Lords Sitting of 10 May 1960

Preamble
The House met at two of the clock, The LORD MERTHYR on the Woolsack.
Prayers—Read by the Viscount Simonds

THE INTERNATIONAL SITUATION DEBATE—PERSONAL STATEMENT
2.4 p.m.
LORD GRANTCHESTER: My Lords, with the leave of the House, I should like to make a personal statement. I wish to apologise for and correct an error which I made while speaking in the foreign affairs debate on April 13 last. The title which President de Gaulle carries as President of the Community does not refer, as I stated [OFFICIAL REPORT, Vol. 222 (No. 70), col. 1092], to the new European Community but to the French Community of France and French territories overseas. Of course, this in no way diminishes the importance of the rôle played by the French Head of State in the new European Community.

SOUTH AFRICAN PASS LAWS
VISCOUNT STANSGATE: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they will make it plain to the Government of the South African Union that the existing reference books and penalties consequent on infringements cannot be accepted as applicable to citizens of the British Commonwealth and Empire.]
THE MINISTER OF STATE FOR COLONIAL AFFAIRS (THE EARL OF PERTH): My Lords, my noble Leader not being able to be here to-day, I will answer in his place. I am not sure that I correctly understand the noble Viscount's Question, since, for the purposes of United Kingdom law—that is, the British Nationality Act, 1948—any citizen of the Union of South Africa has the status of "Commonwealth citizen". If
506
his meaning is that the laws of the Union of South Africa with regard to reference books should not apply to citizens of the United Kingdom and Colonies. I would remind him that any such persons who go to the Union of South Africa are liable to the laws made by the Parliament of the Union, and if that Parliament decides that the laws about reference books are to apply equally to citizens of the United Kingdom and Colonies and to citizens of the Union of South Africa, then that is entirely a matter for the Union Parliament. I would not be reasonable to ask that citizens of the United Kingdom and Colonies who go to the Union should be exempted from the laws there, or placed in a more favourable position than citizens of that country with regard to compliance with them, or to penalties for non-compliance.
VISCOUNT STANSGATE: My Lords, what the Question was intended to ask was whether labourers, Basutos and others, who go from their protected countries to the Union and infringe these brutal pass laws, are to be punished without any protest on our part.
THE EARL OF PERTH: My Lords, I think that I have covered the question raised by the noble Viscount—namely, that anybody who goes to these territories has to obey the laws, which are common to everybody in the territories.
VISCOUNT STANSGATE: My Lords, these are brutal and unjustifiable laws. Do the Government propose to take no action about them?
EARL WINTERTON: My Lords, may I ask my noble friend to bring out this fact—namely, that almost similar repressive laws are in operation in Ghana, and that more than one British subject has been deported from that country. Surely what applies to one country applies to another, as the noble Earl has brought out in his reply.
THE EARL OF PERTH: My Lords, if I may mention first the point raised by the noble Viscount, Lord Stansgate, my noble friend the Leader of the House wrote to the noble Viscount some little time ago and explained the position of our High Commissioners. They do everything they can to look after the interests of United Kingdom citizens in the ordinary course of events. Of course,

507
that applies. But, equally, United Kingdom citizens are bound by the laws of the country to which they go.
VISCOUNT STANSGATE: My Lords, I am afraid that no supplementary question will alter what is a very shocking revelation of the Government's policy.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, could we have a little further assurance? No doubt the Government from time to time bring to the notice of the South African Government the desirability of British citizens within the Commonwealth being fairly assured of the same kind of liberties enjoyed in other sections of the Commonwealth.
THE EARL OF PERTH: My Lords, I do not think that the noble Viscount would expect me to make any particular comment on that. I think that the position of the Government is well known.
EARL WINTERTON: My Lords, is my noble friend aware that if pressure comes from that side of the House to take any action, there will be strong pressure from this side of the House to take action with regard to Ghana?
LORD STONHAM: My Lords, is the noble Earl aware that this question applies to British citizens wherever they are, and that we on this side of the House would protest equally if British citizens were ill-treated in Ghana or anywhere else?
BARONESS HORSBRUGH: My Lords, may I ask the noble Earl: do these people go voluntarily to the Union or are they forced to go there?
THE EARL OF PERTH: My Lords, the noble Baroness has made a very good point. Of course they go voluntarily, and therefore they must abide by the laws of the country to which they go.
VISCOUNT STANSGATE: My Lords, the noble Earl persists in his attitude, but these people are Basutos, and they would starve if they did not go to work in the Union. It should be the duty of our Government to see that they and their wives have decent protection.
THE EARL OF PERTH: My Lords, as I have already said, the High Commissioner does what is appropriate in this case.

THE AFRICAN NATIONAL CONGRESS
VISCOUNT STANSGATEhad given notice of his intention to ask Her Majesty's Government
Whether they will comment on Mr. Louw's statement that the African National Congress was at the root of the trouble in Nyasaland last year and that the British Government's policy in Nyasaland was broadly similar to South Africa's; and whether the police services of the Union and Rhodesia were in touch concerning the activities of the African National Congress.
The noble Viscount said: My Lords, I do not wish to ask the second Question standing in my name on the Order Paper, because I think that perhaps it might not be helpful at this moment.
THE EARL OF PERTH: My Lords, I am grateful to the noble Viscount. I think that in the circumstances it is better not to ask the Question.

BUILDING SOCIETIES BILL [H.L.]
2.14 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.—(Viscount Hailsham.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD MERTHYR in the Chair.]
Clause 1:
Restrictions on certain types of advances
1.—(1) In this section the expression "special advance" means an advance made by a building society on the security of freehold or leasehold estate, being—

(a) an advance of any amount to a body corporate, or

(b) an advance of a sum exceeding five thousand pounds to a person other than a body corporate, or

LORD MILNER OF LEEDShad given Notice of an Amendment in subsection (1) (b), to leave out "five thousand" and insert "seven thousand five hundred". The noble Lord said: As your Lordships are aware, Clause 1, which is the operative clause of this Bill,

509
restricts advances in certain cases. One of these cases is an advance of a sum exceeding £5,000 to a person other than a body corporate. I wished to propose to your Lordships that that sum be increased to £7,500. I think that all those who have had to do with building societies agree that £5,000 is too small a sum. I gather that the noble Viscount, Lord Hailsham, has put down an Amendment which would give a sort of omnibus power to the Chief Registrar to fix such sum as he thinks proper, and as that would appear to meet the situation, I do not propose to move the first Amendment standing in my name on the Marshalled List.
VISCOUNT HAILSHAM VISCOUNT HAILSHAM moved in subsection (1) (b), after "pounds" to insert:
", or such other sum as may be prescribed under this section,"
The noble Viscount said: This and the following Amendments are paving Amendments to No. 11, and it might be convenient if I explained the purpose of Amendment No. 11 in moving this first Amendment and we can have the discussion now. As the noble Lord, Lord Milner of Leeds, has said, my Amendment would give the Registrar power to increase the sum of £5,000 in a particular way. I would not accept from the noble Lord that at the present moment £5,000 was in any way an inadequate sum to mark the limit of what constitutes a special advance, but I would concede (and this is the purpose of my Amendments), that in legislation of this character one should not tie oneself for all time to the arbitrary figure of £5,000 without providing any opportunity of changing it further without an Act of Parliament.
The proposed new subsection (Amendment No. 11), for which the Amendment I am now moving is a paving Amendment, accordingly gives the Chief Registrar power to vary the sum of £5,000. That he may do under the Amendment, either upwards or downwards, for the purpose of subsection (1), which defines a special advance, and of subsection (3), which provides for an annual calculation of the proportion of total advances represented by special advances. Under the Amendment such an order can be made only with the consent of the Treasury, and, of course, it thereupon becomes subject to Parliamen-
510
tary criticism and control. Moreover, it is provided that the Order should be subject to Affirmative Resolution, and that means that it will have to be laid before both Houses of Parliament and will be open to debate before it becomes effective. I hope that the Committee will see fit to accept these Amendments. I beg to move the first Amendment.
Amendment moved—
Page 1, line 10, at end insert the said words.—(Viscount Hailsham.)
LORD MILNER OF LEEDS: I indicated that I would not move the first Amendment I have down, even though I thought it of advantage to increase the sum of £5,000. I did not move it because of the Amendments about which the noble Viscount the Lord Privy Seal has just spoken. Quite frankly, I should have preferred that the sum of £5,000 should be increased to £7,500 or £10,000, as the case may be, because I think that might avoid repeated applications to the Chief Registrar. But having regard to what the noble Viscount has said, probably the course which he proposes is the better one. It occurs to me, however, that this might be taking a sledgehammer to crack a nut, when the amount which the building societies can advance is increased in this way to require the consent of the Treasury, in the first place, and for the Order then to be subject to an Affirmative Resolution of Parliament. I should have thought that it was unnecessary for the Order, on a comparatively minor matter of this sort, to undergo this process, with the obvious delay that would be involved. I do not know whether the noble Viscount has anything to say on that aspect. Otherwise, we support the Amendment.
LORD ELTON: I should like to thank the noble Viscount for this Amendment, which was, I think, suggested on these lines by some of us in the Second Reading debate. It will be extremely welcome to the representatives of the building societies.
VISCOUNT HAILSHAM: I thank the noble Lord for his comments. It may be that we are guilty of a fault—but, if so, I should have thought that it was a fault on the right side—in submitting this matter for Parliamentary control. It is, after all, a serious matter. It will make

511
an Amendment to an Act of Parliament of quite a serious kind, and it may well be said that the Affirmative Resolution procedure is the right one. I hope that the noble Lord will let it go at that.
VISCOUNT ALEXANDER OF HILLSBOROUGH: Is this to apply collectively to the whole of the building societies in the particular year in which the Order is made, and is this going to be a repetition to be brought up again and again to Parliament? If not, why cannot a reasonable figure be put in the Bill now?
VISCOUNT HAILSHAM: Far be it from me to embark on a long economic discourse, but it is thought that circumstances may alter so as to make it unreasonable to tie the building societies down to £5,000 advances. It may be that the circumstances of building societies alter; or current practice may alter; or the value of money may alter, in either direction. There are advantages on balance, one would have thought, in the flexibility proposed in this procedure, and I hope that, on the whole, the noble Viscount will agree that it is better when dealing with an arbitrary figure, as we are here. It may turn out in practice that the arbitrary figure of £5,000 is the wrong one, but it has been selected after consultation with the interests concerned as being most probably the right one. Nobody could be more aware than I am that at the end of the day this is an exercise in judgment. I should think, and probably the noble Viscount would agree, that a degree of flexibility on a matter which is purely arbitrary, is rightly introduced into the Bill, and the degree of control which is retained is, as I said to the noble Lord, Lord Milner of Leeds, if anything, too much on the right side.
LORD SILKIN: I approve of this Amendment, and I think the Government are right to retain a certain measure of flexibility. My only reason for rising is to inquire on the actual wording of the Amendment whether it will be possible to make adjustments on this amount from time to time. If so, would it not be better to include the words "from time to time" in the Amendment? I have got nothing down on the Marshalled List and I merely put
512
this idea forward as something for consideration. It would then read:
"or such other sum as may from time to time he prescribed under this section".
The same words would be inserted in the other appropriate Amendment. No doubt the noble Viscount will consider whether it is desirable to have these words in, so as to make it quite clear that the Government can, not only on one occasion but as experience determines from time to time, make the necessary alterations. If the noble Viscount thinks that is right it could no doubt be incorporated at a later stage.
VISCOUNT HAILSHAM: I am grateful to the noble Lord. This is a drafting point and I know that those who advise me in such matters will take careful note of what the noble Lord has said. I cannot, of course, give any undertaking about it. My first impression is that it is unnecessary, but I will have it looked at.
On Question, Amendment agreed to.
VISCOUNT HAILSHAM: This Amendment is also a paving Amendment to Amendment No. 11. I beg to move.
Amendment moved—
Page 1, line 18, at end insert (", or such other sum as may be prescribed under this section.")—(Viscount Hailsham.)
On Question, Amendment agreed to.
VISCOUNT HAILSHAM: I beg to move the next Amendment.
Amendment moved—
Page line 6, at end insert (", or such other sum as may be prescribed under this section.")—(Viscount Hailsham.)
On Question, Amendment agreed to.
2.19 p.m.
VISCOUNT HAILSHAM VISCOUNT HAILSHAM moved, in subsection (4), to leave out ("subsection (8) of this section") and to insert:
"section (Exemptions from restrictions on special advances) of this Act,"
The noble Viscount said: This Amendment and Nos. 6, 7 and 8, are paving Amendments to No. 14, which is the new clause standing in my name, and it might be convenient to take them together at this stage. The new clause is not quite so formidable as it looks. It has one new subsection, which is subsection (3). The first two subsections are really replacements and purely drafting Amendments of the existing Clause 1 in the

513
Bill; but with the addition of the new subsection (3) it was thought convenient to split Clause 1 into two substantial clauses, instead of making it one very long clause. Therefore the first two subsections of the new clause contain nothing different from subsections (8) and (9) of the existing draft.
Subsection (3), which is the new part, deals with the case where a building society has a power as mortgagee to sell a freehold or leasehold property as a result of the default of the original borrower. There might be difficulty in such a case in effecting a sale unless the society can at the same time lend the new purchaser a proportion of the purchase price secured on the property. But if the purchaser were a corporate body, or if the advance meant that the purchaser would be indebted to the society for more than the £5,000 we have been discussing, the advance would be caught by the control over special advances provided by Clause 1. In many cases, where the society had no more than a small proportion of large advances, this, of course, would not matter; but if the society were somewhere near the borderline for special advances, the effect might be to prevent the society from making the required advance to the purchaser and thus to frustrate the sale.
This would be an undesirable and, I must add, an unintended result, since it is normally in the interests of a building society to command as good a market for any property that it is selling as possible. The subsection therefore provides that in the circumstances described—and only in those circumstances—the Chief Registrar may waive the limits laid down in Clause 1 in respect of a particular transaction. Paragraph (b) limits the amount of any advance in respect of which such a waiver may be granted to the amount of mortgage debt (including arrears of interest) which is awing to the building society on that property. Subsection (4) provides that the new clause shall, like Clause 1 itself, be subject to Clause 1 (12), which provides that a mortgage transferred from one person to another shall be treated as an advance by the society of the debt outstanding to that other person. I beg to move.
Amendment moved—
Page 2, line 7, leave out ("subsections (8) and (9) of this section") and insert the said new words.—(Viscount Hailsham.)
LORD LATHAM: This is a useful addition to Clause 1 as originally drafted in the Bill. But for provisions of this character, unfair and, it may well be, rather difficult restrictions would be imposed upon the building society, to the detriment of the interest of the society. In those circumstances, it is felt that your Lordships will wish to approve this Amendment.
LORD MILNER OF LEEDS: Your Lordships will have noticed that. Amendments Nos. 9 and 10 in my name were designed to amend subsection (8) of Clause 1. The noble Viscount has moved to delete subsections (8) and (9) and, therefore, assuming those Amendments are passed, my Amendments will fall to the ground. I am proposing, with your Lordships' permission, to move those Amendments to the new clause. Amendment No. 14, which is in substantially the same terms as the original subsection (8). Subject to that, I am agreeable to the Amendment.
LORD SILKIN: I approve of this new clause, but I wonder how it is going to work in practice. If every time this has to be put into operation one has to go to the Chief Registrar and get his approval, there may be substantial delay. One knows from practical experience of dealing with the Registrar that often there is a delay of many months in whatever application one has to make, because the officials are simply overwhelmed. I know the noble Viscount cannot say anything about it now, but I hope he will take a note of the fact that if this is to operate successfully the machinery must work smoothly. He will bear in mind that these are applications where one person is disposing of his home and another person is waiting to get in, and a delay of many months can be injurious to both parties. Therefore I hope he will see to it that this provision will be operated with the minimum amount of delay.
VISCOUNT HAILSHAM: I think that is a perfectly legitimate point which I will certainly bring to the notice of those advising me. Of course, ordinarily one hopes that it will not be necessary—I am speaking ex improviso—to invoke the clause, because the building society itself will be well within its limit of advances.
On Question, Amendment agreed to.
VISCOUNT HAILSHAM: I beg to move.
Amendment moved—
Page 2, line 15, leave out ("subsections (8) and (9) of this section") and insert ("section (Exemptions from restrictions on special advances) of this Act,")—(Viscount Hailsham.)
On Question, Amendment agreed to.
VISCOUNT HAILSHAM: I beg to move.
Amendment moved—
Page 2, line 24, at beginning insert ("Subject to the provisions of section (Exemptions from restrictions on special advances) of this Act,")—(Viscount Hailsham.)
On Question, Amendment agreed to.
VISCOUNT HAILSHAM: I beg to move.
Amendment moved—
Page 2, line 32, leave out subsections (8) and (9).—(Viscount Hailsham.)
On Question, Amendment agreed to.
VISCOUNT HAILSHAM: This is the Amendment I have already explained. I beg to move.
Amendment moved—
Page 3, line 23, at end insert—
("() The Chief Registrar may by an order made with the consent of the Treasury and contained in a statutory instrument prescribe that, in relation to advances made by building societies in any financial year beginning on or after the date of the coming into operation of the order, for the references in subsection (1) and subsection (3) of this section to a sum of five thousand pounds there shall be substituted references to such other sum (whether greater or less) as may be specified in the order, and the power of making orders under this subsection shall include power to vary or revoke any previous order.
An order shall not be made under this subsection unless a draft of the order has been approved by a resolution of each House of Parliament.")—(Viscount Hailsham.)
On Question, Amendment agreed to.
VISCOUNT HAILSHAM: This is purely a drafting Amendment. I beg to move.
Amendment moved—
Page 3, line 36, leave out ("so conduct its business as to").—(Viscount Hailsham.)
On Question, Amendment agreed to.
VISCOUNT HAILSHAM: This is also purely drafting. I beg to move.
Amendment moved—
Page 3, line 43, after ("is") insert (", subject to the mortgage,").—(Viscount Hailsham.)
On Question, Amendment agreed to.
Clause 1, as amended, agreed to.
VISCOUNT HAILSHAM: This is the new clause to which we were referring. I beg to move.
Amendment moved—
After Clause 1 to insert the following new clause:
Exemptions from restrictions on special advances
(".—(1) If a building society in any financial year in which it may make special advances up to the limit specified in subsection (4) of section one of this Act, or up to the limit specified in subsection (5) of section one of this Act, makes or proposes to make special advances as defined in that section on the security of freehold or leasehold property which consists wholly or mainly of dwelling-houses or flats which are in course of construction or have recently been constructed and on an application to the Chief Registrar shows to his satisfaction that the dwelling-houses or flats are being or will be made available for renting by tenants, the Chief Registrar may, if he thinks fit, for the purpose of authorising the building society to exceed the said limit by an amount equal to the whole or some proportion of the amount of the advances in respect of which the application is made, grant to the building society permission in writing to make special advances in that financial year in excess of the said limit, but subject to such other limit under the said subsection (4) or the said subsection (5) as may be specified in the permission for that purpose, and section one of this Act shall have effect accordingly.
The limit specified in the permission may be expressed as a percentage of the total of all advances made by the building society in the year, or in any other manner.
(2) Where the proportion ascertained under paragraph (b) of subsection (3) of section one of this Act as at the end of a financial year for a building society exceeds ten per cent. but does not exceed twenty-five per cent. (so that subsection (5) of that section applies in the following financial year) and the building society shows to the satisfaction of the Chief Registrar that that proportion represents in whole or in part advances in respect of which an application has at any time been made under the foregoing subsection and by reference to which permission was granted under that subsection, the Chief Registrar may, if he thinks fit, grant to the building society permission in writing to make special advances in the said following financial year in excess of the limit specified in the said subsection (5), but subject to such other limit under that subsection as may be specified in the permission, and section one of this Act shall have effect accordingly.
The limit specified in the permission may be expressed as a percentage of the total of all advances made by the building society in the year, or in any other manner.
(3) If a building society which proposes to sell any freehold or leasehold estate mortgaged to the building society in exercise of its. Dowers as mortgagee, and to make to the

517
purchaser an advance on the security of that freehold or leasehold estate which will constitute a special advance as defined in section one of this Act on an application to the Chief Registrar shows to his satisfaction—

(a) that the person entitled to redeem the mortgage is a body corporate or a person who is indebted to the building society (taking into account the advance secured by the mortgage and all other debts of any description, whether immediately repayable or not) in an amount exceeding five thousand pounds, or such other sum as may be prescribed under section one of this Act for the purposes of subsections (1) and (3) of that section, and

(b) that the amount of the mortgage debt which at the time of the application has not been repaid to the building society, together with any arrears of interest in respect of the advance secured by the mortgage, exceeds the amount of the advance which the building society proposes to make to the purchaser of the freehold or leasehold estate,

the Chief Registrar may, if he thinks fit, grant to the building society permission in writing to make the special advance to which the application relates; and for the purposes of subsections (4), (5) and (6) of section one of this Act, any special advance for which permission is granted under this subsection shall be left out of account.
(4) Subsection (12) of section one of this Act shall apply for the purposes of this section as it applies for the purposes of that section."—(Viscount Hailsham.)
LORD MILNER OF LEEDS LORD MILNER OF LEEDS moved, in the proposed new subsection (1), after the first "flats" to insert, "which it is proposed to construct or". The noble Lord said: I now propose to move the Amendments which were originally Amendments to subsections (8) and (9). The new clause proposed by the noble Viscount is designed to authorise the Chief Registrar, if he thinks fit, to extend the powers of building societies to exceed the limits laid down by Clause 1 for the purpose, according to the clause as drawn, to make advances on the security of freehold or leasehold property which consists wholly or mainly of dwelling houses or flats in the course of construction or recently constructed. The purpose of my first Amendment is to insert "which it is proposed to construct or" before "which are in the course of construction", and so on. In my experience, builders, who presumably will be the people taking advantage of this new clause, make their arrangements with building societies beforehand. The clause as drawn would appear to limit their applications to cases where dwelling houses are in the course of construction or have recently been construc-
518
ted; and, if I am right, it would seem appropriate to insert the words "which it is proposed to construct" in order that the builders may make the appropriate application to the Chief Registrar before entering upon the construction of the house.
The second point is that the new clause limits the power to make these applications to cases where the dwelling-houses or flats are being or will be made available for renting by tenants. The purpose of the second Amendment is to extend that power to cases where builders propose to erect houses for sale to owner-occupiers. It seems to me that houses are required both for renting purposes and for owner-occupation. We know that the Government house-building proposals, if I may call them such, are now very much reduced; they have come down from something like 300,000 a year to something like 120,000 a year; whereas private building has gone up, although I am not sure of the precise figures. In either case, it would seem that both houses and flats for renting and for sale to owner-occupiers are necessary and desirable in present circumstances.
In this matter I look with sympathy on the efforts of small builders. So often one sees large building contractors building huge estates and selling to owner-occupiers, with the result that in many instances the small builder is being pushed out. In the provinces, in particular, the small builder, the practical man, comes along and wishes to build, say, half a dozen or a dozen houses, and applies to a building society for building advances. But he will be prevented by the limits of this Bill from obtaining any advance. In the case of a small limited company it would be prevented altogether. In the second place, I suppose that nowadays £5,000 would not put up more than two or three houses. Therefore it is desirable that the clause which is merely permissive, should be extended to what is called building finance, and thereby enable small builders (large builders can go to insurance companies or banks; or they may already have the funds) to apply to building societies for building finance to enable them to put up houses. The small builder gives his personal attention to the building; he himself is probably a craftsman, and in many instances it is a better

