORT (Commons), Vol. 578 (No. 18), col. 1316]:
"The interest rates which corporations have to pay to the Exchequer necessarily affect the scale and planning of their own building programmes and all the corporations have been reviewing their commitments and deferring any expenditure which can be deferred."
He went on to say that this was sensible. But is it? Is it sensible to retard the progress of this great social experiment because the financial management of Her Majesty's Government has led to high interest rates? We are now told that the rate is to be 6 per cent.
This running down of progress inescapably means that the intended pattern of the new towns is being distorted, and practically all the corporations are very disturbed at the fact that they have been required to limit the progress which it was intended they should make. In one after another of these published reports we find corporations complaining of the crippling effect of increased costs, especially of the high interest rates which are being charged. Rates have gone up from 3 per cent., in 1951, to over 5 per cent. in 1956; and as the noble Lord has said, the present rate is 6 per cent. And that is, of course, 6 per cent. for sixty years—not for a short period. If lower interest rates are brought about in the near future, the corporations will still be left with a liability for a rate of 6 per cent. in respect of any monies which they borrow at that rate, a liability which continues for sixty years.
I should like to quote the views of the Hemel Hempstead New Town Corpora

575
tion, appearing at page 285 of the volume of published reports:
"Rising costs of building, increased borrowing rates and economic crises have all combined to reduce the standard of housing and to increase the rents."
It is very unfortunate that in these new towns the standard of housing should be reduced, for that standard, and the maintenance of a high standard, is not only important to-day but will be even more so in the years to come. The same report goes on:
"Furthermore, Government policy has prevented many desirable amenities and social attractions from being provided."
That quotation relates to Hemel Hempstead. The Crawley Development Corporation say (page 166):
"While high interest rates generally tend to curtail or postpone capital investment, a development corporation at the peak of its programme is inevitably committed by the impetus arising from investment completed and in progress. To this extent higher interest rates must have an inflationary tendency."
So it follows that the policy of Her Majesty's Government of having a high rate of interest in order to defeat inflation is, in the view of the Crawley Development Corporation, actually encouraging inflation. Another representative new town is Peterlee—and I quote now from page 336 of the published volume, which says this:
"As can be seen from the report, during the year under review the corporation's normal programme has been reduced at your Ministry's request in order to conform with the restrictions placed upon capital expenditure and as a matter of internal policy. The decision to reduce the building programme was taken by the corporation after full consideration of the effect on rents of the high interest rates which prevailed during the greater part of the period and which affected all developers in some measure."
As will be clear from those extracts, which are representative of the situation facing all the corporations, high interest rates have led not only to a retardation of the progress of the corporations but also to high rents, with the result that the pattern of the new towns is becoming distorted. There is a danger that the pattern of the community which it was intended the new towns should provide may become unbalanced. Because of the high rents there is great danger of there being an excess proportion of residents drawn from those groups which can pay higher rents. Workers in a number of cases (I belies e an increasing number) are finding
576
the rents so high that they are reluctant to go to the new towns. I will not pretend that there is yet a serious drift back, but there is a drift back from some new towns by some persons who have been taken there from London.
It is equally the case—though I do not wish to exaggerate the extent of this difficulty—that there is an increasing number of instances where industrialists and those running commercial enterprises in the new towns, who have taken their factories and their premises to the new towns, are finding it difficult, largely because of the high rents, to get the necessary labour. As I said, I do not want to pretend that at the moment this is a serious problem but, what I have said, speaking from some knowledge and as a co-opted member of the Housing Committee of the London County Council, is based upon actual happenings and actual facts. Sir Humfrey Gale, who is the Chairman of the Basildon Corporation, in evidence before the Public Accounts Committee stated, and put in figures in proof, that high rents were due as to 70 per cent. to high interest charges and as to 30 per cent. for increase in building costs. And that, my Lords, was before the bank rate went to 7 per cent., and (as has been confirmed by the noble Lord this afternoon) before the corporations were to be charged 6 per cent.
I now come to the question of the housing pool. I am aware that under Section 12 (1) (I think it is) of the New Towns Act, 1946, the housing pool is entitled to receive only the rents from houses, coupled with the subsidy, which I think is at the rate of £32 per dwelling per annum, and the housing pool fund is required to balance. It may well have been that, with lower and appropriate rates of interest, that result could have been achieved. The income from industrial and commercial properties is excluded from the housing pool. Why, I cannot understand, because the whole conception of the new towns was that there should be created a community of residents and of industry and commerce. It was no good providing residences for people a long way from their place of work therefore it was intended, and has to a very large extent been achieved, that industry and residents should be brought together. They are both parts of one problem they are not two separate problems. And it seems to me highly proper

577
that if, for reasons of high interest rates or high cost, the housing pool accounts cannot be balanced by the inclusion only of housing rents, then the rents of the industrial and commercial properties should be included.
I know, or at least I apprehend, that the noble Lord, Lord Strathclyde, will have a ready and quick and, if I may say so, an equivocal answer. He will tell the House that this was a policy decided upon by my noble friend Lord Silkin, which has been followed, I understand, by successive Ministers. That may be the case—it is not my business to defend Lord Silkin; he is quite capable of doing that himself—but there is this to be said for that policy. It was adopted on the basis that the rate of interest, which was 3 per cent., and building costs, which were much lower than they now are, were such that the housing account could balance on the basis of the receipt of only housing rents. But that is not the case to-day, and it seems to me to be a little inept for the Government to insist that commercial rents should not be credited to the housing pool.
Furthermore, this policy of limiting the housing pool strictly and rigidly to housing rents has been carried almost to an absurd point by the Government. For instance, the rents of garages which are attached to the dwellings are properly and admissibly brought into the housing account. But if (as is the case, I believe, with all the corporations), instead of attaching an individual garage to an individual house, groups of garages are built in what might be called (inoffensively, I hope) compounds, so reducing costs and helping to enable the corporation to achieve its intended density, the rents of those garages are not permitted to be brought into the housing account. That seems to me to be a Gilbertian situation.
I should like now, my Lords, to say a word or two on the question of amenities. In most of the new towns there is a sad lack of social, recreational and cultural amenities, with the result that the younger people are finding it difficult to settle down. There is a crying need for the provision of playing fields and swimming baths; indeed, many of the corporations are lacking what are now regarded as the accepted minimum health facilities. In that connection I should like to quote from the Report on
578
the Hemel Hempstead New Town, page 285 of the volume. This is what it says:
"Furthermore, Government policy has prevented many desirable amenities and social attractions from being provided,"
It is the case that a number of these amenities are normally provided by local authorities, but under the restraints and the restrictions of local government expenditure, local authorities are unable to provide them in the list of their own priorities. I understand that in a number of cases, even when the local authority was willing to provide the amenities, loan sanction from the Minister could not be obtained. It seems to me unfortunate that the utility and value of the new towns, upon which so much has been spent and to the creation of which so much thought and service have been given, should be, as it were, damnified by the absence of reasonable and acceptable amenities.
I come to a matter which was referred to forcibly, I thought, by my noble friend Lord Silkin—that is, the decision of the Government that there are to be no more new towns in England and Wales. Large cities are facing an almost insoluble problem of how to deal with what we now call overspill of their populations. An acute situation in that respect exists, so we are told by the Press, in Birmingham, in Manchester and, I believe, also in Glasgow, where it is estimated that 300,000 people will have to be dispersed, if that is the word, or decanted—that is not a pleasant word.
Last week it was stated in the Press that representatives of nineteen county districts in Middlesex had met in conference to discuss whether something could not be done to provide a new town, or new towns, for the excess population of their districts. They are proposing to make representations to the Minister. The London County Council, after pressing the Minister for well over two years for another new town, especially, but not exclusively, to provide for the remaining overspill of London, and after getting the reply that the Government did not propose to build any more new towns in England and Wales, have been compelled to decide to build one themselves, at an estimated cost of in the region of £50 million over ten years.
The question of dealing with the overspill from great cities, and especially

579
from the conurbations (to use an ugly word), is not a problem which ought to be left to individual local authorities or to a number of, relatively speaking, small local authorities, such as the nineteen district councils of Middlesex. This was recognised in 1946. It was thought then, with the concurrence of most informed people of good will, that it was a matter for the Government. It is a national matter. Especially is that the case in regard to conurbations. Under the proposed legislation of the Government steps are to be taken to deal with these conurbations. Commissions are to inquire into them in England and Wales and a Royal Commission into the situation in Greater London.
The problem of dispersing population is related to, and part of, the problem of conurbations. and these can be prevented, as they ought to be, by the building of new towns. Whilst, as my noble friend said, it may well be that, in the long run—and I do not think that the noble Lord, Lord Strathclyde, dissented from this: it depends how long the run has to be—these new towns will prove to be very worthwhile investments financially, apart from their great and lasting merits socially. But initially the burden which would be cast upon a local authority in building a new town is such that only the largest—probably only the London County Council, Manchester and Birmingham—could face the initial financial obligations involved during, say, the first ten years in buildng a new town.
Already where people have been decanted to some other district, the exporting local authority has lost a considerable amount of rateable value. It is true that it has also lost the obligation to provide certain services, which the local authority of the place where the new town is must provide. In regard to education, there can be a considerable saving to the exporting local authority and a heavy expense to the importing one. There are many other services which have been created to deal with a population, and these services remain and have to be maintained even though the population is substantially reduced, as was the case of London, whose population went down from 4,300,000 around 1930 to something like 3,380,000 to-day. A local authority exporting its population has to
580
maintain services which have become in some measure redundant because of the fall in population.
It is much to be hoped that the Government will think again and reverse their decision not to build any further new towns in England and Wales. I hope the noble Lord, Lord Strathclyde, will be able to give us some satisfaction on the points I have raised, even to considering whether in the special circumstances of the new towns, Section 12 (1) of the New Towns Act, 1946, cannot be amended in order that commercial, industrial and shop premises and other rents, receipts and incomes can be brought into the housing pool, and also whether, having regard to the burden of 6 per cent. interest which is cast upon the new towns development corporations, some adjustment by way of a special rate of interest or by way of an increase of subsidy cannot be considered. I should point out that the subsidy of £32 per dwelling was fixed when interest rates and costs were much lower, and there is a case for review as to whether, in these circumstances, the £32 is adequate. We hope that the noble Lord will be able to give us some encouragement that these important financial aspects, which have their social repercussions, will receive the earnest consideration of Her Majesty's Government.
3.51 p.m.
LORD STRATHCLYDE: My Lords, I thank both noble Lords opposite who have taken part in this debate for the points they have put forward and for the criticisms they have raised, which are always helpful. The noble Lord, Lord Silkin, started off by castigating me for being a gloomy kind of person. But I was not intending to be gloomy. After all, I was, as he said, merely looking at the financial side of the picture, and as I saw it it was my duty to present the true picture and not to endeavour in any way to paint the lily. The noble Lord asked me, in particular, whether it would not be possible to have a valuation made of the properties: that is to say, the land, the buildings, the sewerage schemes and all the rest which have been built by the new towns development corporations. I assume that it would be possible, but at this stage it would certainly be a major task. I should have thought that the best time to undertake such a valuation,

581
if it was to be undertaken at all would be when the development corporations' work was completed and they were being wound up. But in view of the increase in values which has been going on everywhere, I should be very surprised indeed if at the end of the day the assets did not prove to be worth more than the money which has been expended in creating them.
The noble Lord, Lord Silkin, then asked why it was that additional new towns had not been built. We are getting on with some fifteen at the present time. It is true, as he said, that fourteen of them had been started during the period of office of the Labour Government, but in addition one has been started in Scotland under the present Government. We found in Scotland that although we might want to build more new towns, we simply could not get the skilled men necessary to set up and run the organisation. That was the position there, and presumably that applies also to England. If it were not so, then surely we could attract the technicians and others to build further new towns in Scotland.
I turn now to the speech of the noble Lord. Lord Latham, which interested me particularly. He asked me, first of all, whether it really was sensible to retard progress and defer expenditure. That, of course, is Government policy in relation to all public expenditure, and all authorities have been asked to defer what they can. But so far as the main housing programme is concerned, that is being continued.
The principal matter to which the noble Lord, Lord Latham, devoted himself was the rate of interest at present running, and the fact that it is payable throughout the long repayment period of sixty years. I think lie felt that the Treasury should be content with a lower rate of interest, and that any difference between that rate and what the Treasury might have to pay for its borrowings should be borne by the Exchequer. But the Consolidated Fund out of which the advances; are made is fed by revenue of all kinds, plus such borrowings as are required to make up the difference between total outgoings, whether revenue or capital in character, and receipts, and it is not possible to relate a particular advance from the Consolidated Fund
582
with any particular receipt into it. Whether the advance is thought of as coming out of revenue surplus or out of Government borrowing, the rate of interest based on the Government's own borrowing rate is still justified, since if the advance were not being made, the money saved would either imply a reduced need of Government borrowing or it would go to the reduction of debt. It seems to me that the Corporations must, therefore, pay the current rate of interest for their borrowings, just as every other borrower, including the Treasury, has to do.
LORD LATHAM: My Lords, apart: from the Treasury, other bodies normally have the right to pay off at the end of a limited period and re-finance according to what the rates of interest may be. That is not the case with the new towns.
LORD STRATHCLYDE: Perhaps I should try to deal with that point. What the noble Lord says is that it is iniquitous to charge the corporations a high rate for sixty years, since the Treasury borrows, as it sees fit, on short, medium or long term, and on average during the repayment period is likely to pay less than the high rate fixed at the date of the particular advance to the corporation. I suggest that that argument cuts both ways. The corporations have had substantial advances at 3 per cent. repayable over sixty years, and the cost to the Exchequer of financing these advances through the present high-interest period is likely to be considerably higher than 3 per cent. If the corporations were to be given the advantage of averaging for loans made at a high-interest rate, the Treasury, surely, would correspondingly be entitled to average for loans made at low interest rates. It does not seem to me that the corporation can have it both ways; and overall they might be in no better position than they are at the present moment, when, let me inform the noble Lord, on all advances the rate is still below 4½ per cent.
LORD LATHAM: My Lords, at the moment, the London County Council are borrowing for a maximum of twenty or twenty-one years at 6 per cent. They previously borrowed at 2¾ per cent. At the end of twenty or twenty-one years they have the right to repay and to

