Lords Sitting of 13 April 1965

Preamble
The House met at half-past two of the clock, The LORD CHANCELLOR On the Woolsack.
Prayer—Read by the Lord Bishop of Bristol
The Lord Baillieu—Took the Oath.

RE-INTERMENT OF ANNE MOWBRAY REMAINS
2.35 p.m.
LORD DERWENT: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether the date has yet been fixed for the re-interment of Anne Mowbray, Duchess of York; whether a licence has yet been issued; and, if so, what are the terms of the licence.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE, HOME OFFICE (LORD STONHAM): My Lords, my right honourable and learned friend has issued a licence under Section 25 of the Burial Act, 1857, covering the removal of the remains. The licence includes the following conditions: first, no interference with the remains shall take place other than that necessarily required for the purpose of (a) the identification, cleaning and putting together in good order, and (b) the scientific measurement, comparison and examination of the remains; secondly, the replacement of the remains in the casket in which they were found shall take place not later than May 15, 1965, and no further interference shall take place after that date; thirdly, the Dean of Westminster has indicated his willingness that the remains should be re-interred in Westminster Abbey and accordingly when the remains have been replaced in the casket they shall be handed over by the Director of the London Museum to the Dean of Westminster for re-interment; fourthly, nothing in these conditions shall prevent
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any action necessary for the purpose of taking a cast of the inscription on the casket in which the remains were originally discovered.
LORD DERWENT: My Lords, I thank the noble Lord for that satisfactory Answer. It is nice to think that at any rate one Government Department, the Home Office, have behaved with discretion in this matter. May I ask the noble Lord whether the London Museum have found anything of interest?
LORD STONHAM: My Lords, I should like to thank the noble Lord for his kind remarks about my Department. As to whether any discoveries of interest have been made, I understand that a great deal of interesting information has been gathered. It is expected that a report will be published in due course by Her Majesty's Stationery Office, and I hope that this will clarify a great many questions.
LORD DERWENT: My Lords, I am obliged to the noble Lord.

OXFORD OUTER BY-PASSES
2.39 p.m.
LORD LUCAS OF CHILWORTH: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they can confirm that the date of completion of the remaining unfinished portion of the Oxford outer by-passes, given on April 29 last as September, 1965, will be met; and, if not, whether they will state the completion date and give the reasons for the delay.]
THE PARLIAMENTARY SECRETARY, MINISTRY OF TRANSPORT (LORD LINDGREN): My Lords, my right honourable friend's engineers expect that the contractor will be able to finish in September, 1965.
LORD LUCAS OF CHILWORTH: My Lords, I thank the noble Lord for his reply, and I can only hope that the expectation is fulfilled. He will, I hope, absolve me from any seeming discourtesy if I beg leave to doubt whether that will

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be so. Would he allow me to give my reasons? Because, since the plan of a certain section of this road was first authorised—and I have a copy in my hand given to me by the courtesy of his Department—a radical alteration has taken place which turns a section of this road, that which goes off the Southern by-pass and crosses the main Oxford-Abingdon road, into a veritable deathtrap. I agree with the noble Lord's feelings in this matter, that this is not a subject which one can discuss on the floor of the House by way of question and answer.
SEVERAL NOBLE LORDS: Order, order!
LORD LUCAS OF CHILWORTH: The noble Lord should acquaint himself with the facts.
SEVERAL NOBLE LORDS: Question!
LORD LUCAS OF CHILWORTH: I am asking the noble Lord a question, if noble Lords will possess themselves of a reasonable amount of patience. To enable the noble Lord to ascertain those facts, will he accept my invitation to be my guest for one day during the Easter Recess—
SEVERAL NOBLE LORDS: Order, order!
LORD LUCAS OF CHILWORTH: —so that he and I can view this matter together, with any experts he likes?—because in these matters it is far better to be safe than to be sorry afterwards.
LORD LINDGREN: My Lords, on the question of the date of completion, my right honourable friend must, of course, take the advice of his technical advisers, and this is that the contract will be completed by the date of completion in the contract—namely, September, 1965. However, I should always be prepared, provided that it is not considered bribery, to spend a pleasant day in the company of the noble Lord, and I will look into it to see whether we can arrange a mutually satisfactory date, accompanied, as he has said, by my technical advisers.
LORD LUCAS OF CHILWORTH: My Lords, I am grateful to the noble Lord. I can assure him that there is no question of bribery. I will entertain him to a very good lunch, for which I will pay.
LORD SEGAL: My Lords, can my noble friend also confirm that the case for or against a road through the Christ Church Meadows cannot be properly assessed until this Ring Road has been completed?
LORD LINDGREN: My Lords, that is another question, and it is one which, to my knowledge, has been on the stocks since 1950. There are varying points of view whether the completion of the complete Ring Road would or would not make the Meadow road unnecessary.

EXPENDITURE ON EUROPEAN NUCLEAR RESEARCH
2.43 p.m.
THE EARL OF BESSBOROUGH: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they intend to make their financial contribution to the new plans of expansion drawn up by CERN, the European Organisation for Nuclear Research, including the construction of the proposed new "storage rings" and 300 GeV accelerator.]
THE MINISTER OF STATE FOR EDUCATION AND SCIENCE (LORD BOWDEN): My Lords, Her Majesty's Government will pay their contributions to the normal expanding programme of CERN. The size of these contributions for 1965 and 1966 has already been agreed. The CERN administration have formally proposed that storage rings should be added to their present machine. Her Majesty's Government are now considering whether, having regard to other calls on their resources, the merits of the proposal justify the expenditure involved. The design study of the possible 300 GeV accelerator is not yet complete. To assist this study, Her Majesty's Government have decided to put forward for appraisal a possible site for such a machine near Mundford, in Norfolk. This does not imply any commitment to participate in the building of a European 300 GeV accelerator.
THE EARL OF BESSBOROUGH: My Lords, I am most grateful to the noble

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Lord for that reply, and glad to know that we are pursuing this work. But am I not right in thinking that a very considerable expenditure is involved—I believe up to £25 million for the storage rings? If we go ahead with the 300 GeV machine it will cost some£130 million and Britain's contribution will be of the order of over £4 million a year over the next nine years, in addition to the large sums which we are already spending on nuclear physics in this country.
LORD BOWDEN: My Lords, it is difficult to reply to this question without giving a Written Answer. As a country we pay something of the order of 24 per cent. of the cost of CERN, this being the figure which has been agreed as representative of our gross national product as compared with that of the other participating countries. The programme of CERN is decided, as your Lordships know, by a committee which includes representatives of all the participating countries. It is hoped to reach a decision about the storage rings in June. It will add £5 million to £6 million a year to the expenditure from 1967-68 and we shall contribute about one-quarter of this. There are many proposals for the development of CERN, including the improvement of the existing machine—for example, an increase in the intensity of its beam—and the storage rings are a proposed ancillary. The big machine, if we come to build it, will be enormously more expensive. It will cost at least £120 million, as a minimum estimate. My own view is that this figure will be very considerably exceeded. No decision to build it has yet been arrived at. If it were to be built, it would be again a jointly organised enterprise, to which we should contribute about a quarter. The decision whether to proceed will not be taken until the autumn of this year, and will depend entirely on the total resources which are available for nuclear physics in this country and in Europe.
THE EARL OF BESSBOROUGH: My Lords, I am grateful for that reply, but does the noble Lord not think, in view of the vast cost of these new machines,
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that it would be desirable for Europe and America to join together to build one of these machines, and would it not be desirable, as I feel the noble Lord would agree, to locate it in this country?
LORD BOWDEN: My Lords, this again is a complicated question. Certainly collaboration with America would be most desirable. The Americans have proposed that, if ever the time comes to build an even larger machine, one of 500 to 600 GeV, this would certainly have to be financed internationally. At the moment they are not very receptive to the idea of collaborating with us in the smaller machine, but I hope very much that this can be done. The idea that it should be built in this country is one over which we can have no direct control. Many competing sites have been put forward—by Germany, France and Switzerland, to my knowledge—but our site seems likely to be as good as most and will have to be considered with the rest. As for the storage rings, they must inevitably be considered separately as a much smaller item. Large though the cost is, they will cost only one-tenth of the expenditure on the big machine and they will be part of the ordinary CERN expansion programme.
THE EARL OF BESSBOROUGH: I thank the noble Lord for that reply. Does he not agree that one of the main objects of this large machine will be the isolation of the rather elusive nutrino. Does he put a high priority on research of this kind?
LORD BOWDEN: My Lords, I think that I really must ask the noble Earl to allow me to discuss this matter with him in private, as it is hardly a matter for the House. I assure him that serious attempts have been made to isolate nutrinos, mostly in coal mines in remote parts of the earth, in very large tanks of liquid. I do not know whether this new machine would be used for that pupose; but none the less this subject is one of the most important and vital in the whole field of science. Many of the ablest physicists in the world are fascinated by it and it would be wrong for us not to give them such support as we can.

REPRESENTATIONS ON RAIL CLOSURE PROPOSALS
2.49 p.m.
LORD MERRIVALE: 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 arrangements will be made to ensure that Regional Boards, when considering railway closure proposals, are fully representative of all interests;
Whether there will be opportunities for interested parties concerned to state their case;
Whether the Regional Boards will be able to take into account technical considerations and alternative proposals such as light railway operation;
And where there is no Regional Board, as in the South-East, whether consultation between Government Departments concerned will allow for representations to be considered as if by a Regional Board.]
LORD LINDGREN: My Lords, the Regional Economic Planning Boards are composed of officials drawn from Departments concerned with all aspects of regional planning. The members of the Regional Councils are drawn from various quarters, notably local government, industry, trade unions and universities. As has already been announced, they are appointed as individuals and not as representatives of particular interests, but they are widely representative of different types of experience within the region.
On rail passenger closures, the Councils will be advising on planning implications generally in the light of their special knowledge of their regions. The Government's machinery for considering closure proposals already provides an opportunity for representations from interested parties, and it is not expected that the Councils will themselves receive representations. I cannot forecast what considerations they will decide to take into account, but I should not expect these to include matters bearing on the management functions of the Railways Board. The Government's consideration of planning issues in the South-East
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already takes into account any representations made to them.
LORD MERRIVALE: My Lords, I should like to thank the noble Lord for his reply. If I understood him aright, an association that would possibly be interested in considering the feasibility of operating a line to be closed down could not send a representative, could not appoint a representative, to these boards. Am I right in assuming that? I should also like to ask the noble Lord whether Regional Boards or Councils would be empowered to express a view on a method of operation, in the light of any representations which might be made to them. Further, I would ask the noble Lord whether the hearings of the Regional Boards or Councils will be taken in public, and whether their findings will be given a certain amount of publicity.
LORD LINDGREN: My Lords, an outside body could not be represented on a Regional Council. The Regional Boards are made up of Government officials, who service the Regional Councils. They provide material at the request of the Regional Council, and the Council then make recommendations to the various Ministers, after taking account of economic and social planning considerations within the region. I should say that the method of operation of a particular railway line would be entirely outside the function of a Regional Council. They could quite rightly advise the Minister that it was necessary for a certain line to be kept open, but the method of operation surely must be for the Railways Board. So far as I am aware (I speak here subject to correction, and I will establish it definitely and let the noble Lord know), their meetings will not be public and their findings will not be published.
LORD MERRIVALE: My Lords, may I ask the noble Lord one further question? Would the Regional Boards have power, if they deemed it necessary, to co-opt someone who would have a knowledge of light railway operation, for instance within the whole question of planning implications for the area concerned?
LORD LINDGREN: My Lords, perhaps "co-opt" is not the right word. They are to find out all the information

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they can and make it available to the Minister. They will be empowered to take advice from any quarter which they think will be of advantage to them in coming to their decisions.
LORD BROCKWAY: My Lords, may I ask my noble friend whether there will be consultation with the associations which have been formed locally regarding these closures? I have in mind particularly the very representative association formed at Westerham, which has been formed because of the closure of the line between Dunton Green and Westerham. Will there be consultations with such associations?
LORD LINDGREN: My Lords, provision for consultation has been in existence for a considerable time under the old procedure. The transport users' consultative committees remain in existence, and they can receive representations from any interested source and consider them on a basis of hardship, so far as the community in the area is concerned.
LORD MANCROFT: My Lords, will the noble Lord also bear in mind the need for a review of the formula used by British Railways for calculating estimates of losses which are prepared for submission to the transport users' consultative committees?
LORD LINDGREN: My Lords, that, I would suggest, is an entirely different question; and, of course, the method of presentation of facts is a matter for the Railways Board and the consultative committee which considers them.

PEMBROKESHIRE COUNTY COUNCIL BILL [H.L.]
Read 3a, and passed, and sent to the Commons.
LIVERPOOL EXCHANGE BILL [H.L.]
Read 3a, and passed, and sent to the Commons.
SAINT ANNE, SOHO BILL
Read 2a, and committed to the Committee on Unopposed Bills.

SOUTH - EAST ASIA TREATY ORGANIZATION (IMMUNITIES AND PRIVILEGES) ORDER 1965
2.56 p.m.
THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR COMMONWEALTH RELATIONS AND FOR THE COLONIES (LORD TAYLOR): My Lords, I beg to move that the South-East Asia Treaty Organisation (Immunities and Privileges) Order 1965, which was laid before your Lordships' House on March 24 last, be approved. As your Lordships will know, this Order was examined by the Special Orders Committee and they thought that it did not raise any important questions of policy or principle, that it was founded on precedent, and could, therefore, be passed by your Lordships without special attention. Nevertheless, since it involves immunities and privileges, I thought your Lordships would wish to have a short explanation of what it is about.
The South-East Asia Treaty Organisation came into being as a result of the Treaty signed at Manila in September, 1954. The main aims of the Organisation are to provide for the collective defence of the area against outside aggression, and to promote the economic well-being and development of all the people in the Treaty area. There is an international Secretariat at Bangkok for continuing consultation by member Governments in pursuing these aims. The present Order is needed to give effect to an agreement concluded on March 12, 1965, and this agreement requires us to confirm certain privileges and immunities on SEATO and persons connected with it. The agreement is not reciprocal, because the other members of the Organisation have already accorded to SEATO appropriate privileges and immunities.
The United Kingdom has, of course, been a member of SEATO ever since the Manila Treaty was signed in September, 1954. However, Her Majesty's Government are only now preparing to grant it the treatment already enjoyed by other comparable organisations, such as NATO and CENTO, because for the first time since it was established SEATO is to meet in the United Kingdom. What has happened is that the meetings of the SEATO Council have revolved as it were, around

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the capitals of the various nations which belong to it, and it is now our turn. This meeting is the annual meeting of the Organisation at ministerial level which will be preceded by meetings of military advisers of the member States.
The Council meeting is due to begin at the end of April and will last a week, and it is expected that similar meetings will take place in the United Kingdom about once every ten years. So this is not a very serious volume of immunity, taking both time and people into consideration. Since SEATO has no establishments in Britain, the Order will have little effect when the meeting is over, except in relation to acts done in the course of the fleeting, and in so far as occasional official visitors may come here from time to time. For this reason, the Order is in rather simpler form than usual. So far as the representatives of member States are concerned, the Order confers no more than Section 4 of the International Organisations (Immunities and Privileges) Act, 1950, which provides that representatives of foreign sovereign Powers convening in this country should enjoy the immunities of an Ambassador. I think this is only after their names have been published in the London Gazette. Equivalent treatment is available to representatives of Commonwealth countries under a separate Act of 1961. Thus, even in the absence of an Order, the principle representatives—that is, the Ministers, the military advisers and the Council representatives at official level attending the Conference; and in all there will be 21 of them—would be immune from the jurisdiction of the English courts.
The other representatives coming under Article 5(2) of the Order will in fact enjoy less under the Order than they would under Section 4 of the 1950 Act, since their personal immunity is limited to immunity from detention and arrest. The staffs of both categories of representatives will have immunity only in respect of their official acts, and British Government chauffeurs will be provided for the representatives and high officers, so we hope there will be no problem there of chauffeurs having diplomatic immunity. Without an Order under the 1950 Act, however, it would not be possible to confer privileges and immunities on the Secretary General of SEATO, the Deputy Secretary General and the members
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of the Secretariat. Both these two gentlemen will in general be equated with Ambassadors in the matter of immunities, and the Secretariat—there will be about twenty members of the international staff coming to London for the Council meeting—will have immunity in respect of their official acts only.
There remains the question of fiscal privileges under the Order. The representatives and the Secretariat will be exempted from income tax on their salaries, but the exemption will have little, if any, practical effect since during their short stay in this country for the conference they will not in any event be likely to become liable to tax for emoluments they receive from an organisation functioning in Bangkok. British representatives and representatives of U.K. nationality are specifically excluded from benefiting under this Order. A privilege of which senior representatives and high officers may well avail themselves, and which is limited to those two categories, is exemption from customs duties on imported goods. Such exemption is made usually for official entertainment during the short conference and the amounts imported are unlikely to be large. The commitments upon us under the Order are just the same as for NATO and CENTO, and clearly we cannot treat our SEATO allies differently. I therefore ask your Lordships to approve the South-East Asia Treaty Organisation (Immunities and Privileges) Order.
Moved, That an humble Address be presented to Her Majesty praying that the South-East Asia Treaty Organization (Immunities and Privileges) Order 1965 be made in the form of the draft laid before this House on 24th March last.—(Lord Taylor.)
3.4 p.m.
LORD DERWENT: My Lords, I thank the noble Lord for having given us such a full explanation. As the noble Lord will know, many of us are very concerned about the numbers, increasing year by year, of those getting diplomatic immunities and privileges. In this particular case, of course, your Lordships have no option but to approve the Order; it is by agreement, and in any event the South-East Asia Treaty Organisation is a suitable organisation to have these immunities and privileges, which are, as the noble Lord has explained, limited.

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There are two general questions I should like to ask the noble Lord to answer. I believe I am right in saying that international discussions have been going on for some time as to whether—not in this particular case but in other cases—it might be possible to limit, in certain directions for various organisations, either existing or future diplomatic immunities or privileges. I would ask the noble Lord whether those discussions are still going on and, if so, whether there has been any progress.
LORD TAYLOR: My Lords, I thank the noble Lord for the courteous way in which he accepted the Order. I know that the House feels about the extension of diplomatic privileges in the way he has described, and that is true of another place also. But the remarkable thing is that this appears to be a British sentiment only, and we have had considerable difficulty in persuading other countries to think that this is an important matter. We have in fact recently circulated some 24 Governments, mainly those of Western Europe, the United States, Turkey and the old Commonwealth, with a memorandum suggesting that fresh thought should be given to the whole question of the privileges and immunities of international organisations; and they are aware of the public feeling on this matter in this country. The noble Lord is right in thinking that the question is before two international committees. The Committee on Legal Co-operation of the Council of Europe and the International Law Commission of the United Nations have the matter on their agendas. It is expected that the matter will eventually be discussed at the Sixth Committee of the United Nations, and possibly at an international conference. In the meantime, we will certainly maintain our contacts with other Governments on this matter. But I think it would be holding out false hopes if I suggested that they were likely to he sympathetic to our pleas. It is just worth remembering that these arrangements are reciprocal, and that in some cases the benefits which an international organisation obtains in other countries are most welcome to us, for very obvious reasons; the stability
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of the country concerned may be less than that of Britain. I think we need always to bear that in mind.
LORD BROCKWAY: My Lords, I am sure that all Members of this House will wish this humble Address to be presented to Her Majesty. While the South-East Asia Treaty Organisation is in existence we shall want to give the immunities and privileges to its representatives who come here. I would say to my noble friend that many of us are increasingly doubtful about the value of the South-East Treaty Organisation. It represents in South-East Asia only Pakistan and Thailand; it does not represent India or Ceylon or even Malaysia. And I think Her Majesty's Government will have to take into consideration the fact that our overseas defence expenditure is beyond what our economy will bear, and will have to reconsider the whole question of both CENTO and SEATO in the future in regard to our obligations. I think it would be insincere if, in passing this presentation of the Address, Members of this House who have these feelings did not express them.
LORD FARINGDON: My Lords, I find myself in a great deal of agreement with the noble Lord, Lord Derwent, and with other Members of the House who have expressed themselves on this particular question of immunities on other occasions. I should like to ask Her Majesty's Government whether, in their opinion, complete abolition of diplomatic immunities would interfere with the proper functioning of diplomats, either in this country or anywhere else.
LORD TAYLOR: My Lords, I think I can answer that without the slightest doubt; it most certainly would.
On Question, Motion agreed to: the said Address to be presented to Her Majesty by the Lords with White Staves.

LICENSING (SCOTLAND) BILL [H.L.]
Read 3a (according to Order), and passed, and sent to the Commons.

