Lords Sitting of 17 May 1966

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR On the Woolsack.
Prayers—Read by the Lord Bishop of Chester
Several Lords—Took the Oath.

THE EDUCATION DEGREE
2.38 p.m.
THE LORD BISHOP OF CHESTER: 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 it is their intention to place any restrictions on the universities or colleges of education regarding the number of students in colleges of education, considered competent, who may take the examination for the B.Ed. degree; and, if so, what will be the nature and the extent of the restrictions.]
BARONESS PHILLIPS: My Lords, for the present Her Majesty's Government do not intend to place any restrictions on the number of students in colleges of education who may take the examination for the Education degree. At this stage in the development of courses, it is not possible to forecast the number of students who will apply to register for them, or how many will be accepted by the universities and colleges concerned. The Government are assuming, however, that the proportion of college students proceeding to a fourth year as this stage is first reached will be relatively small. It will be necessary to watch how the situation develops in the light of possible effects on the supply of teachers.
THE LORD BISHOP OF CHESTER: My Lords, may I thank the noble Baroness for the fullness and the courtesy of her reply, which will be received with great pleasure by the colleges of education? Also, may I ask her to bear in mind, in formulating policy in future, that there
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will be a sense of injustice if some students who are considered competent are not allowed to take this degree? In addition, there will be a grave lack of economy, since many of the colleges of education have taken specialist teachers on to their staffs in order to train for the B.Ed. degree, and their effort will be wasted if they are not used to the full.
BARONESS PHILLIPS: My Lords, I thank the right reverend Prelate for what he has said. Perhaps it would help him if I quoted what has been said by the Brighton College of Education, at which I had the pleasure of speaking last week. They suggest that the selection of those proceeding to this degree will be based primarily on the student's performance during college and on taking the teacher's examination. In other words, there would appear to be no reason for any restriction of the kind the right reverend Prelate has indicated.

THE KINGSWAY TUNNEL
2.40 p.m.
LORD SEGAL: 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 are satisfied that full use is being made of the Kingsway Road Tunnel and whether they will consider reopening its Embankment approach.]
THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR THE ROYAL NAVY (LORD WINTER-BOTTOM): My Lords, the noble Lord will be aware, of course, that the Strand Underpass is the responsibility of the Greater London Council, as highway authority. My right honourable friend the Minister of Transport, however, is satisfied that the Underpass is being properly used for the purpose for which it was designed. With regard to the Embankment approach, I must stress that the Underpass was designed to relieve traffic congestion at the surface level intersection of the Strand, Lancaster Place and Aldwych. If this intention is not to be defeated then the Embankment approach could not be opened to traffic without major and very costly engineering works.
LORD SEGAL: My Lords, while thanking my noble friend for his reply, may I ask whether he would agree that it is highly desirable to avoid any increase in the amount of traffic in the Strand? Would it not be possible to allow two streams of traffic to enter the Kingsway Tunnel, and to control them by installing traffic lights in the Tunnel?
LORD WINTERBOTTOM: This, my Lords, is a technical point which I do not feel capable of answering. As I said in my main Answer, however, this linking of the two arms of the Tunnel could not be carried out without major and costly engineering works, and it is the opinion of the competent authority that the reduction in pressure of traffic would not justify this expense.
LORD BALFOUR OF INCHRYE: My Lords, could the Minister explain a little more fully what he meant, when he said that the Minister of Transport was satisfied that the Tunnel was being used for the purpose for which it was designed? Was it not designed for single-deck, low trams which are not being used now?
LORD WINTERBOTTOM: Perhaps, my Lords, I was not precise enough. The Tunnel stood empty for a long time and was then converted to use for ordinary motor traffic. As the noble Lord has pointed out, it was originally designed for low trams, and the type of transport which can use this Tunnel is limited to a height of twelve feet.
LORD SOPER: My Lords, would my noble friend think that perhaps a mistake was made in using the Tunnel the wrong way round? As one who lives in Kings-way and uses the tunnel frequently, I wonder whether a complete reversal of the traffic would be worth considering, if it were not too costly.
LORD WINTERBOTTOM: My Lords, the statistics show the contrary, and it is for this reason that this direction of flow was adopted.
LORD FARINGDON: My Lords, would my noble friend agree that this Tunnel was not intended for modern types of traffic, and has been so used recently only because of public pressure to use what so obviously seemed a convenience, although in fact it was nothing of the sort?

SELECTIVE EMPLOYMENT TAX AND AGRICULTURE
2.44 p.m.
EARL FERRERS: 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 why, in the application of the selective employment tax proposed in the Budget, it is shown that firms which process food are considered to be of more value to the nation, by virtue of the fact that they may claim back both a refund and a premium on the tax paid, than are farmers who grow the food and who are to be allowed to claim neither a premium nor a refund.]
LORD SHEPHERD: My Lords, there is no suggestion that firms processing food are considered to be of more value to the country than growers of food. The purpose of the tax and premium is to widen the tax base, to help those industries which have heavy indirect taxation and, in the longer term, to encourage the redeployment of labour, which is already being achieved in agriculture. The noble Earl will be aware of the statement of the Minister of Agriculture in another place, that farmers and horticulturalists will individually receive refund of the tax itself.
EARL FERRERS: My Lords, I am grateful to the noble Lord for his reply and, indeed, for explaining that the Minister of Agriculture has altered the situation since I originally put the Question down. But would he not agree that it would have been rather better if this consideration had been given before making the announcement and causing such havoc in the farming industry, rather than making the announcement and altering it afterwards?
LORD SHEPHERD: My Lords, I personally would not accept any question of havoc within the agricultural industry. In the first instance, the use of the Annual Review was considered the right way of refunding these sums to farmers, but after further conversation within the industry itself, which the noble Earl will accept was not possible before the tax statement was made, the Government have

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now decided to repay direct to the farmers those sums levied upon them.
LORD INGLEWOOD: My Lords, is the noble Lord not aware that that answer is really very weak? These fine phrases about widening the tax burden are not very convincing when this original decision about asking farmers to pay this tax was devoid of all common sense. Can he not see that to ask those who, say, grow peas in this country to pay this tax, even though they will get a refund later on, is quite absurd when others who process peas, for example, imported as well as home-grown, will be given a present for so doing?
LORD SHEPHERD: My Lords, I suggest to the noble Lord that he reads the statements that have been made in another place and, if he cares, the speech I made in your Lordships' House, I think a week ago, in regard to this tax. The reason the processors are receiving a refund is that they come within the definition of "manufacturers", and the purpose of the tax, of course, is to assist manufacturers generally. I do not take the view that my answer was weak. I think it was very strong indeed.
EARL FERRERS: Is the noble Lord aware that many agricultural buildings are rated because they are factory farms? If they are factories for the purposes of rating, should they not also be considered factories for the purposes of the selective employment tax?
LORD SHEPHERD: My Lords, the noble Earl will understand that I should need notice of that question.
LORD SOMERS: Might I suggest that the statement—
SEVERAL NOBLE LORDS: No. Ask a question.
LORD SOMERS:—which the noble Lord quoted is equally unconvincing in relation to his own remarks?
THE LORD PRIVY SEAL (THE EARL OF LONGFORD): My Lords, I must suggest to the noble Lord that he asks a question.
LORD CONESFORD: My Lords, what has caused Her Majesty's Government to change their view about the manufacture of candyfloss?
THE DUKE OF ATHOLL: My Lords, as farmworkers and foresters are frequently interchangeable, would the noble Lord elaborate on the position with regard to foresters?
LORD SOMERS: Would the noble Lord agree that even before this tax appeared there was great anxiety in the agricultural world as to the drift of young people toward urban life, and would he not agree that this is going to make it even worse?
LORD SHEPHERD: No, my Lords, would not accept that. Certainly we want a balance of age within the agricultural industry, but it is perfectly clear that we need a continuing movement of workers from agriculture into manufacturing industry.
LORD FORBES: My Lords, is it the case that farmers are now being asked to lend the Government money? How much more have they got to do for the Government?
LORD BELHAVEN AND STENTON: My Lords, may I ask whether Her Majesty's Government, having changed their mind about farmers, intend to review seriously the position of agricultural engineers and those providing other services to farming, whose contribution to agriculture is as important as is farming itself? Is the noble Lord aware that the selective employment tax placed upon these agricultural engineers, and so on, will seriously affect the costs of agriculture generally?
LORD SHEPHERD: Yes, my Lords, I recognise that certain of the services are going to have some difficulty arising from this tax. But, as I have said on a number of occasions, and certainly once this afternoon, when we imposed this tax we had to take the broad definitions, and unfortunately, in this particular case, the agricultural engineers fall within the services. But the noble Lord will be aware that there will shortly be introduced in another place a new Agriculture Bill which will give further assistance to agriculture on top of what is already a very substantial payment out of the Exchequer to the farming industry.
THE DUKE OF ATHOLL: My Lords, did I understand the noble Lord aright when he said he wanted to encourage

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people to leave the land, and to go to the urban areas and to manufacturing industries? This seems completely contradictory to the reasons why the Highlands Development Board was set up last year by the noble Lord's Government.
LORD SHEPHERD: My Lords, the noble Duke is perfectly correct in what he understood I said. As the noble Duke knows, we are, within the Highlands Development Board, making great efforts for the development of Scotland, but we have also to consider the nation as a whole.

SELECTIVE EMPLOYMENT TAX AND CHARITIES
2.50 p.m.
LORD SALTOUN: 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 how much out of the money contributed by the British public in a year to charity they estimate will be diverted to the Treasury by the operation of the selective employment tax.]
LORD SHEPHERD: My Lords, I regret that this information is not available. There is no central record of staff employed by charities; indeed, there is not a complete record of all charities. It does not necessarily follow, of course, that all of the selective employment tax paid by charitable organisations will have been found from money contributed by the British public to charity. Many of these organisations have income other than public contributions.
LORD SALTOUN: My Lords, I thank the noble Lord for his Answer. I wonder whether the Government would accept a tentative figure of £1 million as the amount of public money that will go to the Treasury from these charities by the operation of this tax. If so, do the Government realise that the generosity of the British public to their charities is an annually recurring miracle to the people who administer these charities? And are the Government not aware that, as soon as the public realise that by means of this selective employment tax the money they are giving is diverted partly
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to the Treasury, there is a great danger of that generosity drying up altogether? I could give the Government proof of that from the terms of legacies and such like which are known to me. Will the Government consider this point?
LORD SHEPHERD: My Lords, I would first endorse what the noble Lord has said in regard to the very great work these charities do and the great support the public give them. As the noble Lord may know, there are now 80,000 registered charities in this country. Some of them are not all that we normally think of as being charitable organisations—I am thinking in terms of the Red Cross and cancer research. Certainly the Chancellor of the Exchequer has received many approaches in this matter. I am not cognisant of what he will finally decide to do. I think we shall have to wait until the Finance Bill and the Ministry of Labour Bill are presented to Parliament: then we shall see what the Chancellor has in mind. Even then, this House and the other place will be able to put their views, no doubt very strongly, on this important matter.
LORD FRASER OF LONSDALE: My Lords, may I ask the noble Lord to remind the Chancellor of the Exchequer that the major charities such as the British Legion, the Royal National Institute for the Blind and St. Dunstan's are all registered by their local authorities. They have stood up to be counted and are therefore easily found; as are the other 80,000 registered, as the noble Lord has said. Therefore the Chancellor's interim defence of his position, that it was impossible to discriminate, will not hold water. Will the noble Lord also tell the Chancellor that these charities help the Government and thereby the Treasury by doing a lot of good work for the nation?
LORD SHEPHERD: My Lords, I fully accept what the noble Lord has said. It is true that there are a number of charities that spring readily to mind; but there are also those others which, as I have said to the noble Lord, Lord Saltoun, do not fall within what we readily understand as charities, and at this stage it is not all that easy to be able to discriminate between one and the other. But this matter is being looked at. I could not possibly give any promises; it would be dangerous and foolish for me to do so; but I can undertake that the views which have been

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expressed this afternoon will be conveyed to my right honourable friend.
LORD DERWENT: My Lords, will the noble Lord explain a little further what he means by "funds belonging to charities which have not been subscribed to the charities". I think he said something like that in his first Answer: that charities have funds which have not been subscribed by the public.
LORD SHEPHERD: My Lords, I do not think I said quite what the noble Lord has attributed to me. I suggested that there are some charities that do not fall within what most of us understand as being charities—the Red Cross, the British Legion and such like. I believe there are also nearly 35,000 educational charities which are quite different in character from those I have mentioned.
LORD CONESFORD: My Lords, do the Government intend to supply to the beneficiaries any of the services they are compelling the charities to abandon or curtail?
LORD MITCHISON: My Lords, is the noble Lord aware that just past Swiss Cottage he will find a lot of property, belonging to a charity. Eton College, from which they draw rents. Those rents do not come from the public?
LORD SHEPHERD: My Lords, I thank my noble friend for that illustration of one of the aspects of this matter.
BARONESS SUMM ERSKILL: My Lords, would my noble friend not agree that too large a portion of bequests is absorbed by the administrative expenditure of a charity? Would not the Chancellor's decision solve this problem?
LORD SHEPHERD: My Lords, I do not think it would quite solve the problem. In some respects it would perhaps accentuate it, in the sense that this added impost on what the noble Lady has referred to as an abnormal share of the contributions made by the public to those charities. I realise that this is a matter of great interest in this House, and one in which we on this side naturally share. But I have said that all points that have been made will be considered by the Chancellor of the Exchequer. When the Finance Bill and the Ministry of Labour Bill are published we can perhaps have
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a more fruitful discussion than is possible in the meantime, putting points which must be largely hypothetical.
LORD SALTOUN: My Lords, I should like to thank the noble Lord for his very sympathetic answers; but I should like to ask him one question. Are the Government prepared, in the event of this very delicate plant being frosted, suddenly to undertake the work of the charitable organizations—which must have an income of from £50 million to £100 million a year? That is the problem I think the Government are facing.
LORD SHEPHERD: My Lords, all I would say is that I will take the noble Lord's point and see that it is passed to my right honourable friend.
LORD MOYNE: My Lords, would the noble Lord allow me to add to his list of points for consideration that of the housing charities, since the one to which I belong, for instance, will have to spend an additional £5.000 a year because of this tax on porters and others? Does the noble Lord not agree that this amount—I am trying to put this into the form of a question—would otherwise go into bricks and mortar? That, of course, depends on the constitution of the charity; but I assure him it is so in our case. Is not the effect of the tax regrettable, and will he put 'the housing charities into his list for consideration?
LORD SHEPHERD: My Lords, I congratulate the noble Lord on the point he has made in the form of a question. I will take up this point, together with the others.
LORD CONESFORD: My Lords, does the Government's exclusion of educational charities from the charities for which they have more sympathy mean that it is their deliberate intention to compel the educational charities to curtail or stop their services?
LORD SHEPHERD: My Lords, I think it would be wrong to develop this Question into a debate. All I would ask the noble Lord to do is to read carefully what I have said. If he will do that, he will find that what I have said cannot possibly bear the construction he has placed upon it.

GLASGOW CORPORATION (CAR NOUSTIE STREET) BRIDGE ORDER CONFIRMATION BILL
Read 3a (according to Order), and passed.

