Lords Sitting of 26 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 Norwich
Several Lords—Took the Oath.

MINISTER'S COMMENTS ON NATO POLICY
2.35 p.m.
LORD GIFFORD: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether the reports of the remarks by Lord Chalfont, Minister of State for Foreign Affairs, on May 13 in Paris to the Anglo-American Press Association are accurate, and whether they correctly represent the policy of Her Majesty's Government.]
THE MINISTER OF STATE FOR FOREIGN AFFAIRS (LORD CHALFONT): My Lords, at a lunch discussion of the Anglo-American Press Association in Paris on May 13 I made a short statement on the record and answered a number of questions off the record. In most of the Press reports written from Paris, both British and foreign, this discussion was reported objectively and accurately. Taken in their context, the points that I was making were fully in accord with the policy of Her Majesty's Government.
LORD GIFFORD: My Lords, I thank the noble Lord for his highly interesting Answer, which seems to me to be a bold step towards an intended Socialist policy for Europe. May I ask the noble Lord if it is really the policy of Her Majesty's Government—and I quote a report from the Observer —
"That in future NATO should be seen not as a defensive military alliance but rather as a means of negotiation with the East"?
When will Her Majesty's Government begin to implement this policy? Does
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the United States Government agree with it, and will Her Majesty's Government have the courage to press forward with this policy, even in the face of United States opposition?
LORD CHALFONT: My Lords, I think the noble Lord's question goes much wider than his original Question. I did say that, in my view, we should concentrate less in the Alliance on reorganising it as a purely defensive organisation and should look upon it rather as an organisation which could negotiate from a position of strength, but I think a comment on the attitude to this of the United States Government would be invidious at this stage. Indeed, I would say that certain Press reports, not written from Paris and therefore written at second hand, lifted a few of my remarks out of context, so I think it would be wrong to believe that they gave the interpretation that I would have given to them when I was making my remarks in Paris.

THE LAW ON MONEYLENDING AND BANKING
LORD WAKEFIELD OF KENDAL: 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 when it is intended to amend the law relating to moneylending and banking, in view of the need for clarification arising from modern methods of providing finance on a credit basis.]
THE PARLIAMENTARY SECRETARY, BOARD OF TRADE (LORD RHODES): My Lords, the Moneylenders Acts exempt from their provisions any person who is bona fide carrying on the business of banking. A recent judgment in the Court of Appeal has led to anxiety among some of the companies which rely upon that exemption. Her Majesty's Government are considering the situation and are in consultation with the Finance Houses Association about it.
LORD WAKEFIELD OF KENDAL: My Lords, while thanking the noble Lord for that reply, may I ask whether it is not a fact that, although Parliament has conferred a number of privileges on banks

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and banking, Parliament has not yet defined what is the business of banking? And is it not highly desirable that this should be clone as soon as possible and the law about moneylending in general brought up to date, whether it is done by banks or anybody else. Would the noble Lord not agree that uncertainty about the legal position of banking and moneylending is undesirable and should not be allowed to continue?
LORD RHODES: My Lords, I came armed with references from Doctor Johnson's day until the present time about this definition of banking, but I do not think it is necessary to read them at length. May I say that I agree with the noble Lord that an investigation into this matter is necessary, and that the Government are doing it.
LORD WAKEFIELD OF KENDAL: My Lords, I am much obliged to the noble Lord for that further statement.

THE ASIAN DEVELOPMENT BANK
2.39 p.m.
LORD OGMORE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what is the object of founding another International Agency, namely, the Asian Development Bank; what necessary functions are there that this Bank will be expected to perform which cannot be performed by existing International or National Agencies or Banks; is membership of the Bank going to cost the United Kingdom and in what currency will our subscriptions be paid; what safeguards are being imposed to prevent, so far as possible, lavish administrative expenditure and waste, and when do Her Majesty's Government expect to ratify the Agreement they have already signed for the establishment of this Bank.]
LORD CHALFONT: My Lords, the basic aim of the sponsors of the Asian Development Bank was to create an institution capable of mobilising additional capital, both from within the Asian and Far Eastern region and from outside, to
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promote economic growth and co-operation in the region. There has been no oanking institution in the region specifically devoted to the co-operative regional approach which Britain and the other member countries have tried to develop through the Colombo Plan. The United Kingdom's subscription is 30 million dollars (£10·7 million), of which half will be callable and half paid-in. The second half is payable in equal instalments over 5 years; i.e., at a rate of £1·07 million each year; payment will be in sterling. The composition and powers of the board of governors, of the board of directors and of the presidency and the voting system provide ample safeguards to ensure the conduct of the Bank's affairs on sound development banking principles. Subject to enactment of the Overseas Aid Bill, Her Majesty's Government hope to deposit their instrument of ratification before 30 September next, as required by Article 64 of the Agreement.
LORD OGMORE: My Lords, I am very grateful to the noble Lord for that full, informative Answer. May I ask him whether he is aware that what is really required in the Far East and South-East Asia is that the small farmer, the peasant, should benefit; in other words, that agriculture in those areas should be far more efficient and productive? Is this necessarily the way to do it? Secondly, may I ask him whether he is aware that the World Bank, which has enormous experience in this field, is now proposing to do much the same thing in the Far East. and is in fact setting up consultative groups in order to get aid to the various countries in the Far East which up to now have received very little?
LORD CHALFONT: Of course, the I.B.R.D. (the World Bank, as it is sometimes called) is the most consistently efficient of international bodies, and I take the point the noble Lord has made. But the aim of this was to adopt a regional approach to this problem, which we thought was necessary, and we believe that the way in which the Bank has been established, or will be established, the composition of the board of directors and the other ways in which the organisation will be formulated will take care of the preoccupations to which the noble Lord has rightly drawn attention.
LORD CARRINGTON: My Lords, may I ask what relationship, if any, there will be between this Bank and the Economic Commission for Asia and the Far East?
LORD CHALFONT: On that particular point, I would ask the noble Lord the Leader of the Opposition if he would ask a separate Question. I have not the information at my disposal at the moment to answer that, but I should be delighted to answer it at some other time.
LORD BARNBY: My Lords, could the noble Lord give some definition of the term he employed in his reply? He referred to, not conventional banking practice, but development banking practice. Could he give some definition of exactly what is implied by the term he employed, which is not frequently used and seems to suggest something quite different from conventional banking?
LORD CHALFONT: My Lords, I think what I had in mind was the development of local and regional resources as opposed to the normal banking practice as we would understand it, for example, in banking in this country. I do not think there was anything more esoteric or significant in it than that.

AID TO TANZANIA
2.45 p.m.
LORD BARNBY: 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 (a) why, when diplomatic relations with the United Kingdom have been severed by Tanzania, disbursements to that country by the United Kingdom at public expense have continued; (b) what previous instances exist of such action towards the United Kingdom by a member of the Commonwealth; and (c) what United Kingdom Mission, if any, continues in Tanzania.]
LORD CHALFONT: My Lords, I shall answer this Question in the three parts in which it has been asked. First, so far as capital aid is concerned, the disbursements relate to formal agreements entered into before the break in relations occurred. As regards technical assistance,
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to withdraw this might well make administrative and economic difficulties in Tanzania, which would not be in the interests of the Tanzanian people, of Tanzania's neighbours or, indeed, of ourselves. Perhaps I might further help the noble Lord by inviting his attention to the answers given by my right honourable friends the Prime Minister and the Minister of Overseas Development when they were asked similar questions in another place on January 27 and 25, respectively.
So far as the second part of the Question is concerned, there are no previous instances of such action towards the United Kingdom. Finally, in answer to the last part of the Question, there is a British Interests Section incorporated in the Office of the High Commissioner for Canada.
LORD BARNBY: My Lords, since I feel obliged to ask supplementaries on the three different sections of the Question to which the noble Lord has been good enough to reply, perhaps it would suit his convenience if I put the questions separately under the three heads. With regard to the first, since he suggested that we have continued to give money to a country which has broken off diplomatic relations with us, which money is for their benefit, surely that would be true of any money given out to any country: if it was disbursed it would be to the benefit of that country. There must be a distinction between a country with which we are in normal diplomatic relations and one which has broken off diplomatic relations with us by their action. Does he also remember that an answer was given recently that the amount is £1½million sterling since they broke off relations, and, that from another answer, we know that at least £13 million sterling was given, in recent years, before this?
LORD CHALFONT: My Lords, I can do no more than repeat the basis of my original Answer, in which I said that some of these disbursements related to formal agreements entered into before the break occurred, and I think this speaks for itself; and to say again, as regards the other forms of assistance, that we think its withdrawal would create difficulties, not only in Tanzania but in neighbouring countries, and for this country itself, which would not be in the interests of the

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Tanzanian people, their neighbours in Africa or of this country.
LORD BARNBY: The noble Lord stresses the interests of the people of Tanzania, but since from the reply we learn that this action is without precedent, are Her Majesty's Government satisfied that this largesse is the correct follow-up diplomatic action with any who break off relations with Great Britain?
LORD CHALFONT: These aid programmes must be a matter of continuous planning. To answer the noble Lord's question directly, Her Majesty's Government are satisfied that this is the correct way to proceed.
LORD BARNBY: My Lords, with regard to the third part of my Question, since the noble Lord indicated that we retain some part of a diplomatic Mission there I would ask him whether he is aware of the cost to our ally Portugal in trying to repress the effect of infiltrations from foreign Communist-trained troops in Tanzania who are operating in the northern part of Mozambique?
LORD CHALFONT: My Lords, the third part of the noble Lord's Question dealt with the functions of British Missions or British interests sections in Tanzania; therefore questions or comments on Portugal are outside the realm of the Question. I would suggest that the noble Lord should put down an entirely separate Question on that matter.
LORD BARNBY: My Lords, with due respect, does not the noble Lord think it worth while that when we have representatives there, some action should be taken to protect Portugal from this unwarranted expense?
THE LORD PRIVY SEAL (THE EARL OF LONGFORD): My Lords, I think this is becoming a matter of debate about details, and, with due respect, I would suggest to the noble Lord that he should take a different course in regard to the matter.
LORD BARNBY: My Lords, I regret the reproof by the noble Earl the Leader of the House, but this appeared to fall within the Question I put.

THE SEAMEN'S STRIKE
2.52 p.m.
LORD SHEPHERD: My Lords, at a convenient moment after 3.30 p.m. my noble friend Lord Champion will be making a Statement on the seamen's strike.

MALAWI REPUBLIC BILL [H.L.]
LORD CHALFONT: My Lords, I beg leave to introduce a Bill to make provision as to the operation of the law in relation to Malawi as a Republic within the Commonwealth. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a.—(Lord Chalfont.)
On Question, Bill read la, and to be printed.

SUNDAY ENTERTAINMENTS ACT 1932
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE, HOME OFFICE (LORD STONHAM): My Lords, this is one of the usual Orders made under the Sunday Entertainments Act 1932. I beg to move.
Moved, That the Order made by the Secretary of State for the Home Department for extending section 1 of the Sunday Entertainments Act 1932 to the Urban District of Bishops Stortford be approved.—(Lord Stonham.)
On Question, Motion agreed to.

EMERGENCY POWERS ACT 1920: ADDRESS TO THE QUEEN
2.53 p.m.
Order of the Day read for the consideration of The Queen's Message of Monday last.
THE EARL OF LONGFORD THE EARL OF LONGFORD rose to move, That an humble Address be presented to Her Majesty, thanking Her Majesty for Her Most Gracious Message communicating to this House Her Majesty's Declaration that a State of Emergency exists within the meaning of the Emergency Powers Act 1920. The noble Earl said: My Lords, there are two Motions which stand in my name on the Order Paper,

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but perhaps it would, be convenient if we were to arrange that whatever discussion takes place should take place on the first one, which I now move, on the understanding that when we come to the second Motion it will be taken formally. I am under the impression that this is acceptable to the House.
I am sure the House will agree that anything we say on this serious matter this afternoon should not in any way prejudice as early a settlement as possible of the strike by the National Union of Seamen. I do not propose to give a review of the strike or of the attempts which have been made, and are still being made, to settle that dispute. Still less do I intend, nor, I am sure, would the House wish me, to criticise one side or the other to that dispute, or to attempt to attribute responsibility for the present difficult situation. We are concerned to-day solely with the Government's responsibility for maintaining the flow of commodities essential to the life of the community. It is because of this responsibility alone that Her Majesty was advised to declare a State of Emergency.
As your Lordships are aware, the Proclamation was made on Monday, May 23; the Emergency Regulations were made and laid before Parliament on the same day, and came into operation on May 24. The Proclamation was under the Emergency Powers Act 1920, which provides, that if at any time it appears to Her Majesty that there have occurred or are about to occur events
"of such a nature … as to be calculated by interfering with the supply and distribution of food, water, fuel, or light, or with the means of locomotion, to deprive the community, or any substantial part of the community, of the essentials of life, Her Majesty may, by Proclamation … declare that a State of Emergency exists."
The Regulations which were laid before Parliament last Monday will lapse next week unless your Lordships and Members of another place now resolve that those Regulations should be continued. If your Lordships so approve, they will continue in operation for as long as the Proclamation of Emergency continues. Under Section 1 of the Act of 1920 this will be for one month only. The duration of the emergency can then be extended only by a further Proclamation.
The powers conferred by these Regulations are of necessity wide, but I should make it clear right away that our sole purpose in asking for these powers now is to ensure that we should have them available without delay, should that become necessary. I wish to make it clear, as I told the House the other day, that the Government have no intention of making use of these powers unless and until the needs of the situation compel us to do so. There will be no question of premature or unnecessary use of these Regulations. At the moment their purpose is precautionary. I should like to repeat that once again. Thirty-four Regulations sounds a fearsomely substantial and, indeed, complicated assortment of powers; and as I said just now, the powers they confer are wide. But now that your Lordships have had an opportunity of studying them I think you will agree that they are neither as Draconian nor as difficult as things might at first sight suggest.
My noble friend Lord Stonham will be replying to any debate that takes place, and he will deal with any particular points which your Lordships may wish to raise about individual Regulations. I am sure that your Lordships would not wish me now to attempt to explain the Regulations in any detail. All these Regulations have appeared on previous occasions, with the following exceptions: Nos. 7, 8, 14, 15, 18, 20 and 21. Of these, by far the most important is Regulation No. 18, which enables the Minister of Agriculture to regulate by order the maximum prices of foodstuffs. I should like to stress clearly that supplies of food are at present adequate, and that the food traders have promised their fullest co-operation in keeping prices steady. This provision, therefore, like the others, is merely a reserve power in case of any later developments which might make it necessary to regulate food prices. The situation will be closely watched, and the powers used (I cannot repeat this too often), only if it becomes essential to do so.
Broadly, the Regulations enable Ministers to control the supply and distribution of goods which are the essentials of life, such as fuel and food, in which shortages might occur during an emergency. Others enable Ministers to waive statutory obligations which

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would hamper the movement of essential supplies. Others give powers of requisition, should these be necessary for the maintenance of essential supplies. There are also provisions for enforcement.
I would emphasise again that these Regulations are not made against the National Union of Seamen. The Government are acting to discharge their responsibility to the nation for securing the maintenance of the essentials of life. I now therefore ask your Lordships to discharge your responsibility, by resolving that the Address to Her Majesty, thanking her for Her Most Gracious Message be approved; and thereafter, when that is completed, I would ask your Lordships to resolve that these Regulations should continue while this State of Emergency by Proclamation is in force. I hope the House will support these Motions, and will feel, as I do, that in this very difficult situation the wisest course is for nothing to be said which could possibly exacerbate a position which is already fraught with so many troubles for our country. I beg to move the first Motion.
Moved. That an humble Address be presented to Her Majesty, thanking Her Majesty for Her Most Gracious Message communicating to this House Her Majesty's Declaration that a state of emergency exists within the meaning of the Emergency Powers Act 1920.—(The Earl of Longford.)
3.1 p.m.
LORD CARRINGTON: My Lords, it is the duty of the Government—any Government—to ensure that food and supplies and fuel and power are available to the people of this country, and should there be a situation in which those supplies are threatened then the Government must take action. The noble Earl, Lord Longford, has explained to your Lordships about the grave situation which may arise as a result of the seamen's strike, and I think that his remarks were emphasised by the Chancellor of the Exchequer in a speech he made last night in another place. Just as the noble Earl did not, I do not intend to discuss the issues of the strike; no good can come of that and, I should have thought, nothing but harm at this stage. All that one can say is that every one of us, on whichever side of the House we sit, must hope that the strike will end as soon as possible.
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There can be no doubt that Lord Longford has made out an unanswerable case for the imposition of a State of Emergency and for Regulations to ensure the continuance of essential supplies to this country. I do not intend, as he did not, to go into any detail about the powers asked for by the Government. I note that they are not to be applied unless it is vitally necessary, and that they are purely precautionary. But I do not think that I could agree with him that they are not Draconian. I should have thought that these Regulations were really very severe indeed, and very comprehensive. As a general rule, I should have thought it a mistake that the Government should ask for powers which they do not intend to use except in the last resort. In this case, however, I think that your Lordships would be justified in giving your assent, for this evening both Houses of Parliament rise for a fortnight and there might well be unavoidable delay unless some latitude were given to the Government in this direction.
However, I think it is perhaps just as well to note that the powers asked for go much wider than those which were asked for by the Government in 1955. Indeed, in many ways they are nearly as all-embracing as the powers which were required in the 1926 General Strike. For example, by Emergency Regulation No. 23 it is possible for competent authorities (and "competent authorities" are described as being "a Secretary of State"—any Secretary of State—"and the Minister of Public Building and Works"), if they consider it necessary or expedient, to take possession of any land. And there are provisions, as the noble Earl has said, for regulating the maximum prices of various foodstuffs, for requisitioning chattels and many other things, which in normal circumstances, would be a gross interference with private liberty and private possessions. We must all hope that it will not be necessary for these powers to be used widely, or indeed at all. But, as I say, I think that in the circumstances it is reasonable for the Government to ask for your Lordships' Assent to these regulations.
I should like an assurance from the noble Lord, Lord Stonham, who I understand is to intervene later in the debate, that as soon as the strike is settled these Regulations will be withdrawn at the

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very first opportunity. Perhaps one might hope that the gravity of the situation, the economic damage, and the possible hardship to innocent people which the strike will cause will be underlined by the introduction of these emergency powers. Those of us who sit on these Benches sincerely hope that they will be an additional inducement to the settling of the strike.
3.5 p.m.
LORD REA: My Lords, I think the noble Earl the Leader of the House need have no worry about these two Motions being passed by your Lordships' House. As the noble Lord, Lord Carrington, has said, we regret that these powers are necessary, and it cannot be too much underlined that they are precautionary, particularly to what the noble Earl calls one side of this dispute. But I would remind him and the House that there are not merely two sides to the dispute: there are three sides. And the biggest side is the consumer, the public, for whom the Government are the watchdog and are responsible.
Without going into detail, or making criticism which might be in any way embarrassing, we on the Liberal Benches feel that there has been an extraordinary lack of action since the year 1894, when the Merchant Shipping Act, and many other Acts of the same sort were passed. Neither this Government nor their predecessors have taken any steps to bring these Acts up to date and to see that the law is fair, both to the men—and particularly the men—and to the employers. The Mercantile Navy has always had our great admiration. Many of us feel that the men may have been rather misguided this time, as perhaps have the employers, but it is the public who are suffering the unfairness of what is happening. I can only say that, although the Government's action is late, it is none the less welcome. We hope that the Regulations will never have to be put into operation. The Government, however, can certainly rely on support from these Benches.
3.7 p.m.
THE LORD BISHOP OF NORWICH: My Lords, the noble Earl, Lord Longford, and the noble Lords, Lord Carrington and Lord Rea, have shown restraint in refraining on this occasion to discuss the issues of the strike itself which has necessitated the Emergency Regulations being laid
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before this House. I hope that in what I have to say I shall indicate that I share the intention to avoid anything which could exacerbate or embarrass such a serious situation. Clearly it is our profound hope that it will not prove necessary to implement these Regulations. It is, however, in the interest of the nation that powers to do so should be sought and should be granted.
It is in those same interests, I would submit, that the Court of Inquiry into the dispute should take place immediately. I would, however, plead that their terms of reference should be wider than those for a normal kind of industrial dispute and should include human relationships as well as wages and conditions. In saying this I feel confident that I am voicing the views of those who sit on these Benches. If ever a section of the community was in a special circumstance it is the seafaring community of this country. This is not just a normal employer—employee conflict taking place annually. More than fifty years have passed since the seamen's last official dispute, although the last six years have seen growing dissatisfaction among seamen. The nation should have been warned long before this. This is not a struggle solely for money, although the cost cannot be ignored.
Let us examine the cold facts logically. More than 65,000 men sail the seas under an Act of Parliament drawn up in the year 1894, 72 years ago. This period covers the most rapid advances in technology and also in the understanding of human relations and conditions of work. At sea there has been an advance in technology; there has also been advance in conditions. The need for improvement in human relations remains. This cannot be achieved by a normal machinery for settling industrial disputes. The relationship between employer and employed must inevitably be one that is peculiar to the situation involved. However men may change laws or reach further and newer agreements, a ship's crew will always be a community at sea, a community tightly bound according to the size of the ship which is their world. Their life cannot be compared in its entirety to any other industrial division.
Each member of the crew of any ship, whether he be captain, able seaman, or cabin boy, has his specialised duties in

