Lords Sitting of 2 July 1964

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

LORD CHANCELLOR'S VISIT TO MALAWI
3.5 p.m.
THE LORD CHANCELLOR (LORD DILHORNE): My Lords, with the leave of the House, I should like to make a personal statement. In my capacity as Lord Chancellor, I have been invited to lead the United Kingdom Government delegation to the Malawi independence celebrations in Blantyre and Zomba at the beginning of next week. I hope your Lordships will consider that it is right that I should have accepted this invitation and taken the opportunity of representing the Government at the celebrations. This visit will involve my leaving London next Saturday morning, July 4, and, all being well, I hope to be back on the morning of the following Thursday, July 9. This means, therefore, that I shall miss only three sitting days of the House. Accordingly, I ask your Lordships to agree to my being absent from my place on the Woolsack during that time.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, we thank the noble and learned Lord the Lord Chancellor for giving us this notice to the House, and we quite agree.

SCHOOLS' COMBINED CADET FORCES
LORD KENNET: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether financial assistance from the Ministry of Defence to Combined Cadet Forces in schools is dependent on membership of the Forces being compulsory.]
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (LORD ST. OSWALD): My Lords, the grants paid to contingents of the Combined Cadet Forces are not dependent on membership being compulsory. Combined Cadet Forces regulations state that the C.C.F. is a voluntary and part-time force.

COUNTY COURT SENTENCES AND SOCIAL INQUIRIES
3.7 p.m.
LORD HAMILTON OF DALZELL: 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 substantial rise in recent years in the number of individuals committed to prison under county court orders, they will consider the appointment of social workers to provide county court judges with social inquiry reports, to undertake means inquiries and to offer such other advice and information as the courts may require.]
THE LORD CHANCELLOR: My Lords, while the number of committal orders made in the county courts in 1963 increased, the number of those actually committed to prison fell slightly. It is, I fear, the case that a considerable number of debtors do not comply with a court order until a committal order is made. Before making a committal order, the county court judge must be satisfied that the debtor has, or has had since the date of the judgment, the means to pay. I do not think that the reports of social workers or their advice would assist in the discharge of this judicial duty. It is only after hearing evidence in court, usually from the creditor or his agents and from the debtor, that the judge decides. I know and welcome the fact that in some areas probation officers, despite the heavy burden of their ordinary work, voluntarily help persons and families in financial difficulties with advice and guidance. While I recognise the importance of this work, I do not think it would be practicable to impose a duty to do this on all probation officers having regard to their other obligations.
LORD HAMILTON OF DALZELL: My Lords, I thank the noble and learned Lord the Lord Chancellor, for his reply. Would he not agree that in fact, although in the last year the number of persons committed to prison may have fallen slightly, in the past ten years the number has increased tenfold and there is here a serious social problem? Would he not agree that it could well be an advantage, both to the debtors and to the courts, if the same sort of facilities as are available in magistrates' courts, in cases of maintenance orders and things of that sort, were available in county courts? Further, would it not be possible to employ retired probation officers or such people for this work, without in any way putting a heavier load on the existing service?
THE LORD CHANCELLOR: My Lords, with regard to the first question, it is true that the number of persons committed to prison has increased over the last ten years, but the number of judgment summons has also increased; in fact, the percentage has not varied substantially. In regard to the second question, I do not think you can compare the functions of the magistrates in relation to maintenance orders and things of that sort, with the functions of the judge with regard to the collection of debts. As to the third question, I do not think myself, as the judge depends upon evidence given in public before he makes his order, that it would be possible to institute a system such as the noble Lord has suggested. What is really required—and voluntary effort can do a great deal towards it—is assistance for the families, and guidance and advice when these families have got into financial difficulties.
THE LORD BISHOP OF SOUTHWARK: My Lords, as has been indicated, a reason for the large increase in the number of those in prison at the moment is the increase in the number of those sentenced for debt. Could the noble and learned Lord the Lord Chancellor indicate, first, whether Her Majesty's Government have any intention of instituting an inquiry as to the reason for this serious increase in the number of those imprisoned for debt; and, secondly, whether any study into the ethics and expediency of imprisonment for debt could be implemented?
THE LORD CHANCELLOR: My Lords, I do not agree with the right reverend Prelate in his preliminary statement. They are not, in fact, sentenced for debt. If they are committed to prison they are committed for contempt, for disobedience of an order made by the court after the court has been satisfied that the debtor has, or has had, the means to comply with the court order. With regard to the second question put by the right reverend Prelate, and the third, the answer is, No. I think it is necessary to keep the sanction of a committal order to ensure payment of debts by recalcitrant debtors. As I pointed out in my original Answer, I fear it is the case that a substantial number of debtors at the present time do not pay until a committal order has been made.
THE LORD BISHOP OF SOUTHWARK: My Lords, with respect, I do not feel that my question has been answered. It was this: have Her Majesty's Government any intention of instituting an inquiry as to the reason for this serious increase?
THE LORD CHANCELLOR: My Lords, I would reply, first of all, that I do not think this question arises out of the original Question at all. But the answer to the question is, I repeat, No. The reason for the increase is quite obvious—namely, that people against whom orders have been made have not chosen to comply with them, although they have the means to do so.

OVERCROWDING IN PRISONS
3.12 p.m.
LORD GRENFELL: 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 what measures they are taking to reduce the number of prisoners who are having to sleep three in a cell: and what measure of success they have achieved.]
THE MINISTER OF STATE, HOME OFFICE (LORD DERWENT): My Lords, on June 2 there were 5,925 men sleeping three in a cell, which is a reduction of 2,700 from the peak figure of 8,625

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in March, 1963. Since February, 1959, when the current building programme was announced in a White Paper (Cmnd. 645), twelve new prisons and borstals and one remand centre for males have been provided and staffed. Two new establishments for women and girls, releasing accommodation for males, have also been provided. Four further secure prisons for men, one secure borstal for boys, and eight remand centres have been put in hand. Further projects are under consideration.
LORD GRENFELL: My Lords, while thanking my noble friend for his Answer, may I ask whether he can say when the building programme to which he has referred will be completed? Can he also say whether the programme, when completed, will eliminate the need for three to a cell?
LORD DERWENT: The building programme we expect to be completed within four years; and, provided that the prison and borstal population does not rise between now and then, we expect that that building programme will eliminate the need for three in a cell.
THE EARL OF LONGFORD: My Lords, while expressing the pleasure of all concerned with penal reform at some reduction in the number who are sleeping three in a cell, may I ask the Minister whether he is aware that when Mr. Butler became Home Secretary there were rather more than 2,000 sleeping three in a cell, and there are still nearly 6,000.
LORD DERWENT: The prison population has gone up since then.
THE EARL OF IDDESLEIGH: My Lords, can the noble Lord give us any news about the closure of Dartmoor as a prison?
LORD DERWENT: I am afraid I cannot. That is a different question, and I cannot give the noble Lord an answer at the moment.

DEVELOPMENT OF NAVIGABLE RIVERS
3.14 p.m.
LORD BOOTHBY: 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 large part waterways now play in the transport system of the West European Continent, and the steady increase in the volume of heavy traffic on our roads, they will set up a comprehensive inquiry into the possibilities of extending the navigable rivers of this country, and of restoring and developing the canals by which they can be linked.]
THE PARLIAMENTARY SECRETARY, MINISTRY OF TRANSPORT (LORD CHESHAM): My Lords, these possibilities are already being taken into account by the British Waterways Board in the course of the comprehensive review on which they are now engaged following their interim report on The Future of the Waterways which they submitted to my right honourable friend last December.
LORD BOOTHBY: My Lords, arising out of that Answer, will my noble friend bear in mind the fact that over 30 per cent. of heavy goods traffic in West Germany is now carried by water, that the geographical and geological conditions in this country are now very well suited to modern canal construction, and that, unless we have a comprehensive overall plan for the transport system of this country by road, air, rail and water, we shall never solve the transport problem?
LORD CHESHAM: My Lords, I was, of course, aware of the situation on the Continent, and indeed in some ways feel envious, because the noble Lord certainly must have overlooked the very considerable difference caused by geographical and historical factors which enable that kind of thing to happen. It is very different in this country, and always has been. What the future may be I do not know, but in the course of the review I mentioned it is precisely considerations of the kind which

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the noble Lord has in mind that the Board are thinking about.
LORD WAKEFIELD OF KENDAL: My Lords, could the Minister say whether in the comprehensive review that is now taking place consideration is also being given to the use of these waterways for storage and distribution of water as well as as a means of communication?
LORD CHESHAM: My noble friend, I am sure, knows that the Waterways Board have the statutory duty on them to try to work out the best possible use, in whatever way it may be, of the waterways.
LORD MERRIVALE: My Lords, will my noble friend bear in mind, when all these matters are being considered, the fact that the canalisation of the Moselle River has reduced the cost of transport by a percentage varying between 40 and 55 per cent., due to competition between waterways transport and railway transport?
LORD CHESHAM: I am quite sure that if the Board feel that bearing that in mind is useful, they will do so.

PRIME MINISTER'S CRITICISM OF SOCIALISTS
3.18 p.m.
EARL ALEXANDER OF HILLSBOROUGH: My Lords, this is the time when I usually raise questions of Business. I want to do something which I very much hesitate to do, and did not want to do, and that is to raise the question of how we, as a Socialist Opposition, are to be treated in future in this House and what exactly we are to make of the speech of the Prime Minister last night. I know he has felt very vexed about certain statements made in connection with quite another matter, but when he says,
"I have always known that the Socialists were too dangerous to allow them to form a Government",
then makes reference to their present position as an Opposition, and then says that there is only one thing to be done: that they must be voted out of public life, as a result of which they would not be able to do any more harm, I
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think those words require a little explanation in Parliament.
We as an Opposition had great friendship with the Prime Minister in this House. I think we worked with him very well. We appreciated his qualities as Foreign Secretary, as Secretary of State at the Commonwealth Relations Office, and as Leader of this House; but we are Socialists and we have served in Government after Government. We served for more than nine years in a Labour Government. We were the balancing factor which, in May, 1940, made Sir Winston Churchill Prime Minister. And we left to the present Government a state of organised defence forces without precedent in the history of our country in peace time.
I resent tremendously the implication of the Prime Minister's words, and I should like to know still further whether the real aim behind it is to lead to single-Party Government. We must know where the Prime Minister stands in relation to those with whom he has worked, and worked successfully, who are Socialists, in this House and elsewhere. This kind of statement cannot be allowed to go unchallenged. If, therefore, the reply is that all these statements are justified and form the opinion of the Conservative Government, then, of course, we shall have to look to see how we organise our position.
THE MINISTER WITHOUT PORTFOLIO (LORD CARRINGTON): My Lords, my right honourable friend the Prime Minister was seeking to make, and I thought made very clearly, the point that if the policy which has been followed over the frigates for Spain is indicative of the sort of policy that a Labour Government would follow, it would be too dangerous for us as a country to have a Labour Government. My Lords, I do not think that the noble Earl the Leader of the Opposition need be too frightened of his position. I would remind him that even if the entire Labour Party opposite me disappeared from this House, which on personal grounds I should greatly regret, we should still have the Liberal Party as an Opposition.
EARL ALEXANDER OF HILLSBOROUGH: My Lords, let me say at once, with regard to the reference of the

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Leader of the House to the Spanish armaments interest, that I wonder what would have been said if at any time there had been a Labour Government in power which had made part of its policy the supply of armaments whenever requested by a Communist Power. What would have been said? There would have been just as much criticism as may have been made in this case with regard to the supply of armaments to a Fascist State. Surely, therefore, the basis of comparison has been quite unfair in this matter.
The position of the Opposition in the future will have to be very largely affected by what the Prime Minister says to the country from time to time on matters and issues like this. I want that to be clearly understood. At any rate, those of us who have served not only in Labour Governments but right through the last Great War in the defence of our country resent, and resent bitterly, the implication that the Socialists should be voted, not out of the next Election but out of public life. That is what he said. We have as much right to be in public life in this democracy as any other section of it.
LORD REA: My Lords, may I point out that the Party for whom I speak have been in Opposition far longer than either of the other Parties. Therefore, we are far more experienced, and in our experience we find that when General Elections come along things of this sort are apt to be said. Would not the noble Lord the Leader of the House also agree that both the larger Parties, in their heart of hearts, would welcome a one-Party system?
LORD CARRINGTON: My Lords, there is something in what the noble Lord said with which I agree, but I do not think I would agree with his last observation. The fact remains that, owing to some of the things that have been said by members of the Opposition, a very large order indeed has been lost, with an even greater potential. It seems to me that my right honourable friend the Prime Minister was perfectly right, and perfectly entitled to point out that if the Opposition had been more responsible in what they said, this would not have happened.
EARL ALEXANDER OF HILLSBOROUGH: My Lords, the Prime Minister holds the most responsible posi-
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tion in the country, and, therefore he, at any rate, should be the most responsible in his speeches. I think I have clearly indicated to the House that he was quite irresponsible in his references to Socialism in general in this country to-day, and about what his intentions are. I might say to the noble Lord, Lord Rea, that the Liberal Party certainly have a long experience—I give them that credit—but perhaps this is the worst type of attack on a political Party that we have had since the days when Sir Winston Churchill made his famous speech as a Liberal. He said then that the Tory Party was the Party of vested interests, with corruption at home and aggression abroad to cover it up; with dear food for the millions and cheap labour for the millionaires, and all that kind of thing. We know all about that. But in this case this is trying to vote Socialism out of public life. We have as much right to be in this democracy as any other.
LORD CARRINGTON: My Lords, I really do not think I ought to let the noble Earl, much as we all respect him, get away with that sort of remark. It seems to me that the Prime Minister was saying that in his view, and I think in the view of all my noble friends behind me, the policy which has been followed, the speeches which have been made by the Opposition on this matter of trade with Spain and frigates for Spain, have been totally irresponsible. And if this is the sort of policy that the Labour Government are going to follow, then the sooner we return a Conservative Government the better.
EARL ALEXANDER OF HILLSBOROUGH: My Lords, I want to point out that what the Prime Minister said in this particular speech was:
"I have always known that the Socialists were too dangerous to allow them to form a Government."
LORD BOOTHBY: My Lords, before the noble Lord replies, may I just ask the noble Earl who leads the Opposition not to be too mealy-mouthed in this matter. For goodness' sake! let us have some good healthy, hearty controversy between the Parties. The noble Earl has greatly praised Sir Winston Churchill. I would remind him that Sir Winston Churchill described the Labour

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Party as "a Gestapo", and that was worse than anything the present Prime Minister has said.
LORD CONESFORD: My Lords, are not some people getting very thinskinned? Is it really so much worse to say that the Socialist Party should not be given office than it was to say that the Tories were "lower than vermin"?

PERPETUITIES AND ACCUMULATIONS BILL [H.L.]
Returned from the Commons, agreed to, with Amendments: the said Amendments to be printed.

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

HOUSING BILL
3.27 p.m.
Order of the Day for the Third Reading read.
EARL ST. ALDWYN: My Lords, I have it in command from Her Majesty the Queen to signify to the House that Her Majesty, having been informed of the purport of the Housing Bill, has consented to place Her Majesty's interest, so far as it is concerned on behalf of the Crown, at the disposal of Parliament for the purposes of the Bill.
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (LORD HASTINGS): My Lords, in moving the Third Reading of this Housing Bill, I do not think I need add very much to what has already been said at some considerable length on a number of occasions. I believe that this is a useful Bill and an important Bill. It came from the other place, where it was given close scrutiny
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and was undoubtedly improved upon, and when it reached your Lordships' House we in our turn considered it carefully and have made some substantial improvements. I am convinced that the objectives which the Government have set out in the Bill will, in fact, be achieved and I would recapitulate only very briefly what these objectives are.
First of all, in Part I we are setting up a new Housing Corporation in order to assist and encourage the creation of new housing societies which are to be developed throughout Great Britain for the purpose of building houses for cost-rent and houses on a co-ownership basis, one-third of the money to be raised from the Housing Corporation and two-thirds from the building societies. I think we all agree that this, if achieved, will fill a useful gap, and I am convinced that this objective will in due course be achieved. In Part II of the Bill we have set out procedures for the compulsory improvement of dwellings to provide standard amenities, by way of both area improvements and improvements applied for in respect of dwellings outside designated areas as well. Part II of the Bill should perform the most valuable task of accelerating an improvement of the 2 million or more houses which should now be improved and which are still structurally sound. This ranks high in the priorities of the Government's housing programme.
In Part III of the Bill, which deals with assistance for the improvement of dwellings, we have made more liberal grants available for improvement to the full range of standard amenities. In some respects we have made grants available for amenities to the reduced standard where one cannot reach the full standard. We have also raised the limit of discretionary grant in respect of improvements in Scotland, and for three-storey conversions in England and Wales. An annual review of the situation, in regard to the cost of rural dwellings and their improvements in particular, has been promised by my right honourable friend. It was in connection with this part of the Bill that criticisms were made of its extremely complicated phraseology and cross-references. It was, of course, dealing very largely with alterations and amendments to the existing scheme of grant, and cross-references to earlier

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legislation were therefore hardly avoidable. But certainly there is a lot to be said for bringing all the relevant legislation into one place, and this is something which the Government have in mind and they feel can usefully be done as soon as a suitable opportunity presents itself.
Finally, on Part IV of the Bill, which deals with houses in multi-occupation and which, of course, has been the most controversial aspect of this Bill, I think there is only the one matter outstanding to which I need refer, and that is that on Report stage the noble Lord, Lord Silkin, asked me to discuss yet once again with my right honourable friend the proposed new clause he had put forward which was designed to give a limited measure of security of tenure to tenants in a multi-occupied house during the execution of works required by the local authority—the Amendment which we might briefly refer to as "the Sheffield Amendment". I have, of course, had this discussion, and my right honourable friend and I are still of the same mind as I indicated at Report stage. Therefore, I do not think I should recapitulate now the rather long argument against the Amendment which I then made.
We feel that Part IV is a very important part of the Bill, and, after the very long arguments we have had on an Amendment which has now become known as "the Rachman Amendment", the Government are convinced that all the objectives we set out to achieve by way of the improvement of bad conditions in multi-occupied houses and the prevention of exploitation of tenants in those houses will in fact be achieved, and that we have dealt a death blow at the would-be Rachmans of the future. My Lords, I do not think I need say any more. I believe we have done our job well in this House. I was slightly out of order on Report stage in thanking noble Lords opposite and my noble friend Lord Jellicoe, who have done so much to help, but I shall be in order in doing so on this occasion. I beg to move.
Moved, That the Bill be now read 3a.—(Lord Hastings.)
3.33 p.m.
LORD SILKIN: My Lords, we are very much obliged to the noble Lord for the statement he has made, and I personally
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have no particular quarrel with what he has said. He has described this measure as useful and important. I would agree that it is useful; I would not agree that it is important. I have always had my doubts as to how far it is going to help in the solution of our housing problem. After all, as I pointed out on Second Reading, this is the twenty-seventh housing measure which the Conservative Government have introduced since they first came into office in 1951. I would say that it falls into line with the other twenty-six. They have all played their part, but to describe this as important is, I think, a considerable exaggeration. But we shall see how far it goes. I very much doubt whether it will go very far.
The other thing I want to say is that, whatever may be said about driving the Opposition out of public life, the fact remains that the efforts of the Opposition in this House on this Bill have very substantially improved it. We have been able to secure greater protection for persons pending the confirmation of compulsory purchase orders; we have been able to secure greater protection to other people during the course of proceedings by local authorities; and, generally, I think the Bill is a far better Bill than when it first came to this House. I therefore feel that the Opposition here have certainly justified their existence.
I do not want to go through all the parts of the Bill to which the noble Lord referred, but I want to say that I think the Government have made a profound mistake in dismissing the appeal we made to them to deal in this Bill with Rachmanism. They had the opportunity. It would have been perfectly possible for them to introduce, or to accept, a simple clause by which a control order could be made, and that would have had immediate effect in providing for those people who are quite unable to look after themselves—people who are intimidated and frightened out of their wits, and whose lives are being made a hell because their landlords want to get rid of them. The Government have found every possible and impossible excuse for not acceding to this. I am very sorry indeed, because this Bill would have been far more useful if it had dealt with what I regard as one of the major evils in housing—successful attempts by bad landlords to get rid of

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their tenants by this means. However, I repeat that this is a useful measure—I will not go further than that—and I hope it may have good effect.
I should like to pay my tribute to the noble Lord, Lord Hastings, for the very capable and reasonable way in which he has dealt with this Bill as a whole, and also to the noble Earl, Lord Jellicoe, who played, of course, a secondary part in this matter. Apart from the differences we have had, I am glad to say we have discussed this matter in a civilised way. The noble Lord has tried to answer the points that have been made on this side of the House and on others, and I think this Bill has been discussed in a way in which measures of this kind should be discussed. We have had our differences, and I am not satisfied in all cases with the result, but I have conceded many times, as have my noble friends, where we thought that the noble Lord had made a case, and we have withdrawn our Amendments. I hope that when the tables are turned and the noble Lord finds himself having to move Amendments to Bills, they will be dealt with in the same spirit.
LORD WAKEFIELD OF KENDAL: My Lords, I did not interrupt the noble Lord, Lord Silkin, but he said something which I do not think ought to be allowed to pass without correction. He said it was the intention of the Conservatives to drive the Socialists out of public life. There has been no such suggestion at all, as I understand the position, but to drive them "out of public office". There is a great deal of difference between being in office and being in public life. Being in public life and taking a proper part in opposition is a very different thing from being in office and therefore having the responsibility of office. I thought it right that that point, made by the noble Lord opposite, should not go uncorrected in this House.
LORD HAWKE: My Lords, if it had been possible to put down an Amendment which dealt effectively with Rachmanism, I should certainly have voted for it. The Opposition did put down an Amendment, and I looked at it, but in my humble opinion it was unworkable, so I did not vote for it. The noble Lord, Lord Silkin, suggested lines on which such an Amendment might have been made, but, with all due respect, I did not think that his sug-
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gestion was in the least workable, because you are always up against the difficulty of malicious allegations. It is quite impossible to prove terrorism and intimidation, and that is the great difficulty in dealing with this sort of thing. Many of us would have voted for any practical solution, but I do not think there is one.
LORD MORRISON OF LAMBETH: My Lords, your Lordships may remember that recently, on the Report stage, I made some reference to the emptiness of the Bishops' Bench. I referred to Bishops generally, and in particular to the right reverend Prelate the Lord Bishop of London and to my friend the right reverend Prelate the Lord Bishop of Southwark, whom we are very glad to see here this afternoon. I referred to the fact that the Lord Bishop of London and the Lord Bishop of Southwark had led a procession from St. Paul's to Southwark Cathedral on some housing problems, particularly homelessness, and that I was sorry they were not here when we were dealing with Rachmanism so that they could have said a word about it. Indeed, there were no Bishops present; and I took the opportunity for, I think, the second time, of rather reproving the Bishops' Benches for not having somebody in attendance.
The right reverend Prelate the Lord Bishop of Southwark has since written me a nice letter stating the inevitable ecclesiastical engagements that he had that day and which he was unable to cancel; and I accept that. I ought to have remembered that he has recently been the victim of a severe motor accident; but, having seen him the week before, I thought he was "fair game" this week. But he has sent me a letter which explains his absence and I accept it. I had dictated and signed—and it had gone off before I saw what happened—a letter in which I had got as near a chap of my temperament can get to making an apology for what I said.
I sat through the greater part of yesterday's debate and there were four Bishops here for the debate on world population. When, having listened to most of the debate, I had gone, because I had an engagement—not an ecclesiastical one, but one which I had to keep—the right reverend Prelate said [col. 694]
"I endorse and support everything that has just been said by my noble friend Lord Taylor.

