Lords Sitting of 11 February 1964

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

APPOINTMENT OF STAFF AT L.C.C. REMAND HOMES
2.35 p.m.
VISCOUNT MASSEREENE AND FERRARD: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they are satisfied that the appointment of staff at London County Council remand homes is carried out with due care and efficiency.]
THE MINISTER OF STATE, HOME OFFICE (LORD DERWENT): My Lords, the appointment of staff at the two remand homes run by the London County Council is the responsibility of the Council. The information before my right honourable friend does not suggest that this function is discharged without due care and efficiency.
VISCOUNT MASSEREENE AND FERRARD: My Lords, I thank the noble Lord for his Answer, but is he aware that there has been a very disturbing case recently? There is at the moment a housemaster employed by the L.C.C. in gaol for gross indecency to a boy at a remand home, and when the boy's father complained to the Home Office, the Home Office told him that there were no grounds for considering him unsuitable for employment at an L.C.C. home. The same man had had live previous convictions before being employed by the L.C.C., two of them for gross indecency.
LORD DERWENT: My Lords, the Home Office did not say that in the letter to which my noble friend refers. What they said was that at the time there was no reason to suppose that there was anything
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against the man. This was a very unusual and regrettable case; according to my information there was an unusual combination of factors, including the use of a false name in the application, the forging of a reference, and a grossly misleading statement by a referee.
LORD MORRISON OF LAMBETH: My Lords, may I respectfully agree with what the Minister of State has said? We all regret this circumstance, as we are bound to do. There was no offence against a boy in the remand home itself. Apart from that, and in addition to what the Minister of State has said, is he aware that one of the referees was a priest whom the Council consulted? He knew the man, and he gave the impression that he was satisfactory, which, on the information before me at the moment, he should not have said. The Council takes a lot of care in these appointments, for which it is difficult to find suitable applicants. In any case, the man is out of it now, and I am sure everybody will have learned a lesson. The matter was subsequently
considered by juvenile court people and a Home Office representative, and they agreed with the conclusions of the Council. It would be a pity to exploit this situation too much against an authority which takes a lot of trouble in its appointments.
LORD DERWENT: My Lords, I would bear out what the noble Lord has said, that there was no offence committed against any boy in the home. This is a matter for the London County Council, but they have shown us the trouble they take to try to get the right people, and there is no system which might not go wrong on some occasion. This was an extremely rare occurrence, and I quite agree with the noble Lord that the London County Council take every possible care they can to see that the right people are employed.
LORD SALTOUN: My Lords, the noble Lord has referred to a forged reference. Surely the falsity of the document would be discovered when the official or the Committee referred to the supposed signatory of the reference; surely that would be the case. Or do the Committee or Council accept references without verification?
LORD DERWENT: My Lords, I do not think I can go into the matter of the actual reference which does not concern the Home Office in any way. In this case, the reference was forged. The London County Council wrote to the man who was supposed to be giving the reference and got a satisfactory reference back. In fact, the answer was forged. This case slipped through. The man was employed for only a short time before it came to light, when he was first of all suspended, and then dismissed. I do not think I can go any further than that.
LORD SALTOUN: I am much obliged to the noble Lord.

SMOKING IN CINEMAS AND THEATRES
2.40 p.m.
VISCOUNT MASSEREENE AND FERRARD: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they will consider prohibiting smoking in cinemas and theatres.]
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF HEALTH (LORD NEWTON): My Lords, Her Majesty's Government are strongly in favour of people not damaging their health by smoking, wherever they may be, but this is a matter for persuasion, not prohibition, and a health education campaign is being vigorously developed.
VISCOUNT MASSEREENE AND FERRARD: My Lords, I thank the noble Lord for his Answer, but is he aware that for an extremely long time one has never been allowed to smoke in cinemas and theatres in France; and does he not agree that it is now time that Her Majesty's Government gave some sort of lead to the anti-smoking campaign by doing something definite?
THE EARL OF SWINTON: My Lords, before the noble Lord answers that, may I ask him whether, while Her Majesty's Government continue in office, we may continue to enjoy a little freedom and the exercise of free will?
LORD NEWTON: My Lords, may I reply first to my noble friend Lord Swinton? I would say the answer is undoubtedly, Yes. In reply to my noble friend Lord Massereene and Ferrard, I would certainly agree with him that it would be very pleasant, particularly for those of us who do not smoke, if other people did not smoke in cinemas or theatres—or, indeed, in hotels or restaurants. But that is precisely one of the difficulties. Once we start on a policy of prohibition, where do we stop?
As regards what we are doing, we are pursuing a very active campaign of health education. It is run centrally by my Department and the Ministry of Education, and locally by the local health and education authorities. We receive a lot of valuable assistance from news items and features in the Press, on the wireless and on television, and in a quiet way I even try to forward the campaign myself. Perhaps I might recall that last week, when we were debating the Question of the noble Baroness, Lady Summerskill, on Road Accidents, I went out of my way to inform your Lordships that, whereas in 1962 in Great Britain 6,709 people were killed on the roads, in the same period 26,383 people were killed by lung cancer—very nearly four times as many.
BARONESS SUMMERSKILL: My Lords, may I ask him whether he has examined the public health legislation of the country passed during this century? He says that he relies upon persuasion—to persuade people not to smoke, and so protect the health of the people. But he will find in every field of public health, whether it is infectious diseases, tuberculosis or even insisting that midwives should be qualified, that it has been necessary for the Government to legislate and so compel people to conform because they would not be persuaded.
LORD NEWTON: My Lords, I would not set myself up as an authority on all the public health legislation in the country, but I am bound to say on this matter of smoking that I do not take such an authoritarian point of view as does the noble Baroness. I am quite certain that the policy which we have been pursuing is right—namely, the policy of doing everything possible to make the facts about the hazards of smoking known to

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the public so that they can draw their own conclusions. I do not believe that there can be many people in this country to-day who are not aware of the facts; and whether they draw what the noble Baroness or I would think were sensible conclusions on these facts is really a matter for them.
EARL ALEXANDER OF HILLSBOROUGH: My Lords, is the noble Lord aware that this shows the necessity for freedom?—and I must apologise to my noble friend. Is he aware that most of us who have been consistent smokers for more than sixty years, with advantage to our nerves and general outlook on life, have never yet had medical proof that smoking is a direct cause of cancer? Nor has anybody informed us what is the cause of cancer.
LORD NEWTON: My Lords, I am very sorry that the noble Earl, with all his authority as the Leader of the Opposition, should, so long after we have had these authoritative reports on this matter, try to throw doubts on the facts which have been established; and I cannot go with him on that.
EARL ALEXANDER OF HILLSBOROUGH: You have never brought the facts to me.
LORD NEWTON: I certainly agree with what the noble Earl said about freedom, but on the issue of how one's nerves are affected, I can only say from my own experience that my nerves have not deteriorated since I have stopped smoking twelve years ago.
LORD CONESFORD: My Lords, is my noble friend aware that the noble Earl, the Leader of the Opposition, is not allowed to smoke in this House, but it does not seem to prevent him from coming here, and there is no reason to think that if he were not allowed to smoke in the theatre he would refuse to go there?
EARL ALEXANDER OF HILLSBOROUGH: My Lords, think of the relaxation after departing from your Lordships' House!
THE EARL OF ARRAN: My Lords, may I ask Her Majesty's Government a question quite straightforwardly without beating about the bush? Are they
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interested in stopping cigarette smoking, which kills people, or are they not?
LORD NEWTON: My Lords, I do not know what my noble friend is trying to trap me into saying in reply to that question. If your Lordships remain in any doubt whatever as to the attitude of the Government in this important matter, then I do not think that anything I can say this afternoon will make your Lordships more aware of the danger.
THE DUKE OF ATHOLL: My Lords, would my noble friend's Department use their good offices to persuade the authorities in those places which allow smoking of cigarettes only either (with due deference to my noble friend Lord Swinton) to ban it completely or to allow cigars and pipes?
LORD NEWTON: All that would require legislation.

GREAT BRITAIN AND EUROPEAN UNION
2.48 p.m.
LORD GLADWYN: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether the Statement by the Foreign Secretary in another place that: "We do not believe in any federal form of political European Union or the cession of national sovereignty" means that, in their view, the already existing Western European Union should suffice to meet the political requirements of the United Kingdom and her immediate European neighbours.]
THE MINISTER WITHOUT PORTFOLIO (LORD CARRINGTON): My Lords, Her Majesty's Government support the development of close political consultation and co-ordination of policy in Western European Union. But my right honourable friend's remarks did not mean that Her Majesty's Government are hostile to the idea of a European Political Union. If there are talks about a future political union of Europe we should naturally hope to take part in them. But there are no specific proposals for a European Union under discussion at present.
LORD GLADWYNMy Lords, while thanking the noble Lord for that reply, may I ask the Government whether they would not agree that, in this age of the thermo-nuclear bomb, too meticulous insistence on national sovereignty might be considered to be a little out-of-date, and could they not, on reflection, at least consider the possibility of accepting one day the system of European political unity which, though not federal in the American sense, would at any rate represent something more than a simple, old-fashioned alliance?
LORD CARRINGTON: My Lords, as I said, there are at the moment no proposals before the Government. If there were proposals, no doubt Her Majesty's Government would take into account what my noble friend has said, in exactly the same way as they would take into account what I know the noble Earl the Leader of the Opposition will now say.
LORD MERRIVALE: My Lords, would my noble friend not agree that our aim in the political field should be a development in our co-operation with Europe towards a common will by thoughts and acts which are in harmony with those of Europe? Would he also not agree that Her Majesty's Government can work towards this goal without detriment to our fundamental interests?
LORD CARRINGTON: My Lords, I think Her Majesty's Government made it plain on a number of occasions that they continue to believe that British participation in the political and economic development of Europe is in the best interests of the country. But how this can be achieved will be for Parliament to decide in the light of changing circumstances.
LORD SALTOUN: My Lords, would the noble Lord not agree that specious and apparent unions which fall apart under the smallest stress are far more dangerous than frank and honest divisions?
LORD CARRINGTON: My Lords, these are the sort of facts which have to be taken into account.
EARL ALEXANDER OF HILLSBOROUGH: My Lords, some of us do welcome the recent statement by the Prime Minister on what used to be called "entry into the Common Market".

ALTERNATIVE TRANSPORT IN RAILWAY CLOSURES
2.50 p.m.
LORD STONHAM: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether, in view of the unqualified assurance given by the Prime Minister on 12th November, 1963, they will confirm that it is their policy that no railway line in the United Kingdom will be closed to passengers until there is adequate alternative transport available to the public; if they will state the considerations which must be satisfied before the alternative can be considered adequate; and, in particular, if these include the provision of accommodation for bulky luggage.]
EARL FERRERS: My Lords, the words used by my right honourable friend the Prime Minister on November 12 reaffirmed the pledge given on March 27 last by my right honourable friend the Minister of Transport in these terms [OFFICIAL REPORT (Commons) Vol. 674, col. 1320] and repeated in this House
"I shall see that, where necessary, adequate alternative means of transport are available before a railway passenger closure takes place."
This remains the policy of Her Majesty's Government.
The adequacy of an alternative cannot be assessed except in relation to the facts of each particular case. In general, my right honourable friend tries to ensure that the alternative services provided are those required to meet the essential needs of the present rail travellers. If it appears from the Transport Users' Consultative Committee's report or the Minister's own study of the case that the alternative services will need to have special accommodation for luggage, then he will see that the nature of the requirements is brought to the attention of the bus operator.
LORD STONHAM: My Lords, is the noble Earl aware that on November 12 the Prime Minister, referring to transport in the Highlands and the long distances and difficulties said [OFFICIAL REPORT, Commons, Vol. 684 (No. 1) col. 41]:
"then adequate alternative transport must be provided."

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There is no qualification whatsoever. Is he further aware that later my right honourable friend Mr. George Brown asked the Prime Minister whether the principle he had just adumbrated for Scotland applied to England and Wales, and the Prime Minister said: "Certainly"? Is that not in direct contradiction to what the noble Earl has now said? The Prime Minister gave the assurance without any qualification; and is he suggesting that his right honourable friend the Minister of Transport is now seeing to repudiate an undertaking given by the Prime Minister?
EARL FERRERS: My Lords, I think the noble Lord conveniently finished his quotation of the Prime Minister's remark before the word "certainly". What he said was [col. 42]:
"Certainly if railways are closed somehow alternative transport must be found".
I think the noble Lord is, if I may say so, trying to drive a coach-and-four between the remarks of my right honourable friend the Minister of Transport and those of my right honourable friend the Prime Minister, because the inference which the noble Lord places on the words "where necessary" is that, if those words are left out, the Government should provide alternative services even if they are not necessary; and that is not the policy of Her Majesty's Government.
LORD STONHAM: My Lords, is the noble Earl aware that I quoted the exact words of the Prime Minister, without any qualification, and it is he who is trying to drive a coach-and-horses through them? Is he further aware that there is no question of services being provided in any circumstances? But can he not say what was in the Prime Minister's mind in using the word "adequate"? What did it mean? Or was anything in the Prime Minister's mind?
EARL FERRERS: My Lords, I find it rather easier to say what was in the Prime Minister's mind than what is in the noble Lord's mind. In fact, what is in the Prime Minister's mind is exactly the same as was in the mind of the Minister of Transport: adequate services will be provided where necessary. Clearly, if they are not necessary they should not be provided.
EARL ALEXANDER OF HILLSBOROUGH: My Lords, is the noble Earl aware that among those of us who live in districts where rail services have been taken away in the absence of adequate services in their place there is profound discontent?
EARL FERRERS: My Lords, if there is profound discontent, as the noble Earl suggests—and I accept his view if he feels there is discontent—then the users of the railways have recourse through the Transport Users' Consultative Committee. That is what they are there for.
LORD STONHAM: My Lords, the noble Earl himself just used the word "adequate". Can he not say whether, in the considerations of what is adequacy, such things as speed, frequency, comfort of the services, and whether they should carry luggage, should be taken into account? Can he not give any guidance whatever to local authorities, bus companies and members of the public who are anxious to know what the Prime Minister's use of the word "adequate" meant?
EARL FERRERS: My Lords, it is impossible to state exactly what adequate is, because what might be adequate in one instance might not be in another. All these difficulties and points are taken into account when a rail closure is about to take place, and the frequency of the service is one of the things which the Transport Users' Consultative Committee take into account and pass on to my right honourable friend the Minister of Transport. It is impossible to say that what would be adequate in one set of circumstances would necessarily be adequate in all.

BUSINESS OF THE HOUSE
2.55 p.m.
EARL ST. ALDWYN: My Lords, I should like to inform your Lordships that my noble friend the Duke of Devonshire will be making two statements at a suitable moment after 3.30, one on the detainees in Aden and another on Ghanaian pensions.

CITY OF LONDON (COURTS) BILL [H.L.]
Read 2a, and committed to the Committee on Unopposed Bills.
HARWICH HARBOUR BILL [H.L.]
Read 2a, and committed to the Committee on Unopposed Bills.
CHAPEL STREET (CONGREGATIONAL CHURCH (SOUTHPORT) BURIAL, GROUND BILL [H.L.]
Read 2a, and referred to the Examiners.
BARRY CORPORATION BILL [H.L.]
Read 2a, and committed to the Committee on Unopposed Bills.

TELEVISION BILL [H.L.]
Order of the Day read for the House to be in Committee, on Re-commitment, on Report of the Bill from the Joint Committee on Consolidation Bills.
THE LORD CHANCELLOR: (LORD DILHORNE): My Lords, I beg to move that the House do now resolve itself into Committee upon the Bill. No Amendments have been made to this Bill by the Joint Committee on Consolidation Bills, and they have reported that the Bill is pure consolidation and represents existing law.
Moved, That the House do now resolve itself into Committee upon the said Bill.—(The Lord Chancellor.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD MERTHYR in the Chair.]
On Question, Whether the Bill shall be reported to the House, without amendment?
LORD MORRISON OF LAMBETH: I rise in a spirit of humility and ignorance. I can understand our being resolved into Committee but what I do not follow is the words "on Re-commitment", which I have always understood to be used if an Amendment that was overlooked, or otherwise not taken
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in Committee, was proposed on recommitment. I wonder whether the Lord Chairman of Committees could help me on this point, as to why the word "Re-commitment" occurs in the Notice on the Paper.
THE CHAIRMAN OF COMMITTEES (LORD MERTHYR): I think the answer is that the Bill in any case has a Committee stage, which we are now engaged upon, and it is called "re-commitment" because it is first of all considered by the Joint Committee on Consolidation Bills who have a power to make Amendments; and that would be, I take it, the first Committee stage.
LORD MORRISON OF LAMBETH: I am much obliged to the noble Lord.
On Question, Motion agreed to.
House resumed.
Bill reported without amendment; Report received.