583
borrow at the rate of interest then prevailing, which may be much lower than 6 per cent. The new towns corporations have no such right.
LORD STRATHCLYDE: My Lords, as I have said, it appears to me that the argument can cut both ways.
The noble Lord further asked me about the exclusion from the housing pool of income from industrial and commercial properties. The situation with regard to that is simply that the deficits on sewerage and other services are so heavy that everything that can be obtained from industry and commerce will be needed to offset them. The real question which the noble Lord raised was whether housing can pay for itself. At the present moment it can. There are one or two cases where the corporations are encountering difficulties and they have run into deficit. But as long as it appears reasonable that housing can pay for itself, there does not appear to be any reason why anyone else should Pay for the housing which is provided. I am glad to be able to give the noble Lord one ray of comfort. He spoke of the rents of garages which were built separately from private houses and excluded from the rent pool. That, indeed, was the position, but it has been decided that wisdom lies, as the noble Lord himself has suggested, in including these rents in the general pool.
The question of overspill is a problem in itself. Whether or not it should be left to individual authorities is a matter on which different views are held, as the noble Lord knows. As he said, at the moment the London County Council are considering building a new town for themselves, as in effect they have been doing over a number of years. We may call these developments housing estates, but in fact they are in the nature of new towns. Other local authorities are doing the same thing. From the taxpayers' point of view, I think they should be encouraged to continue in that course.
During the previous debate in November, we went fully into the whole question of amenities. It is certainly true that the Government would like to see every amenity provided for these new towns at the earliest possible date, but we have to have regard to the national situation at any given moment, and this
584
is not the time to go ahead with things which are not essential to the life of a community. After all, we have to think of those people in the large cities who have nothing like the amenities of the people in the new towns. They have to be considered as well as the populations of the new towns.
The noble Lord spoke of the higher rents which higher interest rates were making necessary. I would put it to the noble Lord that while costs and interest rates have risen, the incomes of the people have risen considerably since 1946, and that is a matter which should be taken into account. I have done my best to answer the various points which were put to me, and I would now invite your Lordships to give this Bill a Second Reading.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

FORTH ROAD BRIDGE ORDER CONFIRMATION 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.

PUBLIC RECORDS BILL [H.L.]
3.55 p.m.
Amendments reported (according to Order).
Clause 4 [Place of deposit of public records]:
THE LORD CHANCELLOR (VISCOUNT KILMUIR)THE LORD CHANCELLOR (VISCOUNT KILMUIR) moved to leave out subsection (2) and to insert instead:
"(2) In choosing a place of deposit under this section for public records of—

(a) courts of quarter sessions or magistrates' courts, or

(b) courts of coroners of counties or boroughs,

the Lord Chancellor shall have regard to any arrangements made by the person for the time being responsible for the records with respect to the place where those records are to be kept and, where he does not follow any such arrangements, shall. so far as practicable, proceed on the principle that the records of any such court ought to be kept in the area of the administrative county or county borough comprising the area for which the court acts or

585
where it sits, except in a case where the authorities or persons appearing to the Lord Chancellor to be mainly concerned consent to the choice of a place of deposit elsewhere."
The noble and learned Viscount said: My Lords, the first Amendment deals with a defect which we have discovered in the Bill, in that under the present subsection I am empowered only to say that records of quarter sessions, petty sessions and coroners' courts should be kept in the administrative county or borough of the court, or in some nearby locality. It has been brought to my attention that, in Wales especially, records are kept in other places—in the National Library of Wales—and I desire to provide for that to continue. Therefore, I have redrafted the subsection in order to make that provision. I beg to move.
Amendment moved—
Page 4, line 1, leave out subsection (2) and insert the said new subsection.—(The Lord Chancellor.)
On Question, Amendment agreed to.
Second Schedule [Enactments prohibiting disclosure of information obtained from the public]:
THE LORD CHANCELLOR: My Lords, my second Amendment, which is to leave out two lines in the Second Schedule, is a prospective piece of tidying up. Under the Schedule, a keeper of the public records has to have regard to certain Acts of Parliament, one of which is the Agricultural Marketing Act, Sections 21 and 24, by which the Board of Trade can ask for certain particulars with respect to the schemes. Perhaps due to the beneficent influence of my noble friend Lord Conesford, over the last twenty-five years the Board of Trade have never asked for that information and have no intention of ever asking for it. In fact, in the next Consolidation Bill we intend that these sections shall be done away with. I hope your Lordships will allow me, in the interests of legislative tidiness, to anticipate that happy date and drop them out of the Schedule to this Bill. I beg to move.
Amendment moved—
Page 13, line 27, leave out lines 27 and 28.—(The Lord Chancellor.)
On Question, Amendment agreed to.

OVERSEAS SERVICE BILL
3.58 p.m.
Order of the Day for the Second Reading read.
THE MINISTER OF STATE FOR COLONIAL AFFAIRS (THE EARL OF PERTH): My Lords, as colonial territories have approached self-government and independence, problems have arisen regarding the position of expatriate civil servants. These are the very civil servants who have played such a vital part in the progress of the territories towards their independence. Noble Lords will remember that in 1954 the noble Viscount, Lord Chandos, then Mr. Oliver Lyttelton, who was Secretary of State for the Colonies, proclaimed the formation of Her Majesty's Overseas Service as successor to the Colonial Service, and he recognised our responsibilities towards these officers. Subsequently, in 1956, Her Majesty's Government issued a White Paper (Cmd. 9768), which set out two new proposals for Her Majesty's Overseas Civil Service.
Before touching on these proposals I should like to pay my personal tribute to this great Service. I must confess that until I had my present job I was sadly ignorant of their great and selfless work. I knew well the work of another overseas Service, the Diplomatic Service; but my knowledge of the Colonial Service was very scanty. Theirs is often a dedicated life. They give the best of their lives to the welfare of the people entrusted to their care; and it is an "up and doing" life. Their very success in their work may often lead to their posts becoming filled by local recruits to whom they have taught the art of administration; and as time passes they are likely to have new masters, local Ministers from the countries concerned, particularly in stages immediately before independence is achieved.
Here I should emphasise that these countries which are shortly to gain their independence willingly recognise two facts: one, the essential need for their public service to continue independent of politics, and the other, the need to retain for a time many of those expatriate officers who have served them so well and devotedly. It is with the second of these needs that we are concerned to-day, and this Bill is designed to encourage those

587
serving abroad to remain as long as necessary with their new employers, as well as recognising Her Majesty's Government's responsibility towards them.
I have so far dealt with a special group of overseas servants—those who have served colonial territories. But, very rightly, all Parties here have been anxious that we should equally meet, if demand arose, the needs of other territories, notably in the Commonwealth, for skilled administrators. Here I use the term "administrators" in the broadest sense, to cover doctors, teachers, engineers, police, nurses, post-office officials, technical advisers on agriculture, town planning et cetera, as well as the purely administrative staff.
With this in mind the 1956 White Paper, as I have already said, made two proposals: first, to build up a central register of those available and prepared temporarily to go overseas, and, if the demand arose, a central pool of officers whose permanent job would be so to serve; secondly, to establish a Special List of officers of Her Majesty's Overseas Civil Service who, while in the service of Her Majesty's Government, would be seconded to the employing Governments. This scheme in the first instance was to apply to the Federal and Regional Governments of Nigeria only. The thought behind this was to help to create conditions which would encourage officers to remain at their posts even though the original terms of their service had been altered, for the fact that they would have new masters would in itself entitle them to retire and receive compensation for premature termination of their careers.
I can deal with the first of these two aspects of policy quite briefly. The idea of a central pool has, anyhow for the time being, proved difficult. There is, for example, at this time not sufficient demand to ensure regular and progressive employment. A central registry has been found unnecessary as Government Departments concerned have their own records which serve the purpose just as well. Moreover, we have discovered that ordinarily it is easier to get older officers, possibly after retirement, who are interested in temporary jobs, rather than younger ones who are wanted very naturally on a permanent basis. How
588
ever, we are extremely anxious to encourage the younger ones who are already in jobs in the United Kingdom or territories to volunteer, and Clauses (2), (3) and (4) of the Bill will enable arrangements to be made to ensure that in so volunteering they in no way lose or prejudice their existing pension rights, and cover their pensions earned while serving abroad. Clause 5 and the Second Schedule cover the same ground for the police temporarily transferred to overseas service.
I turn now to the Special List, which is the second aspect of policy dealt with in the 1956 White Paper. Here officers will be in the service of Her Majesty's Government seconded to the employing Government. As I have said, these arrangements apply in the first instance only to the Federal and Regional Governments of Nigeria. To date, out of about 2,000 officers who are eligible to join the Special List, only 250 applications have been received, almost all from the North and the Federal Government.
During the debate in another place on the Second Reading of this Bill a short while ago, my right honourable friend mentioned that Sir John Martin, a senior official in the Colonial Office, was at that time visiting Nigeria on a special mission connected with the staffing of the Federal and Regional Governments. He has just returned from his extensive tour, and we shall be considering his report very soon. I would only say at this moment that Her Majesty's Government are extremely anxious to ensure that the administrative needs of Nigeria are adequately met, for both we and the Nigerian Governments recognise the vital importance of the expatriate officers at this stage in their constitutional development. Noble Lords may like to know that conversations are proceeding with Malaya on Special List arrangements. It is too early to say more about this, and in any case it is the responsibility of the noble Earl the Leader of the House rather than mine. Similar talks are also going on with Singapore.
So much for the background of this Bill. I have dealt in my review with several of the clauses, and I will briefly talk on those not so far mentioned. Clause (1) gives general authority to the Secretary of State (who might be the

