Lords Sitting of 7 December 1967

Preamble
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Leicester
The Lord Monteagle of Brandon—Took the Oath.

TAXES AND EXCISE DUTIES: CHANGES SINCE 1964
3.5 p.m.
LORD INGLEWOOD: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

TABLE 1

Taxes and Duties which have been increased since December 1,1964

Date of Change

Change in Tax or Duty

Change in Rate

6.4.1965

Income tax (standard rate)

From 7s. 9d. in the £ to 8s. 3d. in the £ enacted Finance Act (No. 2) 1964.

7.4.1965

Tobacco

11·4 per cent.

"

Spirits

13·3 per cent.

"

Beer

11·8 per cent.

"

Wine

Light 3s. 0d. a gallon

Heavy 6s. 0d. a gallon

"

British Wine

Light 3s. 0d. a gallon

Heavy 4s. 0d. a gallon

"

Motor Vehicle Duties:

Cycle

Scales rationalised and three flat rates introduced in place of seven former ones and additional duty for use of sidecar abolished

Percentage increases range between 6 per cent. and 100 per cent. on former rates for solo machines. Abolition of extra duty for sidecar shows percentage increases for combination machines, between 20 per cent, and 33⅓ per cent.

Agricultural machines

Increase of 50 per cent.

Digging machines

Mobile cranes

Mowing machines

Haulage Vehicles (showmen's)

Increase of 25 per cent.

Other Haulage Vehicles

Increase of 50 per cent.

Showmen's Goods

Increase of 25 per cent.

Farmers' Goods

Increase of 25 per cent. at lowest point of scale gradually increasing to 47 per cent, at 4 tons unladen weight. Thereafter increase of 50 per cent.

Other Goods

Increase of 50 per cent.

Private Cars

Increase of 16·6 per cent.

Electric Vehicles

Increase of 39 per cent.

21.7.1966

Alcoholic Drink

Surcharge of 10 per cent, of existing rates (Surcharge on Revenue Duties Order 1966).

Hydrocarbon Oil

Purchase Tax

11.4.1967

Alcoholic Drink

Surcharge of 10 per cent, withdrawn and substantive rates increased so as broadly to maintain the revenue yield.

Hydrocarbon Oil

Purchase Tax

1.8.1967

Stamp Duties

Loan capital duty increased from 2s. 6d. per £100 to 10s. per £100 from August 1, 1967.

1.9.1967

Surtax

Increased by 10 per cent, for the year 1965–66 only (increase first announced July 20, 1966, becoming payable September 1, 1967).

[The Question was as follows:
To ask Her Majesty's Government whether they will publish a table of all the taxes and Excise duties existing at December 1, 1964, which they have since increased and a similar table of those which they have reduced, showing in each case the change in rate and the date on which the change or changes were made.]
LORD BESWICK: My Lords, as the Answer is rather long, I will, with permission, circulate in the OFFICIAL REPORT two tables showing the main changes.
Following are the tables referred to:

Table 2

Taxes which have been decreased since December 1, 1964

Date of Change

Tax or Duty

Change in Rate

27.4.1965

Temporary Charge on Imports

From 15 per cent, to 10 per cent.

6.4.1966

Profits Tax

This Tax (at 15 per cent.) was repealed from April 6, 1966 or the date when the relevant profits became chargeable with corporation tax, if earlier.

24.10.1966

Bookmakers'Licence Duty

These duties were abolished and replaced by the General Betting Duty at 2½ per cent, on stakes.

Duty

Duty on betting on totalisators at dog tracks at 5 per cent, on stakes.

30.11.1966

Temporary charge on Imports

Abolished.

11.4.1967

Brewers, beer primers, distillers and tobacco manufacturers graduated excise licence duties

Converted to a flat rate of £15 15s. 0d. a year.

1.4.1967

Mineral rights duty

This duty (at 1s. per £1) was repealed from April 1, 1967.

1.8.1967

Stamp duties

Transfer duty on houses, etc. valued at over £4,500 and not over £5,500 reduced from ½ per cent, ad valorem to nil and on houses valued at over £6,000 but not over £7,000 reduced from 1 per cent, to ½ per cent, both from August 1, 1967.

LORD INGLEWOOD: My Lords, while thanking the noble Lord for that reply, may I ask him whether he can give the House the two or three most significant items in the list of reductions, as I think that would be particularly interesting?
LORD BESWICK: My Lords, the fact of the matter is, as the noble Lord knows, that expenditure has tended to increase consequent upon improvements in social services.
LORD INGLEWOOD: My Lords, may I ask the noble Lord to answer the simple supplementary question which I have just put to him which was whether he could give us the two or three most significant items in the list of reductions, because I think that would be particularly interesting?
LORD BESWICK: My Lords, I have no doubt that the noble Lord will find interesting also—as we have tried to be helpful to him—the two quite long tables of changes which I am proposing to circulate.
LORD ERROLL OF HALE: My Lords, could not the noble Lord at least answer my noble friend's supplementary question?
LORD BESWICK: My Lords, the fact of the matter is, as the noble Lord knows, that expenditure has increased; and if the noble Lord wishes to make
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an issue of this he had better decide which tune he wants to play. Two weeks ago he was complaining that Her Majesty's Government were afraid of calling for personal sacrifices, and insisting that we had to keep down the level of personal consumption. Now he is complaining that the level of taxation is too high.
LORD ERROLL OF HALE: My Lords, I think that the noble Lord, Lord Beswick, has failed to appreciate the point I was making. I was merely asking the noble Lord to answer my noble friend's supplementary question—not to indulge in a diatribe against me.
LORD BESWICK: My Lords, I am simply saying to the noble Lord, if he is really serious about this, that he should be sufficiently courteous and patient to look at the two tables which the officials of the Treasury have been good enough to supply.
LORD INGLEWOOD: My Lords, may I assure the noble Lord that I shall look at the two tables with very great care; but may I repeat the supplementary question in a somewhat simpler form? If it is, perhaps, too complicated that we should have two or three of the most significant items in the list of reductions, could he at least not give us one?
LORD BESWICK: My Lords, if the noble Lord wishes, I could give him the total amount of the increase; that would probably please him even more.
LORD BYERS: My Lords, surely, if there are two tables, there must have been some taxes which have been reduced.
LORD BESWICK: My Lords, it is quite true that there are two very long and complicated tables. The fact of the matter is that I thought noble Lords would have some interest in studying them. I have not myself pulled out these items which would have suited my case.

AIRCRAFT TAKE-OFF NOISE LIMITS AND SAFETY
3.10 p.m.
LORD FOLEY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they are aware that the instruction to pilots taking off from London Airport and other airfields to reduce power because of the sound nuisance to residents in the vicinity of these airfields constitutes a grave risk of safety generally; and whether they are further aware that there is very little difference between decibels of sound of engines at full power and those at reduced power; and whether they will state the present position and provide details of any discussions at an official level which are taking place on this subject at the present time.]
LORD BESWICK: My Lords, compliance with jet take-off noise limits such as those imposed at Heathrow usually involves a reduction in power after the initial climb, but the manner in which the aircraft is operated to meet the limits is a matter for the operator to determine, taking account of the legal requirements relating to safety, including the techniques contained in the safety manual. The noise limits may at any time be departed from to the extent necessary for avoiding immediate danger. The procedures adopted by British operators for this purpose have been the subject of exhaustive study by officers of the Board of Trade and the Air Registration Board, who are satisfied that the procedures are safe.
LORD FOLEY: My Lords, while thanking the noble Lord for his reply, I should like to ask him whether he is aware that
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because of the noise restriction pilots are forced to take off very steeply at what is known technically as a more acute angle of attack than is normal; and when they reach a certain height, as the noble Lord has said, they reduce power. Is the noble Lord aware that pilots hate this procedure and very often cheat? It seems to me absolutely reprehensible that pilots should be placed in—
THE LORD PRIVY SEAL (THE EARL OF LONGFORD): My Lords, if the noble Lord, Lord Foley, will forgive me for interrupting, perhaps he would allow me to suggest that he should make his point a s a question.
LORD FOLEY: My Lords, I am trying to do just that. Does not the noble Lord, Lord Beswick, think it is very bad that pilots should be placed in a position of having to choose between safety and being hauled over the coals for a small technical offence?
LORD BESWICK: My Lords, I happen to be a member of the Association of British Airline Pilots who have been consulted on this procedure and who have co-operated with the implementation of it. While I agree that it would be much better if one could keep on maximum power for as long as possible, procedures laid down endeavour to get the best of both worlds; namely, to ensure safety, and at the same time cut down the noise nuisance to people underneath.
LORD FOLEY: My Lords, is the noble Lord, Lord Beswick, trying to say that he considers a slight noise decrease is more important than the safety of perhaps hundreds of lives? That seems to me extraordinary.
LORD BESWICK: My Lords, I am sure the noble Lord is not saying that the regulations now in force are jeopardising the safety of hundreds of lives. If he is saying that, I would suggest to him that it is very wrong to create that kind of apprehension.
LORD FOLEY: My Lords, may I say that if this is the case, why do pilots have to cheat? Three very senior B.O.A.C. pilots have assured me that in fact they jeopardise their careers by cheating on this and adopting full power at a shallower angle of attack.
LORD BESWICK: My Lords, the position is as I have stated. Although the limits are laid down, if there is any question of ensuring safety or avoiding immediate danger, the noise limits can be departed from without in any sense cheating.
LORD INGLEWOOD: My Lords, if I heard him aright the noble Lord, Lord Beswick, said that he was a member of the British Airline Pilots' Association. Does that mean that the very limited answers I got to my supplementary questions mean that he is "working to rule"?
LORD BESWICK: My Lords, probably it means that I am careful in what I say.
THE EARL OF SELKIRK: My Lords, can the noble Lord say whether there is any restriction at Heathrow on the use of full power on any type of aircraft?
LORD BESWICK: My Lords, I am not certain that I understand the noble Earl. What I said was that after the initial climb full power is restricted.
LORD ALLERTON: My Lords, may I ask the noble Lord at what height it becomes necessary to reduce power?
LORD BESWICK: My Lords, it depends entirely on the size of the aircraft, the type of engine and the limits laid down for that particular flight.
LORD OGMORE: My Lords, is it not a fact that any limit on a pilot's discretion, as this is, is a danger? And what is the point of restricting the pilot from keeping on full power when he has got up to a certain height? Surely at that height there is much less interference with the amenities of dwellers of houses down below.
LORD BESWICK: My Lords, I am told that the difference between full power and the restricted power is one of ten decibels, which means a lessening of noise and nuisance to persons on the ground by a factor of 50 per cent.
LORD LINDGREN: My Lords, can my noble friend confirm that the safety of an aircraft is entirely in the hands of the pilot and the decision is his.
LORD BESWICK: My Lords, my noble friend has put it very shortly and very well.

S.E.T.: FARMERS' AND PENSIONERS' LIABILITY
3.15 p.m.
LORD WISE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether, in view of the present financial emergency, steps will be taken to abolish the selective employment tax as it relates to old age pensioners and farmers, and so cut down the cost of collection and repayment, and release a number of civil servants for productive industry of greater national importance.]
LORD BESWICK: My Lords, the Selective Employment Payments Act 1966 makes provision for the refund of the tax to farmers in respect of their agricultural employees, and to employers of nursing or domestic assistants in private households which include persons over 70 years of age. It would not be feasible to relieve these employers from paying the tax, because this would over-complicate the National Insurance system.
LORD WISE: My Lords, may I put one or two supplementary questions to the Minister? I shall make them as short as possible. The first is: how many officials are now employed in checking and repaying selective employment tax to old age pensioners, and what was the cost involved for the first year of this non-productive occupation? The second one is: can any information be given by the Minister as to the number of old age pensioners who have had to dispense with some domestic help through being unable to afford the heavy National Health Insurance contribution and selective employment tax? The third one is: do the Government realise that when payment for this stamp has been made, the standard of living of old age pensioners has been lowered?
LORD BESWICK: My Lords, the cost and number of persons employed remains the same as at the time my noble friend last asked the question—In the case of the social security officers dealing with refund of taxes to households where there are pensioners over 70, the number is 61. In the case of repayment of tax to farmers

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the number is slightly higher, but it remains the same as the figure which was given to my noble friend earlier this year. I will confirm it to him later on.
LORD CONESFORD: My Lords, is the Home Civil Service under the present Government the greatest of our growth industries?
THE EARL OF DUNDEE: My Lords, is it really the case that it is simpler and more convenient first to make people nay tax and then give it back to them than not to charge it at all?
LORD BESWICK: My Lords, strange as it may seem, that is the case. I agree that to me it seems a crazy system, but when a statement was made by my right honourable friend some time ago we had the figures looked out and found that in fact the selective employment tax is among the most economic of all taxes. The cost of collecting it is about 1 per cent., whereas for other taxes the cost can go up to 2 per cent.
THE EARL OF DUNDEE: Yes, my Lords, but is the cost of collecting greater than the cost of not charging it at all?
LORD BESWICK: My Lords, not charging it means that there would have to be two categories, and if this category were to be exempted it would be necessary to have two different stamps, and to police the scheme to make certain that people using the lower rate stamp were entitled to it. The opinion of the professional people employed on this work is that it is cheaper to do it in this way than the other way.
LORD CARRINGTON: My Lords, will the noble Lord take note that we on this side think that this tax is not only damaging but absurd, and when we return to office we shall get rid of it.
LORD SALTOUN: My Lords, may I ask the Government this question? When an old age pensioner has to pay the tax, it depends on the letter with which his name begins at what period it is repaid to him in lump. Therefore an old age pensioner who pays the tax is out of pocket for three months or six months before he gets a refund. Would it not be better to arrange matters so that he has the money in hand before he has to pay it, as it were? Could you not delay for six months, or do
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something to let him have the money so that he is not out of pocket before there is repayment?
LORD BESWICK: My Lords, I know that this is one of the problems involved, but I am afraid it still remains the fact that, if exceptions are to be made in the method of collecting National Insurance contributions, it would send up the cost considerably.
THE DUKE OF ATHOLL: My Lords, with the present bank rate, how much is this worth to the Government per week?
LORD WISE: My Lords, unfortunately the Minister has not replied very fully to the questions, but I will ask him just one more. Are there any circumstances in which claims for repayment by old age pensioners have been withheld or unpaid?
LORD BESWICK: My Lords, obviously I cannot answer that question without notice.
LORD CRAWSHAW: My Lords, may I press the question put by the noble Earl, Lord Dundee, and ask the noble Lord whether he is aware that for every civil servant spending time sending off forms there are many more people spending time receiving and answering forms; and whether he would agree that the selective employment tax is one of the many form filling afflictions imposed upon farmers which automatically increase the overhead costs of their production?
LORD BESWICK: My Lords, there is no doubt an element of cost to the farmers, but the fact still remains that if we are to have social services, and if we are to have defence, we must have revenue.
LORD CARRINGTON: But why this tax?
LORD BESWICK: As I indicated earlier—and I now have the actual figure—the cost of collecting this tax is approximately 1 per cent., whereas in the case of other taxes it is up to 2·03 per cent.
LORD MITCHISON: My Lords, may I ask my noble friend not to be beastly to the Scottish computer which attends punctually to my requirements under both these heads. If it were turned on

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to produce something else, I do not know what it would produce.
LORD ERROLL OF HALE: My Lords, the noble Lord was kind enough to tell us the cost of collecting the tax. Would he also tell us the cost of refunding the tax?
LORD BESWICK: My Lords, does the noble Lord mean the cost of administration?
LORD ERROLL OF HALE: My Lords, I wish the noble Lord would listen to my question. I said that the noble Lord was kind enough to tell us the cost of collecting the tax. I am now asking whether he can tell us the cost of refunding the tax.
LORD BESWICK: My Lords, the cost of administration is £80,000 in the case of one tax and £1½ million in the case of the other tax.
LORD SANDYS: My Lords, is the noble Lord aware that the powerful arguments deployed in yesterday's debate in regard to the total abolition of this selective employment tax in Scotland are equally applicable in all cases to the selective employment tax in England and Wales? Would the noble Lord promise the House that he will read yesterday's debate in connection with the answers he has made to-day?
LORD BESWICK: My Lords, anything the noble Lord says is considered. It would have been equally useful if when the noble Lord who leads the Opposition gave a pledge to abolish this tax, he had also indicated the alternative methods of taxation that he would use.

