Lords Sitting of 20 December 1961

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR On the Woolsack.
Prayers—Read by the Lord Bishop of Worcester

BEEF PRICES AND AGRICULTURAL SUBSIDIES
2.35 p.m.
LORD STONHAM: 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, in view of the lack of official knowledge, and the desire expressed by the Federation of Master Butchers, they will institute an inquiry into the relationship, during 1961, between the fat stock prices and the retail prices of beef; and, whether they will implement the guarantees to farmers by abandoning support subsidies and substituting minimum prices, supported, when necessary, by Government buying and control of imports.]
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (EARL WALDEGRAVE): My Lords, the Answer to both parts of the first Question on the Order Paper is, No.
LORD STONHAM: My Lords, is the noble Earl aware that there is a sum of £70 million involved in these subsidies? The butchers and dealers deny that they have had any part of this sum, which is equal to two whole groundnut schemes. Is it not, therefore, the duty of Her Majesty's Government to inquire into this sum which has vanished into thin air and to let us know exactly what has happened to it?
EARL WALDEGRAVE: My Lords, of course the Government are aware of the Supplementary Estimate that my right honourable friend has had to put before Parliament, but some of the other statements made by the noble Lord, that the butchers and farmers (I think he said) have had no part of this, are not substantiated by the facts.
LORD STONHAM: My Lords, will the noble Earl say which statements in the Question are inaccurate? Is he aware that in the days of Sir Stafford Cripps the £400 million worth of subsidies nearly all went to the reduction of retail prices? Now we have a level of some £350 million, and it is difficult to see the extent to which farmers and consumers benefit. Is it not, therefore, not merely important, but absolutely vital, that the Government should make these inquiries to satisfy themselves, and, indeed, to satisfy us, that this money is not being squandered and that other methods would not be better? Will the noble Earl answer that part of the Question?
EARL WALDEGRAVE: My Lords, I did not mean to imply, and I hope I did not say, that any part of the Question was inaccurate. But there are two questions: would the Government institute an inquiry; and would they abandon the deficiency payments system or the support subsidies and substitute minimum prices, supported, where necessary, by Government buying and control of imports? The only simple and accurate answer to those two questions is, No, my Lords: the Government are not prepared to do either.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I seem to remember statements by the Minister on two occasions that the system of support which is at present in operation is not going to be continued, and that farmers will have to look to markets for the support that they require. Is that the position? Is that why the Government are not giving us quite straight answers to the Question?
EARL WALDEGRAVE: Surely, my Lords, my answer was straight enough. What the Minister said was that if negotiations were successful—I know the noble Viscount the Leader of the Opposition would not think they were successful—and we were to join the Common Market, then this system of support would have to be changed.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, on the contrary, that is not exactly what I put to the noble Earl. I understood from the Minister's statement on another occasion

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that he is not prepared to go on with subsidies, but will leave it to the market to supply the support to farmers, whether there is entry into the Common Market or not.
EARL WALDEGRAVE: My Lords, I have not an exact reference to what the noble Viscount is referring to. I know that my Minister has said that this system is under strain—I think those were the words used. With that I think we should all agree. But I have not heard him go further than that.
LORD TAYLOR: My Lords, if the Minister will not make a retrospective inquiry into these retail prices, could he not at least make a prospective inquiry for next year? Surely there will be no difficulty about this. The Government have the machinery in their social survey for collecting retail price data. Will the noble Earl look into the question of making the inquiry in future, if he cannot look backwards?
EARL WALDEGRAVE: My Lords, that is another question. I will certainly bring to my right honourable friend's notice that that is what is desired by the noble Lord. I should like to make it clear that it is not a question of our not having the data on which to base estimates—though unfortunately sometimes they may be wrong—but it is our policy that we do not disclose individual items that make up the retail price index.
LORD TAYLOR: My Lords, this is a particular item, and really there is no technical difficulty whatsoever about collecting this information: it is available to every housewife. All that is necessary is to pick a sample butcher and go to interview him and collect the prices. I cannot see that there is any technical difficulty about it, and it would be most desirable and quite cheap to do it. I hope the Minister will consider this sympathetically, because it really is a piece of common sense.
EARL WALDEGRAVE: My Lords, the Question on the Order Paper relates to 1961, and I have answered that. Whether or not it would be desirable to have some sort of roving inquiry in the future about the future trends of prices and of marketing in general is really another matter. But I will bring what
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the noble Lord has said to the attention of my right honourable friend.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, may I suggest to my noble friend (I do not want to prolong this particular Question unduly) that in view of the rather unsatisfactory nature of the answers we should put down a Motion on agriculture very early after the Recess?
LORD STONHAM: My Lords, I am grateful to my noble Leader for that suggestion, and I agree that this subject cannot be dealt with merely by Question and Answer. But could I ask the noble Earl these questions? First, will he arrange to publish the retail prices of beef, which have already been collected by the Ministry of Labour, as he stated last week (so the information is known); and if not, why not? Secondly, will he say whether the Government are satisfied with the present position of the level of subsidies, and if not, what alternative methods they have in mind?
THE LORD PRESIDENT OF THE COUNCIL AND MINISTER FOR SCIENCE (VISCOUNT' HAILSHAM): My Lords, now that the noble Viscount the Leader of the Opposition has given notice that he intends to move a Motion, I think it would not be right to continue by way of Question and Answer.

EDUCATION IN PRISONS
2.43 p.m.
LORD STONHAM: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what is the estimated total expenditure on education in prisons, borstals, and detention centres, for the financial year 1962–1963 and how this compares with the current financial year.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR THE HOME DEPARTMENT (EARL BATHURST): My Lords, the Vote for Education and Recreation in Prisons, England and Wales, for 1961–62 is £341,540, and in Scotland £12,145. The Estimates for 1962–63 are not yet settled, but, subject to the Government's consideration of Estimates generally, the

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present intention is that the total shall be about the same.
LORD STONHAM: My Lords, I am very pleased to receive that Answer, because there was a report in the Sunday Times that there would be a cut of about one-sixth in the expenditure on education. May I ask the noble Earl, being gratefully aware of his interest in this subject, whether he can make representations to the Prison Commissioners that greater weight should be placed in prison training on the semi-skilled occupations, in which the men are more likely readily to find employment when they come out of prison, than in the traditional craft occupations?
EARL BATHURST: My Lords, we should not be confused over the type of education. So far as I know, there will be no cuts in the ordinary day-time training. Any cut will be purely on educational subjects in the evening, in respect of work taken by outside schoolteachers or such worthy people who come in to do prison training. That is the sort of cut that is bound to take place.
BARONESS WOOTTON OF ABINGER: My Lords, I find some difficulty in following the noble Earl, because he said in the first place that the expenditure was about the same, and he now refers to certain cuts. Would he explain that?
EARL BATHURST: I thought the whole point of the noble Lord's Question was the raising of schoolteachers' salaries and the salaries of the sort of people who do this training. As I say, the estimates are about the same, so obviously some of the classes are bound to be cut.
BARONESS WOOTTON OF ABINGER: Would the noble Earl not agree that if a little more were spent on education in prison there might be fewer persons who returned to prison?
EARL BATHURST: My Lords, it rather depends upon the sort of education. I am certain we are all agreed that there should be the best education facilities that are possible in prisons but, like all Departments of Her Majesty's Government, Estimates must be held to. But I assure the noble Lord that the Estimates will be the same, and that
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there is no intention to take any money away from them.
LORD STONHAM: My Lords, is the noble Earl aware that this cut would amount to about £50,000? It will be an effective cut, in real terms, which is a trifle compared to the £70 million the Government have just squandered on farms. May I also ask the noble Earl whether he will approach his right honourable friend the Home Secretary to see whether this matter can be reconsidered, because a real cut in prison education training for occupations afterwards is a deplorably false economy? If this cut is made, it is bound to lead to far greater expenditure, willy-nilly, on prisons.
EARL BATHURST: My Lords, I think that what will happen is that there will probably be rather fewer classes, but there will be facilities for just the same number of prisoners to attend the classes. Some of the classes are already under strength. It would seem ridiculous to keep those classes going, when they might be amalgamated. Obviously, some of the classes may have to be discontinued, but I hope that it will be possible to keep as many going as the Estimates will permit.

CONTRIBUTIONS TO U.N. CONGO OPERATIONS
2.46 p.m.
LORD BARNBY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government, with regard to special contributions for the United Nations' military operations in the Congo, why, since it is not undignified for France to abstain from financial contribution while a member of the United Nations, it would necessarily be undignified for the United Kingdom to notify its withdrawal of financial support for military operations in Katanga.]
VISCOUNT HAILSHAM: My Lords, I think that in framing his Question my noble friend has inadvertently misconstrued the terms of a private letter I sent him in reply to a telegram he sent me. What I said would be undignified and ineffective would be an

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attempt on our part to support our arguments on the merits of the United Nations' operations in the Congo by linking them with a threat to withdraw our contribution. The question of our continued financial support to the United Nations' operations in the Congo was dealt with in the debate on Monday by my noble friend the Secretary of State for Foreign Affairs and my noble friend the Minister of State for Foreign Affairs. I have nothing to add to what they said then.
LORD BARNBY: My Lords, may I thank the noble Viscount for his reply? It was gracious of him to make reference to a letter which he was good enough to send me, but I would set his mind at rest and tell him that my Question was framed on a quotation from the speech of the Prime Minister, which was categorical. He said that such action would be both undignified and ineffective. Since my Question was framed before the speech of the Foreign Secretary, as ever brilliant, in this House on Monday I would quote from that and ask the noble Viscount if he would interpret it. The noble Earl said [OFFICIAL REPORT, Vol. 236 (No. 23), col. 524] that if we cut off our financial supplies—that is for the conduct of an aggressive war in Katanga—
"… we lose all influence on events."
May I ask my noble friend if it is to be assumed that France has no continuing influence on events? And am I wrong in understanding that Russia has no continuing influence on events?
Secondly, may I ask my noble friend, arising from his reply whether he thinks it would be worth while to give some indication of the basis of the supplementary contribution for this particular operation, since the speech says that the Foreign Secretary—
SEVERAL NOBLE LORDS: Order, order!
LORD BARNBY: With the indulgence of the House I quote the speech of the Foreign Secretary. As to the payments legally assessed under the rules of the Charter, would my noble friend think it worth while that there should be given some indication of how the payments were assessed under the Charter, since certainly they could not have been for the Katanga operations?
VISCOUNT HAILSHAM: My Lords, I will try to answer all that. In the first place, I think my right honourable friend the Prime Minister used the same words as I did in my letter to my noble friend, in exactly the same connection. I think we both felt that it would be ineffective to couple an argument with a threat, because no one would take a threat seriously in those circumstances, and undignified because it would betray a failure of confidence in our own arguments. As regards the rest of the question, I would point out to my noble friend that a resolution has been adopted by the Fifth Committee of the General Assembly referring to the International Court of Justice the question of the obligation to pay costs of this nature. We were among the co-sponsors of this resolution and we voted for it. In those circumstances I do not think my noble friend would expect me to supply my own interpretation of the legal consequences of a resolution of that kind.

THE 18-NATION DISARMAMENT COMMITTEE
LORD KENNET: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they will take the initiative in convening the eighteen-nation Disarmament Committee at an earlier date than at present proposed, namely April next year.]
THE MINISTER OF STATE FOR FOREIGN AFFAIRS (THE EARL OF DUNDEE): My Lords, I should make it clear that, when on Monday I mentioned April next as a tentative date, I was speaking only of the preliminary views of Her Majesty's and the United States Governments. Both the time and the place of the negotiations will have to be fixed by agreement between all the participants. Our Representative at the United Nations has already stated in New York that we would be willing to meet earlier if there was agreement on this. At the same time, however, he pointed out the need for full preparation if the conference is to get off to a satisfactory start.

KATANGA TALKS
2.52 p.m.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, may I put a Question of which I have given Private Notice—namely,
"To ask Her Majesty's Government whether they have any statement to make on the talks between the Congo Government and Mr. Tshombe."
THE EARL OF DUNDEE: My Lords, as your Lordships will be aware, on December 12 Her Majesty's Government sent a message to the Acting Secretary-General of the United Nations calling for a cease-fire in order to create the conditions in which in a united Congo a peaceful and just basis for co-operation might be negotiated. I am happy to say that as a result of very close co-operation between the Governments most directly concerned and Her Majesty's Government, and by proceeding in concert with the Secretariat of the United Nations it has been possible to achieve both our objectives of a de facto cease-fire and talks between Mr. Adoula and Mr. Tshombe.
From the moment that Mr. Tshombe left Elisabethville on December 18, at which time he called upon his own troops to stop fighting, the United Nations forces have also called a halt to military operations. This will continue so long as the talks are in progress. There have been some incidents since that time resulting, I understand, from sniping at United Nations forces. Talks at Kitona between Mr. Adoula and Mr. Tshombe began yesterday and I am awaiting reports from Her Majesty's Ambassador at Leopoldville on their progress. The important thing is that a real attempt is being made to solve the Congo problem by peaceful negotiation and not by fighting.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, I am much obliged to the noble Earl for his Answer, and we are all happy, of course, that certain events have led to the talks which are now going on and that a cease-fire is practically existing. But I must say I am surprised at the terms of the first part of the Answer of the noble Earl. It looks as if Her Majesty's Government are claiming a large share of
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the responsibility for the present happy position, and I find that very difficult to follow. Perhaps he would not mind explaining a little how the terms of the Answer were arrived at, starting with December 12. Because, if my recollection is right, when the Government made representations for a cease-fire this was rejected by the United Nations and also by the State Department in America at the time on the grounds that the United Nations must first obtain their objectives and that these objectives were actually achieved. Surely, the fact of Mr. Tshombe's own representations to Mr. Kennedy for him to help to arrange a meeting so that there could be talks between himself and Mr. Adoula is the main reason why the talks are taking place. I think it would have been a little happier for the country at large if the facts had been rather differently stated.
THE EARL OF DUNDEE: My Lords, the noble Viscount questioned the accuracy or appropriateness of the opening part of this statement, which perhaps therefore I might read again.
"I am happy to say that as a result of very close co-operation between the Governments most directly concerned and Her Majesty's Government, and by proceeding in concert with the Secretariat of the United Nations it has been possible to achieve both our objectives of a de facto cease-fire and talks between Mr. Adoula and Mr. Tshombe."
The proposal for a cease-fire was put forward by Her Majesty's Government last week, and we are very glad that those who at first rejected it have now decided that it is a good thing.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, I really must protest at this extraordinary, deliberate face-saving of Her Majesty's Government, because, in fact, the United Nations and the State Department of the United States said that no such ceasefire could be operated until the United Nations' objectives had been reached; and by December 18 they had been so largely reached that Mr. Tshombe left Elisabethville. Do let us have the facts straight.
THE EARL OF DUNDEE: My Lords, the noble Viscount I think is putting his own interpretation on events.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: Public interpretation.
THE EARL OF DUNDEE: My Lords, I do not know what the minimum objectives referred to were supposed to be, and whether those who referred to them consider they have yet been attained or not. When the noble Viscount asked me about this last week I said that we hoped very much that the attainment of these minimum objectives would not involve heavy street fighting and heavy civilian casualties in Elisabethville, which, as I pointed out, might make it impossible for a peaceful solution ever to be achieved; and I would still repeat that. I hope that fighting will not be resumed because there are many people who think that the minimum objectives have not been achieved. We think that the fighting should be stopped and that peaceful negotiations should proceed.
My Lords, in view of the great difficulty of these negotiations I would rather not say anything now which might prejudice their course. We are all hoping and praying—we have had so many meetings in the past which have not led to a peaceful result. We hope most earnestly that this meeting may do so.
LORD HENDERSON: My Lords, we all echo the hopes that the noble Earl has expressed and we are not saying anything or desiring to do anything which would have any prejudicial effect upon the discussions. What my noble Leader raised was the accuracy of the historical set-out which began this statement; and, as he pointed out, it is quite correct that their suggestion was rejected by the United States and rejected by the Secretary-General. and the rejection was confirmed by the 19-Power Advisory Committee. That ended the matter so far as the British call for a cease fire was concerned. What happened then in the light of the achievement, or the near achievement, of the United Nations minimum objectives, of which the noble Earl says he does not understand? I understand that they were opening the lines of communications and protecting United Nations' personnel in Elisabethville. That they have done, and at that point Mr. Tshombe indicated that President Kennedy could invoke his good offices to mediate between the warring parties. That took place and, as a result of that, the negotiations, or the discussions—I only think of them
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as discussions, not negotiations—are at the moment taking place. We think that it is not quite right to present the facts in the way in which the noble Earl has done.
THE EARL OF DUNDEE: My Lords, I cannot altogether accept the gloss which the noble Lord is putting on this matter. If I may refer to another supplementary question which he asked me last week, about the possible rejection of our proposal for a cease-fire, I said that I did not think it likely that it would be directly turned down, though I thought it might be asserted that the time was not yet quite ripe for it; but in our view, the sooner it was done the better. It was only five days, and that is not a very long time for all the machinery involved to work.
Our view has always been that, whatever your minimum objectives may be, it is not a good thing to achieve those objectives by heavy fighting against a hostile population; and we have never made any secret of our belief that the United Nations has been acting upon a mistaken appreciation of the local conditions and strength of feeling in Katanga. What we are trying to do is to save both Katanga and the United Nations from getting involved in a long, bitter, repressive colonial war which would be equally bad for the Congo and for the United Nations itself. We have repeated that over and over again, and that is why we are glad that the proposal—which, I repeat, we were the first to make—for a cease-fire has now been agreed. I do not want to raise any false hopes that this happy event is certain to lead to a satisfactory solution, because we have had so many disappointments before. But we all are hoping that it will.
LORD HENDERSON: My Lords, I must say that I think a gloss has been put on the facts, and the gloss has been put by the Government, not by me. I stand by the statement of the specific facts which I made, and I think that the noble Lord is not being quite so frank on the matter as he normally is. I am sure that the whole House is anxious to see a successful outcome of the negotiations, and we all accept the desire to avoid a continued conflict on the lines just mentioned by the noble Earl himself. Nevertheless, I think the fact

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remains that the United Nations has played a very leading part in bringing the position to what it is at this stage.
THE EARL OF DUNDEE: My Lords, if the noble Lord thinks that a ceasefire would have taken place just the same, even if the British Government had never pressed for it, he is, of course, entitled to that opinion. All I can say is that we have constantly been pressing for it; and not only by one representation: we have been working for it the whole time. We are not concerned with distributing any credit for it; we are concerned with the future peace of the Congo, for which we have always been working, but which, I might remind your Lordships, has not yet been attained. But at least a step has been achieved towards it.
LORD FRASER OF LONSDALE: My Lords, does it not appear that the Labour Party, for their own good reasons, are fishing in troubled waters and that they are now rather cross because the waters are not so troubled as they were?
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, I think that remark is not very clever at all. I think I am well enough known in Parliament, after 40 years, not to endeavour to fish in troubled waters on such matters as this. What we are anxious about is that we should keep the proper reputation of this country in that great United Nations Organisation. You do not improve it by attempts at face-saving.
LORD CONESFORD: My Lords, are Her Majesty's Government aware that there are many people in the United States who are convinced that the improved and better informed outlook of the State Department results directly from the action of Her Majesty's Government?
LORD STONHAM: My Lords, is the noble Earl aware that the United Nations commander on the spot is reported in to-day's newspapers as saying that Ethiopian troops have achieved all objectives in Elisabethville? In that event, of course, that is the natural end of hostilities and is owed entirely to the United Nations. And let us hope that the present end of hostilities will be a continuous one.
THE EARL OF DUNDEE: My Lords, our belief is that the attainment of certain objectives would not necessarily lead to the end of hostilities in Katanga.
A NOBLE LORD: Why not?
THE EARL OF DUNDEE: Why not! I do not know whether the noble Lord agrees with our appreciation of the situation—I know that some people do not. But our estimate is that popular feeling in Katanga is becoming more and more bitter against interference, and that the longer fighting goes on the more impossible it will be ever to achieve a peaceful solution, let alone to restore orderly government; and that, as I have said, has been our objective all along.
With regard to Lord Stonham's more specific question about what is happening in Elisabethville, our Consul in Elisabethville left with Mr. Tshombe yesterday, and accompanied him to Ndola. He is not taking part in the discussions at Kitona, and I expect that by now he is probably back in Elisabethville. But the result of his temporary absence has been that we have not been receiving full reports about the situation there, and I would rather not make any comment on other reports which we have all seen in the newspapers.
THE EARL OF LUCAN: My Lords, if that is the case, how is the noble Earl aware that popular opinion in the Katanga is so inflamed that they may break the cease-fire and attack the United Nations?
THE EARL OF DUNDEE: My Lords, that is only one very small possibility; there are many future dangers which are far more extensive than that.