589
Commonwealth Secretary, or the Foreign Secretary, as well as the Colonial Secretary) to appoint officers with the concurrence of the Treasury. This can cover the Special List, temporary appointments or the central pool as required. Clauses 2, 3, 4 and 5, as already mentioned, deal with pensions. Clause 6 covers financial provisions and applies both to moneys provided by Parliament and to moneys received from other Governments under Special List arrangements. Clause 7 interprets various terms used in the Bill. Clause 8 gives the short title.
My Lords, the Bill is one which I believe will be welcomed by one and all in this House. The story that I have outlined may not fulfil all that we would wish in providing those countries, and especially the Commonwealth, with a regular and constant service of administrative officers, but it is, I hope, an important step forward. If experience shows that any new arrangements can further help to this end, I can assure noble Lords that we are both ready and anxious to examine them. I beg to move that this Bill be read a second time.
Moved, That the Bill be now read 2a—(The Earl of Perth.)
4.10 p.m.
THE EARL OF LUCAN: My Lords, I should like first, on behalf of noble Lords on these Benches, to underline and support what was said by the Minister about members of the old Colonial Service, and to say that if this Bill restores confidence and establishes them in their posts we shall be more than glad to support it. Some years ago I had a most striking testimonial to the officers of the Colonial Service. It was on the occasion of a Commonwealth Parliamentary Association tour through certain territories in East and Central Africa. The delegation included distinguished members of the Parliaments of all the Comonwealth countries, and after the tour had been proceeding for some weeks, during which we had visited a number of remote and not so remote places, one of the Canadian delegates with whom I was travelling said to me: "Why don't you British tell the world what you are doing in your Colonies?" He, an educated Canadian, had no idea that there were Englishmen devoting their lives in all these countries to the welfare of the colonial peoples. That is something that Her Majesty's
590
Government might bear in mind when they are considering their overseas information services.
To come to the Bill, there is nothing very controversial in it. We hope, of course, that the provisions will do what they are intended to do; we hope that it is not too late. But what is rather disquieting is the reference in the first clause of the Bill to the power of the Treasury in regard to appointments under the new system. Subsection (2) lays down that:
"The power to appoint officers…shall not be exercisable except with the consent of the Treasury,…"
Subsection (3) also refers to the question of consent. Does that mean that the Treasury, and not the Secretary of State, is going to say what officers or what classes of officers are to be appointed to posts under the system? That point was discussed in another place, and the present Secretary of State said categorically that he himself had "blanket" authority, and he added:
"I shall not refer to the Treasury all the individual applications to join the Service."
If that is so, why does the Bill contain a clause which, if the words mean what they appear to mean, gives the Treasury a complete power of veto, not only in regard to the class of appointments but in regard to the appointment of a particular officer? I hope that the Minister will give us an assurance that that is not so. We know of old that the hand of the Treasury has lain heavy on establishments and rates of pay for, among many others, the Colonial Service.
Most of your Lordships will have had friends in the Colonial Service, and will have known the long years they had to spend in bad climates, with long periods without leave, because the Service was understaffed. They will know also that the conditions were not sufficiently attractive. I wonder whether the present Bill will offer more attraction to potential recruits to the Service. Can the Minister say whether he thinks this present Bill will, in fact, increase the flow of applications for the Service? Because unless the number of applications greatly exceeds the establishment vacancies that have to be filled it is almost impossible to make a selection; and if that is the case the quality of the personnel in the Service is bound to suffer. It was announced in another place that the establishment situation is improving;

591
that the number of vacancies on the last day of last year in the administrative branch was 130, whereas the year before it had been 170; and that in all branches it was 1,384, whereas a year before it had been 1,456. But those are still unfilled vacancies. It will be a long time before all the vacancies are made good, and I suggest that the Government should direct their attention to increasing the attractiveness of the terms of service.
Of course, times have changed from the days when a young man was attracted to the Colonial Service by the type of duties he would have to perform. The extraordinary position of the district officer in the old days is something that is disappearing; and it will never reappear. The adventure and responsibility for a young man who had to rule large areas had tremendous glamour, and there was a tremendous attraction in it for people who felt a vocation for that kind of life. But the type that is wanted in future is surely something entirely different. The officers who will be wanted in future will have to work as advisers, technical and otherwise, with the indigenous legislators and others of the colonial territories—what these young men's grandfathers would have called "the natives". In other words, the overseas civil servant must be an adviser, willing to work with, and subordinate to, the Africans or Asians to whom we in the United Kingdom have entrusted the government of their country. That is why the call of the Service has changed and why, in future, it is bound to appeal to a different type of person. We can only hope that the Bill will fulfil what Her Majesty's Government hope, and that it will restore confidence and fill the vacancies in the Overseas Service.
4.20 p.m.
LORD MILVERTON: My Lords, while not wishing to oppose this Bill I must say, with considerable regret, that I do not view it with the complete satisfaction which seems to have marked its reception in other quarters, both here and in another place. I would suggest, to begin with, that it is very puzzling if one tries to understand the Bill without familiarising oneself with the two White Papers referred to, Colonial Paper No. 306 and Command Paper No. 9768. I have wondered how I could best put
592
my views to your Lordships. Certain questions would immediately arise in the mind of a civil servant on reading those White Papers and this Bill, which is specifically said to be founded on the policy enunciated in those Papers.
Perhaps the best way to make clear what I want to say would be to make a very brief reference to Paper 306 and to mention one or two of the questions which arose then and which still arise in my mind. That Paper was very vague and did nothing specific for the Service. It enunciated a policy in very vague terms, recognising the conditions which were arising, but, to take the case of the Gold Coast, it did nothing to improve the salaries of officers or their conditions of service. It did not improve or even guarantee their pensions. There was nothing but a vague reference to compensation on termination of appointment. Did it do anything of these things for Malaya? Has it yet done anything for Nigeria? Those are questions which I am not able to answer. In that Paper there are references to the effect that the terms of service will not be altered. It is a matter of common knowledge that in at least one of the territories a system of supernumerary local appointments was instituted which, without obstensibly doing so, enabled local appointees, who on the ordinary system of judgment were probably not qualified, to be given appointments and, in the final effect, promotion. How, in fact, are pensions to be safeguarded? There is a reference to this matter in paragraph 62. Is there an ultimate guarantee of pension by the British Government or is there not?
I should also like to ask whether the procedure in the case of the Gold Coast, Malaya and Nigeria, was exactly the same as that for Ceylon India and Burma. Or was there a departure from the precedent established in those cases, and an avoidance of making the same declaration at the same time in the House of Westminster and in the Colony concerned? If so, why was there that departure? If I remember rightly, the Secretary of State himself gave Gold Coast officers an assurance that such a declaration would be made. Then there is the point of adequate notice being given. Is it not a fact that some very inadequate notices have been given, such as would be considered unjust on any system of judgment?

593
I should also be glad if, at some point on the Committee stage, the noble Lord who introduced the Second Reading of this Bill could give us the comparable figures for pensionable posts occupied by European officers in the three territories, Ghana, Malaya and Nigeria, say on October 1, 1954, and to-day. It is very confusing to mix up numbers as between officers on the pensionable establishment, officers on contract, those doing temporary business here and there, and all the different sections of Government service. I should like to see the sections taken separately, for only in that way can one get a fair judgment. Then Command Paper 9768, on which this Bill is founded, contains a reference, in paragraph 7 (4) to the fact that posts might be guaranteed for certain officers up to the age of fifty. How can an officer to-day regard retirement at fifty with equanimity? If he has drive and energy he will obviously wish to do the best he can for himself now and will go to another post.
There is very little I wish to say on the other Paper, except that it seems to me that the ideas of the Colonial Office are calculated to keep the dead wood and to drive out the best men—the very men we want to keep; because they are the men who, seeing the writing on the wall and having some enterprise in them, will decide to go while the going is good. And in the circumstances who should blame them for doing that? Moreover, the people who need help are not those at the top, or those who have been picked for higher appointment, but the ordinary run of men who have been doing very good work and who are to be turned out when they are no longer needed, men whose pensions will not only be inadequate for themselves but will be grossly inadequate to support a wife and family. Those men are willing to work, but who is helping them to find work? Has the Colonial Office done anything in setting up organisations to find employment for such officers.
Before saying in a general way what I think of the Bill, there are one or two questions that I wish to raise. Under Clause 1, is it likely to create confidence that an appointment must be made with the consent of the Treasury, with the underlying principle one of finance and not of security? Secondly, is it not clear
594
from this that the application is to the few and not to the many? What is to be offered to those (who must be the majority) who are not acceptable to the Treasury? Then, in Clause 1 (5) there is a note on procedure. I can only say that if this procedure is to be followed it will have to be speeded up, and there must not be the appalling delays that have occurred in this regard in recent times. If the provision in Clause 2 applied to the pensions of all officers in a territory, it would go far to give confidence; but if it relates only to the select few, is it not a reasonable inference that there is no guarantee of pensions for those who are left out?
I am sorry to have developed this suspicious attitude but, turning to Clause 7, I feel that the lumping together of pensions, gratuity and compensation, gives rise to an uneasy thought that for income tax purposes they may all be treated as the same thing; and that is a point which should be carefully considered. There is a minor point arising under Clause 2 on which I would ask a question. What about quasi-Government bodies? What about service with marketing boards and organisations of that kind?
I approach this Bill with mixed feelings. In so far as it is an attempt to save what is left of the Colonial Service, it comes too late and is hedged about with too many hesitant half-concessions. I am not concerned with whether or not the heavy hand of the Treasury or the lukewarm advocacy of the Colonial Office is responsible: I am trying to look at the facts against the background of recent years. It is easy to obscure these facts by eulogies of the magnificent work which has been done by all branches of the Colonial Service, and which is still being done under increasing difficulties by what is left of it. I shall no doubt be told of the numbers of recruits and of the still urgent need of trained officers to help the emergent nations over the difficult initial period of independence. But, my Lords, statistics, as ever, are apt to give a very false picture if looked at in bulk. They certainly require analysis in this case. I should have liked to see the figures split up under the different headings: first, the administrative service proper, and then all the different unified services, from the agricultural service

595
down, through the alphabet, to the veterinary service. They are all set forth in the appendix to Colonial Paper 306.
It would have been interesting, and illuminating, to have the services outside of the Administrative Service further analysed into career members who have joined for life and contract members who have joined for a specified time and job. The Administrative Service, as we all know, has been crumbling away for some years now because the background of security and tenure has been crumbling away too. As to the facilities for training, the noble Earl, Lord Lucan, spoke of obtaining recruits, but the facilities for training recruits do not exist to-day. The more junior posts in these territories are all now, quite properly, being filled by local citizens and local inhabitants—that is exactly what one would naturally wish and expect. The administrative officer certainly cannot possibly be trained to-day. He does not spring full-grown from the brain of Whitehall; it takes years of training and experience to make a good administrative officer. Incidentally, I should accept only with the greatest reluctance—in fact I would not accept at all—the noble Lord's definition of an administrative officer given when introducing the Second Reading of this Bill. The term certainly does not, in my opinion, in its ordinary meaning, include the professional and technical branches.
One has to remember, too, that the administrative officer has no market value per se in the world outside as the professional and technical officer has. It is true that if he leaves early enough he may well have personal qualities that will appeal to commerce or to industry. That is not quite the same thing as the standard qualifications which are possessed by a doctor or engineer or agricultural officer, and so on. To put it briefly, that is why, some years ago, I described Colonial Paper 306, with its grandiloquent title of Her Majesty's Oversea Civil Service, and its lumping together of all branches of Colonial Service and careful avoidance of all specific obligations, as a misleading prospectus; and I think that was a fair description. The Colonial Service indeed suffered a sea-change—an oversea change—into something which was not rich and was certainly very strange. It is small wonder
596
that the idea of a Central Pool had disappointing results in its failure to attract recruits. In my view, neither the idea of a Central Pool nor the more extravagant dream of Commonwealth service makes any sense whatever.
My Lords, the people of the territories emerging into independence want, above all else, their own men and women in their own jobs, whether it be Malaya or Ghana or Nigeria or the Federation of the West Indies or the Federation of Rhodesia and Nyasaland. In differing degrees, according to their background and their history, they need temporary assistance until they are able to run their own show in their own way, with their own people. But, as I see it, the Colonial Empire is now being wound up as regards all sections big enough to stand alone. It is, if you like to look at it that way, feeding the Commonwealth with new members. But, in relation to that process, why not face the fact that the Colonial Service is being wound up too? For the trained administrative officers, those who are willing to stay and who have wanted to stay, there is, of course, work of vital importance to be done in helping the initial changes; but there is no future for new recruits. Such future as there may be will be confined to the small territories which could never support independence, and this means a very different sort of Colonial Service.
For the immense immediate need of professional, scientific and technical help an elaborate contract service seems to be the only answer, and that is what the Special List really is in its essence. In fact, to my mind, the Special List disguises a glorified employment agency which is prepared to gamble on success by underwriting the future of its clients. And even in that respect it will be very natural if these territories wish to run their own employment agencies, as indeed they are beginning to do. But, my Lords, you do not need from me a definition of what constitutes a service and of the loyalties and corporate feelings that the phrase implies. But may I say that you cannot manufacture a service out of a hotch-potch of career men and contract men and men on loan or agreement. You cannot be loyal to a Special List—it is about as inspiring as belonging to a telephone directory. The Special List members will really be the liquidators of the former Colonial Service. In looking at this

