Lords Sitting of 1 February 1962

Preamble
The House met at three of the clock, The LORD CHANCELLOR On the Woolsack.
Prayers—Read by the Lord Bishop of Durham.

PURCHASE TAX ON SAFETY BELTS
3.7 p.m.
LORD AIREDALE: 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, in the interests of road safety, they will remove the purchase tax charged on safety belts supplied fitted to new cars, which is not charged on safety belts bought separately.]
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (EARL JELLICOE): The position, my Lords, is that purchase tax would be charged if the safety belts supplied in a new car were fitted in the factory, before the point at which the legal liability to tax arises on the completed car. But British manufacturers are designing their cars so that safety belts can be properly fitted at a later stage, in order to accord with the customer's choice. In these latter circumstances, no liability to tax on the safety belts arises.
LORD AIREDALE: My Lords, I am very much obliged to the noble Earl for that helpful Answer.
LORD SHEPHERD: My Lords, can the noble Earl give an explanation why a person who fits a safety belt to his vehicle and has to go through adapting his own car must pay the purchase tax? I gather from his reply that that is the position. Is that true?
EARL JELLICOE: No, Amy Lords; it is precisely the other way round.
LORD DERWENT: My Lords, may I ask my noble friend whether he is quite sure he is correct?—because, as I
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understand it, if the anchorage of a safety belt, which is really part of the whole safety device, is incorporated in the car by the manufacturer before delivery, then purchase tax is charged on the anchorage but is not charged on the safety belt. If, on the other hand, a safety belt is provided with the car and the anchorage is fitted after delivery, then, as I understand it, no purchase tax is charged either on the anchorage or on the belt. Can my noble friend think of anything sillier than that?
EARL JELLICOE: My Lords, I should have thought that the answer was that I certainly could think of sillier things. But I understand that when manufacturers fit the anchorage in the factory they absorb the cost in their general production costs.
THE EARL OF ARRAN: My Lords, will Her Majesty's Government consider the question of making safety belts compulsory in motor vehicles?
VISCOUNT ALEXANDER OF HILLSBOROUGH: Free of tax.
EARL JELLICOE: That is another question, my Lords, and would really better fall for answer by my noble friend Lord Chesham, if my noble friend Lord Arran would like to put it to him on another day.
LORD STONHAM: My Lords, can the noble Earl say why there are different rates of purchase tax for the belt and the anchorage?
LORD TAYLOR: My Lords, is not the anchorage simply two holes; and how can one tax two holes?

COMMON MARKET AND AGRICULTURAL POLICY
3.10 p.m.
VISCOUNT ALEXANDER OF HILLS BOROUGH: 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 have any further statement to make on the agreement on a common agricultural policy between Common Market countries.]
THE SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE EARL OF HOME): My Lords, the meeting of Ministers on February 22 is one of the normal meetings in our negotiations to see whether satisfactory arrangements can be made to meet our special interests. It will continue the negotiations and will also begin to discuss the agricultural aspects. This will be the first such discussion, because we agreed not to deal with agriculture in the negotiations until the members of the E.E.C. had reached agreement on their common agricultural policy. But it must not be imagined that these discussions are to be conducted on the basis of hastily formed assessments of how far the new agricultural policy agreements of the E.E.C. members would be acceptable to Her Majesty's Government. The Lord Privy Seal devoted a fifth of his statement of October 10 to United Kingdom agriculture, in addition to dealing at some length with Commonwealth agricultural produce. This statement sets out our objectives in the negotiations, and, in developing our case, full account will be taken of the views of the various bodies concerned.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, I still do not know whether the contents of the settlement on agriculture already made between the Six have yet been communicated to the two great constituent parties, the National Farmers' Union and the National Agricultural Workers' Union. I do not think the Foreign Secretary was quite clear as to whether that was the case, or whether the terms of the settlement were in fact available in a suitable condition. Has he made any further inquiries about that?
THE EARL OF HOME: Yes, my Lords. We have not as yet got the accurate translations of these documents; therefore, anything that has been published is provisional. We hope to get the translations very soon; and, immediately we get them, the French translation will be available in Parliament—we will see to that—and also the English translation as soon as it can be made. Then, of course, it will be available to all the other bodies concerned.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: Should I be right in interpreting the Foreign Secretary's first Answer as meaning that agriculture will
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not be discussed on this basis with the Common Market representatives until both these constituent bodies have seen the text in full and have been able to consult with the Government about it?
THE EARL OF HOME: My Lords, I think that that is going a long way beyond what I said, or even what I hinted. We have, of course, some knowledge of what the agricultural arrangements of the Six are, but the actual, complete and accurate text is not yet available. There are many aspects of agriculture to be discussed, including both the aspect as regards this country and the aspect as regards the Commonwealth. What I said in my original Answer was that at this meeting on February 22 some of these agricultural aspects will be discussed, and there will be the beginning of a discussion on the proposal.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, will the Foreign Secretary please remember that this matter is so vital—and there have been enough statements made by the Government themselves to show how vital the matter is—that if we can get these statements published at the earliest possible moment, not only will the constituent bodies who will be affected in their own spheres be in a better position, but Parliament also might be in a position to look at the matter and be able to advise the Government on it? I think it would be a very sad thing if anything like even a half commitment were made by the Government on this vital question until Parliament and the constituent bodies have been consulted.
THE EARL OF HOME: My Lords, I must say that I am in accord with the noble Viscount. We want to have these translations made as quickly as possible, but the great thing is that they should be accurate when we have them, because it is a tremendously technical business. Therefore we will, as soon as we possibly can, lay the authentic documents before Parliament, and then, as I say, they will be available to all these parties who are interested. The Minister of Agriculture in the past months—and, of course, he will go on doing this—has been in constant contact with different bodies who are interested in agriculture in this country.

MERCENARIES IN KATANGA
3.14 p.m.
THE EARL OF SWINTON: 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 make a statement about Mr. Tshombe's decision to get rid of mercenaries.]
THE EARL OF HOME: My Lords, Mr. Tshombe made a statement on January 27 that the Provincial Government of Katanga was resolutely determined to finish with the problem of mercenaries. It had therefore asked the United Nations for a period of one month in which to seek out and get rid of mercenaries. Thereafter the Katanga Government had proposed that a mixed commission of civil representatives of the United Nations and of the Government should be set up to supervise the application of the Government's measures. Her Majesty's Government welcome this statement and hope that the Katanga Government will use all their efforts to implement the policy outlined in its statement, and as speedily as possible. Her Majesty's Government have always believed that the only satisfactory way of resolving this problem was by close co-operation between the United Nations and the Provincial Government. They are very glad to see this example of it.

NORTHERN IRELAND BILL [H.L.]
3.16 p.m.
Order of the Day for the Second Reading read.
THE LORD CHANCELLOR (VISCOUNT KILMUIR): My Lords, this Bill deals with a number of miscellaneous matters between which there is one common link, derived from the fact that Northern Ireland has a written Constitution, which is contained in the Government of Ireland Act, 1920, as amended from time to time. That Act, as your Lordships know, set up a separate Parliament in Northern Ireland and gave it power to legislate for order and good government in Northern Ireland. The
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powers of the new Parliament at Stormont were, however, restricted in a number of important respects. Noble Lords who are interested will find these restrictions, or the most important of them, in Sections 4, 5 and 47 of that Act. The Parliament cannot, far example, legislate on matters relating to the Crown, the Supreme Court, and trade with places outside Northern Ireland. There are other such matters, and there are other effects of the Act, to which I shall refer in a moment.
The general principle followed in 1920 in the division of powers between Parliament at Westminster and the Northern Ireland Parliament was that the latter should be responsible for purely domestic matters, while matters of wider import, which could more appropriately be dealt with at Westminster, were reserved to the United Kingdom Parliament. However, it is difficult to draw any clear line, and the division of powers has never been regarded as something fixed and immutable, but rather as a working guide which can be revised in the light of experience. Once the need has been shown to widen the powers of the Northern Ireland Parliament, Parliament here has always been ready to pass the necessary legislation.
As I have said, the Act of 1920 provided that all matters relating to the Supreme Court of Northern Ireland should be reserved matters requiring to be dealt with at Westminster. Much of the law relating to the administration of justice in Northern Ireland is now out of date, and the Supreme Court itself is still governed by the Act of 1877. When Lord Jowitt was Lord Chancellor, he set up a Committee to examine the enactments relating to the practice and procedure of the Supreme Court of Northern Ireland; and this Committee, under the chairmanship of Mr. Justice Sheil, reported in 1957. I, among many others, am very grateful to Mr. Justice Sheil and his Committee for their work. The Committee made a number of recommendations designed to simplify the procedure in the Supreme Court and to free it from the need to follow the English practice and procedure in cases where that appeared to be ill-adapted for a small community with wide agricultural areas, such as exists in Northern Ireland.

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The first twelve clauses of the present Bill will enable effect to be given to the main recommendations of the Sheil Committee, and will, I think, bring about a substantial simplification and improvement of the present law. I do not think your Lordships will wish me to enter into any detail about the changes made by these clauses. It is perhaps worth mentioning that Clause 1 will effect a much-needed simplification in the law relating to the right of appeal to your Lordships' House. At present this is most obscure and in some cases it even involves a consideration of pre-Union enactments dating back to before 1801. In future, the right of appeal from the Court of Appeal in Northern Ireland will be much the same as the right of appeal in England and, in particular, it will be necessary to obtain leave to appeal, following the practice which has worked successfully in this country since 1934. At the same time, it has been thought useful to restrict appeals from the High Court to the Court of Appeal in Northern Ireland on relatively unimportant matters, thus further reducing the likelihood of such matters reaching your Lordships' House. This is done by Clause 2, which is very similar to provisions which have obtained in England for some time.
I think that the only other clause I need mention here is Clause 11, which reduces the number of jurors required in civil proceedings—I repeat, in civil proceedings—from 12 to 7. Jury trials are much commoner in Northern Ireland than they are in England and the need to serve on a jury is apt to impose a heavy burden in a relatively small community. No change is proposed for criminal proceedings, where there will still have to be 12 members of a jury.
I now turn to the next group of clauses, which form part of the continuing process of amending the Constitution of Northern Ireland to meet changing needs and circumstances.
The most important provisions in this part of the Bill are contained in Clauses 13 to 15. The object of these clauses is to enable housing, slum clearance, planning and other social legislation of a like nature to proceed in Northern Ireland on lines with which we in the "other Island" are familiar.
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Such legislation has been hampered in Northern Ireland largely because of the existence of a written Constitution, with its rigid definition of powers. and these clauses are designed to remove the difficulties which have been experienced. The position is somewhat complicated and I hope that your Lordships will bear with me for a few minutes if I explain the matter in a little detail.
Section 5 of the Act of 1920 is principally aimed at preventing religious discrimination, but it also limits the purposes for which the property of religious denominations may be taken even on payment of compensation. Similar provision in regard to the property of educational bodies was made by another statutory provision. Section 5 of the Act of 1920 also contains a general prohibition on the taking of any property, not only that belonging to religious and educational bodies, without compensation.
The list of purposes for which property of religious and educational institutions can be taken on payment of compensation is, as I have said, strictly limited and includes only roads, railways, lighting, water or drainage works and other works of public utility. It does not include housing, slum clearance, or the development or redevelopment of land. In consequence, progress in these directions has been much impeded, since Church interests in property are widespread in Northern Ireland.
The worst difficulties have been experienced in connection with slum clearance schemes. The difficulties have not been quite so great in connection with sites for new housing, though, as a result of the restrictions I have mentioned, it has not in fact been possible to make use of some sites which would have been particularly suitable for new houses.
These difficulties will be removed by paragraph (a) of subsection (1) of Clause 13, as a result of which it will be possible for the Northern Ireland Parliament to authorise the compulsory acquisition of land belonging to religious and educational bodies—of course, on payment of compensation—for the purpose of housing, slum clearance and the development or redevelopment of any area.
Paragraph (b) of the same subsection will enable the Parliament of Northern

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Ireland to control the use of land belonging to religious and educational bodies. This will be of particular value in connection with planning legislation. The present power to impose controls of this kind is doubtful, in view of the wide interpretation which can be placed on the prohibition contained in Section 5 of the Act of 1920 against the diversion of Church property. As I have said, Section 5 also prohibits the taking of any property, whether directly or indirectly, without paying compensation. This provision goes further than might at first sight appear, for it can be construed so as to prevent the imposition of restrictions on the use of property.
A great deal of modern legislation is aimed at preventing the use of property, in what may broadly be described as an anti-social manner, without providing compensation. Yet, because of the wide interpretation which can be placed on the provisions I have mentioned, the validity of Northern Ireland legislation of this kind is always open to challenge, and for this reason the planning code in Northern Ireland is a good deal less far-reaching than the planning legislation in the sister island. Much of our own legislation provides for controlling the use of land and buildings, in many cases without any right to compensation, but it is doubtful how far the Parliament of Northern Ireland could go in following these provisions. Clause 14 of the Bill accordingly proposes the removal of these restrictions, thus giving the Northern Ireland Parliament a free hand to legislate on planning matters, which it seems only right that they should be able to do.
It is true that Clause 14 is quite general in its application arid is not confined to legislation on planning matters. But the prohibition on taking property without compensation has given rise to a good deal of troublesome litigation, and it would not be practicable to devise any partial relaxation of the restriction which would work satisfactorily in practice. The truth is that there is no likelihood of the Parliament of Northern Ireland engaging in the expropriation of property without compensation, and so no safeguard of this kind is really needed.
Clause 15 will remove any doubt as to that Parliament's power to pass legislation providing for security of tenure or
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enlarging estates or interests in land. At present, Northern Ireland legislation on such matters as the control or decontrol of rents (your Lordships will appreciate how far-reaching the point is when I point out that the control of rents may affect a right of property in a landlord, and the decontrol of rents may affect a right of property in a tenant, so that even such obvious legislation as this has to be regarded in the light of the risks which I have mentioned), and on such matters as the renewal of long leases and business tenancies—which is the field over which we legislated in the Act of 1954—is capable of being attacked on the ground that it takes property without providing compensation. Accordingly, Clause 15 extends to past as well as to future legislation on these subjects.
The remaining provisions of the Bill will extend the powers of the Parliament of Northern Ireland to legislate on a number of miscellaneous matters, and in certain cases will directly amend the law relating to Northern Ireland. I do not think I need go through these clauses in detail, but your Lordships may be interested in Clause 17, which will enable the Parliament of Northern Ireland to legislate so as to prevent cruelty to horses, asses and mules when exported from Northern Ireland, whether by land, sea or air. It is unlikely that many old or worn-out horses are, in fact, exported from Northern Ireland, but it is clearly desirable that Parliament at Stormont should be able to introduce their own legislation on this subject.
Clause 18 will enable that Parliament to pass wider measures than they can at present in order to foster the export of agricultural produce from Northern Ireland. Clause 19 removes doubt about Parliament's power to base charges for services or facilities on the quantity of any product: under the present law such charges might be held to constitute an Excise duty, which the Northern Ireland Parliament has no power to impose. The only other provision in the Bill that I think I need mention is Clause 24, which will make law enforcement easier by adding to the number of persons who are authorised to endorse warrants of arrest sent from Great Britain to Northern Ireland, or vice versa, for execution in the other country.
My Lords, I am conscious that I have had to cover a great variety of subjects,

