Lords Sitting of 30 January 1967

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Coventry

TRIBUTES TO THE LATE EARL OF KILMUIR
2.35 p.m.
THE LORD PRIVY SEAL (THE EARL OF LONGFORD): My Lords, it is with a heavy heart that I rise, as Leader of your Lordships' House, to pay tribute to Lord Kilmuir, whose death on Saturday will, I am sure, have come as a grievous personal shock to many of your Lordships in all parts of the House. Some of you may recall words which were used by my noble friend the late Lord Alexander of Hillsborough, when Lord Kilmuir ceased to be Lord Chancellor, and which I can hardly better at this point.
"To us".
said Lord Alexander of Hillsborough, referring to Lord Kilmuir,
"he was a most extraordinary example of courtesy, of untold patience, and of a thoroughness that was begotten entirely out of his conscientiousness towards his work in this House. That we shall always treasure in his memory."
Certainly, we shall all wish to echo those words to-day.
Lord Kilmuir was, by any reckoning, one of the most eminent of all those who have sat in your Lordships' House in recent years. He had indeed an outstanding record of service to his country, to his Party and to this House. As he himself has told us, the fascination of the world of politics had attracted him when he was at Balliol immediately after the first war. Without any influence, either in politics or in the law, he embraced the career of politics and that of the law with deep conviction and prodigious effort. At the exceptionally early age of 33 he was a Q.C., and at 34 a Member of the House of Commons. Then came war service, and in 1942 he was appointed
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Solicitor General in the Coalition Government, and later Attorney General in the Caretaker Government of May, 1945.
When Sir Winston Churchill formed his Government in 1951, Sir David Maxwell Fyfe was among the first to join the new Cabinet, in the exacting position of Home Secretary. His service as a member of Sir Winston Churchill's team, first as Home Secretary and then as Lord Chancellor, was always a matter of deep pride to Lord Kilmuir. With the romanticism of his rice, and with a very real humbleness of heart, nothing gave him greater satisfaction than the knowledge that he had been entrusted with these high Offices of State by the greatest of living Englishmen. We are all well aware that he did not fail in any of those trusts confided to him.
Lord Kilmuir brought to the business of State and to the rigours of political life qualities which quickly became apparent to all of us here in this House. He was the personification of utter integrity, deep sincerity, fair-mindedness and conscientious application to every job he had to do. His great abilities and his extraordinary powers of memory enabled him to succeed in a wide range of tasks far beyond the capabilities of most of us. His deep attachment to his Party and to his political principles never waivered for one instant.
But his service to this House was as remarkable as any feature of his entire life. I suppose there was never a Minister in the history of this House—at least, I should be surprised to find one—who took quite so much trouble as he took to answer every point of any substance in any speech made; and those of us who served those years in Opposition will recall that some of the points raised did not always warrant the full attention which he thought it right to adminster; but we were deeply grateful, all the same. He was a great institution in your Lordships' House, and for that, and for so many other things, we cherish his memory.
Since he left high office in 1962 many would have thought that he was entitled to a life of ease and comfort. Instead, he chose a new career, entering commerce and becoming chairman of one of our great industrial organisations. In spite of ill-health in recent years, he carried on with much courage as a Member of this House, attending the debates regularly

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and making contributions which were, as always, governed by his passionate convictions. Now his voice is silent. But we shall remember Lord Kilmuir always with deep admiration and affection, and we send to his wife and family our most profound condolences. My Lords, I felt it right to offer these few words in the spirit of your Lordships' recollection.
2.42 p.m.
LORD CARRINGTON: My Lords, as the noble Earl the Leader of the House has said, it will have come as a great shock to all your Lordships, as it did to me, to learn of the news of Lord Kilmuir's death, for it was only the other day that he was here in this House, sitting in his usual place below the gangway. I should like at the outset to associate those who sit on these Benches with the very moving tribute which has been paid to him by the Leader of the House.
This is not the occasion upon which to make an assessment of Lord Kilmuir's contribution to his country, to the law, to this House or to his Party. The details of his lifetime of distinguished service are well known, and it will be for later generations to decide on the influence which he exerted in the many high Offices of State which he held. Today it seems to me more fitting that we should pay him tribute and mourn the loss of a personal friend, for there can be very few Members of this House to whom Lord Kilmuir was not a personal friend.
For six years he sat on the Woolsack, and carried out the duties of Lord Chancellor with skill, with diligence and with dignity. It always seemed to me very curious that when Lord Kilmuir was dressed in his robes and in his wig he appeared to become a rather severe and forbidding figure. Nothing could have been more misleading. He was the kindest, gentlest and the most generous of men. Nothing was too much trouble. However hard he was worked, he always had the time and, more important, the will to do more. As the noble Earl the Leader of the House has said, he used to sit on the Woolsack during our sometimes very lengthy debates and seemed to be interested in, and to be listening to, speech after speech; and at the end of the debate it turned out that he had in-
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deed been listening. For when he came to reply for the Government, he always managed to mention something in the speech of every noble Lord in any quarter of the House who had spoken in the debate. It was not only a remarkable feat, both physical and mental, but typical of the courtesy and the immense trouble which he took over anything to do with your Lordships' House.
His death is a particularly sad occasion for those of us who were his junior colleagues in the Government of which he was Lord Chancellor. We all knew that if we ever wanted advice or help he was there to give it to us; and give it he did, unsparingly and unselfishly. He was indeed our friend and our colleague, and we send our deep sympathy to Lady Kilmuir and his family.
2.45 p.m.
LORD OGMORE: My Lords, on behalf of my noble friends on the Liberal Benches and myself, I should like to say that we wish to associate ourselves with what has been said so movingly both by the Leader of the House and by the noble Lord, Lord Carrington, for the Conservative Opposition. We on these Benches always found Lord Kilmuir a very warm and human person: he was always ready to help us in every way that we desired. We shall miss him very much, not only in this House but outside.
I have one particular memory of him, and it corresponds with what Lord Carrington has said. Lord Kilmuir represented Her Majesty's Government at the Malayan independence celebrations at Kuala Lumpur in 1957, at which I also had the honour to be present. In spite of the fact that there were many Royalties and potentates present, nobody there looked as dignified and as important as Lord Kilmuir, in the full dress of a Lord Chancellor. In some extraordinary way—I do not know how he managed it—even on the Equator he looked not only dignified, but cool. I came into contact with him to some extent when he was Secretary of State or, as the office was then called, Minister of State for Welsh Affairs, and I assure your Lordships that he was very well regarded in Wales and was much liked by the Welsh people. He did what he could for them within the limits of his

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office, and they even bestowed upon him a nickname, which was a high tribute to him, and one which he much enjoyed. We on these Benches wish to associate ourselves with the expressions of sympathy which have been voiced both to Lady Kilmuir and to her family.
2.48 p.m.
VISCOUNT DILHORNE: My Lords, I should like to add my tribute to those which have been so eloquently expressed by the noble Earl, the Leader of the House, and by the noble Lords, Lord Carrington and Lord Ogmore, and to associate myself with all they have said. My memories of David Kilmuir go back over many years of service together, to the time at the beginning of the war when we worked together in the Judge Advocate General's Office. I recall his coming down to help me fight my first by-election in 1943, when he made a speech of such power and substance that it was almost embarrassing for me to follow him, for I feared the contrast would be such that it would not be to my electoral advantage.
From 1943 to 1954 we were colleagues in the House of Commons, and during those years, both in Opposition and in Government, he did an immense amount of work—indeed he did that throughout his life; far more work than many of us would dare to tackle. During those years up until 1945 when he was in Government he spoke often, and when roused was indeed a formidable debater. I remember, as I am sure do some of your Lordships, an occasion when he was a Law Officer and had to reply to Sir Stafford Cripps, who himself was no mean debater. David Kilmuir, when he came to reply, answered point by point, and most effectively. He was liked and deeply admired by members of his own profession; and not only by them and by members of his Party but also by many members of other political Parties and by the majority of those who got to know him.
It is true to say that he was recognised as a man of the highest principles, a man of great sincerity. His aim throughout the whole of his political life was to do what he could to improve conditions in this country. As Attorney General through the years when he was Lord Chancellor, I naturally saw a great deal
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of him, and I was glad to hear my noble friend Lord Carrington mention the help and advice he was always ready to give to his colleagues. He was a true friend to me, as he was to many others, and I valued his friendship greatly. Now his great career—and it was a great career—has ended, and we who knew him will long remember him. But our loss is slight compared to that of members of his family. To them I should like to extend our deepest sympathy.
2.50 p.m.
LORD CONESFORD: My Lords, may I add my tribute to a friend of over thirty years? We entered the House of Commons in the same year. It so happened that on the last day of his life as a commoner he came to address a great meeting in my constituency at Norwich. I remember that early in his speech he spoke of the endless adventure of politics—a favourite theme of his. Politics was his profession, and he loved and honoured it. To it he brought the highest standards and an intensity of work that was not equalled, I think, by any of his contemporaries. Many have paid tribute to his qualities. May I mention two which are not, I think, universally known: his devotion to Europe and his love of literature. He gave splendid service to his country, to the law and to his Party. Parliament has lost a great servant. We extend our sincerest symapthy to his widow and his children.
2.51 p.m.
THE LORD CHANCELLOR (LORD GARDINER): My Lords, I believe that every one of us who had the privilege of knowing Lord Kilmuir will be deeply moved by the tributes paid to him today, and I certainly feel privileged to be allowed to add my own tribute to my eminent predecessor. I think I knew Lord Kilmuir perhaps longer than any of your Lordships who have spoken this afternoon. We were born within 24 hours of one another. In the First World War we went together to the Guards Cadet Battalion. We left together—he to the Scots Guards and I to the Coldstream. I followed him to Oxford. He was an officer of the Oxford Union, I think a year before I was, and we married in the same year. He made his name initially, as your Lordships know, in the North, while I was in the South. We met from time to time in court.

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His great knowledge of the law, his prodigious industry and his warm personality made him not only among the most sought-after advocates of his time, but undoubtedly one of the most popular and respected members of the Bar. The Northern Circuit has produced many great figures in the law, and indeed in politics, but I think most would agree that David Maxwell Fyfe was among the really outstanding men. In those days, as afterwards, he was a by-word for hard work. He seemed to have the capacity of two ordinary men; and so it went on throughout his political life, as we have heard testified to this afternoon.
After his service as a Law Officer during the war and in the Caretaker Government, the chances of political life gave him the opportunity of playing a major role in one of the most historic and controversial trials in history; that of the major war criminals at Nuremberg. All those who were concerned, directly or indirectly, with the planning or conduct of those proceedings have paid tribute to the services of David Maxwell Fyfe. He indeed bore the burden of the day, but perhaps the most outstanding feature of his services was his remarkable success in keeping the four Allied teams of prosecuting lawyers as a coherent organisation during all the long months of that famous trial. It could not have been an easy task, for the organisation was composed of lawyers from four different nations schooled in entirely different procedures, and with differing attitudes to the trial process. Behind the scenes he worked like a Trojan to smooth over difficulties and to ensure that justice was done.
It is not for me to speak of his years in Opposition in another place, or perhaps of his tenure of the office of Home Secretary, but as his successor but one on the Woolsack I can claim to know something of the burden he carried, and of the tremendous energies which he put forth in the services of this House and of the Government of which he was a member. One thing which always struck me most about any dealings I had with him was how extraordinarily conscientious he was. He spared no pains and, whether or not one agreed with his conclusion, what one would not doubt was that his conclusion was that which he thought was right. It has been said of him that he never refused
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any task which he was asked to undertake. Fortunately for him, he began his term as Lord Chancellor at the comparatively early age of 54. Even so, the energy and industry which he applied to his job were truly extraordinary.
I think one of the features of his term of office as Lord Chancellor was the interest which he took in his fellow judges in Commonwealth and foreign countries. He was at immense pains to foster good relations with them, and he was tireless in travelling to all parts of the globe whenever he thought that his presence might be helpful in furthering the spirit of good fellowship among judges and lawyers of all nations.
He was justly proud of his exceptionally long time as Lord Chancellor. Of those Lord Chancellors appointed in this century he had held the appointment the longest. Speaking in your Lordships' House for the legal profession, I am sure that judges and lawyers alike in this country, and in many countries overseas, will greatly mourn his death, and I should like, if I may, to associate myself with the sympathy which has already been expressed in all parts of the House to Lady Kilmuir and his family.

THE NATIONAL GALLERY
2.56 p.m.
VISCOUNT MERSEY: 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 prepared to recommend that a small charge be made for entrance to the National Gallery on one or two days a week in order to place additional funds in the hands of the Trustees so that—

(a) they may be enabled to purchase additional works of art; and

(b) they may be able to improve the security of those already in their care.]

BARONESS PHILLIPS: My Lords, the answer is, No.
VISCOUNT MERSEY: My Lords, may I point out—
SEVERAL NOBLE LORDS: No.
VISCOUNT MERSEY:—that nearly every public gallery—
THE EARL OF LONGFORD: My Lords, I am very sorry to interrupt. It may sound like a technicality, but I do not think the opening, "May I point out" is admissible in this House.
VISCOUNT MERSEY: My Lords, I take the noble Earl's point. May I ask the noble Baroness whether she is aware that nearly every public gallery in Europe now makes some charge, and that in the United States of America, where the galleries are for the most part still free, they are beginning to find that they are having to limit the number of people who visit at any moment, owing to the fact that they cannot guarantee against the security risks? In view of what I have said, does the noble Baroness not think that sooner or later some form of control should be imposed in this country?
BARONESS PHILLIPS: My Lords, the points raised by the noble Viscount have been considered at different times, as he will probably be aware. In fact, he will probably recall that there was a charge for admission to this Gallery before the war. The comparable figure, which will be of interest to him, is for the year 1937, which was a typical year. It shows that when admission was free the average attendance was 2,000, but when admission was by charge the number dropped to 500. This drop has weighed, rather, when consideration has been given to this proposal by the Government.
On the other point raised by the noble Viscount, I think he will be interested to know that of course the proceeds from any charge would not go to the trustees but would, in fact, be payable to the Exchequer as an appropriation in aid.
LORD STRABOLGI: My Lords, arising out of the reply given by the noble Baroness, would the Government not agree that the figures from before the war are not really comparable, since there was a very much lower purchasing power in those days? Also, would they not investigate some of the Continental galleries, because, for example, the Louvre, which has a fairly high admission charge, is usually crowded every day?
BARONESS PHILLIPS: My Lords, I will convey to my right honourable
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friend the views expressed by the noble Lord. I understand that this is under review at all times. I cannot reply to-day on how far the Government have considered the European galleries, but I will let the noble Lord know further, if he wishes, in writing.
LORD NUGENT OF GUILDFORD: My Lords, may I put a further point to the noble Baroness?
SEVERAL NOBLE LORDS: No.
LORD NUGENT OF GUILDFORD: My Lords, may I ask the noble Baroness whether she will consider the attendance figures at the Royal Academy where, although the entrance charge is pretty stiff, the attendance, when there is a particularly attractive exhibition, is very heavy indeed? There is no doubt at all that if an exhibition is worth seeing a charge does not keep the public away. Also, is the noble Baroness aware that, with the wonderful pictures which there are in the National Gallery, if the authorities would sometimes put on a special show they would have no difficulty in securing a very good attendance even with a charge for admission?
BARONESS PHILLIPS: My Lords, I will convey this point to my right honourable friend. I think the official statement was to the effect that the Government are satisfied that the disadvantages which would come from a charge of this kind would outweigh the advantages.
BARONESS EMMET OF AMBERLEY: My Lords, may I ask the noble Lady whether it is not possible that, if a charge were made and the money had to go to the Exchequer, the Exchequer might make a larger grant to the National Gallery for the purposes of the pictures?
BARONESS PHILLIPS: My Lords, this is always a possibility, but I think the noble Lady will appreciate that it is something as to which I cannot, of course, give any promise.
LORD JESSEL: When the noble Lady referred to an attendance of 2,000 in 1937, she did not say whether it was per day, per week or per year. Could she tell us?
BARONESS PHILLIPS: I apologise for that, my Lords. It was, of course, per day.
LORD SILKIN: Is the noble Lady aware that things have changed since 1937?
BARONESS PHILLIPS: The answer to that, my Lords, is, Yes.
LORD MOYNIHAN: Will the noble Lady also bear in mind that many of us believe that in no circumstances should any charge be made for entry into any cultural or artistic gallery in this country? There are many of us who are extremely proud of the fact that this is the only country which does not make such a charge. Will the noble Lady also bear that in mind?
BARONESS PHILLIPS: Yes, my Lords. I am grateful to the noble Lord for those words.
LORD SOMERS: In view of that last question, would the noble Baroness also bear in mind that artists have to earn their living?

SEA WATER DESALINATION AT NUCLEAR PLANT
3.2 p.m.
LORD NUGENT OF GUILDFORD: 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 progress has been made with the development of the process of desalinating sea water as a by-product of a nuclear electricity generating station, what the cost per 1,000 gallons is expected to be, and when and where the first station is likely to be in commission.]
THE MINISTER WITHOUT PORTFOLIO (LORD SHACKLETON): My Lords, the Atomic Energy Authority, in conjunction with industry, have completed a design study for a combined nuclear electricity generating station and flash distillation desalination plant based on present technology which could produce 60 million gallons per day of fresh water and 400 megawatts of electricity. The estimated cost of water from such a plant in this country, on the prevailing interest rates and on the "ground rules" adopted for calculating nuclear costs and allocating plant costs between electricity and the
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product water, would be between 4s. 6d. and 6s. per 1,000 gallons excluding any treatment and delivery charges. The lower costs quoted in other countries are based upon quite different financial assumptions, and in one major instance include a Government subsidy. As yet, there are no firm proposals for building a large desalination plant in this country.
LORD NUGENT OF GUILDFORD: My Lords, may I thank the noble Lord for that helpful and informative Answer? Is the noble Lord aware that the figures he has given are encouraging? Although the cost of water from natural sources is at present a good deal cheaper than the figures he has given, is the noble Lord aware that costs will inevitably rise as water is brought from greater distances, and so on, and that therefore a time will come when the cost of water from natural sources will meet and, perhaps, exceed the cost of desalinated water? Will the noble Lord therefore use his best influence to expedite the putting into reality of this paper design of which he now speaks, so that we may learn just what can be done with this desalinated supply which will undoubtedly be wanted during the course of the next decade or two?
LORD SHACKLETON: My Lords, in this country, of course, there is a limit to the distances which natural fresh water would be required to be brought, but I am personally very much in sympathy with the noble Lord. The problem is getting this off the ground while fresh water from reservoirs is still a good deal cheaper, whereas in countries overseas, of course, this situation may not arise. I take the point as to the desirability of trying a demonstration plant, probably based on an advanced gas reactor, and if the noble Lord, Lord Nugent of Guildford, or any other noble Lord is interested I will place a brochure in the Library which describes such a plant.
LORD BALFOUR OF INCHRYE: My Lords, would the Minister give an assurance that the Government have in mind, not only the question of the cost of water by such a desalination plant, but also the great advantage to Britain if we can keep our present technical lead over the rest of the world in the development of these particular plants?
LORD SHACKLETON: My Lords, I am well aware of the importance of retaining our lead, and that the competition is going to be very severe indeed.
LORD ARWYN: My Lords, has the noble Lord any figures regarding the value of possible trace minerals which might be recovered in the process of desalinisation? Because the important minerals which the sea contains could be of critical economic value to us in the foreseeable future.
LORD SHACKLETON: I agree, my Lords. I am very interested in the noble Lord's question, and should like to know the answer myself. I might add that one is also concerned with the fact that fresh water obtained by the multi-flash distillation process is so pure that I am told that it is liable to corrode the pipes, and that it will sometimes be necessary to treat it, which will add to the cost. But if the noble Lord would put down a Question, I will try to find out the answer—but perhaps I had better find out if there is an answer before he puts it down.

MUSIC ON AIRCRAFT FLIGHTS
3.8 p.m.
LORD CONESFORD: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether the B.E.A. or the B.O.A.C. intend to subject their passengers to compulsory background music during flight on any of their services; and, if so, what steps the Corporation will take to warn the passengers before they buy their tickets.]
THE PARLIAMENTARY SECRETARY, BOARD OF TRADE (LORD WALSTON): My Lords, this is a matter for the Corporations' own judgment, but I have made inquiries and understand that neither B.E.A. nor B.O.A.C. make a practice of playing music during flight. Perhaps I can interpolate here that I myself flew back during last night from New York by B.O.A.C., and I heard no music during any of the time. However, they normally play only before take-off and after landing; and B.E.A. intend to
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follow a similar practice on jet flights later this year.
LORD CONESFORD: My Lords, I thank the Minister for that reply, which is substantially the same, I am glad to say, as that given to me on November 26, 1959, and I think is satisfactory. Are the Government aware that many people subjected to this background music compulsorily suffer intense discomfort? Does he agree that there is no reason why the Corporations should subject people to this unnecessary risk, and that if they intend to do so they should certainly give them a warning to enable them to travel by different means?
LORD WALSTON: My Lords, I would repeat to the noble Lord that this is purely a matter for the Corporations themselves, but I believe it is often the habit of airlines, including B.O.A.C. and B.E.A., to pass round cotton wool to be put in the ears of passengers, and this may be some means of avoiding the discomfort to which the noble Lord refers.
LORD CONESFORD: My Lords, is the noble Lord aware that it would be much better to hand round earphones to those who wish to listen to this stuff rather than cotton wool to those who do not? The earphones would enable people to listen to it: the cotton wool would not prevent people from hearing it.
LORD LINDGREN: My Lords, even in the present stringent economic circumstances could the Government not afford to allocate a sum in order that the cultural development in music of the noble Lord, Lord Cones ford, could be brought up to the standard of his knowledge of English?
BARONESS SUMMERSKILL: My Lords, am I not right in saying that the playing of music is not for the purpose of entertainment but is in order to divert attention from the hazards of flying; and is it not a fact that those who are less stout-hearted than the noble Lord who put down this Question sometimes welcome this music?
LORD WALSTON: I understand that the noble Baroness is quite right in saying that this music is supposed to soothe not only the savage breast but also the frightened heart. It is, I repeat, purely for those who operate these Corporations

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for profit to judge whether, from the point of view of making that profit, it is advantageous for them to provide music.
LORD SOMERS: My Lords, would the noble Lord not agree that music of certain varieties is apt to make the savage breast even more savage? Would he also not agree that people who are asked why they must provide this background music say, as a rule, that they find their customers like it?—whereas I doubt very much whether their customers would even notice if it were not there.
LORD WALSTON: My Lords, I would certainly not attempt to enter into an argument with the noble Lord on the effects of music.
VISCOUNT BARRINGTON: My Lords, without wishing to prolong this matter, in view of the noble Lord's very satisfactory Answer, might I suggest that in case the supply of cotton wool runs out, the Government would consider suggesting, but not putting pressure on, to the parties concerned that it would be more appropriate, very occasionally—and only very occasionally—to have such music as Handel's Chorus "O, the Pleasure of the Plains" rather than a constant—and I repeat, constant—reiteration of a more modern and popular song which I have heard only once and of which I can therefore remember only the first line:
"We all live in a yellow submarine…"
LORD WALSTON: My Lords, I am sure that the Corporations will read with great interest these various questions and answers.