JUSTICES OF THE PEACE BILL [H.L.]
3.11 p.m.
Order of the Day for the Second Reading read.
LORD SILKIN: My Lords, I beg to move that this Bill be now read a second time. This is a short, harmless and, I hope, completely uncontroversial Bill. It seeks to amend Section 20 of the Justices of the Peace Act, 1949. This section sets out the qualifications for persons who desire to become justices' clerks. The main qualification is that they must be either solicitors or barristers of not less than five years' standing. But there is an exception under subsection (4)(c) of that section, which provides that solicitors need not be of five years' standing but can become clerks to the justices after serving in the office of the justices for a corresponding period which is regarded as a period of training. So that if, for example, a person became articled to a solicitor in the justices' office for five years that would be regarded as a qualification without his having to be a solicitor of five years' standing.
This opportunity has not been afforded to barristers, because until quite recently the Inns of Court regulations have not enabled barristers to take advantage of the period of training and count it as a qualification. But last year I presume that better judgments prevailed, and the Inns of Court have now made regulations which will enable barristers to count the period in which they may be serving in the offices of the justices. It is therefore proposed to extend to barristers the same rights as now exist in the case of solicitors; namely, that it should be possible to count the period which they serve in the office of the justices against the five years' qualification which they would otherwise require. That is the sole purpose of Clause 1(1) of the Bill. Subsection (2) makes certain verbal corrections to the Bill which are consequential on the pasage of Clause 1(1), and I hope that your Lordships will not ask me to explain them. That is the whole of the Bill, and I am quite sure that it will commend itself to your Lordships without a great deal of discussion. I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Lord Silkin.)
3.14 p.m.
LORD DERWENT: My Lords, I do not think it is right that this Bill should have a Second Reading until I have said that we on this side welcome it. It is a small Bill, but it will have quite an effect in a limited field. I may say that Clause 1(2) kept me up at night, trying to understand its content. I think I now understand it, but I, too, shall not try to explain it to your Lordships.
LORD STONHAM: My Lords, I, too, will detain your Lordships only for a minute, to express the Government's welcome to this Bill and my own personal thanks to my noble friend for his presentation of it. As he indicated, the Bill is a natural consequence of the decision of the Inns of Court, to which he referred, to remove the restriction that formerly prevented students for the Bar from serving as assistants in justices' clerks' offices—a decision which the Government welcome.
The importance, in our view, of this measure is that we hope it will draw into the service of magistrates' courts young men and women who seek this form of legal career. At present, it is possible for people to serve articles under a solicitor who is a justices' clerk, but not all justices' clerks are solicitors: some are barristers, and some do not possess either professional qualification. There is a serious shortage of professionally qualified assistants in justices' clerks' offices throughout the country. We want to see far more people entering this service and seeking the professional qualification of a barrister or solicitor that will equip them eventually for posts as justices' clerks. The ideal candidate for a justices' clerkship is the man who can combine the professional qualification and broad knowledge of the law with practical experience as a justices' clerk's assistant. In our view, this modest but useful measure is a not unimportant step towards supplying the need for suitable assistants in the offices of justices' clerks, and I hope that, as such, your Lordships will give it a speedy passage through the House.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

WAR DAMAGE BILL
3.17 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Champion.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD MERTHYR in the Chair.]
Clause 1:
Abolition of rights at common law to compensation for certain damage to, or destruction of, property
1.—(1) No person shall be entitled at common law to receive from the Crown compensation in respect of damage to, or destruction of, property caused (whether before or after the passing of this Act, within or outside the United Kingdom) by acts lawfully done by, or on the authority of, the Crown during, or in contemplation of the outbreak of, a war in which the Sovereign was, or is, engaged.
(2) Where any proceedings to recover at common law compensation in respect of such damage or destruction have been instituted before the passing of this Act, the court shall, on the application of any party, forth with set aside or dismiss the proceedings, subject only to the determination of any question arising as to costs or expenses.
LORD McNAIR LORD McNAIR had given Notice of three Amendments to Clause 1, the first being, in subsection (1), to delete "whether before or". The noble Lord said: It may be for the convenience of the Committee if I make a few remarks upon the combined effect of all the Amendments, which is to extirpate all trace of the retrospective character of this Bill, though my remarks will have particular reference to Clause 1(2). In the earlier debate my noble friends on these Benches and I indicated that we should abstain from voting on the Second Reading, and would move in Committee certain Amendments to this Bill which, in its present form, puts in doubt certain questions of constitutional principle and international practice to which we attach great importance.
I refer in the first place to Clause 1(2) which empowers the Crown to stop an action pending against the Crown. The Crown Proceedings Act, 1947, enabled a subject for the first time to bring against the Crown an action in tort in England, or in delict in Scotland, in the same way
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as if he were suing another subject. How can we reconcile this subsection with that valuable right of the subject? It is most important that the subject should be able to sue the Crown without the fear of his right of action being destroyed in this manner.
Secondly, we objected to the confusion made by the same subsection between the legislative and the judicial functions and to the threat to the independence of the Judges who were told, upon the authority of the Government in power at the time, that if they decided in favour of the pursuers (that is, the plaintiffs) legislation would be introduced for the purpose of over ruling their decision. It is one thing for Parliament to amend for the future the law as laid down by the courts, including the House of Lords Appellate Committee—that happens from time to time; there is nothing retrospective about that. But it is quite another thing to pass a Bill empowering the Crown to stop an action against the Crown which has not yet reached a conclusion in the courts. As the noble Lord, Lord Shepherd, told us:
"… there is still a long way to go in legal proceedings."—[OFFICIAL RFPORT, Vol. 264 (No. 56), col. 738; March 25, 1965.]
One point of constitutional importance is beyond controversy—namely, that the Parliamentary and Judicial functions of your Lordships' House are completely separate, and any attempt to blur that line is fraught with danger to our appellate jurisdiction. The noble Lord, Lord Shepherd, who introduced the Bill has endeavoured to discredit the decision of the Lords of Appeal by counting judicial heads and by telling us, if you please (col. 734), that:
"Her Majesty's Government believe that the law as it now stands, after the Burmah Oil judgment, is utterly wrong…"
LORD SHEPHERD: Would the noble Lord permit me to interrupt him, because I think he has taken my remarks out of context? I certainly did not attempt to discredit the Judicial decision of this House. What I endeavoured to do was to show the considerable doubt that existed in the Common Law in regard to war damage.
LORD MCNAIR: I will leave your Lordships to draw your own conclusions from Lord Shepherd's words.

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We have been urged by more than one noble Lord to restore the Common Law as it was generally understood to be before the recent judgment of this House, but the noble and learned Lord, Lord Guest, has adequately dealt with that point. We object most strongly to being invited to sit in judgment upon a decision of our Appellate Committee—particularly in view of the action now pending in the Court of Session—and to concur in Lord Shepherd's opinion which I have just quoted, that the law as it now stands, after that decision, is "utterly wrong". Surely this must be the first time that a Minister has come to your Lordships' House and told us that a decision of our Appellate Committee is, in the opinion of Her Majesty's Government, "utterly wrong." Your Lordships may have noticed that in the Inner House of the Court of Session all the Judges agreed that there was a general principle that the Crown is liable to make compensation for acts done under the Royal Prerogative. They decided as they did only because they held that this case came within the exception of "battle damage."
Thirdly, I must again remind your Lordships that there are in certain parts of the world (I need not specify them) Governments which, if it suits them, do not hesitate to cancel or erode concessions and contracts granted by them to foreigners or to nationalise, with no compensation, or inadequate compensation, property acquired by foreigners in those countries according to the local law, and they will seize on any excuse to justify ex post facto legislation which may be required to carry out these sinister purposes. British subjects who suffer from such activities look to our Government to exercise their right of diplomatic protection.
The noble and learned Lord on the Woolsack, while expressing the opinion that, as a general proposition retrospective legislation is wrong and contrary to the rule of law, urged upon your Lordships that the argument for reversing the decision in this House in the Burmah Oil Company case was so strong as to justify the making of an exception to the general proposition. We should all agree with him that, however distasteful retrospective legislation may be, circumstances can arise in which such legislation is necessary,
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but a heavy burden of proof rests upon those who propose it. We were referred to a number of retrospective Acts. They included an Act indemnifying officials against mistakes, and Acts validating charges for wireless licences, and a levy of 2d. per bottle of milk and charitable trusts, and so forth. Every time a retrospective Act is passed, it becomes a precedent and makes it easier to pass the next one. The Lord Chancellor asked whether our international reputation had suffered as a result of these Acts. Why should it? These are all purely domestic matters. Why should they attract international interest and produce international repercussions? To-day, however, we are dealing with a very different situation.
The operations of these large companies are international, and their affairs attract world-wide attention. Such information as I have regarding the Burmah Oil Company comes solely from public sources. It appears from the Stock Exchange Intelligence book that the Burmah Oil Company is producing oil in six different countries, three foreign and three in the Commonwealth. Of course, the relations between the Crown and the Burmah Oil Company are not governed by International Law, but this case involves rules of public law which are of international interest, and at all stages in the proceedings numerous international authorities were cited, both by counsel and by judges. For example, Grotius, Vattel, and others, were quoted, as well as several American decisions, and a decision given on an appeal to the Privy Council from the British Prize Court. If this is a purely domestic matter, why should the 1964 volume of the American Journal of International Law, which probably has the largest circulation of any such journal, note both the decision of the Outer House of the Court of Session and the decision in your Lordships' House in this case?
With great respect, I do not consider the domestic precedents cited to us to be on a par with the matter in hand. This is not a purely domestic matter in which we can do what we like with our own affairs, regardless of foreign opinion and international consequences. The Financial Secretary to the Treasury, in introducing this Bill in another place, referred to it as a "purely domestic

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piece of legislation." That reveals, in our opinion, one of the profound misconceptions on which this Bill rests.
Why should we set this example to some predatory foreign Government which may be tempted to encroach upon the rights of British subjects carrying on business in their country? Any Government which is exercising its right of diplomatic protection over its subjects and their property abroad must come to the matter with clean hands. This Bill, if it becomes law in its present form, will place a black mark on our national reputation for the administration of justice, and will gravely hamper British Governments in the future protection of British subjects carrying on business abroad, and their property. The week before the Second Reading debate I happened to be in Holland. I met a foreign lawyer of my acquaintance and I told him about this Bill. His reaction was immediate and it hit the nail on the head. He said, "What a shocking thing to happen in Britain!" It is in your Lordships' power to prevent this shocking thing from happening in Britain. I beg to move.
Amendment moved—
Page 1, line 7, leave out ("whether before or").—(Lord McNair.)
3.32 p.m.
LORD SHEPHERD: I had intended to say that the noble and learned Lord, Lord McNair, had moved his Amendment with restraint. I suppose that, by and large, he has so done. But in his few words he attacked me, in the sense that I am said to have attempted to bring discredit upon, or to express criticism of, your Lordships' House sitting in its Judicial capacity. I should have hoped the noble Lord would give me some warning of what he intended to say. That would at least have given me the opportunity to consider the words that I had used. But I am afraid that, in trying to listen to him and at the same time trying to find in print what I said, I was unable to achieve my object. But I shall look again when I have sat down.
LORD MCNAIR: I must beg the noble Lord's pardon. It slipped my memory and I ought to have done that.
LORD SHEPHERD: I am quite sure of that, and I forgive the noble Lord. We
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all recognise the very strong opinions of the noble Lord, and he has expressed those opinions very clearly this afternoon. My task is infinitely easier in the sense that I am going to deal with only the facts of the case. It is on facts and facts alone that public policy must be decided, and I beg the House to consider the facts that I place before it. My task is not only to defend the Government's position in bringing this Bill before this House and this Committee, but also to ask your Lordships to reject the Amendments that are now on the Order Paper. In view of what the noble and learned Lord, Lord McNair, has said, may I say that we on this side of the House join with him and all others in a respect for the law and for those who administer it. We also believe that this country can set an example, and that it does set an example, not only in its law but in its administration, and I think we do so without appearing arrogant. I think, also, that we all accept the general repugnance of retrospective legislation. But the law—not the administration—is not perfect, and from time to time it has become necessary for Parliament to pass retrospective legislation, not simply to change the law but to bring it into line with what it has in the past been believed to he, because of a decision that has arisen which has shown up a clear difference.
My approach on this Committee stage will be identical to that on Second Reading, and that is to find as much common ground as possible. I believe that on the Second Reading we achieved considerable common ground. If these Amendments were not so important, and if they did not remove one of the main features of the Bill, my speech could be a great deal shorter. But, in view of the importance of the Bill and the importance of these Amendments, I hope the Committee will forgive me if I speak in some detail as to why the Government believe this Bill to be necessary, and why these Amendments should he disagreed to.
The circumstances which led to the need for this Bill are these. Twenty-three years ago, when this nation was fighting for its life, its very existence, when victory was perhaps hardly a glimmer except in our own hearts, when we faced massive destruction not only overseas but in our own home country, destruction of

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property, of business prospects and life, and when either victory or defeat was possible, it was quite clear that this country would face a grave economic situation. And as Lloyd George said in the First World War—and I used his words on Second Reading—it was quite clear that full compensation for damage would not have been possible. I think the Committee should consider not merely the legal arguments that are now put before it, but what was the policy accepted by Parliament during the last war. The Government maintain that we are not altering the law in any major way, but are endeavouring to restore the law and to maintain the intentions of Government and Parliament during the last war.
If I may, I will again read the declaration that was made by the Coalition Government on February 18, 1943:
"It will be the general aim of His Majesty's Government after the war that, with a view to the well-being of the people and the resumption of productive capacity, property and goods destroyed in the Colonial Empire should be replaced or repaired to such an extent and over such a period of time as resources permit. If the resources of any part of the Colonial Empire are insufficient to enable this purpose to be achieved without aid, His Majesty's Government would be ready to give what assistance they can in conjunction with such Common fund or organisation that may be established for post-war reconstruction."—[OFFICIAL REPORT, Commons, Vol. 386, col, 1942, February 18, 1943.]
That was the policy of Government and Parliament during the war years. It is a policy which was accepted by the Colonial Governments responsible for their territories, and, with a small exception, was a policy which was accepted by every manufacturer, merchant and trader in the areas affected.
Clause 1(1) of this Bill seeks to restore the Common Law of England and the law of Scotland, so that when war damage arises where the Crown has acted lawfully in the defence of the realm, no claim should lie against the Crown. This was the generally understood—and the noble Lord, Lord Conesford, I think, accepts it—and unchallenged view of the Common Law until the decision made by the House of Lords.
LORD CONESFORD: Not only do I not accept it, but I quoted from the judgment of Lord Dunedin in a case
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at the end of the First World War that proved the precise opposite.
LORD SHEPHERD: I read the noble Lord's speech, but my understanding was to the contrary. I think the noble Lord said that the judgment was untested. But that was the general view of Her Majesty's Government and of previous Administrations. The reason for that view was that in war there has to be a common burden, that one has limited resources, that one may have priorities for rehabilitation, and it can only be the Government and Parliament who can decide what resources can be made available by way of compensation or rehabilitation.
The noble and learned Lord, Lord McNair, in his notable speech on Second Reading, and I think again this afternoon, was prepared to accept this understanding of the Common Law for the future. I think he would do so for the reasons I have just mentioned; that one has a common burden and one must have a sense of equity between one war sufferer and another. While we may remove (shall we say?) a Common Law right to damages for war damage, we do not absolve the Government and the nation from a moral duty. Governments, Parliament and the nation in two world wars have accepted a moral duty and have, with the available resources, made considerable contributions to colonial territories and their inhabitants.
I suppose that the fundamental question is really one of administration. Can the courts properly assess the extent of the war damage, the circumstances in which it arose, and then make a just decision as to the amount of compensation to be paid? I believe it was the noble and learned Viscount, Lord Radcliffe, who used these words in his judgment:
"Has the law any principle for measuring compensation as a legal right when an act has been done in circumstances so special that the ordinary conceptions of property do not apply to it?"
I should have thought that any reasonable man, without any reflection upon the courts and the administration of the courts, would accept the view—taking the large number of cases of different circumstances that would be involved—that the courts are not built for that type of decision.

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But if, in the end, the amount of money that is available is decided by Parliament—and it is clear that Government and Parliament must be the ones to decide finally the amount of money that is available—how should it be apportioned? I should have thought, from reading the Second Reading debate, that this view was generally accepted by the House. I think that perhaps the other vital factor in this matter is that the colonial territories accepted this view, accepted the Coalition Government's decision, and all their own legislation and their own administration of war claims were based on this view. Therefore, I suggest that if the Amendments on the Order Paper were passed, they would strike at the very base of equity, for it would mean that twelve companies—not merely Burmah Oil—would be in a position to be treated differently from all the many hundreds, perhaps thousands, of companies which have accepted the payments made for compensation under their claims against the commissions set up by the Colonial Governments.
The noble Lord, Lord Conesford, drew our attention to the need for respect of the law. I do not know what the noble Lord had in mind, but I do not believe that he and I will be very far apart when it comes to the provision of justice. May I again repeat the definition that I gave your Lordships on Second Reading as to what "justice" means? I took it out of Jowitt's Law Dictionary. It is:
"The virtue by which we give to every man what is his due; opposed to injury or wrong."
I emphasise:
"to every man what is his due"—
no more and no less.
I suggest that if these Amendments were to be passed we should be striking against justice with regard to those who have accepted payment against their claims and these companies that have decided to continue to prosecute their claims against this country. May I remind the Committee that, if we look merely at Burma, the British European claims alone amounted to £67 million. The denial claims amounted to £60 million. If we were to take the Burmah Oil and those other companies which have made claims through the Scottish courts at about £20 million, if these Amendments were passed it would
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mean that companies with claims to the value of £40 million would be treated differently from those particular twelve companies, because they are time-barred. So in that sense one strikes at the base of equity between one claimant and another.
I would ask the Committee to take the view that, the Common Law having been found different from what we have always believed it to be, notwithstanding that we believe that the Common Law should be restored to what we thought it to be, all the war sufferers, except these twelve who have accepted the terms and conditions of compensation should not be placed in a different position because of these Amendments. I do not believe that on a basis of equity this House would feel that that was right. This is not the first time that this situation has arisen. It aros immediately after the First World War, and the Indemnity Act, 1920, had to be instituted to deal with it.
Now, did the Burmah Oil Company and those other eight companies who now have claims against the Government receive compensation? I am bound to ask this question in view of the speech that was made by the noble and learned Lord, Lord Parker of Waddington, when he said:
"… the issue here is whether it is right to deprive the subject, without compensation, of a form of property—the property being a right to such damages as the company can prove, … "—[OFFICIAL REPORT, Vol. 264 (No. 56), col. 777, March 25, 1965.]
I think the noble Lord, Lord Conesford, acknowledged that the Burmah Oil Company received compensation; it received a sum of £4¾ million. This was part of the amounts that the British Government contributed to thte British/European claimants in Burma. There were no strings to this sum; they could dispose of it as they wished. There was no need, no requirement, for them to plough it back into their business. They could have paid it out to their shareholders; they could have put it into pension funds; they could have disposed of that sum as they wished. They received £4¾ million out of a claim assessed by the Carter Committee at £17 million.
Your Lordships may ask: how did that compare with the treatment by the British Government of the war claimants

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throughout South-East Asia? I will repeat the figures that I gave your Lordships on Second Reading: the British contribution to the war claimants in Malaya represented one-eighth of their claim; in Borneo, one-sixth of their claim; in Burma, slightly less than one-seventh. The difference between one territory and another is largely due to the size of the country involved and the capacity of that country to help itself. Malaya received less than Borneo because Malaya was richer and had a larger population. But, by and large, those countries received from the British Government about the same sort of contribution. There has been no attack upon the Carter Committee as to the sum of money that was made over to Burmah Oil out of the £10 million that the British Government gave to Burma. They received it on the same basis of equity as others.
May I again remind the Committee (because it has been quoted in another place and in publications) of the comparison of British contributions in respect of war damage made to the Anglo-Saxon Petroleum Company in Miri and Seria—installations which were destroyed by contract—with the contributions made to the Burmah Oil Company? The Burmah Oil Company had a claim of £17 million as assessed by the Carter Committee. The British contribution, as I have mentioned, was £4¾ million—27 per cent. In the case of the Anglo-Saxon company, their claim for rebuilding and development was £12½ million, of which the British contribution was £2½ million—20 per cent. Burmah Oil received from this Government a greater percentage of its claim than did the Anglo-Saxon Petroleum Company, which destroyed its property under contract. I try to seek common ground here. Did these twelve companies receive compensation? I do not think there is any doubt that they did. Did they receive less favourable treatment than those who suffered denial or accidental damage? I should have thought, from the figures I have given to the Committee, that they had been treated in parity. Therefore, I hope that we have disposed of the bogy that these companies did not receive compensation.
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Now I would ask the Committee: is there any valid, concrete reason why these companies, 23 years later, should receive a greater contribution to compensation than all the other companies who have accepted the schemes of the local Colonial Governments? I have not yet heard one reason given why these companies should be treated differently.
LORD REA: If the noble Lord would forgive me, surely the reason is that it is the law of the land. It is that law, perhaps, which ought to be changed.
LORD SHEPHERD: I am at the moment talking about facts. These schemes were based upon agreements made by the Coalition Government and Parliament as to the proper, fair and equitable manner of dealing with war damage in our colonial territories. Is there any reason, on those facts, why these companies should be treated differently? I have not heard of any. It is interesting to see, from reading the speeches that were made in another place, that four Chancellors of the Exchequer took this view. Mr. Maudling, Mr. Selwyn Lloyd, Mr. Macmillan and Mr. Butler all took this view: that these companies were not entitled to further contributions from the British taxpayer. I sum it up in this way: that the Common Law in regard to war damage is acceptable in the Bill for the future; that, except for these twelve companies, all other claimants have accepted the compensation; that the British Government have made contributions on a basis of equity to all claimants; that these twelve companies have received compensation with no strings at all; and that there is no reason why these companies should be treated differently. This was the policy of the Coalition Government during the war, and I think has been the policy of all other Administrations, including this.
These are the facts and the circumstances. When we move into the area of the effect of the passing of this Bill on what colonial territories or new, independent territories may think, we are moving into the realm of opinion. We have passed retrospective legislation before. The noble Viscount, Lord Dilhorne, himself moved retrospective legislation in the Finance Bill, 1960.