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but the point of interest is that, with whatever skill the Constitution is drawn, and however much care is devoted to the separation between reserved and transferred powers, one inevitably finds that with the advance of human affairs new problems arise which must be dealt with, and I am glad that we are able to make a stop forward in giving more powers to the Parliament at Stormont and in bringing their law up to date. I am sure that these provisions will improve the law relating to the administration of justice in Northern Ireland and will give the Parliament at Stormont up-to-date powers of which they will make good use. I beg to move.
Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
3.33 p.m.
LORD SILKIN: My Lords, I am sure the whole House will welcome this step forward in giving to the Parliament of Northern Ireland a substantial measure of freedom in the administration of their own affairs. The matter is regulated, as the noble and learned Viscount said, by the Government of Ireland Act, 1920. So we have now had nearly 42 years' experience of the administration of justice in Northern Ireland and it is quite timely that this matter should have been reviewed at this stage. The matter was first put in motion by the setting up of the Sheil Committee in 1949, and it is some indication of the pace at which these things move that it is over twelve years since the Committee was first set up. Well, judging by the speed of other matters, this is not really bad going. It is over five years since the Committee reported, and they had a big task in dealing with the multifarious matters with which they were confronted: indeed, one has only to look at the First Schedule to the Bill and the enormous number of amendments to Statutes for which it provides to see that this was a most complicated matter. As I say, to the extent that the Government of Northern Ireland are given greater freedom and restrictions are removed, I am sure we should all welcome this measure.
There is a certain amount of criticism of the fact that not all the recommendations of the Sheil Committee have been accepted or are provided for in this
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Bill. I do not propose to go through them at this stage—there are quite a number of them—but it may be that at a later stage of the Bill it will be possible to draw the attention of the House to some of the more important of them. I should like, however, to refer to one or two matters dealt with in the Bill and one or two that are not. Let me mention, first, a relatively small matter. There is a recommendation of the Sheil Committee that subpoenas issued by the High Court of Northern Ireland should run throughout the United Kingdom. That is a convenient recommendation. A person who is desirous of evading the necessity of appearing in court on a subpcena has only to move a short distance out of Northern Ireland and he is exempt from the obligation to attend court. I see no reason why the recommendation of the Sheil Committee should not have been implemented and why subpœnas should not be valid throughout the whole of the United Kingdom. That is one example of where a recommendation has not been accepted.
There is another matter of which I should have hoped advantage would he taken in this Bill—namely, the recommendation of the Northern Ireland Child Welfare Council which recommended in its Report that the operation of juvenile courts in Northern Ireland should be such that power be taken for the transfer of probation orders between England, Scotland and Northern Ireland where there is a change of residence. That is really another example of the same thing: it is one of those difficulties that arise where removal from Northern Ireland to another part of the United Kingdom prevents the enforcement of probation orders and enables people to evade them. I hope that I may be able to draw the attention of the Committee (if this Bill goes to a Committee) to these specific points and others, with which I will not trouble the House at this moment, where the recommendations of the Sheil Committee have not been implemented in this Bill.
There are one or two matters to which it might be convenient if I draw the attention of the House on the Bill itself. I hope I shall not outstay my welcome, but there are a few clauses in particular with which I think your Lordships should be acquainted. The first is Clause

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1. Subsection (8) of that clause gives to the Northern Ireland Parliament the power to make a law precluding Northern Ireland citizens from taking their cases to the House of Lords. That is a prerogative which every citizen of the United Kingdom has, subject, of course, to the normal restrictions on going to the House of Lords, such as that of acquiring permission, and so on. This Bill, as I say, enables the Northern Ireland Parliament in terms to preclude people from taking their cases to the House of Lords, and in that sense differentiates between the rights of people in Northern Ireland and in the United Kingdom.
Similarly, in Clause 2 there is a restriction against the right of appeal from the ordinary courts to the Court of Appeal in a considerable number of cases. I agree with the noble and learned Viscount that one does not want a multiplicity of appeals to the Court of Appeal and, consequently, to the House of Lords, on matters which are not worthy of being considered by the august bodies of the House of Lords or the Court of Appeal. But one should not differentiate between the rights of citizens in Northern Ireland and those in the rest of the United Kingdom. Where a citizen of England, Wales or Scotland has the right to go to a higher Court, or to the House of Lords, in my view there should be a similar right to go to the Court of Appeal in Northern Ireland or to come to the House of Lords here. I propose to put this matter before your Lordships in greater detail when we come to the Committee stage.
I do not think the noble and learned Viscount referred to Clause 7, except in very general terms. This clause permits the amendment by the Northern Ireland Parliament of any measure in existence at the time of the passing of this Bill by a Rules Committee, the composition of which is set out in Clause 8, without having to pass an Act of Parliament. That seems to me an extraordinary provision. I doubt whether it could be justified, in view of the special circumstances of Northern Ireland. In this country, if it is desired to amend or repeal an Act it is necessary to pass legislation for that purpose. Is it right that it should be possible for the Northern Ireland Rules Committee to do
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this by incorporating the repeal in Rules? Admittedly, I imagine that such Rules would have to be approved by Parliament, but to have to accept or reject the recommendation of a Rules Committee, possibly en bloc, is a very different thing from having the opportunity of debating whether or not a particular measure should be repealed or not.
The noble and learned Viscount has referred to the reduction in the size of juries in civil cases. This is one of the points which struck me as rather remarkable. It may well be that the case he has made for it, of the small population and the liability that the citizen may have to attend as a juryman more frequently than he would in this country, is a valid factor. But I should like to explore this matter a little further. This was not recommended by the Sheil Committee, and I wonder what is the liability of the ordinary citizen of Northern Ireland to be called for a jury? After all, I imagine the same applies in Northern Ireland as here; that the number of civil cases tried with a jury is getting smaller.
When I first joined the legal profession far more civil cases were tried by jury, and to-day it is a very rare thing. If the position is the same, relatively speaking, in Northern Ireland, is there any validity for reducing the number of jurymen? I find that, far from most people regarding being selected to attend on a jury as an ordeal, they welcome it. It is one of the few concrete cases where the ordinary citizen is enabled to play a part in the administration of justice. People talk with great pride and pleasure about their service on a jury, and after many years very often with great nostalgia. I should hesitate before I reduced the size of juries in that respect, and I should certainly want a good deal more evidence than has been forthcoming so far.
The noble and learned Viscount has referred to Clause 13. This is the clause which enables the Government or local authorities to acquire compulsorily land belonging to the churches or educational institutions for slum clearance, development and redevelopment. This is a most timely measure, and I certainly welcome it because the opportunity of clearing slums in certain cases where the land is owned by these authorities

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has hitherto been held up, and this has prevented redevelopment. I am informed that there will be considerable opposition to this clause, and I was glad to hear the noble and learned Viscount support it with such firmness and conviction. I hope that, as the Bill goes through, any opposition to this clause will be firmly resisted. The same applies to Clause 14.
The noble and learned Viscount referred to Clause 17 of the Bill. This is the clause which makes provision for the comfort of horses and asses exported from Northern Ireland to this country. The question has been raised: Why is it limited to those animals, and why are we not a little more concerned with the comfort of human beings who come over here?—because some of the conditions under which people come from both Northern and Southern Ireland are really deplorable. Although it may not be possible to provide for this in legislation, I think we ought to have some regard to this point—not that I want in any way to make life more difficult for the horses and asses which are exported from Northern Ireland.
The last clause to which I wish to refer is Clause 23, which the noble and learned Viscount did not mention. This is a clause which provides for compensation to be paid for
"plundering, damaging or destroying vessel wrecked, stranded or in distress or its cargo or apparel"
on the coasts of Northern Ireland. I wonder if this is really necessary. Was it recommended by the Sheil Committee? Is there much plundering and wrecking of vessels? I do not know, but I should be very interested to hear whether there is any case for this and whether it is so important as to be incorporated in legislation of this kind. As I said at the outset, I welcome this Bill. I think it is a great step forward. I welcome any measure which gives to responsible bodies, Parliaments and other institutions, the right to manage their own affairs, and in so far as this is a step in that direction I am sure the whole House will wish this Bill God-speed and hope that it will have a successful career through this House and another place.
LORD RATHCAVAN: My Lords, as the noble Viscount who occupies the Woolsack stated, this is really a Bill to
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deal with matters which have arisen since the passing of the Government of Ireland Act, 1920. I think I am right in saying that there have been Bills of this nature in 1928, 1932, 1945, 1947 and 1955, dealing with matters with regard to which it became necessary to give further powers to the Government of Northern Ireland. This is a very technical Bill. The noble Lord, Lord Silkin, has shown great knowledge of the legal aspects of it so far as they affect the Supreme Court. I do not intend to refer to those, but before referring to one or two other clauses in the Bill I should like, if I may, to make a few more general observations.
Northern Ireland is the only federal unit in the United Kingdom. There was a time when federation within the United Kingdom was seriously discussed. Shortly before and after the First World War there was a lot said in Parliament here about what was then known as devolution. That meant devolving local affairs upon the separate Parliaments, and the idea was that there might be a Parliament for England, a Parliament for Scotland, a Parliament for Wales, a Parliament for Ireland, and a Federal Parliament sitting at Westminster over them all. However, nothing came of that although, of course, we know that to-day there is very considerable demand in some places in Scotland for the kind of local Government which Northern Ireland has at present within the United Kingdom.
The reason why this idea of devolution was seriously considered towards the beginning of this century was, of course, that it was found that the central Parliament of Westminster was far too occupied with large matters to be able to give proper attention to urgent local requirements in the different parts of the United Kingdom. That still, I suppose, operates to-day. However, the only portion of the United Kingdom which has become a federal unit and which has its own Government is Northern Ireland, and since that Parliamentary Government was set up, as the noble and learned Viscount the Lord Chancellor has said, some 42 years ago, there is no doubt that there has been far greater progress in local legislation and improvements than could ever have

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taken place under the central direction of Parliament at Westminster.
For example, the housing situation in Northern Ireland has been completely transformed. There is hardly a village now that does not have its housing estate of good modern houses, and the provisions under Clause 13 of this Bill will, I hope, enable housing to be even more actively pursued by making it possible in certain cases to obtain land belonging to certain religious bodies for the purpose of housing and slum clearance. Agriculture has made tremendous progress. There is an efficient and admiraable Agricultural Department and Ministry; and I cannot help feeling that, without the devolution which took place when the local Parliament was set up, the agricultural needs could never have been dealt with in the way in which they have. With regard to electricity, as no doubt noble Lords know Northern Ireland is mainly a province of small family farmers, and there is hardly a farm house in the country that does not now have electricity both for light and power. The whole country is now covered by a central grid. There have also been great advances in education.
To come to one or two further details in the Bill, I have referred to Clause 13, and I agree with the noble Lord, Lord Silkin, that it is very necessary that the clause should be passed. I did not know there was going to be any special opposition to it because, indeed, it is concerned with a social service. Clause 17, to which both the noble and learned Viscount who sits on the Woolsack and also the noble Lord, Lord Silkin, referred, is the one which deals with horses and asses. I do not think there is, or ever has been, any export of decrepit horses from Northern Ireland, although of course, as we know, there has been from the South. That has led to a good deal of criticism and, now that there has been this criticism of the shipment of old horses from Dublin, I think the main reason for this clause would be that there might be some efforts to try to divert that trade through Northern Ireland.
THE EARL OF LONGFORD: My Lords, may I ask the noble Lord whether an attack on the alleged behaviour of the Dublin Government in
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respect of old horses has much to do with the Bill?
LORD RATHCAVAN: I was saying, or at least I intended to say, that I thought the criticism which arose a short time ago about the export of horses from Dublin had led to great qualifications in that trade so I understand that there might be people who would want to divert it to the Northern Irish ports. Therefore, under this Bill the Northern Ireland Parliament will be better able to deal with it than they would otherwise have been.
The only other clause that I should like to refer to is Clause 18, to which the noble and learned Viscount referred. That clause would give the Parliament of Northern Ireland power to legislate as regards the quality of certain agricultural exports. At present in this respect they have power to legislate with regard to the quality of exports within the United Kingdom and the Republic of Ireland only. This is mainly, I think, to deal with the growing trade which has arisen in the last few years in seed potatoes exported from Northern Ireland to countries abroad. Quite a number go, I think, to Portugal, Spain and the Middle East and quite a big trade in seed potatoes has been set up in recent years. Without this clause the Parliament of Northern Ireland would not be able to legislate as regards provision of quality of the potatoes they are packing and so on, which is very necessary in connection with seed potatoes sent abroad.
I should like to say how much we who come from Northern Ireland, as I do, appreciate the admirable way in which the noble and learned Viscount the Lord Chancellor has introduced this Bill and the excellent and helpful remarks which the noble Lord, Lord Silkin, has also made.
4.0 p.m.
LORD OGMORE: My Lords, in common with noble Lords who have spoken, I very much welcome this Bill both on my own behalf and on behalf of my noble friends who sit with me. We are entirely in favour of the principle; we believe in the devolution of powers both legislative and administrative, and we have been studying lately with keen attention, I may say, the situation of Northern Ireland, within the United

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Kingdom. Obviously the Government of this country believe that the experiment in federation, which is what the Northern Ireland Parliament is, has been successful; and, if the noble Lord, Lord Rathcavan, is correct—and I have no reason to believe he is not—this experiment has been highly successful in a sphere in which in Scotland and Wales we have had failure; that is, with reference to rural communities. Everybody knows that large areas of the Highlands of Scotland and quite a large area of the midlands of Wales are becoming more and more depopulated. There are counties in Wales which have less population than in the reign of Elizabeth I. They have been successful in Northern Ireland. The noble Lord said it was because they had had a regional Parliament. He may be right; we believe he is right. But it is rather remarkable that in the 40 years since this experiment was first instituted there has been no development of it elsewhere; and I, for one, should like to see serious consideration given by other Parties than the Liberal Party to the possibility of introducing other experiments of a like nature to Scotland and Wales, and, I may say, to England. We are at the moment going through a process in which we are stirring up violently all the county councils and are making large conglomerations of them. I am, certain, so far as Wales is concerned, that it would be better to have some sort of regional Parliament rather than these enormous county councils now proposed which will be neither fish, flesh nor good red herring. That is one reason why I welcome the Bill and I am in great sympathy with the objects of it.
As to the details of the Bill, there are one or two points to which I should like to draw your Lordships' attention. It is no good disguising the fact that the Government of Northern Ireland is almost entirely Unionist. I say "almost entirely" because I am happy to say that in November last there was a solitary swallow, if she will allow me to call her so, in Miss Sheelagh Murnaghan, a Liberal, who won the Queen's University seat in the Northern Ireland Parliament. We hope the summer will not be long delayed in coming as a result of the swallow. But we have to face the fact that it is largely a Unionist Parliament, and that is because it is based,
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again not entirely but to a large extent, on a Protestant electorate. Some of the objects of the Bill would cause no eyebrows to be raised here, but they may cause, and indeed will cause, eyebrows to be raised in Northern Ireland because of that fact; therefore we must be careful to make sure that there are no possibilities of misunderstanding the Bill.
I should like the noble and learned Viscount the Lord Chancellor to be good enough to explain what the real purpose of Clause 2, subsection (3) is. It says:
"No limitation or restriction imposed by the Government of Northern Ireland Act, 1920, on the power of the Parliament of Northern Ireland to make laws shall be construed so as to prevent that Parliament from making a law providing that an order or judgment of the High Court made or given in proceedings instituted under or by virtue of an enactment of that Parliament shall be final or so as ever to have prevented that Parliament from making a law providing that an order or judgment of that Court made or given as aforesaid should be final."
Bearing in mind that it is very largely a one-Party Government which has control of the legislation, does that mean that the courts can be prohibited or prevented from making an order with reference to any law which it passes? I am not quite sure as to the object of this provision and I think we ought to know what that object is. I am quite sure the noble and learned Viscount the Lord Chancellor will be able to convince us.
The only other point I have on the Bill is the one which has already been raised by two of the noble Lords who preceded me, and that is Clause 13. Here, again, I am perfectly certain that what the noble Lord, Lord Rathcavan, said was absolutely correct: that in any community a clause of this kind is needed. But I think we ought to have some declaration, or something of the sort, that they are not going to use it either to liquidate the property of their political enemies or do something untoward towards the Roman Catholics. I do not think they will at all, but I think there ought to be some declaration. One can see how touchy this subject is by the intervention of the noble Earl, Lord Longford, in the speech of the noble Lord, Lord Rathcavan, a moment ago. It may well be that somebody will create some disturbance on this account.

