Lords Sitting of 25 March 1963

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

Oliver Stratford, Lord Bishop of Bristol—Was (in the usual manner) introduced.
BP REFINERY (KWINANA) BILL
Read 2ª, and committed to an Unopposed Bill Committee.
WATFORD CORPORATION BILL
Read 2ª, and committed to an Unopposed Bill Committee.

NATIONAL COAL BOARD (VALUATION) ORDER, 1963
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (LORD HASTINGS): My Lords, I beg to move that the National Coal Board (Valuation) Order, 1963, be approved. Valuation for rating offers particular difficulties in the case of nationalised industries and public utilities, and formula methods have already been laid down by Statute for gas, electricity and statutory water
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undertakings. Section 3 of the Rating and Valuation Act, 1961, empowers the Minister of Housing and Local Government to specify by order methods of valuing certain classes of property. This order, which is the first to be made under these powers, relates to property occupied by the National Coal Board in England and Wales in connection with coal production.
The order takes effect on April 1, when new valuation lists come into force and the values in those lists have been ascertained accordingly. The new scheme starts from the rateable values in the present lists—that is to say, the 1956 lists. These existing values are to be adjusted to take account of changes in coal production since these values were fixed, and of other matters, such as the Board's additional liability for compensation for subsidence damage imposed by an Act of 1957, industrial re-rating and the rise in rental values between 1956 and 1963. In future, the values of mines and opencast coal sites will be varied each year for changes in coal output, and at each revaluation, every five years, these values will be adjusted to reflect the general change in the level of rateable values among mineral industries, so that the National Coal Board keeps in step with other ratepayers of the same class.
The Order has been prepared in consultation with the National Coal Board, with the associations of local authorities and with the London County Council, as required by the Act of 1961, and the scheme commands their support. A review of the scheme's working has to

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be carried out, under Section 3, in 1968–69 and a report laid before Parliament, so that, if anything should go wrong or should prove to be a miscalculation, correction can be made after a trial run. I ask your Lordships to approve this Order.
Moved, That the National Coal Board (Valuation) Order, 1963, be approved.—(Lord Hastings.)
LORD WILLIAMS OF BARNBURGH: My Lords, as coal mines are to be rerated on the output year by year, may I ask the noble Lord whether the same theory and practice will apply to other industries: that annually they will have a re-rating on the basis of output, whether it is up or down?
LORD HASTINGS: My Lords, if the noble Lord is referring to private industries, the answer is, No. This Order deals with nationalised industries, and, as I said, there are formula methods for some of them. Section 3 of the Act of 1961, which empowers the Minister to specify by order certain classes of property, can apply also to other things like mines and quarries and, I believe, to radiodiffusion. That may be dealt with in due course, but not in respect of the present revaluations.
LORD MORRISON OF LAMBETH: My Lords, would the noble Lord tell the House why there is a distinction between socialised industries and privately owned industries? What is the difference of procedure, and what is the reason for it? Secondly, the noble Lord was good enough to tell us that the local authority associations and the London County Council have been consulted. May I ask him whether they are in agreement with the Order as proposed?
LORD HASTINGS: My Lords, the answer to the last question is that they are in agreement and are quite happy about it. So far as the other question is concerned, I would say that the coal industry always has been revalued year by year on output. The direct rental value of factories is not directly related to output. They go under the 1925 Act, which refers to rental values and is the general system in force. There are only these few exceptions.
Question, Motion agreed to.

PERFORMERS' PROTECTION BILL [H.L.]
2.47 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Mancroft.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD AIREDALE in the Chair.]
Clauses 1 to 3 agreed to.
LORD FARINGDON LORD FARINGDON moved, after Clause 3, to insert the following new clause
Misrepresentation
"A person who knowingly misrepresents that he is authorised by any performer to give consent of behalf of such performer to any act which, but for such consent, would constitute an offence under the principal Act of this Act, and who gives such consent, shall be guilty of an offence, and shall be liable, on summary conviction, to a fine not exceeding fifty pounds."
The noble Lord said: I can put the intent of this Amendment quite briefly. Your Lordships will be aware that the legislation governing this matter, the Dramatic and Musical Performers' Protection Act, was first passed in 1925. This was followed by a Commission, which reported in 1952. On the basis of their Report amending legislation was introduced into the Copyright Act, 1956; and finally they were all consolidated in the Consumers' Protection Act, 1958. Section 7 of that Act lays down what indeed was first of all recommended by the Copyright Committee: that the fact that there was no reason to doubt at the time of the giving of a consent that the giver was in fact entitled so to give consent, should be a complete defence to any action taken by a performer in respect of a recording, be it on a record or on a film. This Amendment imposes a penalty on anyone who fraudulently represents himself to have a right to give a consent when in fact he does not have it. This is, I suggest, not only a small improvement in our own domestic law but also essential if we are to carry out the object of this Bill, which is to enable us to ratify the Rome Convention. The Rome Convention has had certain words inserted

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into it—the words "possibility of preventing"—in order that the legal position in certain countries, including this country, should be met.
My advisers inform me that they are very doubtful whether this Bill can operate as intended unless it has this provision which is in my Amendment, because only then shall we be able to have the possibility of preventing unauthorised recordings of performances which, though given in a foreign country, might be recorded here. Therefore, I venture to propose this Amendment, not only as an improvement in the law but, indeed, as an essential part of the operation of this Bill. I beg to move.
Amendment moved—
After Clause 3 insert the said new clause.—(Lord Faringdon.)
LORD MANCROFT: I appreciate that there has been some misgiving by performers, in respect of records, films, broadcasts or rebroadcasts for which permission has allegedly been given. I know that the British Actors' Equity Association, in particular, has been concerned about this point which the noble Lord has raised in his Amendment, although I believe that both the British Broadcasting Corporation and the Independent Television Authority do not feel very strongly upon it, either one way or the other. What the noble Lord's Amendment would seek to do is to make it a criminal offence for any person knowingly to misrepresent that he is entitled to give such consent on behalf of a performer or performers.
I suspect that the case which the noble Lord has mainly in mind is that of the theatre or the impresario who agrees to the show that is being put on being recorded on the radio or televised without having obtained the performers' agreement and, possibly, even without their knowledge. I see that there is a possibility there, although I think there will be very few cases arising in the conditions which the noble Lord has in mind. This is clearly something which no reputable theatre management would do, though I must admit that a less reputable impresario might do it provided the financial inducement were sufficiently strong.
On the face of it, the noble Lord's Amendment is reasonable, but I would
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suggest to him that, although it is reasonable, it is not really necessary, and for this reason. I think the offences which he has in mind can be met by the existing law. First, the impresario who received payment on the strength of such misrepresentation—that is, that he was authorised by the performers to give consent on their behalf—would, under the existing law, be guilty of obtaining money by false pretences and an action would undoubtedly lie under that head and would be punishable accordingly. The second point is this. The circumstances in which the impresario would be entitled to consent on behalf of performers to record or broadcast, is something which I should have thought could be incorporated in the contract made between him and the performers, and a breach of that contract would give rise to an action for damages to compensate the performer for any loss he might have suffered. Those struck me as being two good reasons for suggesting to the noble Lord that the difficulties which he envisaged are already met by the existing law.
I am a little reluctant to accept the noble Lord's Amendment, even though he may suggest that by so doing it would clarify and emphasise the existing law—I say that even though I am a little uncertain about his draftsmanship—for quite a different reason. This Bill has a limited scope, and I thought at first when I saw the noble Lord's Amendment that there would be a risk of having to amend the Long Title, but I am assured that that is not so. Nevertheless, there is a serious danger that if we open the scope of this limited Bill, all sorts of well-intentioned people will be able to introduce new ideas for strengthening performers' rights which go right outside the scope of the Bill, which is purely to enable us to ratify the Convention.
What I would suggest to the noble Lord, for his consideration, is this. Perhaps he will be good enough to consult with his friends in the light of what I have said about the existing protection given to them by the Common Law, and see whether they are satisfied that their fears are met. If they are not satisfied, then I am perfectly prepared to try to put down an Amendment myself. The noble Lord's Amendment, if I may say so, needs a little redrafting to meet his point. That I will certainly do. I hope it was only a

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slip of the tongue when he spoke about the Consumers' Protection Act, 1958, and not the Performers' Protection Act, because that will open an enormous door through which many cart horses could be driven, and I should lose my Bill at an early stage. If the noble Lord is prepared to consult with his friends and see whether their point has already been met, I shall be grateful. If it is not, I will give him an undertaking that I will, with your Lordships' permission, put down a suitable Amendment at a further stage of the Bill for the consideration of the House.
THE MINISTER OF STATE, BOARD OF TRADE (LORD DERWENT): May I say one word to the noble Lord opposite, because Her Majesty's Government gave their blessing to this Bill on the Second Reading in the form it then was? Briefly, we take the view that the noble Lord's Amendment is unnecessary, for the reasons my noble friend has given. We do not like the present drafting, but that, of course, can always be altered. I would repeat my noble friend's word of warning. Supposing the noble Lord, Lord Faringdon, wishes to go ahead at a later stage—and, as I say, I think it is unnecessary—drafting may present considerable difficulties. If the drafting is too wide, I am not sure that the blessing of Her Majesty's Government would continue on the Report stage.
LORD FARINGDON: May I first of all withdraw, not my Amendment, but the offending word? I am not quite happy about this, because when dealing with foreign performers whose performances are being recorded in this country it seems to me that a middleman of some sort is almost essential and inevitable. Where such a necessity and inevitability exists, I think there is a possibility of fraud. It is against this that I and my friends are anxious to protect performers. However, I cannot possibly quarrel with the extremely generous way in which the noble Lord, Lord Mancroft, has received my Amendment, and I will not press it to a Division. I will rely upon his good offices to reintroduce a better phrased Amendment at a later stage if my friends and I can persuade him that it is necessary. I beg leave to withdraw the Amendment.
LORD DERWENT: May I correct a slip of the tongue? Of course, there will
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be no separate Report stage, and I should have referred to the Third Reading.
Amendment, by leave, withdrawn.
Remaining clause agreed to.
House resumed: Bill reported without amendment.
Report received.

STOCK TRANSFER BILL [H.L.]
3.0 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Clitheroe.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD AIREDALE in the Chair.]
Clause 1 [Simplified transfer of securities]:
On Question, Whether Clause 1 shall stand part of the Bill?
LORD DENHAM: On the Second Reading of this Bill the noble Lord, Lord Shepherd, raised a point which I undertook to answer at a later stage. With your Lordships' permission I will now do so. The noble Lord, Lord Shepherd, who has told me that he is unable to be here this afternoon, was referring to a part of my speech in which I said [OFFICIAL REPORT, Vol. 247 (No. 53), col. 702]:
"In order to protect the Revenue, therefore, the Government would propose to introduce a provision, most probably by way of Amendment in another place of the Bill now before your Lordships, to the effect that a transferee or his agent who receives a blank transfer must insert the name of the transferee before he allows it to go out of his possession."
The noble Lord asked
" … should we be right, in the position in which we in this House are, in passing a Bill that affects the Finance Act and the Budget?"
I have been into this point, and I am advised that there is nothing to prevent the House of Lords from discussing any financial provisions. If, however, when a Bill reaches its Third Reading in your Lordships' House it is found that certain provisions of the Bill affect the Commons privilege, a Privilege Amendment is made to the Bill before

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it leaves this House. This renders inoperative any of the offending provisions. When the Commons receive the Bill they take out the Amendment.
LORD SILKIN: We are much obliged for that statement, which makes the position quite clear. I am sorry that my noble friend is not here, but I am sure he would not disagree with what has just been said.
LORD CLITHEROE: I do not want to deal with the point which has already been so adequately covered, but there is one other point on Clause 1 on which I should like to say a word. In his speech on the Second Reading of the Bill the noble Viscount, Lord Addison, asked about the position of London-registered Commonwealth stocks under this Bill. In reply to that point I spoke principally with reference to the position of overseas companies which had their registers here. I explained that the Parliament in the United Kingdom could not legislate for overseas companies, but that there was nothing in our law to prevent them from altering their articles of association in such a way as to permit the adoption of the revised procedure. I concluded by expressing the hope that all the overseas companies concerned would find it possible to do so and take advantage of that procedure.
The same general principle applies in relation to Colonial and Commonwealth Government stocks on registers here. Nearly all these stocks, as your Lordships probably know, have been issued in accordance with the Colonial Stocks Acts, and the position under these Acts is that in most cases authority to make and to vary transfer regulations has been conferred by the borrowing Government upon the registrars. So in most cases all that would be necessary to enable the stocks to be transferred under the new arrangements would be for the registrar to amend the regulations for the stock. In other cases, where he has not been given this power, the regulations would have to be amended by the Commonwealth Governments themselves. Even if they do not do so, or until they do so, equally, their stocks will continue to be transferable under the present arrangements. In any case, the liability to stamp duty on these stocks will not be affected
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in any way. I should expect that at the appropriate time arrangements would be made to change the transfer regulations in consultation as necessary with the Colonial and Commonwealth Governments concerned. Naturally, one would hope that all Colonial and Commonwealth Government stocks would be dealt with under this procedure, if it is possible.
VISCOUNT ADDISON: I am very grateful to the noble Lord, Lord Clitheroe, for dealing with the point I raised on the question of Commonwealth and Colonial stocks. I had in fact read him as having dealt with the point in his closing speech on Second Reading, but I now have a good deal more information than I had then. Let us all hope that the Colonial and Commonwealth Governments will, in due course, alter their arrangements so as to take advantage of the clause.
Clause 1 agreed to.
Clauses 2 and 3 agreed to.
Clause 4 [Interpretation]:
LORD CLITHEROE: The object of this Amendment is to remove doubts which have been expressed about the definition in the Bill of a stock exchange transaction. It has been suggested that the existing definition might not cover a transaction in either direction between a member of a stock exchange as a principal and a client of a member. It seems to me clearly desirable that the definition should cover, in addition to the cases where both parties are members or where both parties are acting through the agency of members, the in-between hybrid cases where one party is a member and the other is acting through the agency of the member. As I emphasised earlier, the only object is to remove doubts. There is no change in the intention of the Bill as it was drafted, and I therefore beg to move that the Amendment stand part of the Bill. I hope noble Lords will agree.
Amendment moved—
Page 4, line 18, leave out from ("which") to end of line 21 and insert ("each of the parties is a member of a stock exchange acting in the ordinary course of his business as such or is acting through the agency of such a member").—(Lord Clitheroe.)
On Question, Amendment agreed to.
Clause 4, as amended, agreed to.
Clauses 5 and 6 agreed to.
Schedule 1 [Stock Transfer Form]:
LORD CLITHEROE: I beg to move the Amendment standing in my name the object of which is, very simply, to delete certain words from the stock transfer form because, on further examination, we find that these words are totally unnecessary. One of the principal objects of this Bill is simplification, and, realising that some words on the form are unnecessary, it is only consistent with that principle that I should ask your Lordships to agree to delete them.
Amendment moved—
Page 5, at the foot of the page, leave out
("

Delete words in italics except for stock exchange transactions.