597
Bill all sorts of questions arise. For instance, apparently there are to be two services—I am very puzzled by this—an Overseas Service and a Special List Service. Can one be a member of both, or are they mutually exclusive? One must remember that all the time there are two points which really matter to serving officers: first, the preservation of pension already earned; and, secondly, the prospect of future employment. But I will leave arty further questions to the Committee stage.
If a Service implies anything, it surely implies a career. Men want a career, not a temporary job; and if you want recruits you must offer them a career. They also want to know what are likely to be their possible destinies, and all the usual things, such as the conditions that a married man with a family would have to face. Hanging about in England for five years, waiting for a draft, with the Treasury scowling at him, is not an attractive prospect to offer in any so-called Service. The differences in cost of living and the lack of a settled home have all, surely, to be considered.
My Lords, you cannot buy the spirit of service with money: it is based on trust; and the trust the Colonial Service should have in the institution known as the Colonial Office has been undermined by recent events. In my opinion, the Overseas Service is a dream incapable of fulfilment. The scale and nature of demand and its fluctuation, could not be predicted, and the political difficulties would be well-nigh an insuperable handicap. In the past, the expatriate colonial servant was welcomed and appreciated. To-day, he is increasingly unwelcome, not for personal reasons but just because he is a foreigner, and inevitably there are many local aspirants, however unqualified, who want his job. Increasingly the new local Government authorities will find it difficult to face the unpopularity of retaining these expatriate colonial servants, however personally conscious they may be of the need to keep them. It may well be that at least a nucleus of such men is essential to reasonable efficiency for some time to come and it may be that the peasants and humbler ranks in these territories in a vague way will miss and lament the old Service, but the general tone of public opinion as formulated at the
598
top will resent their presence and aim to accelerate their departure.
I am not opposing this Bill. I have tried to explain why I think that its scope is so limited, both in time and extent. As the major members of the Colonial Empire grow up and achieve independence and become independent members of the Commonwealth, the Colonial Service must die. There has been talk of a Commonwealth Service. If such a thing were a practicable possibility, which I most emphatically deny, it could not grow out of the Colonial Service. It would be fundamentally different in composition and ideals and it would function quite differently. Nor would it be likely to commend itself to the Commonwealth membership. Members of the Commonwealth, as we know, are linked by mutual self-interest and by certain simple ultimate beliefs. They are ready to share knowledge and experience and at times to borrow experts from each other, but there is no desire whatever for a special, dedicated, common Service.
The real reason for the difficulties in which we find ourselves to-day is that none of us foresaw the world-wide growth of nationalism, the craving for self-determination and the speed with which our own doctrines would bear this fruit. Nor did we see the need for a sense of urgency in training the citizens of the colonial territories for self-government, which was the acknowledged aim of our colonial policy. The emotional and mental upheaval of two world wars accentuated the process. if blame there is, we are all to blame—all Parties and all concerned with colonial policy. Time overtook us; and so the Colonial Office was taken unawares. As has been well said:
"Time takes his revenge for all the counsels to which he is not called."
In varying degrees, the nascent nations emerging from colonial status into independence are unready, in that they lack within their ranks an adequate supply of trained personnel for all the functions and responsibilities of government. Of course, it is our wish, as well as our duty, to help them over this difficult period until their own people are trained, and this Bill is trying to make the best of a bad job. My support of this Bill may seem to be couched in curiously critical

599
terms, but perhaps I can claim indulgence in being frank about a Service in which I spent thirty-nine years. It is nice to hear the universal eulogies which have been pronounced upon the work that has been done, and is still being done, by members of this Service in all its branches, but I cannot lend myself to pretending that changing its name can obscure its demise within foreseeable time.
In my early days, from the many separate Services pursuing their way in detachment under the ægis of the Secretary of State, I saw come true in the 1920's the dream of Sir Ralph Furse of a unified Colonial Service, buttressed by unified services of all the professional and technical branches of government. It was a great machine, made largely by the constructive imagination and fiery zeal of one man, whose faith burned so strongly that he imposed his will on others. But it has done a great work, and that work is now coming to an end. As the larger Colonies, for whom independence is a viable conception, one by one attain that independence, it remains for those experienced officers still in the Service who are willing, and wanted, to stay and write the epilogue to the tale. After all, the final aim of the Service has always been to render itself unnecessary. Its work was impeded and slowed down by the impact and the aftermath of two world wars, which at the same time made the dependent territories more eager to control their own affairs. It is wonderful, with all these distractions, how much has been achieved during the past sixty years, which is all there has been of a connection with most of them.
My justification for speaking so frankly as I have is the old one:
"The Toad beneath the harrow knows
Exactly where each toothpoint goes.
The butterfly upon the road
Preaches contentment to the Toad."
Noble Lords who have supported this Bill with such undisguised enthusiasm will pardon me for comparing them to butterflies, but one cannot effectively preach contentment to the Colonial Service to-day. I do not see how new recruits can be attracted by the terms of the Bill, though the arrangements indicated therein may well induce some serving officers to stay and complete the work
600
to which they have given the best years of their lives. The least we can do is to try and make their devotion a feasible task. I hope that the Bill will help in the task of at least some of them; and so, without much enthusiasm, I support the Bill.
4.49 p.m.
LORD SHEPHERD: My Lords, it is not an easy task to follow the noble Lord, Lord Milverton, in a colonial debate and I think that it is even more difficult to follow him after his speech this afternoon. However, I cannot agree with him that there is an early end in sight for the Colonial Service, or, as it is now to be called, Her Majesty's Overseas Service. When we look around the Commonwealth we see that there are vast tracks of land full of raw materials and space for agriculture which are practically untouched. I believe that there is a great opportunity for the world in developing these areas; and to develop them we shall require an Overseas Civil Service. I should like to endorse the words of appreciation of the noble Earl, Lord Perth, for the services rendered to this country and to our Colonies by the old Colonial Service. I personally have a number of friends who have spent many years in the Colonial Service, and one of the things that always struck me was their complete devotion to duty and, possibly even more, their love for the country in which they were serving. This afternoon I speak for two reasons: first, to give a general welcome to this Bill; and secondly, to ask for some information and some assurances on matters of which I have given notice to the noble Earl, Lord Perth.
I welcome this Bill, for I believe it is a step in the right direction, and it is one that has been advocated from this side of the House on many occasions. But that welcome must be qualified, in that we cannot be sure how this Bill, when it becomes an Act, will be worked: everything will depend upon the initiative of the Secretary of State for the Colonies and the treatment meted out by the Treasury. The fact that in the Bill one territory is specifically mentioned would indicate to me that the Treasury have already given some warning in regard to this Bill. I personally believe that we need a unified Colonial Service which can offer a lifelong career to a man who is inclined to such a Service, and

601
who has the necessary qualifications. This Service should not merely include administrators—and here I rather agree with the noble Lord, Lord Milverton, on his description or an administrator. An administrator, to me, is the man who is the district officer. But the Civil Service in the Colonies requires doctors, nurses, engineers and surveyors—people of experience and skilled knowledge.
I do not think it is appreciated that in our Colonies we have men who are serving a variety of employers and under a variety of conditions. We have the civil servant who is in the employment of the Secretary of State. This individual is most fortunate, in that he has a career with the Ministry stretching out before him: he can anticipate promotion within the Service and a pension when he retires. We have the civil servants who are in the employment of a Colonial Governor. From what I have seen of it, I have thought that it was these men who were the backbone of the administration and the development of the territory, in that they would be spending all their Service lives in that territory. We have also civil servants in the employment of local authorities, such as municipal and city councils. Then we have men on contract to the Colonial Government or the local authority, serving a set time and for a set purpose. I am not concerned about the men on contract or the men who are employed by the Secretary of State: the former have their terms of service, and the latter have their set careers. I am, however, concerned with the civil servant, the expatriate, in the employment of the Colonial Governments and the local authorities. It is these people whom I should like to see brought within the scope of this Bill. Colonies require men who will devote their lives to their territory, but you cannot expect men to do this if at the end of their service there is no pension available to them to provide them with reasonable comfort.
I should now like to turn to the matters of which I have given notice to the noble Earl, Lord Perth. As your Lordships are aware, Her Majesty's Colony of Singapore will shortly become a self-governing State. As Singapore progressed to this status, it became obvious that the British colonial civil servants should be replaced by officers of that Service locally born. A Government Commission was set up, and they reported two years ago
602
that local-born officers would replace these expatriate officers. The Report was fair and sensible and was accepted by all concerned. It recommended a lump sum to an officer for loss of career, and a pension according to length of service. Many officers have retired, but many have remained at their posts at the request of the local government.
The problem is this. The political situation in Singapore is far from clear. I am loth to anticipate the results of the August General Election in Singapore, but I think we should take note of the gains that were made at the municipal elections in November by the People's Action Party. The leader of the People's Action Party, Mr. Lee Kuan Yew, has repeatedly stated that if the People's Action Party wins the August General Election they will rescind the agreement entered into by the Singapore Government with the expatriate officers. What I should like to know from Her Majesty's Government is what steps they propose to take to protect the interests of these expatriate officers. There is grave anxiety, particularly among those who have remained within the Service at the request of the Government and who have not, as yet, received their lump sum in lieu of loss of career.
I turn now to the other part of the problem. The Malayanisation Commission also reported on the city council expatriate officers and recommended similar treatment. Last October, agreement was made between the expatriate officers and the city council and this was approved by the city council at their last meeting. I think I should point out that that particular council was part-nominated, part-elected. I have already recounted that the People's Action Party, which is completely anti-European, gained control of the city council, and one of the first things they did was to rescind the agreement that had been entered into by the old council with the expatriate civil servants. I have recounted the facts as I know them. I certainly do not wish to embarrass any of the parties concerned by making comments about how this unfortunate position has arisen, but I should like to point out that these local authority expatriate civil servants have given many years of loyal service, not only to the city but to the Colony. I

603
have raised this matter to ask Her Majesty's Government to give an undertaking that these men will be fairly treated and that the local authority will meet its obligations to its expatriate officers; and, further, that Her Majesty's Government will ensure that there will be no opportunity for a future Singapore Government to rescind its agreements with its expatriate officers.
In conclusion, I should like briefly to return to the Bill. I give it a welcome. I believe that if it is properly implemented it will give an Overseas Service that we shall require. When it becomes an Act, I hope it will be implemented imaginatively; but if the Treasury, for the sake of economy, restrict the entry and participation within the scheme, I do not think the Bill will be worth the paper upon which it is written. I hope that this Bill will give us the Service we require.
5.1 p.m.
LORD HASTINGS: My Lords, my welcome to this Bill must be somewhat tempered with caution, in view of the critical analysis, and the great experience with which it is backed up, of the noble Lord, Lord Milverton. Nevertheless, I think I can say that its purpose, which is twofold, must be wholly good. That twofold purpose is, first of all, the increase of security and the widening of the scope for Her Majesty's Overseas Civil Service and, secondly—and this point I think has not been sufficiently emphasised yet—the vital contribution that can and must be made towards the steady and stable development, economic, administrative and political, of the self-governing Colonies and the new independent members of the Commonwealth. There is no body of men who are more worthy to be entrusted with this vital task, or who are more capable of fulfilling it to the entire satisfaction of the Governments of the overseas countries concerned, than the Overseas Service.
I cannot follow the noble Lord, Lord Milverton, to the extent of agreeing that there is no future at all for an Overseas Civil Service, although I am sure that in the administrative branches it must fairly rapidly decrease. I take the point made by the noble Lord, Lord Shepherd—that the real need is for doctors, technical officers, agriculturists and so on, of all
604
sorts, whose numbers, I believe, have increased tenfold since the war. It will be quite impossible for the overseas Governments who are acquiring or about to acquire their independence to do without these technical officers for a long time to come, and I feel sure that it is in this field that the Special List will have its good use.
To take up a point made by the noble Earl, Lord Lucan, I am not sure that he is right to say that a different type of recruit will have to be enlisted. After all, a technician is a technician. He lives with his job, and will no doubt learn to live with the people with whom he is working. As regards the administrative side of the Service, there are many now in it in all parts of Africa (where I have come across them from time to time) who are perfectly willing and anxious to work with what were called the natives and will now be called the masters. They will no doubt work extremely well with them if only they are given the chance and the encouragement so to do; and I believe that this Bill is a step in this direction.
To return to one or two specific points, the noble Earl, Lord Lucan, referred to the anxiety expressed in another place, on both sides of the House, about the part the Treasury will play in this matter. This links up with a point made by the noble Lord, Lord Milverton, who described the Bill as, "very confusing". I think that is a right description. It is largely in legal jargon, not easily intelligible to the layman reading it for the first time. If it is to serve as a recruiting paper, so to speak, for circulation amongst the members of the Service overseas, then I feel that, if it is not possible to clarify certain clauses in the Bill, the Explanatory Memorandum should be of much greater length and much more explanatory.
May I take a particular instance? Clause 2 (4) says:
"Any order under this section may be varied or revoked by a subsequent order thereunder."
My right honourable friend the Secretary of State in another place, when challenged on that point, said it had been put in for the purpose of enabling the Secretary of State to improve the pension rates if they should be varied in the territories or at home. Now surely that could be stated either in the Bill or in the Explanatory Memorandum, for any civil servant overseas reading these words