EXPORT GUARANTEES BILL
3.0 p.m.
Order of the Day for the Second Reading read.
THE MINISTER OF STATE, BOARD OF TRADE (LORD DRUMALBYN): My Lords, I beg to move that this Bill be read a second time. I do not think your Lordships will find this either a very controversial or a very difficult Bill. I do not propose to keep you long in explaining it. The Bill amends the statutory authorities under which the Export Credits Guarantee Department conducts its operations. The principal Act is the Export Guarantees Act, 1949. That Act established the limits within which the Department was authorised to accept liabilities, whether through its insurance operations or as the instrument for operating the Government-to-Government loans for the purchase of British goods or services which Her Majesty's Government make from time to time. These limits have been progressively increased by a succession of amending Acts, of which the last was the Export Guarantees Act, 1961.
In the business of insurance, of course, incurring liabilities does not necessarily mean, and I think we can agree should not mean, suffering trading losses. Although this small but important

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Department has steadily increased its liabilities it has enjoyed a most satisfactory trading experience, so that its current operations are effected against an appreciable reserve resulting from past business. The normal operations of the Department are conducted either under Section 1 or under Section 2 of the Act of 1949, for each of which there is a separate limit of liabilities. Business under Section 1 is commonly referred to as "commercial" business, since it is conducted only after consultation with the Department's Advisory Council and, in practice, with their approval. They base their advise on each insurance proposal as a commercial proposition. Perhaps I might remind your Lordships that two members of your Lordships' House, my noble friends Lord Catto and Lord Melchett, are members of that Council, to whose wise guidance we all owe a great deal.
Business under Section 2 of the Act is undertaken without consultation with the Advisory Council, either because it is business which would not be undertaken on
a commercial basis or because it comprises economic assistance to an overseas country. It is commonly known as "national interest business", because in either case Her Majesty's Government have to be satisfied that it is in the national interest to do it. Under each of these sections the Department's commitments are now pressing on the statutory limit. In the case of Section 1, they are pressing hard. The Bill now before the House provides in Clause 1, for the current limit of £1,000 million to be increased to £1,500 million. The present position is that at the end of December last—the latest date for which figures are available—the Department's actual liabilities amounted to £918·7 million. In addition, the Department was pledged to give certain cover if the exporters in question called on it to do so: and these potential commitments amounted to a further £96·3 million. Although, strictly speaking, only actual liabilities count against the limit, we cannot altogether ignore the potential commitments; and your Lordships will realise that these figures leave little room for further offers.
It is four and a half years since the Government came to Parliament and asked for this limit to be raised. The
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limit under this section has already been raised by amending Acts in 1952 and 1959. The limit in this Bill is based on the best estimates that can be made of the growth of the Department's liabilities in the next five years. If the Department's business grows faster in future than it is doing at present, it may well be necessary to raise the matter in Parliament again before five years have passed. If it should prove necessary to come to Parliament for further authority within a shorter period, it will be only because a greater use of the Department's facilities is being made than we have anticipated; and that would hardly be a matter for either criticism or misgivings. Liabilities under this section have increased by £111 million in the last twelve months. The Department's estimate of the five-year growth is based on an annual increase in these liabilities of some £100 million, so that we are proposing an increase in the limit from £1,000 million to £1,500 million.
Perhaps I may now turn to the limit under Section 2 of the Act of 1949, which was last raised in 1961. Here the Bill provides for an increase in the permitted limit of liabilities accepted from £800 million to £1,300 million. Again we are basing this on estimates of five years' growth namely, at a rate of roughly £100 million each year. The manner in which the Department has arrived at this figure is rather more complicated, since Section 2 provides for several distinct classes of operation. First, there are the Government-to-Government loans, known generally as "Section 3 loans", since Section 3 of the Act of 1949 provides the general powers under which the loans are made. They are, however, required to be accommodated within the limit placed on the liabilities which the Department can assume under Section 2 of the main Act.
Forecasting the future of this form of aid is decidedly speculative, since it depends not only on Britain's future capacity to provide aid, but on the future policy of Her Majesty's Government as to the form such aid should take. At the moment these loans make up roughly one-quarter of our total aid programme. Making a number of broad assumptions, Her Majesty's Government have decided that it is reasonable to allow in this

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Bill for further loans at a rate of something like £50 million a year. In the nature of the case this estimate cannot be more than an approximate estimate and should not be taken to indicate any new policy decision.
Secondly, there are the Financial Guarantees for the financing of large projects. These guarantees were introduced just under three years ago. So far, ten nave been given, accounting for over £80 million of firm liabilities. There are commitments, however, to give a further £290 million of these guarantees, if called on to do so, in respect of projects, that are, so to speak, in the pipeline; and further projects are being approved for this form of cover all the time. The scale on which these guarantees will be issued in the future is also difficult to estimate, but it has seemed reasonable, in the light of our present experience, to put down another round figure of £50 million a year.
Repayments of both the Section 3 loans and the loans covered by Financial Guarantees are on such terms that we cannot expect that much of our existing liabilities will expire during the next five years. We have therefore provided for an annual net increase in our liabilities of some £100 million a year. This should cover other less substantial classes of business conducted under Section 2 of the Act, notably cover on markets not regarded by the Advisory Council as "commercial" risks, and such forms of experimental or non-commercial cover as the small exporter policies introduced in April, 1961.
The remaining provision of this Bill is to extend the facilities of the Department to the Channel Islands and the Isle of Man. The authorities in these islands welcome this change, which should encourage exports from these areas;
and any increase which results from it will benefit the economy of the United Kingdom. The change means, however, that our United Kingdom policy-holders will no longer be able to cover with the Exports Credits Guarantee Department their sales to these islands; but such insured business is small and the facilities of the commercial insurance market are available to cover it.
To sum up, my Lords, the main purpose of this Bill is to ensure that for several years to come—we estimate about
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five—this Department of the Government will encounter no constitutional impediment in carrying out its vital work of helping and encouraging the British exporter. In recent years the Department has expanded its business and its coverage of the export trade very considerably indeed. From time to time, as one would expect, one hears complaints that E.C.G.D. does not do enough. I can assure your Lordships that Ministers responsible for the Department will always be ready to look at any such case which is put to them. On the other hand, the Department gets complaints from foreign credit insurers that it does a good deal
too much. But, of course, the cases which get the publicity in this country are those where the British exporter is dissatisfied. When one considers the vast scale of this business—£1,000 million worth of exports were insured in 1963—it is remarkable how few are the complaints. It is at least reassuring that a substantially higher proportion of British exporters are credit insured than those of any of our competitors.
The amount of insurance written is constantly increasing. At present there are over 6,000 exporters holding E.C.G.D. comprehensive policies, and over 500 specific guarantees on individual transactions. The kind of cover given is continually being widened. The rates of premium have been reduced several times; for example, the rates for comprehensive guarantees insured by E.C.G.D. have fallen in the past nine years from 11s. 8d. per £100 to 6s. 5d. But there is still scope for growth, for at present the proportion of exports insured by E.C.G.D. is just over 25 per cent. That is as good an indication as any that the E.C.G.D. has not only been a commercial success but is serving our exporters well. I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Lord Drumalbyn.)
3.12 p.m.
LORD STONHAM: My Lords, I thank the noble Lord for his lucid and careful explanation of this Bill, with every word of which I agree. I agree, too, that the Bill is neither difficult nor controversial, but it certainly is important. On this side of your Lordships' House we warmly welcome the Bill for a variety of reasons, all of them good. The first

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is that in effect it acknowledges the remarkable success of a measure initiated by the Labour Government in 1949, and it is a tribute to an important form of State insurance. As the noble Lord has indicated, the guarantee of liabilities under Clause 1 has grown from some £500 million in 1949 to £1,500 million under this Bill. Under Clause 2 the national interest guarantees have grown from a single million to £1,300 million. Another reason is that the Department made a profit of some £7 million in its last financial year—and this, in the main, on risks which private insurance would not undertake. Last year guaranteed exports totalled no less than £1,000 million and gave indispensable assistance to 25 per cent. of our total exports—a percentage which, in my view, will continue to increase.
One other advantage is that this Bill includes among its most fervent supporters some of the largest private enterprise firms in the country. Indeed, this is one
form of State enterprise which even the most generous contributors to Aims of Industry do not wish to denationalise. In fact, they would join with me and with the noble Lord in acknowledging the skill, care, foresight and understanding with which the officers of the Export Credits Guarantee Department discharge their complex tasks to the benefit of British industry and the nation. The noble Lord said that the Ministers and the Department are always most anxious to hear suggestions for improvement; and indeed the history of the Department is a long history of considering suggestions and adopting a good many of them for the general betterment of our exports.
I feel that the most useful thing I can do is to give some idea of some of the
improvements which should be made. This Department is an essential and established part of our economy. But although it has progressively extended the range of its facilities, it never quite manages to keep abreast of the credit practice of at least some of our principal world competitors. Indeed, I do not think even now it can be claimed that our credit practice permits British exporters to allow credit terms as good as any available in the world. I submit that that should be our objective if British exporters are not to be unnecessarily,
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and sometimes unfairly, handicapped in their efforts to secure an increased share of world trade. I feel, therefore, that some criticisms which are made by responsible people should be aired.
They fall roughly under three heads. First—the most commonly heard—the arrangements are not sufficiently flexible; second, they are not broad enough in their scope, and, third, they are not sufficiently forward-looking. To a considerable extent the lack of flexibility is inherent in this type of Treasury control. It is true, despite what the noble Lord has said, that valuable export orders have been lost, although the price, delivery and quality were right, just because exporters have been unable to match the credit terms. I could quote cases where, after considerable negotiation, the Department has been able to agree credit terms required, and then it has been too late; the business has gone elsewhere to another country. In some countries, notably Japan, the commercial representative has extraordinarily wide powers. He appears to be in a position to negotiate virtually as a representative of his Government. For example, because of this we missed the order for the steel rolling mill at Dargapur. On that occasion had the British consortium known earlier how far they could go and exactly where they stood, we should have got the order.
In regard to the complaints about the need for a broader scope, the Department's activities should be broadened by increasing their ability to help the smaller exporters and by greater assistance with progress payments. The Federation of British Industries have recently pointed out that the minimum limit on medium-term business should be less rigid. They feel that the present minimum limit of £100,000 should be lowered in suitable cases. There is also considerable difficulty with large-scale exports of heavy engineering plant. The larger, good companies have no difficulty in getting credit from their banks to finance exports under normal E.C.G.D. procedure; but borrowing against the security of a standard policy means that such borrowing is with recourse to the company and, naturally, is aggregated with their overdraft accounts as part of the total

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facility afforded. To the extent, therefore, that companies have to rely on such finance, it can, and does, restrict exports.
The position is obviously alleviated when an E.C.G.D. banker's guarantee is available. But it is becoming increasingly difficult to finance an expanding business, and this would be the case with some exports, even when progress payments were available. This is when there is a very heavy volume of work in progress, because of the long manufacturing period prior to shipment. It is therefore important that better methods should be found, which would permit manufacturers to obtain finance from their bankers to cover manufacture without recourse against medium-term policies, before the date of acceptance of the goods by the customer. This would, in effect, provide manufacturers with the equivalent of progress payments during manufacture.
At present the Export Credits Guarantee Department requiries acceptance certificates given by the customer at the time of shipment. This is absurd in the case of an order for power station equipment, because this is not normally accepted by the customer until the end of the maintenance period, which is, usually a year after the plant has been commissioned. So in such circumstances it is obvious that an adjustment must be made to meet the difficulty. The present system has, in fact, never been really applicable to very large contracts for capital equipment. The length of credit which the E.C.G.D. will
underwrite is usually too short to meet the customer's requirements, and the mechanics imposed by the Department are such that the supplier cannot obtain progress payments which are frequently essential, in the case of the very large contracts, if the finance that is necessary for manufacture is to be available. Obviously, an adjustment must be made to meet this difficulty.
Another useful facility would be the provision of complete coverage for international consortium contracts. At present the E.C.G.D., within its terms of reference, can cover only the British content of a contract of that kind. There are places where it would be of advantage, politically, if the tender could be issued, for example, by a non-committed country. Given the right international
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consortium, we could in such cases obtain a share of the contract which would not otherwise be available to us. This might well be achieved if the E.C.G.D. and other foreign credit institutions could co-operate in providing complete cover. My Lords, I am bound to say here that it may well be that the obstacle is not our own E.C.G.D., but the foreign credit institutions. But it is a matter which should, I think, be vigorously pursued.
With regard to the feeling that we should be more forward-looking, an example of this was given by my right honourable friend Mr. Douglas Jay during the Second Reading of the Bill in another place. He then mentioned the decision of the Pakistan Government to set up a single, large-scale lorry plant, which was to have the monopoly in Pakistan for 30 years ahead. The Leyland Company put forward a complete scheme by which they would construct and manage this factory, and the Pakistan Government was anxious to accept their proposal in preference to that of the Americans. But the American aid and credit authorities were willing to lend foreign exchange, as we were, not merely for all the initial equipment of the factory, but for all the spares and other necessary facilities for a number of years afterwards. Our own Department was unable to permit Leyland's to match this offer, so we lost not only this order for this important factory, but also the lorry market for a whole nation of 100 million people for at least 30 years, and it may well be permanently.
This has happened with a number of large-scale projects in different industries, when we have been in competition with the United States. Obviously, if we are to continue to lag behind the Americans and the Japanese in this way, we are hound to experience a disastrous decline, both in our markets and in our influence in underdeveloped countries, and it will be impossible to achieve or maintain the planned expansion of production to which we are committed. I do not think we have sufficiently absorbed the lesson that trade follows aid. Perhaps it is for this reason that during the last six or seven years the proportion of aid to India from the U.S.A. and Germany has gone up, while ours has gone down. Our position in relation to South America is even worse. I understand

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that only some £3,800,000 is currently allocated for economic assistance to South America. It is, of course, right to urge our manufacturers to increase exports by hard work and hard selling, but in some cases our efforts are fruitless unless we are prepared to invest; and in other countries we are wasting our time, unless the credit facilities we offer are related to the need and capacity of the buying country.
I feel that the time has come—indeed, it may well be overdue—when we should consider another State credit agency as an alternative or supplement to the E.C.G.D. My right honourable friend Mr. Douglas Jay referred to the report on export credits recently published by the steel plant industry, and to their suggestion of a State guarantee corporation, independent of direct departmental control. Such a proposal has a number of attractions, because a corporation of this kind would be able to consider requests for financial assistance from every point of view. Of necessity, the outlook of the E.C.G.D. has to be actuarial. Very often there is not enough time for prolonged negotiations with the Department which are sometimes necessary, particularly when we are competing with countries who are offering unorthodox terms. The decision whether export credit facilities should be made available ought not to be based solely on financial grounds. The overall export needs of the country must be considered. The importance and condition of the industry asking for credit facilities, its location and employment position, are all major factors which should be taken into account. At present, with several Government Departments concerned, it is inevitable that decisions on unusual cases are taken slowly, and often too late. There would be great advantages in having a corporation, Government-sponsored, with a Government-sponsored board of directors, with a small staff and with a remit to do everything possible to further export trade within the Government's general policy.
I hope that the Minister will be able to reply to some of these points, which I agree are not new—he may have heard them before. I hope that he will at least be able to assure us that these suggestions will be carefully considered. On this side of your Lordships' House we
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welcome this Bill, and acknowledge all that has been, and is being, done by the Department. But, my Lords, if our manufacturers are to win for us the exports we so badly need, there must be urgent improvements in the facilities available to them, and we must not send them into the markets of the world handicapped against other countries.
3.29 p.m.
LORD HAWKE: My Lords, I naturally, like all noble Lords on these Benches, welcome this Bill; but I am not quite sure that I can join my noble friend the Minister in congratulating ourselves on its existence, because I regard its very existence as a sign of weakness and collapse in world trade. After all, it ought not to be necessary to have any such Bill; but regrettably it is. In the manufacturing countries of the world we see creeping inflation. The price of their manufactures Roes ever higher, with the aid of their trade unions who every year demand higher wages, and their costs go up every year. That is not reflected in the materials provided by the raw material producers in the world. Occasionally their prices have a brief rise, but only to bring fresh supplies into the market, and there is then a further fall to lower levels. In fact, one might say there is a progressive pauperisation of the raw material suppliers of the world, and an increasing enrichment of the manufacturing countries. That is the reason for this Bill. The manufacturing countries cannot get rid of their goods except on the type of terms which are available under this Bill.
Moreover, I am afraid the process is going to increase. We are seeing the handing over of the various countries in Africa to very inexperienced Governments. There are great population increases, and we are seeing the splitting up of land in order to provide food for that increasing population—and, as we know, the breaking up of estates always means the lowering of agricultural exports. Again, the symptoms are of the increasing extravagance of Governments. The Scottish accountants have walked out, and now the era of extravagance comes in. We are going to see exactly the same things that have happened in the Western hemisphere happen in Africa. There, we know that in many countries it is almost impossible to trade

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except by making loans, which in turn can be paid back only by making further loans in the future. In these circumstances, one asks oneself: do we want to stay in the business at all? Is the business worth having? The answer from the commercial point of view is, probably, "No", but from the point of view of our position in the world the answer is, "Yes, we have just got to do it".
But if that is the situation—and I do not think I am exaggerating it—are the limits in this Bill enough, or have I misunderstood them? I understood my noble friend to say that we were expecting £50 million a year credit on purely trading account and £50 million a year increase on purely Government aid. I should have thought that the second of those was probably a great deal lower than we could hope to expect if we are to do the duty that we have set before us, which is to support financially all these new countries that I have mentioned.

