Lords Sitting of 16 April 1959

Preamble
The House met at three of the clock, The LORD CHAIRMAN on the Woolsack.
Prayers—Read by the Lord Bishop of Manchester

NYASALAND COMMISSION'S PROCEDURE
3.4 p.m.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they are now able to make any statement on the procedure to be followed by the Commission presided over by Mr. Justice Devlin appointed to inquire into the facts concerning the situation in Nyasaland; whether this will secure that the detailed circumstances in relation to the detention of hundreds of Africans will be investigated; and whether the detainees in question will be allowed to be represented by Counsel.]
THE SECRETARY OF STATE FOR COMMONWEALTH RELATIONS (THE EARL OF HOME): My Lords, in the absence of my noble friend, Lord Perth, no doubt the noble Viscount the Leader of the Opposition will allow me to answer his Question. The Inquiry will be held in private. The Commission will have the power to examine witnesses on oath, to call for the production of documents and to make rules for their own guidance and for the conduct and management of the proceedings before them. They will also be empowered to decide the time and place for their sittings as they may from time to time think fit.
The Commission will examine all aspects of the events leading up to the declaration of the state of emergency and I have no doubt that the circumstances surrounding the detention of certain Africans will be generally covered. Any person giving evidence before the Commission will be entitled to have his legal representative present while he gives his evidence, but a witness will not be able to have his legal representative present
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while any other person is giving evidence. This is because the Inquiry is not a trial, the witnesses will not be present on charges of any offence, and in order not to deter persons from giving evidence.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, it seems to me that this Commission is setting out on its undoubtedly difficult task in a rather extraordinary position. We have, of course, great faith in Mr. Justice Devlin, but the special circumstances which I put into my Question and with which, of course, the noble Earl the Leader of the House has dealt, seem to me to be putting these detainees in a very difficult position. I am anxious that Her Majesty's Government should not have to endanger the position of any evidence which comes from informers; that is natural. But there ought to be some real protection, at all stages of this Inquiry, for those who are still to be detained for a long period without trial; and the fact that they can have their counsel there only at certain times and apparently without the right of cross-examination of witnesses—because I did not hear that mentioned—seems to me to be prejudicing the future position of many of these people who may be absolutely innocent of any real crime.
THE EARL OF HOME: My Lords, I think we must keep the distinction clear. The function of this Commission is to inquire into the facts which led up to the disturbances. No doubt during that Inquiry, they will wish to interview a number of witnesses, but there is no charge laid against any witness by this tribunal; and although there is a Judge at the head of it, the tribunal is not investigating charges against any named person. That, at any time, must be the function of the Attorney-General of Nyasaland if he thinks fit. But the Commission is really to examine—because, I believe, Parliament wanted to know—the facts which led up to the recent disturbances.
VISCOUNT STANSGATE: My Lords, who decides whether a witness shall be heard if he desires? That is my first question. The second is: have the persons who have been named in the Paper seen a copy of the charges that have been published against them?
THE EARL OF HOME: My Lords, this Commission has nothing to do with charges that are published against individuals—
VISCOUNT STANSGATE: I did not ask that.
THE EARL OF HOME: I understand that no witness will be compelled to give evidence if he does not want to do so, but no doubt Mr. Justice Devlin will select, from those who come forward with evidence, those whom he wishes to see.
VISCOUNT STANSGATE: My Lords, I am afraid I did not make my question clear. Who decides whether the witness is acceptable? That is my first question. The second is: are the persons named in the White Paper presently in possession of the printed charges which have been circulated against them?
THE EARL OF HOME: My Lords, I should want notice of that last question. I feel that it must be for the Chairman of the Commission, Mr. Justice Devlin, to decide which witnesses he wishes to see.
VISCOUNT STANSGATE: My Lords, in that case, why is it that a notice appeared yesterday in The Times saying that Mr. Michael Scott had applied to give evidence and had been told by the Federal Government that he could not be admitted to Nyasaland?
A NOBLE LORD: Quite rightly.
THE EARL OF HOME: My Lords, as I explained on a previous occasion, the immigration laws are a matter for the Federal Government. I have no doubt that it will be for Mr. Justice Devlin to decide whether he wants to take evidence from Mr. Michael Scott anywhere else.
VISCOUNT STANSGATE: The Times newspaper states quite clearly that Mr. Michael Scott applied and was told—not by Mr. Justice Devlin but by Rhodesia House—that he could not be permitted to give evidence to the Commission.
THE EARL OF HOME: My Lords, from what I read I do not think that that was quite so, although this matter hardly arises out of the Question. I believe the point was that the Reverend Michael Scott would not be allowed into the Federation but that, so far as the Federal authorities knew, it would be possible for
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the Commission to see him outside the Federation, if the Commission so wished.
VISCOUNT ALEXANDER OF HILL-SBOROUGH: My Lords, I am not quite sure whether the noble Earl the Leader of the House is quite seized of the point which is at the back of my mind. Perhaps I did not put it clearly. No one wants to endanger the position of informers, and there is, of course, no reason why the name of an informer should be given; but surely there ought to be some means by which those persons who may be named by informers and against whom charges may be laid should be furnished with the evidence, without giving the name of the informer, letting them know the charges against them and giving them some opportunity to prepare their defence. Otherwise it seems that what is a very fine and right effort to have a fact-finding Commission may ultimately redound to a piece of injustice for many of the people concerned.
THE EARL OF HOME: My Lords, I am not quite sure that we are not dealing here with two different things. I rather think we are. Any charges which were made against individuals would be a matter for the Attorney-General of Nyasaland and would be quite separate from anything to do with the Commission; and the right honourable gentleman the Colonial Secretary has said in another place that nothing which is said by any witness before this Commission shall in any way prejudice them when it comes to the questions of charges being laid or a defence being heard.
VISCOUNT STANSGATE: My Lords, may I press the noble Earl? Is it really true that weeks after these charges were published he cannot say whether the persons accused are in possession of the White Paper?
THE EARL OF HOME: My Lords, the noble Viscount has asked me a specific question as to whether those accused are in possession of a certain Paper. I should not like to give him an answer offhand, since I am not certain whether they are in possession of that particular Paper; but I will certainly give the noble Viscount that information as soon as I have it.
LORD CHORLEY: My Lords, the House will be aware that a very distinguished Lord Chief Justice said it was

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important that justice should not only be done but that it should clearly and manifestly be seen to be done. Does not the noble Earl consider that the arrangements he has announced to the House this afternoon will amount to such an infraction of this important and fundamental doctrine of British law that they will destroy a great deal of the value of this Inquiry?
THE EARL OF HOME: My Lords, I should not have thought that there was any infringement of the principles of British justice. This is an Inquiry into the facts of the disturbances in Nyasaland, and during the course of that Inquiry a number of individuals will give their opinion as to why those disturbances took place; but I would ask the noble Lord to keep quite separate in his mind the question of any charges against individuals for subversion or anything of that kind.
LORD CHORLEY: My Lords, what I am concerned about is the fact that the legal representatives of different people are not to be allowed to be there. Surely that is a manifest breach of the ordinary rules, or at any rate of the way in which these problems are inquired into in this country.
THE EARL OF HOME: My Lords, in order to help him to give the facts or to protect him, if he should want protection, the individual, if he so wishes is to be allowed to be accompanied before the Tribunal by a legal representative, to help the Tribunal to establish the facts about the disturbances in Nyasaland. Again, I must repeat that this is quite a separate thing from charges which may be laid in the future.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, may I say that the British public is still, with its Government, responsible for the Protectorates in the Federation. May I take it from the noble Earl's first answer to my noble friend Lord Chorley that there will be no evidence taken before this particular Commission in private which will be taken as constituting a charge of any kind against any detainee?
THE EARL OF HOME: My Lords, the Colonial Secretary has made it quite clear that any evidence given before this
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tribunal will not in any way be used to the prejudice of individuals in a further trial arising out of a charge.