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that community. To compare each task aboard a ship with a similar task on land is false. A fitter on a ship requires the same skill as a fitter on a bench in a factory. The captain requires initiative and ability analogous to that of a managing director in a board-room. But, over and above these skills, qualities are required which must be applied in a manner that is different from that of any other profession. However we may advance in technological development, nature determines the conditions in which these men work. The purpose of the crew is to deliver their small portable island from A to B safely, and this requires, probably more than any other quality, the loyalty of every man of the crew to the community to which he belongs. This quality, loyalty, applies of course in other trades, but the conditions of work there do not call for it in quite the same way.
Human dignity must always be the essence of the relationship between employer and employed, and this must be the basis of negotiations between the owners and the seamen's union. It may well be argued that to convene a Court of Inquiry while a dispute is in operation is creating a precedent—an inquiry taking place whilst a pistol is held at the head of the nation. But it is the task of Her Majesty's Government to see that justice is done for both parties, whether the pistol is there or not. Equally, it is wrong to deny justice because a threat is in operation.
It is sad that seven weeks have passed since either side in this dispute has been officially in contact. I would say this to my friends of the seamen's union, "Your point has been made. The nation is reminded that almost one in three of your members lost their lives during the war. To stand doggedly on a stock phrase, 'a 40-hour week', is not helpful." That phrase was first used by the craft unions 123 years ago. It was then thought to be Utopia. It may well go a long way in some directions, and in some trades, towards Utopia, but it could also have grave repercussions. In any event, its applicability under the conditions of a ship at sea raises special questions. Is it not time, now that we are all aware of the problem facing the shipowners and the seamen, that rather than bring the nation to its knees—and every hour adds to and extends the bitterness,
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and the intractability of finding a solution—the seamen's union should get their ships to sea? Whether we be seamen, shipowners or standers-by we are all part of the nation. This dispute must not end in a victory for either party or for the Government. It must end in victory for common sense and justice.
The most important considerations to any trade union leader must be: Are my demands just? Is there any other means of gaining these demands without further conflict? I believe there is. To the owner the considerations must be: Are the demands just? Can industry afford it, and if not, why not? An inquiry would find this out. An impartial, immediate inquiry by a panel much broader than the normal machinery for a trades dispute inquiry would answer these questions, and could relieve both parties and the nation from a grave threat to our well-being.
3.14 p.m.
LORD CITR1NE: My Lords, no one, I think, on any of the Benches in this House, would desire to dispute the wisdom of the Government in taking steps to endow themselves with powers to deal with what may easily become a very serious situation. There is no point of contention on that and, like the right reverend Prelate who has just spoken, I would not wish to say anything which could appear to be taking sides, in any shape or form, with either of the parties to the dispute. However, I would say that to my ears some of the phrases which fell from the right reverend Prelate seemed very much like appealing to one side in the dispute rather than to the other side. I just mention that because that is the way it struck me, and that is the way I think it will be seen when it is read.
THE LORD BISHOP OF NORWICH: My Lords, may I ask the noble Lord which phrases?
LORD CITRINE: The part where he appealed to the National Union of Seamen. He laid special stress on that point. There are two sides to this dispute. There are the shipowners on the one side, and the seamen on the other; and while it is perfectly true that the seamen could end the dispute by accepting the terms of the employers, or, alternatively, by carrying on with the work pending negotiations, it remains true that it could be

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solved by the shipowners themselves improving their offer. We must not forget that.
LORD REA: My Lords, may I intervene? There may be something wrong with the acoustics in this Chamber, but I distinctly heard the right reverend Prelate appeal to the employers as well as to the seamen.
LORD CITRINE: I listened to the phrases very carefully, and I am perfectly sure that what I have said will be sustained by the actual reading of the speech.
THE LORD BISHOP OF NORWICH: My Lords, may I be allowed to intervene again? If the noble Lord gathered from the words that I said, that I was in any way weighting my argument on either side of this dispute, I should say that this was certainly not my intention, and I endeavoured to weigh those words as carefully as I could.
LORD CITRINE: That may be. But some very loose language has been used about this dispute, and some of it in very high places. It has been stated that this strike is a strike against the State. I think that would be repudiated strongly by all sections of the trade union movement. So let us be careful just exactly what we say in regard to a dispute of this character.
It is well known that the Emergency Powers Act 1920, under which the Government have made these Regulations, for use if and when necessary, was passed in the teeth of opposition from the trade union movement. The Act has a bad history. It gives tremendous powers. It gives powers, without any shape or form, of summary arrest to a constable who suspects that someone is breaking a Regulation. It gives tremendous power which could in certain circumstances be very much abused. I should like to ask this question: Were either the British Employers' Confederation or the Trades Union Congress consulted before the Government thought it necessary to take these powers?
3.18 p.m.
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE, HOME OFFICE (LORD STONHAM): My Lords, I am most grateful, and Her Majesty's Government are most grateful,
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to the noble Lord, Lord Carrington, the Leader of the Opposition, for the manner in which he has received this Motion and for the support which, on behalf of the Opposition, he has given. I should also like to thank the noble Lord, Lord Rea, for his attitude on the matter.
There are very few points for me to answer. One small point which the noble Lord, Lord Carrington, mentioned was that Regulation 23 was not used in 1955. That is true. But of course, on a previous occasion, in 1949, when there was a somewhat similar crisis, requisitioning powers were available in Defence Regulations, and therefore there was no need for a special Regulation. Indeed, some of the additional Regulations are included now only because of a new need—for example tests for vehicles which have come in since 1955.
I would reaffirm that these powers have been taken only to meet the event—we hope the unlikely event—that they will need to be used, but I think the noble Lord, Lord Carrington, agreed that the case for action was answerable, and that the Government were right to assume the powers. The noble Lord also asked for an assurance that the powers would be ended immediately they were no longer required. I can give that assurance at once. Indeed, it can be assumed that as soon as the emergency comes to an end the Proclamation will be revoked, and the Regulations will then automatically lapse.
The noble Lord, Lord Rea, said there were three sides, and that the most important side was that of the consumer interest. I think he was inclined, quite fairly, to criticise the fact that there had been an apparent delay, or an apparent lack of action, in dealing with the difficulties which are now felt over the Merchant Shipping Act 1894. I would not have it felt that there has been no action, because both under the previous Government and under the present Government, over a period of nearly six years, there has been constant effort in this matter. But this is an enormous document, with many other ancillary and additional Acts. Indeed, Part II, which is the one that mainly concerns the Seamen's Union, has literally hundreds of provisions.
Since 1960, both the shipowners' and the seafarers' organisations have had

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prolonged discussions, and towards the end of 1963 the Ministry of Transport, after these discussions, called both sides together. There were then many days of hard work by the Ministry of Transport and the Board of Trade, resulting in the publication of an initial, detailed review in March last year. This was then, of course, considered by both sides, and 40 foolscap pages of detailed proposals were submitted to both the shipowners and the seamen. We received comments from the shipowners in January of this year and from the seamen in March of this year, but, of course, the present events stopped any further action being taken. We shall press on as quickly as we can.
The right reverend Prelate asked that the Government should proceed as quickly as possible, without any delay, to an inquiry. If he waits for a few more minutes, when my noble friend Lord Champion will be making a Statement, he will receive a complete answer to his plea in that respect. I hope that the right reverend Prelate and my noble friend Lord Citrine will not expect me to enter into any of the points they raised. I think that the note on which my noble Leader opened the debate, and the response that he received from the noble Lord the Leader of the Opposition, ought to be the keynote in this matter, and that we can all join together in hoping that that wisdom will be disseminated outside, and so help to bring to an end a dispute which we all deplore.
LORD BARNBY: My Lords, before the Question is put, could the noble Lord indicate, in view of the expanded connections between British firms and Northern Ireland (and I was in Belfast yesterday), whether any action under these Regulations would apply automatically without any further action by the Northern Ireland Parliament being required? Because he will remember that the present conditions as a result of the bank strike in Northern Ireland have produced an exceptional position which is quite grave in the relationship between these different firms.
LORD STONHAM: My Lords, as the noble Lord is aware, the Government of Northern Ireland have autonomy in these matters, but apparently the noble Lord is not aware that to-day the Government of Northern Ireland have issued
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a Proclamation of Emergency. Presumably, they will be taking steps, although not at our direction, similar to those that we are taking, to protect the interests of Northern Ireland citizens.
LORD CITRINE: The noble Lord who spoke for the Government was quite right in saying that it would be undesirable that anything should be said which appeared to enlarge the area of discussion, but I asked a simple question—
SEVERAL NOBLE LORDS: Order, order‡
LORD CITRINE: —and I am going to repeat my question. My question was: were the Trades Union Congress or the British Employers' Confederation consulted before the Government took this power? That is the question. If the Government do not answer it, the inference will be drawn that the organisations were not consulted.
On Question, Motion agreed to: the said Address to be presented to Her Majesty by the Lords with White Staves.

EMERGENCY POWERS ACT 1920
THE EARL OF LONGFORD: My Lords, I beg to move the second Motion standing in my name.
Moved, That the Regulations, dated 23rd May 1966, made by Her Majesty in Council under the Emergency Powers Act 1920 shall continue in force subject to the provisions of Section 2(4) of the said Act.—(The Earl of Longford.)
On Question, Motion agreed to.

MILITARY AIRCRAFT (LOANS) BILL
Read 3a (according to Order), and passed, and returned to the Commons.

PUBLIC WORKS LOANS BILL
House in Committee (according to Order).
House resumed: Bill reported without amendment: Report received.
Then, Standing Order No. 41 having been suspended (pursuant to the Resolution of Tuesday last), Bill read 3a, and passed.

TRANSPORT FINANCES BILL
3.28 p.m.
Order of the Day for the Second Reading read.
THE MINISTER WITHOUT PORTFOLIO (LORD CHAMPION): My Lords, I beg to move that this Bill be now read a second time. This is a simple little Bill which deals in a straightforward fashion with the finances of the British Railways Board, the finances of the British Waterways Board and the finances of London Transport. I shall explain how the Bill affects each of these three Boards in turn, but before I do so I should like to fill in some of the policy background and explain why it is necessary for the Government to present the measure at this stage, with some inconvenience to your Lordships.
The powers which were given by Section 22 of the Transport Act 1962 to make grants to the Railways Board to meet their deficits on revenue account are now almost exhausted. In fact, it is at present forecast that the sum of £450 million which was provided under that Act for that purpose will be used up by July 1. It is thus essential to have new powers by the beginning of July so as to ensure that British Railways are able to carry on and fulfil their essential role in the national economy. I am sure that your Lordships would agree that it is unthinkable that one of the largest single employers of labour in the country should not have funds available to meet their obligations to their staff and to their customers.
The Bill is being put forward as a stop-gap measure to put the Railways Board in funds while satisfactory policies are worked out which will enable long-term legislation to be enacted which will replace the Transport Act 1962. The Government are working urgently to this end, but there is a long road ahead before all the necessary steps have been taken. As at present foreseen, the first step will be the publication of a White Paper on transport policy this summer. This will lay the foundation of a successful and flourishing transport system. Then there will be thorough consultations with the interests affected, which will no doubt take a considerable time as these
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matters always do. But the Government hope to be ready with a Bill which will give statutory effect to the policies to be outlined in the White Paper, which I have just referred to, in the 1967–68 Session.
Meanwhile it is necessary to carry on under the framework of the Transport Act 1962, and the present Bill is closely related to the provisions of that Act. I have already mentioned that Section 22 of the 1962 Act provided for up to £450 million to be issued to the Railways Board in the five years up to December 31, 1967, to meet their revenue deficits. Unfortunately, the record shows that the Railways Board incurred a deficit of £134 million in 1963, its first year of operation, £121 million in 1964, and £132 million in 1965. Thus, by the end of 1965, a total of £387 million had been spent, and the total to date is already £413 million. It is estimated that the whole sum of £450 million will have been spent in three and a half years, instead of lasting the five years contemplated by the 1962 Act.
The Government are confident that the Railways Board will do better than this in the long run. Nevertheless, if the railways are to go on providing all the services which the country needs, on the present policies there is bound to be a sizeable deficit for the next year or two; indeed, it is only prudent to allow in the legislation for a possible worsening in the Board's finances for reasons beyond their control. This means that a substantial allowance should be included for contingencies in estimating the Board's requirements for Government assistance up to the end of 1968, which is the period dealt with by the Bill. The Government have therefore decided that the approval of Parliament should be sought to extend present powers to enable the revenue deficits of British Railways to be met up to a total of £800 million; that is, up to £350 million more than at present provided for in the period ending December 31, 1968. This is, of course, a round figure. There is no question of precise estimation in dealing with the financial results of one of the largest businesses in the country, which is subject to many factors outside its control.
The new limit allows for a considerable safety margin. But the experience

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of the 1962 Act shows that it is necessary to do this. There is no risk that the provision of a large sum will induce the Board to relax their strenuous efforts to contain their deficit. The Board are fully seized of the need for economy and efficiency and are doing their best within the limits imposed by unrealistic terms of reference. Of course, the provision in the enabling powers to pay up to £800 million does not mean that this amount of money will in fact be spent. On the contrary, the Government hope that the Board will be able to do with much less. The long-term proposals which will be elaborated in the forthcoming White Paper will ease the Board's load, for example as regards the costs of social services which they run purely for the benefit of the community. It is quite unfair that losses on such services should be reflected in the Board's revenue account as part of their general deficit and that they should bear stigma for essential work done in national interest.
Perhaps I could say a brief word here about the substantial progress being made by the Board in modernising the railway system. There have been large achievements. I need only mention the completion of the first stage of the London-Midland electrification, the Glasgow Suburban in Scotland, the introduction of freight liner trains and the commencement of the Bournemouth electrification. Modernisation investment is in general paying off in saving cost and releasing manpower and, at the same time, attracting new traffic. More and more is needed. All these developments mean that the railways are going through a period of rapid change—and there is more to come. It is a testing time for both management and men, and the Government pay tribute to both in the way that they have faced the problems of the last few years.
I now turn to London Transport, where the problems are newer, but none the less difficult for all that. The London Board told the Government last year that they were finding it increasingly difficult to reconcile the statutory duty both to pay their way and to provide an adequate service, which had been laid on them by the Transport Act 1962. Moreover, the Board said that they had formed a view
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that the maximum revenue which could be obtained from fares increases would be insufficient to put their finances on a satisfactory basis. This led the Government to request the Board to defer a fares increase in 1965 until an examination could be made of the Board's operating conditions. It would clearly have been pointless to drive further passengers away by sizeable fares increases before the Government had been able to appraise the basic elements of the problem. The Government accepted the corollary that the Board should not be expected to bear the burden of the consequential short-term deterioration in their finances, and in fact made grants by way of compensation which totalled in all £3·85 million. This was the amount of revenue which the Board estimated they would lose by the end of the year because of the deferment of the fares increase in 1965.
The arrangements I have described were strictly temporary. But they were clearly a pointer to the need for some further continuing support in the medium term and the Bill lays down how this further support is to be given. But before I explain the detailed provisions of the Bill, I will briefly outline the difficulties which have led to the Board's deficit. The basic problem is that the growth of car ownership is changing the role which public transport has to play, with accompanying repercussions on the financial viability of the Board. In London, the loss of traffic to private cars over the last few years has been very serious. In the past, London Transport buses earned sufficient surplus to offset losses on the Tubes, but the fall in bus traffic of about one-third over the last ten years has resulted in a reversal of the situation. The trend away from bus traffic is common to all large towns and cities. But the intensity and scale of the peak hour commuter traffic in London, and the extent of traffic congestion, have made the problem more severe there. On top of this, there has been the utmost difficulty in recruiting and keeping adequate bus staffs. This is particularly serious for London Transport, which is such a highly intensive labour industry; indeed, staff costs amount to about 76 per cent. of total costs. As the bus service worsens and becomes more unpredictable, so the relative attractiveness of the private car increases.

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The Government do not consider that financial measures alone can solve the London transport problem. Fares increases help to the extent that they bring in net revenue, but they tend to divert more and more traffic to the private car. In this sitution, it has proved impossible to reach the financial target which was settled in 1963 for the Board, under which they agreed to aim at earning an average balance of revenue of £4 million a year over the five-year period 1963 to 1967, after provisions for depreciation at historic cost and after meeting interest charges. This was the amount of surplus which it was considered was the minimum necessary to place the London Board on a financially sound footing and to maintain their existing capital intact. In fact, the London Board earned a surplus of only £2·1 million in the first year (1963) and less in the second, only £1·3 million. Their third year showed an actual deficit of £ 1 million even after receipt of a grant of £3·85 million from the Exchequer as compensation for deferring the fares increases at the Government's request.
It is clear that we must look to operating policies for improvement, rather than to financial devices. Various expedients are being considered—for example, fiat-rate systems which would enable working expenses to be significantly reduced. The Board are already reviewing their commercial policies, and the Government are discussing with them what further studies could be made which could make a significant contribution to the improvement of their finances. Your Lordships will of course be aware of the considerable improvements which have already been achieved through traffic management measures and parking restrictions. There is also the possibility of discrimination in favour of public transport vehicles in the use of available road space. That is only a possibility, and, of course, must be studied.
The possible field of action is clearly very wide, and the right path through this is not very clear. The Transport Coordinating Council for London has therefore been set up to provide a forum in which all the bodies concerned—the Ministry, the Greater London Council, transport operators and Regional Council—can consider together problems which can be solved only by co-operative action.
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All concerned with London transport are being assisted by the results which are being obtained from the London Transportation Survey, which will make it possible for the first time to plan transport development in London with the backing of comprehensive data so that decisions made will take the fullest account of land use and the best use of physical and financial resources. In the meantime, financial assistance to the Board is urgently necessary. The present position is that they are expected to incur a deficit of about £5½, million in 1966, after allowing for revenue from fares increases which came into force last January. Further deficits of much the same order may arise in 1967 and 1968.
The Bill therefore gives powers to make grants to the London Board of up to £16 million in respect of their deficits on revenue account up to the end of 1968. This is achieved by subsection (3) of Clause 1, which also applies to London Transport the range of deficit grant provisions which have applied to British Railways since 1962. One effect is that the financial duty of the London Board to break even, taking one year with another, will be mitigated in the same way as the Railways Board's financial duty was mitigated by the 1962 Act. In future it will be recognised that it is unrealistic for the London Board to aim at paying their way without qualification. Instead, they will be required to aim at breaking even at the earliest possible date.
Finally, there are the provisions of the Bill dealing with British Waterways finances. The Waterways Board have been reviewing their waterways with particular reference to the future uses of those which are no longer needed for transport purposes. The Board have published their findings in a Report entitled The Facts about the Waterways, which draws the main conclusion that only a relatively small part of their undertaking can be run on a commercial basis, and then only if a substantial capital reconstruction is made. They are suggesting that their capital debt to the Exchequer of over £19 million should be substantially written down to reflect a more realistic value for the assets which they consider they can still employ profitably, and that their other assets, including all the waterways which may

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be required for amenity purposes but which no longer have any significant transport use in modern conditions of an intensive road and rail network, should have no capital value attributed to them at all. The Board's Report is being urgently considered by the Government. It is, of course, clear that some substantial capital reconstruction must be undertaken, but the exact shape of this still needs definition. In the meantime, assistance must continue to be provided on revenue account.
I must here pay tribute to the Board for their achievement in effecting significant economies since they were set up. The Transport Act 1962 envisaged that the revenue deficits of the Board might average up to £2 million a year over a five-year period. In fact, the Board's annual deficits have been considerably less, and great credit is due to them on this account. On average their deficit each year has been about £1½million, and of this almost a half has been interest on the unrealistic capital debt of £19 million which they inherited under the 1962 Act. Owing to the Board's success in keeping down their deficit, it is not necessary to legislate in the Bill for further cash to be provided to meet deficits. All the Bill does is to extend the period in respect of which revenue deficit grants may be made up to the end of 1968, in line with the extended period provided for in the Bill for both British Railways and London Transport. Thus, again the legislation is in the nature of a stop-gap, interim measure, to be replaced in due course by the major Bill which will be required to give effect to the Government's decisions about capital reconstruction and other matters dealt with in the Waterways Board's Report on the state of their undertaking.
Clause 2 of the Bill is also concerned with British Waterways finances, but in a more technical and limited way. The background is that Section 64 of the Transport Act 1962 gave the British Waterways Board certain protection against legal proceedings for the enforcement of obligations to restore unnavigable waterways to a navigable state. This protection was to cover the first five years of the Board's existence; that is, the same period as that in which they could receive deficit grant from the Minister. The protection was necessary because the
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Board inherited from their predecessors, the British Transport Commission, a liability to keep most of their canals in a navigable condition. A number of canals for which the Commission were responsible were not in fact, however, in such a condition when the Waterways Board took them over on January 1, 1963. This meant that the Board were at risk of having legal proceedings brought against them. Section 64 of the Transport Act 1962 accordingly safeguarded the Board's position in this respect for an interim five-year period. Clause 2 of the Bill simply extends this interim period for a further year, in line with the extension of the deficit financing period which is effected by Clause 1.
The essence of the Bill is that it effects the minimum changes in existing legislation which are consistent with the need to ensure that the necessary finance will be available for the three Boards in question in the period up to the end of 1968 when they will inevitably be in deficit. This has meant that the Government have had to accept for the time being a continuation of the framework provided by the Transport Act 1962. But the firm intention is to replace this with other legislation which will give the nationalised transport undertakings the fair wind and the square deal which they have so sadly lacked in the past. I beg to move.
Moved, That the Bill be now read 2a.—(Lord Champion.)

THE SEAMEN'S STRIKE
3.50 p.m.
LORD CHAMPION: My Lords, with your Lordships' permission, I should like to make a Statement similar to that which my right honourable friend the Minister of Labour has just made in another place about the seamen's strike. I will use his own words, which are as follows:
"I have appointed a Court of Inquiry under the Industrial Courts Act 1919, with the following terms of reference: —
'To inquire into:

1. the immediate causes and circumstances of the present dispute between the shipowners and members of the National Union of Seamen;

2. terms and conditions of service of seamen, taking into account the

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national interest, technological change and the need for an efficient and competitive shipping industry;

3. relations between shipowners, officers and seamen;

4. the law, including the Merchant Shipping Act 1894, relevant to paragraphs 2 and 3 above; and to report.'