DETAINEES IN ADEN
3.33 p.m.
THE MINISTER OF STATE FOR COMMONWEALTH RELATIONS AND FOR THE COLONIES (THE DUKE OF DEVONSHIRE): My Lords, this might be a convenient moment for me to make a statement about the situation as regards detainees in Aden State. On January 16, in reply to a Question from the noble Earl, Lord Listowel, my noble friend Lord Lansdowne undertook that further information would be given to your Lordships about the security situation in Aden. My noble friend is unable to be here this afternoon owing to a meeting of paramount importance, and he has asked me to state—and I am glad to be able to inform your Lordships—that all persons detained from Aden State have been released, except for three still held on security grounds.
THE EARL OF LISTOWEL: My Lords, I should like to thank the noble Duke for this very prompt reply to the inquiry that I and my noble friend made last month, and to say how glad we are that the Federal Government has now released all the detainees save three. May I ask the noble Duke on what grounds these three people are still detained? Are they security grounds? And does that mean
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that they are suspected of having played a part in the bomb outrage? If not, why are they still detained? May I also ask him whether he can give us any indication of how soon the state of emergency in Aden will be lifted?
THE DUKE OF DEVONSHIRE: My Lords, as regards the latter question, I am afraid I am not in a position to give the House any information as to how long the state of emergency will remain. As regards the first part of the noble Earl's question, two of the three still detained are detained in connection with the bomb outrage.
EARL ALEXANDER OF HILLSBOROUGH: My Lords, I also am obliged to the noble Duke for this statement, and I share the satisfaction of my noble friend at the release of such a large number of people who had been interned, apparently without any case being ultimately preferred against them. I have also observed with some pleasure the announcement on the wireless in the last day or two that there had been an inquiry into the conditions under which these internees were detained, and that there was no confirmation of the allegations of personal acts against them in this connection. However, I observed that notes were made by the committee of inquiry that the conditions and accommodation—the amenities in general—were in some cases exceedingly poor indeed, so it cannot be said that these internees, who were there for so long a time and yet had no charge made against them in the end, did not suffer considerable hardship.
THE DUKE OF DEVONSHIRE: My Lords, I will naturally bring to my right honourable friend's attention the remarks that the noble Earl has made.
LORD OGMORE: My Lords, will the noble Duke inform us whether a charge is likely to be preferred soon, either against the two persons referred to or against any other persons, with reference to this bomb outrage in Aden?
THE DUKE OF DEVONSHIRE: I am afraid I am not in a position to add anything to what I have already said.
LORD REA: My Lords, will the noble Duke say whether on future occasions this situation will not arise—that people

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will not be held in detention without any prospect of trial?
THE DUKE OF DEVONSHIRE: I am a little confused by the double negatives, but I fully appreciate what the noble Lord feels—and, of course, we deplore detaining people without charges being preferred against them. On the other hand, as I have said before in this matter, I think it must be accepted that public security is the paramount interest.

GHANA PENSIONS
3.38 p.m.
THE DUKE OF DEVONSHIRE: I should now like, if I may, to make a statement about Ghana pensions. I am glad to inform your Lordships that an agreement has been reached with the Ghana Government which entirely removes for pensioners resident in this country the discriminatory element in the tax imposed by the Ghana Government last October. As a result, the Ghana tax will be at the same effective rate as the pensioner pays on his total income taxable in this country, provided only that this amount of tax is not less than that paid by a resident in Ghana with an income equivalent to the pension.
Because of double taxation relief, this means that the great majority will have no additional tax to pay overall, even if their Ghana pension is their only source of income. In fact, most pensioners, partly because of our own pension supplements, are likely to have some additional income. The Ghana authorities are suspending all tax deductions for the next three months while the detailed application of the new formula is being settled. The adjusted tax will be levied from May onwards.
The Department of Technical Co-operation, in agreement with the Board of Inland Revenue, will send a short statement to all Ghana pensioners resident here explaining how the new formula will work. My right honourable friend the Secretary for Technical Co-operation and my right honourable friend the Secretary of State for Commonwealth Relations are grateful to the Ghana Government for their co-operation in reaching this agreement.
EARL ALEXANDER OF HILLSBOROUGH: My Lords, I am much obliged to the noble Duke for making that statement. Progress has obviously been made in this matter for which we are glad, but I am worried about one point. I see that there is to be a suspension of three months while the question of how the new formula is to be applied is gone into. But can we be assured that there will be no holding back of any refundment to the civil servants concerned of deductions already made since last October while all these discussions were going on, and that they will not be taxed twice during that period?
THE DUKE OF DEVONSHIRE: My Lords, as the House will appreciate, this is a matter which comes outside my normal responsibilities, but it is something which I also had noticed. I understand that part of the reason for this three-month standby period is to provide time to work it out with those who have already paid this tax, to see that they are not penalised by having done so. I cannot give any categorical answer to the noble Earl this afternoon, but I can say that this is very much in our minds, and we hope to use the interim period to see that no injustice is done.
LORD COLYTON: My Lords, may I also thank my noble friend for his statement to-day which many of us welcome very much. I should like to ask one thing: will this double taxation relief arrangement that the noble Lord spoke about mean that at the end of three months' period the pensioners will pay only one tax per month, and will not be called upon to pay both the Ghanaian tax and British tax and then have to wait for a number of months until they are refunded either one or the other?
THE DUKE OF DEVONSHIRE: My Lords, as I understand the agreement they will pay just one tax. I am not an expert in taxation, and it is possible that may mislead my noble friend but, as I understand it, that is the case.
LORD OGMORE: My Lords, I am not sure that this is going to help the pensioners as much as it appears to do at first sight. Is it a fact that if the Ghana Government have deducted a considerable sum from the pensions the United

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Kingdom Government will not assess the pensioner for tax until the amount they have overpaid in Ghana has been taken into account? That is the point we want to get clear.
THE DUKE OF DEVONSHIRE: I think the best thing that I can do, my Lords, is to repeat what I said:
"The Ghana authorities are suspending all tax deductions for the next three months while the detailed application of the new formula is being settled."
Clearly, what people have paid in tax previously must be taken into consideration in any future settlement. It would seem only just that, if they have paid more than they should have paid, that should be taken into account in what they pay in future.
LORD OGMORE: My Lords, I understand the point regarding the Ghana Government. I am talking about Her Majesty's Government. Will Her Majesty's Government take into account any over-payment in Ghana so that these unfortunate people are not assessed here for United Kingdom tax until the overpayment of the Ghana tax is taken into consideration?
THE DUKE OF DEVONSHIRE: My Lords, I will undertake to draw the noble Lord's point to the attention of the Treasury, and, for what it is worth, it will have all the support I can give it.

EXPORT GUARANTEES BILL
3.44 p.m.
Debate on Second Reading resumed.
LORD DRUMALBYN: My Lords, I should like to thank the noble Lord, Lord Stonham, for the welcome he gave to this Bill, and I certainly agree with him on its importance. I do not want in any way to detract from the achievements of the Labour Government, but in indicating that this Department was started by the Labour Government in 1949, I think it is perhaps only fair to say that the Government first entered into credit insurance in 1919. This has a fairly long history behind it.
The noble Lord raised a number of points and he put them under three headings. First of all, he wondered whether the present provisions or rules
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under which the Export Credits Guarantee Department work were sufficiently flexible; secondly, he wondered whether they were broad enough in scope; and, thirdly, he thought perhaps they were not sufficiently forward-looking. I think perhaps it is right to remember in dealing with the whole of this problem that what we are doing here is credit insuring. The whole object of E.C.G.D., the original and principal object of overseas credit insurance, is to insure the credit and to relieve the exporter of the risks involved in giving credit to his overseas buyers. I thought that a great many of the noble Lord's remarks were concerned rather more with pure finance than with the insurance of credit. But I would admit, of course, that finance does come into this in so far as the Government are making money available under Section 2 to overseas Governments.
First of all, the noble Lord wondered whether we were in a position to match credit terms. Well, I feel that there is a good deal of misunderstanding about this. Of course we have gone a long way in recent years to match credit terms. Before 1960 there were a large number of cases—and they were increasing—where credit exceeding five years was given by foreign Governments with the support of foreign governmental facilities. We are, of course, members of the Berne Union. He did not say so; but it is a fact that Japan is not. And members of the Berne Union agree to limit so far as possible the credit they give to five years, and to exchange information in those cases where members extend credit beyond five years.
We have always been reluctant to cover more than five years' credit; but financial guarantees, by their nature, generally—in fact, I would say invariably—exceed five years' credit. They give the freedom which foreign insurers enjoy to select appropriate projects for which more than five years' credit is clearly necessary. But, over and above that, there is a matching policy under our standard supplier credit guarantees whereby we support our
policy-holders in meeting competition beyond five years. With all these facilities, our firms are fully as well placed as foreign firms to secure business on longer credit terms.
LORD STONHAM: My Lords, could the noble Lord say, in that case, where we are in competition with the United States why the Leyland Company could not get insurance for credit terms that were required by the Pakistan Government?
LORD DRUMALBYN: My Lords, I was coming to that. The noble Lord raised this point later in his speech, and the information I have is that E.C.G.D. were not approached by the Leyland Company
on this transaction. I understand that my right honourable friend the Minister of State has written to Mr. Jay, and I will send details to the noble Lord. But I was going on to say that matching policies always involve getting, evidence of competition, and obviously vague allegations that longer terms have been offered are not enough. We all know that in competition of this kind failure to get an order is sometimes attributed to advantages which the competitor has and which one is said not to have oneself. Obviously there are difficulties in getting evidence, but such information as I have does not suggest that it is impossible to obtain.
Obviously we are ready, through our Embassies overseas and our contacts in the Berne Union, and so on, to investigate with promptitude and as widely as possible any allegation that comes our way. I should say that we have made these investigations in some 330 cases since the introduction of matching cover in October, 1960; and also that it has been possible partly through these inquiries to establish a volume of general evidence of fairly constant longer-term credit competition in certain fields. That goes of course particularly to ocean going ships and jet aircraft. For such business, we have been able to dispense with specific evidence of competition to support longer terms. I think that, while it is often alleged that E.C.G.D. is slow to agree to matching terms, it will be found that in the period of two and a half years we have agreed to matching in a very considerable number of cases.
LORD MERRIVALE: My Lords, before the noble Lord leaves this question of matching credit terms, could he tell the House whether the United States of America is a member of the Berne Convention to which he referred? Because I believe I am right in saying
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that American locomotive manufacturers are able to give fifteen years' credit through the assistance given by the United States Government. That is causing great concern to the locomotive manufacturers of this country, who are very desirous of co-operating more fully with the European manufacturers, and their feelings are shared by the European manufacturers who were members of C.E.L.T.E.
LORD DRUMALBYN: My Lords, I am sorry that I cannot answer my noble friend, but I will certainly look into this matter and let him know about it.
LORD SHACKLETON: My Lords, could the noble Lord answer the question whether the United States is a member of the Berne Convention?
LORD DRUMALBYN: My Lords, I beg my noble friend's pardon. Of course, that is so. I am obliged to the noble Lord.
I come now to the question of smaller exporters. The Small Exporter special experimental scheme has been, as I think I indicated, under Section 2 rather than Section 1. I thought that the noble Lord was particularly concerned with the contention of the F.B.I. that we should do something more to meet competition in ranges of £100,000 and under. So far as small exports are concerned, most of these arrangements are in the ordinary supplier way, where the normal credit given is for six months and an extension cover can be given for up to five years. In larger contracts and transactions this becomes a much more difficult matter to arrange, but I can assure the noble Lord that every application is considered on its merits and that in this connection the question of the credit that competition has given is also taken into account. I do not think I can carry the matter further to-day, but I shall be glad to go into it further and consider what the noble Lord has said.
The next point the noble Lord raised was that of the financing of expanding business. Perhaps I have already answered that by saying that we were really concerned here with credit insurance and not with the financial operation itself. It is true, of course, in the normal way that a bank guarantee

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applies from the time of the acceptance of the goods by the importer who is being supplied. On the question that the noble Lord raised regarding coverage for international consortium interests, I may say that we are in touch with the suppliers of credit facilities in other countries and so far as possible cover these arrangements. There are many highly complex problems arising from this side of export business. This is undoubtedly an increasingly important form of contracting, and it would be quite wrong not to do the best we could in order to support British industry in this field. We have reached satisfactory arrangements to collaborate with other credit insurers so that our cover and theirs may be properly interlocked in supporting our respective firms.
Of course, we are not able under the terms of the Act as it now is to insure people other than British suppliers, so I think the proposal the noble Lord made, that we should try to cover the entire transaction—that is, all parties to the contract, no matter from what country they come—would not be practicable as things are, nor, according to the information I have, would it normally be necessary, because each member of a consortium would be able to get credit facilities from his own country. Therefore it is a question of interlocking these provisions rather than having one single organisation to provide for all of them. Perhaps one of these days we shall have such an organisation, but certainly we are not there yet.
I thought that my noble friend Lord Hawke was a little pessimistic in his general approach to the whole of this matter. After all, one of the main functions is to ensure the credit of the importer, and we all know that even without the world being in too great a state of disarray, countries do get out of balance in their payments and have to put restrictions on the transfer of payments or intervene in one way or another, making life difficult for the exporter. It is to cover all these various risks that we have this kind of legislation.
LORD MORRISON OF LAMBETH: My Lords, may I appeal to the Minister
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of State to be as gentle as he can with the noble Lord, Lord Hawke? After all he was speaking as a true Conservative. He does not like State activity of any sort. In fact, he is a sort of Tory anarchist. I respect Tories who are really Tories. What worries me are the Tories who are running away from their principles.
LORD HAWKE: My Lords, as my name has been mentioned, may I rise to say that I spoke because I happen to be one of the people engaged in world trade, in which I believe Ministers of the Board of Trade have not usually been engaged. I do not mind State enterprise at all in its place.
LORD DRUMALBYN: My Lords, I cannot say touché on that one, because I myself was engaged in world trade at one time. But I really do not understand the point that the noble Lord, Lord Morrison of Lambeth, has taken, because, as I have made very plain, this is a field which it has long been recognised is outside the scope of private enterprise. This is essentially a field in which it has long been seen that the Government must intervene, and we on this side of the House are all for ensuring that the Government do their job where there is a job for the Government to do. This, I believe, is one of them. I hope I have dealt with most of the points that have been raised.
EARL ALEXANDER OF HILLSBOROUGH: My Lords, that means that in this case the Government are taking the place of private enterprise because private enterprise is not able to cope with this matter.
LORD DRUMALBYN: My Lords, we are here concerned not only with the question of insuring credit for private individuals—that is, where the private individuals fall down on their obligations—but also with cases where the Government intervene so that the private individual is not able to carry out his obligations, whether he wants to or not. It seems to me that if a foreign Government is intervening in this way it is not unreasonable that the home Government should step in and help to ensure that our exporters are paid for the goods they export and the services they render abroad.
EARL ALEXANDER OF HILLSBOROUGH: My Lords, is it not merely a question of taking an insurance payment from the exporters in order to guarantee the loans advanced by private enterprise banks, and the Government then make payment to insure it, and the Government make a profit on it? But they step in where there was no one else in private enterprise who will do the job. Is not that it?
LORD DRUMALBYN: I thought I had made it plain that this was a proper function for Governments to perform. The function of banks is insuring in normal circumstances.
EARL ALEXANDER OF HILLSBOROUGH: The noble Lord is still qualified to come over.
LORD DRUMALBYN: Here we have a Government that is intervening in order to insure not only ordinary credit but the results of Government interventions of one kind and another all over the world. This is the assurance that can be given to exporters: that, no matter what goes wrong in the world, they can be assured of getting, not all their money, because we ask the exporter himself to bear part of the risk, but a large proportion of it. As I have said, I think this is not only a proper function for Governments, but is a function that was one of the arrows in the quiver of Government, so to speak, before we ever had a Labour Government in this country.
On Question, Bill read 2a: Committee negatived.