605
would quite clearly be alarmed by that particular subsection. There is one more point in regard to the Treasury aspect, and that is in regard to paragraph 7 of the Explanatory Memorandum, which says that it is difficult to gauge the scope of the expenses falling upon the Treasury
"since no forecast can be made at the present time of the extent of the demand by Overseas Governments.…".
Does that mean that the overall limit to this Service will depend upon a demand of the overseas Governments, as indeed I hope, or is there any possibility of an overall veto remaining in the hands of the Treasury and of the overseas Governments being starved of the necessary recruits?
May I turn from that aspect to the methods of payment which are laid down in Clause 2? Subsection (3) says that provision may be made
"for the operation of the order to be different in relation to different cases or classes of cases."
Of course, that is so at the present time in the Oversea Civil Service, the old Colonial Service, in regard to wages and salaries, and must obviously remain so, because different territories are richer or poorer, as the case may be, and pay different rates. But when it comes to pensions—and Clause 2 deals with pensions—I wonder whether it might not be possible for Her Majesty's Government, who, according to the White Paper they issued previously, are willing to guarantee the pension of each individual officer, to equalise the pensions wherever that officer has served. It is laid down that the Government shall recover the pensions from the territories in which the officer has served. But as transfers of an officer are envisaged, whereby he may serve in two, three or even four territories up to the age of fifty—and, after all, those territories have made their actuarial calculations and their proper contribution towards the pension—would it not be possible for Her Majesty's Government, if it should be necessary, to fill in any gap that may exist, so that the officer on the Special List, wherever he serves, will at the end of his service receive pension according to his category and not according to the territory in which he served? It seems to me that that would encourage officers to enlist for any territory. And, of course, it is the most backward territories which are most in
606
need of the skilled officers, whether in the field of administration or technocracy.
Referring to the Special List and the Central Pool, I note that no distinction is made between them in this Bill; and I think that is perfectly right, for they are bound to overlap, as the noble Lord, Lord Milverton, said. A Special List officer might well be transferred for a temporary job on contract and back again, perhaps, to the territory from which he had come, in a higher grade. So there seems no point in distinguishing between the lists. But here I should like to refer to the difficulties which have been mentioned by the noble Earl, Lord Perth, and which were mentioned in another place by the Secretary of State in regard to the Central Pool. It has been found that they can get senior officers or retired officers only on short-contract jobs, and this refers in particular, I think, to Ghana because no arrangements were made in regard to a Special List.
The only fundamental criticism I would make of this Bill is that it was not introduced many years ago. I am not criticising Her Majesty's Government on that score. We started the ball rolling, so to speak, in 1954. It occurs to me that the experience which was gained as a result of the independence of India and Pakistan, Ceylon and Burma ten or more years ago might have been put to good effect in Africa, and I think noble Lords opposite must take their share of the blame for not having thought of this and foreseen it before, because it could have been foreseen that Ghana was on the road to independence in 1949. There had been the Watson Report, which the Labour Government accepted, resulting in the appointment of the Coussey Commission to advise on the new Constitution. If, at that time, something like this had been promulgated, and a few years ago had been brought into effect, then Ghana would have been in a far better position than she now is, and the officers serving in Ghana would also have been in a very much stronger position.
I wonder whether the noble Earl, Lord Perth, when he replies, could say if any progress is being made, or is attempting to be made, in Ghana to put the situation right, for 50 per cent, of the officers entitled to compensation under the terms which the Secretary of State very properly

607
arranged with the Ghana Government have already left. Is it possible to arrange that the other 50 per cent. will remain where they are so badly needed? Already half the Service in the senior grades is staffed by Ghanians; and here, if I may say so in parenthesis, the standard is quite wonderfully high—it is most impressive. I do not say that in any spirit of condescension, but because I think it is not fully realised in this country, or in other parts of Africa, that the standard of the senior African civil servants in Ghana is comparable to that of our own, though there are not enough of them. If half the Service is staffed by these people, and they are going to lose another 400, what will happen in that country cannot be of benefit to anybody, either there or here.
In regard to the Central African Federation, I must emphasise the point which the noble Lord, Lord Milverton, made. They do, of course, want their own home-based Civil Service, and under this Bill the scope for people in the area will be severely limited. Of the 11,000 posts which are in the European branch of the Federal Civil Service, 7,000 men have been recruited directly, but 3,000 have transferred from the territorial services, and have accepted Federal terms of service, and therefore, presumably, are no longer a liability on Her Majesty's Government. Only 700 officers remain on secondment.
There is one small point arising out of this matter. The noble Earl may not be able to answer it on this occasion. I agree that it is a little outside the scope of the Bill, but having got so far I may as well put the question. It concerns the Service in the two Northern Territories, which of course remains under the Colonial Secretary. Recently there was a regulation that no member of the Oversea Civil Service in Northern Rhodesia and Nyasaland—it may apply also to other territories—was entitled to buy any land or a house to which he might retire after his service, for fear that he might be considered prejudiced in the course of his duty. Does that rule still pertain? I have an idea it may have been revoked recently. Certainly it would be the wish of the Federal Government that it should be possible for all civil servants to regard that territory as their home, so that they
608
may become citizens if they wish and settle in that territory at the end of their service. That question is a little outside the scope of the Bill and I apologise. With those closing words I would say that I welcome the Bill, and hope that it has a very important function to fulfil, one which the new Commonwealth and the world cannot well do without.
LORD MILVERTON: Before the noble Lord sits down may I put a point? I am very anxious not to be misquoted in the Record. He misquoted me, I think inadvertently, as saying that this Bill covers not only the Special List but Her Majesty's Government's Overseas Service. My difficulty is precisely that I do not understand that it does. What I should like would be a declaration from the Government that it does; that there are no special privileges reserved for the Special List; that the pensions of members of Her Majesty's Overseas Service whom the Treasury will not accept for the Special List still do not lose these guarantees. I do not want to be quoted as saying I think they are covered, because precisely my point is that they are not.
LORD HASTINGS: I hope the noble Lord is wrong in believing I said that—though I may have done so, inadvertently. In my remarks I was referring entirely to the contents of this Bill and I think I was talking exclusively about the Special List until the end when (it was my own fault) I diverged somewhat to mention the local conditions in Central Africa and the conditions of the ordinary members of the Oversea Civil Service in Northern Rhodesia and Nyasaland. It was somewhat outside the scope of this Bill. I am sorry if I misled the noble Lord.
5.20 p.m.
LORD FARINGDON: My Lords, if I rise it is to detain your Lordships for only a few minutes, and I do so because I have recently returned from West Africa where I have had occasion to discuss the subject of the Bill which is before us to-day with a number of the officers who will be affected by it. I am sorry to say that as a result of these conversations and of my own reading of the Bill I find myself pretty completely in agreement with the noble Lord, Lord Milverton.
I am not in the least inclined to oppose this Bill; I cannot conceive that it can

609
do any harm. Like the noble Lord, Lord Hastings, I should wish that it had been introduced earlier. On the other hand, I am extremely pessimistic as to any good arising from it in the immediate future. The noble Lord spoke of the loss of officers from Ghana. In actual fact, in spite of the Bill, equal loss of officers has been suffered already by Nigeria and, I am sorry to say, additional losses are expected. I do not, however, go the whole way with the noble Lord, Lord Milverton, when he describes the disappearance of our Overseas Service. I believe, like the noble Lord, Lord Hastings, and my noble friend Lord Shepherd, that there will be an Overseas Service of the future. It may not any longer operate in the style that it has done hitherto, but for many years there will be invaluable work to be done by administrators which will tend less and less towards administration and more and more towards specially skilled and technical trained work. Such a Service could. I believe, under this Bill—this is where I am more optimistic than the noble Lord. Lord Milverton, about this particular Bill—be organised, and it is just that kind of a Service which I believe will be needed in the future.
I expect many of your Lordships will have noticed a leading article in The Times this morning about the Economic Development Institute set up by the World Bank. That reminded me of our Own problem here and what I thought we should be doing with the object of obtaining this kind of specially skilled technical corps of civil servants for overseas work. We should, I believe, be setting up a kind of staff college, Clearly the Institute set up by the World Bank is for a rather more developed, a more senior type of civil servant. But I believe that for the type of servant that we need for the future, one who would be doing invaluable work in the Commonwealth for a long time, some such staff college would be essential.
It is in regard to the short term objects of this Bill that I am most pessimistic. I spoke, as I say, to officers in Nigeria and in Ghana, and they are all of them—I speak of Africans as well as Europeans—profoundly disturbed by their loss of expatriate personnel. Unfortunately, however—it was put to me this way—the Special List is a "dead
610
letter". I was not immensely impressed, though still slightly surprised, to hear of the noble Lord's 250 applications; though even that, out of 2,000, possibly is not very considerable. I notice, however, that the figure has gone up—I think doubled—since this Bill was debated in another place. Perhaps that may be a good sign, and I may have come across unduly pessimistic people when in Nigeria. However, the fact remains that already nearly one-quarter of the expatriate personnel in Nigeria have left, and I was told that it is confidently expected that another quarter will leave.
It was put to me that the disadvantages were due to insufficient generosity on the part of the Treasury. Men who may he devoted to, and entirely taken up with, their work, none the less have duties to their families. It is impossible for them to gamble with the future of their families, and they are bound to take the compensation which is offered to them when it is a question of considering their own domesic problems. Here I should like to make a suggestion. It is right and proper that the compensation to such expatriate officers should be generous, and I think it has been generous. Unfortunately, it has had this result, which I have already mentioned: that officers feel that in the interests of their families they must take their compensation and leave.
Would it not be possible—indeed, I am sure it would be—when an officer reaches the age where he is entitled to compensation on a scale which he would find it impossible to refuse, for the sum to which he would then be entitled to be paid into a kind of blocked account with, say, the Crown Agents, where it would remain until such time as the officer claimed it? In the meantime, any interest accruing would return to the employing Government, any pension rights would be suspended, and the officer would be in a position to sign a contract with the local Government and continue to serve them. I was told when I was in Ghana—I was not able to confirm it—that many Ghanaian expatriate civil servants have in fact obtained contracts in Nigeria. I do not know whether the same thing has happened in reverse; but can anything be more fantastically silly? In this connection, I would commend to

611
the attention of Her Majesty's Government the arrangements which were made by Pakistan in similar circumstances. I must apologise that I have not the details of that scheme in my head, but I believe it is along those lines that we must go if we wish to retain these expatriate officers who wish to remain and whom the Governments wish to retain in their territories. It can be done, I suggest, only along some such lines as those which I have suggested. My Lords, I said that I spoke only because recently I have returned from those parts and because I have been in a position to discuss this matter. I do not oppose this Bill, and, like the noble Lord, Lord Milverton, I hope it may do some good. I do not think it can do any harm, so I wish it well.
5.27 p.m.
THE EARL of PERTH: My Lords, first I should like to thank all those who have taken part in this debate on Second Reading for their welcome to the Bill, at any rate in the sense that, if they have not commended it, they have not damned it altogether, and we, have just heard from Lord Faringdon his hope that anyhow it will not do any harm. That, I think, has been the purport of a number of other speeches. The first matter upon which I think I ought to touch, because it was a point raised by many noble Lords, is in regard to the Treasury. Perhaps quite rightly, noble Lords are most suspicious of the Treasury, knowing that it is a watch dog in regard to expenditure. Various noble Lords have made points in that connection on one part or another of the Bill. I should like to repeat an assurance given by my right honourable friend in another place, that ordinarily the Treasury is not concerned with individual applications and that, as will be seen, there is an opportunity for the Treasury to give blanket approval to a whole class of officials. In fact, this has already been done in one case. The Treasury has said that all members of the Nigerian Service who were in that Service in June of this year can be appointed to the Special List. That, I think, is an example of how we may expect that the Bill will be interpreted—generously and in the spirit which I know noble Lords would require and hope for.
612
The noble Earl, Lord Lucan, asked whether, as a result of this Bill, we may expect an increase in recruits. He further asked whether there was a chance that as a result of the Bill we might get recruits of better quality. I am afraid I can give no categorical answer on this point. There is certainly some improvement in the potential terms of service, and to that extent the Bill may help in the problem that we recognise is before us. I believe we all have a feeling that the position is not perfect but that, as the noble Lord, Lord Milverton, pointed out, there is no easy solution. To my mind it will have a particular value for a class of servant which is becoming more and more needed, namely, those who are temporarily called in for specific jobs and who will be moving from one place to another. But we do not really know the answer. We can only feel our way.
The noble Lord, Lord Milverton, raised many points. I am afraid I shall not be able to give him the answers to some of them. Perhaps he will recognise that some will be more appropriately dealt with at the Committee stage. The answers to others I might be able to give by correspondence or after I have had more time to study his speech. The noble Lord has the advantage of me because of his very great experience—thirty-nine years in the Service—and we are all very fortunate to have his penetrating analysis of the Bill, even though I cannot say that I liked all he said about it. The noble Lord asked whether the Gold Coast (or Ghana, as it is now called) was to offer civil servants there the same treatment as was given in the case of Ceylon, India or Burma. Broadly, the arrangements made with Ghana last March under a Public Officers Bill were along the same lines as those in Ceylon, with some small improvement. There is no ultimate guarantee of pensions, but I feel that it would be almost improper for Her Majesty's Government to expect that Ghana will not honour her word; and to ask for any such guarantee at this time would, I think, be both inappropriate and unnecessary.
The noble Lord asked for various figures about pensionable positions in 1954 and to-day; these I can best provide in writing. He also made the point about the age of fifty not being one at