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As I look across the House, my one regret is that my other noble friend, Lord Morrison of Lambeth, is not present to hear such an important speech. I should have thought he would regard it as his duty to be present. Having said that, I endorse all that has been said. I hope the noble Lord, Lord Morrison of Lambeth, will read, mark and inwardly digest what has been said in the debate."
I heard most of the debate, and I am now in the process of reading the rest. It was a perfectly fair retort on the part of the right reverend Prelate which I take as good sport and I do not in any way resent. The interchange that we had—I should not say "interchange" because I was not here at the end; I left at a late point, but he took advantage of my absence by coming in late when I had gone—I do not resent. I hope that this interchange will leave the right reverend Prelate and me the best of friends, as we have always been.
THE LORD BISHOP OF SOUTHWARK: I am grateful for what the noble Lord has said. The score was "deuce" and it has now gone to "vanout" to him. I will bring it back to "deuce" by saying that I realise I ought not to have criticised the noble Lord for his absence yesterday in view of the nature of the debate, it being on birth control, and I realise there was no need for him to be present.
LORD HASTINGS: My Lords, after this little diversion from the strict subject before us, the Third Reading of the Housing Bill, I should just like to say—
LORD MORRISON OF LAMBETH: My Lords, I cannot let the noble Lord say that without some observation. This trouble originated on the Housing Bill; therefore, it is perfectly relative to the Third Reading.
LORD HASTINGS: My Lords, I apologise to the noble Lord. He had an entry into the discussion.
I thank the noble Lord, Lord Silkin, for some, but not all, of his remarks. I still maintain that this is an important Bill and will achieve what we say it sets out to achieve. The fact that it happens to be the 27th Bill in a long line of legislation is quite irrelevant to its importance. I would say only one thing: upon almost every occasion in Committee and in Report, and now again, I have said, again and again, that
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this Bill does deal with Rachmanism and noble Lords opposite have said it does not. I must have the last word on this. It does deal with Rachmanism in all respects except that of where the landlord uses intimidation which is not connected with the living conditions of the house. I explained it very logically to the utter satisfaction of all my noble friends behind me. If noble Lords opposite will allow themselves to be really objective in this matter it will be logical even to them; and I will prove to their satisfaction that this rare case, in fact, virtually never arises end never has arisen in respect of multi-occupied houses. Nevertheless, when intimidation does occur without relevance to the living conditions then a compulsory purchase order can be used. I hope that is the last word on this matter. We have dealt with Rachmanism in Part IV of the Bill.
On Question, Bill read 32, with the Amendments, and passed, and returned to the Commons.

RESALE PRICES BILL
3.46 p.m.
Report of Amendments received (according to Order).
Clause 1 [Avoidance of conditions for maintaining resale prices]:
LORD SHACKLETON LORD SHACKLETON moved, after subsection (2), to insert:
"()If a supplier whose normal practice has been to supply goods to any dealer for sale seeks by entering into an agency agreement with that dealer to sell on consignment and thus to retain ownership of the goods until the customer has taken delivery, and if it appears to the Registrar that the object of the agreement is to circumvent the provisions of this Section, then the Registrar may refer the agreement to the Restrictive Practices Court; and the Court may, if it thinks fit and after hearing such evidence and argument as appear to it appropriate, declare that agreement void, and thereupon this section shall apply accordingly."
The noble Lord said: My Lords, in moving Amendment No. 1, I must apologise to your Lordships for bringing up a subject which we debated very fully on the Committee stage. The purpose of this Amendment is to stop a possible loophole by which someone wishing to maintain resale price maintenance would be enabled to do so by supplying goods on consignment and retaining ownership

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until the customer had taken delivery. We had a very interesting debate on the Committee stage; the noble and learned Lord the Lord Chancellor was extremely forthcoming and he gave us very clear and interesting answers.
I would not have brought this up were it not that I think I am able to make rather a stronger case than I was on the last occasion. We argued on the last occasion that an attempt to get round resale price maintenance could be made by some device as a result of which the manufacturer retained ownership of the goods until after the sale or until the point of delivery; although, I admit, there was a flaw in our previous Amendment. We argued that this would be likely to apply especially in the motor trade; it might apply in the case of motor cars or tyres—indeed, the noble Lord, Lord Latham, gave an example of tyre companies who appoint certain persons as stockists. We are not seeking in this Amendment to upset established practice in regard to stockists and others who act as agents; but there is a possibility that a particular group of manufacturers, and certainly a single manufacturer, might wish to retain control over prices, and that under the Bill as it stands it would be perfectly legitimate for this to be done.
The noble Lord, Lord Drumalbyn, like the noble and learned Lord the Lord Chancellor, produced a number of arguments designed to suggest that such an event was unlikely. He suggested, for instance, that it was unlikely that a supplier or a manufacturer would wish to take the responsibility involved in being a principal in a transaction of this kind. He rather suggested that this would be so onerous that in such circumstances the supplier would not contemplate—or would, at least, be averse to contemplating—such an arrangement. I would reject that argument because there are very many agents who operate quite happily, and clearly a manufacturer in such circumstances takes very good care to ensure that whoever has his agency behaves reputably; although I must admit that there are certain additional responsibilities. It was further suggested that this was a very unlikely event. I think the noble and learned Lord Chancellor suggested that he had had actual assurances
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from manufacturers that they were unlikely to take advantage of this method of avoidance. I would stress, as did my noble friend Lord Latham, that avoidance would be perfectly legal. We wish to stop up the loophole and not put manufacturers in the position of having the Government subsequently (in the words of the noble and learned Lord the Lord Chancellor) "crack down" on them. This would be most undesirable. It would entail some retrospective action, because manufacturers would at least have to undo the arrangements into which they had entered.
There was the further objection that it would not be possible under this Amendment, as then drafted, for the court to take action effectively, because the matter would merely be referred to the court and nothing would then happen. We have redrafted the Amendment to enable the court to intervene. If the principles contained in this Amendment are acceptable, and the redrafting is not satisfactory, I do not doubt that the Government will be able to put it into satisfactory form. All I have said so far is theoretical. The noble and learned Lord the Lord Chancellor said that it would be impossible to predict the effect of this provision in view of the various devices that may be adopted by various individuals and concerns, but he went on to say that the risk would be slight. It so happened that, on the very day of the debate, I was speaking to an American lawyer and found that, only within the last few weeks, such a case had arisen in the United States, Richard Simpson versus Union Oil Company, in precisely the same circumstances which we in our prophecy, and the noble Lord, Lord Lucas of Chilworth, had foreseen might take place.
I would draw your Lordships' attention to this case. It was with some difficulty that I managed to get a photocopy of the report of the proceedings, and the noble and learned Lord the Lord Chancellor will have received a copy only recently. An American dealer found that the oil company, which supplied him with gasolene, wished him to sell it at a fixed price and they proposed an agreement, a lease, under which they would be able to insist on his selling at the price they set for a certain period. The dealer brought suit and, after various processes, the case went to the Supreme Court where, in a ruling (if that is the right

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word), this arrangement was declared illegal under the anti-trust laws of the United States. I should like to quote from this ruling.
"Dealers, like Simpson, are independent businessmen; and they have all or most of the indivia"—
indications; perhaps my noble and learned friend Lord Conesford can help us on this—
"of enterpreneurs, except for price fixing. The risk of loss of the gasoline is on them, apart from acts of God. Their return is affected by the rise and fall in the market price, their commissions declining as retail prices drop. Practically the only power they have to be wholly independent businessmen, whose service depends on their own initiative and enterprise, is taken from them by the proviso that they must sell their gasolene at prices fixed by Union Oil. By reason of the lease and consignment' agreement dealers are coercively laced into an arrangement under which their supplier is able to impose non-competitive prices on thousands of persons who otherwise might be competitive."
The oil company in question used the argument that all those who seek to maintain prices use—namely, that they provide a good service in the interests of the community and of the dealers generally. But Parliament is in process of deciding that, except within very limited terms, resale price maintenance should be illegal. I suggest that the case we put forward is a relevant one. It is likely to happen, and it is the duty of Parliament to stop up in advance loopholes of a kind of which it would be perfectly proper for people to take advantage. I hope that the Government, if they are not able to accept the Amendment as it stands, will at least accept the principle and agree that an additional Amendment will be introduced at a later stage. I beg to move.
Amendment moved—
Page 2, line 19, at end insert the said subsection.—(Lord Shackleton.)
LORD SHEPHERD: My Lords, I wish to support my noble friend in this Amendment. For some time I have felt that in a trade like the selling of petrol there could be a circumvention of the principles of the Bill. I am sure that the Minister will be aware that in recent years there has been a considerable increase in the number of petrol stations that are owned directly by the oil companies. Whereas four or five years ago the number was approximately 300, to-day, it is well over 3,000, and this
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increase has taken place largely during the last two years. Undoubtedly, there is a definite policy behind the petrol companies' decision to increase the number of stations they own.
What will be the consequence of this Bill to them, with their continuing capital investment? The Government say—and here we agree with them—that the privately owned petrol station should be allowed to sell petrol at whatever price they consider right. What will be the policy of the petrol companies, when they see the activities of private stations selling in direct competition with them and gravely affecting the returns on their own stations? I submit that the natural result, which will be perfectly legal, unless the Bill is altered, will be that the boards of the petrol companies will do something to ensure that the returns on their stations will be continued at the same level; and if they cannot impose a retail price upon petrol, they will get round it by bringing the private stations into agency agreements, similar to those instanced by my noble friend when he gave his illustration of what had happened in America.
It was interesting that the noble and learned Lord the Lord Chancellor said that he had obtained assurances from the industry. He did not say which industry. It may well have been the petrol people. If that is the case—and from the nod the Minister gives I surmise that it was—
LORD DRUMALBYN: With respect, I myself said that it was from the motor industry, not the petrol industry.
LORD SHEPHERD: Therefore, we have not an undertaking from the petrol people. It is within the distribution of petrol and oil that we get some of the most vicious restrictive practices. Is it not a fact that the oil companies impose regulations upon their distributors as to the types and brands of oil that they may sell? A company that sells one particular brand of petrol, and is at the same time selling oil under the same market, prohibits by agreement the sale of other brands of oil. I should have thought that this was one of the most vicious forms of restrictive retail practice. It is well known in this trade. Therefore, we have a case where the oil companies are operating restrictive practices, and

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they may now find—as I think they will—that the present method of distributing petrol at a fixed price will be undermined. I imagine (they certainly have the resources to do it) that they will circumvent the intentions of this Bill by adopting agency agreements. I do not think the Government intend that this should be so. The noble and learned Lord the Lord Chancellor suggested that it was not likely and that the possibility was remote. We have tried to put some of the possibilities.
I should have thought that the Government would welcome the opportunity of closing a gap. The Amendment does not affect any of the present or the future agreements. If it were approved it would give power to the Registrar, if he felt that the agreement had been entered into to circumvent the intentions of Parliament in passing this Bill, to refer it to the Restrictive Practices Court. I should not have thought that there was any clash of principle or opinion between noble Lords on this side and the Government. We want to see this Bill strengthened and to have a proper balance. I should have thought that, if the Government accepted the Amendment, we should have gone a considerable way to achieve it.
THE MINISTER OF STATE, BOARD OF TRADE (LORD DRUMALBYN): My Lords, I am grateful to noble Lords for the way in which they have spoken to this Amendment, which is undoubtedly an interesting one. The noble Lord, Lord Shackleton, said in the course of his speech, that if the Amendment was not satisfactory, no doubt it would be possible to put it in a satisfactory form. I do not think he will be surprised to hear that, as a matter of drafting, the Amendment is not satisfactory. Moreover, as a matter of administrative machinery it would not effect what he seeks to achieve.
However, let us consider rather the substance of the matter, because I think this is what noble Lords opposite want us to do. I have only in the last half hour had some indication of this case brought to my attention. I think it would be wrong to go into the merits of the case in a different country with a federal system and all the various implications that are involved there. I do not even
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know whether I have the latest "state of play" on this particular lawsuit, or series of lawsuits—I do not know which it is. So I would rather not discuss that. Nor should I wish to discuss whether that case is on an exact parallel with the kind of arrangement which, at any rate according to the drafting of the Amendment, the noble Lord has in mind.
What I think is important is that the noble Lord has indicated one field in which it is conceivable that this kind of arrangement might be introduced. Financially, this is a field which we considered earlier: we did not entirely neglect it in considering the various developments that might take place and the loopholes that might arise. But we still think that this is a loophole that is unlikely to arise. The noble Lord, Lord Shepherd, pursued this in various ways. He talked about petrol stations that were owned by oil companies. But it by no means follows that a petrol station owned by an oil company might not already have a consignment agency system.
LORD SHEPHERD: It would.
LORD DRUMALBYN: That would not be stopped in any way. There is no intention of interfering with normal methods of trading. What the noble Lord plainly has in mind is that he does not want a change to an agency arrangement to be introduced as a means and for the purpose of avoiding the effects of this Bill. We quite accept that. But we still do not think this is likely to arise in this case. For one thing, in this particular field, the Monopolies Commission are inquiring into the solus site system. I think it would be as well, from that point of view, to await their Report before we, as I think my noble and learned friend put it, "slammed down" in any particular direction.
I think it would be quite impossible to anticipate where loopholes might arise. We have examined this, but I still think that loopholes are unlikely to arise in this way. I still take the view expressed by my noble and learned friend the Lord Chancellor that it would be wrong to try to close loopholes in general. The right course in dealing with a new field of this kind is to wait and see where the loopholes are likely to arise, and then close them, and make certain of closing them. I say, again,

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that this particular Amendment would not close this particular loophole, and for that reason I would ask your Lordships to reject the Amendment.
LORD SHEPHERD: My Lords, with permission, I should like to make one point in regard to loopholes. We were told on previous legislation this afternoon that we have had 27 Bills on housing, and two Acts of Parliament, each dealing with loopholes. Some of them may have been anticipated by the Government, and many of them have been anticipated by the Opposition. It occupies a great deal of Parliamentary time and creates considerable inconvenience and uncertainty within the trade. If there is this loophole, and it is recognised as a loophole, surely it would be sensible to close it up.
4.8 p.m.
LORD STONHAM: My Lords, I should be grateful if the noble Lord, Lord Drumalbyn, could reaffirm a point which the noble and learned Lord the Lord Chancellor made when a similar Amendment was discussed in Committee. The noble Lord will recall that I instanced the practice of sending goods on consignment where the ownership did not pass from the manufacturer and the dealer never really owned the goods at all, because at the moment that he sold them to the customer that was the only moment when he became responsible for paying for the goods to the manufacturer. I pointed out that that was a well-recognised and fairly widespread practice in a number of industries; and I have been thinking of others since.
For example, even in the food trade, in wholesale markets, where there is a good deal of selling on consignment ment—which is another word for selling on commission—the wholesalers or dealers never own the goods. But in cases where prices are fixed by the haggling of the market, there is no possibility of maintaining the price. In many cases goods are sent on consignment without ownership passing. But where the supplier of the goods in wholesale markets—and I am still talking about food markets—does retain ownership, and does fix the price, he gives instructions that the goods shall be sold at that price, and the dealer merely gets a commission when he actually sells the goods.
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As I understand the position from the discussion in Committee, that is not an offence; it is not a matter which would have to be referred to the Restrictive Practices Court. There would not be any need for registration of such practices. If that be so—and that was certainly my understanding when the matter was discussed in Committee—then my noble friends Lord Shackleton and Lord Shepherd are perfectly right in their representations of this Amendment: namely, that there are exceptions to the Bill that if there is this loophole, as he described it, then it is an open invitation for that form of trading to be used in extenso by suppliers who are so disposed in order to evade the consequences of this Bill, without any liability whatsoever to go to the Court; and, therefore, the Bill could be set aside with immunity. I think, therefore, that before we leave this Amendment, it is important for the noble Lord—who I am quite sure would have the leave of the House to do so—to deal with that point with which he did not, in my submission, deal in his first speech.
4.12 p.m.
LORD DRUMALBYN: My Lords, by leave of the House again, may I reply to the noble Lord? It is quite true, of course, that the consignment agency system at present exists—and this is not a legal term, but a loose trading term. In the normal way, where that takes place the manufacturer or supplier retains control of the goods. He sells the goods through the dealer by the agency of the dealer to the customer. The goods are his throughout. That is a system which already exists, which this Bill does not touch, which we use all over the world, and which we do not think it reasonable to touch in this Bill.
LORD SHACKLETON: My Lords, what does the noble Lord mean by "we use all over the world"? We are talking about resale price maintenance.
LORD DRUMALBYN: My Lords, what I meant was that this system of consignment agencies is used in appropriate circumstances, not only in this country, but in our export sales as well. I quite agree that it is not relevent, but, at any rate, it is an indication that perhaps it would not be a very good idea to try

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to interfere. The point the noble Lord, Lord Shackleton, is getting at—and I think the only point with which we are concerned—is the adoption of such a system purely in order to evade the effects of this Bill in cases where, at the present time, the supplier sells to the dealer and the dealer sells to the customer. This is the point at issue at the present time.
I would suggest to the House that there may be particular cases, and there may be very different reasons indeed for changing over to a consignment agency system. There may be good commercial reasons for doing it. What the noble Lord has in mind is that this should not be done purely in order to evade the effects of this Bill. I think the House should appreciate that in most cases changing from one system to another would involve great difficulties for the supplier. It would mean, in many cases, that he would have hundreds of agencies all over the country, and he would retain control of the goods throughout the shops or depots, whatever it may be, of the various dealers who were the agents for the goods. We do not think it is likely that, merely in order to avoid the effects of the Resale Prices Bill, such extreme steps would be taken on any large scale by suppliers. This is the point I was putting to the House, and this is the reason why we do not think it necessary to accept this Amendment in principle.
LORD JESSEL: My Lords, having listened to the arguments, I must say that I think the Government have been almost as obstinate on this as they were over my Amendment concerning putting in exports as an additional gateway. All they say is that this is not likely to happen very often and, therefore, it is not worth putting in. I cannot say I am convinced by that. I cannot see the harm in putting in the words
"… if it appears … that the object of the agreement is to circumvent the provisions of this section, then the Registrar may refer the agreement to the Restrictive Practices Court …"
What is wrong in that? I am afraid I am not convinced at all.
LORD SHACKLETON: My Lords, I really do not think the Government have addressed their minds to this at
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all. I am sorry that the noble Lord, Lord Drumalbyn, did not have this paper more than half an hour ago. I gave notice through the Library to the Lord Chancellor's Office that I was going to quote an American case, and perhaps I should congratulate the Library in getting the details so quickly.
The noble Lord has repeatedly said that this is not likely to happen. He has argued without any grounds and, if I may say so, without very much experience—I do not mean this offensively—that suppliers will not go to the bother and expense of setting up hundreds of agencies. He said, "We use it all over the world." Of course we do. This is the normal process of trading in certain fields, and certainly in a large field of industrial goods people operate through agents and retain possession. Certainly this is so very often in export. But we are dealing here with resale price maintenance. The Government have introduced a Bill the purpose of which they hope is to introduce more competition, ultimately with a view to bringing down the prices. Admittedly, the legislation is very difficult to draft—we have seen that in discussing some of the other clauses.
But the Government in this House have been completely obstinate. As the noble Lord, Lord Jessel, pointed out, they refused to consider arguments on the subject of bringing in an additional gateway which I, personally, found convincing, and I hope other noble Lords will see that this is a genuine attempt to stop up an obvious gap. This is one which is likely to occur, and which is open for anybody to take advantage of. In an extreme case a tobacco wholesaler—this is very unlikely—could retain the ownership of the cigarettes. It is very unlikely, but in certain fields it is likely and, indeed, has happened. It has happened in the United States, and action has had to be taken. There are other difficulties to cope with. I really find it very difficult to believe that the Government have considered this matter at all seriously, and unless we can get some undertaking—and obviously one is not forthcoming—we shall have to divide to test the serious intention of the Government in this matter.
4.20 p.m.
On Question: Whether the said Amendment (No. 1) shall be agreed to?
Clause 3:
Exception for measures against loss leaders
3.—
(2) The reference in this section to the use of goods as loss leaders is a reference to a resale of the goods effected by the dealer, not for the purpose of making a profit on the sale of those goods, but for the purpose of attracting to the establishment at which the, goods are sold customers likely to purchase other goods or otherwise for the purpose of advertising the business of the dealer:
Provided that a sale of goods shall not be treated for the purposes of this section as the use of those goods as loss leaders—

(a) where the goods are sold by the dealer at a genuine seasonal or clearance sale, not having been acquired by the dealer for the purpose of being resold as mentioned in this section;

(b) where the goods are resold as mentioned in this section with the consent of the manufacturer of the goods or, in the case of goods made to the design of a supplier or to the order and bearing the trade mark of a supplier, of that supplier.