SHIPBUILDING CREDIT BILL
4.2 p.m.
Order of the Day for the Second Reading read.
THE MINISTER OF STATE FOR FOREIGN AFFAIRS (THE EARL OF DUNDEE): My Lords, we all regret that my noble friend Lord Chesham cannot be here to take charge of this Bill, but I am glad to say that he is making good progress and expects to be back here by the week after next. At the end of last May my noble friend Lord Chesham read to your Lordships the statement of the Minister of Transport about the shipbuilding credit scheme, whose provisions
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are retrospectively covered by this short and simple Bill. My noble friend mentioned in the statement that at that time, on May 29, the Government contemplated an upper limit of £30 million as the total quantity of loans which were to be advanced to ship owners under the scheme, but he added [OFFICIAL REPORT, Vol. 260, col. 886]:
"We shall consider raising this limit if experience shows that it would be right to do so."
Experience did show that it would be right to do so. Applications were more numerous than had been expected, and in July the Minister announced that the upper limit of loans under the scheme was to be raised to £60 million.
At the same time, the Minister disclosed that one particular separate application, from the Cunard Company for the building of the proposed new 58,000 tons "Queen", with the aid of a Government grant, had been rejected by the Government because the proposed terms put before them were not, in the Government's view, satisfactory. So that no loan for the Cunarder was included in this new limit of £60 million. But three months later, in October, a revised proposal for Government financial assistance by way of loan to the new "Queen" was agreed to. It was agreed that a loan of £17½ million should be advanced under this shipbuilding credit scheme by the Government to the Cunard Company.
The Ministry of Transport, therefore, decided to raise the limit from £60 million to £75 million, which is the figure mentioned in this Bill. The whole of this £75 million has already been committed, but none of it has actually been advanced, because under the scheme no loan is actually paid out until after the ship in respect of which it is made has not only been launched, but delivered to the owners who have ordered it; and although between two-thirds and three-quarters of the tonnage which will be financed under this shipbuilding credit scheme is already under construction, it is most unlikely that any of the ships will, in fact, be delivered to their owners until after this Bill has become law. So the granting of the loans will not take place until some time after the Bill is passed, although all the effective decisions were taken some time ago.

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At the time when the original scheme was announced by my noble friend in this
House, in May of last year, the shipbuilding industry had been suffering from a growing depression for several years. There has been in recent years a great increase in capacity of all the shipyards of the world, and the same amount of ships can be built with far less labour. If, therefore, there is a falling off in world demand for shipping, the effects are much more severely felt. In Great Britain, whereas in 1958 our orders were enough to last for another two years, by 1963 outstanding orders were down to considerably under 2 million tons, and the amount of time which they were likely to last was only about six months. It was obvious that, whether temporary or not, there had been a severe falling-off in demand.
In order to deal with this drop in demand the Government had, of course, considered for some time whether there was any advantageous action which a Government could take. The most obvious method of State assistance to shipbuilding would be a subsidy. The four principal shipbuilding countries in the world are the United Kingdom, Japan, Germany and Sweden: Germany, Sweden and Japan are our three largest competitors. After that, in the next class, so to speak, are France, Italy, Norway, Holland and the United States. Of the three largest competitors, none subsidise their shipbuilding but France and Italy both do so quite openly; and the United States, although they do not subsidise ships built for foreign owners, do subsidise their domestic shipping.
As long as any of our competitors practise subsidisation of shipbuilding, it
must remain open to us, if we think it advantageous, to retaliate by doing the same. But in present circumstances the Government have always taken the view, and the shipbuilding industry have taken the same view, that, on balance, it would not be in our interests to do so: partly because it would encourage those who do not at present subsidise their shipping to do so, which would be considerably to our disadvantage, and also because it would prejudice the efforts which we are always making to persuade those countries who do subsidise that they ought either to reduce or to abolish their subsidies because we believe that they are a bad thing for world trade as a whole.
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Another method of possible Government assistance which is often suggested, and which on one occasion before the war was applied here, is what is called the "scrap and build" policy. One objection to that is, again, that it would depend upon a substantial subsidy. Another objection at the present time is that the age of the British merchant fleet is not old enough to make any extensive policy of scrapping really economical. What the Government decided to do last year was to help the industry over this trough in demand for shipping by offering these loans at what are called Government rates of interest—that is to say, interest rates at which the Government themselves can borrow, which are less than those at which a private shipping company could raise the money.
This Bill, to which we are now asking your Lordships to give a Second Reading, is a short Bill which ex post facto authorises and covers what has been done under this loan scheme. The Bill gives power to lend money for any vessel which is more than 100 tons, except fishing vessels, because these are already in a position to receive assistance from either the White Fish Industry Board or the Herring Fishing Board. It limits the amount which was already allocated before the Bill was printed to £75 million, at such rate as the Treasury may direct. Subsection (1) of Clause 1 enables the Minister and the Treasury to appoint an advisory committee, which was appointed as soon as the credit scheme was announced last May, for the purpose of advising the Government which applicants for a loan under this scheme are creditworthy, and also whether they are likely to build the ship as quickly as possible, which is one of the purposes for which the scheme was introduced. What the Government wanted to do was to try to induce shipowners, by offering these loans at a favourable rate of interest, to execute orders which they were thinking of doing anyhow within the next year or two, a little sooner in order to tide over this trough in demand.
The whole of the money has now been allocated, and the shipping tonnage which
will now be built and financed by money advanced under the scheme is about 900,000 gross tons. Of that total, bulk

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carriers account for 540,000 tons, tankers for 150,000 tons and cargo liners 120,000 tons. The new Cunarder, the new "Queen", will be a little over 58,000 tons, and the rest are made up by tugs, dredgers, coasters and other smaller craft.
As my noble friend Lord Chesham pointed out in the original statement, one reason which had prompted the Government to introduce this scheme was that so many of our shipbuilding industries—practically all of them—are in the development areas. The Government have not made any attempt at all, neither have they asked the advisory committee to make any attempts, to allocate the loans to applicants in any particular proportion between the development areas. Indeed, you could not do that, because the loans are given to the owners who are ordering the ships. After the agreement has been made with the owner, it is then left to him to decide in which shipyard or in what part of the country he will place his order after receiving competitive tenders.
Your Lordships may be interested to know how the distribution does work out in practice. It is more or less in proportion to the productive capacity of the different areas. Scotland gets 288,000 tons, the North of England 424,000 tons, Northern Ireland 94,000 tons; and there are still another 90,000 tons which have not yet been allocated—that is to say, application for loans has been accepted and guaranteed to the owners, but the owners have not yet decided in which yard they will place their order.
At the time when my noble friend Lord Chesham told your Lordships of the shipbuilding credit scheme, employment on construction of merchant ships had gone down from about 75,000 in 1958–59 to about 53,000, not entirely because of the falling-off in orders, but partly because of an increase in productivity. But it was going down, and the trough in orders seemed to be reaching a depth that was alarming. At the present time, the situation is very different. We estimate that by the spring of this year employment in the shipyards will be up to about 70,000, that 1½ million tons will be under construction and that the orders book will
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be very nearly 2½ million tons—I think the actual figure is 2·4 million tons—on shipping. Of course, that improvement has not by any means been all due, or even, I should say, to a major extent due, to the shipbuilding credit scheme. Indeed, if it were, it would not be at all in keeping with the purpose of the scheme, which was only to give a temporary stimulus to help the shipping industry to tide over this bad period.
Of the 1½ million tons of shipping which we think will be under construction by the end of March, between 600,000 and 700,000 tons only will be tonnage financed by the shipbuilding credit scheme. Presumably a good deal of that would have been under construction whether the scheme had been introduced or not. The improvement in the situation is basically due, not to the advantage of this favourable Government credit under the scheme, but to improved demand, to better freights which now prevail and, to some extent, to the improving efficiency—not so fast as one would like, but it is improving—of British yards; and noncredit orders in the last six months which are not financed by Government money have been coming in very much more rapidly than they were before.
Our purpose, first, in bringing in the scheme, and now in confirming it after the event by this Bill, was simply to tide shipowners over their difficult trough in demand so that they would have more time to prepare themselves for the very keen competition which they will have to face and which will persist for as far ahead as can be foreseen. If our shipbuilding industry, as I am quite confident it can do, is going to hold its own in the modern world, both management and labour will have to get rid of restrictive practices; they will have to promote more competition among their subcontractors, and they will have to reorganise and re-shape their yards for the purpose of placing them upon a more competitive basis. In our view, only the industry can decide how to do that: it is not a matter which the Government can decide for them. But we believe that the measures which are authorised in this Bill, and which have, in effect, already been taken, will be a valuable and considerable help in giving the

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industry more time in which to do these necessary things for the benefit of its own future. I beg to move.
Moved, That the Bill be now read 2a.—(The Earl of Dundee.)
4.21 p.m.
EARL ALEXANDER OF HILLSBOROUGH: My Lords, I am very anxious to speak on this Bill but I have a rather bad, heavy cold. I may give your Lordships a little trouble in listening, but I will do my best. In the first place, may I say to the noble Earl that we welcome this Bill in principle, as we did the last one on export credits. The fact is that the Government have been over-late in dealing with the matter. It was pointed out in another place that nearly two years ago we were still pressing in Parliament for help to be given in the shipbuilding industry, and so far as I am concerned the present state of the shipbuilding industry—which I agree with the noble Earl has been stimulated in the last twelve months by the Government scheme—is not in the state in which it ought to be.
We had a tremendous task facing the nation after the First War, and by 1921 unemployment in the same areas in which it began to develop two years ago, was, indeed, terrific. Grave steps were taken. It was felt that there would be no future for the shipbuilding industry unless drastic steps were taken to close yards, and the late Sir James Lithgow was chosen to be the chairman of a company called National Shipbuilding Securities to go into the case for closing certain yards. He became, I think, rather a victim of trade union attack, although he was merely the chairman selected from within the shipbuilding industry to do this job, which he did not like doing. I went into it with some interest and detail later as I got to know him better.
The situation after the last war was dealt with in a very different manner from that adopted in the years 1918 to 1923. We had been so warned by the experience after the First War that the Coalition Government of the War Cabinet began to plan in 1944–45 for the arrangements to be made afterwards. A terrific task awaited the industry. It had been subjected to bombing and damage out of all proportion to any damage it suffered in the First War. It was able from time to time to bring in
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modern replacements for plant which had been destroyed; but above all, with the wisdom of men like Lord Leathers, and his advice as Minister of Transport, and Sir Amos Mann, it set up a joint advisory committee to see how the work outstanding in great volume could be tackled, and how the resources of the country could best be used to lead into a steady prosperity of the industry. I am bound to say, looking back, that there have been few periods in the history of British shipbuilding in which any such joint arrangement made has been so successful.
Up to the moment when Labour left office in 1951, we had easily been the leading contributor, in tonnage, to the shipbuilding programme of the world—a very valuable business for us. But then, almost within a year or two of the arrival of the Conservative Government, began the general trend to what I call the wasted years in regard to the industry. The signs of decay in the industry were apparent to anybody years ago, and yet so little has been done by the Government in these wasted years to put it back again upon a firm footing.
I welcome, of course, this credit scheme, which has been brought in, because it has given a spell and a time for some things to be done of major reconstruction. My honourable friend who spoke for the Opposition in the other place on the Second Reading of the Bill, paid, I noticed, a great tribute to that quite young man, Sir William Lithgow, for what he is attempting to do from the shipbuilding side; and I am glad to join in the praise given to him by my colleague.
But I am bound to say that, as I look at the industry to-day, there are certain very great handicaps. There is not enough progressive outlook in this industry being sharpened by the outlook in the rest of the shipbuilding world. The noble Earl said something about the increase in general capacity for shipbuilding, on which, of course, he is absolutely right. Shipbuilding capacity has been increasing, but how do we hold on to our proper share in this great mercantile nation of ours? By simply standing still, or by attuning our control of the
industry to the needs of the times? Let us look at the facts of the situation and take the reference made

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by the noble Earl to who were the leading shipbuilders after the war—he mentioned West Germany, Sweden and Japan; and quite rightly so. Then he brought in a list of those who were on a different basis—Italy and France. But, of course, Sweden, Norway and Denmark, have made great advances in their modernising of their shipbuilding equipment and, therefore, expanding their output into the world market for shipbuilding. But we have dropped steadily behind.
In 1962, I think, we were 350,000 tons less in output than we had been the previous year, and the noble Earl has quite rightly acknowledged that the prospects at that time were, indeed, very dim; and so they were. I have not seen the final output figure yet; I do not know whether the noble Earl has had the figure for 1963. From what he has said to-night, we hope it will have been affected to some extent by the date of finishing certain of the tonnage covered by this Bill. It may have improved on last year's output, but certainly there is nothing like the output we ought to have from this country.
What stands in the way of our getting going properly? In the first place I think there should be a Government who take a real interest in the prosperity of such industries. When a Government like the one we have now rely upon private enterprise to do everything, and only come in at the last moment as an insurance, as if they were dealing with a fire concern, we cannot hope, in this modern world of ours, to see this industry keep pace as it goes along. I do not think this Government have been anything like as active as they should have been in looking after the state of industry and seeing that it is modernised and kept up to date.
How do I pick out the points in regard to that? I was very interested when I was, politically at any rate, in charge of the building and repair of all naval and merchant shipping for five years during the war, and I know a bit about it from practical experience. I visited practically the whole of the shipyards in this country. I found they were nothing like well equipped, and they were being
constantly interfered with by bombing, but their output was stupendous. One of the reasons for that—let me be quite fair in allocating responsi-
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bilities—was that in war time we seemed to get away from the restrictive practices in the industry which seem to arise in peace time and which are so much more absent from the industry in other countries. And these restrictive practices are not only by the workers. I do not like them when they are done by
workers, but they are done on the other side of the industry as well, very often. Restrictive practices cannot really operate to the benefit of a great industry like this or contribute properly to the general prosperity of the country.
I remember going up to the Wear and taking great interest in a firm—I do not suppose one ought to advertise names of firms, and I will not—which had brought up to date one of the finest marine diesel engines to be found. They did an export trade, but they were also very valuable to this country in time of war, and the work they turned out was really magnificent. What is the situation in diesel engines to-day? Will anybody get up and say we are leading the world, as we did then, in the production of diesel marine engines? I do not think so. I should like to hear from the noble Earl whether he contends that. Is Sweden ahead of us? Is the Swiss engineer ahead of us? Is the Dane ahead of us? This is something which requires consideration. I get my information nowadays only by glancing at the shipping papers now and again when I have time. But it is the Government's job, especially within the Ministry of Transport, to keep pace all the time with these things, and that is not being done.
Let us have a look at costs. One of the great handicaps in shipbuilding, according to the shipbuilders' case to me, was always the excessive comparative cost to the British builder of steel plates. What has happened about steel plates in this country? We had national ownership of the iron and steel industry for not much more than eighteen months. But the complaint of the shipbuilding industry is that the cost of steel plates to-day, in spite of the greatest subsidies to a part of the reconstituted capitalist steel industry, like the £50 million at best borrowing rates to Colville's and the like, is not competitive with the price at which they are being bought by our foreign shipbuiling competitors. What is the