519
job for that reason. In my submission the new clause should be amended to permit applications to be made in cases where it is only proposed to construct dwelling-houses, as well as in cases where the buildings are already in course of construction. By my next Amendment I seek to extend the clause to cases where people wish to build a few houses for sale to owner-occupiers. I beg to move.
Amendment to Amendment moved—
Line 7 of subsection (1) of the proposed new clause, after ("flats") insert ("which it is proposed to construct or").—(Lord Milner of Leeds.)
VISCOUNT HAILSHAM: These two Amendments to the new clause are on rather a different footing, and I propose, with the permission of the Committee, to deal with them separately. As regards the first, which is all that has been formally moved by the noble Lord, Amendment No. 9, I am quite prepared to accept it as an Amendment to line 7 of the new clause. The position is that it is intended that societies should apply in respect of advances which they intend to make, and it would seem only reasonable that they should be allowed to apply not only in respect of intended advances but also in respect of intended projects, and this will enable the approval of the Chief Registrar to be obtained before the builder starts work. I therefore accept Amendment No. 9 as an Amendment to line 7 of the new clause.
LORD MILNER OF LEEDS: I am much obliged to the noble Viscount.
On Question, Amendment to Amendment agreed to.
LORD MILNER OF LEEDS: I beg to move the second Amendment to the Amendment.
Amendment to Amendment moved—
In line 10 of subsection (1) of the proposed new clause, after ("tenants") insert
("or for sale to owner-occupiers").—(Lord Milner of Leeds.)
VISCOUNT HAILSHAM: This is, as I indicated, rather a different matter, and as at present advised I do not feel able to accept this Amendment to the Amendment. It is, I think, important to make oneself clear as to exactly what we
520
should be doing if we accepted it. The effect would be to exempt, or to attempt to exempt, what is called "bridging finance" from the operation of the restrictions on special advances. There is, of course, a great deal of common ground here. We all know and accept that bridging finance for builders, which is a form of assisting builders to build residential property, is a perfectly reasonable form of activity for a building society. Nobody would desire to suggest anything to the contrary. I would also concede without difficulty that bridging finance—that is to say, finance of buildings which are being put up—has this merit over some other forms of special advances or what will be special advances if the Bill passes into law: that it is not outstanding for very long, and therefore the society is at risk for a shorter time in respect of such an advance. I think that is a perfectly legitimate point to make.
On the other hand, I think it would have to be conceded that property under construction has a more speculative element in its value than most other property, and a building society could make a substantial loss if it advanced to a builder who, possibly through no fault of his own, but possibly otherwise, failed to sell the house quickly and for the price for which he expected to sell it, and, as a result went bankrupt. The desirability of societies being able to continue to help builders in this way by way of bridging finance was in truth one of the factors which led us to the decision to permit a proportion of special advances and not to prohibit them altogether. But we have no reason to believe that societies will not have ample scope for advances by way of bridging finance to builders within the permitted limit of 10 per cent. and 25 per cent. already allowed for under the clause and our view is that there is therefore no justification for giving advances of this kind and separate treatment from other advances. The Government would feel that a strong justification would be needed to make an exception to the general limit of special advances and thereby to give the Chief Registrar further discretionary powers in that matter. We feel that the existing limits of 10 and 2½ per cent. are sufficient to take care of the case which the noble Lord has quite rightly

521
made, and for that reason we would ourselves resist the Amendment.
LORD LATHAM: This raises a question not of the merits of what the noble Viscount terms "bridging finance", but the measure of it, and I think the Committee would wish to see to it that there was excluded from the Bill any provision which really vitiated the motive (if I may use that word) which has prompted the introduction of the Bill. Could the noble Viscount inform the House what are the views of the building societies upon this particular clause, and whether they regard it as being likely to be restrictive, to the detriment not only of the activities of the building societies bat of the interests and activities of the private builder?
VISCOUNT HAILSHAM: That is a matter upon which, of course, we have taken the views of, among others, the building societies. I do not think I am authorised to say, one way or another, that they have a concerted view in the matter. As I understand it, the noble Lord who moved the Amendment was moving it in his private capacity, and not as representing the building societies. I do not think it would be proper for me to say more than that.
LORD MILNER OF LEEDS: I think the noble Viscount may well agree with me that his argument is rather far-fetched. It is true, as he said, that the purpose of this second Amendment is to bring "bridging finance", as he terms it, outside the special advances limit. But I cannot see the difference between a builder building to rent who may fail to obtain tenants, or who eventually may have to sell, or who may have some other financial difficulty, and the builder who builds to sell to owner occupiers and who the noble Viscount thinks might in certain circumstances go bankrupt. What is the distinction between the two cases? If the noble Viscount had said that: it is more necessary to have houses to let than houses to sell, then I could understand the position; I think it might be so—I do not know. But what he says is that there is more danger in making advances to a builder building houses to sell—where there is a pre-arranged agreement with a building society to take the houses over, or to advance monies on the houses to the eventual purchasers—than to a builder building houses to rent. With respect, I
522
cannot see the difference between the two cases. If it is permissible to obtain an alternative, or at least the possibility, of an advance out of the special advance limit in one case, then in my submission it should be possible to do that in the second case. I do not know whether the noble Viscount can tell me the distinction between the two cases. If so, I should be grateful.
LORD SILKIN: I should have thought that the criterion in this matter should be the interests of the community. Everyone who has any dealings with property of this kind is aware that there is an increasing demand on the part of persons desiring homes to buy their homes rather than to rent them; and I think that we ought to give every possible encouragement, as, ostensibly, the Government have done in the past, to such people. It is worth while considering whether the Bill should not be extended so as to facilitate advances of that kind to the increasing number of people who are acquiring their homes, or more particularly their flats—there is a growing practice to-day for people to buy flats. The case which the noble Viscount made against this, I understand, is that there is a greater risk in the case of dwellings which are being erected for sale. Could that not be one of the matters which the Registrar should take into consideration?
It may be true that there is a certain amount of risk in certain areas at certain times. That, of course, is a matter which the builder himself would have weighed up most carefully before he embarked on the scheme, and which those who are assisting him and financing him would also have weighed up. But there is no reason why the Registrar should not weigh that up for himself and use his discretion, saying, "This is too great a risk", or that the amount which it is proposed to advance is too great. In that case I would ask the noble Viscount to have this matter looked at again. As I said at the outset, I think it really would be in the interests of the community and would encourage the provision of dwellings of that kind which, as things are, is going to be made somewhat more difficult.
VISCOUNT HAILSHAM: The words, "in the interests of the community are, of course, very like "public policy"—sometimes a rather rough horse to ride.

523
Of course this will be looked at again. The mere fact that two noble Lords have pressed it upon me will, I think, ensure that it will be looked at again. But I am bound to tell both noble Lords that at the moment I have no reason to think that when it is looked at again the Government will come to another decision. I think one has to keep quite clearly in one's mind that the purpose of this clause is, in the interests of the community, to prevent a particular abuse of the purposes for which building societies were founded and which I explained in my Second Reading speech. That abuse is the weakening of the hands of investors in the building societies and the surrender of the confidence of the investors in the building societies. This, as I indicated in my Second Reading speech, is a matter which depends upon the prohibition of abuse.
Of course, we all want to encourage owner-occupiers. I had always thought, until I heard the noble Lord, Lord Silkin, that we on this side of the House were even more anxious to do so than Members opposite. I realise that, even on that criterion, the difference between the Parties has now been removed, and that I was wrong in my supposition. But I said, in answering the noble Lord, Lord Milner of Leeds, that so far as we were concerned, we think, on the evidence before us, that the building societies who wish to provide finance of this kind will be amply catered for by the proportions of permitted special advances allowed for by the clause, and that that is really the way out of that; and that one of the reasons why we made the proportions as high as 10 and 25 per cent. respectively was precisely because, up to a point we wished to encourage this type of advance. But there is an element of speculation in it, and we think that they should not be treated as other than what they are—namely, outside the general run of building society activities.
The noble Lord, Lord Milner of Leeds, with great forensic ingenuity, pressed me to say what was the difference between a tenant-occupied and an owner-occupied flat in such circumstances. The noble Lord is most experienced in legal matters and I should be sorry to attack him on his own ground, because this is very much his
524
own ground, but I would, with respect, suggest to him that for once he has allowed the lawyer in him to get the better of the business man, because we all know that in fact the forms of finance for houses to rent are, in practice, quite different from the kinds of finance that we are talking about, which provide a builder with finance to enable him to go on building a house for which he will recoup himself by selling it to an owner. These are quite different business propositions. I will admit that on a technical point the noble Lord, Lord Milner of Leeds, made a very good case, but I would submit to your Lordships that it was really a legalistic and not a business point.
On Question, Amendment to Amendment negatived.
Amendment, as amended, agreed to.
Clauses 2 to 4 agreed to.
Clause 5:
Power to suspend raising of money by building society
5.—
(6) Not less than fourteen days before making an order applying subsection (2) of this section to any building society, the Chief Registrar shall serve on the building society a notice stating that he proposes to make an order, and shall consider any representations with respect to the proposal made to him by the building society within such period (not being less than fourteen days) from the date on which the building society is served with the notice as the Chief Registrar may allow and, if the building society so requests, afford it an opportunity of being heard by him within that period.
(7) Notice of the making of an order under this section shall be published by the Chief Registrar in the London, Edinburgh and Belfast Gazettes and in such other ways as appear to him expedient for informing the public.
2.50 p.m.
LORD MILNER OF LEEDS LORD MILNER OF LEEDS moved, in subsection (6), after the second "society" to insert:
"and on each director thereof."
The noble Lord said: Under this clause it will be permissible for the Chief Registrar to make an order whereby building societies are prohibited from taking investments and so forth. The clause provides that before the making of such an order notice shall be given by the Chief Registrar to the society; and later in the

525
same clause there are provisions whereby certain quite heavy penalties might be imposed upon directors if a building society should fail to comply with the order of the Chief Registrar. The penalties for breach of his order are stated as:
"on conviction on indictment to a fine or to imprisonment for a term not exceeding two years, or to both, and
on summary conviction to a fine not exceeding two hundred pounds or to imprisonment for a term not exceeding three months, or to both."
Those penalties would be imposed upon the directors of a society, and it is therefore right that the directors themselves should receive notice of the order made, or proposed to be made, by the Chief Registrar. It is not inconceivable that that notice, though it might be received by the building society, might, through failure to take some action, not come to the ears of directors; and in view of the severity of the penalties imposed upon directors personally it appears right that notice, in addition to being served upon the building society, should be served also on the directors of the society. The question of proof of service would arise, but that is quite another matter. In the event of this Amendment being accepted it might be necessary to make some provision whereby an order shall not be invalidated or vitiated in the event of its being impossible to prove service on any particular director. I move this Amendment really for the protection of directors of building societies who, in certain circumstances, might be laid open to very severe penalities. I beg to move.
Amendment moved—
Page 7, line 12, after ("society") insert ("and on each director thereof").—(Lord Milner of Leeds.)
VISCOUNT HAILSHAM: Again, one cannot help sympathising, up to a point, with the purpose underlying the noble Lord's Amendment, but I hope that, on reflection, the Committee will not accept it. It is important to realise that this Clause 5 is a vital one in the machinery of the Bill, to enable the Chief Registrar to stop societies which are misconducting their affairs from raising money. The Bill provides that before this drastic action is taken—and, of course, it is drastic action—notice of the intention must be served upon the society to enable the society to make represent-
526
tations of one kind or another. It is common ground between the noble Lord, Lord Milner of Leeds, and myself that the society must be served with the notice. It would be a substantial injustice to allow a power of this kind to be used otherwise. But in our view it is neither reasonable nor possible to do more than serve notice upon the society, because I am advised that otherwise the whole effect of the clause might be invalidated.
I should have thought that it was the business of directors of the building societies to make sure that they know when things have got to such a pass that a notice of this kind has been served on the society of which they are directors and for which they are, in substance, trustees; and that they ought to exercise at least all the care expected of directors of limited companies or trustees in the conduct of a business for which they have made themselves responsible. It IS not unreasonable, therefore, to leave it to the internal machinery of the society—which must, if it is in any way a properly conducted society, include informing the directors when notice of this kind has been served upon the society—to see that the matter is properly brought to the attention of the management.
I am advised that in particular circumstances acceptance of this Amendment might place the Chief Registrar in a quite impossibly difficult position, through failure to serve notice on any one director of whose identity or address the Chief Registrar might in some circumstances be unaware—he might, indeed, be actually seeking to evade service for purposes which could be only too plain. In given circumstances, that might be fatal to the intended exercise of this power. Therefore, although I have a great deal of sympathy with directors who find themselves liable to prosecution for the misconduct of the affairs of a society, I believe that the balance of advantage and of justice lies in the provisions of the clause as drafted and not in the clause as proposed to be amended.
LORD MILNER OF LEEDS: I wonder whether the noble and learned Viscount is right, because, of course, the Chief Registrar must have registered with him the names and addresses of directors of building societies the moment their

527
appointments are made. There is therefore no question of the Chief Registrar being in any doubt about that; or at least he should not be. But in view of what the noble and learned Viscount has said I agree to withdraw my Amendment.
Amendment, by leave, withdrawn.
2.59 p.m.
LORD ELTON LORD ELTON moved to leave out subsection (7), and to insert instead:
"(7) The Chief Registrar shall specify in the notice given to the building society under subsection (6) of this section the grounds on which he proposes to make an order and he shall also specify in the order applying subsection (2) of this section to the building society the grounds on which he has made the order, and the grounds specified in such an order may differ from the grounds specified in the notice.
(8) If the Chief Registrar makes an order applying subsection (2) of this section to a building society, the building society may within fourteen days of the making of the order appeal from the order to the High Court in England or to the Court of Session in Scotland and thereupon the Court may, if it thinks it just so to do, set aside the order:
Provided that any such order shall remain operative pending the determination of the appeal by the Court.
(9) If the building society does not appeal within the period specified by the last foregoing subsection or if the Court dismisses the appeal, as the case may be, the Chief Registrar shall then publish a notice of the making of the order under this section in the London, Edinburgh and Belfast Gazettes and in such other ways as appear to him expedient for informing the public."
The noble Lord said: I am not sure whether it is proper to declare this kind of interest, but I want to declare that I am President of the Metropolitan Association of Building Societies and a Vice-President of the Building Societies' Association, of which the noble Duke who has asked me to move this one of our joint Amendments is President. And in fact, I am trying to express in this Amendment the views of the Building Societies' Association. The object of the Amendment is to introduce a right of appeal, because I believe that your Lordships will agree that Clause 5 confers very great powers on an individual—the Chief Registrar. Although the building societies have no objection whatever to his having those powers, they feel that in view of their great extent there should be some right of appeal.
It will be seen that subsection (1) of this clause enacts that, if the Chief Registrar considers it expedient, he may, under subsection (2), in effect, put any building society out of business—because that is what paragraphs (a) and (b) of subsection (2) amount to. He can prevent it from accepting a deposit, et cetera, or from accepting any payments, et cetera, and that, in effect, amounts to putting it out of business altogether. That is, of course, a very great power to confer on an individual. It is perfectly true that he can act only with the consent of the Treasury, and that, as the noble Viscount has already pointed out this afternoon, in an analogous context, that means that the Chancellor of the Exchequer can be questioned. In spite of that fact, the building societies feel very strongly that there should be some right of appeal to the courts.
Perhaps one does not feel that, with the present Chief Registrar and the present Chancellor of the Exchequer, and the present Treasury officials, there should be any need to contemplate such a thing as an appeal. But, after all, we are legislating for the future, and it is conceivable that future Chief Registrars might be perhaps hasty or unwise, or some future Treasury might be perfunctory in its control—or even perhaps somewhat oppressive. This is the age of Crichel Down, and Governments have not always been over-tender to the individual or individual organisation. I think that most of us, looking back, can think of occasions when it might have been a good thing for an individual to have had a right of appeal.
This Amendment is drafted with the intention of requiring the Chief Registrar to specify his reasons in writing—the point of that, of course, being that it is difficult to conceive of an appeal against an act of discretion. But if it is not a mere ipse dixit, if it is not a mere act, if the reasons are wrong, then there is something to appeal against; and the proposal in the Amendment is that there should be an appeal to the High Court, althought the notice given by the Registrar would come into operation while the appeal was going on. So it would not be unduly delayed. I am told that

529
this clause is probably modelled on Section 11 of the Prevention of Fraud (Investments) Act, 1958, which confers similar powers. But in that case all the Registrar is empowered to do is to prevent a company from advertising; here, as I have just told the Committee, he is empowered to put a building society virtually out of business.
I think I may claim that there are precedents of a kind for the appeal proposed in my Amendment. For one thing, Section 6 of the Building Societies Act, 1894, provides that where the Registrar cancels the registration of building societies he must specify his reasons, and the society can appeal to the High Court. That is a good analogy for what we are asking for. The noble Viscount will know better than I do whether this is also an analogy which can be put, but I understand that there has been recently in the courts (I am not sure that it is not still going on in the courts) a case of a building society which has appealed against an action by the Chief Registrar in which the Chief Registrar did, of his own grace and favour, so to speak—he was not compelled by any law so to do but did it of his own volition—specify his reasons, and thereupon the building society appealed to the High Court. The High Court, I am told, was in some doubt whether it was entitled to accept this appeal; but it did so, and I understand that the case is being heard. So I would submit that there is a precedent in what has actually happened and what has in the past been enacted. I very much hope, therefore, that the noble Viscount, who I know is always most sympathetic to the individual and would not wish to see either an individual or an individual society put under too great Governmental or bureaucratic powers, may see fit to make some concession here.
Amendment moved—
Page 7, line 20, leave out subsection (7), and insert the said new subsections.—(Lord Elton.)
LORD SILKIN: I should like to support this Amendment. It is, it seems to me, in keeping with the view that this House took some time ago when it considered the recommendations of the Franks Committee. On that occasion we all felt that any action, any decision, by a tribunal or by an authority who had discretion—or by an official, I suppose,
530
other than the Minister himself—should be subject to appeal. It seems to me that this proposal is simply in harmony with the views which the House expressed on that occasion. I very much hope that the noble Viscount will see his way to look at it.
LORD HAWKE: Before my noble friend replies, could he answer a question about this clause? Presumably the Chief Registrar is going to take action in a matter of this kind only if he has good reason to believe that the society is bankrupt. He then gives notice to the society. Then, for fourteen days after that, presumably, the society can go on taking deposits, which stand to be lost in part or in whole. Under my noble friend's Amendment there would be a further long delay, presumably, while the society appealed. Have I misread the clause?
LORD ELTON: I think that the noble Lord is not correct in saying that under my Amendment there would be a further long pause, because it expressly provides that the notice given by the Chief Registrar shall come into force while the appeal is being heard. It is not delayed by the appeal. It holds good; and if the appeal is successful then presumably it is reversed. But it is not delayed.
LORD HAWKE: I thank my noble friend. That puts my mind at rest on the second score. But, on the first score, I am asking the noble Viscount whether he can say what happens to the society during the fourteen days' notice. Does it still go on taking deposits?
VISCOUNT HAILSHAM: I think I am right in saying—although I should have known the answer to my noble friend's question without that qualification—that during the fourteen days it can go on accepting deposits until the order is operative. But if I am wrong about that, no doubt I shall be corrected.
This is not an altogether easy matter, and I do not want in any way, in anything I say, to give the impression that my mind is closed to all proposals for an appeal against the Chief Registrar for this kind of purpose. What I am absolutely certain of is that this particular proposal is wrong. I sympathise very much with all the argumentation in favour of it which my noble friend Lord Elton has given; and I am also,

531
speaking as a member of the profession, very grateful for the trust in the courts as a means of achieving justice which is implicit in the Amendment. But as one who has practised in the courts for 25 years I would say that this is making the wrong use of the courts and would lead to very grave constitutional difficulty.
In order for the courts to work, to do the job which it is the business of the courts to do, there must be a justiciable issue. The courts are not experts in the management of the affairs of a building society or in the multitudinous matters about which they have to pronounce from day to day. Therefore, in order to give the courts anything to try, either the law or Parliament has to create what is called a justiciable issue; that is to say, to give them guidance about the principles upon which they are to proceed. This is precisely what this Amendment does not do. I will come back to that point in a moment, because it seems to me absolutely fatal to this particular type of proposal for an appeal. The decision of the Registrar to suspend the operation of raising money is fundamentally a business decision, arrived at on business grounds, as to the likelihood of depositors losing their money in the building society. Things are going wrong: so wrong that the Registrar feels it his duty—and it will be his responsibility to Parliament in the end—to intervene before things get to the stage where the depositors lose their money. Now that, ultimately, is an administrative and practical decision by an administrative official responsible to Parliament.
Then it is said that the Registrar's view should not be final. As I say, I am not going to pre-judge that question. If we can think of some way, other than the present one, of making it subject to review, I think that there might be something said for it. But I must say that I think there is an insuperable objection to this particular proposal. The courts are not going to make themselves responsible for an administrative act. The whole issue is begged by the last words of the second subsection in the proposed insertion, just before the proviso:
"… the Court may, if it thinks it just so to do, set aside the order.…"
532
Now what, in this context, is justice? The court is given no guidance at all as to the principle on which it should proceed. The Registrar is not a judicial officer: he is an administrative officer, and he is proceeding on the basis of what is administratively necessary if the depositors' money is to be safeguarded. The courts have no such experience, and are given no guidance if this particular method is to Abe adopted.
I think that if the noble Lord, Lord Elton, will look again at the case to which he referred (which is not only before the courts now, but is actually being heard to-day, if my Times Law Report gives me accurate information) it will give him some solace; because, if I have understood it aright, what the courts have decided under the comparable section of the Prevention of Fraud Act, 1958 (it is Section 11) is that in this respect and to this extent the Registrar must act judicially—or, as it is rather inelegantly put, quasi-judicially. If the Registrar does not apply what is called technically "natural justice" (and that is a phrase which lawyers, at any rate, think they understand, although I hope that none of my more pertinacious noble friends will ask me to give a full disquisition of its meaning this afternoon) then the courts have a right of review by a process known as certiorari.
I think this point was argued before the Divisional Court, and it was decided that they had jurisdiction. Although I did not know, when I read my Times this morning, that this point was coming up for me to answer this afternoon, my recollection of the report which I read this morning is that the Court of Appeal had certainly entertained the appeal without suggesting, as a preliminary point, that they had no jurisdiction to hear it; and that it would probably in due course come to be decided one way or another on its merits. But my own feeling is that that is probably the kind of review which already exists: it would exist under the clause as drafted, and would give the most adequate protection to the subject without taking away the administrative responsibility of the official.
It may be that even that is not the last word. I should not like to speculate myself as to the various forms of review which might be discussed as appropriate, partly because my own opinion just