MALTA
EARL ST. ALDWYN: My Lords, on behalf of my noble friend Lord Harlech I should like to ask a Private Notice Question which is as follows.
"To ask Her Majesty's Government whether they can make a Statement about the situation in Malta."
LORD SHEPHERD: My Lords, with permission, my noble friend Lord Berwick will answer this Question in the form of a Statement at a suitable moment after 3.30 p.m.
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My noble friend Lord Walston will then make a Statement on the request to the Monopolies Commission for a general report on the professional services.

IRON AND STEEL BILL
Brought from the Commons on Friday last and printed, pursuant to Standing Order No. 45; read 1a.

LAND COMMISSION BILL
3.14 p.m.
Order of the Day read for the Consideration of Commons Amendments to the Lord Amendments and Commons Reasons for disagreeing to certain of the Lords Amendments.
THE PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (LORD KENNET): My Lords, I beg to move that the Commons Amendments to the Lords Amendments and the Commons Reasons for disagreeing to certain of the Lords Amendments be now considered. I shall with the leave of the House, from time to time propose that certain of these Amendments be taken en bloc, and, first, Amendments Nos. 1 to 5.
Moved, That the Commons Reasons for disagreeing to certain of the Lords Amendments be now considered—(Lord Kennet.)
On Question, Motion agreed to.
COMMONS REASONS FOR DISAGREEING TO CERTAIN OF THE LORDS AMENDMENTS, AND COMMONS AMENDMENTS TO CERTAIN OTHER OF THE LORDS AMENDMENTS.
[The references are to Bill (105) as first printed for the Lords. The Commons Reasons and Amendments are printed in italics.]

LAND COMMISSION BILL

  LORDS AMENDMENTS
  [Nos. 1–5]
  Clause 6, page 6, line 1, after "subsection" insert "and subject to the next following subsection"
  Clause 6, page 6, line 3, leave out from "section" to "to" in line 6.
  Clause 6, page 6, line 20, at end insert—
  "( ) On or after such day as the Minister may by order appoint for the purposes of this subsection (in this Act referred to as 'the second appointed day') the Commission shall have power to acquire land compulsorily for such purposes in addition to those specified in the last preceding subsection as may be specified in an order made for the purposes of this subsection."
  Clause 6, page 6, line 21. leave out "the last preceding subsection" and insert "subsection (4) of this section"
  Clause 6, page 6, line 35, leave out from "made" to second "of" in line 36 and insert "under subsection ( )"
  The Commons disagreed to these Amendments for the following Reason:
  Because the Amendments would be unduly restrictive.
  LORD KENNET: My Lords, I beg to move that this House doth not insist on their Amendments Nos. 1–5 to which the Commons have disagreed.
  Moved, That this House doth not insist on their Amendments Nos. 1–5 to which the Commons have disagreed.—(Lord Kennet.)
  LORD BROOKE OF CUMNOR: My Lords, I should like to draw the attention of the House to the Reason given by another place for not agreeing to our Amendments. The Reason, as printed here, is:
  "Because the Amendments would be unduly restrictive."
  I have no desire to take up a great deal of time this afternoon on the Commons Message, but I think it is necessary to recall to your Lordships what is involved here. If this House does not insist on its Amendments what will happen will be that, after the second appointed day, the Land Commission will have power to acquire land compulsorily for any purpose whatever. Up to the second appointed day it is limited to the four purposes set out in Clause 6(4) of the Bill, and the Amendments to which the Commons disagree were designed to ensure that on coming up to the second appointed day the Government would be obliged, in their Order naming the second appointed day, to define the further purposes for which the Land Commission should be authorised compulsorily to acquire land beyond the four specified purposes in the Bill.
  The Socialist Government regard it as "unduly restrictive" if a non-elected body is deprived of power to acquire land and property of the citizen for any cause whatsoever. Personally, I think this is a lamentable decision. It means that henceforth there is no personal security in the tenure of land; it means that those who wish and have need to buy land as stock-in-trade for their professional purposes, whether as builders
  764
  or others, will be quite unable to judge whether the land may subsequently be taken away from them compulsorily, because they will be given no guidance as to the purposes for which the Land Commission may demand land.
  On the Report stage in this House I gave one or two rather dramatic examples of the kind of purpose for which the Land Commission could demand to acquire land compulsorily if we did not amend the Bill. I have at each stage of the Bill asked the Government spokesmen to intimate to the House what are the sort of additional purposes for which the Land Commission may wish to acquire land after the second appointed day, over and above those specified in the Bill. I have not had an answer; no answer has been given at all. The position is that the Socialist Government desire to have their hands and the hands of the Land Commission completely free, both from judgments in the courts, which might be awkward to them, and from Parliamentary control. That is what I regard as the most serious feature here, because, hitherto, over the centuries, it has been accepted that the two Houses of Parliament are the protection of the citizen against compulsory action by the executive. Now there is to be no Parliamentary control.
  My Lords, if we do not insist on these Amendments it means that, without further reference to Parliament, the powers of the Land Commission will, after the second appointed day, be unlimited as to the purposes for which they can compulsorily take away the citizen's land. I think I am permitted to quote from a Minister speaking in another place. The Joint Parliamentary Secretary said that the clash on these Amendments exemplified the clash between
  "those who want to see an effective Comsion able to serve the community—and those who still hanker after laissez faire."—[OFFICIAL REPORT, Commons; 25/1/67, col. 1542.]
  I have never hankered after laissez faire—I condem it—and it has never been the policy of the Party to which I have the honour to belong. Indeed, if I had hankered after laissez faire I would not have been for four years the Minister in charge of the Planning Acts. But I am personally suspicious when any Minister talks about, "an effective Commission able to serve the community". This is exactly

  765
  the sort of argument which has been used in the past by totalitarian regimes abroad; there must be an instrument of the Executive which is unchallengeable in the courts.
  I suggest to your Lordships that this is a very serious issue. I suggest to your Lordships that we in this House were wholly right to seek both to retain Parliamentary control and properly to safeguard the citizen. The Commons, with whom I agree the ultimate power rests in these matters, disagree. I say "the Commons" disagree, but it is common knowledge that this was decided on a Party vote, so it is the Socialists who disagree, and here one sees Socialism in its true colours. My Lords, I am not going to challenge the Motion that we do not insist on these Amendments, or advise your Lordships to challenge it, because I consider that on a Bill like this, which was part of the Government's programme at the last Election, it would not be right to do so. But I hope that your Lordships will forgive me for having intervened for this short time to bring to the notice of your Lordships' House, and to the country as a whole, what it means to be governed by Socialism.
  3.21 p.m.
  LORD MITCHISON: My Lords, I hope your Lordships will forgive me, too. I have some excuse. Apparently, the noble Lord, Lord Brooke of Cumnor, did not hear the answer given to him last time, or at any rate did not understand it. He began by reading the clause in question at the point where our Amendment was made, and he thereby, deliberately, I am afraid, left out the qualifications to the powers of the Land Commission. First of all, they have to find land which is suitable for material development, and secondly, they can deal only with land which in the great majority of cases (there are minor exceptions but the principle is the same) is land where planning permission is, for the time being, in force and the whole or part of the development authorised by that planning permission has not been carried out. I doubt whether any provision in a Bill has ever been the subject of so much misrepresentation as has been made about this one by leaving out the control and then saying that there is none.
  The question here is not whether the Land Commission can exercise their
  766
  power without any restraint and as they choose, but whether or not the Government are prepared to override the planning machinery which gives effective control in these cases, and which is, of course, planning machinery set in motion in the first place in relation to the planning authority, the local authority, and which is subject at many points—as surely the noble Lord, Lord Brooke of Cumnor, is well aware—to Ministerial control. If this Bill said nothing about planning permission; if it said nothing about the condition that the land should be ripe for material development (and there is a definition, much discussed, about material development later on in the Bill) then indeed I should regard it as somewhat oppressive. But what I should regard as oppressive, the Bill being such as it is, would be if planning permission were to be overridden entirely, and if the Land Commission had power over other land than land which was ripe for material development.
  My Lords, even the "cats' home" put its head up again. I thought we had finished with that—well, perhaps I had better not say what I think about it. But it is a pretty good example of the sort of argument that may be used. What is essentially unfair and wrong about this type of criticism is that, for purposes of Party advantage—because we were told that that is what it was—half the provisions in this clause are relied upon and the remaining half are omitted; and the result, of course, is a complete misunderstanding or misrepresentation (I am not talking about any wilful misrepresentation) of what the machinery is doing and is intended to do.
  I should have thought that one reached a stage where it was perfectly clear that this Bill was going to come into operation reasonably soon; that it was going to be a measure of the greatest importance to the country and that there was a time when criticism of it should not be founded on arguments which had been extensively publicised, which seem to me to be totally unfounded, and which were, I thought, abundantly met in previous discussion, not only here but in another place. I should have thought that at this point we were all sufficiently conscious of the gravity and urgency of the problems with which this Bill is intended to deal, whether they are put in the form

  767
  of the need for land for public purposes used by local authorities and the like, or whether they are put in the form of the exorbitant profits, indefensible profits, made in some cases by those who have been taking advantage of the difficulties of the community—I should have thought that all of us, including the noble Lord, Lord Brooke of Cumnor (because he said so the other day), have become well aware that this, at any rate, was a serious attempt to deal with the problem of betterment, something which we all recognise should be dealt with and about which we differ only on the ground of whether or not it is properly dealt with in this Bill.
  In those circumstances I appeal to your Lordships to bear in mind that these are grave national issues; that they have amounted in recent years to a scandalous state of affairs and, I suggest, that it is up to Parliament as a whole at this stage to do its best to make clear to the country what the Bill does and what it does not do, and what are the effective controls which the citizen has over the Executive in dealing with it.
  3.26 p.m.
  LORD CONESFORD: My Lords, I had no intention of speaking on this Motion and should not have done so but for the intervention of the noble Lord, Lord Mitchison, who seemed to me to get things wrong. That the public should be clear on what has been done was the precise object of my noble friend Lord Brooke of Cumnor, in making the speech that he did. I content myself with correcting what I believe to be the errors of fact and of law underlying the speech of the noble Lord, Lord Mitchison. He seems to think that there is an overriding planning control that makes what my noble friend Lord Brooke of Cumnor said a misrepresentation of the facts and the law. I believe that the noble Lord, Lord Mitchison, is wrong and that my noble friend is right.
  What I think the noble Lord, Lord Mitchison, has overlooked is that the planning control to which he has referred does not give the citizen a protection against the sort of action which my noble friend Lord Brooke of Cumnor had in mind. The Commission itself can apply for planning permission, and if it does so the view of the local planning authority,
  768
  should the Minister agree with the Commission, will be wholly irrelevant. The Commission can ask for the authority to develop and the Minister can give it. It is perfectly true, I suppose, that a debate could arise in either House on what the Minister had done; but to suggest, as the noble Lord, Lord Mitchison, suggested, that this planning machinery gives the citizen a protection against the sort of thing to which my noble friend Lord Brooke of Cumnor drew attention is, I think, a misrepresentation of the facts and the law, though I am sure that that was not Lord Mitchison's intention. I think he spoke genuinely from ignorance.
  I think that there is another reply to the noble Lord, Lord Mitchison. Some of us on this side of the House are at least as keen on good planning as he is. But why, I wonder, does he suppose that it leads to good planning, if the Commission is not in any way limited by Parliament concerning the purposes for which it can compulsorily acquire land? I believe that appropriate provisions could have been inserted in this measure that would meet even the legitimate purposes which the noble Lord, Lord Mitchison, had in mind, but which would not be open to the objections from which the Bill at present suffers. I am glad that my noble friend Lord Brooke of Cumnor has made clear the effect of these Amendments to which the Commons have disagreed. He is right to draw attention to them, and I agree that we should now allow the wish of the Commons to prevail.
  3.30 p.m.
  LORD KENNET: My Lords, this afternoon we are echoing the substance of the great debate which has raged in both Chambers about this Bill. This point, and others closely allied to it, were considered in another place on Second Reading, Committee and Report, again in this House on Second Reading, Committee, Report and Third Reading, and again in another place in the consideration of our Amendments. I do not want to prolong the discussion, beyond saying one or two things.
  The noble Lord, Lord Brooke of Cumnor, complained that without our Amendment the Bill would leave the Land Commission completely free from Parliamentary control, and would permit them to purchase land compulsorily

  769
  after the second appointed day for any cause whatever. Let me remind the House that the second appointed day itself is subject to Affirmative Resolution of both Houses, and the question of whether the second appointed day be approved as it stands in the Bill now, or whether it be approved after the day on which the four former purposes for compulsory purchase cease to operate and a general purpose begins to operate, is largely an unimportant question. First, if Parliament does not like the second appointed day, on the experience they will then have of the operations of the Land Commission, they can throw it out just as well, whether or not there is a new purpose to be declared by the Government at any time.
  Secondly, detailed regulations under which the Land Commission are to operate have still to be published and to come before Parliament. If they are not popular with Parliament, they will no doubt be rejected. And they will be framed with that knowledge in the mind of the Government. Thirdly, the Land Commission will be subject to overall direction by the Minister, and when at any time in the future any Minister gives a direction, or fails to give a direction, in a way which is unacceptable to Parliament, he will he called to book according to the usual democratic procedures of our country. I think it is going too far to say that the Land Commission and the Minister will be completely free from Parliamentary control.
  I will now turn to the allegation that the Land Commission will be able compulsorily to purchase land for any cause whatever. That is not so. It can only be land which is suitable for material development. There is a whole series of conditions in the Bill about the various forms of planning decision which have to be in existence before a compulsory planning order can take effect, and these conditions must be met after the second appointed day, just as they must be met before that date. There is the added safeguard that the Minister must himself approve every contested compulsory purchase order after the second appointed day, as he must before it, and he is accountable to Parliament in the usual way.
  My main complaint about the remarks of the noble Lord is that he made no
  770
  allusion whatever to the fact that, although the Bill as now before us does not provide for the Minister giving one single overriding purpose after the second appointed day, it does provide that after the second appointed day the Land Commission shall give their reasons specifically for each contested compulsory purchase order. I would remind the noble Lord that this Amendment was put into the Bill after discussions with him, and largely to meet the apprehensions which he had voiced in this House. The Government did not believe that it was necessary to put the Amendment into the Bill because the Land Commission are bound by antecedent legislation, and by regulations under the Bill, to give their reasons in every specific case. But we were not adverse to meeting the Opposition's fears, groundless as they were, and specifically wrote into the Bill the duty on the Land Commission to give their reasons in every single case.
  I think that the House may rest content that the operations of the Commission cannot conceivably be shrouded in mystery, and the complaint that one overall purpose might be given by the Minister on the second appointed day, or that the provision may constitute a danger to the citizens, is an ungrounded one.
  On Question, Motion agreed to.

  LORDS AMENDMENTS
  [Nos. 6 and 7]
  Clause 8, page 9, line 1, leave out subsection (4).
  Clause 8, page 9, line 10, leave out "subsection" and insert "section".
  The Commons disagreed to these Amendments for the following Reason:
  Because the Bill already makes appropriate provision for Parliamentary control of orders.
  3.36 p.m.
  LORD KENNET: My Lords, with the leave of the House, I beg to move that this House doth not insist on Amendments Nos. 6 and 7 to which the Commons have disagreed.
  Moved, That this House doth not insist on Amendments Nos. 6 and 7 to which the Commons have disagreed.—(Lord Kennet.)
  LORD BROOKE OF CUMNOR: My Lords, this is a simple issue. Your Lordships took the view that to make an Order which would deprive citizens of their right to a public inquiry if land

  771
  was to be purchased compulsorily was a serious matter which deserved the procedure of an Affirmative Resolution in both Houses of Parliament. As your Lordships will remember, Clause 8 and Schedule 2 provide for an expedited procedure by which the Land Commission can compulsorily acquire land without the usual procedural safeguards which have been accepted for years in the matter of compulsory purchase. In the Bill as it came to your Lordships' House, an Order bringing into force the special expedited procedure could have been made for all acquisitions throughout the country. The Bill also provided that such an Order could be challenged in Parliament only by a Prayer, and did not require an Affirmative Resolution.
  Under pressure from my noble friends, the Government acceded to the proposition that such an Order should no longer be able to be made to apply to the whole country, and we were grateful to them for that. But it is still possible to make an Order for any special class of acquisition, whether geographical or otherwise, and our case has been—and your Lordships approved it by a majority—that this was such an important issue that if the Government wished to deprive citizens of their normal rights, the Government should come to Parliament and ask Parliament specifically to approve the Order.
  Our Amendments have been disagreed to in another place. A Minister, speaking on these, said that the Affirmative Resolution procedure was appropriate to major matters. By implication this is, in the Government's mind, a minor matter. Indeed that is made clear, because the Commons reason for disagreeing to these Amendments is that "the Bill already makes appropriate provision for the control of Orders". It seems to me a most extraordinary state of mind, to think that it is an appropriate provision if the Government can obtain for the Land Commission powers to use this expedited procedure without specififically getting an Affirmative Resolution from both Houses. This is in line with the attitude of mind which I described when speaking on the first Amendment. This is another case of this imperious attitude which pays scant regard to Parliament and less to the rights of citizens.
  LORD WADE: My Lords, this subject has been debated on two occasions in this House and on more than one occasion in another place, and therefore I will not go over the ground again, but I agree that the special procedure is very important and that we should watch carefully the rights of the individual citizen. I should still prefer the Affirmative Resolution procedure. Challenging an Order by way of Prayer is not an ideal system at all. It is difficult for Parliament to keep an eye on the stream of Orders that are being made, and many more will be made under this Bill. Personally, I would rather see some kind of all-Party watchdog committee set up to keep an eye on Orders that are being made. Even the Affirmative Resolution procedure is not a perfect method for dealing with this outpouring of Orders. But I think there is no doubt that the Affirmative Resolution procedure is preferable, and therefore I am sorry that this Amendment, which was accepted in this House, has not proved acceptable to another place.
  LORD WOLVERTON: My Lords, I, too, am sorry that another place have not seen fit to accept this Amendment, because I believe it is an eminently reasonable and constructive one. I agree with other noble Lords who have said that the Negative Resolution procedure is not so good as the Affirmative Resolution procedure. I listened to a great deal of the debate in the other place, where it was said that this is not a major matter. But I should have thought that it was a major matter to try to protect the citizens of this country, and in this respect Parliament has a duty. But another place does not seem to think so, and we can do no more.
  LORD KENNET: My Lords, the charges made by the noble Lord, Lord Brooke of Cumnor, that the Government have adopted an extraordinary and imperious attitude in this matter do not, I submit, hold water anymore now than they did on the other occasions when we discussed it. If I may, I would, by the addition of one letter, counter charge him with being "impervious" to the Government's argument. The argument is exactly the same. It is that if we make the Special Procedure Orders subject to the Affirmative Resolution procedure, the

  773
  Government in both Houses, whatever colour they may be, will be bound to make these Orders fewer and larger. They will not be able to put down so many in any year, because there will not be the necessary Parliamentary time. They will know that they will get only one or two "goes" at it in each Parliament, and they will be tempted, and will succumb to the temptation, to put down larger Orders, for more purposes and for longer duration.
  I should also repeat what I have already stated twice in this House—and I hope that if the Press are going to take notice of our discussions to-day they will take notice of this point. The noble Lord, Lord Brooke of Cumnor, is incorrect in saying that the Special Procedure will deprive the citizen of his right to a public inquiry; and he is incorrect in referring to that right as the usual safeguard which has been accepted for years. I repeat it for the third time. The citizen does not at the moment have a right to a public inquiry in cases of compulsory purchase and, so far as the householder is concerned, under the Land Commission Bill the citizen's right to a public inquiry or to a hearing is not altered.
  On Question, Motion agreed to.

MALTA
3.43 p.m.
THE PARLIAMENTARY UNDER-SECRETARY OF STATE FOR COMMONWEALTH AFFAIRS (LORD BESWICK): My Lords, with the permission of the House, I should like to reply to the Question put by the noble Earl, Lord St. Aldwyn, in the form of a Statement, using the words of my right honourable friend the Minister of State for Commonwealth Affairs. They were as follows:
"Honourable Members will recall that my right honourable friend the Secretary of State for Commonwealth Affairs, in a statement on January 24, described the consultations which Her Majesty's Government held with the Malta Government between August, 1966, and January of this year on reductions in our forces in Malta.
"On January 27 we received from the Malta Government an aide-
774
memoire stating that the Malta Government considered the British Government to be in fundamental breach of the Defence Agreement, and that in consequence the Malta Government regarded the British Government as having forfeited all the rights, privileges and facilities to which they were entitled under that Agreement. The Malta Government therefore called upon the British Government forthwith to take the necessary steps to cease making use of those rights, privileges and facilities.
"The Defence Agreement has a term of ten years and cannot in the absence of a fundamental breach by either party lawfully be terminated before that time except by mutual agreement. Her Majesty's Government cannot accept that they are in breach of the Agreement. On the contrary, Her Majesty's Government consider that any action by the Malta Government purporting to terminate the Defence Agreement would be a breach by the Malta Government of their international obligations and the resulting position would be a very serious one. Her Majesty's Government are entirely satisfied that the proposed rundown of British forces would not put at risk Britain's ability to honour her obligations for the defence of Malta or alter her determination to do so. Her Majesty's Government also consider that they have fully discharged their obligations under the Defence Agreement to consult the Malta Government.
"The Prime Minister of Malta made a statement in the Maltese House of Representatives on January 27 setting out in more detail the Malta Government's reasons for claiming that the British Government is in fundamental breach of the Defence Agreement. After making this statement the Prime Minister moved the First Reading of a Bill to amend the 1966 Visiting Forces Act. I have not yet received details of the form this amendment would take.
"Our High Commissioner in Valletta has reported that demonstrations have taken place there during the past few days. There have been no reports of any violence.