613
which people are necessarily ready for retirement. On that I can only say that service in colonial territories usually leads people to retire earlier than from other careers; but in the case of Nigeria an arrangement has been made by which the retiring age will be not fifty, but fifty-five, and in some degree, therefore, the noble Lord's point has been answered. He asked whether arrangements would be made to take care of those officers who have been retired early, and steps taken to ensure their re-employment. The question of compulsory early retirement has so far arisen only in the case of Malaya, and there is a special Malayan Resettlement Bureau working for that purpose. It goes without saying that the Colonial Office are at all times very anxious to help in securing other employment in cases of need.
Then the noble Lord raised various questions on the Bill itself. On Clause 2, he asked in regard to Nigeria what was the position for those on the Special List in relation to pensions. The answer is that Her Majesty's Government will pay pensions to the vast majority of pensionable officers if they opt to join the Special List. The noble Lord showed certain suspicion about gratuity and compensation being grouped together under Clause 7. My honourable friend in another place made it clear that this was a question of drafting and said it has been agreed that legislation should be embodied in an early Finance Act so as to ensure that officers who join the Special List will not incur any additional liability to United Kingdom income tax.
Finally, the noble Lord, Lord Milverton, criticised what he called the lukewarm advocacy of the Colonial Office and their negative approach on the whole of this problem. In that connection I can only say that if the noble Lord has anything constructive to suggest or any ideas by which we might do better for the Service, we are only too anxious and ready to receive them. We are under no illusions but that we have here a very difficult task, and it is helpful to have all the doubts and dangers pointed out; but it would be even more helpful if, perhaps on the next occasion that we face this Bill, we could have from the noble Lord something constructive which would give us new ideas on how to proceed.
614
May I now take a point raised by the noble Lord, Lord Shepherd, who kindly gave me notice of the two questions he wanted to raise? He asked about the position of the Singapore Government and Government officers serving there. He wished to know whether they were to be ensured compensation or pension rights in the event of their wanting to leave. The Singapore Government have agreed that officers' pension rights and rights to lump-sum compensation should be safeguarded by embodying suitable provisions in the new Singapore Constitution. Again I do not think that at this stage it would be appropriate to doubt whether what has been agreed will happen; so I think that the answer that I give there is all that could be expected.
When we come to the noble Lord's second question concerning the position of those employed by the city council, the position is more difficult because these are not officers serving Her Majesty's Government but officers who chose to serve a city council. There has been no change in the status of that city council. It is true that the original arrangement suggested for compensation or terms of employment by the last city council has been rescinded, but it must be remembered that warning was given that it was felt that such an arrangement, just before elections, was unwise. At the same time I do not think one need be too depressed. The Party now in power on the city council have made a statement recognising the need for efficient expatriate officers and their desire to keep them, and have undertaken to negotiate some new arrangment with them. I hope that those who are concerned will enter into negotiations with the city council on this matter.
The noble Lord asked whether we—that is to say, whether the Secretary of State—would intervene or take over responsibility. It is, as I have explained, not for the Secretary of State to take on this responsibility. At the same time, he is naturally extremely anxious to see that things are satisfactorily settled, and would hope that the two parties will in fact get together, and the sooner the better; and if there is at any stage something which he can do in the way of using his good offices if there is a difficulty, he will, of course, be very ready to try to help. But I think it is fair to

615
point out that the real responsibility, or the real way of handling a situation like this, is for the two parties concerned to negotiate, and only if they fail should other steps be taken. But there are some indications that it ought to be possible to reach agreement.
Several noble Lords took me to task for using the name "administrators" and then giving a whole list of different people who I maintained came into that category. But I would point out that I did use the word in the broadest sense, and it has come out in our discussion this afternoon how, in fact, that is right—namely, that administrators in the broadest sense to-day do cover, and will cover more and more, a wider field than just the administrative service, and it is with them, just as much as with anybody else, that we are going to be concerned in the future.
The noble Lord, Lord Hastings, said that he found the Bill confusing. Perhaps I should make a confession: I do not find it too easy myself; but I think it is perhaps inevitable with a Bill such as this by which we are legislating and taking care of a great number of points which have to be taken into account. At the same time, he made what seems to me to be a most helpful suggestion—namely, that we should consider whether there could not be some form of memorandum, a fuller Explanatory Memorandum, so that the officers concerned will understand the position without doubt. I think that that is well worthy of consideration, although I would just, in passing, make the comment that it is extraordinary how when one's own interests are concerned one understands the most difficult things. Then the noble Lord asked me one or two points on the Bill itself. On Clause 2 (3), I am not quite sure what the point was.
LORD HASTINGS: My Lords. I asked first about the overall veto and whether that was with the Treasury or was the demand of the overseas territories. The point on that particular subsection was the question of evening Out pensions at the end of service, wherever they serve.
THE EARL OF PERTH: I think the idea of evening out pensions to cover people wherever they may serve is a difficult one, but again we will certainly study it and see what may be possible. But
616
when people originally take on their service they know where they are going to serve and the conditions of service there. However, it was a point referred to by several noble Lords and it is certainly one worth looking at. Again, other suggestions have been made. The noble Lord, Lord Faringdon, threw out the idea of a form of staff college. I think we feel that the Government service here, in its broadest sense, is in fact a pretty adequate staff college; but, so far as there is anything in it, by all means let us look further.
The noble Lord quoted certain figures on the number of people who have left Nigeria as opposed to those who have left Ghana. I think I am right in saying, though I may be corrected subsequently, that it is not quite so bad as he thinks. His figures may be true of the Western and the Eastern Regions, but they are not, I think, true of the Federation or of the Northern Region. Lastly, the noble Lord touched on the question of difficulty about the compensation fund and the fact that the compensation fund terms were pretty generous and were apt, as a result, to encourage people to leave. On that matter we have been in something of a cleft stick. Very naturally when people have retiring terms we try to give them the best possible compensation; and I should pay tribute to the generosity of the various Governments which have willingly agreed to pay such compensation. At the same time, I recognise that by that very generosity there is a temptation for the expatriate officers to go rather than to stay. Various suggestions have been put forward in that connection. For example, the one of the noble Lord, Lord Faringdon, which you listened to, and which I should like to study further, was that there should be some partial drawing of the lump sum and not the whole. But we recognise the problem and will do what we can to meet it, if it can be met.
I hope that I have touched on the various questions raised by noble Lords. I will finish more or less as I started. We are not completely satisfied with the position with regard to the Overseas Civil Service. We are feeling our way. The suggestions that have been made to-day are most helpful in that connection. We are not confident that this Bill will be

617
the last thing on this subject—indeed, I should be very surprised if it were. Rather do I expect that as time goes on there will be new requirements and new ideas on how to meet them. I would only repeat what I said at the beginning: I hope that this Bill represents a step forward and it will achieve something we have been seeking. But if experience shows that new suggestions or new arrangements will help us even more, then we are very ready to consider them and to act upon them.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

CAYMAN ISLANDS AND TURKS AND CAICOS ISLANDS BILL
5.49 p.m.
Order of the Day for the Second Reading read.
THE EARL OF PERTH: My Lords, I feel that I owe you an apology. You are hearing me a great deal this afternoon, but it is just an accident of events that there happen to be two Bills on colonial matters to be dealt with to-day. This Bill, I think, is less difficult to understand, and again I hope that it will not he a controversial one. Its purpose is simple. It is to separate the Turks and Caicos Islands from Jamaica, and to make fresh provision for the government of these islands and for that of the Cayman Islands. I might explain to your Lordships that the Cayman Islands do not have to be formally separated from Jamaica for, by the Act of 1863, they are administered "as if they were part of" Jamaica. On the other hand, the Turks and Caicos Islands were, in the words of the Order in Council of 1873 "annexed to and formed part of" Jamaica.
Let me give your Lordships a word on the history of the islands. The Cayman Islands are a group about 200 miles north-west of Jamaica. They have been British for nearly 300 years. Their population is about 9,000, most of whom are of European origin. Many of them originally came to the island as shipwrecked pirates who decided to settle there, or as marooned mariners. Curiously enough, the sea has remained in their blood, so that to-day the main occupa
618
tion of the islanders is to provide seamen for ships.
LORD SILKIN: Not pirates!
THE EARL OF PERTH: Although the main revenue of the people is the seamen's remittances, there are two other sources of wealth—turtles and tourists, though these are not of great importance. The islands have always faced the danger of hurricanes. They are governed by a Commissioner appointed by the Governor of Jamaica, and the local Legislature consists of Justices and Vestrymen.
The Turks and Caicos Islands are about 450 miles north-east of Jamaica. They are a barren group of islands whose main industry—I can almost say their only industry—is salt. The salt-making industry has suffered over many years great ups and downs, but thanks to the technical advice of Imperial Chemical Industries it has now a better prospect. The population of the islands is about 6.600, and the method of administration is similar to that of the Cayman islands.
The Governor of Jamaica has been responsible for the administration of both these groups of islands and a Convention has been developed by which Jamaican legislation does not apply to them unless the islanders so wish. In practice, the administration and technical aid given by Jamaica has been of the greatest help, because these groups of islands cannot themselves provide the necessary staff, whether for roads or accounting, or what you will. I should like to say here how grateful we are for the services which Jamaica has so readily offered. I am glad, further, to say that the new arrangements proposed for administering the islands will not interfere with the continuance of this help from Jamaica. The islands will, in fact, be part of the Federation of the West Indies, but while no provision has been made for their representation in the Federal Legislature, generally it is not contemplated that the Federal laws will apply in the islands unless the Commissioners of the islands have been first consulted.
The arrangements outlined in this Bill are put forward with the approval of all concerned, and on the appointed day an Order in Council will be made. It will provide for increased local autonomy in Constitutions which have not yet been

619
settled, but it will be in the usual form of having legislative bodies containing ex officio and nominated members, as well as members elected by universal adult suffrage; and there will be an Executive Council which the Commissioner will normally consult. In addition, and most important, the islands will remain administratively linked with Jamaica. It will be for the Federal Government to decide what proportion of the block grant-in-aid given by Her Majesty's Government to the Federation may be distributed to the Turks and the Caymans, although at present the Caymans have no grant-in-aid. The eligibility of both groups of islands for Commonwealth Development and Welfare funds will not be altered.
At this stage I do not propose to go into any detail on the clauses of the Bill. I have said that Clause 1 provides for the separation of the Turks and Caicos Islands from Jamaica. Clause 2 (1) enables Her Majesty's Government to make fresh provision for governing the Cayman Islands. The rest of Clause 2 lays down government by Order in Council on the appointed day as outlined. Clause 3 deals with the power to authorise the making of emergency laws. That may arise from many causes—from natural causes, such as a hurricane in that part of the world, or from wars or rumours of wars. Clause 4 is the Short Title. It seems to me that this Bill is typical of so much in our colonial history. It follows no exact constitutional pattern, but rather works out a system of rule for these islands which retains past advantages, particularly the link with Jamaica, and at the same time takes into account the wishes and circumstances of the people. I beg to move that the Bill be now read a second time.
Moved. That the Bill be now read 2a.—(The Earl of Perth.)
5.57 p.m.
THE EARL OF LUCAN: My Lords, this Bill calls for little criticism and arouses no controversy of which I know. The noble Earl gave the House a sketch of the Islands and their condition. Politically, he assures us that the present arrangements have been arrived at after consultation and in agreement with all concerned. I suppose we must be content with that, although one might think that
620
the setting up of the paraphernalia of Constitutions for these two groups of islands, whose populations amount together to about 12,000, might be rather top-heavy. One would have thought that something on the lines of local government as we know it here would have been adequate. But if the people of the islands and the Jamaican and Federal Governments are all in agreement, I think that we can accept it as a sound arrangement.
There is one point on the clause dealing with emergency powers which I feel was not quite satisfactorily cleared up when the matter was raised in another place. Under Clause 3 power can be conferred by Her Majesty, by Order in Council, upon "any authority" to make emergency laws. Presumably the authorities who may require to use such powers are those of the Jamaican Government or the Government of the Federation. But the words "any authority" are surely very wide: they might be applied, for instance, to the Flag Officer of the Royal Navy in these waters, or to any Service officer; or, indeed, to officers in the United States Services, who I understand have a small detachment there. If, in fact, powers are intended to be used only by the Governments constitutionally set up there, and there are only two or three of them, why should they not be specified in the Bill? I think we should hear a little more about that aspect.
It is good to hear from the Minister that grants under Colonial Development and Welfare funds will not be changed, and that the grants-in-aid which have hitherto been paid to the Turks and Caicos Islands may still be paid by the Federal Government. But clearly the economic conditions in those islands are not prosperous, and we should like to know what provisions have been made, and are likely to be made, for improving conditions. We know that the Colonial Development Corporation lent £50,000 for the construction of the airport on Cayman Islands, but that was some years ago. I cannot find that any enterprise was set up to improve the salt industry on the other islands, which one has heard has considerable scope and promise for the export of salt to the United States. Then there is the underlying question of the scope of the Colonial Development Corporation. I see that there is an Overseas Resources Bill coming before us