533
comes down on the side of the existing draft; but I should not in any way like noble Lords to feel that we seek to close the door to further discussion. It is only this particular suggestion for an appeal which seems to me to be, for the reasons which I have given, unacceptable. If the noble Lord, or those he represents, will enter into discussions, we will see whether we can think of something which will do, but I do not think I can go further than that.
LORD CITRINE: May I ask the noble Viscount whether, in view of what he has said about the principles of natural justice, it is not obvious that the Registrar should give to the society the grounds upon which he proposes to act? In the clause as it is, there is a provision whereby the society can make representations to the Registrar, and surely those representations would be facilitated if they knew the grounds upon which the order was being made. I put this point—it is contained in the Amendment—so that when the discussion has taken place with the noble Lord the reasons may be further gone into.
LORD LATHAM: I would support this Amendment on the grounds that, whilst it is desirable and essential to protect depositors and shareholders in building societies, it is none the less necessary to be fair and just to the societies. The noble Viscount made great play—interesting play, I think—of the need in his submission for the courts to have a justiciable issue, and no one would dissent from that. But it is the case that a person can present a petition to wind up a company, and, that petition being presented to the courts, the courts not so much have a justicialyle interest as are required to exercise a business judgment and appraisal of the position of the company at that time. Indeed, in this very clause there is a power given to the Registrar to present a petition to the court for the winding up of a society, and that petition which is presented is based almost wholly, unless there has been manifest misfeasance, on business considerations and the condition of the company—its liabilities, its inability to meet them, its inadequacy of assets in relation to its liabilities and matters of that kind.
It seems to me that if the courts are able to deal with issues of this kind—
534
and they have been able to, of course, for many years: since 1864, I believe—they should not find themselves unable to deal with an appeal on a matter concerning the condition and financial circumstances of a building society. As my noble friend Lord Silkin has said, we were not excessively concerned about the need for justiciable issues when we were discussing, first of all, the Report of the Franks Committee, and then the legislation which followed. It seems to me that the Amendment preserves the rights of the building society, however badly it may be conducted; and it is to be hoped that the conversations that the noble Viscount has been good enough to promise to arrange may result in some less draconian method being found in this connection.
LORD ELTON: I should never have the courage to argue in your Lordships' House as to the nature of a justiciable issue; and, if I were going to argue with anyone, I certainly would not choose the noble Viscount as an opponent. I will therefore not go further into that, except to say that I am not entirely clear why a justiciable issue is so indispensable, and why what would arise from the Amendment would not be a justiciable issue. I am not clear why the section which I quoted from the Act of 1894 was committed to the Statute Book and has been applied, because it would seem that there have been appeals of precisely the same nature arising from that Act.
I was a little alarmed when I saw the wording of my own Amendment as drafted by those who advised me, where it says, "if it thinks it just so to do, …" I half expected that some philosophic questions might arise and I would rather have it put in a much less philosophical way and therefore subject to far fewer pitfalls; perhaps "if it thinks it proper to do so". I am grateful to the noble Viscount for saying, with obvious good will towards this Amendment, that he is prepared to consider ways in which, without raising too profound judicial or philosophic issues, we can do what we are trying to do—which is, not to leave too much autocratic power in the hands of one official and to leave to any society, however it may have misconducted its affairs, some loophole for appeal. On the understanding that the noble Viscount is going to be good enough to consult with

535
us, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
VISCOUNT HAILSHAM: This is a drafting Amendment. I beg to move.
Amendment moved—
Page 7, line 21, leave out second ("the").—(Viscount Hailsham.)
On Question, Amendment agreed to.
VISCOUNT HAILSHAM: I beg to move this Amendment. No. 20 will be consequential to it. Clause 5 authorises the Chief Registrar to make an order prohibiting a building society from accepting further loans, whether by way of deposit or share subscription or by any other way. I am prepared to go into greater detail if the Committee want, but I would say that the protection under subsection (9) of the clause is restricted to shareholders and does not extend to depositors. This is illogical. The protection of this provision ought to extend to depositors and shareholders alike, and the purpose of the Amendment is to extend this protection to depositors as well as shareholders. The rest of the Amendment is drafting.
Amendment moved—
Page 7, line 40, lease out ("members who are") and insert ("depositors or").—(Viscount Hailsham.)
On Question, Amendment agreed to.
VISCOUNT HAILSHAM: I beg to move the next Amendment.
Amendment moved—
Page 7, line 42, after ("money") insert ("deposited or").—(Viscount Hailsham.)
On Question, Amendment agreed to.
Clause 5, as amended, agreed to.
Clause 6 [Power to control advertising by a building society]:
LORD ELTON: This is the same point as that which your Lordships have just discussed under Clause 5. It is an attempt to assert the right of appeal against the power of the Chief Registrar to take action against building societies in respect of their advertisements. The same arguments apply and I assume that your Lordships will wish to leave this clause in the same state as Clause 5. I beg to move.
Amendment moved—
Page 8, line 26, at end insert—
("(4) The Chief Registrar shall specify in the notice given to the building society under subsection (3) of this section the grounds on which he proposes to give the direction and he shall also specify in the notice given under subsection (1) of this section the grounds on which he has given the direction, and the grounds specified in the notice given under subsection (1) may differ from those specified in the relevant notice under subsection (3).
(5) If the Chief Registrar serves a notice under subsection (1) of this section on a building society, the building society may within fourteen days after the service of the notice appeal from the directions to the High Court in England or to the Court of Session in Scotland and thereupon the Court may, if it thinks it just so to do, set aside the directions:
Provided that any such directions shall remain operative pending the determination of the appeal by the Court.")—(Lord Elton.)
LORD LATHAM: As the noble Lord, Lord Elton, has said this Amendment raises a similar question to that which was raised on Clause 5, except that it has also some other disadvantages, which I might be permitted to indicate. It seems to me that under the clause the Chief Registrar is given not only power to prohibit advertisements which he regards as being objectionable and to insist upon their withdrawal and discontinuance, but also, under subsection (1) (a), the power to draft advertisements. Paragraph (a) says
"give directions as to the matter which shall or shall not be included in advertisements, and as to the form of any advertisements,"
I should have thought that that was a most unusual obligation to cast upon the Chief Registrar, on a person who is not personally answerable, except presumably to the Treasury, for what he does. I should have thought that any Chief Registrar would have expressed the desire not to have such wide powers as are proposed to be given him under this clause. Of course, drafting advertisements is an attractive exercise, sometimes, even though they may be called leaflets, but it can lead one into all sorts of difficult byways. It seems to me to be hardly in accordance with constitutional practice and our traditions as regards the Civil Service and those who are in the employ of the State to cast upon them the responsibility or to give them the right we propose to provide in this connection. I hope that the noble Viscount can give attention to this point when consideration is being given to Clause 5, because I think it

537
raises a matter of considerable importance.
VISCOUNT HAILSHAM: I think that the noble Lord, Lord Latham, has somewhat overstated his case. Clause 6 is a more moderate clause because it stops a society only from advertising and not from raising money. As I explained in some detail on Second Reading, it was introduced for the precise reason that Clause 5 procedure, which corresponds to Section 11 of the Prevention of Fraud Act, was considered too drastic for less serious cases. It is true that there is power under Clause 6 to prohibit certain matter appearing in advertisements, but again that is a mitigation of the clause, not an exacerbation. It is thought that in cases not quite so flagrant it would not be necessary to stop a society from advertising altogether, but only to make them discontinue misleading matter in advertisements. For instance, advertisements which have appeared on behalf of some of the perhaps less reputable societies have suggested that they were incorporated so long ago as 1874, by using the phrase, "Incorporated under the Building Societies Act, 1874". This gives the impression of a very long standing, prosperous society. It is thought that the Registrar should have power to prohibit advertisements of that kind.
In a sense, all this is irrelevant to the question of appeal. Obviously, the same kind of argument could be raised on Clause 6 as could be raised on Clause 5, as the noble Lord, Lord Elton, said, and the last thing I desire to do is to suggest that they should be treated differently. I am not sure that they should not be treated exactly the same as regards appeal, one way or the other. But I must tell the noble Lord, Lord Latham, that if he boggles at the Registrar drafting advertisements, as a practising lawyer for twenty-five years I shudder at the idea of the law courts doing so.
LORD LATHAM: I did not intend to overstate the case, but according to the wording of the clause it is the case that the Chief Registrar has the right, and it may well he the obligation, to draft advertisements. The words of the clause
538
are that, with the consent of the Treasury he may:
"by notice served on the building society give directions controlling the advertisements which the building society may issue or cause to be issued and may in particular—

(a) give directions as to the matter which shall or shall not be included in advertisements, and as to the form of any advertisements."

It could not be stated more clearly that he has the power and maybe, as I have said, the obligation to draft advertisements. That is entirely different from the protective consequences of his being able to prohibit objectionable advertisements and to insist upon their withdrawal if they are already in currency. That is a fairly wide power, in any case; nevertheless, in the circumstances of the times it is one which can be accepted. However, it seems to me to be an almost indefensible thing to give the right to, and impose the obligation upon, a servant of the State to draft advertisements for a building society or any other business or entity which already is in difficulties and about the conduct of which there are doubts and apprehensions.
THE EARL OF DUDLEY: I have the same interest in this matter as the noble Lord, Lord Elton. The arguments of the noble Viscount, Lord Hailsham, this afternoon have been a trifle legalistic and somewhat over the heads of laymen like myself, and I have had difficulty in comprehending them. What I should like to know is whether the noble Viscount will give an assurance that this matter will be considered carefully between now and the Report stage to see whether some form of appeal may be given to the building societies against the rather Gestapo-like decision by the Chief Registrar, who is given such great powers under this Bill.
VISCOUNT HAILSHAM: I thought that I had already satisfied the noble Lord on Clause 5, and I have already said that Clause 6 stands on the same footing as Clause 5. I hope that that is not too legalistic. I must say that I cannot accept references to the Registrar as being Gestapo-like. They appear to be intemperate and wholly inaccurate.
LORD ELTON: I am grateful to the noble Viscount for classing Clause 6 with

539
Clause 5, which he has already so kindly promised to reconsider, and, in the circumstances, I beg leave to withdraw the Amendment.
LORD CITRINE: I should like the noble Viscount to tell me one thing. In the clause it says:
"give directions requiring the withdrawal of any advertisements which are on display in public places".
Would it be a public withdrawal?
VISCOUNT HAILSHAM: In the sense that that which was previously public ceases to be public, it would be public. I do not think they have to say publicly why they have taken the advertisement down, and it would not in that sense be public. But if the advertisement is published contrary to the order, I should imagine that such an advertisement which contravened the order would have to be removed from the public gaze, and in that sense I suppose the withdrawal is public.
LORD LATHAM: If I may say so—I shall be corrected if I am wrong—the withdrawal is not limited to advertisements which are already out.
VISCOUNT HAILSHAM: I do not think I suggested that it was. I was only answering a question put to me by the noble Lord, Lord Citrine. I was not in the least intending to suggest that that was so, and if I gave that impression I can only apologise; but I cannot think that anything I said did give that impression.
Amendment, by leave, withdrawn.
Clause 6 agreed to.
Clause 7 agreed to.
Clause 8 [Special powers as respects small building societies]:
VISCOUNT HAILSHAM: This Amendment substitutes "require" for "request". I am told that it is a drafting Amendment. I should not have said that the words were precisely synonymous, but I do not think they would improve from any discussion on my part. Therefore I beg to move.
Amendment moved—
Page 11, line 38, leave out ("request") and insert ("require").—(Viscount Hailsham.)
On Question, Amendment agreed to.
Clause 8, as amended, agreed to.
Clause 9 agreed to.
Clause 10 [Investment and banking of surplus funds]:
VISCOUNT HAILSHAM: This is little more than a drafting Amendment. It enables the society to borrow from a bank which is a partnership as well as from a bank which is a corporate body. It is thought that there is no reason why it should not. There are a few highly reputable banks which operate still as partnerships, and one of them I think is the well-known House of Rothschild. I beg to move.
Amendment moved—
Page 15, line 14, after ("corporate") insert ("or partnership").—(Viscount Hailsham.)
On Question, Amendment agreed to.
On Question, Whether Clause 10 shall be agreed to?
LORD BARNBY: Before Clause 10 is agreed to may I seek an interpretation from the noble Viscount on that part of the clause which gives the Treasury, after request by the Chief Registrar, power to authorise certain banks to hold funds? The earlier part of the clause refers to this matter at great length, and a subsequent clause refers to Northern Ireland. The purpose on which I seek expression from the noble Viscount is: does "bank" necessarily exclude banks in the White Dominions? In asking this, I would draw the attention of the noble Viscount to the widespread feeling that it would be timely that funds of the building societies here should, by the proper means, and possibly some additional legislation, be made available for the purpose of supporting building societies in the White Commonwealth. It is in line with that thinking that, since legislation of this character is now before your Lordships, I am venturing to ask the noble Viscount whether he can give any indication, and if not, whether he will be able to advance that into the proper quarter to see if, at a later stage, the necessary powers can be granted for that purpose.
VISCOUNT HAILSHAM: I can see nothing in the clause to limit the expression "bank", except subsection (8), which does not appear to restrict it in

541
that way. Whether or not the practice would be desirable or what the Chief Registrar would do about it, I cannot say without notice. If I could write to my noble friend as to what the practice may be, I think it would be more convenient; but so far as the interpretation he requires is concerned, I think the clause is plain.
LORD BARNBY: I appreciate the assurance of the noble Viscount. I am sure he has understood my meaning. It would be a pity if the legislation proceeded on this occasion without that matter, which is so important to the future, having been considered during the discussion on the Bill.
LORD MILNER OF LEEDS: I am sure that it was only in error, but the noble Lord, Lord Barnby, referred to the "White Commonwealth". It is a Commonwealth which we hope includes men of many colours. I am sure the noble Lord would wish to withdraw that phrase, which should not go out from this House. On the general question of extending the operation of building societies to the Commonwealth, I have an Amendment down at a later stage, and I should be grateful if the noble Lord could find it possible to support me on that.
LORD BARNBY: On the first part of the noble Lord's remarks, I must admit my ignorance that there were building societies in any other than the white parts of the Dominions.
LORD OGMORE: May I inform the noble Lord that, to my knowledge, there is a building society in Malaya and Borneo, and, indeed, one in Uganda as well.
VISCOUNT HAILSHAM: I hesitate to restrict discussion in any way, but I suggest we are going rather wide.
Clause 10, as amended, agreed to.
Clause 11:
Power to lend money to other building societies
11.—(1) Where it appears to the Chief Registrar that a building society as defined in this Act or a building society of Northern Ireland is in financial difficulties he may, with the consent of the Treasury, authorise any other building society to lend money to that first-mentioned society, and a building society shall have power to act accordingly.
3.42 p.m.
LORD MILNER OF LEEDS LORD MILNER OF LEEDS moved, in subsection (1) after "lend money to" to insert ", or accept a transfer of engagements from". The noble Lord said: As I understand it, Clause 11 is designed to authorise two things. First, it is designed to authorise loans in Northern Ireland (which hitherto, apparently, have not been authorised) ion the same conditions as in this country; that is to say, loans to assist other building societies who are in financial difficulties. My Amendment is designed to add to the power to lend money both in Northern Ireland and elsewhere in the United Kingdom, and to authorise building societies, on the direction of the Chief Registrar, to take what is known as a transfer of engagements of a building society in financial difficulties.
It would appear to me that it is not sufficient merely to lend money to another building society in financial difficulties. There should be power, on the authority of the Chief Registrar, to take over the engagements of that building society and, in effect, the building society itself. Your Lordships may know of a comparatively recent case where a building society, owing to the depreciation of gilt-edged stock in which that building society had invested its funds, was found to be, in effect, insolvent. In that case it was possible for another building society to take over the engagements and, in fact, the society as a whole, and to put its affairs in order. The purpose of my Amendment is to authorise that transfer of engagements as well as the loaning of money to another society in financial difficulties. I beg to move.
Amendment moved—
Page 15, line 19, after ("to") insert (",or accept a transfer of engagements from,").—(Lord Milner of Leeds.)
VISCOUNT HAILSHAM: There is at present a procedure for transfers of engagements from one society to another. It involves the transfer of assets, powers, rights and responsibilities, including membership. The procedure at present in existence is set out in Section 5 of the Building Societies Act, 1874, and Section 5 of the Societies (Miscellaneous Provisions) Act, 1940. It requires for such a transfer the authority of a three-quarters majority of those

543
voting at special meetings of each society, and either the written consent of holders of two-thirds of the shares of each society or the Registrar's agreement to dispense with the requirement, after due public notice and a hearing of those concerned. Clause 50 of this present Bill imposes an additional requirement about the information which has to be sent to members before they are asked to agree to such a transfer.
I was not quite clear whether the noble Lord intended this Amendment to make it possible to by-pass the present procedure. If so, our view is that this would be undesirable. The transfer considerably affects the position of members of both the transferor society and the transferee society, and there would seem to be no justification for dispensing with the present requirements which are intended to give them a proper say in what is proposed. If, on the other hand, the noble Lord desires this procedure to be additional to the existing procedure, then I would say that it is unnecessary. The Registrar, in practice, has to approve all transfers of engagements, since the societies approach him for permission to dispense with the requirement of written consent. On either interpretation of what the noble Lord intends, I would suggest that this is not an Amendment which the Committee would be wise to accept.
There is a second point to which I think the noble Lord adverted. His Amendment would have the incidental effect of authorising a transfer of engagements from a Northern Irish society to a British society, but not vice versa. This is not possible at present because there is no longer any Statute common to both Northern Ireland and Great Britain under which this could be affected. There has been an approach in recent days by the Building Societies' Association to my right honourable friend in the Treasury about this point. I would, however, tell the House that this point requires further consideration, in consultation with the Government of Northern Ireland. If it does prove to be acceptable, it would probably be desirable that such transfers should not be limited to cases where the Northern Irish society is in financial difficulties and that they should be subject to similar conditions to those which
544
already exist for transfers between two British societies. Therefore, the provision, if it is to be made at all, would be more properly made in a new clause later on in the Bill. If the noble Lord will accept this suggestion I would undertake that at any rate before the Bill is considered in another place—I doubt if I could undertake it earlier—the matter will be considered in relation to Northern Ireland, and I would give him that assurance.
LORD MILNER OF LEEDS: I am obliged to the noble Viscount and, of course, I accept his assurance that the matter will be considered before the Bill goes to another place. That is in regard to the first point. In regard to the second point, I am also obliged to the noble Viscount. I had not appreciated that there are existing powers which would permit transfer of engagements in these as in other cases. That being so, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 11 agreed to.
Clause 12 agreed to.
Clause 13 [Valuation of security]:
3.50 p.m.
VISCOUNT HAILSHAM VISCOUNT HAILSHAM moved to leave out subsections (1) to (4) and to insert instead:

"(1) It shall be the duty of every director of a building society to satisfy himself that the arrangements made for assessing the adequacy of the security to be taken in respect of advances to be made by the society are such as may reasonably be expected to ensure—

(a) that the adequacy of any security to be so taken will be assessed either by the directors of the building society or by a director or other officer of the building society who is competent to make the assessment, and

(b) that there will be made available to every person who is to assess the adequacy of any security to be so taken a report as to the value of, and any matter likely to affect the value of, any freehold or leasehold estate comprised in the security, being a report prepared by a competent and prudent person who is experienced in the matters relevant to the determination of the value of the estate and who is not disqualified for reporting thereon by virtue of subsection (2) of this section.

(2) For the purposes of paragraph (b) of the foregoing subsection,—

(a) a person who is a director or the manager or secretary of a building society shall be disqualified for reporting on any freehold or leasehold estate comprised in security to be taken by the building society in respect of any advance;

545

(b) a person to whom a building society has made or undertaken to make a payment for introducing to the building society an applicant for an advance shall be disqualified for reporting on any freehold or leasehold estate comprised in security to be taken by the building society in respect of any advance to be made to the applicant on that application; and

(c) where an advance is to be made by a building society following a disposition of freehold or leasehold estate which is comprised in security to be taken for the advance, any person having a financial interest in the disposition of that freehold or leasehold estate shall be disqualified for reporting thereon.

(3) Every building society shall cause to be kept records showing with respect to every advance made by the building society after the commencement of this Act on the security of freehold or leasehold estate—

(a) the value placed upon the estate in the report thereon under paragraph (b) of subsection (1) of this section, and the name of the person by whom the report was made, and,

(b) particulars of any additional security taken by the building society,

and such records shall be open to inspection by the auditor, and by any accountant or actuary appointed under section four of the Building Societies Act, 1894.

(4) If a director of a building society fails to carry out his duty under subsection (1) of this section, or if any person prepares for the purposes of paragraph (b) of that subsection a report on any estate with respect to which he is disqualified for reporting by virtue of subsection (2) of this section, he will be guilty of, an offence under this Act; and if any building society fails to comply with subsection (3) of this section, the building society and every officer of the building society who is in default shall be guilty of an offence under this Act."