I/We confirm that the security set out above has been purchased by a stock exchange transaction within the meaning of the Stock Transfer Act 1963, and I/We request that such entries be made in the register as are necessary to give effect to this transfer.

Stamp of Buying Broker(s) (if any).

Stamp or name and address of person lodging this form (if other than the Buying Broker(s)).

")
and insert—
("

I/We request that such entries be made in the register as are necessary to give effect to this transfer.

Stamp of Buying Broker(s) (if any).

Stamp or name and address of person lodging this form (if other than the Buying Broker(s)).

")
—(Lord Clitheroe.)
On Question, Amendment agreed to.
Schedule 1, as amended, agreed to.
Remaining Schedule agreed to.
Bill reported with Amendments.

AGRICULTURE (MISCELLANEOUS PROVISIONS) BILL
3.13 p.m.
Order of the Day for the House to be again in Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord St. Oswald.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD AIREDALE in the Chair.]
Clause 25:
Purchases of sugar from Republic of Ireland
25. The Sugar Board shall purchase such sugar, at such prices, as the Minister may from time to time direct for the purpose of fulfilling any agreement made by him after the passing of this Act for the purchase of sugar to be used as an ingredient of goods to be exported from the Republic of Ireland.
LORD MERRIVALE LORD MERRIVALE moved, after "Act", to insert "and before 31st July, 1963". The noble Lord said: In moving Amendment No. 17, which stands in the name of the noble Lord, Lord Milverton, and myself, I propose speaking to this Amendment and the following one as they are to a large extent interrelated. I should like to say that I am sorry that the procedure of the House does not permit consideration of the second Amendment first; in effect we are asking there for a whole loaf, while in this Amendment we are asking for only part of a loaf. It would seem more logical to move the first Amendment after the whole loaf had not been granted.
As mentioned on Second Reading, Clause 25 involves a completely new principle; that is, the Sugar Board will be empowered to trade in refined sugar emanating from a country which technically is not in the Commonwealth. I fear this would mean that the assurances given to the British sugar industry in 1956 would to a large extent be nullified. Also, at that period of time certain undertakings were given by the sugar industry relating to those assurances. As the then Mr. Heathcoat Amory the Minister of Agriculture, Fisheries and Food, said during the Report stage of the Sugar Bill on March 27, 1956 [OFFICIAL REPORT, Commons, Vol. 550, col. 2012]:
"We do not want to give the Board power to buy other than Commonwealth sugar as principals."

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I presume that that refers to parties to the Commonwealth Sugar Agreement, which has now been extended to December 31, 1969. I have with me a copy of this Agreement, and even in a later text, the 1962 text, there is certainly no mention of Southern Ireland as a party to the Agreement. In fact, Article 33 of the International Sugar Agreement of 1958 (Cmnd. 1146) definitely lists Ireland as an importing country, while all parties to the Commonwealth Sugar Agreement, apart from ourselves, are exporting countries.
Also in 1956 another statement was made by the then Mr. Heathcoat Amory, which I feel should still be Government policy, and it reads (col. 2010):
"Right hon. and hon. Gentlemen opposite would like the Board to have wide powers and discretion in fixing a policy. We, on the other hand, regard this Board as an executive board with narrow and clearly specified functions."
Later, for good measure, the Minister went on to say (col. 2057):
"Our object, as we have said frankly, is to reduce to the minimum the extent of Government interference with private enterprises"
I feel that perhaps I should remind your Lordships of some of the undertakings that the Government gave then to sugar refiners; that is, in return for the assurances and the Government Amendment to Clause 3 of the Sugar Bill. I list three: first, an undertaking to prefer Empire sugar to non-Empire sugar as a source of supply; secondly, an undertaking to make an agreement with the British Sugar Corporation guaranteeing the Corporation outlets for the homegrown beet sugar crop; and thirdly, a guarantee not to exceed a maximum refining margin.
Even in the 1962 text of the Commonwealth Sugar Agreement there is certainly no question of any changes in the duties of the Board, which was constituted, as your Lordships know, on October 15, 1956, with a duty (that is the word used in the text) to purchase Commonwealth sugar in fulfilment of the Government's obligations under the Commonwealth Sugar Agreement. So however much one would wish—and I, for one, certainly would wish—to have satisfactory trading agreements with Southern Ireland, there seem to me no strong reasons for extending the powers of the Board, which might constitute in effect a thin end of the
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wedge or might even create an unsatisfactory precedent.
I should like now to refer to the Agreement which would be implemented, by this clause, as the purpose of this Amendment, Amendment No. 17, is purely to limit the powers of the Minister to the implementation of the draft Agreement which was deposited in the Printed Paper Office on March 4. We feel that no strong grounds exist at the moment, anyway, for allowing the Minister to modify or extend the present draft Agreement beyond the date of June 30, 1967. By that time, if in effect the draft Agreement was satisfactorily drafted, it would be reasonable to suppose that it had achieved the end which it set out to achieve.
As normally, before or after January 1, 1962, it is the importer, not the exporter, who pays the surcharge, and as the surcharge is added to the wholesale price of sugar, it is the United Kingdom consumer who ultimately has to foot the bill which it is proposed now to pay by means of that draft Agreement. But in effect it seems a little strange that on May 5 my noble friend Lord St. Oswald should have said that in this case the surcharge was paid by the exporter and not the consumer, and that since January 1, 1962, amounts had been accruing which now stand in the region of £150,000. Thus there is no question I feel of refund or payment since the price changes to which I have referred: these changes were introduced solely to safeguard the Commonwealth Sugar Agreement, and as from that date British refiners and the Irish company paid the same price for raw sugar. It seems to me, therefore, that in this case the Government are proposing to give Southern Ireland a Commonwealth producer status although Ireland is not a party to the Commonwealth Agreement.
Apart from this curious form of accounting, with, so we are told, the surcharge accruing in the coffers of the Sugar Board, it seems to be a curious form of legislation. I would stress, as was said on Second Reading, that I and my noblefriend Lord Milverton are fighting for a principle more than for a question of amounts or quantities. That is why I strongly believe that the powers of the Minister should be limited to implementing this draft Agreement only if the Government can prove

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that this money is effectively owed to the Irish.
In view of the aims of this Amendment, Amendment No. 17, I would ask my noble friend, even if he will not go so far as to agree with the principle of our Amendment, at least to give a categorical assurance that any renewal or extension of the Agreement beyond the date of June 30, 1967, will not be allowed without the approval of Parliament. I ask that, because in another place on March 20 this year Mr. Scott Hopkins, the Parliamentary Secretary, in answer to a Question, said merely that the House would be "informed". I am uncertain whether that means that the House would be empowered to disapprove such an extension, or whether they would be faced with a fait accompli. As the clause stands at present, it seems to me that this Agreement could be extended or modified ad infinitum, without Parliament having any say in the matter at all or being given an opportunity for formal approval or disapproval. I beg to move the first Amendment standing in the name of my noble friend and myself.
Amendment moved—
Page 18, line 37, after ("Act") insert ("and before 31st July 1963 ").—(Lord Merrivale.)
3.25 p.m.
LORD MILVERTON: In adding my support to this Amendment I will be as brief as possible, and will try to combine brevity with clarity. But some length is, I am afraid, unavoidable if we want to understand what we are being asked to approve in Clause 25. In the course of the Second Reading of the Bill I dealt at some length with Clause 25, and in answer to my criticisms on that occasion the noble Lord in charge of the Bill gave a reply which, to put it mildly, seemed to me quite inadequate. There are three points for your Lordships to consider: first, what are the Government trying to do; secondly, is their objective good or bad; and thirdly, is this the right way to set about it?
The noble Lord, Lord St. Oswald, on March 5 stated three objectives an increased market for Commonwealth raw sugar, a small restriction on exports of refined sugar from Eire to Northern Ireland—a trade, may I add, which was built up against British refiners in the
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past five or six years by the advantageous manipulation of Commonwealth preference; and at least a partial compensation to the Irish monopolists, called the Irish Sugar Company. This compensation was apparently to be paid for the loss of their pre-1961 advantage, which, as we heard in the debate on Second Reading, was commonly called the "hole in the tariff"—a hole which was stopped by the new 1961 pricing arrangements introduced to save the Commonwealth Sugar Agreement from destruction by dumped sugar from the Iron Curtain countries.
What are the facts? In 1956, in order to ensure, in the absence of State trading, that Empire producers got the prices guaranteed by the Commonwealth Sugar Agreement, but at the same time that consumers had the option of buying sugar from other sources at freely competitive prices, a Sugar Board was set up under the Sugar Act. This Board was charged with the duty of buying negotiated price sugar at fixed prices, negotiated annually, under the terms of the Commonwealth Sugar Agreement, and of reselling it at prices which are competitive with world prices. The Board also had to receive surpluses or to make good losses to the British Sugar Corporation. The Sugar Board came into being at a time when world prices were rising steeply, and in its early days it was receiving surpluses from the British Sugar Corporation and was selling negotiated price sugar at a profit. But over the years it will make a loss, because the negotiated price is generally higher than the world market price. In order to make good its loss, it has the power to charge a levy on all sugar consumed in the United Kingdom.
Before the 1961 change in pricing arrangements, the reason for which I have just mentioned, British refiners were bound by an undertaking to the British Government to pay a higher price for raw sugar than that which was being paid by the Irish company. After the change in these pricing arrangements British refiners paid the same as the Irish company. The change in pricing arrangements, therefore, so far from hitting the Irish company unfairly, in fact put right the disadvantage previously suffered by British refiners. The proposed Agreement, then, does not redress the losses suffered by the Irish company: it recreates the unfair advantage which that company enjoyed before the price

17
changes, and which, incidentally, was exploited to establish Eire's present trade in Northern Ireland, a trade previously supplied from Greenock and Liverpool. For the £150,000 which the Government estimated the Agreement might cost the British consumer, Commonwealth producers, if they were given such a sum, could find a market for much more of their sugar than the 5,000 tons minimum guaranteed under the Agreement.
On March 5 the noble Lord, Lord St. Oswald, said that he thought the offer—that is to say, this assistance to the Irish Republic (meaning the monopolist Irish Sugar Company, which, incidentally, does exercise its monopoly to shut out products of British refiners from Ireland), was reasonable. How can he argue in this way? It is an indisputable fact that the Irish Sugar Company enjoyed an unfair advantage against British companies before 1962. May I repeat that they arose because British companies had an undertaking to the British Government to pay a higher price for raw sugar than that which was being paid by the Irish Sugar Company. If, therefore, there was a grievance at all, it was a British grievance. Now, after this alteration of arrangements, both the British companies and the Irish company pay the same—the lower price. Is it being seriously contended that the proposed Agreement gives an estimated £150,000 a year to compensate the Irish Sugar Company for having to pay the same as British refiners?
If the same treatment for Commonwealth sugar as is being suggested in the Irish Agreement were afforded to British refiners, it could result in a much larger increase in outlet than anything contemplated by selling Commonwealth sugar to the Irish Sugar Company; and it would not be necessary to pay a subsidy to the British refiners in order to get their agreement to buy the sugar. Surely it borders upon the absurd that what has been refused in connection with British exports can be granted in connection with Irish exports; and, indeed, be treated as a justification for a subsidy.
In passing, I should like to deal with the argument that the unforeseen steep rise in the world price of sugar to £55 or so threatens to eliminate the compensation which was enshrined—I almost said "concealed"—in the strange book transaction in this Agreement: that the
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Sugar Board shall purchase annually from the Irish company 10,000 tons of refined beet sugar, produced and refined in the Republic of Ireland, at a price of £50 per ton ex-factory, and forthwith re-sell it at a price exceeding by £10 per ton the average of the London daily price for raw sugar during the year.
The noble Lord, Lord Walston, on March 5 commented that he saw no reason for making any fuss, because all this meant was that the British Government, infected by the prevailing craze for bingo and other games of chance, was merely having a gamble with the Irish Company on the future world price of raw sugar, and that it looked as if the Irish had (if I may use the phrase) been "sold a pup" in the process. Perhaps I may be allowed to dismiss this reflection on the British Government's use of public funds; also to point out that the average price over, say, the next five years initially contemplated by the Agreement is unlikely to result in anything but an annual payment by the Sugar Board to the Irish Company of some undefined amount which might rise to £150,000, or even more.
It is easy to get the emphasis wrong. For instance, the Evening Standard of March 21, in a note by its reporter, said that it was hard to see how I could be right in speaking of a subsidy to the Irish company, since at the present London daily price (then £55) it would be the Irish who would be paying the subsidy, not receiving it. Present price conditions are admittedly a freak, and the London daily price averaged over a year, which is the period taken in the Agreement, is unlikely long to maintain the present altitude. In any case, it was the British Government who publically estimated the cost of this arrangement to the Sugar Board as £150,000 a year; and even now they do not anticipate its complete elimination, although they have said that perhaps it will not come to as much as that.
It is also pertinent to remember that if we approve Clause 25 as it now stands the Sugar Board, acting under instructions from the British Government, will be able to vary, amend or extend the Agreement, without further authorisation from Parliament. Apparently we should merely be informed. This is clearly, I suggest, very unsatisfactory,