EXPORTS TO CHINA
VISCOUNT ELIBANK: My Lords. I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they can give an assurance that they are, through the Paris Consultative Group or otherwise, keeping under constant review the list of electronic, precision, and automation equipment embargoed for export to China, with a view to avoiding the danger of a list consisting largely of goods in which British manufacturers are the pioneers.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE MARQUESS Or LANSDOWNE): My Lords, I would refer the noble Viscount to the Answer that I gave to this Question yesterday, when I said that the International Embargo List is kept under constant review by Her Majesty's Government and by the other member Governments of the Co-ordinating Committee ("Cocom"). Electronic, precision and automation equipment is included amongst the items thus kept under review. The retention of goods on the embargo list must be decided on the basis of their strategic significance, and there can, accordingly, be no guarantee that the potential exports of one country may not he affected to a greater extent than those of another.
VISCOUNT ELIBANK: My Lords, I beg to thank the noble Marquess for his Answer. Is he aware that I had this Question on the Order Paper before he gave his Answer yesterday, and as I wanted to put a supplementary to this Question I left it on the Paper? Now may I ask the noble Marquess whether he is aware that Mr. Thorneycroft, a former President of the Board of Trade, on his return recently from China, said in so many words last month that the main effect of these strategic controls was to encourage greater specialisation on the part of China and the Soviet bloc; and does not this fact add to the danger to which I drew attention in my Question?
THE MARQUESS OF LANSDOWNE: No, my Lords.
VISCOUNT ELIBANK: My Lords, does the noble Marquess really expect me to believe that?
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, may we be assured that, at any rate in dealing with this list, there are no other prominent national members of N.A.T.O. who are in fact dealing with the Chinese Republic in the goods which are still embargoed on our list? Can we have an assurance upon that point?
THE MARQUESS OF LANSDOWNE: My Lords, I am not quite sure that I have understood the question. Does the noble Viscount refer to members of "Cocom"?
VISCOUNT ALEXANDER OF HILLS-BOROUGH: Yes.
THE MARQUESS OF LANSDOWNE: I can give an absolute assurance that that is the case.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, I did mean that; but may I be quite sure also that no other member of N.A.T.O. is actually exporting any of these goods to China?
THE MARQUESS OF LANSDOWNE: My Lords, the original Question to which I have been replying refers only to "Cocom", and I must have notice if the question is to go outside that.
LORD SHEPHERD: My Lords, may I ask the noble Marquess whether there is any evidence that countries in "Cocom", are, in fact, exporting goods on the embargoed list, not direct to China but through other countries which are not members of "Cocom"?
THE MARQUESS OF LANSDOWNE: My Lords, I personally have no such evidence, but I should be perfectly prepared to make investigation and report.
LORD STONHAM: My Lords, could the noble Marquess say how this Committee reviews a product or an article which is completely new and, therefore, has not appeared on the list? What happens to some new British invention that cannot possibly be on the list, and
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who decides that it shall be put on the embargo list?
THE MARQUESS OF LANSDOWNE: My Lords, I think your Lordships will recall that I said yesterday that it was sometimes necessary to add items to the list.

B.O.A.C.'S SAN FRANCISCO-TOKYO SERVICE
3.15 p.m.
LORD OGMORE: 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 what is the present position under the Agreement between Her Majesty's Government and the United States Government empowering a British designated airline to operate between San Francisco and Tokyo; and what is the weekly loss to B.O.A.C., the British designated airline, as a result of the failure to implement this Agreement.]
THE EARL OF GOSFORD: My Lords, British Overseas Airways Corporation's round-the-world service via San Francisco and Tokyo is provided for in the Air Services Agreement between the United Kingdom and the United States. Under United States law, however, an operating permit must be obtained from the Civil Aeronautics Board before the service can begin. The Agreement stipulates that such permits shall be granted without undue delay. Representations have been made to the United States authorities both here and in Washington, about the delay in the grant of this permit, which appears to be due mainly to the opportunities which the procedure of the Board provides for lengthy intervention by other airlines. It is now expected that the Board's procedure will be concluded shortly and that the permit will be granted early next month.
With regard to the second part of the noble Lord's Question, I cannot give any precise estimate.
LORD OGMORE: My Lords, may I ask the noble Earl whether he can give an imprecise one, because I think the House should know to what extent B.O.A.C. are being prejudiced by the

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failure of the United States Administration to carry out this Agreement?
THE EARL OF GOSFORD: My Lords. the noble Lord must be fully aware that it is always difficult to estimate revenue which would be earned initially by a new service. I am informed, however, that it will be something of the order of £25,000 per week.

HOUSE PURCHASE AND HOUSING BILL
3.17 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(The Earl of Dundee.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL OF BUCKINGHAMSHIRE in the Chair]
Clause 1:
Designation of building societies for investment by trustees and government loans
1.—(1) Where the Chief Registrar of Friendly Societies (in this section referred to as the Registrar) is satisfied that a permanent building society fulfils such requirements as to its assets and liabilities, liquid funds, reserves, and other matters, as the Treasury may by regulations prescribe, he may designate the society for the purposes of this section; and where a society has been so designated and the designation has not been revoked—

(a) the powers of a trustee under section one of the Trustee Act 1925, or section ten of the Trusts (Scotland) Act, 1921, shall include power to invest funds of trusts in his hands by depositing with the society amounts not exceeding five thousand pounds for any one trust; and

(b) the Minister may make advances to the society in accordance with the provisions of section two of this Act.

LORD LATHAMhad given Notice of two Amendments to subsection (1), the first of which was to leave out "its assets and liabilities" and insert "the relation of its assets to its liabilities and as to its". The noble Lord said: I should perhaps at the outset declare an interest. I am, as I have already stated in an earlier debate, a Vice-President of the Building Societies' Association. It may be to the convenience of the Committee if Amendments Nos. 1 and 2 are considered together, for they are closely interrelated. I shall
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therefore address my remarks to both Amendments, 1 and 2. They are both concerned with the considerations prescribed to determine, first, whether a building society shall rank for trustee status in regard to the deposits made with it; and, secondly, whether also, or otherwise, the building society will be eligible for loans from the Government for the purposes prescribed in the House Purchase and Housing Bill.
It is the case, I think, that the requirements necessary for a society to qualify for trustee status are less comprehensive than those which are required for loans by the Government; but there is an over-riding consideration—namely, that the total assets of the building society shall not be less than £500,000. The additional requirements are specified in Appendix No. 2 of the White Paper. What the two Amendments on the Order Paper seek are the abolition of the limit of £500,000, and the substitution of the proposals set out in the Amendments numbered 1 and 2. As regards Amendment No. 1, it is proposed to substitute for the words "its assets and liabilities" the words "the relation of its assets to its liabilities"—and that, I think everyone will agree, is a marked difference. The words as proposed in the Amendment involve the consideration of reserves, the measure of the liquidity of the particular building society, and many other important considerations which are not comprehended in the words "its assets and liabilities".
It seems to us that in this connection Parliament has two responsibilities. One is in relation to the grant of trustee status to building societies in respect of their deposits, where the obligation is to the public, to individuals, to the beneficiaries of the trusts, and the like. The Registrar already has a pretty wide power as regards the financial conduct of building societies, and to add this additional responsibility to him would not, we think, be unreasonable. It is the case, I understand, that there have been one or two points of difficulty, but they have been overcome. However, the difficulties have not necessarily been related to the smaller building societies, or to those whose total assets are below £500,000.
With regard to the loans, we propose in Amendment No. 2 that the Registrar should be required to satisfy himself that the society will be able to carry out its

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obligations under subsection (1) of Section 2—that is to say, that the society will be able to repay any loans which may be made under that subsection. There, of course, the responsibility is to the public as taxpayers; and the test should be that there is no dubiety at all as to whether the building society in question is able to repay. In short, therefore, we suggest by these Amendments that the £500,000 minimum prescribed should be abandoned, and that there should be substituted a requirement, as to which the Registrar must satisfy himself, based upon the relation of the assets to the liabilities of the particular building society; and that, in all the circumstances, the Registrar should satisfy himself that the building society, if it is the recipient of loans from the Government under the Act, is undoubtedly able to repay.
That, of course, involves considerations going much wider than the mere statement of assets and liabilities. As your Lordships will know, the test of insolvency in law is not whether you have less assets than your liabilities: you can, indeed, be insolvent if you have a very large excess of assets over liabilities. The test in law is whether you are able to pay your debts when they fall due. We submit, therefore, that a consideration of all these factors should be taken into account in granting trustee status to building societies, and in providing that the Government may make advances. We think that these Amendments will improve the provisions of the Bill, and will make for greater safety and security as regards the public, both as beneficiaries and as taxpayers. I beg to move the first Amendment.
Amendment moved—
Page 1, line 9, leave out ("its assets and liabilities") and insert ("the relation of its assets to its liabilities and as to its").—(Lord Latham.)
THE MINISTER WITHOUT PORTFOLIO (THE EARL OF DUNDEE): This is, I think, an Amendment with which, at first sight, your Lordships must naturally have a great deal of sympathy, and with the principle of which the Government are certainly not anxious to disagree. As I think I explained on Second Reading, we have considered it very carefully, because a great many of the smaller building societies are very well run and very efficient, and in principle we do not, as a
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rule, wish to do anything which might seem to discourage small enterprises in favour of large ones. But, as the noble Lord pointed out in moving the Amendment, there are two practical considerations that we have to weigh in relation to the Bill: one is trustee status, and the other is how the loan provisions of money advanced by the Government to the building societies can be most conveniently worked.
The noble Lord's second Amendment proposes to prescribe another test in addition to those already contained in Appendix II of the White Paper, but in substitution, of course, for the £500,000 limit. The test is that the Registrar must satisfy himself that the building society in question would he able to carry out its obligations under subsection (1) of Clause 2 of this Bill—that is to say, the obligations to repay the money advanced by the Government for the purchase of these older types of house. But, as I am sure the noble Lord will appreciate, there is a very serious practical objection to this proposal. The designation by the Registrar of a building society as a society which is given trustee status, and through whom the Government may subsequently deal, takes place long before any obligations under Clause 2 are incurred. The Registrar could not, of course, foresee how much money would be lent to a building society if it were designated; and it is therefore not practicable for him to tell in advance whether or not this building society would be able to discharge the hypothetical obligations which it might then incur under the Bill.
The matters which the Registrar has to decide are all set out in Appendix II of the White Paper, to which the noble Lord referred, and they are all questions of fact which the Registrar has to ascertain. We do not think that it would he possible to require that the Registrar should decide hypothetical questions in advance: questions of judgment about whether a certain society may borrow a certain sum of money, or more, or less; and whether that society would then be able to discharge its obligation. We think that it would not be right for Parliament to delegate to the Chief Registrar the responsibility for defining those investments in which a trustee would be free to invest trust funds. What we want him to do is to ascertain whether a society fulfils the