Their Lordships divided: Contents, 30; Not-Contents, 56.

CONTENTS

Airedale, L.

Listowel, E.

Saye and Sele, L.

Amwell, L.

Mackintosh of Halifax, V.

Shackleton, L.

Burden, L. [Teller.]

Meston, L.

Shepherd, L.

Champion, L. [Teller.]

Monson, L.

Silkin, L.

Colwyn, L.

Morrison, L.

Stonham, L.

Douglas of Barloch, L.

Morrison of Lambeth, L.

Strang, L.

Hobson, L.

Peddie, L.

Summerskill, B.

Iddesleigh, E.

Rea, L.

Williams, L.

Jessel, L.

St. Davids, V.

Williams of Barnburgh, L.

Latham, L.

Samuel, V.

Wise, L.

NOT-CONTENTS

Alexander of Tunis, E.

Ebbisham, L.

MacAndrew, L.

Allerton, L.

Elliot of Harwood, B.

Malmesbury, E.

Alport, L.

Falkland, V.

Margesson, V.

Amory, V.

Ferrers, E.

Massereene and Ferrard, V.

Arbuthnott, V.

Forster of Harraby, L.

Merrivale, L.

Bessborough, E.

Fortescue, E.

Milverton, L.

Blakenham, V.

Fraser of North Cape, L.

Monsell, V.

Carrington, L.

Goschen, V. [Teller.]

Newall, L.

Chesham, L.

Greenway, L.

St. Aldwyn, E. [Teller.]

Cholmondeley, M.

Grenfell, L.

St. Oswald, L.

Clitheroe, L.

Hamilton of Dalzell, L.

Sandford, L.

Colville of Culross, V.

Hastings, L.

Spens, L.

Conesford, L.

Hawke, L.

Suffield, L.

Coutanche, L.

Horsbrugh, B.

Swinton, E.

Denham, L.

Ilford, L.

Thurlow, L.

Derwent, L.

Jellicoe, E.

Twining, L.

Drumalbyn, L.

Lambert, V.

Wakefield of Kendal, L.

Dudley, L.

Lansdowne, M.

Waleran, L.

Dundonald, E.

Long, V.

Resolved in the negative, and Amendment disagreed to accordingly.

4.28 p.m.
LORD SHACKLETON: My Lords, the purpose of this Amendment is to establish whether Clause 3, which is concerned with loss leaders, is intended primarily to benefit the customer or to protect the supplier. I personally believe that the purpose of this clause is to protect the supplier. I am not, I may say, in favour of the clause anyway, but we may as well get it clear. Therefore my Amendment is to clarify the purpose of the clause. Subsection (2) says:
"The reference … to the use of goods as loss leaders is a reference to a resale of the goods effected by the dealer …"
My Amendment is to insert, after the word "dealer"
"in such a manner or subject to such description as to give a supplier reasonable cause to believe that the use of the goods in such a way was prejudicial to his goodwill."
It is only a very minor Amendment and I move it more in the hope of getting clarification rather than with any idea of insisting on its acceptance. But I

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think it would help to clarify the purpose of the clause. I think the noble Lord, Lord Drumalbyn, would agree that there is perhaps some doubt as to whom the clause is really intended to benefit. I beg to move.
Amendment moved—
Page 4, line 7 after ("dealer") insert the said words.—(Lord Shackleton.)
LORD DRUMALBYN: My Lords, the Amendment which the noble Lord has moved would not, I am afraid, be acceptable to the Government because it does not seem to take account of the fact that a supplier may withhold supplies from a dealer even if he has been using somebody else's goods as loss leaders, as the noble Lord will see from the last words of page 3:
"… whether obtained from that supplier or not".
The result is that it would, I think, throw an impossible burden on the supplier who wishes to withhold supplies on the grounds that the goods of another supplier have been used as loss leaders. I think the noble Lord will agree that it would be impossible for one supplier to say that the use of another supplier's goods as loss leaders has prejudiced the first supplier's goodwill, and for that reason the Amendment would not fit in with the structure of the clause and we would have to reject it.
The noble Lord raises a wider question as to whom the clause is intended to benefit. I suppose the right answer is both the supplier and the customer, because to the extent that the supplier is injured, and his marketing and sale of his product disrupted, so it might be said to be to the disadvantage of the customer who wants those goods. So think one would have to answer that the clause is primarily intended to benefit the supplier but, secondarily, also the consumer. I think one has to say quite plainly that the loss leader exception has been introduced out of a sincerely held conviction of many suppliers that the practice is intrinsically harmful to their interests. And I think it would be extremely difficult to require the supplier to prove a reasonable cause for fearing such harm in a particular case. I think it is better to rely on the clause as it stands now. If I am right in inter-
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preting the previous debate in the House, the House felt it is going to be difficult enough in any event to ask the supplier to prove that his goods were sold for the purpose of attracting to the shop at which the goods are sold customers likely to purchase other goods, or otherwise for advertising the business of the dealer. That is what he is going to have to prove, and I do not think it would be right to add this additional requirement and put that on him.
LORD SHACKLETON: My Lords, I do not want to press this, but there is one point on which I should like clarification. The noble Lord said the benefit is mainly for the supplier, and if the customer benefits from this at all he benefits indirectly. I accept that that might be so. It is therefore clear that even if a dealer goes in for loss leading with goods supplied and agreed to by one manufacturer, the other manufacturer can regard this as damaging for him. This seems to be clear on the last line of page 3. I should have thought, therefore, there was something to be said for restricting it in the way I have done in relation to the particular supplier whose goodwill is damaged by the goods being used as loss leaders. We are clear on this point. If I as a dealer sell with the agreement of the manufacturer, who says "By all means go ahead and go in for loss leaders as much as you like; it does not hurt me", other suppliers can say this is damaging to them. It is for that reason that I should have liked to clarify and restrict it.
LORD DRUMALBYN: My Lords, this was certainly not the intention of the clause. I cannot exactly see how to answer that from the point of view of the drafting at the present time, except to put it in this way. Subsection (2) gives the definition of what "loss leader" is, whereas subsection (1) merely says it shall not be unlawful to withhold supplies in these circumstances. I will certainly look into this point.
LORD CHAMPION: My Lords, I hope the noble Lord will look into this because, quite clearly, my noble friend has made a very pertinent point. I must admit I did not spot it when I went through this clause, but certainly it is a case where difficulty might arise.
LORD DRUMALBYN: I should have thought the answer was quite clear in

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that the definition makes it clear that it is not to be considered as loss leading if a manufacturer gives his consent to goods being sold at prices which would otherwise have been considered loss leading. That being so, as it is not to be considered loss leading, I do not see how another manufacturer could claim to withhold goods as if those goods had been treated as loss leaders. I think the situation is quite clear, but I will look into it. But I have no doubt that is the answer.
LORD SHACKLETON: My Lords, I do not want to get more tangled in this. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD SHACKLETON LORD SHACKLETON moved, in the proviso to subsection (2), after "leaders" to insert:
"(a) where, at the time of sale by the dealer, the goods so sold were no longer in current production; or".
The noble Lord said: My Lords, the purpose of this Amendment is to clear up a difficulty in Clause 3 and to clarify that in certain circumstances the sale of goods would not be treated for the purposes of this clause as the use of those goods as loss leaders. If your Lordships will look at subsection (2)(a) and (b) you will see that there are certain circumstances in which it is possible for a dealer to dispose of goods—for instance, during a seasonal or clearance sale or with the consent of the manufacturer. I am not sure whether the word "or" is right; that is another point that we shall come on to. I was concerned about the position where a firm buys a special line for a sale.
It is a well-established practice in the retail trade for shops to buy up lines at all sales and clearance periods; they are usually discontinued lines, bought from manufacturers, and this is an important part of the stock clearing process at the manufacturer's end. This is how the manufacturer whose stocks have not been moved or whose lines are being discontinued gets rid of them. Clearly this is a thoroughly desirable and proper action. It is possible (and that is why I have moved my Amendment) for a manufacturer to insist that certain of his goods bought in as a jobbing line should not be sold in a way that might lead to a possible charge of loss leading. I should mention this is a matter which has caused
738
some concern in the retail trade. I have put down an Amendment to provide an additional ground on which goods would not be treated as loss leaders—namely,
"where, at the time of sale by the dealer, the goods so sold were no longer in current production."
This seems to me to be desirable and a perfectly reasonable proposition. It is not going to open the door widely, but it will provide protection for the retailer. I beg to move.
Amendment moved—
Page 4, line 10, after "leaders" insert the said paragraph.—(Lord Shackleton.)
LORD DRUMALBYN: My Lords, I am not going to argue what "in current production" means because the noble Lord has made quite clear what he does mean: that this relates to discontinued lines but not to lines not for the moment being produced. I think the point surely is this. In the circumstances that this Bill will introduce, where a manufacturer believes that the sale of his goods as loss leaders could do damage to his interests he is given the right to withhold the goods. Surely, there is no difficulty about this in any way, because where there is any doubt about it the dealer can obtain the consent of the manufacturer. But what does seem to be quite wrong is to introduce a kind of artificial conception of implied consent when it is perfectly easy for real and actual consent to be obtained in these circumstances.
I should have thought that in the particular case where the whole of an end of line production was purchased by a particular dealer, there would be no objection from the manufacturer's point of view at all; he would not mind at what price the goods were sold in the ordinary way, although there might always be certain circumstances in which he would have reservations about their being sold at too low a price, because it might affect the prices of those lines, and possibly similar lines which are still in production. I should have thought that this is not really a necessary or desirable suggestion, bearing in mind how easy it is to obtain the consent of the manufacturer in the circumstances.
LORD SHACKLETON: My only point is that it is these goods which are no longer in current production that retailers are most frequently anxious to move, and

739
which lead to most allegations of price-cutting. I quite agree that this is a fairly unlikely event, although there is some concern and there have been accusations of this type. But I do not think it is a major point and, unless others of your Lordships would wish to pursue the matter further, I would beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
LORD SHACKLETON: My Lords, this is a small drafting Amendment, and f am sure the noble Lord, Lord Drumalbyn will help me. Do we need the word "or" in line 14, and, if not, why not? Are not both paragraphs (a) and (b) alternates, or do they hang together? I quite agree that that "or" was, to a large extent, consequential on the previous Amendment, but it has occurred to me that it might also be necessary in the Bill as it stands; or does the semicolon in those circumstances equal "or" rather than "and"? I beg to move.
Amendment moved—
Page 4, line 14, at end insert ("or").—(Lord Shackleton.)
LORD DRUMALBYN: My Lords, the noble Lord is quite right in thinking that they are alternates. I am told that, strictly speaking, the "or" is not necessary; but if I may put it in this way, for the removal of the noble Lord's doubts I am happy to accept the Amendment.
On Question, Amendment agreed to.
4.43 p.m.
LORD SHACKLETON LORD SHACKLETON moved, in subsection (2), to add to proviso (b):
"or with the implied consent of the supplier by virtue of the goods having been acquired by the dealer on terms indicative of a clearance of stocks by the vendor."
The noble Lord said: My Lords, this is only the second occasion upon which, when I nearly did not move an Amendment, I found that the Government were going to accept it. I express my appreciation of this improving degree of flexibility on the part of the Government, and I hope that they will be sympathetic to the last of the Amendments I have to move, which again closely ties up, or at least is parallel, with Amendment No. 5. Indeed, in moving Amendment No. 5, I am afraid I may have confused the issue by using some of the arguments that
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apply strictly to this Amendment, but the two hang together.
I shall not take long over this Amendment. Again, it is concerned merely with the question of clearance of stocks. Here I am suggesting that there should be no danger in regard to action for loss leading if the stocks have been acquired by the dealer on terms indicative of a clearance of stocks by the vendor. But I suspect that the noble Lord will again say that this is not necessary, and that obviously this will be done by agreement with the blessing of the manufacturer. However, we are not all quite so confident of this and perhaps we could hear from the noble Lord on it. I beg to move.
Amendment moved—
Page 4, line 19, at end insert the said words.—(Lord Shackleton.)
LORD DRUMALBYN: My Lords, as the noble Lord referred to this idea in his previous remarks, I, too, referred to it, and I thought that I answered him then. I think that this also would not be a wise change to make, simply because of the ease with which the dealer can get the consent of the supplier to sell at any price he likes. I see no great difficulty about this. I do not think that the noble Lord really expects this Amendment to be accepted. It would mean that, by implying consent, one was introducing an artificial conception here, and, as I have said before, one would be doing it where it would be perfectly easy to obtain the consent of the supplier. I should have thought that in cases of this kind there would, in general, be no difficulty in getting that consent, especially where the dealer took the whole of the end of the line. In that case, all the supplier is normally concerned with is getting as good a price as he can. He will not mind so much what price the dealer gets. There may be cases where the supplier has a particular interest in seeing that the dealer sells as usual, in order to get a profit, and not merely to attract customers or for advertising purposes. Therefore, I think we should stick to the provision that the consent of the supplier should be obtained.
LORD SHACKLETON: My Lords, I must press this a little further, really going back to the earlier part, to subsection (1), where it is open to another

741
supplier in such circumstances to withhold goods. Supposing, in fact, a dealer buys some goods on terms indicative of a clearance of stocks by the vendor, and another supplier then sees them being sold, and in circumstances in which he accuses the dealer of loss leading. The dealer then says, "I was only clearing somebody's stocks for them" and the other supplier, who is after him because he does not like these stocks being sold at this low price, says, "You have to prove it. Where is your consent?" It is just conceivable that that consent may not be forthcoming. This sounds a little hypothetical. But what happens, for example, if the original supplier has gone out of business? I should have thought that this was a simple and reasonable Amendment to accept. I wonder whether the noble Lord would think a little further about it? I admit that I think that there is a stronger case for this Amendment now than when I first moved it.
LORD LUCAS OF CHILWORTH: My Lords, is the noble Lord arguing that the supplier of another type of article than that which is alleged to be used for loss leading can take action?
LORD SHACKLETON: Yes.
LORD LUCAS OF CHILWORTH: Surely that is entirely wrong. The only supplier who can take action against a dealer who is loss leading is the supplier of the goods which are affected by that action. There is nothing in this Bill to say that all and sundry suppliers can take action against a supplier or a dealer in regard to an article which is not of their manufacture.
LORD SHACKLETON: Will the Minister explain to the noble Lord, or shall I?
THE LORD CHANCELLOR: I think it is the usual rule that one speaks only once in the course of debate on Report, so to help the noble Lord, Lord Shackleton, I will perhaps answer the noble Lord, Lord Lucas of Chilworth. If the noble Lord looks at the Bill more closely, he will see that the supplier can withhold supplies of his goods if goods of that kind or of a similar character are being used as loss leaders. Therefore, to take the analogy of electric irons, a supplier of electric irons
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who finds that somebody is loss leading with an electric iron which is in fact produced by another supplier will be entitled under this Bill to say, "I will not supply electric irons either".
LORD SHACKLETON: May I, with permission of the House, ask leave to withdraw the Amendment, feeling very dissatisfied?
Amendment, by leave, withdrawn.
Clause 5:
Power of Court to exempt classes of goods
(3) On a reference under this section in respect of goods of any class which have been the subject of proceedings in the Court under Part I of the Restrictive Trade Practices Act 1956 the Court may treat as conclusive any finding of fact made in those proceedings, and shall do so unless prima facie evidence is given of a material change in the relevant circumstances since those proceedings.
LORD STONHAM LORD STONHAM moved, after subsection (3), to insert:
"()—

(a) on a reference under this section in respect of any goods the supply of which has been investigated by the Monopolies Commission the Court shall take into account any relevant facts established by the Monopolies Commission;

(b) in this subsection 'Monopolies Commission' means the Monopolies and Restrictive Practices Commission constituted by the Monopolies and Restrictive Practices (Inquiry and Control) Act, 1948, or the said Commission as reconstituted under the name of the Monopolies Commission by the said Act as amended by the Restrictive Trade Practices Act, 1956, as the case may be."