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because it could result in a greater tonnage and larger sums of money being involved.
I have dealt with what the Government are trying to do and I think I have shown that it is not justifiable. At Question Time on March 4 the noble Earl, Lord Alexander of Hillsborough, who leads the Opposition, expressed grave misgivings about the fact that the main bodies in the trade had not been consulted before the Agreement was drawn up, and also about the failure of the Government to publish the terms of the Agreement, or even to make them available to Parliament until recently. The Press notice published on November 1, if one examines it closely with the terms of the Agreement now available to Members, did not give a full picture of the terms.
Finally, in the debate on March 5 the noble Lord, Lord Champion, pointed out that Clause 25 seemed to be in strange company in this Agriculture (Miscellaneous Provisions) Bill. With respect, I consider it to be entirely out of place in this Bill. The Sugar Board was intended to implement the Commonwealth Sugar Agreement, which was solely concerned with Commonwealth raw sugar. The effect of passing Clause 25 would be, as the noble Lord, Lord Merrivale has just told us, to extend the Board's powers into an entirely new sphere, as a State body trading in the refined sugar of a country over which the British Minister of Agriculture, Fisheries and Food has no authority and which is not technically in the Commonwealth. Not only is this a departure from the purpose for which the Sugar Board was set up, and contrary to assurances that were given to the British sugar refiners in 1955 before the passing of the Sugar Act, but it also introduces a principle which could be extended to trading in other commodities and which might have very far-reaching consequences.
If the British Government are so confident that circumstances to-day merit the cancellation of these former assurances, and an enlargement of the power and scope of the Sugar Board, surely separate legislation should be submitted to Parliament so that a change in policy of this magnitude may be given the separate attention that such a change demands. The effect of Amendment No.
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17 would be to limit the powers of the Government to implementing the Anglo-Irish Agreement, which has already been signed and only awaits ratification. It would effectively prevent the use of the clause to cover any future agreement for which separate legislation would be required. In my view, the objections, in principle and practice, to the present Agreement remain unimpaired, and in principle my objection extends, really, even to this Amendment No. 17, which as the noble Lord, Lord Merrivale, has said, is only half the loaf. But at least a compromise of the sort indicated in Amendment No. 17, instead of the complete cancellation of Clause 25, would save the British Government the embarrassment of being deprived of the power to implement the draft Anglo-Irish Agreement, which has already been signed and which awaits ratification. I feel sure that the noble Lord, Lord St. Oswald, has considered and will be able to tell us, why the Government are so anxious to go on with this particular clause and the powers under it; and why they wish to pay this compensation, the reason for which is not apparent even after the closest study.
3.43 p.m.
LORD KILBRACKEN: I hope that at this stage I may add a few words which could be of value. I should like to begin by saying that I have no personal interest to declare in this matter. I do not grow beet, and I certainly have no connection with the Irish Sugar Company. But I do come from Ireland, and I want to say, frankly, that the interest of Ireland is at my heart in this matter. But when I came to go into this matter in a little detail I began to find myself increasingly doubtful as to where the true interest of Ireland did lie. In particular, I went so far as to investigate what was the London daily price for sugar, although before I personally could not have told your Lordships what it was for toffee, or any other purpose. But, in any case, it is not a very difficult research job, and I discovered that the price to-day is no less than £59 15s. a ton. So far as I can see, this means that Ireland is undertaking to sell sugar to this country at £50 a ton and to buy it back at £69 15s., which is a loss of approximately 50 per cent.; and that does not seem to me very good business.

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I know it will be said—in fact I do now say—that it is not to-day's price that matters, but the average price of sugar over the calendar year ending on June 30, 1963. But I have been into that, too, and I have here the figures for each month from July 1 last year. They are extremely interesting, because in July of last year the London daily price for sugar was only £26, and it stayed at about that figure until the end of October, when it began to rise. By February it was £51; last Tuesday it was £55, and it is now rising by about £1 a day. It reached the record figure of £59 15s. this morning, and I must admit that I wish I had bought a few thousand tons of it. We can estimate that the average figure for the month of March is going to be approximately £55, and the futures for the next four to six months are all in the neighbourhood of £58. In fact, the future for March of next year is over £50. From this we can ascertain that the average price for the first twelve months of this agreement will be approximately £41 10s. It therefore seems certain that, for the twelve months' period we have under review, Ireland will be selling sugar to you at £50 a ton and will be buying it back at £51 10s.
The noble Lord, Lord Milverton, has assured us that in his opinion the price of sugar is now going to fall. It has, of course, to fall to £40, to two-thirds of its present price, before Ireland derives any benefit from this Agreement. I should have thought that, if any businessman were absolutely convinced that the price was going to fall by that very substantial margin, there must be some clever way in which he can "do a bear"—I believe that is what it is called, but I may have got it the wrong way round—and make a very substantial profit out of it. I will leave that to the noble Lord, Lord Milverton. I hope that I have made clear what, at any rate, is my dilemma in this matter: that I do not quite see exactly how Ireland is by any means certain to benefit by this. However, I do feel that it will involve an extension of trading between the two countries, and the Irish Sugar company itself seems to be content with the arrangement, and therefore I certainly have every intention of opposing the Amendment.
3.48 p.m.
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (LORD ST. OSWALD): I am grateful to my two noble friends because, in moving this Amendment, they have been ready for the two Amendments to be debated together. I should have found it very difficult indeed to make a speech on each. With your Lordships' permission, I will first explain the precise effect of the two Amendments which the noble Lords have tabled. With a complicated measure of this kind it is important to see exactly what steps the noble Lords, Lord Merrivale and Lord Milverton, are urging, before I go on to say why I must resist them.
I am advised that the first Amendment would simply prevent us from making any modification we might agree with the Irish Republic during the five-year life of the Agreement. In this instance, therefore, the noble Lords are saying in as many words, "Let us have this Agreement—but let us make sure that we cannot change it in any way during the next five years, even if it was to our advantage to do so." The second Amendment would prevent my right honourable friend from directing the Sugar Board to buy the sugar from the Irish Republic. Although such directing is only part of the Agreement, it is an integral part; and the noble Lords might fairly suppose that, without this part, the whole Agreement must founder. Here the noble Lords are saying in as many words, "Let us not have the Agreement at all". In fact, my noble friend Lord Merrivale, referred to this quite rightly as "the whole loaf", from his point of view.
The last time we discussed this clause, on the Second Reading of the Bill, it seemed to me that noble Lords' objections were rooted in a misconception of the purposes and effects of the clause. The appearance of these Amendments on the Order Paper makes it clear that those misconceptions, as I read them, remain. I can only conclude either that the noble Lords did not fully understand those purposes and effects, as I described them in our Second Reading debate, or that they are still not convinced that the purposes are desirable and the effects beneficial. Having listened to their speeches to-day, I think that probably both of those

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impressions are partly true. May I therefore, on this occasion, adopt a somewhat negative process of persuasion by putting more emphasis on what the clause does not do?—and, in the course of that, I hope to reveal its positive virtues.
The strongest reaction among my noble friends on Second Reading came from my noble friend the Duke of Atholl, who was actually "filled with horror" by this clause. I suppose I should be relieved that he is not behind me to-day.
LORD WILLIAMS OF BARNBURGH: He is.
LORD ST. OSWALD: He is. But, together with the noble Lords, Lord Milverton and Lord Merrivale, he regarded it as a purely Irish "benefit match", with no compensating advantage whatever for this country. With characteristic patriotism, he toyed with the idea of putting down an Amendment to the Water Resources Bill, compelling the Central Electricity Generating Board to buy electricity from the South of Scotland Electricity Board at 2d. a unit and to sell it back to Scotland at a lower price, without any balancing "sweetener" for the Sassenachs. I can see the appeal of such an arrangement to the Scottish soul, but my noble friend was also persuaded that we were getting the wrong end of this sort of bargain with the Irish Republic. Because this illusion appears to be shared by all noble Lords who have spoken against the clause, and because it seems to me the furthest flung of all the illusions aired, I shall try to dispose of it first, and I fear at greatest length. I also, with the noble Lord moving this Amendment, found it very difficult to achieve brevity and clarity in combination. The noble Lord, Lord Milverton, also thought that this "subsidy", as he stigmatised it, to a foreign competitor would come ultimately from the British taxpayer. I hope to dispose of this hallucination in the same passage of argument. And, for good measure, I intend to lay the bogey that this Agreement will aggravate unemployment in the ports of Greenock and Liverpool.
The Sugar Board has in its pocket, or on its books, approximately £150,000 accrued over the past year at the expense of the Irish Republic. This came about as a result of the change at the beginning
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of 1962 in the surcharge which is imposed on all imported and domestic sugar, and the pricing arrangements for sugar in the United Kingdom. These changes were plainly destined to prejudice all suppliers. To compensate the Commonwealth Sugar Agreement countries they, like our home producers, are receiving supplementary payments from the Sugar Board. The Irish Republic, which had been placed under a similar trading disadvantage, was not made subject to this special arrangement. It was in fact treated in the same way as foreign countries. It is thus that the Sugar Board are profiting from the Irish to the tune of about £150,000 a year.
Even had we sought to return the full £150,000 to Ireland in one payment or over the course of one year's trading, this could not have been regarded as a "gift" or subsidy.
LORD HAWKE: Before the noble Lord goes any further, could be explain one point? Are there other foreign countries concerned who also are prejudiced and to whom there is no refund being made?
LORD ST. OSWALD: As I think I have explained, all foreign countries were placed at this trading disadvantage—in fact all countries, all suppliers, were placed at this disadvantage—but compensation was made for Commonwealth suppliers. The similar compensation was not made for the Irish Republic.
LORD HAWKE: The Irish Republic is not in the Commonwealth, is it?
LORD ST. OSWALD: The Irish Republic is not in the Commonwealth.
LORD KILBRACKEN: May I ask the noble Lord this: is it not the fact that in virtually all trade matters Ireland has Commonwealth preference?
LORD ST. OSWALD: Yes. I do not want particularly to turn this into that sort of argument, and I do not imagine that any Member of your Lordships' House would wish me to do so. But it is clear to all of us, I think, that Ireland is a close neighbour and is bound up with our own history very intimately, and quite clearly not many of us, at least, would think of it as a foreign country.
LORD MORRISON OF LAMBETH: What do they think?
LORD ST. OSWALD: I was saying that, had we sought to return the full £150,000 to Ireland in one payment or over the course of one year's trading, this could not have been regarded as a "gift" or a subsidy. It would have been a form of reparation. And it would not have come from the British taxpayer. In fact, this clause does not seek to make any such full and immediate reparation. What we have arranged instead is to pay a fixed price for some beet sugar produced in the Irish Republic. This price may well involve some loss for the Sugar Board in years when the world price of sugar is low, but this is not what the Irish Sugar Company are counting upon. The important thing for them is that it covers their costs. It has now been asserted for the first time, I think, in this debate by the noble Lord, Lord Milverton, that it will do more than that. It is not, in fact, doing any more than that. I suggest that it is also important to British refiners. Since this fixed price is being passed on to Irish beet producers, there can be no subsidy of the kind which concerned noble Lords during our last debate.
In fact, in so far as the Agreement has an effect upon our industry, it is beneficial in four separate ways, all of which seem to me to have been overlooked or misconstrued by the two noble Lords. First, the Irish Republic agree to restrict their exports to Northern Ireland to 10,500 tons, whereas at present those imports stand at 13,000 tons. Noble Lords have dismissed this reduction of 2,500 tons very lightly, but it is fair to point out that the amount of 13,000 tons could, and probably would, have increased in the coming years, taking the distance and transport advantages of a land frontier into account. Secondly, this concession on the part of the Irish Government enables the shortfall of 2,500 tons, small though it be, to be taken up by our refiners at Greenock and Liverpool. This must be to their advantage, not the oposite as was suggested in our Second Reading debate, when my noble friend the Duke of Atholl argued that the employment situation would suffer at these two ports, a claim which was made again to-day.
A third misconception in the noble Lords' arguments concerns the Irish undertaking to import only Commonwealth sugar (for re-export to us) to
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the exclusion of foreign sugar, which they have always bought before. My noble friends Lord Merrivale and Lord Milverton both said that these advantages had been exaggerated. The noble Lord, Lord Merrivale, sought to dismiss them altogether by pointing out that the Republic was at present importing 15,000 tons of Commonwealth sugar before the agreement was implemented under this clause. He concluded that the Commonwealth was therefore gaining no advantage. But, with respect, he is entirely ignoring the fact that these 15,000 tons of which he spoke have been bought in anticipation of the agreement and in order to honour the Irish Government's side of the bargain. He has only to study the trade figures for last year or previous years to see that this is an important and valuable new outlet for the Commonwealth suppliers.
The noble Lord, Lord Milverton, may consider it an unimportant amount, but as a director of a Commonwealth sugar company it is somewhat surprising that he should wish to look even a modest "gift horse" of this nature in the mouth. In fact, the Irish Sugar Company have stated their intention to take at least 5,000 tons of Commonwealth sugar in future years, and in most years they will need much more, possibly as much as 25,000 tons.
The fourth instance in which it appears to me the noble Lord, Lord Milverton, misconstrued the facts was in his reference to the Irish Government's undertaking, to us and its own farmers, to expand its beet-growing area. In reply to my intervention on this point on Second Reading he said he regarded it as indicating how profitable the arrangement would be for Ireland. But hardly to the Irish exporters, my Lords, which is the aspect which bothers him. The plain truth is that sugar produced from Irish beet can seldom be competitive with that purchased in the world market. The advantage as between their new arrangements and their former tradition of buying on the cheapest market, anywhere in the world, clearly lies with us. Yet the noble Lord, Lord Milverton, spoke of an unfair advantage being restored by these measures. Added to these four separate points is that part of the Agreement which will enable an experiment in beet production to be started in Northern Ireland, and this may well prove of some consequence.