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There was the Indemnity Act, 1920. True, that was not of a case which had reached your Lordships' House, but it cut off a decision that had been arrived at in the court of first instance—namely, in the case of the Newcastle Breweries. It deprived, and I think quite rightly deprived, the Newcastle Breweries of special compensation when all the other merchants in this country had received payment under (I think it was) Regulation 2 B, which was decided to be ultra vires. There is a whole host of retrospective legislation.
I have lived overseas; I have traded overseas; and I have never found that restrictive legislation passed by Parliament has had any influence upon the laws of that other country or upon the attitude of that nation or that Government to the British traders in that area. This is a matter of opinion. No Government moves forward in retrospective legislation without giving considerable thought to it. The previous Administration would not have issued the letter about which we have heard so much, this Government would not have introduced this Bill, without taking into account all the possible consequences. We do not believe that this Bill will have any effect on overseas relations between Governments and our traders or upon their own people. I do not believe this Bill changes the law in any material matter. We believe it restores the law—and I beg Lord Conesford's forgiveness in this—to what most people believed it to be, not only in this country but overseas. The compensation has been paid and has been accepted and, apart from these twelve companies, has proved acceptable. We have heard no reason why these companies should be treated differently. I hone that the Committee will disagree with these Amendments.
4.2 p.m.
LORD CONESFORD: The noble Lord, Lord Shepherd, always addresses the House with force and agreeably, and I am sorry if my speech on the last occasion left him with such a very erroneous impression of what I was saying. It was a long debate; he had to listen to all the speeches, and he may not have remembered what I said on the particular point on which I interrupted him. Perhaps I may quote that at the beginning in order to put the record straight. I agree with
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him, of course, that the view of the Common Law which he said was universally held was the opinion of a great many people. My point was that it was never universally held; and the passage of my last speech which I think he had in mind was this:
"But the only point I am on at the present moment is that there was no generally agreed view on whether action under the Prerogative did or did not carry a right to damages. I fully accept that the view expressed by my noble and learned friend"—
the noble and learned Viscount, Lord Dilhorne—
"was a widely held view. I would only say that it was by no means a universal view. I quoted the well-known passage from Lord Dunedin's speech in the de Keyser case to prove my point, and it was quoted amply in the speeches in the Burmah Oil case."—[OFFICIAL REPORT, Vol 264 (No. 56), col. 783; March 25, 1965.]
LORD SHEPHERD: Would the noble Lord not agree that the de Keyser case is not strictly a war damage case?
LORD CONESFORD: The point on which I quoted that made it a not unfair quotation. On that point, also, the noble Lord will remember the intervention of the noble and learned Lord, Lord Guest, and he may also remember some of the passages from the judgments which I quoted in my speech.
But let me say that the thing that mainly astonished me in the speech to which we have just listened is that the noble Lord seemed to think that the law courts in this country had nothing whatever to do with the administration of justice. That really is an illusion. He mentioned, for example, that a great many people in the past had taken a certain view of what the Burmah Oil Company, which is one of the claimants, ought to get from a certain claim; but none of them was then aware that the decision of the highest tribunal would be that the Common Law is what we now know it to be; although the judges in Scotland had very little doubt that that was the trend of all the cases and the noble and learned Lord, Lord Guest, had so advised the company.
But let me make it clear for myself and for my friends that if the view taken by the noble and learned Viscount, Lord Radcliffe, had been the majority view, then of course this matter would not have arisen at all. This matter arises because,

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as was explained in a masterly speech by the noble and learned Lord, Lord McNair, on the last occasion, there is now a decision of our courts in favour of the company—and that is a valuable decision although we do not know, of course, what is the sum, if any, that will finally be awarded if the matter proceeds to further trial—and it is proposed to deprive the beneficiaries without compensation of the benefit of that valuable decision. In my opinion—and perhaps it is impudent for me to say so—that clearly and fully justifies the exact words used by the noble and learned Lord, the Lord Chief Justice.
The Second Reading debate on March 25 made clear the issue before us to-day. The speeches then made by the noble and learned Lord, Lord McNair, by myself and others, make it possible, I think, to say less this afternoon than would otherwise be necessary. My view was that, while the Bill could not be passed by any self-respecting Parliament in its present form, we ought to give it a Second Reading and then amend it. I urged the House to give it a Second Reading and I said that, if the House did that, I should at once table the necessary three Amendments to strike out the retrospective provisions. I did that the same evening, and those are the three Amendments which we are now considering. The noble and learned Lord, Lord McNair, and his friends tabled the first and third of them in identical terms and they have subsequently been good enough also to add their names to my second Amendment: so the three Amendments now on the Order Paper represent the universal and unanimous view of those who are opposed to these provisions.
In the Division on the Second Reading —a Division which I had not sought—I voted for the Second Reading in accordance with the advice which I had ventured to give. I voted for the Second Reading and many of my noble friends abstained, relying on our undoubted right to move Amendments in Committee and to have those Amendments considered on their merits. In view of some very strange contentions that have been subsequently made outside the House and in the Press I would add this: if the House had not relied on the right to amend, it would certainly, I think, have rejected the Bill. I should myself have deplored that, and
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that was why I supported the Government on the Second Reading.
If, however, the House had rejected the Bill on the Second Reading, it would merely have done what the Party opposite urged this House to do less than two years ago, on April 24, 1963, when it divided the House against the Second Reading of the London Government Bill which the House of Commons had passed by a large majority. I noticed, with interest, that voting against the then Government and opposing the Second Reading of their Bill was the noble Earl, Lord Longford, the noble Lord, Lord Shackleton, the noble Lord, Lord Lindgren, and the noble Lord, Lord Shepherd, who was actually Teller on that occasion. That opposition was also supported by two noble Lords whom we greatly respected but who, I regret to say, have died in the interval—the noble Earl Lord Alexander of Hillsborough, and the noble Lord, Lord Morrison of Lambeth. We gave this Bill a Second Reading and are now considering the Amendments which we then foreshadowed, and which we claim should be considered on their merits. I am certain that Her Majesty's Government, whatever else they say, cannot properly deny the right and duty of this House to amend, where required, because amendment of Bills by this House is one of the principal uses that Her Majesty's Government themselves make of our proceedings.
Nobody who has studied our Second Reading debate can have any doubt about the importance of the issues before us. It was not only the lawyers—the noble and learned Lord, Lord McNair; the Lord Chief Justice, Lord Parker of Waddington; the noble and learned Lord, Lord Guest; the noble and learned Lord, Lord Morton of Henryton, and some far humbler lawyers—who took the view that the rule of law was involved. That was also the view of such distinguished laymen as the noble and gallant Viscount, Lord Slim, my noble friend, Lord Chandos, and many others. It really will not do to pretend that the issues before us this afternoon are unimportant. I have served in this House from the year 1955, and I do not remember ever addressing it on what seems to me a more vitally important issue. In my opinion, if the speech of the noble and learned Lord, Lord McNair, on the last occasion had stood alone, the House would still have

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had sufficient reason to pass the Amendments now before us.
The issues about retrospective legislation are important enough, but I agree with the noble and learned Lord, Lord McNair, that the issues now before us go even beyond those generally raised by the problem of retrospective legislation. I wonder if I may read a few sentences of what the noble and learned Lord said in the course of his speech on that occasion. He said this of the Bill (col. 762):
"It raises issues which, in my judgment, transcend Party politics; questions of the correct balance between the rights of the subject and the rights of the Crown; questions of the relations between the Judiciary and the Legislature, and certain international questions".
On all these matters, the noble and learned Lord speaks with authority and, on the last, with an authority unrivalled in this country.
The noble and learned Lord the Lord Chief Justice described the proposals in the present Bill as confiscatory", and gave his reasons. They were confiscatory, he said, because the Bill swept away a right without any compensation. Incidentally, I am sorry that the noble Lord, Lord Shepherd has again dwelt so much on the figures of the Burmah Oil Company's claim. As was pointed out on the last occasion by several noble Lords, by the noble and learned Lord, Lord McNair, and myself among others, we know nothing whatever of what the measure of damages will be, if this case proceeds, as it should proceed, to trial. And both of us quoted from some judgments in this case to make that fact perfectly clear.
There was one point on which I think the noble and learned Lord the Lord Chancellor was inaccurate, when he came to reply to that debate. He suggested—and reference to the speeches will show that he was wrong in that suggestion, though I am fairly clear, I think, about what he had in mind—that everybody accepted the first subsection and that the quarrel was over the second. I think that a more accurate statement would have been that everyone was prepared, though some with regret, to accept a change in the Common Law for the future, but that we made it clear, as he said in another part of the speech, that we proposed to put down Amendments to strike
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out the retrospective application of this Bill.
The first subsection indeed contains a great part of the mischief of this Bill, and it is true that the second subsection makes it even more obvious; but the second provides, so to speak, the machinery for carrying out the retrospective provisions contained in the first subsection. I mention that merely to explain to the noble and learned Lord the Lord Chancellor that the Amendments now on the Marshalled List are precisely what we foreshadowed in the debate. I think that the noble and learned Lord accepts that.
I must say a few words about what the noble and learned Lord the Lord Chancellor said about the retrospective provisions; and here I was very glad to learn with how many of his propositions I agreed. Some of them I will give, for convenience, in his own words. He said (col. 810):
"In my opinion, retrospective legislation is wrong and contrary to the rule of law, and I think any lawyer would agree with that as a general proposition."
With that, my noble friends and I completely agree. Secondly, he said:
"I cannot think off-hand of any case in which I should think that retrospective legislation was right in the field of the criminal law."
Again, with respect, we agree. Then I come to the third of these propositions (I am not quoting his actual words) that, in the field of civil law, retrospective legislation had sometimes been found necessary, but—and now I quote (col. 817):
"The real question every time is whether a particular case is a proper exception."
Again, I respectfully agree. Where I differ is in thinking that any of the examples which the Lord Chancellor cited gave any support at all to the idea that the provisions of this Bill were right and justified by the precedents. The noble and learned Lord the Lord Chancellor cited a number of examples which, if I may say so very respectfully, are, in general, as different from this Bill as chalk from cheese. And I shall give some examples.
But, first, may I make a preliminary comment? If retrospective legislation is prima facie wrong, but sometimes essential, if it is a necessary evil, there is

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much to be said for the view expressed in another place that to lengthen the list of precedents is not to strengthen the case for making another exception, but to weaken that case. When we talk of "necessary evils", it should not be part of our purpose to increase their number. The noble and learned Lord, Lord McNair, has already pointed out that the examples given by the noble and learned Lord the Lord Chancellor were not calculated to affect our international reputation. This Bill, as it now stands, is so calculated.
Just to show that I am not shirking the matter, I would mention one or two of the examples the noble and learned Lord the Lord Chancellor gave us. One was the Charitable Trusts (Validation) Act, 1954, which relieved testators and settlors who, through defective drafting, had failed to establish charitable trusts. Non-lawyers may like to know that a settlor or testator who left anything and used these words, "for charitable or benevolent objects", failed to establish a charitable trust. That subject was considered by the Committee on the Law and Practice Relating to Charitable Trusts, generally known as the Nathan Committee, which recommended legislation. That legislation was carefully considered by the then Government, and that Bill (now an Act) was introduced to enable testators and settlors who had made such a technical mistake, to bring about the result they intended. Who were the main losers as the result of that Act? The main losers were the Inland Revenue and the Estate Duty Office. The Government were not intervening to create legislation for their own benefit in litigation which they had conducted and lost. It is true that there were some individual beneficiaries who would have got the money because the trust had been found invalid, and whom the testator and settlor never intended to benefit, who were worse off as a result of the Act. But what has that got in common with the Bill now before us?
Then there was the Telegraph (Validation of Charges) Act, 1954, and the Truck Act, 1940, the first of which prevented proceedings, among other things, for the recovery of charges which were believed to be in order but had been
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found by the courts not to be in order. If I may mention the Truck Act, which I think was referred to by the Lord Chancellor, the proceedings which it made in effectual were in respect of transactions which might lawfully have been effected in another form. May I remind the layman of what it was all about?—employment for a wage plus meals is bad; employment for a higher wage, with agreement in writing to deduct the value of the meals, is good. That is a highly technical distinction. The Bill did not cause chaos, but was intended to correct what was in fact in the nature of a mistake. There is all the difference in the world between legislating retrospectively to remedy a mistake and legislating retrospectively to deny the subject his rights against the Crown.
May I give one more example of retrospective legislation which is quite interesting, but which has not, I think, been mentioned in the whole course of this discussion? It has been found necessary from time to time to pass a Statute to validate marriages conducted by bogus clergymen. An example is the Marriage Validation Act, 1888. These Acts validate the marriages, not only from the date of the Statute but from the date of the ceremony, and everybody thinks, and has always thought, that to be right. Acts of that sort do not bring the Lord Chief Justice down to the House to warn your Lordships of the dangers.
But consider what precedents will be set if we pass this Bill in its present form. Here the subject has been litigating against the Crown. There has been a long process in the courts, fought out with immense trouble and immense learning, and on which the courts have taken great trouble to give their decision. If we pass a simple Act of Parliament to declare that the successful litigant has lost the litigation, which is what this Bill does, nobody who wishes to justify retrospective legislation in the future will ever need to look for a further example. What will be the position in those countries all over the world in which British nationals and British companies are trading? How often may their only recourse be to take the matter to the courts of the country concerned? Do we really wish the Government of the country concerned to decide, perhaps retrospectively after the British national

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has won the case, that they will pass legislation to make the winner the loser, and then to be able to say: "The example we are following is the example of one of the most respected Parliaments, perhaps the most respected, in the world, the example set by the Parliament of the United Kingdom in the year 1965"?
What astonishes me about this Bill is that Her Majesty's Government do not seem to realise how much credit they could still gain by not proceeding with a Bill which is not even their own. The noble and learned Lord the Lord Chancellor said, towards the end of his speech:
"If the position is left as it is, these companies—and I do not seek to make anything against them because they are wealthy companies, though one might perhaps, take a different view if they were very poor—would he the only people to receive compensation on a footing of 100 per cent."—(Col. 818.)
There are two things I would say about that. First of all, I take the observation that one might take a different view if they were poor. I am not going to discuss morals; I would only point out that we know nothing about the circumstances of the other claimants. If the noble Lord, Lord Wade, was correct in his most interesting speech on the last occasion, there is at least one of these claimants who cannot, by any stretch of the imagination, be described as wealthy. But I say that the precedent our Parliament will be setting is disastrous.
The Amendments, which I support, will prevent immense injury to the reputation of Parliament, to the rule of law, and in the future to the ability of Her Majesty's Government, present and future, to protect British interests threatened in foreign countries. I strongly commend them to your Lordships.
4.30 p.m.
LORD REA: As sponsor of these Amendments, may I say that I support them entirely on the matter of principle, on a non-Party basis, caring nothing whether they benefit or damage the Labour Party, the Conservative Party, the Liberal Party, the Burmah Oil Company, the House of Commons, the House of Lords or anybody else, apart from this country as a whole and its reputation. The broad intention of this Bill—that is, to abolish a Common Law right to compensation from the
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Crown for certain kinds of war damage —has merits which I and, I think, most of your Lordships would in principle gladly accept. But to insinuate a retrospective element contrary to the tradition, practice and honour of the acknowledged procedures which this country has carefully and proudly built up over century after century, to the admiration of the whole world, is to me totally unacceptable.
In this age of emergent nations, on a keen look-out for examples and precepts, it is virtually essential that we in this country, more than in any other country in the world, should uphold the integrity and the sanctity of the ideal of absolute justice, so far as it can be attained. The eyes of the world are upon us, as my noble friend Lord McNair has said, in this very important matter. The acknowledged procedure for settling disputes between citizens and the Crown has taken its proper and traditional course; and if this course be found, in this one instance, to be distasteful to the present Government or to the last Government, then legislation to alter the situation in the future can properly be introduced and, I think, would be welcomed. But in my opinion it is a step towards totalitarianism and to dictatorship, to try to legislate retrospectively in a matter of this sort and to aim at depriving a litigant of the fruits of his litigation which he obtained perfectly properly under the laws of this country as they existed, both when he brought his case and as they still exist up to this afternoon.
If this Bill, with all its retrospective elements, be passed, then logically—and I admit I am giving a very extreme example—there is no impediment to any future or present Government, of any colour, introducing retrospective legislation to, let us say, invalidate all votes cast against the Government at the previous General Election, and so establishing a totalitarian State. I am not suggesting that any British Government would ever do anything of the sort. As my noble friend Lord McNair has pointed out, this Bill is in danger of setting a precedent with possibly quite disastrous effects on the international standards, both of justice and of morality. Two hundred years ago, or even fifty years ago, your Lordships' House had

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to bear some stigma of the self-interest of a non-elected Chamber. We are still a non-elected Chamber, but the atmosphere and outlook of your Lordships' House has completely changed and, so far from being a rubber stamp or a brake on the other place, we now have a solemn duty (which I think is manifest in all quarters of this House) to express and to try to safeguard what we feel to be a true reflection of the will of the people, most of whom are, in my opinion, greatly perturbed at the implications in this Bill as it now stands.
The true position, as I see it, is that the late Conservative Government and the present Labour Government both made a mistake in sponsoring the retrospective elements in this Bill. We all make mistakes, but this is a bad one. But face-saving and amour propre are not sufficient reasons for enacting a thoroughly bad and dangerous piece of legislation, and I ask your Lordships to vote on these Amendments from conscience and not from expediency or from the smaller aspect of a too-narrow Party loyalty. An extremely important principle is at stake, and I most respectfully plead with your Lordships—those who are perhaps uneasy about the Bill, but who are not anxious to go down in the Division List either as diehards or as rebels—at least to abstain from voting against these Amendments, and to let them prevail, as I hope they will.
4.35 p.m.
LORD BROWN: I cannot sit here this afternoon without speaking against this Amendment, because I fear that unless some amateur butts into this discussion we are going to be completely bogged down in these highly legalistic, doctrinaire, arguments which are being bandied across the Floor of this House. Law is for the common man, not for the jurists, and not always for the experts. Its effects are what we are concerned with. I wonder whether those who propose to vote for this Amendment are really prepared to go to the people of this country—
SEVERAL NOBLE LORDS: Hear, hear!
LORD BROWN: Let me finish my statement please; I have not asked the
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complete question. Are they prepared to go to the people of this country, millions of whom have lost limbs and eyes, sons and daughters, and small businesses during the war, and received frugal compensation, and say, "Because of a quirk in the law, we are prepared, on the basis of legalistic arguments, to allot a single company, twenty years after this war has closed, a sum of £50 million, £60 million or £70 million, and this is what we believe to be equity"? Are we prepared to argue that we did this merely because we wanted to uphold the doctrinaire principle that we must not indulge in retrospective legislation?
I have been accused of enough in my time as a member of the Labour Party and as a supporter of certain degrees of nationalisation of being doctrinaire, but I have never been absolute on these points. It shocks me to hear people who are learned in the law supporting this Amendment on the grounds that we must not have retrospective legislation. Let me, as an amateur, make this point to your Lordships. If you believe that all legislation, once laid down, should have its due effect until it is altered, then you can uphold this point of view only on the assumption that you know in advance the effect of that legislation in all the huge and wide variety of cases which may arise. It is nonsense to say that you can always foretell the effect of any legislation, because you never know all the differing circumstances which will arise; and this is a case for occasionally being forced to bring in some degree of retrospective legislation. If ever there was a better case than this one for retrospective legislation, I do not know of it.
I have listened to these arguments about the danger of our national reputation falling. Good heavens! for the last thirty years we have been watching acts of dispropriation going on all round the world. We have made our protests, but the degree of the acts which have been taking place put any act that is envisaged in this Bill completely in the shadow. I take an entirely different point of view about the reaction of the world. I would say that if we eliminate this subsection from this Bill the world will say: "Dear me! here is this doctrinaire country, with its legalistic attitude, prepared to

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give a single company enormous compensation when they know very well that in terms of equity this is not just." I say that we must reject this Amendment in the name of common sense, and stop beating this legal drum about it and getting into a legalistic morass which will cause us to lose sight of the main issues with which we are dealing.
4.40 p.m.
LORD ALDINGTON: The noble Lord, Lord Brown, told us that he was an amateur intervening between the pros. I, too, in this matter am an amateur, but I am bound to say that I wholly and completely disagree with his attitude to the rule of law. I am not a doctrinaire, and I know from the noble Lord's reputation that he is not a doctrinaire. But I am prepared to admit to being a doctrinaire about the rule of law, for that is, I believe, the basis of the society in which we live at home and the basis of the world that we would like to see, where there is peace and where there is sensible international trading. I cannot understand how the noble Lord, with his knowledge of business and training, can really have been prepared to stand up and say to your Lordships that behaviour like that proposed in this Bill can do no harm to our trading interests overseas. Certainly there has been some confiscation and some expropriation of British interests, but there has been far less than there might otherwise have been, because Her Majesty's representatives have been able to say to the friendly Governments who were thinking of doing these things: "This is contrary to the rule of law for which we stand, in which we believe and on which Constitutions which we have given to you have been based "—for many of the countries concerned are ex-dependents of ours. If I may say so with humility, as one other amateur in this debate, I think that the noble Lord has wholly misconceived the situation.
I have admitted to being an amateur but I am not without strong feelings that I myself wish, and I wish to encourage all your Lordships, to vindicate the rule of law by backing these Amendments. Like my noble friend sitting next to me, I have to admit that I was trained as a lawyer, and did, in fact, practise; but my legal career, like his, suffered war damage. But I have also to admit one
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other thing which may strike some sympathy from some of your Lordships, and possibly, at any rate, the noble and learned Lord the Lord Chancellor. I happen to be the grandson of the famous Judge, two of whose judgments were referred to in the Second Reading debate, Lord Atkin, perhaps one of the most famous Common Law lawyers of this century; and I carry with me in my veins at any rate some of the blood that inspired him in his judgments and inspired his dissenting judgment in the case of Liversidge v. Anderson. That may at least persuade your Lordships that my passion for the rule of law is not a synthetic passion invented for to-day's discussion to oppose the present Government.
I should, indeed, have opposed the previous Government, and my noble and learned friend Lord Dilhorne is fully aware of my strong views and opposition to the letter that was sent and to the attitude that he and some of his colleagues had towards this particular problem. I say that because I think there may be an inclination on the part of some of your Lordships, who perhaps do not know my history well enough, to think that this is a synthetic Party political intervention. This is not so. Nor do I think that it is so in the case of my noble friends, certainly not my noble friend Lord Conesford, whose view of these matters is so well known. I would add, too, that this is not the first occasion on which, in one House or the other I have opposed retrospective actions initiated, by my noble and learned friend Lord Dilhorne. There is an earlier pattern in Finance Bill debates which he will remember.
I wish to take up only one point about the legal aspect before coming to the international trading interest aspect of this Bill. The legal, or near-legal, matter that I wish to refer to is the point made about the Indemnity Act, 1920, being a good precedent for this Bill. In passing, I would say that, with my noble friend sitting next to me, I think that precedent here makes the matter worse, not better; the more precedents there are for the breach of the rule of law the worse the effect overseas must become. But the Indemnity Act is not, in my opinion, a good precedent, because the Indemnity Act brought with it a system of compensation. I know that the noble

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and learned Lord the Lord Chancellor and the noble Lord, Lord Shepherd. have said that compensation has been paid to the parties concerned by this Bill, the retrospective parts of this Bill. Frankly, I would say, after studying the papers and talking to the people concerned with what took place in 1947 and 1948, that that is not correct. Sums were paid—that is true; and the payment of those sums would certainly be taken into account, I should have thought, by any court examining the claim of the Burmah Oil or any of those parties. But those sums were not paid as compensation: they were paid for rehabilitation. The noble Lord sighs, but it is very important, because no attempt was made—and the papers show this very clearly—to fix the sum on the basis of compensation. An attempt was made to fix a sum to help in getting the business started again, and the measure of what could be paid was said by Sir Stafford Cripps to be governed by what the country could afford in the times of heavy pressure on our resources which we all remember in 1947 and 1948.
LORD SHEPHERD: May I ask the noble Lord this question? If this sum was paid in rehabilitation, would he not expect that some string would be tied to the manner in which the money was utilised? Would the noble Lord not agree with what I said, both on Second Reading and in Committee this afternoon: that there were no strings; that these companies could use and dispose of those sums as they wished? If they could do that, how can the noble Lord say that it was rehabilitation?
LORD ALDINGTON: I say that it was rehabilitation because it was said to be by the people who gave it. If the noble Lord would kindly look at the document, of which I have seen copies, and have them here—the note of the discussion in the Burmah office between Sir Stafford Cripps and certain representatives of the trading interests, and a further note of the discussion which took place with the Prime Minister at No. 10 Downing Street on June 29, 1948—he will see that the Government's intention then was to provide what they could to help in rehabilitation; and words to that effect
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occur frequently in these documents. The Government were to provide the sum on the basis of what was necessary at that time, rather than on the basis of what had been lost.
I make these points only because the noble Lord, Lord Shepherd, has said to us that we must have regard to the facts. I agree very much with what the noble and learned Lord, Lord McNair, has said to us: that this is not a debate about the Burmah Oil Company's case (I do not know whether it is a good or bad one) but a debate about the rule of law. When the noble Lord tries to argue that there is justification for departing from the rule of law because of some special payments made in previous years 1 think it is as well he should give the full facts and not try to say to your Lordships that payments were made in compensation, because, frankly, that is not so.
If I may pass from that for a moment to the question of the effect upon our international trading position, I admit to your Lordships that, like many others of you, I suppose, I have an interest—indeed, the whole country has an interest, in looking after our international trading position. I agree very much with what the noble and learned Lord, Lord McNair said. The precedents that have been cited have absolutely no impact upon my thinking about how this Bill, if it is left as it stands, would affect our international trading position. They were all domestic matters, none of them concerned and concerned closely with a well-known international trading company, trading in many parts of the world and respected all over the world. And none of those cases, I imagine, would have got into the American law book to which the noble and learned Lord, Lord McNair, referred. The truth is that we do not here in these matters live in a padded cell; what goes on here is heard and seen outside.
Everyone who looks at this case will be aware of the confiscatory nature of the legislation, in that, without any proper compensation, it deprives sufferers from past denial damage of the legal rights which are now known to be theirs; and, second, that there is the arbitrary refusal by the Executive to honour a judicial decision against it. These two