The noble Lord said: My Lords, this Amendment has the purpose of ensuring that the Restrictive Practices Court should take into account any relevant facts which have already been ascertained by the Monopolies Commission. I was pleased to note the more favourable attitude met a few moments ago by my noble friend Lord Shackleton, and, as this is the last non-Government Amendment to be moved on Report, I hope I shall enjoy similar success. During the various stages of the Bill there have been some sharp disagreements on a number of aspects, but I do not think there is any doubt at all that all Parties have fought for the general purpose of the Bill, which is to ensure greater flexibility of retail prices by means of a discontinuance of resale

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price maintenance, except for those particular goods or classes of goods which may be found by the Restrictive Practices Court to qualify for exemption under Clause 5. I believe that in general the Bill is likely to have some effect, at least, in promoting freer competition and in protecting the public interest, but there is no doubt at all that the so-called gateways in Clause 5 will not be at all easy to get through. In fact I think "needle's eye" is a more apt description than "gateway" because, in order to get through it, you must have not only a very good case but a considerable amount of money.
The onus of proof places heavy burdens on the supplier. This creates a real difficulty because an industry may believe, and may prove to the complete satisfaction of the Court, that the practice as they operate it is not, and is not likely to be, against the public interest, and yet be unable to prove that the discontinuance would be positively to the detriment of the public as measured by the test laid down in Clause 5. I would ask whether it is possible to argue that it is in the public interest to discontinue a practice which has already been shown, after complete investigation, to be not against the public interest. I do not claim that, either in principle or in general, resale price maintenance is in the public interest. Certainly throughout my own business life in my own business I have persistently refused to fix retail prices, but there are undoubtedly cases where it is in the public interest.
Everybody operating such a system who feels that he has real grounds for believing that the public interest is not harmed by his practice and that it has positive advantages to his trade, will when this Bill becomes an Act, give notice of application for exemption. There may also be cases, less fortunate cases, where an industry feels that it is clearly desirable from the point of view of its own interests, yet it has little chance of passing through the gateways in Clause 5. Those industries who wish to be able to continue with the practice will continue as they are for as long as possible. If they consider they have any kind of case, enough money, and can stand the expense and trouble, they will submit a case to the Court so as to defer the evil day for as long as possible. The
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Court is already overburdened and provision is made for the appointment of three more puisne Judges. These hearings take a lot of time, and are costly not only to the industry concerned but also to the public purse.
It is because of this and what I regard as the extreme fineness of the distinction, on the one hand, of something which is not, nor is likely to be, against the public interest, and, on the other hand, of something whose discontinuance would be to the public detriment, that an Amendment was moved in Committee by the noble Lord, Lord Sinclair of Cleeve, to give the Court power to exempt a practice as applied to a particular class of goods where the practice had been held by the Monopolies Commission to be not against, or not likely to be against, the public interest. Although that Amendment appeared to be reasonable enough, the Government could not accept it. I hope I can fairly summarise the Lord Chancellor's quite powerful objections as being two. First of all, he said that if the Amendment were accepted it meant that for certain trades the Restrictive Practices Court would be obliged to make an exemption order regardless of the application of the gateways. Secondly, he said that it would be contrary to the intention of the Bill, which is that resale price maintenance in all trades, if it is to continue, must be examined by the Court in the light of the criteria in Clause 5—which means that no goods should be automatically exempted from any liability to be judged by the Court.
I submit to the noble and learned Lord, the Lord Chancellor, that the present Amendment I am moving completely meets those two fundamental objections. It surely is not too much to hope that, bearing in mind what the Lord Chancellor said about what is already the practice of the Courts, the Government will accept the present modest Amendment. It would merely, I submit, write into the Bill recognition of the point that where the Court is satisfied that there is no material change in relevant circumstances, facts established on an investigation by the Monopolies Commission may be taken into account without requiring them to be proved or established all over again. I realise that, even without this Amendment, the Court can have

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regard—and, indeed, as the Lord Chancellor pointed out during the Committee stage, they have already had regard in other cases—to the contents of Monopolies Commission Reports; but this Amendment does no more than seek to consolidate that position by specifically providing that the Court shall take into account any relevant facts established by the Monopolies Commission. It would obviously be for the Court to determine what are, or are not, facts relevant to the particular application before them and to make their own judgment on the basis of those facts.
I submit that in no circumstances would this Amendment offend against the principle of the Bill or even knock down a single gatepost, but it could save a great deal of unnecessary time, trouble, expense and anxiety without, by any stretch of the imagination, putting an applicant whose goods had been the subject of investigation by the Monopolies Commission in a privileged position in the sense of making it more likely than it is now that the application would be successful. The judgment of the Court will still be based on the facts in relation to the gateways in Clause 5, but this Amendment could ease the time, trouble and expense of proving the facts.
In my view the only possible argument against the Amendment is that it is unnecessary, but even if the Government arc not convinced of its absolute necessity I hope they will see fit to accept it. If they do so they will be giving some recognition to the feelings that exist among many industries, and I believe among your Lordships, that this would be a wholly reasonable provision to make. In some industries it will also relieve the anxieties of tens of thousands of small retailers who have every reason to fear that they will be at the mercy of supermarket chains who will have no hesitation in using these particular products as loss leaders thinly disguised as bargains. I beg to move.
Amendment moved—
Page 6, line 23, at end insert the said paragraphs.—(Lord Stonham.)
5.2 p.m.
LORD ROBERTSON OF OAKRIDGE: My Lords, the Three Musketeers who have banded themselves together to promote and defend this par-
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ticular Amendment are, as your Lordships will know, recruited from entirely different parts of your Lordships' Chamber; indeed, I think it true to say that they reached their opinions on the subject quite independently. As the noble Lord, Lord Stonham, has said, we proposed in the Committee stage that if a firm had already satisfied the Monopolies Commission that its arrangements for maintaining the retail prices of its goods were not objectionable in the public interest, it should be saved having to go through practically the same distasteful, time-consuming and costly process all over again before the Restrictive Practices Court. But the Government rejected our Amendment very firmly; therefore we are not putting it forward again.
We are putting forward a very modest Amendment. We are asking merely that something should be done which would make this tiresome, time-consuming and costly process just a little less irksome, a little less time-consuming and a little less costly for the firms concerned. The Amendment is completely innocuous, and though the Government may not think it is very necessary we hope they will agree to it, if only to show some measure of sympathy for firms who have to go through this horrible process twice, and show to them and to others that the Government are not wishing to go out of their way to persecute them. I support this Amendment.
LORD SINCLAIR OF CLEEVE: My Lords, the two noble Lords who have spoken on this Amendment have covered the points so fully that the third Musketeer will occupy your Lordships' time for only a few minutes. However, I should just like to make the point that although one recognises what the noble and learned Lord the Lord Chancellor said in the Committee stage, that the inquiry of the Monopolies Commission is conducted in an administrative field and on different criteria from those which the Restrictive Practices Court will operate, what we are concerned with here is facts. I think it is immaterial whether the inquiry eliciting the facts was conducted in an administrative field and on other criteria. If the facts still remain—and this is the basis of the Amendment—and are held to be unchanged, then we suggest that it would be a great

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economy of time and money if the Restrictive Practices Court could take account of this.
5.6 p.m.
THE LORD CHANCELLOR: My Lords, I do not know whether it would be proper for me to refer to the mover of this Amendment and the supporters as the Three Musketeers. They have tried to represent to your Lordships that this Amendment should be more attractive to the Government because it really is a very small infant compared with the Amendment which was moved during the Committee stage. Despite the attractive way in which the Amendment has been supported, I am afraid that the Amendment itself is no more attractive to Her Majesty's Government. I hope that the noble Lord, Lord Stonham, will forgive me for not following him over the wide range of his speech in relation to this Amendment, but the Amendment itself falls within a pretty narrow compass. It is quite true that a very much more far-reaching Amendment was moved in Committee, which would require the Court to make an exemption order where the Commission had concluded that resale price maintenance did not operate against the public interest. This Amendment does not require the Court to do that, but only to take account of any relevant facts established by the Monopolies Commission. Listening to the noble Lord, Lord Stonham, I gathered that he meant that, if they did receive in evidence the conclusion of the Monopolies Commission, the Restrictive Practices Court would be required to accept it as proof.
There is no question here, if I may say so to the noble Lord, Lord Robertson of Oakridge, of any endeavour to persecute or be oppressive. But what we think is wrong, when we have created by this Bill the matters which have to be considered by the Restrictive Practices Court, is that certain trades or industries which have come before the Monopolies Commission should be put in a different position from anyone else so far as the determination of the case is concerned. This Amendment proposes that it shall apply to all facts found by the Monopolies Commission, and to that
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extent I suppose it is put forward as advantageous to the trades whose resale price maintenance had, if one could use the expression, been "cleared" by the Monopolies Commission—for instance, the tobacco trade. But, my Lords, if it was favourable to them it would be prejudicial to the trades whose resale price maintenance had been condemned—wallpaper and electrical components for motor cars, to give two examples.
So the Government think it would be wrong to require a court of law, like the Restrictive Practices Court, to "take into account", whatever that expression may mean, the findings of an administrative body which was not having regard to the criteria contained in this Bill. There really is no parallel between this Amendment and the provisions of Clause 5(3), which relate to the findings of fact by the Restrictive Practices Court. But I can offer to the noble Lords some small crumb of comfort, and I will follow their example of trying to dress it up as attractively as possible. I draw their attention to Rule 55 of the current Rules of the Restrictive Practices Court, which of course it falls to my lot to consider and to make. The terms of that Rule are as follows—and I will leave out the irrelevant words:
"Where it appears to the Court …"
—that is, the Restrictive Practices Court—
… that the Court would be assisted in determining any issue in the proceedings by the admission of evidence (whether oral or documentary) which would not otherwise be admissible under the law relating to evidence, the Court may make an order allowing the admission of such evidence."
My Lords, that is a very wide provision, and all that will be required is for the counsel appearing for one industry—say, tobacco—which comes before the Court, to satisfy the Court that it will assist them if they look at these documents in determining a question in the proceedings. If it is going to lead to the saving of considerable time and to the avoidance of considerable expense, I have no doubt at all that the Court, in its discretion, will say, "Yes, we will look at them." So while I am not prepared to advise your Lordships to accept this Amendment, because I do not think it is right to do so, at the same time I point out that there is already machinery before the Restrictive Practices Court whereby the ordinary rules of evidence can be relaxed if the Court thinks fit, and if the Court thinks

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it is proper to do so for the purpose of assisting the Court in the discharge of its duties. Speaking from recollection, I think I am right in saying that even in cases that have come before the Restrictive Practices Court already there have been occasions when the Court, under this Rule, has in fact looked at the Reports of the Monopolies Commission.
My Lords, that is the short explanation. I hope I have made it clear, and I hope it will satisfy your Lordships that, despite the persuasive eloquence of the noble Lord, Lord Stonham, and his noble friends, this is not as good an Amendment as all that and should not be inserted in the Bill.
5.11 p.m.
LORD STONHAM: My Lords, I can assure the noble and learned Lord the Lord Chancellor that the gleanings on this particular Bill have been so small that we will certainly not overlook the benefit of any crumb that he is able to offer. In fact, when he read out the extract from the existing enactment he made it sound like not a crumb but an éclair. I can only hope that it will not turn out to be the carraway seed that is so often revealed when we have this kind of assurance. But I find it extremely difficult to understand how the noble and learned Lord can say that the Government found this Amendment no more attractive than the earlier one, because in this Amendment—there is no question about it—we met the two fundamental objections which he had to the previous one.
The only other points I would make are these. It is not clear to me how the Restrictive Practices Court would, through this Amendment, be required to accept it all as proof when they would merely be instructed to have regard to it. The other point is that on the Committee stage the noble and learned Lord the Lord Chancellor pointed out—and I quote his words [OFFICIAL REPORT, Vol. 259 (No. 87), col. 160]:
"It is already the practice of the Court to have regard to the contents of the reports of the Monopolies Commission where these would be relevant … And I can see no reason why a similar procedure should not be followed in exemption proceedings under the Bill."
If that is the case—and it is—then all objections about having to accept something as proof would apply, as the noble and learned Lord said they would apply
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if this Amendment were accepted. I cannot see any real difference in practice between the statement made by the noble and learned Lord which I have just read out and what we are asking for in this Amendment, except that if the Amendment were accepted then everyone would know, whereas if it is not accepted they will always be in doubt. I should have thought it would be to the benefit of the industries concerned, of the Court, of traders and of the public if these doubts were removed, and that is why we moved this Amendment.
On Question, Amendment negatived.
Clause 7 [Late application to, and review of decisions by, the Court]:
5.13 p.m.
LORD DRUMALBYN: My Lords, I hope it will be to the convenience of your Lordships if I talk both to this Amendment and to Amendment No. 10, which is in identical terms. These are purely drafting Amendments involving no change of substance. Their purpose is simply to distinguish between the procedures under the two subsections. Clause 7 makes provision for two distinct types of application: late applications for exemption, under subsection (1) of Clause 7, and applications for the review of previous decisions of the Court, under subsection (2) of that clause. The Amendments are designed to ensure that proper distinction is drawn between them. I beg to move.
Amendment moved—
Page 7, line 34, leave out ("in accordance with this section") and insert ("under this subsection").—(Lord Drumalbyn.)
On Question, Amendment agreed to.
LORD DRUMALBYN: My Lords, I beg to move.
Amendment moved—
Page 7, line 42, leave out ("in accordance with this section") and insert ("under this subsection").—(Lord Drumalbyn.)
On Question, Amendment agreed to.
Clause 11 [Interpretation]:
LORD DRUMALBYN LORD DRUMALBYN moved to leave out subsection (2) and to insert:
"(2) Where the dealer referred to in section 2(1)(a) or section 3(1) of this Act, or the supplier referred to in the said section 2(1)(a), is one of a group of inter-connected bodies corporate within the meaning of the Restrictive

751
Trade Practices Act 1956, the reference shall include a reference to any other dealer or, as the case may be, any other supplier, who is also a member of that group."
The noble Lord said: My Lords, I beg to move Amendment No. 11, standing in the name of my noble and learned friend the Lord Chancellor. On Committee, my noble friend Lord Hanworth moved an Amendment in the name of my noble friend Lord Jessel adding a proviso to subsection (2) of Clause 11, which excluded its operation in relation to Clause 4. My noble and learned friend the Lord Chancellor then indicated that the Government were giving further consideration to this provision, and on that understanding the Amendment was withdrawn. We are grateful to the noble Lords for drawing attention to the fact that, as it now stands, subsection (2) of Clause 11 is too wide. The Bill as now drafted, for example, requires a supplier company and its supplier subsidiary to be treated as one person for all the purposes of the Bill. This would produce undesirable anomalies. For example, unlawful conduct by one person is treated as unlawful conduct by another person, and renders that other person liable to legal proceedings.
My Lords, the Amendment substitutes a new and narrower subsection (2) of Clause 11, which requires suppliers and dealers who are inter-connected bodies corporate—that is to say, members of a group (in the company law sense of the word)—to be treated as a single dealer or supplier in relation only to the withholding of supplies, including withholding on account of loss leading. It might be convenient if I were just to indicate how this will work out in practice. The new subsection works in conjunction with subsection (1) of Clause 2 and subsection (1) of Clause 3 in the following way. If you have three inter-connected companies, A, B and C, and three inter-connected dealers who are inter-connected companies X, Y and Z, then, first, A may not lawfully withhold supplies from X on the ground that X has been cutting the price of B's or C's goods; secondly, A may not lawfully withhold supplies from Z on the ground that Y has been cutting the price of A's or B's goods; and, thirdly, A may lawfully withhold supplies from X on the ground that Z has been using similar goods as loss leaders. This is the
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effect of the change proposed. I beg to move.
Amendment moved—
Page 10, line 39, leave out subsection (2) and insert the said new subsection.—,(Lord Drumalbyn.)
LORD JESSEL: My Lords, I should like the Minister to clarify for me one point about which I think I have been misinformed. Does this Amendment have the result that a parent company will not be allowed to regulate prices of a subsidiary? That is not so, is it?
LORD DRUMALBYN: My Lords, that will be the effect of the Bill, and was always intended to be the effect of the Bill. The relationship between two companies within the same group would be that resale prices could not be maintained there, any more than anywhere else. But, of course, one will no doubt be able to recommend prices to the other.
LORD SINCLAIR OF CLEEVE: My Lords, I am sorry to be stupid on this point (I am afraid that I must be), but in the. case of a subsidiary which is the manufacturer and the supplier, in the circumstances set out in the explanation, as I understood it, they would not be re-selling. They would be the original sellers, would they not? If I correctly understood the question of my noble friend Lord Jessel, I thought it related to that. We are talking of resale, are we not, essentially?
LORD DRUMALBYN: My Lords, I think the question of my noble friend Lord Jessel was related to what was meant by "inter-connected bodies corporate" for the purposes of this subsection, and whether it would mean that there could be resale price maintenance as between a parent company and a subsidiary. The answer to that is that there cannot be resale price maintenance between those two, any more than in any other section of industry, without the sanction of the Restrictive Practices Court; but there can, of course, be recommended prices.
On Question, Amendment agreed to.
LORD DRUMALBYN: My Lords, this is a purely drafting Amendment. I beg to move.
Amendment moved—
Page 11, line 23, leave out from ("date") to end of line and insert ("of the passing of this Act").—(Lord Drumalbyn.)
On Question, Amendment agreed to.

RIDING ESTABLISHMENTS BILL
5.21 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Viscount Massereene and Ferrard.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD MERTHYR in the Chair.]
Clause 1:
Licensing of riding establishments
1.—
(4) In determining whether to grant a licence for the keeping of a riding establishment by any person at any premises, a local authority shall in particular (but without prejudice to their discretion to withhold a licence on other grounds) have regard to the need for securing—
(a) that there will be available at all times, for horses, accommodation suitable as respects construction, size, number of occupants, lighting, ventilation, drainage, and cleanliness;
VISCOUNT MASSEREENE AND FERRARD VISCOUNT MASSEREENE AND FERRARD moved, in subsection (3), after "authority" (where that word occurs a second time) to insert, "or on or after that date". The noble Viscount said: The Committee may remember that during the Second Reading debate it was pointed out that Clause 1(3) was in difficulties inasmuch as it did not cover the initial application for a licence. Clause 1(3) requires that a local authority shall not reach a decision on an application for a licence unless they have received and considered a report by a veterinary surgeon, or a practitioner authorised by them, of an inspection carried out by him within the period of twelve months immediately preceding the date on which the application is received. Obviously, in the case of an initial application a local authority cannot ask the veterinary surgeon to carry out an inspection relating to the premises in question until after the receipt of the application; because until they have the application they do not know where the premises are. It would therefore be quite impossible in an initial application for the local authority to have an inspection
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in the twelve months preceding the application. My Amendment, by enabling the inspection and subsequent report to be carried out "on or after the date" on which the application is received, remedies this defect in the drafting of the original clause.
Perhaps, before asking the Committee to approve the Amendment, I should point out that the reason for having the inspection carried out in the preceding twelve months is to avoid the need for a further inspection on application for renewal of a licence when, as is likely to happen in most cases, a satisfactory report of a fairly recent inspection has been received by the local authority. I beg to move.
Amendment moved—
Page 2, line 7, after ("authority") insert ("or on or after that date").—(Viscount Massereene and Ferrard.)
LORD SILKIN: I do not think I have any objection to the Amendment, as such, but I think it is very badly drafted. I think this provision needs a little looking into to make quite clear what is intended. If the noble Viscount will look at the clause, as amended, I think he will agree that it is not very clear. It reads as though they have to have a report from the inspector and that he can make it at virtually any time. The noble Viscount said it was not practical to have a report made before the application was received, because the inspector would know neither the address nor anything else about the establishment. Nevertheless, the noble Viscount still provides for a report to be made within twelve months before the application. I am not objecting to the idea; but perhaps the noble Viscount would consider whether he is satisfied with the clause in its final form, and, if not, will bring up something on the Report stage. If he will do that I am quite prepared to let it go this afternoon.
LORD DERWENT: I will come to my noble friend's help on this matter. The Amendment was drafted by Parliamentary draftsmen, and we are satisfied that it means what the noble Viscount has said. But I will see that it is looked at again by the Parliamentary draftsmen.
On Question, Amendment agreed to.
LORD SILKIN LORD SILKIN moved, in subsection (4) after "authority shall" to insert:
"have regard to the suitability, qualifications and experience of the person applying for a licence and shall".
The noble Lord said: This is an Amendment which requires the local authority, before granting a licence, to look at the applicant for the licence. Subsection (4) provides for a lot of criteria which have to be satisfied about the conditions of the premises. Paragraphs (a) to (f) all relate to conditions of the premises; but there is no word about the suitability of the applicant. We know that the practice of running a riding establishment has grown rapidly in the last few years, and people are coming to run these establishments not so much for love of horses, as used to be the case, but purely as a profit-making concern. There is no requirement at all that the applicant for the licence should be a suitable person, should know anything about the business, should have any experience of horses or should be of good character.
These people are handling animals and human beings, the riders, and they are capable of inflicting damage on the general public. As I said on Second Reading, I have myself seen horses being managed by young people who have no particular experience of them, who have had quite inadequate training, if any, and have been a menace to the public because they have allowed the horses to run into heavy traffic in a way that might have caused serious accidents. We know many accidents have happened to young riders in the course of their being taught to ride. I feel, therefore, that the local authority, before granting the licence, should have a look at the applicant to see whether, in the words of my Amendment, he has the necessary "suitability, qualifications and experience".
In my Amendment I am deliberately leaving it to the discretion of the local authority to interpret these words as they please. But I think there is sufficient indication in the Amendment of the kind of things the local authority should look for when granting licences. What I am particularly anxious about is that they should look at an applicant to see whether he is a suitable person to run a riding establishment. I am not wedded
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to the exact words and if anyone can think of something better, I am perfectly prepared to accept it, but I should like the principle of the suitability of an applicant to be established and provided for in the Bill. I beg to move.
Amendment moved—
Page 2, line 14, after "shall" insert the said words.—(Lord Silkin.)
VISCOUNT MASSEREENE AND FERRARD: I have some sympathy with the noble Lord on the word "suitability", but when we come to "qualifications and experience", particularly "qualifications", I find some difficulty. So far as I am aware, we have no machinery in this country at the present time by which a civilian can become qualified to run a riding establishment. In the case of motorists, we have schools of motoring licensed by the local authorities. In the case of horses, we have private courses in horse management run by private individuals, but we have no statutory body to lay down any form of qualification. So, while I have sympathy with the noble Lord's intention, until we have the machinery available for teaching people these qualifications I do not really see that we can insert the word "qualifications" in the Bill.
I should like to draw the noble Lord's attention to the wording on Page 2, lines 13 to 15—
"… a local authority shall in particular (but without prejudice to their discretion to withhold the licence on other grounds)…".
As the noble Lord knows better than I, the local authorities are not fools and if an applicant was obviously quite unsuitable they would refuse to grant a licence. And if it so happened, by some mischance, that an unsuitable person got a licence there is a veterinary inspection every twelve months and the licences are renewed every year. I think we could be sure that local gossip about a person's being unsuitable would permeate through to the local authority and at the time a licence came up for renewal any unsuitable person would find that his licence would not be renewed.
I have great sympathy with the noble Lord's intention, and I am sure that everybody is extremely pleased that the noble Lord, with his wide experience of legal matters, has taken such an

