Lords Sitting of 19 June 1958

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers
The Viscount Hill—Sat first in Parliament after the death of his father.

BUSINESS OF THE HOUSE
2.35 p.m.
THE SECRETARY OF STATE FOR COMMONWEALTH RELATIONS (THE EARL OF HOME): My Lords, I have to inform your Lordships that I shall make a statement on Cyprus at about 3.45 this afternoon, after which, with your Lordships' permission, I will make a short statement on the future of Downing Street. I am sorry to interrupt business in this way, but I think your Lordships would wish me to do so.

THE NATIONAL GALLERY AND THE "HAMPTON" SITE
VISCOUNT ESHER: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether, in view of recent developments as reported in the Press, they can now make any further statement on the prospect of acquiring the site in Trafalgar Square adjacent to the National Gallery for the purpose of extending that Gallery.]
THE MINISTER OF STATE FOR COLONIAL AFFAIRS (THE EARL OF PERTH): My Lords, I can only repeat the assurance given in another place by my right honourable friend the Minister of Works, that if this site becomes available Her Majesty's Government will give careful consideration to the question of buying it for the National Gallery.
VISCOUNT ESHER: My Lords, I should like to ask the Government to consider carefully whether they do not think they will be despised by posterity
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if they miss the opportunity of obtaining this site. And would it not give some verisimilitude to the Prime Minister's assertion that we are to be the Greeks and not the Romans of this century if the Government were to use for the financing of this operation some of the £2½ million they are spending on making reserve barracks at Kahawar?
THE EARL OF PERTH: My Lords, I note what the noble Viscount says about the danger of the Government being despised, but I can only repeat that we will consider the question carefully if the site becomes available.
LORD KINNAIRD: My Lords, I should like to ask a supplementary question. While recognising that a permanent extension of the National Gallery on the "Hampton" site may not be possible for some years, could not the site be put to immediate use by erecting on it a temporary, inexpensive gallery to house the excellent and popular exhibitions which the Arts Council provide, such as the Renoir, Van Gogh, Braque and Niarchos Exhibitions, for which it would be possible to make a charge? Or could not the site be used to display exhibitions of open-air sculpture?
THE EARL OF PERTH: My Lords, I would again say that if the site becomes available, then Her Majesty's Government will first need to decide whether to buy it. However, I will bring the noble Lord's suggestion to the attention of my right honourable friend.

THE EXECUTION OF IMRÉ NAGY
2.38 p.m.
LORD BIRDWOOD: 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 they will convey to the Soviet Government the deep horror and disgust of public opinion in this country at the execution of Imré Nagy and his companions after a secret trial; and whether they will further draw the attention of the Soviet Government to the effect of their action on the prospects of success of any Summit Conference which may be held.]
THE MARQUESS OF LANSDOWNE: My Lords, Her Majesty's Government consider that the manner in which Mr. Nagy and General Maleter were kidnapped, held in custody, tried in secret and executed is repugnant to every principle of justice as practised in this country. As regards formal representations to the Soviet Government, both that Government and the Hungarian Government have consistently refused to receive representations about the Hungarian rising and all events associated wtih it, even when they have been backed by the authority of the General Assembly of the United Nations. I have no doubt that any representations Her Majesty's Government might make now would equally be rejected on the ground that the decision to try Mr. Nagy, General Maleter and their associates was a matter within the domestic jurisdiction of the Hungarian Government.
Her Majesty's Government welcome the opportunity afforded by the question put down by the noble Lord, Lord Birdwood, to place on public record the horror and indignation which this latest shameful act has aroused in this House and throughout the country. This barbaric behaviour must have seriously diminished the confidence of the West in the sincerity of Soviet intentions, either in relation to the preparations for a Summit Conference or to the settlement of international problems by other means.
LORD BIRDWOOD: My Lords, I thank the noble Marquess profoundly for the very strong expression of Her Majesty's Government's views which he has given. Arising out of the Answer, I would ask leave to submit two supplementary questions. The first is: would the Government consider, perhaps in consultation with other Powers, recalling their representative at Budapest for consultations? Second, would the Government continue to bring home to the Soviet Government the point that, until and unless they are prepared to accept our representations on these matters of morality, there can be no real peace between us; and that such issues as disarmament are seriously prejudiced? If we go on repeating this, day after day, year after year, perhaps it will one day get home into their thick skulls that it is these issues which divide the world, and
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not the issues of the atomic bomb and such like.
THE MARQUESS OF LANSDOWNE: My Lords, in reply to the first question, it so happens that Her Majesty's Ambassador is returning home to-day on his normal annual leave. This leave was arranged months ago. So in fact Her Majesty's Ambassador has not been recalled, but he is returning to-day, and noble Lords may take it for certain that he will be consulted very closely on this matter. As regards the noble Lord's second question, I would remind your Lordships that the United Nations Special Committee on Hungary is still in being, and I have had reports (though they are still unconfirmed) that it has already met in New York. Her Majesty's Government will, of course, co-operate and give the Special Committee any assistance it can in its consideration of this horrible crime.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, is the Minister aware that it is common to every section of our British Parliament to have very shocked and injured feelings about the action which has been taken against these people in Budapest: it is a cruel and shameful perversion of the proper way to deal with justice in any country. However, whilst I sympathise a good deal with the indignation of the noble Lord, Lord Birdwood, would it not be unwise, at a time when all the people who are concerned in promoting a Summit Conference are still hoping that such a conference will be held, to make any of the gestures he proposes? Things might happen at a Summit Conference that might be much more likely to lead to a change of heart and practice than the action suggested by the noble Lord, Lord Birdwood.
LORD CONESFORD: My Lords would not the holding of a Summit Conference be quite shameful if the liberation of Eastern Europe is to be excluded from the agenda?
THE EARL OF BESSBOROUGH: My Lords could the noble Marquess none the less assure us that, despite this horrific and outrageous act, there will be no diminution in the exchanges between this country and the Soviet Union, since I believe it is only by such exchanges that

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Soviet citizens can be brought to recognise the moral values which we in the West all hold so dear?
THE MARQUESS OF LANSDOWNE: My Lords, I think that your Lordships' House from all sides has made its feelings sufficiently clear. I can assure noble Lords that Her Majesty's Government are as aware as the noble Viscount, Lord Alexander of Hillsborough, of these feelings and will take them thoroughly into account.

THE LEBANON
2.45 p.m.
VISCOUNT STANSGATE: My Lords, I beg leave, speaking from the Back Benches, to ask Her Majesty's Government the Question of which I have given Private Notice—namely: What is their policy concerning the present crisis in the Lebanon, and whether they can give an assurance that British troops will not be committed outside the provision of the United Nations?
THE SECRETARY OF STATE FOR COMMONWEALTH RELATIONS (THE EARL OF HOME): My Lords, if the noble Viscount is dissatisfied with my reply, or the House thinks it rather short, I must ask to be excused because I knew the terms of this Question, in its final
form, only at about half-past one.
VISCOUNT STANSGATE: They were communicated much earlier.
THE EARL OF HOME: Part of it. I would answer the Question as follows: Her Majesty's Government wishes an independent Lebanon to be preserved. With that end in view we are giving our full support to the present United Nations operation. We hope that this operation will be successful, and the Foreign Secretary had a useful conversation with Mr. Hammarskjoeld yesterday about the problems involved in implementing the Security Council resolution. With regard to the question of the commitment of British troops, I must refer the noble
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Viscount to the statement of the Foreign Secretary in another place on May 19 when he said that no action would be taken contrary to the Charter or established rules of International Law.
VISCOUNT STANSGATE: My Lords, I can assure the noble Earl I did my best to meet his convenience by communicating very early, but these things are difficult. I would ask whether he has read in The Times this morning the statement that the concentration of troops in Cyprus is the largest since the emergency began, with the possible exception of the build-up for the Suez intervention. Then the statement goes on to say:
"The Government are clearly taking care … to preserve a strategic reserve for use elsewhere in the Mediterranean if necessary. … The obvious deduction is that the Parachute Brigade will not be committed to internal security duties, but will be kept as a mobile strategic reserve. If an intervention in the Lebanon became necessary, it would have to be mounted from Cyprus."
I should like to ask the noble Earl whether the Government contemplate the possibility of early intervention by British troops?
THE EARL OF HOME: That is a question which I do not think the noble Viscount properly should have asked, but it is one that I intend to answer; and the answer is that there is no connection whatever between sending troops to Cyprus and the Lebanon situation.
VISCOUNT STANSGATE: The noble Earl is perfectly proper in rebuking me, but I asked the question in the light of our experience with Suez. Some people think it a possibility that we might meet on Tuesday finding British troops committed to a very indiscreet—indeed, one might say insane—adventure.

PIER AND HARBOUR PROVISIONAL ORDER (MARGATE) BILL
Read 3a (according to Order), and passed.

LOCAL GOVERNMENT AND MISCELLANEOUS FINANCIAL PROVISIONS (SCOTLAND) BILL
2.50 p.m.
Order of the Day for the Second Reading read.
THE MINISTER OF STATE, SCOTTISH OFFICE (LORD STRATHCLYDE): My Lords, I rise to move that this Bill be now read a second time. The Bill has two main objects: to re-rate industry to 50 per cent. of net annual value, and to reform the present system of Exchequer grants, chiefly by replacing certain grants in aid of specific services by a general grant. The reasoning behind these measures was set out in the White Paper on Local Government Finance in Scotland which was published in July last year. Their underlying purpose is to give local authorities increased financial independence and to encourage local Government electors to take a fresh interest in local government affairs. While there may be some dispute about the method which we have devised to achieve these ends, your Lordships may well agree that they are worth achieving. The Bill has already been debated for no fewer than twenty days in another place—and I willingly admit that it has been improved in some respects. It has also received a great deal of attention outside Parliament, and this is particularly appropriate since the subject matter of the Bill affects all local authorities in Scotland.
No one would wish to dispute that local authorities, in the discharge of the important tasks which are conferred on them by Statute, must receive assistance from central funds. There is, however, room for argument about the proportion which the Government subvention should bear to the total revenues of local authorities. As your Lordships are aware, in recent years local authorities have received an increasing proportion of their revenues direct from the Exchequer, and a great deal of this Exchequer assistance has been given in the form of percentage grants on the expenditure incurred by local authorities. It is difficult for anyone to maintain a healthy interest in getting value for money if someone else is footing his bills, or a fixed percentage of them, and it seems to the Government that one of the results of local
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authorities' increased dependence on ad hoc grants has been the apathy and lack of interest at local government elections which I am certain all of us must deplore, no matter to what Party we may belong.
There does not seem to be any easy cure for this, but our view is that interest in local affairs can be revived by allowing local authorities a wider field from which to raise their rate revenue and by giving them assistance from the Exchequer, so far as possible, in lump sum payments which they may spend as they think fit.
This brings me to one of the main proposals in the Bill, namely, the re-rating of industry. De-rating was introduced in 1929 at a time of severe economic depression. To-day's economic climate is happily quite different, and it would not appear that the de-rating of industry to 25 per cent. of net annual value is still justified. It is obviously a question of judgment as to how far industry should be re-rated, and the Government are confident that at the present time the decision which they have taken, which is to double industry's rateable value by re-rating to 50 per cent. of net annual value, is the right one. Effect is given to this in Clause 7, which will create additional rateable resources in every local authority area in Scotland.
While the matter I am about to refer to is really one for another place, I should perhaps explain at this stage that, in fixing the total of the general grant for the first year—which will be 1959–60—it is proposed to take account of this additional income produced by re-rating. Half of that must go to the Exchequer to offset the loss in taxation; it is proposed to give local authorities two-thirds of the remainder; and the effect of the operation on 1956–57 figures, is to give Scottish local authorities an additional three-quarters of a million pounds a year.
May I now turn to the reform of the grants system? There are two alternatives. Grants can be given for specific services on a percentage basis, as at present, or they can be absorbed in a single general grant which would be given in aid of local authority revenues generally, as the Bill proposes. The existing system of ad hoc grants inevitably carries with it the meticulous

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scrutiny of each claim by the local authority for a percentage grant, while the knowledge that a fixed percentage of the total will be footed by the Exchequer tends to remove from local authorities the incentive to carry out a prudent husbandry. In our view, therefore, there is a clear balance of advantage in rolling up as many specific grants as possible into a single general grant and giving it to local authorities as the State's contribution towards the cost of providing the relevant services.
Clause 1 accordingly provides for the payment of general grants in lieu of the specific grants at present payable in respect of the expenditure set out in the First Schedule. The clause also provides that the aggregate amount of the general grants should be fixed, after consultation with the local authority associations, for periods of two or three years at a time; and that they should be embodied in general grant orders which will be laid before another place together with a White Paper explaining the considerations which have led to the fixing of the particular amount contained in the order. Your Lordships' House will have an opportunity, if desired, of debating this White Paper.
The distribution of the general grant between local authorities is to be governed by the Second Schedule. In the preparation of the formula contained in this Schedule we had the assistance of a Working Party of local authority officials. Its purpose, as I have indicated, is to get the distribution of grant away from the conception of a percentage of whatever the local authority chooses to spend, and to base it on objective factors of local need, such as population, numbers of children of school age, and sparsity. The Third Schedule provides for adjustments in the amount of general grant in respect of some special items of expenditure which are shared between local authorities or incurred by the Secretary of State on their behalf.
Clause 2 prescribes in detail the various factors which the Secretary of State is required to take into consideration in fixing the aggregate amount of the general grants. I invite the particular attention of the House to this, one of the crucial clauses in the Bill. Under the clause, the Secretary of State must take into account three things: first, the
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latest information about the rate of expenditure on the relevant services; secondly, any change in the demand for these services so far as the change is attributable to circumstances prevailing in Scotland as a whole which are not under the control of local authorities—there we have in mind such things as an increased demand for educational services brought about by an increase in the school population—and, lastly, the need for developing these services and the extent to which, having regard to general economic conditions, it is reasonable to do so.
Your Lordships will also note that subsection (2) of the clause empowers the Secretary of State to make an amending order increasing the total amount of the general grant payable in a specified year or years of a grant period, if he is satisfied that there has been an unforeseen increase in the cost of providing the services in question which is of such magnitude that it ought not to fall entirely on local authorities. I hope that the House will agree that this clause gives as fair and explicit an undertaking as any Government could give that the needs of local authorities will be fully met under the new system. I would wish to emphasise that there is nothing in the Bill to justify the allegations which have been made that the general grant is a device to enable the Treasury to reduce local authorities' revenue. My Lords, the Bill is not a '"Smiler with the knife under the cloak"—I do not claim that for myself; I am told that it comes from Chaucer's Canterbury Tales.
Clause 3 gives the Secretary of State power to reduce the general grant payable to any local authority Where the service in question is not adequately provided, and it also enables him to prescribe standards. The existence of this power will, I think, be sufficient in itself, and I am confident that—as in the case of the existing power in relation to the Exchequer equalisation grant—it will not be necessary to invoke it. I hope, however, that the existence of this sanction, together with the explicit undertakings in Clause 2 to which I have already referred, will be sufficient—and in our view they certainly ought to be—to allay the anxiety, which has so frequently been expressed by educational interests, that the effect of the Bill will be to reduce the standard of local government services.

