Lords Sitting of 22 July 1958

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers
The Lord Pentland—Took the Oath.

COLONIAL SERVICE OFFICERS' CHILDREN
2.35 p.m.
LORD MILVERTON: 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 if, where an officer of the Colonial Service remains in a territory after it has achieved independence and has a child which is born in that territory, there is any difference in the treatment of that child from the treatment accorded to a child born to the same officer in England by any other territory in the world as regards (a) immigration, or (b) employment; if so, what the difference is and whether officers of the Colonial Service are made aware of this fact before they are asked to stay on in territories which are about to become independent.]
THE SECRETARY OF STATE FOR COMMONWEALTH RELATIONS (THE EARL OF HOME): My Lords, this is a most complicated question, and I am not sure that I can give an intelligible answer. As I understand it, the noble Lord's Question is directed to ascertaining the treatment accorded by other Governments, including foreign Governments, to the children, born in Colonies, of officers of the Colonial Service. He will appreciate that it is not possible for a United Kingdom Minister to give an authoritative answer to the question of the treatment foreign Governments would in all circumstances grant to such children. The position under United Kingdom law, however, would be that if the father of the child in question was himself a citizen of the United Kingdom and Colonies, by reason of his birth in the
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United Kingdom or a Colony, the child would be a citizen of the United Kingdom and Colonies, wherever born. If the father of the child was himself a citizen of the United Kingdom and Colonies only by descent, and not by reason of his birth in the United Kingdom or a Colony, the position of the child would depend on the place and date of birth.
I would rather not elaborate on this Answer, but I will, of course, do my best to answer any inquiries the noble Lord may address to me on particular cases. For this purpose I should need to know the place and date of birth of the father and the child.
LORD MILVERTON: My Lords, while thanking the noble Earl for the care and attention which has been given to this reply, may I ask, for reasons which are obvious, why it is not possible for the births of British children, in the circumstances named in my Question, to be registered at Somerset House? If that were done, it would obviate the difficulties which have arisen in many cases as to their treatment, either when they wished to emigrate later, or when they wished to enter, it may be, Canada, America or some other country. I should further like to ask, if there were reasons in the past why such births could not be registered at Somerset. House (I understand, in passing, that they are so registered in the case of children of members of the Diplomatic Service), why it is not possible now to have the births of British children of British parents, born in such circumstances, registered at Somerset House?
THE EARL OF HOME: My Lords, the answer to my noble friend is that arrangements already exist in India, Pakistan and Ceylon for the registration by United Kingdom High Commissioners of the births of United Kingdom citizens. The intention is to extend these arrangements to other Commonwealth countries where Colonial Service officers are employed, and I will see that that is done.
LORD MILVERTON: My Lords, thank the noble Earl. I am sure that that assurance will be very much appreciated in the Colonial Service.
LORD HAWKE: My Lords, I think that my noble leader, from his Answer, led us to believe that this applied to all

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people, not only those in Government service, because, of course others besides members of the Colonial Service are concerned.
THE EARL OF HOME: My Lords, I was dealing with members of the Colonial Service. If we are to extend the question I think I should need notice.

DISPOSAL OF KRUPP'S ASSETS
VISCOUNT ELIBANK: My Lords, I beg to ask the first Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government, with reference to a reply given by them in this House on July 8 relating to the 1953 Krupp deconcentration of assets agreement, in what manner they interpret the statement of the Federal Government that the Krupp holdings need be sold only, amongst other considerations, on a basis compatible with the German public interest.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE EARL OF GOSFORD): My Lords, Her Majesty's Government understand that what the Federal German Government mean by saying that the Krupp holdings need be sold, amongst other considerations, only "on a basis compatible with the German public interest", is that there is no compulsion on the German Government to sell to non-German buyers.
VISCOUNT ELIBANK: My Lords, I thank the noble Earl for his Answer. Is he aware that Article 6 of Law 27, which I understand is still in force, expressly dissociates Law 27 from having any regard to the German public interest in the carrying out the provisions of the law? If that is so, perhaps the noble Earl will kindly study that article before I raise this question on the foreign affairs debate on July 28.
THE EARL OF GOSFORD: My Lords, I will certainly do so.

NEW BRITISH POSTAGE STAMPS
VISCOUNT ELIBANK: My Lords, I beg to ask the second Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they have any statement to make as a corollary to their announcement on July 18, 1956, that distinctive stamps were to be issued in certain denominations for Scotland, Wales, Northern Ireland, Jersey, Guernsey and the Isle of Man; and whether, seeing that in the opinion of many well qualified to judge an issue of small, low-value pictorial stamps would add to the revenue and benefit the tourist industry, they will consider the advisability of making an issue of that nature.]
LORD CHESHAM: My Lords, as my right honourable friend the Postmaster General has announced, the new 3d. stamps for Wales and Monmouthshire, Scotland, Northern Ireland, Guernsey, Jersey and the Isle of Man will be put on sale on Monday, August 18, and the new 6d. and Is. 3d. stamps for Wales and Monmouthshire, Scotland and Northern Ireland, will be put on sale on Monday, September 29. Details of the designs of the twelve stamps will be published shortly before the 3d. denominations are isued.
With regard to the second part of the noble Viscount's Question, I have nothing to add to the information given in reply to his Questions on October 20, 1953, March 9, 1954, February 9, 1955, May 17, 1956, July 4, 1956, July 24, 1956, July 18, 1957, and February 13, 1958.
VISCOUNT ELIBANK: My Lords, I beg to thank the noble Lord for his Answer. I am sure that the stamps will be awaited with great interest in the country. With regard to the second part of the noble Lord's Answer, I wonder if he would be kind enough to ask my right honourable friend the progressively-minded Postmaster General whether he would turn a kindly eye in my direction and have designs printed for some small pictorial stamps so that he can see how attractive they are for any possible issue in the future.
LORD CHESHAM: I will certainly convey the noble Viscount's views to my progressively-minded right honourable friend. I am quite sure that he has considered this matter, but I do not think he is likely to move until such time as it is decided to change the policy.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, may I ask whether it is deliberately intended to restrict the new issue to what one might call the Celtic fringe? What is being done about the beauty spots in our own country? Would you consider, say, coming down with us to Essex and getting a picture of the island of Mersea and the estuary of the Blackwater, or shall we have to be content with the Scilly Isles?
LORD CHESHAM: I am grateful to the noble Viscount for his question, which is entirely and utterly hypothetical. There is no question at the present time of issuing pictorial stamps of any sort or kind; and no doubt if there were, the noble Viscount would not have asked his Question yet again.
LORD MILNER OF LEEDS: My Lords, arising out of the original Question, is a distinctive stamp not going to be issued for England? I notice that England is not mentioned among the countries for which distinctive stamps are to be issued.
LORD CHESHAM: No, my Lords, it is not. The present thinking is that the existing stamps containing the rose, thistle, daffodil and shamrock would represent England in association with the other parts of the British Isles. We believe that the stamps are popular and well-liked; and, of course, if they were withdrawn a regional stamp would have to he introduced, and I do not think that would be popular.
LORD HAWKE: May I tell my noble friend how grateful Englishmen will be for his reply, and how greatly they regret that Her Majesty's Government are apparently being pushed by the noble Viscount, Lord Elibank, into collecting sixpences from the juvenile stamp collectors of the world.
LORD SALTOUN: My Lords, would the noble Lord make inquiries to ascertain, so far as he can, what additional revenue, as suggested in the Starred Question, is likely to be derived from these stamps? Presumably they are used commercially in the same way as ordinary stamps. What excess revenue is likely to be derived?
LORD CHESHAM: Any excess revenue that is likely to be derived must be a matter of complete guesswork. We rather think that the revenue concerned would not be very great.

PROPOSED SUMMIT CONFERENCE
2.47 p.m.
VISCOUNT ALEXANDER OF HILLSBOROUGH: May I ask the noble Earl the Leader of the House whether any statement will be made on the position in relation to the Khrushchev invitation to a Summit Conference?
THE EARL OF HOME: My Lords, there will be no statement in another place today, but the Foreign Secretary is, I understand, going to deal in a speech with the substance of the reply which is going off to Mr. Khrushchev. As I think your Lordships will wish to be kept up to date with the most recent news on this subject, perhaps the House will allow me at about a quarter to four to give the main points of the Foreign Secretary's speech, if that is agreeable.

BRADFORD CORPORATION (TROLLEY VEHICLES) ORDER CONFIRMATION BILL
Read 3a (according to Order), and passed.
MAIDSTONE CORPORATION (TROLLEY VEHICLES) ORDER CONFIRMATION BILL
Read 3a (according to Order), and passed.
PIER AND HARBOUR ORDER (GREAT YARMOUTH) CONFIRMATION BILL
Read 3a (according to Order), and passed.
PIER AND HARBOUR ORDER (KING'S LYNN CONSERVANCY) CONFIRMATION BILL
Read 3a (according to Order), and passed.