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I should like to rebut, gently, I hope, the suggestion made by the noble Lord, Lord Merrivale, that this Agreement is a breach of the assurances given when the Sugar Board was first established. The original draft of the 1956 Sugar Bill enabled the Ministry of Agriculture to direct the Sugar Board to buy sugar from any country in the world. In response to representations of the refiners, an Amendment was introduced by the Government so that the Minister could only direct the Board to buy sugar from the parties to the Commonwealth Sugar Agreement. We did not say then that there would never be circumstances in which Parliament would think it justifiable to extend by legislation the powers of the Sugar Board. In fact we had to do this last year when dealing with the position when South Africa withdrew from the Commonwealth, and there were no complaints from the refiners; and since this is the matter of principle, as the noble Lord, Lord Milverton, described it, then there must be some reason for this matter of principle not having been raised then. I can only say to the noble Lord that we do not regard this in any way as a one-sided Agreement. The price of £50 per ton for refined sugar is comparable with the price of £35 15s., free at ship at Durban, being paid for raw sugar under the South African Sugar Agreement; and this is not as favourable as the terms of the Commonwealth Sugar Agreement.
We have been most careful to ensure that the Agreement is consistent with our determination to leave private traders free to get on with their job. It does not transfer to the Sugar Board any business at present in the hands of private traders. Purchase and resale of Irish refined sugar will be no more than an accounting operation by the Sugar Board. The sale of raw sugar will not add to the quantity of such sugar that the Board has to sell; and they will sell it in exactly the same way as they sell sugar to users in Britain. The noble Lord, Lord Milverton, is mistaken in stating that the Sugar Board can vary the terms of this Agreement. They cannot. Only the Government in agreement with the Irish Government can do so.
I was asked a question about the possibility of extending this Agreement after 1967. This would be possible under this
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clause. An assurance has already been given that Parliament would be informed of any proposal to modify or extend the Sugar Agreement with the Irish Republic—and the term "informed" is the correct one, as my noble friend thought. To sum up, we have here an Agreement which opens up a new outlet for Commonwealth sugar producers; which helps to redress an anomaly that has crept into our sugar trade with the Irish Republic; which, in answer to the noble Lord, Lord Kilbracken, I would say will—though not this year—help towards compensating the Irish Republic for previous losses and at the same time ensure that in future there will be no question of the Irish Sugar Company's having any advantage in the cost of raw sugar imported; which spells out levels of trade upon which Irish producers and our own refiners can shape their plans to mutual advantage, and which enables Ulster to engage in experimental husbandry with a new crop. I am sure that your Lordships will wish all this to go forward, and I hope that my noble friends will now be disposed to withdraw their Amendments and to accept this clause as it stands.
4.5 p.m.
LORD HAWKE: The position gets "curiouser and curiouser". So far as I can make out, the sugar trade in this country, at any rate, considers that the Irish refiners secured large markets in Northern Ireland, previous to January, 1962, by the fact that the British refiners were forced by an undertaking to Her Majesty's Government to pay higher prices for raw sugar than the Irish were paying. The noble Lord said that the price arrangements were altered in order to deal with the dumping of Iron Curtain sugar; and in the course of that the Irish position was affected too. Therefore it is proposed, by this curious, roundabout method, to pay compensation to the Irish refiners for the loss of a market which they ought never to have had, because the natural geographical sources of supply for North Irish sugar would be seaborne sugar from Glasgow and Liverpool. Everyone knows that it is cheaper to send this commodity by sea than by land. Frankly I cannot understand it. I feel that Her Majesty's Government must have some other quid pro quo. I wish we could be told what advantage they have secured from this Agreement.

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There has been a good deal of argument about the price of sugar. I can assure the noble Lord, Lord Kilbracken, that when I was in trade and dealt with sugar, I have seen it at £4 or £5 a ton. The sole reason that it has gone up is that Russia has cornered the Cuban sugar crop. I have no doubt that in future years this crop will appear on the world's markets by some roundabout method, and the price of £50 per ton may prove to be too high at the moment. I should have thought that the Board of Trade would be concerned with this particular matter, but I wish that my noble friend, who is speaking for the Minister of Agriculture, will "come clean" and say what advantage we have got out of the £150,000 a year, which could be the amount handed over to the Irish sugar refiners.
LORD ST. OSWALD: I am aware that there have been suggestions that there is a mysterious and hidden quid pro quo. There is no such quid pro quo. I have spoken at exorbitant length on this clause in the Bill to show why I thought the advantages were well balanced as between the Irish and ourselves.
THE DUKE OF ATHOLL: As my noble friend mentioned my name and remarked that I had said on the Second Reading that this clause filled me with horror, may I make it clear that what filled me with horror was that this clause was in this particular Bill? It seems to me, as I said then, that this is a most inappropriate Bill in which to put this clause. It has nothing to do with sugar production in this country; it in no way alters subsidies or increases or diminishes anything; nor does it do anything to beet sugar growers in this country. I should have thought that if we could justify this clause in the Agriculture (Miscellaneous Provisions) Bill, we might well put in another clause entitling, say, the South Africans to send tinned peaches to this country. There are a few peach growers in this country. It is definitely a Board of Trade matter, I should have thought, not an agricultural matter.
My noble friend also says that Greenock and Liverpool will benefit by 2,500 tons extra sugar refining, thanks to this Agreement. The British Sugar Refiners Association do not appear to
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think so; and I should have thought that if this were so, they would have been all in favour of the Agreement, because their object in life, like that of all commercial bodies, is to increase their turnover. They certainly think that this Agreement will diminish their turnover.
Thirdly, it seems to me, on the face of it, that to pay £150,000 for the joy of having an experiment in growing beet sugar in Northern Ireland, which appears to be what this amounts to, is an expensive way of doing it. I should have thought that the Government could easily have found a cheaper way, such as putting up a sugar beet factory in Northern Ireland on their own, rather than doing this. I realise, of course, that at the moment they may get the best of both worlds, because, thanks to events in Cuba, the price of sugar has gone up to a remarkable extent. Therefore they may be able to have their beet grown in Northern Ireland without having to pay for it. But it seems to me that if the Government are going to conduct governmental business in this way the whole time, we are going to come to a very nasty loss sooner or later, when world prices do not move in our favour. Therefore, I should like a little more explanation of what the Government really are trying to do by this particular Agreement.
LORD ST. OSWALD: My noble friend has asked me three questions, or rather given me three opinions, to which he would like a reply. He said that this was the wrong Bill. I cannot agree with him on that. This is a Miscellaneous Provisions Bill which, therefore, allows considerable scope for matters which come under the Minister of Agriculture, as does the Sugar Board under its terms of reference. My noble friend said that British sugar refiners did not think that they would find any advantage from the extra 2,500 tons. I did not say that they were going to, but that they could, and I cannot see who would be better placed to take advantage of the short-fall which results from these provisions.
THE DUKE OF ATHOLL: May I interrupt the noble Lord? What I intended to say was that if this Agreement did not take place British sugar refiners appear to think that they would be

31
able to get considerable more advantage than this 2,500 tons.
LORD ST. OSWALD: I think I have done my best to show that they will get an advantage by the undertaking of the Irish Republican Government to limit their exports to Northern Ireland to 10,500 tons instead of the present 13,000 tons, which, as I pointed out, could easily have increased over the years. This is a question of mathematics. I do not know how British sugar refiners work out their theory, but to me the position seems plain enough. My noble friend also said that we were paying £150,000 for an experiment in growing beet sugar in Northern Ireland and that this seemed rather expensive. Presumably he was being a little frivolous, or came in towards the end of my speech, because £150,000 is not in fact being paid. It is simply not being taken away from the Irish Republic, as it otherwise would be. It is a compensation for the £150,000 per year which the surcharge is at present costing the Irish Republic and which we should not wish to see continue. It is not paying back the £150,000 which has already accrued, as I explained before. Of course, it covers many more things than the experiment in beet growing in Northern Ireland.
LORD MERRIVALE: I do not propose to divide the House at this stage, but there are one or two comments that I should like to make. I am sorry that my noble friend Lord St. Oswald did not consider the point of view we are trying to make from these Benches with regard to limiting the powers of the Minister. He just said that if this Amendment were carried to-clay in its present form, it would not be possible to modify the draft agreement during the next five years. That is not the intention of this Amendment, but, in spite of that, the Government do not wish to consider even the principle of our Amendment. That I find very distressing. Another point, which I think was not given sufficient consideration by the noble Lord is that what the Government themselves are trying to do should not be achieved by separate legislation. I thought that strong arguments had been put forward, and it was disappointing to hear the noble Lord just say that in 1956 the Govern-
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ment had not said that the duties of the Sugar Board would never be extended. Perhaps they could be extended, but I think that those duties should be considered in the proper context, because this is a completely new departure in the duties of the Sugar Board.
I would add that I was a little surprised at the comment of the noble Lord, Lord Kilbracken, when he was standing up for Southern Ireland, that he would oppose the Amendment but that the Agreement was going to cost the Irish company a large amount of money, for the price of sugar tended to rise rather than to fall.
LORD KILBRACKEN: I said that it looked as if it would in the first year, but in subsequent years it was a gamble, as the noble Lord, Lord Walston, pointed out. In the first year, the Irish Sugar Company is certain to lose a bit, and I said that I oppose the Amendment because I liked the extension of trade between the two countries.
The Irish company was apparently in favour of it.
LORD MERRIVALE: I must have misinterpreted the words of the noble Lord. I should like to say—because the noble Lord's opening words were that all those who spoke on this Amendment had an interest in sugar—that I have not any interest to declare, except as a consumer. I think we have to consider very carefully the noble Lord's reply, to see what further Amendments may be necessary at a later stage, but I urge on him and on the Government to give further consideration to what we are trying to do, even if the drafting of this Amendment is faulty. With these few remarks, I beg leave to withdraw the Amendment.
LORD MILVERTON: I should like to say one word before this matter is put to the Committee. I join with the noble Lord, Lord Merrivale, in not wishing at this stage to press for a Division on the points we are trying to make, but I am left completely dissatisfied with the reply of the noble Lord, Lord St. Oswald, in trying to explain why there should be any compensation paid. It still completely defeats me. As the noble Lord, Lord Hawke, said, why we should pay compensation to the Irish for the loss of an

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advantage they ought never to have had, leaves one completely defeated.
Amendment, by leave, withdrawn.
Clause 25, agreed to.
Remaining clauses and Schedule agreed to.
Bill reported with Amendments.