775
"Her Majesty's Government are urgently considering the situation created by the Malta Government's aide-memoire and the action contemplated by the Malta Government in amending the Visiting Forces Act. Meanwhile, I must emphasise that Her Majesty's Government regard the Defence Agreement as being still in force and the status of the British Forces and civilians in Malta unchanged. They earnestly hope, however, that the present difference of view will not lead to the Malta Government taking any irrevocable action in relation to the Defence Agreement, which Her Majesty's Government still believe to be mutually advantageous."
3.47 p.m.
LORD CARRINGTON: My Lords, I am grateful to the noble Lord, Lord Beswick, for having repeated this Statement, but I hope he will realise that we on this side of the House are becoming increasingly concerned about what is happening in Malta. The position seems to me to be deteriorating, and deteriorating very rapidly. I have no idea whether or not we are in breach of the Defence Agreement; in fact, Her Majesty's Government are probably technically right. But the important thing is that the actions taken by Her Majesty's Government have led the Maltese people to take this action and to make these statements.
Many of us on this side of the House are worried about the situation, for this reason. We in this country employed most of the labour force in Malta for the purposes of our Services in the defence of the Mediterranean over many years. Many of us lived in Malta for a long time, and many of us have a great many friends in Malta. We are at the moment increasingly worried that we are going to be accused—and, indeed, it may be the fact—of letting the Maltese people down. I would earnestly ask the noble Lord, Lord Beswick, whether Her Majesty's Government will take steps now to enter into negotiations again with the Maltese Government to see whether these difficulties can be overcome, and whether there is a way in which the Maltese Government can be reassured that the steps that Her Majesty's Government are taking in the defence field will not mean economic ruin to that country.
LORD BESWICK: My Lords, may I say at once that I appreciate what the noble Lord has said about the concern that is felt among many people in this country who have a very special feeling of friendship towards Malta? When one recalls the past association between the two countries, and especially the circumstances in which the George Cross was awarded to the Island of Malta, a measure of emotion in these matters is understandable. At the same time, I hope that we shall be reasonable about this.
The fact that the Malta Government feel strongly about this is not necessarily an indication that we are wrong. They point out that there are going to be serious economic consequences from the proposed run-down. But the fact is that within two years from now we shall still be spending some £10 million in Malta on defence facilities—that is, £10 million as compared with £12 million at the present time—and by 1970, when the run, down is completed, the amount of British, money going into Malta on military expenditure and in economic aid will still be the same; namely, £10 million. So I feel that one ought to take into account that there is some right on the British side as well as on the Maltese side.
So far as the noble Lord's request about consultations in order to assure the Malta Government that we are still able to fulfil the commitments we have under the Defence Agreement is concerned, we have offered to send out to Malta a high-ranking Service officer for the purpose of consulting further with the Malta Government on the implications of the charge that we cannot fulfil our military commitment.
3.51 p.m.
LORD OGMORE: My Lords, I should just like to ask the noble Lord two questions. Was there any actual or implied agreement in the Defence Agreement that we should station a certain number of the defence personnel in Malta? Because it may be true that we think we can defend Malta, but from their point of view, obviously, it is not nearly so good if we defend them from a long-distance base, by people stationed in this country instead of by people stationed in Malta. That is the first question. The second question is this: Are the Government proposing to meet and to consult

777
with the delegation that is at present over here from Malta?
LORD BESWICK: My Lords, as to the first point, there is nothing at all in the Defence Agreement which requires a specified level of forces to be stationed in Malta. On the second point, I do not think that officially we are aware that there is a delegation in this country.
LORD BROCKWAY: My Lords, may I ask my noble friend whether, irrespective of the intensity of feeling there is now, the Government will recognise the very intimate association between the people of Malta and the people of this country? Also, will the Government in particular take note of the fact that this protest by the Government of Malta is remarkable, because, despite the controversies there have been in that Island between the Labour Opposition and the Government and between the Church and the Labour Opposition, there is unanimous agreement among Government, Opposition Parties, trade unions and the Chamber of Commerce on this issue? Moreover, will the noble Lord particularly take note of the suggestion I make, that in view of Britain's financial difficulties this is a responsibility not only of Britain but of America, of free France and of the whole of the West, whom Malta served so decisively during the last war?
LORD BESWICK: My Lords, I am afraid I can only repeat what I said to my noble friend last week. There are various pressures in tnis matter, and, not least, pressure has been applied to Her Majesty's Government from Members on all sides of this House, including particularly my noble friend Lord Brockway, to reduce our defence expenditure; and if there is to be a reduction of defence expenditure, all theatres must be expected to make a contribution. The reduction which it is proposed to make in Malta was arrived at after very careful consideration; and after representations had been made, through me, by the Maltese Government last August, a very significant adjustment was made in the proposed rundown, the effect of which will be to postpone for some two years the greater part of our reduction.
BARONESS EMMET OF AMBERLEY: My Lords, can the noble Lord, Lord Beswick, give me a more precise answer to
778
the question I put to him last week as to what the net saving will be to our Government in respect of transferring the military from Malta and finding houses in which to rehouse them at home?
LORD BESWICK: My Lords, I have re-read the answer I gave to the noble Baroness, but I am afraid I cannot improve upon it. The figure I gave is the figure for the reduction of our expenditure in Malta. It is not possible to give a precise figure of the net expenditure which will be saved as a result of bringing back troops from Malta to this country.
BARONESS EMMET OF AMBERLEY: My Lords, may I put the question another way? Can the noble Lord say what the expenditure will have to be here at home to rehouse the families concerned?
LORD BESWICK: My Lords, the answer is that if the expenditure were related only to the troops which were brought home from Malta, as compared with troops coming home from Malaysia and from other theatres, I could give a precise estimate; but as it is not possible to isolate an element in this way, I am afraid I cannot, certainly at this point, give any exact figure.
LORD CARRINGTON: My Lords, the noble Lord will have noticed that concern is expressed in all quarters of the House, and I must say that, although it is no fault of his, I do not think anything he has said this afternoon has made that feeling any easier. May I therefore ask the noble Earl the Leader of the House this question? It may be that to-morrow we shall have a rather short day. Therefore I wonder whether we might have discussions through the usual channels as to whether or not we might have, tomorrow or on an early occasion, time for a debate on this subject, because I think it would be welcome on all sides of the House.
THE EARL OF LONGFORD: My Lords, as the noble Lord knows, he has only to raise a matter through the usual channels and we will do everything in our power to meet him.
LORD FARINGDON: My Lords, will my noble friend apprise himself of the depth of feeling on this question that

779
exists in the country and in your Lordships' Chamber, and find out whether, even now, it would be possible to reopen negotiations and come to an amicable settlement with the Maltese? They have always shown themselves good friends of Britain, and their reaction to the present situation is, as my noble friend Lord Brockway said, quite exceptional, quite extraordinary, and an indication of how deeply they feel and how deeply, incidentally, many of us feel.
LORD BESWICK: I would add, my Lords, that I feel deeply about this matter. Nevertheless, these negotiations and consultations, have been going on for some months, and it is necessary to come to a decision. However, in view of the views expressed, I will of course see that the suggestion about an early debate is considered.
LORD ST. OSWALD: My Lords—
THE EARL OF LONGFORD: My Lords, in view of what the noble Lord, Lord Carrington, has said, it seems quite likely that there will be an early debate on this subject; therefore, with great respect, I venture to think we have carried the matter as far as we should this afternoon.

RESTRICTIVE PRACTICES AND THE PROFESSIONS
3.57 p.m.
THE PARLIAMENTARY SECRETARY, BOARD OF TRADE (LORD WALSTON): My Lords, with permission, I should like to repeat a Statement which has just been made by my right honourable friend the President of the Board of Trade in another place. The Statement is as follows:
"Over the past year it has been increasingly suggested that there may be restrictive practices in the professions which are contrary to the public interest. I have therefore decided to ask the Monopolies Commission to investigate this matter and to make a general report to me under the extended powers in Section 5 of the Monopolies and Mergers Act 1965. The Commission will be asked to consider such questions as restrictions on entry into a profession, the practice of charging standard fees or commissions
780
for professional services, the terms or conditions on which professional services are to be supplied, and restrictions on advertising. I am circulating the full terms of reference in the OFFICIAL REPORT.
"The intention is that the Commission should conduct as comprehensive a survey as possible of all professions, omitting from consideration practices which are expressly authorised by Statute or Royal Charter. The precise method of handling the inquiry will be a matter for the Commission and they can be relied upon to keep it within manageable bounds. They will however be asked to report to me on the extent of the specified practices, if any, in professional services; whether these practices operate against the public interest; and, if so, what remedies they propose.
"This request to the Commission does not in any way overlap with the activities of the National Board for Prices and Incomes or preclude references to that body of the level of particular professional charges. The possibility of certain references of this kind to the National Board for Prices and Incomes is indeed being considered."
Following are the terms of reference referred to:
Monopolies and Mergers Act 1965
Request for General Report on Restrictive
Practices affecting Professional Services
The Board of Trade in pursuance of the powers conferred upon them by Section 5 of the Monopolies and Mergers Act 1965 hereby require the Monopolies Commission (hereafter called "the Commission") to submit to the Board a report on the general effect on the public interest of the following practices so far as they prevail in relation to the supply of professional services, that is to say practices which are restrictive of—

(a) entry into a profession;

(b) the fees or commissions to be charged for the supply of such services;

(c) the rendering of such services by or on behalf of bodies corporate or by persons acting in partnership;

(d) the persons to whom, or the circumstances in which, such services are to be supplied;

(e) the terms or conditions on which, or the manner in which or extent to which, such services are to be supplied;

(f) the carrying on of any other business by persons supplying such services or the commercial relationship of such persons with others engaged in other activities;

781

(g) the extent to which, if at all, persons supplying such services may advertise.

Provided that the Commission shall not report on practices expressly authorised by or under any enactment or Royal Charter.
2. For the purposes of this instrument the practice of limiting entry to a profession to persons who pass examinations designed to test their proficiency shall be regarded as a practice restricting entry into that profession but the Commission shall not report on the standard of proficiency required for entry into any profession.
LORD DERWENT: My Lords, I am sure we are all grateful to the noble Lord for repeating that Statement. I found it a somewhat strange Statement in that it seemed to me to cover an extraordinarily wide ground. I should therefore like to ask certain questions. Can the noble Lord tell us how many professions there are in this country? Can the noble Lord say how many years this Inquiry is likely to take? Is it at the hack of the Government's mind that all the professions shall be brought into line with each other on these questions? If that is so, perhaps they will tell us why. If it is not so, would it not have been more sensible to take one professional at a time, because nearly all these professions differ widely from each other at the moment? Finally, the Statement says that the Commission can be relied upon to keep the Report within bounds. I am sure they will want to, but in my view they will find it extremely difficult.
LORD WALSTON: My Lords, I cannot tell the noble Lord how many professions there are. There is no exact or legal definition, but it is left to the good sense of the Monopolies Commission to decide what activities—shall I call them?—come within the definition of "profession". As the noble Lord well knows, the Monopolies Commission is composed of distinguished and fairminded people, and I am quite sure their selection will be one which will comment itself to all right-minded people.
With regard to the noble Lord's second point, whether it is the intention of the Government that all professions should be brought into line, the answer is that it certainly is not. The object of this exercise is to allay suspicion, which does exist, and we must all face the fact that in certain professions there are restrictive practices which are against the public interest. It may be that on inquiry it will
782
be found there are no such restrictive practices, in which case the public mind will be set at rest and a great deal of good will have been done. On the other hand it may be that some restrictive practices will be found. I cannot foretell what the Monopolies Commission will find, but undoubtedly if some restrictive practices are found and recommendations are made by the Government for putting these right, it will clearly be in the public interest that this should be done.
With regard to the final point about the difficulty of this operation, I would say that it is not a simple operation and it will undoubtedly take a considerable time—possibly a couple of years. But the fact that an operation is a difficult one should certainly not preclude Her Majesty's Government from asking for it to be carried out, and the skill and standing of the Monopolies Commission are such that I am sure they are capable of coping with it satisfactorily. I would make it quite clear that it is not suggested that each separate profession should be investigated individually by the Monopolies Commission, but that they should look over the whole field of professions and see where, in their opinion, there exist, if at all, such restrictive practices.
LORD DERWENT: My Lords, I am sorry to rise again, but if it is not the intention that these professions should be looked at one by one, and as they all operate differently, how are the Monopolies Commission expected to arrive at a decision as to what constitutes a restrictive practice? If there are restrictive practices, then doubtless they will be different in each profession.
LORD OGMORE: My Lords, I consider this is an utterly nonsensical proposition. It is just a bit of jealous egalitarianism of the worst kind on the part of the Government. What on earth have the Monopolies Commission to do with the professions? We do not want to sell soap, india rubber or bacon. It has nothing whatever to do with the Monopolies Commission. If it is thought that the professions are not carrying out their duties, if it is thought that improvements should be made in the professions, then let us have a Royal Commission. To look at it from the point of view of the Monopolies Commission—in other words, whether we carry out restrictive

783
practices—is ridiculous. Of course, in a sense we do, in that we do not let every Tom, Dick and Harry into the profession and everybody who comes in has to be of good character and be properly examined.
THE EARL OF LONGFORD: My Lords, I hesitate to interrupt one of the Leaders of a political Party here, but may I recall the passage in the Companion to the Standing Orders that runs as follows:
"Questions for clarification may be asked upon such Statements but they should not be made the occasion for immediate debate unless the House so order."
I am not aware that the House has so ordered on this occasion.
LORD OGMORE: My Lords, on the last occasion when this question was raised, about a week ago, the noble Earl, the Leader of the House, said that by custom some consideration and allowance was made to the Leaders of the Parties, who could comment on a Statement at rather greater length than was usually permitted to Back Benchers. However, that is all I wanted to say. I do not want to ask any questions because I do not think the Statement is worthy of further consideration by your Lordships.
LORD CONESFORD: My Lords, in the event of a profession being simultaneously examined by the Monopolies Commission and the Prices and Incomes Board, is it expected to await the Report of either or both before it continues serving the public?
LORD DRUMALBYN: My Lords, may I ask one question? This is a point in regard to the Monopolies Commission which is increasingly becoming more and more a matter for anxiety. The noble Lord says that in this case the Monopolies Commission will be asked to suggest a remedy. May I ask that before either House is required by the Government to carry those remedies into effect there shall be a full debate on the Report? I think it is extremely important that there should be a debate on the recommendations of the Monopolies Commission before the Government go forward to make their recommendations to Parliament upon it.
LORD WALSTON: My Lords, may I first answer the last clear and specific questions asked by the noble Lord, Lord Drumalbyn? The short answer is, Yes.
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The President of the Board of Trade has no power to implement by a particular Order any recommendation of the Monopolies Commission under the relevant section, but these recommendations are naturally valuable as guidance to any Orders that may be laid or any legislation that may be considered, so it would give ample opportunity for further discussion after the Report and recommendations of the Monopolies Commission have been made.
I think I can assure the noble Lord, Lord Cones ford, that no profession worthy of the name would have a sit-down strike during any discussions that may be taking place with the Monopolies Commission or the Prices and Incomes Board or anything else. I think he can rest assured that the public will go on being served at least as well as they have been served in the past.
The noble Lord, Lord Ogmore, used the term "we" very often and I was a little at a loss to know whether he was speaking as one of the leaders of the Liberal Party or as a representative of a profession. Judging from the tone of his remarks and phrases like "jealous egalitarianism" I suspect he was speaking as a representative of a profession, and he went on to say, "We do not sell soap or bacon". I do not think the Liberal Party ever sells soap or bacon. But, in all seriousness, the professions do sell services which, in my opinion, are of far more value and importance to the community even than soap or bacon. Therefore it is surely right that if we are going to investigate any monopolistic abuses that may occur among sellers of soap and bacon, we should also be in a position to investigate any monopolistic abuses that may occur in more important things, such as those commodities or services that the noble Lord's profession sells.
Simply because one investigates it does not mean to say that one accuses. The noble Lord may be right, and his profession—and indeed all others—may be above suspicion they may prove themselves to be admirable servants to the public in every respect, in which case they have nothing whatsoever to fear. Certain members of those professions may even benefit from the removal of some outworn regulations which many of them would like removed yet find hard to

785
remove. So I ask noble Lords not to look at this as a challenge being thrown down to the professions, as a pre-judgment and an assertion that they are abusing their monopolistic position, but to recognise that it is simply an impartial investigation of the very important sector of the providers of services to the public, so that the public themselves, and the professions themselves, will in the long term benefit.
The final point was that made by the noble Lord, Lord Derwent, in which he queried how this investigation could be carried out unless the professions were going to be considered one by one. That is a matter for the Monopolies Commission themselves to decide. What I wanted to make clear was that they were not going to take profession A and look right through it to the end, and then profession B and so on, but would undertake a comprehensive survey into all professions simply picking on those areas where it seemed to them, as experienced and impartial men, that there might be reason to suspect that improvement could be achieved.
LORD OGMORE: My Lords, is the noble Lord aware that he has misunderstood my point? I am not against the professions being examined: in fact I am for them being examined; but not by this machinery. I suggested that if they needed to be examined—and I think there is some case for it—there should be a Royal Commission. The basis of restrictive practices is to misunderstand the very great problems which now confront the professions, and, so far as the legal professions are concerned, problems to which successive Lord Chancellors including the present one, have referred over the years.
LORD DERWENT: My Lords, may I ask which, if any, of the Churches are to be investigated?
LORD ALPORT: My Lords, I am not quite clear on one point. As most professions restrict entry by means of qualification or examination, is it part of the terms of reference of this particular inquiry that the Monopolies Commission should investigate the standards required by various professions for entry into the profession; and, if so, how are they qualifield to judge those standards?
LORD WALSTON: No, my Lords, the standards of entry are not to be investigated at all, because, as the noble Lord rightly points out, the Monopolies Commission are not selected with a view to giving them the right background to pass judgment on this matter.
LORD CONESFORD: My Lords, may I ask a question for clarification, on the lines of what the noble Earl the Leader of the House reminded us was proper on this occasion? Am I right in thinking that the solicitor's profession is excluded from examination by the fact that it is already the subject of Statute? May I ask whether the Bar is equally excluded, on the ground of the Royal Charters applicable to it, or whether, those Royal Charters being rather more limited in their operation, the Bar is going to be examined while the solicitors' profession is not?
LORD WALSTON: I am grateful to the noble Lord for raising that point because, clearly, I have not made that as clear as I should have, or the Statement has not made it as clear as it should have. I will repeat the actual words used:
"The intention is that the Commission should conduct as comprehensive a survey as possible of all professions omitting from consideration practices which arc expressly authorised by Statute or Royal Charter…"
—not the professions themselves but the specific practices.
LORD CITRINE: My Lords, would the Minister not agree it is a matter of common knowledge that restrictive practices are rife throughout the whole country, whether it applies to professions, to industry or trade unions? And would he not consider that the procedure adopted in this case will be very carefully watched by the trade union movement to see whether the same consideration will be given to them in regard to restrictive practices which they consider necessary for the defence of their members as is given to the professions?
LORD WALSTON: My Lords, I am quite sure it will be carefully watched, as the noble Lord says. And I think it right that it should be, because in both cases it is in the national interest that certain restrictive practices should be abolished whereas others may be justified.
LORD MITCHISON: My Lords, will there be power in the Commission to produce interim reports?
LORD WALSTON: There will certainly be power to make interim reports to the President of the Board of Trade, but it will be entirely up to him whether he makes such a report public.

LAND COMMISSION BILL
4.17 p.m.
Consideration of Commons Amendments to the Lords Amendments and Commons Reasons resumed.

LAND COMMISSION BILL

  LORDS AMENDMENT
  [No. 8]
  Leave out Clauses 27–85.
  The Commons disagreed to this Amendment, but amended the words so restored to the Bill as follows:
  [No. 9]
  Clause 49, page 52, line 26, at end insert—
  ("( )the proceedings on a case so stated and signed are abandoned or otherwise disposed of without a decision being given on it;
  ( ) an appeal against the decision of the Court of Appeal or the Court of Session on such a case is abandoned or otherwise ceases to have effect or the time for bringing any such appeal expires without its having been brought.")
  [No. 10]
  Clause 52, page 55, line 30, leave out subsection (2).
  [No. 11]
  Clause 59, page 61, line 29, leave out from ("section") to end of line 30 and insert ("208 of the Housing (Scotland) Act 1966")
  LORD KENNET: My Lords, I beg to move that this House doth not insist on Amendment No. 8 to which the Commons have disagreed. This is the Amendment by which this House excluded Part III, which the House of Commons put back. All the succeeding Amendments before us this afternoon are Commons Amendments to Part most of them Government Amendments originating in another place. When I come to them it may be for the convenience of the House, and speed things up, if I say just a word or two about each, to explain what its effect is and why it is there. I beg to move.
  Moved, That this House doth not insist on Amendment No. 8 to which the
  788
  Commons have disagreed.—(Lord Kennet.)
  LORD BROOKE OF CUMNOR: My Lords, it will be quite clear that I shall not advise your Lordships to seek to insist on this Amendment, because it was I who, when I moved it, explained that it was being moved for technical procedural purposes. There was at an earlier stage of the Bill a suggestion that your Lordships' House might be acting improperly in debating at some length these clauses which deal with finance, and therefore I think it is important that your Lordships should know that in another place on Wednesday last Mr. Speaker ruled that the financial privileges of the Commons were in no way infringed by this Lords Amendment. What has happened is that the Commons have put back these clauses in their original form without any of the three excellent Amendments made in your Lordships' House, but with a number of further Amendments, mostly of a technical character, designed to improve the Bill. Like the noble Lord, Lord Kennet, I do not wish to take up time with each of these Amendments, and if I may speak broadly now I will simply say that I believe all of them to be acceptable.
  I should like to put on record that had it not been for the action of this House in leaving out Clauses 27 to 85 it would have been impossible for the Government to make these dozen or more technical Amendments in the Bill. In fact, it was the action of the Opposition in first amending Part III, and then moving procedurally to leave it out, that has given the Government the opportunity which they would not otherwise have had to correct some flaws in the Bill and to make some improvements. In exactly the same way, I may say, if there had not been further Amendments on this Paper I should not have had an opportunity, because it is not open to me to speak more than once on a Motion, to answer what the noble Lord, Lord Kennet, said about me a moment ago. I am perfectly well aware that the right of the citizen is to a public inquiry or a private hearing, and normally the citizen has his choice. My concern about the special procedure under this Bill is that the citizen is going to be deprived of any hearing at all.
  LORD KENNET: My Lords, may I interrupt? It may be more acceptable, even with our loose procedure, if I do so now rather than at the end of this Amendment. I must introduce one further refinement of correction. The only citizens who are going to be deprived of their right to public inquiry under the speedy procedure are those who are not householders.
  LORD BROOKE OF CUMNOR: Yes, I appreciate that. I think that the noble Lord and I are probably now in agreement about the technicalities of these matters, though not about the policy. If I may come back to Clauses 27 to 85, I think it is worth mentioning also, particularly to advocates (if there be any) of single-Chamber government, that if this House were to be abolished, as has been advocated in some quarters in the past. it would immediately set up a serious technical problem for Governments which found that Bills had passed through another place with technical flaws in them uncorrected; and it would mean that either Bills would have to reach the Statute Book in imperfect form, or at least a further stage of consideration would be required in another place.
  On all these grounds, I submit that we in this House did a valuable piece of work on Part III of the Bill. It is a matter of deep regret to my noble friends and myself that the Government did not see fit to accept our three important Amendments to that Part, concerned with the exemption of owner-occupiers, the complete exemption of charities, and the exemption of small transactions from the levy. In the case of owner-occupiers, I sincerely believe that there is clear inconsistency in the attitude of the Government between their treatment of owner-occupiers in this Bill and their treatment of owner-occupiers in relation to capital gains tax.
  In the case of charities, when the Government seek to defend themselves with the plea that the betterment levy is a levy and not a tax, that is a splitting of hairs. What matters is that charities have never been taxed before, and that those who will suffer from this taxation are the eventual recipients of the charity. Charities enjoy their charitable status because Parliament, acting through the Charities Commission, believes them to be serving a public purpose. That public
  790
  purpose will, to that extent, be impaired, and the recipients will be the sufferers, because the Government have now decided not to accept our Amendment but to tax certain lands of charities.
  Finally, with regard to small transactions, I gather from what was said here and in another place that the Government were attracted in principle by the idea of exempting small transactions, but found no means of doing so which would not open the door to evasion. It brings to my mind a case when I was a junior Minister at the Treasury and I was briefed to resist a certain change, strongly pressed upon me, because I was advised that if this change was made it would open the door to tax evasion. Some years later, when I was no longer there, a Chancellor of the Exchequer made that change, and to the best of my knowledge there has been no evasion at all as a result; and I am quite certain that, had the Government fully addressed their minds to it, it would have been possible to have found a method of exempting small transactions from levy without giving rise to evasion.
  We did not set any special store by our figure of £4,000 in the Bill. Our purpose was to procure that those transactions were exempted from levy where the cost of administration and collection would in fact have outweighed the revenue from the levy. It was a perfectly sensible approach. I should have thought that, in the Government's view, it would have been more than sensible, because this failure to exempt small transactions will destroy the Commission's administration. It may seem strange that those of us who hate the whole idea of the Commission should have been seeking means to make its administration smoother. However, the Government have decided.
  LORD SILKIN: My Lords, the noble Lord knows that I agree with him entirely, and I said so; but would he not agree that it is possible after further consideration still to exempt under what will be Section 63 when the Bill becomes an Act?
  LORD BROOKE OF CUMNOR: Well, my Lords, we shall see what happens. But it is a somewhat strange position, if the Government say that it is not possible by Statute to exempt certain transactions because of the risk of evasion,