"Lord Pearson has agreed to serve as Chairman of the Inquiry. Other members are Mr. Hugh Clegg, of Nuffield College, Oxford; Mr. Stephen Brown, Vice-President of the Confederation of British Industry; Mr. J. O'Hagan, General Secretary of the National Union of Blastfurnacemen and Chairman of the General Council of the T.U.C.
"The Court will begin its work as soon as possible. Both the Employers and the Union have promised full cooperation. I have discussed with Lord Pearson the possibility of the Court making an Interim Report dealing with the immediate issues in the dispute. He will be considering this possibility with his colleagues as a matter of urgency.
"As the House knows, the Government's intention that there should be a full and searching inquiry into all the issues affecting this dispute has repeatedly been made clear to both sides. The appointment of this Court of Inquiry is a further demonstration of the Government's determination to help the two sides to reach a prompt and equitable solution of their differences and so put an end to the serious damage which the strike is causing."
LORD DRUMALBYN: My Lords, I should like to thank the noble Lord for repeating this Statement to us. I am sure that all your Lordships will welcome very much the setting up of this Court of Inquiry to deal not only with the present distressing situation, but with the longer-term issues—the terms and conditions of service; relations between shipowners, officers and seamen, and the law governing these matters. I am sure we are all glad to hear that both the employers and the National Union of Seamen have pledged their full co-operation.
There is only one question that I should like to put to the noble Lord, and it is with regard to the making of an Interim Report. Do I take it that the
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Government have in mind that if it is found possible to make this Interim Report, then the Commission will sit more intensively than is normally the custom of Royal Commissions and will make their Report at the earliest possible moment? With this sole question, I am sure that your Lordships will all wish Lord Pearson and his colleagues Godspeed in their difficult and important task.
LORD REA: My Lords, I should like to echo what the noble Lord has just said. I am sure your Lordships will all welcome the setting up of this Committee under Lord Pearson. I may add that some of us find it extremely gratifying that the problems we put to the Government nearly thirty minutes ago have been so quickly settled and answered.
THE LORD BISHOP OF NORWICH: My Lords, after the speech that I have just made, I think I must say what clearly would be anticipated—namely, how profoundly thankful I am to hear both of the setting up of the Court of Inquiry and also of the terms of reference the Inquiry has been given, and to add my wish of God-speed to the outcome.
LORD CITRINE: My Lords, I, too, should like to thank the noble Lord for the Statement that has just been made, and for the comprehencive terms of reference. I should like to ask one question, and it is this. Did either of the parties to this dispute show opposition to the appointment of a Court of Inquiry prior to the outbreak of the dispute? If they did not show such opposition, why did the Government leave it until the dispute had actually started before appointing the Court?
LORD CHAMPION: My Lords, I should like to thank the House for the welcome that this Statement has received. The first question asked by the noble Lord, Lord Drumalbyn, was as to the urgency with which this Court will be going about their task. Clearly, as the Statement says, on the immediate issue we shall want to get an interim statement as quickly as possible and an Interim Report from which we might be able to urge on the parties to the dispute an immediate acceptance. So far as the wide-ranging nature of the inquiry that they have to undertake is concerned, clearly this cannot be done in a hurry. This is

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a matter of great complexity. It has been going on, and the difficulties have been building up, to some extent, I suppose, since the Merchant Shipping Act 1894.
The noble Lord, Lord Rea, said that we have acted with tremendous promptitude as a result of some remarks that he made earlier. We are always glad to accept his advice, and on this matter I will take unto myself some of the kudos which must naturally flow from the speed with which we acted on his advice. I am grateful to the right reverend Prelate for his welcome.
I think it has been made clear throughout (this is in answer to my noble friend Lord Citrine) to all the parties that this Inquiry was to be set up. We hoped that both parties would realise this, and that any action such as the one from which the country is now suffering would not have taken place. We hope that this may be, to some extent, the answer to the problem which the industry on both sides has been facing. There is no more that I can say on it at the moment, except to pray with everybody else that we shall soon get an end to this disastrous dispute.

TRANSPORT FINANCES BILL
3.59 p.m.
Debate resumed.
THE DUKE OF DEVONSHIRE: My Lords, in terms of length, this Bill is an extremely short one, but I do not think any of us should be deceived by its brevity into thinking that it is not a Bill of great importance. It is in all senses of the word a Bill, and looked at financially it presents a bill for the vast sum of no less than £366 million. Once this Bill is on the Statute Book that amount of money can be charged to the British taxpayer.
The Minister, in moving the Second Reading, has told us that in general the purpose of the Bill is to provide this sum of money, £366 million, for the purpose of financing possible deficits in the Railways Board and the Waterways Board of £350 million, and a further £16 million in the London Board, up to the end of 1968, which is in 2½ years' time. I must confess that I was a little surprised that the Minister referred to it as a "stop-gap" measure. Two and a half years
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is a very long stop-gap. I should have thought that a stop-gap referred to a matter of months rather than 2½ years. I would query the use of the words "stop-gap" for such a long period.
I suggest to the House that this is a most extraordinary time to introduce such a piece of legislation. I understand that the full accounts for British Railways were laid on the Table of another place yesterday. As I understand it this means that the accounts of British Railways for 1965, and all the vital information they contain, are known to the Government and, in particular, to the Ministry of Transport. Yet the Government see fit to ask now, with really the most indecent haste, for a blank cheque for £366 million. Surely it should, and indeed could, have been arranged either to publish the accounts a few days earlier or to postpone the introduction of the Bill until after the Whitsun Recess, when the details of the British Railways accounts for 1965 would be available for all those interested to examine them.
In moving the Second Reading, the noble Lord said that this legislation had to be on the Statute Book by the beginning of July. The House resumes early in June. Surely there would have been plenty of time for this Bill to be discussed after those of us who were interested and those in another place had had an opportunity of examining the accounts of British Railways. We are also being told—to make it even stranger—that the Bill will be passed within a very short time of the publication of a major item of Government policy: that is to say, the Government's White Paper on Transport. We are being asked to pass legislation voting this vast sum of money without the Government's giving any indication of the way in which they propose to spend it. After all, the Government have no earthly need to pursue such a reckless policy, even if they wish to get the legislation through before the Whitsun Recess. They could have followed a perfectly easy alternative course: that of introducing legislation that would have provided the Boards concerned with sufficient money to allow them to carry on until the end of the current year. This sum would have been well under £100 million, instead of the £366 million now under consideration. But the Government have not proposed

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such a course. Instead they are demanding this vast sum without giving any indication to the taxpayer, or to Parliament, how it will be used.
Surely this is a classic example of putting the cart before the horse: demanding money without informing the country of the purposes for which it is to be used. Ought it not to have been the other way round?—the White Paper, a statement of the Government's transport policy, followed by detailed estimates showing the amount of money required to carry out that policy. Instead, we have the Government's policy, all too clearly summed up in the Explanatory Memorandum to the Bill. The last sentence of that Explanatory Memorandum goes as follows:
"The actual payments made will depend on the financial performance of the Boards in the future, which cannot be forecast with any accuracy at this stage."
Why not leave this legislation until the performance can be forecast with some accuracy? I cannot express too forcibly from this side of the House that it is putting the cart before the horse and asking for money when, if we waited a matter of weeks, not only should we have the accounts of British Railways to look at but, on a wider field, we should have the Government's White Paper on Transport. I think the last course would have been the only proper one.
During the Second Reading debate on this Bill in another place, the Government were pressed on this point of why it was necessary just before publication of the White Paper, to ask for the money to last the Boards up to the end of 1968. In winding up the debate, the Joint Parliamentary Secretary to the Ministry of Transport had this to say:
"Once the Government's White Paper is published, the House will need time to consider it and debate it. There will have to be consultations and then legislation will have to be drafted. The legislation will then have to be considered and will have to come into effect.
"It seems a reasonable margin that, to allow sufficient time for full and mature consideration for the coming into effect of legislation, we should ask for this money in order to finance not the White Paper, not to carry out our own policies, but rather to ensure that British Railways, which now has to operate under the statutory limitations of the 1962 Act, will have money to pay its way in the interim."—[OFFICIAL REPORT (Commons), Vol. 728 (No. 23), col. 1460; 18/5/66.]
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From that, I can only assume that the Government expect it will be at least 2½ years before that transport policy comes into effect. I can see no other explanation, and if the noble Lord who is to reply has another explanation, I shall listen to it with added interest.
I would say only this. If my interpretation is right, the Government expect that it will be 2½ years before their transport policy comes into operation. This does not speak much for the Government's boasts of streamlining the procedures of government. Having already been in office for more than 1½ years, they require a further 2½ years before they can bring their policies into operation. The noble Lord complains, but I think that is a fair point. In modernising Britain, transport must play the key role, but under this Government obviously we have to wait for at least another 2½ years before it can play its part in a modern Britain.
I return to my main objection to the Bill, which is (how shall I put it?) the blank cheque philosophy behind it. The Minister, in moving the Second Reading, gave no detailed reason why this huge sum was required. Nor in listening to the noble Lord, Lord Champion, in moving the Second Reading in this House, could I find any detailed reasons why it was required. The right honourable Lady, the Minister of Transport in another place, expressed the hope that it would not be required and, indeed, the noble Lord, Lord Champion, said the same thing. I think his phrase was, "The Government hope to do with much less." It was hoped that this sum would be amply sufficient for the Ministry's needs for the period concerned.
My Lords, the last thing I can do is to put myself before this House as an economic expert, but surely this kind of vague, sloppy, financing of a great nationalised industry must be disastrous, particularly at a time of such national economic stress. The fact that the Boards will have such vast sums upon which they can draw is virtually an open invitation to spend that amount of money. Surely economy must be the first principle. It is folly of the highest order to give the green light to the spending of these hundreds of millions of pounds without giving any indication whatsoever as to how they are to be spent. Who of us, having been

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granted an overdraft by our bank, have not been sorely tempted, and then succumbed, to the temptation of overdrawing to the limit set? Perhaps the noble Lord opposite, who seems to disapprove of what I am saying, is more fortunate than I am. Speaking from my own experience, I would say that if one has a limit one tends to draw up to the limit. It is only human nature to do so.
LORD SHEPHERD: My Lords, I was wondering what the noble Duke thought when the previous Administration passed the 1962 Act. Surely it did very much the same thing as this Bill.
THE DUKE OF DEVONSHIRE: After getting on for two years of office, it is extraordinary that the present Government can only hark back to what has happened in the past and can never cast their minds forward to the future.
I return to my point. Surely the likely result of this legislation is that the full £366 million will have been spent by the end of 1968. I do not wish to weary the House with statistics, and I will give only one, which is this. The amount of money involved is the equivalent of putting no less than 7d. on the standard rate of income tax for the two years that lie ahead and that is enough to make anyone think very seriously of the wisdom of such a policy.
Before I leave this aspect of the Bill, I should like to refer again to the speech of the Parliamentary Under-Secretary in another place when winding up the Second Reading debate. Something he said in his speech to my mind gives all too clearly the attitude of the Government to the spending of the taxpayers' money. The Parliamentary Secretary was referring to the increased cost involved in getting further information about local conditions before any railway closure took place, and he went on to say:
"I make no apology about the additional cost involved in the extra care which we are taking. We are proud of it, and we are proud that we scrutinise very closely and carefully all rail closure proposals. The additional cost is not more than a few hundred thousand pounds in a full year …" [Col. 1464.]
Of course I have absolutely no objection—indeed I support the fact that the utmost care should be taken before a railway closure takes place, but I have
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the strongest possible objection to the attitude so clearly implied in the remark of the Parliamentary Secretary, "A few hundred thousand pounds". Had he said something like, "Unfortunately, this means that several hundred thousand pounds of the taxpayers' money has been spent: we think it is being wisely spent ", that would have been a different matter entirely, but he did not say that. He just said, "A few hundred thousand"—as if it did not matter at all. I must say that I should like to see the Parliamentary Secretary and the Minister be made to write out five hundred times the following sentence, "Take care of the pence and the pounds will take care of themselves."
Quite truthfully, my Lords, I cannot see this country regaining its economic strength so long as Government spokesmen think that "a few hundred thousand pounds" of taxpayers' money is of little or no consequence. So much for the Government's general attitude to the financing of a nationalised industry, and for their apparent determination, on the one hand, to milk the taxpayer of a vast sum of money for the nation's transport system, while, on the other hand, they are equally determined that the wretched taxpayer shall be kept entirely in the dark as to how his money is to be spent.
Before I close, I should like to refer to two aspects of the affairs of British Railways which I think are relevant to this debate; namely, railway closures and the future of liner trains. With respect to the noble Lord, Lord Champion, I thought that his speech lacked any reference to this question, although it occupied a great deal of time, particularly during the Committee stage of the Bill, in another place. I recognise, as all of us must do, that the closure of a railway service is an extremely difficult and delicate problem, and that all sorts of factors must be taken into account. Nevertheless, the fact remains that if British Railways are ever to play their proper part in any up-to-date and modernised transport system, then the principles set out in 1962 by Lord Beeching must be followed. I am quite sure that, in their hearts, noble Lords opposite and the right honourable lady realise this.
I may be wrong, but I have an uneasy feeling that in order to court popularity the Government have adopted a soft

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policy towards railway closures. I can think of no easier way of becoming a popular Minister of Transport than to adopt the attitude of the present Minister; of taking the line that, unlike the wretched, thoughtless Tories, her policy would be to go much more tolerantly on closures. Such a policy may well be popular, but it cannot be in the national interest. I should like to quote some of the same figures as were quoted by the noble Lord, Lord Champion: they refer to the deficit on the railways. In 1962, the deficit reached its highest level, £168 million. By 1963 it was substantially down, to £134 million. In 1964 it was down to £121 million. but then last year, 1965—a year of Socialist rule—it was up, for the first time for four years, to £132 million. I believe this increase is in no small measure due to the Government's policy on the closure of railway services.
I repeat that this is a difficult problem, and one that raises many difficulties, particularly for Members of Parliament, of all Parties, who have constituents. But perhaps in this House, where we have the good fortune, or the misfortune, not to have constituents, it is fair to speak quite honestly. Of course, it is difficult and it leads to unpopularity by those responsible for the closures, but I firmly believe that a Minister of Transport has no business to be a popular figure. I always thought that stickers, "Marples must go" were the greatest tribute to him as Minister of Transport. After all, it is the duty of the Government to do what is in the national interest and not to look after narrow sectional interests.
I turn now to liner trains, and to ask the Minister who is to reply to tell us what exactly is the position in this most important development in the carrying of railway freight traffic. It is clear that the Government attach the greatest importance to these liner trains, and evidence of that is there for all to see in what has been said on the National Plan. I think I am right in saying that in the National Plan only four paragraphs are devoted to the railways. One of them is to liner trains, and as it is relevant I will quote what it says—and since it is in the National Plan, it presumably has the support of Her Majesty's Government:
"The railways cannot hope, however, to maintain, let alone increase, their carryings of general merchandise on an economic basis
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unless the new concept of liner trains, or freight liners, proves successful. This will depend on these trains providing services of a quality and at a price which will induce road hauliers, among other customers, to make use of them to carry a substantial quantity of longer haul traffic between main centres. The Government look forward to the inauguration of the first group of these services later this year."
That is a perfectly clear statement of Her Majesty's Government's policy on linertrains, and of course the Government are quite right to stress their importance. I believe I am right in saying that it has been estimated that by the investment of £100 million in this project the existing loss on freight-carrying operations of £32 million could be transformed into a profit of £18 million, thereby bringing about an improvement of £50 million in the finances of British Railways and thus saving that long-suffering character, the British taxpayer, a large sum of money.
The plan for liner trains first appeared in the spring of 1963. About a year later came the news that it was probable that the National Union of Railwaymen would agree to accept goods for liner trains only if they were carried to the terminals in nationalised lorries. If such a policy were adopted by the Government, it could mean that British Railways could accept goods from only 14 per cent. of the lorries on the roads of Britain to-day. That surely must be absolute nonsense, and to accept such a policy would surely be condoning a very pernicious restrictive practice.
A good deal was said on this subject during the Committee stage of the Bill in another place, and I read the OFFICIAL REPORT of those proceedings with the greatest care. I fear, however, that I am still far from clear as to the National Union of Railwaymen's attitude to liner trains at the present time. So far as I can see, it would appear that the National Union of Railwaymen are saying that private road hauliers shall not in the foreseeable future have free access to liner trains, in spite of the fact that all political Parties, not least the present Government, as my quotation from the National Plan shows, regard this as being highly desirable in the national interest. If, however, I have the attitude of the National Union of Railwaymen wrong I shall be extremely grateful if the Minister, when replying, will put me right and tell me what it is.

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The matter has been made more complicated by the fact that the right honourable lady the Minister of Transport, when challenged in another place on the attitude of the National Union of Railwaymen, had this to say—and I quote from the OFFICIAL REPORT:
"There is the expression of what, to me, is a legitimate view, that the N.U.R. believes that if there is traffic to be got by hired cartage—cartage hired by British Railways—then it is fair to assume that there is room for an expansion of the British Railways cartage service to carry that traffic without going to the expensive expedient of hiring it."—[OFFICIAL REPORT. Commons, Vol. 728 (No. 25), col. 1833; 20/5/66.]
I have studied this statement very carefully and taken advice from my friends who are very knowledgeable on this subject, and, so far as I can make out, what this means is that if a private haulier wishes to deliver goods at the terminal so that those goods may be carried on liner trains, the haulier will have to arrange to be hired by British Railways. The Government would then no doubt put forward the argument that, since British Railways have to hire so many lorries, to save money they should substantially increase their own fleet of lorries. Such a policy would surely be yet another example of nationalisation by stealth.
This is a complicated matter and the Governments intentions have, no doubt deliberately, been obscured. I would, however, ask the noble Lord who is to reply for a categorical answer to this question. Do the Government intend, or do they not, to allow genuinely free access to all hauliers to liner trains, regardless of the attitude of the National Union of Railwaymen; or, when it comes to the crunch, will they take their orders from the Union? Secondly, what exactly does the right honourable lady mean when she says she thinks the National Union of Railwaymen have a legitimate view. What exactly is implied by that somewhat ambiguous statement?
For reasons which I confess I do not understand, this is not a Money Bill, although it seems to me entirely concerned with money. Nevertheless, it would not be proper for my noble friends on this side of the House to divide on the Second Reading, or indeed to amend the Bill. However, I wish to make it absolutely clear that we on this side
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regard it as a thoroughly unsatisfactory Bill, likely to lead to waste of the taxpayers' money, to no increase in efficiency in our railway transport system; and we feel that, by asking for this amount of money, without telling any of us, Parliament or the country, how they intend to spend it, the Government have fallen far short of the principles of democracy which this country has the right to expect from its Administration.
4.24 p.m.
VISCOUNT ST. DAVIDS: My Lords, I have every sympathy with Her Majesty's Government in the very difficult position which they have been put into in the matter of this transport Bill. The fact of the matter is that everyone who was at all close to the inside workings of what was going on in the transport world knew that time was running extremely short if we were going to produce a good transport Bill at this exact moment. An enormous amount of consultation still remained to be done. There were very considerable financial problems.
The alternatives were either to produce a hurried Bill, hastily slapped together and smashed down on the Table in front of our faces, in which case not nearly so much time would have been available to debate it or amend it or to consider what ought or ought not to have been in it; or, alternatively, to go for what the Government has now gone for, a temporary Bill, which means taking two bites of the cherry (a thing no Government ever likes to do because it means doing with two Bills what it is possible to do with one) and then producing a White Paper, giving a lot of time to discuss that White Paper, and then bringing in the legislation at a later date. The difficulty, of course, is this. If you do that, you put Parliament in exactly the position that the noble Duke has complained about because it is necessary to have a Bill asking for a very considerable sum of money without stating exactly what that sum of money is for—a very legitimate complaint. But the alternative would have been to scrape together a transport Bill at high speed and slap that on the Table, giving Parliament and the country at large very much less time to discuss the main measure for what needed doing, which, let us face it, might have meant very considerable changes.

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I believe it is very much better if we can have this temporary measure, sad though it is to have to have two transport Bills, and then have the leisure to produce a White Paper, study the White Paper, study the Minister's proposals on that White Paper, discuss that White Paper, and then stand by for a transport Bill which can be considered at leisure. I believe that will give the country a very much better chance of seeing exactly what ought to be done, of discussing what ought to be done, and of doing something worth while. It has one further disadvantage, of course, and that is that it perpetuates a certain amount of uncertainty. I know, for example, in the case of the waterways, about which I have talked so much in this House, that uncertainty about their future is what has been killing the waterways. And undoubtedly in the railway world the same thing holds true to a large extent.
But the uncertainty need not be entirely done away with by a Bill. The uncertainty could largely be reduced, if necessary, by a White Paper. Then at least we should know what was in the Government's mind. If that were agreeable to the country, we should know that the Bill would follow very much the same lines, with the result that the uncertainty would not be all that serious. Indeed, if a White Paper could be brought forward sooner than a Bill could—and there seems no reason why it should not—it might be that the uncertainty could be got rid of more quickly than we originally believed.
For these reasons I believe the Government have done exactly the right thing in bringing forward this preliminary, temporary Bill, even though it has created this unfortunate picture of a large sum of money being asked for without exact details of its purposes being given. I believe the long-term effect will be much better, and I congratulate Her Majesty's Government on having had the courage to do it.
4.28 p.m.
LORD ROBERTSON OF OAKRIDGE: My Lords, I hope I may be forgiven for speaking for a very few minutes, not at all for the purpose of delaying assent to this Bill. On that I feel that the House really has no option. The rail-
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ways and London Transport are running out of money, and they must not be allowed run out of money; and not even the noble Duke, who disapproved in some ways of the manner in which this matter has been handled, is suggesting that we should do other than pass this Bill. What I am daring to do in these few minutes is to make an appeal to the Government, while they are preparing the White Paper they have promised us, and to the Opposition Parties, as they study that Paper, when it appears, and consider their own attitude for the debate we shall presumably have in this House on it and on future transport policy.
In 1947 the ownership of the railways and London Transport and certain other elements of transport was vested in the nation. That action is now past history and nobody I know of seriously suggests that it should be reversed as such. That is something which exists and which must necessarily be the basis for any study of the problem. But since that date one scheme of reorganisation has succeeded another in rapid succession. The one thing which to my mind is proved by the necessity of our passing this Bill this afternoon is that yet another scheme of reorganisation has failed—failed, at all events, to attain the objective it set out to achieve and to fulfil the promises which were at that time made. But this is only one in a long succession of such schemes which have been produced, first by one political Party and then by another. I want to make an appeal to the Government and to the Opposition to appreciate that no industry, no great organisation, can stand a continuation of this sort of process. If reorganisation succeeds reorganisation, time and again without ceasing, no good result can possibly be expected. We shall never get the railways running, and we shall never get London Transport right, unless we adopt a different attitude from that.
I hope that our political leaders will take the attitude that this is a really complicated problem that has defeated everybody so far. It has defeated not only people in this country, but people in Germany and France and many other countries as well. I hope they will appreciate that the answer to this problem is not to be found in one or two off-hand remarks, as it were. It is not even to be found, if I may dare to say it, in