LEGAL AID BILL [H.L.]
4.21 p.m.
Order of the Day for the Second Reading read.
THE LORD CHANCELLOR (LORD DILHORNE): My Lords, I beg to move that this Bill be now read a second time. Last week the 12th Report of the Law Society on the operation and finance of the Legal Aid and Advice Acts and the comments and recommendations of my Advisory Committee thereon were published. This is not the occasion for a debate on that Report, but I feel that I should draw your Lordships' attention to one or two matters of importance which are relevant when considering this Bill.
The burden borne by the taxpayer in relation to legal aid has in recent years risen very considerably. For England and Wales the position is as follows. In 1959–60 the grant was £1,446,336; in 1960–61, it was £2,202,450; in 1961–62, it was £2,894,470; with the supplementary grants this year it will rise to £3,594,000; and next year it is likely to rise to £3,792,000. For this steep rise there are a number of reasons. One is that the demand for the legal aid and advice service has grown tremendously. To indicate the extent of this growth, I will just mention two sets of figures which relate to this side of the Border. During 1961–62 the Law Society's Committees received no fewer than 105,224 applications for legal aid, 82·2 per cent. more than the year before; and in the year before there was an increase of 42·5 per cent. over the previous year. In 1961–62, 43,205 people took advantage of the legal advice service, and this was an increase of 71 per cent. compared with the year before. I am told that in the present financial year there has again been a substantial increase in the demand for both legal aid and legal advice, though I must confess that I hope it will not be as spectacular as that which occurred last year.
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As the service has grown, so has the amount the taxpayer has been required to contribute risen. That, of course, was to be expected, and was indeed inevitable. As your Lordships know, it is not the case that the service is entirely paid for by the taxpayer. The legally-aided litigant is required to contribute what he can afford, and, where the litigation is successful, costs can be recovered from the losing party. None the less, one must recognise that the cost of legal aid and advice has become very heavy, and also that it is still growing.
My Lords, my Advisory Committee, over which the noble and gallant Viscount, Lord Bridgeman, presides (and he has sent me a letter to say how sorry he is he cannot be here this afternoon), have in their comments called attention to the mounting cost of the scheme and to the wish that Parliament and the public will no doubt have to be satisfied that the taxpayer is getting good value for the money spent on this important service. While there is no doubt that many people are deriving great benefit from the scheme, it is, in my view, imperative to see that it is administered with all possible economy. To secure this there has to be constant vigilance. I have no reason so doubt that proper care has been taken, but I have thought it desirable to write to the the President of the Law Society drawing his attention to the need for economy, and I have been assured by him that the Law Society will do all they can.
The changes made in 1960, enlarging the financial limits of the scheme and enabling many people to obtain legal aid who were previously excluded from it, and the extension of legal aid to the magistrates' courts and courts of quarter session for proceedings authorised by the First Schedule to the 1949 Act, no doubt largely account for the growth in the use of the service, and it is possible that, as the years have gone on, more and more people have become aware of the facilities available to them. What I am concerned to see—and I am sure your Lordships and the Law Society are equally concerned—is that legal aid is granted only in proper cases. The local committees and area committees cannot be sure how the courts will decide the cases that come before them. There may be a considerable conflict of evidence at the trial. But the Committees hear only

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one side. Their task in deciding whether or not a case warrants legal aid is not an easy one, but the figures of successful results in legally-aided cases are high, and they show, I think, that these committees (and thanks are due to those who serve on them for the public services they render) really do their work remarkably well.
One is also very much concerned to see that people whose means do not entitle them to legal aid do not secure it, and to ensure that there is full and proper disclosure of means so that an appropriate contribution by the legally-aided litigant can be secured. I do not think that much has gone wrong in either of these respects. At the same time, I think it is desirable to see that the deterrents and penalties, when those who do not make full disclosure of their means and so obtain legal aid when they should not do so, or legal aid without making a proper contribution, are adequate. I should also hope that it may prove possible still further to improve on the proportion of successes in legally aided cases, and to reduce the percentages of legally aided cases which do not succeed.
My Lords, it is against this background that the present Bill falls to be considered. I was a member of the Committee on Legal Aid presided over by the late Lord Rushcliffe, and that Committee devised a scheme which is now embodied in the 1949 Act. But I recollect that there was one problem which we on that Committee were unable to solve, and that is the problem with which this Bill seeks to deal. I think that problem was also discussed at some length by Parliament during the passage of the 1949 Act, but again without a solution being found. It is a problem that can be simply stated. If an unassisted litigant is sued by a legally-aided litigant and the unassisted person wins, as a general rule he cannot recover from anybody the costs that the has incurred, costs to which he might never have been put if the State had not assisted his adversary. On the other hand, if the assisted litigant wins, the unassisted litigant is usually ordered to pay costs. As my noble and learned friend Lord Reid has truly said, in relation to assisted litigants in the House of Lords it is a case of, "Heads I win, tails you lose ! "
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Section 2 (2) (e) of the 1949 Act restricts the liability of an unassisted person to pay his opponent's costs. His liability is not to exceed
"the amount (if any) which is a reasonable one for him to pay having regard to all the circumstances, including the means of all the parties and their conduct in connection with the dispute."
There are, of course, good reasons for this limitation of liability, but I will not take up your Lordships' time in expounding them now. It is a traditional feature of our legal system that costs ordinarily follow the event in cases in which neither side has legal aid, so that anyone who undertakes litigation in which neither party is legally aided knows that if he loses he is likely to pay the other side's costs as well as his own. But it is otherwise where one party is legally assisted, for the State has made it possible for one party to bring or defend an action, and the unassisted party can defend or sue in the courts only at the risk of paying his own costs whether he wins or loses.
My Lords, the injustice of the present position is most apparent when the assisted litigant has lost in the court of first instance and goes to the Court of Appeal and loses again. Then the unfortunate unassisted party will have had to pay his costs in two courts. It is even worse when the unassisted litigant appeals, having lost in the Court of Appeal, to your Lordships' House; for then the unassisted party, if he wins in your Lordships' House, may have to pay out of his own pocket no less than three sets of costs. I am not suggesting that there are many cases of this kind, but in such a case the injustice is great.
Various suggestions have been put forward from time to time to solve this problem, and much time has been taken up by considering the various proposals. One suggestion has been that payment from the Legal Aid Fund should be authorised of the costs of the successful unassisted party in all cases. This would cast a heavy burden on the taxpayer—possibly in the region of £340,000 a year—for the benefit of a small number of persons, and it would mean that the person sued by an assisted litigant would enjoy an advantage he would not have if sued by someone unassisted. In the latter case, if he won it is true he might get an order for costs, but he would not be certain of getting those costs paid. In the former case, if he won he would be

37
certain of getting his costs paid. Quite apart from the expense involved, I feel that it would be wrong in principle to do this, for the unassisted successful litigant surely should not be put in a better position than he would be in if his adversary was an unassisted litigant, possibly of moderate means. I do not claim that this Bill, if passed, will remove all hardship and all injustice: for that would be claiming too much. But I do claim that it goes a long way to remove the worst hardship and injustice, and I can tell your Lordships that the proposals it contains are the result of much thought and consultation which my predecessor and I have had with our brother Judges. If your Lordships will permit me, I should like to pay a tribute to the great work done by my predecessor in seeking to secure a solution of this problem.
To turn to the Bill, your Lordships will see that it authorises the payment out of the appropriate Legal Aid Fund—that is to say, the English or the Scottish Fund—of the costs incurred by an assisted litigant who is successful in proceedings in which his opponent receives legal aid. Your Lordships will see that subsection (1) of Clause 1 gives the Court which finally decides the proceedings in favour of an unassisted party power, subject to the further provisions of the subsection, to order the payment to him out of the Legal Aid Fund of the whole or any part of the costs which he has incurred in the proceedings. The point at which proceeds are to be treated as finally decided is a somewhat technical matter, and is defined in Clause 2 (3). Your Lordships will observe that it is proposed that the unassisted party's costs should be paid out of the Legal Aid Fund.
Subsection (2) of Clause 1 imposes two conditions which must be fulfilled before any court of first instance, or any appellate court, can make an order for the payment of the unassisted party's costs, or any part of his costs, from public funds. First, the court must be satisfied that it is
"just and equitable in all the circumstances"
that provision should be made for the payment of the unassisted party's costs out of public funds. Secondly, before making an order for costs the court must consider
"what order for costs ought to be made against the person receiving legal aid."
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That provision I regard as most important, for it will ensure that the power to order a payment to the unassisted party from the Legal Aid Fund is not regarded by the courts as an alternative to ordering the assisted party to pay personally any part of the costs which he may reasonably be ordered to pay, subject to the limitation to which I have already referred, namely, that his liability shall not exceed
"the amount (if any) which is a reasonable one for him to pay having regard to all the circumstances, including the means of all the parties and their conduct in connection with the dispute."
As your Lordships will recall, the grant of legal aid depends on the applicant's showing that his case has merits and that his resources are within the prescribed limits. The determination of his means is, of course, the duty of the National Assistance Board. They have to determine his "disposable income", "disposable capital" and "maximum contribution". He may be granted legal aid if his disposable income is not more than £700. But in arriving at the disposable income, the Board makes allowances in respect of rent, rates, income tax, maintenance of dependants and other necessary items, so that a single person could well have a gross income as high as £1,200 a year, and a married man with three children might well have a gross income of £1,600 a year, or perhaps even more, and still be eligible for legal aid. The 1949 Act also provides that an applicant may be refused legal aid if he has disposable capital of more than £500; and the Board determine his disposable capital by a somewhat similar process of making deductions from the gross amount of his capital. Thus, an allowance of £75 is made where the applicant has his wife living with him, and his capital is not treated as including the value of the dwelling house in which he lives, unless its value, free of mortgage, exceeds £3,000, in which case half the value over that amount will be taken into account. A person who is granted legal aid may be required to contribute a maximum of £150 in respect of his income, and in respect of his capital not more than any excess over £125.
It will be apparent that, now and then, a person who has been granted legal aid for a case which turns out to have little merit, and which he loses, may, after payment of his contribution to the Legal

39
Aid Fund, still have some income or capital from which he can reasonably be expected to make a contribution to his successful opponent's costs. It is only right and fair that a man who has caused his opponent expense, and possibly great worry, by embarking on litigation should be made to bear what costs he can within the limits of Section 2 (2) (e) of the 1949 Act, to which I have already referred. I have spent a little time on commenting on that provision because it is, I think, an important one, and it does mean that before any order is made on the Legal Aid Fund the courts will be required to consider the possibility of an order being made against the assisted litigant.
Subsection (3) of Clause 1 imposes a further limitation on the power to order a payment of costs out of public funds by providing that no order shall be made for the payment of the unassisted party's costs incurred in a court of first instance unless the proceedings were instituted by the assisted person and the court is satisfied that the unassisted party would suffer severe financial hardship if no order were made.
My Lords, there is a strong case for giving power to pay the costs incurred by an unassisted party in an appellate court whether he be appellant or respondent, and whether he instituted the proceedings at first instance or not. Other things being equal, it is a greater hardship for him to have to fight his case in an appellate court than in the court of first instance only. Therefore, under the Bill appellants and respondents are treated equally in the matter of costs incurred in the appellate courts. In courts of first instance, however, the position is, I think, entirely different, and I am satisfied that it would be right to allow the payment out of the Legal Aid Fund of the costs incurred by a defendant or by a respondent to a divorce petition, provided that he is successful when the case is finally decided and that he can show that he would suffer severe financial hardship if he had to pay his costs personally.
The unassisted plaintiff, or petitioner, in a court of first instance is in a different position. If he is successful he obtains the fruit of his judgment. When he considers starting the proceedings the
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unassisted litigant should exercise his judgment as to the likelihood of the defendant's being able to satisfy the judgment and also pay his costs if he (the plaintiff) wins. His costs should not be the liability of the Legal Aid Fund. In my opinion there would be the greatest objection to allowing the courts to order the payment of his costs out of the Fund, for to do so would put the unassisted plaintiff in a better position if he were opposed by a legally-aided litigant than if his opponent paid his own costs. That would not be defensible, and it is for that reason that the Bill distinguishes in the first instance between the plaintiff and the defendant.
My Lords, I have chosen the test of "severe financial hardship" in preference to the words "substantial hardship" or "exceptional hardship", or any other hardship test that one may care to think of, as I believe that the test chosen can be applied by all the courts where legal aid is available and where the provisions of the Bill apply, and I believe and hope that it will suffice to avoid the worst hardship and be the best solution of this very difficult problem.
Perhaps, I may turn now to subsection (4) of Clause 1. As the principal object of the Bill is to remove the worst injustice now caused to the unassisted party by the introduction of the Legal Aid Scheme, it is right to provide that no order shall be made under the Bill where, apart from the Legal Aid Scheme, a party would not recover his costs. This subsection is particularly relevant in divorce proceedings where respondent husbands who are successful are not, as a general rule, awarded their costs. So, under this Bill, they would not get their costs either.
I think it will be generally agreed that it would be undesirable to allow a right of appeal on a question of fact which arises in relation to an order made under this Bill. Although I would expect a point of law to arise very seldom, it would, I think, be reasonable to allow a right of appeal on a point of law, and subsection (5) of Clause 1 has that effect.
Turning to Clause 2, subsections (1) and (2) give the Lord Chancellor power to