The noble Viscount said: Clause 13 was one of the clauses which excited most discussion during the Second Reading debate on the Bill. Almost at the moment when I was about to reply, my noble friend Lord Saltoun put a dilemma to me which I promised to have looked into. This rather large Amendment is the result of my endeavours to escape from the dilemma which my noble friend presented to me. He pointed out that the Act of 1939 laid on a director a duty which was almost identical with the task which he was forbidden to perform under Clause 13 of this Bill. On reflection, I think that there was something in that dilemma. It was due to the fact, I think, that there was a confusion to some extent in our minds between the obligation to consider the adequacy of a
546
security, which can hardly be divorced from management of a building society, and the obligation to value a property, which is not quite the same thing, and which we consider ought to be done by an independent valuer. It is in an endeavour to rid ourselves of that confusion that we have introduced this Amendment which supersedes the old provision and the provisions of the 1939 Act.
The clause as amended, or as proposed to be amended, distinguishes between two quite separate processes for which responsibility is to lie in different hands. First it proclaims that the duty lies on the directors of the society to ensure that satisfactory arrangements exist to assess the adequacy of the security to be taken in respect of every advance. In the smaller societies this will no doubt be achieved by the directors themselves considering individual cases. In other cases the duty may be discharged by a director or other officer—for instance, a branch manager. Your Lordships will see that in paragraph (a) of the new subsection (1).
But whatever the arrangements may be the directors are still individually responsible to ensure that, so far as possible, the duty of assessment is undertaken by somebody who is competent for the purpose, and that the person making the assessment, whether a director or branch manager, or whoever he may be, is provided with a report on the value of the property prepared by somebody who is competent, prudent, experienced and independent. In other words, the duty of assessing the adequacy of the security remains with the management; but when that is done, the management must be provided with a report, which must be independent, on the value of the property which is the security. The new subsection (2), in effect, defines what is meant by "independent" for this purpose. There it follows the clause as originally drafted by disqualifying from the task of making the Report (although not from the assessment of value of the security) a director, manager or secretary of the society, or anybody financially interested in the sale of the property in question—for instance an estate agent who has introduced the purchase professionally.
Subsection (3) continues the requirement in Section 12 of the 1939 Act for

547
building societies to maintain records in respect of each advance made, showing the value placed on each property by the surveyor reporting on it and particulars of any additional security taken by the society. Such records will be open to auditors and to any accountant carrying out a special inspection. The new subsection (4) is the present subsection (4) with purely consequential and drafting Amendments.
Amendment moved—
Page 16, line 28, leave out subsections (1) to (4), and insert the said new subsections.— (Viscount Hailsham.)
THE CHAIRMAN OF COMMITTEES: I have received two manuscript Amendments to be moved by the noble Lord, Lord Saltoun. The first of these Amendments to the Amendment is, in line 17 of the proposed new subsection (1), after "is" insert "not a director, manager or secretary of a building society and is". That is in line 17 of subsection (1) of the Amendment moved as No. 25.
LORD SALTOUN: I cannot help being very gratified by the result of our debate on the Second Reading and that the Government have withdrawn the original subsection and proposed these instead. I am grateful to the noble Viscount in charge of the Bill for the trouble he has taken over this matter. I appreciate that he has gone a long way to meet me. I may be wrong, but I believe that he and I have exactly the same object in view: we have the object of ensuring that the board of any building society have before them when they are assessing a security a valuation by an independent competent person who is not either a director, manager or secretary of a building society.
I am bound to admit that I am not quite satisfied with the clause as now drafted, and I think it still goes a little too far. It is the duty of the directors of any building society to take every measure that they can to ensure the sufficiency of any security on which they are going to advance money, and it is a perfectly reasonable thing to do that any director of a building society should go and, being himself a competent person, examine the house or whatever the subject is upon which the loan is to be advanced. If he does so and if he comes to certain conclusions I submit that it
548
is still his duty to submit those to the board. I am probably assuming an improbable case, but I must perhaps do so to make my point. Suppose the board were to have a valuation by an independent person of a subject on which they were asked to advance money, and suppose one of the directors said, "Well, I think Mr. X must have examined that house in rather a bad light. I was going round the wash-house the other day and I thought the rafters looked bad. I took out my penknife and stuck the blade up to the hilt in one of the rafters". That is one of the first things one does when one examines property—one takes a penknife and tests the rafters and other beams.
It is his duty, I submit, to make a report to the board on that matter, either verbally or by letter—reports are of all kinds. It seems to me that subsection (2) goes rather too far in this way: that the persons comprehended under paragraph (a) are persons already mentioned and have a special relation to the society, whereas the provisos (b) and (c) are universal against all people. I do not expect the noble Viscount to accept my Amendment this afternoon; that would be too much to expect; I think he, and certainly I, only got this draft yesterday and we have not had much time to look at it. I was able to draft my Amendment only this afternoon. What I would propose to the noble Viscount is that paragraph (b) be altered to read that there shall be available
"to every person who is to assess the adequacy of any security to be so taken a report as to the value of, and any matter likely to affect the value of, any freehold or leasehold estate … being a report prepared by a competent and prudent person who is experienced in the matters relevant to the determination of the value of the estate and who is not a director, manager or secretary of a building society and is not disqualified for reporting thereon by virtue of subsection (2) of this section."
I submit that that effects the same purpose that the noble Viscount and we all want to effect, and that it still leaves it open to the elected directors to carry out their duties with the greatest freedom.
Suppose a valuer were to get old and incompetent and gave reports which were rather too favourable. If the clause is left in its present condition a director may well say, "Yes, but I am entirely

549
shielded by a report given by a competent man." Directors are elected by the shareholders of the company from a favourable, preconceived opinion of their competence and their honour. As the clause stands I think it is rather strong against such persons, and that my Amendment puts the duty in its proper relation. I know that elections do not always have the effect that they are supposed to have. I think a Member in another place the other day suggested, whether intentionally or not I do not know, that election to Parliament conferred all the benefits of the highest possible education upon the recipient. I am not sure whether that is true or not. So far as I am concerned, I should like to go back to my original suggestion. I would rather have the limitation in subsection (1), because it is a different kind of limitation to that in subsection (2). As to paragraphs (b) and (c) in subsection (2) I accept them as willingly, as gladly and as easily as Millament accepted for her provisos. I beg to move.
Amendment to Amendment moved—
Line 17 of the proposed new subsection (1), after ("is") insert ("not a director, manager or secretary of a building society and is".— (Lord Saltoun.)
4.3 p.m.
LORD MESTON: I think that this is a most important Amendment and that we should be grateful to the Lord Privy Seal for the careful way in which he has explained the provisions of this Bill. I agree that no unqualified or inexperienced man, whether he is a director or otherwise, should ever make a valuation of any property for a building society, and I agree that no director should ever make a valuation for a building society in respect of a property in which he has an interest. Having said that, I am opposed entirely to shutting out directors who are qualified and experienced men from making reports on properties upon which the society eventually makes a loan.
I have down an Amendment which is not yet before the Committee, but it proceeds under a misapprehension, because Clause 13 as originally drafted referred merely to assessing the adequacy of the security. As the noble Viscount has pointed out, there are two quite distinct steps and conceptions: first of all, you make the valuation and, having made the
550
valuation, you then make a report to the building society and the board of directors assess the adequacy of that security. That is the usual procedure. I happen to be a director of quite a respectable building society—it is not respectable because I am a director, but for other reasons—and three of my colleagues are most experienced surveyors and are highly regarded in their own profession. They make most of the reports and valuations for the society. These are then placed before the board of directors who go into all the usual matters—for instance, the status and income of the proposed borrower, the area in which the property is situated and the general financial situation of the building society. Ultimately, they decide how much money it is proposed should be advanced on that security. I quite agree with the noble Viscount that there are two quite distinct steps: first, there is the valuation and the report made thereon; and secondly, the latter is placed before the board of directors who assess the security in the light of all the circumstances.
I think it would be almost disastrous to shut out qualified men who are directors from making these valuations. I have found from a good many years' experience that there is absolutely no conflict of interest in the minds of surveyors who are also directors and who deal with property for the benefit of the society. Not only that, but the noble Viscount must know that the livelihood of certain most experienced and qualified surveyors will go in the night if Clause 13 as now proposed by the Government is passed. The noble Viscount will not think that I am being personal when I say that he is a young man and that if anything terrible were to happen to him he could start life again. But suppose "old boys" like myself who go back to the days of Mr. Gladstone were to be shut out in the night from pursuing their ordinary method of earning a livelihood, what could we do in the future? Therefore, on all grounds, including sentimental grounds, I ask the noble Viscount the Lord Privy Seal not to accept my Amendment or that of anybody else at the moment, but to look at this matter again in order that we can raise it on the Report stage.
LORD ELTON: I should like to say, from the point of view of the building societies, that the importance of this

551
Amendment is that it clearly distinguishes, as both the noble Viscount and the noble Lord, Lord Meston, have so well explained, the two processes of valuation, which is a technical process for experts professionally qualified, and the assessment of the adequacy of a security which covers a good many other considerations besides those technically considered by the valuer. Until this distinction was made a considerable amount of alarm and despondency was spread among the ranks of building society officials. One managing director said to me, "If this clause passes I may as well close down my job." He had read the beginning of Clause 13 and had thought that he would no longer be allowed to satisfy himself in assessing the adequacy of a security—and that he maintained, was one of his principal jobs. This has now been satisfactorily disentangled and the Council of the Building Societies' Association is grateful and views this with every favour. I believe that a minority of the Council still consider that the director who is a professionally qualified valuer is perhaps the best person to value a property, even though he is a director on the board. But that is a minority view and, in general, the representatives of the building societies are grateful to the Government for this clarification.
LORD WISE: I should like to endorse what my noble friend Lord Meston has said. I believe that the noble and learned Viscount has already had representations from the Royal Institution of Chartered Surveyors on this particular point. As an old retired chartered surveyor myself, I feel that under the proposed new clause they are being put in a very difficult position. As my noble friend Lord Meston has said, there are many chartered surveyors, and other professional men of standing, who are also directors of building societies, and I am certain that any one of them would act conscientiously and without any bias at all in making a valuation of property for a particular society. I feel that the Amendment perhaps puts a slur on the professional abilities and honesty of purpose of members of the professional societies dealing with the valuation of property, and I hope that the noble and learned Viscount will think about this particular
552
Amendment and that when it comes up again some alteration may be made.
LORD HAWKE: Before we part from this Amendment proposed by the noble and learned Lord Privy Seal I would ask him to look at the words "a competent and prudent person". The word "prudent" seems to me rather peculiar language to put into an Act of Parliament. I should have thought that that was a quite unprovable stipulation, and that on the Report stage it might be found better to leave it out.
THE DUKE OF DEVONSHIRE: Before the closure is moved I would ask the noble and learned Viscount whether he can answer one or two questions to clarify his new subsections. First, if a director of a building society is in partnership as a valuer with others who are not directors of any society, are those other partners disqualified from making valuations? Following that, if those other partners are not so disqualified, should the report be signed by the partner who has made the valuation or in the name of the firm? Thirdly, where a director is in sole practice as a valuer—that is, without partners—can valuations be made by competent members of his staff? If so, who should sign the report? Finally, where a director is also a director of a limited company which undertakes valuations, who is disqualified from making a valuation, and who should sign the report? On behalf of the Building Societies' Association, of which I have the honour to be President, I should be glad if the noble and learned Viscount could give me some guidance on those points.
LORD OGMORE: I should like to take up the point made by the noble Lord, Lord Elton, who discussed the belief of members of the Building Societies' Association that directors who are also competent persons should not be excluded from valuing properties. I wonder whether the noble and learned Viscount has given any thought to this question. I can see that there are points one way and the other, but I imagine that with smaller societies, where business is not on the scale of the bigger societies, there might occasionally be advantages in having a director who was a valuer and able to speak both as valuer and director, and that he could help his fellow directors in assessment

553
of a particular property or in judging a particular locality.
It must be remembered that in recent years a number of small societies have played a considerable part in the development of the building society movement. For example, just after the war (and perhaps this applies in some cases even to-day) it was practically impossible for a Pole to get an advance from a building society—certainly from any of the bigger societies—though why that should have been I cannot understand, because I believe it has been the experience that Poles are among the best risks that any building society can have. But that was the case. One or two of the smaller societies were responsible for breaking down that situation. Then there was the question of advances on fiats and apartments. That has been frowned upon by the bigger societies but developed by the smaller ones. Here, as in other cases, whether dealing with big industries or trade unions, we must be careful not to shut out small societies, societies which are struggling up, simply in the interests of big societies who naturally will take a rather more bureaucratic line and who always look with some jealousy on their smaller and newer competitors coming into the field. I feel, therefore, that this question should not be decided too hurriedly, for there is more in it than meets the eye.
I have a slight professional connection with a building society, although I am not a director, manager, secretary or prudent person who is experienced in relation to the valuation of estates. I do feel an interest in the small societies, and in my view they should not have their business impeded by what may be largely a doctrinaire point, and not a very serious one. It may be that it will be useful for a society to have on the board a director who knows both the properties and the locality. I am thinking, for example, of my own part of the world, South Wales. A director coming from the district would know all about the people, the locality and the property: he would know that far better than some valuer coming in from outside, perhaps from a distance, or from Cardiff, the capital. He would know far more about the locality and about those to whom loans were to be made,
554
and far more about the prospects of a particular locality than any outside valuer. We must bear that in mind and must not only think of the great building societies like the Halifax but must consider all the smaller concerns which play a very important part in this country, particularly outside London.
LORD SALTOUN: May I beg your Lordships to remember that the Committee are now debating my Manuscript Amendment to Amendment No. 25 and not the Amendment of the noble Lord, Lord Meston, or Amendment No. 25 itself.
VISCOUNT HAILSHAM: I was about to say that from the moment my noble friend referred to Millament this has been a somewhat disorderly discussion. As he has said, it is true that in what Millament called "our odious endeavours" he and I have been labouring under a disadvantage. We have not had much time to get going. If I may first address myself strictly to the matter in order, I will, of course, look again at my noble friend's Manuscript Amendment. Having had it only since this debate began I should not like to pronounce too dogmatically upon it, but my impression is that it makes no difference at all to the construction of this clause and simply re-enacts the clause in another, slightly less eloquent, form. But I see what the noble Lord is trying to say, and I do not think there is any difference at all between us.
I do not think that the clause, as drafted, prevents any directors from issuing reports, but it disqualifies them from being, for the purposes of paragraph (b) of subsection (1), the author of the report which is necessary in order to enable the management to assess the adequacy of the security; and they would not be able to issue such a report whether my noble friend's Manuscript Amendment or the draft on the Order Paper were carried. It is simply a question of whether the disqualifying words are put into the first or second subsection—and they are equally valid in whichever they are put. My own view, therefore, for what it is worth, is that there is no difference between the Amendment of my noble friend and the Amendment on the Paper. I will, however, look at the matter again, before the Report stage, lest I have inadvertently erred.

555
I do not know whether, as we have discussed the matter broadly, it would now be convenient to take the clause itself. But I must say that there is a difference of opinion between the noble Lord, Lord Meston, and myself which does not derive only from the fact that I am (as he put it) a young man who would not suffer any inconvenience if I had to start again. But I am bound to tell the noble Lord that the view of Her Majesty's Government, like that of the majority of the building societies in this country, is that the proper valuation of property is fundamental to the proper conduct of a building society, and it is of the greatest importance, in the interests of those who invest their money in building societies, that the valuation should be undertaken by somebody who is quite independent in the sense that he has no financial interests in the transaction. The view of the Government is that the board of the society, or whoever else it is who has to take the final decision under paragraph (a) on the adequacy of the security, should not be inhibited in that task by the knowledge that the valuation was carried out by a fellow member on the board; and also that the board of directors should not be embarrassed in their duty to select the most suitable available person to make the valuation or the valuation report for the purposes of the second subsection by the knowledge that one or more of their colleagues were anxious to be appointed to that position.
There have been cases of directors—whether they go back to Mr. Gladstone or not I do not know—continuing to do valuations for a society long after they have retired from their general valuation work and have lost touch with market trends, largely because the board have not had the heart to deprive them of the fees. The Government case is that it is wrong in principle for directors to carry out the valuation of property for this purpose—the purpose of the report under the second subsection—and it is not made any the less improper by passing a special resolution to allow them to do it. That is a matter about which opinions differ. It is a matter upon which the Government are fortified by the majority of the building society movement too, but I recognise that the noble Lord, Lord Meston, takes another view and I am
556
sure that he would not like me either to gloss over or to minimise the difference between us.
Of course, like all the other matters, this Bill is in its early stages, and no doubt this particular issue will be debated again here or elsewhere. The last thing I wish to do is to indicate that we would not welcome further discussion, either public or private, on the matter. But I am bound to tell him flatly that, as at present advised, the view which he has been seeking to put before us is not that which corresponds with our own opinion. With that, I would hope that my own Amendment could be accepted and perhaps my noble friend would withdraw his manuscript Amendment on the understanding that I have made my own position plain, and if I have in fact erred I will write to him and give him another opportunity to raise the subject.
4.23 p.m.
LORD SILKIN: I believe it had been agreed through the usual channels that we should adjourn this debate at 4.15 p.m. and go to the next business. The position is in some state of confusion. We have had before us a new clause; we have had a manuscript Amendment, which I think we have followed but which very few of us have actually seen; and we have had a discussion on an Amendment which has not yet been moved. I think it might be convenient if we adjourned at this stage, because, although there is a good deal to be said for the view of the noble Viscount on the Amendment which has not been moved, there is another view which ought to be discussed more fully. Therefore I hope that the Government will see their way, not to insist upon this clause being accepted at this stage and the Amendment being withdrawn, but to leave the discussion in the state in which it is so that we may continue it when we next come to discuss this matter.
VISCOUNT HAILSHAM: I am entirely in the hands of the Committee on this matter, but it is, I think, factually incorrect to say that I have not moved the Amendment. I do not think that my noble friend's manuscript Amendment to my Amendment would be in order had I not done so. It was, of course, the intention to conclude this discussion at 4.15 p.m., which is only ten minutes ago. I think I was correctly interpreting the

557
wishes of the Committee not to break into the series of speeches which were being made. But I frankly think that, now that we have heard almost everything, and probably everything there is to be said from every Member now present, on this subject, we should be in a position to take a decision on this new clause and the Amendment. Certainly I should be sorry not to do so, and I would ask the Committee whether they would not feel that that was not a more reasonable course to take.
LORD JESSEL: There are several questions which have been asked, notably by the noble Duke, the Duke of Devonshire, on the position of a firm where one of the partners was a director of a building society. I think we should like to know more about them.
VISCOUNT HAILSHAM: That is very reasonable. Unfortunately my attention was taken from the noble Duke, the Duke of Devonshire, by the speech of the noble Lord, Lord Ogmore, which intervened. I think I can give an answer to some, and possibly all, of the questions. They came out rather fast and I am not sure that I got them all or, if I did, that I shall be able to answer them all. The principal question was about the position of a report or valuation by a firm or partnership, one member of which was a director of the building society. This would not be prohibited by the clause, which is dealing with persons who make their report. This implies that the report will be the report of the individual and not of the firm or partnership. The fact that a proportion of the fees received in respect of the report may be payable to another partner or director on the board of the society is not directly relevant in this context. I think that that, by implication, at any rate, answers the principal question, and perhaps all of the questions, which the noble Duke put to me.
LORD MESTON: I suggest that the noble Viscount the Lord Privy Seal should accept the admirable suggestion made by my noble friend Lord Silkin and adjourn this particular matter to another time, because I hope to come here with a regular battalion of supporters on the next occasion.
VISCOUNT HAILSHAM: I think that that reveals the net in the sight of the
558
bird. I do not think it is really proper for the noble Lord to complain, after a very full discussion in the presence of a considerable body of the Committee who have heard the arguments, and to say it will be more convenient to take the decision in the presence of a battalion of supporters whom he has whipped up on the grounds that they have not heard the arguments. I would ask the Committee to take the more sensible and judicial view: that those who have heard the arguments on the case are best qualified to decide it.
LORD SALTOUN: I think I am in order to ask the Committee's leave to accept the suggestion of the noble Viscount in charge of the Bill and to withdraw the Amendment to the Amendment which is before the Committee at the moment. Perhaps the noble Viscount will give me a moment after, and I think I can make the position clear.
THE CHAIRMAN OF COMMITTEES: Is it the Committee's pleasure that the first Amendment to the Amendment be withdrawn?
VISCOUNT HAILSHAM: This is the manuscript Amendment.
LORD SILKIN: No. I think we should have the whole thing before us.
THE CHAIRMAN OF COMMITTEES: The Amendment is not withdrawn and is still before the Committee.
LORD SILKIN: I beg to move that this debate be now adjourned.
THE CHAIRMAN OF COMMITTEES: Might I suggest that it would be preferable, if the noble Lord wishes to move that further consideration of Clause 13 be adjourned, for the noble Lord to move that.
LORD SILKIN: I will accept that.
Moved, That further consideration of Clause 13 be adjourned.—(Lord Silkin.)
THE CHAIRMAN OF COMMITTEES: The question is that further consideration of Clause 13 be adjourned.
LORD SALTOUN: May I ask the Lord Chairman whether my Amendment will fall out in that case?
THE CHAIRMAN OF COMMITTEES: No. The Amendment of the noble Lord, Lord Saltoun, has been moved and the Committee has refused permission for it to be withdrawn. Permission for Amendments to be withdrawn must be unanimous. It has now been
THE CHAIRMAN OF COMMITTEES: The question now is, That the first Amendment to the Amendment be agreed to.
On Question, Amendment to Amendment negatived.
VISCOUNT ALEXANDER OF HILLSBOROUGH: Before the Question That the original Amendment be agreed to is finally put, I should like to say this. I have heard exactly what has happened, and I am exceedingly disappointed at the proceedings this afternoon, after the agreement we made through the usual channels about the time to adjourn, and the insistence on this Amendment being carried without adequate discussion. I think that this is so serious a matter that it had better be referred to the Procedure Committee.
VISCOUNT HAILSHAM: I cannot accept that there has been no adequate
moved that further consideration of Clause 13 be adjourned.
On Question, Whether further consideration of Clause 13 shall be now adjourned?
Their Lordships divided: Contents, 27; Not-Contents, 56.

CONTENTS

Airedale, L.

Hawke, L.

Pethick-Lawrence, L.

Alexander of Hillsborough, V.

Henderson, L.

Rea, L.

Attlee, E.

Jessel, L.