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Clause 4 provides for the abolition of certain minor grants. Credit will be given for them in the first general grant order; and their disappearance will remove the need for much time-wasting examination of accounts.
Before I leave the question of the general grant, I should perhaps mention to your Lordships the transitional arrangements. These are to be found in Clause 15 of the Bill. In order to avoid any undue disturbance as a result of the introduction of the general grant, where losses occur they will be made good in full in the first year of the new system, as to nine-tenths in the second year, and so on for such period as may finally be decided on by the Secretary of State. The losses will be made good by the gaining authorities, but the effect will be that no one will lose anything in 1959–60, although many authorities will gain from the £750,000 to which I referred a few minutes ago. That will be received in full in the first year of the new system. In the year 1960–61 no authority will lose more than one-tenth of its loss as determined under the clause. The arrangements for tapering off the transitional payments in subsequent years are left by the clause to be dealt with by regulations, as revaluation under the Valuation and Rating (Scotland) Act, 1956, may alter the whole picture in 1961–62.
Clause 5 provides for the abolition of the Education (Scotland) Fund, from which the education grant is at present paid, and Clause 6 gives effect to amendments of various enactments which are required consequential on the new grant arrangements, and which your Lordships will find set out in the Fourth Schedule. I have already referred to the re-rating provisions contained in Clause 7. Clauses 8 and 9 make two minor amendments to the Valuation and Rating (Scotland) Act.
I now turn to Part III of the Bill. Clause 11 makes permanent the Secretary of State's control over borrowing by local authorities. This power at present depends on annual renewal under the Expiring Laws Continuance Acts, and it is now proposed to make it permanent. I appreciate that at first glance this may seem to be an odd provision for this Government to introduce. The House may agree that it will clearly be necessary for some time to come, in the in-
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terests of the stability of the national economy, for the Government to control the very considerable volume of capital investment which is created by local authorities. Since no end can be seen at present to the need for exercising this power, it is in our view only honest to make it permanent now. To rely on annual continuance implies that there is at least a possibility that the power will no longer be needed at the end of the year in question. That is not the case as regards borrowing control, and Clause 11 takes the realistic course of placing the power on the Statute Book in permanent form, as in England and Wales.
I should like to refer to some of the other provisions in the Bill which become possible when borrowing control is made permanent. Clause 10 removes the rating limitation on expenditure by town councils on halls for public meetings and assemblies. Clause 12 extends the maximum borrowing period for a wide variety of purposes, and Amendments will be tabled for the Committee stage to widen the scope of this clause still further. In that connection I would refer your Lordships to paragraph 6 of the new White Paper entitled Local Government and Central Departments.
Clauses 13 and 14 contain minor reforms which should be of financial benefit to local authorities. Clause 13 extends the powers of trustees to lend money to local authorities. This amendment of the law is in essence a reciprocal action with England and Wales, and a corresponding provision is contained in the Local Government Bill to which your Lordships' House gave a Second Reading last week. Clause 14 empowers the Secretary of State to increase certain registration and marriage fees by regulation. Nearly all these fees are received by local authorities. Most of the present fees were fixed as long ago as in the year 1854, and to-day meet only a fraction of the cost of the service.
I do not need to take your Lordships through the formal clauses of the Bill. I should, however, draw the attention of the House to further important relaxations contained in the White Paper published last week on Local Government and Central Departments in Scotland. As my right honourable friend, the Secretary of State, forecast some time ago,

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we have carried out an exhaustive review, in consultation with the local authority associations, of the relationship between the central Departments and local authorities in Scotland. The outcome of this review—which I have discussed with the local authority associations and which I am glad to say they accept—is embodied in the White Paper. This document marks an important stage in our relations with local authorities, and its proposals will give them substantially more freedom than they have exercised in the past. As regards capital expenditure, which is referred to in paragraph 5 of the White Paper, my right honourable friend intimated to local authorities last week an important simplification of the procedure for considering applications for borrowing consent. In particular, there will no longer be any scrutiny of applications for consent for projects costing less than £5,000—provided, that is, that the total amount of investment available for the service in question allows; and the procedure for larger applications will be simplified.
Other proposals contained in the White Paper include the abolition of the requirements that local authorities must set up particular committees to carry out certain functions, and that they must provide detailed administrative schemes for these functions and submit them to the Secretary of State for approval. The procedure for examining local authorities' accounts for the services covered by the general grant will be greatly simplified, and a number of important changes are also proposed in the regulations made by the Secretary of State under the Education (Scotland) Acts. In so far as these proposals involve legislation, Amendments to give effect to them will be laid before the House at the Committee stage when there will be an opportunity of discussing them in detail.
Meanwhile, I can say with some confidence that the introduction of this Bill, the publication of the White Paper, and the Government's determination to put the recommendations contained in it into effect at the earliest possible opportunity, are a clear sign that we mean what we say and that we intend to give local authorities more freedom to manage their own affairs. My Lords, I commend the Bill to you. I beg to move.
Moved, That the Bill be now read 2a (Lord Strathclyde.)
3.10 p.m.
LORD GREENHILL: My Lords, before I comment on the speech made by the noble Lord, perhaps I should say that any views I may express are the reflection of my own experience as a member of one of the four city councils of Scotland and that I do not regard myself as competent to express the views of members of county councils. I would add, in my opening remarks, that I am rather disappointed with the speech made by the noble Lord because, in spite of the twenty days which he told us was spent in another place debating this Bill, so far as I can judge he has shown little evidence of having been convinced by some of the arguments expressed in the other place. Noble Lords should bear in mind that although a Local Government Bill was debated in your Lordships' House last week, that was an English Bill and included two matters which do not appear in the Scottish Bill. That Bill not only contained financial provisions very similar to those explained by the noble Lord but also dealt with local government reconstruction in England and Wales, a matter about which Scotland is not concerned.
It may be, as the noble Lord has said, that a good deal of anxiety has been expressed outside Parliamentary circles and I believe Her Majesty's Government ought to ask themselves why it is that, in spite of the explanations given in another place both by the Minister of Housing and Local Government and by the Secretary of State, the public are by no means convinced that the purpose of the Bill is in favour of the local authorities. I believe that it is not an exaggeration of the state of mind of the general public to say that the feeling is that Her Majesty's Government, in the pretence that they are now giving greater independence to local authorities, are, in effect, saying to local authorities: "You have the power to do anything you like, provided you do what we tell you," because there is no doubt that these financial provisions do tighten up the powers in favour of the Government and against the interests of local authorities.
This is not a completely new matter raised by Her Majesty's Government. Not only is it part and parcel of a long record of financial changes which Her Majesty's Government have tried to put

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into operation, but if one looks a little further back one realises that this is one of the many changes which have taken place within recent years both in the scope of local government and in the relationship between local government and the Central Government. One has only to refer to the local government manpower inquiries which took place, I believe, from 1949 to 1952, when similar problems (not perhaps wholly concerned with the same financial considerations) were considered between the staff of the Scottish Office and representatives of local authorities. The considerations which they had before them were not merely manpower questions but included also questions of grant, methods of allocation and so on. I should say that this whole Bill deals mainly with administrative matters, and for that reason I do not think we ought to concern ourselves, in a Second Reading debate, with some of the detailed items to which the noble Lord has referred.
I should prefer to deal with one or two headings. Re-rating is one of them. As the noble Lord well knows, there has long been an agitation that the re-rating should be 100 per cent. When, after considerable pressure, Her Majesty's Government at last conceded that industry should be rated to the extent of 50 per cent., instead of 25 per cent., we were more or less grateful for being given "half a loaf"; but it was not the whole loaf for which we had asked and to which we thought we were entitled. But then Her Majesty's Government said: "Notwithstanding that we have increased the rating of industry to 50 per cent., you are not going to get that difference of 25 per cent. at all. Instead of getting the £2⅓ million to which Scotland as a whole would have been entitled by this increase, the second 25 per cent., you are to get only one-third of that amount—some £750,000—for the whole of Scotland".
I want to ask Her Majesty's Government upon what grounds of principle and equity—they say local authorities are not entitled to the whole of the increase which they have agreed industry should pay. I do not agree that industry would have suffered had it been rated at 100 per cent.; nor do I think it wholly a good thing that we should have waited
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until 1958, after some of the "boom" years of the 1950s, before industry was made to pay its fair share of the improvement in trade. But in good trade or in bad, the rates that industry pays are surely part and parcel of the local revenues which a town council or a county council ought to receive, precisely because, as the local authority, they have to incur expenditure through the existence of these industrial premises within their area. I believe, therefore, that Her Majesty's Government ought, if they will, to reconsider this deduction of part of the moneys which are really due to local authorities.
The general grant position is one on which perhaps I do not take quite the extreme view taken by a number of people of whom I know. This is not the first block grant within my own experience. I know that the original block grant of 1929 was meant to cover certain items which were not covered by the present general grant. I do not say that such things as the rating and other factors within that block grant were kept as was originally promised; but that was not due to any dishonesty on the part of any Government: it was due to war conditions and the like, about which no one can complain. When we come to the proposed new general grant, however, I believe that there is every justification for the anxiety which is being expressed, particularly by those interested in education—not merely those professionally interested, but those citizens outside who, like myself, are also interested in certain aspects of the subject.
Why is there this, as I think, genuine and reasonable anxiety about the future of education because of this general grant? I think I am right in saying that, altogether, eleven services are involved in this grant. The police are excluded; so are certain other matters. But I think I am right in saying that, of the total of approximately £37 million for these eleven services, about £33 million is in respect of education. I ask, in all seriousness, whether the Government can really say that it is right to make one grant in respect of the whole of these services, when education accounts for so large a proportion of the total concerned. Later, I propose to make a suggestion of my own about possible reconstruction; but for the present, I ask simply: Upon

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what grounds of principle do the Government say that there should now be one grant for the whole of these eleven services combined, when one service accounts for such a very large proportion of the whole amount under consideration?
We have been told that one of the aspects of this matter which has concerned the Government is the fact that the ratio of Exchequer grant to local rate has gone up considerably; that, whereas (I think this is the expression of the Secretary of State) some thirty years ago the ratio was one part Exchequer to two parts rating, it is now six parts Exchequer to five parts rating. Again I ask: Upon what principle do the Government say that that ratio is unreasonable? What difference, again in principle, would it make if the ratio were either one part Exchequer to nine parts rating or nine parts rating to one part Exchequer? This is not a matter which is being decided on principle at all; it is simply that the Government want, as I see it, to have the minimum of expenditure imposed upon the Exchequer and the maximum met by the local authority.
Here I should like to give an answer which has nothing whatever to do with Party politics. Some years ago, when a senior member of the City Chamberlain's Department in the Glasgow Corporation was lecturing to members of the City Chamberlain's staff on this very question of grants, he put a point of view which I think is wholly reasonable and which certainly had no Party-political significance. It was this: that the reason why Government contribute towards the expenditure of the services of a local authority is the fact that the services in question are as much national in character as they are local, and therefore there is an obligation on Government to contribute at least one half of the total cost in order to show their responsibility for a service which is as much national as local. I am perfectly sure that the noble Lord will not deny, so far as education alone is concerned, that at least one half of the cost of our education is a national responsibility.
There is one other point to which I should like to refer. The noble Lord is well aware that, as the outcome of the Report of what is called the Sorn Committee,
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the Rating and Valuation (Scotland) Act was introduced, and it has a bearing upon the equalisation grant. Some of us who were concerned with that Committee thought we saw, in the recommendations of that Committee, a source of considerable increase in income, purely from the equalisation of grant. As the noble Lord is well aware, Scotland has a particular grievance in that respect—for this reason. In the first instance, when this grant was being determined the old kind of formula was adopted (Goodness knows where it originated!) of adding 25 per cent. to the average of the country in order to determine the datum line. The noble Lord knows that as well as I do. A certain amount of money came to Scotland because of that arbitrarily chosen figure. It was found, after very short experience, that the amount was inadequate, and so we had a second bite at that cherry and the amount of equalisation grant given to Scotland was increased, if my memory serves me, by about £2 million.
That, too, being obviously inadequate, a later review took place, and I think I am right in saying (the noble Lord will correct me if I am not right) that, whereas in 1955–56 the amount in respect of equalisation grant was about £9 million, the year after it was something like £14·4 million. There had been that readjustment. Now, in spite of that, we are told that the figure of equalisation grant for Scotland is not to be determined at present, notwithstanding that we have this new Valuation and Rating (Scotland) Act on the books, but that we must wait until dilatory England and Wales have arrived at their figure and their valuation. When, after over a quarter of a century, that is ultimately decided, and when the Exchequer see what the total figure of equalisation grant will be, they will be good enough to give to Scotland what they regard as its fair share.
LORD STRATHCLYDE: My Lords, before that can be decided we have to complete our own revaluation, which will not be until 1961 or 1962. I would further observe that it was not this Government which introduced Exchequer equalisation grant; it is this Government which, as far as it has gone at present, has put right the difference which existed and added to the 25 per cent., for which we in Scotland are very grateful.
LORD GREENHILL: My Lords, far be it from me to claim credit which is not my due, and far be it from me to cast blame on the Government for which they are not really liable. But I would point out that the whole idea of equalising the burden upon local authorities was due to a political friend in another place; and although it may not be working as was originally envisaged, at least let us give him credit for having introduced that principle of equalisation.
The noble Lord has referred to the most recent White Paper. He will be well aware that, even in circles which normally support the present Government, there has been a doubt either about the importance of that Paper or about the new methods of relationship with which it deals. But I was rather impressed by one part of this Paper in which, after outlining the details of administration and referring, in paragraph 7, to other services—I will not read out the headings of all of them—it said:
"Although individual projects of the kind"—
the kind referred to—
"may often be small the total investment which they involve is too great to be exempted from the general restrictions applying to all local authority investment."
The noble Lord told us that one of the things which the Government have decided upon is that local authorities will no longer be able to raise money for capital purposes on their own initiative. The noble Lord is well aware that already under the 1929 Act a local authority could not raise money for capital expenditure unless a two-thirds majority of those voting approved of it; and, as the noble Lord is also aware, there are not many local authorities in Scotland whose political composition is such as to make a two-thirds majority the opinion of one political Party only. Looked at purely from the point of view of administration, which is what I am concerned with at the moment, I think it unfair so to tie the hands of local authorities that, even within the limited sphere which the Government have so far allowed them, they are not able to exercise that local individuality which, surely, even the present Government will agree is part and parcel of the inherent democratic atmosphere of our country. I cannot help wondering whether the
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noble Lord is wise. After all, what it means is an even tighter financial hold that the Government already have on local authority expenditure.
If I may trespass on your Lordships' patience for a moment or two longer, I should like to say this. We are bound to agree that changes take place and that to some changes there is always some feeling of resistance. But I think that now and again we ought to face the possibility that a change may be desirable. Exactly thirty years ago there was a conference on local government affairs, held under the auspices of the Institute of Public Administration, in which the opinions there expressed, strangely enough by three eminent Scotsmen of the time, make one feel that they were faced with problems of a similar kind to those that we are dealing with to-day.
As noble Lords are aware, in the pre-1929 days education, as such, was under a separate body, as were public assistance and other services. They were undertaken by separate individuals and covered by separate elections; each service was under an ad hoc body. Since the 1929 Act, when education and the other services were all combined under the one local authority, I have wondered whether Tom Johnston was not perhaps right in thinking that the time had come to revert to ad hoc education committees. The effect of that would be, I think, that we should then get people elected to education committees whose interests were primarily educational and who would therefore, on the whole, be those who knew most and cared most about it. My feeling is that it would be an experiment well worth discussing in the near future. From that one might lead on to the further point: that if there are not enough men and women available to go round, is there any reason why each ward in a large city should have three representatives rather than two or even one?
These are thoughts that I throw out because I think in this present time of change it may be appropriate that they should be discussed. Having said that, and realising that noble Lords are perhaps much more concerned to hear what the noble Earl the Leader of the House has to say, I will end on that note.