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explanation of that? It would be jolly interesting to me to know.
I am going to leave my noble friend to deal with all the extraordinary circumstances which seem to us to arise in the different stages of the Cunard business. I must say that as we look to the general future of the industry we must have something much better than the attention at present given by the Government to the industry. I noticed, for example, that the Minister of Transport, in his speech on the original submission of the Bill in the other place, did not make any reference to future possible changes in the propulsion of merchant ships. My honourable friend who was then in charge of the debate for the Labour Party referred in some detail to the extraordinary experiments that were taking place in the world—it is now nearly a month ago that he made this statement—in the development of nuclear marine propulsion. And I dare say many noble Lords here to-day will already have seen a copy of the Economist of last week and read an extraordinary article with regard to this particular matter.
And yet, so far as I can find in the report in Hansard of the Commons debate, after all this detailed case had been made by my honourable friend in the other place, not a single word was said in reply to the case put for the urgent need for the production of an experimental ship as a matter of research and development vitally required for the maintenance on a modern basis of our competitive power in the world as a shipbuilding country.
My honourable friend in the other place pointed out that to his knowledge there were experiments very far advanced in both the United States and Russia. He pointed out, too, that there were very far advanced experiments being built up in West Germany and in Japan. As a matter of fact, the Economist this week claims that unless the Government act at once on the basis of scientific research they may be continuously behind. They state two things: it would take four years, at least, for us to produce for final trials and use an experimental nuclear-propelled marine ship, at a cost of between £5 million and £6½ million. That is the cost I put on it. Some people say £5 million; some people say more. And the Economist
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points out that the present experimental ship which is being produced in West Germany will be ready for full trials in 1967, whereas we could not possibly, even from now, have one ready before 1968. Take the case of Japan. Japan is well advanced with its inquiries into the production of such an experimental ship, and it is greatly helped by something they have devised in connection with their shipyards, that we have not done half enough about in this country. What they have done is to use their shipbuilding yards in the production of other engineering work as well as the construction of ships. That has been exceedingly valuable to them in carrying their overheads in relation to these other new matters, and they are engaged in, and developing rapidly, their experiments in the use of nuclear propulsion.
There are all kinds of problems yet to be settled. It is not easy to produce a nuclear-powered marine engine which is of the right weight to fit into a merchant ship. It is a big problem. A good deal of the absence of the use of special ballast in an ordinary merchant ship of the present type means that great tonnages of oil or other fuels have to be carried; while to have a nuclear and yet more powerful marine engine means that a comparatively light weight is needed. There you have a problem to face, with regard to how to get the proper stability and balance in a merchant ship.
Why are we not engaged in the same experiments? We are told in another place—this is now confirmed in the article in the Economist this week—that not only are Russia, the United States, Germany and Japan well ahead with these experiments, with 1967 fixed for performance by West Germany, but now Denmark, Sweden, Italy, France and, I believe, two other countries are engaged upon this same research and development. Here the Government have come to book on this to-day. We welcome their Bill, but they are late in the actual credit, and they have not deigned even to give an answer to the debate and the case put forward by my honourable friends in another place in regard to the need for having experimental and scientific development of this sort to keep us in line. The other thing that they have failed to tell us is what they have done constructively to see that our ship-

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building yards are sufficiently modern in their equipment and outlook.
Frankly, I am disappointed in the speech of the noble Earl, whom we all greatly like. I thought that he would have studied the debate in another place; and, although the Vice-Admiral there seemed to get a good heckling while making his replies, I should have thought that we might have been told to-day what is the real answer to the case that I am putting and which has already been put by my colleagues in another place on January 15. We ought to have had the answer given us to-day to bring that debate up to date. Therefore, I conclude—and I apologise for having taken so long—by saying that I welcome the Bill as it is. It certainly is not the final answer. You have got to do some more about it in the interim period, while you get the shipbuilding industry properly back on its feet. Meanwhile, we welcome the Bill, and we pray that the Government will get on with the job that they ought to be doing.
4.45 p.m.
LORD HOBSON: My Lords, I rise to address your Lordships' House for the first time with some trepidation. I am strengthened, however, first by the knowledge of your traditional tolerance; secondly, because I am going to speak on a Bill which is not a Party issue; and, thirdly, because if I am informed correctly, it is almost impossible to transgress the Rules in debate. This Bill is a retrospective measure; we are giving authority for expenditure which has already been incurred. While being unusual, this, of course, has its great advantages over some Bills which are produced by any Government. We are able to test and see whether it has been beneficial and has succeeded in its aims. I think we have to agree that here this is the fact. This has been a most successful measure. I am not going to take extreme cases, but if we take the labour force, in June 1963 it was 53,000 and it has now built up to 60,000. That is a considerable achievement. This has given employment to people largely in the distressed areas. So far as tonnage is concerned, the tonnage under construction has risen from 1·8 million to 2·4 million dead weight tonnage.
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The situation before credit facilities were available to British owners was not, in my submission, primarily due to the inefficiency of out-of-date shipyards, or to the intransigent and archaic labour relations which exist in British shipbuilding yards. I do not believe that to be true. Apart from extensive rationalisation, British shipyards have spent a sum of no less than £150 million on modernisation. We must give credit for that. Mention has been made of strikes, demarcation and restrictive practices. I am not going to deal with those subjects, because it is hardly the debate in which to do so, but I must point out that there are far fewer disputes in British shipyards—an old basic industry—than there are in the British car industry, which is relatively new. I get a little tired of the denigrating of this great industry, and I only hope that the people who do it will study the facts.
I do not propose to accept the contention that it is essential for this industry to be contracted. I think it still has a great future, and that we are apt to forget that for every 1,000 work-People employed in British shipyards, at least
1,400 are employed by sub-contractors in providing the necessary equipment for
the vessels. So, in regard to the total manpower actually employed, one has almost to double the number employed in the shipyards. I thought that Ministers in another place were far too facile in talking in terms of drastic closure or retrenchment. The state of the industry and the difficulties that it has gone through are due entirely to the subsidies given by foreign Powers to shipbuilders and owners. The noble Earl gave many illustrations. Take Spain. Few people regard Spain as a shipbuilding country, but Spain gives heavy subsidies against British builders for British and Norwegian owners of shipping. In France, there is a 25 per cent. subsidy, yet French shipyards make a loss. Sweden, which had no disorganisation at all due to the war, has made available a special sum of £27 million in the form of credit to counteract Japanese competition.
Of course, Japan is the most ominous of the competitors. The Japanese Government have set the industry a deadweight target of 1½ million tons for export alone. The average wage rate in Japanese shipyards is £40 a month.

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At present they can quote at 22½ per cent. lower than world prices. This is not the end of the story. Continental shipbuilders are constructing shipyards in Eire, Mexico and Greece, not only in competition with their own shipping companies but of course with British shipyards too. The Governments also provide subsidies. Therefore, it is essential that we should have a measure like this to give credit to British shipowners. It has certainly got the industry over a rather difficult period.
I have certain criticisms of this measure, and there are certain points on which I should like to have an answer. The first question I ask is why this scheme should be brought in at the end of May, 1964. That seems to me discriminatory against British shipowners, because foreign owners can order ships from British shipyards and get the benefit of the credit facilities. I fail to see why British shipowners should be placed at a disadvantage, and I should like an answer on this point.
I come now to the question of the Cunarder—a very controversial question, I regret to say, in a maiden speech, but it has been referred to by the noble Earl. I do not know whether I should call it the Q.3 or the Q.4, but for the purposes of this debate I shall call it the Q.4. Why was it found necessary to include the £17·8 million, the cost of the new Cunarder, in this sum of £75 million? This was not the original idea of the Government at all. If so, why was legislation produced in the other place? This is an afterthought. What is the real reason behind it? We have got to have a new Cunarder because British prestige is at stake, and this ought to have been taken as a separate item of expenditure. Let us look at it from the point of view of giving employment in shipyards—if we are to listen to some people, this "shot in the arm" to this derelict industry. The cost of the new Cunarder, £17·8 million, could have built five bulk carriers or five super tankers—work which could have been spread over the many yards in Britain. Instead of that, the Cunarder, whoever gets the contract for it (and I do not want to name them), is bound to be built in one large yard. I consider that this is a narrow, mean and not very far-sighted policy.
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The noble Earl mentioned in general terms how this money has been distributed. But I should like to ask him to give us an assurance that one British shipowner has not had a 25 per cent. allocation of this global sum. It is a very difficult and tricky business for the Minister of Transport or the Treasury, whoever allocates the money, to do the job fairly. Therefore, we ought to have a little more explanation as to how it is being distributed.
I now come to the question of steel, which was mentioned by my noble friend Lord Alexander of Hillsborough. It is axiomatic to say that steel is the prime raw material of British shipbuilding. Some of us want to know what is taking place in the steel industry. It is said that a reduction of £7 to £8 per ton on steel on a 60,000-ton tanker will reduce the tender price by something like £100,000. Therefore, this is a considerable item indeed. What we find happening is that British steel manufacturers are selling at lower prices to our competitors abroad. I fail to see why we should sell more cheaply to our competitors abroad rather than provide cheap steel plate for the British shipbuilding industry. But that is not the whole story. The Iron and Steel Community will not sell steel to British shipyards at lower than world prices, so it appears that this matter must be looked into. The Parliamentary Secretary in the other place stated that this whole matter was to go before the Restrictive Practices Court. It would be interesting to hear from the noble Earl just why he thinks that is necessary. There is no doubt that British shipbuilders have been placed at a great disadvantage in having to pay such high prices for steel.
I was amazed by the categorical statement by the Minister in the other place
that this was to be a once-and-for-all stimulus to British shipbuilders. This
point was mentioned by my noble Leader, and I should like to develop it. The £75 million credit provides capital for British shipowners to place orders for British ships to be built in British yards. The fundamental difficulty which affects the basic industries of this country at the present time is the

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shortage of fluid capital. To take a homely example, if one were fortunate enough to be left £100,000 and went to one's stockbroker to ask for advice as to where it should be invested, would he mention one basic British industry in which to place that £100,000? The answer is, No. It would be invested in the distributive industries, in speculative building, and probably a few thousand in heavy chemicals. The dilemma with which any Government, whether it be Labour or Tory, is going to be faced is that the basic industries of this country must have capital. They cannot get it all from ploughing back profits, for profit margins are very tight at the moment. There are going to be more and more measures of this sort, in regard to not only the shipbuilding industry but many other basic industries.
There is another argument in support of this point. Whereas large firms could face up to a slump of six or eight years in the bad periods of the 'thirties, today they would be in bankruptcy if they had to face up to a slump of two years. This is going to mean careful consideration on the part of the economists of the Treasury and of both political Parties in relation to the financing of British industry, particularly the basic industries. I am not now going to deal with the question of the nuclear ship, except to endorse what my noble friend Lord Alexander of Hillsborough said—that the sooner we have one the better. It is monstrous that a great maritime nation such as Great Britain should lag behind in this matter, and we should like to have an explanation from the Minister. We might have an indication that a measure is to be brought forward providing the capital for a nuclear ship. If I might digress, I would throw out the suggestion that it would be a good idea to have a nuclear reactor placed in an Admiralty Fleet auxiliary, with the Fleet auxiliary manned in the usual manner.
I do not want to detain the House too long, but I should like to say that I have thought for a long time that the Ministry of Transport is one of those Departments which are far too big. How one man can keep control of roads, railways, docks, waterways, power stations—he has some power stations—and London passenger transport, and look
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after shipping and shipbuilding, I just do not know. The Department will have to be split up. The argument that was advanced in the other place, that this cannot be done without giving every Minister a seat in the Cabinet, seemed to me—if I may say so, in a maiden speech—rather childish. My Lords, I welcome this Bill. Something is better than nothing. The British are a great nation. They can build ships and sail them; and long may they continue to do so.
5.1 p.m.
LORD MOLSON: My Lords, it is a very agreeable privilege for me to be able to congratulate the noble Lord upon his most successful maiden speech in this House. He and I were colleagues for a number of years in another place, and it is a great pleasure to me to resume acquaintance with him here. He was a Minister—he was Assistant Postmaster General—and later, after the fall of the Socialist Government, continued his most useful and public-spirited activities on the Estimates Committee, serving as chairman of one of the subcommittees of that extremely important probing Committee. When he referred to this Bill as dealing with the expenditure of money which had already been spent without statutory authorisation, I thought that his old instincts as a guardian of the public purse were going to make him criticise it. However, on the contrary, he said that this had the advantage that we knew that the money had been well spent before the statutory authorisation was required for it. I cannot think that that sentiment would have been one that he would have expressed when he was a member of the Estimates Committee. As a member of the A.E.U., he is a most welcome recruit to the much valued and respected body of trade unionists in your Lordships' House. I am sure your Lordships all agree with me when I say that we hope frequently to hear from him, and we are confident that he will speak with the same detailed knowledge and wide grasp that he has shown in his maiden speech this afternoon.
My complaint against this Bill is that it is only a palliative, and not conditional on any improvement in the causes of the decline of the shipbuilding industry. It has been in decline for a long time,

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largely through its own fault. In 1946 more than half—53 per cent.—of the world tonnage launched was launched in this country. By 1961 the proportion had fallen to 15 per cent.—that is, a decline in 15 years from 53 per cent. to 15 per cent. In 1962, despite the fact that the tonnage under construction in the world increased that year by 2½ million tons, Britain's share had fallen again, this time to 13 per cent. Between 1957 and 1963 it had lost one-third of its labour force, and we, who at one time were the greatest exporters of ships to the world, are now importing on average 300,000 tons annually from foreign yards.
My Lords, why has this industry declined? There is no secret about that: its costs are too high; ships take too long to construct, and strikes frequently make delivery dates quite uncertain. Usually when the Government ask Parliament to give some special assistance to a selected and favoured industry, Parliament is given an assurance that something is going to be done to put matters right, to make certain that if this special assistance is given the industry will be able, after the lapse of a period of time, to stand on its own feet. There is no such guarantee on this occasion. Indeed, the Minister speaking in another place refused to accept any proper responsibility for seeing that this assistance is conditional upon an improvement in the industry. He said, speaking on 15th January [OFFICIAL REPORT, Commons, Vol. 687 (No. 31) cols. 239–240]:
"I come next to the labour situation. This is a subject with which employers and unions have been wrestling for over two years in a working party under a Ministry of Labour chairman."
My Lords, that was a reference to the working party set up in December, 1961, when my noble friend who is now Lord Blakenham was Minister of Labour. There has been no report, and the Minister went on to say:
"I make no secret of the fact that progress has been disappointing and distressingly slow. I hope that with the recent settlement on pay and hours it will be possible for both sides to get somewhere. I am sure that it is as much in the interests of the men themselves as of the management that this should happen. Indeed, it must happen if this industry is to be healthy and vigorous in the years to come."
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A little later he went on to say:
"But all this is for the industry itself to tackle. It is not for the Government to tell the industry how to run its business."
Much the same words fell from my noble friend the Minister of State at the Foreign Office this afternoon. But is it not justifiable, when special assistance is being given, to ask that something should be done about it? We have, I think rightly, the Government seeking to bring to an end resale price maintenance as it is against the national advantage, and I would say that when they are lending £75 million largely in order to assist this industry, the Government are entitled to ask of the industry that it should set its house in order.
My Lords, the cause of the depression, as the noble Lord, Lord Hobson, has said is foreign competition. In tankers and bulk carriers Sweden is undercutting us by 10 per cent. and Japan by 20 per cent. Surely this is no time for an increase in wages or for the phased introduction of the 40-hour week. Her Majesty's Government have reported the settlement of December 16 to the National Incomes Commission, and have presented this large volume of evidence showing what the effect of the settlement is likely to be. In a leading article, called "Danger Signals" published on December 18, The Times has also drawn attention to the very serious consequences that may result from this settlement.
The Government say, on the authority of the National Economic Development Council, that with a 4 per cent. increase in production it is possible to increase money incomes by from 3 to 3½ per cent. without inflation. I suppose this industry would claim that this settlement is just within the so-called "guiding light". It is estimated that the effect of the increased wages in this settlement, and the reduction of hours from 42 to 40 per week, in two stages, will ultimately increase hourly wages by the equivalent of 9·6 per cent. As this is spread over three years, I suppose it is argued that this is only 3·2 per cent. But, my Lords, that, of course, is conditional upon there being no further wage demands during those three years: it is conditional upon there not being a successful attempt to raise wages by local settlements above the national level; and there is, of course, as The Times has said, every