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Socialist Party dogma, or in the stated philosophy of the Conservative and Liberal Parties. I am certainly not one of those who say that transport should be taken out of politics. That is going too far; it is making a statement which is not practicable and sensible; but the answer to the transport problem is not to be found simply out of Party philosophy. I hope this will be well borne in mind, so that when we come to see the White Paper, and to debate it, we shall do so in a really objective spirit, with a view to finding an answer that will hold water, and with a view to giving these industries that measure of stability without which we cannot possibly expect them to succeed.
4.32 p.m.
LORD HAWKE: My Lords, I heartily agree with every word that the noble Lord, Lord Robertson of Oakridge, has just said. The speech of the noble Lord, Lord Champion, will make sad reading. The only thing that is to be said on the other side is that we are getting a rapidly increasing revenue from the road vehicles which are displacing the railway. That is a small comfort, of course. I did not know that the Railway accounts were out to-day otherwise I should have had a look at them, but, from memory, I would say that it looks as if the railways are still employing 100,000 men who are not being paid for by the consumer. The Beeching Plan, a most comprehensive plan, to my mind, got off to a bad start because, through unfortunate publicity, the Press gave a slant to the closure angle. To my mind, that was not the real nub of the problem at all. The closure angle was much more sensational and likely to interest the general public; but the real gist of that Report was the more efficient deployment of men throughout whatever system was left.
I personally do not share the view of my noble friend the Duke of Devonshire that the elimination of unrewarding manpower is to be found chiefly in closures. I do not believe you save a great deal in manpower that way. Where you are going to find men inefficiently deployed at the moment is in paper work, which I believe has increased greatly, in restrictive practices and in the parts of the railway which employ a number of people—the big yards, stations, workshops and
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so on. Wherever you find a large body of men employed, there you are almost bound to find that, by modernisation and redeployment, you can make considerable saving. To my mind, this saving would be vastly bigger than any that can be achieved by closing branch lines.
I could not quite gather all that the noble Lord, Lord Champion, said about canals and waterways. I would suggest one thing to your Lordships: that we have now got State waterways, State railways, State aeroplanes and State roads. I question whether we can afford to invest heavily in all those four branches of transport. I consider that the nation is probably investing more in transport than we can really afford. Is it really necessary nowadays that, in order to benefit a comparatively small amount of traffic, we should continue to keep open the waterways? Is it necessary that we should invest large sums in aeroplanes to fly short journeys which can be performed almost as quickly by railway? And so on.
With those few words I conclude by saying that I am afraid this Bill is one which it is inevitable that we should pass, though I heartily agree that it would be preferable to have it in instalments, one year at a time.
4.36 p.m.
LORD CHAMPION: My Lords, it seemed to me that the noble Duke was in a fighting mood. I can only imagine that he did not have the good fortune to back the winner at Epsom yesterday, where perhaps he was to be found at round about an hour before this time. Nevertheless, he is, of course, doing something which Oppositions must do, namely, examine the policies of the Government and bring to bear upon them the thoughts of Opposition.
In answer particularly to his point about this being a stop-gap, and a stopgap that was untimely, I would say that he knows the difficulty. He knows enough about transport to know perfectly well that the Acts that we have had since the end of the war, and, as the noble Lord, Lord Robertson of Oakridge, has said, the White Papers and everything else that have come out in connection with transport, have not provided a solution to that which is a great problem to ourselves and, as the noble Lord rightly said,

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is a problem which has not been solved anywhere, I think, in the whole world. That does not mean that we have not got to go on trying to solve this problem, which undoubtedly transport is.
In this connection, I would say to the noble Lord, Lord Hawke, that the most careful observation is required in order to ensure that we are not wasting our resources in manpower and wealth. The tendency is for everybody concerned to look at one bit at a time, and to say that it needs so much money, so much resources, and that so much must go into it, while to some extent forgetting the fact that it will have its repercussions on other forms of transport and is, indeed, wasteful of the resources of the nation.
Here I certainly agree with the noble Lord, Lord Hawke. What I think is being done at this moment, what the Ministry are trying to do and certainly what the Minister is trying to do, is to look at the whole problem over the vast field which is transport, and then to present to the House a White Paper which will give her conclusions, her thoughts upon this matter. Then I am hoping, with the noble Lord, Lord Robertson of Oakridge, and certainly others who are thinking about this problem, that we in Parliament will bring what combined wisdom we have in both Houses to bear upon that White Paper; and eventually that there will emerge from our discussions a policy which will solve some of the problems which undoubtedly this industry is still facing.
I think it is known in this House that I am an old transport man. I went into the industry as a young boy. But throughout the whole of the inter-war period I lived through a period of "Fair play for the railways", and "A square deal for the railways." The companies were not then in a position to get capital in order to keep the railways reasonably up to date and reasonably well-maintained; and they were certainly unable at that time to pay railwaymen decent wages. In post-war years we have had the Transport Act 1947, the Act of 1953, and a number of successive Acts, White Papers and policy statements by Ministers, but we have not yet solved the great problem which transport undoubtedly presents. However, the House is not at the moment considering the wider aspect of
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this matter; that doubtless will follow the White Paper.
If the noble Duke is going to come at me in a fighting mood, I am bound to say that we are only continuing the 1962 Act, an Act for which we were not responsible. That failed in its basic task, partly because of the very fault of which he is accusing the present Government: that they failed in their estimates and forecasts. Therefore, what we have to do at this time, while we are still considering the major problem, is to have sufficient money to enable us to carry on, in this stop-gap period, the 1962 policy decisions. I agree with the noble Duke that it is not pleasant to wait perhaps for 2½ years, but the last thing we must do is to rush hastily into a number of decisions without doing everything which we said we were going to do, matters which I have mentioned in my opening speech on this Bill. We must have a comprehensive policy; we must endeavour to bring about some measure of integration—that is the difficulty. Integration is vital, for we must, as Lord Hawke suggested, avoid the waste that takes place over the whole transport industry. I do not want to hark back to what the Tory Government did or failed to do, but this is a continuing industry. It did not start its work in October, 1964. It has gone through all the difficulties of the "Square Deal" and everything else that followed in the inter-war years—and here I am speaking chiefly about the railways—including competition from the road.
The noble Duke accused us of hiding the figures and facts. There is no question at all of this. The Select Committee on Estimates in another place presented to the House a Report—a first-class Report, I would say, although perhaps I would not agree with every word of its conclusions—which set out the whole of the facts, each and every one of which is available to the noble Duke and to the country as a whole.
The noble Duke asked me about liner trains. The issue of whether private hauliers should be able to bring goods directly into the liner train terminals is primarily a matter between the Railways Board and the railway unions. My right honourable friend the Minister of Transport has, like her predecessors,

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endeavoured to use her good offices in the matter. She has made no secret at all of her view that there should be free access to the terminals, so that the fullest advantage may be taken of this new technical development. But this moment, a moment when there are signs that things are moving in the right direction, is not the moment to say anything that might jeopardise the solution which we are hoping to achieve. The noble Duke told us that this was going on in 1963. I believe that we are now nearer a solution than we were then. I look forward to a solution of this matter, because I believe this will put right at least one of the problems of the Railways Board.
The noble Duke referred to railway closures. The Minister's current policy may be summed up in this way. There is still a certain amount of dead wood in the railway system, and it would be quite wrong to attempt to maintain parts of the 19th century system which eat into our scarce resources but fail to meet the economic and social needs of the 20th century. How right this is. These railways were built in the "Fanny by Gaslight" era and have got to go on working in the age of atomic energy, but to some extent they must be streamlined.
LORD HAWKE: My Lords, may I interrupt for one moment?
LORD CHAMPION: My Lords, I am coming on to say some other things about that. It would be quite wrong to close services simply because they do not pay, if this might conflict with regional planning or cause social and economic damage. It is essential to ensure that all these factors are taken fully into account. In particular, any proposals to close commuter services in the large cities and conurbations need to be scrutinised with particular care, bearing in mind the need to make public transport more attractive in order to help with problems of traffic congestion. We know something about this in London, as indeed they do in Manchester, Glasgow and all the big cities. Moreover, the pruning process cannot be carried on indefinitely.
LORD HAWKE: Has the noble Lord finished?
LORD CHAMPION: I am still on pruning, Beeching and all the rest.
LORD HAWKE: The noble Lord has given me my point by mentioning the "Fanny by Gaslight" era. One of the commuter lines in Sussex which has recently been closed was much used by commuters and students. They have had to go back to the "Fanny by Gaslight" era, because their journey is longer than it ever was before, because the roads are not coping sufficiently with the traffic, as the railway did.
LORD CHAMPION: I am not going to he drawn on that point, but I will take note of it. I dislike the thought of slipping back to the "Fanny by Gaslight" era or of doing anything which causes difficulty. But there was a tremendous amount to Beeching. He brought to bear on the problem of the railways an acute intelligence, and he had the courage to present a Report which deserves, as it deserved at the time, close and careful study, and some action on many of the things he said. I was going on to say that the pruning process cannot be carried on indefinitely. Real stability is essential if the system is to be properly developed to serve essential needs efficiently. This means that the size and shape of the basic system which will not be considered for closure in the foreseeable future should be determined now, and that the future of the rest is decided as soon as possible. The Government are studying the ideas on the basic system recently put forward by the Chairman of the Railways Board and will make a statement as soon as possible. This I believe is essential.
However, we must always remember this simple fact: that we cannot go on with the system which was built up in the last century if that system is wasteful, as much of it I am certain is bound to be to-day. We always have to consider, too, the social needs of the people. In some parts of Somerset, where I happened to be born, they would almost have to go back to the old village courier to get transport into the towns, because there are no bus services and so on to take the place of the old courier.
How right the noble Lord, Lord Robertson of Oakridge, was about the successive schemes. I would strongly—as I think I did at the outset—support his appeal that this matter should not be considered in a Party spirit. The noble

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Lord, Lord Drumalbyn, will perhaps do me the courtesy of remembering that in the other House I never could bring myself to approach a debate on transport from a purely Party angle, partly because of my interest in it as a whole. I appeal to the House to adopt that attitude in relation to the White Paper, which we shall receive as soon as it has been possible to conclude the considerations which are at present going on.
The noble Viscount, Lord St. Davids—and I welcome his support here—made a point about the uncertainty in regard to the waterways. The Government have already made it clear in the White Paper, Leisure in the Countryside, that they are very much alive to the considerable potential for all kinds of recreation in the extensive network of inland waterways. The Minister of Transport has indicated in another place that in the forthcoming White Paper she will have something more to say about the waterways. But careful consideration must be given to the amount that we are prepared to spend on their continuation and the part that they will have to play in the future.
I hope I have answered the main points that have been raised in this debate. I ask the House to give the transport system—because that is really what it amounts to—the money it will require, by enabling us to pass this Bill through all its stages to-day.
On Question, Bill read 2a: Committee negatived.
Then, Standing Order No. 41 having been suspended (pursuant to the Resolution of Tuesday last), Bill read 3a, and passed.

VETERINARY SURGEONS BILL [H.L.]
4.55 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Champion.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD AILWYN in the Chair.]
Clause 1:
The Council of the Royal College of Veterinary Surgeons
1.—(l) For the purpose of managing the affairs of the Royal College of Veterinary Surgeons there shall continue to be a Council of the College consisting (subject to any Order in Council under section 21 of this Act) of the following persons, that is to say—

(a) twenty persons (hereafter in this Act referred to as "elected members of the Council") elected from among themselves by members of the College residing outside the Republic of Ireland;

(b) four persons appointed by the Privy Council;

(c) for each university in the United Kingdom for which a recognition order is in force, two persons appointed by that university of whom at least one shall be a member of the College.

LORD DRUMALBYN LORD DRUMALBYN moved, in subsection (1)(a), to leave out "twenty" and insert "twenty-four". The noble Lord said: On the Second Reading of this Bill I threatened to deploy a considerable weight and extent of argument, and I was going to mobilise my batteries and bombard the noble Lord severely and at some length. As I look around me to-night, I am not sure that it is necessary for me to do so in order to convince noble Lords that this Amendment is worth while. In any case, I have heard tell that the reaction of the noble Lord may be favourable, and that it would be wasting the time of noble Lords if I were to dwell too long on this Amendment.
So I think it will suffice if I simply say that the purpose of this Amendment is to increase the number of members elected to the governing body of the veterinary surgeons' profession in this country—the Royal College of Veterinary

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Surgeons—from 20 to 24. I should say, also, that this is an Amendment which is desired by the British Veterinary Association and supported by the Royal College of Veterinary Surgeons. I beg to move.
Amendment moved—
Page 1, line 11, leave out ("twenty") and insert ("twenty-four").—(Lord Drumalbyn.)
LORD BALERNO: I should like to associate myself with what the noble Lord, Lord Drumalbyn, has said. I do not want to take up your Lordships' time, beyond saying that when I spoke in the Second Reading debate I made some animadversions about the appointed members. I wish to say now that in referring to those appointed members I did not mean members appointed by the Privy Council, but members appointed by others. I should further like to say that, since speaking then, I have had conversation with one of those other appointed members, who thought that my restriction of some of them was by no means inappropriate.
LORD CHAMPION: When I listened to the noble Lord, Lord Drumalbyn, I began to think that there must have been a leak, but not a very serious one. I gather that he already knows that I am about to do what it says at the bottom of my note, where there is a word which I always like to see at the bottom of my note—"Accept ". I am pleased to tell your Lordships that the Minister has agreed that the number of elected members on the Council of the Royal College should be increased from 20 to 24. In accepting the Amendment which the noble Lord has moved, I am bound to congratulate him and other noble Lords on their persistence and advocacy on behalf of those who were desirous of securing this Amendment.
LORD DRUMALBYN: May I just express to the noble Lord my thanks, and the thanks of my noble friend, not only for accepting this Amendment but for the great care which he has taken both in this House and elsewhere to listen to the arguments, and, I suspect also, to press the Amendment which we have moved. We are extremely grateful to him. He has been working very much overtime to-day, and I am glad that we have not
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added to his labours on this occasion. May I also say that, as this Bill has been pretty fully discussed at an earlier stage, it is not my intention to discuss it clause by clause, although I intend to say a word on one of the Schedules.
LORD OGMORE: I should like to say just a word in order to congratulate the noble Lord, Lord Drumalbyn, on this Amendment. I listened to him speaking on this matter in the earlier stages, I think in the last Parliament, and he also spoke on the Second Reading. This is obviously a desirable Amendment to make and I believe it is entirely due to him that it has been made. We should be very grateful to him for pressing it. I am also grateful to the Government for accepting it in the way they have. I came here specially to support him in case he needed support, but he obviously does not.
I want to say a final word. I should like to make it quite clear that, when I pressed the other day for the Regulations which we discussed earlier to come on at an early stage, that was not in any way because I was unaware of the very great importance of this Bill, or indeed of the veterinary profession. I simply wanted a matter of vital, world consequence to come on at the beginning of Business. The Government have obviously done the right thing, and we have almost completed all the Business which we intended to do. I just wanted to say that, because the noble Earl the Leader of the House said that the veterinary profession and this Bill were very important. I quite agree with that, and I do not in any way want to be thought not to be holding that opinion myself. I know this profession very well I have had a long association with it. I know what a wonderful job its members do, very often in extremely difficult circumstances, and what a high degree of skill they exhibit.
On Question, Amendment agreed to.
Clause 1, as amended, agreed to.
Clauses 2 to 26 agreed to.
Clause 27:
Interpretation
27.—(1) In this Act, except so far as the context otherwise requires.—
"animals" includes birds and reptiles;
5.1 p.m.
LORD BALERNO LORD BALERNO moved, in subsection (1), to leave out "includes birds and reptiles" and insert "excludes invertebrates". The noble Lord said: Though they are not mentioned by name, this Amendment deals with fish. It is a simple little Amendment, and I should like to elaborate somewhat on the reasons why fish should be included in this Bill, along with reptiles and birds. One reason is the increase that we can expect, in the not-so-distant future, in fish farming.
Fish farming is at present being pushed forward very strongly by the White Fish Authority and by the fish scientists at the Ministry of Agriculture, Fisheries and Food. There was an extremely interesting article in the Sunday Times of May 1 last which used the significant title,
" 'Battery' fish grow twice as fast."
This refers to the first experimental battery (using the same word as is used for keeping poultry under close conditions) of plaice and soles. Experiments are going on, largely in conjunction with the heated water that comes from the nuclear power stations both in Carmarthen, in Wales, and Hunterston, in Scotland. In that article the writer states that if this work progresses as it can be anticipated to progress,
"fish in an acre of ponds are the source of more good quality protein than the cattle or sheep on an acre of good agricultural land."
That is what we may be coming to, and that is what I would ask your Lordships to bear in mind when listening to what I have to say now.
At the present moment, this is a State enterprise—the White Fish Authority, or the Government themselves—but there is no reason why it should not be private enterprise. It was to private enterprise that I was referring when I spoke during the Committee stage and the Second Reading when this Bill was before your Lordships' House in the last Parliament. From that I received quite a fan mail from people, private persons, interested in setting up fish farms as they are set up already in other countries. A certain number of masterful mothers inquired if this was a good prospect for their sons. The point I want to make about these private enterprise fish farms is that if they are badly run they will constitute a positive danger to human health. Fish
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raised under such congested conditions, with disease getting in them, could constitute a positive danger to human health. In this way, it was no exaggeration for the writer of the article in the Sunday Times to refer to them as "battery" fish. They will need examination just as much as the battery poultry are getting at the present time, and it is only the veterinary profession that will be able to make the necessary technical intervention which is envisaged in the Brambell Report.
There is another point about fish development to which I should like to draw the Committee's attention, and that is the question of pet shops. Some pet shops are excellently run, but not all; and it may be necessary at some time in the not-too-distant future to set limits on the activities of those who are responsible for running such places. Only a veterinary service, a Government service or private veterinary surgeons, could possibly cope with these problems, as well. By including fish in this Bill—and I say this with all respect to the noble Lord, Lord Champion, and to what he said when the Bill was previously before your Lordships' House—you would in no way inhibit the work of the fish scientists. With great respect to the fish scientists of the White Fish Authority, who have done some remarkable work in the five or six years that they have been properly constituted, I should like to reassure them, after 50 years' experience of working as a scientist alongside the veterinary profession, that I cannot see that there is any overlap or prevention of their work.
I should like to quote one or two instances. The first is the work that was done by the noble Lord, Lord Boyd-Orr, who sits on the Cross Benches, more than 50 years ago from the Rowett Research Institute, in Aberdeen. To have rickets in animals is now a matter of no account, and is easy to get over. The fundamental work done on rickets, which is a disease in animals, was done by the noble Lord, Lord Boyd-Orr, as a young man holding no veterinary qualifications whatever, at the Rowett Research Institute, in Aberdeen. He not only diagnosed the disease but produced a cure for it; and he and his assistants in the Institute, who were not veterinary surgeons, advised farmers about the treatment of their animals.
The same sort of thing has happened again in quite recent times. Just a year or two ago, there was a bad disease—a disease more or less unknown in this country—which suddenly appeared in Yorkshire. The answer to it was quickly produced, again by the Rowett Research Institute. It was a case of copper poisoning in pigs. It was the first case of copper poisoning in this country, and if it had not been for the pre-vision of the Agricultural Research Council in allowing a scientist of the Rowett Research Institute to study copper poisoning in pigs, we should not have been able to get on to the job of dealing with it and to devise a treatment for the farmer to use. There is no difficulty in the way of any scientist getting inside a problem and tackling it.
For myself, I have advised farmers on the inherent defects in farm livestock. I have sometimes told them about their bulldog calves without ever referring to a veterinary surgeon—and I have never once been criticised for so doing. If I did see their own veterinary surgeon I explained the situation to him. The same goes for poultry research. The Poultry Institute in Edinburgh is continually giving advice on the diagnosis and treatment of disease in poultry, not by any means necessarily through the veterinary profession, and never once have I heard any criticism from the veterinary profession that the scientists were treading on their toes. This sort of thing has been going on for about fifty years. I am sorry that I cannot give an example of the scientists giving advice on the diseases of reptiles, which are included in the Bill.
Science knows no boundaries, and no Act of Parliament can possibly de-limit what a scientist may or may not do. Nor can it de-limit precisely what a veterinary surgeon can do. The inclusion of fish in this Bill would in no way affect the scientists who are not veterinary surgeons from treating fish anywhere in the United Kingdom or in the seas around this Island. I assure the Committee that there is no "take-over bid" by the veterinary profession of a piece of work which the scientists have done so well and which the veterinary profession recognises to be quite outstanding. The fish research work which has been done by scientists in this
1518
country in the last five or six years is becoming the envy of the world.
The noble Lord, Lord Champion, rightly stated that this Bill does not delimit the power of the veterinary surgeons; it sets a limit to what the ordinary person may do with animals. But if fish are excluded, what will happen? Anyone will be able to start up as an expert on fish. We shall get fish doctors just as, in the old days, we had the cow doctors. Yet the whole purpose of the predecessor of this Bill, and of the Bill itself, is to prevent those old cow doctors from exploiting their ignorance on the farmers.
In dealing with the matter of animals our fathers were wiser in their generation than we are at the present time. The Cruelty to Animals Act 1876 very subtly—and it is not until you get faced with this particular problem that you realise how subtle were our fathers in this matter—said that that Act of 1876 should not apply to invertebrate animals, which is another way of saying that it applies to all mammals save man, to all kinds of birds, to reptiles and to fish. The Protection of Animals Acts 1911 and 1912 specifically included birds, fish or reptiles, the three of them going in together with the mammals; that is to say, with all vertebrates save man. That is precisely what the present Amendment is designed to do. I hope I have been able to persuade the Committee that this is quite an important point. If I have not been able to persuade the Committee, then in five years, or, anyway, within twenty-five years, there will be another Bill before your Lordships' House to include fish—so why not make a tidy job of it now? I beg to move.
Amendment moved—
Page 15, line 40, leave out ("includes birds and reptiles") and insert ("excludes invertebrates").—(Lord Balerno.)
VISCOUNT MASSEREENE AND FERRARD: May I ask the noble Lord, Lord Balerno, whether he has ascertained from the veterinary profession that they are prepared to take on the care of fish?—because, personally, I have never heard of a "vet" who has ever had anything to do with fish.
A NOBLE LORD: Except to eat them.
VISCOUNT MASSEREENE AND FERRARO: Apart from eating them, I have never heard of a "vet" who has anything to do with fish. "Vets" are not instructed in fish; at least, I do not think so. I have some fisheries and when I have had occasion to ask for advice I have always applied to the Ministry of Agriculture and Fisheries who have excellent fish scientists. I should have thought that if this Amendment were accepted it would then exclude the owner of a fishery from applying to the Ministry for advice. What is the point of having fish scientists if the "vets" are going to take on fish? I have not studied the question, but it strikes me as rather odd to ask the "vets" to deal with fish.
LORD BOOTHBY: Before the noble Lord, Lord Ogmore, rises I should like to say that for forty years I have regarded myself as an authority on fish—and I am. I would only say that in principle I would welcome the advent of the fish doctors which the noble Lord, Lord Balerno, seemed to dread so much. I think fish want a good deal of doctoring. When they disappear, we want people to find out why they have disappeared and to where. We have had a lot of trouble in the North Sea in the last three or four years in the matter of herrings. I think the noble Lord's Amendment should be rejected.
LORD OGMORE: I do not think this is quite as amusing a subject as it appears at first. I was associated with this matter some years ago when I was chairman of the Colonial Research Council and also of the Colonial Agricultural, Animal Health and Forestry Council. We had the problem of fisheries very much in mind, because in many parts of what was then the Empire but which now mainly consist of independent under-developed territories, there is a great shortage of protein. In Africa, for example, it has been held that where cannibalism was very prevalent it was largely owing to the fact that there was no protein available. Because of the tsetse fly, the cattle and other animals of that kind could not live. Therefore the people, in order to get protein, became cannibals; and there is something in that. It was a difficulty in those territories.
At considerable expense we investigated the whole question of fisheries.
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We bought a vessel and sent it out to the tropical seas; and we found, curiously enough—and I must say it was a complete surprise to me—that, unlike the Northern waters to which the noble Lord, Lord Boothby, referred where the herring and other fish are in such an abundance (though occasionally not quite in such an abundance as he or I would desire), in tropical waters fish are scarce. I thought myself that the opposite would be true and that fish would prefer to live in warm water rather than cold water. But that was not the case. Apparently it was something to do with the plankton on the surface; they cannot get the nutrition in tropical waters.
We then turned our attention to domestic fisheries in Equatorial and tropical territories. I remember myself visiting a very large artificial fishery in Malaya which was set up in order to provide for the people the protein of which there is such a shortage in the tropical and equatorial countries. We went to a lot of trouble and employed one of the fish scientists to whom the noble Viscount, Lord Massereene and Ferrard, referred, to deal with the question. We took a lot of trouble over it and in the end, with considerable difficulty, we found that there was a future for this type of project, the inland fishery. Whether the noble Lord, Lord Balerno, is right that this should come under the veterinary profession I am not qualified to say. I do not know. I think he has made a case and I shall he interested to hear the answer by the Government. I want only to make the point that this is a matter of considerable importance in many parts of the world, and it might be of considerable importance to this country, in view of the very large population which we now seem to be getting. It is increasing the whole time, and there will be a demand for protein here as well as in other parts of the world. So I would say that this is an important problem and I, for one, shall be very interested to hear the reply from the Government.
LORD AIREDALE: I wondered why the noble Lord, Lord Balerno, when he set about his no doubt excellent objective of including fish within this Bill, did so, not by an Amendment saying "includes fish" but by one which says "excludes invertebrates". I should have thought