BRITISH WOOL MARKETING SCHEME 1950
3.0 p.m.
THE MINISTER WITHOUT PORTFOLIO (LORD CHAMPION): My Lords, I beg to move that the Draft Amendment to the British Wool Marketing Scheme 1950, laid before the House on April 21, 1966, be approved. It is designed to improve the arrangements for appeals by registered producers against valuation of their wool and so to strengthen the statutory safeguard provided by the Scheme.
Under the Agricultural Marketing Act, 1958, a marketing scheme may be amended at the instance of the Board concerned, if the Ministers give their approval, unless it has been necessary to hold a public inquiry in consequence of objections to the proposed Amendment, in which case an Affirmative Resolution of both Houses is needed before the Amendment may be approved. The present Amendments to the Wool Scheme, submitted by the British Wool Marketing Board, were the subject of one objection and a public inquiry was held. The Report of the Commissioner was published on April 21, and copies are available in the Library. My right honourable friends accepted the Commissioner's conclusions, and the Amendments before the House includes modifications to which the Board has assented based on those conclusions.
As I have said, my Lords, the Amendment is needed to make good a defect in arrangements for appeals against wool valuations. To explain it I must describe how the relevant part of the Scheme works. The Scheme requires that practically all wool producers must be registered and must sell their wool exclusively to the Board which arranges for its assembly, grading, bulking and disposal by public auction. The grading is done by merchants acting as the Board's agents. The grades, of which there are some hundreds, are published annually by the Board in a price schedule, together with
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the maximum prices fixed for them by the Board in the light of the Government's overall price guarantee for fleece wool. When a producer's clip has been graded, a statement giving the weight of wool in each grade is sent to the Board's headquarters, where the total valuation of his clip is calculated and notified to the producer.
Generally the producer receives the valuation and his cheque within a week after grading. Under the Scheme as it stands, a producer is entitled to appeal against the valuation within ten days of receiving it. The appeal is heard by a tribunal which the Board is required to appoint under Section 91 of the Scheme and which consists of two nominees of the farmers' union in the country where the producer farms, two nominees of the merchants' organisations and one member of the Board. At present the Scheme does not require the wool in question to be available to the tribunal, and appeals may be heard by the tribunal without any possibility of their examining the wool. This is a weakness of the appeal arrangements which has been criticised but which, it is only fair to add, the Board itself has recognised and taken steps to mitigate. I understand that in practice the Board has granted requests from producers to have their wool set aside after grading for the purposes of an appeal, and that since 1963 it has invited producers, through a notice in the annual price schedule, to take advantage of this arrangement if they so desire.
The present Amendment is designed to give the producers a statutory right to have their wool produced for examination by the appeal tribunal if they have duly made an appeal; and if, in addition, they have already demanded the segregation of their wool at the time and under the conditions specified in the Amendment. The Amendment provides that, in order to have his wool kept separate, a producer must in the first place attend, or be represented, at the grading of his wool. The Board is required to give the producer a reasonable opportunity to attend the grading if he so requests in advance. Secondly, the producer must request the separation of the wool during or immediately after such grading and before the wool is dispersed to bins or piles. Finally, the Amendment provides that if a producer does not take advantage of the right to demand the segregation of his wool

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in this way, and subsequently appeals against the Board's valuation, the appeal tribunal may decide the value of the wool upon such evidence as it may deem proper. It would not be practicable to allow a prolonged period during which any producer was entitled to decide whether to demand to have his wool kept separate. This would mean that every producer's wool would have to be kept separate for some time after grading, and the result would be severe congestion at grading depots, with consequent difficulties from the Board's marketing arrangements.
Under the Amendment a producer has a reasonable amount of time to decide whether to ask for his wool to be kept separate. He can do so immediately the grading begins, if he thinks it at all likely that he will wish to appeal subsequently to the tribunal. This does not mean, of course, that he is bound to make an appeal, and he has ten days after receiving the valuation of his wool in which to decide whether to appeal. The number of appeals against valuation is at present very low. This suggests that producers generally are reasonably satisfied with grading arrangements. It is thought unlikely, therefore, that the proposed changes in procedure will lead to any significant increase in the number of appeals or to any serious inconvenience to the Board's grading depots.
I commend the proposed Amendment to your Lordships as a reasonable compromise which will give producers a necessary statutory safeguard, and thereby conduce to the more efficient operation of the scheme.
Moved, That the Draft Amendment to the British Wool Marketing Scheme 1950, laid before the House on April 21, 1966, be approved.— (Lord Champion.)
LORD INGLEWOOD: My Lords, may I ask the noble Lord one question about the Wool Marketing Scheme? The amendment that is most important to farmers, particularly this year, is the Government's decision to reduce the price of wool. I notice the noble Lord has not referred to that. I know that it is not specifically referred to in these paragraphs, but surely it is an important matter in the marketing of wool. Can the noble Lord tell us the reason for that before we leave this Order?
EARL FERRERS: My Lords, before the noble Lord replies to that question, I wonder whether I may express to him the gratitude of noble Lords on this side of the House for the way in which he has so carefully introduced and explained this Scheme. So often Schemes are fairly straightforward, but this one is not straightforward. Indeed, I think it would be fair to say that it is one which has been born out of frustration and argument on all sides by a number of people. It is one that originated a very long time ago, for it was as far back as August, 1964, that the British Wool Marketing Board published a proposed amendment to the British Wool Marketing Scheme; and since then the original proposal has been subjected, as the noble Lord has pointed out, to argument, objection, public inquiry and modification by the Minister. While we cannot help being amazed at the length of time which it has taken since the original proposal was made, I think we may take some comfort from the fact that at least the processes of democracy and objection have been used to their limit to make quite certain that the resulting Scheme is as fair to all sides as could be expected. I very much hope that those who now sell their wool will feel that they have a better right of objection and a fairer deal than they might otherwise have had. I hope that this will prove an improvement to the British Wool Marketing Scheme, and I should like to thank the noble Lord, Lord Champion, very much for the detail to which he went to explain precisely what it does mean.
LORD CHAMPION: My Lords, the noble Earl has thanked me for the trouble I have taken to explain the scheme to the House. I would thank him for explaining to the House the democratic processes through which this has gone, and pay tribute to those processes, which I think are absolutely right. So far as the noble Lord, Lord Inglewood, is concerned, I am bound to say that the present price of wool does not arise out of this Scheme. We shall be having, I imagine very shortly, a day for the discussion of the Annual Price Review, or the Annual Review as it is called, and I imagine that the noble Lord will then have an opportunity of putting this point,

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which is of some importance to wool producers. I hope that your Lordships may now accept this Order.
On Question, Motion agreed to.

PNEUMOCONIOSIS, BYSSINOSIS AND MISCELLANEOUS DISEASES BENEFIT (AMENDMENT) SCHEME 1966
3.10 p.m.
LORD SORENSEN: My Lords, I beg to move that this Order be now approved. This draft Scheme is made under the Industrial Diseases Benefits Acts 1951 and 1954, as amended by the Workmen's Compensation and Benefit (Amendment) Act 1965. The principal Acts provide for special schemes under which allowances are made available out of the Industrial Injuries Fund to assist men disabled by pneumoconiosis, byssinosis and certain other malignant diseases contracted as a result of their employment before 1948. These diseases develop so slowly that in almost all cases they become apparent too late for workmen's compensation to be claimed within the time limits of the old Act; that is to say, they are termed "time-barred men".
The Scheme is a simple amendment to enable the new allowances of £3 a week for exceptionally severe disablement to be paid to beneficiaries under the main Scheme who are eligible for it by virtue of their entitlement to constant attendance allowances at the intermediate or highest rates. The qualifying conditions for receiving constant attendance allowance at these rates are identical with those which are applied for a like purpose under the Industrial Injuries Act. Constant attendance allowance normally is not payable to a disabled person who is in a hospital or similar institution, because he will already be receiving the attendance which that allowance was devised to help pay for. But this rule does not apply to the new exceptionally severe disablement allowance, because its purpose is
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aimed at helping to mitigate the serious loss of faculty suffered by the patient.
The effect of this amendment will be to ensure that a man on the maximum weekly constant attendance allowance rate of £5 10s. 0d. will receive a further £3, making a total of £8 10s. 0d. The new allowance, unlike the constant attendance allowance, will be payable when the beneficiary is in hospital. I understand that there is only a small group who can benefit under this proposed amendment, but the administrative board responsible for operating the Scheme know who are the beneficiaries and will contact them as soon as the amending scheme is in force. I am sure your Lordships will agree that this proposal will lighten the burden of a category of sufferers, and I hope you will give it support. I beg to move.
Moved, That the Pneumoconiosis, Byssinosis and Miscellaneous Diseases Benefit (Amendment) Scheme 1966 be approved.—(Lord Sorensen.)
3.14 p.m.
LORD DRUMALBYN: My Lords, I should like to thank the noble Lord for his explanation of this matter, and to welcome the provision that is made, which implements the promise given by the noble Lord, Lord Bowles, on the Second Reading of the 1966 National Insurance Act, that Section 6 of that Act would be extended to cases of this kind. Although the cases are not numerous, it is obviously right that this extension should be made. The noble Lord has said that it is just a small group. I do not know whether he is in a position to tell us how many he estimates are affected. We should be glad to have this information, and we are pleased to think that they will benefit from this Order.
LORD SORENSEN: My Lords, I should like to thank the noble Lord for his remarks, and I would inform him that under this Scheme approximately thirty will benefit.
On Question, Motion agreed to.

PLOUGHING GRANTS SCHEME 1966
3.14 p.m.
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR SCOTLAND (LORD HUGHES): My Lords, when the noble Earl, Lord Ferrers, was speaking on the British Wool Marketing Scheme he said that many of the Orders which come before your Lordships' House are straightforward. I think that this Order is in that category. I hope that, in moving that the Order be approved, I may be forgiven if I do not find it necessary to go fully into the background of the Scheme, which, after all, is an annual one which has been regularly debated in your Lordships' House for a number of years. I hope that it will also be acceptable to the House if the remarks which I make on this Scheme can be taken as applying equally to the Ploughing Grants (Scotland) Scheme 1966, which is virtually identical.
The main change we are proposing this year is a reduction in the rate of the Part I grant from £5 an acre to £2 10s. an acre. As we explained in the White Paper on the 1966 Price Review, we are reducing this grant because changing methods of grassland management and arable husbandry have made it unnecessary to continue to provide so large an incentive to ley farming. We do not propose at present to make any change in the rate of grant under Part II of the Scheme which, noble Lords will recall, provides for a payment of £12 an acre towards the cost of ploughing old grassland, where the expenses are significantly higher than in normal ploughing I should, however, draw attention to some minor changes which we have made to this part of the Scheme. First, we have made it clear that any expenses incurred in clearing and other preparatory work may be taken into account in addition to the cost of ploughing in assessing eligibility for grant. It has always been our practice to do this, but we want to remove any doubts on this score so that we can ensure that these preparatory works are properly carried out before grant is paid.
The second change we have made is to allow an approval given under the 1965
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Scheme to remain valid for the 1966 Scheme if the farmer is unable to complete the ploughing before 31st May, 1966. The reason for this is that reclamation work of this kind must often be spread over two years or more, but of course any approval given under the Scheme ceases to be valid when the Scheme itself expires on 31st May. In the past, this has meant that if a farmer who has been given approval to plough under Part II of the Scheme has not completed the ploughing by 31st May he has had to apply for a fresh approval under the following year's Scheme. This is time wasting and annoying, and I am sure that the amendment which we have made will be welcomed by those farmers who take part in this Scheme. My Lords, I think it is generally agreed that these grants play a useful part in our agricultural support arrangements. I beg to move.
Moved, That the Draft Ploughing Grants Scheme 1966, laid before the House on May 4, 1966, be approved.—(Lord Hughes.)
3.19 p.m.
LORD FORBES: My Lords, I want to make it quite clear that I am the last person who would say that any grant should not go to farmers. They are at present hard pressed, and their incomes of people in other industries. But what I object to is that this grant is really a fraud and a deception. It is not an honest grant, but purely one of the aids to keeping down the cost of food. It is merely a convenient way of getting money into the merely a convenient way of getting money into the farmer's pocket so that the price of food can be kept down for the housewife.
When this grant was introduced as a result of the Agricultural Ploughing Act 1952, it was perfectly honest—it was an excellent grant in every way—because the cry then was for maximum production. Now it is very different. Agriculture is being asked for economic production, not maximum production. It is often not economic, or the best husbandry, to plough grass which has been down for only three years. Surely it is making a mockery of government if Her Majesty's Government, by encouraging a practice that is not economic or

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even good husbandry, introduce or continue a grant such as the ploughing grant. Of course, with present agricultural policy the farmer must get the money by some means, but do not encourage him to do something that it not only wrong but deceives the public of the intention of the grant. Why not base the grant on an acreage basis, and call it something like the "consumer subsidy grant", or the "cheap food grant", and then there will be some purpose in it? The grant as it stands is merely deception, and it is high time that the Government became honest about this.
3.22 p.m.
LORD BALERNO: My Lords, there is much to welcome in this Order. It was almost inevitable that there would be some reduction in the grant under Part I of the Scheme, but I would draw the attention of the noble Lord, Lord Hughes, to a fact of which probably he is aware, but to which I think more recognition should be given; that is, that there are in Scotland large areas of agricultural land which are remote and have a particularly adverse climate. In such areas more help is required. In some respects, the remoteness factor is being met by a more generous treatment of the farmer under Part II of the Scheme, which, of course, does not in any way benefit the farmer who is operating on the better lands, the low-lying lands of Scotland, and those which are nearer the market.
I would ask that the operation of subparagraph (2) of paragraph 6 should be very liberally interpreted: in other words, that this more liberal interpretation of Part II should be continued throughout. Undoubtedly the cut in the ploughing grant and the lime subsidy is viewed by many farmers with alarm and dismay, but one must recognise that, from the point of view of grassland intensive farming, a reduction was almost inevitable. As a farmer doing intensive grassland, no longer growing any cereal, I can, without any prejudice or self-interest, press for the more generous treatment of those farmers in the more remote areas with a very adverse climate.
EARL FERRERS: My Lords, I am grateful to the noble Lord, Lord Hughes, for introducing this Order. He began by saying that he hoped that this would
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be considered as a normal Order. I suppose it is true to say that the form of the Order is normal, but it is abnormal in that it cuts the subsidy by 50 per cent. I would not necessarily pick a quarrel with that, but I wonder whether the subsidy of £2 10s. an acre will offer any incentive to farmers to plough up their lands—and that is, presumably, the purpose of the subsidy.
I wonder whether the noble Lord, Lord Hughes, would like to indulge in a little crystal-gazing and say whether he considers that in the next year the subsidy on ploughing grants might be cut yet further, or even annihilated. Indeed, if he were to say so, I would think he would find that at least my noble friend Lord Forbes would be supporting him. But whether or not the £2 10s. an acre subsidy is cut any further, I am glad to see that the Government have retained the £12 an acre ploughing-up grant, because this, I think, serves a useful purpose and is a strong incentive. Personally, I doubt whether £2 10s. an acre is any incentive at all.
Could the noble Lord tell us how many acres, or how much cost, was involved in the last year for which he has the figures, both for the £5-an-acre grant and for the £12-an-acre grant? If so, I think it would be useful information. The noble Lord concluded by saying that he considered that this grant was useful to agriculture. I think it probably is. The only thing is that now it will be half as useful as it was before.
3.26 p.m.
LORD HUGHES: My Lords, may I first of all answer the question put by the noble Earl on the subject of acreage and costs? In the financial year 1965–66, in the United Kingdom as a whole, over 1¼ million acres of grassland was ploughed under Part I of the Scheme, attracting just under £7 million in grants. Of this total 59 per cent. went to England, 23 per cent. to Scotland, 9 per cent. to Northern Ireland and 9 per cent. to Wales. The sum paid under Part II grants is, of course, very much smaller, and amounted during the same period to £610,000, in respect of 54,000 acres.
The noble Lord, Lord Balerno, spoke particularly about the remote areas of Scotland requiring more generous treatment because of climatic and other conditions. I do not know whether I am

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in order in suggesting that climatic conditions are necessarily one of the conditions to be borne particularly in mind in relation to this grant. I have no doubt, however, in giving the noble Lord the assurance that the interpretation of sub-paragraph (2) of paragraph 6 will continue to be interpreted in the liberal way that has been applied throughout the operation of Part II of this Scheme.
The noble Lord, Lord Forbes, took a rather unusual line in relation to this Order and, of course, it was none the worse for being different from that taken by everybody else. Having regard to the fact that not so long ago the noble Lord was himself a Minister with an interest in these matters, I wonder whether he has any particular period in mind at which this grant ceased to be honest and became dishonest, because I think the whole purpose of the grant from the beginning was to help the farmer in the best possible way to give food to the British housewife at the cheapest possible cost.
LORD FORBES: My Lords, to begin with the point of the grant was maximum production, and that has changed now to economic production. That is the crux of the whole matter. If the noble Lord is trying to argue that this grant has been going on for a very long time, I would merely say that two wrongs do not make a right.
LORD HUGHES: I am not trying to argue anything of the kind. I was merely wondering, in my innocent Scottish way, at what point what was once honest became dishonest. It may be that if this had been a question of marriage, the noble Lord would have taken the normal Scottish procedure: that if a man and a woman live together in the beginning it is not particularly honest, but if they do it long enough in Scotland it becomes honest. Perhaps the grant may have been regarded in this way. He is reversing the process.
I think I am entitled to say that the Order has been generally welcomed by noble Lords, apart from the noble Lord, Lord Forbes, and apart from the point made by the noble Earl that the Order is not normal in that we cut the grant by 50 per cent. That is perfectly true. But percentages can be very misleading. I should prefer to say that on this
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occasion we are reducing the grant by £2 10s. an acre. The last time it was reduced by the previous Government it was reduced by £2 an acre. There is not very much difference, and I am quite certain that no one in your Lordships' House would wish to fall out with me over 10s. an acre.
On Question, Motion agreed to.