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Apart from that fact, I think that Clause 13 is probably a very valuable one, but one has to realise it may not seem so in the eyes of a Roman Catholic living in Northern Ireland who objects strongly on political or religious grounds to the Government. From my own visit to the Republic of Ireland I am happy to say that I think many of the old differences of opinion between Roman Catholic and Protestant are going, and that when the present or older generation goes those differences will practically go altogether. I hope so. I believe in these times, when the Free World is in jeopardy, it is a time for Christians to come together, whether Roman Catholics or Protestants. We are all Christians. But we have not quite got to that stage yet, and sometimes these issues do come forward.
Finally, I should like to take issue with the noble Lord, Lord Silkin, on the question of juries for civil cases. I must say that in my own experience I have never found those people who look with nostalgia on jury service. Generally speaking they object very strongly to it on civil jury service. There may be some who rather enjoy a day in the criminal courts, especially if there are cases of an interesting kind, but that does not apply to civil cases. I have yet to find the juryman who looks with delight on listening to some involved case affecting super-cargoes or hills of lading or something like that. Probably this is a good measure because it will enable more juries to sit in civil cases, and it is the sort of measure which in all probability we ought to have here. It might well be introduced in this country. I think it is a pity we do not have more juries in civil cases. But while there is still the provision for 12 jurors—I believe it is still the case—it is nevertheless a little difficult to collect 12 people. So far from objecting, I would suggest to the noble and learned Viscount the Lord Chancellor that he might consider extending the provision to this country. That is all I have to say, and I welcome the Bill.
4.7 p.m.
LORD DENNING: My Lords, may I just say a word so far as the provisions relating to the administration of justice in Northern Ireland are concerned? This Bill clearly intends to make the
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appeal structure similar to that in this country. Indeed, it is to be welcomed. But there is one feature which has been mentioned: the question of trial by jury. This raises an important question, because for centuries the number of jurors in this country and in Ireland has been 12. We know that in Scotland it is 15. During the war we tried for a time with 7, but as I believe, not with complete confidence and satisfaction. The reason this measure reduces the number of jurors from 12 to 7 is because of the strain the larger number puts on a small community. I would suggest that the better remedy is in effect to do away with any right to trial by jury in civil cases but to leave it to the discretion of the judges or the court. That is what has been done in this country. In this country most civil cases nowadays are tried by a judge alone, far more expeditiously and to the satisfaction of all concerned. There are jury trials only in civil cases such as libel cases and others where people's reputations are involved.
If you go to the United States, where there is still a right by constitutional law to trial by jury in all civil cases, you will find that plaintiffs demand trial by civil juries, and the delay is such—they take much longer to try—that four or five years elapse before a case comes on for trial. They envy our system whereby the right to trial by jury is no longer a right under the Constitution but a matter for discretion by the judge. I believe that in Northern Ireland it would be a good thing not to reduce the numbers from 12 to 7—I believe 12 is the best number—but to give a discretion to the judge whether a jury should be had or not. It would be found that in most cases there would be no trial by jury; people would be content to have trial by judge alone. There would not be the burden on the whole community of having a jury, because the judge would decide the case alone and it would be dealt with far more expeditiously. I submit that the experience of this country in the last thirty years is a good precedent for Northern Ireland.
4.11 p.m.
THE EARL OF LONGFORD: My Lords, I had intended only to put a question to the Lord Chancellor, of which I have hardly given him any

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notice, so he may or may not have an answer. But I should like to say to the noble Lord, Lord Rathcavan that I hope I did not intervene too rudely. I realise that the exceptional service which he has given to Northern Ireland entitles him to a most considerate hearing. He will perhaps allow me this amount of credit, that not so long ago I opened a branch of our bank in Bangor, in Northern Ireland, so that in my humble way I have an interest in Northern Ireland which, of course, it is my duty to declare.
I was most interested to hear what Lord Ogmore was saying about progress. He is a great friend of, I think, all parts of Ireland—certainly of the Irish Republic, and it may be of Northern Ireland. I was most interested to hear what he said about the success of the Liberal lady in the election at Queen's University. I have the greatest admiration for Queen's. It is a kind of island of Liberalism amidst waters which are not all so liberal. But I am sorry to tell him that there may be some need for apprehension in regard to this lady's success. I listened to a debate on the Northern Ireland radio a day or two ago when this matter of University seats was dealt with and, so far as I could judge before I switched off in distress, the general opinion seemed to he against her and to her right to be elected. I beg her Liberal friends to keep an eye on the footing that they have gained in Northern Ireland recently.
But I rise not to put a question as to whether there has been great progress in Northern Ireland—there has been progress in Southern Ireland, as in England. Scotland and Wales in the last 40 years—but to put a question to the Lord Chancellor, because on the answer which is given, either to-day or later, my own attitude, I suppose, is bound somewhat to depend. We are told that Clause 13, which was explained by the noble and learned Viscount most carefully relaxes the restriction on the diversion of the property of religious and educational bodies by adding to the list housing, slum clearance and development. As it seems to me to be generally assumed that that must be a good thing, I should like to ask him how this change is viewed by the religious and educational
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bodies concerned. Has the noble and learned Viscount the Lord Chancellor any information at this stage about their attitude? Because until I at any rate—and it may be true of others—have any information as to the attitude of these bodies, I should find it quite impossible to express an attitude to the Bill.
4.14 p.m.
LORD KILBRACKEN: My Lords, I wish to intervene for a moment, because I cannot help feeling apprehension, despite the attention given to it by the noble and learned Viscount, in regard to Clause 14 which refers to the abolition of the prohibition on making of laws taking property without compensation. It is my submission that there are no circumstances in which property should be taken without paying compensation. I should like to ask the noble and learned Viscount (I think he did say that it was not likely that expropriation of this kind would take place) in what possible circumstances this clause could be used.
4.15 p.m.
THE LORD CHANCELLOR: My Lords, may I first say a general word of most sincere thanks to those noble Lords who have contributed to the discussion on this Bill, and before I deal with the somewhat more technical points an the administration of justice I should just like to say one word on the point made by the noble Lord who has just sat down. I did explain—I do not know if he had the opportunity of hearing me—that taking property without compensation has raised a number of problems which I do not think were really in his mind when he made his declaration of faith on the point. May I take the examples which I mentioned before? You may have an Act controlling rents, which may be necessary for social purposes. I can remember at the beginning of the First World War when the Rent Act was first passed it was absolutely essential in the conditions of people joining the Forces, as the older ones of us know. That was an extreme example, but your legislation may be vulnerable and in danger because it may be construed as taking the landlord's property without compensation—because, of course, you may be taking the property in the sense of preventing the charging of higher rents. Similarly, in the case

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of decontrol, the legislation might also be vulnerable, because that would be taking the tenant's property without compensation—namely, his right to remain in the house.
The noble Lord will see the real practical difficulty with which we are dealing. If he will forgive me, as I have a number of points, I will send him a reference to the last two cases in which this matter came before the House of Lords, and he will see that it is really necessary, from the point of view of carrying on with ordinary legislation of the kind I have mentioned, and various kinds which have been accepted by all parties in this Island, to have such a provision. As I have said, I am sure he need have no apprehension at all of the use of the provision for expropriation in the manner that he has in mind.
May I just deal with the other general point of the noble Earl, Lord Longford? So far as I know—I asked for information after he was good enough to give me notice—there has not been any reaction from the religious and educational bodies on this point that has come to the knowledge of those who have been preparing the legislation. Of course, if I hear of any I shall tell the noble Earl at once. They know of none.
THE EARL OF LONGFORD: My Lords, I thank the noble and learned Viscount.
THE LORD CHANCELLOR: The other point that I must just mention is that there has been some entirely friendly discussion in regard to Queen's University from a liberal and from a general cultural position. I just want to make it quite clear that one of the best Unionist meetings that I ever addressed in the many that I have addressed in Northern Ireland in my time was one of the Undergraduates' Unionist Association of Queen's University; so I do not want it to go from this House that that aspect of the humanities is entirely ignored.
My Lords, I come to the point which first of all the noble Lord, Lord Silkin, raised in his most interesting speech as the result of a careful study of many points in the Bill—namely, with regard to subpœnas. I will, of course, look into it carefully, but as I am informed at the moment, under the existing Northern
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Ireland law, a subpœna may, by leave of the court or a judge, be issued for service in any part of the United Kingdom, and service thereof will be as effectual as if served within the jurisdiction. That is the effect of the Attendance of Witnesses Act, 1854. I was under the impression, and I like always to verify these things, that the Sheil Committee was really dealing with the rewriting of the Statute rather than the existence of the powers, but perhaps the noble Lord will allow me to verify that point. That is the position, as I understand it.
I should like equally to look at the point regarding the juvenile court and the transfer of probation orders. But, generally with regard to the Sheil Committee, I think I can say that all the substantial recommendations made by them are implemented by the Bill, or are capable of being implemented by rules made under Clause 7. There are, however, necessarily a number of minor recommendations which it has not been possible to deal with. They would require a complete rewriting of the Judicature Acts which could be undertaken at Stormont only if the Supreme Court were to be totally de-reserved. That is the position we have considered.
The next point that the noble Lord mentioned was with regard to the question of appeals. My Lords, so far as appeals to the Court of Appeal are concerned, the restrictions imposed by Clause 2 are exactly the same, mutatis mutandis, as those imposed by section 31 of the Judicature Act, 1925. In regard to Clause 1, I think that the noble Lord, Lord Silkin, had specially in mind subsections (7) and (8), because they really hang together—at least so my note tells me. The provision in subsection (7) goes back to paragraph (c) of section 49 of the Government of Ireland Act, 1920, because under that paragraph an appeal lies to the House of Lords in any case where a decision of the Court of Appeal in Northern Ireland involves a decision on any question as to the validity of any law made by or having the effect of an Act of the Parliament of Northern Ireland, and the decision is not otherwise subject to appeal. That position is preserved by subsection (7), because even where a Statute provides that a decision of the Court of Appeal in Northern Ireland is

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to be final, the decision will still be appealable if it turns on the validity of a law made by, or having the effect of an Act of the Northern Ireland Parliament. But, subject to that, subsection (7) provides that no appeal shall lie under Clause 1 where any enactment in force immediately before the day appointed for the purposes of this clause (other than Section 11 of the Annual Revision of Rateable Property (Ireland) Amendment Act, 1860) expressly provides that the order or judgment is to be final.
There are certain Acts which provide that a judgment of the Court of Appeal is to be final, and these are preserved, except with regard to valuation cases, where the noble Lord can take it that an appeal lies; but that is not peculiar to Northern Ireland. I have myself been sitting in the House of Lords when it has been pointed out to me by counsel that I had no right to hear an appeal because the British Act of Parliament prevented it. To give one reference to the noble Lord, in the Supreme Court of Judicature (Consolidation) Act, 1925, Section 31, subsection (1) (d) says:
"No appeal shall lie from the decision of the High Court or any judge thereof where it is provided by any Act that the decision of any Court or judge the jurisdiction of which or of whom is now vested in the High Court, is to be final."
So it is a matter contemplated by our Judicature Acts as well.
The next point that the noble Lord, Lord Silkin, mentioned—
LORD SILKIN: My Lords, before the noble and learned Viscount goes on to another point, am I to understand him to say that all this does is to bring the legislation in Northern Ireland into line with what is the position in the United Kingdom?
THE LORD CHANCELLOR: Yes. I am not saying they are the same Acts in both cases. Subsection (7) only applies where there are Acts already in force which make the decision final. But I ought to point out, as the noble Lord had it in mind, that subsection (8) removes the doubt which otherwise might have existed as to the power of the Parliament of Northern Ireland to prevent an appeal against an order or judgment of the Court of Appeal in
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Northern Ireland. I do not think this can be said to be an additional inroad, but I will look into it again. There are certain matters where there is a strong case for not having a further appeal. One I had in mind was where it was pointed out to me that I had no jurisdiction in the House of Lords to hear an appeal on the custody of children. One quite sees the social argument for it—that one appeal may be considered enough—but I will look into the point again and if I find any other information that I think would interest the noble Lord, I will let him know.
He then raised a question on subsection (2) of Clause 7 as to the fact that the Rules Committee had the right to modify existing Statutes
"so far as may be necessary or expedient in consequence of provision made by tile rules".
In the Mother of Parliaments that sounds a very strong right, but it again is well known here, because paragraph (g), of subsection (1) of Section 99 of the Judicature Act, 1925, gives a similar power, as the noble Lord will see if he sends for the Act. What is perhaps even more material, there is a similar power of modification of pre-1877 Acts, given by Section 68 of the Supreme Court of Judicature Act (Ireland), 1877. So, although as a Parliamentary purist the noble Lord may not like it, it is a form which has a considerable legislative history.
The noble Lord and a number of other noble Lords have discussed the question of juries. I think it was my noble and learned friend Lord Denning who said that the use of this provision during the war worked well. That is certainly my information on the point, and I have a certain amount of experience as a law officer of the Crown when I was in touch with it. On the main point, I think that the noble Lord, Lord Silkin, was under the impression that the law with regard to the use of juries is the same in Northern Ireland as here. It is not. The noble Lord will remember that in 1933 Parliament here substantially re-enacted an Act of 1920 which had restricted juries, and the present position is that in England juries can be asked for as a right only in a very limited number of cases. I will not trouble your Lordships with the cases. That situation has been accompanied, as

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the noble Lord, Lord Silkin, said, by an immense fall in the number of jury cases here.
If I may take the dates which I think the noble Lord himself had in mind up to 1913 (when the noble Lord was probably just beginning to think of the law) there was still trial by jury in the majority of cases. That declined very rapidly, and to-day—I am now reading from page 132 of the Hamlyn Lectures on Trial by Jury by my noble and learned friend, Lord Devlin, where he says:
"The popularity of trial by judge alone is now decisively established the proportion of jury trials is now 2 per cent. or 3 per cent. of the whole"—
that is, in this country. I will only read one other sentence, as I do not want to detain your Lordships. Lord Devlin says:
"It must not be supposed that this severe decline is due to a jury being refused when asked for; the number of refusals is in fact quite negligible."
So that has been the trend in this matter. I think it might interest the noble Lord. and if he would like it, I will lend him Lord Devlin's book, so that he may pursue the matter.
In Northern Ireland. however, there has not been this decline; there have not been these restrictions, and jury trial is popular there. Therefore, one has the difficulty of those in a small community leaving their work for jury service; and of course it is especially difficult in Belfast, the big town in the Province. On the other point raised by the noble Lord, Lord Silkin, he will remember that the Bill does not affect the number of jurors in criminal cases, and therefore I think one can say that the citizenry of Northern Ireland are getting a full chance of jury service. The noble Lord need not be frightened from the point of view of their share in the administration of the law. My Lords, I think I have dealt with all the points raised by the noble Lord, but I will go through my speech carefully to see if I have missed any. I am glad to have his support on the planning point.
It was a great joy to me, and I am sure to many of us, that my noble friend Lord Rathcavan should intervene in this debate. Your Lordships will remember, as I do, that, apart from being a colleague of many of us in another place,
1150
the noble Lord was Speaker of the House of Commons at Stormont and had himself to guide that House through the problems which we are discussing to-day. Therefore, it was a great pleasure and support for me to have his appreciative speech on the proposals of the Bill, and I was delighted, if he will allow me to say so, to hear him speaking again.
On the other points that were raised I come to the speech of the noble Lord, Lord Ogmore. I must say that I am very tempted by the depopulation of rural communities, but I will come to his first point on Clause 2, subsection (3). That subsection removes any doubt as to the powers of the Parliament of Northern Ireland to provide that an order or decision of the High Court in proceedings instituted under or by virtue of a Stormont Act of Parliament shall be final. In a number of enactments of the Northern Ireland Parliament, conferring jurisdiction upon the High Court or the Supreme Court, it has been provided that the decision of the High Court or Supreme Court shall be final, and subsection (3) will ensure that the reservation of matters relating to the Supreme Court in Section 47 of the Government of Ireland Act, 1920, does not affect the validity of these enactments or prevent the making of similar provisions in future Northern Ireland enactments. It is similar to the point raised by the noble Lord, Lord Silkin, with which I have just dealt, and I think the noble Lord will appreciate that in some cases it is desirable to make decisions final. But I am sure that the power will be used with discretion.
I was grateful for the help of my noble and learned friend Lord Denning on the jury points. I have already dealt with the question raised by the noble Earl, Lord Longford. My Lords, I hope that I have dealt with all the points, and not at too great a length, but if I find any others, when I read your Lordships' speeches I will try to find an opportunity of dealing with them. Meanwhile, I ask your Lordships now to give the Bill a Second Reading.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

VEHICLES EXCISE BILL [H.L.]
4.39 p.m.
Order of the Day for the Second Reading read.
THE LORD CHANCELLOR: My Lords, I beg to move that this Consolidation Bill be now read a second time.
Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
On Question, Bill read 2a, and referred to the Joint Committee on Consolidation Bills.