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reason to expect that there will be a further wage demand next year, and another the year after. Not only does this settlement not contain any undertaking that during the period of the reduction in hours there shall not be a further demand for an increase in wages, but nothing is said about demarcation disputes, and nothing about restrictive practices.
My Lords, this permitted increase of 3 to 3½ per cent. is a general average over the economy as a whole, and an average implies that some increases may be more but that others must be less. In the case of an industry which is facing competition from abroad, with its own prices, as I have indicated, too high—10 per cent., too high, in the case of Sweden, and 20 per cent. in the case of Japan—clearly this is not an industry where it is safe or desirable for there to be an increase in wages of this kind. The effect of the promise of the phased introduction of the 40-hour week has already caused the closely allied engineering industry to demand the introduction of a 40-hour week; and, as The Times has said, if it were once admitted in the engineering industry as a whole it would be quite impossible to prevent it from spreading through the economy as a whole. While there may well be some progressive, vigorous and efficient industries where the additional cost of the 40-hour week could be absorbed, it is manifest that that cannot be the case at the present time in the shipbuilding industry unless there is to be such a change in outlook and improvement in relations as will enable restrictive practices to be brought to an end.
All these points were clearly foreseen by the Government, and have been set out in the memorandum which they have presented to "Nicky"; and when this is so clearly seen by the Government, is it really enough for them to lecture and to present memoranda upon the subject? If £75 million is being made available as a special effort to assist the shipbuilding industry, surely this is a case where the Government could insist upon something being done. This Bill does nothing to ensure the necessary reorganisation of the industry and the improvement in its labour relations. For example, there are no proposals to bring about keener competition, as I think the
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noble Lord, Lord Hobson, said, among sub-contractors in order to make certain that prices are genuinely competitive; and no proposals, such as I should have liked to see, for buying steel in the cheapest market. If there is this complaint against British prices being higher than foreign prices, is there any reason why British shipbuilders should not seek to buy, as their competitors are doing, from foreign steel producers? My Lords, the Prime Minister has said that the objective of this Government is to try to ensure the modernisation of this country as a whole. Clearly this Bill, which is giving a temporary, unconditional assistance to the shipbuilding industry, is doing nothing to bring about the modernisation of the British shipbuilding industry.
5.16 p.m.
THE EARL OF DUNDEE: My Lords, I should first like to add my congratulations, and those of the House as a whole, to the noble Lord, Lord Hobson, on a most successful and enjoyable maiden speech. I liked the whole of it, if I may say so, and I particularly liked the carefree gaiety with which the noble Lord announced that he had been told that there were no Rules of Order in your Lordships' House, and that it did not really matter what he said. Our Rules of Order are sometimes, perhaps, made up as we go along, and with regard to what is said in another place I never trust myself to give authoritative pronouncements on these matters, but I think we are supposed not to refer to what has been said in another place during the same Session unless we have some reason for quoting the exact words of some Minister in another place. I greatly enjoyed the noble Lord's references to the debate in another place on January 15, which was also referred to by the noble Earl the Leader of the Opposition. I enjoyed, and the House enjoyed, what the noble Lord, Lord Hobson, said about it, but I do not think that, if I pursued the matter, your Lordships would enjoy my remarks quite so much as you did his. I shall therefore try myself to keep in order about that.
I was also gratified by the patriotic tone which imbued most of what the noble Lord, Lord Hobson, said. It is true that we are in many respects holding our own, and doing much better than

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countries like France or Spain, in spite of certain advantages which they give to their shipbuilding; and I was glad that he mentioned the £150 million which has been spent on modernisation, to very good effect. In my remarks I said something about the need for ending restrictive practices and for adapting yards on more competitive bases, but I was glad to hear this figure, of the actual amount which has been spent on modernisation, mentioned by the noble Lord.
The noble Lord said that, although speaking for the first time, he would like to say a few things which could be regarded as controversial. I do not think he was unduly controversial, but I ought to reply to the specific points to which he did ask me to reply, about allocation, about the new Cunarder and about the permanence of the scheme. Of course, one can never give a very definite reply on a question like permanence, because no Government and no Parliament can ever bind its successor, and we must always he free to act in the national interest according to the circumstances of the time. I think that one reason why we never contemplated making this shipbuilding credit scheme anything more than temporary was that we wanted to give the industry a breathing space during which it could give more attention to its own long-term plans which it has got to make for itself in the long run. If we had prolonged this particular scheme, I think it might have reduced the incentive to compete for exports, because this scheme is only for home ships or orders by home owners.
It is for the industry to adapt itself to the needs of the present. It may certainly be that in the long term there will be a reduction in the number employed. Some yards may have to go out of business; but the point is that this scheme has removed the industry's need to preoccupy itself with immediate survival. It has enabled it to give more attention to long-term planning. But we have all the considerations which the noble Lord mentioned, about indirect assistance which other countries give to their shipbuilding, very much in mind.
Then the noble Lord asked about allocation. I cannot, of course, disclose the firms to whom loans have been committed under this scheme; but the whole point of setting up the advisory
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committee under Lord Piercy (for whose services the Government are grateful), provided for at the beginning of Clause 1, was to take the immediate responsibility out of the purview of the Minister of Transport and to appoint a specialist committee of people in a position to examine every claim on its merits. We did not propose that there should be any kind of distribution allocation by trying to divide up the money lent between different owners or areas, but simply that every application for a loan should be examined strictly on its own merits including the credit-worthiness of the applicant. There are some applications which have not been proceeded with; but the numbers finally refused are, I understand, very few.
LORD LATHAM: My Lords, could the noble Earl say whether the loans are to be secured? If so, how?
THE EARL OF DUNDEE: Yes, my Lords, they are secured. The loans, as the House knows, are up to 80 per cent. of the value of the ship, and the security is the ship itself.
LORD LATHAM: Not a debenture?
THE EARL OF DUNDEE: No, my Lords; the security for payment is the ship on which the loan has been spent.
The noble Lord, Lord Hobson, asked about the new Cunarder, and he went into some recent history. I should just like to remind your Lordships that the Government were prepared to carry out, and offered to carry out, their obligations under the 1961 Act which enabled this large sum of money to be spent on what would have been the Q3. It was not the Government who retracted from that undertaking; it was the Cunard company who decided after the offer had been made, after they were first willing to accept it, that, after all, it was not going to be worth their while. It was they, not we, who withdrew.
I have already mentioned the next application in July which we did not accept. But I thought the noble Lord sounded as if he were under the impression that this £17·6 million which we were advancing had been money which might otherwise have been lent to a number of other, perhaps more needy, shipowners or builders. That is not so. The amount was increased in July to £60 million, and at that time the Cunard

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application for a loan was turned down. Later on, the Cunard application was revised on the new terms which were no longer unacceptable to the Government and which should enable the loan to be made. An entirely new amount was authorised, and the maximum raised to £75 million which would not otherwise have happened. It was not at the expense of anybody else. It was done in order to enable this new loan to be given for what the noble Lord correctly described, I think, as the Q4. The Q3 will never really exist.
I should like to thank the noble Earl the Leader of the Opposition for gallantly contributing his part in this debate, in spite of the very severe physical disability which he suffered, and which all of us are only too apt to suffer St this time of the year. I hope very much that he will soon be completely well again. I was glad to hear what the noble Earl said about research. I cannot reply at very great length, and I do not think he would want me to do so; but I would mention that the Ministry of Transport are extremely conscious of the potential advantages which there may be in the nuclear propulsion of ships; and various systems are being examined. The Minister does realise the need for urgency; but it is essential, whatever type of reactor is adopted, that it should be one which offers the prospect of being at least as economical as a conventional type of engine. It is not yet clear beyond doubt what type, if any, could be so developed; but we are urgently studying this matter.
There is not much I can say about diesel engines, because it is the case, as the noble Earl said, that builders have fallen behind in the production of diesels. The need to meet the difficult international competitive conditions does apply to all sections of the industry—engineers as well as shipyards. A great many have spent a great deal on modernisation; and it is the object of the scheme to provide time. The Department of Scientific and Industrial Research has just announced a considerably increased grant to the British Ship Research Association for the next five years; and I should like to mention to the noble Earl, also, that provided the shipbuilding industry raises a minimum grant-earning income of
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£600,000 a year, the new terms will provide grant-aid of 50 per cent. of industrial income up to £1 million. In addition, there will be a grant of £1 for every £1 contributed by shipowners, subject to a maximum grant of £200,000 a year. That could represent the biggest grant yet made to any industrial research association.
I always listen with a great deal of interest to the noble Earl's comparison between conditions immediately after the war and conditions now, because there were so many theatres of administration in which the noble Earl played a distinctive part both during and after the war; and this was one of them. I would say—and I think probably most noble Lords would agree—that the most essential difference between post-war conditions and present conditions is this: after the war a great deal of the world's shipping had been sunk; very little new replacements had come along; and there was an enormous demand for shipping all over the world. It was too easy; almost everybody was crying out for ships, and however expensive and uncompetitive your production of a ship was, for a very long time you were fairly well assured of a market. Now it is the other way round. If we want to meet—and as a great shipbuilding nation we must do so—keen and permanent competition, we have got to think very much more of efficiency, and not nearly so much simply of bulk production.
I know that it is a matter of opinion, but our view is that State control cannot do very much to improve the efficiency of the shipyards. There are other circumstances, as in the emergency of war or in immediate post-war conditions, when a larger measure of Government control is right and justified; but we do not feel that in the present circumstances Government interference or Government management or Government control can be much help to the shipyards in their paramount need, which is to reduce costs and increase competitiveness. I was glad to hear the noble Earl pay tribute to those who have helped in making our modern shipyards more competitive, particularly to one shipowner, whose constituency I used to represent in another place.
My noble friend Lord Molson kindly gave me notice that he intended to raise

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his point about wages, which I think, on the face of it, is a good point. It may have a particular application to the shipbuilding and engineering industries, but I do not think that we could have made any conditions of the kind he suggests in this shipbuilding credit scheme. The whole point is that we thought it would be a good thing if we gave a quick stimulus to the industry, and the need in the middle of last year was urgent. If we had tried to impose conditions, such as that a loan would be given only if there were no increase of wages that the Government thought excessive, it would have been doubtful whether any shipowner would have been prepared to take advantage of the scheme. The buyer needs to know where he stands. He does not actually get the loan until after the ship is delivered and the owner, through the Ministry of Transport, has entered a commitment to place a contract for a new ship, with the reasonable assurance that the commitment will be honoured when the ship is delivered to him. It would be very difficult if he were to be told that he would get the loan only if certain things, such as an absence of wage increases, had or had not happened by then, because individually he might have very little control over any wage agreement which is concluded.
The pay settlement which has recently been reached in shipbuilding has been referred by the Government, as my noble friend mentioned, together with the settlement in engineering, which was reached about the same time, to the National Incomes Commission for examination, and I think that it would be best for us to see what they have to say about it before venturing further comment, because I think it is likely to prove a little more complicated than it may appear to be at first sight, and we do not want to anticipate any opinion that they give. I am sorry not to be able to give a more satisfactory reply to my noble friend, because I think that, in principle, the point is a very good one. But I do not think that we could have done anything to meet it, either in this Bill or in the previous action which we took about the credit scheme, which this Bill somewhat posthumously legalises.
On Question, Bill read 2a: Committee negatived.

PROTECTION OF ANIMALS (ANÆSTHETICS) BILL [H.L.]
5.35 p.m.
Order of the Day for the Second Reading read.
LORD DOWDING: My Lords, I beg to move that the Protection of Animals (Amæsthetics) Bill, 1964, be now read a second time. I must start by referring to the Animals (Anæsthetics) Act, 1919, which contained Schedules listing the operations for which an anæsthetic, general or local, had to be used. That was considered satisfactory for the time, but later the British Veterinary Association thought, because of the new operations and new techniques of anæsthetics which were constantly being devised, that it was impossible to schedule for any considerable length of time all the various surgical operations for which an anæsthetic was required. Accordingly, they sponsored the Protection of Animals (Amæsthetics) Bill, 1953. That Bill was introduced into your Lordships' House by the noble Lord, Lord Stamp, and received a Second Reading on October 22, but lapsed at the end of the Session.
A new Bill was then introduced in another place in 1954 by the noble Baroness, Lady Davidson, and eventually became the Protection of Animals (Amæsthetics) Act, 1954. That Act replaced the 1919 Act and, instead of listing the operations which must be performed under an anæsthetic, it provided that all operations an animals which involved interference with the sensitive tissue or bone structure should be carried out under an anæsthetic, except those listed in the First Schedule.
The British Veterinary Association had some proposals for amending the 1954 Act. The Minister of Agriculture, Fisheries and Food, replying to a question from Mrs. Barbara Castle in July, 1962, said that he was in touch with the veterinary profession on the subject of the possible amendment of the Act. An ad hoc committee of the British Veterinary Association later reviewed the Act, and recommended that the following classes of operation should always be carried

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out under an anæsthetic: (a) the castration of a male dog, cat, horse, ass or mule; (b) the castration of a bull, or a male sheep, goat or pig over the age of two months; (c) the de-horning of cattle by any method, until actual physical severance of the horn occurs; and (d) the dis-budding of calves by actual cautery or incision.
They also recommended that the use of the rubber ring method for the castration of male animals or for the docking of lambs' tails should be permitted only if the ring were applied in the first week of the animal's life. A petition asking that the Protection of Animals (Anæsthetic) Act be amended was presented to the Speaker of the House of Commons in July, 1963, and later that month, in reply to a Question from me, the Joint Parliamentary Secretary, Ministry of Agriculture Fisheries and Food, said that it was intended to introduce legislation to amend the Act.
That brings us to the present Bill. Clause 1(2) has the effect of requiring that dogs and cats may be castrated only under anæsthetic. An Amendment was proposed in the Committee stage of Lady Davidson's Bill in 1954, that the castration of a dog should always be performed under an anæsthetic, but, after some discussion, for reasons which I need not elaborate, it was withdrawn. The elimination of dogs and cats from the classes of animals which may be operated on without an anæsthetic is the purport of this subsection. I must say that the present proposal has the strong support of the veterinary profession.
Clause 1(3)(a) would have the effect of removing from the First Schedule the reference to horses, asses and mules, and consequently would make it unlawful to castrate these at any age without using an anæsthetic. The Protection of Animals (Anæthetic) Bill of 1954 provided that the age above which horses may not be castrated without an anæsthetic should be eighteen months, but this was reduced in Committee to twelve months. An Amendment was also moved in Committee to require that the castration of horses should never be performed without an anæsthetic. This was the only Amendment on which the Committee divided, and the Amendment was defeated by 10
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votes to 8. So from 1954 to the present time it has been legal to castrate horses up to the age of twelve months without an anæsthetic. It is now proposed that horses shall never be castrated without an anæsthetic. In that Committee in 1954 it was strongly urged that the process of applying an anæsthetic to a horse might damage its prospects for racing, and so on. But the development of tranquillisers and anæsthetics has made it no longer necessary to use these physical methods of restraint—that is to say, casting a horse and so on—and in the opinion of the veterinary authorities the whole operation can now be carried out with complete safety.
Clause 1(3)(b) would reduce the age above which a bull or male sheep may not be castrated without an anæsthetic from twelve months to three months. An Amendment to accomplish this was proposed in the Committee stage of the 1954 Bill, but it was eventually withdrawn. It was then stated that it might not be possible in remote parts of the country, and particularly in Scotland and Wales, to get in a veterinary surgeon to perform the operation when required when they had to be castrated up to the age of twelve months. The British Veterinary Association originally proposed that the age should be reduced to two months for bulls and male sheep; but the farming interests pointed out that hill-farming lambs are not brought down from the hills until they are older than two months, and if they were gathered at an earlier age there would be considerable risk that they would lose their mothers. The British Veterinary Association pointed out that animals become progressively more sensitive to pain as they grow older, but agreed that castration without anæsthetics would not cause much more pain to a three-months-old lamb than it would to a two-months-old lamb. I must apologise for reading this speech, but it is so full of detail that I could not memorise it all. Also, I think it is important that I should give these details, because it shows that this new Bill is not somebody's brain wave with the date arbitrarily fixed, but that the veterinary authorities and the farmers have been consulted throughout, and to a very large extent it records an agreed compromise.
The farming industry also pointed out that male calves of hill-suckled herds