1521
that would include certain fish and exclude others. The salmon is, I take it, a vertebrate and would be included in the Bill; the oyster is an invertebrate and would be excluded, but if there is any fish which could be a serious hazard to human health I should have thought it was the oyster. Would it not be better to do this by a straightforward Amendment to say that "Animals' includes fish"?
5.23 p.m.
LORD CHAMPION: I am afraid that I cannot give the same welcome to this Amendment as I gave to the one which was previously moved, despite the great persuasiveness of the noble Lord. This House always amazes me. No matter what we talk about, there is always an expert. I did not expect to find in the noble Lord, Lord Ogmore, an expert in fish; nevertheless we have one, and that is one of the things which makes me think that this House should remain in existence for a quite a time yet.
As the noble Lord, Lord Balerno, told us, the object of the Amendment is to include fish in the definition of animals. As I told the noble Lord previously, I was a little doubtful about the way in which he had framed the Amendment, and the noble Lord, Lord Airedale, also was doubtful. As I understand it, we might have veterinary surgeons dealing with a vertebrate, which man happens to be. This would be a pity, and I should think that it would be quite wrong. We should get the medical profession at our throats if we did anything of this sort. We simply must not do it. I realise that the noble Lord has fish in mind, but nothing I say in connection with this Amendment must be taken as in any way denigrating the work being done in connection with fish farming and increasing the amount of protein which is necessary, particularly in countries where the inhabitants are near to starvation, as was mentioned by the noble Lord, Lord Ogmore.
I must first make clear that the definition of "animals" forms part of the definition of veterinary surgery. At present, veterinary surgery is loosely defined in Section 2 of the Veterinary Surgeons Act 1881 as "the art and science of veterinary surgery and medicine." But since
1522
the Act of 1948 became law it has been an offence for unqualified persons to practise veterinary surgery unless specially exempted. A more detailed definition has been included in the Bill, following representations from the Royal College that the existing definition has caused difficulty in instituting proceedings in cases of alleged unqualified practice. This is the key point—unqualified practice. Whatever living beings are included in the definition of animals, they become the exclusive (I stress the word "exclusive") province of the veterinary surgeon. Anyone else practising what amounts to veterinary surgery under this Bill in relation to such animals could be held to be guilty of unqualified practice. That is our objective. We are saying what people other than veterinary surgeons must not do; we are not saying what veterinary surgeons must do.
It is because the Government appreciate the noble Lord's argument for enlightenment and progress in the scientific field, that we are not including fish. This is the way to ensure not only that veterinary surgeons may treat fish, diagnose disease in fish or give advice about fish, but also that other experts, in particular the various fishery scientists, may do work of this kind. It is true as the noble Lord, Lord Balerno, said, that one could not imagine most sensible veterinary surgeons ever objecting to a scientist working in this sphere. I cannot imagine it, either. But not everyone might look at the Bill, if it became an Act and included the Amendment of the noble Lord, as sensibly as he or some other people might do. Some people might turn nasty about scientists "mucking about" with something which they regarded as their particular province. We must not open the door to this possibility, and that is why we object to the Amendment. It would make the treatment and diagnosis of fish ailments the exclusive preserve of veterinarians, subject to any exceptions in Schedule 3.
I agree with the noble Lord that perhaps in the fullness of time Parliament may consider that the diagnosis and treatment of diseases in fish should be confined to veterinary surgeons, but at present what little is known about this subject is known mainly by fishery scientists who are not qualified in veterinary surgery. With the advent of

1523
fish-farming, disease among fish may become a greater problem, and I think that we should leave this matter open so that both fishery scientists and veterinarians may be permitted to work in this field. In short, it would be a mistake for this subject at this stage to be "cabin'd, cribbed, confined".
I would ask the Committee to reject this Amendment, but before doing so, I must refer to the words of the noble Viscount, Lord Massereene and Ferrard. It is, of course, true that courses in elementary zoology at veterinary colleges include the study of fish. But they do not include any specific instruction in the treatment of fish diseases. So that students can be in no specialised position to deal with fish. I should think that if they want to make this their exclusive province, they must do something about getting the subject included in the curricula, so that eventually they may emerge with the sort of qualifications they ought to have, if we are to give them this exclusive right. If the noble Lord will not agree to withdraw the Amendment, I hope that your Lordships will reject it.
5.28 p.m.
LORD BALERNO: I cannot see this becoming a major Party issue, but I should like to pick up some of the points which have been made. The first was made by the noble Viscount, Lord Massereene and Ferrard. In the Second Reading debate a few days ago I specifically stated that, so far as wild animals were concerned, it was usually the scientists who did the work, not veterinary surgeons. The great scientific work in connection with grouse disease, with which no doubt the noble Viscount is well acquainted, has been done by scientists and there are many other instances which could be quoted.
The fact that the veterinary profession is doing nothing at the moment with regard to fish, that members of the profession are receiving, little instruction about fish, does not mean that the study of fish will not become a major factor; and the point I tried to make during the Second Reading debate was that fifty years ago no one thought that the veterinary profession would play a major part in connection with the care of birds. Fifty or sixty years ago, there was prac-
1524
tically no instruction in the veterinary schools about birds. Sixty years ago there was about as much instruction about birds and poultry as there is at the present time about fish. So I do not see the logic of that particular argument.
This is not a question of either the veterinary profession or scientists. This problem is so great, as the noble Lord, Lord Ogmore, pointed out, that we must get both the veterinary surgeons and the scientists on to it, each in the field for which they are best equipped. I maintain that, so far as intensive fish farms are concerned, and especially the freshwater fish farms of this country, in the future it will be a job for the veterinary profession. There simply will not be enough fish scientists to go round.
LORD BOOTHBY: If the noble Lord will forgive me, the mental processes of fish are extremely difficult to comprehend, and there is not the slightest reason to suppose that such comprehension is confined either to the scientists or to the veterinary profession.
LORD BALERNO: The noble Lord has done so much for fish in his life, and he is so well renowned in Scotland for the way in which he has battled for the fish off the coast of Buchan from which he has taken his title, that I hesitate to take issue with him. But I would say that it is equally difficult to comprehend the state of mind of a snake as it is of a fish; and snakes are included for the veterinary profession. Why should there then be the difference?
I am afraid that the noble Lord, Lord Boothby, took me up wrongly when I was talking about fish doctors. I was not using that expression as one of approbrium. It was the old cow doctor who was completely unqualified and had no education on the subject. The fish doctor, which I think he took to mean the fish scientist, is absolutely essential for the salt water fish. I do not think the veterinary profession would for a moment desire to take over any of that work. It is a most important job to understand the vagaries and the minds of fish. I think the noble Lord would agree that it is probably rather more difficult to understand fish than to understand human beings.

1525
The noble Lord, Lord Airedale, asked what was going to happen to the oyster. That question had occurred to me. There are all sorts of shellfish, which are eaten by humans and there is also danger here. But I was arguing on the fact that the line has to be drawn somewhere; that as our forefathers excluded the oyster from the vivisection laws, and as this was confirmed in the subsequent animal legislation, it was established that zoologically an oyster is not a fish at all. I think it comes under something quite different—a mollusc, I believe, though it is a long time since I was versed in zoology. Therefore, although oysters can be a positive danger to humanity, I do not think that they would be any greater danger to humanity than a fish concentrated in the freshwater ponds, brought up under great congestion, particularly if the water going into those ponds was not as clean as it could be. In other words, fish grown under those conditions could conceivably carry diseases bad for the human, just as the oysters do—and probably the same diseases. But that is pathology, and I am not fully up in it.
The noble Lord, Lord Champion, questioned whether, if we took my definition of excluding invertebrates, we might include man. The answer to that is, No; because the definition specifically states animals. By using the word "animals" we exclude man; and excluding vertebrates takes away half of the animal kingdom. Therefore, it would not make the definition include man. The point made by the noble Lord, Lord Champion, about unqualified practice of the scientist, would mean, if taken to its logical conclusion, that all those animal scientists—and there are a great number of them—who are at present working on ruminants, on quadrupeds and birds, and the few who are working on reptiles, and who are not veterinary surgeons, are guilty of unqualified practice. But that just is not so regarded, and has not been so regarded for fifty years.
As I have said, at the present time there is as little training in the veterinary profession for reptiles as there is for fish. Therefore, the logic of including reptiles and excluding fish is rather difficult to follow. But, as I see no great enthusiasm to support me, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 27 agreed to.
Remaining clauses agreed to.
Schedule 1 [Provisions as to the Council]:
5.36 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved, in paragraph 1(2), to leave out "Five" and insert
"Subject to the provisions of this Schedule, six".
The noble Lord said: I think it would be for the convenience of your Lordships if we discussed Amendments Nos. 3, 4 and 5 together. These are minor Amendments, and possibly I should not have moved them if I had not been teased at an earlier stage for not having put down a consequential Amendment to the Amendment that has been accepted in Clause 1. Amendment No. 3 is a consequential Amendment. The term of office is described in sub-paragraph (1) of paragraph 1 to be four years for an elected member, and it follows, therefore, if you have 24 members instead of 20, that six must retire annually instead of five. That, however, gives rise to certain complications about election.
The second Amendment would give power for the rules for election to be changed from time to time. It is not entirely clear whether it is necessary to confer this power. I am aware of the Interpretation Act, but I recall clearly that when I was at the Scottish Office we had a similar case where there was no power to amend the scheme which had been made for elections and the like, and, that being so, we were advised at that time that this power should be taken. I put this down in case the same would apply here.
The third Amendment is merely an indication (I apologise for these Amendments; they are all my own work, but I do not take any great pride in them) of how the job should be done, so far as elections are concerned. It obviously causes a bit of what the French call décollage if you have to change from a system of electing five a year to a system of electing six a year. This is a suggested method of doing it. The method suggested is:
"At the first, second, third and fourth elections to be held after the passing of this Act the five elected members of the Council who have been such members for the longest time without re-election shall retire in each year, and,

1527
in addition, in the second, third and fourth aforesaid elections one of the members elected at the first aforesaid elections, to be chosen by lot, shall retire".
The intention is quite clear. Whether this is the best way of doing it, whether you should choose a member to retire each year by lot, or whether he should be the one who receives the smallest number of votes progressively, I do not know. All I can say is that it was much easier to draft the Amendment to say "by lot", and that is why I put it in that way.
The purpose of these Amendments is quite clear. I am sure that some Amendments are required here. I am equally sure that the Amendments are not in the proper form, but I move them simply in order to indicate that they are required. I beg to move.
Amendment moved—
Page 19, line 10, leave out ("Five") and insert the said words.—(Lord Dramalbyn.)
LORD CHAMPION: As the noble Lord has indicated, these Amendments flow from his logical approach to his first Amendment which has been accepted. The first Amendment to Schedule 1 is a necessary consequence of the Amendment to Clause 1, and I am happy to accept it. As the noble Lord spoke to all three Amendments, I thought perhaps I might indicate what my attitude will be to the other two, if he still wishes to move them after what I am going to say. On the second of these Amendments, we agree that some Amendment of this sort is desirable. Indeed, we agree in principle with the noble Lord's Amendment. But I understand that some redrafting may be necessary, particularly as the Schedule as a whole may need some recasting, looking at it as a whole and not in little bits and pieces. I hope, therefore, that the noble Lord will not move this Amendment when it is called, but I will undertake to make appropriate provision to cover the point at the Report stage.
The noble Lord's third Amendment is another Amendment which is required to deal with the transitional arrangements made necessary by increasing the number of elected members on the Council from 20 to 24. I am sure the noble Lord realises that this is a complex matter. There are various ways of achieving a desired end, and some careful redrafting
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and recasting of this Schedule will be needed, as I said before. I hope that, when his Amendment is called by the Lord Chairman, the noble Lord will not move it, on the undertaking I will give to him that on Report stage I shall hope to return to it, and perhaps collaborate to some extent with the noble Lord in the preparation of an Amendment.
On Question, Amendment agreed to.
Schedule 1, as amended, agreed to.
Schedule 2 agreed to.
On Question, Whether Schedule 3 shall stand part of the Bill?
LORD DRUMALBYN: I do not want to raise a debate because of the state of Business, but I should like to raise a point in order to give notice to the noble Lord, and to remind him of something he said on Second Reading. He said:
"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."—[OFFICIAL REPORT, Vol. 274 (No. 13), col. 911; 17/5/66.]
May I express the hope that it will be possible to reach a decision in time to have this amendment in the Bill? I think it would be preferable.
May I draw attention to one more point here? On page 23, line 41 of Schedule 3 says:
"The performance by any person of or over the age of eighteen of any of the following operations"—
and the operations which are permitted are specified. What I think the Committee would desire is that those who perform these operations should have been trained to do so. The difficulty is that, unless they have some practice under proper supervision before they are eighteen, there will be a stage after they are eighteen when they are not sufficiently trained to do this kind of operation (as it is called) efficiently and possibly without causing pain. I think there is a point here which needs looking at carefully, to make certain that agricultural apprentices are able to

1529
receive training to carry out this task before they actually pass out as apprentices. As the Schedule stands, that is probably not so now. I would ask the noble Lord to have a close look at this to see whether something cannot be done about it.
LORD BALERNO: May I support my noble friend in this matter? There is already a clause in the Bill which allows students of veterinary surgery, under qualified surgeons, to practise things that otherwise only qualified surgeons are allowed to do. This would be applying a lower degree of apprenticeship.
LORD SOMERS: May I also support this point, about which I feel very strongly? I had hoped that possibly the Government might have looked at this point before now. If not, I shall feel it necessary to put down an Amendment on the Report stage.
LORD CHAMPION: If it were a matter only for the Government, I think we should not have had Schedule 3 as it stands at the moment. Any alteration must follow careful consultation with everybody concerned. I cannot promise that, before this Bill ends its process through this and the other House, these consultations will be concluded. I said this in my Second Reading speech. However, I will make sure that my right honourable friend is made aware of the points that have been raised by all noble Lords who are interested in this matter, because I agree that bad practice—and have seen some of it myself—can cause tremendous pain and suffering to the animal. That is the only undertaking I can give.
Schedule 3 agreed to.
Remaining Schedule agreed to.
House resumed: Bill reported, with Amendments.
LORD CHAMPION: My Lords, I beg to move that the House do now adjourn during pleasure until 6 p.m. for the Royal Commission.
Moved accordingly, and, on Question, Motion agreed to.
House adjourned during pleasure.
House resumed.

ROYAL COMMISSION
6.0 p.m.
The following Bills received the Royal Assent:

Military Aircraft (Loans),

Public Works Loans,

Transport Finances,

Glasgow Corporation (Carnoustie Street) Bridge Order Confirmation.

House adjourned during pleasure.
House resumed.

SELECTIVE EMPLOYMENT TAX AND AGRICULTURE
6.13 p.m.
EARL FERRERS EARL FERRERS rose to ask Her Majesty's Government why, for the purpose of the Selective Employment Tax, the Government are not placing Agriculture, Horticulture and Forestry in the same category as those industries which process agricultural, horticultural and forestry products. The noble Earl said: My Lords, in rising to put this Question I realise that I am inviting your Lordships to delay a little further the moment at which you would normally start the Whitsun Recess. For that I readily apologise. But I make little apology for raising this Question as such, because, quite frankly, the whole of the selective employment tax and its effect on agriculture, horticulture and forestry, and the manner in which it has been applied and so forth, bristles with irrationalities and inconsistencies.
This is in fact the second occasion upon which I have put down a Question on the selective employment tax, and I am bound to say that I find it a trifle peculiar that, just shortly before it is due to be debated, the Government have changed their minds with regard to various aspects of the tax. Last week I put down a Question about why agriculture should not be entitled to any refund of tax at all and, just shortly before the Question was put, the Government altered their mind and said that the refund would not be by way of the

1531
February Price Review, but would be under normal circumstances repayable by the Government. To-day, my Question refers to the effect of the tax on agriculture, horticulture and forestry, which of course was always going to pay the tax and have no form of recoupment. Then yesterday we find that the Government have changed their mind again.
I like to feel that they have changed their mind because I have put down my Question. But I suppose such self-imposed flattery is somewhat ungracious, certainly impertinent, and probably inaccurate. However, I am glad to see that the Government are at last seeing the light in regard to agriculture; and I hope that after we have had this short debate, and when all the points which are still irrational and still inconsistent have been brought out, they will change their minds still further. I assure the noble Lord, Lord Champion, that we look forward to some further change on the part of the Government.
May we examine the situation a little? The Chancellor of the Exchequer decided on the selective employment tax as a method of raising tax and, broadly speaking, classified all businesses in the country into one of two categories: either they were manufacturing industries or they were service industries. That is putting the position broadly. I have no intention of commenting this evening on the effectiveness or desirability of the tax, because this is neither the time nor the place, but let it be perfectly clear that one can at least see the reasoning behind it. Within the manufacturing category there is no distinction. You can manufacture safety pins or steam rollers—you are a manufacturing industry and, as such, you come into Category One for the selective employment tax. The basis of this classification therefore is: are you engaged in manufacturing?
If we are to accept this quite general classification—and we must, because this is the basis of the tax—my question is simply, why exclude agriculture? By "agriculture", I include horticulture and forestry. Here, let me say that I hope that the noble Lord in reply will not use the argument that the Government have moved a long way to meet agriculture by altering the original decision that any
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recoupment should be by way of the Annual Price Review, and that I am being unreasonable in trying to get more. I do not wish to get anything. I wish that to be perfectly clear. But I want to point out that the Chancellor, by his method of imposing this tax, has deliberately and possibly unwittingly, discriminated against agriculture, horticulture and forestry.
As the position stands at the moment, the farmer pays the selective employment tax in September, and he then receives a refund in full in February. This poses three questions. First of all, if he is going to receive a refund, why pay the tax in the first place? Secondly, why should agriculture give to the Government an interest-free loan of £12 million per year? Thirdly, if the tax is to be refunded, why is agriculture not to be put in the first category and classified as a manufacturing industry, and thus enjoy not only the refund but also the premiums due to a manufacturing industry?
Is agriculture a manufacturing industry, and should it be treated as such? I suppose that a purist would say that you do not manufacture wheat, you grow it. Equally, a miller does not manufacture flour, but grinds it. Yet the miller is put into Category One and the farmer is not. Again, it is not generally considered that a cow is a manufacturer of milk; yet no one has yet devised a better or more efficient machine than the cow for converting grass into milk. Yet the farmer who produces the milk gets no premium, but the person who puts it into a bottle does. Is this logical? I, for one, think it is not.
I cannot see why the producer of the primary product is not to be put in the same category as the person who processes that product. Why, for instance, should the man who grows tomatoes get no premium, but the man who makes them into ketchup get a premium? Why should the man who grows peas get no premium, yet the man who puts them into tins get a premium; or the man who grows beans gets no premium, but the man who freezes them receive a premium; the man who grows potatoes get no premium, but the man who makes crisps get a premium; the man who grows fruit get no premium, yet the man who makes lollipops get a premium; the person who for thirty, fifty or a hundred years has grown wood get no premium,

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but the man who makes orange boxes get a premium? These, I respectfully suggest, are illogicalities.
Many farmers, in addition, have had their agricultural buildings—their piggeries, their poultry houses, their bullock yards—rated for one reason, and for one reason only, because their premises have been dubbed as "factory" farms. I put the same question to Lord Champion as I put to his noble friend Lord Shepherd last week, a question to which he was unable to reply. The question is this: If these buildings are to be regarded as factories for the purposes of rating, why should they not be regarded as factories for the purposes of the selective employment tax? I do not believe this makes sense, because I believe agriculture is as much a manufacturing industry as are those industries which make one-armed bandits and those which process pet foods. I believe agriculture should be placed in the first category, and I invite the noble Lord this evening to say that this will be done.
I hope the noble Lord will not use the argument which was mooted by Lord Shepherd last week, that the Government puts a lot of money into agriculture by way of the Price Review and by various other means, and therefore this in itself is reason enough to exclude agriculture from the first category. I can assure the noble Lord that that argument just will not wash. This tax does not pretend, nor should it attempt, to take into account any Government grant, involvement or investment in an industry. It stands, on its own, as a tax.
What is the Government's reason for their reluctance to consider agriculture as a manufacturing industry? Is it that the Government feel that farmers are hoarders of labour, or that if they receive the premium they will begin to hoard labour? One might be forgiven for thinking that the Minister of Agriculture takes this view, because only ten days ago he said:
"Since one of our objectives is to release manpower from agriculture, it would not make sense to give a premium payment on workers employed in agriculture. It would look wrong and it would be wrong."
I am sorry to see that the noble Lord Lord Hilton of Upton, is not in his place, because I wonder how he took those remarks, having just relinquished the
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Presidency of the National Union of Agricultural Workers; or, indeed, what the noble Lord, Lord Collison, who normally sits behind him, thought about them. I could not help wondering how they viewed the prospect of a Labour Government actually wanting to push agricultural workers off the land, and deliberately denying agriculture the right to be placed in the premium category in order to achieve this end. How different are those words spoken by the Minister from the words spoken by an Opposition spokesman in another place when, in referring to the Chancellor of the Exchequer, he said:
"I hope that he will give an adequate reason why there has been a decrease in manpower on our farms."
Those words were not in fact spoken by Mr. Godber, nor by Sir Martin Redmayne, his predecessor; they were spoken by Mr. Peart himself, when he was in Opposition.
The real point is that agriculture has reduced the numbers it employs enormously without the incentive, or the disincentive, as one might feel it, of the selective employment tax; it has increased its efficiency out of all proportion. Is it hoarding labour, or is it likely to? The National Plan is based upon an annual decrease in manpower in agriculure of 20,000 per year. But from June, 1964, to June, 1965, the number leaving agriculture was not 20,000, but 33,000. Indeed, if labour continues to be lost to agriculture at this rate—and I say this advisedly to the Government—it could well be that the task given to agriculture under the National Plan will not be achieved.
It may be the Government feel that those employed in agriculture are not put to the best possible use, and that if agriculture is put into a premium category it will merely aggravate what the Government may consider to be an unsatisfactory state of affairs. But the annual increase in output per man in agriculture between 1960 and 1964 was 6 per cent. How does this compare with other industries? In the textile industry the figure was 3.3 per cent.; in mechanical and electrical engineering, 2.9 per cent.; in paper, printing and publishing, 2.7; in clothing and footwear 2.3; in iron and steel, 1.3; in machine tools, minus 1 per