PLOUGHING GRANTS (SCOTLAND) SCHEME 1966
LORD HUGHES: My Lords, I beg to move that this Order be approved.
Moved, That the Draft Ploughing Grants (Scotland) Scheme 1966, laid before the House on May 4, 1966, be approved.—(Lord Hughes.)
On Question, Motion agreed to.

EGGS (GUARANTEED PRICES) (AMENDMENT) ORDER 1966
BARONESS PHILLIPS: My Lords, I beg to move that the Eggs (Guaranteed Prices) (Amendment) Order be approved. This is a short and, I think, simple Order, the purpose of which is to amend in one respect the Eggs (Guaranteed Prices) Order 1963. As your Lordships will recall, the 1963 Order put into effect the changes in the guarantee system for eggs sold through the British Egg Marketing Board, announced at that year's Annual Price Review. Briefly, the arrangements are that the basic rate of subsidy, which is paid to the Egg Marketing Board, is the difference between the guaranteed price and an "indicator" price which is the price which the Board might reasonably be expected to obtain if supply and demand were in balance, both guaranteed and "indicator" prices being determined at the Annual Price Review.
The 1963 Order provides, however, that the basic rate shall be subject to certain adjustments. One of these, and the one which we are discussing now, concerns what happens when the Egg Marketing Board's actual selling price for hen eggs falls below the "indicator" price. It was recognised by all concerned in 1963 that it would be desirable to phase in the new system over a period of years, and it was therefore agreed then that the Government would continue to pay a proportion, although a diminishing

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proportion over the years, of any deficiency between the "indicator" price and the Board's actual selling price. The 1963 Order specified the Exchequer's proportion of any such deficiency as 60 per cent. for 1963–64, 50 per cent. for 1964–65, 40 per cent. for 1965–66, and so on until, after the end of March 1969, the Exchequer's liability would have ceased. It was agreed, however, in 1963 that the working of the new guarantee arrangements would be reviewed during the third year of their operation, and this was done, in consultation with the farmers' representatives, as part of the discussions preceding this year's Price Review.
As your Lordships will recall, in the period since the new arrangements were introduced in 1963 there has been another important development in the egg marketing field. Following discussions between the Government, the farmers' unions and the Board, to consider what could be done to promote the more orderly marketing of eggs through packing stations and, by so doing, to bring supply and demand into better balance, it was announced in May, 1965, that the Board would introduce, on April 3, 1966, a system of contract marketing for eggs. It was recognised, during the review of the guarantee arrangements to which I have referred, that it would inevitably take some time for this new contract marketing scheme of the Board to get established and start to exert its full influence on the market. The Government therefore announced at the Review that, in order to assist the Board to stabilise producer's returns during the period before the contract arrangements could influence market prices effectively, they had decided to postpone for two years the reduction from 40 per cent. to 30 per cent. in their share of the deficiency which, under the 1963 Order, would have been made this year. In other words, during 1966–67 and 1967–68 the Government will continue to meet 40 per cent. of any deficiency, as they did in 1965–66. In 1968–69, by which time the Egg Board's new arrangements should have got fully into their stride, phasing out will be resumed. My Lords, the Government believe the change made by this Order to be in the interests of egg producers, it has the full support of the farmers' unions, and I accordingly commend it to your Lordships. I beg to move.
Moved, That the Eggs (Guaranteed Prices) (Amendment) Order 1966 be approved.—(Baroness Phillips.)
EARL FERRERS: My Lords, I thank the noble Lady for explaining this Order as lucidly as her colleagues have explained the previous Orders. The egg industry has been going through a certain degree of difficulty, and I think it is likely to go through more difficulty in the near future, not the least part of which is the adjustment which will be necessary for the new scheme by the British Egg Marketing Board for its egg contracts. Therefore I think this Order will be of help to the egg industry; it will know that at least for another two years the proportion of the deficiency borne by the Minister is not going to be reduced to quite the same extent as was originally proposed. But I am bound to say this. When the noble Lady, or perhaps I should say her right honourable friend, next produces an Order, I wonder whether she could persuade him to make things slightly more clear and less highly complicated both to the farmer and to the producer of eggs. This has really become an economist's heaven, because we have "indicator" prices, selling prices, deficiencies borne by the Minister and by the Egg Marketing Board; and it really becomes almost impossible for any farmer or egg producer to know whether his product is wanted or not and whether the final return to him is likely to be high or low.
When one looks at what is called the "Explanatory Note", it is difficult to decide what it is explaining, because it says:
"The reduction in the proportion of the difference to be borne by the Minister if the Board's average selling price is lower than the indicator price …"
and so it goes on. I found I had to read it through about five times before I could understand what it was saying and what it was explaining. So I hope the noble Lady will pass on that suggestion to her right honourable friend—that he should see whether it is not possible to get the payments which the Exchequer makes bear a little more relation to the farmer and what he is required to produce.
BARONESS PHILLIPS: My Lords, I thank the noble Earl and, having spent a lot of time trying to understand the position so that I could explain it to

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your Lordships, I have every sympathy with him. I am most grateful that I have not been asked to explain the contract scheme. I will certainly pass on the comments made by the noble Earl.
EARL FERRERS: My Lords, if it is any comfort to the noble Lady, I might say that I received one of these contracts from the British Egg Marketing Board, which I think came in quadruplicate, and it was so complicated that I just put the whole lot into the wastepaper basket.
LORD SOMERS: My Lords, may I ask the noble Lady one question? Is there any possibility that in the future there will be a different guaranteed price for a battery egg from that of a free-run egg? Personally I will not touch a battery egg, and that is not merely because I object to the use of batteries, but also because of the utter tastelessness of a battery egg. As it is not unusual in most walks of commerce to have to pay more for quality, I wonder whether the noble Lady would not consider it appropriate in this case?
BARONESS PHILLIPS: My Lords, I thank the noble Lord. I also have an interest in this subject, in a different connection. Obviously I cannot at this moment give him a straightforward answer. I should think it would not be impossible to do this, but one difficulty would appear to be how to determine which egg has come from the battery hen and which from the free-range hen. We know that the label should give some indication, but this will ultimately depend on the retailer. I feel this matter will come up again in discussion in a different setting.
On Question, Motion agreed to.

CEREALS (PROTECTION OF GUARANTEES) (AMENDMENT) ORDER 1966
3.40 p.m.
LORD HILTON OF UPTON: My Lord, I beg to move that The Cereals (Protection of Guarantees) (Amendment) Order 1966 and the Cereals (Guarantee Payments) (Amendment) Order 1966, which were laid before this House on May 3, be approved. I hope that it will be for the convenience of the House if the two Orders are taken together.
The main purpose of The Cereals (Guarantee Payments) (Amendment) Order is to make two modifications in the guarantee arrangements for wheat which experience has shown to be desirable. The first modification relates to moisture content. As noble Lords are aware, the guarantee payment on wheat is made on the tonnage sold by growers and certified for payment by authorised merchants. To qualify for the payment, the wheat has to be millable. There is a long-established definition of millable wheat and this has worked reasonably satisfactorily over the years. It does not, however, deal specifically with moisture content, and it is now generally accepted, both by farmers and by the trade, that it would be desirable to lay down some maximum standard for this.
For the last two years the authorised merchants have been applying a voluntary code of practice, and the effect of this has been that wheat has not been certified as millable if the moisture content has exceeded 18 per cent. Experience has shown that this requirement works satisfactorily and, after consultation with the Wheat and Rye Deficiency Payments Advisory Committee, on which both the farming and the trade interests are represented, we feel that the time has now come when the code of practice should be made mandatory. The Order therefore supplements the present definition of mill-able wheat by providing that in addition to the existing criteria the moisture content must not exceed 18 per cent. We regard this as a reasonable maximum for the purposes of the guarantee arrangements but it has, of course, no direct bearing on the requirements of commercial users. In many cases these call for wheat of a lower moisture content.

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On the other hand, there are some commercial uses for which wheat of fairly high moisture is required. There is a growing commercial demand for rolled and flaked wheat which has to be processed damp. In this state, however, it cannot be accepted as millable, either under the current definition or under the amended definition. We must avoid a situation where wheat required for rolling or flaking has first to be dried in order to qualify for guarantee payment and then damped so that it can be processed. This is covered by the second modification which the Order makes in the guarantee arrangements. This enables a payment to be made on wheat otherwise millable but with a moisture content in excess of 18 per cent. It will, of course, be necessary to take account of the excess moisture in the payment and this will be done by basing this on an adjusted weight. This will be calculated by reducing the gross weight in proportion to the excess of moisture subject to the operation of a tolerance which will be kept under review. The detailed arrangements will be set out in amendments to the Cereals Deficiency Payments Scheme, on which we shall have the benefit of the advice of the Wheat and Rye Deficiency Payments Advisory Committee. The Committee have been fully consulted on the modifications to which the Order gives effect.
We are also taking the opportunity in the Order of correcting a purely technical error in the wording of the Cereals (Guarantee Payments) Order 1964, relating to the operation of the standard quantity arrangements. The purpose of the standard quantity mechanism is to reduce the guarantee payment in any year when production exceeds the standard quantity. The present wording, however, gives the Minister power to make a larger payment in these circumstances, and although it has not prevented him from operating the guarantee arrangements in the way intended, the Order now before your Lordships' House puts the wording right by simply transposing the words "production" and "standard quantity".
The other Order before the House amends the Cereals (Protection of Guarantees) Orders by requiring merchants to keep a record of the moisture content of the wheat they purchase. This Order, which is consequential on the Order that I have been describing, is
904
necessary for the purpose of our regular audit checks on transactions attracting guarantee payment. The Order does not go beyond what is strictly necessary for this purpose. Noble Lords will note that where the moisture content of the wheat as purchased does not exceed 18 per cent. the merchant need record no more than this. It is only when he has purchased wheat at over 18 per cent. moisture that the exact figure is relevant to the calculation of the guarantee payment; it is only in this case, therefore, that the merchant will be required to record the exact figure. I hope that I have been able to show that the provisions of the Orders will lead to useful improvements in the guarantee arrangements for wheat and I commend them to your Lordships' House for approval. I beg to move that the first Order be approved.
Moved, That the Cereals (Protection of Guarantees) (Amendment) Order 1966 be approved.—(Lord Hilton of Upton.)
EARL FERRERS: My Lords, may I thank the noble Lord again for introducing yet another agricultural Order. This is again fairly straightforward, but perhaps he would clarify two points for me. He said that the purpose of these Orders is that farmers who sell their wheat with a moisture content above 18 per cent. should not have the deficiency payment on that. What I am not clear about is whether that means that that wheat is not subject to the guarantee, or merely that the percentage above 18 per cent. is not subject to the guarantee. In other words, if the farmer sells it with a 19 per cent. moisture content, is it merely a mathematical calculation that will give him the deficiency payment, or will the moisture content have to be brought down by drying to 18 per cent. before he is entitled to any subsidy? I should be grateful if the noble Lord could explain that.
There is another point which he did touch upon, which I tried to follow but which I did not quite understand, and that is on the Cereals (Guarantee Payments) Order, Paragraph 2, sub-paragraph (b). It has this curious place where it transposes the words, and it says
"… that the standard quantity bears to the annual production"
shall in fact read
"that the annual production bears to the standard quantity."

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This is a reversal which I am sure makes sense, but it sounds in a way very fundamental, and if the noble Lord could explain it I should be grateful.
LORD HILTON OF UPTON: My Lords, I thank the noble Earl for what he said at the beginning. With regard to the 18 per cent. I would say that this is the percentage which is to be aimed at. So far as I can understand the Order, it is intended that if the moisture content is over 18 per cent. it should be brought down to the 18 per cent. before it qualifies for the payment. With regard to the other question, I quite agree that as it is in the Order it is a contradiction in words. It is very difficult to understand, and personally I cannot give the noble Earl a straight answer on this matter. I think, in all honesty, I had better get the proper definition—I quite agree it is a mixture of words—and I will write to him.
On Question, Motion agreed to.

CEREALS (GUARANTEE PAY MENTS) (AMENDMENT) ORDER 1966
LORD HILTON OF UPTON: My Lords, I beg to move.
Moved, That the Cereals (Guarantee Payments) (Amendment) Order 1966 be approved.—(Lord Hilton of Upton.)
On Question, Motion agreed to.

FERTILISERS (UNITED KINGDOM) SCHEME 1966
3.50 p.m.
LORD CHAMPION: My Lords, I beg to move that the Draft Fertilisers (United Kingdom) Scheme 1966, a copy of which was laid before Parliament on May 4, be approved. This Scheme does not involve any significant changes from the Schemes which have been approved by the House in recent years. The rates of subsidy are the same as under the 1965 Scheme and the subsidy continues to be payable on fertilisers according to the amount of nitrogen and phosphoric acid they contain, provided these are not wholly derived from organic materials, and provided the fertiliser is purchased in quantities of 4 cwt. or more for use on agricultural land, for application to crops grown on agricultural land, or for the growing of mushrooms.
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There are two main changes in the Scheme. The first is that the Secretary of State will in future pay contributions to Scottish occupiers. This change is effected by altering the definition of "the Minister" under paragraph 2, and by having a new paragraph, paragraph 9, which amends earlier Schemes to enable the Secretary of State to pay outstanding contributions after the end of the current financial year. The Department of Agriculture and Fisheries for Scotland already undertake the initial processing of applications, and this change means that that Department will assume complete responsibility for payments, thus bringing the fertiliser subsidy into line in this respect with other Schemes.
The second change is that a proviso has been added to paragraph 3, to make it clear that no contribution is payable in respect of fertilisers on which a contribution has previously been refused on the grounds that the application was submitted outside the time limit. Without this proviso there is doubt as to whether a contribution could be refused in respect of a second claim where the fertilisers were still on the farm unused after the rejection of the first application, and were nominally sold back to the supplier and repurchased by the farmer. Points such as this arise in the administration of any scheme where it becomes necessary to close a loophole which was not at first apparent, to ensure the proper and equitable administration of the scheme and to retain a proper degree of financial control.
I do not think I need trouble the House by going into detail over the minor amendments. It is perhaps sufficient to say that we have improved the wording of paragraph 4(1), and have dropped a few words which proved to be superfluous from the Schedule. The important thing about this Scheme is that it continues the fertiliser subsidy for a further year. Fertilisers have played an important part in the development of agricultural production, and I do not think anyone would dispute the fact that the subsidy, which now amounts to £30 million a year, has materially contributed to the increase in their use. In 1938–39 some 250,000 tons of plant foods were used. By 1952–53, the first year in which the subsidy applied to both nitrogen and phosphates, consumption had risen to

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830,000 tons, and it is now about 1½ million tons, six times greater than before the war and 1¾ times the 1952–53 figure. This has not been simply an increase in the use of the same sort of fertilisers. They have become more sophisticated. We have now reached the point where three-quarters of all plant food applied is in the form of compounds, and since the subsidy was introduced compounds have themselves become more concentrated, the average nutrient content now being 38·3 per cent. My Lords, I do not think there can be any doubt that this subsidy should continue, and I ask the House to approve the Scheme to enable payments to continue for a further year.
Moved, That the Draft Fertilisers (United Kingdom) Scheme, 1966, laid before the House on May 4, 1966, be approved.—(Lord Champion.)
3.53 p.m.
EARL FERRERS: My Lords, may I again thank the noble Lord for introducing yet another Order of which we on this side of the House certainly approve. As he says, fertilisers have played a tremendous part in the progress of agriculture over the last decade and longer, and we are glad to know that it is the Government's intention to carry on the fertiliser subsidy for another year. The noble Lord has explained how one or two loopholes are being blocked up by this Order. I am bound to say that I think that the gentlemen in the Ministry of Agriculture are most careful in making sure that the loopholes are blocked up, because I cannot believe that there would be many farmers involved in the type of transaction for which they have in fact made provision in this Order. But it is a good thing that such supervision and care are being taken of the way the fertiliser Scheme is administered, and we are grateful to the noble Lord for introducing it.
3.55 p.m.
LORD ROYLE: My Lords, I wonder whether my noble friend can arrange for the subsidy to be reduced when the exceedingly nasty smells which at the moment are pervading our countryside
908
are really excessive? As I drive about the countryside it occurs to me that we have around smells which are not as healthy as the less sophisticated fertilisers used in earlier days. It seems to me that this is one of the things one finds most undesirable as one goes about the countryside.
LORD CHAMPION: My Lords, I am bound to say that to some extent I agree with my noble friend. The only thing I can suggest to I.C.I., Fisons, and all the other manufacturers, is that they might consider adding a certain amount of Eau de Cologne to the fertilisers, which might help a little.
LORD BALERNO: My Lords, the noble Lord who has just spoken referred to fertilisers. The ones which have the most obnoxious smell are the organic fertilisers, not those for which the subsidy is payable. I think that this fertiliser subsidy is perhaps the most useful subsidy of all subsidies for the farmer, because the man who benefits from it most is the progressive and efficient farmer. The inefficient farmer does not buy the same quantity of fertiliser, and therefore does not benefit to the same extent. I think this is perhaps the most important subsidy the farmer gets, and in the presence of the noble Lord, Lord Hughes, I welcome the fact that this Order will give complete administration and control, right down to the payment of the fertiliser subsidy in Scotland, to his Department, the Department of Agriculture, Fisheries and Food in Scotland.
On Question, Motion agreed to.