TELEGRAPH BILL [H.L.]
Order of the Day for the Second Reading read.
THE LORD CHANCELLOR: My Lords, I beg to move that this Bill, which is also a Consolidation Bill, be now read a second time.
Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
On Question, Bill read 2a, and referred to the Joint Committee on Consolidation Bills.

ACTS OF PARLIAMENT (NUMBERING AND CITATION) BILL [H.L.]
House in Committee (according to Order): Bill reported without Amendment.

IMPERIAL CHEMICAL INDUSTRIES AND COURTAULDS
4.42 p.m.
VISCOUNT ALEXANDER OF HILLS-BOROUGH VISCOUNT ALEXANDER OF HILLS-BOROUGH rose to call attention to the proposed merger between I.C.I. and Courtaulds; and to move for Papers. The noble Viscount said: My Lords, the House will recollect that the statement which was made by the noble Lord, Lord Mills, on Tuesday and which was a repetition of the statement made by the President of the Board of Trade on the proposed merger of the I.C.I. and Courtaulds, did not meet with very general approval in either the other place or this House. It is for that reason that I am calling the attention of
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the House to it to-day and am moving for Papers. For a considerable time now, running into weeks, the country has been watching, with interest, no doubt, what might be called the battle between the two contending forces for the control—the real, united control—of the manufacture of man-made fibres. The situation is a little different from what has often been the case in previous takeover bids, in that there is no agreement between the two contending forces—who, nevertheless, have, I believe, had harmonious relationships in the past. This has meant that one of the contending parties has issued a statement or statements containing a great deal of information; and it is this which has very much stimulated the public interest and had a good deal to do with the formation of public opinion upon this matter.
We on this side of your Lordships' House felt that it was far better to raise this question at once, while the matter was fresh in the mind of the House after the statement by the President of the Board of Trade on Tuesday last. That statement by the President of the Board of Trade has also been very much in the public eye—and, judging by last night's broadcast on the sound radio, very much in the public ear also, because there was a report on the radio last night which seemed to indicate that there was an impression after a Conservative Party meeting (I suppose that an impression is all one can expect, as a rule, from information arising in the Press or in broadcasts after a Party meeting) that nearly nine out of ten of the members attending that particular meeting were critical of either the merger or the manner in which the Government were dealing with it. If one can judge from events—and that was the position last night—perhaps their view was stimulated by the exceedingly comprehensive and. I think, important article which appeared in the Financial Times yesterday morning. I shall be referring to that in a minute, but I mention it at the moment to show that what I said on Tuesday is, I think, right—that is, that this particular type of merger, in the circumstances in which these proposals have arisen, is being thought about and debated in every class of the community. When we on the Labour side of the two Houses of Parliament raise certain objections, they may be for quite

1153
different reasons, sometimes, but it is just as important that they should be considered as it is for these other opinions also to be considered.
Obviously, this merger is unpopular in the City; otherwise I do not think we should have had such an article as was written in the Financial Times yesterday. It is unpopular with the users of man-made fibres—very unpopular; and it is certainly unpopular, to some extent, in certain sections of the trade union circles. I think it is quite proper and right to say at once that there are probably no other great capitalist organisations such as Courtaulds and the Imperial Chemical Industries that have, on the whole, a better history in their experience of industrial relations. As I have said in the House on a previous occasion, the trade unions have always recognised that, although they have their bothers in discussions, their industrial relations with Imperial Chemical Industries, and, I think, with Courtaulds, are such that they could easily be a pattern for some other industrial organisations. It is always well to be fair and to state that position.
On the other hand, the unions, I am certain, are disturbed over the possible effects on actual employment—and if not on employment as a whole in the particular industries which will be covered by a merger, certainly that in particular districts. I think that the section of the statement issued by Messrs. Courtaulds to which I referred to the other day confirms what I am now saying. Courtaulds' statement said:
"I.C.I have said that complete control of United Kingdom man-made fibres is necessary to avoid over-capacity and duplication".
The objective expressed in that statement is, of course, very familiar to those of us who have been connected with industry and wage negotiations over the last forty years—and how great was the cry for rationalisation in the difficult years that followed the First Great War! And whilst there is no doubt that, in arranging the general progress and development of industry, all these things have to be taken into account, there nevertheless must always be some anxiety as to how far these arrangements are going to disturb the actual position of sections of labour; their roots in a district; what the compensation will be if there
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is a final abolition of their particular, individual employments, and so on.
Therefore, we see the range of criticism of this proposed merger now stretching through these three great departments of public opinion: first, in the City, in finance—its effect upon shareholders and upon the general industry of the country. Then we see it among users—and that is covered by the paragraph in the statement issued by Courtaulds and made by one of the most prominent chairmen of the textile industry using man-made fibres. Thirdly, we find this criticism in the opinion of the working class. The combination of these three great powers of public opinion surely ought to bring the Government to think very seriously about this matter.
To return to the leading article from the Financial Times, I should say that it does not seem to occur to the writer of that article that the Government were ready to deal with the situation as it has arisen in these negotiations, or the failure of negotiations, for the merger. I quote:
"The first was an announcement that the Government, adhering to its existing policy, intended to do nothing for the time being.
"His apologia"—
that refers to the President of the Board of Trade—
"for this policy of inaction was unconvincing. It was unconvincing to argue that the position of these two companies in the man-made fibres industry has not been referred to the Mono-plies Commission, though each is formally liable to reference, because they had not yet acted against the public interest. This is question-begging"—
that is pretty strong.
"It was unconvincing, too, to argue that no body of experts could form an opinion about the likely effects of such a merger. …"
Nor, my Lords, should we forget in Parliament that, in the many discussions which took place prior to the passing of the Statute setting up the Monopolies Commission, and the like, it was always within the scope of our debates how far action ought to be taken in advance where it was seen perfectly plainly that a merger of a certain kind would not lend itself to the public interest—indeed, entirely the reverse. It seems to have come rather late at the end of this ten years' experience of rule by the present Government that they have, at this very

1155
late hour, set up an inquiry—which I must concede at once has been set up—as to how they could possibly deal with questions arising out of take-over bids and merger proposals which would be likely to be against the public interest. Moreover, if I may say so, other people have been thinking this way for a long time. We in our Party have thought so for years. We never thought that the final Act of Parliament which was published in the present Parliamentary régime of the Conservative Party went far enough or was strong enough.
I now quote from our future programme, which has been out for some weeks, and from page 18 I take a final paragraph on this question of monopolies, and so on. We say:
"Where major changes of ownership and control in a vital industry are threatened by take-over bid or merger, the State must be free to intervene, either by vetoing a proposed transaction or by stepping in itself and asserting the rights of the community through an extension of public ownership".
It is evident, I should think, from reports of views of Conservative Members of Parliament—and these views may be shared by many Conservatives in your Lordships' House—that it would be far preferable for the Conservatives to take such action as would prevent making (as it was put by a Conservative Member of Parliament the other day), a "ready-made organisation for immediate nationalisation", such as is proposed in the merger plans which have been published. So far as I am concerned, it shows perfectly well that there are always dangers in these matters, which have never been absent to my mind.
I am not sure whether the noble Earl, Lord Swinton, will remember this—he was President of the Board of Trade at the time, and it is a long time ago—but I introduced a Bill, under the Ten-Minute Rule, to curb the power of thrusting combines, in which many of the arguments to which we are referring to-night could be found. The noble Earl was not very sympathetic to my Bill, but I do not think he needed to answer the arguments himself; he could get plenty of Back Benchers to deal with a Ten-Minute Rule Bill.
There is no change in the situation as to what becomes a threat to the public interest if the threat is created by a
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trust, or a combine, however it is formed, whether by merger of great interests or the gradual build-up of something which becomes a monopoly, and the Government say it ought not to be dealt with in the public interest. That is why to-day we look at the experience we have had over iron and steel. That is why, so far as I am concerned, I shall never hesitate in the future to go on moving for the restoration to public ownership of those great interests which were acquired by the State and have been disposed of, again for purely political, dogmatic, reasons, and have since been giving a good deal to the people who got them back, though they are not giving all the results we ought to have from the plans which have been made. I should be just as much in favour of re-nationalising the industry at the first opportunity as I was of nationalising it.
Now, this plan to which we are drawing attention to-night has been very severely criticised by Messrs. Courtaulds themselves. Your Lordships will see that not merely is the principal figure in the textile industry objecting because of the effect upon the user of man-made fibres; objection is raised also because of their own experience in regard to the purchase of chemicals, and the like, from I.C.I., which they would require in their industry of producing man-made fibres. If I can find the spot, and if not I will speak from memory, I will quote the fact (I have found the actual quotation) that in 1951 the I.C.I. price for chlorine, another important raw material, was over 65 per cent. higher than that paid by the Courtaulds' German company to its supplier. By 1961, the I.C.I. price was lower, but still nearly 30 per cent. above the German price.
In what sort of position would the general British public, the user, and the citizens themselves at large, be if that merger came off, and then the side of the industry producing the prime raw material—the chemicals used—were able always to maintain its position? They would be completely within its power. I know quite well that in certain circumstances adjustment might be made here or there, or anywhere, in the arrangement; but who is to make it, and who is to insist on it? Where other manufactures are being dealt with—and, so far as we know, either one of the sections

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of the industry may also be interested in the conditions under which the material or finished article from abroad is imported—what is the ultimate safeguard for the British consumer behind it all? So I feel myself that in this matter we have been perfectly right in pressing for a public Inquiry.
I must say that, like the Financial Times, I am not impressed at all by the reasons given by the President of the Board of Trade as to why the Government either will not, or may argue they cannot—or, if they do, they do it with non-effect—have an Inquiry now. Surely if the Government, instead of having a completely flabby attitude, were to give an indication to industry and finance at large of what their answer would be in such circumstances, that might do a great deal to stop the danger of a merger which so much of public opinion has already decided is not in the public interest.
That is the case we put tonight. I have much more to say but I feel that it would be unfair to go on, when we have a list of eleven speakers and it is now five o'clock. It will be within the recollection of my noble friend Lord Longford that a woman novelist once put these words in the mouth of one of her feminine characters. Looking up at the man she was addressing, she said: "My love, as you are strong, be merciful". I may not he strong, but I should like to be merciful to your Lordships tonight. I think that I have put enough of the case I have in mind to enable the points that we hold on this side of the House to be debated. Therefore, I have great pleasure in moving the Motion which stands in my name on the Order Paper.
5.2 p.m.
THE EARL OF SWINTON: My Lords, I should like to congratulate the noble Viscount the Leader of the Opposition not only on raising this matter in such a timely manner but also on putting the case as he sees it so clearly, so compendiously and, I think, so fairly. I am never very long, but to-day I also want to be as brief as I can. Let me at once declare my interest. Unlike the noble Viscount, I am a staunch supporter of private enterprise, though I am not, unfortunately, a shareholder in either of the two companies.
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I do not propose to follow the noble Viscount in expressing a definite opinion on whether this proposed merger would be a good or a bad thing. I have read a great deal of the stuff that has been put out by both companies, and the general comments, but I am certainly not competent to express an opinion. I very much doubt whether anybody is really competent to express a valuable opinion unless he knows all the facts—and by that I mean all the inside facts, which it is impossible for either company to spread abroad. One cannot say that a merger is either good or bad, judging simply by its size. There may be a very large company which is very efficient and beneficent—and by "beneficent" I mean that it renders good service to its customers and clients—and there may be a much smaller company which is not to be commended in any of these respects.
For a few minutes, I think I can more usefully ask your Lordships to consider what is the function of a Government in a situation of this kind, and what is the course they should follow. I think it is clear that it would not be possible for the Government, under their statutory powers, to refer this matter to the Monopolies Commission; and I very much doubt whether it would serve any useful purpose, even if they had the power, and did so. I am also very doubtful (and here I differ from the noble Viscount) whether an inquiry of the kind he has suggested would serve any useful purpose. I am quite sure that it should not be a public inquiry, which is what was asked for by the noble Viscount on the last occasion, though I do not know whether he presses that point to-day.
That suggestion has been bruited abroad generally by the critics of the Government. Lot me say why I think that it would be, perhaps not impossible, but unreasonable and unfair, to have a public inquiry. If we are to form a really valuable opinion on this matter, we have to know the whole facts and the most inside facts, facts which it would be quite impossible, or entirely unreasonable, to ask either company to disclose in public—for instance, their plans for the future; how far their projects are succeeding; their research plans and how likely those are to suc-

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ceed, and within what time; and details of costs. Obviously, we cannot ask the companies to disclose these in public. The only people who would be enormously advantaged, if that were done, would be the competitors of these companies in foreign lands.
But that does not mean that these vital facts cannot be and should not be disclosed to Ministers; indeed, I very much hope that they have been.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, the evaluation of what is useful or not always seems to me to depend on who puts the questions and to whom. I remember being before the Royal Commission on Food Prices in 1925, which I am sure the noble Earl will remember, as he was then President of the Board of Trade. One morning, when we were dealing only with wheat, flour and bread, Sir Auckland Geddes asked me whether I would give in the public inquiry the Co-operative stocks of tea in bond that afternoon. It all depends on whom you are approaching, and how and why. I cannot see that to instance the competitors of the companies is any real answer to the case for a public inquiry.
THE EARL OF SWINTON: My Lords, the noble Viscount has not in the least "floored" me. I think that I was President of the Board of Trade in 1925. I certainly did not put that question to the noble Viscount. May I say that if I put it to him in private, I would expect him to answer, knowing that it would be treated in confidence. I very much doubt whether I should ever have asked him to say it in public, even in the heat of debate. I should like the noble Viscount, in fairness—and he has been fair over this—to consider whether it really would be fair to go to these two companies and tell them they must disclose in public the whole of their secret plans and secret researches, and their chances and prospects. These are all matters which their competitors would long to know.
I do not want to take too long on this matter, but I would remind the noble Viscount of what happened with the Companies Bill when I was leading on that side of the House, and the noble Viscount's Government, with Sir Stafford
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Cripps at the Board of Trade, were introducing the Bill, now the Companies Act, into your Lordships' House. Both behind the scenes and then in debate, in a most useful, co-operative and constructive Committee stage, we completely altered the Bill as it had been introduced and made it entirely acceptable. I well remember talking with Sir Stafford Cripps and the then Labour Lord Chancellor and asking whether the reserves of shipping lines should be disclosed—there was a question under the Companies Act regarding the disclosure of reserves—and the Labour Party put into the Act that they should not be. The reason for that was that it was the kind of information which would be most useful to competing foreign shipping lines. That was an exception to what would be the general rule. I do not think I need say more to show that that would be wrong.
But I have said that these are matters which it would be proper to disclose, and I hope they have been so disclosed, in confidence to Ministers.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: I think you actually included a quite similar provision in the 1929 Act. I was in Committee with you on it for four months.
THE EARL OF SWINTON: I have no doubt that I did; I had a lot of sensible provisions. The fact that at a later stage Sir Stafford Cripps and I and the Labour Lord Chancellor of the day all agreed shows, I think, that my views on this subject are not too foolish.
While, as I say, I feel the Government are right not to set up an inquiry, that does not mean, in my opinion, that the Government should take no action, and still less that they are impotent to do so. This is not just a matter of powers under Statute. Apart from Statute, the President of the Board of Trade and his colleagues have enormous power in this sort of situation if they choose to exercise it and think it right to do so. To take an example which I hope the Government will entirely accept (I have not consulted them on what I am saying on this, but quite recently they have not hesitated to exercise this kind of power) the Government thought it right that a number of aircraft firms should come together; that, if we were to compete