INTEREST ON DAMAGES (SCOTLAND) BILL
2.49 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do resolve itself into Committee.—(Lord Greenhill.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD MERTHYR in the Chair.]
Clause 1—[Power of courts to grant interest on damages]:
LORD SALTOUN LORD SALTOUN moved, in Subsection (2), after paragraph (a) to insert:
"(b) authorise the granting of interest on sums paid into court, or".
The noble Lord said: The Bill now before your Lordships empowers the courts to grant interest on any damages which have been allotted by the court, not from the moment they were allotted, but going back into the past. It empowers the court to fix a date from which such interest on the damages so awarded shall run. For that reason I have put down this Amendment, which, if agreed, would make the Bill read that:
"Nothing in this section shall … authorise the granting of interest on sums paid into court …".
My Amendment really affects a somewhat larger field than merely sums paid into court, because I am thinking also of sums that have been offered.
There may be an action for damages, and the party against whom that action is raised may be willing to make, and may make, an offer in damages; or he may pay a sum into court. If that offer is accepted, or if the sum paid into court is accepted, there is an end of the matter, and the party who is to answer the case is not subjected to the costs of an action—the whole matter is terminated. If the damages finally awarded are in excess of such offer or sum paid into court, or even if they are equal to the sum paid into court. I do not think that interest should be allowed on such sums, whether they have actually been paid or whether they have merely been offered. We have to remember that a man may make such an offer in complete good faith and he may not know, before he comes into court and hears the whole case, of any circumstances which would lead him to increase that offer; it is only when he comes into court that that may become clear to him. For
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that reason I thought that it was proper to make the suggestion that this Bill should be strengthened by the inclusion of some such Amendment as I am at present moving. I beg to move.
Amendment moved—
Page 1, line 15, at end insert the said paragraph.—(Lord Saltoun.)
LORD GREENHILL: My difficulty is to know what circumstances would give rise to the kind of situation that the noble Lord has tried to describe. If my information is correct, it is thought that that particular position could not possibly arise. As the noble Lord is well aware, what happens in practice is that a defender, after unsuccessfully offering the pursuer the stated sum in settlement of an action, renews his offer in the form of a minute of tender, as it is called—that is, a formal document lodged in court and notified to the pursuer. This may be what the noble Lord has in mind. But even if the wording of the Amendment were altered so as to relate to tenders it would still be unnecessary, because in Clause 1 there is a qualification in the words
" … if the circumstances warrant such a course."
There you have the protection. It must be borne in mind, too, that the awarding of interest pre-dated is, as I said on Second Reading, a matter in the discretion of the judges of the court; and one's experience persuades one that discretion would not be exercised where there was any doubt as to the reasonableness of granting an award of interest backdated. For those reasons, I hope that the noble Lord will be good enough not to persist in his Amendment.
LORD SALTOUN: The noble Lord appeals to the high opinion that he and I both have of the sheriffs and the judges of our courts in Scotland. He does not appeal in vain. However, this is a point which seemed to me material; I thought that I ought to bring it before the notice of the Committee and also to make quite sure that it has been fully considered. In the circumstances, with the permission of the Committee, I will withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause I agreed to.
Remaining clauses agreed to.
House resumed.
Bill reported, without amendment.

COSTS OF LEASES BILL
Read 3a (according to Order), and passed.

OPENCAST COAL BILL
2.58 p.m.
Order of the Day for the Third Reading read.
THE MINISTER OF POWER (LORD MILLS): My Lords, I have it in Command from Her Majesty the Queen to signify to the House that Her Majesty, having been informed of the purport of the Opencast Coal Bill, has consented to place Her Majesty's interest, so far as it is concerned on behalf of the Crown, the Duchy of Lancaster and the Duchy of Cornwall, at the disposal of Parliament for the purpose of the Bill.
My Lords, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read 3a.(Lord Mills.)
On Question, Bill read 3a, with the Amendments.
Sixth Schedule [Application of compensation provisions to special cases]:
LORD MILLS LORD MILLS moved to add to paragraph 8:
"(2) For the purposes of this paragraph no account shall be taken of any opportunities of which the person in question has not availed himself (notwithstanding that they were opportunities of the kind described in the preceding sub-paragraph) in so far as they would have involved his engaging (whether as an employed person or otherwise) in a substantially different occupation from that in which he was engaged during the period preceding the operative date of the order.
(3) Paragraph (a) of subsection (8) of section nineteen of this Act, and the last preceding paragraph, shall apply for the purposes of this paragraph as they apply for the purposes of that section."
The noble Lord said: My Lords, I am moving this Amendment to give effect to the undertaking which I gave to the noble Viscount, Lord Ridley. I promised that I would, with your Lordships' permission, propose an Amendment on Third Reading which would have the effect that a man's annual compensation for loss of profits would not be mitigated on account of an opportunity of mitigation which he did not take and which would have involved his
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engaging in a substantially different occupation from that in which he was engaged during a period, which will normally be four years, before the date of operation of the compulsory rights order.
I think the first paragraph of this Amendment is quite clear, but I should perhaps say a word in explanation of the second paragraph. It provides, by attracting other provisions of the Bill, that the period preceding the operative date of the compulsory rights order referred to in the first paragraph, shall normally be a period of four years, but that this period may be varied by agreement between the National Coal Board and the claimant or by the Lands Tribunal, in cases where this is the equitable thing to do. I believe that this is a sensible provision. I am most grateful to the noble Viscount for the suggestion which prompted this Amendment, and I feel that it represents a satisfactory solution to the thorny problem of mitigation. I beg to move.
Amendment moved—
Page 87, line 31, at end insert the said paragraphs.—(Lord Mills.)
LORD MACDONALD OF GWAENYSGOR: My Lords, if I may comment on the Amendment, before we discuss the Third Reading of the Bill, it is in accordance with what we on this side of the House, as well as the noble Viscount, Lord Ridley, have expressed, We have always felt that it was rather unfair that a farmer should be put in a difficult position, and that, if he could have had a job in some other industry in the area where he was living but did not take it, he should be penalised. This Amendment puts right our complaint, and I must express my appreciation to the noble Lord, the Minister, for at last accepting an Amendment from this side of the House.
On Question, Amendment agreed to.
LORD MILLS: My Lords, I beg to move that this Bill do now pass. Opencast coal mining is an unpopular necessity which causes great inconvenience, and even hardship, to the people who live in the affected areas. It would have been easy for the opponents of opencast coal mining to delay, and perhaps even to prevent altogether, the passage of this long and complicated Bill.

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I am grateful both to your Lordships and to Members of another place for having, instead, approached this Bill in a constructive and helpful fashion. As a result we have been able to produce what is largely an agreed measure which enables opencast coal mining to continue but with many important new safeguards for the authorities and for the people who will be affected.
This process of constructive improvement has gone on to the very last stage, and I am particularly glad that in your Lordships' House we have been able to find what I believe are generally acceptable solutions to certain difficult problems. I should like to thank all those who have contributed to this work, and in particular the noble Viscount, Lord Ridley, and the noble Lord, Lord Macdonald of Gwaenysgor, and noble Lords opposite who, perhaps from different angles, have brought their great knowledge and experience of this subject to our deliberations. I should also like to thank my noble friend Lord Chesham who came in to assist on this Bill at very short notice and has dealt so ably and clearly with many Government Amendments.
It seems to me that as opencast coal mining has to continue this Bill has three great advantages. First, it enables us to dispense with those Defence Regulations relating to land which gave Her Majesty's Government far-ranging powers to take any land for practically any purpose. I am sure we are all agreed that it is high time to get rid of these regulations, and that it would be intolerable to continue them for the remaining life of opencast coal mining. Secondly, the Bill introduces new procedures designed to give those authorities and persons who are directly affected by opencast coal mining a better opportunity to make their views heard. In particular, we have provided for the Board's proposals for working an opencast coal site to be heard, where necessary, at a public local inquiry. This will prove a valuable safeguard of the rights of local authorities and private individuals. Thirdly, this Bill introduces a new code of compensation for those whose land is taken compulsorily. I believe that on the whole this code will prove more generous and certainly fairer than the existing arbitrary arrangements.
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In my view, this is perhaps the most important feature of the new Bill, for if we have to take land compulsorily for opencast coal mining it is essential that we should have a code of compensation which does justice to those affected. I beg to move.
Moved, That the Bill do now pass.—(Lord Mills.)
3.7 p.m.
LORD MACDONALD OF GWAENYSGOR: My Lords, I should not like this Bill to leave your Lordships' House without saying a few words both as to its contents and also about the noble Lord, the Minister of Power himself. The noble Lord has had a pretty long innings—and a pretty good one—on this Bill. I am told that our English cricket team may have difficulty in finding an opening batsman, a good "stone-wailer". I can recommend one to them now, because for many days the noble Lord has been "stonewalling"—finding reasons for not accepting this or that Amendment and giving a great many assurances. In fact I know of no Bill on which more assurances have been given. I am thankful for those assurances, for if I cannot have Amendments I will accept assurances as the second best thing. The noble Lord has batted well and has scored many fours and a few sixes; now, at the end of his innings, he has achieved a fairly good Bill—if we must have an Opencast Coal Bill.
We on this side of the House are very worried about the opencast mining position. Friends of mine living in various areas, and colliery officials, are doubtful about this Bill. Those in the mining community are worried and ask: What need is there at all for such a Bill? Saturday working was dispensed with because we could manage without Saturday work. Now, having dispensed with Saturday working for deep coal mining we continue to increase the output from opencast mining, and those engaged in the industry are a little worried about this extension of opencast mining. I know that various reasons were given for this Bill, and, so far as legislation to deal with opencast mining is required, this is a good Bill. All the same, I regret the need for such a Bill, and I am not yet entirely convinced that there is any urgent need for it. I agree