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make regulations generally for the purposes of the Bill and for enabling the Law Society, which has the statutory responsibility in administering the Legal Aid Fund, to represent that Fund when an application is made for an order for the payment of costs out of the Fund—and when I refer to the Law Society I mean, of course, the Law Society here in England or the Law Society of Scotland, as the case may be. Subsection (3) deals with another technical matter on which I need not trouble your Lordships, save to explain that it seeks to define the point at which proceedings shall be treated as finally decided in favour of the unassisted party so that an order for costs may be made under the Bill. Subsection (4) enables the court to make or refuse to make an order without waiting to see whether its decision in the proceedings will prove to be final. However, an order so made takes effect only if the case, in the event, goes no further.
Subsection (5) of Clause 2 provides that if the assisted person is not assisted for the whole of the proceedings an order under the Bill in favour of the unassisted party shall be limited to that part of the proceedings in which his opponent was assisted. It not infrequently happens that a litigant is assisted for part of the proceedings only, and it is clear that this Bill should be restricted to helping the unassisted party only while his opponent is legally assisted. Important as is Clause 3 in modifying the Bill in its application to Scotland, it is a technical matter to which your Lordships will not expect me to devote any time. I think the only observation I need make about Clause 4 is that it provides that the Bill shall not extend to Northern Ireland, where legal aid is not yet available.
My Lords, from time to time one reads in the Press of cases in which an unassisted party has won against his legally-assisted opponent. It is not infrequently the spectacular cases which are brought to one's notice, and sometimes one reads critical comments by the Judge about the hardship which is caused to the unassisted party in such cases. Apart from those cases which attract great publicity, one must recognise that there have, of course, been many others during the last twelve years in which the unassisted party has
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suffered severe hardship by having to pay his own costs after securing justice in the courts. It is perhaps the man whose income is just above the financial limit within which legal aid is available, or who has just too much capital tucked away in his life's savings, for whom one is most sorry and who Is most likely to suffer severe hardship at present. But the financial circumstances and commitments of people, and the costs they may incur in prosecuting or defending their rights, differ greatly, and I do not consider that it would be practicable to define in this Bill those cases in which severe hardship may occur by introducing any elaborate provisions such as those which govern the determination of the resources of a man for legal aid. It is accordingly the policy of the Bill to leave the courts with a fairly wide discretionary power to grant or refuse an application for relief under the Bill.
My Lords, as payments under the Bill to the unassisted party will depend on a number of uncertain factors—the number of successful unassisted parties the way the courts exercise their discretion, and the amount they order to be paid to unassisted parties—it would be impossible (to make any certain estimate of the total cost of the proposals introduced by the Bill. We have made the best estimate we can, and it is estimated that for English cases the cost will not exceed £50,000 a year and for Scottish cases be of the order of £7,000 a year. In estimating the possible cost of the proposals, I should tell your Lordships that allowance has not been made for the exceptionally expensive cases which last for weeks on end, which occasionally and unfortunately occur and which cost huge sums of money. Such cases are not typical. The estimates which I have mentioned could be upset by a single exceptionally long case in which the unassisted party is awarded his costs out of the fund.
Even so, the cost of the proposals before your Lordships is likely to be very small indeed, compared with the total annual cost to the Exchequer. When compared with the total cost of this service, the cost of these proposals is not great. The injustice which may be suffered by an unassisted litigant may be very great. At the present time he may

43
be faced with the choice between defending a claim which he could win and paying as a price of victory a sum in costs which may reduce him to near penury. This position cannot be allowed to continue, and I would express my gratitude to the Treasury, who so often come in for hard words, for accepting the obligations that this Bill will impose.
As I said at the beginning of my speech, I do not assert that this Bill will avoid all injustice and hardship: it is not designed to do so; nor do I think it would be practicable to do so. But the Bill does include proposals which have been most carefully thought out and discussed, and which will, I hope, do much to remedy a defect in what is generally regarded as a remarkably successful and useful social service. My Lords, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2ª.—(The Lord Chancellor.)
4.53 p.m.
LORD SILKIN: My Lords, I am sure the House will be grateful to the noble and learned Lord for the manner in which he has introduced this rather difficult Bill—difficult to the ordinary layman, and complex, and one which will, I think, give rise to some discussion at a later stage. On Second Reading, however, I should like to say straight away, speaking for my friends and, I believe, for the whole House, that we accept the principle of this Bill. We think it is timely; we think it is putting right an evil which has long been calling out for remedy, and also that it is putting it right in a moderate way. The noble and learned Lord on the Woolsack has taken advantage of the occasion in introducing this Bill to say a few words generally about legal aid. I am sure he is entitled to do so, because, as he points out, he was a member of the Rushcliffe Committee which originally unanimously recommended the policy of legal aid. Although I was not a member of that Committee, I believe I gave evidence to it on behalf of the Labour Party, and I believe that the evidence I gave was on the lines of the Report of the Rushcliffe Committee. So we are all in harmony this afternoon.
I hope that those who consider this Bill and the question of legal aid gener-
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ally will not regard legal aid in a grudging spirit. There has been a tendency, not on the part of the noble and learned Lord on the Woolsack but on the part of the Press occasionally, and of others who are ill-informed, to talk rather grudgingly and disparagingly about the question of legal aid. The fact is, of course, that legal aid is justified because it is recognised that there are a large number of people who believe they have a grievance which they cannot, through lack of means, get remedied by access to the court. And this is a situation which in a civilised community ought not to be tolerated, and that was the recommendation of the Rushcliffe Committee.
I think that, broadly speaking, the contribution which is required of the assisted person is reasonable and acts as a sufficient deterrent against hasty embarking on litigation. But there is a still greater deterrent. It is by no means easy for a person to get legal aid. I would just remind the House of what a person seeking legal aid has to overcome. In the first place, he has to get a solicitor—at least, he would be well advised to do so—to put forward his claim. That solicitor must himself feel satisfied that there is a reasonable case to take to the court. The criterion which the Law Society recommend in advising a potentially assisted person is that the solicitor should act and should advise the client as if he were a client who was going to pay and who would have a reasonable chance of success.
If the assisted person overcomes that hurdle—he finds a solicitor who feels that he has a reasonable case—he then goes to the local committee of the Law Society. The local committee would consist of a series of committees, but he would go to one of them. That might consist of three or four solicitors and one barrister, and they have to be satisfied that there is a reasonable case. Very often before it comes to this local committee counsel's opinion would be taken and would be placed before the local committee. Again, if there is any doubt at all, the local committee could refer the matter to an area committee and the whole case might be reconsidered by that area committee. Or they might require that counsel's opinion should be obtained in detail, with the evidence of witnesses, before they come to

45
a decision. Therefore, a difficult case might have been considered by as many as twelve different lawyers before a certificate is given. That is not an easy hurdle to overcome, although I do not suggest that that is the general case. In every instance, however, there are some four or five lawyers who have to be satisfied that there is a reasonable case.
The fact that this is a beneficent Act can be judged from the figures that the noble and learned Lord has given us: that well over 100,000 people were recommended for legal aid last year. One must assume that the majority of those would not have been able to take advantage of the courts if they had not been given legal aid. One must also assume that a certain number were refused. I think, taking the figures of the Report broadly, some 20 per cent. of those who actually apply are refused legal aid.
The other test of the value of legal aid is the measure of success in cases where it is granted. The noble and learned Lord referred to that. He said that there was a high proportion of success. I think it amounts to something over 80 per cent., and that does not include divorce cases. If you include divorce cases, it is considerably more. If you include cases which are fought and won, and cases which are settled before the hearing, the proportion of successful cases is getting on for 90 per cent. Therefore, I hope that this whole matter will not be treated in a grudging manner. This is a most valuable piece of social service, and the people who get legal aid are being helped to secure justice, which is one of the things on which we pride ourselves.
However, we must recognise, and we do, that there are cases which will fail. There will be some cases which will fail in spite of all the precautions which have been taken by the lawyers, on account of the fact that all the material evidence has not been given by the proposed litigant. I would say that these cases are few indeed. I speak as one who has had some personal experience of the workings of legal aid. I think the number of cases where all the facts have not been disclosed or elicited must be few; but there will be some and, therefore, in a tiny minority of cases the legally assisted person can quite equitably be called upon to make a substantial contri-
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bution towards the costs of the non-assisted person.
The noble and learned Lord referred to the fund. He said that the fund was composed of monies contributed by the assisted litigant and monies contributed by the State. On the whole, the average assisted litigant provides about £48 per case in High Court cases, and £42 in county court cases. But there is a third party to the fund—namely, the unfortunate profession to which the noble and learned Lord on the Woolsack and I belong. We each contribute 10 per cent. of our costs towards this fund. That is quite a considerable amount. Indeed, I can say from personal experience that, so far as solicitors are concerned, they are really rendering a social service in undertaking this work at all because it is not remunerative. I say quite definitely that it is not remunerative having regard to the reduction which is made in their costs. I will not presume to speak for the other branch of the profession, but so far as solicitors are concerned it is not remunerative; and the fact that the vast majority of solicitors in this country are on the panel for giving legal aid does them great credit, because they must know that they are not on the panel for what they can get out of it.
I said that I was not going to discuss the details of the Bill because I think that can better be done in Committee. But to have to decide whether there is extreme financial hardship is putting a great burden on the Judiciary. They will have to decide it at the end of a case. I wonder whether the noble and learned Lord has considered on what basis they will come to a decision. They will have to hear evidence. After the non-assisted person has been given a decision in his favour, then, and only then, will arise the question of whether he should be given a contribution towards his costs from the fund. At that stage the Judge has to make up his mind whether there is extreme financial hardship.
THE LORD CHANCELLOR: My Lords, I hope to save the noble Lord time on that particular point, because the regulations give power under Clause 2 (2) (a) to make provision for a reference; so that the Judge can refer the matter to the Master or Registrar, or to the District Registrar, as the case may

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be, for inquiry and report. That was why that provision was put in. I ought perhaps to have mentioned that.
LORD SILKIN: My Lords, that certainly does save the time of the House, because I need not pursue the matter if that is in fact the intention. The other thing I wanted to say was that by now this scheme is a fairly comprehensive scheme, but, for reasons which I was never able to understand, certain types of action were excluded. You cannot get legal aid for libel or slander, for breach of promise of marriage, for seduction, or in respect of election petitions. I do not want to say anything about election petitions; that is probably a matter that is much less for an individual to initiate. But as regards the other three—libel or slander, breach of promise of marriage and seduction—unless the State deliberately wants to discourage these actions, in which case it ought to do something more than not grant legal aid, I can see no reason why such actions, after the fullest consideration by the various committees, and the fullest advice on evidence, should not come within the terms of legal aid. I am not proposing that at this stage the Bill should be extended so as to incorporate these actions, but I think it is something that we shall have to consider at some time.
The other thing is that we are rather creating a precedent. I do not say that there is no precedent whatever for the State's paying the costs of successful litigants in cases in which the State is not directly concerned. I think there are certain revenue cases where they may do so. But, by and large, for normal litigation this is a precedent, and the Government are rather opening the door to repercussions, because there are a number of other cases where it is equally hard on a successful litigant to have to find his own costs. I can give one instance with which I am quite familiar. It is the case where a person is resisting a compulsory purchase order, and resists it successfully at a public inquiry. He may be involved in heavy cost. Or a person may be resisting some kind of proposal which would be detrimental to his home and his environment. A year or two ago we heard a lot about the chalk-pit case, where a number of people incurred heavy expenditure in fighting a proposal that
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there should be excavations carried out which they thought were going to do damage to their land. These cases are fought at considerable expense by people who object legitimately, but there is no means by which they can be paid their expenses out of State funds. I have no doubt that once this principle is established there will be a strong demand that it should be extended to cases of that kind.
There is one other type of case with which the noble and learned Lord will be very familiar, the case of the person who goes right through to the House of Lords on appeal. He may be successful in the court of first instance; he may be successful in the Court of Appeal; he may be unsuccessful in the House of Lords. In the course of these proceedings he may have a majority of Judges in his favour, yet still be finally unsuccessful. In many of these cases the difficulty is that the legislation itself is so uncertain that it requires a decision of the House of Lords to clarify the law. That can be done only at the expense of the litigant, but he has no means of getting his costs. I believe that there will be strong pressure on the Government that in some cases a litigant should be able to get his costs. Having said that, I repeat that I support this Bill. I think that it is doing an act of justice, and that limited in the way in which the Lord Chancellor has explained it will be limited, it will inflict no great hardship on the Fund, while relieving a number of persons who would otherwise suffer grievously as a result of the operation of the Legal Aid Scheme.
5.12 p.m.
LORD MCNAIR: My Lords, I shall not stand for long between the noble Lord, Lord Silkin, and the two noble and learned Lords who have spent their lives in the administration of justice. I understand the principle underlying this Bill to be that if the State maintains (to use the old language of the Common Law) or facilitates the action of a poor man by assisting him with money, it thereby comes under some degree of responsibility for the consequences—namely, to pay the costs of his opponent if that opponent succeeds and is unable to recover his costs. The real problem before the House is the extent of that responsibility.