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facts are held up for all the world to copy, if they wish. Noble Lords opposite may not realise how much time those of us who trade all over the world have, unhappily, to spend in trying to protect our business, our property and our rights against Executive and legislative acts of foreign Governments. Of course, we spend a lot of time doing other things too; but we have to spend a great deal of time looking after our interests against those predatory instincts which have been referred to before.
In many of these countries the rule of law is accepted in principle because of the traditions and experience either of British law here or of our colonial Administrations. But this acceptance is not as sturdy a plant as it is here. What do we look to, to defend our position when it is threatened? We look to two arguments, both of persuasive force: we look to the argument of principle about the rule of law, and secondly, we look to the diplomatic support of British missions overseas, which must rest their efforts on basically the same argument of the rule of law. I must say that I have found that support of great weight in the past, and I cannot pay too high a tribute to the work that our Ambassadors and High Commissioners do in that respect. But if this Bill becomes law as it is, including the retrospective elements, it will destroy the planks upon which these arguments rest; it will make the protests of Her Majesty's representatives almost ridiculous, and at the same time it will weaken, or perhaps frustrate, the efforts of the United Nations, the International Monetary Fund and the International Bank to secure world acceptance of the proposition that no property should be taken by any Government without proper compensation. And it will make it easier for any Government to disregard, whether by subsequent legislation or not, any decision in its courts in favour of a private litigant and against themselves.
This is no imaginary danger. In more than one part of the world—your Lordships know this to be true—Governments do nationalise, they do expropriate, they do confiscate, and other Governments threaten to do all these things; and they proffer reasons for refusal to compensation not unlike those put forward by the Government for this Bill. Some of
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them may even proffer reasons not unlike those put forward by the noble Lord, Lord Brown, who I see has not been able to stomach the whole of my speech. We cannot afford to see our overseas investments and trading interests jeopardised in this way. As the Chancellor of the Exchequer has been saying, twice in the last week, we want to earn more, and not less, out of these investments. Nor can the world afford any lowering of the respect for the rule of law. Not for the first time it is to Britain's interest in the world herself to stand firmly to principle, so that others will do so too, and I hope that your Lordships will back all three of these Amendments.
4.56 p.m.
THE EARL OF LYTTON: I listened to the weighty speech of the noble and learned Lord, Lord McNair, who was so persuasive that I have nothing left to say of what I had planned to say when I came into this Chamber. It seems to me that the noble Lord, Lord Shepherd, has not been entirely answered in some of his main points, two of which I should like to take. I think he tried to persuade us that this decision had been a kind of judicial fluke—six to four against, and yet in favour—and that if we were sensible, common-sense folk and looked at it from the point of view of fairness and equity, we should come to the same conclusion as he does.
I do not share his view. I have searched for somebody who might have persuaded me, and I have chosen, because he has chosen him himself, the noble and learned Viscount, Lord Radcliffe, who in the peroration of his summing-up said this:
"I do wish, however, to make it quite plain that my opinion does not amount to saying that it is the law that compensation or indemnity should not be provided for such loss as the appellants suffered. That would misrepresent my position, which is that the Common Law itself never has provided, and does not now provide, any remedy for these actions of the Crown which were admittedly lawful, and therefore there is now law on the matter to which we can give effect. That there is something which may, by a permissible transfer of language, be called a public law which requires the careful attention of the State to damage thus inflicted and calls upon it to make such provision for compensation as the recognised equity in favour of compensation may demand, I would be glad to agree."

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It seems to me that seven out of ten judges said something which, either explicitly or by implication, indicated their support for compensation on the basis of equity. Not one of them was quite so forthright as Lord Radcliffe. This is one of the points, then, which I should like to make: that the witness called by Her Majesty's Government, as far as I read him, is in support of compensation on a basis of equity.
The second point I should like to take, briefly, is a question of law. It seems to me that the noble Lord, Lord Shepherd, assumed a conclusion which was not a conclusion we were arguing about. He seemed to assume that we were talking about a verdict in favour of compensation for war damage. As I read the matter, the whole thing turned on whether it was technically war damage or whether it was not. If it was, I cannot find a single legal person who does not agree that it attracts no compensation. As Lord Radcliffe said, if it is battle damage in the face of the enemy, they had no legal right to stop it, and there is no legal claim to compensation.
But the whole point is that the courts have decided that it is not damage of that kind; that it comes in a different category; and I think that the case as it was judged by the majority received immense strength from the eloquent and definite speech of the noble and gallant Viscount, Lord Slim, on Second Reading, when he said that it was not battle damage, that in fact it was the decision of the Government, a political decision, to apply an economic sanction, and only the timing of it was left to the commander on the spot. It was not a necessary action of war. It may even have been an handicap and an impediment to the withdrawal to have to do this at all. It might not have been so if we had been going in again quickly. It might not have been so if we had given greater weight to the harm it did to the economy of the Burmese people. Had we decided never to fight there at all, we might yet have taken the same decision, a political decision, not a necessary decision for battle. That seems to me the whole difference, and it comes close to the legislation which we had in this country.
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We are asked to take account of the facts. I brought to your Lordships' notice last time the Emergency Powers (Defence) Act, which assumed enormous powers—the taking into possession on behalf of His Majesty of any property. There was a corresponding Act which provided that compensation was payable for all this—never mind whether it was a battle structure, pill box, gun emplacement or an airfield. All these things were taken under the special powers by Statute and were paid for under a compensation Act.
What is comparable by analogy is that if the Burmah Oil Company had been in the Isle of Wight or in the Channel Islands, they would have received compensation under these Statutes in the same way as would other people. The whole point of the arguments we have heard is that this is not war damage. Almost everything the noble Lord, Lord Shepherd, said about war damage one would agree with. War damage, in the technical sense, is not eligible for compensation. But that is not what we are talking, about. The decision is that it was not war damage in the technical sense, but something different. Those are the two points I wish to raise.
5.1 p.m.
LORD ALPORT: I rise to intervene briefly in this discussion simply because I think there may be some danger that an argument which has been wrapped in some of the mysteries of legal argument may not always be clearly understood by people outside who are non-experts. The noble Lord, Lord Shepherd, began his speech by saying that he was going to deal with facts on which public policy must be based. I think we accept that point of view. It is the point of view of successive Governments. Put in a different way, it is an expression of the importance of expediency in the formulation of policies which every Executive face time and time again. It was no doubt the basis that led the previous Administration to agree to send the well-known letter from the junior Treasury solicitor because they thought it represented a reaction expedient in the public interest to a particular situation which they faced.
That is precisely what those of us who oppose this provision of the Bill are going

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to vote about. We are going to vote, we hope and believe without being sententious, on a matter of principle as opposed to a matter of expediency. We believe that public policy should on occasion, and more often than not (I put it no higher than that), be based on principle, particularly where the legal rights of individual citizens are concerned. Therefore, in some ways, at any rate—I speak perhaps personally—on this occasion my own vote in favour of this Amendment will be a protest not only against the policy of Her Majesty's present Government but against the action of Her Majesty's previous Government. Had the previous Government been the Government to-day and had they produced this Bill before your Lordships' House, I hope—I do not put it higher than that—that I should have had the courage to vote against them in exactly the same way.
The second matter is that this is not a question of safeguarding property. The noble Lord, Lord Shepherd, in his opening remarks understandably made great play with the compensation which had already been paid to the companies. He argued, as I understood it, that this meant that they had already received their just dues. It may be he is perfectly right. It may be that when a court came to consider the compensation which it was equitable to pay in these circumstances, it would not only have set off the amount which had already been paid but would have taken the view—a view expressed, I believe, by one of the learned Scottish Judges—that possibly the amount of damage would be calculated as between the destruction of the properties before the Japanese occupation and the destruction of the properties after the Japanese occupation as a result of British air bombardment, and therefore the amount of compensation might be small, or nil.
I do not think—I speak entirely personally on this—that the Burmah Oil Company have a very strong moral case for compensation. But that, as I see it, is not the issue before your Lordships at present. What we are concerned with is a matter of constitutional propriety. We are concerned with the maintenance of a long-established Principle of our Constitution: that the Executive should not attempt to interfere, and certainly should not succeed
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in doing so, directly with a decision of the Judiciary.
I do not want to cover all that ground again but merely want to make one point. My noble friends and the noble Lords on the Liberal Benches have cited the importance of maintaining the integrity of our system because of the reactions otherwise on our commercial interests overseas. This is not, as I said, a question merely of property. The effect of the passing of this Bill in its present form would have repercussions not only on our commercial and industrial interests overseas, but also on the whole corpus of the British tradition of law, as followed in Commonwealth countries and elsewhere.
Your Lordships may remember that quite recently there was a celebrated case in the Supreme Court of Ghana. Three distinguished men were on trial for their lives. So far as I know, those who put them on trial and accused them were satisfied that the law was such-and-such, that the evidence was sufficient, and they assumed therefore that the learned Judges, when the time came, would find them guilty. In the event, the Chief Justice and his learned colleagues acquitted the three individuals. The executive stepped in and dismissed the Chief Justice and his colleagues and—so far as I know I am not certain—with the panoply of Parliamentary sanction, reversed their decision. A second trial took place, the men stood trial for their lives on a second occasion, and were condemned to death.
I do not think that it is wrong to draw an almost exact parallel in principle with what we are being asked to do in this Bill at the present time. What happened, according to reports which appeared in the papers, was that the Commonwealth Secretary, no doubt through the instrument of the British High Commissioner in Accra, made an appeal to the Government of Ghana to commute the death sentences. Many of your Lordships in the past have had the experience of representing to foreign and Commonwealth countries Her Majesty's Government's point of view on various matters. Some of you will know the sense of defeat that such occasions produce in the British representative when the other Government, or the Minister, or Prime Minister, or President, whoever he may he talking to,

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can turn round to him and say, "But your Government has done exactly the same thing", and can quote chapter and verse to prove their case.
I do not think this argument too farfetched. Had those representations been made after the passage of this Bill and had it become law, the case put forward by the British Government for a change of decision by the Ghana Government and for clemency for these three men would have been weakened and possibly ignored by the Ghana Government. I use this merely as an example, but an important one because it is a human example which takes the problem out of the realm of property and legal rights and puts it—as the noble Lord, Lord Brown, has tried to do from his point of view—on a human basis.
LORD BROWN: With respect, I think the noble Lord is using unfair arguments, unless it is true that the noble Lord makes no distinction whatever, in principle, between, on the one hand, law governing property, and, on the other, law governing people, their lives and their freedom.
LORD ALPORT: I do not want to enter into an argument, but the law is the law as administered by the courts and decided by the Judiciary with reference, so far as I know, to Acts of Parliament that may have been passed.
LORD BROWN: You make no distinction?
LORD ALPORT: There is no distinction in the minds of judges, so far as I know, between the necessity for integrity in administering the law in relation to property and the necessity for integrity in administering the law in relation to personal liberty and life. But I am not a judge and I would not claim to be a lawyer, although I was once called to the Bar. I have tried to put the arguments on what I believe to be a basis which is clearly understandable outside your Lordships' House, and I hope that, if there is discussion elsewhere, outside this House, arguments of this kind will also be used. I hope that the problem which we are facing and having to decide on here will not be represented as an obscure constitutional and legal problem, but will be recognised as some
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thing which is in fact reflected in the human rights of people, not only in this country but throughout that part of the world which is governed by the English traditions of law.
5.13 p.m.
VISCOUNT MASSEREENE AND FERRARD: May I point out to the noble Lord, Lord Brown, that what he really wants is one law for the rich and one for the poor? I think that that is a most astounding suggestion. I had not intended to speak on this Amendment, but I would point out that the issue seems to have become rather clouded, because what we are really discussing is the rule of law. The highest Court in the land has given a judgment; Her Majesty's Government do not like the judgment; and therefore, they say, "All right; we will have retrospective legislation, and we will deprive the successful party of the fruits of its litigation". In my opinion, if you have a Government that do that—in fact, I do not call that government at all—you are really getting very near to brigandry. It is the road to dictatorship.
LORD SHEPHERD: Is the noble Viscount suggesting that his own Party was on the road to dictatorship?
VISCOUNT MASSEREENE AND FERRARD: It is true that my own Party sent that letter to the Burmah Oil Company through, I understand, the Attorney-General's office—I think I am right in saying that. But, personally, I do not approve of that letter. As I say, the law is the law, and you ought not to try to frighten somebody from going to the law. I do not object to altering the law, but to alter it retrospectively really horrifies me. After all, if you take the trade union case, the Rookes v. Barnard case, people have said, "Oh, but we thought the law was different; we only want to put the law back as we thought it was". Yet nobody has suggested depriving Mr. Rookes of the damages he has received. As I say, the noble Lord, Lord Brown, wants one law for the rich, and one for the poor.
LORD BROWN: With respect, I said one law governing property and one law governing human life and freedom.
VISCOUNT MASSEREENE AND FERRARD: Do you really mean to tell

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me that, if the Burmah Oil Company's claim for damages had been only, say, £100,000, Her Majesty's Government would have produced this Bill? Of course not. I would remind the Committee what the Bible says:
"For what shall it profit a man, if he shall gain the whole world, and lose his own soul?"
If this matter goes to a vote, I shall vote for the Amendment.
LORD MORTON OF HENRYTON: On the Second Reading of this Bill I made what was, I think, the shortest speech I had ever made in this House, and I shall be almost equally short on this occasion. I think that the retrospective part of this Bill is bad for at least two reasons. First, Clause 1, subsection (2), enables the Crown to stop an action which is against the Crown; secondly, the Bill deprives a litigant who has succeeded against the Crown in this House of a right which he has established. In these two respects at least, I suggest that this Bill strikes a blow at the rule of law and at the independence of the Judges.
LORD CITRINE: Like the noble Lord who last spoke from the Government Benches, I have not had the advantage of any kind of legal training. I might go further and say that I have not had the advantage of anything other than a purely elementary education at my school. I was brought up in the trade union movement, where it is the habit of people to look at the facts and not, perhaps, to be indulgent towards those dexterous phrases which lawyers are so capable of using, either to conceal their thoughts or to express them in language which can create all kinds of subsequent litigation. I listened very carefully to the debate on the last occasion, and I was particularly impressed by the speech of the noble and learned Viscount, Lord Dilhorne. I gathered from what he said that this was inherited legislation—that is, legislation which, had there been no General Election, would in due course have been brought forward by the previous Government.
VISCOUNT DILHORNE: I am sorry if I gave the noble Lord that impression. That is just the one thing I did not say. I said it had been drafted in the time of the late Government, but it had not come before the Government, when
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drafted, for consideration, and no decision had been reached as to its introduction.
LORD CITRINE: I see. So the difference really is that the skilled law officers of the late Government, conversant with the rules of equity, conversant from their political experience with a sense of right and wrong, conversant with the rule of law and with all that is attached to those phrases, thought it was perfectly proper to present a Bill of this character to the Government of the day for approval.
VISCOUNT DILHORNE: I am sorry to have to interrupt the noble Lord again, but of course the Bill was drafted by Parliamentary Counsel on the instructions of the Government.
LORD CITRINE: On the instructions of the Government. Surely, that is the whole heart of the case. Draftsmen would never dream of importing principles into a Bill unless those principles had been clearly expressed in some form, whether by memoranda, by consultation or in some such way. Although I know nothing at all about the methods of government, I am quite sure that that would be the fact. Really, it is a debating point rather than one of substance.
THE EARL OF SWINTON: Not having been in the late Government, I can say that there is all the difference in the world between instructing Parliamentary draftsmen to draft something and taking a Government decision that something ought to be introduced into the House. I think, in fairness, it should be made clear whether the late Government ever, in fact, said that this Bill would be introduced into Parliament or whether they did not. If they did not, then it is merely drafted.
LORD CITRINE: Again I must dissent strongly. I understand that the Parliamentary draftsmen are people of legal training who are employed for their skill at putting into language what other people want them to put into language. Those "other people" are usually either the Government of the day or officers of the Government of the day concerned with that particular section of legislation. So I must persist in my view that this Bill is, in substance, inherited legislation.

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I remember the strong support (in view of what the noble and learned Viscount, Lord Dilhorne has said, I hesitate to say "advocacy") that, to my mind, he gave for the basic principle of this Bill. In the course of that debate, he defended—if that is the right expression—first of all, the basic principle set down in this Bill, that no subject of this country has an inherent right to sue the Crown for damage which has lawfully taken place under the instructions of, or by the act of, the Government in the course of a war. I gather that that was the gist of what he said. If I am wrong—
VISCOUNT DILHORNE: I am sorry to interrupt again; but I would ask the noble Lord to look again at what I said.
LORD CITRINE: I was reading it only five minutes ago.
VISCOUNT DILHORNE: Read it again!
LORD CITRINE: Well, the Committee will recall what I said at the outset about lawyers.
I was wondering, as the debate was going on, whether, if this Bill had been presented under the ægis of a Conservative Government, there would have been quite the same indignation expressed on the Benches opposite. But I must say that I think that the indignation that was expressed on the previous occasion when the matter was debated (and even on the present occasion) was rather synthetic in character. Let us look at what we mean by "the rule of law". The rule of law, in two instances, showed that there was no precedent whatsoever, prior to this case, whereby a subject was thought to have the right to sue the Crown in circumstances of this kind. The noble Viscount, Lord Radcliffe, was cited as saying that there had never been a single case in the history of the law, so far as he knew. So, as far as the accepted law was concerned, until this decision of the House of Lords was made there had never been a case which gave a semblance of right to the individual to sue the Crown in the circumstances we are now debating. This right had been created, and has been created, by Judges—by men who are just as susceptible to human emotions as any of us. I do not elevate people, when they come to the
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Bench, into some kind of angelic conception where sprouting wings are visible when they are dealing with questions, some of which are of a semi-political character.
The noble and learned Lord, the Lord Chancellor, in his subsequent statement said that six appeal judges who had dealt with this case had come to the conclusion—and I hope I am quoting him correctly; but it is in the OFFICIAL REPORT—that the Burmah Oil Company had no case. I suppose that those were men of sound legal training: I suppose their integrity was at least as good as that of the Judges in the House of Lords who dealt with the case. Yet, if a majority of judicial opinion on this case had been taken, we should not have been debating it to-day. We are dealing, so far as I can see, with what is an interpretation put on the law by Judges who were, if we take the whole of the Judges of senior status who dealt with this case, in a minority. In other words, there is no right on the part of the subject to demand compensation. We are not now dealing with the fairness of the matter; we are dealing with the right of the individual to claim from the Crown compensation because of damage which he or she or, in the case of a company, they, suffered. I am not for one moment against people who have suffered damage being given some kind of compensation by the Crown; but that is entirely different from handing over to them the right to make that claim.
Let us look a little further than this case. Can there be any doubt that there were thousands of people who suffered damage during the war and who were only partially compensated? They expected nothing better; they thought it perfectly just that they should receive something. It needed a big company, who come along and make a claim of this kind, to say that that is not fair treatment. Let us look beyond this case and see whether we are in fact inviting companies, if this legislation is not passed, to make claims against the Government. I can see no end to the prospective litigation that would follow if this Bill were not passed. Although I was not present for the whole of the debate, since I had to attend to other business and I may therefore have missed something, I have heard nothing said on this aspect of the Bill: on the aspect of the right

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of the individual. Nobody tried to say that there was such a right. Practically the whole brunt of the discussion and of the arguments brought against the Bill have been brought against the retrospective subsection. Is that not correct?
A NOBLE LORD: That is what we are talking about this afternoon.
LORD CITRINE: I am glad to see a glimmer of agreement in noble Lords opposite. It gives me much encouragement. But the noble and learned Viscount, Lord Dilhorne, gave instances of retrospective legislation, as did the noble and learned Lord, the Lord Chancellor. I should have thought that somebody could have shown us the disastrous consequences that follows on this retrospective legislation. Instead of this, an attempt has been made to awaken our fears, and, through this House, the fears of the public, as to what would befall if retrospective legislation of this kind were passed. But no instance has been given to show that previous retrospective legislation had the disastrous consequences which are now predicted.
I now turn to something which I hesitate to say but which I must say in duty and in honesty to myself: this House is not a reflection of public opinion; it cannot be a reflection of public opinion. It is not an elected House; it is primarily an hereditary House, even to this day. Although noble Lords opposite may vote down this Bill in respect of its retrospective subsection, they will have taken a great responsibility on themselves in so doing. I see the noble Lord the Leader of the Opposition shaking his head. I do not know whether it is to cool himself or to show some sense of dissension from what I am saying.
LORD CARRINGTON: I did not mean to intervene, but I was dissenting. It seems to me that if we are denied the right to pass Amendments for reconsideration by another place, we might as well pack up.
LORD CITRINE: I think it would be an excellent thing for the country if a number of noble Lords did pack up and perhaps make it possible for something in the way of equity of debate and of voting to take place in this House. The noble Lords may troop into the Division
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Lobby, but that will convince nobody of the equity and right of their contentions against this Bill. I will conclude by saying this: sooner or later it may be that a quarrel will take place on some basic principles between this House and another place, and I am perfectly sure where the support of the people will go when that does take place.
5.30 p.m.
LORD FERRIER: I had not intended to intervene until the noble Lord, Lord Citrine, spoke, and I will say only a few words. The noble Lord said there was a synthetic element about the opposition to this Bill and the support for this Amendment on this side of the House. I will go along with the noble Lord, Lord Alport, who said that whatever Government had presented this Bill to this House, he would have voted against it, and so would I. I go further, and point out that I voted against the Second Reading. I say that to show, if I may with your permission, that this is not a synthetic feeling at all on the part of a hereditary Peer but on the part of a Life Peer.
I felt inclined to interrupt the noble Lord, Lord Brown, when he spoke and rather involved us in a discussion about law. This is not a Bill against the Burmah Oil Company; it is a Bill about principles. But, as a Scotsman, I would remind your Lordships that it is a Bill about Scottish law and the Scottish legal approach to principles and parties who want the right to claim. What claim they get, if anything, does not affect the principle and for that reason I should like to say, roundly and loudly, that I propose to support this Amendment.
5.33 p.m.
LORD WADE: I am not unduly concerned as to which Government is responsible for this Bill. I regard it finally as a fight against the Executive, and I do not think it is very helpful to suggest that the supporters of the Amendment are doctrinaire. Some day, if we lose the independence of the Judiciary, it will be too late for anyone to say that those who tried to uphold it were doctrinaire. Moreover, let it be remembered that it is the poor, the widows, the orphans, the individual, fighting against the Executive. It is persons of that kind who are protected by the independence of the