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efficiently in the markets of the world, there was only room for two or maybe three aircraft corporations. It was Government policy, and very largely Government pressure, that brought about the amalgamation of all the aircraft firms, I think except one, into these undertakings.
Conversely, it would be impossible in practice for a great merger of this kind to take place if the Government of the day stated that they thought such a merger was contrary to the public interest. I do not believe it could take place in that event. We are to-day far from the old days of laissez-faire, even it my Party ever really swallowed that lazy doctrine—and I do not think we did, even at the time when it was so popular and so successful in the Liberal Party. But certainly that is not the point of view of the Government to-day. The Government to-day insist—and I think rightly—that they must have a financial and industrial policy (and we are to have a further chapter of that revealed to us shortly) and with the best advice they can get (and I sincerely hope they will get from both sides of industry all the help they can, and certainly need, in this matter) that it is their duty to give guidance and, if necessary, direction.
This proposed merger, my Lords, if it takes place, or even if it does not take place, whichever event happens, is bound to have an enormous and important effect upon a large number of industries. I do not complain that the Government have taken time in this matter. I hope that the time has been occupied in ascertaining just those facts which I venture to say I think it is the duty of the Government to find out. I hope it means that they have obtained confidentially all the information they need in order to form a judgment of whether this merger would or would not, in their opinion, be contrary to the national interests. And in saying "national interests" I do not mean any abstract view about monopoly; I mean what setup in this man-made fibre industry is likely to be most efficient in production, research and development, marketing and, most important, in giving the best service to the users of the product, which is a large section of the textile industry.
I must say that I was just a little sur-
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prised when I asked the other day at Question Time whether in all the interviews which have taken place the consuming industries had been consulted, and gathered from the Minister without Portfolio that they had been in only a rather general way. Well, we shall come to know a little more about that. However, I should have thought that, as the consumers are becoming so important, the Government in framing an opinion would naturally take their views into consideration. But if the Government tell us to-day that they have conducted all the inquiries which they think are necessary to give them information and that they have all the information they have sought—and it is their duty to make up their minds—and in the light of it they do not think it is a case in which they should interfere to prevent the matter going on its way in what would be the normal commercial course, because they do not think there are any national interests which lead them to take a contrary view, then, in my opinion, the Government have followed the course which they ought to follow and I should not feel competent to criticise their action. I do not think many of my noble friends would dissent from what I have suggested is the proper function of the Government in a situation like this.
So much for the Government. But I feel I cannot close without saying something of the companies, or one of them—and in saying what I am going to say, quite briefly, I think I am expressing the opinion of a great many people. Under the wise guidance and leadership of my noble friend Lord Fleck, Imperial Chemical Industries obtained a remarkable position. It was not only that they were universally recognised as efficient and successful, but it was a very human enterprise; and, what is more, I think everybody felt that the company under that leadership had a great sense of public responsibility and a high regard for the national interest. Those are assets of inestimable value, some of them imponderable, if you will, but I am not sure that those imponderable assets are not the most valuable of all. That may all be equally true to-day—I hope it is. But I cannot help feeling that in the handling and the presentation of this business that imponderable asset of national good will has been considera-

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ably shaken. If I am at all right in that, then whatever the outcome of this issue may be, it is vitally important, in the interests alike of the company and the country that that confidence should be restored.
5.20 p.m.
LORD GRANTCHESTER: My Lords, I also should like to congratulate the noble Viscount the Leader of the Opposition on the manner in which he has introduced this Motion. I agreed with the noble Earl, Lord Swinton, when he spoke of the danger of making a judgment on insufficient information. I can understand the reluctance of Her Majesty's Government to express an opinion on the state of affairs existing between these two companies before it is known whether the merger will materialise and, if it does, how the resulting organisation will behave. Should its behaviour appear to be against the public interest, the Minister has declared his intention to refer the case to the Monopolies Commission. From the statement made by the President of the Board of Trade, Her Majesty's Government appear to believe that, at that stage, if they get an unfavourable opinion from the Monopolies Commission, they would need additional powers to take any effective action in the public interest. I suggest that this really is not good enough. It could also be most embarrassing after the merger for the new organisation.
What I suggest that Parliament has to do is to define very clearly what is and what is not in the public interest. There is nothing worse for industry than the unpredictable action which Government may take to alter the law after action has been taken which was legal at the time. On the admission of Her Majesty's Government in the Minister's statement, our anti-monopoly legislation appears to be inadequate. In fact, in barring intercompany restrictive agreements it does not seem to have been realised that mergers would increasingly be used to provide a way round the Act. In other words, this case has disclosed a serious and perhaps a dangerous loophole in the Restrictive Practices Act, 1956. What seems to be needed now is a reconsideration of the whole problem of over-concentrations of economic power with
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some simple criteria as to what is and what is not in the public interest. The inquiry should include the protection given by tariffs, which always tend to encourage monopoly growth. In my view the terms of reference should be in the widest possible terms to consider possible misuses of power, whether by the organisation of business or by the organisation of labour, for the public are entitled to be protected against the fears that such concentrations of power create in their minds.
The time for such an inquiry is appropriate. The Treaty of Rome includes provisions to deal with such matters. How they will be applied in practice remains to be seen, but I have the impression that the Commission of the Community intend to be firm in this matter to maintain real competition, without which stagnation would result in the Common Market. An exchange of views at this time during an inquiry with the Commission would be most useful. I hope Her Majesty's Government will set such an inquiry in being without delay.
I am afraid I regard the tears shed over this development between I.C.I. and Courtaulds by those who advocate more nationalisation, or what they call public ownership, as but crocodile tears. If it is as bad as they make out, a merger would make it easier for them to nationalise the combined undertaking. It is those of us who believe in the merits of and wish to preserve private enterprise in a free market economy who should be concerned. One of the greatest protagonists of the free market has suggested three conditions which are essential if the conscience of the public is not to be affronted in accepting the working of a market economy as preferable to that of any other system.
These conditions or rules for the good working of the market economy are, first, the preservation of competition to the greatest possible extent; secondly, to prevent the use of monopoly power, where complete competition is impossible; and, thirdly, the establishment of a State organisation armed with the necessary powers to maintain these rules. We feel, as the Minister seems to admit, that the existing powers of our supervisory organisation are inadequate.
The fact is that the continued

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existence of the market economy is dependent upon individual and not upon collective decisions. While those in industry fulfil their function as free men to take up opportunities with all the attendant risks they are irreplaceable and may claim a position which should not be challenged. But the moment they over-play for safety by trying to eliminate risks by collective agreements, they become but officials in charge of the administration of a business. In such circumstances, any business becomes the target of officialdom. To save us from this, the supervisory organisation set up by the State must be adequate to prevent undue concentrations of power. Further action in this field now appears to be necessary.
This will take time, and I personally cannot see why the two companies concerned should not be invited meanwhile to convince the Monopolies Commission on one issue, tha; should the merger take place, no undesirable concentration will be created in the category of manmade fibres. Such a limited reference to the Commission would, I believe, go far to allay the fears of the public and should be more useful to the companies concerned if decided now rather than after the completion of the proposed merger. I therefore ask Her Majesty's Government whether they will consider inviting the companies to argue that particular aspect of the merger proposals in front of the Monopolies Commission before the negotiations are completed.
5.30 p.m.
LORD SHEPHERD: My Lords, this is the second occasion on which I have spoken in this matter, and I think that I should declare, as I failed to do on the first occasion, that I have no interest whatsoever in either of these companies. My only connection is, shall I put it, of a salesman of merchandise in which man-made fibres play a part. I raised this matter on the last Sitting before Christmas, a Wednesday, in view of the announcement which had been made on the previous Monday by the Chairman of I.C.I., that there was a proposed merger between these two companies. As I indicated to the House then, this was a merger not of two factories but of two large economic production groups. In many respects they were twined and intertwined in production and in agree-
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ments. The noble Viscount the Leader of the House agreed that one could say that in the man-made fibre industry a monopoly did exist.
My Lords, this position had grown up by these two companies through a force of circumstances. In the first case, I.C.I., which had been primarily a chemical industry, had moved into the man-made fibre industry because its product was directly involved. If my memory serves me correctly, they purchased the rights to manufacture two or three different fibres. In the case of Courtaulds, this was one of the oldest of the textile companies of this country and it moved into the chemicals sphere because of a need for raw materials; and as it grew it moved into some of the areas in which I.C.I. itself was operating. It purchased a paint company. And to-day I.C.I. and Courtaulds between them share approximately 30 per cent. of the paint production. Courtaulds are interested in cellulose paper; I.C.I. are interested in plastics and other types of paper used in packaging. So your Lordships will see that we are not dealing with a typical merger of one woollen mill taking over another woollen mill, or one cotton mill taking over another cotton mill; we are faced with two very large economic units—and, I would stress, economic units that are absolutely vital to a very broad section of industry in this country. Therefore when we are looking at this, when we are taking into account the 90 per cent. monopoly of man-made fibres, we see that there is a proposed merger of two large chemical units that play a very vital part in industry.
Yesterday we had a statement from the Minister in which he said that in the present circumstances, whilst it was true that a monopoly position existed, there was no reason to believe that it was against the interests of the public. A monopoly position does exist, in that there are some arrangements, particularly in nylon, where I.C.I. and Courtaulds hold a 50-50 percentage of the shares; but they are, in faot, producing basically different types of yarns and different types of fibres; and they are also slightly different in construction, due to the chemicals that are used. These different fibres, however, are in competition with each other, and can

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be used and exploited by the salesmen of the two companies in competition of price and delivery. A monopoly may exist, therefore, if one looks at manmade fibres as they are. But the monopoly could be broken immediately if Courtaulds or I.C.I. decided to change their lines; then there could be real competition.
Courtaulds themselves are developing new fibres; they have a remarkable story of development. One of their latest, "Courtelle," is advancing very rapidly in this country and overseas. Therefore one can say that, while the two companies monopolise production, they do at the present moment compete against each other in making one fibre more popular than another, with advantage through price, delivery, handling or whatever it may be in the textile world. But once a merger goes through, the existing element of competition will completely disappear. Therefore, if the merger goes through, what might be regarded as a loose monopoly to-day will become a hard, solid fact; and, as the noble Lord, Lord Grantchester, said, it will be a monopoly that will be protected, or is protected at the moment, by a tariff of approximately 20 per cent. If the merger goes through. and is then found to be against the public interest, how can you unscramble it? How will you dispose of the shares? Who will buy them? I do not believe it would be practicable if this merger went through, to bring back the present position.
We have asked for an inquiry. I asked just before Christmas that this matter should be referred to the Monopolies Commission. I do not believe that the Monopolies Commission can handle this inquiry now, because they cannot deal with a hypothetical question. For this reason, I think that the Government should set up a full inquiry. I should prefer it to be conducted on the basis of the Monopolies Commission. So far as possible, it should be conducted in public, as I think the public are interested, and the public should be aware of the pros and cons of such a merger, or any other type of merger that may well occur. I fully appreciate the point made by the noble Earl, Lord Swinton, that there are certain facts which it is obviously right should not become
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public knowledge. But, of course, the Monopolies Commission have a right to go into private session and hear facts if they so wish. So I do not see any difficulty in having this inquiry if the Government are prepared to face up to the issue.
I do not want to speak much longer, but if the Government maintain that the facts before them indicate that this loose monopoly about which I have spoken does not act against the public interest, I have before me certain facts and figures which I feel I must put before the House. They are the various prices for various chemicals used in the man-made fibre industry. There is nothing secret about these figures; any person involved in the chemical business can get these prices. I think it is a fact that the prices of chemical products supplied by I.C.I. to Courtaulds are generally higher than those quoted by any other competitor in this country, if he exists, and generally higher than those called for by Continental manufacturers. There is very little competition in the chemical industry to-day. I.C.I. and Courtaulds have seen to that; they have merged and taken over their competitors.
I will give your Lordships some figures. In 1962 the I.C.I. price for caustic soda is £22 1s. 7d. per ton. This was brought about by a threat by Courtaulds to I.C.I. that if their price was not brought down as compared with their prices of 1959 and 1960 Courtaulds would either build their own plant or turn to the European Common Market countries. The caustic soda price is £22 1s. 7d.; the German competitive price, the local price, is £21 9s. In 1958 the price for chlorine was £33 12s. per ton; in 1962 it is £24 15s. per ton; the German home market price is £20 8s., a difference of over £4 a ton. In 1961 the price for methylene chloride was £77 per ton, and this was only after severe pressure by Courtaulds on I.C.I. to adjust its price. The Continental price is £60 a ton. In 1960 the price for methyl chloride was £126 per ton; in 1962, after a threat by Courtaulds to produce itself, the price came down to £56 per ton. The current price for urea is £36 7s. 6d. per ton; Polish supplies are at £28 10s. Now I am in some difficulty; I cannot pronounce the word. It is the name of the yarn now being used in the manufacture of

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Courtelle. It is acrylonitrile, manufactured in the United States at present and sold by I.C.I. The price is £157 per ton; in 1958 it was £255; the United States domestic price—remember that this particular chemical is made in the United States, is imported by I.C.I. and is sold to Courtaulds—is £116 per ton, as opposed to the price for Courtaulds of £157 a ton.
There may be some reason for these differences in prices. Courtaulds tell me that they estimate that when their competitors purchase in Germany the cost of their raw products would be a least £270,000 less than they pay I.C.I. There may be an explanation why I.C.I. prices are higher than those of their competitors in Germany or on the Continent. It is interesting to note (and here I would not be unfair) that there is some similarity between the European price when you add the import duty and the I.C.I. price. The question I think we must ask ourselves is this. Courtaulds are a textile firm and their products are world wide. If the merger goes through and they have to buy at I.C.I. prices, how then will stand the competitive position of our man-made fibre weaving and spinning industry against the Continental manufacturers'?
I.C.I. have said that this merger is necessary particularly if the proposal for our entry into the Common Market goes through. My experience of the man-made fibre industry, particularly of the well-known products of Terylene, is that these articles are all manufactured in the main countries like France and Germany, the United Kingdom and United States, under licence, and that the market is divided up among the manufacturers who hold the licence. In fact, there is very little physical transfer of merchandise from one country to the other. Last year United Kingdom exports of man-made fibre were in the region of 10 per cent. of its production. I will not refute the statement made by the chairman of I.C.I., that this merger is necessary for our export position, but, being a rather suspicious business man, I rather fall back on this: that the real object of the merger is not for the benefit of the man-made fibre industry but is to protect the position of I.C.I. I.C.I. is an important industry, but is it right for this country that this merger
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should go through if it has ill effects upon this country's ability to export or, even if our participation in the Common Market comes into being, to withstand the pressure of imports of overseas countries? I think that there is an undoubted case for a full inquiry into the whole merger. The country is entitled to he satisfied that if the merger goes through it will be in the national interest and the nation will be well protected.
There is one last point. I rather share the view of the noble Earl, Lord Swinton, about the sorry display of to-day. I think it raises this issue. We have dispute from either side of the House on how our country should develop, whether we should have a system of public enterprise or whether it should be private enterprise. But with this I am sure every Member of the House will agree: that our country would far better develop with careful understanding and planning than that control and direction should come through what is nothing more than a public auction.
5.50 p.m.
LORD BALFOUR OF INCHRYE: My Lords, while in their handling of this matter I cannot see that Her Majesty's Government have done anything that justifies the criticism put forward by the noble Viscount, the Leader of the Opposition, there are certain aspects of the merger which cause me, and I believe others, some concern, and in a very few moments, if your Lordships will allow, I will endeavour to deploy those matters. The noble Lord, Lord Shepherd, with his full knowledge, entered the field of technical controversy. The noble Viscount, the Leader of the Opposition, just skated round the boundaries of the field of technical controversy, but, like my noble friend Lord Swinton, I certainly keep clear of that, because I believe two matters are quite clear in this debate. The first is that we are in no position to judge the relative technical or financial claims of the rivals in this controversy. Nor do I believe that it is Parliament's task to try to judge such matters. There are few Members of your Lordships' House or of another place who are really technically competent to give a view on these complex questions. All of us who have read the literature surrounding this controversy have read documents from each side