CENSORSHIP OF STAGE PLAYS
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE, HOME OFFICE (LORD STONHAM): My Lords, I beg to move, That it is desirable that a Joint Committee of both Houses be appointed to review the law and practice relating to the censorship of stage plays.
Moved accordingly, and, on Question, Motion agreed to.

VETERINARY SURGEONS BILL [H.L.]
3.58 p.m.
Order of the Day for the Second Reading read.
LORD CHAMPION: My Lords, I am sorry once again to have to inflict my voice on the House to-day. I beg to move that the Veterinary Surgeons Bill be read a second time. I do not need to remind your Lordships that the purpose of this Bill is to bring into one enactment, with modifications, the legislation at present in several Acts governing the Royal College of Veterinary Surgeons and the veterinary profession. This Bill is the Veterinary Surgeons Bill as amended on the Report stage in the last Parliament, and I do not think I need go into any further detail about it, except on the constitution of the Council and on Schedule 3.
Your Lordships will remember that on the Report stage in the last Parliament I gave an undertaking that I would ask the Minister to have another look at the constitution of the Council. The opportunity afforded by the Dissolution of Parliament was taken, and the interested bodies were consulted. The Councils, both of the Royal College of Veterinary Surgeons and of the British Veterinary Association, have recommended that the number of elected members under Clause 1(1)(a) should be increased from 20 to 24. The Minister has not accepted this recommendation, and I should like to give you his reasons.
In the first place, I must make it quite clear that the purpose of this Bill is to protect the public and not the veterinary profession. While the views of the veterinary profession, therefore, are undoubtedly of importance and must be carefully considered, the profession is not in a better position to judge public interest than the Government. This Bill, and indeed the Act of 1948, are aimed at protecting the general public against veterinary practice by persons who are unqualified or otherwise unfit to practise veterinary surgery. This is done in the first place by prohibiting the practice of veterinary surgery by persons not on the Register or the Supplementary Register. But this is not sufficient. Positive action has to be taken to ensure that every person admitted to
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the Register is fully qualified and that while on the Register he conducts himself in accordance with professional standards. The Royal College has therefore been charged with the duty of supervising education so as to ensure that new entrants to the Register are fully qualified, and it is also charged with the duty of supervising through its disciplinary procedure the actions of persons already on the Register.
These two functions of the Royal College are almost identical with the functions of governing bodies of the medical, dental and related professions. In these cases the governing bodies, while consisting mainly of professional men, have a majority of appointed members. We could, of course, in 1948 have followed the same pattern and appointed a governing body for the veterinary profession, but the Royal College was in existence. The profession is a comparatively small one and it seemed unnecessary to create a new body for this purpose. The Royal College was therefore charged with these duties. The College is, of course, still an examining body in its own right, although since 1948 its work in this respect has been considerably curtailed by the substitution of certain universities for the College as the examining bodies for qualifying degrees in veterinary surgery. Nevertheless, because the College is still a College, it was considered right that there should be a majority of elected members, but not a substantial majority. Therefore provision was made for what the noble Lord, Lord Drumalbyn, in the course of the discussions, recently called "a bare majority". The Minister has therefore decided that this position shall be maintained.
This decision is a compromise between the principle that the governing body of a profession such as this should consist of a majority of nominated members, and the tradition that a college established by Royal Charter should be self-governing. Like all compromises it is open to attack on both sides. A further consideration is that the Council is a large one—41 members—not very much smaller than the General Medical Council dealing with a profession over ten times as large. If there were to be a change in the constitution it might be thought proper to reduce numbers rather than increase them. I hope, having given these explanations, that your Lordships will accept the Bill as it stands.

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There are one or two further points I should like to bring out. Some criticism has been made of Schedule 3, and in this Bill the Ministers are given power to amend the Schedule by Order, subject to the Affirmative Resolution procedure. After the Dissolution of Parliament, discussions were started with interested organisations and these are proceeding. It is improbable that they will be completed in time to enable us to amend the Schedule here, but there will be no delay in introducing an Order amending the Schedule as soon as possible after the Bill receives the Royal Assent and after the completion of these discussions. I do not think there is any need to say any more. The Bill is a useful measure, and I have no hesitation in commending it to your Lordships for a Second Reading.
Moved, That the Bill be now read 2a—(Lord Champion.)
4.5 p.m.
LORD DRUMALBYN: My Lords, once again I am grateful to the noble Lord, Lord Champion, for having introduced this Bill, which is quite an old friend now. As he had said, the Bill is reintroduced by the Government in exactly the state in which it was when your Lordships had finished dealing with it on the Report stage in the last Parliament. The noble Lord will not be surprised when I say that that has come as a disappointment, not only to me, but to the veterinary profession. The one change that the profession hoped would be made was in the representation of the profession elected by the profession to the Council of the Royal College.
On a Council of 41 the number of members of the Council elected by members of the College residing outside the Republic of Ireland is at present 20. The Amendment which I moved on Report stage would have increased the number from 20 to 24. That, incidentally, would have restored the balance between elected members, on the one hand, and members appointed by the Privy Council and by universities, on the other, to roughly what it was in the Council when constituted by the Veterinary Surgeons Act 1948, without the addition of the Republic of Ireland members—that is, about 5 to 4. The noble Lord was good enough to say, in reply to my Amendment on Report
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stage, that it had come to his notice that on this point there still exists a measure of objection to what is contained in the Bill, and he said that it is a large measure of objection. He kindly undertook to see the Minister of Agriculture himself and bring to his attention what my noble friend Lord Balerno and I had said in the debate and what he had heard elsewhere. That, I know he has done.
What makes me all the more disappointed that the Bill is unchanged is that, as the noble Lord has mentioned, since then the Royal College itself has had an opportunity to reconsider the matter and has expressed itself in favour of the change by a majority of 2 to 1. I am told that there were absentees, and I do not think it would be worth while laying any stress on the views those absentees would have expressed had they been there, but the fact is that the majority was about 2 to 1 of those who were present. In these circumstances, I do not propose to go over the arguments in favour of the change, but I give notice of my intention to put down Amendments on the Committee stage to increase the number of elected members in Clause 1 from 20 to 24, and to provide that after the next election, at which nine members would be elected, six should retire annually instead of five. There would be conditions about the drafting of the provisions in Schedule 1 dealing with the transitional stage, getting on to a system where six retire annually from one where five retire annually. That is a matter which we can examine when we come to it.
At this stage I would only say this. The noble Lord has referred to reasons why he thinks the change should not be made. Considering that the cost of the Council is defrayed by members of the profession and that the profession is in favour of this small increase in the number of members of the Council, I would ask: is it reasonable, whatever members of other professions may think proper for their governing bodies, that Parliament should go against the wishes of this profession and refuse to allow the change to be made? The noble Lord has said that the profession is not in a better position to judge the public interest than is the Government But it has to be remembered that the Privy Council has

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power under the Bill to override the Council of the Royal College. Under Clause 22 it is given default powers. Furthermore, if the Bill is intended purely to protect the public, then one would have thought it would be proper for the expenses of the Council to be defrayed by the Government.
The noble Lord says quite rightly that in a case like this one has to reach a compromise, but he himself admits that there is a bare majority of elected members. What the profession wants is an effective majority, a majority that they can count on being a majority at every Council meeting. This is what they think would be right. I am not going to argue this case in detail now, but I am bound to say that it is right to consider that where the public interest has to be protected the veterinary profession itself should do that protecting, because the vast majority of the Council, whether elected or not, are drawn from the veterinary profession. So one is bound to take the view that this is a self-governing statutory body of the profession, entrusted with the duty of protecting the public interest. That is the position, and what the profession is asking is that in a democratic system such as ours that body should have an adequate majority of elected members.
The forerunner of this Bill was very much improved during the stages through which it passed in your Lordships' House in the last Parliament. At this stage I would only ask: is it too much to hope that in this Parliament we can improve it still further, and make it acceptable to the veterinary profession in this country as a whole, and more in consonance with democratic ideas?
4.13 p.m.
LORD BALERNO: My Lords, I should like to congratulate the noble Lord, Lord Champion, on introducing this Bill once again, and to assure him that we do not get tired of his politically mellifluous voice. It is always a pleasure to hear him, though one is sometimes led away by his persuasiveness.
I rise to support the noble Lord, Lord Drumalbyn, in what he has said about the Government's not seeing fit to make this Bill rather more democratic. It is, in fact, entrenching a vested interest, the vested interest of old age, which is perhaps one of the worst of them all. Who in
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this profession is opposing an increase in the size of the Council of the Royal Veterinary College in this manner, an increase in the proportion of elected members? Certainly not the British Veterinary Association. Nor the Association of Veterinary Teachers and Research Workers, who have also come out very strongly in favour of this enlargement. And, as the noble Lord, Lord Drumalbyn, has pointed out, the Royal College of Veterinary Surgeons itself is, by a two to one majority, in favour of an increase. The only person who can possibly be objecting and preventing this increase from taking place must be the mythical Mr. Jorkins, under the misconception that he is protecting the public. How a predominance of old gentlemen on the Council of the Royal Veterinary College can be a better protection to the general public than an enlarged Council consisting of more young men, beats me completely. If you want to avoid protecting the public, then you keep a small number on the Council and they will keep the status quo and the dignity of the old profession.
I should like to draw the attention of the noble Lord, Lord Champion, to something that happened in another place recently during the passage of the Universities (Scotland) Bill. In the Committee there were very indignant speeches, very forceful speeches, made by a number of the noble Lord's friends—they came largely from Clydeside—for the inclusion in the courts of the ancient universities of a number of lecturers of the universities, men of the junior staff. This was an innovation put forward with all the force which those from that part of the world traditionally have; their Motions were carried, and two members of the junior staff of each of the old Scottish universities will sit on the court of each of the old Scottish universities. I should like to warn the noble Lord that, if this Bill goes down to the other place for consideration in its present state, it is bound to meet with a great deal of hostility on this point. It would be very much better if he were to get the Bill properly into order in this House, so that it can have an easier passage in the other place where there is, perhaps, greater pressure of business. It might be rather politic of him were he to think this matter over.

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There is, furthermore, unfortunately, a growing impression that the veterinary profession consists of two entities—the academic and the practitioner. The present constitution of the Council of the Royal Veterinary College provides, perhaps, one of the reasons why this impression has grown up. Therefore an increase in the size of the Council, in the number of elected members, would help towards the lessening of this division. The veterinary profession is an important profession and it must be made dynamic, but if there are a lot of old fuddy-duddies with an interest in the status quo, using all the guile that old men have to keep it so—and I speak as an old man myself—we shall not have the profession as dynamic as it could be.
The noble Lord, Lord Champion, compared the numbers of the veterinary profession to the numbers of the medical profession in this country. It is not numbers that matter; it is the geographical distribution that matters, and the geographical distribution is much the same Unfortunately, there is a degree of schizophrenia on this subject. There are the dual functions of the College, control of the profession and control of the teaching instruction, and there are also the dual entities of the profession. If this Bill goes forward, both of those aspects of schizophrenia in the profession will be continued. If, on the other hand, there is an increase in the number of elected persons, then I think it will lead to a more united profession and one that will be more progressive and more forward-looking. I therefore hope that the Government will reconsider this point, and will themselves put forward an Amendment when the Bill comes up in Committee.
I must now ask your Lordships' pardon if I return to the matter of an Amendment which I raised when the earlier Bill was in Committee; that is, why fish are not included in the new Bill. I attended a meeting of the Parliamentary and Scientific Committee on April 26, when the Committee were addressed by Sir Frederick Brundrett, who is the chairman of research and development in the White Fish Authority, and also by Dr. H. A. Cole, the Director of the Fisheries Laboratory of the Ministry of Agriculture, Fisheries and Food. Both addresses
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were most interesting, and both of them forecast that fish farming would be taking place in the future and might develop in this country in the not distant future.
When the noble Lord, Lord Champion, was disputing my Amendment (and it is to fish farming, as distinct from catching a wild fish, that I am referring), he said, referring to the definitions of "animals" and "veterinary surgeon", that they
"… are not primarily intended to show what veterinary surgeons may or may not do. They are intended to make quite clear what other people, however well qualified they may be in their occupation, cannot do."—[OFFICIAL REPORT. Vol. 272 (No. 35), col. 1013; 15/2/66.]
So I think the point made against my Amendment was based on a misunderstanding. The noble Lord, Lord Champion, continued:
"If fish were to be included in the definition of animals, it would mean that the various fisheries scientists of the fishery laboratories and aquaria would be unable to treat fish, diagnose disease in fish, or give advice about disease or treatment of fish …"
I am not quite certain that the noble Lord was entirely correct in saying that. He could charm the hind legs off a donkey, and certainly at that time he charmed the hind legs right off me, and I withdrew the Amendment. But suppose that, some fifty or sixty years ago, this attitude had been adopted towards the veterinary profession in relation to birds. There was then practically no work being done by veterinary surgeons in relation to birds, and it would have been perfectly proper to exclude birds. To-day, the veterinary profession plays a big and important part in the poultry industry, but it has not affected in any way the operations of those who are dealing with birds in wild life, with pheasants or grouse.
It has not affected the zoologists who treat grouse for the grouse disease, and it has not affected ornithologists on Fair Isle who take and look after birds that have broken legs or other injuries. The other scientists who are interested in birds have been in no way inhibited by the fact that the veterinary profession have been given the right to look after birds. Therefore, if fish are included in this Bill, I cannot possibly see how it will affect the operations of those zoologists and other biologists who have already been doing such excellent work with fish, almost entirely with the wild

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fish, and why they cannot go on with their work.
There is another point. If fish are excluded, why are reptiles included? Much more veterinary work is being done on fish than on reptiles, and there is a much greater likelihood of intensive fish farms coming in this country than there is of intensive snake farms. Moreover, my Lords, there is the Brambell Report on the husbandry of animals under intensive systems. It is quite clear from that Report that, if any action is taken upon it, it will be for the veterinary profession, in the first instance, at any rate, to draw attention to the malpractices which are alleged. It would be quite as possible to have malpractices in fish farming as it is to have malpractices in intensive poultry farming, and it would be perfectly logical and sensible that the veterinary profession should be authorised to look after and protect the fish farms, as well as the poultry farms.
Science knows no boundaries, and scientists have no demarcation disputes. They come and go in their various subjects, as they overlap, without any marked friction; as from the zoologist to the botanist, to the medical man or to the veterinarian. You find many veterinarians working in medical labs. On the other hand, you find doctors of medicine working in veterinary labs, or working on animal husbandry experimental farms. There is a perpetual and continuous exchange, and until now nobody has ever thought that, because the veterinary profession was charged in that Bill with looking after these animals, it excluded the scientists from also operating in that field. There never has been a dispute, so why should we start to think there could be a dispute now?
I cannot understand why the Government should be so unenlightened in these matters, and why they should be so against progress. Why, again, should they be in favour of the vested interests of the few fish scientists who are located in the Ministry of Agriculture, Fisheries and Food? I think that there is every justification for having this as a tidy Bill. All the history of animal legislation in this country has, in the legislation, kept fish with vertibrates, and at the Committee stage I am certainly going to move that the definition of "animals" excludes invertebrates—that is, as it is in the
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famous Cruelty to Animals Bill of (I think the date is) 1858—the anti-vivisection Bill. That definition, that "'animals' excludes invertebrates", means that "animals" includes the whole of the rest of the animal kingdom except man himself.
I certainly hope that the noble Lord, Lord Champion, and his advisers will take another look at this question. It is a small matter, but I think that in the interests of tidy, logical, scientific legislation the fish should be included and not specifically excluded, as they are in the Bill as it now stands. I ask that, here again, the Government should free themselves from their interest in these vested interests.
4.29 p.m.
LORD SOMERS: My Lords, I should like to thank the noble Lord, Lord Champion, for having reintroduced this Bill; and, like my other two noble friends, I would say that I certainly never get tired of listening to him. But I would join with them in their protests about the Government's attitude towards the constitution of the Council. I think there is a slight tendency on the part of the Government—and I am not speaking merely of this Government—to forget that the professions think, and I believe think not unreasonably, that they are likely to know best about the problems concerning their own profession. I hope that the noble Lord will be able to persuade his right honourable friends to realise that their opinion is really to be taken seriously. However, I should like to thank the noble Lord very much for having given what I feel is a rather faint gleam of hope about Schedule 3. I am sorry that it has not taken a more concrete form up till now. I sincerely hope that he will do his best to urge those responsible to get on with the investigations into this problem as soon as possible.
4.30 p.m.
LORD CHAMPION: My Lords, I am grateful to all noble Lords who have spoken on this Bill. We have had throughout its every stage some first-class advocacy by noble Lords on this very difficult point of the constitution—the size of the Council and its general make-up. I am bound to say—I told the noble Lord, Lord Drumalbyn, this and he