GOA
3.8 p.m.
LORD COLYTON: My Lords, I beg leave to ask Her Majesty's Government the Question of which I have given Private Notice—namely,
"To ask Her Majesty's Government whether they can make any further statement regarding the situation in Goa."
THE EARL OF DUNDEE: My Lords, I should like to begin by explaining that there is no British Consul in Goa; consequently Her Majesty's Government

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have very little first-hand information regarding the situation there. We have, however, received a message from one of the British subjects in Goa saying that all British subjects are safe and well. We have also received assurances from the Indian Government that British lives and property will he protected. So far as we can make out, there is now no danger to British subjects and H.M.S. "Rhyl", which had been standing by in the vicinity of Goa, has now been withdrawn.
LORD COLYTON: My Lords, while we are all relieved to hear about the safety of British lives and property in Goa, has there not since then been a decision by the Security Council rejecting a proposal sponsored by Her Majesty's Government, calling for a cease-fire and for the withdrawal of the Indian forces behind their own frontiers? Does this mean that the United Nations can or will do nothing more in the face of this outrageous act of aggression? And, if that is so, will my noble friend say what further action Her Majesty's Government intend to take, short of military operations, to fulfil their obligations under the Anglo-Portuguese Declaration of 1899. Will they, for example, consult with the United States Government to see what practical steps can be taken to secure the restoration of the status quo in these three territories?
THE EARL OF DUNDEE: My Lords, there were two Resolutions proposed in the Security Council, one providing that nothing should be done and that Portugal should be asked to withdraw her troops and facilitate the end of colonialism in India. That resolution was defeated by 7 votes to 4, being supported by Soviet Russia, the United Arab Republic, Ceylon and Liberia. The other resolution provided that:
"The Security Council,
"Recalling that in Article 2 of the Charter all members are obligated to settle their disputes by peaceful means and to refrain from the threat or use of force in a manner inconsistent with the purposes of the United Nations.
"Deploring the use of force by India in Goa, Damao and Diu.
"Recalling that Article 1 (2) of the Charter specifies as one of the purposes of the United Nations to develop friendly relations among nations based upon respect for the principle of equal rights and self-determination of peoples.
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"(1) Calls for an immediate cessation of hostilities.

"(2) Calls upon the Government of India to withdraw its forces immediately to positions prevailing before December 17, 1961.

"(3) Urges the parties to work out a permanent solution of their differences by peaceful means in accordance with the principles embodied in the Charter.

"(4) Requests the Secretary-General to provide such assistance as may be appropriate."

For that Resolution the same seven Members voted, and the same four Members—Liberia, Ceylon, the United Arab Republic and Soviet Russia, voted against. As Soviet Russia is one of those who have the right of veto, both Resolutions failed and the Security Council was therefore not in a position to take any action.
LORD COLYTON: But my noble friend has not answered my question as to what Her Majesty's Government propose to do now—first of all, whether there is anything more that can be done at the United Nations; and, secondly, what Her Majesty's Government propose to do to carry out their own obligations under the 1899 Declaration.
THE EARL OF DUNDEE: My Lords, with regard to the future we are naturally remaining in touch with the other Governments concerned. With regard to the 1889 Treaty, I think my noble friend already stated the Government's position on that two or three days ago, or at any rate this was stated by the Commonwealth Relations Secretary in another place: that we had warned the Portuguese Government as early as 1954 that we could not engage in hostilities against India. We repeated this warning at the beginning of December, 1961, and the Portuguese did not in fact ask us to take such action. They have asked for full diplomatic support, particularly in attempting to dissuade the Indian Government from the use of force. We certainly did our best to help in that way. Before the invasion we made the strongest representations to the Indian Government that we should deeply deplore the use of force, and I can only repeat that Her Majesty's Government deeply regret that their efforts proved to be unavailing.
LORD CONESFORD: My Lords, is it not quite clear that the United Nations

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neither intends nor has the power to stop aggression anywhere?
THE MARQUESS OF SALISBURY: My Lords, in his reply to my noble friend Lord Colyton the noble Earl, Lord Dundee, quoted certain passages from the Statement of the Commonwealth Secretary in another place yesterday. May I draw his attention to two other statements that he made. One is [OFFICIAL REPORT, Commons, Vol. 651 (No. 35), col. 948]:
"We have long understood the natural desire of the Indian people to incorporate these territories in the Republic of India and their feelings of impatience that the Portuguese Government have not felt disposed to follow the example of Britain and France."
The second statement was this:
"The attitude of Her Majesty's Government on this matter has been clearly explained to the Indian Government from time to time."
What I want to ask the noble Earl and the Government is this: Is that the settled policy of Her Majesty's Government? Has it for some time been the settled policy of Her Majesty's Government? When was it expressed to the Indian Government, to whom it must have given considerable encouragement? In any case, if it was divulged to the Indian Government, why was it not divulged to Parliament, in view of the bearing which any such statement must have on the Anglo-Portuguese Treaty? That is the first question. The other one is: Was it necessary, at this of all times, for us to have made public these views which appear to justify the action of the Indian Government?
THE EARL OF DUNDEE: Yes, my Lords. The fact that we stated these views many years ago and (as the Commonwealth Secretary put it, I think) understood the feelings of the Indian Government about Goa, and that we have never concealed them from anybody, does not in the least diminish our opposition to the settlement of this question by violence and not by peaceful negotiation.
THE MARQUESS OF SALISBURY: My Lords, the point I was trying to make to the noble Earl was that, as stated, that attitude clearly was not in harmony with the views of the Portuguese Government, or with our natural moral obligation to them under the Anglo-Portuguese Treaty. Were these statements ever
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made to the Indian Government that we sympathised with their desire to take over Goa; and, if so, why was that fact not divulged to Parliament?
THE EARL OF DUNDEE: My Lords, I think it would be better, if my noble friend wants precise information about that, to put down a Question. In any case, I will send him written information about it. I do not think that we have ever concealed our ideas on the subject of Goa. But that does not in the least mean that we have ever sought to suggest, or to condone for a moment, that a question of this kind ought to be settled by force; it ought not.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, is the Minister aware that, speaking as the only surviving member of the Mission to India in 1946 which led to the independence of India, I share the great sorrow which has already been expressed in your Lordships' House at the military action taken by Mr. Nehru's Government in order to achieve these particular objectives? We are exceedingly sorry. We understand the resentment of Portugal in this particular instance, but I do not think our action can depend upon an ancient Treaty with Portugal. I think we must remember that we have commitments to the United Nations, and that there is a standard of conduct laid down for Mr. Nehru as well as others in the United Nations Charter, of what ought to be the practice under the Charter, which we are sorry that Mr. Nehru has not followed. I think we should make that perfectly clear to him.
LORD COLYTON: My Lords, the noble Viscount the Leader of the Opposition should know better than anybody else that these guarantees were reaffirmed in 1943, when we sought to obtain the use of the islands of the Azores to protect our merchantmen from sinking by submarine. These guarantees were specifically reaffirmed at that date, so it is not possible to talk about an "ancient Treaty". But the second thing I should like to ask my noble friend—
VISCOUNT ALEXANDER OF HILLSBOROUGH: May I know—
VISCOUNT HAILSHAM: My Lords, I think we are in danger of embarking

743
upon a debate at this stage. This ought to be a time for questioning my noble friend.
LORD OGMORE: My Lords, may I ask the noble Earl whether there is not one thing he can do—namely, to make it known to the Indian Government that many old friends of India in this House, and outside, are horrified at the action of the Indian Government over Goa? May I also ask whether there was any consultation between the Indian Government and the other Governments of the Commonwealth as to the intentions of India in this matter?
THE EARL OF DUNDEE: My Lords, we are all well aware, and I am sure the Indian Government are well aware, of the sensations of shock—they were described in your Lordships' House as of "incredulous horror"—at this action. With regard to the noble Lord's second question, there was certainly no consultation between the Indian Government and any member of the Commonwealth about this action, which took us completely by surprise.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, I must put one point arising from what was said by the noble Lord, Lord Colyton. The first point is that the Treaty or understanding of 1943 took place nearly four years after the war had started, and at the end of prolonged endeavours to get our Ally Portugal to allow us the use of the Azores. I have inner and very distinct recollection of all the facts connected with that. Let me just point out, also, that that understanding was more than two years before the agreement of this country to the General Charter of the United Nations.
LORD CONESFORD: My Lords, have Her Majesty's Government observed that the spokesman of the Indian Government at the United Nations has expressed his complete indifference both to the Charter and to any action that may be taken by the Security Council?
THE EARL OF DUNDEE: My Lords, I have observed many things at the United Nations, and your Lordships will no doubt have read the comments of Mr. Adlai Stevenson upon the rejection of the resolution by the Security Council.
LORD CONESFORD: My Lords, I was actually referring to the statement made by the Indian representative—I think on the previous day—on the proposal to bring the matter before the Security Council.
LORD MERRIVALE: My Lords, may I ask my noble friend just one question on this matter? Does my noble friend not feel that the withdrawal of H.M.S. "Rhyl" from those waters may be viewed by some—and perhaps even by many—as a recognition of a final fait accompli? Also, would it not be possible for this frigate to return to those waters, so that it will not be felt by other countries that we consider the aggression on the part of India as a fait accompli?
THE EARL OF DUNDEE: My Lords, the only reason for sending "H.M.S. "Rhyl" to Goa was to secure protection for British lives and property. The reason why she has been withdrawn is because it is considered that they are not now in danger.

ACTS OF PARLIAMENT NUMBER ING AND CITATION BILL [H.L.]
THE LORD CHANCELLOR (VISCOUNT KILMUIR): My Lords, I beg leave to introduce a Bill to provide for the numbering and citation of future Acts of Parliament by reference to the calendar year in which they are passed. I beg to move.
Moved, That the Bill be now read 1a.—(The Lord Chancellor.)
On Question, Bill read 1a, and to be printed.

WOOL TEXTILE INDUSTRY (SCIENTIFIC RESEARCH LEVY) (AMENDMENT) ORDER, 1962
3.23 p.m.
EARL WALDEGRAVE: My Lords, your Lordships will have heard the Clerk call the Wool Textile Industry (Scientific Research Levy) (Amendment) Order, 1962, and it is the Order for that year that I propose to move. I beg your Lordships' indulgence for the misprint on the Order Paper, where it is described as the Order of 1961.
My Lords, the only effect of this Order will be to increase by one-third

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the rates of the levy for scientific research payable by the wool textile industry. The Order is to be made under Section 9 of the Industrial Organisation and Development Act, 1947. It has been prepared at the request of the Wool Textile Delegation, which represents some 85 per cent. of the employers in the industry, and has the support of the trade unions representing those employed in the industry.
The levy, first introduced in 1950, is raised partly from suppliers of wool—that is to say the merchants, not the farmers—and partly from processors of wool. The amount collected under the levy is now no longer sufficient to maintain the present scope and standard of the services provided for the industry. When the Scientific Research Levy was instituted in 1950, it was expected to produce between £100,000 and £120,000 a year. The average annual yield since the last increase in the rates has been £184,000. It is expected that the amended rates now proposed would produce a total of some £245,000 a year. The increased yield would be achieved by a straightforward increase of one-third in each of the levy rates; the proposed Order does not alter the incidence of the levy on the different classes of levy payers. The cost of the work financed from the levy by the Wool Textile Research Council has risen substantially as new inquiries have been undertaken for the improvement of the already high efficiency and high standards of the industry. In particular, the industry's research association, which receives most of the levy and which is also supported by the Department of Scientific and Industrial Research, has recently opened a new wing at its research station at Torridon. Research is, of course, particularly important to the industry at the present time when there is such rapid technical developments in the textile field and increasingly competitive conditions in international trade.
The 1947 Act requires the Board of Trade, before making such an Order as this, to consult any organisation representing substantial numbers of persons carrying on business in, or employed in, the industry. This they have done. There have been a few objections to this Order but they represent only a
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very small proportion of the total amount collected. The objections have been carefully examined, but do not appear serious enough to offset the large measure of support—I would almost say demand—from the rest of the industry. The industry in general clearly values the work done and paid for by the levy, and wishes it to be continued at the level necessary to meet the industry's needs. This is demonstrated by the fact that the increased rates proposed in the draft Order have been specifically requested by the principal employers' organisation in the industry, and are warmly supported by the trade unions. I hope your Lordships will see fit to approve this Order, and I beg to move.
Moved, That the Wool Textile Industry (Scientific Research Levy) (Amendment) Order, 1962, be approved.—(Earl Waldegrave.)
On Question, Motion agreed to.
LORD BARNBY: My Lords, on a point of order, may I ask the noble and learned Viscount whether there was time for one to have got up before the Question was put? I had deference to the Lord Chancellor's being on his feet. I had notified my noble friend earlier that I was intending to speak in support of his Motion.
THE LORD CHANCELLOR: My Lords, I am very sorry. I try to make a pause after I state what the Question is. The noble Lord did not rise, and I went on to put the Question. I am extremely sorry if we have been prevented from hearing the noble Lord, but I am bound to say that I had put the Question and he did not get up to speak.
LORD BARNBY: My Lords, am I to take it from that ruling that I do not have the indulgence of the House to suuort this Order?

HOPS (IMPORT REGULATION) ORDER, 1961
3.28 p.m.
EARL WALDEGRAVE: My Lords, the purpose of this Order is to safeguard the Hops Marketing Scheme which is designed to secure the orderly marketing of hops. The Order has been made by the President of the Board of Trade under Section 43 of the Agricultural

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Marketing Act, 1958, which consolidated earlier legislation. That Act provides for schemes to ensure stable markets for agricultural produce in the United Kingdom.
Before making an Order under this section, the Board of Trade have to be satisfied that there exists a scheme for the reorganisation of the industry concerned, and that it would be jeopardised if imports were not regulated: that the interests of consumers (including manufacturers) are not prejudiced by the Order; and that the Government's international obligations are not broken. On all of these points the Board of Trade is satisfied.
Before 1932 the hops industry was vulnerable to violent changes in world prices. In that year, a marketing scheme was established under the Agricultural Marketing Act, 1931, and this has served well in controlling the marketing, and stabilising the prices, of the home crop. This could not work unless the home market were insulated from the effect of fluctuations in world prices by some control over imports. This was accomplished by an agreement, included in the Report of a Committee set up in 1934 by the then Minister of Agriculture, between the Hops Marketing Board on the one hand and the Brewers' Society on the other. The parties undertook, amongst other things, to restrict imports of hops except in years when the home crop was short, and to allow limited imports of hops for lager and other special beers, the hops for which could not be grown here.
The Hops Marketing Scheme, together with the voluntary agreements, have given the industry stability and settled prices, and have benefited hop growers and brewers alike. By regulating home production and prices, they have ensured that growers do not produce more hops than the brewers can use, and that the growers get a fair price. The brewers, for their part, have agreed not to let down the English grower by buying hops abroad wherever they can be picked up cheaply, and it is this part of the Agreement which will be replaced by the Order. The consumer, I should mention, gains, of course, by having his beer of the flavour to which he is accustomed, and pays no more for it because, after
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all, the hops element in the price of beer is only about a farthing a pint.
Last year, however, the Hops Marketing Board and the Brewers' Society were advised that the voluntary import restrictions embodied in their agreement would have to come before the Restrictive Practices Court. They were also advised that the Court was unlikely to be able to approve the restrictions. Unrestricted imports would have meant the disruption of the Hops Marketing Scheme, and that would have been a disaster for the hops industry. Fortunately, powers to restrict imports are available in these circumstances. That they were not used in the first instance in place of the voluntary agreement, to which I have referred, was a matter of historical accident, for the Restrictive Trade Practices Act had not then been thought of.
These powers, therefore, have now been used to make the present Order. These secure the effective working of agricultrial marketing schemes. The fundamental problems of the industry have not altered since 1934, and the case for regulation is as strong as ever. The Scheme is an integral part of our agricultural economy, and the regulation of imports is fundamental to its operation. No new control is being introduced, but similar controls to those which have operated since 1934 are being given a legal basis. My Lords, I beg to move.
Moved, That the Hops (Import Regulation) Order, 1961, be approved.—(Earl Waldegrave.)
3.32 p.m.
LORD STONHAM: My Lords, I was carefully observing the noble and learned Viscount who sits on the Woolsack, because I wanted to "hop" up at the right time. On this occasion, I assure him that he did not look towards the Opposition Benches before he "popped the question". My Lords, I would congratulate the noble Earl on a very nice sense of timing, in that he has introduced this measure on the last sitting day prior to the festive season. I am grateful to him for his explanation of the Order, which I think was necessary in view of the fact that the Special Orders Committee indicated that it was a matter which required the special consideration of the House. I think it would be fair to say that the Order gives