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cent. in shipbuilding and marine engineering, minus 5.9 per cent. In agriculture, plus 6 per cent. Yet all those industries are going to be entitled to claim a refund on all their employees—but not agriculture which stands at the top of the list. The average annual increase in output per man of all manufacturing industry was 3 per cent. Agriculture was double that, 6 per cent., and yet it is to be excluded as a manufacturing industry.
"On productivity our agriculture has an unequalled record. It has been going up at a rate of about 6 per cent. a year. This is more than double the rate of the economy as a whole. You are carrying a lot of the other fellows on your backs. We really should not have much trouble if the whole of our manufacturing industries were doing as well."
Who said that? None other than the Prime Minister on April 5 this year. So, even the Prime Minister agrees that agriculture has done twice as well as other manufacturing industry, and yet still his Chancellor deliberately excludes agriculture from its rightful place among the manufacturing industries. What a pity he did not say those words to his Chancellor as well as to the farmers.
How has this tremendous productivity been achieved? It has been achieved by greater efficiency and by continual vast investment of cash in agriculture, which is now running at no less than £170 million per year. That £170 million compares with £85 million in the iron and steel industry; £80 million in the motor vehicle industry; £24 million in the oil refining industry. I repeat that in agriculture the figure is £170 million. Indeed, if we look at the fixed investment per man, we find that in agriculture, forestry and fishery the figure is £217 per man; in mining and quarrying it is, not £217 per man, but £159; in manufacturing industry in general, it is £140 per man; in the construction industry, it is £61 per man. Money is being invested in agriculture; men are being released from agriculture; but still the Government say "No, you are not a manufacturing industry".
The picture which I have given is not the picture of an industry hoarding labour, but of a dynamic and progressive industry, one which is the biggest saver of imports, and which, under the National Plan, is required by 1970 to save the country a further £200 million.
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It is right that it should be treated as, and considered as, a manufacturing industry, especially as it has been called upon to make further massive investments of capital in the future in order to increase food production.
This tax in itself may be bad for agriculture, horticulture and forestry, but the manner in which it has been brought in—being altered and not altered—gives rise to particular concern, because it gives the impression that grossly inadequate consideration has been given to the effects which it will have on these industries. I believe that the answer may well be that there has been no liaison between Government Departments. The Chancellor announced the Budget with these sweeping proposals, saying that agriculture would be reimbursed by the method of the Annual Price Review—a most inadequate and unsatisfactory method, as was subsequently admitted. The Government then changed their mind, but the noble Lord, Lord Shepherd, if I may say so, let an extraordinary cat out of the bag last week, in answer to a supplementary question from me, when he said that the Government had changed their mind as the result of
"… further conversation within the industry itself, which the noble Earl will accept was not possible before the tax statement was made".—[OFFICIAL REPORT, Vol. 274 (No. 13), col. 880, 17/5/66.]
What was the Minister of Agriculture doing? Does he not liaise with the Chancellor of the Exchequer. Was he even unable to tell the Chancellor what would be the simplest effect of this tax on the industry? Was it really to be left to the leaders of the industry to complain to the Chancellor of the Exchequer after the proposals had been put forward?
I should have expected that the Minister of Agriculture would explain to the Chancellor precisely what effect those proposals were going to have. It may be that the Chancellor never consulted him. Does the Chancellor, indeed, as the noble Lord, Lord Shepherd, suggested, make his proposals first, consulting nobody, not even the Ministers whose Departments are going to be affected, and then discuss them afterwards? If that is so, I should have thought that this was a pretty inadequate and unsatisfactory way of going about the matter, because it results merely in impossible and impracticable measures, which have been

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inadequately thought out, being put forward.
One then wonders why, as the Chancellor of the Exchequer had made the first announcement about the selective employment tax and its effect on agriculture, it was not the Chancellor who announced the alteration in the proposals. For it was not him: it was the Minister of Agriculture; and it was not in a Statement: it was in reply to a Written Question in another place. I should have thought it a somewhat novel way of announcing the alteration of the tax system, for it to be explained in answer to a Written Question. I should have thought the correct way for that to be done, normally, was for the Chancellor of the Exchequer himself to explain how he intends or does not intend to gather in taxes.
I am bound to say that the selective employment tax, and its effect on agriculture, horticulture and forestry, have been quite inadequately appreciated. I believe that the Government—now that they are realising the terrible disaster which their original proposals were going to cause—are understanding the difficulties involved. I am glad that the Government have moved a long way from their original position, but I ask the noble Lord to look at this tax most seriously and most carefully. I ask him, when he comes to reply this evening, to tell the House that the Government have thought yet further about this, and that they realise that these important industries are, in fact, as much—and more—manufacturing industries as are some of those at present in the first category of the selective employment tax. I also ask the noble Lord to give an assurance that agriculture, horticulture and forestry will be put in the same category as those people who process the products of agriculture, horticulture and forestry.
6.35 p.m.
LORD HENLEY: My Lords, I greatly enjoyed what one might call a rattling good castigation of the Government from the noble Earl who has just sat down, and of course I agree with a great deal of what he said. I particularly liked his splendid list of extraordinary anomalies and illogicalities. He is, of course, right in saying that agriculture, except in a technical sense—certainly in regard to the
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selective employment tax—is a manufacturing industry. Nevertheless, in spite of the apparent oddness of not classing agriculture as a manufacturing industry, I should be inclined to accept the situation and to get the recoupment which agriculture ought to have in this context, but to get it in other ways.
First of all, I take the view that the best way to recoup the indirect effects of this tax is by means of the Annual Price Review. Of course, the indirect effects of the tax are, first of all, the increased cost of services, of contract work and of those other things which the service industries pass on to agriculture; and, secondly, the interest—not the lack of the premium of 7s. 6d.—which farmers have to pay for lending the Government a large sum of money. On the Minister's own authority yesterday, that sum of money, believe it or not, between September, when the tax starts, and the Annual Price Review will be between £11 million and £12 million. It is a startling thought.
The Minister has said categorically that everything which affects the viability and profitability of the agricultural industry will be made good in the Review; and he must play fair on this point. These costs must not be left to be made good, even partially, by increases in efficiency. The Minister has been less forthright on that point. He said that the costs will be taken into account in the Annual Price Review, but he has not said categorically that some of them will not be left to be taken up by increases in efficiency.
Your Lordships will remember that, at the last Annual Price Review, agriculture made up something like £30 million-worth of increased costs by increased efficiency; and what the noble Earl, Lord Ferrers, had to say about the outstanding efficiency of the agricultural industry in this sense is very remarkable. It would be most unfair if agriculture had to incur these costs and make them up by means of increased efficiency, while the manufacturer is isolated from them by the 7s. 6d. premium. Of course, this 7s. 6d. premium is partly, no doubt, to encourage people to go into industry; but it is also partly to insulate the manufacturer from these very costs. And agriculture, as the noble Earl proved so conclusively, is a manufacturing industry, except in the technical sense.

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I think it would be better not to insulate agriculture from the effects of these costs by means of a direct payment, of the same sort as manufacturing industry is getting—a 7s. 6d. premium, as it were. I believe that if that were done it would cost something like £5 million which would have to come straight off the Annual Price Review, and then the single self-employed farmer would not be at all happy. Though why anybody should have a 7s. 6d. premium at all, I cannot understand. I can see the force of a tax of this nature; I can see the sense of having exemptions from it. But I cannot see the point of a 7s. 6d. premium. By all means have a tax, and let some people off it; but to give a subsidy is an odd way of proceeding.
As to the other two groups in the same category as agriculture, the neutral zone—the Civil Service and transport—they can make good their costs by passing them on to the consumer, the customer. Agriculture cannot. It seems to me that it would be an extraordinary anomaly if agriculture—which, I repeat, is a manufacturing industry—were less favourably treated than either the premium zone, on the one hand, or its colleagues (if I may use that term) in the neutral zone, on the other. I accept the fact that there is a case for not treating agriculture as part of the first category. It is an anomaly: the noble Earl has demonstrated that to all of us beyond any possible doubt. But there are certain aspects of that illogicality which I accept.
The National Plan points out, and I think proves, that agriculture is properly a labour-loss industry, and I think that is fair enough. It would be making rather nonsense of the Government's National Plan to say that, on the one hand, the agricultural industry is a labour-loss industry, which I accept, and that, on the other hand, it has got to have a premium to persuade people to go back into it. Here, I think I disagree with the noble Earl about the position of people in the agricultural industry. I would say only that there is a danger that we shall push them out of agriculture rather too fast. The present rate of increase in production is, I think, something like 6 per cent. If we go too fast, I think there is a possibility that we might endanger the Government's avowed aims of increased
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productivity in agriculture, and that discrimination of this nature on the labour front might be too soon and go too far. I think we must take care that it does not go too fast—and, mark you, in France they are a little worried that they are going a little too fast. They recognised that agriculture was properly a labour-loss industry, but they have gone too fast and I think they are a little worried about this.
Also in connection with labour, I would urge Her Majesty's Government to consider the question of what one might call "fringe" men in agriculture—that is, the part-time, small farmers who do other kinds of jobs. There are no statistics, or no very accurate ones, as to how many men there are in this category, but there are a lot of them. I think they serve a valuable purpose in the industry, and one must think carefully what effect this tax is going to have on them. Similarly, there are other "fringe" men—the 55-year-old-plus men who do a bit of tidying up, vermin killers who kill rats, rabbits and other vermin of that kind, and so on. There are many of these men, and the Government want to think about them very carefully when they get down to considering some of these anomalies. Here I agree very strongly with the noble Earl: all these anomalies ought to have been sorted out before. I think it is preposterous that these ideas are being argued out in Parliament now. They should have been argued out months ago.
There is one last subject I should like to touch on as a very strong reason why I should like to keep agriculture in the present zone, in spite of certain anomalies and certain ridiculous features, and that is the question of rating. I would not have raised this question, because I do not think it is entirely germane to this particular debate, but the Minister of Agriculture has spoken about it very recently when speaking on the subject of the urge to put agriculture into the first category. He said, "If I do this, do you want to have agriculture re-rated?". I am quite sure that in fact the Minister of Agriculture would do no such thing and would press no such thing, because I have no doubt that he knows as well as all of us do that there are two very strong arguments against it. The first and most forceful one is that the rating

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of agricultural land is something quite different from the rating of agricultural buildings. When you rate agricultural land you are not rating in the ordinary sense; you are taxing a raw material, and this is something quite different from and unsuitable to agriculture. So for that reason alone I hope very much that such suggestions will go no further. The other and more immediately obvious reason is, of course, that if agricultural land were re-rated it would be the subject of a total re-claim under the Annual Price Review; so it is as broad as it is long.
For all the reasons that I have mentioned, although I agree with the splendid case which the noble Earl produced for saying that agriculture is, properly speaking, a manufacturing industry, I would nevertheless be inclined to say that I would rather it stayed in the neutral zone and that we recouped ourselves along the lines that I have suggested. I agree with the noble Earl that this is not the occasion on which to go into the whole question of how a selective employment tax should work, and why this is not, properly speaking, a payroll tax but a poll tax. All these problems are not for us to-night. Nevertheless, it does seem to me extraordinary that a tax with such glaring anomalies could be thought up and put before us. Indeed, they are not really glaring anomalies they are glaring nonsenses. It seems to me extraordinary that we cannot, rather on the lines of the Americans, thresh out some of these problems by various Parliamentary Committees before they are flung at us in what is a rather half-baked state. But having said that, I think—and so, I believe, do a lot of the professional bodies concerned with the land that there are very strong arguments for leaving agriculture in the neutral zone.
6.48 p.m.
LORD BALERNO: My Lords, I rise to support wholeheartedly my noble friend in his protest to the Government against the maltreatment of agriculture in this way, and I support three-quarters of the way what Lord Henley has said. I am afraid I cannot go the whole way with him in putting some of the recoupment on to the subsidies. I rise particularly in regard to how these matters will affect Scotland. Here I must apologise that I was unable to make contact with the
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noble Lord, Lord Hughes, who looks after these agricultural matters for Scotland, but, having had experience, both to-day and formerly, of the expertise of the noble Lord, Lord Champion, I feel sure that the Government will in no wise suffer from the absence of the noble Lord, Lord Hughes.
Scotland is particularly badly struck in this matter, both in agriculture and in forestry. To take forestry first, forestry plays a bigger part, a very much bigger part, in the economy of Scotland than it does in England's economy, and a very much bigger proportion of the people of Scotland are engaged in forestry than is the case in England or Wales. I was glad that my noble friend Lord Ferrers included that in his remarks, because it is a very important point; and it is going to be extremely difficult to understand and explain why timber merchants qualify for the 7½"it per cent., or whatever it is, while the growers do not. If it is the timber merchants only who are to qualify for this premium, surely this is going to discourage harvesting by the timber growers themselves either with their own or with contractors' staff. This is the most efficient way of harvesting timber; it is the economical way of supplying many of the new bulk markets for which timber can be cut into correct categories of woods.
Dr. Frankel, to whose ideas we are largely indebted for the construction of the new pulp mill at Fort William—and he is responsible for its running—said only the other day that it was becoming almost cheaper to import wood from Canada for the pulp mill than to grow it in Scotland. Here is an increased charge which will indubitably fall on the timber industry in Scotland. There is no doubt of that: costs will then go up and we shall, perhaps, price Scotland's timber out of the new £20 million pulp mill which has just been erected at Fort William. They must go on working, but they must of course buy their timber as cheaply as they can.
My Lords, I will turn to agriculture. Scottish agriculture is much more dependent than English agriculture is on animal production. The proportion of animal production in relation to the total output of Scottish agriculture marketed is substantially higher in Scotland than it

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is in England. Animal production requires more manpower than cereal production; therefore this tax will bear heavily on those farmers who employ labour, and many of them will think about how they can decrease further the number of men whom they employ. One example of what has already happened is the increase in the practice of running two hersels together on a hill. The total output is reduced by one-third; the manpower is reduced by one-half. This I think is going to be an inevitable result of the Government's policy. However, I must not trespass further on the expertise of my noble friend Lady Elliot of Harwood, who is far more skilled on the matter of hill-sheep farming than I am. But this is an important point.
As a dairy farmer myself, I was glad to note what my noble friend Lord Ferrers said about the cow as a manufacturer of milk and about its not being treated by the Government as such. The question I should like to ask the noble Lord, Lord Champion, arises from that. What happens on the farm where you are a producer-retailer, as we are? If you are a producer-retailer, you are bottling your own milk. The bottling of that milk, as my noble friend pointed out, is a manufacturing process. Are you to get the premium if you bottle milk in a city but not if you bottle it on the farm? How is that distinction going to be made? The noble Lord, Lord Henley, made certain animadversions concerning the "fringe men" in agriculture. I had them down in my notes as "the ancillary workers"; but whatever they are called, it is important that consideration should be given to them.
My Lords, I should like to draw the attention of the Government to the question of milk records. In Scotland, all the work of the milk recorders, including butterfat analysis, is done on the farm; but it is different in England. This tax will add almost certainly to the cost of recording; and in Scotland we are up against a terrible problem at the present moment. I was looking only yesterday at the last report of the Scottish Milk Records Association. It said that the number of herds recorded, of cows recorded, is steadily declining and that there has been a substantial decline in the year under review.
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The importance of recording nowadays is that it is from the recorded cows that you are able to test your bulls for artificial insemination. If you do not have an adequate number of dairy farms recording, and those records being processed according to the different bulls who sired the cows that produced the milk, you cannot test which hulls should be retained for artificial insemination. If you cannot do that, you cannot get an improvement in milk production through breeding. It is an extremely important thing; and it applies in a less degree in England. The present cost of milk recording has led to the decline in the number of records, and if it goes on much further we shall not be able to test the dairy bulls at all adequately.
There is another point in relation to the "fringe men". Are the livestock officers employed for pig recording by the Pig Industry Development Authority to be taxed? Or are they to receive the premium free because they are helping to manufacture pigs? It is a point on which one should get enlightenment. One could ask the same question in relation to all three categories: the staff at pig testing station, those at bull testing stations and those at cattle testing stations. Are these men employed in agriculture; are they manufacturing; or are they merely servicing? If they are merely servicing, that means that the cost of that service to the farming industry as a whole is going up; and the point about factory farming shows how anomalous is the whole thing.
Are the Government going to have it in every way possible, as my noble friend Lord Ferrers said, by rating the poultry factory farmers and the pig factory farmers and then not calling them manufacturing industries; calling them farmers and not giving them a rebate? We shall almost expect, if this goes on (because the thing is getting into such an illogical situation) that they will be termed "service industries".
My noble friend Lord Ferrers said that this tax must stand on its own; but nevertheless we must look forward to what is liable to happen in the future. We must look at the situation as it will exist in a year or two when the commodity subsidies will almost certainly be decreased. The reason I say that the commodity subsidies will almost certainly be decreased is because I took time off a

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month or two ago to read a pamphlet, A Time for Decision, which said:
"Most important of all, we,"—
the Labour Party—
"shall initiate the radical reforms required to achieve cheaper marketing of foodstuffs by reducing the gap between what the producer receives and what the consumer pays".
The selective employment tax can only have the effect of widening the gap between the consumer and the producer, as the increased costs of distribution and service are passed on. Those charges come to something quite substantial. The agriculture industry, the farmers of this country, are spending nearly £1,000 million a year on goods and services. The increased costs of these goods and services that will be a direct result of the tax are certainly going to be passed over to the farmer. Would 5 per cent. be a fair guess at what the increase will be? I do not think it is far out. That means £50 million on the annual cost to the agriculture industry because of this selective employment tax.
The noble Earl, Lord Ferrers quoted what the Prime Minister said at the National Farmers' Union on April 5. It makes sad reading in the light of what has happened since then. These are the words, and I think they might be quoted again, in full. The Prime Minister said:
"On productivity our agriculture has an unequalled record. It has been going up at a rate of about 6 per cent. a year. This is more than double the rate of the economy as a whole. We should not have much trouble if the whole of our manufacturing industry do as well."
My Lords, this tax is a slap in the face for British farmers.
7.2 p.m.
BARONESS ELLIOT OF HARWOOD: My Lords, I rise to support the noble Earl most wholeheartedly. I speak, as did the noble Lord, Lord Balerno, as one who farms in Scotland. I have an interest as I am a farmer, and I declare it. I support all that was said by the noble Earl, Lord Ferrers. He has pointed out the many anomalies in this extraordinary tax, and the extraordinary way in which it was announced and, so far as agriculture, forestry and horticulture are concerned, has been changed. We do not know so far, but perhaps it might be—I hope it will be—changed yet again. In any case, it is most extraordinary. I have
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read as much as I can about the tax and listened to what I could on the radio and elsewhere on this subject, and I still remain quite bamboozled about the whole thing.
I speak with some feeling, for the present Minister of Agriculture, Fisheries and Food is a most delightful person—he is most sympathetic towards farmers—who, I am quite sure, fights as hard as he can in the Cabinet for the farming industry. But every Minister of Agriculture is at a great disadvantage in the Cabinet. I know that, for I was for a number of years married to a Minister of Agriculture. I know how he had often to fight—sometimes losing the battle, but not always—against a very heavy proportion of the 21 or 22 members of the Cabinet—I cannot quite remember the number in the Cabinet to-day, but on the whole they are, frankly, not particularly interested in agriculture. Although the Prime Minister may be very generous, and kindly entertains farmers to dinner at No. 10 Downing Street, and goes to their dinners and makes helpful speeches, which have been quoted in this House, so far as the ordinary practical farmer is concerned this is kind, nice and generous—but "eyewash". I think that something more has to be done if we are to get any real policy for farming in the National Plan.
I have often wondered—this applies not only to the present Government but to other Governments as well—what would happen if some members of the Cabinet represented constituencies where the people were truly interested in farming. It has I think happened in respect of some past Governments, but so far as I know there is no-one tending sheep in the High Street at Huyton; no-one milking cows in South-East Cardiff and, though I do not know, I imagine that in Belper there are probably only miners or people interested in that industry. It is a great pity that we cannot have some Cabinet Ministers who are really interested in the farming industry, because, on the whole, the Minister of Agriculture has to fight a lone battle in the Cabinet. I notice that to-day the noble Lord, Lord Champion, is also fighting a lone battle. He has the support of two noble Baronesses, but otherwise he has to stand up alone to the barrage from Scotland and from elsewhere.