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has mentioned it to-day—that I saw the Minister about this matter, as I promised, and put before him as forcefully as I could every point that was made concerning it in the debate, and I asked him to give it exceptional consideration. In addition, I accompanied my right honourable friend when a deputation from the British Veterinary Association met the Minister last Thursday, when the point was made, I think strongly, that the Royal College had decided 2 to 1 in favour of the Amendment proposed by the British Veterinary Association.
The Minister at that point said that he would carefully consider the point put by that delegation. Up to now I have not heard his final decision; so it is not possible—though I had thought it might have been—for me to make some pleasant noises to-day in this connection. I am not promising now that such pleasant noises will be forthcoming; I had merely supposed that if the Minister had changed his mind between Thursday last and to-day (and clearly the decision is his) I should have been able to make an announcement to-day.
We have been advised by the noble Lord, Lord Drumalbyn, that if I did not do so myself he would put down an Amendment at a subsequent stage. I am not at all surprised that the noble Lord threatens me with this, as does also the noble Lord, Lord Balerno. I can understand it because they have been so keen about this matter. But I must say to the noble Lord, Lord Balerno, that I cannot quite see why the proposal in the Bill should lead to a lot of old gentlemen, fuddy-duddies, sitting in the Royal College. After all, apart from the 20 persons who are to be elected by the profession, there are four to be appointed by the Privy Council; and I should not like to accuse the Privy Council of appointing fuddy-duddies and old, decrepit gentlemen to a College of this sort. And the universities, too, are involved here. I should hope that the universities would not appoint fuddy-duddies, just to be rid of them for the short time that this College actually sits. But one never knows. This is a point that the noble Lord made. I am sure it will be taken into consideration by those people who appoint on behalf of the Privy Council, and by the universities.
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The noble Lord also said that it seemed as though we, the Government, were in this Bill driving a wedge into this profession and forcing a division between the academics and the practitioners. I do not think the noble Lord can be right about that. I should have thought that if any division were being forced in this connection it was being forced by those very people who have from time to time put down the Amendment to alter the constitution of this Council, because they say: "After all, there is a big division between us, the practitioners, and the other people appointed in another way". I cannot quite accept this. This is a point which I am sure we must return to at a later stage.
I am sorry that I have not been able to carry the noble Lord, Lord Balerno, with me on this business of the mention or non-mention of fish in the Interpretation Clause. There is nothing at all in this Bill to prevent any veterinary surgeon from specialising in fish and in fish treatment. All it says is that we are not going to make it an absolutely exclusive province of the veterinary surgeon. I should have thought that this was not too bad. In any case, judging by what I know of the noble Lord's persistence, we shall have to return to this again at a later stage.
LORD BALERNO: My Lords, I am interrupting at this present moment. The veterinary profession has no exclusive rights over poultry, quadrupeds or mammals. Is the inference being made by the Government that the inclusion of fish in the Bill would give the veterinary profession exclusive rights? They have not got exclusive rights at the present moment.
LORD CHAMPION: My Lords, I shall have to go into this matter again, and I will, of course, talk to the noble Lord about it. It seems to me that we are a little at cross purposes. He seems to be saying something that I do not understand, and I seem to be saying something that he equally does not quite understand. Most of these are points that we shall have to discuss at a later stage, and I hope, meanwhile, that your Lordships will be prepared to give the Bill a Second Reading.
LORD BOOTHBY: My Lords, speaking on behalf of the Liberal Party for the moment, may I ask the noble Lord whether he considers that just because you are old you are necessarily a fuddy-duddy?
LORD CHAMPION: My Lords, I am very old myself; and I will not accept for one moment that an old man is necessarily a fuddy-duddy.
On Question, Bill read2a, and committed to a Committee of the Whole House.

MISREPRESENTATION BILL [H.L.]
4.37 p.m.
Order of the Day for the Second Reading read.
THE LORD CHANCELLOR (LORD GARDINER): My Lords, the law of misrepresentation has been the subject of criticism for some years. As your Lordships know, under the existing law if a man is induced into a contract, such as a contract of sale, and he is so induced by misrepresentation by the vendor, his remedies are limited to two: he can rescind the contract but only if it has not been performed—and he may have committed himself to liabilities on the strength of the contract—and, secondly, he is entitled to damages if, but only if, he can prove the misrepresentation was made fraudulently. This is not easy for him to do, because he does not know what the knowledge of the vendor was and, in any case, the burden of proof of fraud is naturally very high.
It was in these circumstances that in January, 1959, the noble and learned Viscount, Lord Kilmuir, asked the Law Reform Committee to consider this problem. The Law Reform Committee did so; and reported in July, 1962—now four years ago. I was a member of the Committee myself at that time, but all the other members of the Committee were singularly distinguished. They included the noble and learned Lord, Lord Jenkins, the noble and learned Lord, Lord Pearce, the noble and learned Lord, Lord Donovan, Lord Justice Diplock, Mr. Justice Ashworth, Professor Goodhart, Professor Sir David Hughes Parry and Professor Wade. Their Report was a
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unanimous one; and the object of this Bill is to implement that Report.
The way in which they themselves put the existing criticisms was as follows. They said in paragraph 2 of their Report:
"We have been impressed by the fact that there is extensive criticism of three aspects of the existing law. First, in the majority of the memoranda we have received the restrictions on the right to rescind a contract on account of misrepresentation are attacked as being too stringent, although opinions differ as to the extent to which rescission should be made easier; secondly, there is an almost unanimous demand for a remedy in damages, either in addition to, or in lieu of, rescission; thirdly, it is said by those speaking from practical experience of sales and other commercial transactions that there ought to be some curtailment of the freedom to exclude liability for misrepresentation by a provision in the contract in cases where the parties are not bargaining as equals."
To these criticisms must be added others of a more technical character.
My Lords, this Bill implements the recommendations of the Committee under five heads. First, it extends a party's right to rescind a contract induced by innocent misrepresentation. Secondly, it confers on a party to such a contract a right to recover damages where the misrepresentation was made negligently and has caused him loss. Thirdly, it empowers the court to award damages instead of ordering rescission of the contract. Fourthly, it limits a party's right to exclude by contract his liability for misrepresentation. Fifthly, it amends the Sale of Goods Act 1893, so as to extend the buyer's right to reject goods which do not conform with the contract.
First of all, on the right to rescind, the rule is at present that if "A" enters into a contract with "B" as a result of a statement made by "B" which is untrue but is not made a term of the contract, then once the contract has been executed, "A" is bound by it unless he can prove that "B" made the statement fraudulently, that is to say, knowing it to be untrue. The operation of this rule outside the field of contracts affecting land rests on a High Court decision which although frequently criticised and sometimes doubted is, nevertheless, followed, a case called Seddon v.The North East Salt Company Limited. The most frequent occasions for criticism of the rule have been cases where somebody has bought a piece of fairly complicated

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machinery, like a motor car, where the non-technical buyer of the car is unlikely to notice technical defects until after he has taken delivery, and by that time he is too late to obtain a rescission. The view formed by the Law Reform Committee was that the rule in the Seddon case was unsatisfactory and works injustice, and they thought that authough there is a distinct possibility that the rule might not be upheld by the appellate court, it would be better for it to be abrogated now by legislation. Paragraph 9 of the Report reads as follows:
"However, whatever its merits in law, the rule in Seddon's case is to-day generally accepted and acted upon. Even if, as we think, it is not impossible that the rule may yet be held by the Court of Appeal or the House of Lords to be without foundation, it cannot be right to leave a matter of such everyday importance to be settled by the accidents of litigation. In our view it should be provided by statute that (except in the case of those contracts for the sale or other disposition of any interest in land to which we have already referred) the fact that a contract has been executed should not of itself be a bar to proceedings for rescission."
Clause 1 of the Bill therefore implements this recommendation, together with a recommendation in paragraph 16 of the Report, that rescission should not be barred by the subsequent incorporation of the misrepresentation in the contract. It provides that neither such incorporation nor performance of the contract should by itself be a bar to rescission. Other bars are not affected. That is the substance of Clause 1 of the Bill.
If I may now come to damages for misrepresentation, which are the subject matter of Clause 2, the second main ground of criticism of the current law, as I have said, is that the victim of a misrepresentation has no right to recover damages for consequential losses unless the misrepresentation was either incorporated in the contract as a term or was made fraudulently. The harsh operation of the rule may be illustrated by a case where the plaintiffs, who were breeders of prize poultry, were induced to take a lease of property by a misrepresentation that the premises were in good sanitary condition. This misrepresentation was not made a term of the lease and was in fact untrue, although it was not made fraudulently. As a result of the in-sanitary condition of the premises, the
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plaintiffs suffered severe losses. Their manager fell ill through poisoning; their stock either died or was made valueless, and they lost their profits on potential sales.
The Law Reform Committee, at paragraph 17 of their Report, refer to the evidence they received in criticism of this aspect of the law. Even when fraud may be strongly suspected, it is difficult for the other party, more usually I suppose the purchaser than anyone else, to bring this home to the vendor; and, of course, if he takes proceedings in a hazardous case he may have to pay the costs. So the Committee's conclusion was that in this respect current law does not provide the victim of a misrepresentation with an adequate remedy. On the other hand, the Committee did not think, that every such victim should be entitled to damages irrespective of any fault on the part of the representor. Their recommendation was that it should be a defence for the representor to prove (the burden being on him) that he believed the representation to be true and that this belief was founded on reasonable grounds. In other words, if neither party was at fault, the loss should lie where it fell. And this is the recommendation which is now implemented in Clause 2(1) of the Bill.
I now come to damages as an alternative to rescission. The Committee recommended that a discretionary power should be conferred on the court to award damages in lieu of ordering rescission where damages would afford adequate compensation to the victim of an innocent misrepresentation, whether it was made negligently or not. They thought that there would be a number of cases where the remedy of rescission might be too drastic in the circumstances. This is the recommendation which is implemented by Clause 2(2).
I turn to exclusion of liability. This was the third main ground of criticism of the current law, that the representor is entirely free to exclude any liability for misrepresentation by inserting a term in the contract to that effect. The Committee thought that the modern tendency to have contracts in standard forms made this factor particularly important. Standard forms are often used where one party is in a much stronger bargaining position than the other, and the presence of a comprehensive clause excluding liability

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would go a long way to nullify the effect of the other reforms proposed by the Committee. The Committee's conclusion was that it would not be possible to exclude by contract liability for negligent misrepresentation. In the Committee's view the victim ought to be able to exercise the right both to rescind the contract and, where appropriate, to claim damages for consequential losses, unless the representor could show that up to the time the contract was made he had reasonable grounds for believing the misrepresentation to be true. This is the subject matter of Clause 3.
I come now to the amendments to the Sale of Goods Act 1893. If the principal recommendations of the Law Reform Committee were implemented, the change in the law would have repercussions on the Sale of Goods Act. One result of amending the law relating to misrepresentation in the way suggested by the Committee would, if the Sale of Goods Act were left as it is, be to put the buyer of goods in a better position if the relevant misrepresentation were not a term of contract than if it were. This result would be anomalous. Moreover, the provisions of the Sale of Goods Act in question (namely, those which restrict a buyer's right to reject defective goods) have been independently criticised and are described by the Committee as unsatisfactory. The Committee accordingly suggested that the Act should be amended so as to meet these criticisms and to make it consistent with their proposals for amending the law relating to misrepresentation. Clause 4 implements this suggestion. Its effect is, briefly, that prima facie the buyer of goods will not lose his right to reject them for a breach of condition until he has had an opportunity to examine them, notwithstanding that they were specific goods the property in which was transferred to him on completion of the contract, or that he has dealt with them before the opportunity for examination arose.
I think I ought to say a word here about hire-purchase contracts. The Committee recommended that where the negotiations for hire-purchase contract are conducted by a dealer, he should, in spite of any agreement to the contrary, be deemed to be the agent of the "finance company"—that is to say, the party financing the deal who actually makes
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the agreement—for the purpose of any representations about the goods. The Committee recommended, as a consequence, that the finance company should not be able to exclude liability by disclaiming the dealer's authority to make the representation. These recommendations have, in substance, already been implemented by Section 10 of the Hire-Purchase Act, 1964, now superseded by Section 16 of the Hire-Purchase Act, 1965. That is the reason why there is no reference in the Bill to those recommendations of the Committee. The Bill does not apply to Northern Ireland or, apart from the consequential amendment made to Section 35 of the Sale of Goods Act, to Scotland.
In moving this Second Reading, I think I ought to say an additional word on two further points. As I have said, Clause 3(1) implements the recommendations of the Committee with regard to the avoidance of exclusion clauses. It is quite clear from the Report itself that what the Committee had primarily in mind were cases where the parties are not in an equal position, and, in particular, where there is some standard form of contract. What is now Clause 3(2) was not in the Bill when it was in Committee in another place in the last Parliament. But the Confederation of British Industry have drawn attention to the fact that there are cases where this might operate some hardship. There are cases, involving contracts for very large plants, or for machinery, where the contract was preceded by long negotiations between people of an equal bargaining strength, and where the precise matters for which the plant was being provided may have been carefully negotiated. The Confederation felt that in cases of this kind it would not be difficult for a purchaser to get on its feet an argument that he had been misled by some oral representation made in the course of negotiations about the performance which might be expected from the plant, notwithstanding the fact that the guaranteed performance provided for by the contract itself was more restricted.
If such a claim were pressed—and I think they have particularly in mind cases where large British contractors contract to provide large plants for overseas customers—the foreign purchasers might be particularly liable to take advantage of such an opportunity. The manufacturer would be faced with a claim for rescission

927
or for damages which would not be limited by the terms of the contract. They readily recognised the need for Clause 3(1) in the context of the ordinary contract for the sale of consumer goods, but they argued strongly that the position was entirely different in the case of contracts negotiated at arm's length of the kind to which I have referred.
The Government considered these arguments, and came to a conclusion that it would be possible to amend Clause 3 in a way that would meet those objections without seriously weakening the effect of the clause. Subsection (2) has accordingly been inserted in the Bill, in order to give effect to that decision.
The final point to which I should refer is this. The Committee themselves recommended that the changes in the law which they were advocating should not apply to contracts for the sale of land. This exclusion was very much criticised in Committee in another place, from all sides, primarily on the ground that it was very often contracts affecting land which, in practice, involved a purchaser or tenant in considerable losses as a result of misrepresentations to him, though he was unable to establish fraud. The Committee took the view that finality was desirable in contracts relating to land; that the parties had usually every opportunity of making their own inquiries or surveys; that it was peculiarly a case in which both parties had probably already acted, either by somebody wanting to marry the sale of one house with the purchase of another, or by the raising of a mortgage.
Consultation has taken place between the Government and bodies who have great experience of contracts relating to land—the Chartered Auctioneers' and Estate Agents' Institute, the Royal Institution of Chartered Surveyors and the Law Society—and all three bodies express themselves as being in favour of keeping this subsection (that is to say, Clause 1(2)) in the Bill, excluding contracts relating to land.
It appears to me that there is a good deal to be said on both sides on this point. I think perhaps the strongest argument of those who would be in favour of omitting this subsection—that is to say, applying the change in the law to contracts relating to land, like
928
any other kind of contract—is this. They say it is quite true that in many cases, probably in most cases, a court cannot order rescission because there would be a mortgage, or things would have been done which would make it impossible to restore the parties to the status quo;but why is that an argument for not giving the court power to do so if the case arises in which it is possible to restore the parties to their previous condition? None of this, of course, contains any Party political points at all. I can only say, so far as the Government are concerned, that I should wish to be guided by the views of the House, and particularly perhaps by the views of noble and learned Lords, as to where they think the balance of advantage would come.
I am glad that after four years Parliamentary time has been found to implement the recommendations of the Committee. I know from experience that when one is a member of a Committee one gives up a great deal of time, and it is rather disappointing when no Government seems to be able to find Parliamentary time to give effect to the views which have been expressed. Law reform is sometimes thought to be a dull subject, but, as all your Lordships know, everyone is affected by the law. The object of these reforms, after all, is not in any way to help the lawyers, but to help people who it is felt have not had in the past certain remedies which they ought to have had. My Lords, I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a.
—(The Lord Chancellor.)
4.59 p.m.
VISCOUNT COLVILLE OF CULROSS: My Lords, as the noble and learned Lord the Lord Chancellor has said, this Bill implements, with one omission and one addition, both of which have been explained, the recommendations of the Law Reform Committee in its Tenth Report. The noble and learned Lord could not say so himself, but I think I may say that he is among the distinguished members of that Committee. I am sure it is entirely welcome that the provisions of this Bill have now been brought forward. Of course, it is an extremely technical Bill, as anybody who begins to read it will see. While agreeing, I hope, with all the principles in it, I think the duty of the House