Shepherd, L.

Burden, L. [Teller.]

Latham, L.

Silkin, L.

Citrine, L.

Lucan, E. [Teller.]

Sinha, L.

Devonshire, D.

Macpherson of Drumochter, L.

Stansgate, V.

Dudley, E.

Meston, L.

Uvedale of North End, L.

Grantchester, L.

Milner of Leeds, L.

Williams, L.

Granville-West, L.

Ogmore, L.

Wise, L.

NOT-CONTENTS

Aberdare, L.

Fairfax of Cameron, L.

Milverton, L.

Ailwyn, L.

Fraser of Lonsdale, L.

Newall, L.

Baden-Powell, L.

Fraser of North Cape, L.

Onslow, E. [Teller.]

Balfour of Inchrye, L.

Freyberg, L.

Rathcavan, L.

Bathurst, E.

Goschen, V.

St. Aldwyn, E. [Teller.]

Birdwood, L.

Grenfell, L.

Saltoun, L.

Bossom, L.

Hailsham, V. (L, Privy Seal.)

Somers, L.

Boston, L.

Hampton, L.

Strathclyde, L.

Buckinghamshire, E.

Hastings, L.

Swinton, E.

Cholmondeley, M.

Horsbrugh, B.

Templemore, L.

Clitheroe, L.

Iliffe, L.

Tenby, V.

Colyton, L.

Kilmuir, V. (L. Chancellor.)

Teviot, L.

Conesford, L.

Long, V.

Teynham, L.

Congleton, L.

Lothian, M.

Torrington, V.

Digby, L.

MacAndrew, L.

Tweedsmuir, L.

Dynevor, L.

McCorquodale of Newton, L.

Twining, L.

Ebbisham, L.

Mancroft, L.

Waleran, L.

Elliot of Harwood, B.

Margesson, V.

Winterton, E.

Ennisdale, L.

Merrivale, L.

Resolved in the negative, and Motion disagreed to accordingly.

discussion. Furthermore, I must tell the noble Viscount that if the moment had come at 4.15 and the noble Viscount had wished to terminate the discussion, he could have done so. It was precisely because the discussion had come to an end, and I think that was within the sense of the Committee—of which the noble Viscount was not a participant member—that we went on for another ten minutes; and any time spent after that has been consumed by the noble Viscount's own side.
LORD SILKIN: There are several of my noble friends who would have liked to say something on this clause. They refrained because it was understood that we were finishing at 4.15. If the Government insist on passing this, they must do so; but we feel that we shall have a grievance because it has not been properly or fully discussed.
On Question, Amendment agreed to.
House resumed by the Lord Chancellor.

ADMINISTRATION OF JUSTICE BILL [H.L.]
4.41 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 Lord Chancellor.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD AILWYN in the Chair.]
Clause 1:
Right of Appeal
1.—(1) Subject to the provisions of this section, an appeal Shall lie to the House of Lords, at the instance of the defendant or the prosecutor,—

(a) from any decision of a Divisional Court of the Queen's Bench Division in a criminal cause or matter;

(b) from any decision of the Court of Criminal Appeal on an appeal to that court.

(2) No appeal shall lie under this section except with the leave of the court below or of the House of Lords; and such leave shall not be granted unless it is certified by the court below that a point of law of general public importance is involved in the decision and it appears to that court or to the House of Lords, as the case may be, that the point is one which ought to be considered by that House.
LORD CHORLEY LORD CHORLEY moved, in subsection (1), to leave out "of general public importance". The noble Lord said: This is the first of a series of Amendments which stand in my name on the Marshalled List. With your Lordships' permission, I will make one or two preliminary remarks before proceeding to the substance of the first Amendment. I should like to express my appreciation of the great help which I have had from the organisation of lawyers called "Justice", who accepted the responsibility of the actual drafting of these Amendments.
I am putting forward these Amendments as a Member of your Lordships' House, but I think I am entitled to say that an organisation, of which (as I think most of your Lordships are aware) the noble Lord, Lord Shawcross, is President, of whose executive committee a well-known Q.C., Sir David Scott Cairns, is chairman, and which includes many prominent members; of the Bar, is heartily in support of these Amendments. I had hoped to have the endorsement of the
562
noble Lord, Lord Shawcross, but unfortunately I have not been able to get in touch with him during the last few days, since the Amendments were ready. The noble Lord, Lord Meston, agreed to endorse them, but owing to a misunderstanding his name does not appear on the Marshalled List. I should say that the Bar Council are behind a number of these Amendments and I shall indicate which these are as we go along, because I wish your Lordships to appreciate that there is a great weight of opinion in the practising part of the legal profession behind them.
The first Amendment relates to the qualification on appeals in criminal cases. This was discussed at some length on Second Reading, and I made the point which, in my contention, substantiates the case for the Amendment. As your Lordships are aware, the present position is that an appeal from the Court of Criminal Appeal can come before your Lordships' House, sitting in a Judicial capacity, only on the fiat of the Attorney General, who can grant this only in cases of particular importance. This clause is undoubtedly a very considerable improvement on the position which has existed ever since the Court of Criminal Appeal was established in 1908, and it has been accepted by everybody as an improvement. But those who hold the view for which I am acting as spokesman for the moment feel that a mistake is still being made in dealing with the matter in the way in which it is tied up in subsection (2)—namely, that your Lordships' House cannot give leave to appeal in a case from the Court of Criminal Appeal, or indeed from the Divisional Court of the Queen's Bench Division, unless the court below which tried the case certifies
"that a point of law of general public importance is involved."
Your Lordships' House may feel that there is a point of general public importance involved; but unless the judge or court which has tried the case below certifies that there is such a point involved, your Lordships cannot give leave to appeal.
Of course, as I pointed out on Second Reading, in civil cases the court itself can give leave to appeal; and where the court refuses leave the parties can apply to your Lordships' House, which can take a general view of the case and,

563
coming to it with a new vision perhaps, grant leave to appeal. Every practising lawyer is well aware that that happens from time to time. I do not say that it happens in anything like the majority of cases, but within the experience of any working lawyer, in quite a proportion of these cases your Lordships' House allows the appeal. That shows that if, in these civil cases, a right of appeal had been dependent on leave being granted by the court below—the court which had made the original decision—the appeal eventually permitted by your Lordships' House could not have taken place, and obviously there would have been a miscarriage of justice.
Surely if this procedure is adopted in civil litigation, where what is at stake is rights of property, rights of compensation, damages and matters of that kind, it is even more important that it should be possible in a case where the liberty of a subject is at stake, where it is a question of a man going to prison, or possibly being executed. If, in a civil case, the would-be appellant, having been refused leave in the court below, can come to your Lordships' House and gets leave, surely in a criminal case there is an even greater reason for this procedure. That is the view which has received great support in the profession, and there has been little opposition to it. So far as correspondence in The Times and elsewhere in the legal periodicals goes, I think the weight of the argument has been entirely on that line. I should say that the Bar Council take up what one might perhaps call an intermediate position with regard to this matter; they feel that it should be "a point of law of importance." That is going not quite so far as the Bill goes, but goes a little further than the Amendment goes. I felt that, having received that communication, it was only fair to bring it to the attention of your Lordships.
I should like to add a point to what I said in the Second Reading discussion, in that it is very familiar in the Privy Council, which of recent years has become more and more a Court of Appeal in criminal cases from many parts of the Commonwealth territories. Applications are continually being made to the Privy Council asking for leave to appeal. The Privy Council give careful consideration to the requests; there is
564
argument, usually competent argument, before the Privy Council, and a decision is taken as to whether or not it is a suitable case for appeal. It seems to me that there ought not to be a difference in favour of the would-be appellant in a colonial territory, which may enable him to obtain leave to appeal from the Privy Council, whereas his opposite number in this country might not be able to obtain leave to appeal to your Lordships' House because the judgment below or the court below had not certified the case.
The noble and learned Viscount the Lord Chancellor, in his speech on Second Reading, did not give a great deal of time to this particular point. So far as I could follow the argument which he put forward, it was that we should all agree that there should not be two full examinations of every aspect of the case. I am not quite sure how far that argument was in fact directed to this point, but in so far as it was, we are not really asking for two full examinations of the case. We all agree, I think, that these cases should come to your Lordships' House only where points of law are involved. In civil cases, every aspect of the case may go to the Court of Appeal, and every aspect of it may come to your Lordships' House, because questions of fact, as well as questions of law, may be important. But in this case we are limiting the right of appeal to a question of law, and the only point is whether that question of law should be of general public importance and one which is so certified by the court below. I do not think your Lordships' House, on an application being made to it, would be likely to grant leave to appeal unless it was generally felt that the point was one that was worthy of consideration by your Lordships' House. But surely the decision on that should be left to your Lordships' House to take, and should not be, so to speak, already pre-judged by the decision of the court below. It seems to me that no real argument has so far been made against the view which is taken by those who support this Amendment—namely, that there should be an appeal from the Court of Criminal Appeal on a question of law, where either that court—because in most cases we shall be dealing with the Court of Criminal Appeal—or your Lordships' House thinks fit to grant leave to appeal.

565
That is the substance of the Amendment. I beg to move.
Amendment moved—
Page 1, line 16, leave out ("of general public importance").—(Lord Chorley.)
LORD DENNING: May I say a word or two on this Amendment? It seems to me to be of vital importance if this House is not to be overwhelmed by applications for appeals that there should be a proper sieve to see that only appropriate cases reach this House. If you consider the Supreme Court of the United States, where twenty years ago they introduced the system of certiorari in criminal cases, with due process clauses, you find that that court has been overwhelmed by applications for certiorari, so that the judges of that court have to spend long hours reading thousands of applications without much merit, and their energies and learning are dissipated in that way. In order that that should not happen here there must be an adequate sieve. Previously the sieve has been too closely meshed. The fiat of the Attorney-General did not let through enough cases of importance. The proposal now is that there should be a wider mesh; but my noble friend's Amendment, a point of law, would still let innumerable applications through. In practically every case from a Divisional Court a point of law could be said to arise, and in many, if not all, cases in the Court of Criminal Appeal it could be said that a point of law arose, not of any general importance, but simply on whether, on the facts of the particular case, there was evidence to go to the magistrates on which they could decide, or on which a jury could decide; or there could be a complaint about a direction in the summing up.
Rather than have such innumerable applications of that kind, is it not right that the court which heard the case should be able to certify whether it is of general public importance or not? We hope that the court would take a liberal view, realising that it might be wrong. I have known cases where the court itself has been wrong. I have myself been presiding in the Court of Appeal and have refused leave to appeal, and it has turned out afterwards that leave should have been granted, and this House has overruled that decision. I suggest that the clause as it stands provides a proper sieve.
VISCOUNT SIMONDS: If I add one word on this, I do so because it so happens that I have been a Lord of Appeal in Ordinary for somewhat longer than any other Member of your Lordships' House. I can only say, out of my experience, that I believe the suggestion made in this Amendment would result in absolutely swamping this House and making the administration of justice by this House almost impossible.
THE LORD CHANCELLOR (VISCOUNT KILMUIR): The argument against the Amendment has been so forcibly deployed by my noble and learned friends Lord Simonds and Lord Denning that I do not think I need elaborate it, but I want to deal with it out of respect for the noble Lord, Lord Charley, and those for whom he appears. The first point that the noble Lord has made is that the words "of general importance" are not necessary. I confess that I share his difficulty in appreciating the great difference between "of general importance"and "of importance", and I think that, so far as this Amendment is concerned, I may claim the Bar Council to be broadly on my side of the line. But I wonder whether the noble Lord has really considered, in the sense that my noble and learned friend Lord Denning put it forward, what it would mean to have the effect of his Amendment and make the only limitation that there should be a point of law.
The second point is, why should it be left to the Divisional Court or the Court of Criminal Appeal? I have not the exact numbers in my mind, but even taking into account the cases that go to the Privy Council, the number of criminal cases dealt with by the House of Lords and the Privy Council in each year are relatively few. I think that my noble and learned friend the Lord Chief Justice said that the number coming up to the Court of Criminal Appeal was over 2,000. Similarly, if one looks at it the other way, from the point of view of the magistrates' courts and bringing up cases that have gone thence to the Divisional Court, one really wants to try to deal only with the points of real difficulty—for example, new legislation dealing with particular regulation of human activity. I should have thought that the Divisional Court or the Court of Criminal Appeal are in the best

567
position to say whether it is of general public interest, in view of the great experience which they must have in dealing with such matters.
Then one comes to the main point which my noble and learned friend Lord Simonds has put so forcibly. If in every case in which a point of law was involved the party who had been unsuccessful below would be entitled to come to the Appeal Committee of your Lordships' House for leave to appeal (even though the Committee would be bound to dismiss the application if it thought that the point was not one which ought to be considered by the House of Lords) is that really fair to the Appeal Committee for the good which it would do? The noble Lord, Lord Chorley, has taken the example of a civil case. That is, of course, an a priori argument, but with the greatest respect to him it is an a priori argument which entirely ignores the fundamental difference between the two classes of litigation. The vital difference between the civil and criminal cases is that in the latter the accused, who is the appellant, has everything to gain and nothing to lose by seeking leave to appeal. It is essential that there should, as my noble and learned friend, Lord Denning, said, be a sieve through which cases which are fit for appeal must pass. With regard to that, we have actually narrowed the difficulty. The words, "general public importance", are more liberal than the test of "exceptional public importance", which the Criminal Appeal Act, 1907, provides.
I ask the noble Lord to consider this. Speed in reaching a final decision is of cardinal importance in criminal proceedings. It must not, and no one would suggest that it should, be bought at the expense of careful examination. I intended to convey, in the phrase which the noble Lord quoted, that we all agree there must be one full examination which can cover every angle of fact and of law. After that, we want to limit it to matters of law. The noble Lord, Lord Chorley, took the example of criminal appeals to the Privy Council. I would venture to remind him, without giving him a summary of Dr. Norman Bentwich's excellent book on that matter, that Dillett's case provides in the case of criminal appeals to the Privy Council a very serious and heavy hurdle which anyone who wants
568
to get leave to appeal must surmount. The noble Lord will, I am sure, have it clearly in mind, and I need not summarise it to-day. But that is the position and, as one who in his time has applied to the Privy Council for leave in criminal cases, I do not think I have overestimated the position which Dillett's case takes, and is intended to take, in appeals to that Court.
For all these reasons, I hope the noble Lord will not press his Amendment. If there are any further points and if, on mature consideration, he sees a great difference between "public importance" and "general public importance", I shall be pleased to look at that again. But I should have thought that "general public importance" was about right and has relaxed the matter sufficiently to cover all the necessary aspects of the case.
5.7 p.m.
LORD CHORLEY: I am afraid I am not convinced by the arguments of the noble and learned Lords. I think to some extent they have some interest in the problem. They are Members of the House and they are naturally a little worried about the amount of pressure which might be involved. I think they are overestimating that. I have a fair amount of experience of the criminal law. Out of the number of convictions at assizes and quarter sessions the number of cases which go to the Court of Criminal Appeal is not very large. A man who has been dealt with is in most cases satisfied with what has happened. Even if he is not altogether satisfied he does not go on to the Court of Criminal Appeal, and I am pretty sure that these forebodings would not be borne out in the result if this Amendment were accepted. It has so often been found in practice that forebodings of this kind are not borne out when the actual step is taken. Even if they were, I feel that the personnel of your Lordships' House ought to be stepped up to deal with it, if that is in fact what is found to happen. It would not be difficult. It would not cost a large sum of money when one looks at it against the national Budget as a whole.
And, after all, in these cases the liberty of the subject is at stake. As I said in my Second Reading speech, much as one admires the way in which the Court of Criminal Appeal does its work, it has

569
not proved itself in all respects a first-class court of appeal. I think most working lawyers would say that, compared with the Court of Appeal itself, it is not so good. There are all sorts of reasons which one need not go into. It is partly because the pressure of work in the Court of Criminal Appeal is so great, as was indicated, I think, by the noble and learned Lord, Lord Goddard, in his speech. Therefore, I think that makes it particularly important that there should be exceptional opportunities in these cases (many of which do involve difficult points of law, even if they are not points of law of general public importance) in which, very often, there is a good deal of criticism of the decisions which have been taken by the Court of Criminal Appeal. It seems to me that it ought not to rest finally with that Court to decide whether or not the matter comes on to your Lordships' House. However, it is obvious that I cannot persist with this Amendment in the face of the noble and learned Viscount's opposition, and, in the circumstances, I have no alternative but to ask your Lordships' leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
5.10 p.m.
LORD SILKIN LORD SILKIN moved, in subsection (2), to omit all words after "decision". The noble Lord said: Having got the first Amendment out of the way, the position remains that if there is to be an appeal to the House of Lords the court below has to certify that there is a point of law of general public importance. It has been suggested that that is a somewhat more favourable criterion to the person who desires to appeal than the one which exists at the moment with the Attorney General's fiat. I would agree, except that there is a second criterion that has to be satisfied in this clause: to get an appeal you have not only to establish that a point of law of general public importance is involved, but also—whatever it may mean—"that the point is one which ought to be considered by that House".
I do not know whether that is a new conception altogether, or whether or not it applies to-day to any kind of appeal, but it is difficult to understand what it means. If it means anything at all, it is a second criterion which must be of a
570
limiting character so that even though a person may have a point of law of general public importance that itself will not be sufficient; it has also to be a point "which ought to be considered by that House". Unless the noble and learned Viscount can satisfy me that that is an expression which is already in force and that even with the Attorney General's fiat it still has to be a point "which ought to be considered by that House", I am bound to say that, far from this being a sieve which allows more cases to go through, it could be operated to allow fewer cases to go through. I would take the point of the noble and learned Lord, Lord Denning, that the House of Lords is very busy; there is a large number of appeals, and they may well quite honestly take the view that this is not a point which ought to be considered on appeal because of the enormous pressure of work or other reasons which are not clear in this Bill. If that were the case and the person making the appeal had to go through that particular criterions, he would suffer as against the present position, when, as I believe, no such condition has to be satisfied.
I wonder whether it is really necessary. If, as I suspect, it does not really amount to very much, why is it put in? Why is this additional hurdle incorporated for the person who wishes to appeal? After all, the whole purpose of this clause is to confer a right of appeal, and what it does is to make it easier on the one hand and then put difficulties on the other. I suggest that the wise thing is to leave it out altogether, and leave as the criterion the one which we have accepted; that is, that it has to be a point of law of general public: importance. For those reasons, I beg to move my Amendment.
Amendment moved—
Page 1, line 17, leave our from ("decision") to end of line 19.—(Lord Silkin.)
LORD PARKER OF WADDINGTON: May I say two things on this Amendment? The first is highly technical. I do not think the Amendment laid before the House carries out Lord Silkin's intention. As drafted, it means that there will still be need to get leave from somebody. I imagine that what the noble Lord had in mind was that if there was a certificate that there was a point

571
of general public importance then automatically the applicant should have leave to appeal. Assuming that that is the intention, I do not think the Amendment at present carries it out. What it really comes to is this: that the Amendment is making the court below, whether the Court of Criminal Appeal or the Divisional Court, the sole arbiter as to whether a man should be entitled to go to your Lordships' House. I should have thought that if the matter was to go to your Lordships' House it would be only right that your Lordships should have the final say.
THE LORD CHANCELLOR: This point was argued on Second Reading. For the purposes of the answer to this Amendment I hope your Lordships will allow me to quote the two ways in which it was put. First, because it happens to come first in time, there was the one by myself. I ventured to say [OFFICIAL REPORT, Vol. 222 (No. 59), col. 250):
"Not every case in which a point of law of general public importance is involved is necessarily one for the House of Lords, because the point may be so clear as not to require further argument, or it may be that the law has stood and been acted on for so long that it would not now be right to disturb it."
My noble and learned friend the Lord Chief Justice dealt with it at col. 267, and again I venture to quote the way in which he put it:
"I know that it has been said that if the point is of general public importance then it must be worthy of consideration by your Lordships' House. It does not work out that way, however, because there are many vital principles of law which may have been laid down for years and years. The certificate of the lower court must state that the case raises a point of law of general public importance, but clearly it would not, in such a case as I have mentioned, be worthy of consideration by your Lordships' House. That is not to say that in many cases the old decisions ought not to be reviewed; it does mean that every case must be considered on its merits."
I endeavoured to explain on the last Amendment the way we approached the problem. We first of all wanted to try to get a sound criterion for the "general public importance" point. We took that phrase, and we thought that the tribunal that could decide it was the tribunal which was most experienced in cases of that class. In order to deal with the point that was raised on Second Reading—slightly fantastic, but it was
572
raised—that the court that had given the actual decision might be partipris on the point, we wanted to be quite clear that the point, as to whether it was useful to have a second appeal, ought to be open to decision by two courts, first, the court that had given its decision on the case, and secondly, the Appeal Committee of your Lordships' House. Really, when you have come to the point, as the noble Lord, Lord Silkin, said, that you have got out of the way the question of general public importance, I think it is more helpful to the potential appellant that he should be able to have two bites at the second cherry.
I venture to say again that we must bear in mind that it is plainly desirable that there should be finality in criminal proceedings, and that some fairly severe limitations ought to be placed on the cases which are fit for the House of Lords. It would not help if the Amendment were made law, for this would enable points of law the importance of which are really academic or unreal to be taken to the House of Lords by appellants who, as I said on the last Amendment, have little to lose by so doing. In initiating reforms it is always difficult to place limitations upon them, because there are always those who, with not only the best will but with the highest possible motives, want to see logical perfection. Broadly, in life logical perfection is beyond the bounds of possibility. What we want to do is to ensure that when there is a really important point of law on which a further decision would be helpful, it will not be shut out. That is why we approach it from the two angles. That is why I should like both angles to remain.
LORD SILKIN: In so far as the language of my Amendment is defective—I have not yet appreciated why it is, but no doubt the noble and learned Viscount will be able to explain that to me—I would not wish to press it. I think that on only one or two occasions have I ever been successful in bringing before this House a technically perfect Amendment. Therefore it is not unusual that my Amendments are imperfect. But on the sense of the thing, the noble and learned Viscount said that a point which is of general public importance might