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statutory force to a voluntary arrangement which has now worked with very great success for 30 years. For those 30 years it has provided—and this is the only branch of horticulture for which it has provided any kind of stability—an assured market and steady prices; no subsidy at all has been paid and it has depended on the control of imports. I would point out to the noble Earl that they are all precisely the factors which I suggested in a Question which he answered earlier this afternoon and which he resolutely rejected as being unsuitable for a different branch of agriculture. I would remind him that it has worked with very great success and I hope therefore that when he considers this question he may take a more favourable view.
There are one or two questions which I should like to put to the noble Earl, about which I hope he will be able to reassure us. He made it clear that this Order is necessary because although the agreement has been registered under the Restrictive Practices Act for some four or five years it was likely to be adjudged a restrictive trade practice and therefore illegal. I have no complaint about bringing in an Order to make something legal which is otherwise illegal, but I would submit to him that there must be many such industries or parts of industries where there is an extremely beneficial though highly illegal practice going on—beneficial to the whole of the industry, to the whole of agriculture or to the whole of the country. I wonder whether in such cases the Government would not consider the possibility of an amendment to the Act to avoid the general uncertainty which must exist in the minds of people engaged in the industry, and if it were possible to do that it would perhaps avoid a whole series of Orders of this type. I would submit that this is a matter for particularly urgent consideration because of our impending (as I view it) entry into the Common Market.
The second question I should like to ask the noble Earl is with regard to the quota. The hop growers operate under a quota system and these quotas are very valuable. That is evidenced by the fact that if a farm which enjoys a hop quota comes up for sale it attracts a very much higher price than it would if there were
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no quota, although it might be in a hop growing area. Now the noble Earl said that this Order would make no essential difference to the existing arrangements, and would merely give them statutory force, particularly with regard to licensing. But what arrangements exist for new entrants? How and under what conditions will horticulturists who are not now growing hops, but who would like to, be allowed to start? I would submit that if we are going to legalise an illegal practice—and I am all in favour of doing that—we ought to have an assurance that it will not be unduly and unfairly restrictive and thereby perhaps force prices too high.
We are at present, and have been for many years, importing hops, and therefore that fact might be a valid reason for enlarging the home industry. Because hops can now be kept for at least a year and if a surplus arises from a good crop it could be kept to cover a deficiency arising in a bad year. That would avoid the need for imports and it might also help to expand the export trade in British hops to the Commonwealth, and to Ireland, as against the continental variety. I ask the noble Earl therefore whether that also is under consideration.
My last question concerns price. He mentioned that the hop content, as it were, in a pint of beer costs only about a farthing. He did not mention, of course, that the tax content in a pint of beer is 8d. Of course that is the most important part. But, nevertheless, the price of hops is a matter of some importance and since we are creating a completely protected market we should be given an assurance—and I hope the noble Earl will be able to give it— that machinery exists, or will be put into operation, to keep prices at a fair level, always providing that there is a reasonable return to the growers and the workers in the industry. Those are my questions, my Lords, and subject to the points I have raised I think we should warmly welcome this arrangement as one which is of benefit to producers and consumers without recourse to the taxpayer. I only hope that before long the Government will see the wisdom of making similar arrangements for other branches of agriculture and horticulture. If the noble Earl, in what he is going to say, could hold out some hope of sense at last, this would indeed be a merry Christmas for the taxpayer.
LORD DOUGLAS OF BARLOCH: My Lords, I should like to follow up one point made by my noble friend Lord Stonham. Is it not the case that, under the Hop Marketing Scheme, the growing of hops was confined to those areas of land which had been growing hops at a certain date before the Scheme was brought into operation, and that it is virtually impossible for any other land to be used for the purpose? That being so, the natural result of the Scheme, as my noble friend has said, is to give a monopoly value to those particular tracts of land, and the real ultimate beneficiaries of it are the people who happen to own them.
3.40 p.m.
EARL WALDEGRAVE: My Lords, I am glad that there has been a general welcome for this Order. I think I can reply briefly to the points which have been raised by the noble Lord, Lord Stonham, and the noble Lord, Lord Douglas of Barloch. The noble Lord, Lord Stonham, suggested that this might be a convenient way of dealing with the subject on which he had been speaking earlier in the afternoon—meat. But I really think that there is very little comparison between the volume and the value of hops used in the flavouring of beer, and such an enormous business as that of meat. I believe that the total value of business in meat is over £800 million a year.
We must realise that this Order which we are considering, and I hope now passing, does not do anything new. It does not make any alteration in the arrangements which have been made in the past. It is simply that the arrangements which have been going on all these years since the 1930's in connection with the hop industry are now, as it were, put under another seal. Instead of an agreement between the Brewers' Society and the Hops Marketing Board, the arrangements are now authorised under this section of the 1958 Act. It is not intended that there should be any changes in the Scheme itself. In fact, there cannot be any change in the Scheme itself in an Order under this section. It is perfectly true that a quota to grow hops is valuable. I think that there is nothing wrong in that. There are quotas for the growing of potatoes, as for the growing of hops.
LORD STONHAM: My Lords, if the noble Earl will allow me, I would point out that there is provision in the Potato Scheme for new entrants. Will he tell me this: does he not agree that it is a point of substance that we are giving statutory authority to an agreement which was previously of a voluntary nature, and, therefore, would this not be the right opportunity to make provision both for new entrants and for a certain control of prices? They are the two points on which I think we should be satisfied.
EARL WALDEGRAVE: My Lords, I am advised that this would not be the proper opportunity to alter the Scheme by making any different provisions as to entry, or by making any other arrangements as to price or price control; but with Notice of the Question I would naturally look into it. I cannot believe that any Scheme under the Marketing Act, or under any other arrangement, is so inflexible and fixed for all time that, if it is desirable or desired, it cannot be altered in the future. I am advised that it is certainly not the intention in this Order to alter the Scheme in any way, but simply to bring, the arrangements under Section 43 of the Marketing Act, 1958, instead of under the voluntary agreement as before. That is the answer which I must give at the moment to the noble Lords who raised that point.
LORD SILKIN: My Lords, my noble friend has brought to light a rather disturbing state of affairs. If in fact we are giving now statutory authority for the doctrine that there can be no new entrants in the production of hops, whereas earlier it was a voluntary Scheme, then I think, while it may be that we can do nothing about it this afternoon, it is something of which we shall have to take note. I warn the noble Earl that it is something which we shall have to raise in this House on a future occasion. I do not think we can tolerate a state of affairs where there can be no new entrants to the production of hops in this country. We are creating a virtual, or a real, monopoly for those who are producing them to-day, and are giving them all the advantages which flow from that. Perhaps the noble Earl may be in a position to deal with this matter on an early occasion when we come back.
EARL WALDEGRAVE: My Lords, the details of the Scheme with regard to new entries and quotas are not fully in my head, and I should not like to answer as to them at this moment. But I think that it would be unwise for it to go out from this House that we were doing anything new which was alarming or dangerous. Whatever has been done has been done consistently since the early 1930's, and, so far as I am aware, there has been no complaint from any section of the community that by the agreement that has been operated in the past, stability and prosperity in this small section of this trade has been undesirable. I should not like it to go out from this House that here, because we were changing the umbrella under which this arrangement has gone on for all these years, we have suddenly uncovered something which is very bad, which ought to be looked at, and that we should stop it, because on examination I do not think that will be found to be the case. But I appreciate the point which the noble Lord, Lord Stonham, has made. We will, of course, look at this, and perhaps I may communicate with the noble Lord afterwards and discuss with him the question of new entries into hop growing.
LORD STONHAM: My Lords, does that mean that the noble Earl will also send me a copy of any communication that he addresses to my noble friend, as I raised the point?
EARL WALDEGRAVE: I should be delighted to do so.
On Question, Motion agreed to.

WHITE FISH SUBSIDY (UNITED KINGDOM) (AMENDMENT) SCHEME, 1961
3.47 p.m.
LORD HASTINGS: My Lords, I beg to move that this Scheme be now approved. It was only very recently that we were discussing a Scheme to provide a measure of relief for the middle-water fleet in their present difficulties. That Scheme, which is now in force, allows grant-aided middle-water vessels to make five voyages to distant waters, instead of only three, without incurring any penalty. The need for this arose because those middle-water vessels which had been fishing at the
754
Faroes had been having a very difficult time, and we wanted to give them the opportunity to help themselves by trying more distant waters.
Welcome though it is to the industry, that measure can provide only a limited amount of help, because the fact is that these vessels, which have been fishing mainly in the waters around the Faroes, have found for more than a year now that the catches there have been disastrously small. When the subsidies for the year beginning August 1, 1961, were discussed with the industry in the early summer, they asked for rates of subsidy considerably higher than those then being paid for vessels of the middle-water fleet, and supported their claim by evidence of the declining catches of the Faroes. At that time the Government had not sufficient evidence to justify paying such high rates of subsidy on this account. The subsidy rates introduced on August 1, therefore, took account of the performance of all middle-water vessels in 1960, and an increase in subsidy was granted which was based on their average performance and needs; and that increase amounted, on average, to £3 to £3 10s. 0d. a day.
When this subsidy Scheme was discussed in another place the Minister did say, however, referring to these Faroes vessels, that if the industry was right, and if a critical situation should arise over the next few months, he would have another look at the situation. The industry has now produced evidence of this critical situation. It has submitted accounts for vessels fishing at the Faroes in 1960 and 1961, and these show that in the first nine months of 1961 vessels spending the greater part of their time fishing at the Faroes lost, on average, £6,400. Vessels spending less time at the Faroes, and vessels not fishing at these grounds at all, were also making losses, but much less than this amount. I should like to remind your Lordships that these losses are not estimates, but the actual losses that have been incurred during nine months of this year. Unless there is a sudden and substantial improvement in catches in the Faroes, or these vessels are more fortunate in finding alternative grounds than they have been so far, the losses are likely to continue. There is an obvious need for urgent action to help the owners over

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their present difficulties. For this reason, my right honourable friend has kept his promise to look at the situation again and is now introducing an amendment Scheme in the middle of a subsidy year.
The Scheme now before your Lordships provides for a subsidy of £13 a day to be paid to all motor vessels which in 1960 or 1961 spent 30 per cent. or more of their days at sea fishing at the Faroes—an increase, according to the length of the vessel, of from £3 10s. to £8 a day. The oil-burners built before 1950 will also receive the same increase.
As I have said, the losses have already been incurred, and had the information now available to the Minister been known earlier this year, these higher rates would have been awarded at the beginning of the subsidy year. Therefore, my right honourable friend has thought it right to apply the higher subsidy rates to voyages made by these vessels since the beginning of the subsidy year—namely, August 1—as well as to future voyages. He has also thought it right to pay the subsidy for all voyages by these vessels, and not only for voyages to the Faroes. If subsidies were to be paid only on voyages to the Faroes, those who have been fishing elsewhere would be penalised and the owners might be encouraged to continue fishing at the Faroes when all the evidence is for the need for less fishing there.
There is one other point to which I should draw your Lordships' attention. As the remuneration of crews is settled by reference to the gross proceeds, subsidy Schemes since 1956 have laid down a maximum amount of subsidy that can be counted in the gross proceeds for this purpose. In the past, the main reason for awarding increases in subsidy has been increases in costs. Therefore, since 1956 subsidy increases have been excluded from the crew settlement. On this occasion, as the additional subsidy is to be paid in order to compensate for a decline in proceeds, and this decline has already affected and will continue to affect, crews, as well as owners, it has been agreed that the whole of the subsidy increase should be added to the gross proceeds for the purpose of calculating the crews' share. I hope, there
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fore, that your Lordships will give approval to this scheme. I beg to move.
Moved, That the White Fish Subsidy (United Kingdom) (Amendment) Scheme, 1961, be approved.—(Lord Hastings.)
3.55 p.m.
LORD WISE: My Lords, there are just one or two small points that I wish to raise from this side of the House in regard to this Scheme. I think that generally we can approve the Scheme as being very necessary at the present time, in order to safeguard the interests of the fishing fleet concerned. From what the noble Lord has said, it is obvious that fishing around the Faroes has become more difficult and the profits of the owners have not only decreased considerably, but have now become a series of heavy losses. It is necessary that we should see not only that boats put out to sea at a reasonable remuneration to the owners but also that the crews are paid reasonable living wages according to results.
This Scheme enlarges upon a previous Scheme, and the higher subsidy involves additional expenditure by the taxpayer. I should like to ask the Minister one or two questions in regard to this. He gave no gross figures of the subsidy. What is the increase above the original subsidy? And can the noble Lord inform us of how many boat owners or boats will benefit by this Scheme? The losses have undoubtedly been very high, and perhaps he may be able to tell us what proportion of the losses incurred will be reimbursed by the subsidy which is now to be paid.
The noble Lord told us about the new procedure in regard to gross proceeds and the remuneration of crews. Can he tell us the amount that will be paid over to the crews: what proportion the owners will receive and, what proportion the crews will receive? We look upon this Scheme as being in the nature of a palliative for the time being, and it may be necessary for the Scheme to be continued in future years, possibly amended in some way, in order that the interests of the fishermen may be safeguarded.
3.58 p.m.
LORD HASTINGS: My Lords, I am grateful to the noble Lord, Lord Wise, for his general recommendation and

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approval of this Scheme. His questions are very much to the point, and I am only too pleased to answer them. Indeed, I apologise for not introducing in my opening speech the figures for which he asked. He asked what the extra subsidy will amount to under this amendment Scheme. Perhaps I should have pointed out that in connection with the Scheme an Order was introduced in another place to allow the Minister to receive from the Treasury the extra grant necessary. It has not come to your Lordships' House, because it is a Finance Order. There is to be a permissive increase up to £250,000 over and above the £25 million already authorised and advanced under the subsidy Schemes.
The noble Lord's next point was the number of boats which will benefit. It will be somewhere between 90 and 100 middle-water vessels, out of a total of just over 300; that is, about one-third. The proportion of losses incurred now to be reimbursed, I am afraid, is a more difficult question. As I said, the average loss in the nine months of this year was £6,400. I think it is correct to say that this extra subsidy will cover between £3,000 and £4,000 of that sum. The extra subsidy will not guarantee the owners altogether against loss but will be an assistance to them to help them over a difficult period.
The amount of subsidy to be paid to crews is regulated by the Scheme already in force. It may interest your Lordships to know how the Scheme is worked. On every voyage certain sums are deducted from the gross proceeds of the haul of fish they take. These sums, which do not include the ordinary overheads, but the actual costs of the voyage—fuel and food and (this is important) the basic wages of the crew. Those sums are taken off the gross proceeds, and then a bonus is paid out on the balance, in accordance with the agreement already in force, of so many pence per pound. That practice will continue, except that gross proceeds will have up to £13 a day added on top as a result of the subsidy, and the same proportions of the balance will be paid as are being paid now. I hope that this explains everything the noble Lord wished to know, and that the Scheme may be now approved.
On Question, Motion agreed to.

FAMILY ALLOWANCES AND NATIONAL INSURANCE BILL
4.0 p.m
Order of the Day for the Second Reading read.
LORD DENHAM: My Lords, I beg to move that this Bill be read a second time. The Bill does not effect major changes in the schemes of national insurance, industrial injuries or family allowances; nor is it one of those several Bills which, over the years, have provided for general increases in the rates of benefit and allowances payable under those schemes. It is a more modest measure, which aims, for the most part, at securing such small improvements and adjustments as have been shown to be desirable as a result of practical experience and study of the day-to-day working of the schemes. Since Bills of this kind invariably bundle together a number of unconnected items, they tend to be somewhat complicated and difficult to understand. It may thus be desired to refer briefly to one or two of the main features only of the Bill.
I should like to mention first the improvement and extension of the allowances payable to "old cases"; that is to say, those who are disabled either totally or partially as a result of employment before the Industrial Injuries Act came into force in 1948. The allowance of 17s. 6d. which was introduced under the 1956 Workmen's Compensation and Benefit (Supplementation) Act for totally disabled persons in receipt of workmen's compensation or allowances under the Special Schemes is to be increased by 15s., that is, to 32s. 6d. a week. A partially disabled man on workmen's compensation is to receive an increase of 10s. a week. Finally, the allowances paid for partial disablement under the Special Schemes are to be increased by 7s. 6d. a week. It is estimated that about 20,000 disabled persons will benefit from these proposals, and that the cost in the first full year will be over £500,000.
Clause 2 modifies the basic condition for benefit under the Industrial Injuries scheme, that the accident in question must "arise out of and in the course of" insurable employment, so that accidents which happen "in the course of" insurable employment are to be held also to "arise out of" it if they result from

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"common risk", provided that the injured person did not contribute to the happening of the accident by any action not incidental to the employment.
Clause 5 re-casts the present provisions on retirement pension increments for wives and widows, as recommended in the Report of the National Insurance Advisory Committee, to whom this question was referred. The result will be to give the wife who is under 60 during her husband's deferred retirement half his increments on widowhood instead of none as at present. The clause will also allow these half-rate widow's increments derived from the husband's insurance to be paid in addition to a retirement pension on a woman's own insurance, whereas at present increments derived from the husband can only be paid with a pension on his insurance.
Clause 8 re-defines "apprentice" for family allowances purposes in the light of the change of circumstances which has occurred since the original definition was enacted in 1945. In order to return to the original concept, that allowances would be payable in respect of a young person who, because he was learning a skilled trade, was earning little and was hence still dependent upon his parents the test which has been taken is that which is applied for deciding the question of whether a person is a dependent under the insurance schemes—namely, whether earnings exceed 40s. a week.
Those, briefly, are the main features of the Bill. It will not, of course, be possible to implement all these provisions immediately. In many cases regulations have to be made, and claims have to be received and determined. It is, however, desired to bring it into operation as soon as possible, and it is hoped that the present rate of progress which the Bill has enjoyed will continue. Every effort is being made to secure that those who stand to benefit will do so as soon as possible.
The main purpose of the Bill is to make provision for "old cases" and also to make amendments and adjustments to the working of the schemes. If not a measure embodying major changes of policy, it is yet one which will benefit many people in many ways. It will, moreover, smooth out several difficulties in our complex schemes of insurance and
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thus have a beneficial effect on their administration. For all these reasons, I hope that your Lordships will give the Bill the Second Reading.
Moved, That the Bill be now read 2a.—(Lord Denham.)
BARONESS SUMMERSKILL: My Lords, I should like to thank the noble Lord for explaining this Bill in such detail and in so lucid a manner. There is only one aspect of the Bill on which I should like to comment. It is customary of course in the Ministry of National Insurance to examine the grievances, hardships and, indeed, injustices which are brought to their notice. Some of these are brought to their notice through the Law Courts and some are quite obvious—they may be anomalies. But, however they are brought, they are collected together and examined, and finally a Bill is produced. The noble Lord used the expression: "You will find that this Bill is a number of items bundled together." I agree that it is a number of items, but actually it is, as I think he will agree, a number of grave hardships in one Bill. On examining Bills of this kind it sometimes occurs to one that perhaps the wrong methods have been adopted in the Ministry.
Let us examine the items bundled together which the noble Lord listed. He talked about the "old cases". I think I am right in saying that some of the cases which come under the first part of the Bill, dealing with industrial injuries and industrial diseases, will be those partial cases of pneumoconiosis. I am sure the noble Lord will agree with me that pneumoconiosis is a terrible occupational disease. These men, who I think benefited for the first time in 1950, are to be admired, because they have served the nation so well in the pits; and furthermore, their expectation of life is very limited. This has been known for many years. Representations have been made by trade unions to amend the Bill, and finally a Bill has come to the House. But it has waited until there are other grievances and hardships to be embodied in a Bill of this size.
The noble Lord has mentioned some of these, although not in detail. There is the question of the guardianship of children by grandparents, where one parent is in prison and the other one is

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dead. Then there is the matter of the widows under 60 who will benefit from this Bill. What I want to say, and what I hope the Minister will note for future action, is this. The men suffering from partial pneumoconiosis must be comparatively few, because while this has been considered over the last few years they have been dying. Would it not be possible in future to break up a Bill of this kind and deal with it in an ad hoc fashion? After all, "hardship" is a relative term. There are greater and lesser degrees of hardship, and not for one moment would I say whether the child of the parent in prison or the widow under 60 suffering grave hardship is the worse off. But in looking at this, I think noble Lords would agree that the old miner suffering from pneumoconiosis should not be compelled to wait until his case can be embodied in one Bill.
What I would ask is that, in future, cases of this kind which can be dealt with should be dealt with, without any further delay. I am quite well aware that an omnibus measure of this kind is much easier for the Department. There is a lot of work in it. It has to be drafted, there have to be frequent conferences, and even when the Minister comes to the House of course he has the Second Reading. All the other stages of the Bill are so much easier to conduct if all these grievances and hardships are embodied in one Bill. But I would ask that there should be a slightly different approach. When it is quite obvious that a great many people, inarticulate, many bedridden, and with no pressure group, are suffering as many people are suffering, they should be picked out and dealt with solely on the merits of their case. Then, later on, a Bill of this kind should be introduced in which the other hardships are dealt with. That is all I have to say. It is simply a question of the timing and handling of the measure.
LORD DENHAM: My Lords, I should like to thank the noble Baroness for the welcome she has given to this Bill. I agree with what the noble Baroness has said about horrors of the disease of pneumoconiosis. It is a really frightful thing. I will pass on to my right honourable friend the remarks of the noble Baroness about the timing of the Bill.
On Question, Bill read 2a; Committee negatived.
Then, Standing Order No. 41 having been suspended (pursuant to Resolution of December 14), Bill read 3a and passed.