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is to see that, in a matter which must clearly be one where translation into Bill form is very difficult, the recommendations of the Committee have been put into the proper legislative language. And, of course, there are one or two other matters which clearly will need discussing.
Subsection (1) of Clause 1 needs little comment after the explanation the House has just heard, except, perhaps, to underline that the field is now not open for all possible circumstances to lead to rescission, because. as the noble and learned Lord said, the existing restrictions and bars other than that specially removed by this subsection still remain: plaintiff's delay, the change of circumstances which makes restoration of previous position impossible, and, of course, the ordinary rules of limitation.
When we come to subsection (2) of Clause 1, there is this difficulty about land. As was said, this was considered and discussed for a great length of time in Committee in another place in the last Parliament, and, as I understood it, the principle that was then acceptable to the Government was that it might be possible to modify the present form of this subsection by allowing rescission to take place, except upon matters of title. I do not know whether the noble and learned Lord could comment on that subject a little later. But there is this difficulty, as I understand the Bill: it is not only a question of rescission that is involved here, and from which all transfers and interest in land except for short leases are now excluded, but subsection (2) of Clause 2 hangs upon the right to get a rescission of the contract. Therefore it would not be possible for the court to give damages in lieu of rescission in the case of land—that is to say, under that subsection, which they would ordinarily be able to do in the case of any other contract. As I understand it, the tortious remedy which is being introduced by Clause 2(1) still remains available in the case of land. There is, however, the other remedy, which does not depend upon any proof of innocent misrepresentation in the circumstances required for subsection (1) of Clause 2. It may well be that some sort of damages in contract ought to be awardable in the case of land as well. No doubt this point could be discussed at a later stage of the Bill.
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Clause 2, on its face, appears to be very difficult. I imagine that the problem is that one wants neither to refer specifically to the tort of deceit, nor to set out in statutory form the tests that are required to prove it. This is why there is the analogy to the fraudulent misrepresentation case, which has previously been the only remedy in tort for this state of affairs. Again, this matter led to a great deal of discussion in Committee in another place, and it emerged quite clearly that what is being provided in this subsection is a completely new tort with a remedy in damages accordingly.
As I have already indicated, there are two ways in which one can get damages under Clause 2 as a whole: first of all, in lieu of rescission, and, secondly, for the tortious claim. These two in subsection (3) are inter-related in terms of the sum actually received in the end. The analogy with fraud in subsection (1) seems to me to be a little complicated, and I hope I have it right. It does not, I think, mean that you must use the rules that now prevail for fraud in order to see whether or not there was an innocent misrepresentation under the Bill. It is not, of course, negligent misrepresentation, which is the way the Law Reform Committee described it, because, as I shall show in a minute, the test for the defence is not a matter of negligence. Rather the analogy is one of drafting, which puts a label on the circumstances.
Therefore, we are not going to run into the sort of peculiar difficulties which arose in cases like Armstrong v.Strain, which was much discussed in another place, where the point was that there were two or three persons involved and you had to decide whether you could (add up the knowledge they all possessed to see whether this constituted fraudulent knowledge for the purposes of the tort. Rather the analogy is simply used to suggest that all you have to do for the new tort, as I understand it, is to prove three out of the four elements which are necessary for the existing tort of deceit. In other words, the false statement of fact, which need not now he fraudulent; the intent that it should be acted on, and the fact that the plaintiff has acted on it and (or partly because of it) has suffered damage.

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I believe, all the same, that subsection (1) may be a fruitful field of litigation for some time, because while the Bill lays down—at least, I hope it lays down—that principle, the detailed application of it will be left for the courts to work out. For instance, the whole field of the rules relating to agency and master and servant will have to be worked out afresh, as I understand it, because there is really no precedent for this type of situation. The only precedent is the situation in fraud, which will not apply. Secondly, there is a difficult point, I think, under the defence which is laid down in this subsection, because it does not seem to me that the defendant is going to be held to what would be the ordinary rules in negligence: in other words, the objective test of what was the reasonable ground that he had for believing at the time that he made the contract that the facts represented were true. But there would be some sort of subjective test under this wording in which different defendants, perhaps with different degrees of intelligence, may be able to rely upon similar facts, and in the one case make out a defence, and in the other fail to do so. If this is in fact the true reading of this subsection, I believe that there will be a great deal of litigation upon it.
On Clause 2, I should also like to ask the noble and learned Lord whether he could say what circumstances he envisages in which there would be damages, or might he damages, under both subsection (1) and subsection (2), because these clearly go together in some cases. Is the dual provision in order to take account of the difference of the measure of damages in tort and contract, or what are the circumstances that are envisaged?
Clause 3 has been explained at great length by the noble and learned Lord, and I am grateful for that fact because certainly there is nothing in the Report of the Law Reform Committee which recommends subsection (2). I do not think that the explanation given by the noble and learned Lord would immediately spring to mind when one reads the words of that subsection. The general principle in subsection (1) is one of which I entirely approve, and one could do nothing else, with the strength of the recommendation that it in fact implements.
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Again, I think subsection (2) may require a certain amount of examination at a later stage. For instance, what is envisaged by the words "in negotiations"? Is this something other than the simple offer and acceptance involved in the contract? Have there to be some special negotiations with regard to the particular clause in the contract which is being dealt with? If not, could it possibly be made a little clearer in the Bill? I believe I am right in saying that this subsection may also be necessary under various international agreements to which this country subscribes. If that is so, I wonder whether it would afford any guidance to look at the terminology of those agreements to see whether they are exactly in line with what now appears in the new subsection in Clause 3. Again, the provisions of this subsection are in effect a defence to an ordinary action under subsection (1), and I think that those who would wish to take advantage of the rule in subsection (2) would be glad of a little more clarification of the precise degree to which they have a defence.
I have one small point to raise on Clause 4. It must, I think, be in this obscure wording, because of the reference to the Sale of Goods Act, but I wonder here again whether the Government have had any consideration of the effect on negotiable instruments and on the position of importers, because, as I understand it now, the negotiable instrument which very often passes long before the goods arrive in this country may well be somewhat invalidated by the fact that when the goods do arrive and are capable of being inspected there may still remain an action for rescission of the contract. I suspect, at any rate, that some care would be required in commercial transactions in order to see that this does not result in considerable confusion. I shall be grateful if the noble and learned Lord is able to make some comment on it. With those comments, my Lords, nay I say that I think this Bill is entirely acceptable in principle to those who sit on these Benches, and we hope that your Lordships will give it a Second Reading this afternoon.
5.11 p.m.
LORD REID: My Lords, I, too, entirely welcome the substance of the changes

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proposed in this Bill. The Bill may look slender, but in fact it makes substantial changes; and of some of them one might well say that they are overdue. But I am not by any means so happy about the form of the various clauses in the Bill, particularly having regard to the ideals which my noble and learned friend on the Woolsack has more than once expressed in this House, with a view to improving the form of future legislation. Two of these ideals are, I think, relevant in the case of the present Bill. The first is that the amendment made should be clear to the non-expert, and the second is that all changes relating to one subject should be kept in one place so as to be readily accessible. But before coming to these points of comparative detail I should like to raise three questions of a more general character.
First, a word in regard to Scotland. For some reason that I am not able to understand, Scotland is excluded from the application of Clauses 2 and 3 but is included in the application of Clause 4. I quite follow that Clause 1 is probably unnecessary in Scotland, because in many respects, as many of your Lordships know, Scots law is, for one reason and another, a good deal ahead of the law in England; and I think this is one example. But I cannot see any possibility of the Courts of Scotland, or of this House, sitting in a Scots appeal, holding that the whole of the provisions of Clauses 2 and 3 already apply in Scotland; nor can I see any difference in the need for those provisions in both countries. The problem is the same and we ought to keep in step. Ever since I can remember, the principle has been that we have a common Bill for the two countries, with a Scottish application clause if the reform is equally necessary in both countries, and unless the differences between the two systems are such as to make it necessary to devise different schemes for the two countries. I cannot believe that this applies with regard to Clauses 2 and 3 of this Bill.
I do not know whether the Scots Law Commission has been consulted. Perhaps the noble and learned Lord on the Woolsack will tell us whether it has or not. May I just say this, too, in order to save time in future perhaps?—and I hope I am not too much out of order. Can the noble and learned Lord tell us whether the Scots Law Commission is being consulted
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about the Sale of Goods Bill which we have to discuss next week, and about the Matrimonial Homes Bill, which we shall be discussing later? With regard to the latter I can quite see that, if anything is to be done, the scheme would have to be different, and therefore there is no point in pursuing that. But on the Sale of Goods Bill I should have thought there was every reason for keeping the two countries in step, and again it cannot be said that all the reforming provisions for England already apply in Scotland.
My second point is in regard to Clause 3, and it is this: is piecemeal legislation a good thing? This misrepresentation provision is only a small element in the very large problem of how to treat standard conditions. I understand that that is already the subject of an inquiry. It is certainly promised in the programme of the English Law Commission, and I should have thought that, unless there is any great urgency about this, it would have been much better to leave Clause 3 but make it part of a general scheme. But if it is to proceed—and I do not wish to move to leave it out—will the noble and learned Lord make it clear that the fact that this clause becomes a section of an Act of Parliament will in no way preclude the Committee from inquiring into the general question, from re-examining the whole matter as one and, if necessary, altering the provisions of this clause in order to make them fit the new and more comprehensive scheme.
A Committee might well feel that the fact that Parliament had enacted a provision with regard to a particular kind of clause in standard conditions was to be regarded as a pointer to what they were to do, or was intended in some way to tie their hands. Perhaps the noble and learned Lord will make it quite clear that passing this clause will not in any way limit the Committee in their consideration of what is the proper and general solution of this incredibly difficult problem. Indeed, I should think that the proper thing to do, in the end, in order to keep all the law in one place, would be to repeal this section, if it becomes law, and incorporate it, in the same or a different form, in the more comprehensive Act dealing with general conditions which I earnestly hope I shall survive to see as an Act of Parliament. I may be a little optimistic about that,

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looking at the speed with which these matters proceed, but I am trusting the noble and learned Lord on the Woolsack to accelerate these matters very considerably.
The third point is this. Clause 4 says nothing about misrepresentation. It is perfectly true that anomalies might result if Clause 4 were not passed, but next week we are to have before us a Sale of Goods Bill, and it passes my comprehension why Clause 4 is included in this Bill and not in the Sale of Goods Bill. I earnestly beg the Government to drop this clause from this Bill when we come to the Committee stage, and to insert it in the Sale of Goods Bill when it comes to the Committee stage. Mere tidiness surely requires it. Why should we, in the same Session, have amendments to the Sale of Goods Act contained in two different Acts of Parliament? I cannot conceive any possible reason for it. Indeed, the difference between Clause 4 and the rest of this Bill is illustrated by the Long Title of this Bill. This is a Bill entitled:
"An Act to amend the law relating to innocent misrepresentations and to amend sections 11 and 35 of the Sale of Goods Act 1893."
There are two quite different matters covered by the Long Title. I cannot for the life of me see why it should not be included in the other Bill, and I hope it will be.
May I now come to some points which are in the nature of Committee points? I do not wish to move Amendments myself. I merely wish to make suggestions. If the Government adopt them, well and good. If they do not, I shall simply acquiesce. But I think I should put the points forward for consideration, and I venture to think it is perhaps more convenient to do it at this stage than in Committee where it might perhaps be more regular. I think in the end it will save time if one deals with these matters at this stage. With regard to Clause 1(2) I have no strong view, but I am bound to say I should rather leave it out. On this I entirely agree with my noble friend Lord Colville of Culross. I do not wish to expand my remarks on this, but as at present advised I should be in favour of leaving this out.
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Clause 2, however, I would deal with in a little greater detail. I cannot object to the form of drafting, though it is a kind of legislation by reference, because it says that if certain things would have happened if the defender had been fraudulent, similar things are to happen if he is not fraudulent, and therefore it leaves the layman in considerable doubt as to what the clause really does. But I do not think one can reasonably object to that provided that it is otherwise clear. But this I must draw attention to. The fact that you link up innocent misrepresentation with fraud in this way causes difficulties. Let me mention just one. I am not sure that it has been considered. I refer to Section 26 of the Limitation Act. As my noble and learned friend well knows, that enacts that where a right of action has been concealed by the fraud then time does not run against the plaintiff until the right of action has been or ought to have been discovered. Does that, or does it not, apply to this new tort? I am inclined to think it does on present drafting, because the third, fourth and fifth lines of Clause 2(1) contain the words:
"if the person making the misrepresentation would be liable … had the misrepresentation been made fraudulently."
So what you, do is to write into the facts the charge of fraud and then you see whether an action lies. If you write in a charge of fraud then an action will lie if the innocent misrepresentation has concealed a right of action.
I cannot think that was intended. It may have been. I should think it probably wrong to put it in that way, because everything is presumed against a fraudulent person, quite rightly, but to allow this sort of thing to be raised after ten or twenty years against an innocent misrepresenter, and then to put him to the proof of not only belief but reasonable grounds of belief, seems to me rather unreasonable, and I think that I myself would prefer to see an amendment to Clause 1 so that this does not bring in Section 26 of the Limitation Act 1939.
That is a minor point in comparison with my criticism of Clause 3(2). The noble and learned Lord has explained that this subsection was inserted at a late stage as a result of representations, but I venture to think that if he looks art it carefully he will find in goes very

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much too far. I agree something was needed, but this does very much smooth the way for the man who wishes to evade the new Act. Evasion of Acts of Parliament has now become something of a fine art. Suppose we imagine a trader who wishes to evade this clause and to maintain his standard condition with regard to misrepresentation. Then suppose he says to his customer, "I will drop Clause X, which protects me in the event of misrepresentation, if you will pay 10 per cent. more than the price which I have quoted." Of course the buyer says "No." But surely that is negotiation, all he has to do is to spin it out a little more until it is negotiation. I venture to think that this is an impossible way of achieving justice to limit the application of this and other general conditions.
I should be prepared to go a great deal further. In the old days it was thought improper for the courts or Parliament or anybody else ever to re-write a bargain. It was quite proper to annul a bargain if the right conditions applied, but it was never proper to say, "Now we will strike out half of it and then hold the parties to the rest". A court was not entitled to do it and Parliament was very chary about doing it. But that outlook has gone long ago and every day Parliament is interfering with the terms of contract, and I do not think they are doing it too much. It seems to me that we have got to pluck up courage very soon and must say, not that we are going to have blunt rules in an Act of Parliament, which never work properly on marginal cases, but that we are going to enable the court to deal with each individual case that is brought before it. I know people will say that this will immensely increase the volume of litigation. I do not believe it. I think that the expiscation of complicated sections is probably going to take up more time of the courts than dealing with individual cases, because people will see, except in the marginal case, whether or not they have a case to fight.
Why should we not say, not only here but in the whole subject of standard conditions, that the court can strike out a condition in any particular case if—and then you can use any words you think right: "if unjust in the circumstances", "if unreasonable", "if harsh and op-
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pressive", "if unconscionable". A number of alternatives can be found, but I think you can find a phrase which can reasonably be put in. I would very much rather—this is perhaps aimed rather at the Committee examining these matters than at your Lordships here this afternoon—see standard conditions subject to that kind of check than to some easily evaded general loophole.
I have already said that I do not think Clause 4 ought to be in this Bill at all. But if it is put in this Bill I would venture to ask my noble and learned friend whether he will reconsider the drafting. I know he is a busy man, but I would venture to ask him to have the complete Sections 34 and 35 written out as amended, then to read the perfectly clear recommendation of the Committee, and, following that, see whether he thinks that subsection (2) is a creditable piece of work from the drafting point of view.
The recommendation of the Committee is perfectly plain: that
"it should be made clear that acts which would amount to acceptance within the meaning of Section 35 should not be held to do so until the buyer has had a reasonable opportunity of examining the goods as contemplated by Section 34."
Nothing could be clearer. Then look what we do. In front of the words
"when the goods have been delivered to him, and he does any act in relation to them which is inconsistent with the ownership of the seller"
we put in, in brackets, the words:
"(except where Section 34 of this Act otherwise provides)";
and it does not otherwise provide a thing with regard to
"any act in relation to them which is inconsistent with the ownership of the seller."
It is about as bad a piece of drafting as I have seen for a long time, and I hope that my noble and learned friend will look at it. It may be that he inherited this Bill. It may have been lying in a pigeonhole for a long time. I do not blame him in the least. I am only asking him to find ten minutes to have a look at this and, if he can come back to this House and say that he is fully satisfied with the drafting, then I will withdraw everything that I have said.
But, seriously, my Lords, this is an example of a complaint which I have had occasion to make more than once, both in this House, in the course of debate, and