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conditions which Parliament has laid down in this White Paper as a question of fact.
The Trustee Act, 1925, sets out the investments which qualify for trustee status and, where necessary, the conditions upon which investments can do so. The same course of statutory prescription ought to be followed in defining the scope and qualifications of new investments for trustees. At present, the Trustee List contains securities of very high standing and any investment added to the list must match the standard. Moreover, size does not necessarily denote stability, though it is generally true that the larger building societies are more likely to withstand economic pressures than the smaller ones. The proposed size limitation is only one of a number of conditions, which are all to be found in Appendix II, but we think that it is an essential one. It is not a new conception. In some form it has been applied to such private organisations as have been put forward as candidates for inclusion in the Trustee List. For instance, proposals have been made from time to time to allow trustees to invest in the ordinary shares of companies; these proposals have confined the extended powers of trustees to companies with a capital exceeding some figure such as £1,000,000, or even more.
The Trustee Investment Act of 1956 would have allowed trustees to invest in the deposits of building societies with assets of not less than £5 million. The limit was challenged when the Bill was debated in another place, and it was suggested that the right limit should be £2 million. That is a great deal higher than the limit of £500,000 proposed in this Bill. What the Government have to do is to strike a balance between our desire to cover as large a proportion of the building society movement as is reasonable and our duty to protect the interests of trustees and beneficiaries. I do not think, in general, that we should be discharging our duty to trust funds and their beneficiaries if we extended this provision so as to give trustee status to all building societies of whatever size. We must have a limit somewhere, and we believe that in putting it at £500,000 we have put it as low as any reasonable person could claim was desirable.
The total number of building societies in the country is 706, and of these 170
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will be eligible for designation under all the conditions laid down in the White Paper. The great majority of the total are smaller ones and, as your Lordships will appreciate, it would be very difficult for the Minister to deal with such a large number of societies, all dealing in small amounts. That is a question which I went into on Second Reading, and I should be glad to go into it again, if your Lordships wished me to do so. But the main reason that I would put to your Lordships now which unfortunately prevents the Government from being able to accept this Amendment, is our duty to trust funds and our belief that in putting the limit at £500,000 we have gone as far as it is reasonably desirable for any Government to go.
3.36 p.m.
LORD SILKIN: My Lords, I am very grateful to the noble Earl for the reply which he has given. I want to say frankly that I think he has made his case, so far as trustee status is concerned. I accept what he has said, that it would be unreasonable to give trustee status to a building society with assets of less than £500,000. Such a society would not command the confidence of the public, and trustee status would not be very valuable to the smaller societies, I imagine, because I do not think that a prudent trustee, for his own safety, would want to invest trust money in a small building society.
Having made that admission, I would say, with respect, that I do not feel that the noble Earl has made his case as regards advances under mortgage. I see no reason whatever why a smaller society having assets of less than £500,000 should not be entrusted with this useful task of making advances in respect of house purchase. I agree that there is an obligation to ensure that the building society is reputable, that it is solvent and that it will be able to repay the advances made by the Government to enable them to make advances to private persons; but I think that, when these things have been ensured, it is unfair to small and growing building societies that they should be excluded from the benefits of being able to make advances to their clients.
Furthermore, in many towns there are small building societies, which are long-established and perfectly reputable, with whom it is most convenient for people

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in the locality to do business. They are well known and already do a large amount of business, but they just have not "made the grade" by having assets over £500,000. It would be a great pity to exclude them altogether. I know that the noble Earl cannot accept this and that the Amendment is not in a form which would enable him to accept part of it and reject the rest. I should be grateful, however, if he would make representations to his right honourable friend on this matter to see whether something can be done for the smaller reputable building societies with less than £500,000 of assets to enable them to make advances, as this Bill contemplates, without necessarily giving them trustee status. I hope that the noble Earl will see his way to make at least further representations on this point before Report stage.
THE EARL OF DUNDEE: My Lords, as I said, I have great sympathy with the noble Lord's desire not to do anything unfair to the smaller building societies. At first sight, I would say that to adopt the suggestion he is making would introduce an entirely new principle into the Bill and White Paper, which lay down that those societies designated as having trustee status shall be those with whom the Minister may deal in issuing these special loans for the purchase of older houses. It is unlikely that it will be possible to upset that principle in this Bill.
I pointed out to your Lordships on Second Reading that the Minister had satisfied himself that there were enough building societies which satisfied the conditions in the White Paper to cover the whole country—that is to say, there was no part of the country in which anybody could want to borrow money to buy a house in which he would not find, conveniently situated, either a branch office or the head office of a building society which would qualify under this Bill and to which he could apply. I also said that the Minister was not of the opinion that that would prejudice the smaller building societies, most of which have a purely local connection and are doing a great deal of local business—in fact, most of their business—which will not be affected by this Bill one way or the other. If, as the noble Lord said, they are expanding, perhaps the time will come when they will qualify. But for the time being,
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although we understand that apprehension is being expressed that the fact that advantage is given to a designated society may be expected to take some business away from the smaller societies, the Minister is not of the opinion that that will happen to any serious extent.
The noble Lord has asked me whether I will consult the Minister about this. I cannot, of course, give him any possible assurance about the consequences of consulting the Minister. I am glad to meet the noble Lord in every way, and I am sure the Minister will he pleased to hear what he has said in the debate. I think your Lordships are well aware of all the arguments on all sides. I will certainly speak to the Minister about it, but your Lordships will understand that I cannot give any kind of undertaking.
LORD SILKIN: May I make this supplementary point? The noble Earl said that he thought the smaller societies would not be prejudiced if they had not the right to make advances under this Bill. I think that they will be. If it is found that they have not been regarded by the Government as suitable to be used as an instrument for these advances, they may well lose some of their normal business. I hope that in speaking to his right honourable friend the noble Earl will put that point, at any rate as coming from me, if not as coming from himself.
LORD LATHAM: I take no exception to the manner and tone in which the noble Earl has indicated, subject to his further conversation with the Minister, that he feels unable to accept the Amendment. I should like to make two observations on the comments made by the noble Earl. I think he will admit that it is the case that in assessing the eligibility of concerns for trustee status there is a steady movement away from the idea of basing appraisal upon the capital of the company—which, after all, is not always an asset, but is sometimes a liability—and towards an appraisal based upon whether, over a given number of years, the concern has defaulted in the payment of a dividend upon the particular stock or stocks in respect of which trustee status is asked. In those circumstances, I still feel that the requirement of £500,000, notwithstanding what my noble friend Lord Silkin has said, is oppressive upon many otherwise eligible building societies.