THE ANGLO-EGYPTIAN AGREEMENT
4.13 p.m.
THE MARQUESS OF SALISBURYrose to call attention to the situation of the various categories of British claimants under the Anglo-Egyptian Agreement of February, 1959, in the light of the Order in Council laid before Parliament on Monday, December 4, 1961; and to move for Papers. The noble Marquess said: My Lords, in rising to move the Motion standing in my name, I should like to say how sorry I am to have had to raise this important subject in the last flicker of Parliamentary life before Christmas. It is not really my fault. We were, we understood, promised a Ministerial statement on this subject as far back as last July, but we were asked to allow it to be postponed until after the Summer Recess. Reluctantly we agreed to postpone a debate to suit the Government's convenience. However, when Parliament reassembled, after another long delay it was not until November 27 that the Order in Council was issued on the subject to which my Motion relates. We asked, immediately after November 27, for a date for a debate, but at that time there was no opportunity, and eventually the earliest day we could get was the day before yesterday. Even then, as your Lordships know, that day was filched from us for a Foreign Affairs debate. I do not complain of that. It was a very important debate indeed. I am only explaining why it is we have been unable to deal with the question until to-day. I can only say how very sorry I am for this delay, both because of the steadily deteriorating position of the claimants themselves, and also because I believe the subject is too important to be dealt with at the last moment in this manner.
As your Lordships know, five years have now passed since the Anglo-French landings in Suez. They have already become almost part of history. It is not my purpose this afternoon to argue the rights and wrongs of the policy

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adopted by the Conservative Government of that day, of which I was a member. That would be merely, I think, to cloud the more limited issues with which your Lordships are concerned this afternoon. But there are, I believe, two things we ought to remember. First of all, one of the main purposes of policy in Egypt in 1956, as the then Prime Minister, now Lord Avon, made clear at the time, was to protect British property there. Secondly, whether those landings were right or wrong, one result, at any rate, is certain: that there have been numbers of British firms and British nationals who have suffered very seriously as a result. In particular, I refer to the nationals, the individuals, who were driven from their country, the country where they had made their homes, and their property was either Egyptianised. which means, in other words, nationalised, or sequestrated, and they have been largely ruined.
For some time, as your Lordships know, their outlook was not so bad. They had the most specific guarantees from British Ministers as to their future. The present Chancellor of the Exchequer, when he was Foreign Secretary, gave particularly binding assurances to this effect. He said in another place on May 16, 1957 [OFFICIAL REPORT, Commons, Vol. 570, col. 584]:
"The blocked accounts"—
that is, the Egyptian sterling accounts in London—
"are our security for the claims of British subjects against the Egyptian Government. We have no intention of whittling away that position."
I am sure, knowing my right honourable friend, that he meant exactly what he said. But the pressure of events—and possibly also the pressure of the Treasury—seem to have forced his hand, and when ultimately two years ago it seemed necessary to Her Majesty's Government to seek better relations with the Egyptian Government, an Agreement, as we all know, was negotiated on which the claimants, I understand, were never consulted at all, and which gave away the main bargaining counter on which our rather unhappy fellow countrymen had relied, in the shape of these Egyptian sterling balances which amounted to £41 million and which were held in this country.
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Since then the claimants, our British fellow countrymen, have had to be content with the hope that some day, in due course, some portion of the £27½ million, which was all that Her Majesty's Government were able to obtain from the Egyptian Government as a reimbursement on the losses which had been incurred by British nationals owing to the Egyptianisation and sequestration of their properties, to which I have already referred, should come their way. I am not suggesting that Her Majesty's Government have been entirely unmindful of the plight of their fellow citizens. We all know that they set up machinery to enable the claims to be assessed, and they agreed, in addition, to make available ex gratia loans to tide the claimants over the period which must elapse before they could receive the moneys owing to them if their claims were established under the Anglo-Egyptian Agreement. But they were, in any case, bound to lose heavily, for the —27½ million represented only a fraction of the losses that had been incurred by firms and individuals, which amounted to upwards, so I am told, of £100 million.
Moreover, while it was no doubt the intention of the Government to act quite fairly as between the owners of Egyptianised and of sequestrated properties, in fact this did not turn out to be so. The owners of Egyptianised properties, which included actually most of the large firms, have to go through only a comparatively simple procedure. If they merely establish the value of their property at the date it was nationalised, and that that property is gone for good and all, an interim award is paid over immediately; and it is paid over (and this is very important) in London. Owners of sequestrated properties, on the other hand, have had a much rawer deal. They cannot, like the owners of the Egyptianised property, simply regard their former properties in Egypt as gone beyond recall and make a claim on that basis.
The conception under the Agreement, as I understand it, it that they will get their properties back in due course, and when this happens they will be entitled only to put in a claim for the difference between the value at the date of sequestration and the date of the signing of the Anglo-Egyptian Agreement. This is often—indeed, usually—extremely

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hard to find out, because the first process of the desequestration in itself is extremely long and tortuous. All kinds of difficulties are put in their way by Egyptian officials, and counter-claims are often made in respect of such things as taxation said to be owing by the claimants—claims which may take months, and even years, to sort out.
Even when the desequestration has been completed, there are still many hurdles to be surmounted before the claimants can actually derive any benefit from their property. If it is cash, or stocks and shares, it is paid by the Egyptians into a specially blocked account in one of the banks in Egypt; and there it stays. If it is, say, house property, it is the case that very often after the forced departure of the owner the property has been let to someone else. In order to get possession of it the owner must appear personally and say that he needs the house for his own long-term occupation; and as re-entry permits are usually limited to one year it is not surprising that normally it is impossible to clear out the occupant so as to be able to dispose of the house at its full value. Further, if the property happens to be a business, that business may have been mismanaged during the years of sequestration and may be worth very little when it is returned to the owner. Details of this mismanagement are, however, very hard for him to obtain, and yet such details of the present value of the business are required, I understand, by the Foreign Claims Committee before any claim can be formulated.
My Lords, above all—and this, I think, is the most important thing we have to consider this afternoon—there is the continuing difficulty for claimants in transferring funds from Egypt to England. Even if they have got their property, of whatever kind it may be, desequestrated and converted to some liquid form so that it can be transferred, nowadays, in practice, it is often impossible to get in out of Egypt. Under the Anglo-Egyptian Agreement of 1959, the Egyptians undertook to transfer up to £E5,000, and to give favourable consideration to the transfer of further amounts. But in practice this undertaking has proved to be a dead letter; and the most a claimant can hope to bring to Britain, whatever the value of
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his estate, is just about £800—that is, the value in sterling of £E1,000. All the rest has to stay in Egypt, and unless the claimant wishes to return there—and, my Lords, after all that has occurred very few wish to do that—it is absolutely useless to him and is likely to remain so for the rest of his life.
This last point of the transfer of funds has become the most urgent problem of all for the claimants at the present time. The situation in Egypt, as your Lordships know, is extremely and, I think, increasingly unstable. There are already cases where property which had been desequestrated has been resequestrated and, taken all in all, the property of claimants in Egypt is definitely not safe there. It is not merely that they cannot get at it; it is worse than that. They may find at any moment, unless they have been able to transfer it to England, that they have seen the last of it altogether. That aspect, which, as I have said, more than any other at the present time causes anxiety to the claimant, is not touched at all by the new Order in Council of November 27.
I fully recognise the effort that has been made by Her Majesty's Government in that Order in Council to increase the grants that can be made out of the £27½ million. In respect of claims that have been established, especially for larger properties, the others had benefited more in the early stages. Though I am quite certain that all those people who have benefited by the new provisions will be duly grateful to the Government for what they have done, this new Order in Council will benefit chiefly the owners of Egyptianised property; and that will make even worse, by comparison, the position of the owners of de-sequestrated property. The more the owners of Egyptianised property get, the less out of the £27½ million will remain for the others. Nor, if I may say so, does the Order do anything to assist what I have described as the most pressing problem of all; how funds which are owed to the claimants in England can be transferred to the United Kingdom.
LORD SILKIN: My Lords, could the noble Marquess give us some approximate idea of the amount of the £27½ million which the Egyptianised property will absorb?
THE MARQUESS OF SALISBURY: My Lords, I think the noble Earl, Lord Dundee, can give more accurate figures than I can, but I believe that if they had the full payment it would absorb the whole of the £27½ million, and a great deal more.
LORD BALFOUR OF INCHRYE: The figure is £60 million.
LORD LLOYD: My Lords, if it will help the noble Marquess I will give the answer. I had a Parliamentary Question about this which dates back, I think, to May 5 last, when the total claims put in on Egyptianised property came to £65,852,000. That figure, of course, represents the claims before they were adjudicated. No doubt the noble Lord will be able to put us further right on that later.
THE MARQUESS OF SALISBURY: My Lords, I am very grateful for that accurate information.
My purpose in tabling the Motion is to ask Her Majesty's Government to look again at these particular aspects. I realise that we have sympathetic Ministers in key posts, both in the Treasury and at the Foreign Office. Cannot they do something to help over this admittedly urgent problem? I say "urgent", not only because of the uncertainty of the situation which to-day exists in Egypt, but because many of those claimants are getting very old. They are retired people; many of them have lost the savings of a lifetime and cannot start afresh. If they are not helped soon it will be too late. I beg the Ministers, therefore, not to weary in well-doing. For, my Lords, welcome though the proposals of the Order in Council are, so far as they go, I must emphasise yet once more that they will not touch at all some of the most basic difficulties of many of the claimants, and especially of those owners whose property has be desequestrated. And, in particular, the Order will do nothing to help them over the problem of how to transfer their money from Egypt to Britain, which, as I have said, is at the present time the worst problem of all.
I very much hope that the noble Earl, Lord Dundee, who I understand is to reply, will be able to give assurances at the end of this debate that the Government really mean to tackle this particular aspect. For instance, I hope he
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will feel able to say on behalf of the Government that if they cannot get the Egyptian Government to release more sterling for this purpose they will look into the possibility of themselves advancing the money, to be repaid when the money now locked up in Egypt can be transferred to this country. Some arrangement of that kind—I do not want to tie it down too tightly—would be, I think, more helpful than anything, but without that, much of what the Government has said becomes meaningless and may even seem insincere. The money in, say, Alexandria or Cairo, is no use to someone, say, in London, and the Government must know that as well as anyone else. I hope, therefore, that we may receive solid assurances on this point at any rate from the Government to-day.
I am afraid that we may have to decide, in spite of the smallness of the attendance, to divide the House, not, I would emphasise, as an attack on the Government but as an act of justice to the claimants who have, many of them, suffered so much and are still suffering so much for events for which they, at any rate, have been in no way to blame. It is in that spirit that I, and I am sure other noble Lords in this House, will await the reply which the noble Earl, Lord Dundee, is to make. I beg to move for Papers.
Moved, That there be laid before the House Papers relating to the situation of the various categories of British claimants under the Anglo-Egyptian Agreement of February 1959, in the light of the Order in Council laid before Parliament on Monday, the 4th December 1961.—(The Marquess of Salisbury.)
4.31 p.m.
THE EARL OF LUCAN: My Lords, there is no doubt that the House owes a debt of gratitude to the noble Marquess and his friends for raising this matter. The fact that it has been so delayed is a matter for regret. Nevertheless, there are some noble Lords down to speak this afternoon who know the subject so well and who have identified themselves so unmistakably over so long with the interests of these British subjects in Egypt that I have no doubt Her Majesty's Government will be reminded of all the difficulties and of their obligations.

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As the noble Marquess said, this is not a time to go back over the Suez incident. It aroused great passions at the time. It has been left in no doubt, I think, where my Party stands on the question. But so far as we in 1961 are concerned, what we have to face is the fact that several thousands of British subjects were, through no fault of their own, owing to the action of the British Government of the day, suddenly, almost overnight, deprived of the greater part of their livelihood and their life savings; that is the thing we must never forget and that is the justification for not letting the Government rest on what they have already done.
I think everyone was glad that relations with the United Arab Republic were restored to normal by the Agreement of February, 1959, but, at the same time, as a settlement it left much to be desired. It is easy to see that Her Majesty's Government were not in a strong bargaining position at that time, and perhaps nothing more could have been obtained, but the fact remains, and it is a fact of simple arithmetic, that the compensation obtained from the Egyptian Government is £27½ million sterling and the value of the assets lost by British subjects far exceeds that. The noble Lord, Lord Lloyd, has reminded us that the claims for Egyptianised property amount to £65 million. The sequestrated property, I believe, has been estimated at £130 million in value.
The noble Marquess said, and I think it is generally agreed, that the Government's proposals in the latest Order in Council so far as the owners of Egyptianised property go are not unreasonable. It is particularly satisfactory that on the smaller estates the Government are giving up to 90 per cent.—that is, up to £5,000. Obviously the small man with the very small property is more in need. The sliding scale goes up to cater for properties of much greater amounts, half a million pounds or over, but it is the owners of sequestrated properties, as the noble Marquess said, who represent the chief problem, and they are the people on whose behalf we ask the Government to think again.
The position is exceedingly complicated. I should be the last to claim full knowledge and understanding of the various categories of the owners of the claims, but other noble Lords who are
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going to speak, I have no doubt, are perfectly well aware of the problems. Looking at some of the documents, I am struck by certain points on which I would like to know the Government's answer. A proportion of the sequestrated properties, something like two-thirds, have been desequestrated up to date; that was the figure given by the Minister in another place on November 15. We are told that of that figure something like 10 per cent. have been resequestrated in more recent measures of the United Arab Republic Government. Can the Government tell us exactly what is the situation and, under this Egyptian legislation, what are the prospects? Is the resequestration going to continue and going to cover more of the desequestrated properties? What are the prospects? What representations have the Government made to the U.A.R. Government?
The Minister assured an honourable member in another place that the U.A.R. Government are being left in no doubt about the great importance which we attach to remedying the various problems involved. That is all right; they have left the Egyptian Government in no doubt about the great importance that we attach to it. But what then? Do they know what the intentions of the Egyptian Government are, and do they know what the prospects are for the owners of desequestrated property which is again at risk?
Secondly, in March this year Her Majesty's Government said that they acquiesced in representations from the Egyptian Government that their foreign exchange position was so weak that they could not continue to allow owners of property to transfer £E5,000 to the United Kingdom, and Her Majesty's Government agreed to the reduction of that figure to £E1,000, at which possibly it stands now.
What is the Government's view on the prospects of the foreign exchange situation of the Egyptian Government improving to such an extent that our claimants can get more money transferred back to this country? As the noble Marquess said, £E1,000 when it has been processed and turned into sterling, comes down, I think, to £840. Lastly, the Minister in another place said of the sequestrated owners, that 205 had actually got their £E1,000 trans-

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ferred to this country and he said there was about another 800 applications in, as he called it, the pipeline. That makes a thousand. But it has been mentioned in another place that there were 3,000 persons with claims for sequestrated property. What is happening to the other 2,000 who have not yet submitted their claims? It seems to me that only one-third of those entitled to compensation for sequestrated property have in fact submitted their claims.
There is one other category. The noble Marquess's Motion mentions the various categories of British claimants under the Agreement of February, 1959. I see in the Agreement that there is another category that has not been mentioned—I think possibly the noble Viscount, Lord Colville of Culross, may refer to it, as he has spoken on the subject before: it is, persons entitled to Egyptian Government pensions, together with arrears and so on. The situation of the claimants for sequestrated and Egyptianised property deserves all our sympathy, but we must not forget the small group of pensioners of the Egyptian Government. We hope Her Majesty's Government will include that category in the Answer they are going to give to this Motion. We want to hear the Government's reply as soon as possible. We want to hear the statements of other noble Lords. All I would do is to assure Her Majesty's Government that we on this side wholeheartedly support the noble Marquess in his Motion.
4.43 p.m.
LORD KILLEARN: My Lords, I rise warmly to support the Motion of the noble Marquess and everything that he said. He put the case before your Lordships with great force. The House has always been well disposed on this case. It is one of those questions where there can be no doubt whatever about the justice of the claims, and I am sure that we have never had a better exponent of the case than the noble Marquess to-night. He put before your Lordships certain of the issues immediately confronting us, and I repeat, I rise to support his Motion with all the force at my command.
I do not want to hold up the debate because it is late. Somebody has said
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tonight that the Government have shown good timing in the time they have allowed—I think it was said in relation to the Motion concerning the hop industry. The time is running rather finely for us; it is now quarter to five. I shall be as brief as I can, trying to limit myself in regard to the Motion to the question of the shortfall.
Before I move to that there are two quite small subsidiary points of which I have given the noble Earl prior notice, and with which he will perhaps be able to deal in his reply. The first one is that which interested this House a good deal the other day—namely, the levy of income tax on the interest on this £27½ million held by the Foreign Claims Commission. There is no doubt that on that occasion the House was solidly against this levy, and I know that the Minister without Portfolio, Lord Mills, undertook to put that matter before the Chancellor of the Exchequer. It would be interesting if to-day the noble Earl could include in what he says some information as to how representations made by this House in connection with income tax levied on the interest of that fund have been received.
The second point of which I have already given preliminary notice—in a sense it is a subsidiary point too—concerns these ex-gratia loans. We have heard little about them lately. Your Lordships may remember that there was an ingenious scheme devised whereby, on the grounds of hardship, advances were made of various sums—they were called ex-gratia loans, I think, and the recipients of these loans had to sign receipts. The receipt was very strongly worded. I have not a copy here—I might well have had one. They agreed that, if and when they received a payment from the Egyptian Government, the loan might be called in. I should like to hear from the noble Earl, if he can give it to us in his reply or perhaps later, a statement of how much has been repaid and how much has been called back. May I put it in this way: what was the total of the ex-gratia loans; and how much has been called back on receipt of doles, or whatever you like to call them, from the Egyptian Government? That is the second point I should like to make.
I propose now to turn to my main point, the question of shortfall. It seems to me that that is becoming the

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fundamental issue of this whole question. In the interval we are having questions of hardship and so on, which ought to be dealt with, but it may be not a bad thing to remind the House of the degree to which the Government are in fact committed on this question of shortfall. I have in my hand seven closely typed pages of assurances in one form or another given by the Government in the two Houses. I do not propose to inflict all of them on your Lordships, but I think I should refresh your Lordships' memories about one or two. The seizure of the property and the expulsion of these people took place in November, 1956. On April 11, 1957, the Prime Minister used these words in another place:
"It is the policy of Her Majesty's Government to secure from the Egyptian Government restoration of these assets in full, or alternatively, complete compensation."
Those words were more than echoed in this House by my noble friend Lord Home on May 2. On May 15, 1957, the Prime Minister said in another place:
"We fully realise our responsibilities and the urgency of the matter for all those concerned."
I do not want to overdo this business of quotation, but there was an assurance given by the then Secretary of State for Foreign Affairs, Mr. Selwyn Lloyd, on May 16, 1957, in these words:
"The blocked accounts are our security for the claims of British subjects against the Egyptian Government. We have no intention of whittling away that positon. The House can be sure of that".
That was a fairly categorical assurance. What happened? At the time that assurance was given I understand that there were standing to the credit of the Egyptian Government in this country, blocked sterling accounts to the amount of £100 million.
Your Lordships may perhaps remember that after the war we agreed to pay Egypt for all the facilities, camps and so on which, under the Treaty of Alliance we had received from Egypt. I had left Egypt at that time, but I thought that we were acting pretty generously, because after all we were paying Egypt for the privilege of saving her national existence. The sum total of that amount was approximately £400 million; it was fairly generous action on our part.
We now come back to the unfortunate affairs of 1956, when the then Secretary
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of State for Foreign Affairs gave an assurance that the £400 million had dropped to about £100 million, and as your Lordships can see it was a very categorical assurance. I must say, my Lords, that I cannot guarantee the accuracy of these figures, and they are approximate. Then time passed, and for reasons explained and, I think, understood by all of us—though we did not approve of all that was done—the Government felt that it had to come to an agreement with Egypt which they did in February, 1959. Under that agreement—which I think I can say without doubt was disliked in every quarter of this House, though we felt we more or less had to accept it—we accepted £27½ million in "full and complete discharge" of every obligation that Egypt had towards us under this unfortunate affair.
Incidentally, the claimants were never consulted. When we raised that point we were told that it is common form that claimants are not consulted in cases like that, and it is just done. I have in front of me a letter addressed by the claimants to the Treasury representative, pointing out that they hoped, and ardently hoped, that those funds which were still held as security would not be whittled away. That was during the negotiations in Rome—I regret that I do not have my chronology quite right—but, despite that, the agreement of 1959 was signed.
My Lords, if you can carry your minds back to that date you will realise that I am not exaggerating when I say that we allowed that to go through unchallenged. We all heaved a sigh of relief that there was no Division, and there was no Division because of certain assurances which had been given by the Prime Minister about this question of short-fall. This is the assurance that the Prime Minister gave on March 16,1959 [OFFICIAL REPORT, Commons, Vol. 602, col. 150]:
"While we will not here and now pledge ourselves to make any fixed addition to the total of £27½ million, as has been suggested in the debate, I can say now that the Government will watch how this works out and will play their part in reaching a settlement which will be reasonable and fair, and we do not exclude a further contribution from public funds."