CYPRUS
3.35 p.m.
THE EARL OF HOME: My Lords, with your Lordships' permission, I now propose to make the statement on the Government's policy on Cyprus which the Prime Minister had intended to make on Tuesday but which, with the forbearance of the House, he decided to defer at the request of the North Atlantic Treaty Organisation Council.
The policy of Her Majesty's Government in Cyprus has had four main purposes: to serve the best interests of all the people of the Island; to achieve a permanent settlement acceptable to the two communities in the Island and to the Greek and Turkish Governments; to safeguard the British bases and installations in the Island, which are necessary to enable the United Kingdom to carry out her international obligations; to strengthen peace and security, and co-operation between the United Kingdom and her Allies, in a vital area. These are the aims which Her Majesty's Government have consistently pursued and which have guided their efforts in recent months to find common ground on which an agreed settlement might be reached. It is deeply regretted that all attempts in this direction have hitherto proved unsuccessful.
In view of the disagreement between the Greek and Turkish Governments and between the two communities in Cyprus, and of the disastrous consequences for all concerned if violence and conflict continue, an obligation rests with the United Kingdom Government, as the sovereign Power responsible for the administration of the Island and the well-being of its inhabitants, to give a firm and clear lead out of the present deadlock. They accordingly declare a new policy which represents an adventure in partnership—partnership between the communities in the Island and also between the Governments of the United Kingdom. Greece and Turkey.
The following is an outline of the partnership plan:—
Cyprus should enjoy the advantages of association not only with the United Kingdom, and therefore with the British
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Commonwealth, but also with Greece and Turkey.
Since the three Governments of the United Kingdom, Greece and Turkey all have an interest in Cyprus, Her Majesty's Government will welcome the co-operation and participation of the two other Governments in a joint effort to achieve the peace, progress and prosperity of the Island.
The Greek and Turkish Governments will each be invited to appoint a representative to co-operate with the Governor in carrying out this policy.
The Island will have a system of representative government with each community exercising autonomy in its own communal affairs.
In order to satisfy the desire of the Greek and Turkish Cypriots to be recognised as Greeks and Turks, Her Majesty's Government will welcome an arrangement which gives them Greek or Turkish nationality, while enabling them to retain British nationality.
To allow time for the new principle of partnership to be fully worked out and brought into operation under this plan in the necessary atmosphere of stability, the international status of the Island will remain unchanged for seven years.
A system of representative government and communal autonomy will be worked out by consultation with representatives of the two communities and with the representatives of the Greek and Turkish Governments.
The essential provisions of the new Constitution will be:
There will be a separate House of Representatives for each of the two communities, and these Houses will have final legislative authority in communal affairs.
Authority for internal administration, other than communal affairs and internal security, will be undertaken by a Council presided over by the Governor and including the representatives of the Greek and Turkish Governments and six elected Ministers drawn from the Houses of Representatives, four being Greek Cypriots and two Turkish Cypriots.
The Governor, acting after consultation with the representatives of the

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Greek and Turkish Governments, will have reserve powers to ensure that the interests of both communities are protected.
External affairs, defence and internal security will be matters specifically reserved to the Governor acting after consultation with the representatives of the Greek and Turkish Governments.
The representatives of the Greek and Turkish Governments will have the right to require any legislation which they consider to be discriminatory to be reserved for consideration by an impartial tribunal.
If the full benefits of this policy are to be realised, it is evident that violence must cease. Subject to this, Her Majesty's Government intend to take progressive steps to relax the Emergency Regulations and eventually to end the State of Emergency. This process would include the return of those Cypriots at present excluded from the Island under the Emergency Regulations.
A policy based on these principles and proposals will give the people of the Island a specially favoured and protected status. Through representative institutions they will exercise authority in the management of the Island's internal affairs, and each community will control its own communal affairs. While the people of the Island enjoy these advantages, friendly relations and practical co-operation between the United Kingdom, Greece and Turkey will be maintained and strengthened as Cyprus becomes a symbol of co-operation instead of a cause of conflict between the three Allied Governments.
Her Majesty's Government trust that this imaginative plan will be welcomed by all concerned in the spirit in which, it is put forward, and for their part they will bend all efforts to ensuring its success. Indeed, if the Greek and Turkish Governments were willing to extend this experiment in partnership and co-operation. Her Majesty's Government would be prepared, at the appropriate time, to go further and, subject to the reservation to the United Kingdom of such bases and facilities as might be necessary for the discharge of her international obligations, to
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share the sovereignty of the Island with their Greek and Turkish allies as their contribution to a lasting settlement.
That is the statement of Government policy. I now use the Prime Minister's actual words as he concluded his statement in another place:
"I am aware that I have taken up much of the time of the House, but since the words were chosen with care, I thought it my duty to give the full text to the House. It will be available as a White Paper this afternoon.
"I would only add this. I have myself sent a personal appeal to the Prime Ministers of Greece and Turkey to approach this policy in a spirit of co-operation and moderation. I have given the House the main outlines of the plan. There are, of course, many details which will require to be filled in after discussion. We are therefore not asking for immediate acceptance of our policy in every particular. While I recognise that some initial reactions may be unfavourable, I believe that further consideration will lead to the recognition of the genuine merits of this policy. Meanwhile, it is a great support to the Government in discharging their heavy responsibilities in this matter to have the good will and understanding of the North Atlantic Council. Their assistance in the process of conciliation is proving, and I feel sure will continue to prove, of the highest value. Finally, I trust that our efforts which are constructive and fair, will commend themselves to the House and to the country."
3.43 p.m.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I am sure that the House is much indebted to the noble Earl the Leader of the House for putting, such a statement before us this afternoon. People in all parts of the country, of all kinds of political and religious opinion, have felt very deeply for years past about the serious state of affairs in Cyprus, and many have been praying that peace may come to that troubled island. This, therefore, is a day of considerable importance, when a plan of such breadth and imagination as this is placed before Parliament as a preliminary to its being submitted to the various parties concerned in the discussions about Cyprus. The statement

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is fairly long and I am bound to say also looks complicated. Of course, the situation in Cyprus is so complicated that it is necessary to deal with all the complications involved, and I do not suppose that that can be done by a simple State memorandum. My noble friend Lord Pethick-Lawrence will remember our difficulties in dealing in the preliminary stages with the communal and racial difficulties in India, and I do not suppose that the size of the place makes much difference to the depth of feeling upon these matters.
I feel sure that it would be wise for us not to think of being for this or that point in the proposed plan. I think we had better examine it in the greatest detail. I am sure that all your Lordships want to be helpful to any discussions on this matter which may succeed this announcement. Perhaps all these questions can better be dealt with in a debate which, whilst I feel it cannot be long delayed, should not now be brought about until all Parties in Parliament have had a chance of studying this imaginative memorandum. I should like to express my personal hope that at last this may be the first step in bringing about such discussions as would bring peace and good will to this troubled community in Cyprus.
My only other point is that I should like to ask the noble Earl whether he has told the House as much as he can about consultation with the Council of N.A.T.O. and whether we can feel that we are really able to rely upon widespread help in conciliation in this matter from that Council.
THE EARL OF HOME: My Lords, I am very much obliged to the noble Viscount. I am sure that he is right. This question is necessarily complicated, although when the White Paper has been read I do not think that it will appear quite so complicated as it does of necessity as I read it out. Of course we shall have a debate arranged through the usual channels when we know what another place is going to do. So far as N.A.T.O. is concerned, the noble Viscount may not know, but there were discussions this morning, of which I have not had a full account, but I am informed that in these discussions it was clear that the Secretary-General and the Governments of the twelve countries not directly concerned
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welcome the United Kingdom plan as a basis for constructive discussions. Their help has been, is and I hope will continue to be, extremely valuable.
LORD COLYTON: My Lords, I feel sure that this constructive and imaginative plan will commend itself to almost all sections of your Lordships' House. I agree with the noble Viscount opposite that we do not want to ask a great many questions to-day; they can be held over for a future debate. The best contribution we can make to-day is to throw the whole influence of this House behind the acceptance of this plan by the parties concerned. Having said that, I hope your Lordships will not regard the two questions which I should like to put to my noble friend as in any way put in a spirit of criticism. The first question I should like to ask him is: what will happen if, unhappily, the present efforts to find a solution of this tragic problem fail? The second is: what would happen if, at the end of the period of seven years, no further agreement were reached as to the future procedure to be decided upon?
THE EARL OF HOME: My Lords, I do not want, and I do not think that the House will want, either to think or to talk in terms of failure. What we have to do to-day is to try to concentrate on making this plan a success and making it work. Nevertheless, as the noble Lord has said, we must face the realities of the situation. To-day, on behalf of the Government, I have put forward a plan for seven years, and we have looked beyond that to an even greater partnership. If in the long run all our hopes are dashed and all this fails, then the pledges given by the British Government will stand.
3.50 p.m.
LORD WINSTER: My Lords, as I have so frequently spoken about Cyprus in your Lordships' House, I should very much like to be allowed to say a word or two this afternoon. I welcome most sincerely the fact that the Government have come to a decision and have put forward a proposal which, whatever its ultimate fate, is an imaginative proposal which bears evidence of great labour on the subject. I think it is a proposal which certainly forms a basis for negotiation; it will be a great thing to get talks started again in Cyprus, and this proposal certainly forms an adequate basis for such

1135
talks. At this stage I hope that no criticism of the offer will go out from Parliament at this particular moment. I think the offer should have a fair run, and those outside this country who have to come to fateful decisions should not be distracted at this moment by conflicting Party voices from this country.
Criticism there must be at some later date, although I warmly agree with the noble Earl the Leader of the House that we need not this afternoon contemplate the failure of this proposal or wonder what we shall be doing in seven years' time. The time for criticism will come, but this most emphatically is not the time. In saying this, I particularly have in mind the Governor of Cyprus, who has the most difficult task to perform in putting this proposal forward and in endeavouring to commend it to the parties concerned. I remember that the Governor has inherited a most damnable legacy which has been none of his making. Let us not complicate his task in any way at this moment by raising discordant voices here at home. What is wanted above all at this time is deliberation by all concerned in a spirit of calm and toleration, seeking not the good of a particular view but the peace and security of Cyprus. So, my Lords, I will say nothing more at this moment, though the time will come when, no doubt, the noble Earl, Lord Perth, and myself will have some things to say to each other. But that time is not yet, and all I want to do is wish the Governor of the Island well and beg those who have deciding voices in this matter in Cyprus to rise to heights of responsibility at a crucial moment and to discard angry passions which have grown up in the past in favour of a calm consideration of the Government's proposal.
THE MARQUESS OF SALISBURY: My Lords, I should, of course, agree with what the noble Lord has said, and of course we all should. Nobody must approach these proposals in a negative, and certainly not in a hostile, spirit. But I hope the noble Earl did not mean that we cannot ask for elucidation. It is an extremely interesting and very novel scheme, and it is most important that we understand exactly what it portends. I do not propose to ask any questions to-day, because we have only just heard
1136
the scheme and it is difficult in a few minutes to understand its full purport. I was grateful to the noble Viscount the Leader of the Opposition for suggesting that we might have a debate at an early date, and I hope that when that debate comes the Government will understand if we do ask questions for purposes of elucidation, because, after all, it is not only the Government but this House which will bear ultimate responsibility for future policy in Cyprus.
THE EARL OF HOME: My Lords, I am first of all obliged to the noble Lord, Lord Winster, who speaks with authority as a former Governor of Cyprus and whose words will carry the more weight for that. Secondly, I would say, in response to the noble Marquess, Lord Salisbury, that we will certainly have a debate, as I said to the noble Viscount the Leader of the Opposition. This is a scheme of considerable complexity and considerable significance, and it will be your Lordships' wish to ask all sorts of questions about it. So far as elucidation is concerned, I hope that the Government will not fail to face all the questions but will be able to give answers which will satisfy your Lordships on the details of the plan.
LORD RADCLIFFE: My Lords, as one who has been concerned in earlier proposals for the Constitution of Cyprus, may I take the opportunity of saying one word, and it shall be only one word, with regard to the declaration of policy that your Lordships have just heard. Your Lordships, of course, have no wish to debate it to-day, but I should like to take this opportunity of saying how much, for my own part, I welcome a list of proposals of this kind, and how ardently I hope, for the sake of Cyprus and for the sake of peace in that part of the world, that progress may be made by discussion between the parties in developing what are at this stage only outlines. These proposals, I believe, contain the essential things that are needed to cope with the tragic situation that has developed, whatever the past contained, and they have, I think, this outstanding advantage: that they explicitly invite the two countries, Greece and Turkey, who have much responsibility for the situation that has developed in Cyprus, to associate themselves with ourselves for the future in the

1137
government of this territory, and to bear their share of responsibility for developing peace and security there.
THE EARL OF HOME: My Lords, everybody knows that the noble Lord, Lord Radcliffe, has given a great deal of his time and his great talents to putting forward constructive proposals in this matter for the future of Cyprus. We were at the time and are now grateful for his work; and to have his generous support for the approach which has now been made will not only be very valuable to Her Majesty's Government but, I hope, will make everybody think very carefully about this plan and realise that it is put forward as a constructive effort to help to solve what has seemed up till now to be an almost insoluble problem.
LORD HARDING OF PETHERTON: My Lords, may I associate myself, as one who has also had some experience of Cyprus, with those Members of your Lordships' House who have urged that this plan should be considered calmly and earnestly by everyone concerned? May I go on and suggest that your Lordships should express the view that people should not take up positions on this plan until they have had time to consider it earnestly and seriously and to discuss it quietly among themselves?
THE EARL OF HOME: I am grateful to the noble and gallant Field Marshal Lord Harding of Petherton. The House has probably not had much opportunity to show their gratitude to him for all that he has done in these very difficult years, but we should like to do so. I am indeed grateful to him for the words he has said this afternoon.