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with the expression "an unpopular necessity." Whatever may be said of the necessity for the Bill, it is certainly very unpopular in the mining district. They do not like the idea. They are afraid for their own future. After all, mines have been closed because they were considered uneconomic, and miners have been put out of work; and in these circumstances they cannot understand why opencast mining should go on.
The noble Lord, Lord Hawke, said something to me, in private conversation, which I am sure he will not mind my quoting. As we know, the rate of accidents has been substantially reduced in the last few years. I remember the time, as other noble Lords will, when the average number killed in the coal industry was four a day. That number has been reduced very substantially. The point which the noble Lord, Lord Hawke, put to me in private conversation was this. "You refer to the accidents underground and to the risks and dangers of coal mining," he said, "but with opencast working we find we are much safer. If we got all our coal in this way, would it not be a good thing for miners at present facing the risks and dangers?" There is something to be said for that argument, but the fact remains that for these miners the work they do is their livelihood. I, for one, should not mind if it were not necessary for a single man to descend a shaft in the country anywhere, provided that industrial needs and domestic needs of fuel were being met, and provided that those miners who were previously underground had found good jobs on the surface. Be that as it may, we have this Bill, and it improves the position for every section affected by opencast mining: restoration is better, and so is compensation. And since we must have the Bill, or it is thought that we must, I extend to it a welcome.
3.11 p.m.
LORD AMHERST OF HACKNEY: My Lords, I am speaking at this very late stage for one reason only, and that is that the noble Viscount, Lord Ridley, unfortunately, owing to a change of programme, was not able to be here to-day; and he felt, having addressed your Lordships on the Second Reading and during all the stages of the Bill, that it would be wrong if an apology were not made for his absence at this stage of the Bill to-day.
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I should like to say, as has been said, that, while we know that all those who are interested in the land—landowners and farmers—and those interested in amenity regret the necessity for this Bill, if there has to be a Bill they welcome the attempt in this Bill to put matters on a much more reasonable and equitable basis than was the case under the old requisition. I think that probably the main criticism of the Bill is still its length and complexity, with its fifty-three clauses and ten Schedules; but we appreciate the efforts which the noble Lord, Lord Mills, has made throughout our discussions on the Bill to meet all the points which have been raised. He has accepted several Amendments and has given many assurances as to how the Bill will be worked. We should like to thank him for that. Though we hope that this Bill will be used but seldom, we hope also that, as a result of the time spent on it, in this House and in another place, it will work more smoothly when it is used.
3.14 p.m.
LORD LAWSON: My Lords, the Bill is a very dangerous and bad Bill, I think, but it could not have been moved in milder terms or treated more carefully than it has been by the noble Lord who has had the task of seeing it through your Lordships' House. If I may say so, I think it is necessary to explain to your Lordships' House just what we are doing to-day. Opencast working, as taken for granted now, was unknown in this country before the war. Indeed, nobody would have dreamt of applying opencast working to either the kind of community we have or the kind of seams that we are considering. Opencasting, was one thing in America, in wide open spaces where there was seldom even a community, or in Australia, where I understand from those who have seen them that they sometimes take seams very deep indeed of practically clean coal. That is one thing; but nobody ever thought about applying opencast working to a small country like this, which has its coal fields in concentrated areas, with the village sometimes—indeed usually—in the middle of the coal field. Where opencast working was carried out in this country (as was described by a supporter of the Government. Lord Ridley), great are lights are used all night, blasting is

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going on continually, and working comes right up to the doorsteps of the people. As a result, if people are not very careful, whether they go out of the front door or the back door, they are in danger of falling into a kind of Grand Canyon.
During the war, of course, it was suggested that this method of mining should be tried and although the people, even those who advocated it, did not care too much for it. because they knew how uncomfortable it would be for the people on the spot, they endured it. I think they have been very good, in that the country did not hear a greater howl than it has heard up to the present time about this business. I know a place where workings go almost up to the doorsteps, and have undermined the houses so that they have had to be pulled down. Now today we are being asked to make this opencast working, which was endured by the people during the war, permanent. However much the Minister may have tried to mitigate the conditions—and I dare say he knows very well what the conditions are under which people are working—we are nevertheless being asked to pass a Bill which I think is not merely going to continue the position but, if I read the signs aright, is going to continue it on a bigger scale and probably a deeper scale than ever.
Let us see what we are doing. Before I came into the House this afternoon a Member of another place asked me whether we were to deal with opencast working to-day and I said that we were. Perhaps I may now read to your Lordships a letter, which has been sent to Mr. Price, the Member for Westhoughton. I think a copy was sent also to Mr. Tom Brown, another Member who lives in the same area. The letter, which comes from the clerk, to a local authority, reads as follows:
"The council has had notice that the Minister is proposing to authorise the Board to prospect on a large area of land on the Westhoughton—Aspull boundary and on a further larger area adjoining Park Road—Platt Lane and which contains the very beautiful glen making Hall Lee Park with which you may be familiar. The Council has decided that it views with great disfavour any proposal to open the areas concerned for the working of coal and that it will resist such proposals as far as possible."
Then the letter goes on to suggest that a copy should be sent to Mr. Brown, M.P., who lives in that area.
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Now, anyone who knows these industrial areas knows that if there is anywhere where there are little places which enable one to get out of the way of the concentrated industries it is in an area like this glen, which it is now proposed to destroy. In the area in which I live—the Birtley area—there has already been a demand to do opencast work. Whether they know what the position is in regard to how much coal is there I do not know, but just outside Birtley I once counted no fewer than eight shafts, which were, of course, small shafts near to each other, and which had worked the surface seams. I live in an area in which we have very nice woodlands, and they have been grown, I discovered by accident, on pit spoil. One hundred yards from where I live there is another shaft in a wood itself. The Birtley people know what is awaiting them, but I am not so sure that the Coal Board know what is awaiting them. These surface seams were worked about the beginning of the nineteenth century—indeed, some in the eighteenth century—and there are no plans of them at all. Plans were not laid, except voluntarily, until 1870. Plans were never laid compulsorily until 1921, after that fearful inrush of water in a mine just outside Newcastle. But, whether they have the plans or not, the Coal Board's aim is to tear up all this area which at the moment is open space.
As I told your Lordships' House the last time I spoke, I have worked all my life in the deep pits. Only a few years before I came here I went into those beautiful open spaces on the West side of Durham. As a rule, when people worked these surface seams they had small collieries and did not carry the coal far under the surface, if they could help it. The curious result of that has been that these collieries are as a rule solely on the West side of the county, and they left open spaces, trees, and sometimes woodlands. To me, emerging from the Eastern coalfields with their large collieries, it was like a breath of new life and an astonishing thing to see the trees and wide spaces of land that I saw. Now, of course, it is proposed to open up this area.
I wonder whether the Minister himself, or the Coal Board, have given consideration at all to the present situation in the coal industry. It seems a strange time to be laying down that this kind of thing

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should be permanent and, as I suspect, extended, when from the point of view of employment in the coal industry matters are becoming very confused. There are large masses of coal lying in various coalfields in this country, and those concerned hardly know what to do with them. It looks as though it is going to be very difficult to keep the present number of men and boys employed, though I would not be sure about that. All I say is that it is generally admitted that the situation in the coal industry from the point of view of employment is rather confused. Is this a good time to be introducing a Bill of this kind, which will take away the work that men would be doing—sometimes men whose sons would be going into the mines if the work was regular? I do not say that some men will not be employed in taking the surface coal away, but coal will be dug up in the opencast that will take the place of some of the deeper coal that otherwise would have to be mined by men.
I beg the Minister to give serious thought before he embarks upon plans to apply this Bill, because it is going to be a serious matter for the coalfields of the country. I do not think the miner will stand this for ever—I really do not. He has endured this business for a long period because the nation needed the coal. The time has now arrived when there is even surplus coal, and I am doubtful about how the miner will judge a situation like that, bearing in mind the conditions under which he suffered when this class of working was being done. We might possibly have trouble about this matter—unexpected trouble in unexpected places. That is not the mind of the miner. I think that since the war his regularity has been a thing of wonder, in spite of some criticism. I am speaking particularly of the coalfield that I know very well. His regularity has been a thing of wonder to those who know what coal mining is. With low seams and narrow walls, you are hemmed in. I sometimes used to think that I had a touch of claustrophobia when I had had a little too much of this work. But that is the class of work that these men have to do, and I would ask the Minister to be very careful in what he is doing in applying this Bill. I would ask him to give careful heed to some of the points—such as those in this letter that I have read—which have been put by people who live in an area
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like the Birtley area and other similar parts of the country. I ask him not merely to give gentle and kindly consideration to them, but to have some compassion upon the men who work under very arduous conditions and who live under very arduous conditions, too.
3.29 p.m.
THE EARL OF HALIFAX: My Lords. I should like to interject a few words into this debate before the Bill finally passes from your Lordships' hands. The noble Lord who has just addressed us speaks on this subject with a feeling and a knowledge that demand all our respect. I naturally cannot claim that knowledge, but I do happen to have considerable connection with another part of the British coalfield and I do not doubt that he has in no way exaggerated the feeling that is to be found in many quarters in regard to the general case for opencast working. I also happen to be one of those to whom my noble friend Lord Amherst of Hackney referred, who have suffered, and are likely to suffer again, from the operation of opencast mining. Therefore, I find myself agreeing with the noble Lord, Lord Macdonald of Gwaenysgor, in regarding this Bill as an unpopular necessity.
But I think that my noble friend Lord Mills, who has won many compliments for the manner in which he has conducted the Bill, would also agree with me that the feeling in the country differs, as the noble Lord, Lord Lawson, reminded the House, from willingness to accept anything in war that was judged necessary to a less assured willingness to accept what is reported still to be necessary by a Department of the Government. We accept because we can do no other, and we are grateful to my noble friend for the form in which the Bill is emerging; but we also hope that, in the words that he will shortly address to the House which will mark the final passage of the Bill from this House, he will be able to assure us that so soon as may be he, or his successor, will take steps to have this Bill removed from the Statute Book altogether.
3.32 p.m.
VISCOUNT HALL: My Lords, I want to say a word before the Bill passes from your Lordships' House. First of all, I should like to compliment the Minister upon the way in which he has conducted