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I am only stating the fact that it was on the basis of that assurance that certain Members of this House did not oppose the agreement and let it go through. If anybody cares to read the record of the debate, it is very clearly set forth.
That brings me down to the present state of affairs. There were all those assurances in 1959, and there are all these difficulties to which the noble Marquess has called attention. But where is this generous spirit of helping out, and so forth? It is not the fault of the Foreign Claims Commission that the distribution is working out so inequitably, so unfairly. The Commission simply follow instructions and there is a legal Order-in-Council. The trouble lies in the faulty drafting of the 1959 agreement. Obviously, we all make mistakes, but nobody foresaw at that time how inequitably this was going to work out as between these two classes.
I come now to the point made by the noble Marquess about the nationalised and the sequestrated property. A great many of the claimants in respect of property now de-sequestrated have not even gone as far as presenting their claims to the Foreign Claims Commission, because the Foreign Claims Commission will not take their claims until they have gone through the rigmarole of getting certificates from the Egyptian Government, and so on. But they never will get them, and this will go on for ever. Are we for ever to stand by, because we cannot state the final amount of the shortfall? Are we just to stand by and let these people suffer? I put it to your Lordships that it is grossly unfair. I know that until the total loss of nationalised and sequestrated property has been worked out authoritatively—which has been put to me as £100 million—you cannot fix the totality of the shortfall. But you can at least somehow meet the cases of hardship, though I do not quite know how. I strongly support the Motion of the noble Marquess, and I think that something should be done in the interim. After all, the Government have experts who can work out some means of helping these wretched people. Only last night, by pure accident, I was talking to an unfortunate woman who has been a widow for the
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last few months. She does not have a cent, not a penny of compensation, yet she had landed property alone worth £33,000. She is now trying to eke out a living by running a shop. And is that right? Obviously, it is not right.
I do not want to say any more because other speakers will follow, but I am extremely grateful to your Lordships for the way in which you have dealt with this matter from the very beginning. Your sympathies are not in doubt, and I think I can probably say the same about the Government, but there is a lot of talk and no action. I should like to see more positive action to meet the difficulties of these people. I feel very strongly about this matter and I think it is a question of national honour. These poor, blameless victims were thrown out without a penny being paid to them and with just the clothes they stood up in. It really is terrible, but the delay still goes on over five years after it happened. It happened in November, 1956, very nearly six years ago—and what more can one say?
4.58 p.m.
LORD LLOYD: My Lords, we have had many debates on this subject, and every time we have a debate I always hope, with everybody, that it will be the last one. For the sake of the claimants, every time we have a debate I hope that it will be unnecessary to have another one because Her Majesty's Government will have done something to put things right. But here we are again with another debate, and I will only re-echo my feelings at other debates, which is that I hope that this will be the last one because Her Majesty's Government will, between now and six months hence, take some steps to rectify what I believe to be a great injustice.
My noble friend the Marquess of Salisbury explained to your Lordships the delay over this debate, and it is perhaps unfortunate that it should have been put off to such a late hour on the last day before the Recess. On the other hand, in another sense it comes at a seasonable time because it is just before Christmas. It occurs to me that possibly something like a Christmas spirit may have got into the breast of the noble Earl who is going to reply. It is true, as we look at Goa and Katanga, that peace on earth is not there in the

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abundance in which we should like to see it, but perhaps that will be made up for this afternoon by a certain amount of good will from the noble Lords on the Front Bench. At any rate we must hope so, and therefore I once again address my pleas to the Government.
I do not wish to detain your Lordships for very long, because I think the case for the claimants was put admirably by my noble friends, and there is not a great deal to add to it. I can only fill in one or two small gaps, perhaps, and ask for a few bits of information. As the noble Marquess said, the 1959 Agreement, from the point of view of the claimants, was really a disastrously bad Agreement. It was bad for the two reasons which have been put forward this afternoon. It was bad because it extracted from Egypt a sum totally inadequate to satisfy all the claims, and it was bad because, whether through inadvertence or for any other reason, it dealt very unfairly as between the two categories of claimants. I should like to touch briefly on those two points.
First of all, as to the inadequacy of the amount extracted from the Egyptian Government, I have not up-to-date information, but earlier in the year I put down some Written Parliamentary Questions to discover what was the total of the claims at that time. I was informed that the Egyptianised claim, which at that time was the largest, amounted, as I mentioned before, to approximately £66 million. Of course, it is perfectly fair to say that £30 million of that is in respect of claims by individuals, companies and associations who held shares in the Egyptian companies concerned. I think it right to say that the Egyptianised claims have been greatly inflated by the fact that there are two or three very large company claims in the total, and the noble Earl will no doubt make that point later on.
It has been suggested in some quarters that, because these claims are so very large, they ought to be treated differently from the others. I should like the noble Earl to tell us what he thinks about that. My own feeling is that it would not really be right or equitable. One of the biggest claims is that of the British and American Tobacco Company. I see that the noble Baroness, Lady Summerskill, is not in her place, but I hasten to
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declare no interest. I am not a shareholder or an employee of the British and American Tobacco Company. The British and American Tobacco Company certainly has a very large claim, but I went into this matter and I found that a very large majority of their stock is held by people who have £300 worth of stock or less. So there again you are dealing with small shareholders in this country, and I think that they are entitled to be protected in the same way as any other small man.
My Lords, as I say, at that time the Egyptianised claims amounted to £66 million. I should expect that the majority of those claims have probably been filed, because it is much easier for them to file their claims than it is for the sequestrated people. But I should like to ask the noble Earl—and I tried to give him notice of this question—whether he can tell us the up-to-date figure of the claims actually presented by people with Egyptianised property. As to the claims for sequestrated property, the Answer to the Question was given on June 15 last. At that time a much smaller amount had been claimed by the people with sequestrated property, for the reasons given by the noble Marquess and others—that is to say, they had the greatest possible difficulty in getting their property desequestrated and all the formalities sorted out. At that time, the claims amounted to only £3 million. Again I would ask the noble Earl whether he would bring us up-to-date on that figure and tell us the present amount claimed for sequestration, so that I may get an idea of the total amount of the bill.
On the inadequacy of the fund for these people, I should like to say to Her Majesty's Government that in the past it was perfectly reasonable that they should say that they could not give any indication of their future policy on this matter because they had no idea of the total bill. I think that was perfectly fair. But, with the figures I have given to your Lordships this afternoon, which were given by the Government themselves, there can be no shadow of doubt that the fund is totally and utterly inadequate for the claims made upon it. Therefore I think we are entitled to know from Her Majesty's Government, and I think the claimants are entitled to know, what is their future policy on

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this matter. They have said throughout that they wish to see a fair and equitable settlement. So far as I can see, even on the figures given six months ago, this fund will pay about 7s. in the pound, and I should like to ask the noble Earl whether, in the view of Her Majesty's Government, 7s. in the pound constitutes a fair and equitable settlement. Secondly, if he does not think so, will he tell your Lordships what sort of figure in the pound Her Majesty's Government would consider a fair and equitable settlement?
Finally, though I do not want to press the noble Earl too hard, I think it would be helpful if he could this afternoon give us some indication as to what steps are going to be taken to produce a fair and equitable settlement on those lines. It would be a great help to noble Lords if we could have that, and I think it is now reasonable to ask that of Her Majesty's Government, because it is quite clear that the claims enormously exceed the funds.
I should now like to touch on the disadvantages suffered by those with sequestrated property. Those with Egyptianised property have already been mentioned by the noble Marquess, and I should not wish to traverse that ground again, but there are one or two points of additional difficulty about which I think your Lordships ought to know and which I think are quite unfair. For example, probably most of your Lordships are unaware of the cost involved to these unfortunate people in getting their property desequestrated. They cannot go there themselves—they would have to spend the whole of their lives in Egypt if they did—so they employ an agent. Over eighteen months ago I was told that an agent's fee at that time, if the desequestration did not take too long, was 5 per cent. of the total value involved. About six months ago I was told it had risen to 10 per cent. Therefore, straight away 10 per cent. goes in getting their property desequestrated, and for that they are not allowed to claim a penny from the fund. On top of that, as your Lordships have been told, the Egyptians, in breach of the Agreement, refused to desequestrate properties until various tax claims had been satisfied—some of them claims
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which were quite unjustified and, very frequently, almost impossible to counter because the papers had been taken by the Egyptians and had been destroyed or lost. All that increases the bill and puts up the cost to these unfortunate people.
Then, again, there is the case of the compensation. These delays all mean that the property remains in the hands of the Egyptian Government much longer than was ever envisaged under the Agreement. During that time it probably suffers additional damage. Yet, my Lords, the claimants of sequestrated property are not allowed to claim for any damage that occurred after February 28, 1959, if my memory serves me aright. That, again, is extremely unjust. Therefore, if you look at the total position as between these two classes, I would say that everything that the noble Marquess and my noble friend Lord Killearn have said is more than justified; and I think the position is very unfair indeed.
Now I should like to come to one last point. It has been pointed out, both by the noble Marquess and by my noble friend. Lord Killearn, that, of course, nobody wished his property to be sequestrated. I have met no claimant yet who would not infinitely have preferred, for obvious reasons, to have had it Egyptianised. It was, of course, entirely fortuitous whether it was Egyptianised or sequestrated. It was your luck; although, if you tended to be a large company, it was more likely to be Egyptianised because there was more loot for the Egyptians in it. If you were a small man, your property probably was not worth Egyptianisina, so it was sequestrated. It therefore happens that it is the small people who are the people who have been hit hardest, and they are the people who are least able to bear it.
As has been pointed out, it is quite useless to these wretched people to have property in Egypt which they cannot repatriate or do anything about. Furthermore, the Egyptians have made, I would say, very little effort, really, to honour their part of the Agreement. They took the sterling balances, which were the last sanction we had available to put pressure upon them to do anything. Here, may I say, looking back,

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that I think it was rather imprudent of Her Majesty's Government not to have kept something back in order to see that at any rate the terms of the Agreement were honoured. As it is, we have no means of exerting any pressure at all on the Egyptian Government.
The sum of £5,000 is, I believe, a small amount to be allowed to repatriate. I should like to re-echo here what the noble Marquess said, and I make a slightly different suggestion from the one he made. The Egyptians have spent all their sterling balances—I suspect on Czechoslovakian arms, which they have been importing recently—and have nothing left. Therefore, I think it is a genuine fact that They have no sterling exchange. But in looking at their balance of payments position, it seems to me that they are not likely to have any sterling exchange in the future. They have had a deficit on current account for the last two years, both with the United Kingdom and with the sterling area, so it is clear that these people will not be paid out in sterling unless something is done.
Therefore, I would ask the noble Earl whether some scheme on these lines would not be possible. Her Majesty's Government have various expenses in Egypt, and £5,000 per head is not a large sum. Would it not be possible for somebody who has his property eventually desequestrated, and can sell it in Egypt, and therefore has Egyptian currency, to be given £4,000 sterling, and give Her Majesty's Government the equivalent in Egypt of £4,000 sterling, which could be used by them for British Government expenditure in Egypt? It would enable these people, at any rate, to get their £5,000 promised in the agreement; otherwise, so far as I can see, they will never get it. I do not put that scheme up as anything hard and fast, but merely as a possible means of doing this, because Her Majesty's Government so far as I know, are the only people likely to want Egyptian currency in Egypt at the present time.
I will say nothing more, except to reecho the pleas which have been put to the Government about these people. It is six years now since this happened to them. Whatever the rights and wrongs of the Suez operation, and whatever the
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rights and wrongs of the agreement—Her Majesty's Government have said it is the best agreement they could get and that may well be true; I do not know—it seems to me that, throughout, these people have been the victims of British national policy at no fault of their own. For that reason alone, they have suffered on behalf of this country, and I think it is up to this country to do something for them in return.
5.12 p.m.
LORD BALFOUR OF INCHRYE: My Lords, this is no new subject, but your Lordships on both sides of the House have been very generous in giving support to the various debates which have taken place. if some of your Lordships are at all weary of repetition, and if Her Majesty's Government are at all weary of debate, that weariness is nothing to the weariness of the claimants. I would, if I may, in a very few moments, summarise one or two points and underline one or two. It seems to me that all the debates, Questions, Government replies and assurances do not alter three facts. The first is that the agreement has not worked out as hoped; secondly, the position remains unsatisfactory; and, thirdly, great sections of claimants remain entirely unsatisfied.
The position of the fund to-day is this. Of the fund of £27½ million, in two and three quarter years approximately one-third has been paid out, almost entirely against Egyptianised claims which will finally amount to some £65 million. There is remaining the great bulk of some £35 million at least of claims for damage to sequestrated property. The contrast in these two classes of claims has been stressed by my noble friend Lord Salisbury, but I have worked out a figure. In the case of Mr. A, who had a claim admitted for £50,000 of nationalised property, under the distribution of the three Orders-in-Council Mr. A will get approximately £30,000 over here. Mr. B, who does not wish to go back to Egypt, has a claim for £50,000 for damage to his sequestrated property, and the most he would get over here at the present time is some £830 sterling. There is only a general indication from Her Majesty's Government of the possibility of future help when the fund is exhausted, as it seems it inevitably will be with the claims of the Egyptianised and sequestrated claimants. Therefore,

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I think I am justified in saying that great sections of claimants remain unsatisfied, and that the position is unsatisfactory.
I believe that the basic reason for this—and I think it is time it was said—is that Egypt has shown an increasing lack of good will to implement, in spirit and in fact, the agreement. For example, paragraph 4, Annex B, said that all sequestrated property was to be released within three months of application, but nothing of the sort has occurred. There are difficulties put in the way; there are arguments over registration; and there is the refusal to release until tax claims have been paid (which is entirely contrary to the Agreement); and, again, claims cannot be dealt with until certain documents are produced, and these documents are either lost or unobtainable. But I would remind your Lordships of these phrases in the Agreement: "Give immediate approval"; "Ensure within three months"; "Provide copies of all records"; "Give favourable consideration". They have become meaningless words because of Egypt's evasion, in spirit and in fact, of what she had undertaken to do under the 1959 agreement. It is hard to foresee any date of finality of claims for damage through sequestration and of claimants either in having their claims agreed in Egypt, or, unless the Government go further than they have felt able to up to the present in regard to Shortfall, in getting cash here.
In successive debates here and elsewhere we have been told: "Go easy; hold hard in your criticism of Egypt for the sake of the claimants' cases being administered in Egypt", and also on the wider grounds of the restoration of Anglo-Egyptian trade and political relations. We were told of hopes that trade would flow and friendship would flower. In fact, trade with Egypt is such that she cannot meet the exchange obligations under the agreement, and Colonel Nasser's economic conditions are becoming desperate. In fact, so far as friendship is concerned, Colonel Nasser's radio and press continues to pour out constant abuse of the United Kingdom and our policies. My Lords, if my remarks are thought in any way unhelpful, I do not care, because there comes a time when, as someone once
784
said, "enough is enough", and constant turning of the other cheek to insults and obstruction becomes a painful and useless process.
I think the time has come to ask Her Majesty's Government two questions, and I hope the Minister will be able kindly to give a reply to these two questions. Do the Government see any finality in the processes of sequestration claims in Egypt; and, with only guarded statements as regards possible shortfall, do they foresee the sequestration claimants getting back a large proportion of their losses? Or, do the Government take the view that these claimants must be prepared to face great losses not envisaged at the time of the agreement, and which Her Majesty's Government cannot be expected to make good? If the latter is the case, I believe it is kinder and better to say so now, rather than continue shadow boxing as to Egypt's real intentions and Her Majesty's Government's ability to make good. In conclusion, I would summarise the position in three sentences. Here we have an agreement that has not worked. A debt of claims remains unpaid. And, a debt of honour has not been met.
5.20 p.m.
LORD BARNBY: My Lords, I wish at once to associate myself with everything that has been said by the noble Marquess, Lord Salisbury, with such lucidity and conviction. As one who has raised this matter in your Lordships' House before, I might have wished to repeat much of what I have already said, when my feelings were high, but I think that there is no point in prolonging the debate by repetition.
It would seem that we are dealing with matters that are particularly in the hands of Her Majesty's Government. There are questions for reference to the Egyptian Government but, in the main, the force of our representations is that the arrangement has been concluded with the Egyptian Government and therefore it remains for Her Majesty's Government to implement it. My noble friend Lord Killearn has referred in a factual manner to the past assurances given by Her Majesty's Government. I feel that, apart from compassion—and, goodness knows!, we all receive enough letters giving the most poignant instances of the misfortunes that have beset the