DETERGENTS AND SEWERAGE
3.23 p.m.
VISCOUNT ST. DAVIDS: 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 steps they are taking to limit or prohibit the use of detergents less than four-fifths of whose materials are broken down to inert matter by natural biological action in drainage or sewerage systems.]
THE PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (LORD KENNET): My Lords, two years ago the manufacturers undertook to include in domestic detergents for use in the United Kingdom a new material that could more readily be broken down. The Ninth Progress Report of the Standing Technical Committee on Synthetic Detergents shows that removals of detergent up to 90 per cent. are now being achieved at sewage treatment works. This compares with the 65 per cent. achieved before the introduction of the new material. In this situation my right honourable friend is not convinced that any further prohibition is needed.
VISCOUNT ST. DAVIDS: My Lords, may I ask my noble friend whether he will see if this magnificent progress, with which we are all pleased, can be pushed even further? And may I ask him whether he does not consider that this should be taken just as far as it can be, in that it is the most unpleasant possible method of dealing with detergents to be forced to drink them and thus take in one another's washing.
LORD KENNET: My Lords, I do not think anybody is forced to drink detergent. The Standing Technical Committee which I mentioned, which was appointed by a previous Minister of Housing, is in continuous touch with the Confederation of British Industry about this matter—who, I may say, are very good on this front—and we can be certain that such advance as is technically possible will be achieved in a reasonable period of months after relevant discussion.

COMMONWEALTH COUNTRIES AND REPUBLIC OF IRELAND (IMMUNITIES) (No. 3) ORDER 1967
3.24 p.m.
THE MINISTER OF STATE FOR COMMONWEALTH AFFAIRS (LORD SHEPHERD): My Lords, this is a simple Order. In 1952 Parliament passed the Diplomatic Immunities (Commonwealth Countries and Republic of Ireland) Act, which provided certain immunities to consular officers of independent Commonwealth countries. Section 1(6) of the Act gave a list of those countries. Since then

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other countries that have become independent have been granted the same immunities for their officers. These provisions have been included in the Independence Acts. The purpose of this Order is to include in those countries whose officers have restricted immunity the representatives of the Associated States in the Caribbean. I beg to move.
Moved, That the Draft Commonwealth Countries and Republic of Ireland (Immunities) (No. 3) Order 1967, laid before the House on November 7, be approved.—(Lord Shepherd.)
On Question, Motion agreed to.

BUILDING SOCIETIES (SPECIAL ADVANCES) ORDER 1967
3.25 p.m.
LORD BESWICK: My Lords, this draft Order, if approved, will enable a building society to advance to an individual up to £10,000, instead of £7,000 as at present, without the society having to treat the advance as a "special advance" for the purposes of the Building Societies Act 1962. Special advances are defined as advances, of whatever amount, to companies, and advances of more than a certain amount to persons. It is this "certain amount" to which the Order relates.
The amount was fixed at £5,000 by the Building Societies Act 1960, because it was felt at that time that £5,000 broadly represented a reasonable limit on what could be regarded as a normal type of advance for the ordinary owner-occupier. An Order was made in 1963 increasing the limit from £5,000 to £7,000. This reflected mainly the increase in house prices over the period. It also reflected in part an increase in the demand for the more expensive type of housing that came with the general development of housing standards and standards of living. For similar reasons the Building Societies Association suggested to the Government that the time had come to make a further increase in this figure.
The building societies have assured us that raising the limit for special advances from £7,000 to £10,000 will not lead them to be more restrictive in granting mortgages for smaller amounts. We have made it clear to the building societies that, in moving to £10,000, we reckon
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that we are not only allowing for the increases of prices that have occurred in the last four years, but also to some extent discounting the future. I hope that with this explanation the House will feel able to approve the draft Order. I beg to move.
Moved, That the Draft Building Societies (Special Advances) Order 1967, laid before the House on November 14, be approved.—(Lord Beswick.)
LORD NEWTON: My Lords, I am sure the House is grateful, as I am, to the noble Lord the Chief Whip for his explanation of this Order. I am certainly not going to suggest to your Lordships that this Order should be opposed; indeed, there is no doubt that at this time there is a need for this Order. But that is not to say that the need for this Order is to be welcomed; because it is not. The noble Lord has told us that this Order raises from £7,000 to £10,000 the amount of the advance which the building societies may make to owner-occupiers before any higher advance becomes what is called a "special advance". It may be thought that this proposal constitutes a useful encouragement to home ownership, but of course it does not do anything of the kind. Something like this Order is required entirely because of the fall in the value of money over the last few years and the resulting increase in the price of building a modest-sized house.
The noble Lord has told us that the building societies themselves asked for something like this, and I understand that they informed the Government that unless the limit on the basic advance was raised they would not be able to continue properly to carry out their function in giving adequate assistance to the man who wants to have a small house of his own. The question then is whether this proposed new limit of £10,000 is high enough. Is it going to do more than restore the status quo of 1964? I understand from what the noble Lord has said that the Government think it will, and he also suggested that it includes a small margin against future price increases. I have considerable doubts about that, because of devaluation. Many people to-day believe that because higher prices will have to be paid for imported materials for building, the cost of building even a modest house will go

787
up by 4 or 5 per cent. If that happens, I should have thought it was fairly obvious that the limit of £10,000 will not be high enough; and of course if it is not high enough we must expect that fewer houses will be built in this country for owner occupation.
Let us suppose that the proposed increase of the limit to £10,000 will cover both the price increases of the past and any future ones consequent upon devaluation. In other words, if raising the limit to £10,000 is going to maintain the rate of building houses for owner occupation one cannot help wondering whether the proposed increase in the limit comes within Mr. Callaghan's Letter of intent to the International Monetary Fund. However that may be, there is no doubt that something like this Order is needed to-day; but equally it is not a matter for congratulation.
3.32 p.m.
LORD PEDDIE: My Lords,—
LORD OGMORE: My Lords, I think it is usual on these occasions for the representatives of the two Opposition Parties to speak before a Back-Bencher on the other side, but I stand to be corrected if I am wrong.
From these Benches I should like to welcome this Order without the rider put to it by the noble Lord, Lord Newton, because I do not believe that since 1964, when the Labour Party came into office, the price of a house has gone up by £3,000. In fact, the building societies were asking for this increase before 1964. I have to declare an interest in that I am a director of a building society, and I know very well that my society, and undoubtedly many others, welcome this increase and thank the Government for it. We believe it will do a great deal to enable us to help people to achieve their object of buying their own house. For various reasons new houses are getting more expensive; land is dear, materials are dear, and the standards of housing are rising all the time, which of course is a good thing. What could be built for £5,000 or £6,000 ten or fifteen years ago possibly is built for £7,000 or £8,000 to-day. Therefore this is a step in the right direction.
One thing I should like to take up with the Minister is his statement that the
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Government suggest that there should not be any further increase for some years to come. I think we must leave this to the Registrar. If he feels that in the interest of the building societies' movement and of getting houses for people it is desirable that the special advances should go up, then Parliament should pass the necessary Orders providing for the increase in the special advance. As your Lordships know, in order to provide one mortgage of £10,000 for a house a building society has to advance £100,000 on other types of houses of less than that figure, so it means that a considerable amount of money has to be raised by building societies even to provide £10,000 a time for houses. I want that to be borne in mind, because it is always in the minds of directors of building societies, realising that they are very much restricted in advancing moneys on new houses to even the limit of £10,000. Up to now it has been £7,000. Nevertheless, I am grateful for comparatively small mercies, and I thank the Government for what they propose.
There is one question of interpretation that I should like to put in regard to paragraph 3 of the Order. I take it that this means that the Order, if it is passed by your Lordships to-day (it has already been passed by another place), will come into operation to-morrow, so any building society whose accounts close on December 31 will reap the benefit of this Order next year. Perhaps the Minister will be good enough to confirm that this is correct.
LORD BESWICK: No, my Lords.
LORD OGMORE: It is not correct?
3.36 p.m.
LORD PEDDIE: My Lords, I am sure the building society movement warmly welcomes this Order. The noble Lord, Lord Newton, referred to the increase in the price of houses and expressed the view that this was the sole reason for this Order. I think your Lordships would agree that we all deplore the rise in the price of houses, but that is a circumstance which is not associated with the conditions of the past three or four years alone; it is something that was on its way for a long period before the present Government came into power. This Order will certainly encourage home ownership, although the noble Lord, Lord Newton,

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cast some doubts on whether that was so. It will be of assistance to a special class that deserves consideration; namely, the young executive class (and particularly in the South-East of England), who in recent times because of the limitation of £7,000 have felt some restriction in securing the sort of house they need and deserve. The increase from £7,000 to £10,000 will widen the scope and make it possible for advances to be made to that particular class of person without impinging upon the special advances. I think from all standpoints this is quite a worthy Order; one which is warmly welcomed and which will make a considerable contribution towards encouraging home ownership.
3.39 p.m.
LORD SILKIN: My Lords, I am not a director of a building society and I should like to say a few words on behalf of those who are not. I have sonic doubts about this Order because it introduces a new type of person who will now be able to obtain an advance from a building society. The noble Lord, Lord Peddie, has just referred to the executive classes and those of higher incomes. I have no objection to them per se, but I am wondering what is going to happen to those of lower incomes who make applications for advances. The fact is that even the funds of building societies are limited, particularly now, in view of the bank rate, which is very high, and the fact that lending to a building society is no longer as attractive as it was formerly, and it probably will not be for a considerable time. Therefore, we must expect that the funds of building societies will not increase and may possibly decrease. I think that there are some signs of that already.
The result of this will be, therefore, that the amount available to buy houses for £5,000, £6,000 or £7,000 will be reduced in favour of people who buy more expensive houses. A building society has not unlimited funds, and to the extent that the lending on higher priced houses is increased it will have to reduce advances on lower priced houses. We are talking now of a house which is going to cost anything from £12,000 to £15,000. Of course, no one can seriously contend that that increase in range is due to any rise in the cost of houses or of land. It is in fact a new type of house that we
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are going to finance. I should like to have some assurance, if the Minister can give it, that loans to people with lower incomes and cheaper houses will not suffer as a result of this increase in the facilities for lending up to £10,000.
LORD ROYLE: My Lords, I also declare the same interest as the noble Lord, Lord Ogmore, but I feel that the fears of my noble friend, Lord Silkin, are not justified in any sense at all. It has to be remembered and stressed that under the 1952 Building Societies Act only 10 per cent. of special advances were allowed, and as the noble Lord, Lord Ogmore, says, if it is an advance of £10,000 in one instance then at least £100,000 has to be found for the smaller type houses. That is the point which has to be stressed. At the same time, building society's experience teaches that in the main nothing like 10 per cent. is ever used, and the vast majority of the loans which come into operation are for much lower priced houses. I do not think there is any risk at all. This suggestion meets with the full approval of the Building Societies Association and I think every building society in the country. I am confident it is a step in the right direction.
3.43 p.m.
LORD BESWICK: My Lords, I am grateful to my noble friends Lord Peddie, Lord Royle and Lord Silkin for putting into proper perspective, if I may say so, the political gibes of the noble Lord, Lord Newton. With respect, he was not too helpful on this matter. This is a question of meeting the wishes of the building societies. It is not simply a matter of the decrease in the value of money; it is to some extent one of improvement in the standard of housing. As my noble friend Lord Peddie has said, the decrease in the value of money has not come simply in the last three years; it was there before. The decrease in the value of money is a factor which we all ought to accept as a common responsibility, and it is a common task of all in this country to try to deal with it. If may say so, I did not think the attitude adopted by some of the noble Lord's friends on the earlier Question helped with the task of trying to secure a stable currency.
I am grateful to my noble friend Lord Royle for answering the noble Lord,

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Lord Silkin, on his point about ensuring that those who seek to borrow for a lower priced house will not be penalised as a result of this increase in the total amount which the building societies can now offer to any given borrower. These special advances are so defined that they are a limited percentage of the total advances of any building society. As my noble friend Lord Royle said, the maximum is 10 per cent., although in the case of certain building societies which in the past provided loans for this category of borrower before the present Act came into operation the limit was often lower than 10 per cent., and I think in some cases was 2½ per cent. So I can say to my noble friend Lord Silkin that the fears that he has are recognised and have been met by this limitation.
LORD SILKIN: My Lords, may I just clear up one point? These advances between £7,000 and £10,000 will no longer be special advances. They will come out of the general funds. Is that not so?
LORD BESWICK: That is right. The special advances will now be over £10,000.
LORD SILKIN: Therefore, this 2½ per cent. or 5 per cent. no longer applies. Theoretically a building society could advance the whole of its loans to people who want £10,000 each.
LORD BESWICK: My Lords, I take my noble friend's point. What he is saying is that the ability to lend a sum between £7,000 and £10,000, without its being counted as a special advance, is giving to the building societies a freedom which they did not previously enjoy. But I think we all agree that the type of person who is now borrowing, say, £7,000 to £8,000 is the type of person who ten years ago would have been borrowing £5,000 to £6,000, so that we are not in fact restricting advances and we shall not be penalising those persons who wish to buy the smaller house. Moreover, the building societies have given an assurance that their policy as regards the spread of risk over all categories of borrowers will be maintained, and I think my noble friend will find that it will not be the policy of any building society to concentrate its band of borrowers on those wishing to borrow between £7,000 and £10,000.
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The noble Lord, Lord Ogmore, asked about the operation of this Order. The Order itself will come into operation immediately it has been approved by both Houses of Parliament, but the operation of the Order will extend this limit to the building societies only from the beginning of their respective financial years. I think that answers all the questions, and I hope the House will now be able to approve the Order.
On Question, Motion agreed to.

CONSULAR RELATIONS BILL [H.L.]
LORD SHEPHERD: My Lords, I beg to move that this Report be now received.
Moved, That the Report be now received.—(Lord Shepherd.)
On Question, Motion agreed to.