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the Bill and negotiated with the various interests concerned with it. Like my two colleagues on this side of the House, I question whether opencast coal working is necessary. My noble friends Lord Macdonald of Gwaenysgor and Lord Lawson and I all commenced our lives in the mining industry. I myself entered the mine at twelve years of age and I spent thirty years in the industry and just outside it. My noble friend Lord Macdonald of Gwaenysgor spent twenty-three years of his life and my noble friend Lord Lawson twenty-six years of his life in the industry, and we are as proud of our association with the coal mining industry of this country as others are proud of their association with the other great industries which have built up the strength of this country during the last fifty or sixty years.
No industry has done more to build up the prosperity of Britain than the coal mining industry. It can be said that the Industrial Revolution commenced in this country with the development of coal mining, and it was coal and steel that made Britain the leader in those industries in all the countries of the world. Wherever one goes in the countries of the Commonwealth, in the United States and in South America, one finds the names of British people associated with the development of the coal and steel industries there. We are proud of our association with the coal mining industry.
We are not opposing this Bill. If opencast working is necessary, then the Bill is necessary. We must get away from the Defence Regulations, and we must give the people who will suffer as a result of opencast operations a fair share; their interests must be protected. That is what the Bill is doing and that is what the Minister wishes to do. But my noble friends and I question whether opencast coal is necessary. At the present time, the coal industry is facing great difficulties. Competition from oil and nuclear power is challenging the position of coal. I well remember in 1913 the praise given to the coal industry for the amount of coal produced and for the amount we exported and sent overseas as bunkers. In 1913 we produced 287 million tons of coal from this small country and exported and sold for bunkers over 100 million tons. It was upon this export and bunker coal, which was in demand because of
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the quality of British coal, that this country built up its great export trade. Without coal, this country could not live; there is no question about that.
I hope that the Minister, who is a man of understanding, will see that opencast coal mining will be limited so far as possible. It is infinitely better that the traditions of the coal miner should be followed by his sons, but at the present time I am afraid that, with mechanised mining and the tremendous amount of small coal which is produced as a result of mechanised working, this is difficult. Unless we can keep up a coal output of something like 230 million or 250 million tons a year, this country will not be able to meat its obligations in respect of the internal requirements of this country and exports.
I regret to say that, so far as I can see, in my native Aberdare Valley, either the Minister or the Coal Board have already agreed to continue the production of opencast coal. I hope the Minister will inquire into the contract which has been given to a company for the development of opencast coal at Rhigos, involving the removal of 230 feet of overburden and something like eighteen tons of rock for the production of one ton of coal which could be produced in the coal mines in this country. I cannot understand the economics of that, and I beg the Minister to look into it. Let me say, on behalf of my colleagues and myself, that we feel that this Bill is necessary. We have not opposed it in your Lordships' House, and we agree to its having a Third Reading.
3.42 p.m.
LORD BURDEN: My Lords, perhaps someone who is not a miner may say a word or two on this subject. It is perfectly true, as my noble friend Lord Lawson said, that opencast coal working is well-known in America, but from what I gathered from American mining engineers who came to this country to instruct our people with regard to opencast coal working our machines are mere toys compared with theirs. My first acquaintance with opencast coal working was when some 10,000 tons of overburden was shifted merely by one electrical discharge. I rise on behalf of the many thousands of people who have found joy and refreshment in our lovely English countryside, which was man-made in past

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generations and is now being largely destroyed by man. I knew at least two beauty spots where thousands found peace and refreshment for body and soul, but these spots have now been ruined by opencast coal working. I remember appealing to the Minister in connection with the matter, but I was given to understand that nothing could be done about it. There is perhaps one virtue in this Bill—namely, that opencast coal working is to be under the authorisation of the Minister of Power and we shall know where to go to fix the responsibility if there is any threatened vandalism in the future. Perhaps to some of us who love our countryside that is the principal virtue of this Bill.
3.45 p.m.
LORD MILLS: My Lords, I am grateful to the noble Lord, Lord Macdonald of Gwaenysgor, the noble Viscount, Lord Hall, and other noble Lords for their kindly references to my conduct in relation to this Bill. I think it is important that we should know what this Bill is. It is not, as the noble Lord, Lord Lawson said a Bill to extend and augment opencast coal mining: it is merely a Bill to replace the Defence Regulations and to settle the terms under which compulsory rights in land for opencast mining shall he given. I agree with the noble Lord. Lord Amherst of Hackney, that this is a long Bill. I have always had a high admiration for the legal profession, and since I became acquainted with this Bill my admiration has greatly increased. I should have liked to see a quite short Bill, which would enable us to do what we sought to do, but the complexities were so great and it w as so important to protect the rights of everybody in this matter that we finished with a very long Bill indeed.
My noble friend Lord Halifax said that the country would not tolerate in peace time matters which they cheerfully assumed in times of war. That, of course, is true, and it is something of which I am deeply conscious. Noble Lords in all parts of the House have left us in no doubt as to their views about opencast coal mining and how much better off we should be without it. I share those views, and when it is possible I am sure that the Minister (whoever he may be) and the Coal Board will be only too happy to do without it. But I was
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a little hurt when the noble Lord, Lord Lawson said: Have the National Coal Board and has the Minister given consideration to the position of the coal industry in coming to the decision to have this Bill? I have already tried to explain that this Bill has nothing whatever to do with the extent of opencast coal mining.
LORD LAWSON: Perhaps I may interrupt the noble Lord. This Bill was introduced, I believe, towards the end of January, and there have been great changes in the coal industry since that time. That is the point I was making.
LORD MILLS: I am quite aware of the position of the coal industry. I have made it my business to be aware of the position of the coal industry ever since I came into office, and I take second place to no one in my admiration for the mining community. I am deeply conscious of the fact that this country owes its present position and its prosperous industrial past to the coal industry and to the men who mine coal.
The principal preoccupation of the Coal Board is both to provide coal and to consider the needs of the men engaged in the industry—and I can pay tribute to the way they do it. I can assure the noble Viscount, Lord Hall, that I will look into the cases he has mentioned. I would remind your Lordships—because certain cases of prospecting for opencast coal have been mentioned—that authorization will not lightly be given. There is the safeguard of the public inquiry, and that will be used to the full because, apart from the inconvenience and the dislike of people of opencast coal mining, and apart from the hardships which may be caused to certain people, I am deeply conscious, as the noble Lord, Lord Burden reminded me, of the necessity for preserving the amenities of this beautiful country of ours.
I am grateful to your Lordships for agreeing to the passing of the Bill, which enables us to do justice wherever we have to undertake opencast coal mining. I am glad to have the reinforcement of your Lordships' views about opencast coal mining, and I will finish on another assurance—that the powers which have been given to me will be used with discretion.
On Question, Bill passed and returned I to the Commons.

PROPOSED CONFERENCE ON THE MIDDLE EAST
3.53 p.m.
THE EARL OF HOME: My Lords, as I indicated to the House earlier, a debate on Foreign Affairs is taking place in another place at this moment and the Foreign Secretary is making a speech in which he is dealing with the substance of the reply which will be sent to Mr. Khrushchev's note, although, as the final reply has not been delivered to Mr. Khrushchev, there is no formal statement of its actual contents. The Foreign Secretary in another place is emphasising the following points, of which I think your Lordships would like to be informed.
He will emphasise that any such meeting as that proposed by Mr. Khrushchev should be held within the framework of the United Nations. That, in our opinion, is the right and proper forum. Under Article 28 of the Charter, the heads of Governments, if they wish, could attend meetings of the Security Council. The Prime Minister would be willing to attend. This machinery seems to us to provide the necessary flexibility. It would, for instance, allow other nations who are not members of the Security Council to be associated with discussions if that was desired, and it would provide the opportunity for formal as well as informal talks which might well help to facilitate constructive solutions to the problems before Governments.
It is the Government's hope that your Lordships will feel that it is right and proper that this should be placed formally within the framework of the United Nations; that it does provide the necessary flexibility and continuity, and, indeed, that this which is the substance of the reply would receive the support of Parliament to-day.
3.55 p.m.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, we are all obliged to the noble Earl the Leader of the House for giving us the background of the points that the Foreign Secretary is making in another place at the present time. I think the general feeling of the country would be that when and if a Summit meeting can be held in connection directly with the United Nations, that is something desirable. The use of Article 28 of the Charter for this purpose no doubt could be made a success
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if all the people who are to be included in the invitation to join that Conference agree upon it.
What I am concerned about, however, is the existing urgency of having this matter dealt with. If a reply is going from the Prime Minister to Mr. Khrushchev within hours, then the reply will not have been delayed too long, considering that an interim reply has already been made. Nevertheless, at the moment there can be no indication to your Lordships of what action is likely to occur. That really disturbs me. Could the noble Leader, from his other general knowledge of the situation, give us any assurance as to whether, in connection with the proposal to get it within the framework of the United Nations, which certainly at the moment I do not want to oppose, an urgent date will be suggested for the actual meeting? If that could be a matter of urgency, then something can be added to the general sense of hope that we get from the indication of the statement he has just made to us, that such a meeting, which would in essence be almost a Security Council meeting, will afford not only the opportunity for heads of Governments to attend but also the opportunity of having different kinds of meetings together between the heads of State while they are all gathered together, and therefore substantially meet the point which was suggested in the original Khrushchev proposition. I think it is very important.
The other point that strikes us, and it is also very important, is this. If this matter goes on very much longer and an urgent date is not fixed for the meeting, how do we stand as Parliament? We are at the present moment at July 22, and we are proposing to adjourn Parliament altogether on the 31st. That is in nine days. May I get an assurance that if there is any further delay—which God forbid!—Parliament will be kept in session? We are passing through, I suppose, the most important phase of history yet in our country. The issue ultimately is vital. Therefore I am sure that the noble Earl the Leader of the House will forgive us for feeling rather strongly about it and appreciate our need for getting the firmest assurance we possibly can.
THE EARL OF HOME: My Lords, I do not know that an actual date is suggested in the reply to Mr. Khrushchev,