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There is one other point that I confess I did not follow—it may be due to my obtuseness—and that is the difficulty in which the noble Earl appeared to be as regards, first, timing the grant of trustee status and secondly, determining when the building society granted trustee status will be eligible to receive advances from the Government. Even with the larger societies with over £500,000 total assets there will, in the normal course of events, be an interregnum between the grant of trustee status and the making of advances by the Government. It seems to me to be perfectly simple, as a matter of administrative procedure, for the Registrar to determine that the building society is entitled to have trustee status, upon the basis of the facts and circumstances indicated in the Amendments, plus those indicated in Appendix II of the White Paper; and then, when later the society comes along for an advance, the only thing the Registrar will have to do is to establish that the real circumstances (I do not say that the actual liabilities and assets will not have changed in terms of figures) which indicate security or insecurity have not changed. Certainly there will be an interregnum period between the two operations of granting trustee status and the making of the advances and I cannot see the difficulty. If the noble Earl could elucidate that point a little, I should be obliged.
THE EARL OF DUNDEE: I do not think it is a question of difficulty but more one of distinguishing between ascertainable facts and making hypothetical judgments. In the case of the larger society, as the noble Lord rightly says, the Registrar would equally have to decide, in accordance with Appendix II of the White Paper, whether the larger society fulfilled the other conditions therein laid down entitling it to obtain trustee status. But the Registrar does not have to decide in advance whether that larger society would be able to repay loans which might possibly be made to it by the Government. And even if he waited, and then had the matter submitted to him again every time a loan was applied for, it would not be fair to impose on the Registrar the task of deciding whether any society was likely to be incapable of repaying a loan. All we want the Registrar to decide is questions of ascertainable fact, which have been laid down in Appendix II.
LORD LATHAM: In the light of the promise made by the noble Earl to discuss this matter with his right honourable friend, I ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
Clauses 2 and 3 agreed to.
Clause 4 [Duty of local authorities to make grants towards certain improvements]:
3.49 p.m.
LORD HYLTON LORD HYLTON moved, in subsection (1) to insert as a new paragraph:
"( ) a drain and cesspool requisite for the proper disposal of foul matter from a dwelling; "
The noble Lord said: It may be convenient to the Committee if I speak on both Amendments in my name together. I do not propose to move the second Amendment should the first one fall, and therefore it may save time if I do that. I ventured to comment on the substance of this Amendment on the Second Reading of the Bill. What the Amendment does is to attempt to assist the modernisation of isolated houses or groups of houses where, owing to their situation, they are not within reasonable distance of a main drainage system, either public or private. Of course, the modernisation of such premises, which occurs frequently in the country and particularly in the more rural parts, is a most urgent matter and equal in importance to the modernisation of houses in urban areas which have the benefit of a modern sewerage system.
The intention of this Amendment and my second Amendment is not to alter the total amount of the standard grant as detailed in Clause 6 of the Bill. Indeed, I doubt whether this Committee would be competent to do such a thing. There is no intention of altering the total amount. What it attempts to do is to spread the amount mentioned in Clause 6 (2) (d) to include the expense of providing a septic tank or other means of disposal of waste products from the water closet, which is one of the amenities dealt with in Clause 4 of the Bill. In that clause four separate amenities are mentioned: a fixed bath, a hot water supply, a water closet for the exclusive use of the occupants, and satisfactory facilities for the storage of food. But your Lordships will observe that there is

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no provision for the disposal of the waste products from water closets. Rural houses which are not within reasonable distance of a public sewer are at a considerable disadvantage to a house in an urban area where the sewer may run quite close to the house. Therefore, the first Amendment suggests that in Clause 4, after the word "dwelling" there should be inserted the words:
"a drain and cesspool requisite for the proper disposal of foul matter from a dwelling."
I think I have explained the import of this small change. It would help people who are honestly doing their best to modernise these old cottages or houses.
In order that the countryside should not be littered with septic tanks, I thought it was proper to limit this proposal so that if the local authority—and this is the substance of my second Amendment—certify that within five years they are going to put a main sewer within reasonable distance of the house, then this provision should not apply. The other provision in my second Amendment refers to a public sewer being within a reasonable distance of the house. If such a sewer was available and within a reasonable distance, then, of course, it would be quite unreasonable that any spread of the grant for making a septic tank or cesspool should be made. I hope I have explained the matter as shortly as possible to your Lordships, and I beg to move.
Amendment moved—
Page 4, line 37, after ("dwelling;") insert the said paragraph.—(Lord Hylton.)
LORD CAWLEY: I am rather anxious to know whether the term "cesspool" includes "septic tank". I know the noble Lord desires it to do so, but there is a good deal of difference between the two, as anybody who has sat on the drainage committee of the local authority will know. A cesspool is an antiquated device, and the septic tank is the modern way of getting rid of sewage. I should be quite satisfied if the noble Lord's Amendment covered both.
LORD HYLTON: I hope the word "cesspool" includes "septic tank".
LORD CAWLEY: So do I.
VISCOUNT GAGE: I rise only to say that it seems to me that what my noble friend Lord Hylton has said is most
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logical and reasonable, and I beg formally to support the Amendment.
THE EARL OF DUNDEE: This is another Amendment with which I have a great deal of initial sympathy, because it is intended to help the reconditioning and improving of country cottages which may not have a main water supply, which may not have access to a public drainage system, and whose reconditioning expenses are therefore greater and more difficult than those of an urban house. I have often had myself to do a great deal of this kind of reconditioning.
The reason why the Government cannot accept the Amendment is not because they wish to discourage the reconditioning of rural houses, but because the expense of putting in a septic tank or cesspool—I am quite prepared to consider them as all included in the Amendment—may, and probably will, be of a much higher order than the expense of the other standard improvements as defined in this Bill, and is therefore the kind of expenditure which ought to be at the discretion of the local authority as part of a larger and perhaps more comprehensive reconditioning scheme. The Committee will see in Clause 6 of the Bill that the amount of a standard grant shall not exceed £155. That is estimated at half the probable cost of all these new standard improvements. The deductions which are provided for from the grant is what is estimated at half the probable cost of each of these items: by £25 for a fixed bath or shower; by £5 for a wash-hand basin; by £75 for a hot water supply; by £40 for a water closet and by £10 for satisfactory facilities for storing food.
As many of your Lordships who have had to install improvements of this kind will be aware, the cost of putting in a septic tank would probably be of a different order of magnitude from these small standard items. The innovation made by this Bill is to put these standard items in a different class of improvements on which the local authority is compelled to give a grant without any distinction. But we think that a work of the size of putting in a sewage tank is one which should not be included in that class. We want to encourage local authorities to do it; I think most of them do, and I have no doubt that as a rule anybody who found it necessary to put in a

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sewage tank in reconditioning a cottage would probably think it worth while to have a proper reconditioning scheme, in which the grant would be, at the discretion of the local authority, up to £400. If the total expense is less than £800 the local authority still have discretion to give a grant of up to 50 per cent. of the cost, and we think they ought to do it in all reasonable cases of reconditioning, particularly in the country and particularly when a sewage tank is required. But we do not think that the expense of a sewage tank and the nature of the work is of such a kind that it ought to be classified with these new standard improvements as defined in the Bill. We think it ought to be part of the reconditioning schemes at the discretion of the local authority.
LORD HYLTON: I am grateful to the noble Earl for looking into the question. I am a little disappointed by his reply. I should have thought it was not unreasonable that some of the £40 allocated to the water closet should be spread over part of the cost of the septic tank.
THE EARL OF DUNDEE: Would not the noble Lord think it more reasonable that you should get the full £40 for the water closet and an additional grant for the septic tank, which is what will happen but is not obligatory on the local authority?
LORD HYLTON: I entirely agree with what the noble Earl says, but I believe that he has overlooked the fact that the improvement or any part is available only to a house which has a very high standard of condition., a higher standard of condition than that contained in this Bill.
THE EARL OF DUNDEE: The local authority would nevertheless have discretion to give an additional grant if the sewage tank were put in.
LORD HYLTON: I am delighted to hear the noble Earl say that, and I only hope that what he says will be taken into account by all local authorities and housing authorities who have to deal with this point, because the experience of myself, and I am quite certain of many other noble Lords who for the last ten years have been modernising houses, is that the local authorities do not do this in the way that the noble Earl suggests.
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In order to get even one item under improvement grant a very high standard has to be maintained, no doubt properly, over the rest of the building. This standard allowance helps to put in these four amenities where the rest of the house need not be of such a high standard. But I am almost certain that, the four standard amenities having been put in, the local authority will not make an improvement grant for the septic tank which would be necessary, because the four amenities of course are no use without a septic tank. The local authority will not make the improvement grant on the septic tank if put in afterwards because they will say that it does not comply with the six, seven or eight points which are contained in the House Repairs and Improvements Act.
LORD MESTON: May I ask the noble Earl an elementary question? Have the improvement grant and the standard grant got to be repaid?
THE EARL OF DUNDEE: They are grants paid by the local authority to a person who improves a house. They would have to be repaid in certain conditions: for instance if the house was not kept fit or if the conditions under which the payment was made were broken by the owner; but they are not intended to be repaid.
LORD MESTON: I am much obliged.
LORD DOUGLAS OF BARLOCH: I am rather puzzled by what the noble Earl has said. If I understood him correctly, he said that the owner of a house could get a grant under this Act, if it is passed, up to £40 for putting in a water closet, and could go to the local authority under the other legislation and ask for assistance in putting in the drains and the septic tank. But will a local authority which is called upon to administer this Statute allow anybody to put in a water closet when there are no drains and nowhere for the disposal of the sewage? I cannot really believe that that is a correct statement of the position. Local authorities work according to certain bylaws and regulations, and their sanitary inspectors will not approve of that proposition at all. In any case, what objection can there possibly be to accepting the Amendment which the noble Lord has moved? It does not throw any greater