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people who have had their property sequestrated—we have a right to look to the Government to give evidence that they are not shirking their responsibility. I refrain from saying "commitment", because no succeeding Minister can be committed necessarily by his predecessors. My noble friend Lord Killearn quoted the Prime Minister's words:
"We do not exclude a further contribution from public funds."
And in another place as recently as December 5, Mr. Heath, the Lord Privy Seal, stated that [OFFICIAL REPORT, Commons, Vol. 650 (No. 26), col. 1143]: Her Majesty's Government adhere to the statements, but cannot foresee what the total amount will be. Presumably, that is the amount of additional compensation contribution the Government may make.
The noble Earl, Lord Lucan, put forward in a temperate manner the strong views felt on the other side of the House. The noble Lord, Lord Lloyd, has given us, in appealing language, the position of the claimants under sequestration. I am going to refer to a case under Egyptianisation. It is of a company which is based in the City, in which I have a great interest and which I had the honour to represent in Parliament. It is a large concern with 14,000 shareholders and is very much in the position of the company about which the noble Lord, Lord Lloyd, was speaking. The holdings of the shareholders are very small, and therefore it is quite inequitable to suggest that, because this is a large claim from one company, it should be treated differently from the smaller claims, because the effect on the thousands of small shareholders may be just as great.
In the past, this company has shown great courage and spirit of adventure in investing a large amount of money in Egypt, to the advantage of the shareholders and of the Exchequer in this country, and it has experienced a very large loss. The amount of their claim is over £3 million. Under the distributions to date, they have received only 25 per cent. of their claim. Surely it sounds very unfair that 75 per cent. should not be returned to the company. In the first distribution, the amount they received was £97,000; in the second dis-
786
tribution, £256,000, and in the third, which we have recently had, they received the modest sum of only £50,500.
I give this as an illustration of a purely business case. In the cases of sequestration, there is compassion and hardship and sad tales of the effects of the present policy. My purpose is to raise the instance of a large claim which receives such a small amount of compensation. It appears that only about 48 per cent. of the approved Egyptianised claims have been completed. It would look as though in the end not more than 45 per cent, will be available without recourse to public funds. Surely, on those grounds, the earnest pleas that my noble friend Lord Killearn made should carry great weight. The noble Marquess, Lord Salisbury, has also said that there is strong feeling in the country about this matter. It is in that spirit of Christmas anticipation to which my noble friend Lord Lloyd referred that we earnestly hope the noble Earl may be in a position to-day to remove the need for these continued references in Parliament to the dragging of their feet by the Government, and that he will be able to announce something not only on grounds of compassion, but on sheer business grounds; that there should be the honouring of an apparent intention by the Government. If there is not, I feel that I should look forward to following the noble Marquess into the Division Lobby, should he decide to divide the House. However, I hope that will not be necessary and that the noble Earl will be able to give us the reassurance for which we have been so long waiting.
5.31 p.m.
THE EARL OF DUNDEE: My Lords, I should like to begin by saying that I entirely appreciate and sympathise with the difficulties the noble Marquess has had in bringing this subject before your Lordships until now. I know it has been put off on many occasions. I remember that a little before the Summer Recess, when I had a different office from the one I am in now, I was to have had the duty of replying to the Motion which my noble friend had put on the Paper, because none of my colleagues was able to be here on the day for which it had been put down, and although I most diligently prepared myself to undergo a

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severe inquisition from the noble Marquess, I was considerably relieved when I heard that he had decided that I ought not to be allowed to "hold the baby" and he would prefer to wait until some more experienced nurse should arrive.
May I express my gratitude both to the noble Marquess and to all noble Lords who have spoken to-day, not only for the moderation with which they have expressed themselves but also for their brevity. I do not think, if I may say so, the strength of their case has in any way suffered from it. I realise that the reason for it is that we all want to get our business finished before the Royal Commission. I am grateful for their consideration, and I will certainly do my best to give them all the information that I can give at the present time.
I know that your Lordships are deeply affected by the real hardship which has been and is being suffered by so many British subjects, both men and women, who either temporarily or permanently have lost property and possessions in Egypt. I recognise that it is the hard situation of many of these persons which underlies what has been said by your Lordships this afternoon. The Motion of the noble Marquess calls attention to the various categories of claimants, but in reply to it I think I should prefer to distinguish not between the various categories of claimants, but between different categories of hardship, because one claimant may suffer in two or three quite different respects, some of which are covered by the 1959 Agreement, while others are not.
There are, as I see it, several different categories of hardship. There are, first, those whose property was Egyptianised permanently in 1957. Next, there are those whose property was sequestrated and restored having suffered damage. Both these categories of hardship are covered not only by the Agreement of 1959 but specifically by the £27½ million which was then transferred to us for the purpose of compensation by the Egyptian Government. Thirdly, there are the people (who, of course, may in some cases be the same) who have received back their property; who may or may not have a claim for damage, but who, whether they have a claim for damage or not, have great difficulty in
788
getting any value out of their property—either in getting any of the income from it or, if they find it necessary to sell it, getting any of the capital. These are also covered by the 1959 Agreement to the extent of £E5,000. They are not covered by the £27½ million which was transferred to us for the purpose of compensation, but under the Agreement the Egyptian Government undertakes to pay them up to £E5,000 in respect of the value of their property, quite apart from whether they can get any other value out of it or not.
The next class of grievance is that of those people whose property has been sequestrated and restored, but who, even if they do get the £E5,000 which is provided for under the 1959 Agreement, may have a lot more property in excess of £E5,000 from which they are unable to get any benefit, because they are not living in Egypt and because of exchange difficulties. They are not covered by any agreement at all. All the benefit to which they are entitled under the 1959 Agreement is, first, compensation for damage inflicted while the property was sequestrated (that may come out of the £27½ million); and secondly, the £E5,000 which the Egyptian Government undertook to make available. Apart from that, they may have no claim for damage, and the £E5,000 may be a very small fraction of the value of their property. Over and above that, they do not come under the 1959 Agreement, and, naturally, they may suffer hardship through owning property in Egypt out of which they cannot get any benefit owing to ordinary exchange difficulties.
Finally, there is the question of resequestration; that is to say, in the last few months in some cases the Egyptian Government has again sequestrated property which may or may not have been sequestrated before. That presents us with an entirely new set of difficulties. With your Lordships' permission, I should like to say a word about all these different categories of hardship.
THE EARL OF LUCAN: My Lords, before the noble Earl does that, could he clarify one point He said that the Egyptian Government would make available £E5,000.
THE EARL OF DUNDEE: Under the Agreement.
THE EARL OF LUCAN: That is the claimant's own money, not a grant from the Government. They are going to give exchange control permission to export that money.
THE EARL OF DUNDEE: I said that it did not come under the £27½ million, which is their own money which they gave for the purpose of compensation. That is a question of releasing currency.
THE EARL OF LUCAN: Releasing the individual's money.
THE EARL OF DUNDEE: Yes, of course. It does not come under the £27½ million given for the purpose of compensation. It was an undertaking that they would release up to £5,000—that they would release £5,000 of the property of the owner whose property had been sequestrated and restored.
LORD LLOYD: My Lords, before the noble Earl goes on, for the purposes of clarification may I make one point? When he said that things are covered by the Agreement, I take it he means that they fall within the ambit of the Agreement. He does not mean that the fund has enough money to cover the losses, because there is not enough money to cover them.
THE EARL OF DUNDEE: I did not mean to imply that £27½ million was enough to satisfy all the claims—certainly not.
Now let me say a word about the first category—that is, the former owners of Egyptianised property whose payments have been revised under the recent Order in Council. The scope of this Order (in regard to which my noble friend Lord Killearn asked me a question a week or two ago, and to which I think a fairly full answer was given) is a limited one. It does not widen or narrow the categories of claims on which compensation can be paid, and it does not relate to people who have suffered losses which are later than, or not covered by, the financial Agreement of 1959. The purpose of the new Order was to allow the money still available in the Foreign Compensation Fund to be distributed as soon as possible, particularly to those who are most in need of it—namely, the many individual
790
claimants for smaller sums, many of whom have been suffering very severe hardship. Its purpose was thus to provide additional relief for the more needy claimants, whose cause has often been pleaded so eloquently by my noble friend Lord Killearn and others.
I am sure your Lordships will not wish to go again over the various percentages which have already been fully gone into. As I explained to your Lordships, the result will be that all the smaller claimants will now receive about 90 per cent. of their assessed claims. I pointed out to your Lordships that we appreciate that a large claimant (whose case has been mentioned, very rightly. this afternoon by both my noble friend Lord Lloyd and my noble friend Lord Barnby) may be a limited liability company with many small shareholders.
LORD KILLEARN: My Lords, I do not like to interrupt the noble Earl, but he was talking about the small claimants being satisfied as to 90 per cent. Can he tell us how much they have had to hand back in payment of loans?
THE EARL OF DUNDEE: As my noble friend asked a question on that, I have got an answer, and perhaps I might give it now.
LORD KILLEARN: It seemed to fit in there.
THE EARL OF DUNDEE: My noble friend particularly asked how much had been given in ex gratia loans, and how much had been called back and paid. The amount so far repaid is negligible—practically nothing. The amount issued, I am informed—I have only just got this—is £700,000.
LORD KILLEARN: Do I understand that the amount repaid is negligible?
THE EARL OF DUNDEE: Paid back, yes.
LORD KILLEARN: Is that really so?
THE EARL OF DUNDEE: That is my information, but I will certainly confirm it.
LORD KILLEARN: With all respect, I wonder if it is correct.
THE EARL OF DUNDEE: If it is not, I will certainly inform my noble friend.
LORD BARNBY: My Lords, could the noble Earl at this point in the sequence of his speech say what is the percentage of the distribution to date on the sequestrated claims?
THE EARL OF DUNDEE: I do not think it will be necessary for me to give that in the form of percentages. In a moment I was going to give the actual figures, particularly in reply to some detailed questions which were asked by my noble friend Lord Lloyd.
LORD SILKIN: My Lords, the noble Earl is trying to explain a very complicated question which some of us here are trying to follow. I think it would be in the interests of the House if he were allowed to make his statement. The noble Earl does not need me to champion him, but I am trying to understand, and all these questions seem to me to confuse the issue.
THE EARL OF DUNDEE: I will do my best to speak, either without or with interruptions, as your Lordships please. I hope we shall be able to conclude before the Royal Commission. Until then I am very much at your Lordships service in this matter, because I know it is a complicated question, and I think your Lordships are entitled to all the information you want and I am in a position to give.
In respect of the larger claimants under this new Order in Council, I want to say that they will receive about 25 per cent. of their total claims, if they are over £500,000. Although the percentage above £500,000 is not increased, they get the increased percentages up to £500,000 which applies to everybody; and that, in the case of a firm which has more than £500,000, would amount to £50,500. This new Order of course does not represent a final distribution. It provides only for what we think can safely be paid out now, keeping a reasonable amount for the claims which have not yet been formulated.
I should like, before I go any further, to try to give the information which my noble friend Lord Lloyd asked for, first, about the amount of Egyptianised claims, and then the amount of the claims for damage on sequestrated property, on which I can give some more up to date figures than I gave last time
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in respect of claims presented to the Commission up to November 30. The claims for compensation for Egyptianised property amount to £59,489,406. We must divide that into two classes, the claims which have been assessed, and those which have been made but not assessed. The figure of £38,980,138 represents the total assessments made and approved by that date—that is, November 30—including both large and small. Then the balance of £20,509,268 represents the claimants' figures of amounts of claims for which no assessments had been made by November 30.
Now the claims for sequestration losses, as your Lordships will appreciate, of course, take very much longer. It takes people much longer to find out how much damage they think they are entitled to claim for than it takes them to find out the value of property which was confiscated in 1957. The information about these claims for damage is often difficult to get. But the total claims for sequestration losses presented by November 30 amounted to £4,043,234, of which a good deal less than half, namely, £1,613,869 represents assessments made, and the balance of £2,429,365 represents the amount of claims still to be considered and assessed. When we add these figures together we find that the total known commitment on November 30 was £63,532,640, which is not very much less than the conjecture of £65 million which was made in another place on November 16 by my honourable friend the Parliamentary Under-Secretary, Mr. Thomas.
There are just two further facts regarding the work of the F.C.C. that I should like to put before your Lordships. The first is that since the new Order in Council came into force on December 5, up to December 18, the Commission have sent out a further 503 cheques for a total of £474,378. Next, we are trying to speed up the work of the Commission in dealing with all these claims, which have taken so long to formulate; and in order to hasten matters further two Commissioners have been appointed so that from the beginning of this month six Commissioners have been at work instead of four.
As my noble friend Lord Killearn suspected, the information which I had got was not complete, but I now have it

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complete, if I may go back to that question of ex gratia loans. The total amount issued was £7½ million, and the amount repaid directly by recipients is negligible. That repaid by deduction from Foreign Compensation Commission payments is £700,000 out of £7½ million. I am sorry that the first paper I got, which had to be done in a hurry, was not complete and not at all clear in that respect. I am very glad now to be able to give my noble friend the figures which I know he wanted to get.
LORD KILLEARN: I thank the noble Earl very much.
THE EARL OF DUNDEE: I have spoken about the owners of Egyptianised property and the people who have claimed for damage for sequestrated property which has been restored to them. After that, we come to the next category of British owners of de-sequestrated property, that is to say, those who are entitled under Article V (1) (a) of the Financial Agreement to receive a transfer of up to £E5,000 of their released property into sterling. The noble Earl, Lord Lucan, said in his speech that this had been reduced to £E1,000. It is not quite correct to say "had been reduced." Owing (as I think most of your Lordships who have studied the matter recognise) to genuine currency difficulties, it has not been possible to make the payments provided for so far under the Agreement, and last March, as a temporary measure, and for the time being only, we got the Egyptians to agree that they should grant permission for immediate transfer of up to the first £E1,000 of each application which was found to be in order. That is the basis for the figure of £840. which represents £E1,000, which is all that these people have so far been able to get. In the great majority of applications which have been notified to us as being in order—the number is about 240—this permission has been granted.
Her Majesty's Government are constantly pressing the Egyptians to give full effect to the provision of the agreement by which the full amount of £E5,000 should be authorised, but so far without success. My noble friend Lord Balfour of Inchrye asked me to say whether we really thought that they would be able to pay. I know his motive was to try to let people know the worst
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now, as I think he put it. It is a very difficult thing to prophesy whether the future course of international trade will or will not allow another country to have a larger foreign exchange balance than it has now. And would it do any good if one took a pessimistic line and said that, according to the way things seem to be going now, there does not seem to be much chance of it? I do not think it would be desirable for me to take that line. It is not at all impossible that the trade of any country should improve its balance with the result that that country might hold a greater quantity of any particular kind of foreign currency; and I do not think we should take such a necessarily despairing view of the future of world trade that we think a country which is now in exchange difficulties should not be able in future to extricate itself from these difficulties.
As for the question of Egyptian will to do so, I shall say something about that at the end of my remarks when I deal with the question of re-sequestration; but my noble friend will understand that we want to give every chance of goodwill operating or reviving and you do not always achieve that object by losing your temper early in the negotiations because you are irritated by delays, some of which seem to be deliberate and many of which seem to be unnecessary. I am sure your Lordships will understand that if I want to do the best I can for the claimants I ought to be as careful as I can in what I say on that subject in reply to my noble friend's question.
Her Majesty's Government are constantly pressing the Egyptians to give full effect to the provisions of the agreement by which the full amount of £E5,000 should be authorised, but, as your Lordships know, so far only with the meagre success of getting the first £E1,000 released. We are of course actively considering whether any means can be devised, without relieving the United Arab Republic of their obligations in this matter, to help those people who have not been able to obtain their full rights under this particular revision of the agreement, because their difficulties are very keenly appreciated.
I am not sure whether the noble Marquess was referring to people who had claimed £5,000 or to the people who

795
had a great deal more than £5,000, but it does not really matter; he said, if they cannot get sterling, will the Government advance money against the future possibility? We are considering many possible lines of action in that direction. I will certainly put the noble Marquess's views before my right honourable friend and the Treasury. My noble friend, Lord Lloyd, had a suggestion that we might transfer sterling to people here and get it back from them with our expenses in Egypt. I will certainly look into that and I am grateful to him for making the suggestion.
It is, of course, more urgent in the case of the people who have not got their £5,000 sterling which was promised under the 1959 Agreement, but it applies also, as your Lordships recognise, to people who had more than £5,000 and who, even if they got their full amount of sterling payable under the 1959 Agreement, would still have a lot more property left which might be of very little use to them. There is no provision under the Financial Agreement by which those people can transfer more than £5,000 of their property from Egypt to here, and they may therefore be worse off even than the people who can claim against the Compensation Fund. That is a difficulty which does not apply by any means only to Egypt. There are very many countries in the world who, for various reasons, have nationalised or seized or taken property, sometimes with compensation and sometimes without compensation, sometimes with compensation which is extremely inadequate; and some of your Lordships may well think that this would have happened in Egypt even if the events of 1956 had not occurred and even if the Financial Agreement had not been concluded.
The question of what can be done to help people with more than £5,000 of Egyptian property does not arise out of the Financial Agreement, but we have had their case very much in mind, and during the past year or so we have been actively exploring a number of suggestions for trying to help them by some kind of arrangement by which their blocked assets in Egypt could be utilised against the provision of sterling in this country. I am bound to tell your Lordships the difficulties have been
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rather greater than we thought they would be at first, and so far I am not in a position to say that any practical solution has been found, but we are very anxious indeed to find one.
The whole position on this question, which has been giving us all so much anxiety for the last four years, has been sharpened in the last few months by the decision of the Egyptian Government to resequestrate a considerable amount of property owned by foreigners in Egypt. It began in the third week of October. So far a total of about 850 people are involved, of whom 47 are British subjects. So your Lordships will see it is not a measure directed against British subjects in any particular sense; it is a general policy of taking over the property of foreigners. It has affected 850 people, of whom 47 are British; and of those 47, 11 are living in Egypt, the remainder are not. It is impossible to assess with any degree of accuracy the value of all these assets belonging to British subjects affected by these new measures; any estimate must largely be guesswork, since it can be based only on unverified figures which were given a long time ago in our case. As I said, most of the 47–36 out of 47 of the British subjects—are living outside Egypt. They have been unable to regain personal possession of their property in Egypt since 1956, either because it has not been returned to them at all under the 1959 Anglo-Egyptian Financial Agreement or because they have not been allowed to bring assets out of the United Arab Republic, except for very small quantities in a few cases; and therefore these latest measures mean that a number of British subjects have had their property sequestrated a second time.
With regard to those who are living in Egypt, I understand that the Egyptian Government are making arrangements for the payment of monthly allowances to them, but only after an examination of each individual's assets and liabilities, which takes time. The Egyptian bureaucracy is even slower than those with which we are more familiar. One British subject is known to have applied for such an allowance, and Her Majesty's Embassy in Cairo have spoken to the United Arab Republic authorities about her case. But so far the Embassy have