573
be unreal and academic. I should like to think about that, but at first flush I find it most difficult to reconcile those two things. An unreal and academic point could hardly be one which is of general public importance. But, having said that, I should have thought that that criterion is good enough; or, if the noble and learned Viscount would like to look at that criterion again, in order that the words "of general public importance" are interpreted so as not to include unreal and academic cases, I think it might well be worth looking at.
What I am anxious to avoid is that there should be a double hurdle for a person to overcome, one portion of which is defined in the Act and the other is quite uncertain and, if I may say so with the greatest respect to the noble Lords who are sitting on the Cross-Benches, might be quite arbitrary and depend entirely on the whim or mood of particular individuals who are sitting there—"that the point is one which ought to be considered by that House." While I am going to withdraw my Amendment because it is allegedly imperfect, I think that this is a matter which ought to be reconsidered by the Government, as I undertake that I will reconsider it, and perhaps we can come back to it again on the next stage.
THE LORD CHANCELLOR: Before the noble Lord withdraws his Amendment, may I say that he did me the honour of saying that on all Committee stages when I said I would consider something, he believed that I did consider it. That is what I think is the object of a Committee stage: that points should be raised and the representative of the Government ought to consider them. Of course I will do that. Equally, I have always indicated to the noble Lord whether I thought it was really hopeful or not. I do not want to raise his hopes, but I promise I will consider this, as I always do, and if anything occurs to me I will write to him and let him know.
LORD SILKIN: I thank the noble and learned Viscount very much, and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
Clause 2:
Application for leave to appeal
2.
(3) Except in a case involving sentence of death, the House of Lords or the court below may, upon application made at any time by the defendant, extend the time within which an application may be made by him to that House or that court under subsection (1) of this section.
5.26 p.m.
LORD SILKIN LORD SILKIN moved, in subsection (3), to omit "except in a case involving sentence of death". The noble Lord said: Clause 2 provides for applications for leave to appeal in criminal cases, and it provides that the appeal shall be made within seven days. Subsection (3) provides that the House of Lords or the court below may extend the period, except in a case involving sentence of death. I want to make two points on this clause. One is that seven days is not very long. I have had representations made to me that the period ought to be at least fourteen. But that is not part of my Amendment. I am saving the time of the Committee, because otherwise I might have raised it on the Question, That the Clause stand part.
I find it difficult to understand why an exception should be made in a case involving sentence of death. I realise that it would be highly inconvenient that a person under sentence of death should be able to wait until the day before the sentence is proposed to be carried out and then be able to make an application for an extension of time within which to make an appeal. But, of course, the granting of such an application is entirely within the discretion of the court, and if the court found that there was no merit in the request for an extension of time it would not grant it: an extension would be granted only in cases where the court was satisfied that there was justification for it.
If that is so, I do not understand why an exception should be made in the case of a person who is under sentence of death. I should have thought that, particularly in those cases, before the sentence is carried out we ought to exercise the greatest care to ensure that if a person has the slightest chance of being able to put up a case which might cause the court to take a different view, he ought to be given a chance. After all,

575
a sentence of death is something final: it cannot be recalled. Sometimes there is fresh evidence. Even if a person under sentence of death were able to secure fresh evidence at the expiration of seven days after the sentence had been pronounced, he could not apply to the court, and the court would have no power to grant him an extension of time. I am sure that my drafting of this Amendment is imperfect, but at least I think I have made the idea behind it quite clear. I hope that the noble and learned Viscount will look again at this question—I am not going to press it—and will perhaps explain to-day why an exception should be made against the person who is involved in a sentence of death. I beg to move.
Amendment moved—
Page 2, line 29, leave out from beginning to ("the").—(Lord Silkin.)
THE LORD CHANCELLOR: I hope your Lordships will forgive me if I indulge in a little statutory history on this point, because I want the noble Lord, Lord Silkin, to have it before him when he considers the matter. Clause 2 (3) follows Section 7 (1) of the Criminal Appeal Act, 1907, which enables the Court of Criminal Appeal to extend the time within which notice of an application for leave to appeal may be given except in the case of a conviction involving sentence of death. That has always been the position under the Criminal Appeal Act and the purpose of excepting capital cases from the pro: visions allowing an extension of time within which to apply for leave to appeal is to prevent the execution of the sentence of death being indefinitely postponed by applications made out of time. Under Section 7 (2) of the Criminal Appeal Act, the sentence is not to be executed until after the expiration of the time within which notice of an application for leave to appeal may be given, or until after the application or the appeal as the case may be, is disposed of. There is a corresponding provision in Clause 3 (2) of the Bill.
One has to face that if the court had power to extend the time during which an application could be made it would be open to a prisoner under sentence of death, having failed in one appeal, to ask for an extension of time in which to
576
appeal on some further point, and by a series of such applications to postpone the execution of the sentence. Our law and practice are based on the belief that when a prisoner has been sentenced to death, a final decision in his case should be reached as quickly as is compatible with giving him reasonable opportunities to appeal, and that there should not be opportunities for prolonged delays, at the end of which it might be felt inhuman to carry out the sentence at all.
LORD SILKIN: If the noble and learned Viscount would forgive my interruption, would he explain how this would mean postponing the execution of a sentence? To put an extreme case, suppose a person under sentence of death applies for an extension of time on the day before the sentence is to be carried out, and the court decides that it is a frivolous application and refuses it, then the sentence can be carried out exactly as intended. How then does the noble and learned Viscount fear an extension of the time in carrying out the sentence?
THE LORD CHANCELLOR: The sentence would have to be postponed for the application to be made to the court (I am taking the noble Lord's own hypothesis), and if that application for further time is made on the day before the sentence is to be carried out, then the carrying out of the sentence would have to be postponed for a certain number of days—at least a week—in order to give time for the application to be made to the court, and the possibility that the court would have to consider it. That could go on. This is very serious. I know the difficulty.
My noble and learned friend Lord Goddard may remember that on two occasions when I was Home Secretary a question was raised in the Court of Criminal Appeal with which he and his brethren felt they could not deal. One was a case in which someone came forward with evidence that someone else had confessed to the crime, and the Court of Criminal Appeal being unable to help on that point, I had to order an inquiry into it, I believe I am right in saying that that was suggested by my noble and learned friend himself in his judgment in the Court of Criminal Appeal. At any rate, he said that it was for me, as Home

577
Secretary, to deal with the matter; and I did so. By the extrordinary speed and hard work of both persons holding the inquiry, it was possible to have that done in a limited time, but I remember being intensely worried by just this problem: I had to have the inquiry. But even if the inquiry shows no foundation for any action, at what time does it become inhuman to have the person hanged? I believe that that is a point which we have always to bear in mind.
There is another interesting point which the noble Lord, Lord Silkin, may already have considered, but at any rate I draw it to his memory. There is at present no power to extend the seven days during which an application must be made to the Attorney General for his fiat. Clause 2 (1) of the Bill allows seven days in which to apply to the court below for leave to appeal to the House of Lords, and a further seven days in which to apply to the House of Lords, if the court below refuses; so that there is additional time there. An appeal to the House of Lords will be made only on a point of law, and since any points of law arising on the case will have been considered in the course of the application to the Court of Criminal Appeal, there should be no difficulty in deciding within the period of seven days whether to apply for leave to appeal to the House of Lords. The point ought to have become crystallised by that time and a decision could be made within the seven days; and when an application has been made the defence can, if necessary, ask for time before the application is considered.
I want to be "more Royalist than the King", and introduce another point which the noble Lord, Lord Silkin, did not mention, but which I believe it is material that he should consider in this regard, because it might be put to me. That is an argument the force of which we see in the case where there is no reprieve. But suppose there is a reprieve. The objections urged in this argument might then be said to have no force. It was held by the Court of Criminal Appeal in the case of Twynham in 1920, where a man was sentenced to death and reprieved, and applied eight years later for leave to appeal out of time, that the court had no power to grant such application notwithstanding that the death sentence had been commuted.
578
That raises another point and one which might well have importance; and, as the noble Lord will be aware, the Home Secretary can ensure that the court is not estopped from hearing a case by referring it under Section 19 (a) of the Criminal Appeal Act. That was done in the case of George Fratton, in 1929; and, of course, if the point at issue is one of law and is decided against the prisoner, he will have then a fresh right to apply for leave to appeal to the House of Lords under Clause 1 of this Bill.
That still leaves the point (I want to face up to all the difficulties) that it could be suggested that a reprieved prisoner's access to the Court of Criminal Appeal out of time ought not to depend on the exercise of the Secretary of State's discretion. There, I think the answer is that that really raises a point which relates to the powers of the Court of Criminal Appeal and is not appropriate to this Bill.
But I should like to undertake to consider, when a suitable opportunity arises, whether the Criminal Appeal Act should be amended so as to enable the court to give leave to appeal out of time to a person who has been sentenced to death and reprieved. That is primarily a matter for my right honourable friend the Home Secretary who is charged with reforms in the criminal law. I should like to discuss it with him, and I should like to have the advantage of discussing it with my noble and learned friends Lord Goddard and Lord Parker of Waddington, with their immense experience in the matter. But I think there is a distinction between the two points. At the moment I am impressed with the point which I have endeavoured to put to the Committee, on the question of whether the death sentence is ping to be carried out. But I am quite prepared to look into the second point and, if an opportunity presents itself, to deal with it. I am sorry to have taken so long, but I should not have liked the noble Lord, Lord Silkin, to think I had not given fairly deep consideration to his point.
5.42 p.m.
LORD CHORLEY: May I say a word on this Amendment? I have a great deal of sympathy with the Amendment of my noble friend Lord Silkin. I would have said a word or two in respect of it, but before intervening, I wanted to hear what

579
the noble and learned Viscount had to say. I must say that, while I can understand how the situation in the clause developed from the existing terms of the earlier Act, it seems to me that, on the whole, the argument which the noble and learned Viscount has put forward emphasises the need for something of the kind for which my noble friend Lord Silkin is asking.
I quite agree with the noble and learned Viscount that one ought not to allow the dreadful sort of situation which we have recently been looking at on the other side of the Atlantic to arise in this country by means of the possibilities of certiorari. In the United States we have in the Chessman case the ghastly situation the whole world has looked at. We should not allow anything of that kind to develop here, and I appreciate that point. But, after all, seven days is a very short time, and a man in this sort of situation becomes—or many men do—numbed by the shock of the Court of Criminal Appeal's dismissal of the appeal, and it may easily be more than seven days before the man is in a position to decide what he wants to do.
It seems to me that it ought to be possible—and I am sure it would be, with the ability of the noble and learned Viscount and those who help him in these things—to devise some sort of regulations by means of which the prisoner would be prevented from obtaining an indefinite postponement of the carrying through of the sentence by means of making applications of this kind. I am quite sure, in looking at the matter broadly, and in the interests of justice as a whole, that there ought not to be a distinction against the interest of a man who has been sentenced to death in respect of getting extended time in which to appeal; and the Amendment assumes that in the particular case he has an argument on which the Court of Criminal Appeal or your Lordships' House would feel there ought to be an appeal. It seems to me that a fundamental matter of justice is at stake here, and the necessary regulations ought to be devised to enabie this matter to be carried through.
LORD GODDARD: Surely in practice no difficulty will arise in this matter—would it?—because this is dealing with
580
an appeal to this House from a decision of tie Court of Criminal Appeal. The first thing that will have to be shown is that there is a point of law of general importance, and the court below has to certify that. In giving judgment in a capital case, surely it will emerge at once from their judgment whether or not there is a point of general public importance. The prisoner is always represented by counsel, who can ask the court at once to say that the decision raises a point of general public importance; and if there is a point of general public importance in a capital case of course the Court of Criminal Appeal will say so. Once they have said that, then the prisoner can at once give notice; he can ask them there and then for leave to appeal; and if the court refuse leave all he has to do is to give his notice to this House and ask this House to give him leave to appeal. Once he has leave to appeal, he can put in his notice of appeal. But it seems to me that in practice everything would be done at the hearing of the appeal. I do not think any difficulty will arise.
LORD SILKIN: The difficulty arises where it has not been done and the person under sentence of death has allowed the seven days to go by and then finds, possibly, as a result of further evidence—
LORD GODDARD: But one cannot appeal on further evidence. It is only on a point of law to this House. That is just the point.
LORD SILKIN: At any rate, I should like to study what has been said by the noble and learned Viscount, and by the noble and learned Lord, Lord Goddard, and possibly raise the matter again. But in the meantime I am grateful for small mercies; and if my Amendment has had the result of bringing to the attention of the noble and learned Viscount the case of people who are reprieved and still suffer the same disability, it will be something. However, I should like to look at the matter again, and I know the noble and learned Viscount will not mind if I raise the matter again later.
Amendment, by leave, withdrawn.
Clause 2 agreed to.
Clauses 3 and 4 agreed to.
Clause 5 [Power to order detention or admission to bail of defendant]:
THE LORD CHANCELLOR: This is purely a drafting Amendment. I beg to move.
Amendment moved—
Page 4, line 1, leave out from ("Where") to end of line 2, and insert ("the court below has power to make an order under subsection (1) of this section, and either no such order is made or the defendant is released or discharged by virtue")—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 5, as amended, agreed to.
Clause 6 agreed to.
Clause 7 [Restitution and revesting of property]:
THE LORD CHANCELLOR: This also is a drafting Amendment. There is an interesting historical and technical argument, which I shall spare the House. I beg to move.
Amendment moved—
Page 5, line 14, after first ("conviction") insert ("on indictment")—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 7, as amended, agreed to.
Clause 8 agreed to.
Clause 9 [Procedure]:
LORD CHORLEY LORD CHORLEY moved to add to subsection (3):
"or where his presence is necessary to enable him to argue his case in person."
The noble Lord said: I am moving this Amendment, really ex abundanti cautela. The third subsection of Clause 9 states:
"A defendant who is detailed pending an appeal … shell not be entitled to be present on the hearing of the appeal or of any proceedings preliminary or incidental thereto except where an order of the House of Lords or rules of court, as the case may be, authorise him to be present or where that House or the court below … gives him leave to be present."
It seems that, unless it is intended to cover this in the regulations—and I think it is a matter which should appear in the Bill itself if that is the proposal—the position when the prisoner himself is arguing his own case has been overlooked. Therefore the Amendment proposes that the words
"or where his presence is necessary to enable him to argue his case in person"
should be added to the clause. I hope that this will commend itself to the noble and learned Viscount, and I beg to move.
Amendment moved—
Page 6, line 25, at end insert the said words. —(Lord Chorley.)
THE LORD CHANCELLOR: I am very pleased to consider this, but all my researches so far show that it is not necessary. An appeal to the House of Lords under the Bill may be brought only where a point of law of general public importance is involved in the decision of the court below, so that it is unlikely that a defendant in custody would wish to argue his case in person. But if he does wish to do so, on appeal from the Court of Criminal Appeal or the Courts-Martial Appeal Court, whether on an application for leave to appeal or on the hearing of the appeal itself, it is in the highest degree unlikely that the court below or the House of Lords, as the case may be, would refuse him leave. No instance is known of this having occurred, and the point therefore appears to be of no practical importance.
May I leave it in this way? I am anxious not to make an unnecessary Amendment, because it is conceivable that there might be repercussions on the practice which my noble and learned friend the Lord Chief Justice has laid down in regard to applications for habeas corpus. But if those for whom the noble Lord, Lord Chorley, is speaking have any cases in mind, or if they or he on their behalf could convey to me whether they have any feeling of a danger of practical injustice, I should be most glad to consider it. Perhaps the noble Lord would withdraw his Amendment on the terms that, if he or they would write to me, I should be very pleased to consider it again and, if it proved necessary, to put something in the Bill.
LORD CHORLEY: I am grateful to the noble and learned Viscount. As I said, I am moving the Amendment ex abundanti cautela. I am inclined to agree with him that the chance of its being needed is a small one. I will, in fact, consult with those who are interested in these matters, and will let him know, as suggested. On that basis, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 9 agreed to.
Clause 10 agreed to.
Clause 11 [Innocent publication and distribution]:
LORD CHORLEY LORD CHORLEY moved to add to the clause:
"() Nothing in this section shall be construed as implying that any publication is punishable as contempt of court which would not be so punishable apart from this motion."
The noble Lord said: This Amendment is really rather similar, in the sense that I am moving it also in order that a possible interpretation (although, one might say, perhaps not a very likely one) may not creep into the clause as it stands which might possibly lead to a new punishment for contempt. We therefore think that this subsection should be added to the clause. I should like to hear what the noble and learned Viscount thinks about the need for it, and for that purpose I beg to move.
Amendment moved—
Page 7, line 17, at end insert the said subsection.—(Lord Chorley.)
THE LORD CHANCELLOR: I have considered this very carefully, and I do not think it is necessary. I should like to explain my reasons. I observe that the new subsection which the noble Lord, Lord Chorley, wishes to add to Clause 11 is in the same terms as subsection (4) of Clause 12. There is, however, no need for a provision of this kind in Clause 11, which is designed solely to give a new defence in certain cases of innocent publication and distribution. There can be no implication from Clause 11 as it stands that a person may be guilty of contempt in circumstances in which he would not be so guilty apart from the clause. In the case of Clause 12, however, subsection (4) is desirable, if not strictly necessary, in order to put it beyond doubt that, even in the excepted cases mentioned in subsection (1), publication of information is not to be treated as contempt where it would not have been so treated under the law as it stands at present. Without a provision of this kind, there might be room for argument as to whether the listing of the cases in which mere publication may amount to contempt had not replaced the existing law under which publication in these cases does not always amount to contempt. There is no room for such an argument in the case of Clause 11. I am quite positive in the matter. I have put it out, I hope clearly; and again, per-
584
haps, the noble Lord and his friends might consider and see whether there is any aspect that I have inadvertently ignored. If so, I shall be pleased to consider it; but, personally, I have no doubt about the point at all.
LORD CHORLEY: I am grateful to the noble and learned Viscount. I must say that my own impression was much that which he has so lucidly explained to your Lordships. I should like to reserve the possibility of putting the matter down again, but, in the meantime, I beg leave to withdraw it.
Amendment, by leave, withdrawn.
Clause 11 agreed to.
Clause 12 [Publication of information relating to proceedings in private]:
LORD CHORLEY LORD CHORLEY moved in subsection (1), after the first word "private" to insert:
"(including information relating to any order made by the court in any such proceedings)".
The noble Lord said: This, again, is rather of the ex abundanti cautela type, and I move it with much the same feelings as I did the last Amendment. Your Lordships will see that the first subsection in Clause 12 reads in this way:
"The publication of information relating to proceedings before any court sitting in private shall not of itself be contempt of court except in the following cases,"
which are set out. We feel that it would be safer, so to speak, to expand that a little by putting in these words after the word "private" so that it would then read:
"The publication of information relating to proceedings before any court sitting in private (including information relating to any order made by the court in any such proceedings) …"
The noble and learned Viscount may say that it is not necessary to put these words in. I should like to hear what his views are on this particular point, and on that basis I beg to move.
Amendment moved—
Page 7, line 19, after ("private") insert the said words.—(Lord Chorley.)
THE LORD CHANCELLOR: Again, I do not think that there is any need to make express provision for this purpose. It is true that subsection (2) refers to publication of the text or a summary of the order, and it may be that the

585
contrast between this and the reference to information relating to the proceedings in subsection (1) has led the noble Lord and his friends to doubt whether subsection (1) does in fact cover information about the order itself. I can, however, assure him that there is no room for doubt on this point. The reason why express provision was made in subsection (2) about the text or a summary of the order was that it seemed desirable to draw attention to the existing position under which, even in the special classes of case mentioned in subsection (1), publication of the order cannot normally amount to contempt; and at the same time to make it clear that the court may go so far in certain cases as to prohibit publication of the order where it has power to do so and this course seems desirable. As the noble Lord knows, it is always undesirable to add words to a Bill which, in one's own view, serve no useful purpose. On the other hand, the last thing I want to do is to appear to be stalling for the stake of stalling, and if the noble Lord and his friends have any doubt and they will let me know, I will consider the matter again. But I myself am very clear at the moment.
LORD CHORLEY: I am grateful to the noble and learned Viscount. If I may, I would deal with this on the same basis as the last two Amendments, and on that basis I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 12 agreed to.
Clause 13:
Appeal in cases of contempt of court.
13.
(2) An appeal may be brought under this section by the defendant against any order or finding made against him, or by the prosecutor against the refusal of an application for committal or attachment; and the appeal shall lie—

(b) from an order or decision of a county court, the Chancery Court of a County Palatine, a single judge of the High Court or an official referee, to the Court of Appeal;

6.2 p.m.
LORD CHORLEY LORD CHORLEY moved, in subsection (2) (b), after the first "of" to insert "a Divisional Court of the Queen's Bench Division". The noble Lord said: This is the first of a series
586
of Amendments which have the same object in view—which is, to route the appeals from the Queen's Bench Divisional Court to the Court of Appeal. The Divisional Court may come into contempt cases, either as a court of first instance or as a court of appeal under paragraph (a). This Amendment, as framed, covers both aspects of this. It has been suggested to me since I put down the Amendment that it is not so clear as it might be. If the noble and learned Viscount takes that view, I should be glad to have it cleared up at the next stage.
It seems to me particularly important that in cases where the Divisional Court have been acting as a court of first instance there should be this routing through the Court of Appeal, rather than an immediate routing to your Lordships' House, partly for the reasons which I have already given. But on Second Reading the noble and learned Viscount, the Lord Chancellor, pronounced so definitely against this course that I have confined my Amendment to contempt cases, though it might be desirable that the practice should be more widely applied.
I think that it will be rarely necessary to have more than one appeal in cases of this kind, and the procedure for appeals to the Court of Appeal is so much simpler and expeditious than that to your Lordships' House that the argument seems to me to be strongly in favour of that procedure. This is also the view of the Bar Council. I have a letter from the Chairman of the Bar Council, which says that the Council have considered the matter and are very much in favour of this course. The organisation of the noble Lord, Lord Shawcross, takes the same view. I feel that, on the whole, the Court of Appeal would deal with this sort of matter more expeditiously, and it would be cheaper. I think that there is a very strong argument in favour of its being routed in this way. I think that puts the matter as shortly and as clearly as I can. I beg to move.
Amendment moved—
Page 8, line 21, after ("of") insert ("a Divisional Court of the Queen's Bench Division").—(Lord Chorley.)
THE LORD CHANCELLOR: I do not make a habit of dealing with