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burden upon the Exchequer. It may be perfectly true that the amount which could be granted under this provision would not amount to half the cost of carrying out the work, because it would be more expensive than the amount which is adopted as a standard cost here—namely, £80 to get a contribution of £40. But if the owner elects to bear the remainder of the cost himself and put down that £40, what public objection can there be to it? There might indeed be the advantage of saving money from public funds which would be asked for under the alternative which the noble Lord is putting to the House.
THE EARL OF DUNDEE: The distinction is not between what is being done under this Bill and other legislation; the distinction is between what will now be compulsory on the local authority and what will be discretionary. Until now any improvement grant has always been at the discretion of the local authority. The change which this Bill makes is to classify five small—what are called "standard"—improvements on which the local authority is bound to give a grant if the owner puts them in. One of those standard improvements is the water closet. Of course, the local authority sanitary inspector would not agree to the putting in of a water closet if no provision were made for the effluent, and if there were no provision the local authority then has to use its discretion as to whether it will give an ordinary reconditioning grant towards the cost of putting in a septic tank. The reason why we do not include a septic tank in this new class of standard improvements on which a compulsory grant must be made is simply because the expense of doing so is of a different order from the expense of these five new standard improvements we have defined. Therefore we feel it would not be right to take it out of the discretion of the local authority. Most local authorities are, I think, very good in their administration of the improvement grants under the Housing Acts.
LORD DOUGLAS OF BARLOCH: But the expense to the local authority is not of a different order; it is limited.
LORD HAWKE: I accept what my noble friend has said and I really believe that my noble friend Lord Hylton would probably be better off with the certainty
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of the price of a water closet plus the slight chance of a grant for the drainage than he would be if the small grant were spread over a very large engineering operation. That brings me to this point: are we to understand that these grants have no discretionary application about them at all? Can the owner demand and receive from the local authority these grants for these specific objects?
The other point that I might raise here, rather than on the Question whether the clause shall stand part, is this. I am a little puzzled by the significance of the words in paragraph (a):
"a fixed bath or shower in a bathroom."
It could be possible to read that as meaning that a fixed bath or shower can be provided if there is a bathroom at this moment. It seems to me that there is a slight ambiguity as to whether the conversion of a new room into a bathroom would be covered. There is one further point. I believe that the best way of tackling this question is for the Minister to make much stronger representations to the local authorities that if an owner thinks a cottage good enough to put a water closet in, then surely the local authority should be less reluctant to follow it up with a grant for the requisite drainage.
THE EARL OF DUNDEE: As regards a bath, the grant is compulsory whether a new room is made for the bath or not. My noble friend asked whether all these grants were absolutely compulsory. They are, of course, subject to certain conditions as to the fitness of the house, and so on. It must be likely to remain fit for fifteen years after improvement before the compulsory grant is allowed.
LORD LATHAM: Will not the noble Earl agree, particularly with regard to the installation of cesspools in rural areas under the general improvement grant system, that very few rural authorities have the money? Their rateable product is too small for them to undertake any number of improvements of this type and pay out £400 as a grant.
THE EARL OF DUNDEE: Well, I am glad to say that the majority of them are doing it. I have always got grants in Scotland. There, it is not the rural district council but the county council which gives the grant. But in England

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rural district councils are, I think, doing very well in this matter. I have not any gross figures to give the noble Lord but I will get them if he would like them.
VISCOUNT STONEHAVEN: Would my noble friend make this point quite clear? In order to get this compulsory grant must the house be brought up to a standard of condition in other respects? For example, must there be one-tenth of the floor area in your windows, and so on? My noble friend said that the house must be fit for fifteen years. I am not quite sure what that means. Could he make quite clear whether the local authority can refuse to give a standard compulsory grant (if I may call it that) because a person has not the requisite size of window or ceiling height, or various things of that kind? Could he make quite clear whether that is the criterion or whether it is merely that the house will last fifteen years?
THE EARL OF DUNDEE: They will not have to insist on the standard requirements, such as floor and window space; but I must say to my noble friend that the local authority is the judge as to whether the house is going to be fit for fifteen years or not. Therefore, it is possible that a local authority which did not wish to "play" under this Act might make itself difficult on this grant.
LORD HYLTON: I am afraid that this Amendment has taken up rather more time than I anticipated. I should like to say that the last point of my noble friend is covered by the definition of an unfit or a fit house in Section 4 of the Housing Act, 1957. That, in fact, is what the local authority will stand on if they do not wish to make a grant. I fear that there is no doubt about that matter. I should like to thank noble Lords who have spoken on this really important matter concerning houses which are not within a reasonable distance of a public sewer. That is the whole thing. It looks to me as if these houses are going to fall between two stools. I am not suggesting, therefore, that they will get improvement grants; in many cases they will not get standard grants. I am indebted to the noble Lord, Lord Douglas of Barloch, for what he has said on this particular point. However, I think that the matter has been fully ventilated. I am sure the noble Earl will bring the comments of
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the Committee to the attention of the Minister, and perhaps he will even be able to help in some way at a later stage of the Bill. I do not wish to press the matter any further this afternoon, and I beg leave to withdraw this Amendment. I do not propose to move a second Amendment standing in my name.
Amendment, by leave, withdrawn.
On Question, whether Clause 4 shall stand part of the Bill?
4.17 p.m.
VISCOUNT GAGE: I think that this is the moment at which I should make a point in regard to administration which has arisen in connection with previous grants and, I think, may well arise in connection with these grants. Your Lordships will know that before a district council makes an improvement grant it has to satisfy itself on a number of conditions, among them the structural condition and soundness of the house. That is quite right and proper. But your Lordships may also know that where, as so often happens, an owner wishes to complete the operation by borrowing money from the Lands Improvement Company or the Agricultural Mortgage Corporation, both bodies have to have that loan approved by a representative of the Ministry of Agriculture, Fisheries and Food. That representative conducts his own inquiry and gives his own advice to the lending bodies.
In my experience it has happened twice that the district council has been perfectly satisfied about the state of the house and has been prepared to make a grant, but in both cases the Lands Improvement Company, on the advice of the Ministry of Agriculture, were not satisfied and would not make anything but a qualified grant—in the first place, because in their opinion the soundness of the house was not as satisfactory as it had appeared to the district council surveyor, and in the second case because they were not satisfied that the then occupants of the house entirely qualified under Section 3 of the Agricultural Credit Act of 1923. I am not complaining that anything that was done was illegal. It is clear that under that Act the Minister of Agriculture has a discretion, but it seems to me slightly ridiculous that there should be two Government agencies coming to opposite conclusions about the state of the same house.