THE FUTURE OF DOWNING STREET
4.0 p.m.
THE EARL OF HOME: My Lords, I have a short announcement to make on quite a different subject, the future of Downing Street.
THE EARL OF SWINTON: Does the noble Earl mean the occupant or the place?
THE EARL OF HOME: I am confident about the future of the occupant—he needs no support; but the place might. The Report of the Committee
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on the Preservation of Downing Street is being presented to Parliament as a Command Paper, and copies will be available in the Printed Paper Office this afternoon. We are most grateful to the noble Earl, Lord Crawford, and his colleagues for their labours. The Report recommends—and I wish to make it clear that the Committee were concerned only with the fabric of the building: so that answers my noble friend's question—that Nos. 10, 11 and 12 Downing Street should be given a major structural overhaul. The external appearance of the houses would, so far as possible, be retained, and rooms and features of historic importance. The Report also recommends the appointment of an independent architect to draw up plans. For this purpose my right honourable friend the Minister of Works proposes to appoint Mr. Raymond Erith.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I am obliged to the noble Leader of the House for this statement. Many noble Lords, on both sides of the House, will know enough of the shakings that the premises had during the last war to realise that probably a good deal of work requires to be done. But I am old-fashioned enough to hope that, with the reinforcement of the fabric, we shall not have too big a change in the appearance of the house, which is a great relic of the efforts which have been made to establish democracy in this country.

LOCAL GOVERNMENT AND MISCELLANEOUS FINANCIAL PROVISIONS (SCOTLAND) BILL
4.2 p.m
Debate resumed.
THE EARL OF ELGIN AND KINCARDINE: My Lords, if we may now return to the more mundane subject of local government in Scotland, in presenting the Second Reading of the Bill to your Lordships' House the Minister of State used these words [col. 1115]:
"to give local authorities increased financial independence and to encourage local authority electors to take a fresh interest in local affairs."
I think your Lordships will all agree that that is a most laudable statement, but whether we shall all agree with the noble Lord's contention that the Bill presents

1139
that case, I am not sure. If I could be assured of it, both as an individual and as Provost of the Royal Burgh of Culross, I should give the Bill my welcome. But the noble Lord is aware that there have been considerable criticisms of the Bill in many places, and there is also the feeling that it may be presenting not financial independence but financial responsibility.
Speaking as a member of the town council of a small burgh, I would say that the present system of central controls is frequently extremely aggravating and has a most devastating influence on local interest and local patriotism. But at present I do not feel that I can quite go with the noble Lord the Minister of State in saying that the Bill presents the improvement which he was inclined to attribute to it. The Bill has been definitely criticised, both by the Convention of Royal Burghs and by the County Councils Association, and in spite of the small adjustments which have been made as the result of conferences and of the long debates in another place, I still feel that the Bill is one to which we cannot give a wholehearted welcome.
It seems to me that the Government are perfectly satisfied with the position from their own point of view, as indeed they should be, because by it they establish, absolutely fixed, their contribution to the schemes of development and otherwise which they carry out jointly with the local authority. But in doing so, they are handing over to the local authorities an uncertainty which may arise from the demands, particularly of education and of the provision for technical education, which may be increasing from year to year and which, even now, stand at colossal figures. The noble Lord, Lord Greenhill, dealt with this question of joint action and the responsibility of the Government to take their proper share in this matter: and he raised, quite rightly, the point that the only assistance which local government authorities will secure from the Bill are increased receipts arising from the re-rating of industry. Surely receipts from rates ought to be in the possession of local authorities, and not of the Government; and unless local authorities do get assistance in that way, they are faced, as I have already said, with the uncertainty as to where the money is to come from for the various schemes
1140
which they have in hand and which all need constant attention. These demands cannot be avoided or neglected, and should surely be shared between the Government and the local authority concerned.
In any case, Scotland is perhaps being more harshly treated in this matter than England and Wales, which were dealt with in the Bill which was before your Lordships' House last week; because the re-rating which the noble Lord mentioned, in reply to Lord Greenhill's speech, cannot in Scotland be finished until 1960–61, and therefore the uncertainty remains much longer with us than with England and Wales. I feel, as I said at the beginning, that, while the intention may be laudable, we should like more proof that the Government are not only keen to get the Bill through but are prepared to give the local authorities a fair deal. That is the point that I want to bring before your Lordships to-day. It is one that is creating great anxiety among all local authorities in Scotland.
4.9 p.m.
THE EARL OF DUNDEE: My Lords, I do not like this Bill very much, and I think perhaps it is a little difficult for a Member of your Lordships' House who is not very enthusiastic about the Bill to decide how much or how little he ought to say, or whether indeed he ought not to choose the more excellent course of saying nothing at all. This Bill received its Second Reading in another place as long ago as December 17 last year, and it is a little sad for some of us to think that this was the last Scottish debate in which Walter Elliot made a speech. Since then, for the best part of six months this Bill has been in Committee in the other House, where it seems to have been discussed with even less than the usual brevity with which Scottish Members of that House are accustomed to express themselves. Now, if your Lordships were to do this all over again, and if your Lordships were perhaps to insert Amendments which had not been agreed to in the other House, we should then be accused of acting in an undemocratic manner and of frustrating the will of the elected representatives of the people, although on this particular occasion we might perhaps receive the support of some institutions and individuals in Scotland who are not usually at all favourable to a hereditary Chamber.

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On the other hand, if we were to let this Bill go through in complete silence, it might then be thought that Scottish Peers were neglecting a matter which is of great importance to our country, and that some of us might even have preferred the attractions of an English race meeting to the performance of our Parliamentary duties.
This Bill is supposed to confer two great benefits on the local authorities in Scotland. One is to give them much greater freedom in the management of their own affairs, which is a thing I always like to have; the other is to give them an additional £750,000 a year, which is a thing I should not particularly mind having, either. But, my Lords, the local authorities in Scotland appear to be singularly unappreciative of the bountiful generosity of the Government in this matter, and they have even circularised your Lordships asking you to regard the Bill in a most unfavourable way and to amend it out of all recognition.
I am afraid that in some respects I dislike the Bill even more than the Scottish local authorities do, because it provides for the re-rating of industry. Some local authorities are in favour of that, of course, because it would mean that every penny from the rates would produce, a good deal more revenue, but I have always thought that the rating of industrial buildings and plant is a thoroughly bad and vicious method of raising money. When industry was de-rated in 1929, I wished that it had been derated 100 per cent. instead of only 75 per cent. I deeply regret now that the rating of industry should have been raised to 50 per cent.
The collection of rates on the assessment of house property is not an entirely fair method of raising money, because it is quite possible that a millionaire, if he chooses, may live in a single room rated at £10 or £15 a year. Conversely, there are some people who are obliged by circumstances to live in houses which are far bigger than they can really afford. But if you rule out a local income tax—which is recommended by some people but which is, I think, opposed by most people for reasons which I think are good reasons—then the collection of rates on the assessment of the valuation of everybody's house is, on the whole, the
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least unfair method of raising money for local purposes.
That cannot be said for the rating of industrial buildings and plant. Imagine two people living next to each other, one of whom is a local industrialist who has spent all his life building up a business and has put all his money into extending his business. He has now got a factory employing, perhaps, 300 or 400 men. The whole of his means has been put into this business, which may be rated at £10,000 a year. If the rates are 20s. in the £, he will now be rated at £5,000. That is a direct tax on employment and a direct tax on production. It discourages employment, it discourages enterprise, and it adds to the cost of production and to the cost of our export trade. Now suppose that his neighbour has never put a penny into local industry, and suppose he has £1 million invested in Government securities from which he is receiving an income of £50,000 a year. He does not pay one penny in rates except, of course, on his house, which his neighbour does in any case. But he gets exactly the same value from local services, on which the money from the rates is spent, as his neighbour who has spent his whole fortune and means on something which is really socially useful to the community. That, my Lords, is the case against any rating of industrial buildings and plant at all. I think it is a bad and vicious method of taxation, whether local or national, and I regret it should have been raised in this Bill.
Now whether you re-rate industry or whether you do not, I think you will still be left with the fundamental problem of local authority finance, which I do not think this Bill does anything to solve. That problem is this. If you go back a hundred years, you will find that local rates at that time were raised mainly for parochial purposes—for purposes which affected the local ratepayers and not the country as a whole. At any rate they were never much more than 6d. in the £, so it did not much matter how they were assessed. The local rates now not only go up to 20s. in the £ but have to be levied mainly far purposes which are really for the nation and not for the locality, and which ought properly to be paid for by national and not by local

1143
taxation. That is the problem which you have to consider.
There are two possible solutions, and I think there is a good deal to be said for both of them. One is that you should give the local authorities not 38 per cent., as I think it is at present, of their expenses from the national exchequer, but something like 90 per cent., and to allow them to administer the services in the way they think best. What fun it would be to have to justify that to the officials of Her Majesty's Treasury! I do not know how they would take it, but it would be very interesting. However, I think it would be one possible solution. The other solution is to remove the services like education, which are really national services, from the control of the local authorities and administer them nationally in the same way as the poor law and the health services, both of which used to be run not long ago—in our own lifetime—by local authorities but which have now been transferred to national administration.
This Bill does neither of these things. It allows local authorities to collect a little more revenue than they are now collecting on their own by a thoroughly bad and undesirable method of taxation, and at the same time tries to fix, by this general grant, a contribution from the State towards these services of national importance which local authorities consider is entirely inadequate and which will always cause trouble and difficulty in reaching agreement on how those services ought to be run most efficiently in the public interest.
The late Walter Elliot, in the speech I have referred to, supported this Bill and I like to read that speech because I believe that it was so characteristic of the man. Twenty years ago, when he was Secretary of State for Scotland and I had the honour to serve with him as Under-Secretary, I remember him once saying to me: "You know, the only people in Scotland who really like me are the people to whom I can say, 'Here is a bag of money. Take it away and do what you like with it'." In his speech on the Second Reading of this Bill in another place last December, just before he died, he said something very similar, though not quite in those words. He said [OFFICIAL REPORT (Commons), Vol. 580, (No. 31), col. 314]:
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"When I was in the Administration all kinds of people with whom I was working said to me, 'For goodness' sake, give us a little money and let us go away. We will use it far better than if every penny we spend is checked and counterchecked, accounted for, scrutinised, audited and summed-up by the auditors in your Department'."
He went on to say something of which I am sorry I did not have time to give the noble Lord, Lord Boyd-Orr notice:
"I remember Lord Boyd-Orr when running the Rowett Research Institute at Bucksburn, which we all know very well, saying 'I will take half the money if I can have it in a box and not have to bother with all the checks and counterchecks that I have to go through with the Department of Agriculture.' There is something to be said for that point of view."
Mr. Walter Elliot concluded by asking another place not to reject this Bill, and I certainly do not presume to ask your Lordships to reject it. I am utterly opposed to the re-rating of industry, and if there were an Amendment to that effect in Committee I should be glad to vote for it. But as for the Bill in general, I would only say to your Lordships that this long-term problem of local authority finance will remain with us. It will grow greater, and we shall have to decide sooner or later—and I think sooner rather than later—whether we are going to give local authorities a bag of money from the Exchequer and let them do what they like with it, or whether they are going to transfer education and other important services from the administration of the local authorities to the administration of the State.
4.25 p.m.
THE DUKE OF BUCCLEUCH AND QUEENSBERRY: My Lords, as a member of a local authority for a good many years and chairman of a county council for much of that time I should like to say a few words in support of this Bill and in support of the action of Her Majesty's Government in bringing it forward. I should also like to express thanks for the confidence shown in local authorities and for the fresh encouragement which is being given to them. Affection cannot be shown for any legislation of this kind and universal acclamation cannot be expected. The Bill is, however, a natural development, carefully prepared by persons impartial and experienced, both in central and in local administration, to enable each to be carried on more easily, efficiently and economically.

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In 1929, the last occasion when a very big and necessary advance was made, the proposals were extremely unpopular. The opposition was very violent, and as a candidate for Parliament at that time I remember being strongly attacked from many directions, the election being fought on that issue with representations from education interests and teachers who forecast that I should be easily at the bottom of the poll; but the majority of the voters upheld and returned me. Though I was strongly denounced at the time as a supporter of the proposals, I remember that wiser and more experienced people quietly gave one assurances that the proposals were necessary and appropriate. During the next few years it was found that the results worked well, and although the changes were not popular they were inevitable. This time the opposition and the criticisms are much less; and although changes are unlikely to be entirely welcome, and there are reasons why they may not be fully appreciated, I have not seen or read any real arguments against them, nor any alternative methods suggested for finding the money to pay for the services.
My noble friends Lord Elgin and Lord Dundee should perhaps restrain me in my remarks and in the display of any optimism, as they have been much less optimistic, and perhaps even slightly critical. Perhaps I should have followed them, for this reason: that if one does not take that line it may be thought that local authorities are being treated too well or quite well enough. Although there are more frequent demands for more independence for local authorities and for less control by the central Government, interdependence is close and important; and I have felt that this Bill probably provides sufficient freedom and about the correct amount of independence for local authorities and of freedom from control by the central authority. If there were less control over expenditure, local authorities would often spend more than can be afforded. Pressure to spend more money is continuous, as if the money could always be provided from somewhere. Ratepayers, as well as taxpayers, pay heavily and need some protection, and I hope that nothing in this Bill will put upon them heavier burdens than they already have to bear.
The main criticisms I have heard in Scotland about the proposals are in connection
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with education and the block grant. I have a warm admiration for Scottish teachers, but I admire the determination of the educational institutes of Scotland more than I admire their arguments and forecasts. About the block grant proposal, I have not seen any facts or evidence that would justify in advance its condemnation. I find that the present Government and their predecessors did not in any way discourage or reduce expenditure upon education, and that there has been a steady advance—as much as possible, I hope, in accordance with what the nation can afford. I have one question about finance and estimates. In Clause 1 (6) which deals with the fixing of the amount of grant, there are references to grant orders being made in advance for two or three years, perhaps in the nature of general orders, and without as much certainty as would be welcome. I think it is important that councils should know as far in advance as possible the exact sums they are likely to receive.
Before concluding I should like to say that I feel that much thanks and credit are due to those who give a lot of time, often in busy lives, to local government work. Sometimes it is a few of the busiest upon whom much of the work falls, and I do not think it would be wise to give to local authorities more responsibility and duties than are already entrusted to them. I feel that the proposals in this Bill are to control not so much what different people would like to see done as the nature of the services and duties which fall upon us as representatives of local government. I feel that this measure is a genuine effort to take a correct step forward in the development and devolution of local government.
4.33 p.m.
VISCOUNT COLVILLE OF CULROSS: My Lords, I hope that your Lordships will allow me, not to follow the wide approach that has been taken by the noble Lords who have spoken before me on this Bill, but rather to speak to one narrower effect of its operation, and that is upon the salmon net fisheries around the coasts of Scotland. It may surprise your Lordships to hear that the effect of this Bill on such fisheries would be to re-rate them to 50 per cent. instead of the 25 per cent. which they at present enjoy in company with all other