  791
  and then find some non-statutory form of words which does the same thing, but does not leave the way open to evasion.
  LORD SILKIN: Which it can easily change, if need be.
  LORD BROOKE OF CUMNOR: My Lords, I am most grateful for the assistance and support that the noble Lord has given on the Bill, and we shall see what happens. I am simply expressing my own personal view, that the Land Commission will curse the day when it was not relieved by Statute of the necessity of dealing with hundreds of thousands of small transactions. While I remember that the noble Lord, Lord Kennet, at one time suggested, or alleged, that property owners might hold up the whole functioning of the Commission by disputing every case, I do not believe for one moment that that would happen. But nothing that property owners can do would be as effective to jam the works of the Land Commission as the action of the Government in refusing to take any action in the Bill to exempt these small transactions. This will be one of the features of the working of the Land Commission that will, as I said on Second Reading, eventually condemn it in the public eye and lead to its abolition. The sooner that day comes, the better!
  4.28 p.m.
  LORD WOLVERTON: My Lords, I greatly regret that another place has thought fit to turn down our three important Amendments on owner-occupiers, charities and small transactions. I must be careful not to make myself out of order, but I think I can paraphrase what was said in another place by a supporter of Her Majesty's Government. It was there said that a betterment levy can have only one effect, and that is to put up prices for those who wish to buy their property. We tested this most carefully in this House, in order to try to find out where the betterment levy was going. I do not want to go over all the ground again, but we are quite creditably informed that the majority of the betterment levy was going straight to the Treasury. Therefore, I think that the words of the supporter of Her Majesty's Government are quite right.
  792
  It was also said in another place by a supporter of the Government that he was prepared to speak for the Lords' Amendments "despite their source"(that is rather interesting), which is, of course, this side of the House. He went on to say that a great deal of public expenditure goes on another place, and that
  "we are entitled occasionally to have some constructive Amendments sent down to this place."
  We on this side of the House have tried our utmost to send down some constructive Amendments. We thought that certainly these three Amendments were constructive. They were in no way destructive Amendments; they were in no way on Party lines—they were to exempt charities, or owner-occupiers or small transactions. We were told that probably there would not be any levy on small transactions, but that they have all got to go through the hoop.
  Therefore, I much regret that another place cannot see fit to accept these three important Amendments which we made on Part III. I was very pleased to read Mr. Speaker's observations that we did not go out of order at all in doing what we did in excluding Part III from the Bill. It has given Her Majesty's Government the chance to move a large number of technical Amendments, which they said they could not move here, but which they then had to move in another place.
  LORD MITCHISON: My Lords, I apologise for speaking again, because I know that the House is passionately anxious to get on to decimal coinage. I will not for a moment enter into the merits of these matters, but the noble Lord, Lord Brooke of Cumnor, said something about procedure, and too, should like to say a word or two about it. It seems to me to be somewhat lamentable under the present procedure that we have to have recourse to an Amendment of this kind in order to enable points to be raised in another place, and that when it comes back for discussion anything is in order in these 40 clauses or so of the Bill—that is to say, anything that occurs to the noble Lord, Lord Brooke of Cumnor, when he is speaking. He did in fact discuss a number of matters which had been the subject of previous Amendments. I cannot help feeling that this is a confused procedure.

  793
  There lies behind it another matter. It seems to me, speaking as an outsider in these matters, that the position as regards money matters as between this House and another place is somewhat confused, and that that confusion is one of the causes of the prolonged consideration that has to be given to the question of whether this or that point is in order. We have discussed this matter again and again, and I am not going to add to it to-day. I have never personally wished to see this Chamber disappear as part of the Legislature, and I do not wish to see it happen now. But I feel that there are procedural difficulties in connection with a Bill of this character, indeed in connection with Bills generally, which, if they are not resolved, may lead to such an impatience with this place that they may imperil its continued existence.
  LORD WADE: My Lords, I think your Lordships' House has been trying very hard to listen to the advice of the authorities and act in such a way as not to contravene the privileges of another place. As the noble Lord, Lord Brooke of Cumnor, has pointed out, it was for those reasons that this House on Third Reading moved to delete all provisions relating to the levy. Personally, I think it a rather roundabout procedure, as I said on Third Reading, but there it is. Until the Rules are altered, we must observe them.
  I do not think any of your Lordships expected the whole of the levy provisions to be deleted as proposed, but I regret that some of the constructive Amendments have not been accepted by another place. I am still of the same opinion in regard to the collection of land values created by the community; I believe that some part of them should accrue to the community. Unfortunately, the Government have set about this in the wrong way, and I believe that as a result prices will tend to rise. I think that the levy procedure will be appallingly complex, and for that reason I am sorry that some of these proposed exemptions have not been accepted. I think that the £4,000 limit for small, single transactions need not necessarily have led to evasion. In the case of conveyances where the problem of stamp duty arises, there is procedure whereby a certificate is included stating that the amount of the consideration does not exceed a certain amount,
  794
  either for that or for a series of transactions. A similar way could have been evolved for ensuring that there was not evasion. I believe that we could have had this exemption for small transactions. That would have somewhat lessened the complexity of this levy procedure. I do not think one can go any further into that. Obviously, one cannot press the proposal that the whole of the levy procedure should be excluded.
  4.37 p.m.
  LORD KENNET: My Lords, we have had what has amounted to a short general debate on the provisions of the levy and the Schedules. That being so, I propose to take the following Amendments formally. But before doing that, I should like to be sure that there are no noble Lords who have any more general points to make on the Amendments which appear further down the list. If there are not (as I gather is the case), I will reply briefly to some of the points which have been raised.
  I think the noble Lord, Lord Brooke of Cumnor, is playing a little fast and loose with the record this afternoon. I have never said that the Government feared that householders, or indeed anybody else, would club together to hold things up by disputing every case for levy. I said that the Government could envisage the possibility of a conspiracy to withhold land from purchase, and that this was the reason for putting the speedy procedure into the Bill. I have also said that we did not want the Commission to accept a form of words on the second appointed day which might itself be open to challenge in the courts on every compulsory purchase order. I have never said—and I must point out to the House that the noble Lord is quite wrong in suggesting that I had said—that anybody would club together to hold things up by disputing cases for levy.
  We have been shortly into the merits of the three Amendments to Part III which were carried by this House, and although this is far from the first time we have considered these merits, I must once again briefly state the reasons why the Government—I do not say cannot, but why the Government do not think it would be right to accept them. On the question of the owner-occupier it has been said very often, and I repeat it,

  795
  that the enormous majority of all transactions will pay no levy. There are, however, owner-occupiers of houses, especially in city centres, who when they get a planning permission for this or that development of their property may find that the development value has increased tenfold over the existing use value of the existing property. If a man has a house and garden worth £2,500 on a corner in a desirable site in some suburban centre, let us say; and if planning permission is given for the erection of a high hotel or whatever it might be, he may very well find that that site is worth £25,000. And it is the view of the Government that, owner-occupier or no owner-occupier, he should pay levy on that tenfold increase created by the community in the value of what is his.
  In regard to charities, I think that the point is quite familiar to the House, and it is this. As the levy is a tax, not on property as such, not on land as such, not on any kind of goods or property whatever as such, but solely on the very special case of development value (and it is the specialness of this case that leads us to the use of the word "levy" in the Bill, and to avoid the more usual word "tax" in this case), this being a special kind of tax or levy on a unique kind of value—that is to say, development value not created by the owner—we feel that charities should pay it as much as anybody else. Of course, it is entirely up to charities, as it is up to everybody else in the country, to make what adjustments they desire in their investments when this levy comes into force. We are talking about investment, not about their own functional land on which the charities have their school or hospital or whatever it may be, but simply about property they hold for the revenues they can get from it.
  Lastly, may I deal with the question of the small transactions up to £4,000? I do not state, absolutely and categorically, that it would be impossible to find a way of getting over the difficulties and legislating so as to avoid the risk of fragmentation with which the House is familiar, but I do think that it would be extremely difficult. We should have run the risk of doubling the length of the Bill and its attendant Schedules if we had taken that course. Moreover, it does not
  796
  seem to us worth it, for the very simple reason—and I state this for the third time in this House, though the argument has never been answered by any noble Lord opposite or, indeed, by the noble Lord, Lord Silkin—that 10 per cent. of an increase in current use value is, in any case, utterly exempt. The "material development" definition is such that one can add up to 1,000 square feet to one's house, which is in itself about the size of a three-bedroom house, without paying development value.
  The Government have not accepted this Amendment, because they believe that small transactions are already cared for in a manner which makes it impossible to use this as a fragmentation device. It is perfectly obvious that the approach of the Opposition in their Amendment would throw this wide open to fragmentation, and would not achieve any desirable social end for the small man which is not already achieved by the definition of "material development" and by the 10 per cent. de minimis provisions which are in the Bill.
  Lastly, I should say a word about what the noble Lord, Lord Brooke of Cumnor, said, when he claimed that the opportunity which has been taken by the Government in another place to introduce certain minor Amendments to this Part and these Schedules was due to the action of the Opposition in this House in first amending and then leaving out Part III. No, my Lords, it was not due in any measure to the Opposition's having first amended Part III; only to its having moved to leave it out—an Amendment which was not resisted by the Government in this House.
  In conclusion, I would only repeat what I said before, that the Government neither commend nor condemn the Amendment of the Opposition to leave out these clauses which we are now putting back.
  On Question, Motion agreed to.
  LORD KENNET: My Lords, I beg to move Amendment No. 9 formally.
  Moved, That this House doth agree with the Commons in their Amendment No. 9 to the words restored to the Bill.—(Lord Kennet.)
  On Question, Motion agreed to.
  LORD KENNET: My Lords, I beg to move Amendment No. 10 formally.
  Moved, That this House doth agree with the Commons in their Amendment No. 10 to the words restored to the Bill.—(Lord Kennet.)
  On Question, Motion agreed to.
  LORD KENNET: My Lords, I beg to move Amendment No. 11 formally.
  Moved, That this House doth agree with the Commons in their Amendment No. 11 to the words restored to the Bill.—(Lord Kennet.)
  On Question, Motion agreed to.

  LORDS AMENDMENT
  [No. 12]
  Leave out Schedules 4 to 13.
  The Commons disagreed to this Amendment, but amended the words so restored to the Bill as follows:—
  [No. 13]
  Schedule 4, page 113, line 34, leave out ("2Ist") and insert ("29th").
  [Nos. 14–22]
  Schedule 5, page 118, line 13, at end insert—
  ("( )Regulations made for the purposes of this Schedule may provide that, in such circumstances as may be specified in the regulations and subject to such exceptions and modifications as may be so specified, the preceding provisions of this paragraph shall have effect in relation to a previous chargeable act or event which fell within Case F and consisted of—

  (a) such a disposition as is mentioned in subsection (3) of section 35 of this Act, or

  (b) the accrual of such a right to compensation as is mentioned in subsection (5) of that section,

  as those provisions have effect in relation to a chargeable act or event to which this paragraph applies.")
  Schedule 6, page 127, line 33, after first ("of") insert ("paragraph 7 or paragraph 8 or")
  page 128, line 26, leave out ("authorises the carrying out of") and insert ("relates to the land comprised in")
  page 128, line 45, leave out ("authorised the carrying out of") and insert ("related to the land comprised in")
  Schedule 6, page 134, line 33, at end insert—
  Allowance for costs of valuation or apportionment
  (".—(1) For the purpose of assessing levy in respect of a chargeable act or event—
  798

  (a) if it falls within Case A or Case C, the market value of the relevant interest (ascertained apart from this paragraph), or,

  (b) if it consists of a disposition falling within Case B, Case E or Case F, the amount of the consideration for the disposition (ascertained apart from this paragraph), or

  (c) if it consists of the accrual of a right to compensation falling within Case D or Case F, the amount of the compensation (ascertained apart from this paragraph),

  shall be reduced by the amount of any costs to which this paragraph applies.
  (2) In relation to a chargeable act or event, this paragraph applies to any costs which are reasonably incurred by an appropriate person in connection with that act or event and are costs so incurred in making any valuation or apportionment required for the purposes of the computation under the relevant Schedules.
  (3) In this paragraph 'appropriate person', in relation to a chargeable act or event, means a person who, if—

  (a) a notice of assessment of levy has been or were to be served in respect of it, and

  (b) that notice resulted in an operative assessment of levy, would be liable to pay levy in respect of that chargeable act or event.")

  Schedule 11, page 172, line 24, at end insert

  Part IV

    CREDIT CARRIED FORWARD FROM CASE F
    (". Regulations made for the purposes of this Schedule may provide that, in such circumstances as may be specified in the regulations and subject to such exceptions and modifications as may be so specified, the provisions of Parts I to III of this Schedule shall have effect in relation to a previous chargeable act or event which fell within Case F and consisted of—

    (a) such a disposition as is mentioned in subsection (3) of section 35 of this Act, or

    (b) the accrual of such a right to compensation as is mentioned in subsection (5) of that section,

    as those provisions have effect in relation to a previous chargeable act or event which fell within Case D or Case E.")
    Schedule 12, page 173, line 47, leave out from ("him") to end of line 50 and insert ("which, in relation to the chargeable act or event in question, are costs to which paragraph 19 of Schedule 6 to this Act applies")
    Schedule 13, page 180, line 17, leave out ("either")
    Line 19, after ("Ireland") insert ("a company which is constituted under any Act, Royal Charter or Letters Patent or is formed under the law of a country or territory outside the United Kingdom")
    LORD KENNET: My Lords, I beg to move Amendment No. 12 formally.
    Moved, That this House doth not insist on their Amendment No. 12, to which the Commons have disagreed.—(Lord Kennet.)
    On Question, Motion agreed to.
    LORD KENNET: My Lords, I beg to move Amendment No. 13 formally.
    Moved, That this House doth agree with the Commons in their Amendment No. 13 to the words restored to the Bill.—(Lord Kennet.)
    On Question, Motion agreed to.
    LORD KENNET: My Lords, may I have the leave of the House, simply for the purpose of saving time, to move the remaining Amendments on the Order Paper en bloc? If this is acceptable to noble Lords, and is in order, I would beg to move formally that the remaining Amendments Nos. 14 to 22 inclusive, be adopted.
    Moved, That this House doth agree with the Commons in their Amendments, Nos. 14 to 22, to the words restored to the Bill.—(Lord Kennet.)
    LORD MITCHISON: My Lords, I should have liked a word of thanks to the Government from the Opposition Front Bench, for introducing an Amendment which seems to me to be a small and rather good thing; that is, to allow costs to be taken into account when incurred by an individual.
    LORD BROOKE OF CUMNOR: My Lords, there are several of these Amendments of which I quite definitely approve. Frankly, I was seeking to save time by keeping silent, knowing that another important debate is coming.
    On Question, Motion agreed to.

DECIMAL CURRENCY
4.45 p.m.
LORD REDMAYNE LORD REDMAYNE rose to call attention to the advantages of the 10s./cent system of decimalisation of the currency; and to move for Papers. The noble Lord said: My Lords, noble Lords will not be surprised, and I think will certainly be relieved, to know that I have now been busy with my blue pencil for some long time. But there is one thing I cannot fail to say, and that is that the Committee under the chairmanship of the noble Earl, Lord Halsbury, have every reason to be proud of the work which they did some years ago. The Report of that Committee has never been debated, I think, in either House of Parliament—certainly not in full. It set out clearly a mass of evidence and as clearly weighed it, but I think it will be proved in this debate that, since that Committee reported, the balance has tipped against their final and marginal conclusion, which was in favour of the pound unit of decimalisation.
Those of your Lordships who have followed this subject for a number of years, will recollect that when it again became a lively issue in the 'fifties, the argument then was whether decimalisation was acceptable at all, and many were opposed to it. But that situation changed, and the principle of the desirability of decimalisation is, I think, now widely and perhaps universally accepted. The next stage in the argument was acceptance of decimalisation in principle, but with a strong bias, based more, I think, on sentiment than on conviction, in favour of preserving the pound as the national unit of currency—and in this respect I refer to it as the national unit and not as the international unit.
I believe that that was perfectly understandable, and I accept that even to-day if you put the question to those who have had no reason to give the subject great thought—and they are, after all, the vast majority of the people—they would express precisely the same sentiment. It is the instinctive, traditional and patriotic reaction. But it is not on that account necessarily right, and it will not be the opinion of the vast majority of people when they come to the hard facts of personal experience in four or five years' time. It is those four or five years—

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a perfectly proper, preparatory period—which create our difficulty to-day, simply because it has enabled the Government to imply, and to imply quite innocently and properly, that there has been no strong expression of public opinion from the man in the street.
Nevertheless, although the opinion of the man in the street is as yet unspoken or largely unspoken, the Government's decision has inspired a very large number of influential bodies to express a view contrary to the Government's, and I believe that the Government should pay heed to those views. Further, I believe that it is for Parliament in both Houses to show itself wise in time, to judge what will be the effect of the Government's decision, and to persuade the Government not to persist in a course which will, in fact, prove to be impractical and unpopular those long years ahead.
We are told in the White Paper that
"it would be wrong to let controversy—delay the introduction of a decimal currency".
I do not dispute that and, indeed, I certainly do not want delay—and I do not believe that any noble Lord in this House would want to delay—decimalisation. But I must say that if there is controversy now it is very much the Government's fault. In fact, they should have arranged for the Halsbury Report to be fully debated in both Houses. If, then, there had been no strong lead from Parliament; if, then, it had been found that opinion was still fairly evenly divided—and I do not believe it would have been—then none could have disputed the Government's right to give the casting vote.
As it is, my Lords, we have been presented with the Government's decision and have been told in various terms and at various times that we had better accept it and get on with the job.
"The decision".
says the White Paper,
"is a firm one, subject to the approval of Parliament."
I would ask the noble Lord who is to reply: what is the significance of those words? Do they mean that when this subject is debated, as it is being now in your Lordships' House and as it will be in the other place, the Government will take heed of the opinions expressed and
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will act on them? Does it mean that; or does it mean, on the other hand, that the Government's majority in the House of Commons will be used only to rubber-stamp a decision already reached and made public? I put those questions without malice at all, and I should be grateful for a clear answer to them, for they are important—and not important only in respect of this matter alone.
Certainly I do not approach this subject in any Party political spirit, whatever my past record may have been. Without question—and I say this frankly—the Government deserve credit for making the decision to decimalise. In the past, other Governments have failed to do so, for good reason and bad, although, of course, the last Conservative Government accepted the principle. But what concerns me, and what should concern now those who may expect to he in power in 1971, whoever they may be (and I am not going into that, for the reasons I have already stated), is that it will be found that we have done the right thing in the wrong way; that in 1971 confusion and irritation arising from the choice of the pound system will set up a quite unwarranted prejudice against decimalisation as such and against those who fostered it in this form. Frankly, all Parties, all Members of both Houses, will bear the same burden of criticism: that in their unwisdom they chose wrongly or allowed the wrong choice to be made.
Now I should like to come to some of the details of the argument. It is true to say, as the White Paper says, that the Halsbury Committee very soon decided that the choice lay only between the pound/half-cent system and the 10s./cent system. But at that point any real certainty ends, and I say that if one reads the Report without regard to the conclusions one is hard put to it to say on which side the final conclusion should fall. That is shown clearly in the Minority Report; but the deciding factor for the Halsbury Committee at that time—and we all know this—was the advice given by the bankers that the continuation of the pound as the unit of currency was of considerable international importance. In the intervening five years opinions on this point have undoubtedly weakened, and to-day even the Government say that, though it is important, it is not decisive.
My Lords, the case for the 10s. unit is based first on associability; that is, on ease of handling for the cash-using public. Under the 10s. system, four common coins remain in use—the shilling as 10 cents, the florin as 20 cents, the sixpence as 5 cents and the half-crown as 25 cents. Each one of those is a ready guide to conversion, running side by side, the new with the old. Under the pound system the sixpence and the half-crown disappear. Under both systems, fractions of the shilling offer some difficulty, but the 10s. system does offer two firm advantages: first, that the old penny and the new cent are equal for practical purposes (and by "practical purposes" in that connection I mean as a quick check of conversion), whereas, the Government's new penny is two pence-halfpenny in terms of the old; secondly, that for quick calculation, for quick conversion, the sixpence, the five cent piece, is a very useful signpost on the road between the penny and the shilling. If 1s.6d. is 15 cents under the 10s. system, 1s. 7d. can hardly fail to be 16 cents; and 1s. 1 11d. must be 19 cents if 2s. is 20 cents, as it is. The thing has rhythm. The corresponding conversions in the pound system have no such ready reckoner: 1s. 6d. is 7½cents, 7d. is 8 cents, 1s. 11d. is 9½ cents and 2s. is 10 cents; but there is no easy pattern for quick calculation.
Above Is., the pattern of the 10s./cent system is also clear: 10 cents, 20 cents, 30 cents, 40 cents and so on, for 1s., 2s., 3s., 4s., et cetera. It is an added convenience that above the 10s. unit the same pattern persists: 12s., 120 cents; 25s., 250 cents; 25s. 6d., 255 cents; 25s. 11d., 259 cents; 26s., 260 cents. The new currency is in harmony with the old; whereas under the pound system the conversions are 12s., 60 cents; 25s., 125 cents; 25s. 6d., 127½ cents; 25s. 11d., 129½ cents; 26s., 130 cents. There is no easy rhyme or rhythm in it; and, of course, the half-cent is an added complication. I will not labour the point. It was inevitable that these comparisons had to be given, and I am afraid they may be given more often than once in this debate; but at least my excuse is that they have never been on the record in your Lordships' House. The fact is that, whatever example you choose, the sim-
804
plicity of the 10s./cent system proves itself.
The half-cent, which is unavoidable in the pound system, undoubtedly adds to the complication of that system, and the Halsbury Committee admitted it. I fear that it may be said in this debate that the difficulties which it produces must be accepted; that, in the words of the Halsbury Report,
"its presence is tolerable, not desirable"—
that it is a necessary evil in view of the advice given by the banks that the "international case" for retaining the pound is vital. I shall have something to say later about the international case, but it is fair to comment here that the banks can afford to dismiss the arguments against the pound system since they themselves have opted out of the necessity to use the half-cent. They will use a straight two-place system of decimals, and will leave the ordinary mortals, who are in by far the greatest majority, to struggle with a three-place system as best they can. So one is not over-inclined to be too sympathetic to the bankers' argument, anyhow.
I ask your Lordships in this connection to do a simple sum. Just think for a moment how many times you put your hand in your pockets each day to take out change—perhaps five times a day or ten times a day. Then multiply that by 20 million, 30 million or 50 million for the population. It comes to quite a considerable total of cash operations in any one day—probably a minimum of 200 million and perhaps up to 500 million. Each of your Lordships pays for your taxi, or queues for the tube—and the queues will he long in the transitional period. You buy a paper, cigarettes, lunch, tea, drinks, more cigarettes (not more drinks, but more cigarettes), and on each and every occasion during the day, under either system, your Lordships' irritation with yourselves that your mental arithmetic is so slow will be nothing to your irritation with the wretched girl or man who is fumbling with your change; or, if I may say so, with her irritation, at the end of a long and tiring day, with you. In these circumstances, is it not certain that, if other things are equal—and I will deal with that point briefly in the next part of my speech—we should do far better to choose the system which would get us most easily through the difficult period of transition