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On the second question, although I appreciate that one must guard against abuse in regard to these loans, I think that any of your Lordships who has cottages to administer will agree that it is not easy to give an absolute undertaking that over the whole of the loan period a particular kind of estate worker will be inhabiting that house. I appreciate that one can raise money from other sources, but one can do so only with complication and with difficulty. We are always being urged, as landowners, to do a number of rather contradictory things. We are urged by the amenity interest to preserve country cottages, many of which have great attraction. We are asked to be humane to widows and dependants; and we are also asked, rather frequently, to raise the whole standard of our housing—as, indeed, I am always hoping to be able to do. But it does not make it any easier when we have authorities disagreeing in this way, and I should have thought that, with some pressure from my noble friend, we might get suitable agreement between them so as to make our very difficult task as easy as possible.
VISCOUNT STONEHAVEN: On this same point, I have had similar experiences in Scotland. In applying for a grant I submitted the plans and everything else, and obtained approval from the county authorities in the normal way. I had to do that before I could approach the agricultural authority for a loan. Before I could start the job I had to wait until they sent their inspector round. When he came he required a quite different specification from the county council on one or two points, and the whole procedure led to added delay, extra cost and general annoyance. It seems to me rather absurd that in dealing with buildings which are not of very grave importance one authority cannot do the passing or engineering that is necessary for the whole matter. That would save a lot of delay and extra annoyance.
THE EARL OF DUNDEE: I too, upon occasions, have been vexed by the inevitable delays which take place between approval of a scheme for a grant by a local authority and its later approval for a loan by the officials of one of the agricultural Ministries who have to act on behalf of the Lands Improvement Company. I do not know the details of the cases which have prompted my noble
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friends Lord Gage and Lord Stonehaven to raise this point on the Bill this afternoon, but it is quite possible, and sometimes unavoidable, that a man may qualify for an improvement grant from a local authority yet at the same time not qualify for a loan from the Lands Improvement Company.
There are two conditions which have to be fulfilled before a loan is granted which do not apply at all to a reconditioning grant. One condition does not apply to agricultural workers houses but applies to all other schemes for land improvement—namely, that the annual rent charge (that is, annual repayment of principal and interest) must be less than the increase in the annual value of the subject which has been improved. As my noble friend probably knows, agricultural farm workers' cottages are exempt from that, because in their case the rent is often nominal and may not have any significance. The other condition, which also applies to agricultural workers' houses, and which is a more important one, is that the increase in capital value resulting from the improvement must be greater than the amount of the loan advanced by the Lands Improvement Company.
Now there is, of course, no condition whatsoever of that kind attached to a local authority grant. The reason for attaching it to the loan—and it has always been so since the Lands Improvement Company was begun more than 100 years ago—is that it is not thought right to prejudice the interests of any other mortgage holders or any heirs under entail, or anyone who has any interest in the land, by permitting improvements loans, which take priority over all other charges on the property, to he greater than the improvement which results from the expenditure of that loan. It may often happen, therefore, that if a rural district council or another local authority, as the case may be, decides to give a grant for it, which may be perfectly right, when the Ministry of Agriculture come to look at it under the Improvement of Lands Acts, they find that the capital value of the property is not increased by as much as the amount of the required loan, and therefore they cannot sanction a loan by the Lands Improvement Company.
A grant and a loan are, of course, two quite different things, and I do not think it is really an intolerable anomaly that

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different conditions should apply to them. One can get a grant even though one is spending a sum which does not increase the marketable value of one's property by the amount of the money one has spent. But one cannot get a Government loan of the balance if the amount of the loan is greater than the amount by which the value of the property has been increased.
I would point out, however (though I do not think it is done much in Scotland), that in England local authorities often give loans as well as grants. They give a grant, and a loan for the balance. There is nothing to prevent a rural district council which has given a grant to an owner desiring to improve his house, from giving him, in addition, a loan of the balance of his expenditure, even though the amount of his loan may be greater than the amount of the increased value, because the rural district council are not bound by the same rules as the Ministry of Agriculture. In the same way, of course, the banks are not bound by it; and as the credit squeeze has now been removed, an overdraft advance from the bank for a purpose of that kind will not, in present conditions, be very much more expensive than a loan from the Lands Improvement Company.
VISCOUNT GAGE: While thanking my noble friend for his reply I must confess that I was not very much encouraged by it until he pointed out the practice in Scotland, which he seemed to suggest we should follow in England. We must try that. I must confess that the last time that happened to me I had to go to the somewhat ridiculous length of having to insure my life in order to get a loan from the insurance company. That is just the kind of thing which seems very ridiculous to people who are being encouraged to try to improve their property.
It is not the first occasion on which the intention of Parliament has been to some extent frustrated by what appears to the ordinary person to be undue technicality and "red tape". My noble friend has asked me why I raised this point at this stage. As I have said, it occurs to me that the high standard that is now required in order to get an improvement grant may very well occur in the lower standard required for the
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working of this Act. I have explained my position, however, and I have nothing to add for the time being.
On Question, Clause 4 agreed to.
Clause 5 [Approval of applications for standard grant]:
4.29 p.m.
LORD SILKIN LORD SILKIN moved, in subsection (2), after "will" to insert:
"not be overcrowded (within the meaning of section seventy-seven of the Housing Act, 1957, which dcfinies overcrowding) and will"
The noble Lord said: I beg to move the Amendment standing in my name on the Order Paper. Under Clause 5 the local authority have to be satisfied that certain conditions are complied with before they make the standard grant, and these conditions are set out in Clause 5 (2). The purpose of my Amendment is to add a further condition—namely, that the dwelling shall not be overcrowded within the meaning of Section 77 of the Housing Act, 1957. That section reenacts a provision of the Housing Act, 1935, or at least it comes down through that Act, under which it is an offence on the part of the landlord or occupier of a house to permit it to be overcrowded; and it defines what amounts to overcrowding. I will not trouble the Committee with the definition: it is pretty well-known. It provides for separate sleeping accommodation for children of different sexes, and so on.
The purpose of this Amendment is to ensure that before the grant is made the local authority must be satisfied that no offence will be committed by the occupant and that no overcrowding will exist. Let me say at once that, in so far as this might be interpreted to mean that for all time the local authority must satisfy themselves that no overcrowding exists, I would say that that is already an obligation of the local authority; their duty is to prevent overcrowding. What I want to ensure is that the local authority do not themselves become a party to creating an offence or to encouraging an offence.
By making a grant on the one hand they are, in some cases, curtailing the amount of accommodation. For instance, they may be using a room for the purpose of providing a bathroom, which reduces the amount of available living accommodation. If, as a result, they create overcrowding, they become themselves a party to the commission of an

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offence; and that would be, it seems to me, an impossible position in which to put a local authority. Therefore, I want to include in the matters upon which the local authority must be satisfied that there will not be overcrowding when the grant is made.
It may be that, as a result of this provision, in some cases they will not make the grant, because there are already too many people occupying the premises. They may be forced to provide alternative accommodation for the people concerned. But I think it would be wrong that we should, by the use of public money, actually encourage the commission of what has been an offence for the last twenty-four years—namely, the permission of overcrowding in dwelling-houses. Therefore, while recognising that this is not an easing, I hope that the noble Earl will recognise that there is great force in including this condition among those conditions upon which a local authority have to be satisfied before making the grant.
Amendment moved—
Page 5, line 25, at end insert ("not he overcrowded (within the meaning of section seventy-seven of the Housing Act, 1957, which defines overcrowding) and will").—(Lord Silkin.)
THE EARL OF DUNDEE: The effect of this Amendment would be that the grant could not be paid if the house was overcrowded according to the definition in the 1957 Act. It seems to us that if the house is overcrowded anyhow, and if the overcrowding is not affected by the result of the improvements, it would be wrong to say, "You shall not insert these badly needed standard improvements which everyone in the house wants", simply because it happens to be overcrowded. The fact that it is overcrowded may make the installation of standard Improvements, such as a bath and lavatory, much more necessary than they would be if the house were not overcrowded. Therefore, I think it would be a pity if the Amendment were to be accepted and the possibility of an improvement for that kind of house were to be removed.
There is obviously a stronger case for the Amendment, as the noble Lord, Lord Silkin, pointed out, if the result of these improvements is that a house which was not previously overcrowded becomes
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overcrowded; if, for example, a small bedroom is converted into a bathroom which results in a house becoming overcrowded, according to the definition of the Act, when it was not overcrowded before.
LORD SILKIN: Where the overcrowding is aggravated or where overcrowding becomes aggravated as the result.
THE EARL OF DUNDEE: Yes; but it would be quite possible to put in standard improvements without aggravating overcrowding. The point really concerns the case where a room previously used as a bedroom, or as living accommodation of any kind, is diverted to one or other of the standard improvements, so that either overcrowding is aggravated or a house which was not overcrowded becomes so as a result of the improvements. Overcrowding can be remedied without anything being done to the physical structure of the house. If the local authority think action needs to be taken against overcrowding they have the necessary powers under Part IV of the Housing Act, 1957, and they can use these powers to secure the abatement of overcrowding if they think it necessary in a house for which application for a grant is made. No additional powers are needed so far as a local authority are concerned, and we think it would be a pity to prevent them from giving a grant for these standard improvements, since they have the power if it causes overcrowding to put that right.
I would direct the Committee's attention to an Amendment which was accepted in the other place, which is not unrelated to this matter. It was felt that perhaps the owner of the house who was applying for a grant might not appreciate the fact, or might not take the trouble to ascertain the fact, that the result of the improvement would be to make the house overcrowded, and that the verbal acquiescence of the tenant might be given under a misunderstanding, because he did not realise that his house was going to be overcrowded. Therefore an Amendment was inserted, at page 5, in subsection (4) of Clause 4, which reads:
"An application under this section must also contain a statement either that the applicant is the occupier of the dwelling or that the occupier has consented in writing to the making of the application."