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industries. I think it is important to see how salmon net fisheries came to be classed as an industry for this purpose. In 1896 agricultural lands and heritages were defined in an Act of Parliament as:
"Any lands and heritages used for agricultural or pastoral purposes only or as market gardens, orchards or allotments."
In 1926 the Rating (Scotland) Act introduced certain rating differentials between various forms of lands and heritages, and in the First Schedule to that Act various forms of these lands were devalued to different extents. Among them were agricultural lands and heritages which were devalued to 100 per cent. in all; and there were certain other exceptions to the full rating. But among those exceptions did not appear salmon fisheries, and as a result of this it was found that, as they were not mentioned in any of the exceptions, they had to be rated to the full value of 100 per cent. and were covered by the general residuary clause, Section 12 (3) of that Act. As I believe the noble Lord, Lord Strathclyde, said, in 1929 it became necessary to devalue the rating of industry, and with this devaluation the benefit also came to the salmon fisheries. They were, in fact, expressly included by a special section in that Act, which rated them as industries for this purpose. It is perhaps indicative of the doubtful position they held that it was necessary to put in a special explanatory clause making it clear that they were industries for this purpose.
If these salmon fisheries are re-valued up to 50 per cent., I hope your Lordships will allow me to point to some of the very serious consequences that this will have, and also to draw your Lordships' attention to the fact that this is a matter closely related to the Motion yesterday of the noble Earl, Lord Dundee, in that it is connected with employment in rural areas. These salmon fisheries are carried on chiefly in very rural parts of Scotland which have suffered and are continuing to suffer to a serious extent from depopulation. They are mostly small concerns—they have to be, because the rivers and estuaries in which they are carried on are small in themselves, and there is not room for a big concern to grow up in any of the places where there are salmon fisheries. I would give as an example a river
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I know very well indeed: the Beirie, in Kincardineshire.
The very smallness of these concerns is the important fact, because they are situated in parts of the coastal areas of the country all round Scotland where there are only small communities, where there are no big towns particularly close, and where communities would have to travel a very long distance to find employment if they could not be employed where they live. I can give one example on the same coast. There is a small village, a fishing village basically, called Johnshaven, where until recently there was a paper bag factory which I believe was a branch of a factory in Aberdeen. Within the last six months this factory has ceased operation. The result of that was that there was nothing whatsoever to do in Johnshaven for the people who used to work in that factory; they had to go to Montrose, the nearest big town. And gradually Johnshaven is moving to Montrose; this is the result of taking away the only industry there was in Johnshaven. This is going to happen over a very wide extent if the only industry in certain small communities is taken away and that industry is the salmon net fisheries.
There is one other point: it is a rural occupation and it fits in particularly well with the rest of the agricultural picture. The off season of agriculture happens to be the highest period of employment in the salmon fisheries, while, conversely, during the close season of the salmon fisheries agriculture requires peak employment, and therefore it is very useful for agricultural workers to have an alternative form of employment when they are not actually wanted on the farms. The stations are already closing down. One closed down very recently at Gourdon, on the same part of the coast, with which I am familiar. This re-rating will strike a death blow at the rest of them, and although it may not seem that the re-rating of this particular form of industry in itself is going to mean a great deal of money—that is quite true from the point of view of what rates will accrue from it—from the point of view of the people who are carrying on these concerns it will mean the whole difference between continuance and closure. Her Majesty's Government cannot think that the rating difference between 25 per cent.

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and 50 per cent. on salmon fisheries is really going to help very much in the overall picture. Do they think that that is more important than the depopulation of these rural areas?
The point of my legal analysis of all that has happened is this. The whole reason why the salmon net fisheries are classed as industries is the definition in the 1896 Act. When it came to the 1926 Act, which rated all lands and heritages, salmon fisheries were not involved at all, but as they were not mentioned directly they had to become a residual industry and so accept the 100 per cent. rating. Naturally they were delighted to have a 75 per cent. reduction in 1929, but to the argument that they were pleased to be regarded as an industry in 1929 I would point out that they would have been far more pleased to have been classed as agricultural land or a heritage, because in that case they would have received not a 75 per cent. but a 100 per cent. reduction—the more so under the 1926 Act, under which they would not have been rated at all. Cannot Her Majesty's Government take this opportunity of putting this matter right? In Scotland, as in England, fisheries are associated with agriculture. Could not these fisheries also join their fellows in that general department?
4.42 p.m.
LORD LOVAT: My Lords, I should like to congratulate my noble friend Lord Colville of Culross on what he has said, and I would follow his footsteps in emphasising in lesser degree the points which he has raised. I would refer particularly to the new form of rating which the Under-Secretary of State in another place suggested should be levied on salmon fisheries. I simply cannot comprehend how, in any way of thinking, an occupation as hazardous as the salmon net fishing industry on the bleak coastline of North Britain can be considered as an industry in any shape or form. As my noble friend has already pointed out, it should be looked upon as part of the agricultural working plan. As salmon fishers, we are producing a food. That food is not snatched from the sea without a great deal of hard work, not only in the final phase but also in producing the grown salmon.
It is common knowledge to all owners of salmon rivers that they cannot extract
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fish without putting fish back into the water. I am the owner of a small river in the North of Scotland, the Beauly, and I have spent a great deal of money in building hatcheries. The salmon are caught, the spawn is extracted from them and put in the hatcheries, the baby salmon, the salmon fry, are hatched out and put back in the river. All the time the river has to be closely protected from two-legged and four-legged and web-footed "enemy agents". And all that time the salmon are treated like a farm crop. They are nursed and protected through every stage of development until they return as fully grown fish five years later, when the coast nets have a chance of catching them, whilst those that survive are caught on rod and line, no doubt a method which your Lordships approve of much more than the idea of hauling them out by net and sending them down to feed London's large stomach.
If these salmon stations go out of production, there will be no question at all that salmon will be much scarcer and not more numerous. There will be a great deal of inshore poaching, which to-day is largely prevented by the activities of those employed in the netting stations, who take good care that there is no interference which would play havoc with their livelihood. I should like to tell your Lordships—I do not think it is any secret—of the netting company to which I belong, the Moray Firth Salmon Fisheries, which employs 190 men, who are all crofters. They are the best type of men we can breed in the Highlands. They have seasonal work in the fisheries as well as on the land, without which they would certainly drift into the towns or move south and be lost to the Highlands. If my noble friend Lord Strathclyde was in any way sincere, and I am sure he was, when we had the debate on Scottish unemployment yesterday, I feel sure that he would be the last person to wish to see an industry closing down which has splendid people looking after it.
This small company of which I am a director lost a good deal of money last year. Its wages bill runs to £25,000. How are we going to begin to face the future when the prices of materials and wages are mounting all the time (nets are a very expensive item) and when the price of salmon is falling—and it will fall still further? It means that we are going

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to have no netting stations working in Scotland and have the English fish markets flooded with Japanese salmon or fish imported from other countries. I hope that my noble friend Lord Strathclyde will reconsider a decision which was taken in a hurry and which, I feel there is no harm in my saying, was taken without an opportunity for full discussion. A hasty conference was held at St. Andrew's House, Edinburgh, but the netting representatives had hardly time to marshal their facts or attend.
LORD FORBES: My Lords, I would give my full support to what has already been said about salmon fishing in Scotland. If these fisheries are re-rated, it will merely mean that another depopulation nail has been driven into the coffin of the Highlands and the more remote areas in Scotland.
LORD SALTOUN: My Lords, before the noble Lord replies, I should like to say one thing: that is, that all my life (it is getting rather long now, I am afraid) I have heard complaints of the rating system in Scotland in precisely the same terms as those used by the noble Earl, Lord Dundee, a few minutes ago. I feel that the re-rating of industry is a backward step, unless it can be justified by Her Majesty's Government in much more convincing terms than I have heard.
THE MARQUESS OF ABERDEEN AND TEMAIR: My Lords, I should like to say that every speech made this afternoon has my sincere support, because all that has been said is as true as can be. I think that we ought to help Scotland the best we can and make things more easy for those who really support the welfare of Scotland.
4.50 p.m.
LORD STRATHCLYDE: My Lords, we have had a number of very interesting speeches in the course of this debate and I will endeavour to the best of my ability to reply to the points that were made. The noble Lord, Lord Greenhill, spoke of the difference between the Bill which we are discussing this afternoon and that which your Lordships discussed on Second Reading a week ago applicable to England. The noble Lord pointed out that the English Bill dealt with local government reorganisation. I would say to the noble Lord that, so far as I have
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been able to discover, there is no great enthusiasm among local authorities in Scotland to-day for a reorganisation of the present system; at any rate, if such enthusiasm exists, I have been unable to find it.
The noble Lord asked why, in spite of all the explanations that have been given, public anxiety still exists. But I do not know that it does. It certainly should not exist, I suggest, in the mind of any fair-minded person who has read and studied Clause 2 of the Bill. As I said in my opening remarks, surely no Government could give a fairer explanation of what they intend to do. I cannot understand how it can be said that this Bill tightens rather than loosens control.
Several noble Lords, including the noble Lord, Lord Greenhill, and the noble Earls, Lord Elgin and Lord Dundee, have spoken on the subject of re-rating. I thought that the noble Earl, Lord Dundee, really answered the other speeches made on the subject. After all, one has to consider not only the ratepayer but the taxpayer also: we have to try to hold the balance fairly between the two. If industry has to be re-rated, then surely the taxpayer should get some relief, as in fact he will under the Bill. For, as I said, half of the total sum that will accrue as the result of re-rating will go to the Exchequer to recompense the Exchequer for the tax lost in consequence of this re-rating. That is also the answer to the question of the noble Lord, Lord Greenhill, about why the local authorities will get only part of the total that will accrue as a result of re-rating.
The noble Lord, Lord Greenhill, spoke also about industry being re-rated to 100 per cent., which he considered would be just. He said that the local authorities have to provide services for industry, and therefore they should be re-rated to 100 per cent. That, of course, is not strictly correct. After all, industry does not benefit very much from the education rate; and there are other matters. too. that perhaps will occur to the minds of noble Lords. What puzzles me about anyone who has taken such an active part in local government as the noble Lord, Lord Greenhill, has, is how he can have anxiety about the future of education because of this general grant. It would

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seem to me that anyone expressing that view can have little real trust in the local education authorities, because, after all, the ball is at their feet; the money is there, and they can use it is they will. If the noble Lord feels doubts as to the future of education, it can only be because he fears that the local education authorities will not put the money given to them to the purpose of education to the extent they have done hitherto.
LORD GREENHILL: I always hesitate to interrupt a speaker when he is summing up a debate, and I certainly will not say anything which will introduce new argument or elaborate something that I have already said. However, I think the anxiety of those interested in education should be made clear. They feel not only that education as a service may suffer, but that in these times, when we all admit that inflation is part of the increased total of cost, the danger is that if the Government alone are to determine the amount then the scope of education will suffer. The Government's answer, I confess, is a reasonable one, because they determine standards and they control the rate of development. The criticism is that the local authorities want to be able to exercise that function and that right on their own, and not have to depend wholly, as they will, on the good will of any Government which happens to be in power.
LORD STRATHCLYDE: I thank the noble Lord for that explanation, but I do not quite follow it, in view of what I said in my opening remarks about the matters that would be taken into consideration in arriving at the total sum of the general grant. It may be that I have some little sympathy with the noble Lord when he speaks of the desirability of a change to ad hoc education committees.
LORD GREENHILL: I am glad to hear it.
LORD STRATHCLYDE: Perhaps more than that I had better not say. It may also be an interesting speculation whether local authorities would really welcome a reduction in their numbers. I must confess that when the noble Earl, Lord Elgin, spoke, I felt that he was a little half-hearted in his praise of the Bill; and indeed, he confirmed that later in his remarks. I do not know what
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more proof we can give than is contained in the Bill itself, arid in the White Papers the Government have issued, about our extreme desire to give local authorities the fairest possible deal we can. That has been our wish and our intention, and I hope that the noble Earl, after considering the matter further, may feel that we have at least gone some little way towards securing that.
I think the noble Earl, Lord Dundee, is quite correct in saying that the local authorities are unappreciative of the Government's generosity, but I have never known them to be wholly satisfied where the question of money is concerned. I realise his anxiety in relation to the re-rating of industry. I believe that if we can take a middle course between the views expressed by the noble Lord, Lord Greenhill, and those expressed by the noble Earl, Lord Dundee, the Government may come out at about centre, and at the end of the day it may be felt, as I suggested earlier on, that they have arrived at the right total. I agree that the problem of local authority finance is one very difficult of solution and one that is likely to remain with us for a considerable time.
I sincerely thank the noble Duke, the Duke of Buccleuch and Queensberry, for the generous terms in which he spoke in support of the Bill. It was rather heartening that one Member of your Lordships' House, at least, should give the Government such support. I feel that the analogy which he gave between 1929 and 1958 may well prove to be correct, and that at the end of the day this Bill will be found to be of real benefit to the local authorities and, therefore, to local government throughout our country. The noble Duke asked me a question which is of considerable importance to local authorities, and I will endeavour, so far as I can, to make the situation a little clearer than I left it earlier on.
The point I want to make is how and when each local authority will know the amount of general grant it is to receive each year; and that obviously is of importance to local authorities. General grant orders, as I tried to explain earlier, will be made in advance for periods of two or three years, and they will be laid before another place for approval. But orders will not specify the sums payable

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to individual authorities. It will not be possible to do that until the total amount of the grant has been approved. I can tell your Lordships that I hope that the first order will be made in December next, and will be debated either in that month or in January, 1959.
LORD GREENHILL: Will the order be debated in your Lordships House?
LORD STRATHCLYDE: No, it is a matter for the other place, dealing with money. After approval of the order it will be possible to proceed with the calculation of the effect on each authority. This involves making the necessary adjustments provided for in the Third Schedule to the Bill and working out the distribution on the basis of the Second Schedule; estimating the additional rateable value arising from the partial re-rating of industry, estimating the effect of the changes on the equalisation grant; and, finally, calculating the transitional arrangements. Obviously, these calculations will take some time, but so far as can be foreseen at this moment we should be able to give the local authorities by the end of February, at the latest, the first estimate of the general grant they will receive. That will still be some two and a half months before the beginning of the local government financial year. It will not be possible to give local authorities at the same time the same details for the second year of the grant period, although as the aggregate amount of the grant for that year will be known the local authorities will have a broad indication of how they will fare. The reasons why we cannot make the detailed calculation for the second year in advance are that different figures of population and schoolchildren have to be used each year and that the Third Schedule adjustments will also differ from year to year.
I should like to join with the noble Duke in the tribute of appreciation which he gave to those who give so much of their time and energy to the service of our country in local government. I said in reply to the noble Lord, Lord Greenhill, a moment ago that we should not
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have an opportunity of debating the general grant orders, but on the other hand, as I pointed out earlier, the House will be able to debate the White Paper which is presented with the order if they so wish.
My Lords, we had two very interesting speeches from the noble Lords, Lord Colville of Culross and Lord Lovat. I would assure them that the Government's earnest desire is to maintain the population in our rural areas, and we are doing all we can to that end. I hope, therefore, that re-rating will not, as they say, strike a deadly blow at our salmon fisheries. In that connection I would say to the House that the history of this matter is somewhat complicated, but for most rates levied before 1929 salmon fisheries received no relief and were not associated with agriculture for rating purposes. De-rating to 25 per cent., on the same basis as industry, was introduced for the first time in 1929. There is no similar de-rating for salmon net fisheries in England and Wales, although I admit that the positions in the two countries are not entirely comparable. Under the Bill the rateable value of salmon fisheries, like that of other industrial subjects, will be doubled. The Government have considered very carefully the representations made on behalf of the salmon net fisheries, that their liability to rates should not be increased but should even be reduced, but I regret to inform your Lordships that they have not felt that any sufficiently substantial case has been made out for making special provision in the Bill for salmon fisheries. Having said that, I would add this to the noble Lord, Lord Lovat. He spoke about hurried consultations and being unable to get together all the relevant facts. If the noble Lord has other information which he would like to put forward, I shall be very glad to consider it. I thank all noble Lords who have taken part in the debate for the helpful contributions they have made.
On Question, Bill read 2a and committed to a Committee of the Whole House.