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in the course of my judicial duties, when the House is sitting judicially. There is an almost intolerable tendency for some draftsmen to prefer brevity to clarity. In the present case we have four lines of a recommendation condensed into eight words of an amendment. I have no doubt that, technically, that is something of a feat. But surely, if we are going to prefer clarity to brevity, an extra line or two would not matter if we can make the thing look a little more respectable and intelligible. I hope that my noble and learned friend will find the time to look over future Bills or to get someone to draw his attention to the more doubtful passages, to see whether they do, in fact, come up to his most admirable standards for the future drafting of Acts of Parliament.
5.35 p.m.
LORD DENNING: My Lords, may I say that I am greatly in favour of this Bill, largely, perhaps, because it does things which we in the Courts have been trying to do for a long time? I am glad that, after four years, the noble and learned Lord the Lord Chancellor has managed to get this Bill introduced. It may read a technical Bill, but in truth it affects many people in cases which we have in the Court of Appeal. It should do a great deal to protect the ordinary public from the smooth tongues of the salesmen. In the old law there was a maxim that the buyer had to look after himself—caveat emptor;let the buyer beware. He ought not to rely on what the seller told him; he ought to inspect the goods himself. If he relied on any particular term he ought to have it embodied in a contract, because otherwise he had no remedy unless he could prove fraud. Now I hope that we are getting it the other way round: that it is for the seller and for the salesman to beware. If he makes a statement to induce a person to buy a thing, or to take it on hire-purchase, let him beware. He must take good care to see that his statement is true. If he does not, he may find himself liable in damages, and indeed to have the whole contract set aside.
Let me tell your Lordships of two or three cases which we have had in the Court of Appeal and which will be altered by this Bill. They are ordinary, simple cases. One case concerned a
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man who bought a picture of Salisbury Cathedral for £85. The salesman told him that it was by "J. Constable", and it was delivered to him. Nothing was put on the receipt about its being by Constable, but he believed it. After a little time, when he was going to resell it, he found it was not by Constable at all, so he wanted to set this sale aside and to get his money back. But the court said, "No, you cannot do that. You cannot even get damages, because it was not a term of the contract." I hope that this Bill will remedy that situation at once.
There was another case in which a man bought a lorry for £750. The seller told him it was in excellent condition and that it would do eleven miles to the gallon. After a few days he found that it was quite unroadworthy and would do only five miles to the gallon. He wanted to return it and to get his money back. But the court said, "No, you cannot get your money back; you cannot even get compensation." I am glad to say that these cases will be remedied. The seller or the salesman in these cases will not be exempt from damages unless he can prove that he had reasonable grounds to believe that the picture was a Constable or the lorry was in good condition, and that he did in fact believe this.
I may say that we have tried quite often in the Court of Appeal to get round that old law. We have often done it. We have often said that these representations are really warranties—what we call "collateral warranties"—and we have managed to make them liable. I do not know whether your Lordships have heard of Dick Bentley. He bought a Bentley car for £1,800. The salesman represented to him that it had done only 20,000 miles since the engine was last overhauled. When he had had it a little time it was discovered that it had done 100,000 miles. He brought his action before us, and despite those other cases, we held that this was a warranty and that it was binding on the person concerned unless he could show that he really believed, on reasonable grounds, that what he said was true. This he could not do, and we managed in that case to hold that the seller was liable. This Bill will remedy, as I see it, all such injustices.
Furthermore, and most important of all, Clause 3 will do away with some of the exemption clauses in standard

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contracts. I remember years ago the case of a lady—she was a small shopkeeper—who had a salesman call upon her. He wanted her to buy a cigarette machine. He produced it, and managed to persuade her to buy it. He produced a long form, and he said, "Sign here". She signed the form. Afterwards, when the machine did not work at all, she wanted to return it. The sellers would not have it, and when she complained that it did not work, they pointed out that in the form there was this clause:
"This agreement contains all the terms and conditions under which I agree to purchase the machine, and any express or implied condition, statement or warranty, statutory or otherwise, not stated herein, is hereby excluded."
I am afraid I argued the case on it for hours, but the Court of Appeal in those days held that that exclusion clause prevented the lady from recovering, even on any misrepresentation made by the salesman or anything else. Since I have been on the Bench I have tried to alter that, but not very successfully. Now this Bill covers it in Clause 3(1). Therefore, on the whole, I greatly welcome this Bill for enabling us in the Court of Appeal, as I hope, to do justice in these cases. It will also, incidentally, mean that the textbook writers on the law of contract will have to rewrite whole chapters of their books.
I should like to refer to two or three points. First of all, I would suggest that Clause 1(2) should come out. It seems to me that if a person makes a misrepresentation, even in the case of a sale of land or the grant of a tenancy for four or five years, and somebody is misled by it and is induced to enter into a contract which he would not otherwise have done, one should be able to set it aside, so long as the person comes along in time before other people are prejudiced. The Common Law has always done this in regard to chattels. It should now apply also to sales of land, and I consider that there should not be that exception in subsection (2). I agree with my noble and learned friend Lord Reid that one does not want too much of Clause 3(2), where one lets people get out of responsibility for the representations they have made. If they have made misrepresentation leading to a contract, I, for one, would in most cases rescind it, if I could; and if I could not rescind it I would give damages.
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This Bill will greatly assist to those ends, and I warmly support it.
5.43 p.m.
LORD UPJOHN: My Lords, as a constant attendant in your Lordships' House, in its Judicial capacity, for over two years, I feel that I owe your Lordships an apology for not addressing you before now. My only excuse can be that I was for the whole of last year much pressed with the affairs of one of the Inns of Court, a burden which I have now passed on to other shoulders better able to bear it; and I trust that I shall be a more constant attendant in your Lordships' House in future. But there is, indeed, some mystery about it to-day, in the office which organises these affairs, which at this very moment is stoutly maintaining that I have already made my maiden speech. I ask your Lordships to bear in mind that an occasion so unique as that of having the privilege to address your Lordships for the first time makes me a much more reliable witness of fact, and I ask you to accept my evidence. But whether that be so or not, I hope your Lordships will accept my assurance that in this regrettable matter I have been guilty of no misrepresentation, either innocent or fraudulent.
I welcome this Bill most strongly. We ought to be most grateful to Lord Jenkins and his Committee for the very hard work which they have put into this Report and for the admirable result which they have produced. The law relating to rescission for innocent misrepresentation after the performance of the contract is, in my view, quite unsatisfactory, and indeed, except in relation to contracts affecting the sale of land, is not even well settled. It depends on some obiter dicta of Mr. Justice Joyce in Seddon v.North Eastern Salt Company Limited. My noble and learned friend Lord Denning has denied the existence of the rule, and he may be quite right. As your Lordships have heard, your Lordships, sitting Judicially, have never yet had occasion to consider this point. The Bill therefore puts the law of innocent misrepresentation on a sound basis. In addition, of course, it enables parties to sue for damages where they have been induced to enter into a contract by reason of an innocent misrepresentation, unless the person who has made the

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representation can establish affirmatively that he had reasonable grounds at the time the contract was made for believing it to be true. So I give wholehearted support to this Bill.
I have three points which I should like to make at this stage, and I hope that the Lord Chancellor will consider that they are worthy of consideration when we come to deal with the Bill in Committee. First of all, when working out the remedy of rescission after a contract has been performed—and that must, of course, include a case where it has been partly performed—I think the courts will require much greater powers to adjust the rights of the parties, so that justice may be done between them, than this Bill at present confers. Although I think that the draftsmen have in mind a rather simpler type of contract, we must remember that this Bill is going to apply to complicated commercial contracts of every sort; and there will be many cases where acts will have been done by both sides which will require adjustment. The case where a contract is rescinded for innocent misrepresentation bears a certain analogy to the cases of frustration where a contract has become impossible of performance or is otherwise frustrated. That matter is now dealt with by the Law Reform (Frustrated Contracts) Act, 1943. That Act provides (it is all in Section 1, and I will put it very shortly in my own words) that the court can make the necessary financial adjustment for money paid, work done and benefits received in order to achieve real justice between the parties. I am sure that there ought to be some similar provisions in this Bill if it is to become workable.
My second point deals with contracts affecting land. I must confess that I have spent most of my working life in the Chancery Division, either at the Bar or at the Bench, but I hope that does not mean that I am an old-fashioned fuddy-duddy. For my part, I am very glad to see that subsection (2) of Clause 1 is in the Bill, and I hope that it will remain there. I believe that if it were removed, if one could have rescission of a conveyance on sale after the legal estate has passed, it would give rise to many difficulties. I think the law in respect of innocent misrepresentation should remain: that if you want to
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rescind you must do so before conveyance. After all, contracts affecting land are in a very special class of their own. The solicitor investigates the title, and the surveyor inspects the property and any adjoining properties which he thinks fit. With all respect to my noble and learned friend Lórd Denning, I think this is where the rule of caveat emptor applies in its full rigour, and I should be sorry to see it removed. I think its removal might give rise to very grave injustice.
As the noble and learned Lord the Lord Chancellor pointed out, so many contracts of sale are married up with the sale or purchase of some other houses. Mortgages are almost invariably taken on some new property. I think, to use the words of Lord Jenkins's Report, that if you rescind where there has been a passing of a legal title you might set up a chain reaction. But, of course, I agree entirely that leases for under three years should be subject to what will be the new general rule; that is, they may be rescinded for innocent misrepresentation. The truth of the matter is that tenancies of that description are frequently entered into without legal advice, no proper surveys are made, and therefore the oral representations of the intending landlord play a far greater part in inducing the contract than they do in the bigger transactions.
I should like to see this provision in the Bill. I can see no reason why, if there has been an innocent misrepresentation the purchaser should not be enabled after conveyance to sue the vendor who has made the innocent misrepresentation, for damages. I can see no ground for excluding him from that at all, and the Jenkins Committee saw no objection to that. But I am very doubtful whether Clause 2(2) of the Bill, as it at present stands, is apt and appropriate to cover a case where the purchaser has completed the sale and executed conveyance from the vendor. If my noble and learned friend on the Woolsack tells me I am wrong, I shall be very happy, but at the moment I can see some highly technical arguments that after conveyance the original contract will have merged, and therefore it will be said that there is no ground for claiming damages under Clause 2 of the Bill. At all events, I hope that this point may be clarified in the direction of making it quite clear that the purchaser, although he has taken a conveyance of the legal estate, may

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nevertheless claim damages for innocent misrepresentation.
My third point is this. Clause 2 provides that, although the plaintiff establishes a claim for rescission for innocent misrepresentation, the court may in its discretion order damages in lieu thereof. That is a very sensible provision, if I may respectfully say so, for there will be many cases where justice cannot be done by rescinding the contract and damages must be the only remedy. But I fear that what may happen in some cases is this. In this inflationary age a plaintiff who has purchased a property—whatever it is—may say, "I want to keep the property, but pay me damages for the misrepresentation. You misled me and I should not have entered into the contract without that representation." But it seems to me that the person who has made the representation may not unfairly say, "True. I misled you, though innocently, but I am willing to undo the contract and repay you all that you have paid me. But give me back my property. It is in fact now worth more. You have suffered no injustice for we shall rescind the contract." I hope that in Committee consideration may be given to a clause entitling a defendant, who is in a position to offer complete restitution, to insist on that remedy—that is, the remedy of rescission —if he so desires, except where there has been a conveyance of the legal estate in land.
There is one very small point on Clause 2(2). The middle of that subsection reads:
"… if it is claimed, in any proceedings arising out of the contract, that the contract ought to be or has been rescinded"—
the important words are, "has been rescinded"—
"the court may declare the contract subsisting".
If out of court somebody has exercised his power of rescission and that has been acquiesced in by the other side, I do not myself see how the court can declare, in relation to such a contract which has been rescinded, that it is still subsisting. But that, I agree, is really a drafting matter.
I must, I fear, end on a note of sorrow rather than of anger. In fiscal legislation we have become very accustomed to much obscurity of language. That is no
946
doubt caused by the fact that those practising in Lincoln's Inn and other places have been sufficiently ingenious to find loopholes where the Crown did not think it was possible for a loophole to exist. So the draftsmen use a great plethora of language to try to fill up the loophole, and we are used to such obscurity. Indeed, as your Lordships know, this often leads three of your Lordships, sitting judicially, to think something means one form, and two to think it means precisely the opposite. That is no doubt necessary in fiscal provisions, but this is a simple Bill and I am bound to confess that I think the draftsman of it has entered into a great deal of obscure language.
I am not going into it in detail—my noble and learned friend Lord Reid has pointed out a number of points—but I personally find Clause 1 difficult to understand. Indeed, one of my colleagues said to me, "You will not understand it at first. You had better go and get Lord Jenkins's Report and then you may follow it." So I did get the Report, and found it very useful in helping me to understand Clause 1. It has said what is intended all right, but I venture to think that Clause 1 and the other clauses could have said it in clearer and more simple language. However, I hope that your Lordships will give this Bill a Second Reading.
6.0 p.m.
LORD WILBERFORCE: My Lords, for the main and really important task of this evening I am, frankly, hopelessly unqualified. I should very much have hoped that the duty of congratulating my noble and learned friend Lord Upjohn on his maiden speech would have fallen on someone other than one who has to his credit only one or two speeches in your Lordships' House. Nevertheless, it is a very great personal pleasure for me to offer my respectful congratulations to my noble and learned friend upon his most admirable intervention; and I am sure, so far as authority is concerned, that in saying that I may rely on the general support of noble Lords present and speak on behalf of the whole House. It is quite obvious that your Lordships have suffered a serious loss in the last year or two, during which my noble and learned friend has been obliged to keep silent,

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and it is equally apparent that we shall gain very much from the future interventions which I have no doubt we shall have from him.
Now, my Lords, may I make a few observations on this Bill? And if I do so with something less than full enthusiasm, I hope that the noble and learned Lord on the Woolsack will acquit me of any general indifference to the cause of law reform, or of any lack of appreciation of the work of the Jenkins Committee. It is just because I have a great respect for the comprehensive programme of law reform which the noble and learned Lord the Lord Chancellor and his Government have set on foot that I feel some reservations as to this example of piecemeal legislation. Generally on the Bill, its character is one which deals with the law of contract over a fairly wide front. It deals with warranties; it deals with statements inducing contracts; it deals with the terms of contracts; it deals with remedies and it deals with exemption clauses. What it does is to attempt the rather ambitious task of putting into statutory language matters which normally are dealt with by judicial development of the law. That is by no means an easy thing to do.
One sees from the very first section of the Law Commission's Report, which was laid before Parliament in 1965, that the Commission is to undertake a review with a view, possibly, to codification of the law of contract as a whole. The Report says:
"It will be necessary to pay special attention to the recommendations on innocent misrepresentation made by the Law Reform Committee in its Tenth Report"—
that is, the Jenkins Committee—
"and to various other matters".
That, I understand, has not been done up till now, and I am therefore generalising what was said by my noble friend Lord Reid in relation to a particular clause when I express the thought that, for myself, I should have been happier if, before this interference with the law of contract had been presented for legislative approval, we had had the general survey of the law of contract from the Law Commission, and, in particular, its review of this matter of innocent misrepresentation which it was promised should be made before the Bill was presented.
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My Lords, it may be that one's fears can be assuaged if the noble and learned Lord on the Woolsack does as he was invited to do by my noble friend Lord Reid, and assures us that anything that we do now will be without prejudice to an ultimate and broader review by the Law Commission. But that still leaves me with the doubt whether it is wise to embark on this legislation now when, with perhaps one exception, there is no great urgency as to the measures to be taken.
Perhaps I might illustrate what I have in mind by one supporting piece of argument; and it is this. The American Law Institute, in its restatement of tile law, which represents the most modern thinking on so many matters, has given very great attention to this question of representations inducing contracts, or entering into contracts, and there is a long and elaborately-worded section there, with a lot of comparative material which deals with fraudulent misrepresentation, on the one side, and innocent misrepresentation, on the other, comparing and differentiating the kind of facts which may form the subject of one or the other, and the kind of remedies. There is a great deal of other material of that sort which I have no doubt the Law Commission, when it studies this matter, as one hopes it will, will take into account. But that has not so far, I believe, found its way into the deliberations which preceded this Bill, and I should have thought it would have enriched the propositions which are to come before this House, and before Parliament in general, if the benefits of that wider examination had been available.
But when that is said, the question then is perhaps this: have we here in this Bill specific reforms which we can usefully take at this present stage without waiting for the wider review? If so, I should be quite in favour of undertaking them, on the understanding that we can look at the whole thing again later. So let us look at Clauses 1, 2 and 3 in that spirit. Clause 1 has been sufficiently discussed, and I need not say very much about it. It gets rid of the effect of the decision—or, rather, the dicta— in Seddon'scase, which, as my noble and learned friend Lord Upjohn has said, is a precarious decision: it lays down a rule which other eminent judges have