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interest in this Bill. However, I think that "qualifications" will have to be ruled out, but my noble friend Lord Derwent is going to say a few words on this and perhaps it may be possible to redraft the Amendment to make it acceptable.
LORD FERRIER: I strongly support this Amendment. I think that I am right in saying that the Institute of the Horse has a diploma and that the Pony Clubs are developing a system of diplomas. I think that we are suffering from the absence of the mounted Yeomanry. which used to provide a standard for qualification.
If the word "qualifications" presents difficulties, perhaps some other word of the sort could be embodied in its place, because I feel sure that it would be a great improvement to the Bill to have something of the sort included.
EARL FORTESCUE: I should like to support the Amendment because, as the Bill stands at the moment, it is permissive for local authorities to find reasons for turning an applicant down, but nothing obliges them to have a jolly good look at him before they start. I am not going to express an opinion on the word "qualifications", but we ought to have something of this kind in the Bill.
LORD DERWENT: I wonder whether I can be of help both to the Committee and to the noble Lord, Lord Silkin? If the noble Lord's Amendment were accepted, there would have to be a Government Amendment on Report stage, because the drafting is defective. May I say straight away that we are in sympathy with the noble Lord's intention, but we see difficulties about the actual wording, some of which have been mentioned by my noble friend Lord Massereene and Ferrard. One possible result of adopting the Amendment as it is at present is that it might be interpreted by some local authorities as meaning that licences should not be granted to persons who have no proper qualifications, such as a certificate, but may otherwise be suitable. Therefore, the Government would like to look at this again.
At the moment, we feel that the word "suitability" really covers all the points that the noble Lord, Lord Silkin, wants. The word "qualifications" is perhaps
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too difficult to operate, or may operate unfairly. I would suggest to the noble Lord, Lord Silkin, that the word "suitability" ought to be retained, and if he is prepared to withdraw his Amendment now I will undertake—although this does not affect my noble friend Lord Massereene and Ferrard in any way—to draft a Government Amendment for the next stage to carry out the intention of the noble Lord.
LORD SILKIN: It would be ungracious if I did not accept that offer in principle. I would only say in reply to the noble Lord that merely to leave "suitability" in might mean just suitability as to character. It would have no relationship to the knowledge of horsemanship that is required. What I meant by "qualifications" was, not that they should have some specific diploma, if that is not practicable, but that they should have some knowledge of horsemanship, particularly if they are going to teach other people to ride. I realise that the licence can be withheld at the end of the year, but that is, after all, to use the noble Viscount's own parlance, locking the stable door after the horse has gone. You are giving this person a year's run, and I do not recollect any machinery for withdrawing a licence during the year. It is far better to deal with it in advance. What I would suggest is this. Perhaps the noble Lord will not mind my seeing the Amendment before it is put down. We can have a word about it, and possibly come to some understanding. On that basis, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
VISCOUNT MASSEREENE AND FERRARD: This is a drafting Amendment. I beg to move.
Amendment moved—
Page 2, line 34, leave out ("the").—(Viscount Massereene and Ferrard.)
On Question, Amendment agreed to.
5.42 p.m.
LORD SILKIN LORD SILKIN moved, in subsection (4), after paragraph (f) to insert:
"(g) that the horses are in a good state of health and suitable for the purpose of a riding establishment;".
The noble Lord said: This subsection again sets out all the matters which the local authority have to look into in

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granting a licence. The various matters included in paragraphs (a) to (f) all relate, in greater or lesser degree, to the conditions under which horses are to be kept. But there is nothing here that I can see which relates to the condition of the horse itself. I have seen horses that are quite unfit to be used for the purpose intended: they are aged horses, too old to carry the burdens that are required of them; horses, particularly at the seaside, that are grossly overworked and overburdened; and horses which are in obvious bad health. I can see nothing here which requires any kind of supervision over them, or which enables the local authority to have regard to the condition of the horses themselves in granting a licence. I submit that when the veterinary surgeon goes round and examines the stable, the feeding, the water supply, and so on, he should have power, also, to say that in his opinion the horses are not fit to be used for the purpose for which they are intended. I am sure the noble Viscount will have sympathy for the object of the Amendment, and I can see no practical reason why it should not he incorporated in the matters which the veterinary surgeon is required to look into. I beg to move
Amendment moved—
Page 2. line 36, at end insert the said paragraph.—(Lord Silkin.)
VISCOUNT MASSEREENE AND FERRARD: I have some sympathy with the noble Lord, but I should like to point out that at the time a person applies for a licence to keep a riding establishment he may not have bought any horses. It would be quite a gamble for him. He might go and buy some horses and not be successful in his application. Alternatively, he might have one or two horses at the time of the official inspection and after the application is successful he might then buy, perhaps, twenty horses. I would draw the attention of the noble Lord to Clause 3. In that clause, the offences clause, the condition of the horses is fully dealt with in paragraphs (a) to (d). You cannot have a stronger clause than that to safeguard the condition of horses in a riding establishment. I feel that Clause 3 amply covers the noble Lord's point, and I would ask him to withdraw the Amendment.
LORD SILKIN: If the noble Viscount is saying that he thinks the point ought to be covered but that it is covered by Clause 3(4), paragraphs (a) to (d), then I would ask him to look at those paragraphs again. Paragraph (a) relates to accommodation being suitable with regard to lighting, ventilation, drainage and cleanliness. That has nothing to do with the condition of the horse. Paragraph (b) relates to horses being maintained at grass at various times, and that there should be adequate pasture and shelter.
VISCOUNT MASSEREENE AND FERRARD: I think the noble Lord has the wrong clause. Clause 3 has nothing to do with horses being maintained at grass or there being adequate pasture and shelter.
LORD AIREDALE: Is not the objection to invoking Clause 3 here the same as was mentioned just now: that Clause 3 starts to apply only after the person has had a run? He may be quite unsuitable. I can see the difficulty that an applicant for a licence may not have his full complement of horses at the time he applies for his licence. But might it not be a good plan to have an Amendment along the lines of saying that any horses for the time being present in the establishment when the licence is applied for shall be suitable for the purposes of a riding establishment?
LORD FERRIER: In the light of what the noble Lord, Lord Airedale, has said, still believe that Clause 3 does not cover the point that was being made by the noble Lord, Lord Silkin, and I would support, if not the actual Amendment he has put down, something of the sort: that horses should be in a fit state of health and suitable, or something like that. I have personal knowledge of a case in which a horse was let out on hire this spring. It was a perfectly sound horse, but it had on its heavy winter coat. It set off with a party of young people to travel across country for four days at an average of fifteen miles a day. The horse, in its winter coat, was not fit, and the result can well be gathered: the trip was a failure. I do not think the horse was submitted to any suffering, because the people were very sensible about it; but it did get saddle galls. I think the noble Lord,

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Lord Silkin, is right in suggesting something of this sort in the place he has, as an additional paragraph to Clause 1(4), in order to make it absolutely watertight that the people in charge of the establishment should see that their horses are fit for letting out; and not only fit physically but fit, as I have indicated, in terms of their coats.
LORD HAWKE: Is not the Amendment of the noble Lord, Lord Silkin, in the wrong place? Is it not, as my noble friend in charge of the Bill would say, putting the cart before the horse? Would not a proper place to have such an Amendment be in Clause 2, because first of all the man gets his licence, then he buys his horses, and then the local authority may send in a man to inspect at any time? Surely it is at that stage that the inspector should have power to say whether the horse is fit, and so on.
LORD DERWENT: May I say something which might help the discussion? I must say that we are entirely behind what the noble Lord has in mind, but we do not like the Amendment. Perhaps I may explain at some length, because I think it is applicable. Where the horses are already in the stables at the time of the inspection, a local authority already has power to withhold the grant of a licence if the horses are unlit or unsuitable, under the general discretion given to them under Clause 1(4) to withhold a licence on grounds other than those specified in paragraphs (a) to (f). My noble friend is quite right that the provisions of Clause 3(1) are also relevant. These make it an offence for any person to hire out a horse in such a condition that its riding would cause it unnecessary suffering—which I think covers saddle galls—or to keep a sick or injured horse without providing suitable curative care.
LORD FERRIER: The point I was making was that this pony to which I have referred was perfectly fit for an hour or two a day in the spring before it was clipped out, but it was not fit for a trekking expedition. Therefore I feel that a provision of this sort should be in the Bill.
LORD DERWENT: May I go on? Among other things, it is not quite clear what is meant by "suitability". I am afraid that if this Amendment is accepted
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it will give rise to difficulties of interpretation. Apart from the health aspect, which is referred to separately in the Amendment, the suitability of a horse for use in a riding school might depend upon its age and physical characteristics. Even from these aspects, however, suitability depends to a considerable extent on the extent to which a horse is to be hired out, and by whom it is to be ridden. An elderly horse might, for example, be suitable for limited riding by children, but not for more extensive riding by adults. I am merely reinforcing what my noble friend said.
The matter which worries the Government is this. We think it is very doubtful whether the Amendment, or anything on those lines, if accepted would be enforceable, except, of course, under the general powers of a local authority which I have already described, and which are very far-reaching. We are here dealing with people who want to evade the law, who do not care about horses if they are unfit or in pain, and so on. Riding establishments often accommodate horses other than those which are kept for hiring out—for instance, young horses which are being broken in, those kept for the personal use of the proprietor or his family, or horses kept at livery. It would be relatively easy—and we are talking only about people who are trying to get round this measure—for a proprietor to claim that any horses which were alleged to be unsuitable were not kept for. hiring out. There is, too, the point that certain horses may well be unfit at the time of the inspection, but may be receiving appropriate treatment and not being hired out for the time being. Even if they were being hired out, you would have to catch them being hired out. An inspection might be carried out in the stables, and the owner might say, "I am not hiring these out at the moment", and it might be difficult to prove that he was doing so.
I think it would be unreasonable to expose a riding school to the possible refusal of a licence on the general grounds that some horses were not in a good state of health at the material time. It may be, and it probably is, the case that some horses are at present being hired out for riding which are not fit or suitable for the purpose, or perhaps both. But this is the sort of defect—and this is what I want to bring to the noble Lord's attention—which local authorities may be

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expected to ask inspectors to have in mind when reporting on the suitability of establishments for licensing. In our view, because of the difficulties in enforcement and for the other reasons, and for the wide powers that are already in the hands of local authorities, we think it would be preferable to rely on the general discretion to withhold licences given to local authorities under Clause 1, and on the provisions, as my noble friend said, in Clause 3(1). We think we shall get into immense difficulties if we write anything more specific into the Bill.
LORD SILKIN: What I am saying is that the local authority should have regard to these things; that is all. They are being asked to have regard to a number of matters such as feeding, pasture, and so on. Why should you not say in the Bill that they should have regard to what I regard as the most important question of all? Once more, I am prepared to recognise that the Parliamentary draftsman can make a better job of it than I have done—he always can. Sometimes the words are intelligible, and sometimes they are not. But if the noble Viscount who is in charge of the Bill is prepared to look at this again to see whether words can be formulated which will give expression to what we all want—that unsuitable horses should not be used in riding establishments, even if they are there for curative purposes-I shall be quite happy to withdraw the Amendment. But I think it is worth considering to see whether words can be inserted to deal with what we all recognise is a need.
VISCOUNT MASSEREENE AND FERRARD: I will certainly have words with the various organisations and with my noble friend Lord Derwent.
LORD SILKIN: Then I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 1, as amended, agreed to.
Clause 2 [Inspection of Riding Establishments]:
VISCOUNT MASSEREENE AND FERRARD: This is a drafting Amendment. I beg to move.
Amendment moved—
Page 3, line 47, leave out ("section 1 of").—(Viscount Massereene and Ferrard.)
On Question, Amendment agreed to.
VISCOUNT MASSEREENE AND FERRARD: This is a further drafting Amendment. I beg to move.
Amendment moved—
Page 4, line 6, leave out ("above") and insert ("of the foregoing subsection").— (Viscount Massereene and Ferrard.)
On Question, Amendment agreed to.
Clause 2, as amended, agreed to.
Clause 3 agreed to.
Clause 4 [Penalties and disqualifications]:
VISCOUNT MASSEREENE AND FERRARD: May I take Amendments Nos. 8 and 10 together? Subsections (1) and (2) of Clause 4 refer to "Section 2(5)" of the Bill but, of course, we do not have a Section 2(5), only a Section 2(4). These Amendments correct that error. I beg to move.
Amendment moved—
Page 5, line 4, leave out ("2(5)") and insert ("2(4) thereof").—(Viscount Massereene and Ferrard.)
On Question, Amendment agreed to.
VISCOUNT MASSEREENE AND FERRARD: This is another drafting Amendment. I beg to move.
Amendment moved—
Page 5, line 6, at end insert ("such").— (Viscount Massereene and Ferrard.)
On Question, Amendment agreed to.
Amendment moved—
Page 5, line S. leave out ("2(5)") and insert ("2(41").—(Viscount Massereene and Ferrard.)
On Question, Amendment agreed to.
Clause 4, as amended, agreed to.
Clause 5 agreed to.
Clause 6:
Interpretation
6.—
"local authority" means the council of a county borough, the council of a London borough or the Common Council of the City of London; as respects any non-county borough or urban district which

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has according to the last published census for the time being a population of 20,000 or upwards, the council of the borough or urban district; and as respects any other area the council of the county; and in Scotland means the council of any county or any burgh;
6.0 p.m.
LORD CHAMPION LORD CHAMPION moved, in the definition of "local authority", after "county borough" to insert "or county district,". The noble Lord said: This Amendment and the next standing in my name go together. I think that their purpose is quite clear. It is to make all rural and urban district councils local authorities for the purposes of the Bill. I find it a little difficult to see why the sponsors of the Bill selected a population figure of 20,000 or over and said, in effect, that any rural or urban district council with a smaller population is not a suitable body for this purpose—and the purpose is, of course, the functions of licensing, inspection and prosecution under the Bill.
It is strange that the sponsors of the Bill should have taken this figure, since Parliament has already decided that, for the purposes of the Pet Animals Act, 1951, and the Animal Boarding Establishments Act, 1963, county districts, no matter what their population, shall be the local authorities for this purpose. Both those Acts make provision for licensing, inspection and prosecution by the county districts without any reference to the size of their population. Section 4 of the Pet Animals Act, 1951, makes provision for inspection by a veterinary surgeon or veterinary practitioner of any premises licensed by the local authority on any authorisation by the local authority. Section 2 of the Animal Boarding Establishments Act, 1963, makes exactly the same provision. Clause 2 of this Bill, with the addition of a very few words which in no way increase or decrease the right of the local authority to cause an inspection to be made, has the same effect as Section 4 of the 1951 Act and Section 2 of the 1963 Act.
There have been no complaints at all, so far as I can gather, of the functioning of those county districts I have mentioned under the, in many ways, comparable Acts of 1951 and 1963. Nor have the county districts experienced any difficulties in carrying out their functions, which, in the main, can be economically
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and expeditiously executed by public health inspectors who are in the employment of the county districts. I think, too, that mention should be made of the fact that under Clause 1 of this Bill a person disqualified under either the 1951 or 1963 Act from keeping an animal establishment (presumably as a result of action by a local authority) is precluded from applying for a licence under the Bill.
Perhaps I might call in aid of my Amendments the words of the noble Lord, Lord Derwent, on the Second Reading of the Bill when he said [OFFICIAL REPORT, Vol. 259 (No. 87) col. 113]:
"May I say one word, rather 'off the cuff', about the private argument that has ensued between the noble Lord, Lord Silkin. and his noble friend Lord Lindgren. Having heard this argument for the first time between the noble Lords, I believe, on balance, that the noble Lord, Lord Lindgren, is right."
My noble friend Lord Lindgren was taking the point of view that I am now expressing: that the county districts are suitable authorities for carrying out the provisions of this Bill. After some further words the noble Lord, Lord Derwent, went on (col. 114):
"One must remember, too, that the general public, in regard to complaints about horses being in bad condition and so on will want to go to their local member. If he is a county councillor he may be too far away; but if he is a man who lives in the next street it can be mentioned to him, and the local authority may then be prepared to send somebody round to look at the premises."
He concluded:
"I think that is really the argument of the noble Lord, Lord Lindgren."
Of course he supported it, but I admit that he said his remarks were "off the cuff". He said that he had not consulted his Department about it, and I accept that absolutely.
But the Government's spokesman in another place was not speaking "off the cuff" when, on the Third Reading of the Bill, he said [OFFICIAL REPORT (Commons), Vol. 694 (No. 106) col. 1638]:
"The provisions of the Bill closely follow the provisions of the Pet Animals Act, 1951, and the Animal Boarding Establishments Act, 1963. The former has not given rise to any difficulties of administration, and there is equally no reason to believe that the latter which has only just come into operation, or this Bill, if it becomes law, will not work smoothly and effectvely;".

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So to that extent, I think we can be optimistic. It is true that he was talking about two Acts of Parliament and was also talking about this Bill which contains this 20,000-population provision. But he clearly was arguing that the Acts passed previously by Parliament were suitable in every way for this purpose.
My Amendment is, I think, soundly based on experience under the 1951 Act, and on my experience as a member of an urban district council. I believe that the urban district council and the rural district councils are suitable bodies for this purpose; and my Amendment is certainly in line with the previous enactments.
I am bound to say that if I thought for one moment that adoption of this Amendment would kill the Bill, I would not even move it. I would certainly withdraw it without a great deal of argument, if either the noble Lord, Lord Derwent, or the noble Viscount, Lord Massereene and Ferrard, assured me that if this went back to the other House it would be such a controversial Amendment that it would kill the Bill. The last thing I want is to see this Bill killed: I want it to operate as soon as possible. No one who has ever seen anything of these establishments, who has ever thrown his leg over the back of a horse, would want to see the treatment continuing which is quite often meted out to horses in these establishments. I was bound to think when I heard my noble friend Lord Silkin speaking about the qualifications of some of these people who keep these establishments. I am worried tremendously about the instructions the youngsters give, and no one who has ever seen harsh hands sawing at the sensitive mouth of a horse could ever feel other than worried about the treatment meted out to them. Nevertheless, this is not such a controversial matter as all that. This is a matter of administration and I believe that if this Amendment went back to the other place—which, of course, passed the 1951 and 1963 Acts—it would be approved quite rapidly and without the Bill being held up or killed. I beg to move.
Amendment moved—
Page 6, line 27, after ("borough") insert ("or county district,").—(Lord Champion.)
LORD DERWENT: Before the noble Viscount who is sponsoring the Bill speaks, perhaps I may be able to help. I am not going to argue the merits of this case, but I have had put to me what would be the position of this Bill if this Amendment were carried. Therefore, I thought I would make my only intervention now, if the noble Lord agrees. I am not speaking "off the cuff" to-day, and having gone into the matter, I do not feel strongly either way, any more than the Government do. But, as he has asked me, I would say this to the noble Lord, Lord Champion.
This is a matter about which the different local authority associations feel very strongly and on which they have differing views. The Bill as it stands is, in fact, the result of a compromise reached in the other place and, I am told, to some extent, of discussions outside. All I would say is that if the Bill is amended on this particular point I feel that there may be a serious risk of losing the Bill altogether. Because, as I say, the present wording is a result of discussion and is—I say this quite frankly—a compromise. I thought that I had better put that point at once.
LORD SILKIN: Since I have been referred to, I would say one word. This Amendment has been moved with my noble friend's usual persuasiveness and he has put the case for it as strongly as it can be put. Nevertheless, there is another point of view. My noble friend has quoted a number of Acts which are analogous to this present Bill, but he did not quote the Riding Establishments Act, 1939, under which the local authorities responsible are exactly those set out in this Bill. I think that is a much more reliable precedent than those he has quoted. For those reasons, and for the reason which the noble Lord, Lord Derwent, has just given, that this is a compromise, I myself would be prepared to stand on this compromise and accept the Bill as it stands, although my own opinion is that the more suitable authorities would be the larger ones who have under their control the inspectors and veterinary surgeons, and so on. But if my noble friend is prepared to do a deal with me and accept the Bill as it stands, I am prepared not to move at a later stage for the larger authorities.
LORD BURDEN: Like my noble friend Lord Silkin, I agree that my noble friend Lord Champion has put this case admirably to your Lordships. I intervene only because of what has been said by the noble Lord, Lord Derwent, that this measure is a compromise, and I have been asked to state the position of the Association of Municipal Corporations in regard to the Amendment. The Association has considered the Bill during its progress through another place, and it considers it will be a most helpful measure if and when it receives the Royal Assent. But in regard to the Amendment the Association feels that, since this Bill is intended to re-enact the Riding Establishments Act, 1939, with amendments, it is reasonable that the pattern of administration provided by that Act shall be followed on this occasion, leaving the question whether there should be a redistribution of function for consideration in a wider context. In those circumstances, and particularly in view of what has been said by the Minister, and my noble friend's anxiety for the Bill to become law, I do hope that we shall not have this Amendment pressed on your Lordships this afternoon.
6.14 p.m.
LORD STONHAM: I join with my noble friend Lord Champion in supporting this Amendment, and also in desiring not to do anything at all to delay or damage the prospects of getting the Bill on the Statute Book. I want to register one point of disagreement in regard to the suggestion—and I know it is true—that this is an agreed measure. it rather seems to be one of those agreements where at least some of the parties do not agree at all, and certainly that appears to be the position of the Rural District Councils Association because they are very much behind this Amendment moved by my noble friend, as indeed I am.
With regard to the question of suitability, I am not now thinking of the riding schools providing courses for trotting round Rotten Row; I am thinking of riding schools and riding establishments in rural areas. There are some 474 rural district councils, of which 301 have less than 20,000 population. So if the Bill goes through in its present form, and I know it will, it means that two out of every three of the rural district councils will not be local authorities under this
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Bill when it becomes an Act. I would just say this. In roost cases the rural districts with these small populations not only are the authorities that have the facilities for administering this Bill, public health inspectors and vets readily at hand, but they have a number of riding establishments.
I see the noble Earl, Lord Fortescue, in his place. I am thinking of rural district councils such as Dulverton on the edge of Exmoor, where, of course, almost everybody rides and where quite a large number of horses are hired out, some for hunting, others for going over the moors, and where the need for this Bill is just as apparent as, or even more apparent than, in some urban districts. It has quite a small population, but nevertheless, they have everybody at hand, everything suitable for administering a Bill of this kind. They are indeed the people who know, and I think therefore it is a pity that this deal, as it were, was made outside and that the smaller authorities are going to be excluded. I think it is a mistake, because in many cases they would be the best authorities to administer this kind of legislation.
VISCOUNT MASSEREENE AND FERRARD: I do not have any precise knowledge of the number of rural district councils and urban district councils, but I should imagine there must be between 1,500 and 1,800. There are only 2,000 riding schools, and it is surely rather ridiculous to have, say, 1,800 authorities inspecting 2,000 riding schools. It is really rather like Alice in Wonderland.
LORD STONHAM: I think that after this Bill becomes an Act the noble Viscount will find he has a lot more riding schools than he thought. There are many riding establishments hiring out horses which are not registered as riding schools.
VISCOUNT MASSEREENE AND FERRARD: It remains to be seen. But surely it is far better to have the power of inspection and granting of licences in the hands of the authorities who presumably will have within their jurisdiction the necessary officers. I think it was the noble Lord, Lord Silkin, who mentioned the precedent of the Riding Establishments Act, 1939. The county councils have been using their powers in the carrying out of that Act. They do know the business. I feel that if we are going to