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Judiciary just as much as any powerful company, and we must be thankful for legal aid.
It may be helpful to consider to what extent noble Lords are in agreement. First, many noble Lords would agree that there is a case for amending the law in the future, and in saying that I do not accept the view that there is no doubt as to what the law was. I think there is considerable doubt, but I accept the view that there is a case for altering the law so far as the future is concerned. Secondly, as to the retrospective elements in this Bill, on Second Reading the noble and learned Lord the Lord Chancellor said that the proper course was to raise this by way of Amendment in Committee. I agree. That is precisely what my noble and learned friend Lord McNair has done to-day. So at any rate so far as procedure is concerned we are in agreement.
Thirdly, the noble and learned Lord the Lord Chancellor stated that so far as the general principle is concerned we all agree that retrospective legislation is objectionable. The only question is whether in the particular circumstances of this case we should depart from that general principle. I believe that there are overwhelming reasons for not doing so in this case. There have, of course, been many precedents put forward and I would readily acknowledge, so far as the Second Reading debate is concerned, that the noble and learned Lord the Lord Chancellor and the noble Lord, Lord Shepherd, put up as good a case as it was possible to make. I am bound to say that I admired the skill with which the noble and learned Lord the Lord Chancellor built up this wonderful edifice, but at the same time I must say that I thought the foundations were far from sound. I have examined all the precedents very carefully and I cannot find any that really justify the retrospective provisions of this Bill.
For example, there is the Charitable Trusts (Validation) Act, 1954, but by no stretch of the imagination can that be considered comparable with this Bill. In that case it was felt that the wishes of the testators expressed in good faith would be defeated if the law were not altered, but the Crown did not benefit from the change and this was not a case of action brought against the Crown. Personally, I think the most persuasive argument
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made by the noble and learned Lord the Lord Chancellor and the noble Lord, Lord Shepherd, was the assertion that the claimants in this case had received compensation and all had been treated alike. That was the foundation of the edifice to which I have referred. It was mentioned three times in the speech of the noble and learned Lord the Lord Chancellor, and it was mentioned again to-day by the noble Lord, Lord Shepherd. If it is true it does not necessarily justify retrospective legislation, but at any rate it has some persuasive effect. On the other hand, if it is incorrect then the whole edifice falls to the ground.
If one examines this case one finds that the money directed to be paid for rehabilitation was not compensation. There was no fund to be shared out pro rata among those who had suffered in Burma. I illustrated this point on Second Reading by mentioning the case of one individual who received nothing and is not entitled to receive anything from the rehabilitation fund, but who would receive some payment if he was allowed to bring his case at Common Law. It seems clear from one's observations that this fund which was paying for rehabilitation in Burma is not compensation as we understand it. This is not only my own view; it was expressed quite clearly by the Attorney-General in the Second Reading debate in the other place. Indeed he said that this is
"only on the basis of a contribution towards rehabilitation".
He also said:
"I entirely agree it was not compensation"—
THE LORD CHANCELLOR (LORD GARDINER): He went straight on to say that rehabilitation was a form of compensation.
LORD WADE: I was going to read the remainder of the sentence:
"I entirely agree it was not compensation in the sense of damages for wrongful acts or alternatively compensaton at Common Law."—[OFFICIAL REPORT. Commons. Vol. 705 (No. 49), col. 1207, February 3, 1965.]
I do not think one can regard this as compensation, nor was it paid pro rata among those who suffered.
I do not think I ought to take up your Lordships' time by referring to the Indemnity Act, 1920, because that has

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been referred to before, but before rejecting these Amendments I hope the Government will consider the effects of passing this Bill. One can see only too clearly what might happen in the future if this Bill is passed without Amendment. Some day some unfortunate subject will have a claim against the Government of the day. He may bring an action and he may succeed in the court of first instance, or he may have to fight it out in a higher court, but having succeeded the Government will say, "No; we are not going to stand for that. We are going to introduce retrospective legislation to prevent you from having the benefit of the action you have brought".
Judging by the number of precedents brought forward, the Government have searched the Statute Book to try to find precedents to support what they are doing, but if this Bill is passed I can foresee only too well what will happen in the future: they will not worry about the Charitable Trusts (Validation) Act; they will not even need to refer to the Indemnity Act, 1920, which set up a compensation fund; all they will do is to refer to the War Damage Act, 1965. I believe there are cases when Parliament senses that the Executive are going too far. I believe that the basic principles of our Constitution have been preserved only because Parliament has that sense. I believe that this is such a case, and I hope that the Amendments will be carried.
5.40 p.m.
LORD PARKER OF WADDINGTON: On the Second Reading of this Bill, I ventured to express, as strongly as I could, my views against retrospective legislation. Those views will certainly be no better and more persuasive for being repeated, and therefore, I do not propose to do so. It seems to me that almost everything has now been said, on one side or the other, for or against these provisions. But, at the end of the day, or of this afternoon, the broad facts as we see them are as follows.
First, the provisions are, as the noble and learned Lord the Lord Chancellor said, contrary to the rule of law. Secondly, they are confiscatory, taking away property without compensation. And when I say, "without compensation", I am not dealing with the point as to whether it is compensation or rehabilitation. I am quite prepared to concede that
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something by way of compensation has been paid. But, after all, it is compensation paid by the Government of the day, as judged in its own courts. Certainly in the courts there is a principle that "justice must be seen to be done", and this Bill hardly falls within that principle. Thirdly, it provides for the setting aside or dismissal of proceedings in which a subject has been confirmed by the highest tribunal in his right to claim such damages as he can. Fourthly, and still more amazingly, a court is required to set aside the proceedings on the application of a defendant, who has lost his case and who seeks to avoid the incidence of that loss.
No one can say—and I do not want to put this too high—what effect these provisions will have upon the reputation and standing of this country in the world. Nobody can suggest that they will improve that standing; indeed, in one way they will do infinite damage, which we shall all regret. It so happens that this June we in this country and the people of the United States of America shall be celebrating the 750th anniversary of Magna Charta. Your Lordships' attention has been drawn to the fact that Chapter 40 provides that:
"To no one will we deny or delay right or justice."
In the past, there have been many attempts to contravene that principle. All those we have resisted. Is it really to be said that, in this 750th year, we are to sweep all that aside? I venture to think that your Lordships will give an emphatic, No.
5.44 p.m.
THE LORD CHANCELLOR: It is very nice, is it not, to have an afternoon, or part of an afternoon, when we can all discuss something which is not a question of Party politics? This is a case which six successive Governments have had to consider and in which the Burmah Oil Company have received £4¾ million (whether we choose to call it compensation, or whatever word we like, that is what they have had, for the damage they suffered during the war. Four Conservative and two Labour Governments have had to consider this matter, and they have all come to the same conclusion. I am not in the least advancing that as an

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argument for saying that they were right. The good Englishman will consistently, I hope, be against all Governments. But at least it shows that this is not in any way a Party question.
The Government's case, like the cases of previous Governments on this point, is fairly simple. It consists of three propositions. The first is that retrospective legislation is wrong and contrary to the rule of law. The second proposition is that there may be exceptional circumstances which justify a departure from that rule. And the third proposition is that this is one of those cases.
If I may examine those propositions for a moment, I do not suppose that any noble Lord in any quarter of the Committee differs from the first proposition: that, in general, retrospective legislation is wrong. Little has been heard in the debate of the reason for it. As was pointed out by the noble and learned Viscount, Lord Dilhorne, on Second Reading, the alteration by the Legislature of the judgments of a court is a form of law reform. A great many of the Acts of Parliament which are passed every year have the effect of altering people's legal rights for the future and of modifying decisions which judges have made. Nobody regards that as an attack on the Judiciary. It is for Parliament to decide whether they do or do not agree with the law as laid down by the judges, and to alter it, if they so choose, for the future.
So that retrospective legislation is not objectionable because it is changing the law, or because it is changing somebody's existing legal rights. We have done this two or three times to-day: in relation to licensing in Scotland, and the qualifications for magistrates' clerks. These changes interfere with people's legal rights. That is what Parliament is for, if it does that for the future. What is objectionable, in general, about retrospective legislation (and so far as I know this is the only objection that has ever been given against it), is that as men go about their daily affairs they are entitled to act according to the law as it is. It was, I think, the noble Lord, Lord Wade, who referred to a statement made in Wade and Phillips:
"Retrospective laws, are, however, prima facie of questionable policy and contrary to the general principle that legislation by which
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the conduct of mankind is to be regulated ought, when introduced for the first time, to deal with future acts and ought not to change the character of past transactions carried on upon the faith of the then existing law."
This is why, if ever one is considering retrospective legislation, one looks to see how far the people whose legal rights are being interfered with retrospectively did what they did because they were acting on the faith of the existing law. It is this that is the very backbone of the objection to retrospective legislation. I assume, therefore, that we all agree for that reason, but only for that reason, that retrospective legislation is in general wrong.
As to the second proposition, I am not sure how far all your Lordships agree with it—that is, the proposition that while that is so in general, there are exceptional cases in which retrospective legislation is justifiable and, indeed, is the only equitable thing to do. The noble and learned Lord, Lord McNair, said that we should all agree with that. I am not sure whether we do all agree with that. Some noble Lords, I thought, indicated that they thought that retrospective legislation was always wrong. In the instances in which we have in the past so legislated, whether rightly or wrongly, those laws were almost invariably accompanied by the very objections which the noble and learned Lords, the Lord Chief Justice and Lord Morton of Henryton, gave. Where there has been retrospective legislation it has generally enabled the Crown to stop an existing action and to reverse an existing custom. Obviously, to take the point of the noble and learned Lord, Lord Parker of Waddington, it is retrospective, because that is what we are talking about. They were cases which often left the nation the judge in its own cause as to what the compensation should be, and in some cases involved the dismissal of proceedings in which the subject had succeeded. I can understand the argument—"I am against retrospective legislation in any circumstances whatsoever, and wherever it has been done in the past it ought not to have been done." But if one accepts, as the noble and learned Lord, Lord McNair, does (and he said that we should all agree), that there are circumstances in which it is justifiable then one comes to the Government's third proposition, that this is such a case.

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The general nature of the Government's case is really simple enough—namely, that in 1914 something happened which had never happened before. Before then, wars, in substance, were conflicts between professional armies. But now, for the first time, we had a world war and not only in this country, but in others, nearly every citizen suffered damage. Some, as has been pointed out by the noble Lord, Lord Brown, lost eyes or limbs. Some were rather luckier, and only suffered monetary loss, but some loss. For a man to lose his home from bombs or to lose the little shop which is his means of livelihood is a great loss. But we could not afford to compensate everybody, because the economic condition of the country did not allow of it. So in that war the Government decided what they thought would be fair compensation, and everybody else was deprived of his legal rights.
The Government's case here is that in the last war the position was exactly the same. We were not unsympathetic to these claims. They totalled £165 million in Malaya and £160 million in Burma. And as the noble Lord, Lord Shepherd, has pointed out, in all these cases we paid the European Burma claim, £67 million, of which £60 million was denial damage. These were exactly the same cases as the Burmah Oil Company's. In all these cases we paid approximately the same proportion: in Malaya 8 per cent., in Borneo 6 per cent. and in Burma 7 per cent. And we said, "We are sorry, but we cannot afford any more".
The same thing happened in 1920. The 1920 Act of course goes very much further than this, because the House may remember that that Act provided that:
"No action or other legal proceeding whatsoever, whether civil or criminal, shall be instituted in any court of law for or on account of or in respect of any act, matter or thing done, whether within or without His Majesty's dominions, during the war before the passing of this Act, if done in good faith, and done or purported to be done in the execution of his duty or for the defence of the realm or the public safety, or for the enforcement of discipline, or otherwise in the public interest… and, if any such proceeding has been instituted"—
this is coming to the learned Lord Chief Justice's point—
"whether before or after the passing of this Act, it shall be discharged and made void, subject in the case of a proceeding instituted
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before the twentieth day of July, nineteen hundred and twenty, to such order as to costs as the court or a judge thereof may think fit to make".
It then goes on to provide that nothing in the Act is to stop the Government from suing a citizen.
This came before Parliament, and the circumstances were substantially the same. Sir Ernest Pollock (and I think the noble and learned Lord, Lord McNair, would agree that there was no lawyer of greater integrity) said: "Here is the position. Take shipping. We simply could not afford in the war to give to ship owners whose ships had been requisitioned and sunk and so on, that which would compensate them adequately for their loss. And we said to them: 'This is all we can afford to do'". And the Government agreed, and everybody agreed, that that was the most that we could afford.
Most of them accepted the compensation and said: "Thank you very much. We quite appreciate the position." But one or two "smart Alicks" among the shipowners issued writs and said: "We are going to get ahead of all our competitors. We are going to get more than anybody else. We are going to rely on our legal rights."
This was the situation which faced the country, and Sir Ernest Pollock, on behalf of the Government, said this:
"Shipowners, I think, as a whole, have acted quite patriotically, and have accepted the rates. They have suffered great losses but, broadly speaking, have bent their energies to the common weal. I should be very sorry to make any distinction, or to suggest that that was not true of any class, but I am pointing out the difficulties which particular classes may have had. I think, however, that what this House, and those who have already settled their claims, would deprecate, is that there should be a new and larger measure of compensation in the future for those persons who have not been ready, so far, to accept the compensation which others have accepted, and that those persons who, so to speak, stood out for their rights, should get those rights, while those who were prepared, for the public weal, to take less and make an end of the matter, should be paid less compensation.
"As we stand here to-day there is only this one course that I can see. You must either reopen the cases for all alike"—
that applied here would apply to the whole of the £60 million for Burmah, and also Malaya—
"or you must stand by the principles which have been drafted and put into operation for

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so long a period. To reopen the whole system for those who waited would be to do an injustice to those who settled their claims, and I think I am on firm ground when I say that in fairness to those who, during the five years, made as little difficulty as possible, it is right that we should continue that system."—[OFFICIAL REPORT, Vol. 128, col. 1756; May 3, 1920.]
Then in the course of the debate Sir Frederick Banbury asked whether the Bill would have the effect of overriding one decided case, namely, the Newcastle case, and Sir Ernest Pollock said:
"It would override the decision in the Newcastle case and decisions which depend upon it."
Sir Ernest Pollock later said:
"We cannot put the clock back to the days before the War. It is quite impossible to give everybody their rights, direct and indirect, we must look at the subject as a whole, and at the point of view of the community as a whole."
Then Sir Frederick Banbury said that he disagreed—and this is a point of view which anybody can take on retrospective legislation. But having considered the position which arose when it came to a Division Members who voted against the Bill numbered only 28.
When the Bill came to your Lordships' House, the noble and learned Lord, the Lord Chancellor, Lord Birkenhead, explained the position, and Lord Sumner (and I think the noble Lord, Lord McNair, will agree that there was no more learned noble Lord) said this:
"The responsibility for introducing such a measure as this is undoubtedly great, because it does two things which, I am quite sure, the Government themselves would recognise as being usually objectionable. The first is that it closes the Law Courts to litigants who have the right of entering them. It says in terms—and that is the object of the Bill—that no action or other legal proceeding shall be brought, although the citizen may have been wronged and may have a legal remedy which he is entitled to bring before the Courts by means of an action. It says furthermore—and it has been very candidly explained to us by the noble and learned Lord on the Woolsack—that it proposes to lay down in certain classes of wrongs a rule as to compensation which docks the person entitled of a very considerable proportion of that which he might be entitled to if he were allowed to go to law. I think everyone would agree that any tendency—and there has been such a tendency at times—to withdraw various classes of legally contentious issues from the jurisdiction of His Majesty's Courts is a tendency very much to be deprecated. But this is an exceptional case. It arises out of wholly exceptional circumstances …"
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The circumstances out of which that Act arose were World War I. The circumstances out of which the present claim arises are World War II. We have, perhaps, some disadvantage, in so far as that Act was being discussed only two years after the war had ended. I wonder what view people would have taken if the suggestion that these particular claimants should be paid so much more than anybody else had come on for decision in 1947, when people's recollections as to what they had all suffered were very much clearer.
I have only heard one suggestion as to why the position under the 1920 Act was any different from the position here. It is said that the 1920 Act is different because it provided for compensation. There are two answers to that. The shipowners who held out had not at that date had any compensation, whereas here these claimants have had the £4¾ million, which is the same proportion that all similar claimants have had. Secondly, it is a false point, because your Lordships may remember that I pointed out, in reading Section 1, that it took away all rights of anything in respect of damage to property whether within or without His Majesty's Dominions. The Schedule which did provide for compensation was limited, so far as damage to property was concerned, to property in this country. So that if the point had been the same as in this case, the Burmah Oil Company could have got nothing at all. In every other respect it is entirely comparable.
LORD ALDINGTON: Surely the noble and learned Lord will not mislead the House. So far as I recall, the Act had provision for extending it to places in His Majesty's Dominions outside.
THE LORD CHANCELLOR: The provision for compensation. There was nothing to stop anybody, if he could get the certificate of the Attorney General, from suing somebody outside. But I think the noble Lord will find that the provisions which provide for compensation, so far as property is concerned, were limited to property in this country. Section 2(1)(b) of the Indemnity Act, 1920, says:
"… who has otherwise incurred or sustained any direct loss or damage by reason of interference with his property or business in the United Kingdom…"
LORD ALDINGTON: If the noble and learned Lord looks at Section 7(2), he will see that it says:
"His Majesty in Council may, by order, apply this Act to any part of His Majesty's dominions outside the United Kingdom…"
THE LORD CHANCELLOR: The subject whose rights were being taken away was not, by this Act, given any legal right in respect of any damage suffered outside the United Kingdom. So the legal rights were taken away, and they were not given any legal rights back.
The point in this case, at the end of the day, is really the same: is it right that in the last war, in which we could not possibly afford to compensate everybody to the full, these companies, because they took a 1,000 to 1 chance (which poorer litigants could not have afforded to do, in going to the House of Lords), should receive at the end of the day a different measure of compensation from the others? What are your Lordships going to say when the other claimants, who were in exactly the same position, come along and say: "We understand that the time has expired, but we feel that, as a matter of morality, if the British taxpayers are going to pay the oil companies, they ought to pay us."
We have acted exactly similarly in a great many other cases. I do not want to take up much time with them, but I should like to refer shortly to them, because they illustrate the sort of exceptional circumstances in which retrospective legislation is justifiable. I mentioned on Second Reading the case of the Attorney-General v. Wilts. United Dairies, in 1922. In that case your Lordships' House decided that a licence granted by the Food Controller to the company to sell milk in their district, subject to a levy of 2d. a gallon—because other districts got a subsidy paid for by the levy—was ultra vires. The Government then found that there had been a number of other charges made by Government Departments on the same footing which were also ultra vires, and they introduced the War Charges Validity Bill. This Bill had a curious history, because your Lordships may remember that about that time there were several changes of Government, and whenever this Bill was put forward there was usually a General Election. But each Government in turn was
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going to have retrospective legislation; and they did.
It was argued in another place that this was unconstitutional, because it was retrospective. In another place there were only seven speakers on the Second Reading, and while somebody said, "This is unconstitutional because it is retrospective", there was no Division. Yet that was an Act in extreme terms, because it not only validated very large numbers of charges made by the Food Controller, the Board of Trade, the Ministry of Munitions and the War Office, but it provided that:
"Any sum so charged on any person but not levied or paid before the commencement of this Act may be recovered as a debt due to His Majesty."
The milk company and everybody was held to be entitled to get their money back, and the Food Controller could not recover against it. These proceedings were, in effect, compensation without the authority of Parliament. Accordingly the Act said:
"No proceedings whatsoever shall be instituted by any person in any court of law or before any other tribunal whatsoever for the repayment to him of any sums so levied as aforesaid, or for compensation in respect of the making of any such levy, and if any such proceedings have been instituted before the date of the passing of this Act, they shall be discharged and made void, and any judgment of any court or tribunal obtained after the eighteenth day of December, 1924"—
the year before—
"in any such proceedings shall be void."
That is another case in which, when the Bill came before your Lordships' House on its Second Reading, Lord Banbury of Southam moved an Amendment, "That the Bill be read a second time this day six months." He said:
"I venture to say that this is an extremely bad precedent which we ought not to follow and which we ought not to allow."
The noble Marquess, Lord Salisbury, pointed out that if the Amendment was carried the Bill would only go back to the Commons. The same sort of arguments as were used in another place were advanced here, and ultimately the Amendment was negatived without a Division. This was another case in which the existing rights of the subject were taken away from them. An amount of about £18 million was involved. Nobody's legal rights were in question. It was conceded—it had to be conceded in

343
law—that all these charges made by these different Ministries were invalid, but as a matter of common sense, because they had all resulted from a slip, their legal rights were taken away from them and existing decisions were overruled, and they were prevented from continuing with their actions.
Let me take another class of case, which has already been referred to. In 1940, your Lordships' House decided a case in which a packer who had been employed for fifteen years by some wholesale traders, on terms that he got so much a week and his dinner and tea, valued at 10s., took the view, rightly or wrongly, that this was contrary to the Truck Acts. Being a persistent man, he brought the case up to your Lordships' House, who said that he was right. He recovered £397, which I think represented 10s. a week for the previous fifteen years. This meant that thousands of workmen had legal rights: the court had decided the law, so they were entitled to it as a right. Accordingly, the Government issued a warning. I remember the noble Lord, Lord Conesford, spoke very strongly about the warning given by the Government in this case. I have never understood that. I am not a notorious enthusiast of the last Government, but I never understood this point at all.
I can understand people saying that no Government ought ever to introduce retrospective legislation, but if a Government are right in deciding, as in the Truck Acts case, to introduce retrospective legislation I can imagine nothing more unfair than allowing litigants to go on increasing costs without warning them what they are going to do; and that is why in all these cases you always find the Government giving a warning by saying, "We may be right or wrong, but we are going to introduce retrospective legislation and therefore it is no good complaining to us about anything you spend from now on; we are going to make it retrospective to to-day". Here also was a case in which the same kind of retrospective legislation was brought in, taking away again the legal rights of all these workmen—and I am assuming of course that the law is the same for workmen as it is for oil companies. This was in substance a Parliament of employers taking away legal rights,
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according to what the courts had decided, which these men were all entitled to. In another place he was referred to as the fortunate and persistent Mr. Pratt.
LORD CONESFORD: If the noble and learned Lord will allow me to intervene, I did deal with this in my speech this afternoon. The precedent is one of correcting a slip, where the transaction that gave rise to the case could have been lawfully effected in a slightly different way. Why I say the present claims dealt with in this Bill are on quite a different footing, is that here there are people saying they have claims at Common Law. The Government said they have not, and on that they litigate and go to the highest tribunal. I suggest it is improper to say, "We believe you are entirely wrong but, should the court decide you are right, we will deprive you of your victory by legislation".
THE LORD CHANCELLOR: It has already been said in this debate that legal rights are a form of property and these men have those legal rights. It might have been one thing to alter it for the future, for any further contract of that kind, but that was not done; their existing legal rights were taken away from them.
"In respect of anything done … and any such action or other legal proceedings as aforesaid, whether civil or criminal, instituted before the commencement of this Act shall be discharged and made void"
subject again as to costs. He was referred to as the fortunate and persistent Mr. Pratt, just as I suppose one might refer to the fortunate and persistent oil company. But it was said that some thousands in London alone had these legal rights; some men were entitled in law to between £600 and £700, and many other actions had been started, and the then Government did not hesitate in the case of those legal rights to take them away retrospectively. That was a Government which included Mr. Churchill (as he then was), Mr. Attlee, Mr. Butler, Mr. Bevin, Sir William Jowitt, Lord Simon, Mr. Macmillan. In your Lordships' House the same argument was put. Retrospectively taking away the legal rights of large numbers of employees was, it was said, a monstrous thing to do. But the Second Reading in all only took a very few minutes and again there was no Division, no Committee stage, no debate on