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but should he accept this suggestion then everybody, I can assure the noble Viscount, will be anxious to get on with the job as quickly as possible. So far as the position of Parliament is concerned, I will take note of what the noble Viscount has said and convey his feelings to my right honourable friend the Prime Minister. Of course, the position in Parliament in all these matters must be protected. It may be that discussions will continue for a considerable time—we cannot tell. At any rate, I should like to consider that matter a little further.
3.59 p.m.
THE EARL OF SWINTON: My Lords, I should like to add one word in view of what the noble Viscount the Leader of the Opposition has said. I think the whole House will have heard with a considerable measure of satisfaction the statement which the Leader of the House has made. We are all anxious that this meeting should take place, and should take place within the framework of U.N.O., and should take place as soon as possible with the prospect of success. But I should like to say this to the noble Viscount—and I do not think he really differed from the general line that the Government have taken: may it not be that what we all have in mind is much better achieved by the line which the Government are now proposing? First of all, on the question of speed, surely we can get much more quickly to work if we accept the line, and everybody accepts the line, that the Government have taken, of a meeting within the framework of U.N.O. and on this limited field, which, after all, is what Mr. Khrushchev himself has proposed.
The noble Viscount said that we all want to see a Summit Conference; I think that is common ground to us all. But what has been the difficulty surely about the Summit Conference is the anxiety not to go into a Summit Conference which would deal with a very wide range of issues unless there has been careful preparation. But here, surely, is the opportunity to go into a conference within the framework of the United Nations, which is seized of this matter already, with this limited objective of seeing whether we can get a settlement of the Middle East. Surely that has a much better prospect than a wide and far-ranging Summit Conference. Surely, if we can get success within this limited
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conference, is that not much more encouragement then to go on at a later stage to a wider conference, maybe in which wider subjects would be discussed? For all those reasons, I hope that the whole country can unite now behind the Government in what I believe is the wish of all of us.
4.2 p.m.
LORD SILKIN: My Lords, we are all obliged to the noble Earl for making this statement under rather difficult conditions. I appreciate his making it at a time when the Foreign Secretary is actually making a speech, and no doubt elaborating on what the noble Earl has said. I find myself in some slight difficulty, first because this statement has been made at such short notice, and one would like to think about it; and secondly because I do feel certain apprehensions.
I do not go so far as to say that I object to this method of dealing with the matter, because if it were practicable I think it would be the best way of dealing with it. But my doubts are these—perhaps I had better state them. Is it possible, at a meeting of the Security Connell, to deal with this specific question which we all have at heart when nations which are not directly concerned will be present and other nations which may be concerned will not be present? That is the first difficulty that I see. On the face of it I should have thought there was a good deal to he said for an ad hoc gathering at which the proper people were present and the subject under discussion could be clarified and clearly stated. I do not know whether the noble Earl is in a position to deal with that point and say whether it is within the competence of the Security Council to isolate its members and to have discussions among a limited number of them, and possibly to bring in others who are not members of the Council.
The other point I should like to stress is what my noble Leader has said; that is, the question of urgency. My view is that it is far more important that discussions should take place than is the framework under which these discussions will take place. I am less concerned about the framework than with the actual fact of discussions. I hope, therefore, that in the days that come if there are any negotiations between ourselves and the Soviet Union we shall not be too

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difficult about the form in which the discussions will take place and that we shall get on with the discussions.
THE EARL OF HOME: My Lords, it is a little difficult, as the noble Lord has said, because the Foreign Secretary is making his own speech and I am just interpreting some of the main features of it. Under Article 28, as I understand it, it is possible for Governments to be represented by a member of the Government or some specially designated representative; that is the first point. Secondly, as Mr. Diefenbaker and Mr. Lester Pearson both indicated to-day, I think it is possible for the Security Council to appoint a committee of itself, and it is also possible to bring in other persons; I believe that both those things are possible. Of course, in a gathering of this kind what the noble Lord, Lord Silkin, has called ad hoc gatherings can also take place. I think it is possible that in this way, using this machinery, we really get the best of all worlds, without undue formality. On the question of urgency, I would repeat: if Mr. Khrushchev can accept this suggestion we can get on with the job quickly.
LORD REA: My Lords, will the noble Earl affirm that, whatever form these discussions take, Her Majesty's Government are anxious to proceed with them as soon as possible.
LORD TEVIOT: My Lords, there is just this emphasis which the noble Viscount the Leader of the Opposition puts on the "urgency" aspect. I should like to ask the noble Earl the Leader of the House whether in view of the fact that Mr. Khrushchev has directed a question to Her Majesty's Government, any sort of answer has been sent to him, affirmative or otherwise. I feel that we ought to get into touch with him as soon as possible. Certain criticism has been made that we must not get in a panic. Of course we are not in a panic; but when anybody writes to me, or makes any sort of suggestion to me, I answer it, and I hope the noble Earl the Leader of the House will be able to say to us, "Yes, we are in touch with Mr. Khrushchev, and we are telling him what we are doing to get on with the job."
THE EARL OF HOME: My Lords, in answer to the noble Lord, Lord Rea, of
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course, as I say, the Government are anxious to get on with this conference and to get it into the right forum. In answer to my noble friend Lord Teviot, Mr. Khrushchev has had an interim reply already, but he is going to get a full reply either to-day or to-morrow; and I think he has been pretty well "done by" through the post.
THE MARQUESS OF SALISBURY: My Lords, there is one point I would make, following what was said by the noble Lord, Lord Silkin, who was a little doubtful whether the Security Council was in every way the best body to deal with this matter, on the ground that there might be members of the Security Council who were not directly concerned. As I understand the composition of the Security Council, the intention was that it should include all the great Powers, with one or two other responsible countries who were generally approved by the members of the United Nations. I should have thought that a great issue of this kind was especially suitable for a conference including all the great Powers. I was very glad to hear the noble Earl, the Leader of the House, say that the existing membership was not the only membership possible. I am sure we want to be as elastic as we can in matters of this kind. I do not feel that it is a disadvantage to have present great Powers who might not be directly concerned, because they are directly concerned in any world settlement.
LORD SILKIN: I had in mind particularly the fact that India was not a member of the Security Council.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, before the House resumes its Business on the Order Paper, may I just say one final word? We listened with great interest to the noble Earl, Lord Swinton, and I should hope that the noble Earl the Leader of the House has gathered, from the manner in which his statement has been received on this side of the House, that whilst, of course, we shall wish to read very carefully to-morrow the whole of the Foreign Secretary's statement, which I think is important to every Member of the House, if we get urgency pursued now in the direction indicated, there would be a great deal of united feeling.

FUTURE BUSINESS
4.10 p.m.
EARL ST. ALDWYN: My Lords, I think it would be for the general convenience of the House if I made an announcement of the arrangements to be made through the usual channels for our Foreign Affairs debate next week. It will be necessary to ask the House to meet at 11.30 a.m. on Monday and to sit through lunch, as we shall have to rise on that day at about five o'clock to permit the final preparations to be completed for the State Reception to the competitors at the Commonwealth Games, which is to be held in the Royal Gallery at six o'clock. If the Foreign Affairs debate has not been completed by the time the House rises on Monday, it will be adjourned until 11.30 the next day, Tuesday, when we shall hope to finish it before 2.30. This would not disturb the present arrangements for the Second Reading of the Finance Bill that afternoon, which is the occasion for an Economic Debate.
THE EARL OF SWINTON: My Lords, will there be any extra allowance for double-shift working?
LORD SILKIN: Time and a half!
VISCOUNT ALEXANDER OF HILLSBOROUGH: Dirty cargo!

CONTROL OF BORROWING (AMENDMENT) ORDER, 1958
4.12 p.m.
LORD GRANTCHESTER LORD GRANTCHESTER rose to move, That an Humble Address be presented to Her Majesty praying that the Control of Borrowing (Amendment) Order, 1958 (S.I. 1958 No. 1097), dated 2nd July, 1958, laid before the House on 3rd July, 1958, be annulled. The noble Lord said: My Lords, I apologise for the formidable form in which this Motion is worded. It is, I understand, the only way in which the important issues raised by this Order and the background against which it is set can be debated. I must also apologise in advance for the very technical provisions to which I shall have to refer. But, having made these apologies, I have no hesitation in saying that I am sure your Lordships would wish to consider and examine this new Order most carefully.
Together with the directives which have been given, the expressed intention is to
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secure the general control of credit. I would ask your Lordships to note carefully the words that are contained in a letter from the Governor of the Bank of England to the Chancellor of the Exchequer dated July 3. There he says this:
"The scheme will serve to reinforce the existing monetary instruments and would be employed as a general control of credit."
It is, of course, a general control of credit in the private sector only, as the Chancellor of the Exchequer made clear in answer to a question which was put to him when he announced this Order in another place. It is significant, I think, that at this time the Government should consider it necessary to bring in more and tighter controls. This, I suppose, is an admission that all is not yet well on the inflation front. This may well be so. But I shall seek to show that this is not the way to hold inflation at bay. Strange as it may seem to some who do not remember the days when there was freedom, there are still some of us who believe that controls create evils rather than cure them, because they prevent the automatic checks of the market from operating.
My Lords, this Order is made under the authority conferred upon the Treasury by the Borrowing (Control and Guarantees) Act, 1946. That was one of the restrictive measures introduced by the Labour Government immediately after the war. I am sure that even the Labour Government intended the provisions of that Act to be temporary, and I think they must be surprised at the use which a Conservative Government is making of it after some twelve years. Let us examine for a moment what sort of measure is this Act of 1946. Briefly, it gave the Treasury power to control the borrowing of money in excess of £1 0,000. By an Order under the Act the figure of £10,000 was increased in 1947, by the Labour Government, to £50,000. The Act also controlled the raising of money by the issue of shares or debentures. The Labour Government clearly expressed their purpose when they passed this Act, in a White Paper which they issued at the same time in which these words appear:
"The planning of the investment programme as a whole must be continually guarded by the Government."
These sentiments of "planning the investment programme as a whole" accord with Socialist thinking on this matter.
My first question to the noble Marquess who is to reply is, are these also the sentiments of the present Government? If so, I am surprised. If not, I would ask, why do they play with the poisoned barbs of Socialism? In practice, applications under this Act for consent to borrow are made to the Treasury who give or refuse permission to borrow without giving any reasons, on the advice of a body which is known as the Capital Issues Committee. I ask your Lordships to note that this is control without any reasons being given for refusal, and without any appeal if a citizen is refused permission to borrow. I would ask why the excellent decision to require reasons to be given, taken by Her Majesty's Government in considering the Tribunals and Inquiries Bill which is now before honourable Members in another place, cannot be adopted here? Why should that rule not be applied to the Capital Issues Committee? So I would put as my second question to the noble Marquess: if you intend to keep the Capital Issues Committee in being, is it not wrong to allow it to continue to exercise control without any reasons being given for refusing applications and without any right of appeal from its decisions?
I think no one will dispute that the decisions of the Capital Issues Committee have been quite unpredictable—that is putting it in polite language, which is not always current in the City when the decisions of the Capital Issues Committee are discussed. May I give one or two examples of the unpredictability of its decisions? On an application on behalf of a company called Worthington-Simpson, in December. 1956, consent was refused for the issue on capitalisation of reserves of one share for two. A year later, or rather less, permission was given for an issue of one share for one. In the meantime there had been no alteration in the directives in force. A similar result followed two applications made within eight months by Great Universal Stores. Instances such as these do not inspire confidence. There was a great deal of speculation about the reasons for the decision of the Capital Issues Committee in the case of Rhodesian Anglo-American Limited. If there was a reason behind that decision, why be so modest as to keep it in the dark? Our leading financial newspaper has commented upon
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the eccentricities of the Capital Issues Committee, and has gone so far as to say that there is apparently no limit to them.
Before I leave the 1946 Act, from which the current Order springs, I must refer to the Schedule which contains the provisions as to enforcement and penalties. The Schedule provides that:
"Any person who contravenes any provision of any order made under this Act"—
and I ask your Lordships to take particular notice of those words, so the new order is included—shall be liable (here I am abbreviating to save time) to heavy fines and imprisonment up to two years or to both imprisonment and fine.
But that is not the worst of this Act. It is not the kind of Act we in this country like. Paragraph 4 of the Schedule, which I think can properly be called iniquitous, provides that in the case of an offence committed by any company, any person who is a director, general manager or secretary or any other officer, or anyone who was purporting to act in any such capacity, shall be deemed to be guilty of the offence unless he proves, in short, that he is innocent That is not the kind of Statute we like to have on the Statute Book in this country. I hope the noble Marquess will not proudly assert the intention of Her Majesty's Government to uphold the rule of law and at the same time allow this Statute to remain unrepealed. A man is innocent, as we in this country like to think, until he is proved to be guilty. So I would ask that neither the noble Marquess nor his right honourable friend in another place will rest content until this offensive provision is removed from the law of this land.
In March last Mr. Butler gave to a Conservative meeting an undertaking that it was the intention of the Government to remove, during the lifetime of the present Parliament, all the remaining economic controls. I certainly should have expected this measure to be one of those which he would wish to remove. I shall reinforce this plea when I come to consider the language of the new Order. But with all these fearsome threats of heavy fines and imprisonment, I must admit that sometimes the opportunity is taken to introduce a little comedy. There was the case where, presumably on the advice of the Capital