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hand it over to all these small district councils it is going to cause a great deal of unnecessary trouble.
One noble Lord opposite brought up the question that the local inhabitant of a small county area would be far more inclined to lodge a complaint with his local authority, the rural district council. That probably is so. But, on the other hand, there are considerations against that, too. You may have Mr. Smith who is friendly with Mr. Brown on the local council, and perhaps he may have a grudge against the man who owns the riding, school. Human nature enters into this. I personally would be of the opinion that it is far more satisfactory to have this power in the hands of the big authorities.
One noble Lord opposite brought up the question of the precedent of the Animal Boarding Establishments Act, 1963, and the Pet Animals Act, 1961, which of course are administered by district councils. But these are completely new Acts, and we do not really know how they are operating; I think it is too early to say. They have not been working long enough to set a precedent for new legislation relating to riding establishments. As I have already mentioned, the county councils have been exercising these functions for many years, and to operate this Bill sufficiently well it is far better to allow the authorities who already have the available powers and machinery to carry on with the good work.
LORD CHAMPION: I am not going to spend a long time replying, because I said at the outset that if there appeared to be the slightest chance that this Bill would be lost if it went back to another place, I certainly would withdraw my Amendment. I am bound to say to the noble Viscount that the fact that many authorities would have the powers does not necessarily mean that all those authorities would exercise them. They would only exercise them in cases where they happened to have such establishments within their area. There is just one other point that I would mention. The noble Viscount said that somebody on this side suggested that the local member would be approached. It was his noble friend who made that point on Second Reading. I was merely calling him in aid. I shall
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not prolong this discussion because I think there is something in what the noble Lord, Lord Derwent, said. Having regard to the local authority associations and their feelings in connection with this matter, they might get their champions to ride fearlessly into battle. If this Bill went back to another place, it might cause it to be lost. In the circumstances, I am happy to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 6 agreed to.
Remaining clauses agreed to.
House resumed.
Bill reported, with Amendments.

TRADING STAMPS BILL
6.25 p.m.
Order of the Day for the House to be again in Committee read.
Moved, That the House do now again resolve itself into Committee.—(Viscount Colville of Culross.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD MERTHYR in the Chair]
BARONESS ELLIOT OF HARWOODhad, on Thursday last, moved an Amendment to add to Clause 3 ["Redemption of trading stamps for cash"] the following new subsections:
"(6) Upon delivery of a trading stamp to any person (in this and the next two following subsections called the holder') in connection with the sale of any goods or the performance of any services there shall enure to the holder the right either—

(a) to redeem that stamp (subject to the provisions of this section) for the cash value shown thereon, or

(b) to exchange that stamp for any goods properly described to the holder as being exchangeable therefor;

and any condition or term of any contract or offer which purports to enable that right to be extinguished without the oral or written consent of the holder shall be of no effect.
(7) In the last preceding subsection 'goods properly described to the holder as being exchangeable therefor' means goods—

(a) which have been described in any announcement or advertisement as being exchangeable for stamps of the kind delivered to the holder, or

(b) which have been the subject of any declaration or allegation, made to the holder by any person concerned in the transaction in connection with which the holder's stamps were delivered, to the effect that they were so exchangeable.

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(8) At the time of delivery to the holder by a supplier of any goods in exchange for that stamp as provided for in subsection (6)(b) of this section of this Act, there shall subsist between the holder and the supplier a contract for the sale of such goods within the meaning of section 1(1) of the Sale of Goods Act, 1893, and to which the provisions of that Act shall apply."
THE CHAIRMAN OF COMMITTEES: The Committee will now resume discussion upon Amendment No. 27, the Question upon which, pursuant to Standing Order No. 50, was left undecided on Thursday last.
Does the noble Baroness wish to speak again?
BARONESS ELLIOT OF HARWOOD: No, not at the moment.
VISCOUNT COLVILLE OF CULROSS: I wonder whether it might be to the convenience of the Committee if I said a word at this stage, because there were a great number of points raised in the debate upon this Amendment last week, and it would certainly be of great assistance to me if I could try to pin-point some of the matters which your Lordships wish to see dealt with, by means either of this Amendment or something like it. I am bound to say that I am not altogether clear what the specific points are at the moment, and I would ask your Lordships' indulgence if I run quickly over what was said. If I then try to put the issues to the Committee, so that we can have a further discussion about them, it may crystallise the matter and make it clear.
First of all, may I deal with the point of the Sale of Goods Act. My noble friend Baroness Elliot of Harwood made a tremendous speech upon this, among other things, at the end of the Committee stage last time, and I should greatly like to know whether she has come to a conclusion upon this point, and whether other noble Lords have come to the same conclusion or a different one. The points at issue seem to me to be these. You have to weigh up whether you want at this stage a complicated Amendment, which I think it would be, which would attract suitable provisions (they would not all be suitable; but some of them might be) out of the Sale of Goods Act and put in a proper legal arrangement to deal
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with a sale for the purposes of that Act, with a buyer, a seller and a price.
Then, secondly, one must face the fact, that having done that, one is content with a situation whereby, as under all the Sale of Goods Act provisions at the moment, the trading stamp company could quite easily contract out of the whole thing, thereby nullifying all the protection which the Act might have provided and which the Amendment in this Bill would seek to provide. What protection would this give? I ask this because I want to know what your Lordships think about it. I suspect—and my noble friend Baroness Elliot of Harwood referred to them with approbation—that the good companies would probably play fair anyway. I think that the bad companies might easily contract out. Therefore, I am afraid that the attraction of the Sale of Goods Act as it is to-day would probably come to nothing at all.
LORD SHACKLETON: May I interrupt the noble Viscount? On the contracting out, what actual process would they use? Would it be possible to distinguish between the good company that did not contract out and the one that did, so far as the consumer is concerned?
VISCOUNT COLVILLE OF CULROSS: do not think so. It is comparatively simple. It would require something written, perhaps on the catalogue or some other document constituting the scheme, simply saying that "it is a term of this scheme that Section 14 of the Sale of Goods Act does not apply", and you take it or leave it if you want to go into the scheme. I understand that it is as simple as that, and therefore if a company chose to do it it could do it, and there would be nothing that anybody could do to counteract this action, because one would then have to accept the scheme as such or not at all.
LORD SHEPHERD: Would the noble Viscount not agree that the attention of the stamp collector would be clearly drawn to the fact that the company has contracted out of what is one of the recognised obligations under the Sale of Goods Act?
VISCOUNT COLVILLE OF CULROSS: I should have thought it could be done in such an obscure way that the ordinary

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consumer would not have taken the point with that degree of ease. But be that as it may, I should like your Lordships' views on this. However, if you wish to stop this, of course it might be done by some form of limitation of the powers to contract out or prohibition of it. This is precisely the Molony Committee recommendation, and is something which my noble friend Lord Drumalbyn promised was going to be looked into in the whole field of the Sale of Goods Act, and not simply as applied to trading stamps. Is it right to put something like that in this Bill ad hoc? My noble friend Lady Elliot of Harwood thought not on the Committee stage. Or is it better to leave it until the whole matter is dealt with and, by taking my noble friend up on his assurance that it will be dealt with, see that trading stamps—
LORD CHORLEY: Would the noble Viscount agree that, if we do not have it in this Bill, when the Molony proposals are carried into law they will not bite on this; whereas if it is in the Bill now, when the Molony proposals become law they will bite on it and we shall have solved the problem?
VISCOUNT COLVILLE OF CULROSS: I do not think the noble and learned Lord, Lord Chorley, has read the assurance given by my noble friend Lord Drumalbyn last Thursday on this particular point. This was covered and there was an assurance given that there would be a new clause in the new Sale of Goods Bill.
LORD SHACKLETON: Not quite.
VISCOUNT COLVILLE OF CULROSS: I think so. I think that it is in col. 419 [OFFICIAL REPORT, Vol. 259 (No. 89)]:
"I can give the assurance that it will be considered in connection with the consideration of the Sale of Goods Act as a whole,"
LORD SHEPHERD: Yes, considered.
VISCOUNT COLVILLE OF CULROSS: I do not know that my noble friend could have gone further than that. This is an assurance which he has given, and I should be content to abide by it as being given in every good faith. I should hope to take him up on it if, when the time comes, it was not done.
LORD GARDINER: Is the Bill to be introduced this Session?
VISCOUNT COLVILLE OF CULROSS: I should think not.
LORD GARDINER: Is the assurance worth anything?
VISCOUNT COLVILLE OF CULROSS: This depends, of course, upon what happens next Session. However, that is the issue, as I see it, on the point of the Sale of Goods Act, and I should he grateful for the views of the Committee on this matter.
To go on to the other part of the noble Lady's Amendment, the first provision about redemption in cash need not be discussed any further, as it is already perfectly well covered in Clause 3. Therefore, the remaining point is a statutory contract for redemption of goods. The noble Lady—and I say this in no form of criticism of the noble Lady—set out within a few lines of her speech two different types of contract of this nature. It seems to me to be very important to find out which of these two your Lordships would prefer. Perhaps I could quote them very simply in the noble Lady's words. The first proposition is this [OFFICIAL REPORT, Vol. 259 (No. 98), col. 422]:
"If the consumer wants to collect for an object I think it should be an obligation on the company to try to supply that object."
The second proposition was a few lines later, and was different. The noble Lady said that, when the collector has collected the correct number of stamps for a given article, there is an obligation on the company to have that article in stock, or to provide a good excuse why it is not in stock, or to provide the next best equivalent to it. There are two propositions there. Either you create the contract at the time when the stamp collector gets his first stamp, and thereafter the company is bound to provide him with the goods that he wants; or you feel that that could not be done and wait until the collector has the right amount of stamps or right number of books for the given object. The first of these two propositions seems to me to have a certain number of difficulties. To start with, it is not a hire-purchase type of transaction. If the collector has not collected

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the correct number of stamps for the goods, it seems to me wrong that there should be a contract at that stage by which he can insist on having those goods. It would inevitably have to be deferred until the stamps had been collected. Secondly, what evidence, or what possible machinery, could there be at that stage for the stamp collector and for the company to pin down the object that the stamp collector has in mind? He might not want what he originally decided on when it came to the point.
It works the other way round, too. If a contract for that article was going to he created at that stage, would it not also be binding on the stamp collector to take it when he collects enough books? Would it not be possible for the stamp company to enforce it against him, as well? This might not be at all a desirable thing. I do not think this would be at all easy to work when collection of stamps spreads over a long period of time, during which all sorts of things might happen—new types of goods coming in, prices changing, and different sets of circumstances occurring at the end of a few years when the books are full and the collector is ready to go and get his article. Those are practical difficulties which would have to be dealt with in drafting a contract at that stage.
The only other alternative I can see is to wait until the stamp collector has the proper number of books for the article which he chooses. Say that it is two books. At that moment you could say that there should be a contract for anything in the catalogue which can be acquired for two books. This would meet the point of the noble Lord, Lord Shepherd, at any rate to a certain extent. I do not think you could say that there should be a contract at that stage for any specific goods, because how would you decide from the outside what goods the stamp collector had in mind? It could be done only when he had gone to the shop or done some other equivalent act and actually chosen the particular article. I do not think one can do it in a vacuum. The difficulty about this is that in most cases the terms of a trading stamp scheme in itself provide a contract which has exactly this effect. I do not think they all do, but
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the majority of them would. There is an offer, there is an acceptance, and I think that there would be a contract for a collector to go along and say "I have two books. You advertised certain articles that I may obtain for these books. Here they are. May I have the article?". I think that this in most cases would be a contract, and to make it statutory might add nothing. I hope that that is a synopsis of what was said, and I should be grateful if your Lordships would let me know which of those points, if any, you would like me to try to get into this Bill.
LORD SHEPHERD: I am sure we are all grateful for the manner in which the noble Viscount has refreshed our memory of the debate of last Thursday. I am quite sure that those of us who were present that evening are gratified to see there are now more noble Lords present in the Chamber to help us come to a decision in this matter. I do not think there is any doubt that in all quarters there is some uncertainty as to the effect of the Bill in the protection of the consumer.
The noble Baroness, Lady Elliot of Harwood, when moving this Amendment, made perhaps the main point when saying that the stamp collector at present has no right at all to the stamps. It is a fact that in many of the catalogues and the conditions that go with them it is clearly stated that the stamp holder has only one right—and that is to place those stamps in the book; that the stamps, the book in which they are collected, and the catalogue remain the property of the issuing company throughout. It may well be that under Clause 3(5) of the Bill in the case of cash redemption we are in some ways giving a right to the stamp collector in the sense that the clause itself gives them a right to redeem the stamp for cash. Subsection (5) makes void any agreement that may be entered into by the stamp company with the stamp collector if it were to take away this power for cash. So in regard to cash redemption, the position of the stamp collector is satisfactory.
We now come to the question of goods. Here again—I repeat this, for it is important—in the case of the presentation of stamps to the stamp company for redemption, the stamp collector has no rights whatsoever—none. I was attracted

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to subsection (8) which is the subsection dealing with the Sale of Goods Act. It may be that this Act, which has been in existence for many years, has only marginal effect in that it can be avoided by the contracting out of the merchant. But it is a fact that the trader, if he wishes to contract out, has got to go through the particular physical act of so doing. At the present moment, however, the stamp company does not have to do anything, until the moment at which the stamp collector presents his stamps in order to redeem them for goods.
I should like, first, to speak on a very narrow issue, as to what goods shown in the catalogue the stamp collector may receive. These catalogues are produced in very fine form, with good paper and good photographs, and in some cases with definitions—but not always. It may well be that the catalogue has a photograph, shall we say, of a "Hoovermatic" washing machine which many housewives would like, and it may be obtainable for a very large number of stamps. What happens, however, when the housewife sends the stamps to the stamp company and says, "I want the Hoovermatic'"? She may anticipate from the catalogue that she will be receiving a new "Hoovermatic". What happens if the company sends her a rebuilt, secondhand "Hoovermatic"? Will she have any right to change her mind and say, "I asked for that. It does not come up to my requirements. It is not what I believed I was going to get. Therefore, I wish to have something else"? Will she have that right, or will the stamp company say" We supplied you with exactly what we offered"?
We know of the problems and disappointments that arose from newspaper advertisements. In fact, we had to legislate to control the advertisements. I am not sure whether or not that was done under the Sale of Goods Act, but we certainly legislated to protect the consumer from receiving goods which did not meet with what the advertisement would have led the applicant to expect. I appreciate the difficulty of asking the noble Viscount to accept a part of the Amendment or the whole Amendment—certainly, it would be difficult within the Rules of the House to be asked to accept half an Amendment—and this is why I respond very much
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to the noble Viscount's suggestion that we should try to get clear in our own minds what we should like to see. Certainly, I should like to see some provision which would give the consumers protection. Perhaps it can be done within the Sale of Goods Act. That may be the only vehicle that we have for drawing attention to this matter.
It may be that the wording is imperfect, but the stamp company would have to take a physical act. It would have to state in its catalogues that it was contracting out of the requirements under the Act. I should have thought that that was better than to leave the public, perhaps, to think that the goods in the catalogues were offered under the Sale of Goods Act, when they were not. I should have thought it was infinitely better, even if the wording is imperfect, to put it in so that if the company wished to change its relationship it would have to take a physical act. We appreciate the tremendous difficulties under which the noble Viscount is working, owing to the shortage of time, but I hope that he and his noble friends who are supporting this Bill will consider this matter very seriously, because I think there are many dangers here, and the consumer might be placed in a position where he felt he had had a rather bad deal.
6.45 p.m.
LORD SAINSBURY: Once more I must declare an interest, but I should like to say this in support of my noble friend Lord Shepherd. I have received many letters from housewives complaining of their bitter disappointment—some with very strong criticisms of certain stamp companies—when they have tendered their stamps for a certain article which has been advertised in the catalogue only to be told that the article is no longer in stock. And in some cases they have not even been told that, but have been given a different, an inferior article. I think that the Consumers' Association, would say that they, too, have received a large number of complaints from disappointed people, but have been unable to do anything about them. I am no lawyer, and I appreciate the difficulties; but I do feel that even the perhaps inadequate protection of the Sale of Goods Act would be of some help in protecting the housewife against this, in some cases, sharp practice.
TILE EARL OF SANDWICH: I apologise to your Lordships for coming late into this debate, and I did not hear the opening statements. But from listening to what I have just heard in the last few minutes from the other side of the House, I should have thought it quite clear that a purchaser of goods by redemption of stamps could always investigate the situation, where he or she was doubtful about something in a catalogue, by going to one of the redemption centres and seeing for himself or herself. If customers were to buy the grocery goods of Lord Sainsbury's great establishment as pigs-in-a-poke, no doubt their wild imagination would disappoint them greatly when the goods arrived. But as they, fortunately, go in very large numbers to his grocery establishments and see them for themselves, they are constantly reassured. Anybody who is doubtful about whether the glossy covers in the catalogue do not quite "hit off" the actual article, can go to the redemption centre and see for himself.
I do not think that this Amendment will really fit the Bill. The noble Lord, Lord Shepherd, did not actually state whether the example he gave—of a shopper who wanted a "Hoovermatic" machine and who found, when the stamps were redeemed through the post, that the machine which arrived was a rebuilt second-hand affair—would be caught by the Amendment which has been moved by the noble Baroness. It may be that there is full provision for that sort of thing in Section 1(1) of the Sale of Goods Act, 1893—I do not happen to have the Act by me. But if the case which he has made out is not covered by that subsection, then it certainly is not included in any of the wording in the rest of the Amendment. I think the noble Lord is conscious of that and, if he wants to catch up with that situation, some fresh Amendment will have to be put down.
LORD AIREDALE: I do not find the first part of what the noble Earl said very reassuring, because there must be, I suppose, a number of stamp collectors in towns about the size of Knaresborough or Richmond, in Yorkshire. I do not suppose there are gift redemption centres in Knaresborough or Richmond, and one could hardly expect a stamp trading company to open a gift shop in small
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towns like that. I do not know where one has to go from those towns. I should think one would probably have to make an expedition to Leeds for the nearest gift redemption centre. Having saved up enough stamps for a "Ken-wood" mixer, a lady might be quite prepared to go off to Leeds to collect the mixer; but I do not think she would be prepared to go to Leeds just to have a look in advance: to see whether there really was a "Kenwood" mixer in the shop in Leeds corresponding to the "Kenwood" mixer in the glossy catalogue which she had seen in the grocer's shop.
BARONESS ELLIOT OF HARWOOD: I am not going to delay the Committee, because I am going to withdraw this Amendment. However, various points of some substance have been made, and perhaps they could be looked at by the noble Viscount. I should like to thank him very much for the summaries which he made at the end of the debate last Thursday which, as your Lordships know, was very late. I do not want to press anything very strongly beyond the question of some protection under the Sale of Goods Act. I have been told, and perhaps my information is incorrect, that under that Act as it stands (and, like the noble Lord, Lord Sainsbury, I do not have a great knowledge of the Sale of Goods Act) one could cover the stamp-trading companies, and such people. It could be done.
The noble Viscount says that it would be very easy for them to contract out. I rather agree with the noble Lord, Lord Shepherd, that if they say they are contracting out, that would at any rate warn people that they could not make any claims under the Sale of Goods Act, and they would therefore know it was going to be no good for them. It is a weakness, I agree, and perhaps the noble Lord, Lord Drumalbyn, who promises to review that Act and bring it more up-to-date, will in the future be able to make it more effective in this particular respect.
think it is something which the consumer should be granted, in view of the importance of the principle of that Act to consumers who are already covered, or can claim to be covered, by its terms.
The other point with which the noble Viscount did not deal is this curious business about the stamps not belonging to