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and will, in fact, since the half-cent does not occur in it, remain easier for all time as a straight two-place decimal system in common with practically all the decimalised world?
My Lords, I said, "if other things are equal". What other things? Let me take them briefly from the White Paper. The strongest argument against the 10s. unit and in favour of the pound was the international case for retaining the pound sterling. I say frankly that if I believed that that case was still valid I would accept it as conclusive, as did the Halsbury Committee at that time. But the truth is that it has been universally criticised as being unrealistic. What it means, in effect, is that the Government expect that if sterling should happen to be weak in 1971 the foreign holder of sterling at that time would mistake this internal reshuffle of units of currency for an external devaluation. But, in fact, the foreign dealer in sterling will be fully aware of the impending change. After all, he will have had to study the effect of it in respect of his dealings in advance, as we all shall. Without elaborating that argument further I believe it is unthinkable that the standing of sterling could be adversely affected just because in 1971, declared well in advance, we change to a 10s./cent system. At home, the Government try to make a case for preserving the pound for the benefit of the associability between the old and the new at that level; but in domestic use the problem of multiplying by two at that level is surely less onerous than the complication of conversion at the lower levels of currency to which I have previously referred.
After all, the White Paper says:
"the½is a familiar concept to us all; no one will be puzzled by it."
If that is sauce for the Government goose in respect of the half-cent, it is surely equally sauce for my gander, the 10s. unit as half one pound. It is said also that to retain the pound makes easier any comparison with the past and will reduce the cost of converting accounts. The comparison with past records is in the same terms—the terms of dividing by two or multiplying by two depending upon which way you do it—and the same arguments must apply. As to the cost of conversion of records, I should want a lot of persuading—and I hope the noble Lord will take this point—that the
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added cost of converting pounds is really any serious addition to the necessary cost of converting shillings and pence. One has to be done; that the other is added to it, does not, I think, constitute a very valid argument.
It is said, too, that a heavy unit has advantages in a highly developed industrial and trading economy. That sounds good enough as far as it goes; but the dollar does very well in this respect and so does the franc and so do all the Continental currencies which could be described as featherweight compared to the pounds or 10s. The White Paper says that no country would opt for a light unit "if they were starting afresh." But Australia did: South Africa did; so did France. The mille/1000 francs was the practical unit of currency in our terms before revaluation, at a worth of 14s. 6d. On the Government argument, the French should have made that the unit—but they chose the franc at a worth of 1s. 6d.; and the French have not been conspicuously unsuccessful in these last few years.
Equally, it is said that a heavy unit allows room for inflation. What a miserable, pessimistic argument! The dollar has lasted nearly 200 years and I know of no suggestion that the dollar is an unsatisfactory unit at to-day's level. The 10s. unit would start at a face value some 40 per cent. ahead of the dollar. That would seem to be enough margin for the pessimists. The White Papermakes a point about the cost of conversion of machines; but that is as broad as it is long. With the pound system a converted machine must have an extra column for the half-cent; with the 10s. system you need a column to accommodate the doubled major units. The White Paper says that finding a name for the unit is difficult. Really, I need not spend any time on that. As to the minor unit, I believe the Government have made a grave mistake in calling it the "new penny." Nothing will cause more confusion than to have two pennies circulating side by side, one worth two-and-a-half times the other. I say frankly that for the minor unit of either system I personally find no embarrassment in the name "cent"—for cent is what it is. I do not believe that we shall be selling our soul to the Americans by using a most practical name.
My Lords, as briefly as I can at this time, I have given the main arguments in the White Paper and my answers in support of the 10s. unit. I have said that the simplicity and associability of the 10s. system demand its adoption, if other things are equal. I have briefly detailed those other things as set out in the White Paper; and, where they are not equal, they fall in favour of the 10s. unit. This, indeed, is what the Halsbury Committee would have found if they had not been over-influenced at that time by the international case for the pound unit. I do not criticise that Committee; a strong case was made to them. If it were still valid, as I have said before, I would accept it as conclusive; but it is no longer so accepted.
In conclusion let me say this. The Chancellor of the Exchequer has said in various ways that those who support the 10s. unit must produce new arguments. Of course there are no new arguments: the Halsbury Committee and its minority group did their work too well. But there are new situations; and the new situations are, first, the failing support for the international case for the pound, led by the Government themselves; and, secondly, the growing body of opinion now expressing itself in favour of the 10s. unit. This body of opinion represents practically all of those who handle cash in the course of business or in the course of their daily lives. It includes every branch of the retail trade, the Co-operative Union, the brewers, the industrial life offices, the vehicle operators, the London Passenger Transport Board, British Rail, and two Government Departments, the Ministry of Social Security and the Post Office. Add to those the Consumer Council and the various other bodies representing the consumer. Add, again, the Association of British Chambers of Commerce and the retail trade section of N.E.D.C. And now, in the last few days, the Chancellor of the Exchequer has received powerful letters from the T.U.C. and the C.B.I., both stressing that his present proposals are widely opposed in industry and that there has been a notable shift of opinion in favour of the 10s. unit. I really wonder why we are having a debate at all.
My Lords, I accept that the majority of advice in the Treasury favours the
808
pound unit. I do not believe that advice could be unanimous. If it is, then things have certainly changed. I suspect that Ministers themselves are not unanimous. Of course, they have come to a unanimous decision in accordance with custom; but I cannot believe that the Department of Economic Affairs and the Board of Trade—the Departments more closely concerned with the practicability of the matter—are sold on the pound system. I believe that this is one of those moments in politics in which it is for Ministers to take a line contrary to the advice given to them—which is, in any case, by no means convincing, and is becoming less so day by day—and to take a line for themselves which will further the convenience and good will of the people. The Halsbury Report in support of its decision in favour of the pound unit, while admitting the difficulties of that system, says:
"Under both systems some will grumble, most will manage."
Let me say to the Government that they will earn nothing but praise for having the strength to change their minds so that people may grumble less and manage better.
5.9 p.m.
LORD SHEPHERD: My Lords, as the Minister responsible for the organisation of business, I am prompted—although I would have done so without prompting—to apologise to the noble Lord, Lord Redmayne, for the fact that this important debate has come, unfortunately, I think, at what we used to term "a rather late hour". I say that I am prompted, because I have received a note from the noble Lord, Lord Nugent of Guildford, which I should like to refute. It says:
"The supporters of the 10s./cent system believe you have arranged the Land Commission business first today in order to do them down. They are surprised at the weapons which you have used, especially"—
but no; I will not go on. I apologise to the noble Lord.
The last occasion on which we debated the problem of decimal coinage was November 10, 1960, on a Motion of the noble Lord, Lord Fraser of Lonsdale. I am very sorry that he is not with us this afternoon. On that occasion the noble Earl, Lord Dundee, had the unenviable task of replying for the Government. Reading his speech, it is clear

809
that he regarded the subject as very much a "hot potato". He limited his words to a summary of the pros and cons of decimalisation and the difficulties involved. He did, however, draw the attention of the House (and I think that the attention of the House again should be drawn to it) to the fact that this is a subject which we have now been discussing for some 150 years. In fact, according to the noble Earl it became of interest in 1793, when the French went on to decimal coinage. We were reminded—and again I remind the House—of the Royal Commissions in 1838 and 1843. There were two further Royal Commissions in 1857 and 1868, and the last one was in 1918.
The noble Lord, Lord Fraser of Lonsdale, in winding up the debate to which I have referred, said he hoped that we should not have to wait for another hundred years before this matter was discussed again. I give credit to the Party opposite for the fact that when in office they set up a Committee of Inquiry, under the chairmanship of the noble Earl, Lord Halsbury. In paying tribute to the noble Earl and his colleagues on that Committee I would also say how glad I am, and I am sure that your Lordships are, that he is to speak this afternoon. I found the Report of the Committee fascinating and very detailed.
I should say at the outset that the Government welcome this debate. I thought that the noble Lord, Lord Redmayne, was slightly unfair when, as I think, he tended to criticise the Government for not having provided time for a debate on their White Paper. The White Paper was issued on December 12, if my memory is right, and shortly afterwards the noble Earl, Lord St. Aldwyn, the Opposition Chief Whip, came to see me. I am sure he will agree that I readily provided time for this debate—and out of Government time, at that.
LORD REDMAYNE: My Lords, if I may interrupt the noble Lord, Lord Shepherd, that was not my point. My point was that the Government, before declaring their decision, would have been wise to have a debate in both Houses on the Halsbury Report, and that that could have taken place at any time in the last few years.
LORD SHEPHERD: My Lords, if that is the case, then both Parties are at fault, because if my memory is right the Report was issued in September, 1963. So perhaps we are both to blame. But we on this side of the House were very ready to provide an opportunity for a debate on this subject.
I think I should draw the attention of the House to the first item and, I think, the most important item, in the Halsbury Report; the desirable features which they felt should be seen in decimal coinage. They are included in paragraphs 26 and 27. The Committee say that in their view:
"The system (i) should be a consistent decimal system and should seek to maximise the benefits hoped for from decimalisation; (ii) should be simple; (iii) should be flexible, and convenient for money transaction of all values; (iv) should be lasting."
I will not go over all the other points, but they are very pertinent to our problem.
I think it true to say that whatever system is likely to be adopted, clearly no system would cover all the criteria. The Halsbury Committee considered 25 different systems. They discarded 23, and in the end decided that the decision which the Government and the country would have to make would lie between the pound system and the 10s./cent system. By a majority of four to two it was finally decided in favour of the pound system. In their Report, and in the minority Memorandum of Dissent, arguments in favour of the 10s./cent system were fully given. Since the Committee reported some three years ago, the Government have re-examined these arguments very carefully. They have also had the benefit of the Australian experience. The Government have reached the same conclusion as the Committee, but the weight they place on the various arguments is not the same. They do not believe that on internal grounds the case is a finely balanced one and that it is the weight of the international argument that tips the balance. The Government believe that in fact the Halsbury Committee under-estimated the case for retaining the pound on so-called internal grounds and probably—I stress the word "probably"—they over-estimated the international case.

811
My Lords, I think I should emphasise this point, because it is fundamental to the Government position. We do not say:
"How happy could I be with either, Were t' other dear charmer away!"
We have weighed all the arguments for both systems, and we have concluded that the case for the pound is clear. This does not imply that all the arguments advanced for a 10s. major unit are misconceived, or that there could be no possible criticism of a system based upon the pound. We are not saying that it is a matter of all black or all white. We are saying that, having carefully considered all the arguments, and all the representations put forward by special interests, we have concluded that the balance of arguments is definitely in favour of the pound. We have made our reasons absolutely clear, and I will discuss them in a moment.
The Government White Paper on Decimal Currency in the United Kingdom, presented to Parliament by the Chancellor of the Exchequer on December 12 last year, includes in Chapter III, "The Choice of System", a complete restatement of the position as the Government see it, and it reflects the difference in the balance of argument compared with the Halsbury Report. The White Paper is an authoritative statement of the Government's intention to decimalise, and is designed to make the intentions of the Government absolutely clear.
There is little need for me to dwell on the benefits of decimalisation. I should, however, mention that the case for decimal currency is reinforced by the decision announced by the President of the Board of Trade in May, 1965, that the Government consider it desirable that British industries on a broadening front should adopt the metric unit system sector by sector until the system can in time become the primary system of weights and measures for the country as a whole. The two operations, while closely linked, are, however, of a different nature. The metric system of weights and measures has to be introduced gradually. A decimal currency system has to be introduced on a fixed day, even though it must, for practical reasons, be followed
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by an interim period of dual currency working.
As I said earlier, my Lords, the Halsbury Committee, in the Report and the minority Memorandum of Dissent, gave full weight to the argument in favour of the 10s./cent system. The chief advantages of that system as outlined by the noble Lord, Lord Redmayne, include its simplicity; its flexibility; its convenience for money transactions of most values; its easy associability with the present system; the somewhat lower cost of introducing it; the fact that it would be less likely to cause price increases, and that without the half cent or half new penny it is a pure decimal system. The major conclusion of the Halsbury Committee, looking only at the domestic considerations, was that the 10s. system without a fraction offered the best system for the immediate future and for the smoothest transition. However, the Committee went on to argue that
"If we look further ahead than the transitional period, the balance of advantage, even without the international case, inclines in our view increasingly towards the£/cent /½ system".
When the Government came to review the arguments set out in the Halsbury Report, it was after a lapse of two or three years, when, as it were, the dust of conflict had settled and we were able coldly and objectively to review both the arguments in the Report and the points made in articles in the Press and in letters from the general public. It is fair to say, and to say now, that no new points have been made that were not presented before the Halsbury Committee or during the weeks immediately after their Report. This is not to say that the Government viewed the arguments from some gazebo far removed from the human problems involved. The realities of life were much in our minds.
In taking this fresh look at the arguments the Government considered that the case for the pound on internal grounds had been understated. I will now set out the arguments, not necessarily in order of importance. First, one long-term advantage of retaining the pound as the major unit is that it avoids the necessity of changing past accounts and records. Any such break in continuity in Government and company records would continue well beyond the transitional period. Secondly, in the United

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Kingdom we have become accustomed to an unusually high value major unit. This heavy unit has advantages in a highly developed industrial and trading economy where there are so many large transactions expressed mainly in the major unit.
Thirdly, the adoption of the pound system makes it possible to use quicker and cheaper conversion methods for some of the main business machines affected by the change-over, machines which account for a large proportion of the total change-over costs. Fourthly, the importance of currency units inevitably lessen with time. This is not only because prices tend to increase even without serious inflation, but because as we become more prosperous the units represent a smaller proportion of incomes. As the Halsbury Committee put it,
"To halve the major unit would be to go against the economic logic of history."
Fifthly, the pound has the associability advantage of retaining the familiar major unit. There is evidence both in South Africa and in Australia that people have found it difficult to eradicate the pound from their minds as a standard of value. The noble Lady shakes her head, but if she goes to South Africa—and no doubt she would like to go there for the sunshine—she will still see in the newspapers and on the hoardings motor cars and houses advertised in pounds, even though the pound has long disappeared from the currency. It is a habit that dies hard.
Finally, there is the international case. There has been a great deal of misunderstanding and controversy on this. For this reason the Government have made their case clear in the White Paper, and I will not repeat all the arguments. The Government took the view that the international case was important, but not in itself decisive. As the noble Lord has said, this is not a Party issue, and it is one on which I think my noble friend the Leader of the House would agree that Ministers may be permitted to express themselves a little more frankly than perhaps they do in another place. Having traded overseas for many years, I myself think that the problem that would arise from going over to a 10s. system would be great. It is easy to poke fun at the international case by saying that international bankers
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are well able to multiply by two, but they are not the only people whose confidence in sterling may be shaken by a sudden change. Let me remind the House of the view expressed by the highly competent and qualified expert, Per Jacobsson, the then managing director of the International Monetary Fund, who was consulted by the Halsbury Committee on this point.
There are not only bankers, but many traders throughout the world, in Africa, in the Middle East and in the Far East, who trade in sterling. We shall be able to carry out a large educational programme so that our people can understand the change to decimals, but it would be hard to believe that we could do so for all these merchants and traders overseas. Confidence in the pound is vital, and recent experience has shown how a "hunch", a rumour, and irrational pressure of every kind can affect the position of sterling. As I have said, the Government believe that the international case made by the Halsbury Committee was overstated; but whether it was or not, I believe that it is a vital factor in our consideration of this matter.
Supporters of the 10s. system have advanced a number of reasons for preferring that system to the pound. These include such statements as that under the 10s. system there would be fewer hybrid units; it would be simpler for monetary calculations; it would be more associable with the present coinage; it would have less effect on prices and it would lower the cost of the conversion of machines. The supporters of the 10s. system have made much of the fact that the pound system is not a pure decimal system and that the new halfpenny results in awkward decimal translations—for example, 6d. would be equal to 2½new pence and 2s. 6d. to 12½new pence. It is also said that if the new halfpenny is an obstacle to a pure decimal system it might well be ignored in transactions and consequently lead to inordinate price increases; that is to say stages of 2·4 pence.
The Government agree that the new halfpenny is a blemish on the pound system, but it is important that it should be put into perspective. The new halfpenny does involve additional work when

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printed or written, and an additional nonstandard column would be necessary on some business machines. But the half is a familiar concept. No one is likely to be puzzled by it. It will not stay for ever, and certainly in much of accounting work it will not need to be used. These points are not serious in planning a lasting decimal system. I think that I should stress the fact that the system which we are now considering and which we wish to bring into operation has to last not simply for our lifetime, or that of the next generation. The present pound system of 240 parts came into being well before the eighth century, if Appendix 1 of the Halsbury Report is right. Certainly it has stood us in good stead. Therefore, when we devise a new system, as we must now, clearly we must devise a system that looks well ahead.
The assertion that the new halfpenny will be ignored in transactions, thereby leading to inordinate price increases, fails to take into account competition in the retail trade and the fact that the present inconvenient halfpenny, less than half the value of the new halfpenny, is still being used. Furthermore, during the transitional period it will be the task of the Government, with the assistance of the Decimal Currency Board, to ensure that steps are taken to prevent any kind of exploitation of prices.
There are, in fact, no significant differences between the pound and 10s. systems, so far as the possibility of price rises are concerned. Under both systems the smallest denomination will be 1.2 pence, under the pound system the new halfpenny, or under the 10s. system, if it had been introduced, the new penny. It is worth noting that in Australia one of the main sources of difficulties arose during the first few days after decimalisation when there was confusion over the old one penny and the new cent., worth 1.2 pence. Because of the close identity between the two, there was a tendency to equate them in value. This confusion is less likely to arise with the pound system.
Much of the case for the 10s. system rests on the assumption that it will be simpler; that it will present people with less difficulty in adaptation during the changeover period. In effect, it is said that under the 10s. system less effort will
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be required to translate decimal prices and coins into familiar values and terms. In seeking to substantiate their case, supporters of the 10s. system tend to choose a shilling and a sixpence as examples to prove it—for example, 3s. 6d. being equal to 35 pence.
This problem is chiefly significant in the short term—say, a period of two or three months. Experience in Australia has shown that with training and education the changeover can be effected smoothly. The advocates of the 10s. system do not appear to have taken sufficiently into account the importance of training and education. The Australian system demonstrated that when proper attention had been paid to this there was no trouble at all. The larger stores, in particular, which had spent a good deal of time and money on training, got a good return on their investment because they found that on D-day things went off with remarkable smoothness. The difficulties arose when this had not been done. In the light of the Australian experience, the Government do not think it likely that associability difficulties will be much increased by the choice of the pound system.
In oral evidence before the Halsbury Committee it was suggested that the average housewife might be expected to attain her pounds, shillings and pence standard of performance under the 10s. system in about one month, and under the pound/cent/half system in about two to three months. She would, of course, be getting better and better all the time. In short, the 10s. system had advantage over the pound new penny half system in individual change-giving situations, but the advantage was essentially short-term—some two or three months. The experiments leading to this conclusion were, of course, "cold": that is, they took no account of the real-life situation, where a customer will be faced by a shop assistant who has been trained to help the customer. There has been a great deal of experience to support the Government view in this matter, both in Australia and in South Africa.
The 10s. supporters, if I may use that phrase, choose shilling and sixpenny examples in trying to prove easier associability. The Government agree that under the 10s. system shillings and sixpences are more easily converted; but I would point out that there is no identity

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in either system with odd pence. In transactions involving odd pence, there is a possibility of friction, whatever the system. Hence, there is a need for the training of shop assistants; the education of the public; the issue of conversion cards to all householders, and the use of dual-price tickets to facilitate conversion during the transitional stage. Given extensive education and training during this preparatory period, the Government believe that there would be little practical difference between the 10s. and the pound systems. What difference there is is transitory.
The Government have examined with great care all the criticism of the pound as the major unit made since the decision to decimalise was announced on March 1, 1966, and the publication of the White Paper on December 12 of that year. The analysis shows that no new arguments have been advanced in favour of the 10s. system or against the pound system that have not already been considered by the Halsbury Committee and by the Government. Many of the arguments are based on conversion difficulties. I have already mentioned the associability problems and the fact that the difference between the two systems in this respect is both marginal and transitory.
Other arguments are founded on misunderstanding. One of these is that under the pound system prices will increase more rapidly than under a 10s. system. Fears expressed by consumer associations that the demonetisation of the halfpenny and the introduction of a decimal system with the smallest coin having a value of 1.2 pence will cause a rise in the cost of living are real. But they apply whatever the system introduced. This is an aspect which the Government will watch—and will be expected to watch—with the greatest possible care.
It is said that, because of the halfpenny, for convenience, there may be a case for rounding up. If we have competition—and this is what we have been talking about for so long—let us hope that when there is a rounding up it is rounded up downwards. There is no reason why that should not be so.
LORD ERROLL OF HALE: Rounded downwards.
LORD SHEPHERD: I am not sure how we do it.
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The appeal of the 10s. system, my Lords, lies in the fact that its advantages can more readily be seen. I should like to quote a paragraph from the Halsbury Report which I think sets out succinctly why the 10s. system has so much immediate appeal. It says:
"In the degree of resemblance between old and new prices and amounts, the 10s. cent system possesses an advantage for 'shopping" prices which none of its rivals can be said to share. The£cent half system offers certain advantages, perhaps more deep seated, but further removed from the bustle of everyday and the immediate problems of the man in the street. Obvious resemblance between prices is a very transitional advantage; and in practice we believe it to be less important than has often been maintained in evidence."
The Government believe that, with training and education, many of the disadvantages that lie between the pound and the 10s. systems can be easily overcome.
The noble Lord, Lord Redmayne, asked what is the Government's view and what is the Government's intention. As I said at the beginning, the White Paper is an authoritative statement of our intention to decimalise. It is for Parliament to decide what shall be the value.
The Government will stand by the decision in the White Paper, that in the long-term the pound system will be best for this country. I will say this to the noble Lord, Lord Redmayne: that when one considers the Reports of previous Royal Commissions and debates upon this subject, if the Government had decided to go for the 10s. system—I am not saying that the same noble Lords would be rising up in wrath, but we should have had just as heated a debate on that decision as perhaps we shall have this afternoon. The noble Lady shakes her head, but I suggest that she should go through some of the previous debates and the Reports of Royal Commissions.
My Lords, I end by saying this. Certainly let us have a debate on this subject. Let us have it clear that the Government have made up their minds; that we do not see our way to change it. What we should now be directing our attention to is the best method in which this change can take place. The decision of the Government is an historic one. We are changing a system that has lasted since the 8th century. There are many advantages for the country in adopting the decimal system. The Government have