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were not generally castrated until they were between four and five months old, and that it would encourage contravention if the age above which an anæsthetic must be used for their castration were set as low as two months, and an extra collection of cattle would be necessary. In view of these circumstances, the R.S.P.C.A. and the Central Council in Scotland of the societies for the prevention of cruelty to animals, and the veterinary profession, agreed with the representatives of the farmers that the age above which bulls and male sheep should not be castrated without an anæsthetic should be set at three months. This morning, when I came into the House, I received a letter from the Secretary of the R.S.P.C.A. giving the wholehearted support of his Society to this Bill.
Clause 1(3) would reduce to two months the age above which goats and pigs may not be castrated without an anæsthetic. At present the ages are three months and seven months respectively. In the Protection of Animals (Anæsthetics) Act, 1954, the ages were set at six months and seven months respectively, and an Amendment was moved that they should be reduced to three months. The Amendment was agreed to in the case of goats, but resisted in the case of pigs. Lady Davidson said that there was a reason for resisting the Amendment in the case of pigs, that
"in the remoter parts of the country and in Scotland and Wales the farmers are in some cases a hardier and tougher breed, and it would be unreasonable to expect them to bring in a veterinary surgeon when necessary to castrate pigs five or six months old."
The evidence suggests that the adoption of the present proposal would cause no hardship to the pig industry, because early castration is now practised very widely.
Clause (1)(3) would make it unlawful to castrate an animal by using a rubber ring or other device to restrict the flow of blood to the scrotum applied later than the first week of the animal's life, unless it was anæsthetised during the whole time that it carried the rubber ring. This would be quite impossible, of course, because castration by this method takes up to three weeks. The practical effect of this new paragraph 6A,
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therefore, is to forbid the use of the rubber-ring method for castration unless it is applied within the first week of the animal's life. This proposal is, perhaps, likely to prove the most contentious one in the Bill, but the opinion of the Veterinary Society is that this method of castration by constricting the flow of blood to and from the scrotum causes a great deal of suffering over a longer period. Farmers have objected that it is not always possible to apply the ring in the first week of a lamb's life because the testicles have not developed sufficiently for the purpose. Now that other methods of castration are to be permitted, with amæsthetics applied by laymen and not by veterinarians, I very much hope that the practice of using the rubber rings will fall into desuetude.
Clause 1(4)(a) and paragraphs 7 and 8 of the Schedule to the Act of 1954 exempt minor operations from the general requirement concerning anæthesia. This provision covers those operations which may never be counted as such minor operations and, accordingly, an anæsthetic would always have to be used when they are performed. In Clause 1(4)(b), the de-horning of cattle as a surgical operation is an operation which is customarily performed by a veterinary surgeon and so its performance without an anæsthetic probably constitutes an offence at present. This paragraph is included, however, so that there shall be no doubt.
Clause 1(4)(c) would make it unlawful to dis-bud calves without an anæsthetic except by chemical cautery applied within the first week of life. It would therefore be unlawful to use any other method without an anæsthetic. This is in accordance with veterinary opinion. Clause 1(4)(d) deals with the docking of lambs' tails by using a rubber ring or other device to restrict the flow of blood to the tail. This is subject to the same argument as castration by rubber ring; it is permitted only if the ring is applied during the first week of the animal's life.
That completes the examination of the Bill itself, but there is another Act in existence to-day which has some bearing on the case. It is the Veterinary Surgeons Act, 1948, which requires that the castration of animals of any of the

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classes that we have been talking about this evening above a certain age must be performed by a veterinary surgeon. That means, of course, that the operation
must not be performed by a layman; and that is still the law. I do not think it is going to affect the question very seriously because the ages that were set at that time were very high. For instance, a horse might not be castrated over the age of two years except by a veterinary surgeon. Now, horses have come out of the Schedule altogether and may never be castrated without an anæsthetic.
In the same way, for bulls, goats, rams, boars, cats and dogs, the ages are all fixed much higher than they would be now. So, although this law remains in existence it ceases to have much effect, because (and this is the important part) the implied prohibition of the application of anæsthetics by laymen no longer exists, and this is, I think, a very important point of the Bill. It is, I believe, recognised by the Royal College of Veterinary Surgeons and by the veterinary societies, and so on, that farmers themselves, or their farm hands, may properly be allowed to apply anæsthetics.
The difficulty of making that power general at present consists in the fact that most anæsthetics are on the poison list and cannot be supplied without an order from a veterinary officer. But there is a recommended anæsthetic, called "Lignocaine", which is not on the poison list and can be obtained through an ordinary chemist without great difficulty. This is an innovation; it is strongly supported by the veterinary fraternity, and I think that it will result in a great deal of alleviation of suffering of animals. But there is just this caution. I understand that if these anæsthetics are applied by an unskilled person they may quite possibly do more harm than good. I am therefore asking the Ministry of Agriculture, Fisheries and Food, supposing this Bill goes through, whether it would not be a good thing to circularise all farmers and stockholders advising them not to allow anæsthetics to be applied by any of their staff unless he has first received instructions from a veterinary officer. That, I hope, will remove the danger of inexpert application. I am sorry I have been so
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long in explaining this new Bill, but I hope it has been clear, and I now beg to move that the Bill be read a second time.
Moved, That the Bill be now read 2a.—(Lord Dowding.)
6.10 p.m.
LORD WISE: My Lords, I think we must thank the noble Lord for the introduction of this Bill and for the many details which he has given, both as to past Bills and what may happen under this proposed Bill. It is a short Bill. Perhaps it is none the worse for that. At any rate, I do not want to deal with the details which were covered by the noble Lord, but I want to put one or two points very briefly. This Bill amends the 1954 Act. That has been in operation for only ten years and I am wondering why it is necessary at this particular stage to amend that legislation. Of course, it may be the result of experience, the discovery that that Bill does not quite meet the situation in regard to certain classes of animal disease and animal operations.
I was wondering also, in listening to the noble Lord, whether or not the Royal College of Veterinary Surgeons had been consulted, but in almost the final sentences he mentioned the College. I ask that because, in looking at the 1954 Act, I see that the Minister may, after consultation with the Royal College of Veterinary Surgeons—they are the persons concerned—do certain things, and I concluded that these were referred to and agreed to before that particular Act was passed. Among the things the Minister can do under that Act is to make orders to reduce the ages, and I wonder whether any orders have been made in the intervening years. Perhaps the Minister can say whether any orders have been made under the 1954 Act, whereby the ages included in the Schedule which has been referred to by the noble Lord have been reduced in any way, or whether it is sufficient now to adopt that previous Act and introduce orders to amend it.
I asked whether the Bill was the outcome of experience, and I wonder whether it has come to the notice of any noble Lord or anybody concerned with the Bill that there has been malpractice and a good deal of animal suffering through insufficient experience. None of us are infallible in anything, and it is

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quite certain that neither "vets" nor experienced farmers or farm workers can be quite certain that any operations they carry out will be successful. I heard of one two or three days ago where two young bulls were castrated by an experienced
farm worker. One died and the other is very seriously ill at the moment. So it shows that none of us can be certain that any operations we carry out, with or without anæsthetics, are likely to be successful.
This Bill is restrictive in the sense that it restricts the operations on animals which may be performed without the use of anæsthetics, and I think it is, for that reason, a sensible little Bill, a decent little Bill, and one which should merit our support. There may be one or two minor details which have to be amended if the Bill receives its Second Reading to-night and comes up later. For instance, the noble Lord referred to the docking of lamb's tails and the castration of lambs. There are other means now of castrating lambs which one could mention. As he said in regard to hill farms—and the same applies to other farms where large flocks of sheep are kept—it is difficult to do this work in the lambing season when everybody is busy, to put the rubber ring round the tail or do any other operation within a week.
I am anxious to know—perhaps the Minister can tell us, and I expect he will in the course of his reply—whether this Bill, which is a Private Member's Bill, has been vetted by the veterinary officers of his Ministry, and also whether it has the approval of the Government. If we can in any way help to relieve pain and suffering among animals, whether they are domestic or farm animals, I think we in this House, as in another place, should do everything possible by Act of Parliament to do so and so establish what we hope will be better conditions for animals on farms and elsewhere.
6.18 p.m.
LORD SOMERS: My Lords, this is not a revolutionary Bill. It is merely tightening up regulations which were made under the 1954 Act, and as such I think it is well worth while. The noble Lord, Lord Wise, quoted two cases where operations went astray and, as a result, animals died, and I think that sort of thing is an illustration of the reason why
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we should be careful to see to it that operations are not carried out other than by experts, except, of course, in cases such as he mentioned, of the docking of sheeps' tails, which is certainly a difficult problem.
I am not one of those who have the idea that animals have the same thought processes as human beings. I have no sentimental feelings about it at all, but I think it is important to prevent suffering, either among human beings or among animals. And there is no doubt that animals, even if they are not capable of reasoning and thinking, are capable of feeling pain. That is borne out by the statement of a well-known circus trainer, who once said that the circus trainer's three chief weapons were hunger, fear and pain. There is no doubt that animals are capable of feeling pain. One can tell that perfectly well, unless one is deliberately showing a blind eye, by their reactions. The trouble is that they cannot inform us of the fact except by those reactions.
This new Bill, I am very glad to see, removes from the possible classes of animals on which operations without anæsthetics can be performed, the dog, the cat and the horse, which I think is right because they are the three animals which one may say have the most sensitive reactions. This view, in spite of what the noble Lord, Lord Wise, has said, is supported by veterinary surgeons.
I think that my noble friend actually mentioned the Royal College of Veterinary Surgeons.
LORD DOWDING: Yes, I did.
LORD SOMERS: That is quite true, yes. Veterinary surgeons are not, as a class, sentimental about animals. They know their job well, and they know exactly what an animal feels and what it does not feel. Therefore, even if my speech is not too convincing, I think that possibly their opinion may be convincing. As to the de-horning of cattle I am a little uncertain, because I have never seen it done. I have no idea whether it is as painful as cutting one's nails or perhaps cutting through a tooth. It may be either. I think that one must leave that for the veterinary surgeon to decide.
In Clause 1(4)(d) we are concerned with the docking of lambs' tails. Why

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not apply this to dogs, too? I think this should apply to dogs. I know that it is the fashion (shall we say?) for certain dogs' tails to be docked, but I think that that should not be done without an anæsthetic. I entirely agree with what my noble friend said about the circularisation of farmers in the event of this Bill's going through. I have the greatest admiration for farmers as a race—they are a fine lot of men—but some of them are rather apt, owing to having dealt with animals so much, to be a little insensitive about them and about their feelings. It is not easy to make certain that they observe the regulations, and I think that circularisation would be a good thing and a wise means of seeing that the Bill is more widely applied.
6.23 p.m.
LORD FERRIER: My Lords, I had not intended to take part in this debate, but while listening to the speech of the noble Lord, Lord Dowding, several points occurred to me upon which I feel I can make a contribution. With the noble Lord who has just spoken, I support the Bill and anything that leads towards the reduction of suffering among animals. I think all noble Lords will have that sentiment. I have some knowledge of the handling of horses and dogs, but, more than that, I have to declare an interest in that I am chairman of a company which manufacturers Lignocaine, a drug which was mentioned by the noble Lord, Lord Dowding. It is for that reason that I am speaking. Technically, this product is an anæsthetic, but it is because it is a novel product and its uses have been developed, as the noble Lord said, only in recent years that it occurs to me that it might be prudent to look at this Bill again, and that before the Committee stage the Government might perhaps consider the definition of "anæsthetic". I am not altogether prepared to agree with the noble Lord, Lord Somers, that "vets" are often insensitive. My impression of them is that, on the whole—
LORD SOMERS: I did not say "vets". I said "some farmers".
LORD FERRIER: Then I misunderstood the noble Lord, and I beg his
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pardon. My impression of the veterinary surgeon is that, ordinarily, he is not only highly sensitive but tender hearted; and, especially with the development of anæsthetics as they are available to-day, the saving of suffering to animals is a contribution to the veterinary surgeon's own skills and to that end he is readily willing to adopt any method which can save an animal pain, if only in the pursuit of his profession and in order to maintain the health of the animal.
I understand that in the de-horning of cattle this new application of an anæsthetic is of great value. The only object of my intervention is to support what the noble Lord, Lord Wise, said about taking the veterinary profession along with the Government in a Bill of this nature. Off-hand, and from what I have seen of the available legislation, the only thing I can suggest is that perhaps a definition of "anæsthetic" might be considered as a help towards the end which the noble Lord, Lord Dowding, and all of us, I think, seek, which is to reduce so far as is humanly possible any suffering that may be caused to animals.
6.26 p.m.
VISCOUNT MASSEREENE AND FERRARD: My Lords, may I just point out, from my own personal experience with regard to the docking of lambs' tails, that in wild hill country it is impossible to find all the lambs in a week? There may be thousands of sheep ranging over tens of thousands of acres; to find them all in a week is an impossibility. But we have found that if rubber rings are used up to the age of three weeks, no inconvenience is caused to the lambs. That is as far as we can ascertain. With regard to the question of the noble Lord, Lord Somers, as to whether the de-horning of cattle is cruel, I may say I have often seen this done in Eire, and it is extremely cruel. The blood spurts out, and the bullocks make a great row. I can assure the noble Lord that it is extremely cruel. I cannot quite agree with him that all animals cannot think. I can assure the noble Lord that some animals can think, as I have occasion to regret.
LORD SOMERS: My Lords, I did not deny that. All I said was that possibly they cannot think like human beings.
6.29 p.m.
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (LORD ST. OSWALD): My Lords, it has been made clear that there is a general and characteristic wish to support a measure the object of which is to prevent pain and suffering among animals. We are a nation of animal lovers, and it is consistent with the feeling that we have for animals that we should enlarge the protection already given to them by the law. I have listened, as I am sure all your Lordships have done, with the warmest interest to the exposition of the purposes and contents of the Bill given by the noble Lord, Lord Dowding, and I should like to make it clear that Her Majesty's Government have every sympathy with the objects of this Bill. I do not think there is much I need say, except that the Government favour the Bill.
In reply to the question addressed to me by Lord Wise, I could say that it is true, as he said, that the Schedule to the existing Act of 1954 reduced the ages, but our legal advice is that we have no power to remove animals from the Schedule. Therefore, we cannot reduce the period from twelve months to nil. In those circumstances, it is more desirable to have fresh legislation. We have not, in fact, made any reduction under the 1954 Act. There have been advance in technique which have been referred to by the noble Lord, Lord Dowding, and changes in outlook since 1954, when the present Protection of Animals (Anæsthetics) Act, 1954 was passed, and the proposals in the new Bill are the result of consideration of the working of the present Act by a Committee of the British Veterinary Association. They are supported by the Royal College of Veterinary Surgeons, the R.S.P.C.A., and the Central Council in Scotland of societies for the prevention of cruelty to animals.
Full consultations have been held with the farming and welfare interests, and I feel sure that this new Bill will commend itself to the public in general and to all enlightened members of the farming community. We will naturally consider the closing suggestion of the noble Lord, Lord Dowding, which was in the form of advice and, therefore, outside the terms
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of the Bill itself. I conclude by congratulating the noble Lord once more en bringing forward this Bill, and I hope that the House will, at the end of this debate, give it a Second Reading.
6.32 p.m.
THE EARL OF LISTOWEL: My Lords, I often think that debates in your Lordships' House are most interesting when, like the lark's song, they are unpremeditated, and particularly when they rouse latent feelings in many noble Lords on behalf of animals and farming. This debate has shown that noble Lords on both sides of the House warmly support this small but humane and useful Bill. The only objections that have been raised, relating mainly, I think, to the tails of domestic and farm animals, are such as can easily be met during the Committee stage of the Bill, but I must confess that I have one worry about the future of the Bill.
This is a Private Member's Bill. Judging from the speeches we have heard this afternoon, it will clearly have a smooth passage through this House, but what will happen to it when it reaches another place? There its survival is a doubtful matter. I should like the Government to consider—and perhaps the Minister would think about this—whether the Bill could be adopted as a Government Bill. I understand from what was said by the noble Lord, Lord Dowding, that when this matter was discussed in another place the Minister then said that the Government intended to introduce amending legislation. Alternatively, I should like to know whether the Government could give Government time for the Bill when it reaches another place. We are all equally concerned not only that our work should not be wasted, but that this useful measure should reach the Statute Book. I very much hope that the Minister who has spoken so warmly and encouragingly about the Bill this afternoon will give us whatever further assistance it requires to make quite certain that it becomes law.
6.35 p.m.
LORD DOWDING: My Lords, I think that all the points have been satisfactorily cleared up by this discussion, with the possible exception of the use of the rubber ring on lambs for castration and on lambs' tails. I feel that that

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is a point that could well be left to the Committee stage. The noble Lord, Lord Wise, asked whether the Bill had Government approval and the approval of the veterinary fraternity. The noble Lord, Lord St. Oswald, has spoken for the Government and also for the veterinarians, but I should like to add my own gratitude to the Royal College of Veterinary Surgeons and to the British Veterinary Association for the wholehearted support they have given to this Bill and particularly for their great open-mindedness in the way they have looked at the possibility of anæsthetics being administered by laymen. My Lords, I have much pleasure in commending this Bill to your Lordships for a Second Reading.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