621
before long, and I hope the fact that the Federation of the West Indies has achieved independence will not mean that all help and investment by the Colonial Development Corporation will have to cease in those islands. Subject to those few questions, we on this side of the House support the Bill.
6.2 p.m.
LORD MILVERTON: My Lords, I, too, must apologise for detaining your Lordships for a second time this evening, but I can assure you that it will only be for a moment or two. My only excuse for intervening in this debate is that I know these islands probably better than any of your Lordships, as they were my responsibility for five years when I was Governor of Jamaica. I have no reason or wish to add anything to the excellent summary given of the islands, historically, economically and ethnically, by the noble Earl who moved the Second Reading, and I will not attempt to say anything about that.
It is obvious that this position has arisen from the approach of Jamaica to self-government and the birth of Federation of the West Indies. The question was, I suppose: were the Turks and Caicos Islands to be left as part of Jamaica, which they were, and were the Cayman Islands to be embodied in Jamaica and given representation, presumably, in the Jamaican Legislature, or were they to be given a separate existence? The present arrangement is a peculiar one, for which I suppose there is hardly any precedent; they will be part of the Federation, and yet will have no representation, and will have this (the noble Earl will excuse me for saying so) rather cumbrous arrangement of Executive Councils, Legislative Councils and the rest of it. One can only hope that they will make the best of it.
I can think of only one question which might arise, and it is this. Supposing that these untutored democrats, with this new and dubious gift of adult suffrage, do not use it properly; and supposing that the control gets into utterly wrong hands, as may easily happen, who then is going to intervene and who will be responsible for setting that situation right? Especially might that arise after the Federation of the West Indies has attained complete independence as a
622
member of the Commonwealth. I know that in the Bill the right is reserved for emergency powers and so forth, but the exercise of that right in those hypothetical circumstances would surely be fraught with a great deal of difficulty. I only mention the point, and there is perhaps no reason to advance to that stage. But I can see all sorts of possible difficulties arising even at an early date. For instance, to the Cayman Islands is now coming a relative prosperity, because they have luxury hotels, and even a night-club. Now, with adult suffrage added to those other modern pleasures, all sorts of things might happen in a community like that. The tourist traffic, with all respect to it, does not generally improve the behaviour of people in that stage of development.
However, I wish this Bill every success, and I sincerely hope that the experiment, as indeed I regard it, will be successful. I personally, had I a voice in the matter, should have thought the easiest solution would have been to give them representation in Jamaica and to have made them part of Jamaica. But if it was the wish of the islanders themselves, as we are told it was, then this experiment has that justification of being according to the will of the people. I support the Bill.
6.8 p.m.
THE EARL OF PERTH: My Lords, both the noble Earl, Lord Lucan, and the noble Lord, Lord Milverton, have touched on the same point—namely, that it appears to be a rather heavy paraphernalia of government that has been outlined for these two small islands. I think I would agree that one should not take this too seriously. What I mean is that although you may give the people rather important-sounding names—and that is natural, I think, when they are going to govern themselves—in practice one will find that the machinery will be very much like that of a local government. There must be some form of election and of suffrage, and if, as a result of that, there is some form of a board which is going to govern or guide the island under the Commissioner, it warrants, since it has the main responsibility, the sort of set-up which has been outlined. But it does not need to be taken too seriously, in the sense that it will be top-heavy and have everybody consisting of civil servants. In practice, the islands

623
will continue to rely, as now, administrative help from Jamaica.
The noble Earl, Lord Lucan, raised a question, which was also raised in another place, as to what is meant by "any authority". It was said in another place—and I would confirm it—that what we had in mind was British authorities. It is difficult to know just which ones it might be—federal, if it was a question affecting the whole of the Federation; local, in which case you might call only on Jamaica to act; or completely local, in which case you would give authority to the Commissioner to act. So it is necessary to use these words, and I can give the same assurance which was given in another place in regard to them.
The noble Earl, Lord Lucan, asked whether the Colonial Development Corporation would continue to operate there. Certainly, at the present time, if they so choose they may do so. What may happen once the Federation has achieved independence, which is some time off, remains to be seen, but if they have started a scheme then, as noble Lords know, they can carry on with it after independence is achieved. The other point raised by the noble Lord, Lord Milverton, was: Who can step in if something goes wrong? The answer, surely, is the Commissioner or the Governor of Jamaica, or the Federal Government, depending on the seriousness of the crisis.
This is a simple Bill. It achieves, I hope and believe, the purpose which is the wish of the Islanders, as agreed with the authorities of Jamaica.
On Question, Bill read 2aand committed to a Committee of the Whole House.

STAMPED RECEIPTS
6.12 p.m.
LORD SILKIN LORD SILKIN rose to ask Her Majesty's Government what is the estimated loss of revenue to the Exchequer by the growing practice not to give stamped receipts for sums of £2 and over, and what action(if any) Her Majesty's Government propose to take to prevent this loss of revenue. The noble Lord said: My Lords, after the momentous discussions we have had on world affairs, I feel that perhaps I ought
624
to apologise for raising this relatively minor domestic matter but it is of considerable interest to a number of people. On December 10 I had a Question down on this subject, and afterwards a number of noble Lords from all sides of the House spoke to me about it and indicated that they were not entirely satisfied with the answers. I thought it right, therefore, to raise this matter again. The Question as it stands is a simple one: I am asking what is the loss of revenue through people no longer giving 2d. stamps on receipts. I do not know whether the Government will be able to give me a figure to-day—probably not. We can all make our own guess, and I would say that the loss to the Revenue runs into several millions of pounds. I take it that the Government would not willingly sacrifice at the present time a loss of revenue running into that kind of figure.
One of the things that rather puzzle me is that when I last put the Question, the noble Marquess, Lord Lansdowne, who replied, said that the Government had foreseen that there would be a loss of revenue. But if he is going to say this afternoon (as I gather he is) that he does not know how much, is it not rather reckless for the Government to have foreseen a loss of revenue yet not be able to forecast the amount? I do not know whether it is £50 million or less, but we have had resignations in respect of figures of that order. If the loss is of that kind of figure it is a serious matter, although probably it is not as high as that. But at this stage, for the Government complacently to accept the fact that they are prepared to lose revenue because it is a matter of convenience to certain traders, is something that I fail to understand.
The position is quite simple. Under Section 101 of the Stamp Act, 1891, every person who receives a sum of £2 or upwards is required to give a stamped receipt. The Stamp Act, 1891, is still in force the law has not been changed, except possibly by implication under the Cheques Act, 1957, which came into operation last October. I say "possibly by implication" because the position is by no means clear. The Cheques Act provides that
"An unindorsed cheque which appears to have been paid by the banker on whom it is drawn is evidence of the receipt by the payee of the sum payable by the cheque."

625
Therefore, a person who does not give a receipt would have some cover in that provision. It is rather odd that that fact should not have been foreseen at the time and adequately dealt with so that there could be no possible doubt that the law has not been changed, and that the fact that an unendorsed cheque is evidence of payment will not absolve people from giving stamped receipts as they did heretofore. There has been a loss of revenue which we can ill afford—whether it is for a large sum or a small sum—and this loss has been the indirect result of the passing of the Cheques Act. It was not contemplated by most of us, and if it had been intended to change the law as regards receipts then it should have been done in terms and not in this indirect manner.
I wish to say a few words on another aspect of the matter altogether, and that is the effect on small people who keep their own accounts—those who pay out perhaps a dozen cheques a week; who have no auditors or accountants, except for the purpose of preparing their annual accounts for the year, and who have otherwise to keep their own records. The inconvenience to them has been quite considerable. People have adopted all kinds of devices and methods for not giving receipts. Some do not give receipts at all, and in such cases a person who pays by cheque is in some difficulty. He has no means of knowing whether the cheque has duly reached the person to whom it was paid, except after some interval or if he gets a second statement for the amount. When he does get the statement, if it has been paid he has no receipt and has to rely on the cheque itself which, on the face of it, is evidence that some sum has been paid. But that has to be related to the statement itself, and involves the payee in considerable labour in sorting out these cheques and attaching them to the statements. Generally, it is a matter of considerable inconvenience.
I have brought along half a dozen of the latest receipts I have had, none of them stamped. Some people have just put, "Received with thanks"—these are quite reputable concerns. Another has a special form of receipt; the next one the same; the next one has nothing—it just returns the account. Another simply returns the account, and another one says
626
"Settled." All that is most unsatisfactory. I realise that the noble Marquess who is to reply may say that those who acknowledge that the amount has been paid should, by law, have put on a 2d. stamp. I do not think they are trying to evade the law. But is one to accept the situation or report them all to the Inland Revenue? The object of my Question is to get a clear and unequivocal statement as to what the position is. Are the noble Marquess and the Government turning a blind eye to the absence on receipts of 2d. stamps? Are they accepting the position? If so, I submit that they ought to regularise it by legislation and not leave it to implication or to a statement in this House. I hope that we may have some satisfaction in this matter to-day, which we did not have on the occasion of the last Question.
LORD LAWSON: My Lords, may I ask this question?—I ask it from observation in my own particular area. Have the Government any intimation from the banks about the working of this new system? What complaints have they from, say, local authorities? So far as I can see, neither party seems to be satisfied with the result of what has been done, and I should like to ask whether there has been any intimation from any of these great organisations since this thing came into operation.
EARL ATTLEE: My Lords, I should like to support what the noble Lord has said from this side. There is a state of absolute confusion on this matter. We are constantly receiving receipts without stamps. My wife asked why, and I said it was supposed to have been made quite clear in the House of Lords that tradesmen had got to put the stamps on. If they do not, it is an infernal nuisance for everybody. The payers have to wait till the cheques come back. This needs a very clear statement. Most people are not putting on the 2d. stamp.
6.23 p.m.
LORD KILLEARN: My Lords, I should like strongly to support what the noble Lord, Lord Silkin, has laid before the House. He has performed a useful public service in so doing, because untold confusion exists, as has been observed. We have all suffered from it, and when one reads the debate of December 10 one does not really know

627
what the situation is. I am not surprised there is some confusion. I have put down here (I have given private notice of this to the noble Marquess) a suggestion in the form of a question, to meet the difficulty:
"Are Her Majesty's Government not contemplating the introduction of a provision in the next Finance Bill which will eventually stop this obvious gap in our legislation by providing a legal obligation upon the tradesman to supply a receipt to any customer who pays him by post, with a revenue stamp for 2d, upon it whenever the account is for £2 or upward?"
I understand that that is, in fact, a repetition of what the present law says. It may be what the present law says, but it is completely ignored by tradesmen, and even when one writes and asks for a formal stamped receipt one gets a curious bit of paper back without a 2d, stamp. I should like to support strongly the proposal put forward by the noble Lord, Lord Silkin.
6.26 p.m.
LORD JESSEL: My Lords, I rise to make only a brief intervention because as the sponsor in your Lordships' House of the Cheques Act, 1957, I wish to make it quite clear that I have no sense of guilt in respect of the loss of revenue to Her Majesty's Government which is arising now from the growing practice of firms not to give stamped receipts. The fact is that the Cheques Act, 1957, is not in itself responsible for this practice of not giving stamped receipts. Since 1880, as a result of the decision in the case of Egg v. Barnet, traders could have adopted exactly the same course in regard to endorsed cheques—and then all cheques had to be endorsed by the payee—as is now being done by traders in respect of unendorsed cheques; and to-day the bulk of cheques in circulation are unendorsed.
I think the explanation is that the arguments and debates in your Lordships' House and in another place drew the attention of traders and their legal advisers to the existing state of the law, which had been so for over 150 years. I quite appreciate that no Government likes losing a source of revenue, because obviously it has to find another source of revenue to make up for the loss. In this case, however, I hope that Her Majesty's Government will allow this particular loss to continue, because it is more than com
628
pensated for by the great decrease in unproductive work in industry, shops, commerce and the banks. This argument, of course, was one of the great arguments put forward for the Cheques Act when it came before this House.
Like most of your Lordships, I have had a great many letters on this subject of stamped receipts not being given. Although it annoys me every time I see the heading "Cheques Act, 1957," which to me is misleading, I can see the point of view of the firms if they do not expect to return the bill when you pay a cheque. But some traders, I am afraid, are not out to save labour but to save tax. I have a statement here from a firm of wine merchants, one with which I think the noble Lord, Lord Silkin, also deals, and it says:
"We shall be obliged if you will continue to return our statements when remitting in settlement of an account. The statement will be returned to you with an impressed acknowledgment that your cheque has been received."
Whether an impressed acknowledgment should attract a 2d. stamp I should not like to say, but perhaps the noble Marquess when he gives the reply will give us his view on the matter. Personally in this case I have written and asked for a stamped receipt for this particular account and all future accounts. As the noble Lord, Lord Silkin, rightly said, I am entitled to do so under the Stamp Act, 1891. If such receipt is not given to me, the firm can be fined up to a penalty of £10. This firm is not saving any labour; it is not saving any postage; all it is doing by giving what they call an impressed acknowledgment is saving a 2d stamp.
I am sure your Lordships will be grateful to the noble Lord, Lord Silkin, for raising this matter. I am sorry that Lord Chorley is not here, because he is a great expert on this particular branch of the law and I think his views would have been most helpful. Finally, I am glad to have had this opportunity of defending the Cheques Act, 1957, which is perfectly sound in principle, although it has made some traders suddenly sit up and appreciate the state of the existing law and find some means of avoiding a little tax.
6.30 p.m.
LORD CONESFORD: My Lords, I do not think that my noble friend Lord Jessel need apologise in any way for the