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made up their mind. but of course it is for Parliament finally to decide. The Government believe the pound system to be the best, certainly in the long run; and that, surely, is what we are trying to deal with. My Lords, I hope that Parliament will now help the Government to see how best this change can be implemented.
5.41 p.m.
LORD CARRINGTON: My Lords, I rise to support my noble friend Lord Redmayne. I do not think there is a great deal more to be said after his excellent speech, and at any rate I shall try to be brief. I shall try to confine my remarks to lasting within ten minutes, which seems an appropriate length of time when discussing a decimal system. I always listen attentively to what the noble Lord, Lord Shepherd, says, but I must say regretfully that on this occasion I remain wholly unconvinced with his defence and explanation of the reasons for the Government's decision to adopt a pound/cent system. Of course, there is no question of Party politics in this, and I speak only for myself, though I think a great many other people feel as I do about the matter. And I speak only in the hope—not the very convinced hope, after hearing the noble Lord, Lord Shepherd—that the Government will, even at this stage, listen to what I believe are the overwhelming arguments in favour of the 10s. system.
I must also confess that I am not much looking forward to any change. I am used to pounds. shillings and pence, and I understand the system. I shall find any new system difficult, and I shall probably greatly resent it. Nevertheless, I accept the advantages of the change, and I do not expect many people share my hesitation. In any event, it has been decided that we are going to have a change, and it seems to me therefore that we should concentrate on trying to persuade the Government to choose the right system. This is a decision which affects all of us and which, having been taken, really cannot be undone. It is inconceivable that another change of system could take place in the lifetime of anybody in this House, however young he may be: so what is decided now is to all intents and purposes for all time.
I should not have troubled your Lordships this afternoon had I not been in
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the Commonwealth of Australia just after they had successfully decimalised their own currency, and also in New Zealand where they are preparing to do so in July of this year. Both of those countries, and South Africa (as my noble friend has said), have chosen the 10s. system, and I think there is a great deal of experience to be gained from that. I was greatly impressed by the smoothness of the changeover in Australia. I am a director of one of the big banks in Australia and New Zealand, and naturally a bank is somewhat intimately concerned with a major change of currency of this kind. The changeover took place with really remarkable smoothness; and, though no doubt this was due partly to careful planning—and there was careful planning—it was much more due to the relative simplicity of the system chosen.
We are told there are a large number of advantages in the present system, and the noble Lord, Lord Shepherd, made a catalogue of them this afternoon. I must confess, having read them, and the Report, and having listened to the noble Lord this afternoon, I do not find them very compelling; and, in any event, if they were so powerful and convincing, they should have convinced our Commonwealth colleagues that they applied equally to them as to us, except in one particular respect. That exception, of course, is the international case, where it is said that a change in the name or value of the pound would jeopardise good will and might lead foreigners to stop using sterling; though this does not apply in the same degree to Australia, South Africa and New Zealand. Certainly Australia has not found that difficulty. I find this a most extraordinary argument, and I do not think that the noble Lord, Lord Shepherd, dealt with it properly.
Can one really visualise international bankers and people engaged in trade, those bogeymen of noble Lords opposite, so astute in financial affairs, such experts in economic matters, so adroit that the Government and the Treasury have come to regard their reactions as something to be taken very carefully into account, being intellectually overwhelmed by a change to the 10s. system? They would not be the Gnomes, they would be the Zombies of Zurich! But, so far as I

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can judge, the Government have departed from that argument in some degree, and now say in the White Paper that it is wrong to assume that the decision is based primarily on the international case; though, listening to Lord Shepherd, I thought he perhaps did not quite agree so firmly with the White Paper as one would suppose of a spokesman in this House on an issue of this magnitude. Would the noble Lord like to interrupt?
LORD SHEPHERD: My Lords, yes. I certainly should not like to suggest that the noble Lord is a zombie; but if he will read what I said—he perhaps did not remember it—he will find that I mentioned the case of the international bankers, but pointed out that there are thousands of traders who do not come within that particular definition.
LORD CARRINGTON: But, my Lords, they can still multiply by two; you do not have to be a genius to do that. It would seem, therefore, that the Government, if they have changed their ground, are basing their case largely, from the domestic point of view, upon the idea that this is a better system; and here I would think the arguments, with respect, are almost wholly on the side of the 10s. system.
In the first place, as my noble friend behind me said, it is far easier to convert the old currency into the new currency under the 10s. system; and this was particularly noticeable in Australia. For example, if one saw something in a shop priced 37 cents, one knew it cost about 3s. 7d.—actually it was 3s. 8d.—and something costing 78 cents cost 7s. 8d. or 7s. 9d.; 1 dollar and 60 cents was about 16s., and so on. It is so easy to convert it. One must not forget that there are a great many of us who have been used for a great many years to the existing system, whose mental arithmetic is not all that strong, and will find it pretty difficult in any case to do these sums. Seriously, my Lords, ease of conversion is a very important point when having regard to a decimal currency.
What would be the case under the system proposed by the Government, if I understand it rightly? What are 37 new pennies worth? They are 37 times 2.4 old pennies, or 37 one-hundredths of a pound. After a good deal of counting
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up, I think I could work out that that was 7s. 4d., but it is going to take me quite a little time to do that, and it is much more complicated and much more time consuming.
The only criticism I have of the way the Australian system has been introduced—and this deals with something the noble Lord, Lord Shepherd, said—is that there has been far too long a changeover period from one currency to the other. During that period it has been legally possible both to use the currency and to mark goods in both currencies. Thus, people have not got used to the change as quickly as they could, and shopkeepers are still using pounds, shillings and pence as the major units when goods are sold. For example, it does not sound nearly so expensive to buy a car for £800 as for 1,600dollars, and to sell a shirt for £3 19s. 6d. is superficially a good deal more attractive than to sell it for its equivalent in the dollar currency.
I very much hope that the Government, whatever system they finally decide to adopt here, will not make the mistake which I think Australia made, because people there are still thinking in pounds, not because it is difficult to convert the currency, but because goods in the shops are still marked in pounds, shillings and pence. If we are to have a change in currency, let us take the plunge and make everybody get round to using the new currency as soon as possible. Additionally, the 10s./cent system, I think, would make it less likely, in spite of what the noble Lord says, that there would be an increase in prices in the shops, since it is clearly more flexible than the pound unit.
There is one argument on the other side which appeals to me, and probably it is the only argument which does not appeal to noble Lords opposite. It seems to me that it would be a great pity to lose the name of the pound and to change to something else. I would very much oppose any suggestion that our 10s. should be called a dollar as the Australians and New Zealanders have done. The difficulties of finding another name were highlighted by the Australian Government. They suggested all sorts of names like "Austral" and "Royal", which did not find favour with the public over there. But in our case would it not be possible to do what the French have

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done in reverse and, in the interim period, to call the 10s. unit the "new pound"? After all, under his system the noble Lord is talking about "new pennies", and if the changeover period were limited to the shortest time possible I do not believe it would lead to too much difficulty or confusion, and it might be a way of saving the name of the pound. I hope the Government have not closed their minds on all this.
As my noble friend said, there is increasing opposition to the system the Government have chosen, from the consumer interests, retail trade, the Gas Council, chambers of trade, the C.B.I., the T.U.C., the G.P.O. and many others; and in addition there is the precedent of South Africa, Australia and New Zealand. I do beg the Government to look at this again because, with great respect to the noble Lord, Lord Shepherd, I do not believe they have made a good case for their present proposals, and public opinion will certainly be against them.
5.51 p.m.
THE EARL OF HALSBURY: My Lords, I am grateful to the noble Lord, Lord Redmayne, for raising this matter in your Lordships' House this afternoon. I am sure your Lordships are, too, but I am personally grateful because it is some three and a half years since the Halsbury Committee reported, and during this period the Report has been subject to continuous and far-ranging criticism, while I have felt myself barred from replying until the matter had been properly discussed in Parliament. So if I go at it systematically I ask for your Lordships' indulgence on the ground that three years' bottled up enthusiasm is waiting to make itself heard. I am glad to defend my views to-day accordingly.
It is naturally gratifying, when one has invested eighteen months hard work in something, to find it approved by the Government who have commissioned it. I am naturally gratified, and I am sure my colleagues are, too, by the adoption of practically the whole of the recommendations in the Halsbury Report. The Government were kind enough to say that it was an authoritative Report and I am very glad they found it so, because that is what it was intended to be.
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There are only minor differences between what they propose and what we recommended. We left open the choice of a name for the minor unit: they have chosen "new penny", which was always my favourite, and they have done away with the uncomfortable decision about either introducing a 20-cent, coin in the present cupro-nickel tier of the coinage, or introducing a third tier by adopting a 10s.-coin in a third tier. This will make it possible to adopt a 20-unit coin later on if it is required.
I think the only differences the Government have expressed relate to differences of weighting in the arguments. They have taken this decision for the same reasons as we expressed in the Report, but they attach different weights to the component reasons. I believe that every member of the Committee would in fact have expressed the same view as the Government; namely, that they agreed with the verdict of the Halsbury Report, but not for the weight of reasons expressed therein. This is a technical difficulty of writing a Report. The Report must be the work of one pen, or it will lack unity; and if it is expressing the opinions of six people it has to strike a kind of weighted average of the weights which they give to the different components in their choices, and this inevitably results in something that does not express the views of any one of them absolutely.
This situation can lead to considerable misunderstandings. One of them has been widely quoted; indeed, it was repeated in your Lordships' House this afternoon by the noble Lord, Lord Redmayne, who raised this question. The whole issue of how much influence the City view had on the Halsbury Committee has been widely misunderstood. At a Press conference following the publication of the Report one of the Committee members, Dame Anne Godwin, went on record publicly as saying that the City view made no impression on her whatsoever. She thought the pound was the right thing to adopt, for precisely the sort of reasons put forward by the noble Lord, Lord Shepherd, on behalf of the Government. That was one member of the Halsbury Committee who was attaching the same weight to the balance of arguments then as the Government are now attaching.

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Of course, we were unable to take evidence on the Australian and South African experience, but all the information I have been able to collect since is that for the higher priced items, such as salaries, motor cars and so on, people in Australia and South Africa still think in terms of the pound. I am told this by people who go out there. It is not a question of the commotion caused by a changeover from the bronze tier of the coinage; it is a feeling for a familiar sum which they understand. A car priced at £1,000 means something to them, whereas if it is priced at 2,000 dollars they have to think for a bit as to what class of car it is.
My Lords, what is all the commotion about and why, on this almost stratospheric intellectual matter, are such strong feelings being expressed? From the very start there has been strong pressure, triggered off originally by the retail interests, their friends, their suppliers, advertising media, and so on. They have kept up this pressure continuously from the moment we started our work, right through the publication of the Report. I joined a Press agency and arranged for all the references to decimalisation to be sent to me. It is quite clear that the current pressure is only an intensified form of the pressure which has been there all the time. It has, in fact, been kept up continuously for the past three and a half years. The lobby is well organised and vocal and why should it not be? It is all perfectly fair: it has had a good Press because it is good copy; it has adopted good tactics. They never argue, but adopt the old maxim, "Never argue, repeat your assertion". I am reminded more of the state of mind that Westminster was in during the reform of the calendar, 200 years ago or more, when people so misunderstood the issues involved that they went around frustrating the reform and demanding, "Give us back our eleven days", to the embarrassment of the Government of the day.
I have never succeeded in persuading the advocates of the 10s./cent system to answer some of the arguments put to them when they were giving evidence. For instance, they continuously say, "The half cent will cause confusion". I have cross-examined many of them and said, "Tell me why the halfpenny does not cause confusion?" They never answer
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this question, and I have come to the conclusion that in time past the retailers had a nightmare—the nightmare of a housewife whose pockets bulged with decimal currency but who never shopped because she could not do her sums. The critical part for me in developing this argument was when I realised that this was a fantasy and that sums were not the question at issue. I sympathise with the mental agony of anybody who is required to do arithmetic beyond his or her ability, but I do not believe that that kind of arithmetic will arise.
Let me take the example of the 37 cents which the noble Lord, Lord Carrington, mentioned—and he went as far in the way of getting your Lordships in an arithmetical muddle as he could in the time. May I suggest that the whole thing can be done without multiplying by one thing and dividing by another. You simply know that 35 cents are 7s. and add two more cents. That is the way people do these calculations. The housewife is as busy as a beaver with her housework, and shopping and housekeeping, but we do not want to face her with the agony of that other beaver in The Hunting of the Snark, who had to do the mental arithmetic:
" ' Two added to one if that could but be done'
It said 'with one's fingers and thumbs'
Recollecting with tears how in earlier years
It had taken no pains with its sums."
If I thought I was going to inflict that on the housewife, I should not do it. But I do not believe that I am.
I see no difference between shopping in new currency and shopping in a foreign centre. Here again is where the argument somehow sins against common sense. Every year millions of tourists go abroad from this country and shop in foreign currency. We are told that they cannot shop in a small variant of their own currency when already millions of them do it in far less familiar currencies abroad every year. What happens if you are shopping in New York and you offer a dollar bill for something priced at 85 cents? You are given 15 cents in change. Do you, to check your change, convert 85 cents back into sterling, subtract it from the sterling equivalent of a dollar, and then convert the difference back into dollars to make sure that it adds up to 15 cents? No, my Lords, you

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know that the change of 85 from 100 is 15 of anything; you simply keep the whole transaction in dollars as you go along.
Again, supposing you were hesitating between the purchase of two different articles, one of them priced at 30 cents and another at 20 cents. You do not have to convert 30 and 20 back into sterling to find out that one is more expensive than the other. Whether you are shopping in sterling, roubles, rupees, drachmae or whatever it may be, 30 is always more than 20; it is a larger number. Finally, if you are a businessman on £10 a day and have to live within your budget, you do a once-only conversion of £10 to 28 dollars and then live within 28 dollars a day; you do not keep on checking back into sterling to find out whether you can afford something.
The claims for the greater associability of the 10s. system, which is at most transient, are not erroneous. To my mind they are irrelevant. The customer just will not do all these calculations that are the nightmare of the noble Lords who have spoken for the 10s./cent system this evening. They will learn simple little things such as that 6d. old equals 2½d. new, just as when your Lordships change a florin into sixpences you do not multiple four by six and divided by 12 to make sure that the two equate. It is a fact of common knowledge that four sixpences make a florin, and this is what makes shopping possible, not lightning arithmetical ability. In just the same way we remember the telephone numbers of our friends not by learning them as an actor learns his lines but by using them.
I am sure we shall hear something of the alternative system that is being canvassed at the moment, particularly by the C.B.I., the mil system. What should the smallest coin be? I have here a penny and a farthing, two coins that have been familiar to your Lordships for most of your lives. The penny to-day has a smaller purchasing power than the farthing of 1900. It would need a coin of 20 per cent. greater purchasing power to equal a farthing of 1900. That was the smallest coin we ever had. The real income per head now is much greater than in 1900, so to take a penny of to-day as the smallest needed coin is a
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finer module for expressing purchasing power than the farthing was in 1900. Whereas in 1900 the banks accounted to the nearest penny, this would be equivalent to accounting to the nearest 5d. to-day, but in fact they are going to account to the nearest 2½d.
The halfpenny is a doomed coin; it has only about ten to fifteen years' life left. Although it is sometimes used to express individual prices, such as 4·Dd. for an egg, it can equally well be said that eggs are 4s. 6d. per dozen, and very few people buy one egg at a time. Inflation is an enemy in every age, but we must not strain at a gnat and swallow a camel. We tried in the Report to calculate the inflationary effect of abolishing the halfpenny. The absolute maximum we could find was 6d. in £5. We thought it more likely that the figure would be 3d. in £5, but that that would still be a maximum; it would probably be less. So if we accept that the halfpenny is on the way out, we ought to rejuvenate the coinage by abolishing it, and this is proposed in both the pound and the 10s. systems.
There is one rather awkward arithmetical fact that stands in the way of the mil system. That is that the lowest coin in such a system must be odd. This is connected with the fact that two odd numbers can make an even number but two even numbers can never add up to an odd number. If you have nothing but two-mil coins in a mil system you cannot make up 5 mils; you cannot give change for 5 mils if you have only 4 mils or 6 mils in your pocket, and so on. The lowest coin must be odd. The mil coin—that is the purchasing power of a farthing to-day if it existed—is so negligible that people would throw it away as they do in the subway in New York. In the New York subways you can go round in the small hours of the morning and see the platforms littered with cents which people have thrown away because they are too much nuisance to hang on to. If you are going to have the lowest coin odd, then the mil is derisorily small; five are merely equal to half a cent. You would have to go back to the farthing system and have a 2½ mil coin. That is a possible one, because it counts as the equivalent of an odd number.
My Lords, think of the fuss that people are making about the halfpenny. How much more fuss are they going to make

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over the farthing! If the 10s./cent and pound/mil enthusiasts could agree with each other, I think I might bow before the combined weight of their authority. As it is, I feel rather like the parish priest who assured his parishioners that God would answer their prayers for the weather if they could first of all agree about what weather to pray for.
Of course much is made of the impurity of the half cent. A half cent is 0.5 of a cent. I think the people who talk of impurity in this context are inventing some sort of sense of the word "decimalisation" which is quite peculiar to themselves. A half is a perfectly respectable decimal fraction. It can be expressed as 5 mils or 0.5 cents. There is no reason why we should not put a half into the coinage. Rejuvenating an inflated currency is now a major operation, owing to coin-handling machines, owing to automatic accountancy techniques and so on. Here I am talking of coinage questions not decimalisation. Our obligation to posterity is to provide them with a longeval coinage, and I remember in this context that posterity is the one interest that has not a lobby, either in this House or in the Press, at the moment. We do not want to clutter them up with unwanted coins; we do not want to force premature repeat operations on them: we want to design something that will last as long as possible, and of course inflation is the enemy of a longeval coinage.
This is not a matter of contemporary Party politics. The secular trend is towards inflation. The penny of the 8th century, the first penny we ever had, would probably have a purchasing power of a pound to-day. The rate of inflation is something of the order of a factor of two per century. Last century was one of stable prices—no century resembles another quite in all respects—and we have caught up in this by a factor of four. Once upon a time when coins were not worth their face value it was called "debasement of the coinage"; that was softened a little to "depreciation of the currency", and now we call it "inflation". All modern Governments are pledged to resist inflation when returned, and most of them end up by indulging in it when they depart, just as in ancient times every reign began with a resolve by the new Monarch to
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reform the coinage and ended by his debasing it like all predecessors. We must therefore suppose a secular trend to inflation and therefore to put in a half cent now must give the coinage we design now a longer life than if we do not put it in.
I have put all this forward to your Lordships without once mentioning the City view. I have already said that too much can be made of this City view. First of all, it took us a lot of time and trouble in Committee, for good reasons: it was unfamiliar. At first we did not know what the bankers were talking about; we did not understand it. Then they did not smooth our path by discussing it in rather obscure terms. The analysis took up much time. We had to recall witnesses to try to understand what they were talking about. Even so, it occupies only eight out of 83 pages of exposition, and I think it is the duty of Committees to get down to the allegedly important details of obscure subject matter.
The final impressions left on us, I think, were widely different. Probably on Sir Ronald Thornton, a banker, it made most. I have already told your Lordships that it made no impression at all on Dame Anne Godwin; and I think that Sir Roy Allen and myself occupied a somewhat intermediate position. There was no pressure from the City of London. There was no war of nerves, as has been suggested. There was a certain amount of obscurity, and we finally fetched up with the point of view that we were told there might be a risk, and it was a good principle, in risk-taking, to avoid it if possible. So we decided not to disregard the City view, provided that it was possible for us not to do so; and it turned out to be the case that we could.
There are two ways in which I could agree with the noble Lord, Lord Shepherd, on the question of its being a fine run affair. In my mind and in his mind, it is not a fine run affair. To my mind, the arguments are quite conclusive. But when it comes to convincing other people, then it is in someway a fine run affair. Taking a dispassionate view of this, I have to concede that, out of six of us on the Committee, two who listened to exactly the same evidence as the other four came to opposite views; and in New Zealand and South Africa

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the minority view and the majority view changed places. One has to concede that.
But I am particularly anxious that this issue should not be threshed out on emotional lines. Common sense must assert itself. These two proposals are alternative. The 10s./cent and the pound/cent/half-cent system are both workable. It is wrong to pretend that either of them will produce a national disaster if adopted. We are merely talking about a factor of two in the size of the major unit, and it is not an issue on which any man should express intemperate opinions. My own, I think, are fairly simple. Planning a coinage is a long-term operation and therefore long-term considerations should be allowed to prevail.
6.13 p.m.
LORD SHERFIELD: My Lords, I have a natural hesitation about intervening on a subject which has been hashed over so much, and of which the pros and cons have been set out so fully in blue books and elsewhere. Especially have I a hesitation in following the noble Earl, Lord Halsbury, who has become such an eminent authority on this subject. Furthermore, I must apologise that, unavoidably, I must leave the debate shortly, owing to its delayed start. But what I have to say will be extremely brief.
I do not speak for the City, or for any part of it, or for any organisation. This matter seems to me to be very much a question of personal assessment and judgment in the light of the evidence. I see a clear advantage in the adoption of the 10s./cent system for the period of the change-over, and for all domestic purposes in the near and, perhaps, the foreseeable future. We were told that the awkward halfpenny—and with all deference to the noble Earl, Lord Halsbury, I still think the halfpenny is an awkward coin—would ultimately disappear. It is like being assured that after twenty years in Purgatory we shall get to Heaven.
It was my impression that in the Report of the Committee of Inquiry, and indeed in the White Paper, the advantage of the 10s./cent system had been under stressed, and further, though a number of reasons are given for the adoption of the pound/ cent/halfpenny system, the reasons were
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rather overstressed, especially that relating to the international case. This is now admitted. The weight attached to these arguments has shifted and they have been remarshalled. But although it is now agreed that the argument on the international status of the pound has been overdone and that it is not decisive, it is still with us, and I wonder whether there is any substance in it at all.
Like many others, I find it difficult to believe that people who hold or trade in sterling are going to be confused or have their conduct affected by the adoption of a decimal system which is simple, makes sense, and is similar to that adopted by most other countries, including a number of sterling countries. Certainly, the experts, the dealers in foreign exchange, "the gnomes", the dealers in commodities, are not going to be put off and confused. Nor are the banks throughout the world who hold sterling. In the case of exports, many, if not most, British exports are quoted to importers in their own currencies.
As the noble Lord, Lord Redmayne, said, there is surely no real danger of confusion between decimalisation and devaluation. The noble Lord, Lord Shepherd, said that there were many other traders throughout the world who traded in sterling, and that it was these people who were going to be or might be confused. But, surely, these traders represent quite a small part of the total trade and transactions in sterling, and I think it is possible to underrate the intelligence of even these smaller people.
A great deal of weight is placed on the name "pound". The idea of calling the new unit a "new pound", to which the noble Lord, Lord Carrington, referred, is dismissed almost without argument in both the official publications. On the other hand, the argument for calling the smaller unit a "new penny" is developed in a favourable sense. I am not persuaded that the name "new pound" would cause confusion. The French manage well with their "new franc". If one new coin does not cause difficulty or confusion why should another? My Lords, "In for a new penny, in for a new pound".
I think it is true that all the other sterling countries who have changed to a decimal system have adopted the 10s./cent system, with, for special