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the person who has, in fact, earned them by purchases. It seems to me, in all fairness, that that is something which should be included in the Bill. If the stamps that I earn by my purchases are not mine, whose are they? They are the stamp company's, I suppose. But I have obtained that discount through my purchases, and I have paid for those purchases. It seems to me a little difficult to say that the stamps are not mine. The noble Viscount could no doubt explain why they are not mine, but I think they should be. Those are the only two points in which I am interested, but I hope that, perhaps on Report stage or at some future time, the noble Lord, Lord Drumalbyn, will be able to satisfy us that the Board of Trade really intends to make a serious contribution to this subject by bringing the stamp-trading interests under the Act when it is revised. I beg leave to withdraw my Amendment.
LORD SHACKLETON: Would the noble Lady, before she withdraws it, allow the Committee to have a little more time on it?
BARONESS ELLIOT OF HARWOOD: Certainly.
LORD SHACKLETON: Perhaps the noble Viscount would like to answer the noble Lady's question first.
VISCOUNT COLVILLE OF CULROSS: Perhaps the noble Lord, Lord Shackleton, would rather precede me.
6.54 p.m.
LORD SHACKLETON: I expect the noble Viscount would like to reply to all the speeches in one go, rather than have several bites at the cherry. I must say that those of us who heard the debate last week very much appreciate the efforts which the noble Viscount has made, and I echo what my noble friend Lord Shepherd has said. It is a pity that the noble Earl, Lord Sandwich, was again a little behind time and did not hear some of the noble Viscount's opening remarks. We are all agreed that this particular Amendment is not suitable, and the noble Baroness never thought it was. She does not claim to be a skilled Parliamentary draftsman; and this matter has caused difficulty even to such a skilled lawyer as the noble Viscount—and I really think the noble Viscount
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must be a pretty skilled lawyer, because of the clarity of his explanations. When he tells us it is exceedingly difficult to draft something in this Bill, then I absolutely accept that. None the less, there was some gleam of hope in his speech. He rather asked the Committee to express views on certain matters. I agree very strongly with the noble Baroness—and, surely, everybody must agree—that it is a ridiculous situation that the stamps do not belong to the person who holds them, if this is in fact so.
VISCOUNT COLVILLE OF CULROSS: I do not think that this necessarily matters. It may be indicative of the fact that there is no contract, or it may mean nothing at all; but it would be cured, I think, by the creation of some sort of contract, if that is the way your Lordships' Committee would like it to be done. If a contract were created, I still do not think it would matter whether the stamps belonged to you or not.
LORD SHACKLETON: I entirely agree with the noble Viscount, but it is an indication of the extreme peculiarity—indeed, the ridiculousness—of the situation that there is no contract nor do the stamps belong to the individual who thinks they belong to him.
VISCOUNT COLVILLE OF CULROSS: There may be.
LORD SHACKLETON: There may be, and that is the point I am coming on to. It is apparent that in a situation of this kind Parliament or the Government ought to try to provide safeguards of the kind that are provided in many other fields, and which have been provided not merely in the last few years but in the last fifty or more years. It is obvious that some sort of contract needs to exist. I must say that I am attracted by the idea, taking into account the practical side, that such a contract should exist, should be created or should be deemed to exist at the time the individual hands over the completed stamp book. One would very much like it at the time he got the stamps, but this is obviously not practicable. Customers may hold on to them for years. If, therefore, a contract could be created at that time, this would seem to me to be a satisfactory advance.

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It would also make it more possible, perhaps, to apply at the same time certain sections of the 1894 Sale of Goods Act. I am not going to press the noble Viscount too far, but he will recall that in Clause 1 certain sections of the Companies Act have been applied. I think it is obvious that certain parts of the Sale of Goods Act would not be suitable: nor am I clear whether it would be possible to draft a clause in the form that not only is a contract deemed to take place but a sale, also, is deemed to take place at such a time, because I am not sure that otherwise it is a sale. It presumably is not. It might be that, in those circumstances, if it were deemed to be a sale, no reference to the 1894 Act would be necessary at all; it might be that the words "for the purposes of the 1894 Act" would suffice; or there might be a reference in relation to particular sections only—those relating to conditions and warranties; for instance, Section 10. If this could be done, I think there would be a very real advance.
I agree with my noble friend Lord Shepherd and other noble Lords that the fact that it is open to a stamp company to opt out is not an insuperable difficulty, or is not one that is decisive. It seems to me that if the stamp company has to opt out in some way, they have to opt out in precise terms. I do not know where this disclaimer would be. It would presumably be on the catalogue—or, rather, either on the catalogue or on the stamp book itself, because, after all, the stamp book would be the document in the possession of the customer or consumer. This is a point on which possibly my noble friend Lord Gardiner would be able to help, if the noble Viscount feels unable to clarify it.
I should like to know how this disclaiming has to be done. On a railway ticket or an airline ticket it appears, perhaps, on the ticket. In the case of a cash transaction, I am not quite sure. After all, the Sale of Goods Act makes a cash transaction a contract for the purposes of that Act. I am not quite sure where this disclaimer comes in. It may be that perhaps I ought to know. Equally, my noble friend Lord Sainsbury might be able to help on this point. It is quite important to the precise consideration of
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this matter, and I therefore hope that we shall not shrink from applying the Sale of Goods Act if it is possible, even though it is equally possible for people to disclaim. We all agree that the good stamp company does not need this—although even the good stamp companies have gone in for some rather odd things, and it may be that some of the complaints mentioned by the noble Lady have related to stamps from even good companies. But I hope that we can get this right.
The problem would not exist, of course, if we had been able to write into the Bill a proper cash value—and this is the point that the noble Lord, Lord Airedale, made— because in the last resort people can always ask for the cash. But we have been unable to do this; and I think this is the best hope of doing so. I am sure the Committee—and I hope we are all in agreement on this—will welcome any effort that the noble Viscount can make, both to apply the Sale of Goods Act and to establish a contract at some stage, presumably in relation to the current catalogue at the time the goods are handed over. People may say that that will be of no value because at any moment the companies can alter the value of their stamps in relation to the catalogue.
It is astonishing how totally unprotected people still are on this point. At an earlier stage there were some attempts to establish the prior rights of the stamp holder and various speakers in your Lordships' House and in another place asked: "Why should their claims come before that of the trade creditor?" But at the moment they do not come anywhere at all. It is still open for the stamp company, instead of writing down its shares, to write down the value of the stamps, provided that they do not go below the actual cash value; but they may be only 25 per cent. of what individuals had thought was the real value. This is, even then, a limited protection: for there is no protection against the company which is forced, through bad trading or management, into a situation—or does it wilfully—where it cannot meet its obligations. Such a company can still opt out.
However, we are reckoning that most of these trading stamp companies will go on, and the catalogues, one hopes, will be valid. People will notice if new catalogues come along with infinitely less value; and there is, in any case, the effect

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of competition—which seems to provide quite a good protection. I wish we could do more; and I would only add that I think the Government's attitude over this has been extremely feeble. It must be apparent to the noble Lord, Lord Drumalbyn, that much more thorough legislation is necessary. None the less we congratulate the noble Viscount, Lord Colville of Culross, who goes on battling, for the way he has taken notice of our criticisms.
VISCOUNT COLVILLE OF CULROSS: I am grateful to the noble Lord and to other noble Lords who have spoken, because I think my task is a great deal clearer. At any rate, I have the views of the noble Lord, Lord Shackleton, as to when the contract is created. The stage he suggests, I think, might be practicable. Earlier on in the process I did not think it could be done even at that stage. I might say to the noble Lord, Lord Sainsbury, that I do not think it will be the panacea he is seeking; because if you start collecting in this year and do not collect enough stamps until 1970 to redeem the article of your choice it is perhaps not surprising that it is not the same as it was at the beginning of this year. We cannot reasonably rule out the freedom of the stamp company to bring in new articles, to bring their stamps scheme up to date, and, if necessary, to change their prices, if they are forced to do so.
I am grateful to noble Lords for the greater clarification I have had on this issue. It may be that the noble Lord, Lord Shepherd, wishes to attract some provision other than the sale of Goods Act; because I am not certain that the point he raised is covered by it. If he can give me specific references, I will look at them. However, I understand that the noble Lady is to withdraw her Amendment, and I have now a considerable amount of information to get my teeth into before the next stage, and I undertake to have a thorough look at this.
THE CHAIRMAN OF COMMITTEES: Does the noble Lady wish to withdraw her Amendment?
BARONESS ELLIOT OF HARWOOD: Yes, I wish to withdraw.
Amendment, by leave, withdrawn.
Clause 3, as amended, agreed to.
Clause 4 agreed to.
7.6 p.m.
VISCOUNT COLVILLE OF CULROSS VISCOUNT COLVILLE OF CULROSS moved, after Clause 4, to insert the following clause:
Advertisements referring to value of trading stamps
" .—(1) It shall be unlawful for the promoter of a trading stamp scheme, or for any person carrying on a trade or business in which a trading stamp scheme is operated, after the coming into force of this section to issue or publish, or cause to be issued or published, an advertisement in any medium which conveys, or purports to convey, the cash value of any trading stamps—

(a) by means of a statement which associates the worth of any trading stamps with what the holder pays or may pay to obtain them, or

(b) in terms which are misleading or deceptive.

(2) A person contravening this section shall be liable on summary conviction to a fine not exceeding fifty pounds.
(3) For the purposes of this section an advertisement issued by way of display or exhibition in a public place shall b treated as issued on every day on which it is so displayed or exhibited, but in proceedings brought by virtue of this subsection in a case where the display or exhibition began before the date of the coming into force of this section, it shall be a defence to show that the defendant had taken all reasonable steps to secure that the display or exhibition was terminated before the date."
The noble Viscount said: I hope that at least this Amendment will bring a little joy into the life of the noble Baroness, Lady Elliot of Harwood, because this does, I hope, meet the third of the criticisms that were put forward in the Consumer Council pamphlet on the deficiencies in the Bill. This new clause will prohibit the misdescription of cash value of trading stamps in any kind of advertisement. The examples of this are well known to us all. There is the "£1" voucher with which the front of the document I have referred to is well and truly embellished and there have been other examples. One was given by the noble Lord, Lord Sainsbury, in his speech in the Second Reading debate. But, at any rate, I hope that this Amendment will stop this practice.
It will make it a criminal offence for a promoter of a trading stamp company or a retailer or any person operating a scheme, in other words the person in

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control of the trading stamp scheme, to issue one of these advertisements. But I would ask the Committee to note that the clause prohibits only advertisements describing the cash value of trading stamps either in terms of the amount expended to obtain them or in any other terms that are misleading or deceptive. I think this will cover misleading advertisements, but will not prohibit the proper advertisements. The penalties will apply only to the promoter and not to the advertising medium, whatever it may be, through which the advertisement was put out. I think this is fair, because I feel the person we want to deal with is the promoter. I think the penalty is the proper one and is in line with other penalties for similar offences in other Acts which have already been passed by Parliament.
I would draw the attention of noble Lords to two further points in subsection (3). The first part provides that there would be a continuing offence if one of these advertisements were left up. In other words, every day it stays a new offence is committed for which a new fine is imposed. The third subsection also provides a transitional provision which will enable the promoter already displaying such advertisements to protect himself if they are beyond his control, if when the subsection comes into ford he is not in a position to withdraw the advertisements. If he shows that he has taken reasonable steps to stop them he will have a defence under this particular subsection. I think that that is right because withdrawal may have gone beyond his control at that stage. Apart from the these technical provisions at the end, I hope this clause will be precisely that for which the noble Lady is asking and that it will be acceptable to the Committee.
BARONESS ELLIOT OF HARWOOD: I welcome this clause. The noble Viscount is right. This is the first time I have seen something come forward on this Bill which I think really will be of some protection to the consumer. As he knows, I had in an earlier Amendment mentioned a number of practices indulged in by the stamp companies which I thought were misleading and should be made impossible. It seems to me, on listening to the noble Viscount,
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that in fact this is going to happen under this clause, and I have great pleasure in supporting what he said.
LORD AIREDALE: I wonder whether the word "associates" in the first line of paragraph (a) is really intended to be "equates"? I ask this because, if the word "associates" remains, this will knock out my Amendment No. 30 before we even get to it. This is like having the linesman calling "Fault!" before you even strike the ball.
VISCOUNT COLVILLE OF CULROSS: I am very willing to look at that point. If I have succeeded in displacing the noble Lord's Amendment, it may be that I have been even more cunning that I thought. I do not wish the word "associates" to do anything here, in the context of the display of a notice in the shop, but to explain the terms of the scheme and how many stamps one gets for the money spent. If there is any other effect I will see that something is done about it. On the other hand, I do not think that the word "equates" would be right, because it is ofen done in a far less accurate way than that word would require, and it is still extremely misleading. Therefore, this is a matter I should like to look at again. Subject to that, I hope that the Amendment may be accepted.
LORD SHACKLETON: Obviously we welcome this Amendment. I have only one question. Is the noble Viscount satisfied that this covers the most glaring case, that of the voucher which purports to be something else? Can this be called an "advertisement" in the terms of the Amendment?
VISCOUNT COLVILLE OF CULROSS: I am advised that that is so.
On Question, Amendment agreed to.
Clause 5 [Display of information in shops]:
VISCOUNT COLVILLE OF CULROSShad given Notice of three Amendments to subsection (1), the first being after "operated" to insert ("(a)". The noble Viscount said: I think that it might be convenient if, with this Amendment, I speak to Nos. 33 and 36, which are part of the same point. Their purpose is to ensure that whenever a trading stamp promoter issues a gift catalogue a copy

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of the current edition is available for inspection by customers in all shops that operate under that stamp scheme. This is the second time that an attempt has been made to put an Amendment of this type into the Bill. On the first time, in another place, the Amendment was found to be faulty. So this is a matter which has been under way for some time.
There are one or two points I would make about what is provided by these three Amendments, taken together. The main point is that it is not made compulsory to issue a catalogue or display. This is because there is, for example, one scheme which only redeems in cash and therefore no catalogue is necessary. There is also the type of scheme which redeems in goods in the shop itself; and here again no catalogue is necessary, because there they are in the shop for all to see. So there is no requirement that there should be a catalogue in all cases. But if a catalogue is issued, these three Amendments require that it shall be on view for the people who are taking advantage of the scheme. I believe that this would be an improvement to the Bill. I beg to move.
Amendment moved—
Page 3, line 27, after ("operated") insert ("(a)").—(Viscount Colville of Culross.)
LORD AIREDALE: I think that on balance these Amendments are worth while, but I wonder whether the practical effect will be that fewer catalogues will be issued to stamp collectors to study in their own homes. I mention this point because the last page of the catalogue is used for the purpose of contracting out. If the collector has an opportunity of consulting the catalogue only in the shop, she is much less likely to read the conditions about contracting out on the last page, whereas if she has a catalogue in her own home, she can read at her leisure the whole of those provisions, which we may regard as rather mischievous.
VISCOUNT COLVILLE OF CULROSS: This is one of the disadvantages of putting in the Sale of Goods Act. However well-intentioned the noble Lord is, I rather think that, even if customers read the last page, the purport of contracting out would remain obscure. I do not think that the noble Lord need fear
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anything about this. One of the points taken care of in this Amendment is that the current catalogue should be on display in the shop. There are difficulties in making a current catalogue available to take away; but, of course, the catalogue is the main sales instrument of any scheme. The promoter has lavished an enormous amount of attention and care on printing a coloured catalogue, and the noble Lord need have no fear that the stamp companies will seek to limit the distribution of these catalogues; because if they did so, they would not be getting the benefit of the attraction of the goods shown in them and their advertisement of the scheme. I do not think that the Amendment will have this effect.
LORD SHACKLETON: Is the noble Viscount satisfied with the definition of "shop" which arises in connection with this Amendment? On looking at the Interpretation Clause, I see that "shop" is drawn as widely as humanly possible, but even then are there any trading stamp activities which may take place outside
"any premises, and any vehicle, stall or place other than premises, on or in which any retail trade or business is carried on:"
It might not be a retail business—I am thinking of the garage which, under manipulation under the Resale Prices Bill, ceases to be a retail establishment and instead becomes an agency.
THE EARL OF SANDWICH: I wonder whether my noble friend would look at the possibility of substituting the word "copies" for "copy", in line 4 of Amendment No. 33. We all know what happens to a much-used London Telephone Directory on the slab of a large hotel. It seems to me that if we are to require only one catalogue to be kept in a large departmental store or multiple grocery, it will soon get into a tattered condition and there is no requirement in law for the owner to renew it, except when a new catalogue is issued. If "copies" were substituted, then, of course, they could be confined to two, which would not be too expensive for a small shop or store.
LORD AIREDALE: Or perhaps at the next stage, before "copy" we could insert the word "clean".
VISCOUNT COLVILLE OF CULROSS: I think that is asking for litigation. The noble Lord, Lord Shackleton, raised the

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question of the definition of "shop". This is a highly complicated matter and there is a great body of court decisions upon the meaning of "shop", as well as numerous definitions in various Statutes. Without having had notice, I do not know how this particular definition fits in. At the moment, I can think of no activity that would be carried on outside this definition. Perhaps the noble Lord will be able to think of such an activity. If he will write me about what he has in mind, I will see whether it can be covered. I think the definition is drafted as widely as it can he at the moment.
I should like to look at the point raised by my noble friend Lord Sandwich to see whether it can be dealt with in a way that will not be too burdensome and require too many copies of these fairly expensive catalogues to be produced. I think it is a good point, and I should like to study it. Otherwise, I think the Amendment is acceptable.
LORD SHACKLETON: I was thinking of a house-to-house salesman who might carry the catalogue but might not carry the current catalogue. I do not think that is a shop, although perhaps if he comes on a vehicle, or stands in a stall he becomes a shop. I will leave it with the noble Viscount.
VISCOUNT BRENTFORD: If this itinerant salesman comes round, does he not convert the front door step on which he is doing business into a shop?
On Question, Amendment agreed to.
7.22 p.m.
LORD AIREDALE LORD AIREDALE moved, in subsection (1), after "number" to insert:
"and aggregate cash face value".
The noble Lord said: This is an Amendment to that part of Clause 5 which requires retailers to display in their shops notices which will enable stamp collectors to know the number of trading stamps to which they will be entitled in relation to purchases they make. The purpose of the Amendment is to ensure that not only the number of trading stamps shall be stated, but also their cash value. If trading stamps are going to have cash values of, say, one-seventeenth of a penny, and the lady shopper is entitled on a certain purchase
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to 23 trading stamps, her arithmetic may not be up to calculating what is the value of 23 trading stamps, each worth one-seventeenth of a penny. I should have thought it was a help to everybody, and particularly to the shopper, that not only the number of stamps should be displayed on the notice, but their cash value as well. Presumably, stamp trading promoters will not be ashamed of their cash values—they will be quite pleased that people should know them—and, in my submission, it will be of great help if not only numbers of stamps but cash values, as well, are shown on these notices. I beg to move.
Amendment moved—
Page 3, line 29, after ("number") insert ("and aggregate cash face value").—(Lord Airedale.)
VISCOUNT COLVILLE OF CULROSS: I am a little puzzled about the problem that the noble Lord, Lord Airedale, has here in mind. It may be that some people want more help with their arithmetic than others, and probably I need as much as anybody, but, seriously, I do not think there is any need to legislate on behalf of the ordinary person in adding up this type of thing, even if it could be done. Perhaps the noble Lord does not quite appreciate how I envisage this system of notices working. The noble Lord at one stage (I think it was in his Second Reading speech, or perhaps it was privately to me) suggested that the effect of Clause 5, as at present worded, would be to require a shopkeeper to put up a list of literally every item in his shop, with the price and number of trading stamps against it. This would then, no doubt, be a format into which the noble Lord's Amendment could fit, because then it would be possible to add up the face value of whatever number of trading stamps was set against the particular article. But I think this would be a ludicrous form of notice to put up. Imagine, first of all, the size of it. It would be impossible for the shopper to find her way through a prodigious notice of every article in one of Lord Sainsbury's stores, supposing that there were such a thing as a trading stamp in one of them.
I do not think it is reasonable to ask the shopkeeper to put up that type of notice. The type of notice that I