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said is not a rule; at any rate, it could be got rid of, if it were thought fit to do so, by judicial action. But there it is; it has been on the books for 60 years, and a case may be made, I quite see, for getting rid of it. I am in favour of that provision in the Bill which does dispose of it.
But then, of course, we are brought up against this distinction between contracts generally and contracts for the sale of land, one dealt with by the Bill and the other not to be dealt with by it—and that does raise a problem. I do not want to discuss that at any length at this stage, but would say simply that I am rather with those who would be in favour of deleting from the Bill the existing subsection (2) of Clause I on the simple ground that misrepresentations as to houses or bungalows are just as common, and just as damaging to purchasers, as are misrepresentations about other goods. One does not see at first sight why buyers of motor cars are more liable to be duped or are more in need of protection than buyers of bungalows.
It is perhaps rather significant to remember that the case which, far more than Seddon'scase, gives rise to the difficulty in the existing law (the noble and learned Lord the Lord Chancellor referred to it: a case about drains, decided in 1911) is itself a case about the sale of a house. So the problem does exist in relation to houses. One would think it needs to be solved, and I do not see any difficulty in solving it in the way already suggested—namely, by giving a right of rescission where rescission can be carried out without interfering with third party rights. Of course, in some cases that will not be possible, though in others it will. But, on the face of it, I do not see any reason for differentiating between sales of land and other sales.
However, I do not wish to detain your Lordships on this point, which no doubt will be further discussed, but will pass to Clause 2 of the Bill, which is of very much greater importance. This introduces—let there be no mistake about it—a very remarkable innovation into the law, and I feel myself perhaps alone in this House in experiencing some alarm about it. What it does is this. The law has up till now made a difference, a distinction between cases of fraudulent mis-
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representation, for which you can get damages, and cases of innocent misrepresentation, for which you cannot. One would think that this is a perfectly sound distinction which in general is based on common sense as well as on jurisprudence. Recently, though perhaps not so very recently, the courts have recognised that there may be a third class in between the two where there is a duty of care when you are making representations. The courts have worked out cases where it has been thought fit to say that a person, when he makes a statement must take care to see that what he is saying is accurate and right. As your Lordships in this House put it in one recent case, where there is a special relationship between the parties then this situation arises: you must take care; you are liable if you do not.
What Clause 2(1) of the Bill does, as I read it, is to impose generally a duty of care, in relation to all contracts—and I repeat, all contracts; it is not limited to cases of sales of goods as to which my noble and learned friend Lord Denning addressed your Lordships with such conviction. According to the words of the Bill, the person making a statement must show that he has "reasonable ground to believe" that what he said was true. One wonders whether "reasonable ground" is subjective or objective. One does not know. That was discussed in another place. Let us assume for the moment that it imposes an objective duty to take care that what you say is correct. What it does in that case is to impose a general duty of care in making representations.
Now, if one looks at the Jenkins Committee Report, the basis on which they recommend this is, with respect, really very slender. It says that in cases of sales of motor cars there are a lot of fraudulent sales where you cannot prove fraud and that it is necessary in such cases to give a remedy in damages. They go on to say there is no case for giving a general right of damages; but there is such a case where one party was at fault in making the representations. Elsewhere they use the word "culpably". It seems to me, with respect, that there is a lack of clarity and of thought here. When they talk about culpability, are they thinking of a case where there is a duty to be careful, or not? The Bill is drafted on the basis

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that there is always a duty to be careful, and that unless you have taken steps to see that what you are saying is correct you are to be liable.
The analogy given by the Jenkins Committee after this passage, which is the only other justification they give for this very wide extension of the law, is an analogy drawn from the Companies Act legislation. They point out, rightly, of course, that directors of a company are under a duty to show that they have reasonable ground to believe that what is said in a prospectus is correct. But is that a sound basis on which to generalise the law as to misrepresentation? Surely directors of companies are in a very special position. They are in possession of special information as to the company's affairs. They are dealing with a numerous class of people, many of whom are completely ignorant and many of whom are simply gulls; and they are persons rightly thought by the Legislature to be in need of protection. But outside the City of London, is there any evidence for supposing that the human race is to be sharply divided between the sharks, on the one hand, and the gulls, on the other? I know of no such evidence. Is every party to every contract to be treated like the widow or the vicar who is invited to subscribe for shares? It seems to me to be going very far. And if these are perhaps subjective doubts, they are reinforced by a cross-check one can make from other legislation.
I venture here to remind your Lordships of a Bill which was introduced in the last Parliament, the Protection of Consumers (Trade Descriptions) Bill. I do not know whether that Bill is to be brought back in the present Parliament or not; I do not think Her Majesty's Government have so far shown their hand. For my argument, it makes no difference whether we are going to hear any more about that Bill or not; because the point I want to make is this. The Bill was based on the recommendations of the Molony Committee on Consumer Protection, a very authoritive committee; and it is a Bill which has been produced by the Board of Trade, a very well-informed Department and one very much in touch with the needs of consumers. What does that Bill do? If we turn to Clause 2 of the previous Bill, as it was before this House, we see it gives a list a what it calls "trade
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descriptions". It says that a trade description is a statement about a number of matters, method of manufacture—whether it is painted by a Constable, to take my noble friend's example—composition, physical characteristics, the standard of performance, the person by whom manufactured and other history including previous ownership or use. There is a long list of what comes under a "trade description".
Then in Clause 34 of the Bill one finds this provision: that in any contract for the sale of any goods to which a trace description is applied there shall be an implied warranty that the trade description is not a false trade description, unless the warranty is excluded by a statement in writing at the same time. So what there is in that Bill is this. There is a number of important matters as to which statements may be made by the persons selling the goods: there is a statement saying there is to be civil liability if the trade description is not true—there is nothing about fraud—if it is objectively not true; and there is a statutory permission to exclude liability for that warranty if you put the exclusion in writing at the time of the contract. One might mention one other material provision in the Bill. There are a number of matters specified in the Bill which are said not to be trade descriptions, as to which this liability is not to attach. They are matters of some importance.
Having drawn attention to that, one is faced with a number of questions in relation to the Bill now before us. Does this Bill, when it gives a right to damages in respect of a misrepresentation which is not true, include contracts for the sale of goods and trade descriptions? If so, how is one to reconcile what this Bill sets out to do with what apparently is thought to be the policy of the Protection of Consumers Bill and the interests putting that forward?
The second question is this: does this Bill extend to other contracts, other than trade descriptions? In which case, what evidence is there and what case has been made for treating other contracts in this way, when the Board of Trade and the Molony Committee think that the provisions of the former Bill should be limited to trade descriptions? What is the duty; in fact, what is the case for imposing a general duty of care in other

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cases than trade descriptions and in other cases where there is a special relationship? What is the case for treating exclusion clauses in relation to other contracts more severely than such clauses are treated in the Consumer Protection Bill, where they are allowed in relation to trade descriptions? And what about the cases which are excepted from the Protection of Consumers Bill, where it is said that liability is not to exist and there is not to be an implied warranty? Does this Bill go back on that and reintroduce liability in respect of these matters? I confess myself very puzzled by all this, and it leaves me with the thought that it might be better to have consolidated these two matters into one measure, or at least to have ensured what ground is covered by one measure and covered by another.
My Lords, I will detain the House a moment with Clause 3, which deals with the right to contract out. That, as has been said, is a difficult matter and a very troublesome subject altogether. The Molony Committee which preceded the Protection of Consumers Bill, felt itself unable to consider this subject generally though it did so in some particulars. And the Jenkins Committee, again in paragraph 23, gave some rather halfhearted reasons for their recommendations—recommendations which, in any case, as the noble and learned Lord the Lord Chancellor has made clear, did not extend to the whole of what is now in Clause 3 of the Bill. That it had not all been properly thought out is now confirmed by what we have been told: that Clause 3(2) of the Bin was inserted after representations made by important trade interests.
The position is this: that under the Protection of Consumers Bill contracting out of the implied warranty created by that draft legislation as to the truth of a trade description is allowed: but this Bill makes a distinction between contracts made after negotiation, whatever that means, and other contracts; and it gives a limited and, I must say, rather obscure right to contract out in the former case. My Lords, I must say that I feel a good deal of doubt about this. I share the doubts expressed by other noble Lords who have already spoken as to whether the basis of division is workable and whether it will not lead to
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evasion in its present form. I doubt whether what is put in this Bill is really sound as a matter of policy.
Of course we all know that there are very grave cases of abuse in these exclusion clauses—and my noble and learned friend Lord Denning has referred to many of them. But the world is not populated only by "slick" salesmen; not all trade is carried out through the medium of such persons, or door-to-door contracts; and it is quite wrong, in my belief, to lump together all standard forms of contract, and to condemn them together; to assume that an equal degree of protection is required in every case. The Jenkins Committee, in its recommendations, limited what it said to cases of inequality, where there is a person who is in need of special protection. In many cases that is not so: in many cases trade cannot go on without standard conditions; in many cases buyers and sellers are in a perfect state of equality; in many cases the buyer is a member of an association which has vetted the standard forms of contract, in the interests of both buyer and seller, and they are perfectly acceptable. No doubt they exclude liability, but that is appropriate to the kind of trade which is being carried on. Again, as has been pointed out, I think by my noble and learned friend Lord Reid, the Law Commission has this matter under consideration. Paragraph 2 of its First Report refers to the extent to which the Molony Committee dealt with this subject and promises us in due course a more comprehensive review.
So my Lords I am left in this position as regards the Bill. I find that Clause I brings about a modest, but perhaps useful, measure of reform. I feel very great doubts as to both Clauses 2 and 3; whether the implications of them have been properly worked out at this stage. T feel fairly clear as regards both those clauses that what they recommend will be overtaken by what the Law Commission ultimately propose, and generally I have the feeling that this Bill does accompany a positive measure—that in Clause1—with proposals of considerable difficulty which will give rise not only to a lot of discussion in this House and in another place but possibly also to litigation. Quite frankly, I should have preferred to see them more comprehensively

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dealt with by the Law Commission before legislation was presented to Parliament.
6.25 p.m.
THE LORD CHANCELLOR: My Lords, I am extremely grateful for the welcome which, in general, has been given to this Bill. I think that your Lordships, with the exception of the noble and learned Lord, Lord Wilberforce, have thought that the Bill as a whole is on the right lines and should be enacted; and the noble and learned Lord, Lord Wilberforce, has confined his commendations to Clause 1. The noble Viscount, Lord Colville of Culross, will, I am sure not misunderstand me if I say that I am particularly grateful to the noble and learned Lords who have given us the benefit of their advice on the Bill. The noble Viscount raised one or two points; first of all, the question of agency. I would submit that there is no need for the Bill to deal with questions of agency as the ordinary law of agency will apply. Then he raised the question of damages and there again I apprehend that the ordinary measure of damages will be as in tort.
The noble and learned Lord, Lord Reid, raised a number of points; first of all regarding Parliamentary drafting. I do not draft Bills myself, and I am sure I should make an awful hash of it if I did. They are necessarily drafted by Parliamentary draftsmen, who have had a certain training in a certain school. I have in the past expressed views suggesting that this is a style which might with advantage be simplified. I am still of that opinion. But a change in that repect is not going to come, I think easily or quickly. I know that the Law Commission are themselves considering the whole question of Parliamentary drafting, together with what is, perhaps the other side of the same coin: that is, the interpretation of Statutes. They have found it necessary to consider the two together. I hope to receive their advice, if and when they come to conclusions on the points. When the noble Viscount raised this matter the other day I said that it was a difficult question, and, of course, in my position one is apprehensive that if one expresses the view that one would like to see Statute Law quite differently drafted, it may be taken as some reflection on our present
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draftsmen, whose skill I am sure we all admire.
As to Scotland and the other point raised by the noble and learned Lord, Lord Reid, regarding the Sale of Goods Bill and why alterations in the Sale of Goods Act were not put into that Bill I would say that the reason is that the Sale of Goods Bill is a Private Member's Bill. Therefore it was not possible for the Government to put anything into it. The position as to Scotland, as I understand it, is that Scottish law or the subject of misrepresentation is different from English law and that those provisions of the Bill which relate solely to mirepresentation could not conveniently be applied to Scotland. The Sale of Goods Act is an Act which applies to Scotland as well as to England, and therefore, of course, it was necessary to apply in to Scotland so far as that Act is concerned.
I can assure both the noble and learned Lord, Lord Reid, and the noble and learned Lord, Lord Wilberforce, that anything done in the passing of this Bill will not prejudice the work of the Law Commission, in this field. The Law Commission is considering the codification of the whole of the law of contract I appreciate that, in a sense, part of this Bill may be said to be part of that, but that is a very large task which I think is likely to take two or three years. The Scottish Law Commission is also, quite independently, engaged in the codification of Scottish law of contract, and the two Commissions, I know, have already considered together how far it is really necessary, in a small country like Britain to have two entirely different codes of contract law, according to whether you happen to live in the South or the North. Whether it will be possible completely to assimilate the contract laws of England and Scotland I' do not know, but I understand that this is a point which both Commissions have very much in mind. A number of other points were raised by the noble and learned Lord, Lord Reid, which he said were Committee points. They will be borne carefully in mind before the Committee stage of the Bill.
I am sure that in all parts of the House we are grateful to noble and learned Lords for the obvious thought which they have given to the Bill and

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for the observations which they have made, even those which may seen critical of it. The noble and learned Lord, Lord Denning, gave us, if I may say so, his blessing, and we appreciate hearing from him just the sort of cases with which the Bill is intended to deal.
It was a great pleasure to me personally to hear the observations of the noble and learned Lord, Lord Upjohn. I can assure him that whether or not anybody else has heard him before, I personally have not. His knowledge of the subject, and particularly of contracts relating to the sale of land, is such that it has been of the greatest advantage to us to have the benefit of his opinions. I will take carefully into account before the Committee stage all the points which he made. Each in turn obviously demands careful consideration which each will get.
The reason why I am particularly delighted to have had the comments and thoughts of noble and learned Lords is precisely because of their value. They will not expect me to say off-hand whether any of the proposed alterations they have in mind will be given effect to. For my part, I am still in some doubt whether contracts relating to land should be excluded or not. I think, speaking from memory, that two noble and learned Lords thought they should, and two thought not. But I will think carefully over what is to be said on that subject on both sides.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

SEA FISHERIES REGULATION BILL [H.L.]
6.33 p.m.
Order of the Day for the Second Reading read.
THE LORD CHANCELLOR: My Lords, I beg to move that this Bill be now read a second time. This is a consolidation Bill and, like others of its kind, it will be referred to the Select Committee on Consolidation Bills, whose Report will be laid before the House in the usual way.
Moved, That the Bill be now read 2a.— (The Lord Chancellor.)
On Question, Bill read 2a, and referred to the Joint Committee on Consolidation Bills.

BRIGHTON CORPORATION BILL [PETITION FOR ADDITIONAL PROVISION].
  HOVE CORPORATION BILL [PETITION FOR ADDITIONAL PROVISION].
  Examiners Certificate that the Standing Orders have not been complied with: referred to the Standing Orders Committee.

CONSOLIDATION BILLS
Message from the Commons to acquaint this House that they have appointed a Committee of twelve members to join with the Committee appointed by this House to consider all Consolidation Bills in the present Session.
Ordered that the evidence taken before the Joint Committee from time to time be printed, that no copies be delivered but except to members of the Committee, and to such other persons as the Committee shall think fit, until further order.
Leave given to the Joint Committee to report from time to time.
House adjourned at twenty-six minutes before seven o'clock.