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reasons, the exception of Ghana; and it is said that there has been some difficulty in the case of Australia and South Africa. We have heard some evidence on both sides this afternoon in support of this. But so far as I am able to judge these difficulties were of a quite short-term nature.
Great emphasis is laid on the importance of having a heavy unit, but a new 10s. "pound" would be still one of the heaviest units among the major countries of the world, and I dare say they are as susceptible as we are to secular inflation. It seems to me, therefore, that it needs much stronger arguments than have been advanced to justify the selection of a system which is more complicated than it need be. It carries on the British tradition of seeking to be different from everyone else, an aspiration which, in the context of our present foreign policy, is rather outmoded.
I have wondered whether the weight of of the evidence against the 10s./cent unit on international grounds was connected in any way with the atmosphere prevailing at the time in relation to the defence of sterling. The noble Earl, Lord Halsbury, has really said that that was not so, and I would not claim that the change would actually, in the words of the White Paper, "benefit the international standing of sterling".
I would certainly contend that it would not have an adverse effect. It seems to me that the status of the pound will depend on our general economic position, on the success of the prices and incomes policy, on the improved efficiency of our industry, and on the success of our export drive. In comparison with these factors, the effect of this decimalisation point must surely be negligible, a fragile reinforcement if sterling were really in trouble. Moreover, it is surely reasonable to suppose that agreement will be reached in the next year or two on some reform of the international monetary system and, in that context, that the position of the pound under any name will be safeguarded and reinforced.
I do not propose to follow the noble Lord who has spoken on the domestic front but there was one point which the noble Lord, Lord Shepherd, made about the difficulty of accounts and of comparing past accounts. I do not know how much weight there is in that point.
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I am sure that by 1971 every efficient bank and industrial concern will either possess, or have access to, fast computers, and that would seem to me to neutralise any awkwardness there may be in this respect.
When a decision of this kind has been taken, even though comparatively little work has been done to put it into effect, there is of course a strong vis inertiae against having another look at it. There are minutes to be torn up, decisions to be reversed, even faces to be saved. It is certainly all very difficult. But I suggest, with the greatest respect to the noble Earl, Lord Halsbury, that the Committee, if it were to hear evidence to-day, might have come to another conclusion. I have very little hope, after what the noble Lord, Lord Shepherd, has said, that the suggestion of the noble Lords, Lord Carrington and Lord Redmayne, and of myself will be accepted—the suggestion being that before proceeding on our halfpenny path the Government might take another look at the alternative solution, which is at once simpler, more convenient and more in line with what other countries have done or have decided to do.
6.22 p.m.
LORD AIREDALE: My Lords, I am another supporter of this Motion. If it were true when the noble Lord, Lord Carrington, said it, that there was not much left to be said after the noble Lord, Lord Redmayne, had spoken, it must be even truer now. I have very little I feel I can usefully add to the debate, but I should like to say a few words about this all-important international case for the pound, as it is called, because this would seem to me to be the most important matter that we are discussing.
More than anything else in the Halsbury Report I was surprised by a single sentence in paragraph 39 of the Memorandum of Dissent by the two dissenting members, which says:
"The Bank of England advised that there was nothing to be gained by taking direct evidence from foreign bankers on the 'international' case for the pound, pointing out that, while some foreign bankers would favour retention of the pound, others would minimise its importance and, in the end, an act of judgment would still be required."
Far be it from me to pick a quarrel with the Bank of England, I whose father served that great institution as a

835
director for 24 years, but I simply do not understand this argument at all. I should have thought that it was a very good argument against having this debate on the subject in your Lordships' House, because, of course, one of the tiresome things about debates in your Lordships' House is that some noble Lords say one thing and other noble Lords another and, in the end, an act of judgment is still required. I wonder what would be thought if learned counsel, opening a case in the High Court, were to say to the Judge, "My Lord, my learned friend and I find that among the witnesses we are proposing to call before your Lordship some will say one thing and others will say another. Therefore we do not propose to call the witnesses because, of course, in the end an act of judgment on your Lordship's part will still be required."
I find this argument "ununderstandable", if that is a word in the English language, and I should like to know whether Her Majesty's Government have themselves filled in the gap that is shown here. Have the Government, since the publication of the Halsbury Committee Report, themselves taken the opinion of foreign bankers as to whether a proposed new 10s. unit would cause confusion internationally or not? The Bank of England have said that some would minimise the importance of the change from the pound unit. It would be interesting to know who these are, and who are the foreign bankers who would wish to favour retention of the pound. If Ghana and the sheikdoms of Arabia were to come down on one side of the fence and Western Germany and the United States on the other, that would be useful evidence upon which the act of judgment which is eventually required could be based.
I cannot help feeling that the two dissenting members of the Committee are quite right when they say in their paragraph 42:
"We believe that the City does itself less than justice by suggesting that a large section of foreign customers might take their business elsewhere…"
I just do not believe that the service which the City renders to the rest of the world is so marginal in the advantages it gives that that service will no longer be in
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demand just because we had adopted a decimal system by falling into line with a great many other countries, one which required multiplication or division by two in order to convert the dear old pound, which everybody understands so well, into the new unit.
I should like to say a word or two about the Government's own White Paper in which they deal with the international case for the pound, and then I will sit down. The White Paper on this part of the case is divided into three paragraphs. The first, which is much the longest and which takes up about a third of the page, sets out the importance of the pound sterling internationally, and I do not think anybody disagrees with a word of that. Then the next paragraph, paragraph 31, begins:
"Witnesses…argued before the Halsbury Committee that to change the name or value of the pound would jeopardise the goodwill that is embodied in it…".
No doubt that may be so, but of course this Motion does not seek to change the name or value of the pound at all. Admittedly the noble Lords, Lord Carrington and Lord Sherfield, have advocated to some extent a new pound worth 10s., but this Motion does not suggest that. So far as this Motion is concerned, all we are left with of the Government's case as stated in their White Paper is paragraph 32, which consists of only four lines and a bit, and it begins:
"There is no doubt that a change in the major unit would inconvenience a lot of sterling users who are not concerned with the domestic arguments…".
No doubt it will; but it will not inconvenience them nearly so much as it will inconvenience the users who are concerned with the domestic arguments.
Of course, changes of this kind cause great inconvenience at the time. The noble Earl, Lord Halsbury, recollected the reform of the calendar in 1751. They thought it was terrible at the time; they thought they would never get over it; but they did get over it and handed down to us a much more satisfactory calendar than Julius Caesar had handed down to them. And if the noble Lord, Lord Merthyr, succeeds in pinning down Easter, we shall hand down to posterity a very much more satisfactory calendar than we have inherited even from 1751.

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The White Paper on this subject concludes:
"…it would be idle to claim that a change could benefit the international standing of sterling; if there were any effect at all it might prove to be an adverse one."
I would end upon this note, and ask Her Majesty's Government: are they really serious about their argument on the international case, when that paragraph ends:
"…if there were any effect at all it might prove to be an adverse one."?
6.31 p.m.
BARONESS ELLIOT OF HARWOOD: My Lords, we are suffering from a lack of time to-night, and perhaps that will improve all our speeches, because I am sure we all know that if we could only speak shortly we should speak better. However, I am sorry that circumstances have curtailed the time at our disposal to the extent to which we are suffering to-night, because this is an extremely interesting and important subject and, as always, we have in your Lordships' House many great experts. This is, therefore, an opportunity to hear their views as well as to air our own.
I am delighted that the noble Lord, Lord Airedale, who spoke before me, has drawn attention to the Minority Report in the Report of the Halsbury Committee, because it is on the Minority Report, and also on the influence which that has in the world in which I am working at the present moment, that I am basing my speech. Of the speakers who have spoken so far, I think that the noble Lord, Lord Shepherd, was a little unnecessarily concerned about the records of the past, because what we are interested in is the future. We can do nothing about the records of the past. They are there, and what we are interested in is what is going to happen in the future, what we are going to do at an absolutely crucial moment—which is now—about something which is going to take place in four years' time.
One of the curious things about this subject is that what is going to happen has not really got round to the general public. On the whole, the general public is really not aware of what is proposed by the White Paper and by the Government at the present time. Perhaps that is hardly to be surprised at, since nothing
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is going to happen for four years and most people are so busy trying to make decisions which affect them in the next week or month or couple of years that they have not really got round to the thought of what is going to happen in four years' time. Nevertheless, it is extremely important that we should draw the attention of the public to what is going to happen, and see whether or not after the speeches we have heard, particularly the speech of the noble Lord, Lord Shepherd, we can persuade the Government to think again on this matter.
One of the points which has struck me very strongly recently is that, having published the White Paper, having had one or two discussions on the television and the wireless, the attention of the public is now focused on this subject in a different way. But it still remains a very small proportion of the public who realise what is going to happen. Yet it is a moment when the public should be really interested, and when they really would understand, because in the last ten or twenty years millions of people have gone abroad to countries where decimal currency is the usual thing, whether it is Canada or the United States, or whether it is Europe. People have become quite accustomed to the decimal currency, and I believe that they would not be worried very much if our currency were to be changed to the system which they understand and know and appreciate and handle when they go abroad for their holidays.
But, in fact, according to the White Paper, the currency which we are going to embark on is not that kind of currency at all. It is a currency in which, as the noble Earl, Lord Halsbury, has been trying to explain, we are going to try to take the non-decimal system which we have at the present time, keeping the nomenclature and adding what is called the new penny. At the end of the day we shall be producing something which is going to be extremely costly, and yet, quite honestly, I do not think it will be a proper decimal currency of the kind in which the currencies of Europe and elsewhere are calculated.
We have heard about the heavy unit, and we have heard various criticisms. I think those criticisms have been answered, because, even if we take our 10s. unit as our major unit, that is a

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great deal heavier, in the sense of currency, than any other currency in Europe to-day. It is heavier than the dollar. I think the heavy unit argument is one which we can really discount. The point has been made that, orginally, great stress was put upon the international importance of keeping the pound and adopting the pound/cent/half-cent system. That argument has swung around now, and people are talking in terms of not stressing the international so much as the internal transactions.
It is important that we should consider the new currency in terms of the everyday activities in this country. The Report of the Halsbury Committee points out that 40 per cent. of all the weekly transactions in this country involve very small amounts of cash, and under the 10s. system these small amounts are easily identified. The noble Lord, Lord Carrington, pointed out some of them, as did other noble Lords. Anything costing 1s. will cost 10 cents. A 4d. stamp will cost 4 cents. A loaf of bread which now costs 1s. 6d. will cost 15 cents. Indeed, under the 10s. system the 6d., 1s., 2s., and 2s. 6d. coins will all be clearly recognised as 5, 10, 20 and 25 cents. This will be extremely convenient for the vast majority of people who every week carry out transactions in very small sums indeed.
Some facts are given in paragraph 24 of the Minority Report. There are 20 million families in the United Kingdom, and each family is involved in 100 cash transactions a week; that is, day-to-day payments over the shop counter, to the milkman, to the insurance man, on the bus, in the cigarette slot machine, at the pub, the football ground, et cetera. This makes a grand total of over 2,000 million cash transactions a week in Britain, and 95 per cent. of these transactions—a figure of 1,900 million—are in shillings and pence, and not in heavier units at all.
If the pound is kept, the figures involved in these transactions will be unrecognisable when converted from the pound system into the pound, new penny, halfpenny system. Then 17s. 6d. will become 87½new pennies, 13s. 6d. will become 67½new pennies, and even the simple 5s. will become 25 new pennies. Under the 10s. system they are easily recognisable, because 17s. 6d. becomes
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1·75 of the new units, 13s. 6d. becomes 1·35 of the new units, and 5s. becomes 50 cents, all of which are extremely simple. The noble Earl, Lord Halsbury, said just now that it would be quite easy for the public to learn the new and complicated system. Of course, you can learn anything if you set your mind to it. But the ordinary shopper, the ordinary person who is going to use this currency, will find it far easier to identify 17s. 6d. with 1·75 new units, 13s. 6d. with 1·35 units, 5s. with 50 cents and so on. This is why I feel very strongly that the 10s./cent system is one which would greatly ease all the ordinary transactions which are carried out in this country.
Under the other system, the pound/half cent system, it is proposed to use the word "penny"; but, of course, it will in fact be nothing of the sort. It will be 2.4 pennies as the public know it; and even the halfpenny will not be the halfpenny we now know, but approximately the present penny. This is all quite unnecessarily confusing. As I see it, the whole point of the decimal system is that it should fit into decimal arithmetic—5, 10, 20, 25, 50, 100. That, in fact, is how the people understand it, as they do quite well when they go abroad. As I have said, in the last twenty years we have had many millions of people going abroad and understanding that system, and knowing what it means. Even if one does not travel abroad, the cent system is far easier to understand against a coin which ordinary people know, as has been pointed out already.
I agree with the noble Lord, Lord Sherfield, about names. I do not think there is any particular reason to be worried about names. I feel that to use a new name—and various names have been suggested—would be perfectly in order. If you want to talk about a "noble", which I believe is one of the names which has been suggested, I see no reason why you should not; but I should be perfectly content to do what the French have done, and as the noble Lord, Lord Carrington, has suggested; that is, to talk about the "new pound". After a few years the "new pound" would take its place in the world currency, just as the new franc does today. We read in the papers of the negotiations going on at the present time to get us into the Common Market. To change over

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at this moment to a currency which is not in step with that of other European countries would surely add to our difficulties. I think that this is an opportunity to identify our currency with that of Europe and other countries, such as Canada and the United States, in a way which would be very helpful to a policy which, on all sides of the House, we are anxious to see develop.
Mention has been made of the machines which will have to be used once the currency has been changed. I understand that it would be much better for us to have machines which are interchangeable with European currency—that is to say, truly decimal machines—rather than to have machines which would need to have the additional halfpennies included in their construction. Although perhaps this is not a very large field, we might well be able to export quite a number of machines of this kind.
The noble Earl, Lord Halsbury, said that opposition to the pound system had been organised ever since the very beginning of his Inquiry, in particular by the retail trade. I have been enormously surprised and impressed, my Lords, by the fact that ever since my Council took a lead in getting support for the 10s./cent system—and that is not very long ago—overwhelming support has come from an enormous number of people, of which the retail trade is only a very small proportion indeed. We have had response from (I think it was the noble Lord, Lord Carrington, who gave the list; I have it here) chambers of commerce, all the Co-operative Unions, the Economic Development Committee of the Distributive Trade, the National Chamber of Trade, the National Federation of Consumer Groups, the grocers, the Supermarket Association, the Multiple Shops Federation, the T.U.C., the Confederation of British Industry (to which reference has already been made), the National Association of Master Bakers and Members of Parliament in all Parties.
This, I think, shows that this is not a matter involving merely those people who are engaged in buying from one side of the counter. I think it covers the whole range of British manufacturing, distributing, buying and services. I hope that this concentration of all those interested in the 10s./cent system, which we are so anxious should be recon-
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sidered, is something which will impress the Government, and will make them think again. I forget which Prime Minister it was who is supposed to have said:
"Nothing is irrevocable unless it is persisted in".
Many people have appealed to the Government to think again. I know it is very difficult—the noble Lord, Lord Shepherd, made a very eloquent plea about this—to go back on something that you have firmly said you are going to do. But, after all is said and done, this matter has not been discussed in the House of Commons, this is the first time it has been discussed in your Lordships' House, and there are still four years before this change comes into effect. I hope that our appeals to the Government, which are on non-Party political lines and are simply in the interests of a wide range of the community, will not fall on completely stony ground.
A third of the membership of the Halsbury Committee signed a Minority Report. There were only six members, two of whom made it perfectly clear that they were in favour of the 10s. system and were not in favour of the pound system. That is a very large proportion of any Committee. It is true that there were only six people, and therefore two is a very small number; but there is a gathering momentum among those people interested in this matter who are turning towards the findings of the Minority Report. I look at this matter from the point of view of common sense and simplicity.
It was interesting to hear from the noble Lord, Lord Carrington, that he was in Australia when the changeover took place and that, although he had some criticism of the length of time the changeover was allowed to operate, he had no criticism of the fact that the 10s./cent system was the one adopted. Furthermore, if both New Zealand and South Africa are proceeding on the same basis, surely it would be extraordinarily unwise of us, the last of the great currencies to come into line, to adopt a different one. This is an occasion when we have an opportunity to be co-operative, an opportunity to follow the lead that has been given. I beg the Government to be brave—because it requires great courage

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to say, "We are going to think again; we will consider it all over again"—to be fair-minded and, before it is too late, to change their minds (because they have the time now, whereas in 1971 we shall again be completely out of step with the rest of the world) and not change into a currency which, in my opinion, will be very detrimental at least to the ordinary working people of the country, who are the people involved in the largest number of transactions. I beg the Government at this juncture to think again and to realise that this is not a political issue at all. This is something which transcends all political Parties. All we want to do is what is best for the country, and the 10s. system is so overwhelmingly the best that I hope that the Government will think again.
6.49 p.m.
VISCOUNT HALL: My Lords, I hope that the noble Baroness will forgive me if I beg the Government not to think again, possibly for reasons completely different from hers. The noble Lord, Lord Redmayne, and those in support of the 10s. unit, have put forward some valid points of logic and mathematical convenience, but I am afraid it is clear to us all that their arguments specifically apply only to domestic issues here in Britain. Neither logic nor convenience carry the day in international monetary matters. With all due respect to the noble Lord, Lord Airedale, the atmosphere is always much too fickle for that—as we all knew to our cost last July, and as we know from the repercussions since.
Accordingly, my views of this subject, which I have been following with some interest for many years, are that those advocating the 10s./cent unit are in all probability playing with fire—all £150 million a year of it. The choice between the heavy and the light unit of currency is a crucial one in the assessment of the risk to our international survival—which is a very real risk. And the domestic issue of whether the choice lies with the day-to-day convenience of us living here at home is almost wholly irrelevant to the effect of the choice between a pound or 10s. upon that ageless old ogre, our balance of payments—unless the noble Lords advocating the 10s. unit really have in mind and are talking about a very for-
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ward currency union, with its ensuing guarantee against a devaluation loss. But I doubt whether they are talking in this context to-day.
The Government have declared their view that the international case is important, though not in itself decisive. My Lords, the effect of a light unit would prove to be so vitally important in degree of risk to the well-being of this country that the choice of the pound is unequivocally required to be absolutely decisive—and for the simple reason that the world does not owe us a living; we must work for it; and the pound note as it stands now is vital to us all abroad. Unlike others, I see her, in her old age, not decrepit, as has been perhaps suggested here, but young, with a secret vigor and a pulse like a cannon sounding around all the trade centres of the globe. Indeed, the pulse of the pound note is almost like the pulse of the human body; it cannot easily be doubled. If the pulse of any noble Lord here to-day were to go up from about 70 to 140, he would be very uncomfortable indeed. Certainly, there is no growing body of opinion abroad in favour of the 10s. unit.
Furthermore, we reap the benefit of its long usage, its stability and its fundamental honesty. The one pound note is not ours alone to tamper with. It is guarded, kept and bargained for in trade, kept in currency reserves, used in debts and insurance, almost all around the globe by people who, in vast majority, have never set foot on these shores and to whom the 10s. or any other unit of British currency means less than nothing at all or makes as much sense as the difference between the American dime and the Australian 10 cents does to most of us here to-day.
My Lords, that is what this debate is about: the pound sterling or the English dollar. I would suggest that the correct phraseology for the Motion put down to-day is:
"To call attention to the advantages of the English dollar";
for already circles abroad are talking of the choice between sterling and the English dollar. Your Lordships will note that there is no reference to the pound sterling—only to sterling and the English dollar.
Great play has been made of the success of the rend and the Australian

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dollar, quite properly so in their own fields; but our currency is on a completely different international plane. Already malicious commercial tactics and lay recognition of the rand and Australian dollar tend to draw those two currencies toward parity with the United States dollar, so that those currencies are talked of and dealt with in discount terms approaching the United States dollar equivalents.
One can well imagine, in the international commercial field, a commercial trader or entrepreneur who is told that a project will cost one million Australian dollars. He immediately thinks of a million American dollars. When the time comes for the signing of the document he finds that it is 1,143,000 U.S. dollars, and immediately the bargaining starts. I have seen deals done in 1,050,000 dollars. Let us not forget, too, that few of us who have studied the crescendo of development of modern industry abroad are in any doubt—and this is a serious note—that it is at least feasible to have a great conspiracy to undersell the trade of England and to capture a large part of our financial market of £50,000 million a year.
Fundamentally, Britain's future prosperity depends almost wholly upon our ability here to bring about a radical and basic improvement in our balance of payments. This calls for a continuous and jealous guard by all of us in this country over the whole sterling area and its code of behaviour; and the pound note is the symbol of that code of behaviour. Denude the sterling area of this symbol of fundamental honesty, dating as far back as the Lombardy goldsmiths of the fifteenth century, and the sterling area becomes a pseudo-dollar zone. We not only endanger an income of £150 million a year but at this moment would also risk a tremendous asset in leverage of fiscal advantage upon countries for better terms in bargaining; and this is very relevant in the rounds of negotiations being strenuously pursued to-day. Destroy the pound sterling and we get nothing of substance in return. The effect could be only to accelerate inroads into the sterling area by the U.S. dollar in international trade.
My Lords, in Parliament we may have the right to disturb our people here at
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home, but we have no right, in this changing world, to reject the immense advantage of their heritage of the pound sterling, now better known in many places than the Union Jack. Sterling is the pound. The English dollar is as nothing.
7.0 p.m.
BARONESS BURTON OF COVENTRY: My Lords, I am particularly grateful to the noble Lord, Lord Redmayne, for introducing this subject. I am particularly grateful because it gave me the opportunity of hearing the noble Earl, Lord Halsbury, for the first time. I am quite sure that if I had had that pleasure some time ago, I should not be as ignorant as I am sure he will now think I am about to be. I enjoyed the speech of the noble Earl very much, and I am sure that the rest of your Lordships did, too.
I have come to this debate with a completely open mind. I know that often—I myself have been guilty of this—we feel this to be the case when it is not so; but really and truly I have come with an open mind to-night. I tried to read what material was available, and the result was, I am sorry to say, that I got myself into a complete fog. I got bogged down with different systems and different coins, with proposals and with alternatives. It seemed to me, having got myself in that state, that the only way out of the fog was to find out what were the questions that I wanted answering to make up my own mind. The questions are very simple ones. They are, first, which would be the better, a pound unit or a 10s. unit? The second, do we need a coin less in value than 1.2d.? And third was the fact that I have considerable respect for many of those people who believe that the Government proposal is a mistake, but naturally (I say this to my friends on the Government Front Bench) I wish to support the Government. I should like to think as they do, and I am hoping that my noble friend, Lord Winterbottom, when he replies to the debate, will be able to give me very convincing reasons for rejecting the 10s. unit: and you cannot say fairer than that. These questions have got me out of my fog and now it is up to the Government to answer them.