587
Amendments on a technical basis, but the noble Lord, Lord Chorley, has invited me to point out where his present series of Amendments are defective, and in reply to that may I briefly do so? I am considering Amendments Nos. 9, 11 and 12, which form this series together. These Amendments would leave appeals from inferior courts other than county courts (in particular quarter sessions) to go to the Divisional Court of the Queen's Bench Division under paragraph (a). The effect of his proposal however would be to insert a further tier of appeals in these cases by giving a right of appeal from the Divisional Court to the Court of Appeal and thence to the House of Lords, and this is plainly undesirable. The Amendments are in any event defective in point of form, for they make no provision for what is to be done about a Divisional Court of the Chancery Division or of the Probate, Divorce and Admiralty Division. The last mentioned Court sits frequently to hear appeals from magistrates in matrimonial cases, while the Chancery Divisional Court hears bankruptcy appeals from the county court and also sat recently to hear the case of Re Hastings (No. 3).
On the first point, I hope that the noble Lord appreciates, and that it is generally appreciated, that under the scheme of the Bill there is one unrestricted right of appeal from any court acting as a court of first instance in cases of contempt, and that the restrictions which we have been discussing in relation to other matters in the Bill do not apply where a court is sitting as court of first instance. The Amendments do not propose that appeals from the Court of Criminal Appeal in contempt cases should go to the Court of Appeal and one has then to consider whether the same should not apply to the Divisional Court of the Queen's Bench Division. The noble Lord suggests that these cases should go to the Court of Appeal and not to your Lordships' House. I think that he would agree that in nearly all cases such proceedings contain a quasi-criminal element and that, broadly, that would be inappropriate for the Court of Appeal. The result of this Bill will be to make a clear channel from the Divisional Court to your Lordships' House in a variety of criminal matters,
588
and I consider that these cases should go through the same channel.
Most of the cases that have caused the worry have been newspaper cases, which come to the Divisional Court as the court of first instance, and where there is now to be an unrestricted appeal to your Lordships' House. I hope that the result will be, in the matters which are mentioned in "Justice's" pamphlet and which have been mentioned on previous occasions, that guidance will be given and the position made clear; and even though there is no criminal appeal from Scotland, if a case comes to your Lordships' House, clearly, notwithstanding any lack of binding authority, the views expressed in your Lordships' House will be treated with great respect in the Court of Session. Therefore I feel that we have built up a sensible structure. Everyone, of course, is predisposed in favour of his own child. But I arrived at this structure not only after great consideration (which may not be very important) but with a great deal of help from a number of people of immense experience. I believe that this will work and will do much to help those people in the newspaper world who, for various reasons, have been afraid. I hope that on consideration the noble Lord will feel that the new structure is the right one and will not press me on that point.
LORD CHORLEY: Obviously I must withdraw this Amendment and not move those which follow, because of the difficulties which the noble and learned Viscount has pointed out, but I should like to safeguard the position in respect of putting something down on the next stage of the Bill. I think the noble and learned Viscount has been a little too much influenced, if I may say so, by the newspaper aspect of these contempt cases. After all, they are not the only cases. While no doubt newspaper owners would wish to come to your Lordships' House, there may be other people to whom the cheaper and more expeditious procedure of the Court of Appeal would make a stronger appeal. I feel that the Court of Appeal is a very good court to deal with this sort of case. It may be that technically this is a criminal case; but it is only technically so, and it is certainly not like the ordinary sort of criminal case with which criminal courts

589
are concerned. I do not feel that the fact that the Court of Appeal does not in the ordinary way handle criminal cases is a very strong argument in this particular connection. However, I do not want to take up your Lordships' time at this rather late hour by arguing the merits of Amendments which I have indicated I will withdraw or not move, and therefore I beg leave to withdraw this Amendment.
Amendment, by leave, withdrawn.
THE LORD CHANCELLOR: This is little more than a drafting Amendment. Broadly, in the clause as it stands the class of persons in judicial capacities is confined to official referees. There are other persons who I think are best described as
"any court, tribunal or person having the powers of the High Court or of a judge of that court".
This would include, inter alia, official referees. For that reason, I put forward this Amendment. I beg to move.
Amendment moved—
Page 8, line 23, leave out ("an official referee") and insert ("any court, tribunal or person having the powers of the High Court or of a judge of that court").—(The Lord Chancellor.)
On Question, Amendment agreed to.
On Question: Whether Clause 13 shall be agreed to?
LORD CHORLEY: May I say a word before we leave this clause? As the noble and learned Viscount will remember, on the Second Reading of this Bill we had a good deal of discussion about contempt in face of the court. As I understand this particular clause, it includes contempt in face of the court; but one or two people have asked me if I am sure about this, because they are not so sure. I should like to have the assurance of the noble and learned Viscount on this important point before we leave the clause.
THE LORD CHANCELLOR: It includes contempt in face of the court, in the various courts, and there is to be one unrestricted appeal in each case. When you get to the Divisional Court as an appellate court, then the second appeal is restricted. I hope that I have made myself clear. You always get one unrestricted appeal, but when you come up from the appeal court, then it is a
590
restricted appeal. But there is an appeal, and the Bill provides for an appeal in the case of contempt in face of the court.
LORD CHORLEY: That means that it is restricted by the provisos we were considering earlier on?
THE LORD CHANCELLOR: Yes.
LORD CHORLEY: I should perhaps take this opportunity of indicating that the Bar Council's view about this is that in respect of these contempt cases, and also habeas corpus cases, they do not want to include points of law of importance. They think that in this type of case a right of appeal should be completely unrestricted. It may be that I shall put down Amendments with the object of trying to get half a loaf where I could not get the whole loaf as a result of the noble and learned Viscount's resistance to my first Amendment.
THE LORD CHANCELLOR: I should be grateful if the Bar Council could develop it on paper, because it is sometimes easier to follow that way. I find some difficulty in seeing why there should not be the restriction when the Divisional Court is acting as an appellate court. If the Bar Council could direct their attention to that, and would care to let me see their views in writing, I should be pleased to consider them. But, of course, I should be equally pleased to consider them through the mouth of the noble Lord, Lord Chorley.
LORD CHORLEY: I am grateful to the noble and learned Viscount. I think the substantial point is that in this type of case we are not so much concerned with points of law as with the broad impingement of the facts as a whole. It is there, I think, that they feel there ought to be the unrestricted right. However, I will bring the views of the Lord Chancellor to the attention of the Chairman of the Bar Council, and I feel sure that the noble and learned Viscount will get an indication in writing of the reasons why they take such a view.
Clause 13, as amended, agreed to.
THE LORD CHANCELLOR: I think that will be a convenient moment for us to break off, and I beg to move that the House do now resume.
Moved, That the House do now resume?—(The Lord Chancellor.)
THE DEPUTY CHAIRMAN OF COMMITTEES: Does the noble Lord, Lord Conesford, wish to say something?
LORD CONESFORD: I only wanted to say something in respect of Clause 13, and I can say it in a sentence. I would express my great regret that there had been no Amendment put down by the Government to Clause 13 to meet the points so forcibly put by the Lord Chief Justice and supported by my noble and learned friend Lord Goddard on the last occasion.
On Question, Motion agreed to, and Ho use resumed accordingly.

CIVIL AVIATION (LICENSING) BILL
6.20 p.m.
Order of the Day for the Second Reading read.
THE PAYMASTER GENERAL (LORD MILLS): My Lords, I beg to move that this Bill be now read a second time. This Bill is designed to deal with two current problems of civil aviation: first, to ensure that operators of air services are equipped and organised to conduct their operations safely, and, secondly, to introduce a wholly new licensing system to replace the makeshift arrangements which have existed for a number of years.
The arrangements for the safety of aircraft as such depend on provisions made under the Civil Aviation Act, 1949, and so far as they go are broadly satisfactory. There is, however, a gap in the safety arrangements in so far as they apply to the control of air operators. At the present time this gap has been filled by a procedure whereby the Air Transport Advisory Council confirms with the Minister that the operators' control and safety arrangements are satisfactory before approving any air transport services. The procedure of the Air Transport Advisory Council, which I will mention more fully later, relates, however, only to scheduled air services and there is no means of ensuring that the arrangements of the operators for non-scheduled services are up to the standard which can be reasonably required.
592
Under Section 8 of the Civil Aviation Act, 1949, it would be possible without further legislation to introduce a scheme for the inspection and regulation of air operators. However, the penalties provided would be unsatisfactory. The profits involved in air operations can be very large, and it might pay an operator to repeat an offence and risk a number of prosecutions. Although the problem has been recognised for some time, the Southall crash in which seven people lost their lives a few years ago brought home to the public the unsatisfactory state of the law and that all operators without exception should be made to comply with proper safety requirements.
This Bill is, therefore, designed to rectify the position. It introduces requirements for all air operators to secure from the Ministry what will be known as an air operator's certificate, certifying that they are competent to secure the safety of operations they propose. The detailed provisions with regard to the air operator's certificate will be made in an amendment to the Air Navigation Order and regulations under it. The Bill lays down a new scale of penalties for the offence of flying without or in contravention of the provisions of an air operator's certificate. If an air operator's certificate is withdrawn, an operator cannot fly at all until it is restored. This will be the main sanction behind the law.
An appeal system will be introduced in the Air Navigation Order in connection with the issue or revocation of air operator's certificates. The amendment of the Air Navigation Order will be laid before Parliament and will no doubt be debated at the same time as regulations made under the licensing provisions of the Bill to which I will refer later. Plans for the recruitment of the necessary staff are well advanced, and it is hoped that the issue of air operator's certificates can begin before the end of the year.
It was enacted in 1946 that the Air Corporations should have a monopoly of scheduled services to and from the United Kingdom. This provision was consolidated in Section 24 of the Air Corporations Act, 1949. It very soon became apparent that this monopoly was not satisfactory. It provided insufficient scope for the activities of the various

593
independent airlines which already existed, and under the Labour Government devices had to be found to circumvent the monopoly and provide wider opportunities to independent airlines. The device which was adopted was to appoint the independent airlines, with the Minister's approval, as associates of the Corporations under Section 15 (3) of the Air Corporations Act, 1949. This enabled them to share in the monopoly. The Corporations lent themselves to this device.
At an early stage the Minister of Civil Aviation who was then responsible decided to avail himself of the advice of the Air Transport Advisory Council in deciding which services or which independents to approve for the purpose of Associate Agreements with the Corporations. The Government policy of strengthening the position of the independents was announced in 1952 and the present terms of reference of the Air Transport Advisory Council were issued to it in that year. The practice is for any independent that wishes to operate either a regular scheduled service or any inclusive tour holiday service (which ranks as a schedule journey within the terms of the Air Corporations Act) to apply to the Air Transport Advisory Council. These applications are advertised and objections are considered by the Council which gives its advice to the Minister. The Minister almost invariably adopts the advice of the Council and the Corporations then appoint the independent as an associate for this purpose.
This makeshift procedure is in many respects out of date. For instance, in nearly every case one of the Corporations has opposed the application of the independent in question to the Air Transport Advisory Council. The legal fiction has assumed a scale where it is quite unrealistic and unsatisfactory to all parties. It is a credit to the good sense and goodwill of the Corporations and the independents, and in particular to the Air Transport Advisory Council and its Chairman, Lord Terrington, that such an arrangement has worked as well as it has.
The time has certainly come for a change. The Air Transport Advisory Council was not set up for any such purpose and its constitution and procedures are hopelessly inadequate. It
594
was devised in the first place as one of a series of consumer councils associated with nationalised industries, and its constitution is adapted to that purpose. Its proceedings have not been conducted in public and there is no system of appeal from its recommendations. Despite the fairness and good judgment of the Council it is not satisfactory as a permanent administrative tribunal, which is what, in effect, it has become.
There is another important weakness. Control is exercised under this system only over those services which can be claimed as scheduled journeys within the meaning of subsection 2 of Section 24 of the Air Corporations Act, 1949. This definition has proved extremely weak and all manner of closed groups, private clubs and so forth have grown up for the purpose of ensuring cheap travel which fall outside the definition of scheduled journeys or at least which do not without doubt fall within it. Under cover of such devices all manner of near-scheduled services have grown up which are seriously undermining the activities of the Corporations and those independent airlines who follow the rules. These so-called non-scheduled operations are under no form of control at the present time and are very rapidly increasing. One of the objects of the Bill is to bring them into the system now envisaged.
The concept of licensing air transport owes much to the highly successful system of licensing bus transport which was introduced in the Road Traffic Act, 1930. Applications for licences are made to Road Traffic Commissioners who consider all the evidence and make the necessary decisions. There is an appeal from the decisions to the Minister. The degree of regulation of the industry which has been introduced in this way has proved acceptable to all the interests concerned. The system now proposed is based largely on that experience.
The main purposes of the Bill are: (a) to abolish the statutory monopoly of the Corporations, which has in many cases now ceased to exist; (b) to replace the Air Transport Advisory Council by an Air Transport Licensing Board properly constituted to carry out the quasi-judicial functions that have recently fallen to the Council; (c) to institute a system of appeals to the Minister. The opportunity has been taken to revise many other

595
aspects of the system: for instance, the new Air Transport Licensing Board is given as a residual duty the advisory functions which were the original raison d'être of the Air Transport Advisory Council. The Regional Advisory Councils (Scotland, Wales and Northern Ireland) which have hitherto been by Statute advisory and responsible to the Corporations are now to be reconstituted as advisory to the Air Transport Licensing Board. A scale of penalties for offences has been introduced which is realistic in relation to the profits which can be made from illegal flights.
The Bill will also enable convenient and proper procedures to be introduced which can be adapted for all the different kinds of commercial flying which exist. These procedures and many other aspects of the scheme will be introduced by regulations to be made by the Minister. These regulations are subject to annulment in either House of Parliament and there will be an opportunity to debate them. The Board is also required to make an annual report which is to be laid before Parliament so that its proceedings can be debated annually. A minor but not unimportant purpose of the Bill is to prohibit the nuisance of aerial advertising except for public purposes.
The Bill aims to introduce a new and liberal régime for the regulation of air transport services in this country and abroad by United Kingdom aircraft. It is not intended overnight to create a new situation as between the Corporations and the independents but to meet a developing situation. It has been made clear, again and again, in another place, that the Minister regards the Corporations as our main flag carriers throughout the world and that he has every intention that they shall continue to be so. But in an expanding industry it is his conviction that there is room for independents as well, and the Bill is intended to allow scope for both the Corporations and the independents to expand with the new opportunities in the air which are continually arising.
The future pattern will evolve gradually from the decisions of the Board on the applications made to it and from the decisions of the Minister on any appeals made to him. In this way a pattern will grow up as it has done in
596
the case of bus licensing. The Minister recognises that the international aspect of flying produces a number of complications which do not arise in the purely domestic system of bus licensing, and he has therefore taken steps in this Bill to reserve to himself, as he must, certain powers with regard to international and other overseas relations and with regard to the negotiation of such affairs. Otherwise the responsibility for the decisions to be taken on applications for new air services will rest with the Board. It is most important that the Board should be composed of persons of the highest calibre. The Minister is giving thought to the membership of the Board, but until the Bill is law it will be premature for him to anticipate in any way the appointments which he may wish to make.
I hope it will now be convenient to your Lordships to have a brief résume of the principal contents of the Bill. Clause 1, subsection (1), establishes the Air Transport Licensing Board with the general duty of furthering the development of British civil aviation. Subsection (2) makes it an offence to fly for hire or reward or in connection with trade or business except under, and in accordance with, the terms of the air operator's certificate certifying the operator's competence to engage in the operations he proposes, and an air service licence issued by the Board. Subsection (3) enables the Minister to exempt any descriptions of flight from the requirement to have an air service licence. These exemptions will be made by regulation subject to negative resolution. In another place the Minister gave a list of the principal exemptions he intends to introduce. These exemptions deal with such cases as air ambulances and crop spraying; they will be carefully drafted not to exempt closed group operators.
Clause 2 deals with applications for the grant of air services licences. Subsection (2) is of particular importance. It sets out a series of eight matters which the Air Transport Licensing Board are required to consider in particular before they decide whether or not to grant an application for a licence. They must consider first whether the applicant is competent and a fit and proper person to operate the aircraft for the service proposed. Then they must consider whether

597
he has adequate third-party insurance and whether his staff is employed on fair terms and conditions. The Board must next pay attention to the need for the service, the adequacy of any existing services and the question whether the new service, if granted, would be likely to result in wasteful duplication of traffic or material diversion of traffic from existing services. They must also consider any capital, financial or commercial commitments reasonably entered into by the applicant. These provisions are designed to make the Board pay full regard to the position of existing operators (whether Corporation or independent) before they agree to grant a licence to a new operator on any route. Finally, they must have regard to any objections or representations made in accordance with the appropriate regulations regarding procedure. These terms of reference take the place of those under which the Air Transport Advisory Council has hitherto been operating.
Subsection (4) provides that the Board shall not consider safety matters, since it would obviously be unfortunate if there was an overlap between the functions of the Board and of the Director of Aviation Safety and Licensing in the Ministry of Transport, who will be responsible for the issue of air operators' certificates.
Another very important provision is contained in subsection (6). This subsection empowers the Minister to authorise the grant of transitional air service licences to any person who previously provided air transport services in order to start the new system going. It is obvious that when the Bill is brought into force and it becomes an offence to fly without a licence, there must be in existence licences enabling all the existing services to continue. After much consideration of the alternatives, the Minister came to the conclusion that the right course would be for him to authorise the issue of transitional licences which reproduced the present state of affairs.
Thus in the case of the Air Corporations transitional licences would be issued to them without any limit of time or frequency to cover all the services they operate. In the case of the independents they would receive licences reproducing all the approvals which they at
598
present hold on the advice of the Air Transport Advisory Council, subject to the conditions as to period, frequency and so forth set out in those approvals. This would enable the Board to start its operations on the basis of the situation precisely as it is to-day. It would then be possible for any operator who was dissatisfied with the present state of affairs to apply to the Board either for a new licence enabling him to do what he has hitherto been unable to do, or for some other operator's licence to be varied. For instance, an independent could apply to the Board for a licence to operate in parallel with a Corporation's service and for a limitation to be imposed on the frequency of that service. The powers of the Board to vary licences either on its own initiative or on the application of an operator are contained in Clause 3.
Special considerations apply in the case of those air transport services operated at separate fares which have not hitherto been regulated and will for the first time be regulated by the Bill. As I have said, the Bill provides for issue to the existing operators of transitional air service licences. It will be a number of weeks before Parliament completes its consideration of the Bill. In the meantime, airline operators who are planning to provide closed group services at separate fares in 1961, which if the Bill becomes law will require a licence, will naturally wish to know where they stand. The Minister has therefore arranged that any operators concerned may submit their case to the Air Transport Advisory Council who, after considering it, will recommend to the Minister whether or not, in the event of the Bill becoming law, a transitional licence should in due course be issued in respect of the service in question. In the light of this recommendation the Minister will inform the applicant whether or not he may expect to receive a transitional licence. This arrangement will enable operators and travel agents concerned to make their plans in proper time. The detailed arrangements have been agreed with the Air Transport Advisory Council and will be circulated to the operators and to the technical Press.
Subsection (7) of Clause 2 provides that air service licences should be granted only to, broadly speaking, citizens

599
of the United Kingdom and Colonies. This is in accordance with the general practice in civil aviation; there is a standard clause to this effect in the bilateral agreements between countries.
LORD OGMORE: My Lords, may I ask the noble Lord: Does that mean that countries, members of the Commonwealth other than those which are Colonies or Protectorates, are excluded from the scope of this Bill?
LORD MILLS: That is precisely what is meant. In most cases there are bilateral arrangements. As I was saying, this is in accordance with the general practice in civil aviation. There is a standard clause to this effect, and there are bilateral agreements between countries.
Clause 3, to which I have already referred, provides powers under which licences may be revoked, suspended or varied. This is important owing to the form which the transitional licences will take, since without it it would be difficult for any operator who objects to the present position to make his case heard to the Board. Subsection (2) of Clause 3 enables the Board to revoke, suspend, or vary a licence if they are no longer satisfied that the holder is competent or a fit and proper person to operate it. Clause 4 reproduces in brief the original duties of the Air Transport Advisory Council which was set up under Section 12 of the Civil Aviation Act, 1949. It will enable the Board to operate in the way the Council has hitherto done as a Consumer Council. The advice of the Council was, however, primarily directed to the activities of the Corporations, whereas Clause 4 relates to air transport services provided by any United Kingdom air operator.
Clause 5 empowers the Minister to make the necessary regulations, subject to the Negative Resolution procedure, to enable the Bill to operate. Attention need be drawn only to two of these. Paragraph (c) of subsection (1) creates a right of appeal to the Minister by applicants for, or holders of, air service licences and any other appropriate parties against any decisions of the Board. Hitherto, there has been no right of appeal from the decisions of the Air Transport Advisory Council. The right of appeal is obviously a valuable safeguard for the interests of those
600
affected by the grant or refusal of licences, and it will also enable the ultimate decisions on applications to reflect Government policy as it may evolve from time to time. Under paragraph (g) of subsection (2), the regulations may set up the Regional Advisory Committees, which are now to be advisory to the Board. The Minister contemplates setting up one for Scotland, one for Wales and one for Northern Ireland.
Clause 6 creates penalties appropriate to the various offences which may be committed under the Act. It may be borne in mind, as I have already mentioned, that the profits to be made from unauthorised flights can be very considerable. Under Clause 7, aerial advertising and propaganda are prohibited, save in any circumstances to be set out in regulations. It is intended that these regulations should make provision for aerial advertising only where needed for public purposes, such as crowd control, and for communications between the aircraft and the ground for the purposes of safety.
Of the remaining provisions of the Bill, the only one to which attention need be drawn, is Clause 9, which contains the repeals. Of these, the most important is the repeal of Section 24 of the Air Corporations Act, 1949, which established the monopoly of the Airways Corporations, and Section 12 of the Civil Aviation Act, 1949, which established the Air Transport Advisory Council. The composition of the Air Transport Licensing Board itself is dealt with in the Schedule. It is envisaged that the cost of the Board can be met out of the fees payable in respect of the applications for or grant of licences. My Lords, I hope that this brief explanation of the scope and purposes of the Bill will be sufficient to commend it to your Lordships. I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Lord Mills.)
6.55 p.m.
LORD SHACKLETON: My Lords, this House is particularly well fitted to discuss the topic of civil aviation and the public Air Corporations, because so many of our Members participate in them. It is unfortunate, however, that their participation also denies us the opportunity of hearing from them. This,