CIVIL AVIATION BILL [H.L.]
3.49 p.m.
LORD BESWICK: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Beswick.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD MERTHYR in the Chair.]
Clause 1 [Control of road traffic at aerodromes]:
On Question, Whether Clause 1 shall stand part of the Bill?
LORD BURDEN: I should like to raise a point on Clause 1 which is regarded as of some importance. Local authorities are not sure of the full implications of the application of road traffic enactments to airport roads. At present, airport authorities do not take out road fund licences for vehicles which never go outside the airport boundaries—for example, vehicles that are used only on the roads, apron, taxi-ways and runways within the airport. It is hoped that this clause will not be used to impose on aircraft operators a requirement to take out such licences for vehicles of the kind that I have indicated. I have not raised this point with the Minister. He may

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perhaps think it advisable, if he has not the information, to look into it and to write to me, so that the matter can be dealt with if necessary at the Report stage.
LORD ROYLE: I should like to add a few words in support of my noble friend Lord Burden on this question. I think that the airports which are owned by municipal authorities are particularly concerned about this problem. As my noble friend has said, it has not been customary for them in the past to tax the vehicles which never leave the airport premises, and they are a little concerned at the moment lest what is said in Clause 1 indicates that in the future they will be asked to pay Excise licence fees on vehicles that never leave the airport. I would ask my noble friend whether, when he replies, he can give an assurance that for the future what is now set out in Clause 1 will not require these authorities to take out Excise licences for vehicles that remain on the airport.
LORD PARGITER: Before the noble Lord replies, I would point out that there is another aspect of this with regard to the major aerodromes, not particularly the local authority aerodromes, where a great amount of public transport uses or is operated within the perimeter of the airport. From the point of view of safety, and matters of that kind, it is highly desirable that there should be some regulation though without necessarily impinging on the question of Excise matters. Perhaps the Minister would deal with this point as well, because it affects to some extent the complete freedom which may otherwise operate within the airport perimeter.
LORD BESWICK: As I understand it, the intention here is not to make any difference at all to the Excise provisions for road traffic vehicles. The clause is concerned simply with the control from the point of view of safety and good organisation on airports, where there is a considerable amount of traffic, and to give the airport authorities concerned the kind of power which a local authority would have outside for the regulation for road traffic vehicles. The clause is into the point which has been raised, and let my noble friends know the answer.
Clause 1 agreed to.
Clauses 2 and 3 agreed to.
Clause 4 [By-laws at certain private aerodromes]:
On Question, whether Clause 4 shall stand part of the Bill?
THE EARL OF KINNOULL: May I raise two small points on Clause 4? The first arises under subsection (1). As it reads at present, as I understand it, the definition of a "private aerodrome" would not include a busy flying club aerodrome or, for that matter, a mixed-user aerodrome; that is, one which is both civil and military. I am wondering if the noble Lord could confirm whether this is correct, and whether the words "a substantial amount of commercial passenger traffic" in subsection (1) should be widened to bring within its scope the special flying club.
My second point is this. I understand that there is considerable concern among private aerodrome operators that the runway approaches are not sufficiently safeguarded. They are, of course, safeguarded in airport authority and local authority aerodromes, but not in the case of private aerodromes. There was apparently a case recently where one of the runways at Southend Airport was endangered. A tree was growing just outside the perimeter of the aerodrome and in direct flight path with one of the runways. When the farmer was approached he was not prepared either to prune or to cut down the tree. Would the noble Lord consider the question of whether local by-laws for private aerodrome Operators ought to come under this clause?
LORD BESWICK: Previously, of course, the by-law-making powers did not apply to private aerodromes. But there were representations from proprietors of such aerodromes, and it was with the intention of meeting their wishes that this clause was included. I imagine it will be generally agreed by the noble Earl and others than a universal by-law-making power for all private aerodromes would not be appropriate, and it was thought the dividing line would be whether there was at the aerodrome commercial passenger traffic. I confirm that the intention of this clause, as now drafted, is to confine this power to those airports where, as the Bill says, there is "a substantial amount of commercial passenger traffic".

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The question of defining the "substantial amount" will be one for the Board of Trade. They can designate an airport which should be given this power of by-law-making, and I have no doubt that they will have regard to the total amount of the traffic on the aerodrome. If the noble Lord wishes to pursue further the precise definition of what is "commercial" or "commercial passenger". I shall be glad to look into it with him later.
Clause 4 agreed to.
Clauses 5 and 6 agreed to.
Clause 7:
Financial assistance for certain aerodromes.
7.—
(2) No grant or loan shall be made under this section in respect of, or in connection with, any of the aerodromes which were transferred to the British Airports Authority by the Airports Authority Act 1965.
3.58 p.m.
THE EARL OF KINNOULLhad given Notice of two Amendments, the first being, in subsection (1), to leave out; " Subject to subsection (2) of this section", and the second to delete subsection (2). The noble Earl said: I beg to move Amendment No. 1, and if it meets the convenience of the Committee I will deal also with Amendment No. 2. Both Amendments stand in the name of my noble friend Lord Jellicoe and myself. The noble Lord, Lord Beswick, will recall that during the Second Reading of the Bill my noble friend Lord Jellicoe raised the question of why, under subsection (2) of this clause, the British Airports Authority was specifically excluded from the benefit of the clause. The clause gives the Government power to make grants and loans towards expenses incurred in the development of aerodromes in Great Britain; and the specific purpose of this Amendment is to bring back within the scope of this clause the British Airports Authority.
The noble Lord, Lord Beswick, partly answered my noble friend's question on why the Airports Authority was to be excluded when he said, during the Second Reading debate, that any new airport which the Authority took over, in addition to the four major airports it at
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present controls, would be covered by the clause. If this is so, it seems strange logic that the Airports Authority should be granted the benefit of this clause in one instance, for airports which it takes over in the future, but not in regard to the existing airports under its control. In fact, this seems to assist my argument.
The second point I would make on this Amendment is that, while I realise that the financial provision under the Airports Authority Act 1965 already give the Authority borrowing powers, the provisions, so far as I am aware, do not include special finances for the Authority in cases where it is directed by the Government—this is the important matter—to do something contrary to the criteria of sound commercial grounds. One has in mind the case where the Government insist, for reasons of planning or social necessity, that the line of a runway shall be altered. One also has in mind the question of the future development of Stansted.
The noble Lord may reply that in such cases the Airports Authority Act permits the Government to make loans to the Authority at very reduced rates of interest. If this is his answer, he will be missing my point entirely. The point of my Amendment is that any Government direction made to the Authority which is outside the criteria of being in the Authority's "best commercial interest" should clearly be shown and separated as a Government responsibility. This only follows the line laid down by the Government themselves in their White Paper Nationalised Industries (Cmnd. 3437), from which I quote the following:
"Where there are significant social or wider economic costs and benefits which ought to be taken into account in their investment and pricing these will be reflected in the Government's policy for the industry: and if this means that the industry has to act against its own commercial interests, the Government will accept responsibility. (Where necessary, the Government will make a special payment to the industry or make an appropriate adjustment to its financial objective.)"
Finally, I should like to ask the noble Lord whether or not the British Airport Authority was ever consulted before this clause was drafted. I beg to move.
Amendment moved—
Page 5, line 39, leave out ("Subject to subsection (2) of this section").—(The Earl of Kinnoull.)
LORD BESWICK: The noble Earl is now, in effect, asking that we should go back on an Act which went through this House comparatively recently; namely, the Airports Authority Act 1965. That Act, which was given a good deal of very detailed consideration by Members of this House, laid down the borrowing powers of the Authority in respect of the four named aerodromes. Probably the most important theme which went through the discussions which we had on that Bill was that there should be the minimum amount of interference by a Government Department in the workings of the Airports Authority. It was thought that the financial arrangements which were made under that Bill would give the Airports Authority that kind of financial independence which it sought, and which the House thought it should have. I must say it is rather strange that the noble Earl, and indeed his noble friend Lord Jellicoe, should come along so soon after the passing of that Act to ask us, in effect, to vary its provisions.
The noble Earl asked about the possibility of the Authority having to borrow more money, if the cost of extending Stansted was higher than that which was envisaged at the time when the Airports Authority Act went on to the Statute Book. If Stansted, because of the realignment of runways or for other reasons, involves expenditure of a higher order than that which we then contemplated, it will still be possible for Her Majesty's Government, through the Board of Trade, to make a once-and-for-all grant on this account. Nothing that is said in this Bill, so I am advised, would rule out the possibility of an increase in the borrowing powers of the Airports Authority or a once-and-for-all grant on the special account of Stansted.
THE EARL OF KINNOULL: I am sorry, I did not understand the noble Lord. Is he saying that under the Airports Authority Act 1965 a grant may be paid for special purposes such as Stansted?
LORD BESWICK: What I am saying is that under the powers which Her Majesty's Government have, irrespective of the Airports Authority Act, a grant could be made to the Airports Authority for this particular purpose. I am not saying that the Government are consider
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ing making a grant, nor that it should be made. I am saying that in the correspondence which the Government have had with the Airports Authority—and this covers the question of consultation raised by the noble Earl—Her Majesty's Government have said that it would be necessary for them to raise, by way of landing fees and so on, the necessary revenues to service the capital charges which the new airport at Stansted would involve. This is the policy which I thought we had agreed, and this is how it would be applied in the case of Stansted. But, in addition to any special grant, I am saying that it would be possible for the Airports Authority to ask for its borrowing powers to be increased, and it was envisaged at the time the Airports Authority Bill went through this House that by the beginning of the 1970s an extension of the borrowing powers would be required. I should have thought that that would meet the kind of case which the noble Earl has in mind.
He also asked about the difference between the case of a completely new airport taken over by the Authority as against the four named in the Airports Authority Act. The difference is that it was possible to assess the capital cost of those airports; it was possible to see what kind of job they would have to fulfil; and indeed we have found that the assessment then made about the profitability of this group of four airports has more than been made good. The four airports taken together are in fact making a considerable profit, and, on their account there does not at present seem to be any need to contemplate an addition to the borrowing powers. If, however, the Authority wishes to take over other airports, then the considerations in the White Paper, which the noble Earl very fairly quoted, might well apply, but they would have to be considered on their merits.
THE EARL OF KINNOULL: I am afraid I am not fully satisfied with the noble Lord's argument. As I understand it, he first of all accused us of going back on the Airports Authority Act. I do not think that applies at all. In fact, we were basing our arguments on Her Majesty's Government's White Paper. Where I think the noble Lord is confusing the issue is in talking of Government powers to increase loans to the Authority, when it is, of course, grants

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with which we are concerned. This is where the criteria come into the matter. I am afraid that I cannot ask the Committee's leave to withdraw this Amendment.
LORD BESWICK: May I make it perfectly clear that I am talking about two possibilities under the Bill as now drafted. One possibility is the extension of the borrowing powers of the Airports Authority, and I am also saying that the subsection to which the noble Earl refers does not affect the Government's general powers, subject to the money being voted by Parliament, to make grants of a non-repetitive kind, under contract or equivadent, to pay for services rendered. So I should have thought that the particular case of Stansted, which I gather the noble Earl has in mind, would be covered. If he is still not satisfied and would wish to make a better case, I suggest he raises the matter again on Report stage.
THE EARL OF KINNOULL: With that assurance, I am quite willing to do that. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
4.10 p.m.
LORD BESWICK: I should like to speak to Amendments 3 and 4. The amounts involved in the loans under the clause are likely to be small, and it is not considered necessary that they should be made from the Consolidated Fund. If they were, it would involve rather complicated arrangements which are not provided for in the original Bill, anyhow, and it would be necessary to empower the Government to borrow money for the purpose. It is thought that a much more simple and straightforward course for making both loans as well as outright grants would be to make them from Departmental Votes. This, I am advised, is the normal practice so far as loans are concerned where relatively small sums are involved. The subsections to be deleted are those which would have been required for loans made directly from the Consolidated Fund. They are not required in the case of loans made from Parliamentary Votes. The money for both the grants and the loans which may be made under this clause will now be provided under a slightly amended Clause 20. I beg to move.
Amendment moved—
Page 6, line 14, leave out subsection (3).—(Lord Beswick.)
THE EARL OF KINNOULL: May I just say from this side of the House that I am sure we welcome these two Amendments. I am also sure that they are extremely practical.
On Question, Amendment agreed to.
LORD BESWICK: I beg to move.
Amendment moved—
Page 6, line 25, leave out subsections (5) and (6).—(Lord Beswick.)
On Question, Amendment agreed to.
Clause 7, as amended, agreed to.
Clause 8 agreed to.
Clause 9 [Detention and sale of aircraft for unpaid airport charges]:
THE EARL OF KINNOULL THE EARL OF KINNOULL moved, in subsection (1)(b), to leave out "twenty-one" and insert "forty-two". The noble Earl said: I am sure the purpose of this Amendment will be perfectly clear to the noble Lord, Lord Beswick, as the matter was raised by my noble friend Lord Jellicoe on Second Reading. As drafted at present, the clause gives power to an aerodrome authority, in the event of non-payment of airport dues or charges, to detain and sell any aircraft after a period of only 21 days. While one appreciates that there is a good case for this power, I suggest it is a pretty harsh penalty to allow an airport authority or airport operator to sell an aircraft after giving only 21 days' credit. One could have the absurd example where, perhaps for the sake of £200, an aircraft worth over £1 million is sold.
Before drafting this Amendment we tried to find from practical people what would be a practical period of time. We consider that the present 21 days' limit would cause concern, particularly to overseas owners of aircraft or to anyone who fell ill. As the noble Lord will see, we have taken 42 days as a more practical period of time, and I trust that, as he implied on Second Reading, he will find this acceptable. I should perhaps add that we have not based our calculations on the number of days allowed under the Harbours, Docks and Piers Clauses Act 1847, as seemed to us to have been done by the draftsmen of the Bill. I beg to move.
Amendment moved—
Page 8, line 1, leave out ("twenty-one") and insert ("forty-two").—(The Earl of Kinnoull.)
LORD BESWICK: I understand from the noble Lord that he is complaining not about the harshness of the penalty but about the time within which it shall be decided whether the penalty should be exacted. As I indicated on Second Reading, I was inclined to think that a period of 21 days was too short and I said that I would have a look at it. However, we did not take the 21 days from the Harbours, Docks and Piers Clauses Act 1847, as the noble Lord has apparently indicated. There the time limit is seven days. Everyone thought that seven days was too short, even though, surprisingly enough, the communications all over the world in 1847 were probably not so good as I hope they are to-day. It was thought that leaving seven days as a precedent and putting in 21 days was reasonable, but the noble Lord still thinks that it is unreasonable. He seems to have taken the number which we thought of and doubled it, making 42 days. I thought he had perhaps gone a little too far, but if he cares to compromise with me and say 28 days, I shall be glad to make provision at Report stage.
THE EARL OF KINNOULL: Perhaps before the next stage I could discuss this point with the noble Lord. In that case I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 9 shall stand part of the Bill?
THE EARL OF KINNOULL: I wonder whether I may mention one point on subsection (7) of Clause 9. Subsection (7) specifies those bodies which will be given powers under this clause, but it does not include the privately owned aerodromes. Obviously, this would seem totally unfair to any aerodromes such as Southampton Airport, which handles a considerable amount of traffic. It also seems illogical, and if private aerodromes are important enough to warrant bylaws under this Bill why cannot they be granted the same privileges and remedies under this clause as other aerodromes?
LORD BESWICK: I think the noble Earl and his noble friend Lord Jellicoe are on a good point here, and it seems to me that we ought to do something about it. They have not put an Amendment down, but again before Report stage I will certainly look into it and see whether we can meet the point which the noble Earl has made.
Clause 9 agreed to.
Clause 10 agreed to.
Clause 11 [Power to provide for the mortgaging of aircraft]:
LORD BESWICK: I beg to move Amendment No. 6. It may be for the convenience of the Committee if I refer at the same time to the following Amendments relating to Clauses 12 and 13. The proposal in this Amendment is to redefine the overseas territories to which the provisions of this Bill should apply. It was thought that the original definition would be too wide in certain cases; for example, it would have authorised Her Majesty in Council to legislate for countries such as Brunei, in which we have no jurisdiction. We are responsible for the foreign policy of that country at the present time but we have no power to legislate for it, and the original terms of the Bill would have brought in Brunei. On the other hand, the original terms would not have included a territory such as the New Hebrides, for which, although it is a condominium, we might have wished to legislate in the future. I am suggesting, therefore, that the new words
"relevant overseas territory and to aircraft registered in any such territory."
would be much more suitable. I beg to move.
Amendment moved—
Page 11, line 19, leave out from ("any") to end of line 22 and insert ("relevant overseas territory and to aircraft registered in any such territory.")—(Lord Beswick.)
THE EARL OF KINNOULL: I wonder whether I could raise one point on Amendment No. 6, as the noble Lord is taking them all together. It concerns the question of mortgages. As I understand it, the U.S.A. Federation Act 1958, Section 503, covers "all persons"—that is the term they use, I think—on the question of mortgages. I believe that in