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not reported receiving any request from the British subjects concerned for financial assistance as a. result of the measures in question.
On October 29, a fortnight after these measures were announced, our Ambassador in Cairo asked the Egyptian authorities to explain the grounds on which these measures had been taken against British subjects. On November 13 he raised the matter again with the Egyptian Foreign Minister and left an aide armoire setting out more fully the information which we required and which we think we ought to be given. Since then we have received an unofficial translation of the Proclamation under which these measures have been published. It is dear, as I said, that they are not directed against British property as such, but their effect seems to be equivalent to the sequestration measures which were imposed in 1956, and there are several important questions which will require clarification. Accordingly, my noble friend, the Foreign Secretary, raised this matter on December 7 with the United Arab Republic Ambassador in London. He pointed out that Her Majesty's Government still awaited from the Egyptian authorities an official statement for the reasons for the sequestration of British property affected; that Her Majesty's Government needed to know whether the Egyptian authorities had really taken a temporary measure and would hand the property back or whether they proposed to confiscate some of the property, and if so what rate of compensation they would pay. The answers to those questions are still outstanding. They have not yet been received, and until they are forthcoming the situation is bound to appear unsatisfactory.
As I said earlier to my noble friend, Lord Balfour of Inchrye, I do not want to prejudge it, but Her Majesty's Government have left the Egyptian Government in no doubt of the seriousness with which we view these matters. Unless the position is clarified soon, there is clearly a risk that the welcome improvement in Anglo-Egyptian relations over the past year or two may not be sustained. We should naturally regret such a development, but the remedy, in our view, now lies firmly with the United Arab Republic Government. Meanwhile, I should like to associate myself
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with the expressions of sympathy from your Lordships for this new class of hardship which has arisen so lately. Although it is difficult, in the absence of further information, to decide what further steps might usefully be taken to protect their interests, we are actively considering all possible courses.
My noble friend Lord Salisbury indicated in the course of his remarks that he might possibly wish to divide on this question, or he might possibly wish to withdraw his Motion. I do not know whether it would do more good to withdraw the Motion or to accept it, but if the noble Marquess would prefer it to be accepted I see no objection to advising your Lordships to do so. With regard to the Motion for Papers, your Lordships are fully entitled to all the information you want on the subject, and I see no objection to calling attention to the various categories of claimants. I am not trying in any way to incite the noble Marquess to press his Motion, but I should like to make it plain that I do not see any objection if the noble Marquess thinks it would do more good to the people we are all trying to help, that the House should accept the Motion rather than that he should withdraw it.
LORD BARNBY: My Lords, before the noble Earl sits down, is he able to say how soon another substantial distribution is to be made, even if it involves, as has been suggested, a contribution from public funds?
THE EARL OF DUNDEE: My Lords, we have just made a new distribution under the new Order. With regard to the question of public funds, I could not go beyond the statement of the Prime Minister, which was quoted in full by my noble friend Lord Killearn and which he made on March 16, 1959. I will not quote it again because my noble friend has quoted it all correctly.
I would conclude by thanking the noble Marquess for giving us an opportunity to debate this question, and I would again say that I will leave it to him whether he thinks it will do more good to withdraw the Motion or to ask your Lordships to accept it.
6.12 p.m.
THE MARQUESS OF SALISBURY: My Lords, I need not say how grateful I am to the noble Earl, Lord Dundee, for

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the sympathetic and persuasive tone of his reply. I will not go into all the points he has raised, first of all because there is nothing so tiresome at the end of a debate as a mover who makes his speech again, and, secondly, because I understand we have coming a Royal Commission and the Government wish to finish this debate before that. I would only say that he has done his best for the Government in the circumstances, but he has in fact given no absolute assurances on some of the most important points which were raised, and in particular he has given no absolute undertaking that the Government will make it possible for claimants who have assets in blocked accounts in banks in Egypt to transfer them to this country.
I know that my Motion was widely drafted, and in order to crystallise the position I should like to put one simple question. I am not sure whether my noble friend has answered it yet, but anyway I should like him to do so. My question is: will Her Majesty's Government give an undertaking that they will make arrangements by some means or other that will enable claimants with assets in blocked accounts in banks in Egypt to transfer those assets forthwith to this country? If the answer to that question is "Yes", I will withdraw my Motion. If the answer is "No", I must press it to a Division. In saying that, I should like to make it clear that the vote on this question need not, and should not, be regarded as hostile to the Government. It is not intended to be that, because in my view this is a purely non-Party matter. It should be regarded as an expression of the sympathy of the House towards these unhappy people, and support for their claim to justice. I just ask my noble friend, is the answer to that question which I have asked him, "Yes" or "No"?
THE EARL OF DUNDEE: My Lords, the answer is that we could not give an undertaking to do so, but we are trying our best to find out means of doing so. The noble Marquess has put me in a slight difficulty in suggesting that perhaps the whole of his Motion should be dependent on this one point. The only reply I can give is that we are doing our best to find some method of
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doing this. I do not see how we can give any promise that it will be done.
THE MARQUESS OF SALISBURY: My Lords, I am afraid that I think these claimants will expect an expression of the opinion of this House, and therefore I am afraid I must divide the House.
On Question, Motion for Papers agreed to.

THE ELECTION IN MALTA
6.15 p.m.
THE EARL OF LISTOWELrose to ask Her Majesty's Government what steps they will take to ensure the participation of all the political Parties in the forthcoming Election in Malta and to guarantee that it is conducted with scrupulous fairness towards all qualified to vote. The noble Earl said: My Lords, I am inflicting a Question upon the Government and a short speech on your Lordships before the Recess for this reason: that in the middle of February there will be a General Election in Malta and this is the last opportunity I shall have before the Recess of asking the Government for certain further statements about their policy with regard to Malta and the Election.
We all hope that this Election w ill be successful and that Parliamentary Government in Malta will be restored on a firm and representative basis. We are all glad that Malta is getting out of direct rule and returning to a Parliamentary system of Government. But this Parliamentary system will not be successful unless it is representative and the people who are elected really speak for the people of Malta; otherwise there is a grave danger that we shall go back again to direct rule, which has so often happened before in the history of Malta. To get a representative Government in Malta it is essential that all the main political Parties should take part in the Election; and for this to happen I think that certain further actions are required by Her Majesty's Government. That is why I am addressing this Question to the noble Earl opposite.
First, I think we may need a fresh statement of policy from Her Majesty's Government about Malta. This state

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ment of policy should include two important things: first of all, it should acknowledge in principle the right of Malta to self-determination and independence. This does not seem to be going very far. I know that the statements that have been made so far stress that this new Constitution is not the last stage in the constitutional development of Malta; but I think we want a definite statement that Malta has the same right to self-determination and to independence as any other Colony and cannot be treated as an exception to the general rule. I am not going to labour that point because I have laboured it before. I do not wish to inflict a long speech on your Lordships, but I think it is quite impossible to expect that the Maltese will accept a position in which they are treated quite differently from their neighbours in Cyprus and from any of our Colonies on the other side of the Mediterranean in the continent of Africa.
The second thing that I think we want the Government to say is that they would be willing, after the Elections have taken place, to discuss with an elected Government in Malta the questions of a final. Constitution for Malta and of fixing a date for the independence of Malta. After all, in February a Conference is being held in Lancaster House for this particular purpose in connection with Kenya, and it is impossible for Malta to watch all these things going on in connection with other Colonies without feeling that they are not being given the same right to self-government and self-determination.
Finally, it seems to me that it is most important that a statement of policy on those lines should be published as soon as possible and well in advance of the Election. That is why I am asking the Question now. If this is done then there will be a very good chance that all the main Parties will take part in the Election; if this is not done, then there is a chance that that will not happen. The other thing which I hope the Government will do is to give every guarantee they can give that the Election will be free and fair, and that all persons qualified to vote will be in a position to do so without any interference or any pressure from outside.
What I mean in that regard is this.
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Unfortunately, at the moment, in Malta, there is very considerable tension between individuals and between organisations. We all know, we all regret, the conflict between the Malta Labour Party and the Church of Malta; I mention this only because it is an example of the extreme tension in Malta which may easily explode into violence. As your Lordships know, the Church of Malta has decided to ban the literature of the Labour Party—its publications, its printing and the selling of such literature. It has also placed an Interdiction on the members of the Executive Committee; and, of course, the Church also feels that members of the Labour Party have been disrespectful and have not played their proper part as Catholics in Malta.
I do not, of course, venture to express any opinion about the merits of this conflict, and I should hope that that would be the view generally held in your Lordships' House, because the last thing we want to do is to inflame opinion. What we all desire is that there will be a friendly settlement of this religious conflict. I merely point to it as a most striking example of the tension in Malta. Your Lordships will remember that only a short while ago shots were fired at some visitors from overseas and from the Commonwealth, as they were passing in a car through a street in Valletta, and there have been other examples of violence and of interference with freedom of assembly in Malta. I hope the Government will do everything in their power to make certain that the Election campaign is conducted with absolute fairness, and that all Parties will have an equal chance of holding their meetings without being interfered with, without the meetings being broken up, and with the proper protection to which they should be entitled from the police. The other point is that when the Election takes place on February 18, polling should be absolutely secret and no pressure should be brought to bear on any voter to vote in any way except in the way he or she wishes. Obviously, that is equally indispensable.
I hope, therefore, that the noble Earl can give these guarantees that the Government will do whatever they can to ensure that the Election is conducted in the way in which Elections are conducted in this country, in order to ensure

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that every voter has a chance of forming a reasoned judgment and expressing that judgment secretly when he casts his vote. Also, I hope that the Government may be able to make a firm statement of policy which would encourage all the main Parties to take part in an Election which they would then feel is leading to another stage in the progress of Malta towards self-government and independence.
EARL ST. ALDWYN: My Lords, I beg to move that this House do now adjourn during pleasure, until the Royal Commission at 6.30 p.m.
Moved accordingly, and, on Question, Motion agreed to.
House adjourned during pleasure.
House resumed.

ROYAL COMMISSION
6.30 p.m.
The following Bills received the Royal Assent:
Export Guarantees,
Expiring Laws Continuance,
Coal Industry,
Family Allowances and National Insurance,
Glasgow Corporation (Parking Meters) Order Confirmation,
Edinburgh Corporation Order Confirmation,
Rothesay Burgh Order Confirmation,
Argyll County Council (Scalasaig Pier, etc.) Order Confirmation.
House adjourned during pleasure.
House resumed.

THE ELECTION IN MALTA
6.45 p.m.
Debate resumed.
LORD OGMORE: My Lords, I am grateful to the noble Earl, Lord Listowel, for giving us the opportunity, before we rise for the Christmas Recess, to ask a few questions about the situation in Malta. I agree with him entirely that, in time to come, it will be a question of Malta's having either self-determination or independence, or going from one stage to the other. But that is not, of course, the issue at the moment. I myself strongly hope that all Parties in Malta, or the main Parties in Malta, at all events, will contest the Elections. I think it would be a great pity if they did not contest the Elections. But if any of the Parties who do contest them get a strong measure of support, then it will show what the opinion in Malta is; whereas if any of the main Parties do not contest the Election, the result will be unbalanced, to say the least, and that would be a great pity. As I understand it, the Progressive Constitutional Party and the Nationalist Party have already agreed to contest the Elections, and the Labour Party has not yet committed itself one way or the other. That is the situation.
There is one question I should like to ask on this matter, purely on the subject of the Elections, and that is this. In another place yesterday, a Question was put to Mr. Maudling as to whether 50 candidates were asked for from each Party. Mr. Maulding did not actually answer this Question, and I think that here is some possible misunderstanding. I gather that it is not essential for every Party to put up 50 candidates. As I understand it, there are to be 50 seats. I think there must be some misconception about that, because it seems to me unnecessary that every Party should be required to put up 50 candidates, whether they could do so or not. I think there is confusion between the requirement that there are to be 50 seats, and the necessity for candidates; but perhaps the noble Earl, when he replies, will clear up that point.
Then as to the feeling in the Catholic Church, we in this country, of course, are not used to clerical politics of any

805
kind, and have not been so for many years. But that is not so in the Mediterranean countries, and I think it is very much more common in Latin countries for the church to take an active interest in politics than it is here. Therefore, it is not at all unreasonable that the Catholic Church should take a very strong interest in politics in Malta. Although a good deal has been said in this House and elsewhere as to what the Catholic Church has said about the Labour Party, we have not heard very much about what the Labour Party has said about the Catholic Church. They have 'been by no means backward in giving very strong expressions of opinion.
The situation is this. The Archbishop, whom I had the honour of meeting, as have many of your Lordships, feels, I have no doubt, that his opponents, or some of them, are connected with, and perhaps sympathetic to, the Communist system, and very naturally—I do not blame him at all—he wishes to keep that out of the Island of Malta, for which he thinks he has, and indeed has, a good deal of responsibility. But Communists in many parts of the world do not go into fights with kid gloves, by any means, and 'I do not think that people who flirt with them should necessarily expect to have kid glove methods used toward them. I must say that I entirely agree with the noble Earl, Lord Listowel; it is not for us in this House to take sides in any way at all. But I say that the hard punching has not by any means been all on one side. There have been some pretty shrewd blows coming from the other side as well.
There are just two points I should like to make. First of all, there is the question of local government. I do not think that it is realised in this country what the Blood Commission were very surprised to find: that there is no local government whatsoever in Malta. There are embryonic beginnings on the island of Gozo, but nothing in Malta, so that when the Constitution is suspended, as unfortunately happens now and again in Malta, all political life, national and local, is suspended. I agree that on a little island like Malta it would be ridiculous to have as well as the national Government a whole series of local government bodies. The
806
island cannot carry it. There would be "far more harness than horse", to use an old expression. But there is a case for Valletta having a Council and Mayor. I think that would encourage local interest and patriotism. Then, if at any time the Constitution is suspended, as it is at the moment, at least the Valletta Town Council would carry on and there would be some local interest in Malta for people to rally around.
The other point I want to mention is the Election. The noble Earl, Lord Listowel, made the important point that it is a responsibility of Her Majesty's Government to ensure that the Elections are properly and fairly conducted, because Parliament and the Government here are at the moment responsible for all affairs in Malta. I have no doubt that the Elections will be fairly conducted and there is no reason to suppose that they will not be—the noble Earl would be in the best position to know this—but if there is doubt perhaps it would be possible to send some experienced people from this country to give them a hand. There are precedents for this. In the past we have sent people from the Central Office and from Transport House to Greece. Perhaps the noble Earl might care to think about calling upon various sources in this country which could give the necessary aid in this respect.
6.52 p.m.
LORD FARINGDON: My Lords, at this late hour, I venture to rise for only a couple of minutes because I have a special knowledge of the Island of Malta and I am in fairly constant contact with people there. I rise mainly to support the point which was made by the noble Lord, Lord Ogmore. I am sure that it is the desire of all of us on both sides of the House to see all Parties in Malta participating in the Elections. The noble Lord, Lord Ogmore, is perfectly right when he suggests that some kind of electoral commission, a body of people of standing from this country or an international body, to oversee the Elections would have an enormous influence on the decision of the Malta Labour Party about whether or not they shall take part in them. As the noble Lord said, there are plenty of precedents for this. Therefore, I strongly

807
urge the Government to appoint some such Commission to supervise the Elections and give what I hope and believe would be an unnecessary guarantee, but none the less one which I know people in Malta feel they will require and with which they would be far more likely to take part in the Elections. I beg the Government to consider this proposal very seriously.
6.54 p.m.
THE EARL OF PERTH: My Lords, I think it has been both useful and appropriate that almost the last subject before the Recess should be the Election in Malta, which is coming shortly. The noble Earl, Lord Listowel, and other noble Lords have expressed the hope that all Parties will take part in the Elections. I certainly hope that, too. I think that we have done all we can or should do to ensure this. With great difficulty, we have carved out a Constitution, with the help of the Blood Commission, and we have promulgated it. Now the stage is set. I think that we have really "done our stuff"; it is up to the Parties in Malta to do theirs.
I am glad that the Progressive Constitutional Party and the Nationalist Party are going to take part in the Election. If other Parties do not, of course, that is regrettable. I think that one would be inclined to ask why. I am sure that the reason is not that the stage is not available for them to do all they can to run their own country, and to get back to what we all want to see, a normal form of Government.
The noble Earl, Lord Listowel, asked me to give a further pledge about the future. He has pressed me many times before, and I am sure he is not surprised when I say that I am not able to go beyond what I have said before—namely, that we do not regard the present Constitution as the final stage in Malta's development, and that when we have a new Government and that new Government want to talk about other stages, it is always open to them to do just that thing. But I cannot, and will not, go further to-day, because I do not think that there is any advantage in doing so, much as I know the noble Earl would like me to do so.
THE EARL OF LISTOWEL: My Lords, I am sure that the noble Earl does not
808
want to raise false hopes in Malta when he referred just now to a future Government in Malta talking about the next stage in constitutional development. Clearly, that would not be possible unless Her Majesty's Government were also willing to talk. I understand that that is not the case. I am sure that the noble Earl would wish everyone to be absolutely clear about this, both here and in Malta.
THE EARL OF PERTH: My Lords, what is quite clear is that people can raise this subject. Whether Her Majesty's Government would be prepared to consider it can only be decided in the light of events. I know on15' too well, as do your Lordships, that one should never use the word "never" in this context.
The next part of the noble Earl's Question is whether we will do all we can to ensure—"guarantee" is the word used in the Question—that the Elections are conducted in a perfectly fair way in regard to all qualified to vote. I understand the importance of this very well, and we have been at the greatest pains to ensure that just this will happen. Not only have we studied the question here, but we have also had the Chief Electoral Officer and Registrar of Malta over here to discuss with him his plans for the Election. We have advised the Governor upon all our anxieties in this matter, and when the Governor was here last my right honourable friend the Secretary of State and I cross-examined him (if I may put it in that way) very closely on all the angles and everything that would have to be done to ensure that the Elections were fairly handled. I assure your Lordships that we are fully satisfied about this.
If it would be of any value, I should be glad to write to the noble Lords who have spoken this afternoon and give them in more detail just what is being done to make sure that this will happen. There is in Malta a detailed and complicated system of representation and election, something which the people there have always been accustomed to, but we have taken particular care in this case to avoid the possibility of unfairness or duplication or anything like that. As I say, I should be only too happy to give further details in

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writing to the noble Lords. but there is no point in going into it at great length at this moment.
The noble Lords, Lord Faringdon and Lord Ogmore, said that, despite all this, we should send a representative group of people to oversee the Election. I do not really think that this is called for. It is rather a curious situation. Here, on the one hand, is a demand that Malta should be given self-government and should be allowed to run its own affairs, and, on the other, it is said that we cannot trust them to do it.
LORD OGMORE: My Lords, I did not say that. I said, if the noble Earl was not satisfied would he call in aid from here? I agree that if he is satisfied that they have the aid there then there is no need to call in aid from here.
THE EARL OF PERTH: My Lords, I thank the noble Lord for saying that. I am satisfied, and I am willing to write and give further detail on this.
LORD FARINGDON: My Lords, what I said, or hope I said, was that, in my view, this anxiety on the part of the Maltese might not be justified, but if one wanted them to take part in the Elections one must set at rest unreasonable fears.
THE EARL OF PERTH: My Lords, I understand that. But I feel that to set at rest even unreasonable fears in an unreasonable way—and I believe this is an unreasonable way—is not the right course to follow.
There were two other points made by the noble Lord, Lord Ogmore, one of which—whether we require 50 candidates from each Party—I am glad to have the opportunity of clearing up. Of course, the answer to that is, No. What has happened is that there are to be 50 seats, and it is up to the Parties to nominate as many candidates as they want to, or can do, in the constituencies where they think they will have a good chance, or, for one reason or another, they may want to nominate candidates. If it happens that an independent candidate or a Party of only two comes forward, that is fine; and if it is 50, that is fine, too. It is up to the Parties to put forward the candidates they want.
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On the second point raised by the noble Lord, on local government, I have great sympathy with the suggestion he makes, and I am not at all sure that it is not something which we have already commended; because, although one does not want too much harness, as the noble Lord put it, none the less, I think there is value in a certain degree of local government more widely spread than is projected at the present time, or as he suggested it in relation to Valletta. There has been a start made in regard to Gozo, and it will be for the people of Malta themselves to decide whether they want to go further. I would only say that we should certainly welcome any such move. So, there we are, my Lords: the date of the Election is fixed and the stage is set. We have done our part, and I hope the Parties will do theirs and all go to the Election, and that we shall see what we all want to see—namely, Malta with her own Government, running her own affairs.