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which, with force and conviction, seem to cancel each other out. I must say that when I have read all the literature there has been brought to my mind the song, "Anything you can do, I can do better." For that reason I think it is wise that we should leave the technical aspects alone.
The second matter which I think is clear is that Her Majesty's Government at present have no legislative powers to forbid this merger. As I understand it, the position is that, after the merger has taken place, if the giant which has been created apparently abuses its powers, then the President of the Board of Trade can refer the matter to the Monopolies Commission. But that is after the event, and even if the merger is of benefit to our national economy I believe that this action after the event is not really good enough, because great mergers such as this must have social as well as economic effects.
In this case we know that both parties to the merger have exemplary records and achievements in the way of staff relationships. Even so, what we are seeing is tens of thousands of workers having their employers changed without notice or consultation, and without any individual say in their industrial fate and future. What we see is the way of work, possibly the location of work, possibly the conditions of work, possibly even the security of work, changed without any notice or any say on their part. Thirdly, what we see is an undignified display of what I would term financial "tinsel" on the Stock Exchange, and an unedifying exhibition of capitalism and free enterprise working at its very worst as regards public relations. I say that as a Conservative and as a firm believer in the principles of capitalism and free enterprise.
The President of the Board of Trade has declared that he is inquiring into all aspects of mergers and take-overs. But he has admitted that that is a considerable task—something of a long-term review. Surely what we need now is something not so complicated or difficult to devise. For mergers beyond a certain size in terms of money—and, after all, terms of money finally govern the amount of human employment—I think we should consider some simple machinery which, while not hindering
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desirable mergers, will look at such proposals from the two viewpoints of social importance: first, to see that the interests of those engaged, workers and management, are reasonably safeguarded, and secondly, to see that such national or international competition as may hitherto have existed is not likely to be swept aside. After a merger, and when the merger is working, the Monopolies Commission then, as it were, take over as regards any possibility of abuse and are the watch-dog of public interest.
Such an inquiry as to the desirability of mergers is not strange to us. It is not much different from some parts of the terms of reference of the Press inquiry going on at the present time. It is not an exact analogy, but the Press inquiry is looking into the desirability of the merging and elimination of newspapers. It occurs to me that, possibly for mergers beyond a certain size, something on the lines of the old Capital Issues Committee might be considered—as it were, an approval committee—as an instrument from whom those merging would obtain certification for the two aspects which I have suggested: the safeguarding of the interests of those engaged in the industry and ensuring that competition which hitherto existed is not swept away. Both parties would be free to go to such an approval committee for their certificate of approval, and in the case of a reluctant board finding itself attacked by a powerful enemy wishing to take it over, either party could apply and both parties could be heard.
This is only a suggestion in respect of something which I feel is wrong at the present time in the industrial system under which we live. It is for the Government to recognise that all is not well, and it is a responsibility of the Government to put matters in order. It is for these reasons that I have intervened in the debate this evening, feeling that Her Majesty's Government have acted in every way perfectly correctly but that there is still something not quite right in our system which we look to them to put right in the future.
5.56 p.m.
LORD WALSTON: My Lords, I freely confess to a prejudice in this matter. My prejudice is that I am an anti-monopolist, and I share a great many of the views

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of the noble Lord, Lord Grantchester, as to the advantages and the importance of competitive private ownership. But the accent must be not on the words "private ownership" but on the word "competitive". There is no point in closing our eyes to the fact that at the present time, as things are moving today, in our economy the room for relatively small competing units is becoming less and less; and the whole tendency, for technical reasons as well as for financial reasons, must be towards ever larger units.
To my mind, this proposed merger of I.C.I. and Courtaulds, although by far the most important that has arisen so far, is no more than a symptom of this general trend. We have many examples. Twelve months ago, from the national point of view although, directly speaking, perhaps not from the economic point of view, we had an extremely important merger of the Daily Mirror Group with Odham's Press—something which is bound to have a great, and an increasing, effect as time goes on, upon the life of this country. At a rather lower level we are now having an increasing trend towards monopoly in the shoe industry. The motor car industry, in the shape of the B.M.C. giant, is growing. The ultimate effect is bound to be that one by one its smaller competitors will disappear. The noble Earl mentioned, quite rightly, as another example of movement towards monopoly the aircraft industry. Some of these monopolies are essential. Some of them do harm; some of them, on balance, do rather more good than harm. At this stage (because I certainly have no technical knowledge which would enable me to do so), I am not going to say whether or not the advantages of a merger between I.C.I. and Courtaulds outweigh the general disadvantages of any monopoly and any great concentration of power, particularly in an industry or group of industries which so closely affects the economic life of the nation.
I go a very long way with the noble Lord, Lord Balfour of Inchrye, in his general proposals about this matter. Looking at it in rather more perspective than just in regard to the present matter, I think we must realise that we are now emerging from the form of business
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organisation which had its roots in the middle of the nineteenth century and are entering at the present time into a firm and monopolistic business structure. There are various ways of dealing with that. Some of my colleagues, and certainly I myself, say that the answer is nationalisation. That certainly has the value, in some cases, of simplicity, and also has the value of logic, from the theoretical point of view, if not always from the practical point of view. At least, with such a great concentration of power, those directing it and driving it are responsible, not just to a relatively small group of shareholders but to the country at large. That is one of the very strongest arguments, to my mind, in favour of nationalisation. But it also has many disadvantages, though perhaps this is not the time to go into them.
There is another way of dealing with monopolies. That home of private enterprise, the United States, has for many years had its anti-trust laws, specifically designed to prevent undue concentration of economic power in a small number of hands. From what we have seen of the way those laws act over there. that is not a method that I think would commend itself to your Lordships, and certainly it does not commend itself to me. But I feel that the present attitude, whether in this particular case, or in more general cases that will arise in the future, of sitting back and saying, "This is purely a matter for the owners of the business and the shareholders, acting with their directors; let them get on with it," when it is a matter of urgent public interest and importance, is not the right way of going about it.
Reverting to what the noble Lord, Lord Balfour of Inchrye, suggested, I believe that it should be said very clearly that, before any merger takes place which is likely to bring about a monopoly, or where two already monopolistic firms are getting together, or where, in the opinion of the Government, there is likely to be such a concentration of economic power that the interests of the country may be affected, the Government should be in a position to call upon those parties, and not simply rely on one side or other in the proposed merger to object. The Government should have the right to call upon

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both the sides to prove that the public interest will not suffer. In other words, the onus of proof must be upon those who are proposing to create the concentration of power, rather than for the Government or Monopolies Commission to show that the public interest is likely to suffer.
I would remind your Lordships that there are many ways other than simply in regard to high prices, or restriction of choice, and direct matters of that kind, in which the public interest may suffer through a monopoly. For instance, the group may decide that it will not pursue a particular form of research; or it may decide to bring its influence to bear on the Government to protect it by imposing high import duties, or by a restriction of imports. There are many ways, both direct and indirect (which, inevitably, cannot come up before the Monopolies Commission) where the monopoly can act against the public interest.
I feel, even if we fail in this request to-day, that there should be an inquiry into this specific proposed merger. I hope that the voices which have been raised about it will at least have the effect of making the Government think seriously and urgently, not solely about this particular merger between these two firms, but about this growing trend in our national economy towards huge concentrations of power which can have such great effects upon the whole life of the country and its economic future.
6.5 p.m.
LORD HAWKE: My Lords, we are dealing here with a very fashionable industrial marriage, and the usual questions arising on a marriage arise here: first of all, the question of the marriage settlement; secondly, the compatibility of the parties; and, finally, the national interest. As regards the marriage settlement, as a shareholder of Courtaulds I am not greatly enamoured of the terms offered. I do not think the "bridegroom" is putting enough into the settlement. As regards compatibility, this is quite clearly no love match, but I am told that, on the whole, marriages of convenience, arranged marriages, often turn out better than those starting as love matches.
But the main point we are debating here, of course, is the public interest.
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Some people think that the public interest is best served by a number of small men competing bitterly against one another. The noble Lord, Lord Grantchester, has for many years been an apostle of that creed in this House. I regard that as a nineteenth-century idea which is completely outdated, and any doubts that I ever had on the subject were resolved when I was engaged in the textile trade and watched Lancashire slowly bleeding to death between the wars through pig-headed adherence to precisely those ideas. My Lords, modern industry requires huge capital to be sunk into it in regard to the very expensive processes involved, and that capital, whether it is capital inside the company, or its reserves, fresh capital raised on the market, or whether it is capital put up by the Government, is a national asset. As a great trading nation our stock of capital is our lifeblood. It is of the greatest importance that our great trading companies should do their utmost to maintain the stock of our national capital.
This raises, of course, a very wide question which is very general to-day. Industrial processes in these days frequently require the setting up of gigantic plants costing enormous sums of money, which can very quickly be made obsolete by some improvement, perhaps not a large improvement, thought out abroad or elsewhere. The noble Lord, Lord Balfour of Inchrye, will be well aware of the difficulties he has with his air transport company, due to the fact that people keep inventing aeroplanes that go faster than those he bought a few years back. The chemical industry is faced with precisely these problems. The cost of producing some product may be comparatively small, but the cost of writing off the plant in the few number of years in which it may have some monopoly value is quite enormous. The industry is particularly liable to price-cutting, because somebody who may not have the same regard for writing off that plant can come along and offer very heavy reductions in price without showing a manufacturing loss, but, of course, at the same time not replacing his stock of capital.
I emphasise again that it is in our national interest that in most cases capital should be replaced before it becomes obsolete. This, I believe, is probably

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the main reason for the I.C.I. bid: to own your own customers gives you the best security in the market for your products. The second main reason I guess to be that when we go into the Common Market, if we do, we shall then be competing with the giant producers of Europe and America. I.C.I. will be greatly strengthened in bidding for a share of this marker, if they control not only most of the chemical industry in this country but also that great chemical user, the man-made fibre industry, which moreover in this case itself owns very important sally-points into the Continental markets.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, does the noble Lord maintain that that should go on; that the I.C.I. should endeavour to do the same thing with regard to paint, to fertilisers, or to any of the other industries in which they provide a large amount of the raw material?
LORD HAWKE: My Lords, these things are a question of degree. They already are a considerable size in paint, but the man-made fibres and the chemicals, particularly, go together, because the man-made fibres are really only chemicals in another form. If they are to get a proper share for Britain, it is to our advantage that they should have the greatest possible bargaining power. I agree that a case for strength in this way can lead to a monopoly. There are to-day some safeguards. To start with, at least a year or two ago I believe I.C.I. was run by divisions, and it was perfectly open to one division to buy products from outside its own firm. They are subject to tariffs, there is foreign competition both in chemicals and fibres, and it is perfectly open to Parliament at any time to cut the tariffs.
Incidentally, the noble Lord, Lord Shepherd, gave instances of what he thought was the abuse of I.C.I.'s position. It seems very strange that during these last two years, in spite of paying what he regards as inordinate prices for chemicals, Courtaulds' exports have nearly doubled. But, in the last resort, of course, the Government can have some sort of inquiry.
Personally, I do not regard the danger of exploitation as very great, because there is a new conception of the duty of industrial giants abroad in this
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country, and the noble Viscount the Leader of the Opposition referred to this. I think the chief danger is that they may be tempted to treat their shareholders in a very cavalier manner. Although I think the board of I.C.I. well deserve certain strictures, which my noble friend Lord Swinton passed, I would say that I do not consider that my board of Courtaulds have treated me very well in cutting my dividend one day and a few months later painting a very glowing picture to the people who were proposing to buy them out.
If we go into the Common Market, my Lords, it will be absolute nonsense to talk about a monopoly. There will be no monopoly of I.C.I. and Courtaulds with chemicals and man-made fibres. It will be just one of the competing manufacturing giants of the Common Market, and there will be no monopoly at all. If we do not go into the Common Market we can always cut the tariffs. I believe that the danger of exploitation is small, and the advantage to public interests, by creating an industrial group covering both fibres and chemicals which is able to talk on equal terms with the industrial giants of America and the Continent, is very great.
Courtaulds are pleading for horizontal combinations. I believe that in the modern world the vertical combination system is more modern, for under the vertical system there is much more security for anybody to recover the capital he sinks in manufacture before that capital has become obsolete. I believe that the President of the Board of Trade has acted quite rightly in the light of modern trends and conditions; but I do not mean to say, necessarily, that the merger will go through, because it has got to satisfy the shareholders of Courtaulds and, I hope, the I.C.I., too. Nevertheless, I believe that the Government have taken a perfectly proper attitude in the matter.
6.16 p.m.
LORD SILKIN: My Lords, it is traditional in this House to thank the person who has put down a Motion, for having done so. I have known occasions when, perhaps, I did not feel that gratitude at all. Nevertheless, it is the tradition and thanks were duly given; but on this occasion I am sure that the whole House will be grateful to my noble friend for

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having put this Motion down, and for a number of reasons.
The first reason is that I scarcely remember a debate when there were so many worthwhile, indeed excellent, speeches on one side or the other, although I am not at the moment expressing approval or disapproval of the point of view of any of the speakers. I am referring to the quality of the speeches and the thought that has been put into them, starting from the excellent speech of my noble Leader, which certainly did not suffer at all because he put his case in a concise form, right down to the last speech to which we have listened and to which I listened with complete disapproval, but, nevertheless, I thought it was an excellent speech. From that point of view, therefore, I think that the debate has been well worth while.
There is one speech to which I should have liked to listen unfortunately we are not going to get it. While I always enjoy the speeches of the noble Viscount, the Leader of the House, and I look forward with great pleasure to hearing him, I should also have liked to hear the noble Lord, Lord Mills. who sat very quietly listening to it all. One would have very much liked to know what he really thought.
THE LORD PRESIDENT OF THE COUNCIL AND MINISTER FOR SCIENCE (LORD HAILSHAM): My Lords, although my noble friend is now here to speak I think I ought to say that he was, unfortunately, not able to attend the greater part of this debate for reasons which were outside his control, and out of courtesy to the House he has asked me to reply.
LORD SILKIN: My Lords, I do not complain of the substitute. But there is still time for the noble Lord to make good the deficiency.
This is not really a debate on the question of whether or not this particular merger should take place. Obviously, it is the occasion for it, but most of the speeches were in such terms as to express general views on a very difficult problem indeed, the problem of monopolies, size of undertakings and so on. I should particularly like to express my approval of two speeches, not because
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I agreed with them absolutely, but because there was so much in them that was of substance which most people could accept; those are the speeches of my noble friend Lord Shepherd and of the noble Lord, Lord Balfour of Inchrye. I do not often agree with Lord Balfour of Inchrye, at least not publicly—although I think that privately we might agree very much more—but I agreed with almost every word he said tonight.
I would say that the balance of the debate on this occasion is quite definitely in favour of an inquiry. Although, as I have said, the occasion of this debate is the proposed or contemplated merger, I think an inquiry would have served the general purpose of clarifying all our minds on what are to be the criteria in judging whether or not a merger of this kind is in the public interest. This particular battle, of course is a battle of giants, and I do not think I am being unfair if I say that the real battle is not over the public interest. The battle between the two giants is simply a battle as to the terms upon which this merger should take place. After all, as the noble Lord. Lord Hawke, said, there were preliminary encounters and discussions, and the parties were quite willing to go into a merger. The quarrel is only as to whether or not four I.C.I. shares are equal to five of Courtaulds. As I understand it, that is the sole issue between the parties. If the I.C.I. were willing to give one share for one, it is probable that we should not have heard very much about the matter—and I would not for a moment suggest that they should not or that they will not offer it in due course.
What we have to decide is whether the Government were right in saying that if this merger came about it should come about without an inquiry of any kind at this stage. I would suggest that if a prima facie case can be made that this might be against the public interest, then an inquiry ought to take place; and I would submit that a prima facie case has already been made. I do not know how many noble Lords have received a document from the Courtaulds group, but if they read that I think they will find that it is full of instances indicating that a merger would be against the public interest. I do not want to quote from the document, as there have been a good many quotations from it in