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Those words make it quite clear that the occupier of the house, before he agrees to these standard improvements being made, must give his consent in writing; and it is not likely that he would give his consent in writing if the results of the improvement were to create for his family a serious overcrowding which did not exist before.
The definition of overcrowding in the Act, as everybody knows, cannot distinguish between the more and the less desirable types of overcrowding. Three small children being together in one large room constitutes overcrowding, but it is not a thing to which anybody would object; whereas the fact that two adolescents of different sexes occupy the same room is a much more undesirable thing. Here in the Bill it is left to the tenant to decide whether he will agree to the standard improvements or not. As we who have any concern with the housing problem all know, overcrowding is a thing which can change in the same house from one week to another: by one member of the family getting a job somewhere and going out to live on his own, or by new members of the family being born, and so on. Overcrowding is not necessarily constant, and we think it would be a pity to introduce into this Bill a new regulation which might have the effect of preventing a great many desirable improvements that are not likely to have the effect of seriously aggravating or increasing the overcrowding problem, with which local authorities already have ample powers to deal.
LORD LATHAM: I do not quite follow the very wide distinction which the noble Earl draws between an unfit house and a house which is overcrowded. He will recall that at the outset of his reply to my noble friend Lord Silkin he said that it would be wrong not to make a grant just because the house happened to be overcrowded; yet the grant cannot he made if the house is unfit. But surely an overcrowded house is, from the point of view of occupancy, an unfit house.
The noble Earl went on to say that the local authority is under an obligation to abate overcrowding. That is true; but the local authority is also under an obligation to remove slums. It has an obligation as regards slum clearance, and at the present time slum clearance is regarded as priority No. 1 in the field of
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housing. It seems to me, therefore, a little difficult to justify refusing to make a grant if the house is unfit, and yet to make a grant if the house is already overcrowded, or will become overcrowded as a result of the carrying out of these improvements. Everyone acquainted with the problem of housing knows that nothing more quickly turns a normally decent house into something near a slum than that it should be overcrowded—as when a house built for single-family occupation is occupied by two or three families. I entirely support the submissions of my noble friend Lord Silkin, that there should be provided in the Bill some protection against the use of public money not only to aggravate overcrowding but, in fact, to condone it.
THE EARL OF DUNDEE: If I may say so with respect, I do not think your Lordships ought to accept the noble Lord's identification of an unfit house with an overcrowded house. After all, an overcrowded house can at any moment cease to be overcrowded, and it is the object of everybody's policy that it should cease to be overcrowded as soon as possible. On the other hand, with regard to a house which is structurally unfit, if it is judged to be so unfit that the proposed improvements will not make it fit, then it is always going to be unfit. In that case it is not a suitable subject for reconditioning. In the case of an overcrowded house, however, we all hope that it will soon cease to be overcrowded; and, of course, numbers of overcrowded houses are continually ceasing to be overcrowded.
When I replied to the noble Lord, Lord Silkin, I did not wish to make a statement upon the legal liability of the local authority on the question of whether or not they were committing an offence under the Housing Act; but I have since obtained a statement, based on the opinion of the Law Officers, made on March 11 in another place by the Parliamentary Secretary. He said [OFFICIAL REPORT, Commons, Vol. 601 (No. 75), col. 1134]:
" His question was whether in those circumstances the local authority might not be held to be abetting the offence of overcrowding in accordance with Section 78 of the Housing Act, 1957.… The legal advice which I have received is that there is no real possibility of a local authority in such circumstances committing an offence under the Housing Act, 1957."

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I give that quotation simply for information. It is not a question on which I am competent to give an opinion.
LORD SILKIN: I fully appreciate the legal opinion which the noble Earl has obtained, and I respect it for what it is worth. But legal opinions are not always correct, and, as the noble Earl knows, the courts are fully occupied in setting aside opinions which have been given to Government Departments and to other people also. But, whether that is so or not, I cannot help feeling that it is morally wrong that public money should be used in helping to create an offence; and that is what is being done here, particularly where overcrowding is being created by the diversion of a room which would otherwise be used for a family for use as a bathroom, desirable as that normally is.
There is force, of course, as there always is, in what the noble Earl has said, but I should have thought that the right solution would be to make it discretionary. In cases where there is already overcrowding, or where there is likely to be overcrowding, I should have thought the right thing would be to say that the local authority should not be under an obligation to make a standard grant but should have the discretion to do so in any particular circumstances, and to leave it to them. I put that thought into the mind of the noble Earl. In the meantime, I do not want to delay the Committee, and I beg to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 5 agreed to.
Clauses 6 to 8 agreed to.
4.48 p.m.
LORD SILKIN LORD SILKIN moved, after Clause 8 to insert the following new clause:
Obligation of lessors receiving standard grants and application to tied dwellings (England and Wales)
".—(1) During a period of fifteen years after the making of a standard grant under this Part of this Act to a person in respect of a dwelling, section six of the Housing Act, 1957 (which prescribes conditions to be implied on the letting of small houses), shall apply to any contract for letting that dwelling or any part thereof, being a letting by that person, his successor in title or a person deriving title from the first-named person or his successor, as that section applies to the contracts mentioned in its subsection (1).
(2) Where under a contract of employment of a workman employed in agriculture the provision of a dwelling for his occupation forms part of his remuneration, and the provisions of the last foregoing subsection are inapplicable by reason only of the dwelling not being let to him, section seven of the Housing Act, 1957 (which applies section six of the said Act to houses occupied by agricultural workers otherwise than as tenants), shall have effect in relation to that dwelling and to the provisions of the last foregoing subsection as it has effect in relation to such a house as is mentioned in that section and to the provisions of the said section six of that Act."
The noble Lord said: This formidable-looking new clause can, I think, be explained in a very few sentences. Normally, there is an obligation on the part of a landlord, where the rent is below a certain figure, to comply with certain conditions as to fitness laid down in Section 6 of the Housing Act, 1957. There is an implied condition that the house is at the commencement of the tenancy, and an undertaking that the house will be kept by the landlord during the tenancy, fit for human habitation. Broadly, then, where the rent is below a certain figure the landlord is under that obligation. Where the rent is above the figure laid down in Section. 6, then the landlord is under no such obligation.
The purpose of this new clause is simply to put the landlord, where he is in receipt of a standard grant, under the same obligation as he would he if the rent had been below a certain figure. That seems to me to be plain common sense. If a landlord is in receipt of public money, it ought to be a condition of letting at the commencement of a tenancy that the house is fit for human habitation and he should be required to undertake that during the tenancy the house will be kept fit for human habitation. That is all the first part of the new clause requires. I should think that the noble Earl would jump at that. The second part of the Amendment applies to tied tenancies. Section 6, so far as I know, does not apply to tied tenancies, and the Amendment seeks to put such tenancies in exactly the same position as other tenancies where the landlord has received a standard grant. In other words, in consideration of receiving the grant, the landlord must agree that hereafter he will keep the house fit for habitation. Nothing can be more right than that, and I hope that

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the noble Earl will finish the day's proceedings by conceding, at least in respect of this clause, that the Opposition may sometimes have a contribution to make. I beg to move.
Amendment moved—
After Clause 8, insert the said new clause.—(Lord Silkin).
THE EARL OF DUNDEE: Perhaps I may first clear up the point which the noble Lord mentioned about tied houses. Section 7 of the 1957 Act applies the provisions of Section 6 to tied houses, so that they are in the same position as houses with annual rents of less than £80 in London and £52 elsewhere. With regard to improved houses, it is one of the conditions, both of a standard grant and of an improvement grant, that a house which has been improved shall be kept fit; and the person responsible for the house, in the definition given in the Housing Act, 1958 (in the Seventh Schedule, I think), who forfeits the outstanding balance of the grant if the house is not kept fit, is the owner. That is so even if an owner is not the person who is responsible under the lease for keeping the house fit. If, under the contract of lease, it is the tenant who is responsible, the owner is, nevertheless, liable to forfeit the grant if the house is not kept fit. He will then have to recover at law his loss from the tenant who has failed to fulfil the terms of the lease.
The effect of this new clause would be to extend Section 6 of the Housing Act, 1957, to any house improved with the aid of a standard grant, irrespective of the rent at which it is let. It would put such a house in the same category as houses let at a rent of below £80 in London and £52 elsewhere, as defined in Section 6 of the 1957 Act. But there is no reason why these conditions should be extended to cover houses improved with a standard grant. There is no particular relevance in this definition. If these conditions ought to be extended, they ought to be extended to all houses as part of the general law. The limits were reviewed by Parliament in the Rent Act, 1957, and nothing since then has suggested that they need to be altered again. Substantial alterations were made at that time in the former rent limits under which this condition applied.
No doubt tile noble Lord. Lord Silkin, will remember that in 1949 his Party did
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not attach any condition of that kind to houses improved with the improvement grant under the Housing Act of that year. I hope, therefore, that the noble Lord will be satisfied with the present position as redefined under tile 1958 Act—namely, that a house which has been improved, whether by an improvement grant or by a standard grant, has to be kept fit, subject to the penalty of forfeiting the grant which has been paid.
On Question, Amendment negatived.
Remaining clauses and Schedules agreed to.
House resumed.