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I agree with the noble Earl, Lord Ferrers, who asked why agriculture was classed first as a service industry and then, after an outcry, as a neutral industry. We are not in the least neutral, we are a very active, hardworking and practical body of people. I do not feel neutral, and I do not think that the industry should be called a neutral industry. We do a number of essential things which this Government in particular are very anxious should be done. We are a dollar-saving industry and there are very big exports of agricultural machinery, fertilisers and so on. We know that in time of war the farmers are essential, but in time of peace we have to struggle on with everything weighted towards manufacturing and other types of industry. In spite of this, the members of the agricultural industry increased their production over the last twenty-five years so that now we supply about two-thirds of that part of the nation's food which can be produced in this country; compared with only half in the period before the war, although the population was then much smaller.
The farming industry has been asked to give up more labour, and figures of the amount of labour which has left the land have been quoted. I could also give (it is too late in the evening to do so) quotations from Ministers, particularly Ministers in this Government, who have talked about stopping people from leaving the land. Now in the National Plan we are again being asked to give up more men. The number of men regularly employed by the industry has fallen from 680,000, in 1955, to 480,000, in 1964, and I think that the figure has gone down considerably since then. I do not think we can continue to lose more and more men from the land.
As the noble Lord, Lord Balerno, has said, there are certain great sections of the agriculture industry where manpower is absolutely essential. The noble Earl, Lord Ferrers, talked about the intensive type of factory farming. I know best—and I think that there are noble Lords on both sides of the House who also know it—the other kind of agriculture, the stock-rearing type which represents the greatest proportion of farming in Scotland and Wales; and that type of industry desperately needs men. The other day
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I heard the noble Lord, Lord Collison, who is the greatest expert on the employment of agricultural workers in the country, say that there was no shortage of labour on the land. With all due respect to him, I beg to differ from the noble Lord. I know that in the areas where stock-rearing is important and where shepherds are needed, where it is impossible for farming operations to be mechanised, there is a shortage of labour.
In the area in which I live I notice week after week there is never less than two columns of advertisements in the local newspapers by people applying for shepherds and tractor drivers. They are the two main types of labour in short supply. I also read in other of the farming papers, like the Scottish Farmer and the Farmer and Stockbreeder, long columns of people who want more labour. It is not possible to keep up production of beef cattle and mutton, let alone increase it, unless one is able to recruit sufficient labour for the purpose.
As my noble friend Lord Balerno said, people are trying to rear 1,000 or more sheep with one shepherd, and inevitably the sheep death rate is high. The difficulties are so great that you cannot possibly keep up the rate of production without men. At some point or other when we are discussing agriculture I shall have more to say about this. But on this particular matter of the tax and the way it is going to affect our industry, I would say that it is simply no use thinking that we shall be able to continue with our production and our efficiency. I do not need to repeat the figures about efficiency which have been given—the noble Lord, Lord Champion, knows them very well—and the way that our industry has contributed to the national economy.
I now come to the point that I particularly dislike about this tax, and it is that, even though we are now told (and I am glad that we have been told) that we are to have it refunded, I cannot, for the life of me, see why we should pay out 25s. a week with one hand and be given back 25s. a week with another hand, while in the process a great number of clerical workers will have to be employed. The farmers themselves will have to do considerably more accounting, because you cannot do all these things without more accounts and more

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accountants. This question of agricultural accounting, as we all know, is a tremendous business. And all this is going to be done in the interests of—what? I cannot see why we are going to pay and it is going to be refunded to us, with all this tremendous business of paying it into an office, giving a whole lot more people forms to fill up. It must, in the process, lose some of its value, because it is a costly operation. If you did not pay it, and did not have to have it back, no money would have to change hands. It is a kind of Alice in Wonderland situation.
I have tried to think who could have thought of anything so extraordinary and, in a way, inefficient. During the last Election we heard from all sides—and it was perfectly justified—that this was going to be a more efficient Government who would do away with all the inefficiencies of the past years. If ever anybody invented a way of using clerical labour, form filling, postage and the rest of in order to take away from somebody 25s. for every man he employed, and giving him back 25s.—well, words fail me. This is the most inefficient method of dealing with taxation and people that I have ever known. I am inclined to quote Alice Through The Looking Glass:
"The Walrus and the Carpenter
Were walking close at hand;
They wept like anything to see
Such quantities of sand;
'If this were only cleared away,'
They said, 'it would be grand‡'"
I feel that if this could only be cleared away we might see where we were going. But this kind of Alice in Wonderland atmosphere of taxation is appalling.
To sum up, the agricultural industry helps the nation in three main ways. We can save imports by our valuable production. We can export large quantities of agricultural machinery, fertilisers and so on—I could give all the figures, but it is late, and I will just mention that in 1963 the export of agricultural machinery was worth £130 million; and it is worth more to-day. We can make good use of labour. We can make as good a use of labour as any other section of the community. My noble friend Lord Ferrers has given the figures per head of the workers in agriculture compared to the production in other industries. I beg the noble Lord, Lord Champion, to see
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that he and some of his colleagues back up the Minister of Agriculture so that we may get a better deal for agriculture. Do not let them look upon us as a neutral industry, because we are not.
7.15 p.m.
LORD BARNBY: My Lords, my purpose in rising to speak is to support the appeal which my noble friend Lord Ferrers made that the Government should take another hard look at their proposal on this matter with regard to agriculture. He made so forceful and convincing a speech that it does not really need further support from this side. But the noble Lord who is to reply has already had experience, and knows well, that when it comes to matters of agriculture there is on this side of the House a wealth of speakers who are both knowledgeable and authoritative on these matters. Tonight we have had a most interesting explanation from my noble friend Lord Balerno of the complications and classification of various actions that are necessary in connection with agriculture.
My noble friend Baroness Elliot of Harwood speaks with great knowledge, as did her husband, whom I remember so well: he spoke not only with authority, but with great knowledge, and always in an appealing way. It appeared to me that my noble friend Lord Ferrers emphasised the inadequacy of the preparation that had taken place from all angles affecting agriculture.
I would only give one illustration that came to me last week in relation to wool. The wool clip of Great Britain is collected with great efficiency by the Wool Marketing Board. I was told last week by the Secretary that of the authorised agents through which the Government's scheme works one-third falls under one classification and two-thirds under another classification. They are all employed to do the same operation and function in part in a similar way. There must be scores of other cases where such complete confusion exists. So it seems that agriculture has an additional reason to assume that the Government will take another good hard look at this matter.
My noble friend Baroness Elliot of Harwood emphasised that the Government take away with one hand and give back with the other. She said nothing

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about the loss of interest. Of course, the whole purpose of this scheme is interest-free loans to the Government. The banks have already reached the point where they cannot make any more advances: indeed, they are beyond the guide line of 5 per cent.
Where on earth is the money to be found? I have some doubt whether the Government have really considered what proportion of those in industry and agriculture who are likely to be called upon to put up this interest-free loan to the Government currently have an overdraft with their banks. In view of the guidelines of the Government, the banks are in no position to give further advances, and I am sure there must be tens of thousands of people in the country who are wondering how this financial jugglery is to be resolved. My purpose in speaking was to support my noble friend in his appeal. His reason as to why there should be reconsideration was convincing, and it is that which I wish to support.
7.22 p.m.
EARL FORTESCUE: My Lords, before the Minister replies, there are one or two points I should like to make. I will be as brief as I can, because it is late. The noble Lord, Lord Barnby, has emphasised the point brought up by the noble Baroness that this loan is interest-free. Why agriculture is to give the Government a loan interest-free absolutely passes my comprehension, and I should like to know why it has been proposed. This is not the case with the so-called manufacturer, because he gets 7s. 6d. on his loan, which must be an exorbitant rate of interest.
I should like to dissent from what the noble Lord, Lord Henley, said when he advocated utilising the Price Review for this purpose. The Price Review rarely gives wide satisfaction to anybody. Sometimes a farmer is lucky, sometimes unlucky, over the Price Review. But it does nothing for horticulture at all, still less for forestry. I think that some adjustment of the Government's proposals would be much more suitable than adjustment in the Price Review. Of the different types of farmers concerned, the very small man with a family farm does not have to pay, because everyone working on that farm is self-employed. The very large cereal farmer, highly mechanised,
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can probably manage to pay, because by much mechanisation he has reduced the proportion of his labour bill to turnover.
The man who is really hit is the fairly small farmer, who employs, say, two or three men and who has not been able to take advantage of the various improvement schemes which have come up hitherto because he was offered only a third of the cost of improvements. He has been unable to carry out those improvements and thereby reduce his labour costs in proportion to his turnover. That man is extremely hard hit, and one can say that he is almost certainly already in the red. I rather see an underhand Government attempt to squeeze out this type of farmer by forcing amalgamations and liquidations, in the same way as the tax is calculated to drive out the private schools.
7.24 p.m.
LORD CHAMPION: My Lords, as I listened to this debate to-day I wondered whether I was in the House of Lords, or in the House of Commons on the Committee stage of the Finance Bill. It seems to me that we have strayed a little into fields which are proper to another House, because here we are dealing with something which is appropriate to the other House. But I do not stress this point, and I will not make use of it to run away from the debate which was started by the noble Earl, Lord Ferrers, with a forceful speech.
I must admit that, as I sat here this evening, if I had not known something about agriculture my heart would have been bleeding for it. But it is not. I know that exaggeration is the language of politicians, and I am used to it. I have been in this game a long time, and I have listened to a tremendous amount of exaggeration here tonight. The noble Earl started by referring to a change of mind by the Government. I really do not know what he is complaining about. The other day he lectured the House on democratic procedures, and praised them in relation to an Order that was going through this House. If Parliament is not the place in which to criticise and persuade the Government of the day to change their mind, the sooner the whole place is dissolved the better. I have no desire to change what is taking place.

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The Government came to a decision on a matter which, clearly, they could not go out into the world and discuss with everybody—as we will do on Transport, the subject of the other debate I was answering this afternoon. They prepared something which they thought would work, and they thought that it would be easier to do it through the Price Review. As a result of democratic procedures and discussions, both inside and outside the House, the Government changed their mind and made an announcement. And we are charged with doing precisely this. If we are not permitted to do this, and if Parliament is not to function in this way, the sooner the whole shoot is dissolved, the better it will be for the nation. It will certainly save the expenditure of a lot of money on Parliament and everything that Parliament means.
I am tremendously in favour of this system. This sort of thing will happen from time to time. If ever it should be my bad fortune again to sit on the Benches opposite, I am sure that I shall be doing very much what the noble Earl has done to-night; that is, criticising the Government of the day. I hope the Government of the day will do precisely what we have done in this connection—look at it, and come to the House and say that they have changed their minds on some of the detail, purely as, or partly as, the result of this democratic procedure that I am now praising so highly. And I should hate to see it lost to this country. The last thing I want to see happen—
EARL FERRERS: That is the way you have been continuing.
LORD CHAMPION: That is what I am saying, and I am saying that the Government were right to consider all the points raised in this connection. The only thing I dislike about the noble Earl is that if the Government come along with a gift-horse he not only looks it in the mouth but feels its legs to see if it has splinter. Nevertheless, it is a process of democratic Government, and I am still in favour of it, despite this debate to-night and the debates I have had to answer to-day.
I am grateful to the noble Earl for raising this question, despite my doubts about its suitability to this House in some of its aspects, because it gives me an opportunity, on behalf of the Government, to express the appreciation which the
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Government have of the valuable contribution that agriculture, horticulture and forestry are continuing to make to the development of the national economy. As the noble Earl knows, the National Plan envisaged that home production would rise steadily over the next few years, and in view of the past record of these industries I am confident that the desired levels of production will be reached.
I know that there has been widespread concern because the premiums which will be paid to manufacturers will not be available to employers engaged in agriculture, horticulture and forestry. As I understand it, the argument is quite simply that all productive industry—this word has been stressed many time tonight—should be given similar treatment, whether it relates to natural processes on the land (such as the cow giving milk, which somebody instanced) or to factory-type operations. This argument is based on a misunderstanding of the purposes of the tax, which I will come to in a moment.
What I should like to stress now is that it is quite wrong to think of the scheme as dividing industry into classes based on their relative importance. We have never regarded agriculture, horticulture or forestry as second-class industries. The fact that they are not to receive premiums does not mean that they have been in any way downgraded. As my right honourable friend the Minister of Agriculture, Fisheries and Food pointed out in a recent speech to the National Union of Agricultural Workers at Shrewsbury, the same category includes such important classes as the miners, the seamen, the dock workers, transport workers and workers at power stations and gas works. Each industry has a contribution to make to the smooth running of the economy, and the treatment of each for the purposes of the new tax merely reflects our overall assessment of the present deployment of labour and our considered view of the best method of raising revenue to meet current requirements.
I will therefore seek to put the picture in perspective by explaining the main objectives of the tax. In his Budget speech the Chancellor of the Exchequer made it clear that in proposing the tax he had three things in mind: first, to avoid the adverse effects of further increases in purchase tax and income tax; second, to broaden the tax base; third,

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to make a positive contribution to the long-run structural changes needed to achieve a healthy balance of payments. These considerations pointed to a new payroll tax and, in turn, directed the incidence of the tax on various sectors of industry.
A feature of the existing tax system was that manufactured goods subject to purchase tax and Excise duties bore a disproportionate burden of tax when compared with service industries, including distribution. This was one of the main reasons for giving premiums to manufacturers. Another reason was that the growth of manufacturing output had been hindered by labour shortages, and measures were required to encourage the saving of manpower in services and in this way to assist manufacturing.
In answer to points that have been raised in this debate, and particularly, perhaps, by the noble Earl, Lord Ferrers, I would say that we must recognise that in agriculture, horticulture and forestry we do not face the same problem, despite what the noble Baroness said. In particular, the labour position is different. The National Plan estimates on manpower in agriculture, which were agreed with the farming unions, indicated that as many as 140,000 persons could be released during the period up to 1970 while still raising production sufficiently to meet a major part of the increased demand for food.
One of our objectives for this industry is to help it to continue increasing its output per man and in this way to make manpower available to other industries which have very urgent needs. I hope that the noble Lord will notice this particularly. The Government are already committed to a heavy programme of support for agriculture, and we do not think that the awarding of premiums to farmers and growers who employ labour would be an appropriate method for giving any additional support that may be thought necessary. The existing channels for supplying Exchequer assistance enables funds to be provided for particular products and classes of expenditure, and the Government intend to continue to use these channels, which are well tried and very well suited to the purpose.
The Government are pledged, and remain pledged, to a system of guaranteed
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prices and assured markets. At the same time, we are paying out large sums for capital improvements to enable the industry to become still more efficient. Our basic policy for agriculture remains unchanged, and I would point to the proposals in the Agriculture Bill, which will come to this House eventually, as further evidence, if further evidence is needed, of the Government's desire that agriculture should flourish.
EARL FERRERS: Perhaps I may interrupt the noble Lord. He has said that large sums of money are paid out in capital improvements, for buildings and so forth, in agriculture. But I think he will admit that similar grants are also available to manufacturing industry.
LORD CHAMPION: To some, yes. Certain grants are available, but this industry has been extremely well placed in this respect in the whole of the postwar years. I remember the capital injections into the annual prices that were made in the years immediately following the last world war. I remember these very well, because I had some association with the industry and the Ministry at that time. Large amounts of taxpayers' money have gone for these purposes. The only thing I would say to the industry is that it has used this money for the purposes for which it was given, and the country is now reaping some of the benefits brought about by this injection of capital received from the taxpayers. This is right. I am not complaining about it; I am merely reminding the noble Lord and others who have spoken of the facts of this situation.
Against this background that I have mentioned, noble Lords will readily understand that it would not make sense to give a premium for the employment of agricultural workers. It would impede the release of surplus workers and would not contribute a stimulus to greater efficiency. Farmers and growers are entitled to be proud of their outstanding record of increasing productivity. It has been said before, and I have no hesitation in saying it again, that if all industries had been able to increase productivity to the same extent, our present economic problems would not have arisen.
EARL FERRERS: Hear, hear‡
LORD CHAMPION: The noble Lord says "Hear, hear‡". He knows I am right and, strangely enough, I know I am right in this.
THE EARL OF LONGFORD: Hear, hear‡
LORD CHAMPION: I think it was the noble Lord, Lord Henley, who said that this is a labour-loss industry. Of course it is; and this is recognised in the National Plan. The facts are that the circumstances of the industry make it possible for the increasing use of machinery to release men for other industries. I thought the noble Lord, Lord Henley, made a very responsible speech except in so far as he strayed into the wider field of the incidence of the tax, into which I do not propose to follow him. What I will say to the noble Lord is that the question of the part-time "fringe" men that he mentioned is one that will have to be looked at, and it will be looked at in connection with the Bill which will eventually be introduced in the other House.
The noble Lord, Lord Balerno, referred to forestry in Scotland, and to some of the effects of this selective employment tax on the timber industry there. I should have thought, having regard to what has been announced in relation to forestry, that he would be reasonably satisfied with this, and the very fact that the sawmills will in certain circumstances get a refund of the tax might help them to provide cheaper timber, so that they will not be priced out when the timber goes to the Fort William Pulp Mill. The noble Lord asked a number of detailed questions about the farmer-retailer. I cannot answer them offhand but we shall probably have to return to that subject later.
On the point of milk recorders I cannot quite see how this will work out, but I agree with the noble Lord about the importance of recording. This is something in which we have rather lagged behind other nations for a long time. But recording, once started, and properly used by the industry, enables it to improve the quality of the progeny of the bulls. It also enables the farmers to call the low milk yielders—and there are still too many of these within the farming industry.
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I think that at least three noble Lords—the noble Earl, Lord Fortescue, Lord Henley and the noble Baroness, Lady Elliot of Harwood—referred to the forced loan. The only thing I can say in this connection is that the interval before repayment will be much shorter now that the Government have decided to make direct payments to individual farmers, rather than use the machinery of the Annual Review. We recognise, however, that farmers employing labour will have to find additional working capital and this, together with the other effects of the tax, will be taken into consideration at the Annual Review. Beyond this I cannot go now.
THE EARL OF FORTESCUE: What about horticulture?
LORD CHAMPION: What I am saying here applies equally to horticulture.
EARL FERRERS: There is not a Price Review for horticulture.
LORD CHAMPION: There will be some difficulty about that. We shall have to look at that. I had forgotten momentarily that horticulturists do not come into the Price Review. They get protection in other ways. We might have to look at that.
The noble Lord, Lord Henley, rightly stressed the desirability of keeping agriculture—certain aspects of it—within a single rating zone, as he called it. I should hope that agriculture would be very careful to ensure that they do not stray out of that zone, because, as we know, the farmhouse is rated, but below the usual rate for dwelling-houses; while agricultural land and buildings other than dwelling-houses are exempt from rates. This is no small privilege, I would say, to that industry, and I hope they will not do anything which would cause them to stray out of this field of what I regard as something of a privilege.
We are still considering the many problems that have been put to us in connection with the classification of different types of undertakings for the purpose of the tax. The criteria for agricultural rating relief are not necessarily the right ones to follow for the new tax. But I can assure noble Lords that their comments will be taken into account when the Government decide into which category intensive husbandry establishments

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are to fall. I do not think there is very much more to which I need reply, but I can, of course, say that everything that has been said here to-day, in the democratic process that I mentioned at the outset, will be taken into consideration.
There is one last point I may make to the noble Baroness, about the difficulty of retaining farm workers, shepherds and others, farm workers generally; that is, that whenever they make an application for a reduction in hours, or for a wages increase, the people who fight that application are the farmers. Part of the job of keeping people on the land is to make sure that their wages, their conditions of service, match up to the wages and conditions of the workers in urban areas. It must always be remembered, in this connection, that people are not going to stay in the countryside on low wages; their wives will not let them do this for ever. Farmers must recognise this fact, and accept their responsibility in this connection.
LORD BALERNO: My Lords, may I ask the noble Lord whether he has any idea of what proportion of the farm-workers are on or near the minimum wage? My experience of most farm-workers, particularly on the livestock side, is that they are receiving wages greatly in excess of the minimum wage.
LORD CHAMPION: I know that some are, and I recognise the point the noble Lord has made. But the simple fact is that there are complaints to-day in this Chamber that workers are deserting the industry, and in some cases where they could usefully and productively be employed on the land.
LORD BALERNO: We are paying them wages—
THE EARL OF LONGFORD: My Lords, with very great respect, I do not think the noble Lord is really in a position to continue the debate any further.
LORD BALERNO: I apologise.
BARONESS ELLIOT OF HARWOOD: My Lords, the noble Lord did ask me a question, and all I would say is that I entirely agree with him about wages; and it is not a matter of trying to keep wages
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down. If someone wants 25s. a week for every person I employ, I would rather give it to the shepherd. That is not the point.
THE EARL OF LONGFORD: With very great respect, the noble Baroness has spoken once and, unless the House gives special leave, I do not think she ought to speak a second time.
BARONESS ELLIOT OF HARWOOD: I am sorry, but the noble Lord asked a question of me direct.