601
of course, is no more true of any noble Lord than it is of the noble Lord, Lord Terrington, who at present occupies the Woolsack. It must be rather unusual to be sitting in that position when a Bill, one of the purposes of which is to abolish the body over which he presides, is before your Lordships' House. I am sure that all noble Lords, and Her Majesty's Government in particular, would wish to pay a tribute to the really excellent work of the body over which the noble Lord has presided, and his own conduct of that activity.
I hope that I am not out of order in referring to the noble Lord when he is silenced in the position he is in at the moment, but I wanted to say fairly early on that I hope that, in the arrangements that are about to be made, the services of the members of the Air Transport Advisory Council, and particularly of the noble Lord, will be preserved in the transitional stage; because one of the strengths of this body is the excellent way in which they have conducted some very difficult operations. The Council enjoy a confidence which is essential to the further progress or implementation of this measure; and although the Government cannot, before the Bill becomes law, announce who the members of the Board are to be, or who is to be their chairman, I have no doubt that they are already thinking about these matters, and I should like to encourage the noble Lord the Minister to urge his right honourable friend to think along those lines.
This Bill comes, among other things, as a result of a pledge given at the General Election by the Party opposite, and from that very fertile and ingenious source, the Minister of Aviation. I hope that it will be more successful than the Blue Streak activity for which he was responsible. I should make clear that we on this side certainly do not intend to oppose the Bill on Second Reading, and that we acknowledge that a great part of what has been said by the noble Lord who has just spoken is a proper justification for the introduction of this measure. There is no doubt that the old arrangement with regard to the Corporations' monopolies had broken down. The associate agreements by which the possibly unwilling Corporations had, in effect, to enter into agreements allegedly to supplement their activities but actually
602
possibly to bring people into competition, was the kind of sophistry or stratagem which ought not to continue indefinitely; and I believe that the time has come when that situation needs to be tidied up and the Air Transport Advisory Council, in effect, turned into the Air Licensing Board.
Further, it is also clear that there was some need—though I do not know how great it was—to bring some of the charter services and the flying Club arrangements within control; and it is quite obvious that Her Majesty's Government had to act on this. Although I doubt whether there has been very much that has been sufficiently unsatisfactory among these operators to cause public anxiety, this is, quite clearly, a responsibility which the Government must take on; and the two processes now established, the setting up of the special arrangement for both the air operator's certificate and the air service licence, seem to be a satisfactory way of doing it.
But, my Lords, we on this side have objections to this Bill as it stands. I will not elaborate all the objections that were made in another place. We do detect, though certainly not from the Minister's speech in this House or from the Minister's speech in another place, a certain amount of what might be called private enterprise prejudice (and I do not use this term, I hope, in too offensive a way) in regard to the strengthening of the independent operators. We are all prepared to acknowledge the virtues of competition where it can be achieved; and quite clearly there is some argument to be made, although I do not believe it is possible to develop competition within some of the great public monopolies operating within this country, the nationally owned monopolies. But it cannot possibly apply to the Air Corporations, who are facing the most tremendous competition in the world, who undoubtedly carry a great national investment in their operations and, as the noble Lord said, also "carry the flag". They have to carry the flag, but, unlike the Royal Navy in the past, they have at the same time to operate at a profit; this is not so easy to achieve, as we know when we look at their records over the previous years.
It is a matter of great satisfaction that British European Airways and the

603
British Overseas Airways Corporation, who have had a difficult time, are achieving ever-improving results. I believe it was the noble Earl, Lord Swinton, when we discussed the Bill to improve the borrowing powers of these Corporations, who had some doubts as to whether British European Airways' trading results were likely to be as good in the forthcoming year. On that occasion, whether properly or improperly, we stimulated my noble friend Lord Douglas of Kirtleside to give an undertaking that they would be very good; and they are. They show a profit of £2 million after the interest charges have been met.
However, this does give rise to some slight anxieties. On the one hand, there will be people who say, "Public corporations ought not to make a profit, and other people ought to participate." Equally, if they should run into trouble, into the bad luck which B.O.A.C. had over aircraft, people will say, "Quite obviously they do not know how to operate at a profit, and we must give the work to the independent operators." I am sure that the noble Lord and the Minister have no intention of weakening these Corporations. But there is an enormous investment—already well over £100 million has been invested—and these are our Corporations; it is British investment, and clearly we must do nothing to weaken them. We have acknowledged that there is a place for the independents, and I would remind the noble Lord that, ignoring trooping, it is estimated they do about one-third of the air traffic work of British operators of all kinds. I am not too happy about that figure, but it is a figure that has been given; so at least they have a sizeable amount of it.
While the Bill will be operated, and the new Licensing Board will undoubtedly operate, in the public interest, it is, I think, unfortunate that certain of the matters which are contained in Clause 2 are for consideration only and are not mandatory on them. It seems to me that if we are to preserve the position of these two Corporations then particularly Clause 2 (2) (f), which is concerned with wasteful duplication and material diversion of traffic from an existing service, ought to be mandatory on the Board. It seems to me that it
604
is of real importance in this matter that the Government should make the position clear. This provision does not make it clear; it leaves it for future consideration, and this undoubtedly gives rise to a certain amount of anxiety and doubt. It is of very great importance that the Corporations and all those who work in them should be quite certain of what the Government's intentions are in this matter, and I hope that the Government will give this point some further consideration. Already, I admit, the matter has been threshed out in another place in Committee, but I hope the Government will give consideration to tightening up certain of the subsections in that clause. Indeed we may have to consider from this side whether there are not one or two Amendments, perhaps, to Clause 2, and possibly to Clause 3, which we ought in due course to move, in order to clarify the position.
There is a very big investment, and it looks as if the Corporations are going to have to continue the responsibility (and I think it is a proper one for a public Corporation) of proving and introducing new aircraft. They will need a great deal of confidence and security to take the very real risks they will have to take in this matter. If they do, in fact, find that investment—whether it concerns the twenty Vanguards for British European Airways or the VC10s and the Boeings that B.O.A.C. are ordering—the Corporations must be certain that not only will they continue to have their own existing commitments maintained, because they have prepared for these commitments, but they will also get a proportionate increase in the traffic; and that this Bill will not result in a measure by which the independents only participate in the new and developing business.
Your Lordships may say that this is the sort of speech one might expect from this side of the House, in the same way that some of the speeches in another place from the other side would reflect the views of those who believe in competition at almost any price. But I hope that the Government and the Minister will give us a little reassurance on the matter, so that this Bill, admittedly, as I have said, introduced as the result of an Election pledge, will not in any way damage the great national interest that is invested in the Corporations.
7.8 p.m.
LORD OGMORE: My Lords, I should like to join with the noble Lords, Lord Mills and Lord Shackleton, in thanking the noble Lord, Lord Terrington, and his Committee for the excellent work they have done over the years. I remember on one occasion that we had a very happy trip together to the Channel Islands, where we enjoyed the scenery and the hospitality but also tried to stimulate civil aviation in that very charming part of the world. That is a good many years ago. It is many years since my noble friend Lord Terrington undertook this task which he has performed with such ability and, so far as I am aware, without any criticism on the part of anyone—in fact, praise from all. I think it is high time that the Government introduced this Bill because, quite obviously, in a rapidly expanding industry like civil aviation a Bill which was passed some twelve or fourteen years ago must get a little out of date as time goes on, and I think it is high time for this Bill.
As the noble Lord, Lord Mills, has said, our attention and the attention of the public was drawn to the problem particularly by the Southall disaster, but there were many other indications that things were not quite right, particularly at the time of Cyprus and of Suez. I myself heard a number of very disturbing stories about some of the charter companies which were using aircraft and imposing tremendous strain upon their crews in getting them to fly out to Cyprus. They had to sleep in the aircraft for security reasons while the aircraft was in Cyprus, and then they would come back and, with inadequate rest, go up again. Therefore I think it is high time this Bill was put before your Lordships and that these regulations were prepared by the Ministry concerned.
Having said that, I also think that the noble Lord, Lord Mills, is right when he says that the independent operators, under the existing situation, have sometimes been able to take advantage of it, to the detriment of the Corporations. This is not, as the noble Lord, Lord Shackleton, implied, a sort of anti-Corporation measure, or should not be, by any means, because I think that these people take advantage of it. The last time I was in West Africa, which I think
606
was last year, the B.O.A.C. manager there complained bitterly to me that this was happening. He had to provide a service for B.O.A.C. to West Africa all the year round; and then a charter service would come in, would take the cream of the traffic, would use his facilities—his engine shops, and so on, for any minor repairs or checking up that had to be made—and would then go off again, leaving the unfortunate manager in West Africa to provide a service for his aircraft all the year round, for the not so good parts of the season, as well as for the height of the season. Of course, at the height of the season, when the schoolchildren are taken out, and then later on taken back, the traffic can be very lucrative indeed.
I have one or two points, and, despite the lateness of the hour from our point of view and of what they would call in theatrical terms the thinness of the audience, I think that as this is an important Bill one should spend a little time on it. I do not quite see the point in Clause 1, that the Air Transport Licensing Board should have the general duty of furthering the development of British civil aviation. Surely this is the duty of the Ministry: it is not the duty of the Board. I should have thought that that was a duty (it is not in any way, I may say, relevant to the succeeding clauses) which they could not be expected to perform and should not be expected to perform. The duty of furthering the development of British civil aviation is the Minister's responsibility and that of the Ministry, which is his instrument. We should not let him "get away" with that. Apart from that, so far as Clause 2 is concerned, I think that the two noble Lords who preceded me, if I may respectfully say so, are looking at the matter from too narrow an angle. They are thinking of it in terms of the Corporations and of the existing charter companies.
Recently there has been evolved, or there is in the process of being evolved, in this country an entirely revolutionary invention which is going to alter completely the whole situation so far as air transport, and possibly ground transport, here and elsewhere, is concerned. I refer to the jet-sustained, wingless vehicles, made possible by the development of the jet engine. These wingless vehicles will

607
be driven along the roads when necessary, and will be taken up into the air when necessary. They will give complete mobility and flexibility. When the noble Lord, Lord Mills, said that the regulations under the Bill were being developed on the lines of those for a bus service, I was very glad to hear it, because a bus service, in fact, is what we shall see. In my view, we are going to see in a very short space of time in this country jet-propelled, wingless buses which will no longer be tied to the roads (they will do more than anything else to relieve the congestion of the roads) but which will be able to take off into the air.
The Bill as it is at present drawn seems to me to have no regard whatsoever to this development, which may come much faster than the civil servants and the Ministry of Aviation think. Clause 2 talks about all these restrictive things; about whether there is likely to be wasteful duplication, and so on—again having regard to the sort of services which are now provided by B.O.A.C. It asks such questions as: "Is it wasteful to have another service to Singapore?". But it has little regard to the fact that we may have very many services to Manchester from London, Birmingham, Cardiff, and so on; and I am not at all sure that these subsections in Clause 2 are going to be elastic enough to deal with that sort of situation when it arises: in other words, whether the rather narrow point of view of those who drew up this Bill will enable them to deal with the sort of situation which I envisage will come about in quite a short time.
For some reason—I do not quite know why, but for some reason—in this Bill the Air Transport Licensing Board is going to have the responsibility of prohibiting, or the power to prohibit, aerial advertising and propaganda. I do not think that this is their business. Here again, this is the Minister's business: it has nothing to do with them. This is, I take it, something which a person is not going to do as a general rule. He will go up at some particular time, such as a Coronation, a Royal wedding, the Opening of Parliament, or something like that. People will take an aircraft up and will do this sort of advertising at that time. A fine is to be
608
imposed on a person who does that sort of thing. Now prohibiting that sort of action is surely, again, a matter for the Ministry, and should not come within the purview of this Board at all.
But, if it does come within the purview of this Licensing Board, I should like to ask this question: is it possible to deal with the matter of noise, which seems to me to be equally tantalising and annoying, whether it is concerned with advertising somebody's soap or beer or whether it is simply concerned with the taking of photographs? I gather that when the Royal yacht was lying in the Pool of London the other day great annoyance was caused by five helicopters manœuvring round it, trying to take photographs of it, making a tremendous noise, which upset a lot of people. That is just as much a nuisance as an aircraft which flies across with a streamer behind it exhorting people to buy someone's detergent or to drink someone's beer. In fact, the annoyance may be a great deal more, because you can avoid looking at the streamer, but it is very difficult to avoid listening to the noise.
Finally, I should like to give a word of commendation to the Minister and to the noble Lord, Lord Mills, on the fact that a quite extraordinary situation which has lasted throughout the years is now, under this Bill, coming to an end. The Scottish, the Welsh and the Northern Irish advisory authorities are going to be advisory authorities to the Minister. Up to now, they have been advisory only to B.E.A., and not to the Minister. I think it is high time that that situation was ended, and that they were true advisory committees to the Minister. I am glad now that there is going to be a change, and that the Minister is going to be advised, and not Lord Douglas of Kirtleside. I also hope that something will be done about that advice, because up to now nothing has been done about it. So far as Wales is concerned, at any rate, nothing whatever has been done about it. Year after year the Welsh Advisory Council has been making the most detailed and most forceful representations, and nothing whatever has been done about them—it has been a complete dead letter.
I started the Rhoose Airport. At that time there was no international airport anywhere in Wales. I started it, and it

609
was opened by my successor in 1951 or 1952, or thereabouts. In spite of the fact that Rhoose Airport, which is the only international airport in Wales, was opened in 1951 or 1952 (I have forgotten the exact date), the Government ever since have failed to make it possible for the bigger aircraft, even the Viscount, to land there. Surely it is quite time that that was remedied. It is not difficult to lengthen the runway.
Secondly, year after year, the proposition has been put forward that there should be an air ferry between Wales and Ireland. There was very nearly not an air ferry between this country and France, but I personally gave Silver City Airways their first 10-year licence, which shows the noble Lord that we were able to get round some of the restrictive practices in the original Act, even in those days. As the result of my granting them a licence, they were able to buy the necessary planes and to develop the very successful ferry service which runs between Kent and Le Touquet and other French airfields. Why is there no service between Wales and Ireland? The Irish want it and have pressed for it. When I was in Ireland last year the Ministers themselves pressed me, and when I came back I had a talk with the noble Lord, Lord Brecon, who was sympathetic. But nothing has been done. The reason is that the Air Ministry will not undertake to keep Valley Airfield open for this purpose. They will not give any rights whatsoever to the Irish, or any security of tenure.
In my view, it is ridiculous. Here is an opportunity to encourage the great growth of traffic there would be between Ireland and England. There are independent operators (not the Corporations) who are ready to operate this service, but because of the restrictive attitude of the Air Ministry, which other Ministers in the Government have not in any way tried to loosen up, or been successful in loosening up, we have no air ferry service. Here is a bit of enterprise, of private enterprise, which the Government have singularly failed to encourage. There is no excuse for it. All they have to do is to say to the independent operators that they will undertake to keep Valley Airport open for, say, five years. Then we should get a good car ferry service betwen Anglesey and Dublin. It is wanted by the Irish; it is wanted by
610
the Welsh, and by the operators; it is wanted by all the people who would like to take their cars to Ireland, of whatever nationality they may be. Yet this big development in tourist trade and aviation has been completely sterilised by the fact that the Government have not taken any steps in the matter whatsoever. I hope that the new Advisory Committee will have some "teeth" in it, and I hope that the first thing they will do is to bite the Secretary of State for. Air and make him do something about an air ferry service to Ireland.
7.24 p.m.
LORD HAWKE: My Lords, we must greatly welcome this Bill, because in this country at the moment there is an enormous thirst for world travel and the vast majority of people have to indulge in it on a "shoestring" budget. Of course, the temptation is to travel as cheaply as possible, either through bulk arrangements with the travel agencies or by direct arrangement. Under these new arrangements, one hopes that there will be no chance of "shoestring" air operators being allowed to function at all, and so the general public can receive some assurance that the services of independent operators will be just as carefully and safely run as those of any of the Corporations.
There is one small aspect of the Bill which I think is not quite satisfactory—that is, the question of licensing, which has been referred to by the noble Lord, Lord Ogmore. My noble friend who introduced the Bill drew a comparison with the system of operating passenger bus services. The operator of surface passenger transport—bus operators; and perhaps the railways, though I am not sure in their case—want to make sun., that they have full rights of representation when the question of granting air licences comes up. An Amendment to Clause 2 of the Bill was moved in Standing Committee in another place and the Minister gave certain assurances, upon which the Amendment was withdrawn. But when those assurances, which at first sight seemed ample, came to be examined more carefully, they did not seem to be quite so satisfactory as at first thought. In fact, they boiled down to saying that he intended to provide the arrangement by regulations. Operators would like

611
to see this set out in the Bill, because they believe—and I think that they are right—that the spread of various competing forms of air transport is going to make great strides in this country and it is important to see that we do not have too much wasteful duplication of services. I do not know whether the Minister, after examination, will see fit to put down an Amendment to bring this right definitely into the Bill; but if he does not, I expect that I shall put down an Amendment on Committee stage.
I agree with the noble Lord, Lord Ogmore, about sky advertising, but I should have thought that it was more a matter for the Home Secretary than for the Board. The matter of photographs is likely to be a potential annoyance, and in this case, again, I do not know whether that should come under the Board or under the Home Office. Anyway, I am doubtful whether the Air Licensing Board are the right people to prescribe regulations about this form of nuisance. With that proviso, I heartily support the Bill.
7.28 p.m.
LORD MILLS: My Lords, the noble Lord, Lord Shackleton, regretted that certain noble Lords and, in particular, my noble friend Lord Terrington were prohibited from giving us the benefit of their expert knowledge. All I should like to say is that the noble Lord himself has great expert knowledge and we have had the benefit of it, and I am glad that on the whole he supports this Bill. I am grateful to the noble Lord, Lord Ogmore, for joining in the tribute to my noble friend Lord Terrington.
My right honourable friend the Minister intends to rely on the advice and help of the Air Transport Advisory Council until the Air Transport Licensing Board is functioning. The noble Lord, Lord Shackleton, said, quite rightly, that this Bill has been introduced in accordance with a pledge given at the General Election, but he attributed that pledge to the noble Lord the Minister of Aviation. That is true only in so far as he was a member of the Government. At that time he was not Minister of Aviation but Minister of Defence. The object of the Bill is really to further British civil
612
aviation. We expect that the Corporations and the independents will both share in the expansion which surely lies before us. I am certain that there has been no what the noble Lord was pleased to call "private enterprise prejudice" in the consideration of this matter. Our aim has been to advance British civil aviation by all the means at our disposal, and I think we must all be proud of the part which B.O.A.C. and B.E.A. have played in the development up to date. Many of us, if not all of us, have travelled on their lines and have seen at first hand what they have been doing.
The noble Lord expressed some dissatisfaction with Clause 2, and no doubt he will let us have the benefit of his views when the Bill comes to be considered in Committee. But I should have thought that Clause 2 is pretty definite: it places on the Boards that they should consider, in particular, certain things which are laid down in the Bill. The noble Lord says that that is not mandatory. It is difficult to see how it could be mandatory. But it is clearly laid down in Clause 2 what they are to consider, and I should have thought that they would not be carrying out their duty if they failed to consider any of the matters laid down in that clause. The noble Lord asked for some reassurance that the Corporations would have a proportion of the increase in the traffic. I think that is our intention: that both the Corporations and the independents should share in the expansion of the traffic, always having regard to what the Minister is seeking to do—namely, to promote British civil aviation. Surely the great means at his disposal are these two Corporations which have built up such a fine reputation and fine business.
The noble Lord, Lord Ogmore referred to charter lines taking the cream of the traffic, and of course that has occurred. But it is hoped that this Bill will give everybody the opportunity of sharing in expansion, and the Minister has the Licensing Board as one of his weapons to see that that is done. The noble Lord rather quarrelled with the phrase in the Bill that they are to further the development of British civil aviation, and said that that was the job of the Minister. Of course it is the job of the Ministry, but they must have certain bodies through

613
which they can see that this responsibility in the matter is carried out; and surely the Air Transport Licensing Board is such a body. Its decision will help the Minister normally to carry out his responsibilities in the matter.
LORD OGMORE: I do not object to that, so long as it is clearly realised that these words, which I still think are very wide for a Board of this kind, do not absolve the Minister and the Ministry from their duty; and it is their duty to develop British civil aviation.
LORD MILLS: I can only tell the noble Lord that in my view it does not absolve the Minister, but it places upon the Air Transport Licensing Board the responsibility for seeing that, in carrying out their duties their job, too, is to advise on the development of British civil aviation in the best and most appropriate way. I was interested to hear the noble Lord's faith in the new and exciting British invention—I think he was referring to the hovercraft.
LORD OGMORE: I did not refer to the S.R.1, or whatever it is called, which goes across the water. I was referring to what they call the wingless jet aircraft, which does not depend upon a cushion of air but is a jet; it used at one time to be called a "flying bedstead".
LORD MILLS: I am sorry to have misunderstood the noble Lord; I can quite see now what he meant. I have not studied these clauses in relation to that, but I am sure the point will be studied by the Minister and I am grateful to the noble Lord for drawing attention to the matter.
In regard to the prohibition of aerial advertisement, that has been carefully considered, and it was thought that it was something we could well do without. There are aspects of it even from the safety point of view, as well as from what I may term the nuisance point of view. Nor does anyone like unnecessary noise in the air, and the whole question of noise nuisance is being considered.
The noble Lord gave us some interesting information under the heading of the Regional Advisory Boards with particular reference to Wales. I am sure my
614
right honourable friend the Minister will have regard to what he has had to say in that respect. So far as Valley Airport is concerned, that has been under careful and active consideration in which the Air Ministry have taken part. I am afraid that I have no further news to give the noble Lord on that matter, but again his views will be carefully considered.
I am grateful to the noble Lord, Lord Hawke for his general support of the Bill. I should have thought that the matter to which he drew attention—the question of other people having a say in these decisions—was covered by the Bill. But as he says, the Minister gave assurances in another place. I will see that attention is drawn to that matter, and if it is necessary to do anything I am sure it will be raised in Committee. I am grateful to noble Lords for their help and attention to this matter.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

CLERICAL, MEDICAL AND GENERAL LIFE ASSURANCE SOCIETY BILL [H.L.]
The CHAIRMAN OF COMMITTEES informed the House that the Promoters do not intend to proceed further with the Bill: Ordered, That the Bill be not further proceeded with.
SHEERNESS HARBOUR BILL [H.L.]
Presented (pursuant to leave given this day), and read 1a.
PRESBYTERIAN CHURCH OF ENGLAND BILL [H.L.]
Reported, with Amendments.

NORTHAMPTON COUNTY COUNCIL BILL [H.L.]
Returned from the Commons, agreed to.
House adjourned at eighteen minutes before eight o'clock.