803
the United States that gives some assistance to people undertaking mortgages of their aircraft, as it not only protects inside the U.S.A. but protects, apparently, throughout the world. I do not know whether that ties in at all with this Amendment.
LORD BESWICK: No. Frankly, I cannot understand the point which the noble Earl is getting at here. I should like to; and it is probably my fault. Obviously we cannot legislate here for any other parts of the world. What we are doing now is seeking powers to ratify a Convention which will apply to those other parts of the world where the Convention is ratified, but we cannot say, as Her Majesty's Government in this territory, that Governments of other countries shall observe legislation which we ourselves pass, except in so far as it relates to this Convention under which the other countries accept an obligation by virtue of their ratification of the Convention. In this respect, I should have thought that what we are proposing to do here is virtually on all fours with the legislation in the United States: but if, on consideration, the noble Earl can see any flaw in my argument, he will probably let me know.
On Question, Amendment agreed to.
Clause 11, as amended, agreed to.
Clause 12 [Power to give effect to Convention on Rights in Aircraft]:
LORD BESWICK: This and the next Amendment are consequential Amendments. I beg to move the first of them.
Amendment moved—
Page 12, line 14, leave out from beginning to ("of") in line 15 and insert ("relevant overseas territory").—(Lord Beswick.)
On Question, Amendment agreed to.
LORD BESWICK: This is the second consequential Amendment. I beg to move.
Amendment moved—
Page 12, line 30, leave out from ("any") to end of line 32 and insert ("relevant overseas territory").—(Lord Beswick.)
On Question, Amendment agreed to.
Clause 12, as amended, agreed to.
Clause 13 (Provisions supplementary to sections 11 and 12):
LORD BESWICK: This Amendment is in two parts. As to the first part, on page 12, line 44, the insertion of the proviso will have the effect of ensuring that the Order in Council relating to these relevant overseas territories will not have to be laid before Parliament in the United Kingdom. It is not thought appropriate that these detailed, technical matters should take up the time of Parliament here, and there are precedents for not including them, by way of the Affirmative Resolution procedure. The second part of the Amendment is really consequential upon the three Amendments to which we have just agreed. Given the different definition of an overseas territory, it is necessary to mention the Channel Islands and the Isle of Man. I therefore hope that these words, which are really spelling out the new definition of overseas territories, will be acceptable to your Lordships. I beg to move.
Amendment moved—
Page 12, line 44, at end insert—
("Provided that this subsection shall not apply to an Order which applies only to a relevant overseas territory.
( ) in the two last foregoing sections and in this section "relevant overseas territory" means any of the Channel Islands, the Isle of Man, any colony and any country or place outside Her Majesty's dominions in which for the time being Her Majesty has jurisdiction.")—(Lord Beswick.)
On Question Amendment agreed to.
Clause 13, as amended, agreed to.
Clause 14 [Extra-territorial regulation of certain British-controlled aircraft not registered in the United Kingdom]:
On Question, Whether Clause 14 shall stand part of the Bill?
THE EARL OF KINNOULL: On the Question, That Clause 14 stand part of the Bill, perhaps I may raise one point with the noble Lord. In line 9 of page 13 the words "chartered by demise" are used. As I am advised, this expression is more known to Parliamentary draftsmen than to practical aviators, and it seems that it would be comparatively easy to devise a form of charter, hire or lease which did not constitute a charter by demise and would therefore escape the admirable intentions of this clause. I appreciate that this point could be better

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dealt with in the form of an Amendment, but perhaps the noble Lord would consider this point so that a suitable Amendment may be drafted before the next stage of the Bill.
LORD BESWICK: The noble Earl was kind enough to give me notice of his fears about this wording, and I have looked into it. It seems to me that his fears are not justified and that the present wording in fact carries out the intentions of the Bill.
Clause 14 agreed to.
Clause 15 agreed to.
Clause 16 [Time limit for prosecutions arising out of accidents]:
4.28 p.m.
LORD BESWICK: This Amendment defines rather more carefully the meaning of the word "accident". At the present time there are some slight differences between the definition of "accident" contained in the Civil Aviation Act and the regulations which flow from that Act. In effect, what we are now proposing to say is that an accident shall include an incident. There are cases where there is no actual accident, where there is no destruction of aircraft or loss of life, but where there might have been a very near-miss and an inquiry is called for. The words now proposed will make it quite clear that the Department would have the power to have an inquiry into an incident, even though there was no actual loss of life. I beg to move.
Amendment moved—
Page 14, line 19, at end insert—
("( ) In the said section 10 and in this section "accident" shall be construed as including any fortuitous or unexpected event by which the safety of an aircraft or any person is threatened.")—(Lord Beswick.)
THE EARL OF KINNOULL: On behalf of noble Lords on these Benches may I say that we welcome this Amendment. I think we all know that many incidents occur during every year of aviation which are never really looked into.
On Question, Amendment agreed to.
Clause 16, as amended, agreed to.
Clause 17 agreed to.
LORD BESWICK LORD BESWICK moved, after Clause 17, to insert the following new clause:
Minor amendments relating to British Airports Authority, B.E.A. and B.O.A.C.
".—(1) Paragraph 8(1) of Schedule 1 to the Airports Authority Act 1965 and paragraph 11 of Schedule 1 to the Air Corporations Act 1967 (which require the fixing of the common seal of the Authority and of B.E.A. and B.O.A.C. to be authenticated by the signatures of the chairman or a member of the body concerned and also by another person authorised to act for that purpose) shall be amended as follows:—

(a) in the said paragraph 8(1) for the words from "the signatures" to the end there shall be substituted the words "the signature of the secretary of the Authority or some other person authorised by the Authority, either generally or specially, to act for that purpose",

(b) in the said paragraph 11 for the words from "the signature" to the end there shall be substituted the words "the signature of the secretary of the corporation or some other person authorised by the corporation, either generally or specially, to act for that purpose".

(2) It is hereby declared that in the said Act of 1965 "pension", in relation to a person, means a pension, whether contributory or not, of any kind whatsoever payable to or in respect of him, and includes a gratuity so payable and a return of contributions to a pension fund, with or without interest thereon or any other addition thereto and any sums payable on or in respect of the death of that person."
The noble Lord said: The purpose of this new clause is to simplify the procedures under Paragraph 11 of Schedule 1 to the Air Corporations Act 1967. Under that paragraph the common seal of B.E.A. and B.O.A.C. has to be authenticated by two signatures: that of the Chairman of the Corporation, or some other member authorised by the Corporation to act in his stead, and that of some other person authorised by the Corporation. Both Corporations and the British Airports Authority, who are under the same obligation under present legislation, have expressed to the Board of Trade the view that the procedure laid down is cumbersome and wasteful. It is proposed to simplify it in the manner suggested in this new clause.
Subsection (2) relates to the pension provisions. Here the new wording proposed is simply to avoid a certain amount of doubt that is felt by some about the present wording of Schedule 1 to the Airports Authority Act 1965. Under that Schedule, it seems doubtful whether the word "pension" can include a lump sum. It is proposed now to adopt the definition of Section 92 of the Transport Act 1962, which is the same as that

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of the 1954 Act, with the addition of a reference to sums payable on, or in respect of the death of a person. As I have said, this re-definition of the pension powers of the Airports Authority is one that seeks only to avoid doubt. I hope that it will be acceptable to the Committee. I beg to move.
Amendment moved—
After Clause 17 insert the said new clause.—(Lord Beswick.)
THE EARL OF KINNOULL: Perhaps I may say that the clause is quite a lot to assimilate in 24 hours. I think it was put down only yesterday. But I am sure it is well-founded and perhaps one should congratulate the Parliamentary draftsman on producing this lengthy clause in order to streamline the managament of B.O.A.C.
On Question, Amendment agreed to.
Clauses 18 and 19 agreed to.
Clause 20 [Financial provisions.]:
LORD BESWICK: I made reference to this Amendment when we were discussing Clause 7. It is necessary to enable loans, as well as grants, to be made from moneys voted by Parliament which may be included in the Annual Estimates in the usual way. Repayments of capital and interest on loans will be made to the Board of Trade and surrendered to the Treasury as Exchequer Extra Receipts (a technical expression with which noble Lords present may be familiar) or, to use another expression, Appropriated in Aid of the Board of Trade's Vote. I beg to move.
Amendment moved—
Page 15, line 3, leave out ("other than") and insert ("including").—(Lord Beswick.)
On Question, Amendment agreed to.
Clause 20, as amended, agreed to.
Clause 21 [Short title, interpretation and extent]:
LORD BESWICK: This rather complicated Amendment is a further exercise in streamlining. Its simple purpose is to extend to Northern Ireland the new clause which the Committee have just accepted. I beg to move.
Amendment moved—
Page 15, leave out line 37 and insert—
("sections 16 and 17
section (Minor amendments relating to British Airports Authority, B.E.A. and B.O.A.C.) so far as it relates to the Air Corporations Act 1967
sections 18 and 19").—(Lord Beswick.)
On Question, Amendment agreed to.
Remaining clause, as amended, agreed to.
House resumed: Bill reported, with the Amendments.

FAMILY ALLOWANCES AND NATIONAL INSURANCE BILL
4.36 p.m.
LORD BOWLES: My Lords, this is the first Bill for 11 years to increase family allowances, and it gives me particular pleasure to be introducing it to your Lordship's House to-day. I think the proper place to start, by way of introduction to the Bill, is to remind your Lordships of all that the Government have achieved in three years of office to help the less well off sections of society. First, so far as the problem is one of low earnings, the Government's incomes policy has always recognised the need to improve the standard of living of the worst-off members of the community. One of the current criteria for pay increases is, to quote the White Paper on Prices and Incomes Policy after 30th June, 1967 (Command 3235):
"Where there is general recognition that existing wage and salary levels are too low to maintain a reasonable standard of living."
Since the beginning of the year there have been substantial increases in wage rates for lower-paid workers—for example, workers in the agricultural industry and in the distributive trades. These will have been of particular importance in improving the circumstances of those covered. Since I made these notes I have made further inquiries, and I should like to draw attention to the figures published in the November Ministry of Labour Gazette, which show that between January and October this year increases in weekly wage rates amounting to nearly £1 million net a week have been awarded to workers in agriculture and the distributive trades. I stress the word "net", since this is not

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the figure of earnings but simply the increase in the basic full-time weekly wage rates. The majority of these increases were accepted under the lowest-paid-workers criterion.
Secondly, there are various measures taken to protect people against the effects of unemployment or sickness. National insurance benefits have been increased twice since the Government came into power, the last increase being at the end of October, with the result that they are now one-third higher than in October, 1964. A married couple with two children now get £9 8s. 0d. in benefit as against £7 1s. 0d. in October, 1964, which is a rise of £2 7s. 0d. In addition, the Government have introduced a scheme of earnings-related supplements to unemployment and sickness benefit, providing a supplement of up to £7, depending on his previous earnings, on top of his basic benefit, to prevent a drastic drop in income if a man becomes unemployed or sick. Further, we have remodelled the old national assistance scheme in the new supplementary benefits scheme. This scheme, with improved rates of benefit and easier qualifying conditions, was introduced in November last year, and the rates were increased again in October of this year. Then there is the redundancy payments scheme. This scheme provides a tax-free payment, dependent on age and length of service, to an employee if he loses his job. During the year ending last September payments were made to no fewer than 230,000 redundant workers, who received an average payment of £200 each—a total expenditure for that year of £46 million.
My Lords, these are the special measures which the Government have taken for those who are not in work. For those who are in work, there are other measures. First, there is the rates rebate scheme, which will have benefited many low income families. Over 1 million householders are now enjoying rebates amounting on average to about £15 a year. Despite massive publicity we are not sure that all who qualify for a rate rebate are in fact applying for one, and this is a problem we are studying. "Take-up", if I may use the word, is uneven as between one area and another; and there is some evidence that tenants who pay no rates as such but simply have rates included in their rent are slower to come forward for a
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rebate than owner-occupiers. As I say, this is something the Government are looking at. As a personal view, however, I think I may say that, no matter how many leaflets or advertisements are put out, there are many families who are impervious to official print of any kind and will not respond to it. Possibly personal contact by, for example, rent collectors and social workers should be the main means of persuading these families to apply.
Next, there are rent rebate schemes run by some local authorities for their poorer tenants. Such schemes have the Governments firm backing, and I am glad to say that 650 local authorities in Great Britain are now operating such schemes. In addition, we have substantially increased the housing subsidies paid to local authorities. Then, for owner-occupiers in the lower income groups there is the Government's new option mortgage scheme. This comes into operation next April and gives help, by way of a preferential rate of interest—I think 2 per cent. lower than it otherwise would be—to those borrowers who cannot derive much benefit from the tax relief at present given on the interest part of mortgage repayments.
Finally, my Lords, I come to the measures relating to school meals and welfare milk which were announced last July. In April we propose to improve cur provision for the larger families by extending the right to free school meals automatically to all fourth and subsequent children in a family; and to free welfare milk to all third and subsequent children under five, including a pregnant mother with two or more children under five. Apart from this, the scales for exemption from charges for school meals have just been raised in line with the recent increases in the rates of supplementary benefit. We wish to see many more families take up their rights to free school meals and welfare milk, and we have in hand the preparation of publicity campaigns for this purpose. The arrangements for claiming are also being reviewed so as to make it easy for families to exercise their rights without embarrassment. The changes and improvements introduced by this Labour Government in social security since it came into office costs over £520 million a year. Next year it will cost £820 million, and I hope

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the public begins to know what we are doing for the worse-off people in our community.
My Lords, now I come to the Bill itself. Family allowances were, of course, one of three main assumptions on which Beveridge based his plan for social security in 1942. It was, he argued absurd to make satisfactory provision for the abolition of want when a man became unemployed or sick, if want persisted when a man was in work. The wages structure took—and still takes—no account of family commitments. Family allowances are the logical solution to this problem and the arguments which Beveridge adduced are as valid and as conclusive to-day as they were in 1942.
The immediate background to this Bill is the Report of the Ministry of Social Security's inquiry entitled Circumstances of Families, which was published last July. The key figure in that Report was the estimate that in the summer of 1966 there were about 500,000 children in about 160,000 families whose incomes were below the supplementary benefit level introduced in November, 1966. They could not be brought up to that level, either because the father was in full-time work (and hence not eligible to receive national assistance, as it was called in those days) or because he was already receiving assistance but his normal earnings were not such that the gap between his resources and his requirements could be fully closed. In a sense this figure of 160,000 families was a measure of the extent to which the earnings of the lower paid had lagged behind the improvement in the benefits provided for those unable to work or to find work. It was clear that, of the existing social services, the family allowance scheme represented the only way of improving the financial position of these families. Consequently, the series of proposals announced by the then Minister Without Portfolio in another place and by my noble friend Lord Shepherd to your Lordships' House on July 24 included as their central element a substantial all-round increase in family allowances to take place next April. Provision for this increase is the main purpose of the Bill.
There are two other principal provisions in the Bill. The first concerns the
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rates of national insurance dependency benefits for children which are related to the level of family allowances, and thus it is in effect consequential on the family allowance increase. The second, which is quite unrelated to the increase, gives the Minister of Social Security power to deal with a problem of family allowance administration which may arise at some time in the future in the event of a general trend towards the staggering of school holidays.
My Lords, Clause 1(1) of the Bill, increases family allowances by 7s. a week per child as foreshadowed in my noble friend's statement of July 24. The new rates will be 15s. a week for the second child in the family and 17s. a week for the third and each subsequent child. Family allowances started in 1946 at a rate of 5s. a week. They were increased to 8s. in 1952 and, for third and subsequent children only, to 10s. in 1956. As I have said in my opening remarks, for the past 11 years they have remained unchanged. The new rates will also give the allowances a higher real value than ever before. They come into operation on April 9 next. Larger families, I would remind your Lordships, have already had an advance instalment of this 7s. increase. Under temporary powers conferred on the Minister of Social Security by the National Insurance Act 1967, a 5s. increase has been paid for the fourth and each subsequent child in a family from the end of October. The Government thought it only right that the larger family should be given some help before the winter. This 5s. temporary increase terminates on April 8, immediately prior to the coming into force of the new rates under the Bill.
Subsections (2) and (3) of Clause 1 deal with the adjustments of national insurance and industrial injuries dependency benefits for children by reference to the new levels of family allowances. The revised rates are set out in Schedules 1 and 2. To put the matter briefly, they represent an increase of 3s. for the first child, who does not qualify for family allowances, a reduction of 4s. for the second child, as against a family allowance increase of 7s., and a reduction of either 4s. or 6s. for third and subsequent children, again as against a family allowance increase of 7s. Taking these alterations together, the result is to increase the total