THE EUROPEAN SPACE VEHICLE LAUNCHER DEVELOPMENT ORGANISATION
7.47 p.m.
EARL JELLICOE EARL JELLICOE rose to ask Her Majesty's Government whether they can confirm that it is their intention to continue to give full support to the European Space Vehicle Launcher Development Organisation (ELDO). The noble Earl said: My Lords, I am asking this Question at this very late hour in this very full House on the eve of our holidays, because, rather boringly, I believe it to be my duty to do so. ELDO is perhaps Europe's most important joint venture in technology. Great doubts at present hang over its future, and those doubts spring pretty directly from the actions of Her Majesty's Government. It was on February 15 that the Minister of Aviation, Mr. Mulley, made a statement in another place calling in question continued British participation in ELDO. It was under the shadow of this statement that the conference of ELDO Ministers, which the noble Lord, Lord Chalfont, attended, met in Paris at the end of April and adjourned without reaching any final conclusion. But although that conference reached no final conclusion, and although I think it is true to say a considerable variety of opinion was expressed, I think it was the unanimous view of six of the seven participants that ELDO should continue. There was only one doubting Thomas among the seven and that was the United Kingdom. In a few days' time, on June 9, that conference will be reconvened, and it is likely to decide whether or not this great project is to prosper or to perish. That is why I have felt I should briefly refer to this matter
I realise that the noble Lord, Lord Chalfont, may be in a somewhat difficult position. He is only one of a covey of British Ministers concerned with space, and he is also suspended, as it were, between two conferences. I nevertheless hope he may be able to give us a reasonably reassuring reply, and I hope this because I believe that on practical and political grounds, for pragmatic reasons if you will, it is really supremely important that we should not, as a country and as a Government. "rat" on ELDO.
Why do I believe this? I shall try very briefly to explain. There are many practical applications visible to-day of space technology. I am not advocating—I should not dream of advocating—that we in Britain, or we in Europe for that matter, should try to race the Russians or the Americans to the moon. What I am arguing is a far more terre-à-terre pedestrian case. What I have in mind are the practical applications of space technology which are already perfectly apparent to us. There are V.H.F. communications by satellite, very important for the supersonic aircraft of the future. There are navigation satellites for aircraft and ships which will be in common use very soon. There are meteorological satellites, potentially of vast importance for the British and the European farmer, let alone for that increasingly rare bird the British cricketer or that ubiquitous bird in her bikini. There are telecommunications satellites—this is, of course, the most immediately obvious practical application of space technology.
As most of your Lordships know, we are already involved, thanks to the Washington agreements of 1964, in an interim global telecommunications system which is developing quite rapidly. However, without going into details at this late hour, I should like to remind your Lordships that these interim agreements embody a built-in American monopoly, whether we like it or not. They are due for renewal by 1970, and of one thing I am utterly convinced—namely, that Britain and Europe will in future play a far more modest role in world telecom-thereabouts, we can show that we are munications, and so will British and European industry, unless, by 1970 or seriously in this business.
But there is still another sphere which perhaps overshadows in potential importance all the other possible applications of space technology. It is the use of satellites for television broadcasting. Here progress has been, and is likely to be, astonishingly rapid. It was only two years ago that some 200 million Europeans were able simultaneously to participate in the grief of the United States at the funeral of their late President. Those pictures came over with poignant force. But of course they came by quite primitive means. They depended on a small, low-powered satellite, Telstar, which in turn depended on a whole battery of complex and extremely expensive ground stations. Technology here is moving very fast indeed, and within ten years or so—this is what the experts tell us, and I think it will be quicker rather than later—the advanced space Powers will be able to transmit by satellite directly to the individual sitting before his or her individual television set. There will be no need for these vast expensive ground stations. What can this mean? Let me take two examples. It could mean that the Russians or the Americans could station satellites in synchronous orbit above Europe, and provide a 24-hour direct television service for the individual subject. That may be a good or a bad thing. But more important perhaps than that is that the same can be done over the less sophisticated developing areas of the world.
We discussed all this at the Council of Europe in Strasbourg some three weeks ago, and I remember extremely well what the noble Lord, Lord Norwich, had to say. He had just come back from six weeks in the Southern Sahara, and he mentioned that even in the remotest areas of the Southern Sahara almost every adult possessed his or her transistor radio set. I would suspect that in about ten years' time these same Tauregs will be carrying with them their individual transistor television sets, and that those transistor television sets will be able to receive direct programmes from the Russians or the Americans or the Europeans.
We have only to visualise this to recognise that space technology is placing in the hands of the great space Powers an instrument of immense power for

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good or for evil—what will constitute by far the most important medium known to man for information, for education, for entertainment or for propaganda. I doubt whether all Governments fully recognise this. I hope that the British Government is fully aware of it. It is an area which certainly should not be too lightly dismissed.
The question which I am asking the noble Lord, Lord Chalfont, this evening, and one of the questions which the ELDO Ministers will be facing on June 9, is whether at this stage we and Europe would be wise to opt out of this technology; whether we should leave this whole developing sphere, with all its practical and political implications, to the two great space Powers of to-day, the United States and the Soviet Union, and to the great space Power of the future, China. In taking that decision I hope that the Ministers concerned will recognise that space technology is in its infancy. I think to-day one can probably say that compared with the automobile it is about the same age as the "Tin Lizzie", and compared with the aeroplane it is about the same age as those ponderous contraptions which the Wright Brothers used to fly. I question whether it would be wise for us in Europe to close our options at this moment.
The noble Lord may feel that I am overstating the case. He may argue that the options are not so stark; that we can jettison ELDO and still maintain a role for Europe in space. True, we could continue purely scientific work. True, we could continue developing scientific satellites—I do not underestimate the importance of that. True, we could continue to design and build satellites with practical applications. It is true that we could continue to thumb lifts for them off the Russians or the Americans. All I would reply is that while the Americans will certainly, in my view, continue to be generous, and the Russians might become so, about putting purely scientific European satellites into space for us, we are living in Cloud Cuckoo Land if we seriously suppose that we could hire their launchers on reasonable terms for those European satellites which were designed to compete with theirs, practically and commercially.
The noble Lord may in theory agree with this. But he or the Government
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may feel that there are certain areas of advanced technology which, unfortunately, we poor Europeans have to opt out of because we just cannot keep up with the rich Joneses in the United States and the Soviet Union. And he or the Government may buttress this argument by suggesting that in any event the type of launcher which ELDO is developing is out of date, useless for practical purposes, and quite intolerably expensive.
In the first place, I am not prepared to admit that Europe need necessarily opt out of any field of advanced technology, provided, and provided only, that we organise our efforts in Europe on a sensible co-operative basis. Secondly, whilst the ELDO A development has slipped in time, I cannot agree that it will not have practical uses. Above all, the new development of ELDO A which ELDO has been studying recently—that is, the ELDO A launcher, with an apogee and a perigee motor—could have most important applications in the telecommunications and television broadcasting field.
Thirdly, as far as cost is concerned, whilst I would concede, sadly, that expenditure has escalated seriously, I think we should remember a thing or two here. Some 250 million dollars have already been committed on this project. To cancel it would cost another 50 million dollars more. To complete it would cost, we are told, 425 million dollars. Therefore, if we cancel now we shall have spent three-quarters of the expenditure and got nothing in return. It is true that going on will be expensive. But we must keep things in proportion here. We sometimes talk as if our relatively modest space programme in Europe is laying a crippling burden on our poor, impoverished European shoulders. The facts are quite otherwise. The Americans spend 1 per cent. of their gross national product on space research, the Russians possibly double that. We in Europe spend ·04 per cent., or possibly ·05 per cent. We in Britain spend £20 million or so a year. These are not small sums, but I would suggest that they are hardly intolerable if the return is worthwhile. I have tried to suggest that it is, for purely practical and pragmatic reasons.
I suggest that we should keep our options open, and "keeping our options open" means keeping ELDO going. That

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is why I very much hope that we shall decide to give our representatives at this reconvened conference a brief to go ahead with ELDO A, in particular, with its further refinement with the apogee and perigee motor; and also that they will be empowered to support an intensive design effort with the next generation of launchers.
In conclusion, I should like to consider what a decision to opt out, to abdicate, in this matter could mean in political terms. We must remember that it was we who fathered this child; it was we who hawked it around Europe and eventually found a home for it in Europe. We must also remember that, on a purely financial basis, this baby of ours has proved quite profitable to its parents. Up to now we have, I am told, received £112 from ELDO contracts in this country for every £100 we have put into ELDO by way of contribution. We must remember, too, above all, that we are in partnership. We have five European partners up to the neck in this project, and we have a partner in Australia deep in it, too. All our partners wish to persevere. If we alone now lose heart and opt out; if, worse still, we drag our feet because the going has got a bit rough, or has got a little expense and difficult because we have our special economic problems, we run the risk of gaining for ourselves in Europe the reputation of being fair weather partners.
I ask the noble Lord, Lord Chalfont, to recognise that I appreciate our problems here. I am not unaware of our financial difficulties. Nor am I unaware that, hitherto, we have borne by far the largest percentage of ELDO expenditure. But our special problems here are not unrecognised by our partners in Europe. Moreover, it is now generally agreed within ELDO that it is only reasonable that our share of future ELDO programmes should be reduced.
By the same token, I very much hope that the noble Lord and his colleagues will appreciate that there are far wider political considerations at stake here. I remember very vividly the words used at the meeting in Strasbourg, three weeks ago, by M. Peyrefitte, the French Minister of Science. At the end of a very remarkable speech, and referring specifically to
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the crisis in ELDO caused by our actions, M. Peyrefitte permited himself to say—and I paraphrase his words—that each of the member Governments should think not only of the damage to ELDO itself which would be caused by a brutal slamming on of the brakes, but also, and above all, of the repercussions which such action would have on the other attempts to organise European co-operation, and for European co-operation in all fields. I believe that the Government would be wise to ponder those words very carefully indeed. They were intended, I think, not as a threat, but more as a warning and as a statement of fact.
In any event, my Lords, if the Government are serious about joint projects with Europe—and I believe they are (at least we have a number of very important projects on our plate, not least with the French)—then I ask them to ponder very carefully before opting out of the most important of all of these joint projects. If they are serious about entry into Europe—and we must assume that with two Ministers for Europe they must be—then I ask them to ponder very carefully before withdrawing from one of the very few organisations in which they are active partners with five out of the Six—and that just at the moment when the vista of our possible entry into Europe may again be opening up. Above all, if the Government are really modern-minded, and really European-minded, I ask them to continue to put their shoulder to a project which is both. I ask them, above all, before they reach for their knife, to ponder on the wound which they could thereby inflict on the whole cause of European co-operation. That is why I sincerely hope that in his reply the Minister, who is, I think, both modern-minded and European-minded, will be able to sound a positive note.
8.6 p.m.
LORD MERRIVALE: My Lords, I should like to congratulate my noble friend Lord Jellicoe upon initiating this discussion to-day, as it is the last opportunity Parliament will have to consider this matter before the next Ministerial Conference of Member States resumes its deliberations in Paris on June 9. I wholeheartedly support my noble friend's initiative, for I think it would be disastrous if we decided to opt out of

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ELDO. For by such a move we should establish for all time the absolute superiority of the United States and U.S.S.R. in the field of medium and heavy launchers.
It can be truthfully said, I feel, in the same way that a nation is not in aviation if it does not manufacture aircraft, a nation is not in the space business if it is not concerned with building and operating space-launching vehicles. I feel, too, that it would be a very retrograde step if we considered, as a short-term or stop-gap measure, the acquisition of more powerful American launchers; because I sincerely believe that it would prove to be a short-sighted measure indeed. At the moment the market for space equipment in Europe must be uncertain, while the market for launchers may also at this stage appear to be a little limited. But there is absolutely no doubt that the British industry is viewing with grave concern American advances in various fields of technology solely due to their space programme.
This broadening of the technological gap between Europe and the United States should cause all of us the greatest concern—and by "all of us" I mean both those in Parliament and those outside. We certainly do not need a curtailment of programmes, but a definite expansion of space activity in Europe as a whole, if we are not seriously to lag behind the Americans in various fields of technology. This desirable objective of European space expansion must be matched by a useful and strong domestic space programme. It is interesting to bear in mind that France, which last year spent around £20 million on such a programme, as compared with the approximately £15 million which we spent on a domestic programme in this country, is reaping most of the rewards regarding European business in the fields of sophisticated space electronic gear and tracking radars.
I feel that possibly the noble Lord, Lord Chalfont, on comparing the two expenditures of £20 million and £15 million last year, will reply that, on the other hand, we spent £14 million last year on ELDO and ESRO, whilst France spent only around £7 million. But to that I would echo the words of my noble friend Lord Jellicoe, that I think it is true to say that anyhow the French recognise the need for another look at
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this question of the percentage of British participation in ELDO—it seems a little high at the moment, with 38·79 per cent., against France's 23·93 per cent. and Germany's 22·01 per cent.—for I understand that it has transpired that the actual expenditure on Blue Streak is turning out to be a lesser proportion of the total than was originally anticipated.
I am strengthened in my feeling regarding the French attitude, because last week a French Parliamentary delegation came over here, and one of the subjects which we discussed in one of the Committee Rooms in the House of Commons was Franco-British cooperation in aero-space activity. The question of ELDO was naturally touched upon to some extent, and I have the feeling, as had other members, that the French Parliamentarians were very willing to meet us halfway, and felt it most desirable that the technical and financial problems affecting ELDO should be solved very promptly.
To turn now to the present technical situation, I think it is important to bear in mind that the working group under the chairmanship of Mr. W. H. Stephens, Technical Director, unanimously agreed last year on the choice of ELDO B as the most desirable objective for the Organisation's future activities. The working group deprecated any foreshortening of the initial programme, and also recommended the continuation of the initial programme. It is regrettable to think that only the last—that is, the continuation of the initial programme—was approved at the April, 1965, meeting of the Ministerial Conference.
In a very interesting paper presented last Monday at Brighton, during the 6th European Symposium on Space Technology, Mr. A. V. Cleaver, Chief Engineer and Manager of the Rocket Department of Rolls-Royce, expressed deep concern that the ELDO B programme was not proceeded with during 1965. I think it is important to heed some of the opinions and remarks of Mr. Cleaver, for it is his considered opinion that they are shared by all the engineers and managers of the ELDO contracting firms. Their experience has been one of frustration and disappointment, I understand, if not of anger. They believe, very strongly, I am informed, that technical effort on major projects cannot be turned

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on and off, like water flowing from a tap. This lack of continuity, and short-term funding—that is, on a yearly budget—is bedevilling the whole scheme.
As in certain quarters there has been criticism of the fact that insufficient attention has been paid to the operational requirements or missions for ELDO A and B, can the noble Lord, Lord Chalfont, say whether there has been any progress in ascertaining these requirements? Can he say, too, when it is expected that the CETs—that is, the European Conference on Satellite Communications—will be able to report on what exactly is required to develop a European capability in satellite communications? My understanding at the moment is that there is a requirement for communications satellites, as mentioned by my noble friend, to be injected into geostationary orbits for incorporation in a basic global system. But it would be interesting to know—and this was referred to in some detail by my noble friend Lord Jellicoe—what consideration is being given to the future with regard to the launching of broadcast television satellites, as well as to their use in radio navigation and radio meteorology.
According to last year's CECLES-ELDO report to the Council of Europe, the ELDO A launcher with an apogee stage launched from a equatorial site would only be able to place into a geostationary orbit a payload of 40 to 50 kilos, so that would not seem to have a great commercial future. On the other hand, according to a French source, the ELDO A launcher, with the perigee and apogee rocket system, could place a payload of around 140 to 190 kilos into a similar orbit, which would seem to have great advantages from a commercial point of view. Other people think that the ELDO B1 rocket, with an apogee stage, could place a satellite weighing around 300 kilos into a geostationary orbit. No doubt, with the apogee and perigee rocket system, it could place an even heavier satellite into orbit, and I feel there are quite a number of persons on the Continent who believe that that may be a better objective to pursue.
I certainly think that one of the most important recommendations of the working group was the need for continuity. That is something which seems to have
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been sadly lacking over the past months and year or so, with regard to the initial programme and the further work on other programmes. That is why I sincerely hope, like my noble friend, that the noble Lord, Lord Chalfont, will this evening be able to lift a little the veil concerning the Government's intentions as to the future of ELDO, and as to the way they would like to see the initial programme and other programmes developed. I think that would allay to a very great extent indeed the fears of industry in this country, and also allay the fears of quite a number of our European partners who are rather worried, as was mentioned by my noble friend Lord Jellicoe, about any curtailment of such a programme, because they believe very strongly indeed in the future of collaborative projects on a European basis.
8.20 p.m.
LORD CHALFONT: My Lords, I am sure we are all very grateful to the noble Earl, Lord Jellicoe, for raising this Question to-day, and indeed to the noble Lord, Lord Merrivale, for adding his most valuable contribution, and for giving us an opportunity of pursuing, although it will have to be very briefly, the very interesting and informative debate on space age science and technology that we had in this House on November 3. I must add, too, that I found the opening remarks of the noble Earl, Lord Jellicoe, most impressive in their imaginative view of the way in which this sort of technology might develop.
But, my Lords, when together with our French partners we proposed in 1961 the setting up of a European organisation for the development of these satellite launchers, the estimated cost of the programme over a five-year period was £70 million. Since then, the cost has rather more than doubled, and the time-scale has spread from 5 to 7½ years. The mounting cost of this programme and the delay in its completion have been a cause for concern to all the participating Governments—and especially, of course, to the Government of the United Kingdom, who, as the noble Lord has said; contribute between 38 and 40 per cent. of the total costs of the ELDO programme. Because the value of a launcher of this sort depends not only on what it will cost to produce and fire, but also on its

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ability to meet the requirements of the day in terms of technical performance.
The noble Earl, Lord Jellicoe, has talked—and, as I said, talked most imaginatively—about the need and the possibility of the development of navigation satellites for supersonic aircraft, and he has talked of telecommunications satellites and of satellites for television broadcasting. When we embarked on the ELDO programme it was hoped that the launcher might be useful for putting a communications satellite into orbit and for putting up scientific experiments, particularly for the European Space Research Organisation, ESRO. As the noble Earl has said, in the intervening period satellite communications have made rapid progress; and, as he has also said, progress in television broadcasting is likely to be even more dramatic. We might even reach the stage of direct broadcasting from satellite to domestic television sets. But it now seems certain that the communications satellites which will be used for the global system to which the noble Lord referred will be, as he suggested, geostatic satellites—that is to say, satellites in a position in space which remains constant in relation to any fixed spot on the earth's surface. This means that they have to be put into orbit at least 23,000 miles above the earth's surface.
It is beyond the capacity of the ELDO launcher as it was originally planned to put satellites into orbits of this kind, and so we have had to ask ourselves what customers there will be for the ELDO launcher when its development is completed. It is true that ESRO may require two launchers for its large astronomical satellite, but it is not clear at present how many other potential users there may be.
As the noble Earl, Lord Jellicoe, has mentioned, in these circumstances, together with our partners in the project, we have been looking at proposals for improving the payload of the ELDO vehicle by the addition to the original three-stage launcher of two small motors, called, as we have heard, the apogee and perigee motors—called so because they are timed to fire at the furthest and nearest points to the earth in the orbit of the launcher, and in this way to force the launcher from a parking orbit into a higher, and even perhaps geostationary, orbit. As the noble Earl has implied, this
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refinement would have the effect of allowing the ELDO launcher to place a satellite in geostatic or geostationary or synchronous orbit, whatever one might like to call it. Indeed, if, as has been suggested, the launcher were fired from an equatorial site, this satellite could have a payload of about 200 kilogrammes—that is to say, about three or four times the payload of the existing American telecommunications satellite, Early Bird.
But the fact remains that the possible customers for such a launcher are limited, and although it can and has been argued that in due time—and possibly a relatively short time—this telecommunications technique and the relaying of television programmes by means of satellites will be a normal part of our daily life, we cannot be sure that even an improved ELDO launcher will be suitable for these purposes. Perhaps only the proposed programme of the European Conference on Satellite Telecommunications—the CETS, to which the noble Lord referred—would make use of it for the purposes of orbiting experimental satellites, and only a few of these would be required. I cannot answer categorically the noble Lord's question about when the CETS will come up with its full estimate of requirements, but my impression is that it will be quite soon, and perhaps in the course of the next year.
As a result of these considerations, at the meeting in Paris in April of this year, which I attended, the Ministers of the Governments taking part in the project reviewed the current activities of the organisation and discussed adapting its programme to the requirements of possible users. At the same time, they considered the feasibility of defining more clearly the general aims of European space activities. It was agreed that the proposals for upgrading the performance of the ELDO launcher—the apogee-perigee system, to which I have just referred—should be given the closest consideration, and that the cost and consequences of doing this should be carefully studied. As we have heard, to allow time for these studies to take place the Conference adjourned until June 9, when it will resume its deliberations.
The noble Earl mentioned the proportion of the gross national product in Europe which is being spent on space

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research, and the noble Lord, Lord Merrivale, made mention of several figures in this respect. But I think that the relevant and important figure is that we in this country spend 2·5 per cent. of our national income on advanced research and development, and, as noble Lords will find if they refer to the figures, this compares favourably with those proportions of national incomes or gross national products spent by any of our European partners. My Lords, little of this expenditure is of economic and commercial importance in the short term, and we must, I submit, inevitably exercise some choice as to how we use our limited resources. We cannot afford everything, and, however desirable some of these imaginative space projects may seem to be, we must make a choice, and a careful choice, as to where we spend our money. I must say, my Lords, that we still have doubts about the programmes of ELDO.
EARL JELLICOE: My Lords, may I interrupt the noble Lord for one moment? I accept his figure of 2·5 as the percentage of the gross product expended on research and development, and I would agree that that is higher than the amount of many of our European neighbours. But he is aware, of course, that some of our European neighbours—and I have in mind the West German Government, for instance—are going to increase considerably their research development expenditure. I think the West German Government propose to raise their proportion from 1·9 per cent. to 3 per cent. by 1970. I wanted to put that as a gloss on what he said.
LORD CHALFONT: My Lords, I take the point the noble Earl has made; but I think it underlines the point that I was about to make; that is, that, so far as this particular project is concerned, we still have doubts about whether the objectives which we can achieve in ELDO justify the allocation to this project of the necessary resources of money, facilities and scientific effort.
Therefore, to answer specifically the question put by the noble Earl, Lord Jellicoe, I have to say that until the studies which were put in hand at the April meeting are completed, and until we have had an opportunity of further discussions with our partners, Her Majesty's Government cannot confirm that it is their intention to give full support to the European Launcher Development
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Organisation. We have been carefully considering the advantages of completing the initial programme and of improving its performance. We are fully conscious of the interest our partners in the project have shown in continuing to co-operate with them in the Organisation's programmes, and we have, of course, taken full account of this. As the noble Earl said, there is a firm belief among our European partners in the future value of ELDO, and this has naturally been a major consideration in our balance sheet of the conflicting factors. The issue has had, as he rightly said, significant political content, quite apart from the technological and other aspects; and we have been fully alive to this.
But I should like to take up one point which I think we sometimes interpret in a careless way. The noble Earl pointed out that we were the sponsors of this project and therefore have special responsibility for continuing it. I should like to put that in another way, and say that as we are the sponsors of this project we have a very special responsibility in seeing that it continues effectively and that its results are commensurate with the cost expended on it.
Whatever our decision, however, it cannot be said that we have ignored the importance of these political considerations, and especially the considerations of collaboration with Europe. I should like to take the opportunity now of making it clear that we remain very conscious of the need for European co-operation in all fields, including that of space technology and research, and that this principle is not questioned by Her Majesty's Government which, as the noble Earl will know, quite apart from the question of ELDO, took a leading part in organising the European Space Research Organisation and the Conference on Satellite Telecommunications. But it goes without saying that we must ensure that all these international organisations are conducted efficiently and with sensible and logical objectives, and that their cost, as I have said before—and this is most important—is commensurate with the results to be obtained.
I should like to end by commenting by implication on the words of the noble Earl when he paraphrased the remarks of the French Minister. M. Peyrefitte. I would suggest that we must not be hypnotised by this word "co-operation", even

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in the very topical context of European co-operation. If we engage in co-operative adventures that turn out to be, at the end, unproductive, we shall, I suggest, have done nothing but damage to the whole European idea.
EARL JELLICOE: My Lords, before the noble Lord resumes his seat may I ask him one question, and may I also thank him for his very full reply? It did not go as far as I hoped, but he has not shut the door to continued participation. He talked of there being no market for the ELDO A, and then went on to say that there might be a market for the ELDO A with the apogee and perigee motor. Is it not the case that the French Government offered to buy two ELDO A Launchers?
LORD CHALFONT: My Lords, there has been a qualified provisional suggestion from the French Government that they might be in the market for two of the launchers with apogee-perigee motors; but the offer was qualified and was provisional.

BARRY CORPORATION BILL [H.L.]
The Queen's consent signified; and Bill reported, with Amendments.
TEES AND HARTLEPOOLS PORT AUTHORITY BILL [H.L.]
The Queen's consent signified, and Bill reported from the Select Committee, with Amendments.