SEA FISHERIES (COMPENSATION) (SCOTLAND) BILL
House in Committee (according to Order): Bill reported without amendment.
SOLICITORS (AMENDMENT) BILL [H.L.]
House in Committee (according to Order): Bill reported without amendment.
EISTEDDFOD BILL
House in Committee (according to Order): Bill reported without amendment.

HOUSING (UNDERGROUND ROOMS) BILL
5.1 p.m.
Order of the Day for the Second Reading read.
LORD ABERDARE: My Lords, this is a Private Member's Bill introduced in another place by Mr. Robert Jenkins. At first sight it may appear involved, but it is in fact quite simple in its effect. Its object is to restore a useful public health provision enabling local authorities to close insanitary basement rooms which fall under certain conditions. This was a power originally granted to them in 1936 which has inadvertently slipped out of their hands. I think I can best explain the position to your Lordships by going briefly through the past history. The Housing Act, 1936, was the first to

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authorise local authorities to close insanitary underground rooms which failed to satisfy a simple formula, and this was largely due, I believe, to the efforts of my noble friend Lord Balfour of Burleigh. The main provisions that had to be satisfied for the closure to be made were either that the average height of a room from floor to ceiling was less than seven feet, or that the room did not comply with local by-laws for securing proper ventilation, lighting and sanitary conditions. This was found to he a useful provision and was used by many local authorities to good effect.
In 1954, however, there followed the Housing (Repairs and Rents) Act, which contained in Section 9 a definition of matters to be taken into account when local authorities were determining whether a house was unfit for human habitation before serving a demolition order. This section was never meant to affect in any way the 1936 Act formula for dealing with underground rooms; nor, indeed, was it ever taken to do so until in 1957, in the ease of Critchell v. The Metropolitan Borough of Lambeth, in the Court of Appeal, the Master of the Rolls gave a judgment which, to all intents and purposes, meant that these general provisions of Section 9 of the Housing (Repairs and Rents) Act superseded the provisions of the 1936 Act with regard to underground rooms.
There is one further piece of history with which I must trouble your Lordships, because at the same time as this judgment was given, a consolidating Act, the Housing Act, 1957, was passed which included both the underground rooms provisions of the 1936 Act and the general provisions of the 1954 Act. The underground rooms provisions became Section 18 of the 1957 Act, and the general provisions of the 1954 Act became Section 4 of the 1957 Act. Moreover, in close accord with the judgment given in the Court of Appeal, Section 18, the underground rooms section, was specifically made subject to the operation of Section 4. It has been as a result of that that Section 18 has since 1957 been wholly inoperative, and instead of local authorities being able to deal with the problem of underground rooms in a simple way, they have had to go through the more cumbersome procedures of Section 4. It is proposed, therefore, in this Bill, to
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remedy the position by simply restoring to local authorities the previous powers they had under the 1936 Act.
Clause 1 (1) of the Bill states specifically that Section 4 of the Housing Act, 1957, shall not affect the operation of Section 18; that is, the underground rooms section. Subsection (2) repeals specific words which were added in the consolidating Act of 1957 subjecting Section 18 to Section 4. I think there is only one other point I need draw to the attention of your Lordships, and that is that nothing in this Bill extends to Scotland, for the reason that the Housing (Repairs and Rents) (Scotland) Act, 1954, did not contain any of the same provisions in a general way as were contained in the English Act.
To sum up, this short Bill seeks to rectify a defect in existing public heath legislation which has arisen unintentionally. Its scope is narrow, and in practice only a minority of local authorities are concerned. These are mainly in London and in certain other urban areas where there are many properties with underground rooms of the defined type. The Bill is supported by the Association of Municipal Corporations and can, I think, be recommended to your Lordships as a simple measure which is urgently needed to ensure that unhealthy underground rooms can be closed with the minimum of delay. I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Lord Aberdare.)
5.13 p.m.
THE EARL OF DUNDEE: My Lords, the noble Lord, Lord Aberdare, has given to your Lordships a satisfactory explanation of this Private Member's Bill, and I do not think there is need for much comment from me on so simple a measure. It has been introduced, as the noble Lord explained, with the intention of restoring to local authorities a useful public health provision which was unintentionally lost in 1957 as the result of a Court of Appeal judgment, owing to a legal interpretation of an Act of 1954. This Act apparently did not apply to Scotland, and therefore this Bill need not apply to Scotland either. Nobody can be aversely affected by the Bill, and therefore I can recommend it

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to your Lordships as a simple and useful measure which is needed in order to ensure that unhealthy underground rooms, such as dungeons, but not, I hope, wine cellars, may be closed with the minimum of delay.
5.10 p.m.
LORD SILKIN: My Lords, may I begin by congratulating the noble Lord, Lord Aberdare, on the manner in which he has discharged his function as a legislator. I hope that on suitable occasions we shall hear more of him in that capacity. This Bill becomes necessary because somebody has blundered—because the Housing Act, 1957, which is a consolidation measure, was not properly dealt with, and because words crept in which should not have crept in. It should normally have been the function of the Government to put right its own mistakes. No doubt the noble Earl will tell us why it is that they have not come forward themselves and put right this mistake, and why they have put up the noble Lord, Lord Aberdare, to put it right for them. Is it because they had not the face to admit that they have blundered, and that they have put this Bill forward quite innocently as an improvement? Of course, it is not an improvement; it is merely the rectification of a blunder which has been made. However. I am all in favour of rectifying the blunder, whoever was responsible for it. The cause is right, and we will certainly not put any difficulties in the way.
I recognise the purpose for which the Bill has been introduced, but I am bound to say that I find the utmost difficulty in reconciling the purpose with the language which is now being used to achieve that purpose. I read this Bill in the morning and I read it at night, and I am blessed if I can make head or tail of it. I must take the noble Lord's word for it that it does put matters right and achieves the object he has in mind. I hope he can put his hand on his heart and say that he is satisfied it does the trick, but I must say I am not. I should have thought that to achieve his desire could have been done in very simple language indeed. It did not need all this paraphernalia and legislation by reference, and all these sections and subsections. I say this as one who is quite familiar with legislation
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by reference, and with complex legislation. As the noble Earl will remember, we had some on Tuesday with the Town and Country Planning Bill.
Nevertheless, if we can be assured that this Bill does what is desired, that there will be no more litigation about it, that it removes the ambiguity beyond a peradventure, and consequently that local authorities will no longer be involved in the trouble and expenditure in which they have been involved in fighting these cases in the courts, then we will certainly let it go through in the language in which it is. But I should be happier if somebody looked at it again to see whether it could be put in much clearer and less ambiguous language than this.
LORD AMULREE: My Lords, I should like briefly to support the Bill which the noble Lord, Lord Aberdare, has introduced. It is one in which I am particularly interested, because these extremely insanitary and uncomfortable rooms are quite frequently occupied by elderly people who have moved there because the rent is a little cheaper. They live in dark and damp rooms with most dangerous staircases, and I am sure that anything we can do to make it simpler for the local authorities to shut these rooms is a good thing.
I share the worry of the noble Lord, Lord Silkin, about whether the Bill says what it is said to say. I am afraid I accepted Lord Aberdare's word for it, and if he tells me it does what he says I have great pleasure in supporting the Bill.
LORD ABERDARE: My Lords, may I reply briefly to what the noble Lord, Lord Silkin, has said about the complications of the Bill? I am perfectly satisfied that it does achieve its object. The complications arise because since the two original Acts became law they have been consolidated into the consolidating Act of 1957. The net result of passing this Bill is that in the 1957 Act which is now applicable there will be one section, Section 18, under which local authorities will be able to close insanitary underground rooms if they fail to satisfy simple conditions. Quite independently, there will be Section 4, which applies generally when local authorities are considering demolition orders for whole

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houses or the closing of rooms in them. I should like to thank the noble Earl who spoke for the Government for his support, and also the noble Lord, Lord Amulree.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

BUSINESS OF THE HOUSE
EARL ST. ALDWYN: My Lords, I should like to inform the House that there will be a formal Sitting to-morrow at 11 o'clock for the purpose of receiving a Bill from another place.
House adjourned at sixteen minutes past five o'clock.