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amount payable for a child by 3s. a week, with the exception of third and subsequent children, who already get in total 2s. more than do first or second children. In these cases the increase will be 1s. The effect will be that the total amount of insurance dependency benefit together with family allowance, where payable, will be the same whatever the place of the child in the family. The new rates, taking account of family allowance where payable, will be 45s. 6d. for guardian's allowance, child's special allowance and the children of widows, instead of 42s. 6d. as at present; and 28s. for the children of other beneficiaries, instead of 25s. or 27s.
Your Lordships may question why there should be this increase in the provision for the children of insurance beneficiaries. This is a natural query. Benefits for children have, after all, been raised substantially over recent years, and your Lordships will recall that the latest increase came into effect as recently as this October. Your Lordships may also point out that the object of a family allowance increase is to help people who cannot be helped through the national insurance and supplementary benefit schemes. There is also the point that the balance between family allowances and benefits under those schemes has been upset during the long period that family allowances have been untouched, and that this Bill presents the opportunity of restoring that balance to some extent.
There are, however, two reasons why the Government have thought it right that the family allowance increase should not be offset to the full extent against the insurance dependency benefits. First, the charge for school meals is to be increased by 6d. from next April, and this may affect recipients of benefit if they have any income in addition to their basic national insurance benefit—for example, the earnings-related supplement to sickness and unemployment benefit and to widow's allowance, or benefit under a private sick-pay scheme. Secondly, there is a tax point. Family allowances are taxable: sickness and unemployment benefit are not. To exchange one for the other could have the result that a beneficiary with enough other income to bring him into the tax field would be worse off. These two factors, in the Government's view, justify the increase in the total payment which we are proposing.
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A word about costs. The gross cost of the family allowance increase is estimated to be about £124 million in the first full year. This figure will increase in later years with the increase in the number of children who qualify. The fact that it is stated in the newspapers to-day that the birthrate seems to be rising too slowly, does not mean that this statement about an increase in later years is wrong, as the noble Lord, Lord Drumalbyn, of all people, will certainly know. Children are staying at school longer, and therefore more qualify for family allowance. The offsetting reductions in dependency benefits will produce a saving of nearly £3 million to the National Insurance and Industrial Injuries Funds, and there will also be a saving of £5 million on supplementary benefit. The total expenditure on family allowances next year is estimated to be £281 million. These figures are not by any means negligible.
Clause 2 is extraneous to the main purpose of the Bill. It gives the Minister of Social Security power to prescribe notional school-leaving dates for family allowance purposes. Title to family allowances in general ends when a child reaches the upper limit of compulsory school age or, if he continues in full-time education beyond that age, the date when e leaves school or college, or reaches age 19, whichever is the earlier. For administrative reasons it is necessary to predict with some accuracy the date of school-leaving, and this is required over a year in advance, so that the issue of an allowance order book can be arranged to take account of the fact that a child will be dropping out of the family as defined for family allowance purposes. The fact that the Ministry requires over a year to deal with an alteration of this kind gives some idea of the extent of the administrative work the Ministry do.
At present, matters work satisfactorily, because the great majority of schools in England and Wales, on the one hand, and Scotland, on the other, break up at or about the same time. Serious practical difficulties will, however, develop if school-leaving dates become staggered. Clause 2 therefore, as I say, makes it possible, if the need arises, for the Minister to prescribe school-leaving dates for family allowance purposes. I must stress that the power is purely precautionary,

815
and it is not thought that its use will be required in the very near future. It simply seemed prudent to take the opportunity of the Bill to have the power in reserve.
The remaining provisions of the Bill are subsidiary. Clause 3 deals with finance. Clause 4 is formal. Schedule 3 deals with commencement and transitional provisions.
Some of your Lordships may criticise the Bill as being insufficiently "selective", the fashionable adjective nowadays for "means test". If they consider that family allowances should be subjected to a direct means test, no doubt they will take this opportunity of making their position completely clear. So far as the Government are concerned, as has been made clear on a number of occasions, a direct means test in this sphere of social security would be totally unacceptable. There are many reasons why, but perhaps the three most important are these. First, a means test would be an obvious and powerful disincentive to work and effort because any increase in earnings would merely result in a corresponding reduction in the allowances payable. Secondly, it would require an immense administrative apparatus. And, thirdly, it would not in any case be a complete solution to the problem of family poverty. All our experience suggests that many people eligible for means-tested benefits cannot, for a variety of reasons, be persuaded to claim them. Moreover, we would certainly not agree that the families living below supplementary benefit level are the only ones in need of help. An even greater number of families are living not very far above that level and they can by no means be described as living in affluence. They have suffered over the years from the steady erosion in the real value of family allowances.
On the other hand, some of your Lordships will no doubt regret that the increase in family allowances is not greater. But in this, as in every other sphere of public expenditure, we must recognise that, however desirable the objective, the speed of our advance must necessarily be limited by the resources for the time being available. As I have said, the cost of the Bill as it stands will be a very substantial one—£124 million in the first
816
full year. Some people, including the Trades Union Congress, have argued that the cost could be substantially offset, and the benefit of the increases effectively concentrated on the lower-paid, by reducing income tax allowances for children. The T.U.C.s proposal is to add another 10s. a week to the 7s. increase proposed in this Bill. The gross cost of this would be £177 million in a full year, which of course would be in addition to the £124 million which is the gross cost of this Bill. On their question of tax alteration it would be presumptuous of me to say anything at this moment. Any question of this kind must, of course, be left to the Chancellor of the Exchequer to consider in the context of his Budget.
My Lords, this is a short Bill, but I should not like your Lordships to think it an insignificant one or to underestimate the benefit which it will bring to families with children. To restore family allowances to their original real value we should have to raise them to 10s. 8d. per child. To raise them to their real value at the time of the last general increase in September, 1952, would require a rate of 12s. 8d. So that in setting rates of 15s. and 17s. we are going well beyond what is necessary to give family allowances the highest purchasing power they have ever had. I beg to move that the Bill be now read a Second time.
Moved, That the Bill be now read 2a.—(Lord Bowles.)
5.0 p.m.
LORD DRUMALBYN: My Lords, we are grateful to the noble Lord, Lord Bowles, for his careful exposition of this Bill. From his start I felt that his long catalogue of the additional benefits that have been given could only be interpreted as an apology for this Bill. This is a Bill about poverty. Family allowances are really a device to reduce the effects of poverty due to large families. It originated in France; and it is interesting to note that it did not originate through the State but by employers during the First World War. Indeed, in France it continues to be paid by employers. This would perhaps have been an opportunity to adapt ourselves to the Common Market system. It is worth noting that our own family allowances are considerably lower than those paid in the majority of European countries, and certainly in the Common Market countries. How could this have

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been done? When the selective employment tax was brought in I wondered whether it was being introduced in order to condition employers to pay rather more in the way of contributions in respect of each employee. The Green Paper has come along and seems to have disposed of that idea. But the fact is that on the Continent employers do have to pay rather more than we do in this country.
As the noble Lord said, the arrangements that are contained in this Bill were announced last July. Since that time devaluation has come along. There is a sense in which devaluation presents an opportunity. It is then possible to increase social security benefits—family allowances and the like. I would recall to the House that this is precisely what France did at the time of her last devaluation. In a sense, we are doing it now. But the difference is that France planned the conjuncture, whereas we have had it forced upon us.
Another disadvantage of the present way of dealing with these matters was pointed out in an interesting couple of articles in The Times on Thursday and Friday, April 6 and 7. It was pointed out then that one of the great disadvantages under which family allowances have suffered is that they were introduced during the war—or, rather, they were planned during the war: they were agreed upon in 1942, the Bill was passed in 1945 under the National Government, the Caretaker Government, and they came into operation in 1946. But they were passed at a time when there was no opportunity for public discussion of family allowances, and that is possibly why there is not the overwhelming support for family allowances in this country that is enjoyed by National Insurance. Sir John Walley said in his article:
"The British system relies heavily for the popular understanding of new measures on the discussion and controversy which in peace-time precedes and accompanies legislation."
Well, this announcement was made last July. It was a firm announcement. It has had remarkably little public discussion since, and we are not going to have a great deal to-day.
In this country we have national insurance to provide a basic income for the old, the sick and the unemployed. From
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the start, it was recognised that some people would not qualify for national insurance and that some of them would have young families. First, national assistance scales, and now supplementary benefit scales, lay down the minimum income, apart from rent, which Parliament has thought it right for all to receive.
Assuming a weekly addition of £3 for rent and rates, the present minimum income for a married man and his wife, if they have three children between five and eleven, I calculate to be £14 11s. 0d. That is what a married man with a wife and three children, paying £3 a week rent and rates, will get in the way of supplementary benefit if he is not working. If he has six children up to 16 years old he will get £16 5s. 0d. This compares with £12 13s. 4d. which is the National Joint Council rate for local authority manual labourers. So if he is working, and he earns less than that sum, neither national insurance benefit nor supplementary benefit are available to him. Not only does he fall below the minimum income approved by Parliament for those who are old, sick or unemployed, but if he falls sick or loses his job he will not get more than the net amount he is now earning. It is bad enough if he has nobody but himself to provide for. If he is married and has no children, his wife can also work. But it cannot be disputed at the more children he has the worse off his family will be.
It was, I suppose, to find out the extent of the problem that the inquiry into the circumstances of families, to which the noble Lord referred, was carried out in the summer of 1966. The Report was published last June. The inquiry was based on a sample of some 2,400 families, who were interviewed by officers of the Ministry of Social Security in their spare time. I think that one should pay due respect to them for this, and convey our thanks. Colloquially, I suppose it could be said that the purpose of the inquiry was to find out how many families, with how many children in them, fell below the poverty line, and how far they fell below it. In truth, however, the concept of a poverty line is pretty arbitrary. It is not a subsistence level; nor is it based on any scientific method of ascertaining what resources are needed in different parts of the country. It is

819
rather a reflection of the social conscience of the community—what resources can be regarded as providing a tolerable minimum level in a comparatively affluent society. Thus, in the last dozen years there has been a rise in that level—of real spending power—of well over 50 per cent.
The Government have stated their intention of ensuring that the most needy shall not suffer as a result of devaluation. I hope that they will be able to fulfil this intention. But it cannot be assumed that they will. If the kind of situation to which the Chairman of the Prices and Incomes Board referred yesterday arose—and in all our hearts we know that it could arise—it would not be possible for anyone in the country to maintain their standard of living. What the Report did was to calculate from the sample estimates the number of families which fell below the level of national assistance scales as they were in 1965 and 1966, until the new supplementary benefit scales were introduced at the end of November, 1966. Since then, however, there have been further changes in the supplementary benefit scales, the last coming into operation on October 30.
Each time the poverty level is raised by increasing supplementary benefit scales by more than the rise in the cost of living since the last increase, the number of families falling below the poverty level is automatically increased. For instance, the number of families of two or more children whose resources, apart from supplementary benefit, fall below the requirements as measured by supplementary benefit scales automatically rose, according to the inquiry, from 280,000 to 345,000 when the November, 1966, increase was made; and the increase last month must have increased it still further.
LORD BOWLES: Perhaps I could interrupt the noble Lord. Surely he is not suggesting that when we increase a benefit more people are really poorer.
LORD DRUMALBYN: No.
LORD BOWLES: A position could be reached where I could raise the standard of life of people in this country when the noble Lord might be on the poverty level.
LORD DRUMALBYN: I agree with that. This is something the noble Lord said when he quoted what Lord Beveridge said. I also equipped myself with that quotation. But the fact is that this gap between the supplementary benefit scales and the lowest levels of income becomes more difficult to fill as the supplementary benefit scales are increased.
The other point the noble Lord mentioned was that there are many people whose incomes exceed the supplementary benefit scales but who are badly off, often because they have to pay more than they can afford for rent. Even professional people with large families can be really hard pressed, especially if they have a position in which they are expected to fulfil heavy social obligations but with no opportunity of recovering expenses. To some extent the embarrassment of such people can be relieved by family allowances; but these allowances have never enjoyed the overwhelming support of the nation, and it may have been a mistake to pay them weekly. If such allowances had been paid monthly, those who received them might have been less apt to waste them. I am not implying that everybody wastes them, but there is some waste of them, and I do not think any of the Common Market countries pay social benefits weekly. In some of them, of course, family allowances have by law to be paid with the weekly pay packet by the employer. Incidentally, this is why it is so much easier for countries like France to practise the principle of equal pay as between the sexes. I believe that this would not be readily acceptable without a good deal of public discussion in this country, where we believe in "the rate for the job", irrespective of family commitments. Incidentally, I know of no country in which family allowances are subject to a means test, although I understand that in Germany there is a rather high income limit.
Given our present system, every time family allowances have been under review the main questions have been, first; what general level of increase is needed to restore their value and make them more effective? Secondly, should increases, or the same increases, be paid in the case of each eligible child, or should more be paid for the fourth child than for the third child, and so on? Thirdly, should

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there be a limit above which they are not paid at all, as in West Germany? And, fourthly, how should whatever increases are made be paid for?
Taking the last question first there is, of course, a great deal to be said for transferring the entire burden to what on the Continent are called equalisation funds. In some countries these are run by public corporations, in others by occupational groups, always under State supervision. The general principle is that people should draw out of the funds while they have families and that all who are not bringing up families should help those who are. The effect is that of a consumption tax—the allowances raise the cost of goods and services to those who buy them. I believe this to be a good principle. What I think would be thoroughly bad (the noble Lord said it would be presumptuous of him to refer to taxation, but it is not so presumptuous of me) would be any suggestion that the net increases in family allowances should be paid for solely by reductions in child tax allowances. The real value of child tax allowances has declined by 40 per cent. since before the war and is now 10 per cent. less than it was a dozen years ago. The cost of family allowances should be met by taxpayers as a whole and not merely by taxpayers with children to bring up. I should have thought this was very clear.
Any form of help to families is, of course, redistributive. In this country family allowances form part of taxable income and are treated as earned income, and are a charge on the Exchequer. Child tax allowances are also redistributive, in that they allow families to keep more of what they earn at the expense of taxpayers in general. But there is a fundamental difference between family allowances, which are a handout by the State, and allowing people to keep more of their own money to discharge their family responsibilities; and I hope that this fundamental principle will be maintained.
On what principle should Exchequer help to families be based? I suggest that it should be on compassion and on national policy—compassion for the most needy, and particularly for children, who should all be given a fair start in life. Then there is the national policy, the aim of which should be, first, assisting the wage and salary earners who could
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not bring up their families, to use a Burnsian expression, "in decency and order" without help; and, secondly, ensuring that young married people, and particularly those who have the ability to contribute most to the national wealth, are not discouraged by excessive taxation from having children. I think it is a pity to overlook this essential point.
In principle, therefore, we ought not to be considering what increases should be made in family allowances without considering how and by whom they are to be paid for, as we do in the case of national insurance benefits; and, secondly, how they are to dovetail with other forms of help to families. What consideration is being given to what is called negative or reverse income tax? One such proposal was developed by Professor Dennis Lees in the October issue of Lloyds Bank Quarterly, on the basis of a payment of 50 per cent. of the difference between income and the supplementary benefits scale, where income falls below it. I quite agree that the same objection which applies to the means test applies also to this payment of 50 per cent. Nevertheless, it mitigates the gap which will still remain after family allowances have been made available.
Turning to the first question, I understood the noble Lord to say that the figure would be some 2s. 8d. per week. I should have put it rather higher, at some 4s., but presumably the difference between that and 7s. was added either to pay for the 6d. extra cost of school meals per day or to cover the prospective rise in prices following the period of severe restraint. On that basis, only the first child's school meal will cost the parents more.
I come to the question of which children should get increases in family allowances and whether we should continue to have them straight across the board. Chapter II of the Ministry of Social Security Annual Report shows that at the end of 1965 approximately 65 per cent. of the 4 million or so families receiving family allowances contained two children, 25 per cent. contained three children, and 9½ per cent. contained four. The total number of children in these families was estimated at nearly 10½ million, excluding those over the age limits, and the total number of children for whom family allowances were paid