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Justice is, of course, expensive: it has always been expensive; it was expensive long before suits in formâ pauperis were ever thought of. But it is one of the expenses that one should be very reluctant to grudge, because, next to the defence of the country against external violence, and the protection of the citizen against internal violence, there is nothing more important within the functions of the State than justice. That was made clear for us a very long time ago. Your Lordships will remember that the Magna Charta, one of your Lordships' earlier legislative efforts, contained this promise by the Crown to its subjects: "To no man shall we deny justice, nor delay it". I say nothing about delay, because I believe that there is no country in the world where one gets speedier justice than in this country. But denial of justice is a very serious matter, and after two or three centuries it came to be realised that if a man is too poor to litigate he is being denied justice. Thereupon legislation was passed enabling the court to nominate counsel and attorney to assist the poor man.
The magnitude of the figures given to us by the noble and learned Lord on the Woolsack, in particular of the number of persons who are assisted every year, makes one realise what was the state of affairs before the rather haphazard and sporadic system of suits in formâ pauperis was replaced by the system introduced under the Legal Aid Act, 1949. The figures of cost involved in the Legal Aid Scheme are themselves formidable. As the noble and learned Lord pointed out, our great guarantee against waste of money is not only the local committees of solicitors and barristers who examine these claims, but the highly expert officers of the National Assistance Board who assess the contribution which they think it would be proper for the assisted litigant to pay.
It often happens that when the State tries to remedy one injustice it inadvertently creates another. And this is what has happened in this connection. The problem before us now is how, and to what extent, we are going to remove that secondary injustice for which we are responsible because we devised this instrument for removing the first and major injustice. The Lord Chancellor has explained the hardship suffered by the
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successful opponent of an assisted party in being unable to recover his costs. There are other kinds of hardship which I might mention and which would reinforce the examples given by the noble and learned Lord.
If your Lordships will look at the statistics contained in the Annual Reports of the Legal Aid Committee, you will find in one column the number of actions tried, and in another the number of actions settled. I am told by persons concerned with the working of this Scheme that it not infrequently happens that the person against whom an action is brought by an assisted person will sometimes realise, even when he is advised that he has a good defence and is likely to succeed, that even if he wins he will not be able to recover his costs and will therefore find it cheaper to settle the action by making a payment to the assisted person. That is not in accordance with justice, and it is a further argument in support of the principle embodied in this Bill. Moreover, as the noble and learned Lord has told us, even if the unassisted party against whom an action is brought succeeds, he has to face the fact that the assisted party may appeal to a higher court, and perhaps even to your Lordships' House, and thus still further increase the liability of the unassisted party.
There are two qualifications which this Bill places upon the remedy of protecting the unassisted successful party from the hardships to which I have referred. The first is, as the noble and learned Lord told us, in subsection (2) of Clause 1, which states that relief in respect of such costs may be given to him
"if (and only if) the court is satisfied that it is just and equitable in all the circumstances that provision for those costs should be made out of public funds".
In that event the court must quite properly, in the first place, consider whether or not it is right that the assisted person should make a contribution. It may well be that there is an unexpended balance of the sum to which he has been assessed by the officer for the National Assistance Board.
The second qualification for an order is that the court must be satisfied that without it the unassisted party will suffer "severe financial hardship". That expression causes me some difficulty. I believe that I should be right in saying

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that it is a novel expression, and at present it is very difficult to know how it will be administered. A particular difficulty will arise when the successful defendant is covered by insurance. Take the case of a motorist who is compulsorily insured, and large numbers of other defendants, such as the occupiers of houses, offices, factories and so forth, who are voluntarily insured. Is it to be said that, because they are insured they cannot suffer "severe financial hardship", since they can pass it on to someone else? That is a provision which at present I find it hard to justify, and it is one that will certainly be reflected in the insurance premiums. Once the principle embodied in this Bill is accepted, it is very difficult to find for it a logical resting place, short of complete responsibility for party-and-party cases.
The noble and learned Lord on the Woolsack gave us an estimate of the probable cost of the passage of this Bill—£50,000 per annum for this country and £7,000 for Scotland. I was surprised by the modesty of those figures. It does not seem to me to be a big price to pay for the remedying of this injustice. I can quite realise how at a time like this one has to be extremely careful about being generous with public money, but I venture to hope that, before this Bill passes into law, the noble and learned Lord on the Woolsack will be able to shift the balance rather more in the direction of—I will not call it generosity, because there is no question of generosity, but of giving the unassisted successful party something closer to an indemnity against the costs to which he has been put by the action of the State in granting legal aid under the Legal Aid Scheme.
5.26 p.m.
LORD DENNING: My Lords, the legal aid system is one of the greatest revolutions in the law in our time, and has been very beneficial, but it has suffered throughout from one serious difficulty—namely, that the unassisted person could not recover his costs against the legally-aided person. This Bill to remedy that injustice ought to be welcomed, but I should like to draw attention for a few minutes to the real impact of legal aid in this country, because we see here the State subsidising litigation, subsidising one side and quite often both sides.
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Our forefathers in the law would have been shocked to the core. They held, following the Roman jurists, that it was in the interest of the State that there should be an end to litigation. So they held that, if anybody subsidised another in his litigation, he was guilty of an offence, the criminal offence of maintenance. Blackstone gave the reason for it. He said that it
" … keeps alive strife and contention, and perverts the remedial process of the law into an engine of oppression."
So a poor man in those days could not get financial help in order to bring his case, because whoever helped him would be guilty of a criminal offence. Not only that; there was another brake, another deterrent, on his fighting an action. If he lost he always had to pay the costs of the other side, and if he had to pay the costs of the other side it might pretty well ruin him.
That is why, when this evil was exposed by Charles Dickens, as your Lordships will remember, in Bleak House, he said that the law then gave
" … to moneyed might the means abundantly of wearying out the right—so much so that there is not an honourable man among its practitioners, who would not give—who does not often give—the warning, 'Suffer any wrong that can be done you, rather than come here ! '".
That is all remedied now. I think it may fairly be said that, in consequence of the legal aid system, no person who has a reasonable case to put before the court is prevented from doing so by lack of means. If he has means, he has to pay such contribution as he can comfortably afford. If he has no means the State will pay. So that is remedied. At the same time, even if he loses he is no longer compelled to pay the costs of the other side. Even if he loses, in the great majority of—nearly all—cases to-day he is not ordered to pay the costs of the other side unless he has sufficient means for the purpose.
We have now remedied, therefore, the injustice which formerly arose for the poor person, or the person with modest means, who wanted to seek redress in the court. But we have left outside the scene the other side, the man who has been brought before the court by a man who is State aided or subsidised by the State. This means that an unassisted party has to fight someone who is

53
assisted and has the resources of the State at his command. There have been great cases in the courts which have shown this injustice. I would remind your Lordships of a case in 1960, the case of Auten v. Rayner, where the learned Judge, Mr. Justice Glyn-Jones, pointed out:
"In the prosecution of this cause against the defendants, all the rigour of the law has been applied with pitiless efficiency and with a zeal and energy worthy of a better cause—all paid for out of the legal aid fund and at grievous cost to the defendants in money and misery".
There have been many cases like that, and I have seen the smaller cases which never reach the headlines. There was the case only a few weeks ago of a small farmer in Cornwall. His farm was all he had, and he was sued by a claimant who claimed half his farm. Of course he had to resist it: it was the only livelihood he had. The claimant was legally aided. The case was tried before the court of first instance, and before the court over which I have the honour to preside. We found the claim of the legally-assisted person quite unfounded, and rejected it. But there it is. The small farmer was left with two lots of costs, and I am not sure that he has not been even ruined by it. At least he must have been forced to beggary, having been sued by a legally-aided person, who I am confident would never have brought the case if he had had to pay for it out of his own resources.
Many of these cases are of that kind. Previously, the action would never have been brought. Now, with legal aid, it is done at the expense of the State. Mark you ! I would not criticise the legal aid committees. They look into the position carefully to see whether there is a reasonable case; but they hear only one side. In the case of the claimant against the farmer, they had only his word for it. All the documents were against them, but they did not know that. They cannot cross-examine a claimant: they have to see the case from one side, and therefore they grant legal aid on that basis. What a burden it is on the other side ! But those are the cases which this Bill will remedy.
I should just like to stay for one moment to compare what happens in what we call trade union cases. If a trade union supports a person's claim
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against his employers—say, in a case of personal injury, which often arises—and if the man loses, who pays the costs? It is the trade union. We always ask, "Is it a trade union case?". If the answer is, "Yes", we know that the trade union will pay the costs if the man they support loses. Ought not the State to do the same when it subsidises litigation? This Bill will remedy that position.
But some would go further. As my noble and learned friend Lord McNair pointed out, where do you stop? Any person who is sued by a legally-aided person and wins, suffers an injustice. But, in spite of all that my noble and learned friend said, there must he a stopping place. Financial reasons alone might demand it. Cases will arise, as contemplated by this very Bill, where the defendant is insured, as is so often the case—it may be a master who is insured; it may be an employer who is insured; it may be a public corporation, such as the British Transport Commission or the National Coal Board. I imagine that under this Bill—I would not like to commit myself on the interpretation of it—if they had to pay their own costs, they would not suffer severe financial hardship. So in those cases where the defendant is insured or a great public corporation is involved—perhaps a hospital, or whatever it may be—under this Bill, as I understand it, even though such a person wins, he will not get his costs from the Legal Aid Fund. Some may think that unjust. I would not argue that now.
However, there is this other difficulty in extending the scope of aid generally. If you allowed costs to every person who won against a legally-aided person, you would get the spectacle of both sides having their costs paid for by the State. It happens now, and brings great dangers and troubles. In many divorce cases now, each side puts a plausible case before the legal aid committee; each side gets legal aid; each solicitor conducts the case with efficiency and skill. But, somehow, sitting in the courts, it distresses one to see two people fighting out their domestic squabbles and differences, maybe for a week or fourteen clays, all at the cost of the State, when, but for legal aid, they would not have dreamt of fighting it out in that way. It applies also to children's cases—wardships in the Chancery Division, and so on. They are all perfectly

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justifiable, with legal aid being perfectly properly granted, but the State pays the costs of the litigation on both sides.
I do not know whether there is any answer to it. All I say is that it is a reason for not saying that in every case the successful, unassisted party should get his costs. It should only be, as the Bill says, when it is just and equitable for him so to do. As my noble friend Lord Silkin said, sometimes it may be difficult to decide. But I trust the Judges can do it, always remembering that litigation itself is an evil and a thing we wish to avoid, except in so far as it is necessary to produce justice. But this Bill will remedy one crying defect, and will put the system, I hope, on as logical and firm a foundation as it may be.
5.38 p.m.
LORD EVERSHED: My Lords, I should like also to support both warmly and, if I may say so, gratefully the Bill which is now before your Lordships. I say "gratefully" because during the time that I had the honour of sitting in the judicial seat now occupied by my noble and learned friend Lord Denning, I was constantly sending urgent papers to the predecessors of the noble Lord upon the Woolsack asking that something of this sort might be done. I was particularly concerned with the real hardship—nay, real injustice—sometimes suffered by the unassisted, successful respondent in the Court of Appeal. Of course, if the respondent was, say, the Commissioners of Inland Revenue, or some very large corporation, one's heart might not be so much moved; but it is not always so. There is the example my noble and learned friend Lord Denning has given. I should not wish to make your Lordships' hairs
" … stand on end,
Like quills upon the fretful porcupine,"
but, of course, it might be one of your Lordships.
It is an injustice, and a real injustice, for this one reason if no other—and I am grateful for this point to that great Lord Chief Justice, Lord Goddard. If two unassisted litigants should fight, and if one should win with an order for costs which the other did not pay, and that other then served a notice of appeal, it would be open and would, indeed,
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be common for the successful man in the court below to seek and obtain an order for some security for costs in the Court of Appeal. So it is, as Lord Goddard pointed out, that the legally-aided appellant is not just as well off as anybody else not prevented by lack of means from coming to the seat of justice but is in a better position than other litigants.
I venture to support what fell from the noble and learned Lord on the Woolsack, that the figures are not very formidable. I looked at the figures I kept for my last year as Master of the Rolls in 1961 and there may have been, say, twenty cases of such unaided successful respondents. I also venture to think, with all respect to the noble and learned Lord, Lord McNair, that to have drawn a line where this Bill has drawn it is not only wise, but logical. I would not repeat what the noble Lord, Lord Denning, said as to the danger of going too far in this matter; but I think anyone who has spent his life in the law would endorse it when I say that, in the ordinary way, if I bring an action for some claim and win the action, but without costs, I should think, on the whole, I had not done badly. I think most counsel, if the opportunity arose, would advise a settlement on those terms. For that reason I consider it is not illogical to say that where a man starts an action he should not then get the benefit of this Bill; although if an action is brought against him, in exceptional circumstances—that is, where there is severe financial hardship—he should get some relief. I would ask noble Lords to bear in mind that if a man is legally aided you should, and indeed can, assume that he has got a point.
I would, if I may, take the opportunity which the noble Lord, Lord Silkin, has put before me, of expressing my own great respect for those who have administered this Legal Aid Scheme, not only the area committees and the other committees but also, if I may say so, particularly the Law Society. When I was Master of the Rolls I made, on one occasion, a quite substantial tour of inspection and I marvelled at the immensity of the work. Your Lordships may like to know, if you do not know already, that the typing work is, in fact, done by young women who suffer from

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the appalling affliction that they are totally deaf and dumb. But they have been found useful employment under this scheme which I am told they do most admirably and conscientiously. So I support again what fell from the lips of my noble friend Lord Denning in not at all grudging this scheme but saying, as the noble Lord, Lord Shawcross, said when it came into force, that it has been in truth the
"charter of the man of small means",
and so far as my visits around the world have convinced me that it is the envy of most other countries.
This measure now put forward, which answers my prayer of ten years, is, I think, a great improvement, a justice which is demanded. I take no further time, except again to pick up something that fell from the noble Lord, Lord Silkin. When appeals come to this House it is to be assumed, at any rate, that the question is one of real public importance. The costs, by comparison with the costs in lower courts, are very great. I hope that at some time your Lordships may be able to consider again the recommendation that was made by the Committee over which I had the honour to preside and which, I think, is sometimes referred to by my name. We suggested that appeals to your Lordships' House on matters of real public importance should be, in any case, at public expense. My Lords, I say no more except to acid my support to this Bill.
5.45 p.m.
LORD CHORLEY: My Lords, I should like to take part in this discussion this afternoon if only because it gives me the opportunity of paying tribute to my late noble and learned Leader, Lord Jowitt, who was responsible for getting the Legal Aid Act, 1949, through Parliament in the first instance. I think that everybody who took part in the Second Reading debate on that occasion has now passed away, apart from the noble Lord, Lord Mancroft, who was in his place earlier this afternoon and whom I should have liked to see here now in order that he might add a word in his usual inimitable way to the debate.
As one who was in the position of lieutenant, or, perhaps more accurately, "devil" to the noble and learned Earl, I did not take any part in the discussion on that occasion, although I was
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involved to some extent in the preparations for it. On that occasion Lord Jowitt, who was a great legal reformer, said that this was one of the measures which he had very much at heart in assuming the honourable though onerous role of Lord Chancellor. One of the others he mentioned, which I would commend to the noble and learned Lord on the Woolsack who is at the outset of a career which we hope will be marked by legal reforms of importance in the same way, was the codification of the law, which is still very much lacking and which in many respects always puzzles foreign lawyers when they visit this country. Lord Jowitt also mentioned the Crown Proceedings Act, which he had recently succeeded in obtaining time to pass through Parliament. And that is, of course, a very substantial Statute—more important, perhaps, even than the Legal Aid Act, although I agree with the noble Lord, Lord Denning, that that does mark a revolution in legal proceedings in this country.
In that connection I should like to make a point, which probably is not a good one, but which arose in discussion with my noble friend Lord Douglas of Barloch the other day. He wished to be present this afternoon and to take part in this discussion, but he was unavoidably prevented from doing so. The noble Lord's impression is that legal aid certificates cannot be granted in cases in which a litigant is suing the Crown. I am not sure that that is correct. The Act, which I looked at this afternoon, says that, "This Act is to apply to the Crown." I should have thought that that meant that legal aid certificates could be granted. I promised the noble Lord, Lord Douglas of Barloch that I would put this point to the noble and learned Lord on the Woolsack, and I hope that he will forgive me for doing so without giving him notice.
A very important result of the Legal Aid Act and one which I have previously mentioned in this House, is that it has to a large extent obviated something which was rather in the nature of a legal scandal; that is, the tremendous growth of speculative actions in connection with accidents which was a marked feature of the administration of justice in this country before the war.