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another place and, to a certain extent, also here, but noble Lords have only to read this document to satisfy themselves that there is at least a prima facie case for an inquiry. I do not want to make much of the point that the Imperial Chemical Industries have not replied to it. It may be that they have not had time, or there may be another reason. But, whether they have or not, a prima facie case has been made out, and I would submit that there ought to be an inquiry on that ground alone.
The real case against an inquiry was made, I think, by the noble Earl, Lord Swinton, whom we are always glad to, hear in the rôle of an elder statesman who looks at both sides and then comes down on the side of the Government. He says that nobody is competent to express an opinion at this stage. I would say that the Courtaulds group have expressed an opinion—and if he read this document he would find it was worth while giving it consideration.
THE EARL OF SWINTON: With the greatest respect, I did not say that. What I said was that, as I saw it, it was the duty of the Government to get the whole of the facts and, because they were the Government, to make up their minds. The real issue is whether we should have an inquiry by some independent body or whether it is the intention of the Government to make up their minds—and both would have exactly the same facts before them. I happen to think that when the noble Lord's Government nationalised everything they made up their minds and did not have an inquiry. What would be intolerable would be if on this issue the Government said, "We have not got a mind".
LORD SILKIN: But is that not exactly what the Government are saying?
THE EARL OF SWINTON: I hope not.
LORD SILKIN: That is exactly what they are saying. They are saying, "We cannot make up our minds at this stage. We must wait and see." By which time the damage will be done. They say, "We will wait several years, until the damage is done"—
THE EARL OF SWINTON: Will the noble Lord forgive me for interrupting?
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I do not want him to think I am defending something which I should regard as entirely indefensible. If the Government to-day were to say, "We think this is nothing to do with us. Let nature take her course"—or whatever the expression may be—"and let there be a fight. We have no responsibility in the matter", then I would say that certainly you had better have an inquiry. But I am sincerely hoping that that is not what the Government are going to say, although I do not know what the Government are going to say.
LORD SILKIN: The Government are not saying, "We have no responsibility in the matter". They are not going as far as that. They are going as far as to say, "Even if we think there is something we can do about it, we must wait some years and see, until the damage is done, and then, after the damage really is apparent, we will introduce legislation and act accordingly". But to carry one's mind forward, what will it be possible for the Government to do in those circumstances? By that time, on the case that is made, there will be a monopoly; it will be a monopoly carried out by one company, not two—the Imperial Chemical Industries. There will be one group of shareholders and the two concerns will have been integrated. What possibility is there of a Government's being able to take effective action short of nationalisation? And that, of course, I am sure the noble Earl would not contemplate for a moment. He said so. So what is the good of saying, "Let us wait some years and see what happens, and then act"? I say the Government are not acting responsibly in taking that view.
I am dealing specifically with the noble Earl's speech because I think he made the best case that could possibly be made—and I say this quite sincerely—for doing nothing at the present stage.
THE EARL OF SWINTON: No. If the noble Lord will deliberately misunderstand and misrepresent me, I really must leave those Members of the House who heard me to interpret my speech, which I thought was pretty clear, and those who did not to read it to-morrow and see what my version is and what the noble Lord is saying now.
LORD SILKIN: The noble Earl must not say that I am deliberately misunderstanding him. It may be my stupidity, or it may even be possibly the way in which he put his case, but I am not deliberately misunderstanding him.
THE EARL OF SWINTON: I accept that: not "deliberately".
LORD SILK1N: As I understood him, he is accepting the position that, having had some discussion with the parties, the Government have decided to take no action. That is all I was saying.
THE EARL OF SWINTON: It was not what I said.
LORD SILKIN: No; but the noble Earl went on to say that the only possible course of action, if they did take it, would be by way of a public inquiry.
THE EARL OF SWINTON: No.
LORD SILKIN: Then I will leave the noble Earl alone. What he thinks he said and what I understood him to say are so far apart that we are not really in a position to debate it.
THE EARL OF SWINTON: Read it to-morrow.
LORD SILKIN: However, there was some talk of the difficulty of holding a public inquiry, and the suggestion that it would not be practicable or feasible to have a public inquiry because disclosures would be made which would be damaging to the trade, to the industry, of the the different concerns. But, my Lords, if a case goes to court, and the Monopolies Commission take action, there is a public inquiry, and all the relevant facts are gone into in order to decide whether it is a case in which action should be taken. The kind of inquiry we think should be held is no different in principle or character from the kind of inquiry which would be held if the Monopolies Commission acted. While it may not be practicable in the present circumstances for the Monopolies Commission to intervene—they may not have the powers—I nevertheless have in mind, and I am sure my noble friends have, that the kind of investigation which would be necessary to determine the issue of public interest is simply the one which would be conducted if the Monopolies
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Commission had the power to order such an investigation. So I do not think we need be deterred from holding an inquiry by the danger that it would have to be in public.
My Lords, that is the simple issue. Has a prima facie case been made out for the holding of an inquiry before action is taken? I would ask further that, in any event, is any possible action that might be taken in some years to come likely to be of any value at all in repairing the damage which, if it is created by this merger, will have been inflicted upon the public of this country? We feel—and I think most of us who have spoken take this view—that there is a strong prima facie case, at least, for such an inquiry being held. The general public is concerned about these matters. There is a feeling of uneasiness among the general public, and I would say that the Government would have been wise to have an inquiry on that ground alone. If the Government had been satisfied that such an inquiry would be desirable and valuable, I have no doubt that the public spirit of both companies would have enabled them to hold up any further discussions on the merger till the result of such an inquiry had been declared. So I hope, even at this late stage, that the Government will see their way to reconsider their decision and decide that some form of public inquiry should be held into this merger.
6.32 p.m.
VISCOUNT HAILSHAM: My Lords, before I embark upon the reply which I have to make, I have to tell the House that, when I learned relatively late yesterday that this was to be my task. I caused a message to be sent to my bankers asking whether I had shares in either of these two concerns. I thought the answer would be "No", but the answer was "Yes"; I have shares in the Imperial Chemical Industries, and my wife has shares in Courtaulds. I do not think that this circumstance has deeply affected my judgment in the matter, but it is quite clear that first I should declare my interest in the matter, and also that I should apologise for having spoken on December 20 without having done so. The reason, I am afraid, is that I was unaware of the lively interest which I

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ought to have been betraying on personal grounds in this proposed merger.
This has been a thoughtful and temperate debate, and I, like other speakers, am grateful to the noble Viscount for putting down the Motion for Papers. If he will allow me to say so, I think it is a very satisfactory method of debating the subject and is preferable to the kind of ragged discussion which sometimes follows Ministerial statements if this course is not taken. I think we all recognise the importance of the questions involved. They go to many issues which lie at the root of industrial and economic organisation. So far as I am concerned—and I hope this may almost be the theme of what I have to say—the more often they are discussed in Parliament, the better; and the more often they are discussed in a spirit of good humour, as they have been discussed to-day, the better. This, of course, does not necessarily mean—and here, I am afraid, I am to some extent repeating what I said to the noble Lord, Lord Shepherd, before Christmas—that I think there ought to be, at this stage, at any rate, an inquiry, because my view, for what it is worth, is that Parliament is not at all ready to be shed of this matter yet, and that the true interest of the country and of Parliament is that Parliament should retain seisin of a discussion of these matters, and not try to delegate its responsibilities to somebody else by an inquiry of any kind.
I would also make only these two general qualifications. The matters are so important that I think it is at least as important to act rightly, or at least not to act wrongly, as it is to act quickly. I personally have such absolute confidence in our Parliamentary system that I have no doubt whatever of our complete ability to tackle any aspect of this problem, at any time, in what may seem to us to be the proper manner. Therefore I am not one of those who, on that count at any rate, would move into premature or precipitate action. I should also think, although I recognise the immense importance of a merger of this particular size, that it is still, on general grounds, preferable to deal with questions like mergers on general principles, rather than try to legislate for a particilar case. This is a general principle of legislation, and although I recognise that, on a merger of this particular size,
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there are arguments, and powerful arguments, for dealing with it as sui generis, I would not depart from the general idea that general principles of legislation should be pursued rather than ad hoc action.
We discussed this matter, as I have already said, just before the Recess. There were not so many noble Lords present then as to-day, and I am afraid I took the opportunity at that time of giving some general thoughts to the House. But for all that, I will not repeat myself to-day. On the contrary, I will try to deal with the issues raised to-day on a more pragmatic, if on a slightly more superficial, level. Since December 20, when we discussed the matter last, the situation has changed in one respect: the two companies, which were at that time, unless my memory plays me false, thought to be in some kind of agreement, have broken into public conflict, and one has threatened to appeal to the shareholders of the other above the heads of its board. Personally, I deplore this development. The spectacle of two great public companies of such immensely high national and international reputation, and with such a splendid record, each of them, thus at conflict is, I think, both unedifying and undignified, and I could wish that they had not chosen this particular method of conducting their affairs. But my business is to handle the matter as it is, and not as I should like it to be, and from this point of view I should like to define the attitude of the Government.
The first thing I should say is to make it plain, if it required to be made plain, that the only thing which interests any of us on either side of the House is the public interest. Private interests are, of course, important things, and I think we all recognise that, but in matters of this particular kind, and I would say generally in matters of this kind, the particular interests involved—the shareholders, the boards, the staffs, the individual customers and users of the product—are probably fairly well able to look after themselves. And even if they were not, it is at least not self-evident that it is the Government's business to look after them at all here.
What we have therefore to consider is the public interest first, last, and all the

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time, remembering, as I think we should remember, that the public interest may just as well require that we should stand aloof from a matter of this kind as that we should involve ourselves in it at any particular stage. I would entirely agree with my noble friend who spoke below the Gangway that we cannot throw off responsibility in this matter. Nor can we fail to interest ourselves in the matter; nor can we fail to inquire into the facts and make up our minds about the matter. All these things are our duty. There I would agree with the noble Lord, Lord Walston, although I would not go with him in his conclusion that it is our duty to impose a burden of proof on one side or the other. I think that our business is to ascertain where the balance of advantage lies in any particular case, and to say so without hesitation.
I would go all the way with my noble friend below the Gangway when he demanded that, if the Government get the idea that the public interest requires our intervention, either officially now, or unofficially now or in the future, either before or after any merger of this kind, we should not hesitate to act in accordance with what our conviction may be. I have not, and the Government have not, the smallest doubt that, if the public interest required it, and if Parliament were behind us, we could act effectively at any time.
I entirely agree with my noble friend Lord Swinton that we have many powers already and have great influence already. Every Government of this country ought so have influence in such matters. It may be true that we have not the power which we have in relation to the aircraft companies, because in fact we are the principal customer of the aircraft companies. But I have no doubt at all that if the Government were to say that this thing should not go forward, responsible business interests would probably see to it that it did not go forward. And if the Government. with Parliament behind them, said that this should not go forward, either it would not go forward, or Parliament would be able to take action which would be able to prevent it from going forward. Of course, it might be to some extent that we should require new legis-
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lative powers, but I have no doubt that, if Parliament felt that way, we could get them. Therefore, I do not rely upon absence of powers at all, though it was perfectly proper for my noble friend Lord Mills and for my right honourable friend in another place to inform both Houses of what is the legal position. This is important, but it is not decisive.
It is worth saying, however, that, apart from the case which the noble Lord, Lord Shepherd, endeavoured to raise, based on the prices of certain raw materials used in the manufacture of man-made fibres, no one, neither the noble Lord, Lord Grantchester, from the Liberal Benches, nor any noble Lord opposite, has brought forward any positive evidence that any mergers of this kind which have taken place in the past have, in fact, operated against the public interest. I am perfectly sure that in a debate of this kind, if there had been such concrete evidence, it would have been brought forward by somebody, and probably by numerous noble Lords, before this.
LORD SHEPHERD: My Lords, this is one of the difficulties which the noble Earl, Lord Swinton, mentioned. We do not know the facts. I set out a case that a monopoly position existed in the production of chemically man-made fibres and that there was a disparity of prices through a fairly large range between I.C.I. and those on the Continent. Therefore I say that there is a case for our looking into the facts—whether they are working against the public interest, and whether that is due to inefficiency or to the problems of the industry.
VISCOUNT HAILSHAM: My Lords, what I was saying was that there have been mergers in past years, perhaps not on the same scale but certainly on a very substantial scale, and I should have thought that if there had been any evidence to suggest that these mergers had operated against the public interest, noble Lords who are critical of such things would have been the first to bring it before us. But I have neither read in the newspapers nor heard this afternoon, nor ascertained from another place, that evidence has been brought forward that these mergers are intrinsically bad. And I must say that I should be reluctant to invite a public inquiry into a subject on which there

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was no positive evidence that there was any public mischief.
I do not share the dogmatic convictions of many noble Lords upon these subjects. As your Lordships know, I do not entirely accept the economic and political philosophy of the noble Lord, Lord Grantchester, or that of noble Lords opposite. I should think that Parliament would be unwise, in the absence of any positive experience or evidence, either to dogmatise itself a priori or to encourage a group of independent experts to dogmatise.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: Then what is the other body the Government have set up into matters like take-over bids? What are they doing, if it is not something similar to what we want in this case?
VISCOUNT HAILSHAM: My Lords, I hope that the noble Viscount will not press me, because I shall come to it in my argument. In a few words, this body is reviewing the experience of five years' working of the Restrictive Practices Act and more than ten years' working, since 1948, of the Monopolies Act; and I think that that is a very reasonable thing for them to do.
If I may make a slight digression, the noble Lord, Lord Shepherd, endeavoured to construct an a priori case based on the prices of certain raw materials of fibres. On the whole, I agree with my noble friend Lord Balfour of Inchrye in deprecating an attempt this evening, probably too late this evening, to go into technical merits of this kind. Nor do I think that I am entirely qualified to do so. It seems to me that the argument, as an argument—because these are criticisms, some of which emanate from Courtaulds, which I think can hardly be treated as entirely impartial in the matter, of a situation which has obtained in spite of the merger—falls because, whatever evil may be indicated by these figures, it is not an evil to be anticipated as a result of the merger. As I shall endeavour to show the noble Lord, Lord Shepherd, my own view is that adequate safeguards already exist in this field, and in due course I shall seek to enumerate them.
It is said—and it has been said forcibly and cogently by the noble Lord,
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Lord Silkin—that if a merger took place, we should be too late, because it would be impossible (as the noble Lord, Lord Shepherd, phrased it) to "unscramble the eggs." I must say frankly that I do not accept this particular argument. No doubt it is true that if the shareholders of Courtaulds accepted the offer of the board, if they persist in making it, we could not restore to the individual shareholders the shareholdings with which ex hypothesi they had parted with willingly. But it is not conceivable that the public interest would require that we should do that. What the public interest is concerned with, what it would be concerned with, either before or after a merger, is whether the existence of a management complex as large as that of the merged businesses is in the public interest, or whether it is more in the public interest that the management of the industry should be divided into a number of smaller units. I absolutely reject the idea—
LORD SILKIN: Smaller and competing units.
VISCOUNT HAILSHAM: I would say, with respect, that the noble Lord, Lord Silkin, and his noble friend Lord Shepherd have overstated the extent to which competition either exists or can exist at the present time. As I pointed out to your Lordships on December 20, in this particular field, what are called, in the jargon of the trade, monopoly conditions already exist, and though it is true in a limited sense that some of these fibres compete, in the sense that they can be used for the same purpose, this is only marginally true: in the main, the fibres exist for difference purposes and occupy different parts of the field. Although there is an element of competition in the present situation, it is not so large as to entitle us to rely on it, and I think it would be positively dangerous to exaggerate its extent.
But what I am concerned with is the idea that if the public interest required us to intervene at any stage in either direction we could not do so. At any rate, in my view, that is a most dangerous heresy for a Parliamentarian to accept: it is tantamount to saying that a British Government, with public opinion and Parliament behind it, is not master in its own house. I, for my part, wholly reject that idea. The