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Issues Committee, the Treasury sanctioned the borrowing by a hopeful applicant of some £4 million. One day someone may tell the full story of that curious episode. If, after studying the file, the noble Marquess still wishes to defend this system which is being imposed upon us, I shall be surprised. The approval which was given for the borrowing of some £4 million held good until two months ago. I wonder how many applications were turned down while this credit was open in order to keep the authorisations to be allowed during the period within the limit fixed by the Treasury. I think that aspect is a serious one. I referred to this case as a comedy, but it is not really comical at all. This kind of fiddling with the economy brings the Treasury into disrepute and makes the institutions of the City look foolish and ridiculous.
I want to say a few words about the new Order, and first about the manner in which it was introduced by the Chancellor of the Exchequer. It was represented by him as a liberalising measure. The Chancellor of the Exchequer remarked [OFFICIAL REPORT, Commons, Vol. 590 (No. 134). col. 1599]:
"We can safely … make some limited relaxations in the control of borrowing."
That was the emphasis placed upon the Order by the Chancellor when he introduced it. He probably had in mind the small retail trader and the individual who sometimes requires temporary accommodation at the bank and who, unlike some of the bigger companies, has been unable to arrange alternative facilities during the time this control has been on. The door of the bank manager's office may be open again to the small retail trader and the private individual—I hope so—but I fear their confidence has been rather badly shaken by the last interference by Her Majesty's Government, as between banker and customer, which I believe is a very bad thing.
I should like further to test how far this Order is the liberalising measure it was represented to be. I do not want to take up your Lordships' time by too detailed examination of the Order. It will perhaps be sufficient if I summarise the effect of the amendments which have been brought in by this Government Order. There are twelve amendments to four articles. One restores the right to
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borrow up to £50,000 without consent, which, as I have already said, was the limit from 1947 until 1958. There is no special reason to be proud of, or to take credit for, a reversion to a limit which was fixed by a Labour Government in 1947. One amendment permits the capitalisation of reserves by the issue of shares which are not redeemable. I shall have to refer again a little later to the question of redeemable shares. All the other amendments are designed to tighten control—not relax it. So I ask whether the emphasis in the statement made in another place by the Chancellor of the Exchequer was not wrongly placed upon relaxation.
I will return just for a minute, if I may, to the limitations imposed upon the issue of redeemable shares. Surely this is an unwarranted restriction. If the Treasury believe that in certain cases the issue of such shares is a matter which involves tax considerations, then surely that should be dealt with in a Finance Act and not under an Order of this kind. This is the first time, at any rate in an Order, that control has been introduced for taxation reasons and not far economic reasons.
I would ask those of your Lordships who are interested in official phraseology to look at paragraph 8, at the top of page 3 of this new Order. I think that anyone who does so will agree that it is quite beyond the comprehension of the ordinary businessman. And this, my Lords, is one of the provisions by which if contravened by him, he will go to prison, being deemed guilty unless he proves himself innocent! I hope that I have said sufficient, in drawing attention to the provisions of this Order, to show that on balance it should be more correctly described as a retrograde step in restriction rather than as a relaxation of control.
Before concluding, I should like to make three brief comments upon the directives which have been issued in conjunction with this Order. First, there is the provision for special deposits. What may be the effect in practice of releasing the banks from the requirement that they should keep their advances within an overall figure, while at the same time holding over them this new threat, only experience will tell. If the banks put themselves in a position to increase their advances the Bank of England can

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immobilise their cash resources by requiring them to deposit part of those resources with the Bank of England. In principle I think it is necessary to register the strongest objection to a power of this kind, the exercise of which is quite unpredictable. At least the banks knew where they were when they were restricted to an overall figure; but there is no indication of any rule by which this new idea of special deposits will be exercised.
It seems to me, that this goes back to that White Paper of the Labour Government in 1946. Her Majesty's Government are really trying to get—is it a general control of investment? Is that what they are after? Is one of the results of this Order likely to be a greater demand for Government securities in the market? If that is the intention behind it, or even if it is not the intention but if that proves to be the result, I say that it will strike a further blow at confidence in the gilt-edged market, which has been so badly shaken by the attempts of a former Government artificially to influence rates of interest.
The second matter in the directives to which I would refer is the favour shown to unit trusts, which is limited. They can have a little more money but they must not invest it in any substantial amount in foreign securities. As purchases of dollar securities have to be made in the dollar pool, it seems to me that the reason for this restriction is not quite obvious. Perhaps the noble Marquess can explain the purpose of that limitation.
The other matter upon which I should like to seek some clarification is the emphasis all through these directives upon the undesirability of lending for speculative purposes. The suggestion is that borrowing is not to be permitted for the purchase of materials—I will not refer to stocks and shares, but it is not to be permitted for the purchase of materials or for the development of land. I should very much like to know what is meant by the use of the words "speculative purposes" in these directives. As I understand it, all production or buying in anticipation of demand is speculative, the exception being production under contract. I do not know what is meant by
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this emphasis upon "speculative purposes". I do not know what interpretation will be placed upon it for those who deal in the commodity markets, but it seems to me that it may at times deprive our manufacturers of opportunities to buy raw materials when prices are considered advantageous and that this could be detrimental to our export trade.
Then I come to the restriction on the development of land, and the question I want to ask the noble Marquess is: Has the idea of a property-owning democracy been abandoned? The directive is being interpreted in some quarters as banning the lending of money, even "bridging" finance, for the building of houses for sale. If a small builder came along and wanted finance to help him build a dozen houses, in the days before the war that was called speculative building, because he had not sold the houses before he built them. Is the interpretation to which I have referred the intention of this directive? Perhaps the noble Marquess will make the position of Her Majesty's Government clear on this matter, because it is very important, particularly in the provision of houses by the development of land. In some quarters speculation is associated with making a profit. I wonder whether that is what the drafter of this paragraph had in mind. That might at least make some sense in some quarters. But how misleading and dangerous all this is! Abandon the test of profitability and you will bring down the market economy and destroy both the standard of living and the welfare services which have been built up out of private profit. I suggest that the time has come when Her Majesty's Government should abandon new and better attempts to indulge in more effective intervention. Surely they need not in this way anticipate the coming to power of a Socialist Government, but should be showing us a better way.
My Lords, what is this better way, and what does it involve? We would reply that it involves allowing the market to do the controlling—that is, the people who have the savings to invest. I should not use the word "controlling" at all. I would say: "Let the people who have the savings to invest do the choosing." It also means, I think, that the Government should allow the nationalised industries to submit their

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case to the discipline of the market: that they should secure the money required for the expansion of the nationalised industries out of savings, in exactly the same way as any other industry has to secure money for expansion.
There are, however, measures which Her Majesty's Government should take if the credit position is not to get out of hand: but this is not controlling the private citizen in his borrowing—it is restraining the actions of the Government themselves. I suggest, as I have said on a number of occasions before, that they must put a limit to the currency issue, which has been going up and up all the time; and they must refrain from increasing the number of Treasury Bills by which they pay for their overspending. This Order, which seeks to cure the symptoms of the malaise from which this country has been suffering, is in itselt a confession of failure on the part of the Government to restrain the overspending for which they are responsible, for to enable them to continue that overspending they have had to create credit—and they are the only people who can create credit. That has led to the most dishonest of all results—the debasement of our currency.
My Lords, I suggest that we must bestir ourselves with this new Order before us. We must sound the alarm again. The danger to which the Government were aroused a year ago is not yet past, as this Order proves—otherwise, we should not have it. That danger will not be surmounted until the facilities which the Government have to expand credit to meet their own overspending are limited. The Government must not be allowed to evade the issue. They must not he allowed to pretend that the control of the citizen is the remedy, when the root of the trouble in the economy lies in their own failure. I beg to move.
Moved, That an Humble Address be presented to Her Majesty praying that-the Control of Borrowing (Amendment) Order, 1958 (S.I. 1958 No. 1097), dated 2nd July, 1958, laid before the House on 3rd July, 1958, be annulled.—(Lord Grantchester.)
4.44 p.m.
LORD TEVIOT: My Lords, we have listened to a very forceful speech from the noble Lord, Lord Grantchester. There is just one question I should like to ask
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in regard to this Order. In paragraph 4 of the Schedule to the Act of 1946 there is what I consider to be a most objectionable method of dealing with directors, general managers, secretaries, and anybody connected with any business. I should like my noble friend who is to reply to say, if he can, whether this is embodied in the Order which we are now asked to consider. I will not trouble the House by reading out the passage, because it is rather lengthy; but it is a terrible threat to anybody who is a director of any company or connected with any business. I was not aware of it until this moment. But it makes me shake in my shoes, to think that, without my knowledge, certain things may happen to businesses of which I am a director and that I may suddenly find myself under the punishment suggested in this Schedule to the Act of 1946. I hope that my noble friend will be able to say that that has been eliminated in this new Order. That is all I wish to say on the subject, but it is something I feel sure all of us would like to see removed.
4.46 p.m.
LORD PETHICK-LAWENCE: My Lords, we have listened to a most erudite speech from the noble Lord, Lord Grantchester, who has moved this Prayer, and I think that anyone who attempted, without the great knowledge which he evidently has, to deal with this subject without expert advice would be a very brave and a very bold man. I certainly do not claim the knowledge that would enable me to deal in detail with any of the questions which the noble Lord has so skilfully raised. I cannot say that I envy the noble Marquess who has to reply, because it seems to me that if he were to attempt to reply adequately to all the remarks made by the noble Lord, Lord Grantchester, we should be here well into the hours of the night. However, there are just one or two points that I should like to make.
I am quite sure your Lordships will not be surprised when I say that I am not rising in order to support the Prayer which the noble Lord wishes us to raise. Equally, I am not here to defend in detail all the minute clauses and sub-clauses of this order, and I propose to address myself to one or two wider considerations. The noble Lord speaking from the Benches of the Liberal Party has put forward what