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The Americans call this "ambulance chasing". While many cases were no doubt justly brought, and did very properly lead to awards of damages, it was not a savoury aspect of legal administration. While that practice has not perhaps completely disappeared, undoubtedly the Legal Aid Act has had a magnificent effect in largely cutting it down.
I agree with my noble and learned friend Lord Denning, whose speech I listened to, as we all did, with great interest, that this is a revolution; but I am not sure that he altogether regarded it as a beneficent one. Personally I think that this is a beneficent revolution. I am not sure that I altogether agree with what the noble Lord said about maintenance. I was not brought up to believe that maintenance was made a crime, because of the maxim: Interest republicae ut sit finis litium. In the Middle Ages the great baronial chiefs used to assemble at assize courts, with bands of armed retainers, and supported the litigant by not only providing the money for the lawyers but also by the armed support which might overawe the judge. I am sure that my noble and learned friend is familiar with the Paxton Letters, which contain an interesting example of how that occurred at Norwich Assizes towards the end of the fifteenth century.
I very much welcome the present Bill, though I feel, in view of Clause 1 (3), that it is giving us only half a loaf. I find myself in agreement with what my noble and learned friend Lord McNair said on this point. I agree with my noble and learned friend Lord Evershed that the litigant who has achieved success against an aided person may well be left to be satisfied with the judgment. But I do not think it was about that my noble and learned friend Lord McNair was complaining; he was complaining about the fact that a successful unaided person at a trial is not going to get his costs unless he can show that there is "severe financial hardship". It seems to me that my noble and learned friend Lord McNair is right when he says that that is neither logical nor fair, because this is the stage at which heavy costs are incurred, when numerous witnesses have to be produced, and voluminous correspondence copied. Especially in view of the fact that the estimates for ensuring the whole of this
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exercise are comparatively small, I should have thought it would be right and proper that a little more money should be provided by the Treasury, so that this matter should be put right, and the whole loaf given instead of only the half loaf.
It is true, as all speakers have emphasised this afternoon, that for the last fifteen years a real injustice has been going on in this country. The rapid growth of the Legal Aid Scheme, to which the noble and learned Lord properly drew our attention in his speech, has become more and more oppressive; because the more of these cases there are, the more cases there are of successful defendants who are being mulcted in heavy damages which they are unable to recover from the unsuccessful aided litigant. In spite of what the noble and learned Lord said about his gratitude to the Treasury, I am sure that it is the Treasury who have prevented this matter from being put right down the years. We have been arguing for it for a long time, and if the truth were known, I think it would be found that the Treasury have resisted it. It may well be that the gratitude of litigants is due to the noble and learned Lord, who has now overcome the opposition of the Treasury at least to a limited extent.
It is my experience that the Treasury are not much concerned with justice and with seeing that justice is done, and considerable pressure has to be brought to bear upon them by the occupants of the Woolsack and by those of us who are concerned that justice should be done, in order that the finance, which is unfortunately so frequently necessary in order that justice may be done, is forthcoming. I should not have thought that there was any reason why we should be to greatly worried about the expansion which has taken place in the Legal Aid Scheme over the last year or two. I am sure that the noble and learned Lord and my noble and learned friend Lord Silkin are right when they said that this is really a natural expansion of the Scheme, due to the fact that it is getting better known and that many cases come within its ambit and call for assistance from the State.
I am sure that we all agree that every effort should be made to see that money is not wasted. I have not much practicable experience of the working of the

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Scheme, but, so far as I know, it is working well, and so far as I have seen it, I should have thought there was no reason to criticise the Committee of the Law Society for granting certificates too readily; indeed, I should have thought they went a little the other way, if anything. I recently came across a case in which a comparatively poor man, who no doubt had a certain amount of financial backing behind him, was granted a certificate to fight a case in the county court on the basis that he provided the first £150. That seemed to me to be an altogether too cautious atitude on the part of the legal aid committee concerned, because undoubtedly the man had a good legal case, one which was not only fit to fight, but proper to fight, and which justice required should be fought.
It may be that these matters ought to be looked into more carefully. The Scheme has been running for fifteen years, and I always feel that after any experiment of this kind has been working for a substantial period of time, it is just as well that a survey should be made and a careful inquiry instituted, in order to make quite sure that it is working as efficiently as may be and that public money is not being wasted. For that, I hope that we may rely on the noble and learned Lord, who is obviously very interested in this, as an original member of the Rushcliffe Committee. With these words, I should like to add my own congratulations to him and give my support to this Bill.
5.58 p.m.
BARONESS HORSBRUGH: My Lords, I will not detain your Lordships for more than five minutes, but this is a subject in which I have been very interested for some time; and, like other noble Lords who have spoken, I have looked upon the present situation as a complete injustice. There is only one anxiety that I have now, and that is that those who may be considering defending cases will feel there is nothing definite enough in the words that they will be helped only if the court sees that otherwise there would be "severe financial hardship". From those words it will be very difficult for many people to decide whether to go forward with their cases.
The noble and learned Lord on the Woolsack said, I gathered, that there
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will be no prescribed limit of income when deciding the unassisted litigant's costs, as there is for the assisted litigant. I wonder why not. It seems to me that if there were a little more certainty it would give a great deal more comfort to people who are considering the problem. What is "severe financial hardship" will have to be decided by the courts. Perhaps they will decide that a certain amount that has been spent is not "severe financial hardship", although it may well be a great deal more than the unassisted litigant wishes to pay. Perhaps there could be some way of giving him, before he decides whether to defend a case, a little more definition of what is meant by "severe financial hardship".
6.0 p.m.
THE LORD CHANCELLOR: My Lords, I am grateful to your Lordships for the way in which you have received this Bill. It is, I must say, a matter of great pleasure to me to have had the honour of introducing it to your Lordships after a fairly long association with the Legal Aid Scheme. I should like to deal quite shortly with some of the points that your Lordships have made, although I think, with great respect, some of them went considerably outside the actual scope of the Bill.
The noble Lord, Lord Silkin (and I should like to thank him for his remarks) indicated that there would be a closer examination of this Bill in Committee. I should, of course, want that to happen, because we want to make this Bill as good a Bill as we can. But I must say that I hope it will not be a prolonged examination. I am very keen to get this Bill on the Statute Book at the earliest possible moment. It is not retrospective in its effect, and the sooner we get it on the Statute Book, the sooner will injustice be prevented.
The noble Lord, Lord Silkin, referred to the proportion of successes in legal aid cases, and the figures are, indeed, remarkable. In the Queen's Bench Division, 88 per cent. have been successful. In the Divorce Division, where, of course, the figure is increased because there are so many undefended cases, 91 per cent. have been successful; and in the county courts, 79 per cent. The figure is lower for the Court of Appeal, 61 per cent., and an

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inquiry is now being made to see whether we can find out what is the reason for this. But it is a substantial figure.
The noble Lord then asked why certain types of action were excluded from the scope of the Legal Aid and Advice Act, and while I was listening to him I was trying to recollect, I must confess without success, why it was in the discussions during the passage of the Legal Aid and Advice Bill through Parliament we made that particular exception. I cannot remember, and, therefore, I am afraid I cannot give him an answer on that at the present time. He also made the point that he thought this would be a precedent and an opening of the door to the payment of costs by the State in other cases. Some may take that view; but I think the question raised by the Report of the Committee over which the noble and learned Lord, Lord Evershed, presided as to the State's obligation to pay costs should there be an appeal to settle a question of law, is really a different question from that now under consideration in this Bill. I hope it will not lead to difficulties in the passage of this Bill—that it might be thought to be opening the floodgates or doors or creating precedents, or matters of that sort.
The noble Lord, Lord McNair, raised the question of the meaning to be attached to the words "severe financial hardship", which is a test applied to litigation in courts of first instance. I would say this to him: we have given the most careful consideration to those words. I think he is right in saying that, whereas one can find the word "substantial" preceding "hardship", this is the first time that the word "severe" has been used. We have done that deliberately and after considerable thought, because if the amount of costs is large, anyone can say it is substantial, but for the particular unassisted litigant it may not constitute a severe hardship. What we have had in mind is to make provision for a particular type of case, of which there are a number, which the noble and learned Lord, Lord Denning, illustrated in the course of his speech.
The noble Lord, Lord McNair, raised the question as to whether someone who had insured against the risk, and whose insurance company would, therefore, defend the litigation on his behalf, could be said to have suffered severe financial
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hardship. In my view, that unassisted litigant will have avoided the possibility of suffering severe financial hardship by taking out an insurance policy, and I do not think he would come within the scope of this provision. The noble Lord, Lord McNair, criticised the Bill for a certain amount of lack of logic. I do not seek to defend it on the ground of logic, but I think it will go a good way to meet the difficulties that now exist.
The noble and learned Lord, Lord Denning, said that there must be a stopping place. We have to draw the line somewhere. I gave the figure to your Lordships of what the total cost would be likely to be if costs were paid in all cases—namely, £340,000. That is a big sum, which would go to a small number of individuals for their costs, and there might be great objection to going to that extent.
My noble friend Lord Evershed drew attention (and I was glad he did) to the activities and interest he had taken in the proposal over a considerable period. I may say, in answer to a point raised by the noble Lord, Lord Chorley, that there have been all kind of suggestions for various proposals. Suggestions have been made that this Bill should make provision for only those unassisted litigants who incurred costs in the Court of Appeal. We have thought it right to go wider than that. But we feel it right to put in these words in limitation: that in courts of first instance the defendant must have incurred severe financial hardship. I will come in a moment to the points raised by the noble Lady in her questions a moment or so ago.
The noble Lord, Lord Chorley, put to me a question which rather surprised me, it having emanated, apparently, from the noble Lord, Lord Douglas of Barloch, to the effect: was it right that a legal aid certificate could not be granted against the Crown? I can tell the noble Lord straight away that that assertion is completely unfounded. Legal aid certificates can be granted against the Crown. Then the noble Lord, Lord Chorley, raised the question about the amount of contribution of £150 for a county court case. I would make this point to him: the amount of contribution which a litigant would be able to pay is assessed by the National Assistance Board after

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examination of his means. The amount of the contribution he could make is not settled by the legal aid committee. They consider what is necessary for a particular piece of litigation, but his means are decided by the National Assistance Board.
I now come to the question put by the noble Lady. I do not think it is possible to prescribe a limit of income to be possessed by the unassisted litigant and to say, "Below that limit you will get payment from the State for the hardship that you suffer, but, no matter how great the hardship that you suffer, if you are above that limit you get no contribution." The difficulty here is that costs vary so much. A sum which may be substantial may be no severe hardship to one particular litigant but may be a very severe hardship to another of lesser means. I think is was the noble and learned Lord, Lord Denning, who referred to what was said by one of Her Majesty's Judges in a case brought by a legally-aided litigant which lasted for a very long time, and where costs were extremely
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high. We have felt it better not to try to draw an arbitrary line of that kind.
Then the noble Lady asked: how can one tell in advance whether a court will make an order for costs in one's favour? One cannot tell that, whatever formula is arrived at. But if a case takes much longer than is necessary, or if the amount involved is large according to the respondent's situation in life, then this Bill gives the court power to make an order in his favour. As I said, in an interruption, to the noble Lord, Lord Silkin, this Bill gives the court power to cause inquiry to be made to find out exactly what the unassisted litigant's position is. I hope I have replied, at not too great length, to the points raised in the course of this debate, and I would conclude by again thanking your Lordships for the way in which you have received these proposals.
On Question, Bill read 2ª, and committed to a Committee of the Whole House.
House adjourned at eleven minutes past six o'clock.