PROPOSED MERGER OF I.C.I. AND COURTAULDS
7.3 p.m.
LORD SHEPHERDrose to ask Her Majesty's Government whether, having considered the proposed merger of Imperial Chemical Industries and Courtaulds, they will in the general interest refer the proposition to the Monopolies Commission. The noble Lord said: My Lords, although the hour is late and the attendance is thin I feel that I should proceed to put the Question standing in my name on the Order Paper. At the beginning of this week an announcement was made by the Chairman of Imperial Chemical Industries to the effect that, after friendly discussions, there was the intention to create a merger between Imperial Chemical Industries and Courtaulds. The Financial Times of yesterday described the matter in this way:
"The take-over bid that I.C.I. has made for Courtaulds is a major event in the history of British business".
I believe the issue is such that Parliament should give some consideration to it. This is not an ordinary take-over. It raises considerable matters of policy, and I believe that in the interests of the shareholders of Courtaulds it is well that

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we have a statement from the Government of their position. We could hardly wait until we returned after the Recess, because then the merger may have been completed.
I personally am not against take-over bids, as such. I believe that by certain mergers much good has been done, and certain firms have been made more virile by the finance that has become available to them following a merger. But I believe that when very large organisations which play a vital part in our industry become involved in takeover bids or mergers careful consideration should be given to the position not only by the Directors of the company but also by the Government. The Conservative Government have always made their position quite clear. When Mr. Peter Thorneycroft was introducing the Restrictive Trade Practices Bill in the other place on March 6, 1956, he described it as
"reinforcing the system of free and flexible competitive enterprise which we on this side of the House foster and sustain."
I must put the question whether a monopoly of such a magnitude as will be created through the merging of Imperial Chemical Industries with Courtaulds will provide the competitive enterprise that the Government wish to sustain.
I think we should consider the position of these two companies. I would, first of all, make it quite clear that my remarks are in no way intended to be critical of these companies. Both are very successful and virile, and they have done a tremendous amount for British industry, particularly in the field of research. It is perhaps for that reason that they hold so much influence and power. This is not the first occasion that we in this House have expressed disquiet about take-overs and mergers. Not so long ago we had the question concerning newspapers; then there was the Guest Keen & Nettlefold merger with Delta Metals, and there have been others. We have seen over the years. and particularly of more recent months, a great concentration in industry. I would remind the House of the merger between Tube Investments and Raleighs, when over 80 per cent. of the production of bicycles came under one control. I have to ask noble Lords whether they are happy with that situation.
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To come back to I.C.I. and Courtaulds, I.C.I. have net assets of £695 million; they have 95 subsidiary companies, 54 of which operate abroad. Courtaulds have net assets of £207 million: they have 78 subsidiaries, 42 of which operate in the United Kingdom and the remainder abroad. These companies are not, as many people believe, companies that are producing simply one line of production. They are very large groups. In many ways their productions and interests are twined and intertwined. They have grown up by force of circumstances. The Imperial Chemical Industries were started as a chemical firm, and by force of nature and force of circumstances they were driven into textiles and other lines, such as paint, plastics and paper. Courtaulds, who were initially a textile firm, again by force of circumstances, have moved into chemicals.
If this merger goes through, in the man-made fibres industry, which is basically a chemical industry, the new group will account for over 90 per cent. of production in this country. If it goes through, in the paint industry, the subsidiaries of both these groups are, I believe, the biggest producers of paint in this country, and they will be responsible for from 25 per cent. to 30 per cent. of production. In the case of plastics and paper, their position is equally important. But what is interesting to note is that throughout industry, and particularly in the items that I have just mentioned, both Courtaulds and Imperial Chemical Industries are themselves responsible for the production of the raw materials. If the proposal goes through, the group assets will be in the region of £900 million.
But I do not believe that is the real issue. I think the real issue lies in their interests, in their production, and the question of distribution. It is said by the Chairman of Imperial Chemical Industries that the purpose of this merger is that it will make them strong to face international competition, particularly when we enter the European Common Market. I think there is some truth in that. But it is interesting to note that in the man-made fibres, the nylons and the Terylenes, there is very little physical transfer of goods to any part of the world. Most of the production is done under licence. Imperial Chemical Industries have a licence for

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Terylene, and they also grant sub-licences to other parts of the world. In fact, in 1958 I believe only 10 per cent. of the entire production of man-made fibres was exported. Therefore, it would appear at the present moment that the main distribution for man-made fibres will be in the United Kingdom.
Therefore, I think the Government must consider whether this merger is going through for future development in overseas markets, or whether it is being created to bind tighter the already existing agreements and arrangements that there are, not only in this country but overseas, and perhaps, as far as this country is concerned, in regard to the Restrictive Trade Practices Act. It is interesting to ask—and this is again a question which the Government must face—if this merger goes through, where will it end? In recent months and last year both these companies have been absorbing virile organisations. Courtaulds amalgamated with one of its main competitors, British Celanese. The whole progress has been to concentrate power into these two organisations. To what degree there was competition between them it is difficult to assess. But it is again interesting to note that they had a 50/50 partnership in British Nylon Spinners.
It is true, on one side, that Courtaulds were on nylon viscose production (again, I am talking of man-made fibres) whereas I.C.I. were on Terylene. It may well be said that they competed with each other. But if this merger goes through there will be no competition. The policy of the Board 'obviously will be to relate both productions for the market needs. I would submit that, if this merger goes through, in the manmade fibre industry the monopoly will be complete. I should remind the House also that, apart from these restrictive arrangements, this industry is also well protected by tariffs. As an illustration, rayon and nylon yarns coming into this country from the Continent 'have a 20 per cent. ad valorem duty, plus 9d. per lb. weight. From the Commonwealth and E.F.T.A. there is a slightly lower tariff. But it is quite a high tariff on such a bulk item. Therefore, we have the position that, if this merger goes through, in the man-made fibre industry
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you will have a complete monopoly protected by high tariffs.
I will not go over the other items where these two companies have arrangements, and where the arrangements will become complete through the merger. But I feel that the question I must put to the Government is this. Are they themselves satisfied that the benefits they wish to see in industry—virile competition, from which efficiency and low prices will arise—will flow from this merger?
On an Unstarred Question I have no right of reply, and therefore to some extent I must anticipate the reply of the Minister. I understand that the Monopolies Commission are not in a position to study or rule upon a hypothetical question and that this present case is hypothetical in that the merger has not been completed. I think that is true. Equally, a Monopolies Commission in practice takes a good deal of time in making its Report. In this particular case and in others which no doubt will arise—because the whole trend of 1960 and 1961 is one of increasing mergers—it seems to me that the Government will need new machinery, because if this type of proposition arises, an urgent, prompt decision must be made, not only for the benefit of the company, but also for the benefit of the shareholders. I believe present trends definitely show and justify that a fresh look by the Government should be made in the machinery that is available.
I feel that I have been guilty of going rather wide of the Question, but this is the immediate issue. Two large companies of national importance may merge with or without the consent of the directors. The arbiter may be a question of price or profit to the shareholders. A complete monopoly on a certain side of the industry will be created. May I remind the noble Viscount, Lord Hailsham, of some words that he uttered on November 7, words which I thought had a good deal of wisdom in them. He said [OFFICIAL REPORT, Vol. 235 (No. 4), col. 339]:
"Excellent as our system of negotiating may be, I must testify personally that in the five years in which I have been in the Government I have seen case after case where agreements have been made between employers and employees, or awards have been made by

815
arbitrators after hearing arguments between employers and employees, in which the public interest could not possibly have not been made a determining factor in any of them, and where nobody was present to argue the case for the public interest where what determined the matter was not what the public economy would stand, but only what the parties were willing and able to pay ".
That is probably, in context, a little wide of the subject but I think it is clear what was meant.
I submit that in cases like this, if it applies to wages it certainly applies to the question of capital and industry. I think that where an issue arises in which the public and the nation may be in a position of loss through the creation of such a monopoly, there should be some quick, flexible machinery, and if it applies to wages I certainly feel it should apply to industry and capital.
7.22 p.m.
VISCOUNT HAILSHAM: My Lords, the noble Lord, to whom I am much indebted for the way in which he has asked this Question, has raised a number of very wide issues and, as he said, he put a number of questions to the Government. While I welcome, as will emerge I hope in my reasonably short remarks, the raising of these issues, the only question he has asked the Government is whether, having considered the proposed merger of the two companies, they will in the general interest refer the proposition to the Monopolies Commission. Really, therefore, there are two kinds of question which I have to answer, one the Question on the Order Paper and secondly, the kind of general reflection with which the noble Lord introduced it.
Now I am glad that this question has been raised in Parliament, because the issues are obviously important and deserve public discussion. I am also glad that it has been raised in this House of Parliament, because I think there is a genuine danger that these issues, which are really very complicated and important, might become the subject of rather stereotyped Party attitudes. Those of us who support competition—among whom I would certainly number myself —are rather apt to think of competition in 19th century terms, between relatively small units of production or distribution, and not to realise that in the modern world advanced technologies
816
may involve a somewhat different conception, which I shall try to examine very shortly. On the other hand, I think those noble Lords who favour what I think they themselves describe as Democratic Socialism—and I make no attempt to-night to define either term—are rather apt to think again in the terms of the evils of the capitalism of the 19th century, and of a national corporation or national machinery, as the noble Lord has referred to it, as the right remedy for these evils. I think in truth and fact we are up against something different and more fundamental than either Party is prepared to acknowledge at the present time.
However, before I consider these wider philosophical questions of general policy perhaps I may call them that—I must deal with the question on the Order Paper and some of the practical constitutional points raised by it. Since the war, two main Statutes have been passed to deal with monopolies and restrictive practices; one by the Labour Government and one by the Conservative Government; and they are, respectively, the Monopolies Act, 1948, and the Restrictive Practices Act, 1956. Together they form, and are intended to form, part of the Code. One is a complementary Statute to the other. Neither Government have so far thought it proper to ask for, or to receive from Parliament, statutory power to interfere with the purchase and sale of shares in the public market, although, of course, both Governments retain restrictions on the export of capital abroad, which gives them some power to control mergers if control or money were to pass outside the country. This is a subject I am not going to deal with to-day.
Clearly, therefore, there could be no question under any existing Act of Parliament of referring the desirability of the purchase of shares—what is popularly called a take-over bid, which covers a multitude of activities, whether sins or not—to the Monopolies Commission or to any other existing body. The noble Lord really admitted such when at the end of his introductory remarks he said that what was needed was some kind of "quick, flexible machinery ". There is nothing which could be referred to the Monopolies Commission in

817
accordance with the suggestion in the Question. Whether, should the merger go through, there will be anything which it is worth referring to the Monopolies Commission is, of course, another matter which I must leave open until the merger has gone through and until my right honourable friend the President of the Board of Trade, at whose discretion it lies under the Act of 1948, has had time to consider the implications of the subject. Probably the House will come to the conclusion on both sides that, even if there is something to refer to the Monopolies Commission, it is not really the important question which the noble Lord has raised.
If I may go back to the Statute for a moment in order to illustrate that point, the situation its as follows. The Monopolies Commission was created by the Labour Government following, I think, the recommendations of my noble friend Lord Woolton, when he was Reconstruction Minister during the war, in order to deal with a state of facts which could exist as a result of a merger, but something on a very much smaller scale and of quite a different order from that which the noble Lord was really dealing with in his introductory remarks. Reference can be made to the Monopolies Commission, if monopoly conditions prevail—that is to say, if control of, say, one-third of the supply (I think that is the proportion mentioned in the Act) is in the hands either of a single concern or of a series of inter-connected concerns.
Now the position in this field—I am going to ignore paint, where I do not think it will happen, either before or after the merger arid other activities which I do not think really matter for the purpose of my present answer—is that monopoly conditions already existed in the field of man-made fibres, independent of the proposed merger. The result of the inter-connected shareholdings of the two firms concerned, and in the third firm referred to, in relation to nylon spinning, is that monopoly conditions already existed because of the interconnected shareholdings of the two firms. Therefore, it would be possible for my right honourable friend, quite independently of this merger, to refer questions in the
818
field of man-made fibres to the Monopolies Commission. The effect of the merger, if it takes place, will in this field, I am advised, be only marginal, so far as the creation of monopoly conditions is concerned, precisely because they already exist. The effect will be that, instead of its being true, as it is, that monopoly conditions exist in a series of man-made fibres such as terylene, nylon 66, and so on, it will be true that in man-made fibres as a whole monopoly conditions will exist, because the manufacturers of the different fibres will by that time have merged or amalgamated.
The effect of that, strangely enough, will, I think, be only marginal. It will reduce the amount of competition only to this extent. At any rate in theory, there are a number of fibres which the consumer—by which I mean the user of the end-product—could select as suitable for his particular purpose, a choice between terylene and nylon, and to that extent the monopoly conditions will be accentuated by the merger. But this is relatively rare, since in actual practice the particular fibres concerned are different kinds of fibre, used not for competitive purposes but for different purposes; that is to say, they occupy different areas of the field. The result is that the monopoly conditions which already exist, which cover the entire field, fibre by fibre, will not be very materially increased as a result of the merger.
This, of course, does not mean at all that my right honourable friend may not think at some stage that there is something to refer to the Monopolies Corn-mission. Where monopoly conditions prevail and he considers it would be worth while, he must obviously have that question in mind. But I should not myself think that it really determines any of the particular issues raised by the noble Lord, because the truth is that the Monopolies Commission is not the kind of animal which was created for the purpose of discussing these very wide issues which the noble Lord has raised. It is obvious that where monopoly conditions exist in, say, the manufacture of electric light bulbs or car tyres, the Monopolies Commission would have a say. But we are dealing here with a merger of companies with £1,000 million of capital, and it was not

819
the purpose of the Monopolies Commission to deal with this kind of thing.
I would agree with the noble Lord that the question one has to consider is whether a fresh kind of machinery is required or not—not whether it should be referred to the Monopolies Commission. But I do not think it would be appropriate to embark on this extremely difficult and thorny subject. I would say, in passing, that I welcome the acknowledgment by the noble Lord that mergers are not intrinsically bad and that bigness is not necessarily a synonymous term for badness in this connection. I think we all ought to see that and agree with it. I think also it is remarkable that, although a great number of mergers on one scale or another have taken place in recent years, there is remarkably little evidence—I should say no evidence, but it may be that I should be challenged on that—that any particular merger which has taken place has in fact operated to the public disadvantage.
That being so, I think we must ask ourselves some questions. One of the criteria of the public interest laid down by the Act of 1948—and I choose that simply because it was the Labour Government's Act—was the efficient production and supply of the articles in question. Of course, in the 19th century when raw materials were largely naturally obtained by industrial agriculture and processed by relatively small firms, we thought in terms of competition between these relatively small firms or. as I say, State monopoly. This was the classical argument between Socialism and private enterprise, which I am afraid still goes on, although I had hoped that after the war it might take on a rather more constructive phase. But over great new ranges of really advanced technologies, of which one can think of a whole number, it is becoming increasingly obvious that the old size of production unit is no longer appropriate to the process involved. Capital involved in the manufacture of computers or manmade fibres or the generation of nuclear energy is something quite out of proportion in scale to that of the production unit or distribution unit of 19th century industry; and in the latter part of the 20th century, whatever system of production or distribution you choose, we are dealing with giants, and giants of
820
this scale—they may not always be so big as to have £1,000 million of capital, but sometimes millions of capital and sometimes hundreds of millions.
It is quite clear, whatever we do about monopoly, whatever we do about Socialism and whatever we do about private enterprise and competition that these technical factors are going to dominate the scene in one way or another. In passing, I accept wholeheartedly the statement by the Chairman of I.C.I. which was made on the wireless the other day, that his motive in promoting this merger was that of creating a scale of unit of a technological kind rather than trying to tighten up arrangements, as the noble Lord put it. I think it is a true view of the problem, although of course we shall see how it works out in practice.
But the point about this, of course, is that it does set a lot of problems for all of us. In the first place, some people think that it gets rid altogether of the reality of the discussion between monopoly and competition. It sometimes does. Nuclear energy is, so to speak, an operating monopoly; these great power stations of 500 megawatts we are putting up now cannot compete with anything except conventional fuel power stations, which are controlled, rightly or wrongly, under the Labour Party's Act, by the Central Electricity Generating Board. The same is going to be true of a great number of kinds of production where really advanced technology is employed. But I think a second look leads one to the conclusion that something quite different is really happening. In this field of man-made fibres, for instance, to take a relevant one, there will be, I think, quite bitter competition, but it will be competition between the giants. The giants are not small firms operating within the United Kingdom, but the United Kingdom giant, if it comes into being, the American giant, and I think it is the French giant —certainly the European giant. If we enter the Common Market, which the House has already expressed the desire to do, that competition will be quite severe. I agree that this raises the whole question of tariffs, although I do not propose to try to answer it this evening.

821
Quite obviously you have there got competition, but on an entirely new scale. One must not therefore assume too readily, as I think many people in all Parties tend to assume, that when a merger on this gigantic scale is contemplated you thereby automatically get rid of competition. Very vast competition goes on between oil companies, between different types of industry providing the same service—road and rail is a good example; there is oil and coal; there is conventional fossilised fuel and nuclear energy; there are these different units of production in the chemical industry and in man-made fibres industries, this vast and intricate process of macromolecules being used for manufacturing raw materials which previously could only be derived from agriculture. This obviously sets us all difficult problems.
The only point I want to make this evening is a double one. The first is that no political Party which values its reputation for being contemporary can fail to face these problems in some form or another, and no political Party that wishes to arrive at solutions can adopt stereotyped attitudes derived from its forbears. This does not necessarily stultify the healthy controversy between the two Parties, but it means that it ought to be conducted on an extremely constructive level. The other thing is that I personally do not believe that when we are dealing with things of this kind Parliament can yet afford to shelve its direct responsibility. This would mean, in my own view, that we should he quite wrong, and in the view of the Government, that it is probably premature to talk in terms, such as the noble Lord opposite did, about the flexibility of the machinery, because until you have verified your principles about what is to be to your interest or advantage—you do not know which of them will take the form of debates ranging over months, and I should have thought, probably years—it is not much good delegating your responsibility to a body which is not directly responsible to the nation.
Moreover, I would make this last reflection: that more and more, I think, we are coming to see with these really advanced technologies and units of production that not all of them, and perhaps not most of them, can be fixed into a national mould. Certainly in this kind
822
of field you get into international economics before you know where you are, and therefore the national corporation or the national machinery is not necessarily the right way of approaching it. This was recognised, I think, in a dim way in the Monopolies Act, when the fact had to be faced that the. orders of the competent authority would not have very important extra-territorial effects. But I think the issue is much deeper than that, and that is when we move to a scale in units of production in the advanced industries when the nation is not the appropriate organ through which to exercise control.
It is obvious, I hope, both that I have tried to deal rationally with the actual Question on the Order Paper and that I have shown that the noble Lord was quite right in raising in this House the wider issues in the discussion which I do not pretend that I have adequately covered, in my rather sketchy reply.
LORD SHEPHERD: My Lords, I do not propose to break the rules. I thank the noble Viscount for his reply and, if I may, I wish him a happy Christmas.
VISCOUNT HAILSHAM VISCOUNT HAILSHAM: The same to you.

MANCHESTER CORPORATION BILL
Presented, and read 1a.