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I gather is the attitude of his Party to the financial control of this country. We are glad to have that, because we are rather accustomed to a great deal of criticism from the Liberal Party, both of the actions of the present Government and of the various proposals of the Labour Party, and we always want to know what the Liberal Party would actually do themselves.
The noble Lord who has moved this Prayer told us what his own attitude, at any rate, was, and I think we are entitled to gather that it is what the attitude of his Party would be. As I understand it, his object would be to remove all controls and to let everyone go his own way, and to hope that out of that chaos really good government of this country and a good economic position would evolve. But I am not quite sure whether, in fact, he really would go as far as that, because there is one control which I believe (he will corrrect me if I am wrong) he would wish to maintain, and that is the control of the bank rate. But so long as that remains the final sanction of the economics of this country it is idle, futile and incorrect to consider that the Liberal Party really desire to remove all financial control from persons in this country; because (I have said in this House before, and I shall say it again) the most deadly control, the most potent control, and the control which has the greatest power to work evil, is the control of the bank rate, improperly used. Therefore, when the noble Lord comes to this House and says that his Party stand for having no controls, I do not believe that that is really correct.
I maintain that the controls in these Orders, in principle, are less injurious than the blind, "bludgeon" control which is involved in the indiscriminate use of the bank rate. Though I would not eliminate the right to use the bank rate, because in certain circumstances that might be absolutely essential, I have always maintained that this blind force should be mitigated by some selective control—though it will interfere, as all control must do, with the liberty of the individual—such as has been found from time to time in these Orders. The Party opposite, who believe in the principle of a "free-for-all" economy, have found it necessary to keep on some of these Orders, most of which existed during the war and some of which
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were retained by the Labour Government. On the other hand, we on this side do not claim that we stand for a "free-for-all" economy; but we do not wish to have any control which we do not think is required by the necessities of the time. So much for the principle.
There are a great many points in the noble Lord's speech which need a considerable amount of thought. No doubt we shall be having a financial debate on the Second Reading of the Finance Bill next Tuesday, and some of the points with which he has dealt I shall hope to deal with in the course of that debate. I would only say now that I think that we are much safer with some of these deliberately created selective controls than with one single control of the bank rate which, even if it be necessary, can, and always does, cause great hardship to individuals and work great havoc with the economy as a whole. There is one point, however, which the noble Lord made, which I should like in some way to support, and I would ask the noble Marquess who is going to reply to give his attention to this.
On March 25 of this year, arising on a Question put by the noble Lord, Lord Conesford, and answered by the noble Earl, Lord Selkirk, we had an exchange of views on the Capital Issues Committee, upon which the noble Lord, Lord Grantchester, has spoken. It was pointed out [OFFICIAL REPORT, Vol. 208 (No. 49), col. 390] that:
"A White Paper was published in May, 1945, giving the broad principles on which the Committee would give its advice to the Chancellor of the Exchequer."
The Committee referred to was, of course, the Capital Issues Committee. I would just remind your Lordships that May, 1945, was a time when not the Labour Government but either the Coalition or the Caretaker Government were in office and Sir Winston Churchill was Prime Minister. The noble Earl, Lord Selkirk, added:
"These principles have been changed from time to time to meet current economic requirements and the terms of letters to the Chairman have been published in Answers to Questions in Parliament."
Then there were some further cross-remarks, and my noble friend Lord Wilmot of Selmeston said this:
"My Lords, would it not be wise, in view of the length of time that has elapsed since the publication of the White Paper and

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the numerous modifications which have been made by way of correspondence, to publish a new White Paper giving those principles as they are now?"
The noble Earl replied:
"My Lords, I will certainly see that my right honourable friend bears that point in mind, which I think has a certain force."
I would ask the noble Marquess whether he shares that view of his noble friend and thinks that there is some force in the point that was put forward by my noble friend, that a statement, not detailed but of the general principles which guide the Capital Issues Committee, might with advantage be given publicity. With that one exception, I am afraid that I disagree almost in toto with the noble Lord, Lord Grantchester. I hope that the noble Marquess will give your Lordships as much information as he can, but I hope that he will not keep us until eleven or twelve o'clock, because I think that by that time we shall be getting rather tired.
4.58 p.m.
THE MARQUESS OF LANSDOWNE: My Lords, I think your Lordships will all appreciate that this is certainly not the terrain which I would have selected on which to attempt to act as an interpreter of the law for the noble and learned Lord, Lord Grantchester. For him, with his experience of the City, of banking and of the law, the course which he has been pursuing this afternoon has been along old familiar paths. I must confess that for me, until very recently, much of the country traversed by the noble Lord was in a large measure terra incognita. The noble Lord was good enough to let me know last night of the general line of the argument which he would develop to-day and also to enumerate some of the specific points upon which he would call for clarification. I have done my best to study the somewhat recondite and complicated points and I am most grateful for the intervention of the noble Lord, Lord Pethick-Lawrence, who has warned me of how complicated they are, but I shall do my best to deal at least with some of them.
With your Lordships' permission, I will first turn to the specific points and then in rather more general terms give your Lordships the point of view of Her Majesty's Government in support of the Control of Borrowing (Amendment) Order, which is, I must remind your Lordships, the subject of the noble Lord's
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Prayer this afternoon. With great respect, I think that his extremely interesting speech ranged somewhat beyond the limits one might perhaps impose in the terms of this Motion. The noble Lord referred to the increasing complexity of this branch of legislation, and on that point at least I am in complete agreement with him. The 1958 Amending Order which we are discussing to-day is, in fact, the fourth instrument amending the original Control of Borrowing Order of 1947, and it has now reached such a state of complexity that it is extremely difficult to discover the current state of the law.
It is no secret that we have received a number of complaints from City solicitors and others on this score. But when changes are made it is desirable that they should take the form of Amendments to the existing law, so that everybody concerned can see at once just what has been done. In time, however, these superimposed piles of amendments tend to form an almost impenetrable mass of deletions and additions. Your Lordships will, I feel sure, be pleased to know that it is intended to make a Consolidated Order in the very near future which will set out the existing law in one single and intelligible instrument.
The noble Lord, Lord Grantchester, referred to certain other specific points, and to the best of my ability I will attempt at least to clarify those points and try to put the view of the Government. He referred to the original White Paper of January, 1946. The purpose of that White Paper was shortly this: that it was the policy of His Majesty's Government of that day to keep the balance between the economic resources of the community and the demands made upon those resources. As the noble Lord said, it was further stated therein:
"That the planning of the investment programme must be continuously guided by the Government."
It stated also:
"That the Capital Issues Committee would be continued and that an investment council would be set up to assist the Government in organising investment to promote full employment."
It is still the policy of Her Majesty's Government to keep the balance between the economic resources of the community and the demands made upon those

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resources, and it is for this reason that the C.I.C. is being retained in existence.
The noble Lord also referred to the Borrowing Control Guarantees Act, 1946. Under that Act two things were done. The Act enabled the Treasury to make orders controlling borrowing as strictly defined by the Act, or the raising of money by issues of shares. It also enabled the Treasury to make loans for the development of industries or parts of industries. The Schedule contains particulars of the penalties to which the noble Lord, Lord Grantchester, has referred with such horror, including fines up to £500 or three months' imprisonment or both, which may be incurred by contravening any order made under that Act. Here I think is where some explanation is required. That Act was certainly intended as a permanent piece of economic legislation to enable the Government to deal with either booms or slumps. The purpose of having the power to make orders is that flexible policy can be pursued which accords with changing economic conditions. It is not the policy of the present Government to favour detailed control—there are other detailed methods for controlling investment—but we have kept the monetary control, as the noble Lord, Lord Pethick-Lawrence said, through the bank rate and through restriction on bank advances, and also the selective control through the Capital Issues Committee to which the noble Lord referred.
The noble Lord, Lord Grantchester, then spoke, I thought with some vehemence, about the manner in which decisions were taken and the method used by the Capital Issues Committee. The practice of the C.I.C. is perfectly simple and is as follows. Applicants reply to a detailed questionnaire designed to elicit from them all the material facts, and if more information is then needed the staff of the Capital Issues Committee make further inquiries from the applicant. A summary of each application is then prepared which sets out all the relevant facts. This is sent to all the members of the Committee a few days before the weekly meeting at which the Committee decides on its recommendations, and in reaching its decision in each case the Committee has regard to the principles laid down by the Chancellor of the Exchequer.
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Perhaps it would be convenient if I here refer to the question put to me by the noble Lord, Lord Pethick-Lawrence, arising out of the discussion we had in your Lordships' House on March 25. The noble Lord called the attention of your Lordships to the reply made by my noble friend Lord Selkirk. In fact what was suggested by the noble Lord, Lord Wilmot of Selmeston, has taken place, for the letter written by the Chancellor of the Exchequer to the Chairman of the Capital Issues Committee amounts to being the new White Paper. It was written on July 1; it was alluded to on July 3 and it was published in the Hansard of that day. That directive has been published and is available for everyone to see. Therefore I think the question raised by the noble Lord, Lord Wilmot of Selmeston, has been answered, and we are in possession of a perfectly up-to-date White Paper which gives in complete detail what the directive of the Chancellor of the Exchequer is.
LORD LATHAM: May I ask whether all previous directives were annulled by the recent one?
THE MARQUESS OF LANSDOWNE: I do not want to weary your Lordships by going into too much detail, although I am in possession of the facts, but, broadly speaking, the answer to that question is that it supersedes everything that went before.
The noble Lord, Lord Grantchester, referred to certain specific cases. As noble Lords will be aware, it would be quite improper for me to disclose the reasons for or against approval given by the C.I.C. One of the regulations is that the cases of the applicants are not disclosed, and this, as the noble Lord will realise, is certainly in the interests of the applicants themselves. I could, perhaps, suggest reasons in general terms. Certainly in the case of Mr. Roth there is an explanation which I think it is proper to make. It is not the duty of the Treasury or the C.I.C. to decide on the substance of the individual himself who makes the application. What they have to decide on is what the application is for. It is certainly not the function of the Treasury or the C.I.C. to go into what I might call the credentials of particular applicants.
I think, if I understood him aright, the noble Lord, Lord Grantchester,