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was 6½ million. The noble Lord says that the total cost now will be £281 million.
LORD BOWLES: My Lords, that is next year.
LORD DRUMALBYN: I am sorry to trouble your Lordships with some figures, but I am afraid that I cannot make my argument without mentioning them. The inquiry showed that on the basis of the supplementary benefit scales applying from November, 1966, there were 345,000 families—that is one in twelve—whose resources were less than requirements, excluding any supplementary benefits. Of these, rather more than 120,000 who were not working had their resources made up to supplementary benefit levels; 20,000 more received some supplementary benefit but, because of the wage stop, could not be made up to the full supplementary benefit scales. The Report for 1966 says:
"The amounts by which such allowances were restricted ranged from a few shillings to several pounds."
Indeed the Supplementary Benefit Commission's report on the administration of the wage stop, which has just been presented to the House, referred to two cases where the wage stop deduction was over £6. This was the highest level of the cases, although in the majority of cases it was less than 50s. In addition, there were something like 75,000 families who were thought to be eligible for supplementary benefits but were not receiving them. Many of these would be only temporarily in need, through sickness or unemployment, but the biggest group of families were those not eligible for supplementary benefits because the father was in whole-time work. These amounted to 125,000. The Report "tentatively estimates" that the number of families with only one child where initial resources fell short of supplementary benefit scales was a further 25,000. I think it is a good thing to get these figures on the Record.
Leaving out of account the estimated 75,000 eligible for supplementary benefit but not receiving it, there were something like 160,000 to 170,000 families, containing some half a million children, below the so-called "poverty line". How far below the poverty line were they? About three out of five had a deficit of
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less than £1, and of the remainder two out of five had a deficit between £1 and £2, and three out of five had a deficit of over £2. Less than one in four had net incomes of over £15 a week, and more than half had net incomes of under £12 10s. This Bill is going to add 7s. to the net income of families with two children and 35s. to the net income of families with six. It is estimated that there are about 455,000 children in families of six children and over. While three out of five of all families receiving family allowances comprised only two children, only about one in seven of children in families with resources less than supplementary benefit scales and not receiving supplementary benefit were in families of only two children, while nearly one in four was in families of three, and the remaining three-fifths of children were in families of four or more.
Given these figures, my Lords, there is surely a strong case for limiting the increase to the third and subsequent children. It is not unreasonable to consider a family of two as normal and therefore not in need of an increase in allowances. If the increase were given only to families with three or more children, I calculate that the saving would be at least £40 million to set against the extra gross cost of £124 million. Part of this could be used to increase the amount of the allowance for the fourth and subsequent children. There is, of course, the complication of the increase in the cost of school meals and welfare milk. But if it were desired to cover these increases for those not entitled to free meals—and every child of families receiving supplementary benefit or with incomes below supplementary benefit scales is entitled to free meals—an increase of 3s. for the second child could be made, the same increase as is made for the first child in national insurance benefits. I estimate the cost at £18 million, leaving £22 million for increasing allowances for large families, which would be quite worth while.
I recognise, of course, that devaluation is going to add to the cost of feeding and clothing children. But the figure of 7s. was decided on last July, at a time when the Government were still proclaiming their intention never to devalue. But devaluation is going to hit the largest families most heavily. Surely it

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is in the largest families that the biggest shortfall of incomes below supplementary benefits scales mainly occurs. In that case should not the saving on the second child be used to increase the family allowances for the fourth and subsequent children? Clearly the Government must have considered this. The Leader of the House in another place said this on November 16:
"I gather that my right honourable friend has some late Amendments and that it would be for the convenience of the House to see them in due time to debate them."—[OFFICIAL REPORT, Commons, col. 638.]
For that reason the Committee stage in another place was put off. These Amendments, however, never came forward. Of course, the Amendments might have been of quite a different character.
Many people have thought it odd that, in order to help some 240,000 families, increases in family allowances are to be given to some 3¾ million families. They also think it odd that those on supplementary benefit scales will receive no increase whatsoever. It is hardly an answer to say, as the noble Lord did, that they have just had an increase last month, because that had nothing to do with devaluation. Are we about to have another Order laid before Parliament to increase supplementary benefits, and in particular the children's allowances under them?
In fact, of course, the Government can truly say that they have not given a flat increase of 7s. for all eligible children. But the exceptions they have selected are curious. There are the families receiving supplementary benefit I have just mentioned. But there are also families receiving national insurance benefit. They will receive 3s. more national insurance benefit for the first child—presumably to compensate for the increased cost of school meals—but 4s. less national insurance benefit for the second child, and 6s. less for each additional child. So that while they will get their 7s. family allowance, the total they receive, taking family allowances and national insurance together, will be 3s. more for the second child and 1s. for each additional child. I doubt whether these families will take very kindly to having the increases in national insurance benefit they received only last month reduced. Nor will the civil servants, I suggest, enjoy having to recalculate the benefits before next April
826
for all who remain sick or unemployed throughout the period.
I recognise that from next April the fourth and subsequent children are to be entitled to free school meals without regard to their parents' income, and that the cash value of these will be 7s. 6d. a week, at least in term time. But the Inquiry into Family Circumstances showed that although all children of parents who are receiving supplementary benefit or whose incomes fall below supplementary benefit scales are entitled to free meals, only about half the children entitled to them actually take them. I have not given notice of this question to the noble Lord, but perhaps he may be able to tell me the answer. Can he say whether the Working Party which was looking into the working of the school meals service has yet reported, and what it proposes to encourage the other half of the children to take them, top? Has he considered issuing parents of children entitled to free meals with vouchers which they could cash at the Post Office, so as to provide the cash with which the children could pay for the meals and so avoid this odious distinction between those who pay and those who do not?
Perhaps the main difficulty of low income families where the father is in full-time work in comparison with families receiving supplementary benefit is that the former cannot get any help from the Supplementary Benefit Commission towards their rents. Could not something be done about this, even as an interim measure? It is absurd for the Government to try to ban rent increases altogether in order to help 250,000 people. Surely, the way to help them is by a proper system of rent rebates from local authorities for which the Supplementary Benefits Commission should reimburse the local authorities. If this needed a change in the law, surely that change should have been in this Bill. Of course, I recognise that this would still leave private rents out, and you would probably have to deal with them direct through the Suppementary Benefits Commission. I recognise the difficulties of getting people entitled to benefits to apply for them; or, alternatively, getting the Supplementary Benefits Commission to seek them out as they did in the case of the old and retired.

827
To sum up, this Bill will do some good but at a cost out of all proportion to the good that it does. We have very little confidence in the Government's judgment in this. No convincing argument has been put up for the original decision to give a flat increase of 7s. for all children after the first. The Government themselves recognised that it was the largest families who were the most needy when they raised the allowance by 5s. for the fourth and subsequent children from the end of October. My guess is that the intention was to raise the amount for the fourth and subsequent children by 5s. in October and then to have a flat increase all round. My guess is that that is probably why the Minister resigned—because we did not get that increase. Perhaps the noble Lord will tell us, because the Minister has never done so. We all realise, of course, that the resources of families which fall below the so-called poverty level cannot be raised only by increasing family allowances. There are a host of other factors—rent and rate rebates, allowances for non-industrial disabilities among them. But we shall need a lot of convincing that it was right to make a flat increase right across the board, including the second child.
The questions I have been putting to the Government are these: First, has the Working Party on School Meals yet reported? Secondly, why did the Government choose 7s. as the appropriate increase in family allowances last July? Thirdly, why, having chosen it, and having declared their intention that the lowest paid shall not suffer, have they decided to stick to it in spite of devaluation? Fourthly, are the Government intending to increase supplementary benefit scales in the near future? And, fifthly, why, in view of the Inquiry into Family Circumstances, was it decided to give the same increase in family allowances for the second child as for subsequent children? Ought not the fourth and subsequent children to have received a higher allowance? I hope the noble Lord will be able to answer these questions.
5.30 p.m.
LORD ILFORD: My Lords, my noble friend has recalled something of the early history of family allowances. Many of your Lordships will recollect, as I do,
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the persistence and determination of Dame Eleanor Rathbone in another place. She was the real author of and prime mover in the movement to obtain family allowances.
There is nothing novel or startling in this Bill. It aims at no more than increasing the scales of family allowances to make up their loss of value due to progressive inflation. I make no complaint of that, but I recall that when a Conservative Government were in office they were frequently taken to task upon the ground that they introduced periodical Bills for improving scales and never did anything else. This Bill is for precisely the same purpose as the Bills which have been introduced periodically for the purpose of improving the scale of rates of national insurance and of supplementary benefits. This Bill really goes no further than that.
The Bill aims at relieving what is called child poverty, or family poverty; and in so far as it does so, we should all welcome it. But when we examine the things which this Bill does and some of the things it leaves undone, we are bound to ask ourselves whether the Government have chosen the right instrument for dealing with this problem of child poverty. Indeed, the Government themselves appeared at one stage to have been in some doubt as to whether family allowances were the best instrument for that purpose.
When a debate took place in another place in April of last year the then Minister of Social Security, discussing this question of family allowances, said:
"Another method of helping is by a general increase in family allowances, but would this be the way of using scarce resources when so much needs to be done over the whole field of social services, not only cash payments, as the honourable Lady has said, but in health, in housing and in education? We all know that much needs to be done here, and we as a Government have decided that this method"—
which is the use of family allowances—
"would not be the best way of helping."—[OFFICIAL REPORT, Commons, 20/4/67, col. 849.]
She then gives reasons for that. We do not know what made the Government change their mind between April and November, but undoubtedly they must have considered various means of relieving the poverty which this Bill seeks to relieve.

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I have been trying to ascertain how many families would benefit by the proposals in the Bill and in how many families one might expect to find child poverty will be relieved. It is not easy to get this information from the published statistics. I have done my best with the statistics published by the Ministry of Social Security, but I am not convinced that I have been able to get at the truth; and I hope that if I go wrong the Minister will be able to put me right.
It is, I think, clear that nearly 4 million families will in fact benefit by improved payments. The figure is actually 3,900,000, but 4 million is good enough. Of this 4 million, 280,000 families had resources which were less than was required to meet their needs by the supplementary benefits standard. There were 135,000 families out of the 280,000 who were receiving national assistance. Those families will not benefit by this Bill because what they receive in additional family allowances they will lose in a reduced supplementary benefit.
I suspect that arising out of this proposal the Minister will have a large number of disagreeable letters from those who have been disappointed, having read in the papers that they are going to get a 7s. increase and then they find that they do not get anything because it has been taken off national assistance. Of course, those families are maintained at the standard at which further assistance is considered unnecessary; but they do not look at it like that. They look at it in a human way and say, "I saw in the paper that I was going to get 7s. and I have not got it."
The 135,000 families who are receiving assistance must be deducted from the 280,000 whose resources are below the supplementary benefits standard. That leaves 145,500 families whose resources are below the supplementary benefit standard but who, for one reason or another, are not receiving supplementary benefit. Some of them are families where the father is in full-time work. In some cases the allowance has been reduced by the operation of the wage stop. That brings the total number down to about 145,000, and I take that as the number of families where child poverty may be expected to exist. In order to relieve the need of those 145,000 families we have to pay in
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creased benefits to nearly 4 million other families. It is rather shattering that in order to improve the conditions of 145,000 families, we have to pay increased allowances to nearly 4 million persons.
LORD BOWLES: My Lords, may I just ask the noble Lord one question? I think I am right in saying that we are not paying these family allowances to just the number of families that the noble Lord has mentioned purely and simply to raise the standard of living of the 120,000 families or whatever number he mentioned. We want them all to have an increase—all the families.
LORD ILFORD: If that is the purpose, I can understand it; but there must be a large number of those 4 million families whose income is well above the supplementary benefit standard and who are not in need at all.
I turn for a moment to another aspect of this rather difficult question. I read with great interest the Ministry of Social Security's latest publication which deals with the operation of the wage stop. Of course, a wage stop is repugnant to anybody. I found it very repugnant when I first found on the National Assistance Board that I had to offer a man an allowance which was less than he was entitled to by my own calculation. The difficulty is that there is no escape from doing it, and that is what the Government have found. There are strong feelings about the wage stop and there always has been. I used to receive a considerable correspondence on the subject of the wage stop, but I think I was always able to satisfy my critics because, when one comes to look at the circumstances in which the wage stop is applied, there is no alternative but to restrict the payment made to an applicant in this way.
It is not right that a man should receive more money when he is not working than he is able to earn when he is working. The public recognise that, and certainly the newspapers recognise this fact and are very ready to bring to the attention of the public cases where this sort of thing is alleged to take place. In many of the cases one reads in the newspapers the real facts are not fully stated. A man is prosecuted at a magistrates' court and, with his having been leading a life of crime, the police naturally inquire what he has been doing

831
and how he has been living. He frequently says, "Oh, I get national assistance". When one looks into the circumstances of the case one often finds that he does not receive national assistance. Frequently he has not only himself but his wife and a family of young children dependent on the allowance. The allowance paid to him by the Board is the appropriate scale allowance for two adults and perhaps two or three small children. I think that to some extent we can disregard the criticisms which appear in the newspapers, but the fact remains that the public very much resent a man's being paid more money when he is idle than when he is able to work. The argument which appears to convince the Minister is the one based on the man who is still fully in employment. It is not right that a man who is at work should be earning less money than he would receive if he became unemployed and was totally idle. The wage stop, however repugnant it may be, is something to which we have no alternative. I am glad to see that the Government have come to the same conclusion, as indeed I thought that they would when they became responsible.
We have been told the cost of these proposals, but we have not been told very much about the sources from which the cost is to be met. It has been freely suggested in the newspapers and elsewhere that the cost of this increased family allowance ought to be met by withdrawing the child allowance in income tax relief enjoyed by parents. The Minister was asked about this in the debate on the Bill in another place, and she replied that that would be a matter for the Chancellor of the Exchequer in his Budget in the spring. That may be so, but I think that we ought to be told a little more now about what is proposed.
If it is proposed to withdraw tax allowances in respect of children, I hope the proposal will be dropped. In my view it would be grossly unfair to make one section of the population pay for a social benefit received by another section. If social benefits are to be paid for out of public funds, all those who contribute to public funds ought to contribute to them and not simply a selected group. That proposal would hit just the type of young
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man whom one wants to encourage to-day, the young professional or business man getting on in his profession or business and not finding things very easy financially. It is no good wailing about the brain-drain if one is going in for taxation of that sort. It will inevitably produce dissatisfaction, discontent and resentment among precisely that section of the population upon whom we are largely dependent for the success of our industry and our national life.
In conclusion, I will say a word about the national minimum wage. It is often held out, usually by the Party opposite, that some day we shall establish a national minimum wage which will make all these devices like the wage stop and everything else unnecessary. I believe that a national minimum wage is a totally impracticable proposition. I think anyone who has had experience of assessing allowances to poor people very soon finds out that what one wants is not a fixed scale but a flexible scale, so that in one case you can pay a little more and in another case it may not be necessary to pay so much.
LORD ROWLEY: My Lords, may I ask the noble Lord, in view of his statement that a minimum wage is totally impracticable, whether he is aware that in the United States there is an hourly minimum wage operating throughout the whole of the nation applying to anybody who obtains a contract of employment?
LORD ILFORD: But does it relieve poverty? The factors which make up an applicant's requirements are so varied. Take, as an example, his rent. The levels of rent in the North of England are very different from those in the South. The national minimum wage would have to take account of that and of any special requirements due, perhaps, to ill health or to some other factor on the part of a particular individual. To my mind, the great merit of the supplementary benefit system, as we now call it, or the national assistance scheme as I once knew it, is that the allowance which is paid is so completely flexible. The officer can work it up for a high rent, lower it for a low rent, take into account a diet involving more expensive food, which a man may have been ordered, circumstances which impose excessive wear on his clothing and details of that sort. The allowance can be adjusted to the requirements of