MERCHANT SHIPPING (LIABILITY OF SHIPOWNERS AND OTHERS) BILL
5.5 p.m.
Order of the Day for the Second Reading read.
VISCOUNT STONEHAVEN: My Lords, I rise to ask your Lordships to give this modest and, I hope you will agree, useful Bill a Second Reading. During its passage through another place it was usefully amended and its scope increased. As the law stands at the moment the liability for damages of owners and demise charterers of ships is limited to £15 per ton for loss of life, personal injury and damage to property, and to £8 per ton in cases where there is no loss of life or personal injury. The limits were set down by Statute in 1862 and re-enacted in the Merchant Shipping Act of 1894. This Bill replaces the limits of £15 and £8 by limits of 3,100 gold francs and 1,000 gold francs respectively. Where the tonnage of the vessel which was responsible for the accident giving rise to the liability for damage is less than 300 tons and the claim is in respect of loss of life or personal injury, the limit of liability is to be calculated as if the tonnage were 300 tons. The Bill also provides for the conversion of amounts calculated in gold francs into pounds sterling in accordance with a rate to be specified by statutory instrument. International agreement on these limits of liability was reached in the International Convention relating to the limitation of the liability of owners of seagoing ships (Cmnd. 353) which was signed by Her Majesty's Government on behalf of the United Kingdom on October 10, 1957.
The apparently unsatisfactory state of affairs under the present law has prevailed for some 90 years or more and has resulted in great hardship for the relatives of deceased seamen and many others who happen to have been killed in accidents and have come under the limitation clause. However, it is one thing to condemn a state of affairs; it is a very different thing to rectify it. I am no lawyer; I have no legal qualifications at all; but I hope your Lordships will forgive me if I say that the legal complications and complexities in this subject are enormous. I also hope your Lordships will forgive me if I leave it to my noble
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friend Lord Merriman to enlarge upon the vast amount of work that was necessary before this Bill could be drafted. It would be impertinent for me to congratulate those concerned, but I am sure he would like to say a word on that line; I will not endeavour to do so at all, because I am not qualified in any way to do so.
May I give your Lordships a few illustrations of how the existing law has operated in recent times? Presumably, many cases were settled on limitation figures without ever going to the courts because the limitation clause is well known. I can only assume that, but I believe it to be the case. As to the cases which went to the courts—when people felt that they had such a case that, limitation or no, something might happen—the figures for the period 1950–56 (which to the best of my knowledge are accurate), are as follows: the claims proved and allowed by the Courts total £1,918,000—practically £2 million—but owing to the limitation the amounts actually paid out to the unfortunate people who have suffered were only £396,000.
Totals and averages often hide as much as they disclose, and I will go on to the 1957 figures which are more detailed and are really most startling. Of the 47 proved claims totalling £163,076, the benefit that was handed out had to be cut down to £30,442; nine claims agreed at £42,876 had to be cut to £3,684, and three claims agreed at £11,478 were cut to £723. These figures are taken from the OFFICIAL REPORT (Commons) of March 25, 1958, at column 32. That is my authority, and I believe it to be accurate; the figures have not been challenged.
My Lords, I hope that I have shown by that short statement that cases of great hardship may arise, and indeed have arisen, and also that when a small vessel is concerned the situation can be really desperate; and I hope that the amendment calculating the limit of liability as if the ship was at least 300 tons will go a long way towards putting that aspect right. I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Viscount Stonehaven.)
5.12 p.m.
THE MINISTER WITHOUT PORTFOLIO (LORD MANCROFT): My Lords, this is a Private Member's Bill but it

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is, as I think your Lordships will agree, an unusually important Private Member's Bill, and the Government reaction to it is also a little unusual. Perhaps I may be allowed to explain briefly the course which I am going to suggest your Lordships may see fit to adopt. As introduced in another place, the Bill sought to give effect to one of the provisions of the International Convention drawn up in Brussels last year on the limitation of shipowners' liability. This particular provision, as my noble friend Lord Stone-haven has explained, raised the monetary sum, based upon the tonnage of the ship, at which shipowners could limit their liability, provided they were not themselves guilty of actual fault or privity.
The Government welcomed this initiative because the sums laid down in the 1894 Merchant Shipping Act had been widely recognised as out of date. But the Government thought it a pity that the legislation which the honourable Member for Mid-Ulster proposed should be confined to this one provision of the Convention when Her Majesty's Government had strongly supported the Convention as a whole. We therefore announced in another place our intention of adding to this Bill so that it would give effect to all the provisions of the Convention. This would not only bring up to date our own law, which is now seriously out of date, but would also enable Her Majesty's Government to ratify the Convention with the minimum of delay. By doing so, we hope to encourage other Governments to ratify this Convention.
This is particularly desirable since the Convention represents, for the first time, international agreement in a difficult and complex field of maritime law which has been in a state of disorder and uncertainty for the best, or worst, part of a century. Furthermore, the agreement is based on the British system of limits which are calculated upon the tonnage of the ship rather than upon the Continental system of limits calculated upon the value of the ship. At the same time we should like to take the opportunity of tidying up one or two additional points in our law on limitation of liability which are not covered by the Convention.
The limitations imposed by the Long Title of Lord Stonehaven's Bill restricted the scope of the Amendments which
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could be moved in another place, but my honourable friend the Parliamentary Secretary explained during the Second Reading debate there that we hoped to be able to make good those deficiencies during the passage of the Bill through your Lordships' House. The Bill in the form now before your Lordships already incorporates one of the most important amendments needed—namely, the 300-ton minimum tonnage provision to which my noble friend has referred. This ensures that, even with the smallest vessels, an adequate sum will be available out of which death and personal injury claims can be met.
It also contains the safeguard that the ordinary monetary rates per ton of the ship's tonnage are expressed in what are rather charmingly known as notional gold francs of specific weight and fineness. This device was adopted in the Convention, and consequently in the Bill, to give some degree of protection against a decline in the real value of the monetary rates through inflation. Such a decline has been one of the most unfortunate aspects of the existing law, in that the monetary limits, in pounds sterling, have remained unchanged since 1862.
I propose to put down the remaining Amendments needed to give full effect to the Convention before the Bill is considered in Committee. In view of these rather unusual circumstances, may I indicate very briefly some of the more important of the Government's proposals? One will extend the categories of persons entitled to limit their liability so that anyone who is in possession of the ship, and thereby liable to the same risks as the shipowner, should be able to limit his liability in the same way as the shipowner would be able to in the same circumstances. This goes a little way beyond the Convention, but it is, I think, a reasonable extension.
Another provision which I shall ask your Lordships to insert in the Bill will allow limitation of liability in respect of death and personal injury on shore. As your Lordships know, limitation is already allowed for damage to property on shore, and the opportunity is being taken to repair this omission. I think we should also make some provision for the release of a ship, or of bail put up if the ship has already been arrested or

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satisfactory security has been given elsewhere and is actually available for the benefit of British claimants. The object of this provision is to avoid the great inconvenience attaching to repeated arrest of ships or requirement of security for the same incident.
Finally, my Lords, I shall suggest an Amendment permitting limitation of liability for the costs of wreck removal. At present, if I understand aright, most harbour authorities can recover these costs, in full, from the shipowner concerned. My Amendment will propose that this provision should not come into force until an appointed day, in order to provide time for a scheme to be worked out with the agreement of the harbour authorities and the shipowners by which the harbour authorities may be compensated for any loss sustained because of the prevision.
We have, of course, held consultations with the many outside interests likely to be affected by the amended Bill, including, in particular, with shipowners, covering ocean-going ships, fishing vessels, tugs, barges and other smaller craft; and also with the trade unions, shipbuilders, dock and harbour authorities. These consultations have now been completed, and I should like to express the Government's gratitude to the bodies concerned for their co-operation in this legislation. It is not only highly desirable for its own sake but also marks a further important step towards international agreement in maritime law. I hope, therefore, that your Lordships will support the Bill of my noble friend, Lord Stonehaven, on its Second Reading and, in due course, the important Amendments which I shall ask your Lordships to make to it in Committee.
5.20 p.m.
LORD WINSTER: My Lords, I think I should explain, as a personal matter, that my interest in this Bill arises from the fact that I am President of the Association which looks after the interests of officers of the Merchant Navy. In consequence of that, of course, I have had this matter constantly brought to my notice in the course of the last few years. The Bill has already been much improved by Amendments made during its passage through another place, and the remarks of the noble Lord, Lord Mancroft, indicate that we may expect further improvement
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while it is passing through your Lordships' House.
I think the necessity for the Bill can be illustrated if I make a comment upon the last figures mentioned by the noble Viscount, Lord Stonehaven, when he was introducing the Bill—the three cases where compensation amounting to over £11,000 was granted but was scaled down to £723. The effect of that was that the innocent parties got 6 per cent. while the wrongdoers got away with 94 per cent. I think those figures alone indicate the necessity for this Bill. The old figures of compensation which have prevailed for 100 years were most unjust. That is an injustice which is now being remedied by this Bill which, in my opinion, marks a milestone in the affairs of the Merchant Navy. It will help the crews of both large and small ships. It is the first time that the minimum tonnage has been laid down in a Bill regarding owners' liability to compensation. I am very glad to say that the noble Viscount, Lord Simon, is to speak later on, and I feel sure that we shall hear from him that shipowners welcome the Bill. That is my information, and I hope that I am not putting too wide an interpretation into the mouths of shipowners.
When compensation is limited on a basis of tonnage, it is of course very difficult for the crews of trawlers and fishing vessels to receive just compensation after accidents. Under this Bill the financial limits for personal and property claims are raised. Of the unions concerned, I can answer for the association that looks after officers, but my information is that the National Union of Seamen—which is the Union that looks after the interests of the seamen—is also quite satisfied with the Bill. I should perhaps have reminded your Lordships of a fact of which probably most of you are well aware: that physical damage caused by collision is covered by insurance by one set of underwriters or another, but loss of life or personal injury is not so covered at present. A member of the crew is not so covered, and hardship to his widow or children may, of course, result. This Bill will help such dependants at a very cruel time in their lives, and the provisions regarding liabilities in respect of death or injury to merchant seamen have undoubtedly long been out of date.
This legislation, as has been stated, stems from the Brussels Convention,

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which was adopted in October, 1957, some provisions of which were most important. It states (and these are the actual words) that the provisions of the Convention should apply:
"To the Master, members of the crew and other servants of the owner, charterer, manager or operator acting in the course of their employment."
The Convention adds:
"… such persons may limit their liability even if the occurrence which gives rise to the claims resulted from the actual fault or privity of one or more of such persons."
Those are two most important provisions. The Convention also provides that the limit of liability of shipowners in respect of personal claims is raised to the equivalent, in our currency, of £74 (for the 3,100 gold francs mentioned may be taken as the equivalent of f74) per ton of the ship's tonnage.
Another important point in the Convention is that limitation of liability shall not apply—and here again I am reading the actual words—to:
"claims by the master, by members of the crew, by any servants of the owners on board the ship or by servants of the owner whose duties are connected with the ship, including the claims of their heirs, personal representatives or dependants, if under the law governing the contract of service between the owner and such servants the owner is not entitled to limit his liability in respect of such claims or if he is by such law only permitted to limit his liability to an amount greater than that provided for in Article 3 of this Convention."
If those words are studied, it will be seen that, as I have said, that is a very important point in the Convention.
The improvements in the legislation were undoubtedly overdue as, under the provisions of the Merchant Shipping Act, owners could limit their liability to £15 per net registered ton—an absurd sum. That legislation dated back to 1894, and had long ago become outmoded owing to the change in value of money. Another very important change is the insertion of a tonnage limit of 300 tons. It follows that owners of ships of less than 300 tons can now limit their liability only on that minimum tonnage based on the new financial provisions. It may well have been that our Government would have preferred, and would probably have received support from the shipping industry for, a higher tonnage limit of 500 tons, instead of 300 tons, but I gather that the
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Government could not obtain sufficient support for this at the time when the Convention was adopted, and so had to remain satisfied with the 300 tons.
I should also like to point out that neither the officers' union nor the seamen's union has ever been adversely affected by owners claiming limitation of liability. That is probably due to the excellent industrial relations which, in the main, prevail between the seafarers' organisations and the shipowners—a matter to which I have paid tribute before, when dealing with Merchant Navy matters, and to which I am happy to pay tribute again in connection with this legislation.
My Lords, the new provisions may not give all that seafarers think desirable—of course, people in every walk of life would always have more—but they represent a distinct improvement on what previously obtained. It has been represented to the Ministry by those speaking on behalf of the officers and men of the Merchant Navy that in principle we are opposed to limitation of liability as applied to crew members. The Convention, however, is silent on that point, and I should not want to raise the point at any stage in the proceedings on the Bill, because I want the Bill to have a smooth passage. The seafarers' representatives can press that point on other appropriate occasions, and if this were done successfully amending legislation could be introduced to cover the question without in any way conflicting with the Brussels Convention or the obligations imposed by Britain's acceptance of that Convention. But in fact the disability of not limiting legislation so far as seafarers are concerned can be dealt with through the National Maritime Board, and if agreement can be reached there it will obviate the need for any amending legislation.
In any case, however, I regard this Bill, much as I welcome it. as a temporary measure which will one day be repealed and incorporated in a comprehensive measure. With those remarks, it only remains for me to say that I congratulate Her Majesty's Government on a Bill which, to my mind, is entirely in keeping with our tradition as a leading maritime nation and in harmony with the good treatment of the employees in the shipping industry which now prevails.
5.31 p.m.
VISCOUNT SIMON: My Lords, I should like briefly to welcome this Bill and commend it to your Lordships. I do that the more readily after hearing what my noble friend Lord Mancroft had to say about the attitude of Her Majesty's Government towards the Bill and what they propose to do. I am afraid I am not in a position to do as the noble Lord, Lord Winster, suggested—to tell your Lordships that this Bill has the approval of the shipping industry. Though I am not authorised to say that, believe, as a matter of fact, that it has. I believe we shall all be agreed that if the limits fixed in 1862 were right then, they must be wrong now, and that it is high time that they were raised. It is worth remembering that the movement to get these limits raised started very much in the shipping industry itself, among people who are concerned with it. I know, as a fact, that the shipping industry played a great part in getting these new limits agreed in the Convention, primarily at the Conference in Madrid and finally at the Diplomatic Conference in Brussels last year.
I believe it is important that we should endeavour to make this a matter of international understanding, and that is why I am so pleased to know that these Amendments are to be moved, to bring the Bill in line with the Brussels Convention and so enable Her Majesty's Government to ratify it without delay. I say that not just because in these days it is always nice to get international agreement on one of the few matters on which we seem to get international agreement, but because there is real value to the people concerned in having the law on these matters brought into line in the principal maritime countries.
Looking at this from the point of view of the claimant or the defendant, we want to avoid the position which I believe has arisen in the past where a claimant is busily trying to find if he can bring a suit in a court where the limits are as high as possible, and the defendant is doing his best to get himself out of the jurisdiction of that court and place himself solely in the jurisdiction of one which provides for lower limits. That is a very unsatisfactory state of affairs; but, quite apart from that, people like to know where they are and what they are about, and I am sure it will be of immense
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value if we can get international agreement and implement it.
As my noble friend Lord Mancroft pointed out, we believe that one of the great advantages of the Brussels Convention is that, as a result of the efforts of the British delegation, some of our friends were persuaded to abandon their principle of limitation by relation to the value of the ship and to adopt the British system of limitation by reference to tonnage. It is easy for your Lordships to see that if we have a limitation by reference to the value of the ship, then the owner of an old "tub" which is very badly maintained and which, one might think, was more likely to be the cause of an accident than an up-to-date and well-found ship, will have a lower limit of liability than the owner of the new, up-to-date ship. I am sure that that is a very bad arrangement.
I feel we can congratulate ourselves that in the Brussels Convention the British system of measuring the limitation by the tonnage of the ship was adopted. The addition of this special provision, incorporated in the Bill, by which the minimum limitation is related to a tonnage of 300 tons is again very valuable. I believe I am right in saying that in the Convention today the 300-ton platform applies both to personal injury and death claims, and to claims for damage; whereas in the Bill it has been applied only to personal injury and death claims. I imagine that among the Amendments which will be brought forward on the Committee stage there will be one to bring the Bill into line with the Convention in that respect.
The advantages of the Bill have been very well expressed already by the noble Viscount, Lord Stonehaven, when he introduced it, and by other speakers, and I do not want to say any more except that I hope your Lordships will give it a Second Reading and, when it comes to Committee, will agree to those Amendments which will bring it into line with the Convention. That will enable Her Majesty's Government to implement the Convention; and seeing that we are still, I am happy to say, the leading maritime nation of the world I am quite sure that our lead will encourage others to do the same, so that we may hope to get the Convention widely ratified. The Convention was in fact approved by