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suggested that by allowing some £4 million and more to be raised by Mr. Roth, perhaps other people were kept out of the queue. This, I must explain at once, is a misconception, because there is no limit to the amount that may be raised, and, therefore, the fact that this particular gentleman was able to raise that sum of money had no effect on the general picture whatsoever. I hope that answers that question satisfactorily.
There is also a point which perhaps the noble Lord would care to bear in mind, and that is that one of the directives given which may perhaps have a certain bearing on cases he has considered, was that the Committee were asked to see that bonus issues were made only as a single operation in the capitalisation of true reserves. I do not want to have to go into that in detail, but I am sure the noble Lord will appreciate that it may have some bearing in certain cases which he has laid before us this afternoon.
LORD LATHAM: Does that exclude reserves from a revaluation of capital assets?
THE MARQUESS OF LANSDOWNE: That is rather difficult; I should like to have notice of that question. A reference was made to special deposits. In fact—and I hope the noble Lord will not object to my saying this—that is quite irrelevant to the subject of his Motion. But perhaps I might say this in passing. As the noble Lord knows, on July 1 the Chancellor of the Exchequer wrote to the Governor of the Bank of England announcing his decision to remove the limit on bank advances which Mr. Thorneycroft had asked the banks to observe, and asking the Governor to prepare an alternative scheme for restraining any increase in total advances. The letters referring to that are again public, and were published in Hansard on July 3, 1958. The technique for operating this scheme is still under discussion, so there is nothing that can be added at the present time to these letters.
I have tried, I am afraid perhaps not altogether successfully, to deal at least with some of the points that have been raised in the extremely interesting and learned speech of the noble Lord, Lord Grantchester, and I think I have replied to the one question put to me by the
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noble Lord, Lord Pethick-Lawrence. As to the question asked me by my noble friend, Lord Teviot, I am afraid I must explain to him that, interesting though this question is, it does not apply to the Order under discussion. It applies to the Act of 1946, and so is not relevant to this Motion. As it is an extremely difficult and complicated question, I suggest that the noble Lord should ask it another time.
LORD GRANTCHESTER: My Lords, I do not want to interrupt the noble Marquess, but surely that is not so. The Act governs all the orders that are made under it, and so it governs the present Order.
THE MARQUESS OF LANSDOWNE: With all respect to the noble Lord, it is very presumptuous of me to argue with him on a matter of this sort, but I understood his Motion was a Prayer for the annulment of a specific Order.
LORD GRANTCHESTER: It is an Order made under the Act of 1946. That is the authority for making it and, surely, the penal provisions of the Act of 1946 expressly provide that those penalties apply to any Order which is issued under the Act. I do not want to press the noble Marquess, but perhaps he will look into it.
THE MARQUESS OF LANSDOWNE: I shall be pleased to look into the matter further, but I still maintain that what the noble Lord is really asking for is the annulment of the Act of 1946, whereas the Motion he has put down is for the annulment of the Order of 1958.
I have dealt to the best of my ability with a number of the points that have been raised, and I should like now to put before your Lordships the case against this Motion. Your Lordships will have seen that this Order, in fact, does three things. First, it raises to £50,000 the limit of the value of transactions which are exempt from control, and thus restores the position which was in force from 1947 until March, 1956, when the limit, as your Lordships know, was reduced to £10,000. In the view of the Government, the economic situation now justifies this cautious relaxation of some of the credit restrictions and the resumption of some measures to encourage investment.

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Secondly, this Order exempts from control most issues made to capitalise profits or reserves, which are commonly called bonus issues. As your Lordships will appreciate, no new money is raised by the issue of bonus shares and no wealth is brought either to a company or to its shareholders. The purpose of such an issue is usually only to bring the capital structure of the company more into line with its real assets. A company is thus able to present a more realistic balance sheet. But it is still necessary to keep the control over bonus issues of redeemable securities, because some of these issues are designed to reduce tax liabilities. Nevertheless, it would not have been right simply to prohibit bonus issues of redeemable shares. In some cases these issues are used, as your Lordships will know, as a convenient method by which shareholders of family companies can ensure that cash is available to pay estate duty due on the death of a substantial shareholder, and so avoid the need to sell vote-carrying shares and the risk of allowing the control of the company to pass out of the hands of the family. The Order therefore provides that issues of redeemable bonus shares should not be prohibited but should require Treasury consent—I say deliberately, "Treasury consent", because it is taken outside the ambit of the powers of the Capital Issues Committee.
The third effect of this Order is to bring some classes of transactions under control. Most of these transactions are those which were exempted by the amending Order made in April, 1955, which was designed to let out transactions, such as those between associated companies, by which no new money was raised. But by a combination of transactions, each in itself exempt from control, companies have found three main ways of raising capital: by carrying out operations which have the same effect as if property were charged by way of mortgage; by acquiring in return for the issue of shares the shares or the undertaking or the assets of another company whose assets consist largely of cash or of securities that can readily be sold for cash; and by borrowing money temporarily without security and then converting such borrowings into permanent capital by the issue of shares in satisfaction of the indebtedness. Each of these operations will once again require consent.
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The Order, however, still leaves a wide range of normal transactions exempt from control, of which some of the most important are: borrowing from a bank in the ordinary course of the borrower's business; borrowing temporarily—and I emphasise the word "temporarily"—without security; issuing shares as consideration for the acquisition of property on the incorporation of a private company; issuing shares for conversion or redemption of existing issues. I hope that your Lordships will see from this brief outline that the general effect of this Order is to make two modest relaxations in the control of credits while at the same time preventing the main evasions of the control, and this with as little interference as possible in normal commercial operations.
I feel sure that it will have been appreciated by your Lordships that although this Motion has served a valuable purpose in enabling these matters to be debated, if it were to be passed we should not be proceeding to a happy state of perfect freedom; we should only be returning to the more onerous but also relatively less effective restrictions that were in force up to three weeks ago. That would be the effect of annulling this present Order. In these circumstances, I most sincerely hope that the noble Lord, Lord Grantchester, will not wish to press his Motion.
5.22 p.m.
LORD GRANTCHESTER: My Lords, I think the patience of the House has already been sorely tried so I will not say more than a few words. I should like to thank the noble Lord, Lord PethickLawrence, for his intervention and to say how honoured I am that he should have intervened in the manner he did. If I may reply to the question that he raised, speaking for myself I do not believe that bank rate should be regulated by the Chancellor of the Exchequer. I think bank rate is a reflection of conditions in the money market and should be fixed by the monetary authorities. That is my personal view, but I will not argue that now.
I should like to thank the noble Marquess for the gallant and courteous way in which he has grappled with this very complicated matter. I gather from what he said that he excludes from speculative purposes any transaction which is in the ordinary course of business, whether the money is borrowed temporarily from the bank or whether it is

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borrowed as a "bridging" operation for the building of houses by a building society or an insurance company. If so, I think that ought to be made clear. The only objection I have to the remarks made by the noble Marquess was when he questioned the inclusion of the directives in my comments. I look upon these as part of the Order, because they are really intended to interpret the Order. That was why I thought I was entitled to refer to the directives in discussing the Order. I did not expect that he would be able to say that Her Majesty's Government would at once repeal the Act of 1946 and all the Orders that go with it; but I did expect that he might say at least that they would give second thoughts to this matter. That is what I hope they will do. After all, quite simply, all I am asking is that the Government should practise in their legislation the principles that they profess. I recognise their preoccupation at the moment with more important matters in the international field, but I hope that the noble Marquess will consult with his right honourable friends as soon as convenient to ensure that this matter is not overlooked for action.
There are a great number of supporters of Her Majesty's Government who have great experience—greater than I have—on this subject in the City, and I ask whether it is not significant that no one has come here this afternoon to defend this Order. The waste of time and of ability, the sense of frustration engendered by these procedures, is notorious. Having ventilated this matter, I
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think time should be given to Her Majesty's Government to have second thoughts. If they do not, I should like to have your Lordships' permission to raise the matter again. At the moment all I can do is to ask your Lordships' leave to withdraw the Motion.
Motion, by leave, withdrawn.

BIRMINGHAM CORPORATION BILL
Reported from the Select Committee, with Amendments.
ROYAL SCHOOL FOR DEAF CHILDREN MARGATE BILL
Returned from the Commons with the Amendments agreed to.

ROCHDALE CORPORATION BILL [H.L.]
Returned from the Commons, agreed to with Amendments: the said Amendments considered and agreed to.
House adjourned at twenty-six minutes past five o'clock.