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the individual. No system of payments will ever relieve poverty completely if it operates on a fixed scale or is not capable of being adjusted to meet those various factors which I have suggested. I think we should all welcome the Bill, but whether it is really the right instrument for the purpose for which it is intended is more doubtful.
5.51 p.m.
LORD HAWKE: My Lords, I have always supported family allowances ever since I read of the Rowntree survey at York and, I hope, not merely because I have always drawn them—though I do not declare an interest in this. But I would point out that they are taxable, and to that extent they are selective. The noble Lord, Lord Bowles, at the Dispatch Box, played the old, old political game of defying the Opposition to make some announcement which, if they had done so, would have been a vote loser. My noble friend Lord Drumalbyn was not born yesterday, and needless to say, he made no such pronouncement.
I think any sensible person would like to find some method of directing the money chiefly to those who really need it more than others, and I must say that I cannot think of a way. Administratively, it seems almost impossible, having regard to the fact that the family allowance is paid to the wife and not to the husband. The only method which I can suggest is the idea put forward from time to time, I believe by the Liberal Party, of what you might call positive and negative taxation, whereby the people below a certain level receive taxation and those above pay. Perhaps we shall come down to that one day. If the Government wanted to make the payment more selective, it would of course always be possible to treat it as unearned rather than earned income. Such a move would make no difference at all to the people at the bottom, and would make a few shillings a week difference to people such as myself at the top.
This particular increase has come at a fortunate moment from the point of view of devaluation, because on a £14 wage 7s. a week will be 2½ per cent., and 14s.—that is, for two children—will be 5 per cent. The rise in prices will probably be about 10 per cent., so anybody with four children will expect to have been taken out of the devaluation hazard by
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a benevolent Government. But I hope that, when the inevitable wage and salary demands are made—and it is almost imperative in the national interest that they should be strongly resisted, unless they are accompanied by increased productivity arrangements—that point will be put forward; that those who have the families, and therefore have the largest expenditure, are to some degree catered for by this increase in the Bill.
I want to ask the noble Lord only one question. He said that staggering of school holidays was in contemplation, but not in the near future. I wonder whether he could enlarge slightly on that point, so as to give the unfortunate parents some inkling of what is to happen.
5.55 p.m.
LORD BOWLES: My Lords, we have had a most interesting debate and I am only too sorry that the noble Lord, Lord Amulree, could not speak. He came to see me before the debate started and said that he had to leave at half-past five, and therefore we have missed the benefit of his contribution. I told him that nobody would mind if he went immediately after speaking, but he was unable to wait any longer.
The noble Lord, Lord Drumalbyn, gave us an interesting lecture about what is going on on the Continent, and particularly in reference to those countries in the Common Market. But we think it is unfair to make a direct comparison between our family allowances and those of the Common Market. One should take account of all the social, health and welfare services. Also, in some Common Market countries the scheme is contributory and confined to employees; that is to say, the self-employed are omitted. It is noteworthy, too, that Germany, whose scheme was originally employer-financed, recently went over to being State-financed.
Then the noble Lord referred to the question of negative income tax, and wondered whether the Government had given that any consideration. I have made inquiries and I find that it is not a new idea but has been receiving increased attention recently. It is something the Government have been looking at, but I should be deluding the House if I did not stress the difficulties involved. It is idle to present it as a solution to our social security problems. For example, not everyone is inside the Pay-as-you-earn

835
system—for example, the self-employed, and those earning below 5 guineas a week—and last year's income tax return is by no means always a very useful guide to this year's needs. Professor Lees, while concluding that the system he described was fiscally feasible, said that whether it would have the effect intended and be administratively feasible was quite another matter. Professor Titmuss, in his recent New Statesman article, took a much more pessimistic note.
The noble Lord, Lord Drumalbyn, talked about the 7s. He said that it was decided before devaluation, and asked why we still stuck to it. The answer is that it is the most the Government can afford at this particular juncture, commensurate with our economic situation. Then he made a rather interesting point about dropping the family allowance for the second child, as well as not giving an allowance to the first.
LORD DRUMALBYN: I am sorry to interrupt the noble Lord, but I said, "not increasing it".
LORD BOWLES: I beg the noble Lord's pardon. I misunderstood what he said. But poverty is not confined to the larger family. Over 40 per cent. of the families living below the supplementary benefit level, where the father was in full-time work, had only two children. It seemed quite wrong to the Government that those families should be given nothing.
Then the noble Lord suggested that it was in some way unfair that national insurance beneficiaries should get a general increase of only 3s. a child—1s. in some cases, as he rightly said—while a working person receives 7s. a child in family allowances for each child after the first. The answer is set out in a note which I have here, and perhaps I may read it. It is a little long but it may be useful to have it on the Record.
Family allowances and dependency benefits are, and always have been, part of the same total provision for the children of beneficiaries. In total—and it is the total figure which is important—beneficiaries will get more money for each child under the Bill than they do now. A widowed mother, as I said in my original speech, at present receives 42s. 6d. a week for each child in benefit and,
836
where appropriate, family allowances. Under the Bill she will get 45s. 6d. A sick or unemployed man at present receives 25s. or 27s. a week in total for each child. The Bill will give him 28s. There is more, but I do not think the noble Lord will want me to continue. I was asked: How many families will benefit? The answer is that nearly 4 million families will benefit.
The noble Lord also asked a question about the Working Party into the question of school meals and welfare milk which were not being taken up. The Working Party was set up by the Secretary of State for Education and Science to look into the question of why the school meals were not more adequately enjoyed and used. Their report has not yet come to hand. The problem of getting people to take up their rights is very much in the forefront of the Minister's mind, as it is, indeed, in that of the Supplementary Benefits Commission. I would refer the noble Lord to paragraph 41 of the Commission's recent Report on the administration of the wage-stop. For wage-stop beneficiaries the Commission have decided not only to make sure that each wage-stopped claimant understands what other State benefits are available to him but also to help claimants to obtain and, where necessary, complete application forms, and to follow up to see that the benefits are actually enjoyed.
LORD DRUMALBYN: My Lords, the noble Lord will, of course, appreciate that the wage-stopped families represent only one-sixth or less of the total families involved.
LORD BOWLES: Yes, my Lords. The number is about 26,000. I see now that it was the noble Lord, Lord Ilford, who asked the question as to the number of families who benefit under the Bill, and I did say that it was four million.
Lord Drumalbyn also raised the question of devaluation and asked whether the supplementary benefit rates would be increased to offset its effects. I can do no more than repeat the assurance given in another place, that the Government will watch price trends carefully and at the right time will take whatever action appears appropriate to protect the position of those who are most likely to be affected by price increases arising from devaluation. If the noble Lord will refer

837
to the Commons Hansard of November 29—he mentioned the fact that in another place the Committee stage of this Bill was postponed for about a fortnight—he will see that I think on a Motion to report progress the Minister made a statement. I have got a copy of that here, but I do not think I need refer to it.
On the question raised about the wage-stop and the Commission's decisions, which, as the noble Lord, Lord Ilford, knows, the Minister has said that she is accepting, I perhaps might read those decisions in a summarised way. Up to now, estimates of labourers' earnings have, where necessary, been based on local average earnings. In future the Commission will in these cases use the rates fixed by the National Joint Council for Local Authorities (Manual Workers). This will mean that in many areas there will be a higher rate than before. At present, earnings rates are reviewed twice a year. In future they will be kept under continuous review to make sure that improvements are fully reflected. In estimating earnings, the Commission at present deduct 7s. 6d. for what are known as "intangible expenses". I do not know whether the noble Lord knows what they are, but I do not, and I have never found anybody who does.
LORD ILFORD: My Lords, I recall the 7s. 6d. What the Board's officers do is to obtain, if they can, a realistic estimate of the man's earnings. If he has been in employment during the last six months, for example, they take what he earned during that period and do not use either the 7s. 6d. or any other measure. But if they are not able to get a realistic figure for his earnings before unemployment—if, for example, it is twelve months since he was employed, and perhaps he is no longer fit for the work he was previously doing—then they have to obtain some other standard. Now they are going to use the 7s. 6d.; and, indeed, they did in my time.
LORD BOWLES: My Lords, I am grateful to the noble Lord for that explanation. The noble Lord has also seen that the Minister is proposing that the 7s. 6d. should not be deducted in the future. The Commission will ensure that there is a full discussion with each claimant about the way in which his
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benefit, if it is subject to the wage-stop, is calculated, and that he is notified of the details. At present, if the wife of a claimant with a wage-stopped benefit starts work, the full amount of her earnings is deducted. This practice will cease, and the family will benefit from the wife's employment.
Then the noble Lord, Lord Ilford, expressed regret that all families receiving supplementary benefit will not gain an advantage from the increase in family allowances. Of course, the Government's proposals, as I think the noble Lord appreciates, will help those families whose supplementary benefit is subject to the wage-stop. These are families who will not have benefited in full from the previous increases in supplementary benefit rates because their benefit had to be held at the wage-stop figure. Family allowances are payable whether or not the recipient is in work, and they are therefore payable in addition to supplementary benefit; so the family whose benefit is subject to the wage-stop will usually benefit in full from the family allowance increase. Other families receiving supplementary benefit will, under the Government's proposals, gain no advantage from the changes proposed by the Bill, but the children of those families have over the years been provided for by the increases in the supplementary benefit and national assistance rates. I do not think I need bother the House any more on this aspect. All these facts are probably known to the noble Lords who have come to listen and take part in this debate, so I will not keep the House very much longer.
As regards the staggering referred to by the noble Lord, Lord Hawke, I understand that he heard me say that it is not likely that this will take place in the very near future. This is purely a precautionary measure. We are taking advantage of this Bill to put it in so that the power is available to the Minister in case it is needed. But from my little knowledge of some parts of the country I think places like Coventry have already staggered industry and the school terms, because unless the schools and the factories stop at the same time the families cannot go away. I think I am right in remembering that four or five years ago, in Coventry at least, the factories and the schools stopped, I think, in the middle of

839
July; and that was a date that was perhaps agreed upon sufficiently in advance for the Ministry in those days to issue the necessary family allowance books. But I do not know that it is contemplated to be on anything like a large scale in the near future. I hope that, with those explanations and replies to a very interesting debate, your Lordships will now see fit to give this Bill a Second Reading.
On Question, Bill read 2a; and committed to a Committee of the Whole House.

RENT ACT: CONTROLLED AND REGULATED TENANCIES
6.9 p.m.
THE EARL OF KINNOULL THE EARL OF KINNOULL rose to ask Her Majesty's Government when they propose to implement Section 11 of the Rent Act 1965 in regard to converting existing controlled tenancies into regulated tenancies. The noble Earl said: My Lords, it is with some relief that I come to-night to this Unstarred Question on controlled tenancies, as, for various reasons, it has been like a yo-yo: on and off the Order Paper no fewer than three times. The reason for my putting the Question will, I am sure, be clear to the noble Lord, Lord Kennet, and his Department. It is because there is now a general feeling of alarm and suspicion among those connected with controlled tenancies—it is not only among the landlords, but even among the professional bodies and the rent officer service—that the Government, and the Minister, in particular, have decided to abandon the use of their powers under Section 11 of the 1965 Rent Act to convert controlled tenancies into the regulated-tenancy system.
If this is so—and I hope the noble Lord, Lord Kennet, will be able to-night to assure us that it is not—the Minister will be greatly dishonouring the pledge given by his predecessor, Mr. Crossman, at the time of the passing of the 1965 Rent Act. Perhaps I may remind the noble Lord that the pledge was that as soon as the main bulk of the rent officers' work dealing with regulated tenancies was out of the way, stage II of their work, dealing with the controlled
840
tenancies, would be undertaken. It is my submission to-night that stage II, so far as the rent officers are concerned, was reached in a number of areas throughout Britain some months ago when their work-load started to diminish. It is also my submission that the noble Lord's Ministry had full knowledge of this situation over six months ago and that since that time they have consistently stonewalled as to when stage II would be started.
My Lords, the problem of controlled tenancies has, of course, been with us ever since the 1914–18 war; but, whereas under war-time conditions, the system served a useful purpose, to-day, in my opinion, there is not a single argument that can commend it. It causes financial hardship to the landlords, it causes social hardship to the tenant; and, to the country, it is directly responsible for an annual loss of our housing resources, and to a situation amounting to no less than national negligence. I believe that few people to-day realise just how big a problem controlled tenancies constitute in relation to the overall picture of our national housing stock. Controlled tenancies, in fact, represent, unless I have my figures wrong, no less than 12 per cent. of our entire housing stock—approximately 2 million dwellings, including those in Scotland, out of a total of 17½ millions. One hears that this figure is diminishing, due to natural processes, at the rate of 8 per cent. a year, but, even so, it is still a very large figure.
When one examines what type of landlord owns these controlled properties, what type of tenant lives in them, and what are the conditions of the properties, some pretty striking facts emerge. Perhaps here I may say that I am taking my information from a survey published by the Fair Rents Association last March, much of which was taken from various Ministry publications. I am aware that a copy of this was lodged with the noble Lord's Ministry.
Taking the landlords first, one finds that they are not the insensitive property company that might be expected but are, in fact, 400,000 small, individual landlords, owning perhaps one or two houses each. On top of this, about 70 per cent. of these small landlords are themselves old-age pensioners, widows or orphans—the very section of the community that

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rely on income from their property investments to live on. The average rent that they receive from their property throughout the country is approximately 17s. per week. In Scotland it is less than 5s. a week. Theoretically, out of this money comes the cost of repair, management and insurance, before any income can be paid to the landlord. The practical result of this is that virtually no repair is done. Repair is shelved and the property slips away year after year into a state of deterioration, and eventually into slum condition. Looking at comparable rents of comparable-sized properties outside the controlled tenancies, one finds that the rentals are on average three times those of the controlled tenancies; and this includes council house rents.
Looking at the tenants of controlled tenancies, one finds that, very broadly, they fall into two categories: first, old-age pensioners. They represent perhaps 70 per cent. of the controlled tenants, and obviously they need protection; and, of course, here the Government can easily help with a form of rent rebate. In the second category, approximately 30 per cent., you have younger people who can well afford to pay an economic rent and who could well afford at least to keep their properties in order. As to the properties themselves, it would be fair to say that most have seen the better side of 50 years. Many are slipping rapidly into slums. If the majority of these are to be saved, then I submit that immediate action by the Government must be taken under their powers in Section 11. Few of the properties are, in fact, modernised—and for one good practical reason. The tenant of a controlled property, in order to avoid paying an additional 12½ per cent. interest on the cost, is quite entitled under present law to refuse to agree to any improvement to his house. I hope that the Government may look into this point. It is a situation that can hardly encourage landlords to modernise their property.
My Lords, controlled properties offer to the national housing stock, as I see it, two bonuses if action is taken now. First, if the properties are caught before they slide into slums they can be improved and modernised at roughly one-third of the cost of building a new dwelling. Such improvements to controlled properties must offer a great
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saving and better utilisation of the country's existing housing resources. Secondly, the tenant of controlled properties—in many cases a widow or widower—is living alone and using perhaps only one-quarter of the house. If suitable alternative arrangements could be made for such people, controlled properties could play an important role in the fight against the national housing shortage.
As I mentioned earlier, among those who are worried about the situation are the rent officers. It has been my privilege in my professional life to come into contact with rent officers and I can truly say that, whether one agreed or disagreed with their decision as to a fair rent, they are a body of men who have earned the respect of all who deal with them. I think I am right in saying that 99 per cent. of them have a background of property experience and for many of them it was a choice of sacrificing lucrative careers in private practice to take up a far less lucrative career—but, I hope, a more rewarding one—in community service. By January, 1966, about 350 rent officers had been appointed, and in every letter of appointment the following paragraph appeared:
"Stage I will deal with previously decontrolled rents which are brought into regulation by the Act, and Stage II with the rents of properties which were subject to control under the earlier Rent Acts before the Act of 1965 came into force. This is the important stage. Stage I will throw up a relatively large volume of work initially which will then tail off to a steady and lower level. As this point is reached, the Minister will bring Stage II into operation. This will enable the present controlled rents to be reviewed by the new regulation system and fair rents to be fixed. It is expected that there will be another up-surge of work falling upon the rent officer service when this stage commences."
By early this year it became clear that the volume of work under Stage I had never reached, and was never likely to reach, the proportions expected. As the year progressed, it became clear in the minds of many of the rent officers—particularly in the regions—that Stage II could now be tackled; but by late summer of this year, as I understand it, the rent officers learned that, instead of Stage II being brought into force in the areas where their work had diminished, there were whispers from Whitehall of plans for redundancy and redeployment. It is perhaps not surprising that each rent officer likely to be affected turned to his