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the Third Reading. It was thought in all the circumstances it was not an unfair thing to take their rights away.
The case of the Charitable Trusts (Validation) Act has been mentioned. There, next of kin had legal rights to money which testators had intended to go to charity, but it did not, and your Lordships' House had held that it was the heirs, the next of kin, who were entitled to the money. I again read the debates both in another place and here, and all were extraordinarily similar to the arguments used here. Some said, "You are taking away their legal rights retrospectively and this is quite wrong". It was said that this was retrospective legislation of the most unusual kind to the prejudice of the persons who in law now have an entitlement; but the Government thought that in the circumstances of the case retrospective legislation depriving people of considerable sums to which they were in law entitled was a fair thing to do. And here again, of course, the Government at that time included most of those to whom I have already referred, including the noble and learned Viscount. Lord Kilmuir (as he then was), Lord Hawke and other Members of this House, and again there was no Division, and although there was a short argument the whole Bill was dealt with in less than an hour.
Then there was the wireless case, which is the last one I think I need mention. I did refer to this before. Your Lordships may remember that what happened was this. It was found that under the provisions of the Post Office Acts fees could be charged for wireless services according to regulations to be made at the consent of the Treasury, and for many years it had never been noticed that, although the fees had been charged, the regulations had never been made. Here again was an act which was retrospective, and again in another place and here some very strong things were said during the course of the debate, because although the noble Lord, Lord Alport, who was then in another place, supported it and said he thought most Members on both sides would support the Bill, others—Mr. Weitzman, he may remember—delivered a very savage attack on the Bill as being retrospective legislation with which they could never agree at all. I appreciate from what
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several noble Lords have said that there is this general feeling against retrospective legislation. Here there was no question of legal rights, because the Government, when it came to the point, threw in their hands and submitted to judgment and said, "All these fees have been illegal; they have been taxation without the authority of Parliament". And again exactly the same warning was issued—quite rightly—warning that it was no good issuing a writ following the successful plaintiffs who got their judgment, because they were going to introduce retrospective legislation to take their legal rights away. I should have thought that to give warning was a perfectly proper thing to do if they were going to introduce retrospective legislation, and so they did.
I can quite understand the argument that this is wrong and one should never take away other people's legal rights retrospectively—because if you do, just think what will happen in Ghana. All these arguments we have heard apply to all these cases. But I do not think that the Indemnity Act 1920, led to international constitutional difficulties. It is true that everybody's right of action was destroyed in all those cases, but I do not know of any ground on which anybody can truthfully say that there were what have been called repercussions from foreign parts. I do not think anybody said, what a shocking thing to happen in Britain!" I can understand that in cases of this sort people might say, "If the Government has messed the thing up and charged these sums without authority because they did not make the regulations, why should not they be the people to suffer? Why should the people entitled to the money suffer? There has been a case; the courts have decided it. We do not want the Executive interfering with what the Judiciary have decided. The court has decided that all these people are entitled to their money back". I am not in the least saying that it is not possible to take that view. And I have observed in most cases there is usually one member or somebody who rather complains.
LORD ALPORT: Would the noble and learned Lord allow me to interrupt? He has quoted a most impressive list of precedents in justification of this act. He has given us the details of them. Are we

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from that to assume that he regards the action of the Government and Parliament on each of these occasions as being justified in the circumstances when the action was taken?
THE LORD CHANCELLOR: I think so. I have considered all this. Take the wireless case. Noble Lords who are against any retrospection really must face the fact that in a case like that there are only two alternatives; either to introduce retrospective legislation back to whatever date of account you are going to do it from, or to employ a vast army of clerks—the amount involved was, I think, £17½ million—to pay back to millions of people £4, £1, £3 or £2. Where they are dead you have to find the executors and see what they are entitled to. Then, when you have done that, you have to levy additional taxation to provide not only for the money you have paid back, but also for the cost of paying it back. And when you have done it, all you have done is to repay their wireless fees to those who used the wireless and were quite happy at the time to pay, and you have put it on the backs of those people who in some cases have not used the wireless, but who were all taxpayers and were the same people. It would not have made sense. I should have thought retrospective action was the only sensible and fair thing.
If one comes again to the facts of this case, as your Lordships know, the position is that the claimant companies have had exactly the same proportion as all others who were similarly situated, it being a war in which we could not possibly afford to compensate everybody 100 per cent. I think it was said in World War I by Sir Ernest Pollock that if all the shipowners had had their deserts it would have cost the country, so far as shipping alone was concerned, another £550 million. No such large figures are involved here. The claimant companies in question here are claiming £31 million, and there is a further £8 million claimed by companies who issued their writ but whose claims have been stayed pending the hearing.
The four claimant companies are the Burmah Oil Company (Burmah Trading), the Burmah Oil Company (Burmah Concessions), the Burmah Oil Company (Overseas), Limited, and the Burmah Oil
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Company (Pipe-lines), Limited. The companies which remain include the Indo-Burmah Petroleum Company, Limited, the Shell Company of Hong Kong, Limited, and the Shell Company of India, Limited; and the total claims come to over £39 million. But that is without interest. They are also claiming interest back to the time when they say it ought to have been paid. They are claiming interest at 5 per cent. If that is at simple interest, it brings the claim to £84 million; if it is at compound interest, it is £124 million.
The question at the end of the day is, having regard to the nature of a world war, having regard to the fact that the war-time Government did their best, in relation to widows' pensions and disablement pensions, war damage insurance and compensation of various kinds, to compensate so many people who suffered damage of one kind or another in the war, is it equitable or just that, taking a 1,000 to 1 chance on a case coming to the House of Lords, and without now paying more compensation to others who suffered in exactly similar circumstances and exactly the same damage, these claimants, and they alone, should be the only people who, throughout the whole of the war, received their war damage 100 per cent.?
It has been the view of each successive Government that that would not be right. It was, of course, originally considered by the post-war Labour Government, when Sir Stafford Cripps expressed that view in a Government in which the noble and learned Lord, Lord Shawcross, was then the learned Attorney General.
LORD SHAWCROSS: Would the noble and learned Lord allow me to intervene? I hope he is not going to refer to the opinion that I and the learned Solicitor General gave at that time. If he is, I should wish to say something to the Committee about it.
THE LORD CHANCELLOR: I was not going to refer to that opinion because I did not think it would be right. But the Government which took the decision was a Government of which the noble and learned Lord was a member. In 1951 the Burmah Oil Company tried again, and Mr. Butler, when Chancellor of the Exchequer, took the same view. In 1955, they tried again, when Mr. Macmillan was Chancellor of the Exchequer, and

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that Government took the same view. It is rather like the persistent and fortunate Mr. Pratt. In the 1957 Government they tried Mr. Selwyn Lloyd, and then in the 1961 Government they tried Mr. Maudling.
I quite agree that because so many Governments took the same view it does not necessarily show that it is right. They have certainly been consistent. But I do suggest that the Government are right in saying that it would be grossly unfair and inequitable to all the others who suffered in the war. After all, all of us, as taxpayers, have already put our hands in our pockets for £4¾ million for this oil company. This we did not grudge, because the war-time Government said that that was the fair amount to pay them. But this Amendment means that people, many of whom suffered damage, whether physical or financial, from the war, are to put their hands in their pockets for what may be £100 million.
The Government are not thinking of themselves in this matter. They are thinking, as Governments do, of what in all the circumstances is the fair thing to do. Therefore, if we are all agreed that while retrospective legislation is in fact
generally wrong and contrary to the rule of law, there are cases in which it is justifiable and is really the only equitable thing to do, I suggest that this case comes clearly within a number of past precedents and, more particularly, what happened in 1920; and that this Government are right in saying that it would be quite wrong, and unfair that taxpayers and others of our citizens, nearly all of whom put up with damage of one kind or another suffered in the war, without, in many cases, getting any compensation, at all, should, so long after the war, again have to put their hands in their pockets. All the others, even in Burma, who suffered £60 million worth of damage, all of which was denial damage, have had only one-seventh compensation, which was all the country should provide, and I suggest that it would be quite wrong that these claimant companies should have any more.
6.33 p.m.
On Question, Whether the said Amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 144; Not-Contents, 69.

CONTENTS

Aberdare, L.

Conesford, L.

Henley, L.

Aberdeen and Temair, M.

Congleton, L.

Horsbrugh, Bs.

Adrian, L.

Cornwallis, L.

Howard of Glossop, L.

Ailwyn, L.

Cottesloe, L.

Howe, E.

Airedale, L.

Craigmyle, L.

Hylton, L.

Aldington, L. [Teller.]

Crathorne, L.

Ilford, L.

Alexander of Tunis, E.

Crawshaw, L.

Inglewood, L.

Alport, L.

Croft, L.

Keyes, L.

Amherst, E.

Cullen of Ashbourne, L.

Killearn, L.

Amory, V.

Daventry, V.

Kilmarnock, L.

Ampthill, L.

De La Warr, E.

Kirkwood, L.

Amulree, L.

Devlin, L.

Latymer, L.

Atholl, D.

Digby, L.

Layton, L.

Baden-Powell, L.

Ebbisham, L.

Limerick, E.

Baillieu, L.

Effingham, E.

Lloyd, L.

Barnby, L.

Ellenborough, L.

Long, V.

Barrington, V.

Elliot of Harwood, Bs.

Lucas of Chilworth, L.

Belstead, L.

Emmet of Amberley, Bs.

Lytton, E.

Bledisloe, V.

Falkland, V.

Mabane, L.

Boothby, L.

Falmouth, V.

McCorquodale of Newton, L.

Boston, L.

Ferrier, L.

McNair, L.

Boyd of Merton, V.

Foley, L.

Mancroft, L.

Bridgeman, V.

Forster of Harraby, L.

Massereene and Ferrard, V.

Brocket, L.

Fortescue, E.

Maugham, V.

Burton, L.

Fraser of Lonsdale, L.

Merthyr, L.

Carnock, L.

Furness, V.

Meston, L.

Chandos, V.

Gladwyn, L.

Milne, L.

Chelmer, L.

Godber, L.

Milverton, L.

Clitheroe, L.

Gorell, L.

Molson, L.

Cohen, L.

Grantchester, L.

Monsell, V.

Coleraine, L.

Greenway, L.

Monson, L.

Colgrain, L.

Grenfell, L.

Morton of Henryton, L.

Colville of Culross, V.

Grimston of Westbury, L.

Mottistone, L.

Colyton L.

Hayter, L.

Mountevans, L.

Moynihan, L.

Russell of Liverpool, L.

Swansea, L.

Ogmore, L.

Selkirk, E.

Swaythling, L.

Parker of Waddington, L.

Shawcross, L.

Swinton, E.

Parmoor, L.

Sherfield, L.

Tangley, L

Pearson, L.

Silsoe, L.

Tenby, V.

Poole, L.

Sinclair of Cleeve, L.

Terrington, L.

Rathcavan, L.

Sinha, L.

Teynham, L.

Rea, L.

Slim, V.

Thurlow, L.

Reading, M.

Soulbury, V.

Tweedsmuir, L.

Redesdale, L.

Southborough, L.

Verulam, E

Remnant, L.

Stamp, L.

Wade, L. [Teller.]

Robertson of Oakridge, L.

Strathalmond, L.

Wolverton, L.

Rowallan, L.

Strathclyde, L.

Wrenbury, L.

Runciman of Doxford, V.

Swanborough, Bs.

Yarborough, E.

NOT-CONTENTS

Addison, V.

Eccles, V.

Morris of Kenwood, L.

Arwyn, L.

Erroll of Hale, L.

Morrison, L.

Beswick, L.

Faringdon, L.

Nathan, L.

Blackford, L.

Francis-Williams, L.

Newton, L.

Blyton, L.

Fraser of North Cape, L.

Peddie, L.

Bowden, L.

Gaitskell, Bs.

Phillips, Bs.

Bowles, L. [Teller.]

Gardiner, L. (L. Chancellor.)

Reay, L.

Brecon, L.

Geddes of Epsom, L.

Rhodes, L.

Brockway, L.

Granville-West, L.

Rusholme, L.

Brown, L.

Harvey of Tasburgh, L.

Sainsbury, L.

Carrington, L.

Hawke, L.

St. Aldwyn, E.

Chalfont, L.

Henderson, L.

St. Helens, L.

Champion, L.

Hobson, L. [Teller.]

Sandford, L.

Citrine, L.

Hughes, L.

Segal, L.

Collison, L.

Hurcomb, L.

Shackleton, L.

Colwyn, L.

Iddesleigh, E.

Shannon, E.

Crook, L.

Jessel, L.

Shepherd, L.

Denham, L.

Leatherland, L.

Simonds, V.

Derwent, L.

Lindgren, L.

Snow, L.

Devonshire, D.

Listowel, E.

Sorensen, L.

Dilhorne, V.

Llewelyn-Davies, L.

Stonham, L.

Drumalbyn, L.

Longford, E. (L. Privy Seal.)

Summerskill, Bs.

Dundee, E.

Mitchison, L.

Taylor, L.

On Question, Amendment agreed to.

Resolved in the affirmative, and Amendment agreed to accordingly.
LORD MCNAIR LORD MCNAIR: I beg to move.
Amendment moved—
Page 1, line 11, leave out ("was or").(Lord McNair.)
LORD McNAIR: I beg to move this Amendment, and I wish to add that, in our opinion, subsection (2) is even more obnoxious than subsection (1).
Amendment moved—
Page 1, line 12, leave out subsection (2).—(Lord McNair.)
Clause 1, as amended, agreed to.
Clause 2 agreed to.
House resumed: Bill reported, with Amendments.

CEREALS MARKETING BILL
6.47 p.m.
Order of the Day for the House to be in Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Champion.)
House in Committee accordingly.
[The LORD MERTHYR in the Chair]
Clauses 1 to 12 agreed to.
Clause 13.—[Orders prescribing rates of levy]:
On Question, Whether Clause 13 shall stand part of the Bill?
EARL FERRERS: There is only one small point with regard to Clause 13 about which I should like to ask the noble Lord, Lord Champion. This clause deals with the question of raising the levy for the purposes of the Cereals

353
Authority's functions. I am not quite certain from the clause whether the levy is to be of a uniform character throughout the whole country, or whether it will vary according to the parts which are described in Clause 24 on page 19, where subsection (6) says that the various parts of the United Kingdom are, first, England and Wales, secondly Scotland and thirdly, Northern Ireland. The question which I should be grateful if the noble Lord would clarify is whether the levy can be different in each of these parts of the United Kingdom, or whether in fact it is uniform throughout the whole area.
THE MINISTER WITHOUT PORTFOLIO (LORD CHAMPION): I am grateful to the noble Earl for raising this point. This doubt is one which I know exists, but I am very happy to clear it up. I indicated in the course of the Second Reading debate that I cannot say what the rates of the levy will be until the Authority make their estimate and submit that estimate to the Ministers, who will then make an order, after the fullest consultation with the appropriate Farmers' Unions. I can also say that, whatever decisions may be taken about the rates of levy and the kinds of cereals to be covered, the Government propose that there should be one single uniform rate of levy throughout the United Kingdom for each kind of cereal involved. This is the basis on which the Bill has been drafted, and we arc satisfied that it is the right basis. The object of the Bill is to improve the marketing of homegrown cereals throughout the United Kingdom. The payments under the Deficiency Payment Scheme from which the levies will be deducted in the ordinary way are made at the same rate throughout the United Kingdom. It is right, therefore, that the levies should also be made at the same rates throughout the country.
I believe that this completely answers the noble Earl's question. It is a point that has raised some little doubt in people's minds, and I am grateful to him for putting this question and so enabling me to deal with the point.
EARL FERRERS: I am grateful to the noble Lord for answering it so clearly. It was a point that was open to doubt; and I am very glad to know that it will
354
in fact be a uniform levy. I am sure that from his point of view and from that of his Department, it will be far simpler to administer as such.
Clause 13 agreed to.
Remaining clauses and Schedules agreed to.
House resumed: Bill reported without amendment; Report received.

SWEEPSTAKES ON HORSERACES (AUTHORISATION) BILL [H.L.]
6.53 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Jessel.)
House in Committee accordingly.
[The LORD AILWYN in the Chair]
Clause 1 [Promotion of sweepstakes on horseraces]:
LORD AIREDALE LORD AIREDALE moved, in subsection (2), to leave out paragraph (a) and to insert instead:
"(a) that the sweepstake is promoted and conducted by the body nominated for that purpose by the Secretary of State under subsection (5) of this section, or by the person who has been granted the right to do so by the said body;".
The noble Lord said: I hope it is in order to say how glad we are that the noble Lord, Lord Jessel, who is this Bill's pilot, if not jockey, is fully restored to health and strength.
This Amendment—and I think that this one and No. 11 stand or fall together—stems from opinions expressed during our Second Reading debate by noble Lords opposite, who objected to the idea of a national lottery being run in any way for private profit. I must confess I have some sympathy with that point of view. Perhaps it is not altogether a satisfactory arrangement for Parliament to create special opportunity for private interests to make a profit out of gambling, not because gambling is wrong or immoral but because it is unproductive, it does not help the national interest and is not, therefore, something for which Parliament should provide special opportunities for private enterprise.
I have therefore tabled this Amendment, which would at least enable the body nominated by the Home Secretary itself to conduct the lottery. In that way Parliament would have some sort of control over the profits derived from the lottery and over the way those profits were devoted. The kind of body that I envisage as performing this task is something on the lines of the Horserace Totalisator Board—a body of that kind, which could itself run the lottery. I beg to move.
Amendment moved—
Page 1, line 14, leave out paragraph (a) and insert the said new paragraph.—(Lord Airedale.)
LORD JESSEL: First of all, I should like to thank the noble Lord, Lord Airedale, very much for his kind words about me; and I would apologise to the House, and especially to those noble Lords who have put down Amendments, for having had to postpone the Committee stage of this Bill.
I confess that I am not attracted by the suggestion of the noble Lord, Lord Airedale, that the body nominated by the Home Secretary should actually run the sweepstake. My idea was that the nominated body should be a sort of watchdog. If the nominated body is going to run the sweepstake, it will need another dog to watch it—probably the Comptroller General, or somebody like that. I am quite unashamedly in favour of a private body's being allowed to run this sweepstake. I think such a body would have a better organisation, they would have more incentive to sell more tickets and they would be prepared to put down more money to do the thing well. On the other hand, if you allowed the nominated body to do it, it would be done in a very lackadaisical manner, and there would be no incentive to make a great success of it. Therefore I resist this Amendment.
LORD STONHAM: I would join with the noble Lord, Lord Airedale, in congratulating the noble Lord, Lord Jessel, in having come safely through the coughing epidemic which has afflicted our racing stables. Although, of course, we all deplore the reason for the postponement of the Committee stage from last Tuesday, it did give some of us who would otherwise have been sitting here in
356
a thin House the opportunity of hearing the Chancellor of the Exchequer in another place.
I hope that your Lordships, and particularly the noble Lord, Lord Airedale, will not think me discourteous if I do not, on behalf of Her Majesty's Government, speak to his Amendment, but I would respectfully point out to the noble Lord that if it was accepted there would be a need for consequential Amendments to Clause 2. The nominated body would have no power under that clause as it stands at present to make contributions for the racecourse from the receipts of a sweepstake promoted by the nominated body itself, because Clause 2 provides only for such contributions from sums paid to the nominated body by a person granted promotional rights by the nominated body.
I hope, however, it will be helpful to the noble Lord, Lord Jessel, and to the Committee, if, at this early stage, I am allowed to make the Government's attitude to all the Amendments quite clear. The Committee will recall that during Second Reading I stated the Government's fundamental objections to the Bill and urged your Lordships not to give it a Second Reading. That advice was rejected, but the Government's objections remain. During the Second Reading debate the noble Lord, Lord Jessel, following comments on the handsome profit left to the sweepstake promoter under the Bill as presented, said that he was prepared to modify that part of the Bill (although not, apparently, to the extent which the noble Lord, Lord Airedale, asks for), and the noble Lord has now tabled Amendments which, if accepted, would have the effect of limiting the profit to 5 per cent. Your Lordships may be under the impression that it was the size of the profit provided by the Bill for the sweepstake promoter that constituted the core of the Government's objection to the Bill, and that a suitable limitation of the promoter's profits would make the Bill acceptable to the Government. That is not so. As I tried to make clear on Second Reading, the Government objections go much wider and involve fundamental issues of principle which were enunciated by the Royal Commissions of 1932 and 1949—namely, that it is wholly undesirable that the State should either itself directly, or through