629
Cheques Act. So far as I understand the law, the Cheques Act has nothing whatever to do with the matter. I am surprised that the noble Lord, Lord Silkin, made the suggestion which I think is too generous to the trader, that there was some implication in the section which he quoted that altered the law regarding receipts.
LORD SILKIN: My Lords, I did not mean to say it altered the law. I said that a person, not a lawyer, reading it might be excused for believing that he need no longer give a receipt.
LORD CONESFORD: I am much obliged to the noble Lord. But I think it is important that the House should realise that the law is as stated by my noble friend Lord Jessel. An endorsed cheque was always evidence of receipt and the Cheques Act most reasonably provided that, when endorsement was no longer necessary, then the unendorsed cheque would have the same effect as the endorsed cheque had hitherto had. That is as I understand the law to be, and therefore the Cheques Act has nothing whatever to do with this change in practice on the part of traders. The law regarding receipts has not been changed in any way.
Many of us have been placed in a difficulty by the problems put to us by firms and companies with whom we have long dealt, who wish to be spared a good deal of trouble and expense by not putting on stamps which they are not bound to put on and by not involving themselves in unnecessary correspondence. The thing that astonishes me most about so many of these companies is that, while they have seen an advantage in saving themselves some trouble, they have not hesitated to give the customer quite a lot of trouble. My noble friend Lord Jessel did not much like the action of his wine merchant, but the wine merchant at least said what he was going to do. He did at least say that, if you paid the account and sent it back, the document would then be returned to you. A great many people are left in complete doubt as to what will happen if they return the account with the cheque.
Another suggestion of how the convenience both of the trader and of the customer can be met has been made, I think, by one of the bodies that advise companies. It is that their statement of
630
account should be accompanied by a second document, or possibly by a perforated part that can be torn off, and that the customer should keep the account and return the section with his cheque. That is a not inconvenient method. If that is done, the customer can write out his cheque, send it with the portion of the account the trader desires to be returned with the cheque, and keep the remainder himself, writing on it "Paid by Cheque". In due course he will have the evidence from his bank that that precise sum has been received. That does not solve the question of revenue, on which I do not in any way wish to forecast the Government reply; but at least it is quite convenient from the point of view of the customer and it is also convenient to the company or firm.
I was astonished, a day or two ago, to get from a most reputable company a statement of account with a perforated portion to be sent back with the cheque, with the insolent demand that I should fill it up with various particulars of date of invoice and so forth. I will not give the name of the company, but it was a company with which I am on most friendly terms. I wrote back to say that I did not know why the customer should be expected to fill up a form which they could quite well have filled up before they sent it out; that I had been much tempted to demand a receipt, and that the Cheques Act gave no cause or excuse for the trader to put the customer to any new trouble whatsoever. Whatever other result this debate may have—the revenue aspect will of course be dealt with in the Government reply—I hope that it will have the result that traders who desire to escape unnecessary expense, both as regards the stamp and as regards correspondence, will take the necessary steps to save the customer from trouble. That could quite easily be done by the method I suggest.
6.37 p.m.
THE MARQUESS OF LANSDOWNE: My Lords, I will address myself straight off to the Question of the noble Lord, Lord Silkin, without referring to the other questions which I will endeavour to answer later. This matter was raised on December 10 by the noble Lord by a Question in similar terms, and on that occasion I said that it was anticipated that at the time of the coming into force of

631
the Cheques Act there would be a certain loss of revenue. The noble Lord, Lord Silkin, said that he wondered what that loss of revenue might be—could it be in the order of £50 million? Well, I can assure the noble Lord that it is nowhere near in the order of £50 million; but it is of the order of £5 million. The figures that I have been able to obtain for 1956–57 are that this source of revenue yields a figure in the neighbourhood of £5 million; and to the best of my knowledge that is the highest figure that has ever been obtained from this particular source of revenue. So much for that part of the noble Lord's Question.
As regards the second part of the Question, quite clearly, as the noble Lord realises, I cannot anticipate anything that my right honourable friend the Chancellor of the Exchequer is likely to put into his Budget statement. The noble Lord, Lord Silkin, reaffirmed that the Stamp Act has not in any way been changed, and I think perhaps there was some slight misunderstanding—I wrote down the words the noble Lord used. He said that perhaps, possibly by implication, there had been a suggestion of change. Well. of course, there is no change whatsoever, as I said before, either by implication or in any other way. It is simply that traders have discovered how the law stands and how the law has, in fact, stood—not since 1880, as I think Lord Jessel said, but since 1800 so that for 158 years the law has been exactly the same.
As regards the effect on the small people, I fully appreciate the point made by the noble Lord. Like him, I myself have had a degree of inconvenience as a result of the passing of the Cheques Act. Though the Act should not have brought this result, it has done so and we accept the fact. I suggest to the noble Lord and others who have suffered inconvenience, that they should adopt the suggestion of the noble Lord, Lord Lucas of Chilworth. It is perfectly simple, and surely no great inconvenience to write on a bill that you require a receipt. Only two words are needed: "Receipt required". The moment those two words have been written you are entitled by law to a stamped receipt, and that is the end of all the trouble. Surely there is no great inconvenience in writing two words on the bottom of a bill. A trader is then
632
obliged by law to supply a stamped receipt. There is, therefore, no question of a blind eye being cast upon this practice, for the situation has not changed. It is exactly the same as it was before.
LORD SILKIN: My Lords, there are these receipts.
THE MARQUESS OF LANSDOWNE: My Lords, it is a little difficult exactly to define the law about what is and what is not an official receipt, and I should be risking getting into difficult legal complications if I attempted to do so. My own view would be that the impressed acknowledgment would, in fact, call for a 2d stamp; and really the noble Lord, Lord Jessel, is under an obligation to report this to the Commissioners of Inland Revenue.
LORD JESSEL: My Lords, I have asked for a stamped receipt.
THE MARQUESS OF LANSDOWNE: My Lords, I am much obliged to the noble Lord. That is the position.
With regard to the question addressed to me by the noble Lord, Lord Lawson, so far as I have been able to ascertain there has been no unusually large number of complaints. I use those words advisedly. But there has been a very large number of inquiries, and for that reason the operation of this Act is being carefully watched. The noble Earl, Lord Attlee, repeated a suggestion made in the previous debate, that there was a degree of confusion. I hope that I have been able to dispel some of the confusion, for I feel that there is no reason whatsoever for it. I believe that it has been rather exaggerated by articles in the Press which have now made the issue sound rather more complicated than in fact it is. But the receipt position is exactly the same as before.
EARL ATTLEE: My Lords, I doubt whether any of our local traders read the Report of our proceedings.
THE MARQUESS OF LANSDOWNE: My Lords, perhaps in this case it is a great pity they do not.
I believe that I have already largely replied to the question of the noble Lord, Lord Killearn, of which he was good enough to give me advance notice, in my reply to the noble Lord, Lord Silkin. I

633
was very grateful to the noble Lord, Lord Jessel, for making the situation as clear as he did. His contribution was helpful, and even if I have been unable to make things any more clear, his contribution has certainly done so. I can only give the noble Lord, Lord Conesford, my sympathy in the unfortunate treatment meted out to him. I very much regret that he should have suffered these unpleasant demands on the perforated portion of his accounts but I suggest, with respect, that the solution would be to write the words "Receipt required", and then there would be no further trouble.
LORD REA: My Lords, may I ask the noble Earl one more question. I understood him to say to the noble Lord, Lord Jessel, that if he had some indication that payment had been made it was more or less a public duty, in theory, to report to the Commissioners of Inland Revenue that payment of 2d. had been evaded. If that amount has been evaded, surely it is up to the Commissioners of Inland Revenue to take steps to see that it is not missed, rather than leave it to public-minded members of the general public. Is there any substance in that point? Can the noble Marquess help?
THE MARQUESS OF LANSDOWNE: My Lords, I really do not think there is any substance in the point. The obligation is purely a legal one: if a trader sends an unstamped receipt we are all under a legal obligation to report that fact to the Commissioners of Inland Revenue; but it is perfectly possible to call the trader's attention to it, and no doubt the normal trader would at once correct it.
LORD CONESFORD: My Lords, I am not quite sure that the noble Marquess is right on the last point about a legal obligation. In my profession it has long been the position that one never takes a stamp objection in court, and I cannot think that the whole legal profession has been disobeying the law all these years. Perhaps the noble and learned Viscount on the noble Lord's right will enlighten him.
THE LORD PRESIDENT OF THE COUNCIL (VISCOUNT HAILSHAM): My Lords, I am afraid that the noble Lord is not quite right about this. I do not want to detain the House with personal reminiscences, but the position is that
634
every officer and judge of the court is under an obligation to take a stamp objection. As regards the profession of the Bar, the obligation is some what different. The matter arises only in litigation, owing to the subsidiary rule in the Stamp Act that certain documents, of which a receipt is one, although not invalidated by the absence of a stamp, cannot be adduced in evidence without the presence of one. The duty of the profession has always been held to be to leave the protection of the Revenue to the officer of the court, because he has a duty to the requirements of justice as well as to the requirements of the Revenue. If, in fact, the payment has been made, the requirement of justice, as seen by the profession, is that people should know it has been made and it should have been established to have been made. The ditty of the court is to exact the penalty which is the price of putting in the receipt. That is the division of labour usually adopted as a convenience between the parties. It is considered by members of the legal profession other than an officer of the court to be a mean and also dishonourable thing to try to prevent proof of a statement of fact disadvantageous to one's own client, and which has in fact taken place, simply because the requirements of the Revenue are that duty should be paid. But it certainly has nothing to do with the point with which my noble friend is dealing. It is a nice point of legal professional etiquette which most of us have argued in our time.
LORD SILKIN: My Lords, it has not been made clear whether a person accepting an unstamped receipt without protest is himself committing an offence.
THE MARQUESS OF LANSDOWNE: My Lords, I should like notice of that question, but so far as I know he is not.
LORD SILKIN: My Lords, I will give the noble Marquess notice.
THE MARQUESS OF LANSDOWNE: My Lords, while I am on my feet, I will, with your Lordship permission, try to clarify something I said earlier. My attention has been drawn to a possible misconception I may have given. I gave a figure of £5 million. That figure was £5 million of revenue; that is to say, the maximum that could be lost if no receipts

635
at all were given would be £5 million. I hope that is now clear.
LORD KINNAIRD: My Lords, would the noble Marquess forgive me if I asked him one other question, because I am not clear about the position? I understood from what the noble Lord, Lord Jessel, said that he was responsible for the Cheques Act, and he would not admit that there was any disadvantage to the Government in losing this £5 million. He thought it was saved in other ways. The noble Marquess suggests that we should write "Receipt required" on our bills. Most of us do not pay our own bills; others do it for us. Does the noble Marquess wish all people to adopt that plan, and to try to save the Government £5 million by putting "Receipt required" on bills; or does he wish to leave it as an advantage to industry not to pay it?
THE MARQUESS OF LANSDOWNE: My Lords, I am not in the same happy position as the noble Lord, Lord Kinnaird; I have to pay my bills myself.
636
But I still claim that the sensible way of setting about this problem is to put on bills "Receipt required".
LORD JESSEL: My Lords, may I clear up one point? The advantage to industry has nothing to do with receipts, but lies in doing away with the requirement for endorsement of cheques.

CLERGY ORPHAN CORPORATION BILL [H.L.]
Referred to the Committee on Unopposed Bills.

SOUTH LANCASHIRE TRANSPORT BILL [H.L.]
Referred to a Select Committee.
House adjourned at ten minutes before seven o'clock.