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question, therefore, is: what is it that the public interest requires?—and it is here that noble Lords have put forward various pleas for an inquiry. These pleas have taken different forms, and I think it is material to say so. The noble Lord, Lord Grantchester, wanted a general inquiry, with fairly wide terms of reference, into the whole subject. This was not what the noble Lord, Lord Silkin, was asking for, because obviously an inquiry of the type asked for by the noble Lord, Lord Grantchester, would take a considerable period, probably years, to go into.
What the noble Lord, Lord Silkin, was asking for, both now and when he questioned my noble friend when he made the statement, was something which would entitle the Government to ask I.C.I. and Courtalds to hold their hand while the inquiry was going on which must mean some kind of inquiry particularly directed to this individual merger and which would be completed in a few weeks: otherwise, the merger would be completely frustrated, even if it were in the public interest. So far as that plea is concerned, I should have thought that it was answered by the argument of my noble friend below the Gangway, and I am content to rest on what he said.
A third suggestion was made—and it was most interesting—by my noble friend Lord Balfour of Inchrye. But what he was asking for, if he will allow me to interpret him, was not really an inquiry in the sense that the noble Lord, Lord Grantchester, or the noble Lord, Lord Silkin, was asking for an inquiry. What my noble friend wanted was a piece of constitutional machinery which would judge matters of this kind and then enable the Government to form a mind on it.
LORD BALFOUR OF INCHRYE: To judge from two aspects, I suggested.
VISCOUNT HAILSHAM: I think that was a valuable suggestion, although I will venture a criticism of it a little later in my speech. But that is a different type of thing from asking for an inquiry. As the noble Viscount has just reminded us, there are inquiries going on at the moment. My right honourable friend thought it right to say in his original statement, and has made it quite clear,
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that after five years of experience of the Restrictive Practices Act, 1956, and a longer period of experience of the Monopolies Act, the time has come for a general review of the working of those Acts, in the course of which if defects in our machinery emerge—and they may—we can put them right. That is going on. So far the demand for an inquiry is met by such a review, to some extent; at any rate, I would say that the requirements of the noble Lord, Lord Grantchester, were met by that review. That has been acceded to, and we accept it. Whether or not noble Lords accept the type of inquiry, they will accept the fact that an inquiry is going on.
So far as my noble friend Lord Swinton is concerned, it is true that my right honourable friend did his best both to ascertain and to communicate to his colleagues the particular facts of this merger; but for the reasons which my noble friend gave, I do not think he could go further than ascertain the facts for himself in a confidential form and seek to place some of them, at any rate, before his colleagues. Such an inquiry is not at an end, because the transaction is not at an end and the situation is developing. But I would wholly agree with my noble friend that it is my right honourable friend's duty to perform that function on behalf of the Government, on behalf of his Department and on behalf of the country.
I should like to make this comment about demands for inquiries—although perhaps in this sense I might be a little more controversial than I should wish to be in the rest of my speech. I sometimes wish—although I know that noble Lords are under no illusions on the matter—that the public would rid itself, once and for all, of the idea that an inquiry is the solution of every difficulty, real or imagined, which can give rise to anxiety. I am not myself in the least minimising the value of inquiries. In my own small Department the other day I had the misfortune to enumerate no fewer than seven major inquiries which I had either set up or intended to set up in my limited sphere in the near future.
In the immensely complex structure of modern government the inquiry has come to stay as a means of elucidating

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issues, finding facts and making recommendations of policy; and I poke no fun at it at all when I say that it has limitations, and it is as well that we should make up our minds what these limitations are. But before we institute an inquiry of the kind for which the noble Lord, Lord Silkin, was asking, we have to ask ourselves whether there is any rational answer which within the course of a few weeks an inquiry could reasonably be expected to make to any intelligible question which was demanded of it. If not, an inquiry is not merely not, in this instance, a reputable instrument of government, but it would simply be an abdication of responsibility—a device for misleading the public as to the real reasons for action or inaction.
I think I should mention—only to dismiss—some side issues which have come into this debate and which I do not think should detain us in examining the main subject. One is the fear expressed by the noble Viscount the Leader of the Opposition and the noble Lord, Lord Shepherd, that these great corporations might go on to misuse the powers which their great economic strength already enables them to use, in other directions—caustic soda, fertilisers and other things. I would say, first, to the noble Lord, Lord Shepherd, that the merger will not of itself strengthen or weaken them in those directions at all. Courtaulds are not producers of these substances; they are produced by I.C.I. or by other firms. Indeed, if it had an effect, it might be to weaken the dangers to which the noble Lord, Lord Shepherd, referred, since if the merger goes through the corporations will certainly be pre-occupied for a long time with the problems emerging from the merger rather than with other matters.
LORD SHEPHERD: My Lords, this is something in which. I am very much interested. Courtaulds are producing the fibres which are woven into fabrics. Therefore, on the production side, if the merger goes through and they are not able to buy competitively, say, from overseas or from alternative buyers, it will mean that the fabric produced in their mills will rise in cost and be less competitive. Therefore I.C.I. may get their production disposed of, but the
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weavers and the finishers will be worse off.
VISCOUNT HAILSHAM: lf, in fact, the merger went through, it would not be much good I.C.I. having monopoly production if they were unable to sell their products.
The second and, I think, conclusive point is that it is precisely to deal with that kind of potential misfeasance by monopolies that the Monopolies Commission exists, and my right honourable friend would, of course, have no hesitation, on a case being presented, in referring it to the Monopolies Commission, and in suitable cases he can use the tariff weapon which is equally in his hands. Those, I think, are the proper ways of dealing with the particular dangers to which the noble Lord referred, because they have no direct relevance to the merger under discussion. I would also say that I personally am not impressed quite so much as are some noble Lords with the size of the proposed new entity. It certainly would not he particularly large as compared with the American Du Pont. As regards textiles, I think it would not be out of proportion to the French, if not also to the Italian, combine.
Certainly, for the reasons I gave on December 20, I am not so impressed as the noble Lord, Lord Grantchester, with the absence of competition, or the alleged absence of competition. I agree with him that competition is a desirable spur to efficiency. But, as I tried to argue to the noble Lord, Lord Shepherd, before Christmas, the effective competition of to-day and to-morrow is not necessarily between the two firms which we are discussing and which already enjoy monopoly conditions, but between the British giant or giants, the American giant or giants, and the Common Market giants. Merger nowadays in the technical areas of the production and management unit does not destroy competition, and it does not necessarily create monopoly; it simply enlarges the size of the units between which competition exists. The competition between the rival coalmine owners has disappeared, but coal still has to compete with oil. The competition between the rival railway companies has been eliminated, but railways still have to compete with road, and sea with air.

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I am not impressed, therefore, with attitudes of mind which seem to me not to differ from my own in fundamental philosophy, but seem to stem too much from an assumption that the conditions in which perfectly agreed principles were applied in the last century, and the first half of this, will continue to apply in the same way in the present and the future. My view, for what it is worth, is that an inquiry, to be effective, either way, for the purposes of this particular merger, would have, within a few weeks, to try to ascertain and answer a question which I do not believe will ultimately be decided until after years of commercial experience and public political discussion, inside and outside Parliament. If we were to set up an outside inquiry here we should, I think, be setting up an inquiry which was doomed to be inconclusive. What is very much worse, we should be inviting Parliament and the political Parties to abdicate their great responsibility as the arbiter of the public interest and, in the case of Parliament. the Grand Inquest of the British nation.
Secondly, I do not want to waste much time over the actual methods employed by Mr. Chambers and Sir John Hanbury Williams in conducting the discussion which has now broken out between them. Some of them may well be open to question and, even if they were not, I have already confessed to a certain distaste at the spectacle of these two respectable corporations criticising one another in public. These things are interesting but not relevant to the matter we have in hand. Nor, I think, is it really relevant to determine the desirability—as to which I personally have some doubts—of appealing to the shareholders of an undertaking over the heads of the board which is supposed to be representing the interests of the undertaking itself. I think there may be a public interest here, but if so it is the very thing, among others, which is within the terms of reference of the Jenkins Committee and must await their Report.
What we have to consider to-day is exactly the same issue as it was when it was first raised by the noble Lord, Lord Shepherd, before Christmas—that is, before the boards were openly at variance. The fear that is expressed is
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that the public interest will be disregarded, however the merger is established. The demand which is put forward is that a public inquiry should take place before it goes through. It is this demand which, frankly, we have not accepted, and it is this fear which we must try to allay. I think noble Lords have attempted to speculate as to the harm to the public interest which might take place if the merger came about and if it were operated in a particular way. But I believe that what noble Lords have not sufficiently appreciated is the manifest and, to some extent, irretrievable disadvantage to the public interest of the Government's intervening in a matter of this kind, whether by making requests to the parties, or by taking positive action, or by setting up an inquiry if they did not possess adequate reasons for doing so.
The first thing I would say is that some mergers—and it may be this one—are based upon technical requirements which dictate an optimum size for units or production and management. I think this fact was recognised by the noble Lord, Lord Walston, when he said that we were moving towards larger units throughout the twentieth century. We should be hamstrung in our ability to compete with the great industrial complexes which exist overseas, in America, Europe and, above all, I would say, behind the Iron Curtain, if every time something of this kind on a large scale was contemplated the presumption was made—as the noble Lord. Lord Walston, actually and explicitly invited us to make it—that prima facie it was against the public interest, and that Parliament ought to handle it unless it was established not to be so. I think we have to get used to the new patterns of technological industry in our midst and examine the developments in the light of experience and have full confidence in our Parliamentary system of government, so that we shall, when the time comes, and we feel it to be necessary, apply the Biblical maxim, "By their fruits ye shall know them."
There is another evil to I must draw attention. Nobles Lords opposite are sometimes shocked at speculative operations in industrial securities which take place on the Stock Exchanges and elsewhere. I

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am not here either to endorse or to criticise that viewpoint this evening, but I think we can all agree that, whatever else Governments should do, they should, wherever possible, abstain from action which encourages speculation, or which is calculated to depreciate or give a rise in the valuation of some shares to the advantage or disadvantage of others. I wonder whether noble Lords have really considered the effect on the stock markets. Let them be under no illusions as to what would happen. Every word of my right honourable friend the President of the Board of Trade would be scrutinised for its implications, and share values would go up and down in accordance with every rumour as to what was going on inside the inquiry, even if it were not in public, and would go on all the worse if it were being held in public. Do noble Lords want that to happen? Do they think that there is a case for bringing that about? Obviously conditions might exist which justified our taking this disadvantage on board. But there are few things more contrary to the public interest than uncertainty of this kind, either commercially or technically, and it is uncertainty of a prolonged and indefinite nature which this policy of an inquiry is calculated to create.
Or take what actually happened in another place last Tuesday. One set of honourable Members sought to impugn and, I think, another to defend the expertise of the managements of each of the two boards concerned. One said that I.C.I. was a dead hand; another, I think, criticised Courtaulds. What really could be more intolerable or more contrary to the public interest than that on every occasion when an important merger was discussed, the Government should first form and then announce their views as to the relative values of the two boards? Yet this is exactly what we should be driven to do if we created the precedent demanded by noble Lords opposite.
I must mention—I am afraid I cannot do justice to it at this late stage—the interesting suggestion made by my noble friend Lord Balfour of Inchrye. I think very likely that the day may come when something of this kind may emerge from our government machine. But I would say this to my noble friend—end it seemed to me that this was the criticism
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of his proposal at the present time and in the form in which it was put. If we should create a body which is going to pronounce on the desirability, even from the two limited points of view which he mentioned, of mergers of this kind, they must be given by Parliament definite criteria to go upon. The difficulty with regard to that at this stage of our development is that we cannot oiler to delegate to others criteria about which public opinion has not yet crystallised. We are the parties who decide, the two Chambers of Parliament. If it goes to some kind of general census of opinion based on experience, and evidence as to what is desirable emerges, I think very likely something of that kind will be just the sort of suggestion which may be valuable, but I doubt myself whether we have yet reached that.
I had it in mind to say rather more about this subject but I have already detained the House too long. I would simply close by saying that our attitude in the matter is not due to weakness or vacillation; it is not due to tenderness or partiality to one side or the other; it is not due to some doctrinaire adhesion to the orthodoxy of laissez faire or private enterprise. Nor do we seek in any way to avoid responsibility for what must necessarily be a standing Government charge to see that no harm is done to public interests by the operations of private industry.
My Lords, what we have done is due to the conviction based on what we believe. I have sought to show adequate reasons that at this stage and for this purpose the public interest is served, at any rate for the present, by silence not based on ignorance but on discretion, by aloofness without disinterest, rather than by intervention or external inquiry, and by complete confidence, should the public interest require a change of policy, in the ability of Parliament to discharge its functions as the Grand Inquest of the nation.
7.11 p.m.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, I am grateful to all the Members of this House from either side who have partaken in this debate. I think it has been worth while, if only to have enjoyed the oratorical performance that we have just received from the noble Viscount the Leader of

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the House. I thought a great deal about it as he was going through his speech and I do not remember any time in my memory hearing so much packed into a speech and with such a continuous, flowing process of oratory since I first heard, in my early Parliamentary life, the late Lord Birkenhead; and when he made up his mind to defeat something, whether he believed in it or not, he defeated it. As I listened to the noble Viscount to-day I was very much persuaded to think about him. Still, I do congratulate the noble Viscount on this: he had a great brief, but one could not mistake the personality which had been put into the brief. Whatever were the ingredients, it was his performance. I should have liked to be able to say that I was so persuaded that I could go even further, but I do not get even nearly as far as that. I am not at all persuaded that our case has been met. As my noble friend Lord Silkin said, the very evidence which has been submitted from the two concerns themselves gives a prima facie case for an inquiry, and we have not been moved from that by the oratory of the noble Viscount the Leader of the House.
When we come to look at the explanations which have been given as to why the Government do not wish to do anything at this present moment, I am struck by two facts. There is nothing left in the statement given by the noble Lord, Lord Mills, which can support that position, except that we are relying, in the meantime, upon other supplies coming in by import from abroad. Whatever explanation could be given, I think the imports, some of them valuable, coming in will also be the products of companies abroad which are subsidiaries or otherwise of these two concerns.
I still have not seen any answer on that point, therefore, which destroys our prima facie case, but on the general philosophy which he indicated, the noble Viscount then seemed to bring my memory back to our operations in the wider sense of whether industry should be large or not. Nobody hopes to be
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able to keep back the floodgates of this growth in size, whether it be in the sphere of a local supermarket or the development of an organisation which supplies the great markets of the world. Nobody thinks he is going to keep them back. But we have still to protect the public interest. That is vital, and that is where we are not getting a policy at the moment to prevent what may be a tragedy and disaster.
I am glad to note that the noble Viscount the Leader of the House feels sad in his heart at the spectacle, as it is called, of these two great organisations being in this position at the present time. But if he goes back to consider the philosophy of this matter, and the position of nationalised industries and the way in which they were talked about to-day by the noble Lord, Lord Hawke, let him not forget that you have done things before without an inquiry. You did not have a public inquiry as to whether you should hive off the great and growing part of the Transport Commission, the road transport. But you can tell us to-night that the railways have still to face that competition. That does not seem to go in exactly the same line of argument that we have been listening to to-night. Nor can you say that with regard to a firm of which I have personal experience, Browne's, who were producing compasses, of which we were so short, and the product was so poor in quantity that we had to take them over in the war without any inquiry or any real consultation. The Government reversed the decision without reference to public interest and only on the basis of private profit.
However, I do not want to make another long speech, but I was so intrigued by the arguments produced by the noble Viscount that I felt he ought to know exactly how I was feeling. I admired tremendously the oratory with which he stated a case so poor in content. We will not withdraw the Amendment and certainly shall not bother the House to divide, but we shall let it be negatived.
On Question, Motion for Papers negatived.