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the ægis of a statutory board, be concerned in the provision of facilities for gambling.
Further, and again in accordance with the view of both Royal Commissions, the Government are convinced that it would be wrong for the State to create a private monopoly by restricting the right to promote a large-scale lottery to any one or to any strictly limited number of organisations. In our view, the Bill infringes both principles: it would involve Government sponsorship of gambling facilities. It would confer special favours on horseracing alone, and it would provide a handsome profit for a commercial promoter. It is not irrelevant to remind your Lordships that in so far as the existing law allows private and other small lotteries, it does so subject to the condition that there is no element of private gain. Obviously there is no possibility that the Bill can be amended in such a way as to render it acceptable. The Government will not therefore be a party to the discussions on the Amendments or to any Divisions which might arise from them. Your Lordships will, I know, acquit me of discourtesy if I do not speak again. But I would say that if the noble Lord, Lord Jessel, or the Committee think I might be able to help on a point of information, and I am in a position to obtain that information, I shall be glad to give it.
LORD AIREDALE: I am much obliged to the Minister for giving us Her Majesty's Government's attitude to this Bill. The noble Lord, Lord Jessel, does not favour the Amendment I have moved. I will not press it this evening, particularly because I should like to think about it again in the light of the debate we are going to have on the noble Lord's own Amendment, No. 5, about limitation of the profits that can be made out of the proposed sweepstake. Therefore, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD BROWN LORD BROWN moved, in subsection (2)(b), to leave out "twenty-five" and insert "thirty-five" [per cent.]. The noble Lord said: I voted against this Bill on Second Reading, and in broad terms I am not with it. I recognise that the noble Lord, Lord Jessel, has sincere and worthy motives in introducing it; but I believe that the award of this monopoly to a
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particular section of the community in this way is bad in principle. However, there must be some possibility of this Bill's becoming law, and it is because of this that I have put down certain Amendments; and with the Committee's permission I should like to speak to all three of the Amendments which I put down as they all concern the same issue.
I should like to clarify one or two points before I proceed. I want to make it clear that when I refer to the "nominated body" I am referring to the body appointed by the Government to put the sweepstake up for auction; when I refer to "the promoters", I am referring to those who run it. I want to draw attention to the way I treat these figures for the sake of simplicity. I want to regard the expenses of the promoting body as being insignificant. They might, I know, amount to £10,000 or £20,000; but in relation to the whole they are insignificant. I want to point out that if, for example, the total sum realised by sale of tickets is £10 million, if we give 50 per cent. of it as prize money we are properly considering a sum of £5 million, because there must always be some return to those who buy tickets in any sweepstakes. So the "bunce", if I may use so crude a term, is £5 million. This is to be split, under the provisions of this Bill, as to medical research, et cetera, £2½ million; as to local amenities, £¼ million, making a total of £2¾ million.
LORD STONHAM: I am sorry to interrupt the noble Lord, I think he is wrong in saying £¼ million. As the Bill stands, the other provision would be £150,000.
LORD BROWN: I am sorry. I do not think it makes any difference to my argument. The balance, of some £2,350,000—I think I am correct in my figures in the light of what the Minister has said —is divided between those who promote this sweepstake and the racing, industry. The exact split of that amount lies in the amount which the promoters have to pay for the right to run the sweepstake. So I end up with these two figures: to charity (I use the term in the broadest sense) there goes £2,650,000, and to the promoters and the racing industry, £2,350,000. It is the balance of these two figures which caused me to put down these Amendments. They are quite wrong. To give a particular body the

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right under an Act of Parliament to sell sweepstake tickets and undoubtedly, however inadvertently, to create the impression that this is largely in the interests of charity or to maintain Aintree, when in fact the proper proceeds, if I may refer to the half that is left after paying the prize money, are divided in this way, would be quite wrong.
Under the Amendments I propose the figures would instead be approximately £4 million to charity and £1 million to the promoters and the racing industry. If the figure realised from the sale of tickets, instead of being £10 million in total, were £20 million, under the Bill as it stands a sum of approximately £5½ million would go to charity and approximately £4¼ million to the promoters and the racing industry. If my Amendments were considered acceptable to the Committee, the figures would instead be approximately £8 million to charity and £2 million to the promoters and the racing industry.
I do not want to keep the Committee too long this evening but may I make this further point? The Committee may object to my grouping together the sums that go, on the one hand, to the promoters and, on the other, to the racing industry. But I think it is difficult to separate these two because they are both concerned in the racing, industry—for it is an industry. I think we are justified in adding them together and comparing the addition of those sums with the sums that go to charity. The balance of the two amounts, as the Bill now stands, is not right. On these grounds rest the Amendments which I have put forward and which I beg to move.
Amendment moved—
Page 1, line 18, leave out ("twenty-five") and insert ("thirty-five") [per cent.].—(Lord Brown.)
LORD JESSEL: Although the noble Lord, Lord Brown, voted against the Second Reading of the Bill, I am nevertheless grateful for his now taking an interest in it and putting down what I may call a very sensible Amendment, although I am not going to agree with it. First, I think he is wrong when he says the expenses of the promoter are going to he insignificant. They are not going to be insignificant at all. Second, the amount—
LORD BROWN: I think I may have used the wrong word. I was referring to the expenses of the nominated body.
LORD JESSEL: The noble Lord said "promoter".
LORD BROWN: I am sorry. I was referring to the expenses of the nominated body.
LORD JESSEL: That I would quite agree with; but this 22½ per cent. which is floating around under my Bill will have to look after racing and the promoter of the sweepstake, and, in my view, as I said on Second Reading, the promoter will have to give a great deal of that 22½ per cent. back in order to get the franchise, and that is the money which will have to go to racing.
We all have our ideas about what should be the proper balance. It is very difficult to get it right, but I am afraid I must stand by what I call my "carve up". The Amendments of the noble Lord, Lord Brown, really do two things; they give a smaller margin to the promoter so that he will have less money to give back to racing when he is competing to obtain the franchise; and the other thing they do is to tip the balance more in favour of the local authorities and against the broader national interest generally. So I am afraid I must resist these Amendments.
LORD BROWN: I beg to move Amendment No. 3. I have already spoken on it, and will not say more.
Amendment moved—
Page 2, line 1, leave out ("two and one half") and insert ("five").—(Lord Brown.)
On Question, Amendment negatived.
LORD BROWN LORD BROWN: I beg to move Amendment No. 4.
Amendment moved—
Page 2, line 2, leave out ("£150,000") and insert ("£.300.000").—(Lord Brown.)
On Question, Amendment negatived.
LORD STONHAM: I have probably misunderstood the position, but may I ask whether Amendment No. 2 was accepted, or not? I was under the impression it was not, yet I thought I heard the noble Deputy Chairman say that the Amendment was carried.
LORD JESSEL: I was under that impression, but of course if that is the case it makes a nonsense. We have negatived Amendments Nos. 3 and 4, and yet Amendment No. 2 was said to be agreed to. Is it possible to put Amendment No. 2 again?
THE DEPUTY CHAIRMAN OF COMMITTEES: My impression is that I put the Question in the ordinary way, and there was no reply from the "Contents", and I therefore said that the Not-Contents had it. However, with the Committee's permission, I will put the Question again.
LORD STONHAM: It was on Amendment No. 2 that my hearing was defective. When the Question was put I did not hear the word "Content" from anybody; I thought I heard a faint "Not-Content" and yet I believe the noble Lord the Deputy Chairman said that the Contents had it.
On Question, Amendments Nos. 2, 3 and 4 negatived.
7.14 p.m.
LORD JESSEL LORD JESSEL moved, in subsection (2), after paragraph (d) to insert:
"( ) that the profits made by the promoter on each sweepstake shall not exceed five per cent. of the whole proceeds of the sweepstake but if a loss has been made on any previous sweepstake the amount of that loss may be carried forward and the whole or any part thereof set off against the profit made on any subsequent sweepstake."
The noble Lord said: At the close of his speech in the Second Reading debate the noble Lord, Lord Stonham, said that Her Majesty's Government had been asked to
"set up machinery empowering the Government to grant, to a private person or persons, what amounts to licence to print money".—[OFFICIAL REPORT, Vol. 264 (No. 51), col. 328, March 16, 1965.]
My reply to that was that competition under open tender to obtain the concession would be so intense that no promoter would make an excessive profit; and just to make sure of this I am now putting it in the Bill.
This Amendment limits the promoter's profit to 5 per cent. of the turnover. It is anticipated that any promoter will make a loss the first year, and probably the second year, so the new subsection will also allow him to carry forward any loss and set it off against the profit allowed him for the subsequent year. But I would
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ask your Lordships to note that he cannot carry anything forward if he makes a profit in the year, even if it is only a small profit, and less than the 5 per cent. allowed. For example, if he makes only 2 per cent. on the year he cannot carry forward the 3 per cent. difference to set off what is allowed in the following year.
LORD JESSEL LORD JESSEL moved to leave out subsection (3) and insert:
"(3) The following provisions shall apply to the last foregoing subsection:—

(a) the whole proceeds of a sweepstake shall be deemed to be the total amount received from the sale of tickets and, if any ticket has been disposed of either without receiving any payment or for a sum which is less than that which it is on sale to the public, it shall be assumed that the full amount has in fact been received;

(b) the profit which under paragraph ( ) of the said subsection it is permissible for the promoter to make shall be calculated as if it were being assessed for income tax under Case 1 of Schedule D;

(c) any profit which may be made by the promoter on a sweepstake in excess of that which is permissible under the said paragraph shall be added to the amount payable under paragraph (b) of the said subsection and treated accordingly."

The noble Lord said: I think it is usual, when selling books of sweepstake tickets, to give the agent one free ticket. If a book of eleven tickets is sold, he gets one free ticket, so if he sells a book of eleven £1 tickets he will send only £10 cash to the promoters. This Amendment, which clarifies Clause 1(3) of the original Bill, lays down that the percentage profit will have to be worked out on a notional figure as if all the tickets had been paid for in cash. This will result in the promoter getting less than would appear at first sight. His percentage on a book of eleven £1 tickets will be based on £11 cash, when in fact only £10 cash will be available on which he can draw his percentage.
With regard to paragraph (b), as I said when speaking earlier in reply to Lord Brown's Amendments, the promoter will have large initial expenses. He will have to provide staff, area offices, printing, advertising and probably a computer, so this Amendment really says that his profit shall be calculated under Case 1 of Schedule D of the Income Tax Act, 1952. This is the standard calculation of tax

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in respect of any trade carried on in the United Kingdom or elsewhere. Paragraph (c) of the Amendment says that any profit which the promoter makes in excess of the 5 per cent. laid down in my previous Amendment shall go to what I call "the good cause", and that will be in addition to the money given under paragraph (b) of Section 2(1), which is the paragraph which says what shall go back to racing. This will be an additional amount. I beg to move.
Amendment moved—
Page 2, line 7, leave out subsection (3) and insert the said new subsection.—(Lord Jessel.)
7.20 p.m.
LORD AIREDALE LORD AIREDALE moved, in subsection 4(a), after "one horserace" to insert "other than a handicap race". The noble Lord said: I developed in the Second Reading debate the argument in support of this Amendment, and for that reason, and also because it is getting rather late, I will re-state it now as shortly as I can. We were told by the noble Lord, Lord Jessel, in the Second Reading debate that this is really a Bill (I think his words were) "to save the Grand National". In many ways, the Grand National is a most remarkable race. It is worth over £20,000 and is by far the richest prize in the whole of steeple-chasing. One would therefore suppose that it would attract the best steeplechasers, but it does not, because the owners of the best steeplechasers are loath to watch them struggling round the Grand National course under such a huge weight that it slows the good horse down to the pace of the slowest horse in the race, which, I understand, is what the handicapper seeks to do, so as to try to produce a dead heat. The fact that the handicapper of the Grand National singularly fails, year after year, to produce anything like that result, does not alter the fact that that is what he is trying to do.
On Second Reading, I quoted the racing correspondent of The Times as saying that this year no top horses were taking part in the Grand National. This seems to me to be very unfortunate. I should have thought that what was needed at Aintree Racecourse, if it is the finest steeplechasing course in the world, as we
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are told it is, is a really valuable race with the best steeplechasers. At present, I believe that the most prized race for the best steeplechasers is the Cheltenham Gold Cup, but that is worth only £8,000 against the more than £20,000 of the Grand National Handicap. This Amendment would enable a valuable non-handicap race to become the subject of the proposed sweepstake.
On Second Reading, the noble Duke, the Duke of Devonshire, who I am rather relieved to see is not in his place this evening, did not, I think, make a speech, but he cross-examined me and elicited from me the information that whereas there is a large field of horses in the Grand National, which makes it a suitable medium for a sweepstake, a championship race has a much smaller field and this makes it not such a satisfactory race on which to base a sweepstake. I see the force of that argument.
Therefore, if this view prevails that a championship race such as I have in mind would not be a suitable medium for the sweepstake, I shall be perfectly willing to withdraw this Amendment. I think it would still be possible, under Clause 2 of the Bill, for the sweepstake to be on the Grand National but for the proceeds to be devoted, not to the Grand National itself, but to providing the prize money for a new championship race. The result of all this would be that the Aintree Racecourse authority would get all sorts of incidental additional revenue—presumably there would be television fees for covering the new championship race, additional gate money from an extra day's racing, additional takings from the Tote and so on. I believe that the Aintree Racecourse authority would easily be able to continue in operation, running the Grand National as it is and also running over the Grand National course this new championship race whose prize money would be provided by the sweepstake. That is what I seek to achieve by means of this Amendment, which I beg to move.
Amendment moved—
Page 2, line 14, after ("horserace") insert ("other than a handicap race").—(Lord Airedale.)
VISCOUNT MASSEREENE AND FERRARD: I cannot agree with the noble Lord. He said that top horses never take part in the Grand National.

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That is not so. The Grand National has several times been won by the horse that has won the Cheltenham Gold Cup, so he is not correct in saying that the Grand National is not a race for champions. It is true that the two champion steeplechasers of this year did not run in the Grand National. I do not know why—there may have been a multitude of reasons. We have to remember that the Gold Cup is over 34¼ miles while the Grand National is over 4½, miles. Perhaps the trainers thought that the horses would not stay the 4½ miles. They are comparatively young horses and perhaps their trainers did not want to risk them over the severer fences.
I think that the noble Lord is wrong in trying to detract from the Grand National. He has to remember that the Grand National is the greatest steeplechase in the world and the greatest racing spectacle. Nobody outside this country has heard of the Cheltenham Gold Cup, but everybody in the world has heard of the Grand National. If we had a non-handicap race instead of the Grand National, possibly only half-a-dozen horses would run and the same horses would win the race three or four years in succession, as has happened in the Cheltenham Gold Cup.
I feel that the noble Lord is getting a little mixed up with fiat racing, where all the most valuable races are non-handicap, because the chief object of flat racing is selection for breeding. The horses are extremely young, so that the classic races are all for three-year olds, carrying the same weight and, to a great extent, of the same sex. The two cannot be compared. Flat racing is more of a science. Steeplechasing is not indulged in to select horses for breeding. Steeplechasers are at least three years older than flat race horses. It would be quite hopeless to have the Grand National as a non-handicap race, because people go to see the Grand National in order to see a spectacle. They will not go to see a race with six or seven horses, possibly the same horses every year. Therefore, I cannot support this Amendment.
LORD JESSEL: The purpose of this Amendment seems to be to turn the Grand National into a championship race at level weights. In regard to that, 1 would echo what the noble Duke, the Duke of Devonshire, said when he intervened
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in the Second Reading debate, that if we do this, it will cease to be the Grand National, which is a race known throughout the world. That is a view which I share. Surely it is the large field and the chance of any horse winning which contributes to the excitement. I am glad to have the support of my noble friend Lord Massereene and Ferrard, who is a racehorse owner. He has rightly pointed out that it just happens that this year the two best steeplechasers were not running in the National. He also pointed out that in the past the Grand National has been won by the winner of the Gold Cup—for example, Golden Miller. So let us remember Golden Miller when we say that the Grand National can never be a championship. I want to preserve the Grand National as it is, and I must resist this Amendment.
LORD AIREDALE: I have been interested in the arguments adduced against the Amendment. I am sorry that the noble Viscount, Lord Massereene and Ferrard, thinks that I was trying to detract from the Grand National. I certainly did not seek to, and I did not think I had given that impression. Then I am told that I am trying to have the Grand National as a non-handicap. When what I said is read in Hansard, after we have had a night's sleep, I think it will be apparent that I was not advancing an argument of that kind. The noble Viscount says that steeplechasing is quite different, and that flat racing is more of a science. I suppose, therefore, that Epsom Downs on Derby Day is a sort of conversazione. I should have thought that the spectacle of both forms of racing is obviously most of the object of the exercise.
I am told by both noble Lords who are against me that the Grand National is indeed a championship race. This is something that I have never been able to understand. If a horse carrying 12 stone 7 lb. is beaten by a neck in the Grand National by a horse carrying 10 stone, which of the two horses is the champion? I should like to pose that question, and perhaps after reflection the noble Viscount may be able to answer it. However, it is getting late, and I do not propose to take the Amendment to a Division. Therefore, I beg leave to withdraw it.
Amendment, by leave, withdrawn.
LORD JESSEL: With your Lordships' permission, Amendments Nos. 8, 9 and 10 can be taken together. They are drafting Amendments and relate to the new subsection (6) which comes later as Amendment No. 13. I beg to move.
Amendment moved—
Page 2, line 30, after first ("body") insert ("(hereinafter in this Act referred to as 'the nominated body')").—(Lord Jessel.)
Amendment moved—
Page 2, line 30, leave out second ("a") and insert ("either an existing").—(Lord Jessel.)
Amendment moved—
Page 2, line 31, leave out from ("statute") to ("who") in line 32 and insert ("or a body incorporated by order under subsection (6) of this section").—(Lord Jessel.)
LORD JESSEL LORD JESSEL moved in subsection (5), after "person" to insert:
"(a) for a term of more than seven or less than five years; and
(b)"
The noble Lord said: The purpose of this Amendment is twofold: we thought it best to put maximum and minimum periods of time for the promoter's franchise to run. As I said previously, it is anticipated that, certainly for the first year and probably for the second year, considerable losses will be suffered. Therefore it is only fair that the promoter should have some security of tenure in order to get back his loss and make a reasonable profit, or, if he sees no future in the business, to back out of it gracefully. On the other hand, if in the last few years it is apparent that the promoter is making a great deal of money, at the end of seven years the Home Secretary can put the sweepstake once again up to public tender, for obviously the competition will be extremely severe in order to get into the business, and tenderers would be competing to see how much of their permitted percentage they could afford to give back. I beg to move.
Amendment moved—
Page 2, line 34, at end insert the said words. —(Lord Jessel.)
LORD AIREDALE: I am wondering what happens supposing the promoter is found not to be very satisfactory in his conducting of the sweepstake. Are we, so to speak, landed with him for not less than five years? Is there not some way of getting rid of him in under five years if he is found not to be doing the job very well?
LORD JESSEL: I think that is a good point. Provided he is doing the job well, I feel that he should have the chance of going five years, in order to recoup possible initial losses. Presumably the authority would take good precautions to see that the promoter was financially sound and a person who was likely to be able to stay the course for five years. However, I see the possibility of even the best regulated promoter going wrong, and I should like to think about it.
LORD JESSEL: This Amendment is introduced as a result of some observations made by the noble and learned Viscount, Lord Dilhorne, on Second Reading in regard to Clause 1(5). The idea behind the Amendment is this. It may be that the Home Secretary will find some suitable body incorporated by Statute already in existence; but if he does not, this Amendment gives him power to set up, by order, a suitable body which will be charged with the right to promote a sweepstake. It gives him the chance of doing it by order, without further legislation, which is, I think, much tidier. I beg to move.
Amendment moved—
Page 2, line 45, at end insert—

("( ) (a) the Secretary of State may by order provide for the constitution of a body to he charged with the duty of granting the right to promote and conduct either or both the sweepstakes which are or may be authorised under this Act and to perform such other functions as arc by this Act assigned to the nominated body;

(b) an Order made under this section shall provide for the constitution of the body and may make such other provision with regard to the body as the Secretary of State thinks proper;

(c) The power of the Secretary of State to make an Order under this section shall be exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(d) The power of the Secretary of State to make an order under this section shall

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include a power, exercisable in the like manner, to vary or revoke such an order.") —(Lord Jessel.)

Clause 1, as amended, agreed to.
Clause 2 agreed to.
Clause 3 [Allocation of proceeds of sweepstake to be devoted to medical research]:
LORD JESSEL: This is a drafting Amendment which follows the new paragraph (3)(c) in Clause 1. I beg to move.
Amendment moved—
Page 3, line 37 after ("Act") insert ("together with any profit made by the promoter which under Section 1(3)(c) of this Act is to be treated as if it were an amount payable under Section 1(2)(b) of this Act").(Lord Jessel.)
Clause 3, as amended, agreed to.
Clause 4 agreed to.
Clause 5 [Return by promoter of authorised sweepstake]:
LORD JESSEL: With your Lordships' permission, I will take Amendments Nos. 15 and 16 together. They are consequential on the limitation of the promoter's profit and the provision for dealing with any surplus. I beg to move.
Amendment moved—
Page 4, line 41, leave out ('and").—(Lord Jessel.)
Amendment moved—
Page 4, line 43, at end insert—
("(e) the amount of any profits made by the promoter on the sweepstake; and
(f) any amount payable by the promoter under Section 1(3)(c) of this Act.").—(Lord Jessel.)
Clause 5, as amended, agreed to.
Remaining clauses agreed to.
House resumed: Bill reported with Amendments.