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twenty-two nations, including half a dozen of the most important maritime nations, and although I have to admit that the United States of America, for one, felt unable to vote for it, they did not vote against it. If there is general agreement we might even get the United States of America to join. I beg to support the proposal that we give this Bill a Second Reading.
5.37 p.m.
LORD MERRIMAN: My Lords, I am conscious that I have been intervening rather frequently lately in your Lordships' debates, but mostly—in fact entirely—with reference to the matrimonial aspect of the jurisdiction of the Division over which I have the honour to preside. But, as its name implies, we in that Division have to be versatile and accustomed to deal with the vagaries of the unpredictable "she"—whether the female concerned happens to be a wife or a ship; and we are now dealing with the Admiralty branch of my jurisdiction.
I do not propose to accept the invitation of the noble Viscount, Lord Stonehaven, to speak about the Amendments on which the noble Lord, Lord Mancroft, has spoken and with which I am familiar, having been to some extent consulted about them. I propose to speak solely on the main purpose of the Bill, and from two points of view: one, the hardship, about which I will say something in a moment, and the other a point which has not been mentioned—that is, the prestige of the Admiralty Court in foreign countries. There is no disguising the fact, which is perfectly well known, that the work in the Admiralty Court has been steadily decreasing for years. To a very large extent that is due to the transfer of the salvage work from that Court to arbitration. That is entirely irrelevant to our present purpose, and I want to eliminate that altogether from my remarks.
But doing the best I can, I have ascertained that some twenty-five years ago the collision cases, with which we are really dealing, took about ninety court days a year, whereas now they do not take as many as sixty court days a year. That is a very serious diminution in the business. Many causes have been suggested for this drop in the work, but there is one thing on which everybody I
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have consulted—Judges, members of the Admiralty Bar and my own officers—are agreed; and that is that this out-of-date limitation is at any rate one of the most serious causes of the drop in the work. I am going to suggest that the irresistible inference is that it is having the effect of depriving us of the pride which the Admiralty Court at one time enjoyed, in that it was quite commonly the resort not merely of an Englishman and a foreigner but of two foreigners. I have ascertained that it is becoming, and during the last year has increasingly become, the habit of foreign shipowners, when there is any suggestion of litigation in the Admiralty Court, to insist upon the substitution of their own limitation (which, as Lord Mancroft has pointed out, is, generally speaking, in many foreign countries based on the value of the ship) for our out-of-date limitation of so much per ton. I suggest that the irresistible inference is that unless, in some way or another, we are prepared to get rid, for a particular case, of our own limitation laws, the foreign shippers will not come to our courts. Therefore, I put the prestige of the Admiralty Court in the forefront of my reasons for supporting this Bill.
A great deal has been said on the subject of hardship. I expected hardly to add anything to the figures that have already been given, but, after all, the proof of the pudding is in the eating. I have recently, within the last year, tried a limitation action, and I think it may be of interest to your Lordships to know something about the way that that has worked out, because it is, as I think your Lordships will agree, a perfect illustration of the wrongness of the present system and also a perfect illustration of what this Bill will do to remedy it. The noble Lord, Lord Winster, mentioned particularly the question of trawlers. This action concerned a most lamentable casualty to a trawler. I am not going into the detail, of course, but what happened was that the ordinary, common, everyday accident occurred, and the trawler caught fast on the bottom of the sea. In the process of adopting the usual remedy of trying to get her head round and going to pick up the trawl from where it was held fast on the bed of the sea, unfortunately, owing to a mistake, for which liability was accepted by the owners, the ship was held with the winches jammed, and the warps out to the trawl bar tight, in such

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a way that she was shipping sea after sea. In less than ten minutes she went under on her beam end, with the loss, unhappily, of five valuable lives on board, while another one of the crew who was rescued died in hospital.
I had to try the limitation action. The liability to the widows and infants had been accepted, because it was admitted that there had been negligence. But as the noble Lord, Lord Mancroft, pointed out, in a limitation action it is, of course, necessary for the owners to prove—the burden is on them to prove—no actual fault or privity. That means that they have to prove they sent out a vessel which was seaworthy in every sense; that she was properly equipped. If she was not properly equipped she was not seaworthy; but she might be fully equipped yet nevertheless unseaworthy if sufficient instruction had not been given to those in charge of her about the equipment which had lately been put into her. In this limitation action both points were taken against the owners.
I am not going to bore your Lordships with the details, but after an investigation lasting several days I held that the owners had abundantly proved that there was no fault or privity on their part. There was no appeal, and I have not in fact heard any criticism of that particular decision. Therefore the matter came to the practical result of the limitation. The tonnage of the trawler was 227. There was no complication about any other claimants than the dependants for the £15. It all went to them. There were three widows, one of whom had five infant children, and there were two other infants: ten in all. Their claims were allowed at the sum of £23,350. I will give your Lordships just one instance. The claims of the woman who had five children and of the children themselves together come to £10,000; the amount they actually received was £1,693. The total fund was just £5 under £4,000, as against the £23,000-odd for which the claims were allowed. And may I just say, in parenthesis, that it is a very distressing thing for the Registrar in a case like that to have to assess claims on what he knows to be the just basis, with the absolute certainty that some pittance like that which I have mentioned will in fact be the result.
That is a particular case that has occurred within the last few months.
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How would it have worked out if this Bill had been in force at the time? As the noble Lord, Lord Winster, has pointed out, the liability limitation would have been raised from 227 tons to the minimum of 300 tons; the £15 would be raised, roughly speaking, to £74—speaking in round figures, five times as much; and these people, against their claim for £23,000-odd, would have received £22,200, instead of the miserable pittance which in fact they received. I think I have said enough to make clear that the Court would welcome this Bill as a belated step in the right direction.
5.48 p.m.
LORD SALTOUN: My Lords, my interest in this Bill, which I warmly welcome and which I have long been hoping for, is more of an inland interest. But I think I should make it clear to your Lordships that my interest occurred in that I married a lady who happens to own a property on the bank of the River Thames at Twickenham. The property is built on a hill fifty or sixty yards from the water—an ancient monument of which one portion is a kind of summerhouse or river room on the edge of the Thames, and there is a concrete block which extends down some five or six feet behind a strong concrete river wall about fifteen inches in thickness.
One night I happened to be sitting in this house when the whole house shook as if it had been bombed. I rushed out, but it was dark and there was a heavy fog and I saw nothing. But when I came to make an examination, I found that this river room had been completely wrecked, and it was extremely fortunate that the house did not fall also. By good fortune I was able to find out the tug that had done the damage and asked the owner for damages. Of course, he limited his claim under the Merchant Shipping Act to £8 a ton. We got £100 to £200 for damage which took the best part of £1,000 to repair No sooner had the repairs been done when, a year later, in another fog, there was another crash and the same thing happened. This time I was able to get out, and I discovered that the boat that had done the damage was stranded on the other side of the Thames. It was in heavy fog, however, and I never found it.
If a collision occurs at sea, even providing the boats separate, it is possible to

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trace the offending boat, which has to come into port somewhere; but on a river it is much more difficult because a boat can get back to port without being spotted. As the house in question is just below the upper limit of the Port of London Authority, I applied to the police to help me trace the boat. This is a rather important point. The police said that they had no duty to find the boat and would not help. They said they were concerned only when a duty was laid on them by Statute. I believe it is the case that if I live in a house by the side of the road and a lorry comes and knocks it down, the police will help me to find the lorry; but if I live on the side of a river and a ship comes and knocks my house down, the police will not help me to find the ship. I should be grateful to my noble friend Lord Mancroft if he would see whether this Bill cannot be amended a little to give some protection to riparian owners.
My excuse for bringing this matter before your Lordships at this length and in such detail is that though, fortunately, the house I live in is a strong one, built in the seventeenth or eighteenth century, the houses farther up the river are modern ones, of extremely flimsy construction; and if they had been subjected to the shock to which my house was subjected they would have collapsed completely on the owners. Yet if they had succeeded in tracing the offending ship, they would have been limited to £8 a ton damages. I do not know how far the operation of this Bill extends, whether it extends to the City of Oxford on the River Thames, but it appears to me that there is a question here that deserves consideration now that the Bill is going through your Lordships' House. I hope that when the Committee stage comes, we shall find on the Marshalled List not only the Amendment mentioned by my noble friend Lord Simon, which applies the limit of 300 tons to property damage as well as to personal injuries, but also one which will help people who may be injured in the way that riparian owners can be injured to obtain adequate compensation for any damage done. I very much welcome the Bill.
5.55 p.m.
LORD CHORLEY: My Lords, as one interested in maritime law for a large number of years, I should like to make a
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few observations on the Bill of a more general character than those made so far in the interesting discussion which we have had. This system of the limitation of liability according to the value or the tonnage of a ship is a unique institution, not only in our law but in other systems of law, and its history is interesting. It goes back to the Hanseatic League and was adopted by our own country some hundreds of years after it had been applied among the Hansa ports and in Holland, and even in France. The object, of course, was to protect the maritime marine, because in the days when ships were small it often happened that a shipowner was ruined if his ship sustained a serious collision and the claims made against him were large. No doubt it was part of the public policy of the maritime countries in the seventeenth and eighteenth centuries to strengthen their mercantile marine by cutting down the liability which might be placed upon shipowners and in that way prevent their being made bankrupt and driven out of business altogether.
In this country we have had a number of Merchant Shipping Acts over the years. The first one dealing with this matter was in the time of George II, but, as noble Lords have pointed out, commencing with the noble Viscount who moved the Motion, so far as the monetary side goes our system has been out of date for a very long time. Another interesting aspect, which was mentioned by the noble Lord, Lord Mancroft, is that we are now at the point of establishing a uniform system among maritime States in regard to this matter. One of the most fascinating aspects of maritime law is that it has led the way in the unification of private law, starting with the York-Antwerp Rules, in which this country took the lead in the middle years of last century, followed by The Hague Rules, in which this country again took the lead in the early 1920's. The Hague Rules have been adopted by all the maritime countries and the York-Antwerp Rules apply to 99 out of every 100 contracts of affreightment. During the years between the wars there were a number of important international conventions relating to the safety of crews on ships and their passengers and to many other questions. It is particularly happy that Her Majesty's Government are proposing to