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envisage going up under the terms of Clause 5 is something on these lines:
"For every 6d. spent in this shop one trading stamp will be delivered, except for chocolate and cigarettes, for which you will get no trading stamps; but on Tuesday you will get two trading stamps for every 6d."
I envisage something quite simple, in that form, setting out the way the shopkeeper is operating the scheme, setting out the goods for which you get no trading stamps, and any particular terms, such as the Tuesday one I have mentioned, where he is prepared to try to attract people to his shop on a slack day. I do not envisage anything more complicated than that, and into that type of notice the noble Lord's Amendment could not fit, because there would be nothing to add up and no list of goods against which the aggregate could be set. The notice he suggests is not the sort of notice that I should wish to see provided under Clause 5, and I hope the noble Lord will not press the Amendment.
LORD AIREDALE: I admit that I did express (and it was privately) those fears which the noble Viscount has perfectly accurately recollected and expressed. I am only thankful that my fears were unfounded, and that a complete inventory of all the items of the shop will not be published, with the numbers of trading stamps against them. Nevertheless, however simple the notice is, and even if it says that for every 6d. you get one trading stamp, and says nothing more, my Amendment seeks to ensure that it shall say in addition: "One trading stamp worth one seventeenth of a penny" or whatever it may be. Then, customers going into the shop for the first time and wondering whether they will become stamp collectors will have a clear idea of what the cash value of these trading stamps is, and will be able to make up their minds whether they want to join the scheme or shop somewhere else. I hope, therefore, that the noble Viscount may find the Amendment acceptable.
VISCOUNT COLVILLE OF CULROSS: The "aggregate" is not the correct word, because there will be no aggregate against which any sum can be set; nor will it help on arithmetic, because it will be the simple value, which is shown
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clearly under the other clauses of the Bill, on the face of every stamp in the shop. If a customer wishes to know the value of a stamp, all she has to do is to ask to look at one. I do not see that this will help at all.
LORD SHACKLETON: Now that we have this clear, I think that it becomes a rather more attractive idea. The Amendment as it stands is, of course, not suitable, but if the shopkeeper is required to put up the number of trading stamps for the transaction, even if it is one trading stamp for 6d. or whatever it may be, why not put up the cash value at the same time? The noble Viscount says that they have only to get the trading stamp to see the value; then they have only to buy something to know how many trading stamps they get. It would seem to me that one is giving a little more information. I suggest, quite seriously, that this does seem to be advantageous in relation to cash values.
The noble Viscount argued quite eloquently in an earlier debate—at least, I think he did; certainly some noble Lords did—that competition would be effective in relation to cash values. This is one way in which one can encourage that competition. People go into a shop; they see what they get in the way of stamps, and they see the cash value of the stamp. They can see that in one scheme they only get 056 of a penny, and in another they get 78, or something like that. I should have thought that this was an idea worth exploring, and if would seem to require only a fairly simple Amendment. I do not mean the Amendment, as drafted. I think the noble Lord, Lord Airedale, accepts that this is based on a misconception, and I may say that it is one that I shared. But now that we have this point clear, I think there is something in the idea. and perhaps the noble Viscount would like to consider it. I am urging this quite seriously.
VISCOUNT COLVILLE OF CULROSS: I do not think there is any particular objection to this. The rest of the terms of the scheme are to be displayed in the shop, and if the noble Lord thinks this might be an improvement I will certainly look at it again. I see no reason, on the face of it. why if the number of stamps you are to get is displayed in the notice you should not also have some

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remark about the face value of them. I will certainly respond to the noble Lord's suggestion, but not to this Amendment.
LORD AIREDALE: I am obliged to the noble and learned Viscount. I, too, quite accept that the Amendment in this form is not satisfactory. I must confess that it was not until I heard the noble and learned Viscount's exposition just now that I got a picture in my mind of how the provisions of Clause 5(1) were going to be applied. That is why this Amendment, in its present form, is defective. In the hope that we may return to this subject later, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD AIREDALE: This Amendment also springs from my difficulty in appreciating the true meaning of Clause 5(1). It occurred to me that the quickest and simplest way to express, for the benefit of shoppers, the number of trading stamps to which they would be entitled would be to do it on the notice in the way this Amendment says—that is to say, in respect of every 10s. spent on purchases or on any other transaction. I am not wedded to the sum of 10s. If you like to take every 5s. or £1 spent I do not mind at all. But I thought that this Amendment was perhaps clearer, if I may say so, than Clause 5(1) in its present state. I beg to move.
Amendment moved—
Page 3, line 29, leave out from ("entitled") to the end of line 30 and insert ("in respect of every ten shillings spent on purchases or on any other transaction").—(Lord Airedale.)
VISCOUNT COLVILLE OF CULROSS: I think this also arises, as the noble Lord said, somewhat from the same cause. I am a little unhappy about the terms of this Amendment. There is a limit, I am perfectly certain, to the degree which one can in legislation spoon-feed the customer in a matter of arithmetic. If the noble Lord, Lord Shackleton, is right, and a notice is to be put up of the face value of the stamp, then it really cannot be beyond possibility that a customer can work out how much he or she will get for 10s. or any other sum. The danger I foresee arising out of the noble Lord's suggestion is that, if customers are in such need of help and instruction in their
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arithmetic, it perhaps presumes that the noble Lord is thinking of people who may not be very clear about the whole terms of the scheme. If you suggest to them that you get a certain number of stamps for 5s., 10s., or whatever it may be, it may appear to them to be the case that you get stamps only if you spend 5s. or 10s.; they may not realise that this is merely a logarithmic calculation, or whatever it may be, to assist them in their arithmetic. I think this may be quite misleading, and I should like the noble Lord to think about that, because, after all, the last thing one wants in putting up notices to help customers is to do them out of the stamps to which they are entitled. I seriously think that this might be the result.
LORD SHACKLETON: The shopper will not need a logarithmic table, but it might be desirable to provide a slide rule. Some of these calculations will be anything but simple. I would not press this, but I should still like to see some noble Lords multiplying 0·164 by 15, or whatever it might be. Perhaps just a bit of pencil and paper is needed, or it may be that a suitable table is needed at the check-out point.
LORD AIREDALE: I beg leave to withdraw the Amendment.
Amendment, by leave withdrawn.
VISCOUNT COLVILLE OF CULROSS: I put down this Amendment in order to meet a point the noble Lord, Lord Airedale, mentioned to me privately. I do not intend there to be a large list of all goods in the shop and I thought that possibly the word "given", in the place where it appears in this clause, would suggest that this was the intention. I do not think it does any harm to leave it out, and if you agree, I think it will produce the type of notice I have already explained to your Lordships. I beg to move.
Amendment moved—
Page 3, line 30, leave out ("given").(Viscount Colville of Calross.)
LORD AIREDALE: I am a little disappointed in the noble and learned Viscount, because at one stage I thought that his Clause 5 was going to require a complete inventory, and that this was his secret weapon for destroying stamp trading altogether.
On Question, Amendment agreed to.
VISCOUNT COLVILLE OF CULROSS: I have already spoken to this Amendment. I beg to move.
Amendment moved—
Page 3, line 30, at end insert ("and
(b) if any current catalogue has been published for the trading stamp scheme by or on behalf of the promoter, a copy of that catalogue shall be kept where it can be conveniently consulted by customers.")—(Viscount Colville of Culross.)
On Question, Amendment agreed to.
VISCOUNT COLVILLE OF CULROSS: This Amendment provides for the insertion of a defence for the shopkeeper who fails to comply with what are now the two requirements in Clause 5: first of all, to keep up a notice showing the terms of the scheme and, secondly, to keep a current catalogue. As your Lordships will appreciate, there may be occasions, particularly when it comes to the catalogue, where the failure to provide it, or to provide a current one, is outside the control of the shopkeeper. It may be that his catalogue has been lost in the post, or was not posted by the trading stamp company in time, or something of that nature. Technically, as the clause now stands, he would be absolutely guilty of the offence, and he would have no excuse whatever to bring when he came before the magistrates' court. I think this is unreasonable, and I have therefore provided him with a let-out if he can show a reasonable excuse why he has not complied with the provisions of this clause. I beg to move.
Amendment moved—
Page 3, line 33, after ("If") insert ("without reasonable excuse any of").—(Viscount Colville of Culross.)
On Question, Amendment agreed to.
LORD AIREDALE: I understand that the law of England recognises personal injuries, on the one hand, and damage to property, on the other. But this subsections says:
"If any person 'injures' any notice …"
I should have thought the phrase "if any person damages any notice" was more appropriate. I beg to move.
Amendment moved—
Page 3, line 37, leave out ("injures") and insert ("damages").—(Lord Airedale.)
VISCOUNT COLVILLE OF CULROSS: This Amendment causes me a certain amount of grief, because at one moment
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I thought I should be able to accept at least one of the noble Lord's Amendments. But in this case I am afraid I cannot do so, and I will tell the noble Lord why. This subsection is treated in exactly the same way as Section 138(4) of the Factories Act, 1961, which also deals with notices which you must not pull down, injure or deface. It is, I think, in the interests of conformity to statutory language, where you are dealing with a precisely similar set of circumstances, that you should use, if it is possible to do so, precisely similar words. It is true that the word "injure", when it is applied to an article is of somewhat archaic usage, but I do not think it is entirely impossible to understand it in the clear sense in which it is meant, and it might be a little broader than the word "damage". I should like to quote one authority which is one I found in Murray's Lexicon for the use of the word "injure" in this particular sense. It goes as follows:
"Those parts of the wall which are near to the ground, but the alternate injuries of dust and wet are very apt to moulder and rot."
That comes from Leoni's translation of Alberti's Architecture, 1726. So it is possible to find a precedent, and I hope the noble Lord will not press the Amendment.
LORD AIREDALE: I do not mind a bit what the Factories Act says, and I am not going to withdraw this Amendment.
On Question, Amendment negatived.
VISCOUNT COLVILLE OF CULROSS: This Amendment is consequential. I beg to move.
Amendment moved—
Page 3, line 39, at end insert—
("(5) In this section 'current catalogue' means any such catalogue as is described in section 4(1) of this Act, being a catalogue which has not been superseded or withdrawn.")—(Viscount Colville of Culross.)
On Question, Amendment agreed to.
On Question, Whether Clause 5, as amended, shall stand part of the Bill?
7.40 p.m.
LORD SHEPHERD: I should like to say just a few words. I am very grateful for the noble Viscount's explanation as to what the promoters had in mind in regard to the notice that must be posted

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in the shop premises, but, as I understand it—and I think this is right—it will be the duty of the shopkeeper to put up the notice. Equally, I understand that it is the duty of the shopkeeper himself to prepare the notice. Therefore, we may well have many types of notice in all the different shops with the same object of giving information.
It may well be that one shop will have its notice in a fairly large print coming within the definition that it "will enable customers readily to ascertain". Equally, I should have thought the notice might be a small typewritten notice done on a machine with a very small type-face. It could still be claimed that it enabled customers "readily to ascertain", but it might be very difficult when relating that type of notice to the premises in which it was being displayed. This morning I went into a small shop in Streatham in which it was very difficult to move around because of the amount of goods on display. Apart from that there may be a mass of advertising literature and notices perhaps showing "knock down" prices that one sees in many shops.
I should have thought that if the notice is not very clearly readable, or of such a character that the public's attention is drawn to it, the notice will be of very little value. I wonder whether the noble Viscount would perhaps have some consultation with the noble Lord, Lord Drumalbyn, whose Department, I think, was responsible for the Weights and Measures Act (and I believe also some other legislation, including the Hire-Purchase Bill on which we had some discussion over the legibility of documents) to see whether subsection (1) can be re-phrased. I think that responsibility should be laid on the shopkeeper to ensure that the notice is of such a character that it can be read easily and without difficulty by the harassed shopper.
I appreciate what the noble Viscount has in mind with regard to the notice. It may well be that the shopkeeper would have a very involved notice, not with the intention of making things difficult, but in order to give information to the shopper; but it may be so confusing that it may be of little value. I should be grateful if the noble Viscount would have
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consultations with the Minister for his Ministry have had some experience in drafting provisions in legislation dealing with this problem, and I am sure that one or two words added to this subsection could make the responsibility of the shopkeeper clearer.
LORD AIREDALE: Might I ask why this clause begins with the words:
"In the case of every shop … there shall be kept posted a notice …"?
Why does it not say: "In every shop there shall be kept posted a notice"? If you say only, "In the case of", it might mean that the notice could be kept posted on the pavement outside the shop. Would the customers have to go and stand in the rain in order to study it?
BARONESS ELLIOT OF HARWOOD: I should like to support the noble Lord Lord Shepherd, on this question of legibility, because so much difficulty is caused when people who wish to escape their obligations print things in fine print which one cannot read. We have had this point before, in connection with hire-purchase agreements, and so on. I think it would be a great help, and also very wise, to include some such words as "clearly written", or some similar phrase. These notices should not be typed in tiny print on very flimsy paper which tears so easily that it becomes useless. I think it would be of value to put in a word or two to this effect.
VISCOUNT COLVILLE OF CULROSS: I think this is probably a good point but I wonder whether it would be adequately dealt with in the mind of the noble Lord and noble Lady if the subsection read:
"There shall be kept posted such a notice as will enable customers readily to ascertain …"
I think the main difficulty, where there is a penal provision that will have to be interpreted in the magistrates' courts, in most cases, is that it is undesirable to get involved in requiring a whole lot of things to be proved. If you use words like "clear" and "legible", as well as "readily ascertained", this provides three things upon which a dispute could arise in a magistrate's court. That, I am sure, is undesirable. If it can possibly be done in one word, that is the best way of doing it. I will look into the noble Lord's suggestion to see if the wording can be

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improved. So far as Lord Airedale's point is concerned, I have no idea what the answer is. It has always been thus in the Bill. I will see whether it should remain so.
Clause 5, as amended, agreed to.
Clauses 6 and 7 agreed to.
Clause 8 [Interpretation]:
VISCOUNT COLVILLE OF CULROSS: This is a drafting Amendment. I beg to move.
Amendment moved—
Page 5, line 6, leave out ("herein") and insert ("in this definition").—(Viscount Colville of Cuirass.)
On Question, Amendment agreed to.
VISCOUNT COLVILLE OF CULROSS: This Amendment also is drafting. I beg to move.
Amendment moved—
Page 5, line 10, leave out ("herein") and insert ("in this definition").—(Viscount Colville of Cuirass.)
On Question, Amendment agreed to.
VISCOUNT COLVILLE OF CULROSS VISCOUNT COLVILLE OF CULROSS moved, in subsection (1), to leave out paragraph (c) of the proviso, and to insert:
"(c) in the case where a business is carried on at six or more separate retail establishments, the stamp is one of a kind obtainable at no more than six of those retail establishments, and not obtainable by the public elsewhere and the arrangements under which it is redeemable are entirely separate from arrangements under which any other stamps, whether trading stamps or not, are redeemable."
The noble Viscount said: This is a fairly important point, although perhaps not a very large one. I am sorry to have to inflict upon your Lordships and upon the public the definition of trading stamps which appears in this Bill at the length it does, but in order to be perfectly clear what is to be caught by this Bill and what is not I think it is necessary to go into some detail of the types of things one has in mind, because, of course, there are all sorts of sales promotion other than trading stamps which one does not necessarily wish to treat in the same way as trading stamps.
The clause, as it at present stands, does not, I think, carry out the purpose which was intended. I refer to paragraph (c)
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of the proviso to this definition. The present wording would enable any chain of shops with six or more retail outlets to carry on a trading stamp scheme without complying with the provisions of this Bill provided that the stamps were redeemable only either at the particular shop where they were issued or at the head office of the firm. This seemed to me to let in the sort of scheme which, although perhaps from the point of view of its promoter is quite different, from the public's point of view is quite indistinguishable from any other trading stamp operation. Because, after all, if a large chain of shops issues coloured pieces of paper which have precisely the same effect as any trading stamp issued by a trading stamp company separate from the shop from which the trading stamp is issued, I do not see any reason why, from the consumer's point of view, you should differentiate between them, and why you should not have face value and the rest of it written on them.
I have sought in this Amendment, therefore, to change the provisions of this definition. Although paragraph (b) for the most part exempts from the terms of the Bill, as not being a trading stamp, the type of retail trading stamp when it is issued on a small scale, the new provisions of paragraph (c) will, I think, tidy it up. It says that if a chain of shops issues trading stamps of one particular brand in one particular scheme in more than six of these shops. then these shall be trading stamps. The number "six" is purely arbitrary, but I think it is as good a figure as any other; and I do not think there is any likelihood of there being a misuse of this provision because I cannot envisage any sensible company making entirely separate provision for each group of six shops in order to get out of putting the face value on the stamp. I think this closes a loophole and will be to the benefit of the consumer and give a little more protection under the Bill. I beg to move.
Amendment moved—
Page 5, line 15, leave out lines 15 to 21 and insert the said new paragraph.—(Viscount Colville of Cuirass.)
On Question, Amendment agreed to.
Clause 8, as amended, agreed to.
Clause 9 [Short title, extent and commencement]:
7.51 p.m.
VISCOUNT COLVILLE OF CULROSS: I explained the purpose of this Amendment at an early stage last Thursday. I would just remind the Committee that it is a result of Lord Shepherd's suggestion that different parts of this Bill might come into force at different times. It provides for Clause 1 to come into effect earlier than the later, more difficult, administration Clauses, Clauses 2 to 5, and I hope it will have the approval of your Lordships. I beg to move.
Amendment moved—
Page 5, line 45 leave out subsection (3) and insert—
("(3) Section 1 of this Act shall come into force at the expiration of a period of six months beginning with the date of the passing of this Act, and sections 2 to 5 and section (advertisements referring to value of trading stamps) of this Act shall come into force at the expiration of a period of twelve months beginning with that date.")—(Viscount Colville of Culross.)
LORD SHEPHERD: I am most grateful for what the noble Viscount has done in this matter, but I think it would be very ungenerous of me if I did not say that the germ of the idea in fact stemmed from the noble Earl, Lord Sandwich, on Second Reading. Therefore, in accepting the credit, I should like to associate the noble Earl with it.
LORD SHACKLETON: Since this is the last Amendment, I do not think we should leave the Committee stage without noting that this has been rather a profitable hour-and-a-half, and I hope the Chief Whip is more reconciled to our performance the other night. I notice he is here to see we do not get out of order on this occasion. I think that we have achieved quite a lot. I am sure the whole Committee have recognised the great amount of hard work the noble Viscount has put in. I must say I think his reputation has gone up steadily throughout this Bill, and if he felt a little short-tempered on occasions he also realises that the House has ways of curbing such activities.
We were greatly helped—and this I think was the decisive point in the Bill—by the quite spirited action of the
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noble Baroness, Lady Elliot of Harwood, who has fought for the consumer all the way through, rather despairingly at times; and I think it was the last flush of battle in her eye that stirred us into making this further effort. I think even the noble Lord, Lord Airedale, an extremist, like all Liberals, was not so saddened by some of the concessions that were made. What has been most notable has been the total silence of the Government during the last part of the debate, which I can only say is typical of their attitude towards the interests of the consumer.
LORD DRUMALBYN: I should like to join in the congratulations to the noble Viscount, Lord Colville of Culross, for his handling of this Committee stage. I am bound to say that, having said what I had to say at the end of the last debate, I felt I should expedite matters much better by remaining silent, and so I think it has proved. I think we have had a valuable discussion on the remainder of the Bill.
BARONESS ELLIOT OF HARWOOD: As I am afraid I held up the Committee several times, I would add my thanks to the noble Viscount, Lord Colville of Culross, for the way he has listened to my pleas for the consumer. I am sorry to tell him they are not entirely finished, but on this occasion I would add my thanks and congratulations on the very skilful manner in which he has handled an extremely complicated Bill.
On Question, Amendment agreed to.
Clause 9, as amended, agreed to.
House resumed: Bill reported, with Amendments.

BEDFORD CORPORATION BILL
Reported, with Amendments.

PERPETUITIES AND ACCUMULATIONS BILL [H.L.]
Returned from the Commons, agreed to, with Amendments: the said Amendments to be printed.
House adjourned at four minutes before eight o'clock.