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original letter of appointment with a feeling of growing indignation. I believe, my Lords, that every rent officer is entitled to feel aggrieved, and the question I should like to ask the noble Lord, Lord Kennet, is this. Why is it that controlled tenancies could not be started now in areas where rent officers have the time and capacity to tackle them? Also, how many redundancies or redeployments of staff are planned? Further, I should like to ask him whether the rent assessment panels are also being included in the plans for rationalisation?
My Lords, during the last six months the Ministry have of course, been pressed by many individual landlords about their plans for controlled tenancies and, so far as I know, the replies have all been exactly the same. On every occasion the Ministry have, of course, been pressed an explanation for the delay. The first reason was that the Ministry needed more experience of the Rent Act before dealing with controlled tenancies. Not surprisingly, the reaction to this answer has been somewhat hostile. What is the special experience that the Ministry feel they require, and what are the repercussions they fear will result? Perhaps the noble Lord can explain this later.
The second official reason that has been given is that hardship would be suffered by both sides. This again has not appeared a very convincing reason to anyone, since during the discussions on the 1965 Act, as the noble Lord, Lord Mitchison, knew so well, the question of hardships was considered most carefully. Under Section 11(6) of that Act a limit was imposed on the rental increase in any one year, the maximum being fixed at 15 per cent. This provision was brought in by the Government. Are they now saying that these safeguards were not enough?
As I said at the beginning of my speech, controlled tenancies represent over 12 per cent. of our national housing stock and their future must be recognised and accepted by the Government as a national problem. The Milner Holland Report said it, and the Report Our Older Homes also said it. There are many alternatives which, in my opinion, are open to the Government to achieve a combination for safeguarding the future of the property while safeguarding the
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older tenants against hardship; the least of which, of course, is the introduction of some form of rents rebate scheme.
But whatever are the alternatives, there is clear proof now, in my humble opinion, that the problem of controlled tenancies can and should be tackled. I very much hope that the noble Lord, Lord Kennet, will be in a position tonight to announce the start of a scheme for dealing with controlled tenancies, even if it is only a pilot scheme. There is, my Lords, as I have said before, a feeling among many people that the Government pledge in this matter is about to be finally broken; and although I must admit that this would not cause a precedent with the present Administration, there are a few—disillusioned, perhaps, old-fashioned perhaps—people still left in this country who believe in a Government pledge as something which should be honestly upheld.
6.24 p.m.
LORD MITCHISON: My Lords, I remember Section 11 quite well during the Committee stage on the Bill. And I have been looking at it again. The noble Earl, Lord Kinnoull, pressed eagerly for a timetable on this section—that is to say, he wanted the Government to commit themselves to a time at which they would begin to operate the change from controlled tenancies to the regulated tenancies which perhaps constituted the major change in the Bill. He was refused, and I think there was not the least doubt that he was rightly refused. The noble Lord, Lord Hastings, who was then speaking from the Front Bench opposite on this matter, agreed that a timetable was quite impossible. My Lords, I should doubt whether it is any more possible now, though I am not going into that this evening. But I want to make one or two things clear.
It is quite untrue to say that rent control in its former form, before the 1965 Act introduced regulated tenancies, is at all recent. It is not simply a case of something that has gone on for a few years. It has been in operation since 1915, and it was continued between the wars, under Tory Governments as well as under Labour Governments.
THE EARL OF KINNOULL: My Lords, that is what I told the noble Lord if he was listening.
LORD MITCHISON: My Lords, perhaps I did not hear the noble Lord properly. I thought he was attributing a recent existence to it. If I did not understand him I certainly apologise, because I should not have thought that he and I could differ about this.
The point about it is that rent control in that form was thought to be necessary by everybody, and there is not the least doubt that from time to time during all that period landlords of controlled properties, with the support of the Tory Party, were claiming that the control should be diminished in some form or other or that, ultimately, provision should be made to do away with it altogether. Just the same thing is being said now, and I am going to leave it of course to my noble friend Lord Kennet to explain what is the Ministry's attitude about it. We can all have some inkling of what their attitude is, because it has been raised in another place more than once; and most recently, I think (I am not quite sure whether I have the most recent reference) towards the end of July of this year.
What the Minister said, in effect (I am not going to quote in detail), was that we must see rather more of how the new system—that is to say the system of regulation—is working. I should have thought that was pre-eminently the kind of question which must be left to the Minister, and that one would have to be very bold indeed to say that the system was all working so perfectly, to the satisfaction of all parties concerned, that the time had now come when it was imperative to make the change. Indeed, I did not understand the noble Earl, Lord Kinnoull, to suggest that. Therefore all I have risen to say is that it was made perfectly clear, when this section was under discussion in Committee in your Lordships' House two years ago now, that no time table could be given for its operation and that it would depend on getting the system of regulation into full operation to the complete satisfaction of the Minister. That is, of course, a gradual process. I suggest that it is for him to decide at what point it has been reached, and I repeat, just as the rent control itself is no new invention, so the demand for higher rents for controlled properties is also no new demand.
6.28 p.m.
THE PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (LORD KENNET): My Lords, I am grateful to the, noble Earl, Lord Kinnoull, for putting down his Question, and I shall try to answer to as much of what he said to his satisfaction as I can—and to answer the rest. I am grateful also to my noble friend Lord Mitchison for remembering the discussion in this House during the Committee stage of the Bill whose operation we are now reviewing, and I shall revert to that later.
LORD MITCHISON: My Lords, I ought perhaps, if my noble friend will allow me, to take the opportunity of doing what I omitted to do before—to thank the noble Earl, Lord Kinnoull, for telling me that he was going to raise the point, which caused me to go and look it up. The noble Earl is always a most courteous person and that was a piece of courtesy for which I was grateful.
LORD KENNET: My Lords, part of the objections of the noble Earl to what is happening were based on the well-known fact that if you hold rents down, it is difficult to get repairs done. I shall have something to say about that later, but I should like to say in advance that the operation of this Act has not been uniformly to hold down rents. Quite a large number of persons have applied—landlords as well as tenants can apply—and there have been a large number of applications which have resulted in a rise in rent where that has been held to be fair; and we in the Ministry have pretty firm evidence from the presidents of rent assessment panels that this fact has given rise to an increased level of repairs. Where you get a rent increase it works out in detail on the ground—and I do not needs to tell the noble Earl how it works—and to that extent this Bill has already had the effect of improving the maintenance of older housing stock.
I should like to remind the House of some of the things which the Bill does, and on which the noble Earl did not touch. It establishes security of tenure for the vast majority of tenants of unfurnished accommodation and confers upon regulated tenants security of tenure similar to that hitherto enjoyed by controlled tenants. Only a court can order

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a tenant to leave, and with tenants under regulated tenancies, as with those under controlled tenancies, a court can do this only on the strict conditions laid down by the earlier Rent Acts. Thus, for example, possession may be sought by the landlord if the tenant has failed to pay the rent, or has made himself a nuisance to the neighbours. Even so, the court cannot order the tenant to leave unless they are satisfied that it is reasonable to do so. This is an added safeguard, and it is clear that the Act is having the effect in this field that Parliament desired when they passed it.
The 1965 Act also extended jurisdiction of the furnished houses rent tribunals so that they can fix reasonable rents for furnished dwellings with rateable values up to £400 in London and £200 elsewhere, and can give tenants security for up to six months at a time instead of three months. This, too, is a gain on the side of the security of tenants.
To come to the heart of the matter, the Act came into effect at the beginning of 1966. The provisions establishing the rent registration service were brought into force area by area, and the service was functioning throughout the whole country only by the end of June of last year. The rent officer service, which I think the noble Earl slightly underestimated, is operated by 323 officers in 157 areas.
At this point, I should like to give the House the latest news about the actual effect of registration of fair rents. I think that the most interesting figures I can give are those valid up to the end of September of this year about the way rent is likely to go up and down according to the rateable value of the property occupied. I want to lay some emphasis on this because the shape of these adjustments is not generally appreciated in the country and possibly in your Lordships' House. I have caused to be prepared a rather formidable table which gives all the details. I think that it is interesting enough to entitle me to ask leave of the House to circulate it in the OFFICIAL REPORT. Let me say in advance that noble Lords who consult it to-morrow in Hansard will find that there are certain blanks. These blanks are because the number of tenancies of the rateable value concerned were statistically insignificant.
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The pattern will emerge clearly to anyone who knows the business.
I do not wish to confuse the House, but I should like to take one or two examples to show what has been happening. If we take the rateable value band between £25 and £50, we find that there has been for houses an average rent decrease of 17 per cent., for flats an average rent decrease of 21 per cent., and for rooms an average rent decrease of 37 per cent. Let me take the next band from between £50 and £75 rateable value. For houses there has been a decrease of 2 per cent., for flats 12 per cent., and for rooms 29 per cent.
I jump now to the rateable value band between £100 and £125, and here the figures show for houses an average rent increase of 26 per cent., for flats an increase of 3 per cent., and for rooms a decrease of 12 per cent. As we go higher, so we find increases. The point I want to get across to the House, which is one of great social importance, is that people living in poor quality property with a low rateable value who apply for registration of a fair rent are likely to get a decrease. On the other hand, people living in good property with a higher rateable value who apply for registration of a fair rent are likely to get rent increases at the end of the day. I do not believe that this is known to the country. I believe that the word has got about that tenants who go to the rent officer and then appeal against his determination through the assessment machinery are likely to get increases. This is only true if they live in good property. As we know, it is difficult to get Government information to the kind of people who live in poor property.
The Government are satisfied in general with the way in which the machinery set up by the Act is working, but naturally enough with a completely new organisation we have found in the light of experience that there is room for improvement, especially under the present system, the noble Earl's Stage 1. My right honourable friend is not convinced that the time is yet ripe for a considerable enlargement of the field of rent legislation which would result from taking into it the tenancies at present subject to rent control.
We have to remember that a gradual expansion in rent legislation is probably

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resulting from decontrol by the ending of controlled tenancies—the so-called creeping decontrol introduced by the 1957 Rent Act—by the re-letting of houses on the death or departure of a controlled tenant. The noble Earl said he thought that 8 per cent. a year might have become decontrolled by this means. My information is that it may be nearly 10 per cent. But there is not a great difference between us. There will be a further decrease in control with the passing into law of the Leasehold Reform Act, which converts into regulated tenancies long tenancies at rack rents. For these reasons, as well as for the newness of the whole scheme, my right honourable friend feels that it would be premature to go beyond this at the moment.
Another reason, perhaps the main reason—and this should be understood in all sections of the House—is that when we have a large new structure operating a completely new system like this, 18 months (it is rather less than 18 months since it completely covered the country) is not a long time to allow to carry out Stage 1. When the Bill was going through the House, the noble Earl asked for a term on Stage 1 of three years. The House was not willing to grant him a term at all, and he did not suggest 18 months, but three years. Yet of some 750,000 tenancies concerned, less than 60,000 have been referred to rent officers at the moment.
THE EARL OF KINNOULL: My Lords, the reply I received at that stage was, as Mr. Crossman said in another place, that Stage 2 would come into operation as soon as the bulk of the work of Stage I was out of the way. So I am satisfied with that.
LORD KENNET: My Lords, I think that what we are differing about is whether the bulk is or is not yet out of the way. It is for this reason that we are now engaged in mounting more publicity measures to get the operation of the Act known, and, above all, to get known the fact that the lower the rateable value the more likely people are to get a rent reduction.
Although there has been a suggestion that the functioning of the service is too complex for ordinary people to understand, our impression, sitting at the centre of the old Whitehall web, is that this is not really what is at stake, but
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it is the mere existence of the service which is not yet known. So we are looking into various new means—television "fillers", possibly a poster campaign in the right place, where there are low rateable values—in order to spread knowledge of the sheer existence of the service at all; and we are getting out another leaflet shortly.
There is another improvement that we should like to introduce into the service, and that is the provision of a surveyors' aid scheme for people of limited means appearing before rent assessment committees. I understand that the chartered bodies think that they themselves may be able to launch a pilot scheme quite soon now. I am most grateful to them for the work they have been doing on this matter, and look forward to the successful operation of this beneficent idea.
The Government are not unmindful of the fact that rent control does affect property as well as people. The House will remember that the sample survey carried out earlier this year of the condition of houses in England and Wales disclosed that a disquieting high proportion—more than a quarter—were in a condition which varied from less than satisfactory to just better than unfit. That is a very high figure. We are conscious that new building is only one way of increasing and bettering the national housing stock, and that the improvement of older dwellings and the prevention of further decay is another most important way of achieving the same end.
It was for that reason that the Government undertook a general and comprehensive review of the problems and legislation affecting older houses, and in this are bearing in mind the difficulties of landlords, as well as those of tenants. This review, I am glad to say, is making good progress. My former right honourable friend Mr. Crossman invited me to gather an informal study conference on this whole field, and this I did at Cambridge in June of this year. This conference was attended by some 50 experts from the universities, the professions, local authorities, the building industry and the Government Departments concerned, and reviewed the progress achieved in this field and discussed possible changes. Further legislative proposals treating comprehensively the problems of our older houses and their

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environment will be produced in due course.
My Lords, on a point of Order, I am informed that I cannot circulate tables in the OFFICIAL REPORT, but I can put them in the Library. This I will do, and I hope that noble Lords who are interested will study them.
LORD MITCHISON: My Lords, before my noble friend sits down, may I express the hope that the rift in the lute is not too serious, and that his former friend still remains his friend?
VISCOUNT COLVILLE OF CULROSS: My Lords, what I should like to know from the noble Lord before he sits down (perhaps he has not come to the end of his speech) is this. He has not dealt with the question asked by my noble friend Lord Kinnoull about the future of the rent officers and the rent assessment committees. If there is some rumour that they are not going to be required in such numbers, or that they are going to be reorganised, this is not likely to be healthy for the service. I should have thought that this was an excellent opportunity for the noble Lord to deal with this point.
LORD KENNET: My Lords, to answer the first point, raised by my
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noble friend Lord Mitchison, my right honourable friend remains my right honourable friend. What he does not remain is Minister of Housing and Local Government. That is all. It was he who started this idea, and I did it during the term of office of my right honourable friend Mr. Greenwood. There is no rift in the lute.
On the question of the future of the rent officers service, I have little to add to what has been said on more than one occasion recently in another place. There is a review of the rent officers service to see what reshaping and economies may be needed to adapt it with the current and expected workload from tenancies already regulated. This load is uneven. In London and some provincial areas, it will be obvious to all noble Lords, the load is heavy; elsewhere it is lighter. This varying geographical distribution and the ignorance of the existence of the service, of which I am convinced, are two of the main reasons for the review of the service. There is no review of the assessment panel structure, as such, but there is a review of the panel staffs which corresponds to the review of the rent officers.
House adjourned at a quarter before seven o'clock.