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take the action which the noble Lord, Lord Mancroft, indicated, so that again this country may lead the way in what is obviously an important reform.
I entirely agree with everything that was said by the noble Lord, Lord Winster. The harrowing case which the noble and learned Lord the President of the Probate, Divorce and Admiralty Division told us about and the figures which the noble Viscount produced show that this has been a serious business over a number of years. But, as the noble Lord, Lord Winster, indicated, the largest proportion of these cases are of property damage, and property damage is almost always covered by insurance. Incidentally, I can advise the noble Lord who has just sat down that an insurance on his Thames-side property would probably be a more satisfactory way of guarding himself against further fogs on the Thames than reliance upon this Bill.
LORD SALTOUN: My Lords, after the first accident, we did insure. The point is, however, that it is not covered by a comprehensive insurance; it has to be a special insurance.
LORD CHORLEY: I appreciate that; and what I was saying was only by the way. So far as property is concerned, all these matters can be covered by insurance. I am wondering whether it would not be more satisfactory, if the international aspect could be got over (I appreciate that that makes it complicated) to introduce a system of compulsory insurance in respect of loss of life and personal injury of the kind which is operating in this country now—and not only in this country, but in a number of other countries—in respect of the other types of collision with which we are more familiar, namely, those that occur on the roads, and in regard to which, since the Road Traffic Act of the early 30's, all drivers have to be insured. If damage is caused to some unfortunate pedestrian or a passenger in another car, then that is covered by an insurance policy and the matter is almost always (in 999 cases out of 1,000, I think) satisfactorily dealt with in that way.
As the noble Lord, Lord Winster, said, even with this Bill the position will not be altogether satisfactory in regard to many cases where serious loss of life and personal injury result from a collision in which a ship, and sometimes two ships,
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founders with all hands, or with a large number of the crew, and sometimes with passengers as well. In that type of case, I think it would be much more satisfactory to have a compulsory insurance system, parallel with the sort of system which exists at the present time in connection with motor vehicles. I do not want to delay this measure—I think it is a good one—but I should like the Government to have this alternative method of handling the problem in mind, because it seems to me that it should be possible to get some kind of International Convention on these lines. So many other countries now have compulsory motor insurance that it would not be strange to them if the same proposal were made in respect of insurance in regard to loss of life and personal injury in the case of collisions between ships. With those observations, I strongly support the Second Reading of the Bill.
6.4 p.m.
VISCOUNT STONEHAVEN: My Lords, I should like, first of all, to thank all noble Lords who have taken part in the debate for the interesting and informed speeches they have made. In particular, I should like to thank my noble friend Lord Mancroft for the Government's welcome to the Bill, and also for the foretaste he has given us of how it will be largely improved and expanded to serve, as I am sure we all agree, a most useful purpose. It is getting late, and as there has been no disagreement and everyone has welcomed the Bill, I am sure your Lordships would not wish me to give a detailed reply. I should, however, like to refer to the last two speeches. I have great sympathy with my noble friend Lord Saltoun. The great difficulty is that this Bill is one dealing only with limitations, and you cannot bring the actions of the police under such a Bill. That is my own view, but I will take advice from those who are advising me. To deal with Lord Saltoun's point you would need to amend a Bill dealing with the police. I do not see that we could have a hybrid Bill of that sort. I think much the same applies to the interesting suggestion of the noble Lord, Lord Chorley. This Bill deals solely with limitations, and it would be inappropriate—I would say it is impossible, although I should have to take advice on it—to include in it what he suggests.
LORD CHORLEY: I agree. I was not suggesting that it could be put into this Bill.
VISCOUNT STONEHAVEN: Then there are no other points with which I need deal.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

LICENSING OF BULLS AND BOARS BILL [H.L.]
6.6 p.m.
Order of the Day for the Second Reading read.
VISCOUNT STONEHAVEN: My Lords, I can only apologise for speaking once again to-day—and I hope it is worth a guinea a time, which is how it is working out. I beg to move that this Bill be read a second time. This is an Enabling Bill. It enables the Minister of Agriculture, Fisheries and Food and the Secretary of State for Scotland to refuse licences for non-pedigree bulls and boars. It does not compel them to do so, but merely makes it possible for them to refuse licences on those grounds. The Ministers were given the power to licence bulls in 1931 and to licence boars in 1944, and the relevant Acts set out the grounds on which they may refuse or revoke licences which have been granted. As the law now stands, the Ministers are precluded from restricting licences to pedigree animals.
It is, I think, agreed on all sides that the control by licensing of bulls and boars which are used for breeding purposes has substantially improved the standard and productivity of livestock since it came into force. There may be some difference of opinion on the actual methods of licensing and so on, but the mere fact of that control has, I think everyone agrees, produced good results. I think it is startlingly brought out to anybody like myself who has been connected with farming in Swaziland, where no such control exists, and has seen the results of no control of the sire. The general principle that the better the sire the better the progeny, is, I think, a very sound tag for farmers.
The use of crossbred sires does not hand down the predominant features that one trys to get into one's breeding. It is for that reason that this power is
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essential. Cross-breeding with pedigree sires plays an important part in commercial livestock farming—in which I am engaged—and I should never agree to using anything but a pedigree sire. Those of us who are farmers know that if you are running a dairy herd and want to get rid of your surplus dairy calves, the practice is common now to use a beef bull in order to get the beef characteristics into the calf. You can sell it as a store animal for beef fattening, and you do not produce unwanted dairy cattle. In the same way, people use pure-bred white boars on a coloured sow to obtain pigs which will meet a particular market.
This question was dealt with in the Report of the Advisory Committee on the Development of Pig Production in the United Kingdom, which was published in October, 1955. It makes a particular reference to this matter, so far as boars are concerned, and with your Lordships' permission, I should like to read a short passage from the Report. It says:
"We further recommend that Ministers should seek powers to limit licences to pedigree boars and use those powers immediately. Known and pure ancestry is essential for intelligent breeding, and we can see no justification for the continued use of other boars in this country."
The Ministers can already refuse licences to bulls and boars known to be crossbred, but that does not really go far enough, because they cannot refuse to licence an animal of which there is no telling whether it is cross-bred or not. They cannot at the moment refuse to licence if somebody says, "That is not a pedigree boar."
I should like to emphasise that although I am advocating an extension of the Ministers' powers to refuse licences, it does not mean that the owner of the bull or the boar will have no appeal against the decision of the Minister or the Secretary of State. The present arrangements under the present Acts will continue; this Bill does nothing to alter them. If a person is refused a licence, he may appeal to an independent referee, and the referee's decision is binding on the Minister. That is not always the case, but it is the case here. The Bill is an Enabling Bill and it only slightly increases permissive powers, not compulsory powers, beyond what are already there. With those few remarks, I beg to move.
Moved, That the Bill be now read 2a— (Viscount Stonehaven.)
6.11 p.m.
LORD FORBES: My Lords, whilst I am in agreement with most things that my noble friend Lord Stonehaven has said about this Bill, and I agree that it is an attempt to improve the 1931 Act, I would point out very strongly that the 1931 Act is now totally out of date, in view of what is known, not only in this country but in many other countries, about animal breeding. There should be no question of patching up this old Act, the foundations of which are completely unsound and must be pulled down and completely rebuilt. Under the 1931 Act bulls and boars are chosen and licensed by their looks, and in the case of dairy bulls the milk records of their mothers are also taken into consideration. This little Bill seeks to add pedigree to the list of qualities. I shall very briefly try to explain why the 1931 Act and this Bill are now absolutely out of date.
What we want in this country is dairy bulls able to produce cows that will give the maximum amount of milk of the highest quality and be fed on the cheapest feed. With boars we want them to produce bacon pigs of the highest possible quality. Anyone connected with animal husbandry should know that you cannot tell whether a bull is going to transmit good milking qualities just by looking at him or going over his mother's performance. Often the ugly bulls produce the best milkers, and so do the non-pedigree ones. Regarding pigs, it is well-known that it is quite impossible to judge by the eye the best-grade bacon pig; it just cannot be done. I shall not bore your Lordships by going into and discussing any question of animal genetics. Instead I shall attempt to draw the simplest parallel.
The Act of 1931 merely means that you select a lot of fine-looking men, and the judges in this case are the civil servants. You then marry them to "Miss Englands" and "Miss Americas" and other people, and the results you get are expected to be the leaders of the future. I am afraid that you will be very disappointed. That is just how this 1931 Act works at the moment. Continuing the parallel, all this Bill seeks to add to the Act is that in future the selection
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of males should, if possible, be made from among the hereditary Peers of your Lordships' House, instead of from among the rank and file of another House or other such place. That might be a help if it were not for the fact that the whole theory of selection on looks is completely false. No, my Lords, the only way to breed better stock is from bulls and boars that have been progeny-tested and are known to transmit, or to be capable of transmitting, the desired qualities. If we want to continue to breed some of the best and finest stock in the world we must get down to and rely on progeny testing; otherwise we shall be left standing by those countries who have made a study of animal breeding and who are now employing progeny-testing methods to breed better animals.
6.15 p.m.
LORD DYNEVOR: My Lords, I intervene for only a very short time, and purely selfishly, if your Lordships will permit me. The noble Viscount who introduced the Bill did so with his usual clarity, but I want him, if he will, to clear up a special point. I happen to be the owner of a particular herd of cattle which is historically very famous and one of the original herds in this country. I merely want to make quite certain that the licensing of the bulls by the agricultural authority is not going to be impeded by these fresh regulations that are being suggested. It is a historic herd and it is very difficult to keep it going—it is really about the only domesticated one left. There are three or four herds which run in a semi-wild state in enclosed land, but the bulls are no good to me because one cannot handle them. We have been looked at with a benign eye by the authorities and, provided that the herd pass the T.T. test, we can have a licence for breeding. And, as I have said, it is a great struggle to keep the herd going. The noble Duke, the Duke of Bedford, has a herd, but I understand that he is giving it up, and the problem of getting fresh blood is going to be very difficult indeed. I should like an assurance, if possible, that there will be no further unnecessary difficulties placed in the way of anyone in my position who does try to keep an old historic herd of what are known as the White Cattle of Britain going as long as possible.
6.19 p.m.
LORD STRATHCLYDE: My Lords, like the noble Lord who has just sat down, I am sure that the whole House is grateful to the noble Viscount, Lord Stone-haven, for the clarity with which he has explained the desirability of this Bill and its provisions. I will not comment on the matters spoken of by the noble Lord, Lord Forbes, but I have taken note of what he has said, and I am quite sure that it will be studied by both my right honourable friends. On behalf of Her Majesty's Government, I commend this Bill to the House as a useful and beneficial measure, and I trust that your Lordships will give it a Second Reading.
6.20 p.m.
VISCOUNT STONEHAVEN: My Lords, I wish to thank the noble Lords who have taken part in this little debate. My noble friend Lord Forbes raised an interesting point, but I do not think it is quite relevant to this Bill. I would say that he would require to move the repeal of the 1931 Act. If he does that after this amendment of the Act comes into force, he will have a bigger and better Act to repeal. I do not know that his views are shared by everybody. Indeed, I cannot altogether agree with them myself, because pedigree is a sort of registration, and animal family characteristics are handed down and recorded carefully in the pedigree. It is not only a beauty contest—although I agree that perhaps the modern style of showing cattle frequently errs in that direction. However, that is rather beside the point.
The noble Lord, Lord Dynevor, asked me if I could give him an assurance that if your Lordships pass this Bill he will be in no worse position than he is already. If he will take it from me, I will give him that assurance "off the cuff". And if I am not correct, I will let him know before the next stage of this Bill; then he can do what he considers appropriate. I can see nothing in the provisions of this Bill that will make the situation more tiresome for him because he has a well-known, historic herd. In a way, it is a sort of "closed shop". Whatever he does, he is not selling bulls to other people for dairy purposes or something of that kind. Therefore, I am pretty certain that the licensing which exists to-day and the benevolent eye which is cast upon him will continue to be cast upon him.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

MAINTENANCE ORDERS BILL
6.23 p.m.
Order of the Day for the Third Reading read.
THE LORD CHANCELLOR (VISCOUNT KILMUIR): 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 Maintenance Orders Bill, has consented to place Her Majesty's interest, so far as it is concerned on behalf of the Crown, at the disposal of Parliament for the purpose of the Bill.
I want to detain your Lordships only by saying two things: one to apologise for having put down an Amendment on Third Reading. It is a purely drafting Amendment and is in consequence of the new clause that we added to the Bill on the Report stage, by which the tense of one of the verbs has to be changed. The other point that I want to make is that I am most grateful to noble Lords, and especially to the noble Lord, Lord Silkin, and my noble friend Lord Merriman, but indeed to all noble Lords who have helped at every stage of the Bill to send the Bill on to the Statute Book. It does two things. It improves the methods by which people who are entitled to payment under a maintenance order can enforce their rights; and secondly, it will prevent wasteful and expensive imprisonment to-day. On both these objects it has been greatly helped by the attention it has received in your Lordships' House. I should like once again to express my gratitude for that. I beg to move that the Bill be now read a third time.
Moved, That the Bill be now read 3a,—(The Lord Chancellor.)
6.26 p.m.
LORD SILKIN: My Lords, before we part with this Bill it would perhaps be a little ungracious if I did not say a word or two in reply to the noble and learned Viscount. I feel that the Bill has gone through both Houses in the best tradition of Parliament. It is a Bill which is beneficial to a large section of the community, in that it protects wives who

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have claimed maintenance orders and gives them rather more security, and it deals with the vexed question of the imprisonment of husbands who have failed to make payments.
It is no secret that when the Bill was first introduced into another place it was met with a good deal of suspicion—and I think justifiable suspicion—on the part of many of my friends. The sanctity of wages has been enshrined in our economic life for a great many years. Undoubtedly, this Bill is an attack upon wages in the sense that wages can be attached for the purpose of a civil debt. Of course, already wages are not sacrosanct—there is Pay-as-you-earn and there is insurance. But those are State liabilities and no one can seriously complain. But this Bill does constitute a breach into the sanctity of wages, and it was not surprising that a number of my friends, especially those connected with the trade union world, found some difficulty and needed considerable assurances in accepting the principle. The Government have been most reasonable and forthcoming in providing those assurances, and I think to-day the Bill has met with general acceptance.
When the Bill reached this House there were, I think, two blemishes: one, that imprisonment for failure to carry out a maintenance order wiped out the debt, and many of us felt that it might be a paying proposition for people to go to prison for a short period in order to wipe out what might amount to a considerable liability. That point has been met; imprisonment does not wipe out the debt. On the other hand, by a most ingenious piece of drafting it is not possible for a person to go to prison twice for the same debt. The other blemish was that, as the law stood, once a committal order had been made for a person to go to prison in default, it was impossible to stop it, whatever conditions might subsequently have arisen. Again, that has been met most satisfactorily by the noble and learned Viscount in the amending provisions which were introduced on the Report stage.
I should like personally to thank the noble and learned Viscount for having, as always, most conscientiously carried out the undertakings he gave on the Committee stage and meeting quite satisfac-
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torily all the points that we raised. I am sure that the result of that is that we now have a Bill which should work quite satisfactorily, and one in which all of us can feel rather proud at having taken some part.
On Question, Bill read 3a, with the Amendments.
THE LORD CHANCELLOR: My Lords, I beg formally to move the Amendment to which I drew attention a few moments ago.
Amendment moved—
Clause 17, page 16, line 11, leave out ("is") and insert ("has been").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Bill passed, and returned to the Commons.

MARRIAGE ACTS AMENDMENT BILL
6.30 p.m.
LORD WINSTER: My Lords, on behalf of my noble friend Lord Milner of Leeds, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read 3a,—(Lord Winster).
On Question, Bill read 3a, and passed.

LAND POWERS (DEFENCE) BILL
6.31 p.m.
Order of the Day for the Third Reading read.
EARL BATHURST: My Lords, in moving that this Bill be read a third time I beg your Lordships' indulgence while I give an assurance to my noble friend Lord Dundee, who is not in his place, and to other Scottish Lords—who have now disappeared from their places—on the point which my noble friend Lord Dundee raised with regard to ownership of land in Scotland. The assurance is that, in regard to Scotland, in Clause 25 of this Land Powers (Defence) Bill the procedure is followed in exactly the same way as under Section 7 of the Acquisition of Land (Scotland) Act, 1947, and Section 63 of the Civil Aviation Act, 1949. With that assurance, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read 3a.—(Earl Bathurst.)
On Question, Bill read 3a, and passed.

FALMOUTH DOCKS BILL [H.L.]
Referred to the Committee on Unopposed Bills.

FALMOUTH HARBOUR BILL [H.L.]
Reported from the Select Committee, with Amendments.
House adjourned at twenty-eight minutes before seven o'clock.