NEW FOREST BILL [H.L.]
6.35 p.m.
LORD MOLSON LORD MOLSON rose to move, That it be an Instruction to the Select Committee on the New Forest Bill that in considering Clauses 3 and 4 they have due regard to the need to preserve as far as is reasonably practicable public rights of access; and that in considering Clause 10 they have due regard to the undesirability of too much ornamental timber in a natural forest. The noble Lord said: My Lords, I beg to move the Instruction standing in my name. I regret that I was not able to be present in your Lordships' House when this Bill was given a Second Reading. My noble friend Lord Crathorne, with his usual courtesy, was kind enough to refer to two matters which, on behalf of the Commons, Open Spaces and Footpaths Preservation Society, I had wished to raise and about which I had written to him. In both cases he went a long way to give us the reassurance that we sought.
The first matter dealt with is the possible interference with public rights of access if and when the A.35 is fenced. At column 1317 of the OFFICIAL REPORT for January 30 [Vol. 254], my noble friend said:
"I should like to assure your Lordships that wicket gates or stiles will be provided at points where defined paths meet this main
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road and that the appropriate bodies will be consulted about the location of these wicket gates or stiles.'
The second point dealt with Clause 10, by which power is given to verderers to permit the Forestry Commission to plant ornamental timber. I raised the point with my noble friend Lord Crathorne that we did not want too large an area to be planted up with ornamental timber in what is by nature a more or less primeval forest. Again, he very kindly gave satisfactory assurance, so far as it went, at column 1318:
"The verderers accept in principle that the powers under Clause 10 should not be overused, but there would be great difficulty in arriving at a proper figure for the purpose of describing a maximum acreage …"
It was because of the extremely friendly and co-operative nature of my noble friend's replies that I drafted the Instruction, so that it should direct the attention of the Select Committee only to particular matters to be looked into in detail.
It is not our intention to oppose the principle of the Bill. All that we ask is that they should preserve, so far as is reasonably practicable, public rights of access, and should have due regard to the undesirability of too much ornamental timber in a natural forest. I hope, therefore, that this Instruction, which is merely a guidance and not mandatory and does not interfere with the general purposes of the Bill, will be acceptable to my noble friend who moved the Bill and also to your Lordships.
Moved, That it be an Instruction to the Select Committee on the New Forest Bill that in considering Clauses 3 and 4 they have due regard to the need to preserve as far as is reasonably practicable public rights of access; and that in considering Clause 10 they have due regard to the undesirability of too much ornamental timber in a natural forest.—(Lord Molson.)
6.40 p.m.
LORD SHACKLETON: My Lords, I am grateful to the noble Lord, Lord Molson, for moving this Instruction, because it enables me to make yet another Second Reading speech and to say some of the things I failed to say on the previous occasion. However, personally, I think the House ought to be extremely

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careful about accepting an Instruction of this kind; and one, furthermore, which is vague and deliberately worded. It is open to the Select Committee to read the speeches either on Second Reading or on this occasion, and it seems to me that an Instruction of this kind gives undue emphasis to one particular aspect of the matter.
There is a further reason why I should object to this particular Instruction, and that is in regard to the words about having
"due regard to the undesirability of too much ornamental timber in a natural forest."
The noble Lord called it a primeval forest, I think, but the noble Earl, Lord Waldegrave, will know that it is neither a natural nor a primeval forest. Indeed, the only possible natural part of it is the ornamental timber. My Lords, the ornamental woods to which reference was made in the Baker Committee's Report, the ancient beechwoods and oakwoods, are, of course, the original part of the forest. But a large amount of open forest was certainly not natural when it started, and the greater part of the forest that carries trees, as opposed to the large open areas, comprises plantations of the Forestry Commission.
I think it would be a little unfortunate (and I do not know what is the attitude of the noble Lord, Lord Crathorne, on this particular point) to send to the Committee an Instruction which is as misleading as this one. On the subject of the ornamental timbers, I would point out that there are powers in the Bill to enable certain enclosures to be made for the preservation or, equally, the replacement of these ornamental areas. In the past, there has been deep suspicion on the part of the commoners that anything the Forestry Commission did would be for some baleful purpose. But I am happy to say that relations between the Forestry Commission and the commoners in the New Forest have steadily improved ever since the 1949 Act was passed. Although there are powers to make certain enclosures—and I think there ought to be a limit on the amount of this—I really cannot see the justification for directing the Committee to consider this particular matter; and especially to consider it as opposed to all the other provisions of the Bill.
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On the subject of public rights of access, I am, of course, in complete sympathy with the noble Lord, Lord Molson, but it seems to me that the noble Lord, Lord Crathorne, gave fairly satisfactory undertakings. What would be far better would be to have no fences at all. I should hope, if we were to pass this Instruction, that the Select Committee, when they consider the whole Bill, would still have regard to the question of whether we want the New Forest—as undoubtedly it would seem to many people to be—ruined by posts and wire along the main roads. We know that the original proposals for what was mistakenly called a "ha-ha" fence, but which was nothing of the kind—it was a bank and a ditch—have been dropped. A ha-ha fence would be far too expensive but entirely acceptable, and would of course be greatly preferable to anything else. But now we know that, after the first abortive attempt to put up a picket post, where one saw something looking rather like a parapet—a most hideous bank which cut off the view of the Forest—that idea has been dropped. The noble Lord dissents, but I understand that in fact this idea of a bank and a ditch has been abandoned. The proposals are partly for posts and rails in some places, but mainly for wire and posts; and, again I am wondering whether the Select Committee should consider whether this is, in fact, desirable. I objected to this on the Second Reading. Since then I have had any number of objections from people who live in the Forest and who wish to preserve it.
The Bill proposes to extend fencing to the A.35. I think the A.31 has already gone, and to this we are committed. But if they are going to put fencing on to the A.35, then there is no alternative but to put it also on to the A.337, which joins Cadnam and Lyndhurst. I am wondering—and I put this point to the noble Lord, Lord Crathorne—whether, when the matter is considered, we ought to consider the possibility of a speed limit. I have the figures of animals slaughtered in the forest, and the number of accidents which have caused loss and have killed human beings; and since the great majority occur at night, it is possible that even a speed limit at night would meet the case. In regard to the accidents to animals which occurred in

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1963, there were 349 (which includes one pig injured), and of those 278 took place at night.
I hope that the noble Lord may consider this point, and I hope that the Select Committee will consider it, if—as I am sure they will—they have due regard to the speech of the noble Lord, Lord Molson, even if we do not pass this particular Instruction. There is already to be one road through the New Forest on which people will be able to drive, if they so desire, at 80 miles an hour. The length of the A.31 within the New Forest is about eleven miles, maybe twelve. The noble Lord, Lord Congleton, will know this. Whatever happens, I should have thought that some attention (and this is not, perhaps, a matter for legislation) ought to be paid to the possibility of a speed limit. We are here seeking to preserve one of the great beauty areas of this country, and I think the public, and indeed the inhabitants of the New Forest, many of whom favour this, ought to be prepared to pay some price with a diminution in speed. So instead of getting along that 11-mile stretch in 15 minutes, let them take 22 minutes or something of that order.
My Lords, these are all very complex questions. They are questions which the Select Committee will surely be examining when the Petitions come to them. While I have sympathy with the first part of the proposal of the noble Lord, Lord Molson, I have the greatest doubt as to whether, on a Hybrid Bill, we ought to have an Instruction of this kind. I am wondering whether there is some other noble Lord who, from a constitutional point of view, might have views on this point. With a Private Bill it may well be necessary, but here there is the Second Reading and there will be a full Committee stage when we can make our views known. In these circumstances I personally hope that the noble Lord, having put his case very well, except in regard to his references to the ornamental woods, will not press the proposed Instruction.
6.49 p.m.
EARL WALDEGRAVE: My Lords, it would be contrary to the Rules of the House if I were to take any part in this debate on the merits of the arguments
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that have been used, and I do not propose to do that at all, but I am concerned, as a Member of your Lordships' House, about the procedural point here, and perhaps other noble Lords may be worried also. I see that the Lord Chairman of Committees is on the Woolsack, and I do not know whether he can help us in this matter.
The noble Lord, Lord Shackleton, said that an Instruction of this sort would perhaps be out of order, and your Lordships should not agree to this Instruction because the Select Committee upstairs are perfectly at liberty to take these points themselves. Well, my Lords, are they? This is a point on which I think
your Lordships might be enlightened by somebody who knows about the question. I am under the impression that the Committee upstairs are entitled to deal only with the Petitions that are being argued before them, and that they are not entitled to range widely over other matters that are not specifically brought before them. In that case, if a matter has not been raised on Second Reading, and if there is not to be a Committee of the Whole House, I do not see, unless an Instruction is given to the Committee—not an Instruction to do any one thing but an Instruction to pay regard to a clause—how the Committee upstairs can look at that clause. But perhaps I am wrong, and perhaps somebody can enlighten us on that point.
LORD MOLSON: My Lords, I should be greatly indebted if the noble Lord the Lord Chairman of Committees could deal with that point. My reason for putting down this Instruction was exactly that to which my noble friend has referred. I understood that it would not be constitutionally proper for the Select Committee to pay attention to matters which had not been brought before it either in the form of a Petition by parties outside this House or in the form of an Instruction passed by this House.
LORD MERTHYR: My Lords, I have listened with interest to what has been said upon the points raised, and perhaps it would be to the advantage of your Lordships if I informed the House that there are two Petitions against this Bill, which of course means that it is an opposed Bill and that it will, unless the

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Petitions are withdrawn, be heard by a Select Committee upstairs in just the same way as any Private Bill. This Bill, of course, is a Hybrid Bill. Indeed, because it is a Private Member's Bill and a Hybrid Bill it is in itself a somewhat rare species. I do not recollect any other Private Member's Hybrid Bill; but there is nothing against it on that score.
So far as the Motion before your Lordships now is concerned, I can only say, as Chairman of Committees, that I can see no objection to this Motion inasmuch as it does not tie the hands of the Committee in any way. It merely draws the attention of the Committee to two clauses. It does not tell the Committee what to do or what not to do; and, therefore, it seems to me to be harmless at least from the strictly neutral point of view.
I should perhaps add that the Motion draws the attention of the Committee to two clauses, which I think are Clauses 3 and 4, and tell your Lordships that in any event I think the attention of the Committee will be drawn to those same two clauses, unless the Petition of the New Forest Society for the Prevention of Straying Animals is withdrawn, because I see that in the Petition they refer to and recite, among other clauses, the provisions of Clauses 3 and 4. Therefore, unless there is some alteration, I apprehend that the Committee will in any event have to look at those clauses. I think that those two things are all I can tell your Lordships at the moment: first, that I can see no objection to this Motion, but, second, that it may be superfluous because the Committee will have to look at the clauses in any event.
EARL WALDEGRAVE: My Lords, Before the noble Lord sits down, I would point out that he has mentioned Clauses 3 and 4, but what about Clause 10? Is the point that, if there were no Petition on a particular clause, the Committee would not be entitled to look at that clause unless they were instructed to do so by this House?
LORD MERTHYR: My Lords, I am much obliged to the noble Earl. I did not notice the mention of Clause 10 in the Motion. I do not at the moment see any reference in the Petitions to Clause 10, and I therefore think that the noble Earl is quite right in making that last
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point: that they might not have their attention drawn to Clause 10 by the Petitions—a hurried look at the Petitions rather indicates that—and that the Motion before the House does that very thing.
LORD DOWDING: My Lords, may I ask the Chairman of Committees a question? He rather implied that the Committee upstairs would consider only Petitions that were brought before it; but surely the Committee will carefully read the speeches that were made on Second Reading and the various points that were then brought out in criticism of the Bill. Is that not so?
LORD MERTHYR: My Lords, if I may, with the permission of the House, speak for a second time in answer to that question, the procedure in the Committee upstairs will follow precisely, I think, the procedure of a Private Bill Committee. The custom there is that the Committee do not pay attention to all the clauses in a Bill: they pay attention upstairs only to the clauses which are opposed. Whether they read your Lordships' speeches is a question which I would rather not answer, but I rather suspect that most Committees probably do not read all the Second Reading speeches or the speeches on a Motion such as this. It is true, as the noble Earl, Lord Waldegrave, has suggested, that the probability is that the Committee upstairs would not pay attention to clauses which were not opposed or to which their attention had not been specially drawn.
Perhaps I should add just this. The various Government Departments which might
be concerned with the Bill may make a report on the Bill, and those reports are available to the Committee. As your Lordships will no doubt know, Government Departments cannot petition against a Bill, but they can report on it, and usually do—that is, those which are interested—and the Committee have the advantage of having available to them the reports of the appropriate Departments.
LORD CRATHORNE: My Lords, I should like to say how grateful I am for the observations which have been made by the noble Lord the Lord Chairman of Committees, and to add that, so far as I am concerned this evening, speaking on

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behalf of the Promoters of the Bill (because it is a Private Member's Bill and a Hybrid Bill), having given the undertaking on Second Reading on behalf of the Promoters that these particular points would be looked into, then I naturally do not dissent from the Instruction now moved by my noble friend Lord Molson, for the reason that the Chairman of Committees gave. He has spoken with authority, whereas I can speak only—shall I say?—without authority, but it appeared to me, as explained to me, that there was a doubt whether these points could be effectively considered by the Select Committee unless an Instruction of this nature were moved. As I, on behalf of the Promoters, had said they would be considered by all concerned, naturally I do not dissent from the Instruction moved by my noble friend Lord Molson.
LORD CONGLETON: My Lords, had hoped not to rise to my feet, but after what the noble Lord, Lord Shackleton, has said I think there is a point on this Instruction which should be made clear. The timbers of the New Forest that are open and are the old timbers are known as the ancient and ornamental woods of the Forest. I think it rather confusing to look at the comment about too much ornamental timber which the noble Lord, Lord Molson, made in reference to Clause 10. I think he literally means foreign ornamental timber which is being imported into the Forest. In this case there is confusion in the terms used, and I should be happier if that were made clear.
May I just say one thing to the noble Lord, Lord Shackleton? So far as the ha-ha fence scheme is concerned, I may say that the present one has been dropped, but I understand from the Council for the Preservation of Rural England that they have approached the Ministry of Transport and that the Ministry of Transport may have agreed that the present fence should be a temporary one while a new scheme of ha-ha fence or bank is developed. In his reply the noble Lord may be able to expound that, but I think we should have this question of ornamental timbers clear.
LORD MERTHYR: My Lords, I wonder whether, with the leave of the House, and with apologies for speaking
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three times, I may add one more comment. The point was mentioned, but I have not answered it. May I point out to the House that, this being a Hybrid Bill, the position is that after the Committee upstairs have dealt with it and allowed it to proceed—if they do so—the Bill is dealt with in all respects as a Public Bill. This means that it will be referred to a Committee of the whole House.
LORD AIREDALE: My Lords, does it not follow, from what the noble Lord, the Chairman of Committees, has said, that any noble Lords who have representations to make about Clause 10 will have the opportunity to make those representations in the form of Amendments to Clause 10 to be taken at the Committee stage on the Floor of the House; so that that matter may be dealt with then, notwithstanding that this Motion may not be passed this evening?
LORD MOLSON: My Lords, may I, with your permission, say two things? I am grateful to my noble friend. I had understood—and I think the Commons Preservation Society had understood—ornamental timber to mean exotic trees which, however beautiful and attractive in gardens and parks, would not be suitable in excessive quantities in the New Forest. But, naturally, if my Instruction is passed by your Lordships that point would be brought out fully in the Select Committee. In reply to the noble Lord, I would say that it is, as my noble friend Lord Crathorne said, extremely difficult to define accurately how much should be enclosed for this ornamental timber. It is essentially the kind of thing that can best be discussed by a Select Committee upstairs; it is not the kind of thing we could usefully deal with on the Floor of the House. I hope that noble Lords will agree to this Instruction I have moved.
LORD SHACKLETON: My Lords, might I, with your permission, speak again? Dealing with the noble Lord's last point, I had understood that the Promoters of the Bill had already agreed with the Commoners' organisation to a maximum figure for new ornamental woods; and I had understood it was, in fact, 200 acres. I should have thought that this might have been inserted in the Bill by the ordinary process when the

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Bill comes back to this House. The noble Lord will find there will be trouble if he does not agree; because I have had some very strong views on this point. It is a little unfortunate that we are using the wrong word in this Instruction. The word "ornamental", as the noble Lords, Lord Congleton and Lord Waldegrave, know, has a specific meaning in the context of the New Forest. I do not want to press too hard; but, the Petitions, and the one in relation to straying animals, goes right to the root of the Bill. It seems to me, as the
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noble Lord, the Lord Chairman of Committees, said, that this was bound to follow; and these particular clauses were the ones that would be specifically examined in full. I do not want to take up the time of the House, and if your Lordships desire to pass this Instruction I should not wish to stop you. But personally I do not think it is a very useful thing to do.
On Question, Motion agreed to.
House adjourned at four minutes past seven o'clock.