POST OFFICE CHOICE OF INDUSTRIAL CONSULTANTS
7.40 p.m.
LORD ERROLL OF HALE LORD ERROLL OF HALE rose to ask Her Majesty's Government whether they will reconsider their decision to appoint an American firm of industrial and management consultants to investigate the affairs of the British Post Office. The noble Lord said: My Lords, in the course of a statement on postal services in another place on Thursday, March 25, the Postmaster General announced that he was going to appoint a firm of American consultants. Perhaps it may be useful to your Lordships if I quote from the Hansard concerned, column 745, where the Postmaster General said:
"The first and most important task is, therefore, to improve the productivity and profitability of the postal services. I have accordingly commissioned a fundamental and far-reaching examination of the problem by Messrs. McKinsey—the eminent management consultants."
So on Thursday of last week I asked the Government a Question about what consultations had taken place and what consideration had been given to British firms. The noble Lord, Lord Hobson, was good enough, in the course of his reply, to make plain that in fact no British firm of consultants had been considered. This statement came to me as a complete surprise, and I am sure it did to your Lordships; and that explains the reason for my tabling the Question for answer to-day.
First of all, as I am sure your Lordships appreciate, there are many British firms which are eminently suitable to undertake work of this sort. One firm has no fewer than 400 qualified persons able to carry out work of this sort. Furthermore, British firms have carried out work for clients of international repute, of international status, who have affiliated companies in many parts of the world. They have carried out full and thorough-going surveys and reviews of manufacturing organisations, of commercial undertakings, banks and other such bodies, whose activities are every whit as complicated and involved as those of the British Post Office. Furthermore, one firm of British industrial consultants has been commissioned by the Swiss Post Office—itself a very efficient undertaking

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—to carry out a review of its postal services, and has been rewarded by a statement made by the Swiss authorities that they were very pleased with the work. The Swiss Post Office said that the work had been most satisfactorily carried out.
Quite apart from the question of the suitability of British firms (which I believe to be clearly and absolutely established), there is the question of the damaging effect overseas. We are a great exporting nation of goods and services, and we are also, of course, a great importing nation. I am not one of those narrow-minded individuals who would urge Her Majesty's Government to pursue a policy of self-sufficiency: only to employ British and never to employ people from abroad; never to import what might be made, at higher cost, in this country. But here is a case where our firms have an international reputation in this field and are every whit as good as their American counterparts; firms which may, in many cases, be proved better, and certainly cheaper. Yet they were not even considered by a member of the new Labour Government when he was casting around for somebody to help him in his work. I should not have minded if British firms, having been considered, had been found to lack the necessary qualifications, in which case it would be only right to employ an American firm, a German firm or even, if appropriate, a Japanese firm. But in this case no consideration at all was given to the employment of British firms, thereby rather indicating that the British Government did not think that British firms were suitable or up to the job.
Your Lordships have only to consider for a moment what a damaging blow this is to British firms in attempting to negotiate overseas industrial consultancy work in competition with their American rivals. Not only the firm of McKinseys (who I am sure will play the game honourably) but other American firms, will be able to say, "Don't employ a British firm, because the British Government will not employ them. The British Post Office, that unique British institution, under a Labour Government had to go to America for assistance". So, far from aiding the export drive in
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goods and services, the Postmaster General, by his action, has dealt a very real and damaging blow to the export of a very important and valuable British service.
During the period of question and answer last Thursday, there was a certain amount of question and answer regarding the method of selection. If I may paraphrase, briefly, what the noble Lord said in reply to several questions, the impression was given that it was "not the done thing" to go out to competitive tender, so to speak—that in a field such as this, a professional field, one asked a single individual concern, secured their consent, and went right ahead. Since last Thursday I have been making some inquiries, and I find that that is by no means the practice. In fact, a number of British local authorities (who I am glad to say are increasingly making use of this valuable and developing service of British management consultants) are going so much the opposite way that they are inviting as many as eight or ten firms to put in programmes of work for a single project. That, perhaps, is too many, and can lead to wasteful duplication of effort on the part of management consultants themselves. A better method might be to employ two or three in any given case.
The point I wish to make this evening is that it is certainly not within ethical practice (if one likes to say that of this particular profession) that they do not compete with each other in submitting outline programmes of work, detailed estimated costs of programmes, and so on. Therefore, it can be no defence on the part of Her Majesty's Government to say that it is not the correct practice to seek alternative programmes of work from other firms—certainly not in a case such as this, where it is American firms versus British firms. There is no doubt at all in my mind—and I hope in the minds of other noble Lords this evening—that in this case the Postmaster General should certainly have given full consideration to British firms and given them a full opportunity to submit programmes of work.
The Postmaster General, whom we know to be a very tender flower, had he not felt like approaching individual firms, could, I am quite certain, have obtained

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full assistance from the Management Consultants' Association, which is the Association of the leading British firms in this field, who could have given him help and advice as to whom he should approach, or whether possibly some joint effort by two or three of the leading British firms might not have been practicable. Then it would be no defence for the Government to say that British firms were so full up with work that they could not have embarked upon this important assignment without delay. I have been checking up on this aspect and while I am glad to say that British consultant firms are active and busy in this particular field, they have, nevertheless, if I may use an industrial expression, spare capacity available; and, in any case, in such an important assignment as this they would immediately have made available all the resources necessary to carry out this important work.
The next point I wish to make is this. I am rather disturbed at the secret way in which the decision of the Postmaster General was arrived at. One would expect that within the Department there would have been full consultation, but I have been informed that a crucial meeting was held between the Postmaster General and the representative of McKinsey's at which no officials at all were present. I think that in a matter of this sort the Postmaster General was very ill-advised to hold a meeting of this sort, and I should like to know what took place at this meeting and why he chose to see this individual privately. It is interesting to note that the noble Lord, Lord Hobson, when he was answering one of the Questions dealing with this matter said:
"one has to assume … that the factors … which led up to the Postmaster General making the decision were borne in mind not only by him but also, of course, by the experts within the Department who would presumably be present to advise him when the decision was made."—[OFFICIAL REPORT, Vol. 265 (No. 63), col. 176, April 8, 1965.]
I know from my own experience in answering supplementary questions that it is very easy to let slip a word, an adverb or an adjective, which does not quite convey the sense of what one intended to say, but I am very struck by that word "presumably". Were the experts within the Department present when the crucial decision was made, or were they not? That is a point on
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which I am sure noble Lords would be glad to be enlightened.
On a matter of this sort, when so many members of Her Majesty's Government have expressed the need for Britain to cut down on imports and not buy abroad what we can make or do for ourselves, I should be very interested to know whether this decision was made by the Minister alone or whether the matter went to the Cabinet. Was it a decision of the Government as a whole, sitting as a Cabinet, or just a quickly-thought-up decision by the Minister designed to get something flashy out in time for his unpalatable announcement about the raising of the postal charges? It would be interesting to know whether any Cabinet Minister knew about this step until he read it in Hansard.
Then, since we are all having to watch dollar expenditure—indeed, all expenture across the exchanges—it is relevant to bear in mind the cost of employing American consultants. It is well known that American consultants' charges are very much higher than those of British firms. I should be grateful if the noble Lord would tell me how much, in total, this assignment is going to cost, and whether it is an open-ended commitment or for a limited and definite sum in return for a definite amount of work carried out. I ask this because it is notorious that some American firms (and here I am not making any allegation against McKinseys), when they have once got their foot in the door, go on, year after year, piling up charges deemed to be necessary as a result of investigations. It is said that American firms start invoicing you as soon as you make the first telephone call. I think it is deplorable that the British taxpayer should be liable for this very heavy expenditure across the exchanges when cheaper and equally good, if not better, services could have been made available by British firms if they had been given an opportunity to make proposals.
I now want to put to your Lordships reasons why, quite apart from what I have said already, I think that a decision to employ any American firm for this particular work was an unsuitable choice. First of all, one must remember that American citizens—and, of course, McKinseys will be employing Americans specially brought over for the purpose, since they have only a very small staff

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in this country—are accustomed to, and accept, a very inefficient postal service. I am talking of the postal service, which is the subject of investigation, not the telephone service which is not the subject of the investigation. They are accustomed to a very inefficient service and one that is quite different from ours.
First of all, they accept delays in transmission and delivery of mail which would not be tolerated in this country. It is not unusual for a letter to take five days to cross New York, whereas we take it for granted that a letter posted in the late afternoon or evening one day will be delivered first post anywhere in Great Britain the next day. I was particularly delighted to notice a day or two ago that when I posted a package in Kensington at mid-day on Friday to Cheshire I received by the first post on Monday a letter of appreciation of the package. That shows the high standard we are accustomed to in this country. This particular movement of the package sent North, and the reply sent South, occurred almost entirely over the week-end when most people enjoy the benefits of a five-day week. This is a sort of service unthinkable in the United States and not used.
I always think that one reason why their telephone service has to be so good is because the postal services are so bad. Yet these are people who will come along and presume to tell us how the British Post Office should be run. They are bound to suggest as one economy a very much lower standard, the standard of the United States, a standard which they will say is quite good enough for the great industrial country of the United States and therefore ought to be good enough for us. The sort of suggestion I can almost hear them making will be, "One delivery is quite enough, and not on Saturday"; and "Do you mean to say that you send postal vans all the way up country roads to deliver letters to isolated farmsteads? Make them come down to the main road and have a mailbox on the mainroad, as we do". We are going to have to pay hard-earned dollars for this sort of advice.
Then I noticed, in the course of the debate in another place on the postal services an interesting indication of the sort of problems which McKinseys are
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to be employed to solve. In the course of his speech the Postmaster General posed some questions which I should like to read to your Lordships as illustrating the sort of problems which he has in mind. He said:
"What for instance, is the real cost of a first-class letter as compared with a printed paper package? What is the real cost of a postcard which goes cheaper but gets first-class treatment? In fact, there is very little cost indeed. Does weight really matter as compared with the size of the envelope and speed with which it is required to move?"
And here is an interesting point:
"How many people really want a fast service, and how many people would be happy to pay a little less for something which was a little slower? "—[OFFICIAL REPORT (Commons) Vol. 709 (No. 88), col. 1422, March 30, 1965.]
Do we really need a lot of Americans to come and ask this sort of question? We are perfectly able to find out these answers for ourselves.
The Minister went on to say:
"I tell the House frankly that we do not yet know the answers to these questions, but we mean to find out. This is the reason why we have commissioned Messrs. McKinsey to undertake the Survey for us".
If ever there was a set of questions which could be answered by British firms these are the very questions. We certainly do not need an American firm, however eminent, to do work which is essentially British in character and which we ought to carry out for ourselves. Moverover, Americans are accustomed to different methods within the American Post Office from those to which we are accustomed. They accept a degree of political interference in the affairs of the Post Office at local levels. Staffing matters, and so on, are handled very often by politicians in the states, and in the counties and in the townships. They take that for granted. They have to unlearn all they have grown up with before they can begin to study what is our practice and why we do it our way.
Furthermore, when they come to look at our postal service, if they do, they will be in complete ignorance of the many services in connection with the Welfare State provided by the Post Office—for example, payment of pensions; payment of sickness benefit; payment of family allowances and the like—because these things are unknown in the United States.

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They will have to learn it all. I daresay they will learn exactly how we do it. But they will have to learn all this at the expense of the British taxpayer before they can begin to start constructive work on the problems which they unearth.
I have already mentioned that I believe that the employment of an American firm will be costly compared with using the services which any one of a number of reputable and highly experienced British firms could have rendered. As I come to the close of my remarks, I would say that Her Majesty's Government are not afraid of cancellation charges. They have shouldered an immense and unnecessary burden of cancellation charges over the TSR 2. If a definite commitment has been entered into—1 should be grateful to learn from the noble Lord if a definite commitment has been entered into—then I would urge Her Majesty's Government to cancel it and to pay the cancellation charges, if any are payable; to award the investigation to a British firm, or to a consortium of British firms, and thus live up to what they are always preaching—namely, that we should employ British brains and British resources whenever we can, as undoubtedly, in this case, we not only can, but should.
8.2 p.m.
LORD MORRIS OF KENWOOD: My Lords, I am pleased that the noble Lord opposite has raised this Question, since I myself had intended to table exactly the same Question. He has rather stolen my thunder and what I had to say, but he has, I think, expressed well the feeling of dissatisfaction which must be felt on both sides of this House over what seems to me to be a most arbitrary decision. This decision seems to me to be quite contrary to the basic principles of selection. As is the case with the noble Lord opposite, I also have had conversations with the Management Consultants Association. The noble Lord quite rightly says that none of the major consultants, or even minor consultants for that matter, were even considered at all when this matter arose. I have spoken to one particular consultant, and he has expressed righteous anger that the Postmaster General should have made this decision and indeed have gone to an American firm. He knows this firm well,
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and in his opinion—which may not have been altogether unbiased, but I believe it to have been so—McKinseys are not in any way suited for this particular job.
One point that the noble Lord did not mention was the fact that on two occasions the Post Office has used the services of British consultants and has found these services to be most satisfactory. In the light of that, I think it is even more extraordinary that the Postmaster General should have made this decision. Our management consultants bring valuable and much needed currency from abroad. I, too, shudder to think what must be the feelings of firms, particularly in America, when they consider the requirements of management consultants, if the British Government cannot, or does not, see fit to employ their own firms when they need work of this nature to be carried out. I earnestly hope that Her Majesty's Government will reconsider their decision in this matter.
8.6 p.m.
EARL FERRERS: My Lords, I think that the Question which my noble friend Lord Erroll of Hale has asked this evening is most pertinent and is going to take a great deal of answering, even with the eloquence of the noble Lord, Lord Hobson. I would say at the outset that I have no objection whatever to the Postmaster General's deciding to engage some efficiency experts to try to make the Post Office more efficient and more economic to run. One of the advantages or (shall we say?) one of the consequences of a change in Government is that we have fresh people with fresh ideas, and we tend to get a few "new brooms" who wish to make themselves active. I feel that this is in fact all to the good, and I would not deny for one moment the Postmaster General's desire to make the Post Office more efficient. But if he wishes to do this, why does he choose an American firm?
I hope that the noble Lord opposite will be much more specific than he was the other day when he answered the Starred Question of my noble friend Lord Erroll of Hale, I believe last Thursday, because vague generalities such as, "They were considered to be the most suitable for the job" really are not in the slightest convincing. There must have been some prime reason why

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this firm, of all British and American firms, were chosen to perform this task, when no other firm was even consulted. Clearly, there was some good reason for this, and I hope that the noble Lord will say precisely what it is. If the firm of McKinseys are so special, what are the peculiarities that distinguish them from all the others? Are they cheaper? Indeed, we do not really know this, because apparently no other firm was asked to tender. Are they more able? If so, on what basis are they judged? As my noble friend said, a British firm were considered sufficiently able to advise the Swiss Post Office, which after all is one of the most efficient in Europe. Why, then, are their qualities apparently so insufficient as to make them unsuitable for advising the British Post Office? These, I believe, are questions which require an answer.
Many British consultants export their services to other countries. Some even give up to 20 per cent. of their effort to assisting firms abroad and to exporting their services, and it is not altogether difficult to imagine the damage done to their efforts when Her Majesty's Government deliberately insinuate that their services are not sufficiently good for them to be enlisted in advising a British Government Department. This is the more particularly unfair when in fact they were never given the opportunity or invited to tender. I do not, of course, say that a British firm should be employed in all cases; but I do feel that it is quite inexcusable for a British firm not even to be given the chance of being considered. Unless the noble Lord comes out with some most astonishing and unexpected reasons, one can only come to the conclusion that Her Majesty's Government have once again fallen victim to the high-pressure sales technique of American firms.
I cannot help thinking that it is tragic to see contract after contract, whether it is for the reorganisation of the Post Office or for the purchasing of aircraft, going abroad to other countries—these contracts not being given by private industry but given by the British Government. I wonder, indeed, when Her Majesty's Government will realise that one of the prime qualities of the American business man is his high-pressure sales technique.
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This contract seems to me to smell strongly of high-pressure salesmanship.
I therefore hope that the noble Lord will answer one or two specific questions which I should like to ask him. At what date was agreement given to McKinseys for their services to be used in the Post Office? What is the cost to Her Majesty's Government of their services? How long will their employment last? Was this agreement given as a result of a lunch to which the Postmaster General was invited and at which none of his officials were present? If so, I can only say that it would certainly justify the McKinsey's expense account. And what are the unique qualities possessed by McKinsey for this work which are absent from British firms? Precisely what are the reasons which determined the Postmaster General not even to give consideration to a British firm? Finally, I would ask the noble Lord, Lord Hobson, whether he will give an undertaking that his right honourable friend will consider again this decision to eliminate from tendering—that is the point, not the giving of the contract to the Americans—a British firm, which was clearly a grave error of judgment and of prudence.
LORD AIREDALE: My Lords, I have listened with the greatest interest to the three speeches, and all I would say is this. The United States of America abounds in admirable institutions of all kinds, but when it comes to Post Office efficiency I should have thought that in that matter Her Majesty's Government could have said to their American friends:
"Cast out first the beam out of thine own eye, and then shalt thou see clearly to pull out the mote that is in thy brother's eye."
8.11 p.m.
LORD HOBSON: My Lords, may I say, first of all, that the noble Lord, Lord Erroll of Hale, was quite right to raise this matter. I am very pleased to face him in order to answer his Question. We met many years ago, and I suppose that neither of us thought that we should ever meet again, first in the other place, and now in the House of Lords. The noble Lord complained, or rather made certain minor criticisms, about my replies last week. I thought that the replies which I gave last Thursday to the Question were rather long. I was

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brought up in the school which was taught that the Answer to a Parliamentary Question should be brief and to the point, and should add nothing to the information already known! If your Lordships read the replies which I gave, you will see that I have fallen into the pleasant habit of your Lordships' House whereby we almost debate Questions. I thought that I was most forthcoming on this matter.
The point I want to deal with (and there is a point of principle involved) is that here we are discussing a nationalised industry—to my mind the only complete nationalised industry, in so far as complete public accountability is concerned. We are raising a question of an intimate contract between a firm of consultants and the Post Office. We can even raise the question of a postman being 6d. short in his pay—that would be perfectly in order; whereas we know that, so far as the other nationalised industries are concerned, we are limited as to the occasions and the extent to which matters can be raised and debated. It is of great importance that we should take advantage of the fact that the Post Office, which is the oldest nationalised undertaking, is in a position to answer questions of detail. The matters raised this evening are questions of detail, particularly when they are thought of in the context of the £1 million contracts which the Post Office is engaged in every year.
I want to make one or two points perfectly clear. The Postmaster General, in arriving at this decision, has certainly not gone outside his legal power. He was perfectly entitled, as one who holds an office under the Crown to make this decision. It was an administrative action. There was absolutely no need to get any law passed to enable him to do it. He did not have to come to Parliament, by way of regulation, and ask for permission to do it. This was day-to-day management, in the full sense of the term, and he arrived at the decision.
Before I come to answer specific questions raised by the noble Lord, Lord Erroll of Hale, and the noble Earl, Lord Ferrers, I want to say straight away that my right honourable friend is not prepared to appoint another firm in place of McKinseys. That is his decision. The
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firm has already begun work. The selection of this firm implies no criticism of British firms of consultants. Over the last ten years the Post Office has used British consultants. Five at the present time are undertaking assignments. However, in this case my right honourable friend felt there was a need for an entirely fresh and fundamental look, the size and complexity of the Post Office being what it is. McKinseys is a firm of international repute and experience and with the resources capable of grappling with an organisation of the magnitude and complexity of the Post Office. Their operations are world-wide. They have offices in six countries, their London office being their second largest. Some of their partners are United Kingdom citizens, and most of the personnel in their London office are also United Kingdom citizens. For the Post Office assignment they will be using a combination of United Kingdom staff and staff imported from their other offices.
Over the last six years they have carried out studies of the overall organisation and management methods of many large British firms. I do not propose to gave the names of those firms. I am quite prepared to put it in the form of a letter, but I do not think that on an occasion of this sort I should be called upon to advertise McKinseys by giving the list of firms for which they have carried out management consultancy. Nevertheless, they are important firms which can be classed under the generic term of "blue chip" organisations. There can be no doubt that McKinseys already enjoy a very strong reputation in the field of management. My right honourable friend was not content to be guided by reputation alone. He has discussed the assignment with two of the principals of the company, who have also had many talks with top officials of the Post Office. These meetings not only enabled McKinseys to form a very good picture of the nature of the task they were undertaking but also confirmed the appropriateness of their selection.
There have been suggestions that the Post Office should have gone out to tender for this contract. I need hardly say that it is not possible to draw up specifications for this type of work except in the broadest terms. The specification emerges from detailed discussion between

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client and consultant. As I have said, the assessment of how far the consultants will be able satisfactorily to conclude their study must be the decision of my right honourable friend, based on his own judgment supported by that of his officials. In short, I would assure your Lordships that my right honourable friend chose this firm because he considered that they were particularly suitable for the task. The Post Office is always eager to use the talents of the home industry. In the last ten years the Post Office has given several assignments to firms in the United Kingdom, and their services will undoubtedly be required in the future. That, briefly, is the statement for the defence on behalf of my right honourable friend the Postmaster General.
I have been asked some specific questions and I want to come straight to them, though some may have been answered by the statement. The main question which was asked was in relation to cost. My right honourable friend takes the view that he does not think it proper to disclose fees paid for professional services of this nature. We cannot state the cost at the present moment, but it would be perfectly appropriate for Parliament to know the final payment that will be made. How would Parliament be able to find out? Well, first of all there is the Comptroller and Auditor General; secondly, the Public Accounts Committee; and, thirdly, there is the Estimates Committee—and I have experience of this, having been Chairman in the past—in which I can imagine questions being put on these matters. The cost to the Post Office of this firm of McKinsey, can be ascertained after payment has been made. That is precisely because of the fundamental safeguards that exist, particularly in dealing with Government affairs and, in this case, with a nationalised industry.
There was the question of whether the Cabinet were consulted. Here, again, I do not propose to make a statement on Cabinet conclusions. The noble Lord, Lord Erroll of Hale, has been a member of the Cabinet, has been a member of the Government, and I am a member of the Government. The fact of the matter is that we all know very well, without asking about Cabinet conclusions, that you cannot really make decisions without
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being in a position to carry your colleagues with you. I should have thought that that was a reasonable and fair answer to the question that has been asked.
The other question is: How long will they take? I cannot give the answer about how long they will take; I have no experience of these people. It is true that I was at the Post Office for over five years. I had a very happy time, indeed, and we did not have quite so many squalls; we did not have to combat inflation such as we have to do at the present moment. We never had them in the time of my right honourable friend Wilfrid Paling and my right honourable friend Ness Edwards. How long the job will take, I do not know.
I enjoyed the flight of fancy of the noble Lord—and, of course, paradoxically, it was true—in regard to the comparison between the United States Post Office and our own. Far be it from me to do anything to jeopardise the Atlantic Alliance, but I know as well as he does that our Post Office compared to theirs is far more efficient. We all know that. But I should respectfully suggest that it is hardly on the sort of ideas that the noble Lord has in mind that McKinsey would be asked to inquire. This I should have thought was far more of an internal character than an outside one. I think I have answered the questions of the noble Lord, Lord Erroll of Hale. I do not want to miss any. I made fairly copious notes, but if I have missed any I shall be only too happy, either by way of ordinary answer in your Lordships' House or by writing to the noble Lord or by speaking to him, to give him further information. I now come to the noble Earl, Lord Ferrers—
LORD AIREDALE: My Lords, if the noble Lord is moving on, may I ask this question on this matter of time and how long it will take? Surely some programme has been drawn up. Surely there is some interim operation which is going to take some agreed time. Surely some time factor has been decided upon.
LORD HOBSON: That is quite true; I am sure there is. But I was asked whether I know, and I do not know; I have not been able to find out. I have been perfectly honest and straightforward.
LORD ERROLL OF HALE: Does the Postmaster General know?
LORD HOBSON: If the noble Lord cares to put that question down, I shall be only too happy to answer. But I have been asked specifically to give a direct answer. There is no equivocation, no dubiety. As a matter of fact, I have been saved. The information has just come. It certainly was not available a little while ago when the noble Lord was speaking. But there, again, we have an example of the efficiency of a nationalised industry who, presumably, can use the nationalised telephones and even have a clerk standing by and able to get this information for your Lordships. The figure is nine to ten months. That, presumably, is the period of gestation, my Lords.
I now come to the noble Earl, Lord Ferrers. He really did dot the i's and cross the t's of the noble Lord, Lord Erroll of Hale. I was glad he did so, because I have always had a high opinion of the noble Lord, Lord Erroll of Hale. Then—and I think he may regret having said it; I do not know what he based his statement on—he gave some account of a lunch. Reasonably the Postmaster General was present and there was a hint, a sous entendre—I suppose we have to get into the delicate meaning—that a representative of McKinsey was present. Let us make the full assumption that they were all there —the managing director, the chairman, the lot. No one is going to tell me that
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my right honourable friend would succumb to that sort of thing—I have known him long enough—and I am sure that no member of Her Majesty's Government would. I feel that in the morning, when the noble Earl comes to read what he said, he will regret making that mistake. I am absolutely sure that my right honourable friend the Postmaster General arrived at this decision convinced that he had chosen the firm most suitable to perform the task, and I am sure that that was the only consideration he had in mind.
My Lords, I have endeavoured to answer the questions raised, and if the noble Lords opposite are dissatisfied, then that is life, that is the political fight, and, indeed, it is one of the joys of a democratic society. But, to finish more seriously, if there is any information that noble Lords would care to ask for, it will be my earnest endeavour as a servant of this House to give the information that is sought.

POOLE CORPORATION BILL [H.L.]
Reported, with Amendments.

INDUSTRIAL AND PROVIDENT SOCIETIES BILL [H.L.]
Returned from the Commons, agreed to.
House adjourned at twenty-six minutes past eight o'clock.