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My Lords, it is obvious that, whichever system is used, good times are coming to the business machine industry. As I understand the present attitude of that industry it is anticipated that the transition will go much more smoothly than was expected some little time ago. Under the pound system as proposed by the Government, the White Paper makes plain that shillings and florins will be retained as 5 and 10 new penny pieces. As I understand it, this means that about 11 million gas and electricity meters now in use will not have to be converted. I do not know how many gas meters take sixpences, but these will need conversion, as the 6d. is to disappear. If I remember correctly, the Halsbury Committee estimated that there are about 1.8 million machines taking pennies, sixpences or half-crowns which will require some conversion. Among these are telephone call boxes, stamp machines, coin sorting and counting machines and some vending machines. All these will be affected. I am not competent to argue about the conversion costs, but certainly conversion before 1971, or perhaps "pre-conversion", as we might call it, will be cheaper than after. I think there is no doubt among any of us who have read the White Paper that whatever the cost, the Government have no intention of meeting it. While there may be exceptions, it is implied in the White Paper that they will be very exceptional exceptions indeed.
I do not know whether my noble friend, Lord Winterbottom, can tell the House whether it is true that those organisations incurring the highest cost stand to gain most in the long run. I think it would be quite helpful to know. I have heard a good deal of discussion from various sections of industry about what the cost of conversion would be, and if it is true that those incurring the most will stand to gain the most in the long run I think it would substantiate what the Government have been saying.
As long ago as December 13 the Financial Times had an article about the work done on this matter by the National Cash Register Company. I was interested to note four points that it made. It stressed, of course, that the advantages of buying now machines with a built-in capacity for conversion are enormous. It stated that, on average, the cost of the
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new machines would be 2½per cent. more than the old ones, making the point that over the next few years about one quarter of the business machines now in existence would have to be replaced anyway. It made the third very obvious point that according to existing trends there would be considerable development in this market, and it stated that by 1971 as many as half the machines then in use may be of a type which could be converted very easily on the spot. The remainder, according to the National Cash Register Company, would be as much as 25 per cent. cheaper to convert before the actual changeover than afterwards. Obviously, companies such as these are interested parties; but those of us like myself who have no specialised knowledge of this subject are dependent on such organisations, and I should be glad to hear whether my noble friend agrees with the statements which have been made.
From all this it would appear as though the business world is indeed going to be happy. But now I am coming—I was going to say "down"; I am coming to what the noble Baroness, Lady Elliot of Harwood, was talking about—to the customer and the shopper. What about them? As has been said already, the retail trade is certainly not pleased that its appeals for a 10s./cent system have been overruled. On the other hand, some quarters feel that the job must now be got on with. This, I think, is difficult to evaluate, because opinions may have changed; but I noted from the Drapers' Record of December 17 that the Drapers Chamber of Trade was still adamant for the 10s./cent system, while the Retail Distributors Association, also in favour of the 10s./cent system, feels that the time has come to accept the Government decision to adopt the pound unit and settle down to the many problems which will arise in the changeover.
The first question that I should like to ask the Government is: what do they feel about the cash handling difficulties which some people consider will arise as a result of replacing the 10s. note by a coin and the introduction, therefore, of a three-tier coin structure? As my noble friend will know, this is referred to in paragraphs 46 and 47 of the White Paper. It is referred to, I think, as quite a drawback. After all, nobody in this House

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will dismiss lightly comments from the noble Lord, Lord Sieff, or the noble Lord, Lord Sainsbury, on the matter of retail distribution and selling. If they believe that the pound system is not a good one, I, for one, want very convincing reasons from the Government to go against the acknowledged expertise of people like these.
The Government do concede that the transitional period for the pound will be about two or three months, for housewives to become accustomed to it, whereas the transitional period for the 10s./ cent will take about one month. They also, as I understand it, concede that under the 10s./cent system the shilling and the penny shopping prices are easily translated, the coinage changes are fewer and there is no fraction of the minor unit. Those concessions the Government make. The Government contend that although they consider the Halsbury Committee overstated the international argument and understated slightly the domestic one, the Committee were right in their decision about the pound.
In common with other Members of your Lordships' House I read the Adjournment debate held recently in another place, and the arguments put forward by the Minister in reply were, of course, the same as those put forward by my noble friend, Lord Shepherd in the debate to-day. I must say that I found myself unconvinced by his speech. I pretend to no knowledge of the financial aspects but I was not convinced. The first reason was that the pound is of great psychological importance. Everybody knows that. It is something that I would not argue against, if given a convincing reason. But I am drawn to the suggestion of the noble Lord, Lord Carrington, about the new pound. I can see no reason why that is not feasible. I find the second reason, for want of a better term, to be unprogressive and stuffy—that all existing records would be invalidated if there were a change to the 10s./cent system. I appreciate that, but it seems to me to be a reason for never doing anything. I should not like my Government to advance that as a reason.
The next reason was that a heavy unit results in greater efficiency. I accept that, but I was interested in what the noble Lord, Lord Sherfield, and, I think, the noble Baroness, Lady Elliot of
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Harwood, suggested, that even with a 10s./cent unit, we should still have a heavier unit than most of the other countries in Europe. The last point was the international case, which is set out in paragraph 30 of the White Paper. I will not weary the House with repetition. It does not seem to me that, if we had a 10s./cent system, we should lose the one-third of the world's trade which is settled in sterling.
I come to three simple matters, on which I should be glad if my noble friend could help me. To come down to earth, I use the London Transport Underground and bus services daily. I do not know the reaction of the Government and of the Minister of Transport to what has been submitted by London Transport. From the information I have, I gather that £1,250,000 is collected every day and paid over by the staff in weighing bags. London Transport state that some 8 million cash transactions are handled daily by their services, and of these 40 per cent. involve minimum fares, as mine are. What is the Government's reaction to the statement that some fares may rise by 20 per cent. as a result of the introduction of the pound system?
The next point is that I gather that in fixing prices in certain industries, it is essential to have a halfpenny unit. I am told that a larger minimum unit would have an inflationary effect when price increases were made, particularly in those industries which operate on the basis of a small profit margin on a large turnover. When I look at the letter in The Times of December 12 last dissenting from the pound system, which I have here in my file, I note among the signatories my noble friends Lord Sainsbury and Lord Sieff. I only wish that we could have had the pleasure to-day of hearing these noble Lords on this point. I think that we all appreciate that for those industries dealing in bulk in small quantities sold directly to consumers, an increase as large as 1.2d. in the retail selling price can represent a very substantial percentage change. I should be glad if my noble friend would comment on that.
I have had a chance of talking to some people connected with negotiating bodies. An economist—I hasten to say a practical economist, by which I mean one I can understand—told me that in dealing with the public and on negotiating

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wage rates he considered it vital to have a small unit. People concerned with wage negotiations tell me that although it is not strictly necessary for hourly wages to be negotiated on the basis of the smallest unit of currency in circulation, in practice this tends to be the case. They feel that the proposals now put forward by the Government will be inflationary in this particular context, and that for some considerable time a unit roughly equivalent to the present halfpenny will be necessary. What do the Government feel about wage rates and the small unit?
I have now come to the end. My last question is a simple one. I have supported entry into the Common Market from the very earliest days. Can my noble friend tell me categorically when we get into the Common Market (I am not going to say "if", but "when") which system will be the better? I do not know, and I should like to know. I am here waiting to be converted to my Government's point of view, if they will answer my questions on cash handling difficulties, on London Transport, on price fixing and the necessity for a halfpenny unit, on negotiating bodies and the small unit, and on the Common Market.
7.17 p.m.
VISCOUNT BRIDGEMAN: My Lords, I resist the temptation to follow the noble Lady in the interesting points she has raised because I want to approach this matter from another angle. Before I do that, I should like to add one suggestion to what has been said about the changeover of business machines. There are two problems connected with that: one is worry, and the other cost. The noble Lady dealt more with worry than with cost, but I hope that the noble Lord on the Front Bench opposite will bear in mind the necessity of adjusting the rate of depreciation allowances to the period which is necessary to run off the outdated business machines.
I did not get up to talk about that sort of thing. I venture to take part in this debate because it so happened that I was in South Africa in 1961, when the change to decimal currency took place, and in Australia in 1966 at a similar moment in the history of their currency.
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The first occasion was a pure coincidence. The second was by design, because, like my noble Leader in front of me, I am a director of one of the big Australian Banks and was sent out by the Board to be there at the time.
My only quarrel with the White Paper is the question of the unit of currency: the pound or the 10s. system. Has the experience in South Africa and in Australia, and that facing New Zealand, which is to decimalise this year, given any pointer to the idea that the 10s. system was wrong for them and therefore will be wrong for us? Both those two countries carried out a most detailed technical preparation before they started to decimalise. South Africa made the running, and Australia had the advantage of being able to send a high-class technical team to watch the South African experience. New Zealand, apparently, has had no hesitation in copying South Africa, and also in copying Australia if, indeed, any New Zealander would admit that he was going to copy Australia in a matter of any kind.
Because the technique was so good, the amount of trouble and difficulty was much less than the wildest optimist in either country had expected. It happened that on the Saturday when the decimal currency was introduced in South Africa I went for a long motor trip to the Kruger National Park. I noticed that all the attendants at the petrol stations were somewhat confused with the currency; but I also noticed that what mistakes they made were to their own advantage. In Australia, the whole thing ran off fantastically smoothly: much, I may say, to the disappointment of the Press, who the following week were only too glad to report some slight difficulties, which I think they had encouraged, with Greek café proprietors and Italian fruit vendors in Sydney. That, as far as I know, was the extent of the difficulty.
As I have said, South Africa decided on the 10s. unit first. I do not know at this distance of time what the deciding factor was, but I imagine that the considerations they had in their minds must have been much the same as those in the memorandum on the cent in the Halsbury Committee's Report, and also the need to keep the future cent in some sort of relationship with the existing penny. Nor can I remember that in

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Australia there was any serious difference of opinion as to the desirability of following South Africa in adopting the 10s. unit. Certainly I could not accept the view which I think was put forward by the noble Viscount, Lord Hall (he has now left the Chamber), that experience in South Africa and Australia has no real relevance to the problem with which we are faced to-day. Nor, indeed, am I going to be very much frightened by some of the bogies which the noble Viscount waved at us from the Benches opposite.
After all, Australia, to take that country alone, has a population of about 12 million. Both Australia and South Africa have considerable foreign trade. Both Australia and South Africa employ, with the exception of the biggest businesses, machines as big as the ordinary banking house or big commercial house needs in this country. That I know, because I have seen them. Equally, both Australia and South Africa, and particularly South Africa, have sufficiently developed and sophisticated money markets to test the sort of problems which are likely to occur here when the currency has changed. Therefore, it seems to me that the differences which are likely to occur between their problems and ours are not differences of principle or fundamental differences of any kind, but the sort of differences that occur when you take a programme and multiply it by four, five or six, or whatever is the necessary number to calculate the difference in the volume of trade. If things had been otherwise, I am certain that the matter would have come out, in some way or other, "in the wash" in one of the countries that I have mentioned.
But Australia may have had another reason for deciding on 10s. and not the pound: that South Africa, having made the running and having decided for 10s., had thereby created strong arguments against having two different denominations among principal countries in the sterling area. The only disputes in Australia that I heard were over the name of the unit, which has already been mentioned in this debate. As I say, I have never heard any serious expression of regret at the decision taken. Nor have I heard of cold feet being experienced in New Zealand when they received copies from this country of the Blue Paper (Cmnd. 3164).
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The noble Lord, Lord Shepherd, said that he had considered Australian experience. Perhaps the noble Lord who is to reply will refute, if he can, anything of what I have said about Australian and South African experience, bearing in mind that, although I may be wrong, at least I am talking at first hand. The Halsbury Report, as we have been told, came out in 1963; that is to say, after the South African decimalisation in 1961, and before the Australian action in 1963. Therefore, although the Halsbury Committee knew before they reported that the Australians had decided to decimalise, they were short of three years of Australian experience between 1963 and 1966. The noble Lord, Lord Shepherd, said earlier that there were no new points to cause the decision to be altered, but I think he is bound to admit that there was room in those three years for new experience, and that experience, as I put it to your Lordships, was in favour of the 10s. unit.
At this point, I feel that I must say one or two things about the structure of the White Paper, bearing in mind what I have said about Australia and New Zealand. I find it quite astonishing that no attempt is made anywhere in the White Paper (in Chapter II or Chapter III, for example) to let the public know anything about the Australian and South African experiences, bearing in mind that the Halsbury Committee could not possibly have commented on them, because they had not happened. In those circumstances, it makes it even more astonishing—and I think I would even say objectionable—that, having failed to put the case for the Australian and South African experience, they then go and burn their boats publicly in paragraph 11 of Chapter III.
My noble friend Lord Sherfield, who I see has now left the Chamber, mentioned this matter, and I want to reinforce what he said. When Ministers and their advisers are on record as having taken a firm decision—in my submission, a decision which ought not to have been taken firmly until the House had been consulted, and should not have been taken firmly on the merits of the case—whythen make it difficult to retreat from a position which, by all the sounds of the debate this afternoon, is rapidly becoming untenable? This, I think, is a defect of first-class importance.

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I, for one, have not been convinced by anything that has been said to the contrary this afternoon. I believe we are entitled to a fuller explanation of the matter from the standpoint from which I have looked at it; and I feel that we ought to take note of the fact that, so far as I know, there has been no flight from the rand or from the Australian pound because they decided to choose 10s. and not 20s. as the unit. I think we should have known by this time it there had been any difficulty, particularly as so many dealings in gold go through the South African financial system. I think it is probably perfectly true that a certain number of Australians and New Zealanders will go on talking in pounds for a while. But they have not had nearly enough time to get used to something else: it will probably take a generation. Some of your Lordships may have gone to France and bought something by weight in a French shop. If so, the lady behind the counter will probably have told you that the price is something like deux francs la livre. It may be thought that Napoleon was wrong to decimalise the French currency at the end of the 18th century, but it does not make me think so.
There is one other point I should be interested to know the answer to. At Strasbourg, and again in the interviews which the Prime Minister and Mr. Brown have had with General de Gaulle, a great deal of thought appears to have been given to the position of sterling as the reserve currency if we are to go into the Common Market. I have seen no report in the Press that, in connection with that point, the question of a 10s. or a pound unit was discussed, or any suggestion, either at Strasbourg or by the French, that our reserve currency would be weaker if 10s. were to be the denomination, and not the pound. But, my Lords, I am straying away from the Australian and South African experiences, and I will leave it to others to continue on those lines of thought.
To conclude, all I would say is that those experiences I have had in Australia and South Africa cause me to be a strong supporter of the Motion in the name of my noble friend Lord Redmayne.
7.32 p.m.
LORD RAGLAN: My Lords, much of the debate this afternoon has necessarily
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been repetitious. I do not intend to repeat what has been said but to take up one or two points. It has been suggested, I think, by the noble Lord, Lord Shepherd, that decimalising the currency is rather a go-ahead, modern kind of thing to do. It is, in fact, a far older system than our present pound sterling system. It goes back, if I may say so, to the "year dot"; and decimalisation of our currency is only a matter of changing one tradition for an older, rather tyrannical tradition, in which one cannot divided ten by three or by four to leave a whole number, which is a great pity; it detracts greatly from the system.
The second point is that Lord Redmayne (who is not in his place at the moment) said something about not selling our souls to the Americans if we called our new penny a cent. But I think, as a matter of fact, he will find that the Americans in everyday life do call their cent a penny. I myself am entirely convinced by the arguments of the noble Earl, Lord Halsbury. I think his was an extremely lucid, interesting and very important speech. I can find nothing to add to what he has said, and I beg your Lordships' leave to resume my seat again.
7.34 p.m.
LORD SINCLAIR OF CLEEVE: My Lords, may I say how grateful I am to my noble friend Lord Redmayne for introducing this Motion. In presenting the case for the 10s./cent system so clearly, he has thrown light on many facets of this important question, and it is, I believe, highly desirable that your Lordships' House should have an opportunity of considering these issues before the Government's proposals are finally crystallised in a Bill—a Bill, my Lords, which it is rather refreshing to think of as a Bill which may sound like a Money Bill, that rara avis among Bills, but which, without offence to Parliamentary Rules or Privilege, can be freely debated in your Lordships' House.
In the White Paper the Government have made very plain that the lines on which they are intending to frame the legislation necessary to bring into force a decimal currency in 1971 are substantially the system recommended by the majority of the Halsbury Committee. Many tributes have been paid to the noble Earl, Lord Halsbury, and the

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members of his Committee, for the extreme thoroughness and clarity with which they examined the problem and analysed the merits and demerits of the various alternatives. Particularly, perhaps, because I am going to voice a feeling of regret that may be tantamount to a point of criticism, I should like to say that I very sincerely join in the general tributes.
The point of criticism is that, having weighed the arguments of the international case for the pound against the associability case for the 10s., and having by a majority of 4 to 2 come down in favour of the pound, the Committee did not, in their published Report at least, set out fully the arguments for and against the pound/mil system in contrast to the arguments for and against the pound/half cent system. In expressing this view, I believe I am voicing an opinion held by many men in industry who have given serious thought to the subject, and I shall hope to develop the underlying argument later in my speech, an argument which, I hope, can stand up to the mild ridicule with which the noble Earl, Lord Halsbury, shrouded the mil a little while ago.
The noble Lord, Lord Redmayne, has called attention to many of the disadvantages of the pound/half cent system, and I would support him very much in what he said in that respect. I am afraid no system is without some disadvantages, but to those he has mentioned I would add the point that the pound/half cent system does not include the halfpenny equivalent, and could not do so without the complication of the ¼ cent. I recognise, of course, that Lord Redmayne and those for whom he speaks do not attach great importance to the question of the halfpenny equivalent in whatever system is adopted. Yet it is a factor not unimportant in many industries and it is possible without undue complication, impairment of the associability argument or infringement of the canons of pure decimalisation, to have the halfpenny equivalent, 0.5 of a cent, included in or added to the 10s./cent system.
The Halsbury Committee, having taken a great deal of evidence, concluded in paragraph 131 of their Report that on balance there was no strong reason for retaining the halfpenny equivalent, if the
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structure of a new decimal system would be sounder without it, and provided that its withdrawal would have no significant effect on prices. In paragraph 172 they concluded, again on balance, that:
"it would be wrong to allow the possibility of the price rises of the order we have mentioned to take precedence in our thinking over the need to choose the right decimal system."
These two paragraphs I have quoted are the concluding paragraphs of two consecutive chapters, Chapters IV and V, and the repetition of the phrase "on balance" indicates that there was a good deal of weight in the arguments for the retention of the halfpenny equivalent, but as the Committee saw it, rather more weight for the arguments against it. They do not question that it is of some value, nor suggest that it can be dispensed with as vestigial, like the farthing.
I accept the fact that there are numerous articles in the price of which the halfpenny used to appear which are now priced in multiples of ld. Yet there are still a great many which still have the halfpenny: for example, in beer, bread, confectionery, petrol, postage, sugar, and tobacco, the halfpenny still figures. Its abolition would mean, as I think the noble Baroness, Lady Burton of Coventry, said, that the minimum price change would be 1.2d., or more than twice the present minimum. Moreover, the halfpenny equivalent is commonly, though not invariably, used in negotiation of hourly wage rates, piecework prices, et cetera. There can be no question that to some degree the abolition of the halfpenny equivalent would be inflationary. What that degree is I confess is difficult to state with precision, but it is clearly appreciable.
THE EARL OF HALSBURY: My Lords, I do not want to interrupt the noble Lord, but in fact I did give the figure. It is a probable maximum of 3d. in £5.
LORD SINCLAIR OF CLEEVE: I thank the noble Earl. But can we, my Lords, in our present state afford any stimulus to inflation?
It is not irrelevant to point out that, despite assertions that the halfpenny is rapidly going out of use (and there is no question that in a number of ordinary transactions: for example, newspapers,

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bus fares—in England though not in Scotland—and detergents, it has gone out of use), the number of halfpennies in circulation on January I, 1956, was 874 million; on January1, 1961, it was 1,011 million, and on January 1, 1966, it was 841 million. To put those figures in perspective, the number of pennies in circulation on the same dates were 1,650 million, 1,490 million and 2,066 million. The conclusion from these figures is, I submit, that although over the past ten years the proportion of halfpennies to pennies has materially decreased, there are still a large number of halfpennies in daily use—in fact almost as many as ten years ago, though less than five years ago—and that to abolish the halfpenny is actually, as well as psychologically, inflationary.
It is true that Australia introduced the 10s./cent system without the half-cent; and New Zealand, we understand, is doing likewise. South Africa, too, introduced the 10s./cent system with the half-cent, and in many other decimal systems the halfpenny equivalent, or an even smaller coin, exists and, indeed, is an important coin. May I give your Lordships a few examples? In Germany the smallest coin, the pfennig (0.01 of a Deutschmark and roughly equivalent to our farthing), is numerically by far the most common coin in circulation. There are 3,400 million of them—approximately 58 per head of the population. The Netherlands have a cent, which is also roughly equivalent to our farthing, and there are 1,031 million of these coins in circulation, or 84 per head of the population. Denmark and Norway have the Ore, which is worth approximately one-eighth of a penny and is in considerable numbers—roughly 83 and 100 respectively per head of the population.
It is interesting, too, though not so immediately relevant to my argument, that there are a great many cents (or "pennies", as they are commonly called) in circulation in the United States of America. I have not been able to find statistics as to the precise number in circulation at the present time, and though I cannot say that my own observation entirely coincides with that of one of your Lordships, who said that he found the platforms of the underground littered with pennies in the evening, I
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do know that 3,384 million new cents were put into circulation in 1965, 3,652 million in 1966. From figures which have been obtained from the United States Treasury, cents and nickels in circulation to-day, together represent about one third in value of the aggregate of dimes, quarters and half-dollars, and the number of cents substantially exceeds the number of nickels. In short, my Lords, in the United States the cent is a significant coin.
It is clear that, quite apart from the consideration that the abolition of the halfpenny equivalent in this country is inflationary, its loss could be inconvenient, to put it mildly, in our trading relations with European countries. I suppose one must assume that it is conceivable that by 1971 we may be in the Common Market or have negotiated a basis for entering. If by that time our smallest coin is equivalent to 1.2 pence and many of our trading partners have coins in common use of a half or a quarter of that value, we should, in my judgment, be at some disadvantage in the matter of comparable shading of prices, or in the matter of applying comparable sales taxes if we should want to do so. I think there is little doubt that sales taxes are one of the factors which contribute to the retention, and the retention in large numbers, of coins of denominations equal to or less than one halfpenny. To decide now to abolish the halfpenny equivalent, and to adopt a system which makes its subsequent restoration difficult, would seem to be a mistaken policy as well as a declaration of lack of confidence in our ability reasonably to control the progress of inflation. We should thereby unnecessarily restrict our room for manœuvre, and the retention of some flexibility is important to us.
Since at the outset I made a brief reference to the pound /mil system I trust that your Lordships will bear with me for a few minutes more if I say a word in explanation of a system which to some ears may have a strange or even foreign ring. It is, in fact, essentially simple, and I believe that on a dispassionate analysis it comes nearer than any other to meeting what the Halsbury Committee described in paragraph 26 of their Report as "the eight features desirable in a decimal system", and certainly it

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retains what the Chancellor described as the first essentials of the pound and the penny.
In terms of coinage the pound/mil system has all the advantages which the noble Lord, Lord Redmayne, claims (and, If I may say so, rightly claims) for the 10s./cent system over the pound/half-cent system. Moreover, like the 10s./cent system it is pure decimalisation. Under the pound/mil system the penny equivalent (1.2 of the present penny) would be 5 mils; the 2.4 pence would be 10 mils; the equivalent of the sixpence (live new pennies) would be 25 mils; the equivalent of the shilling would be 50 mils and of the florin, 100 mils. If, on further consideration, it were decided to retain the halfpenny equivalent, a small 2.5 mil coin could be minted. The size weight and metal content of the 2.5 mil, 5 mil and 10 mil coins could be precisely those proposed in the White Paper for the new halfpenny, the new penny and the new two penny piece. The 2.5 mil piece, which could be called a "tanner", would be exactly the same size and metal content as the present sixpence. The same would apply to the 50 mil—the shilling—and the 100 mil—the florin.
The analogy with South Africa and Australia, and the comparative ease with which they have effected the changeover to an equivalent of the 10s./cent system is clearly an argument for a similar system here. Yet I believe that the arguments which the Halsbury Committee advanced, and the Government accepted, for the pound—what the White Paper describes as "the international case for the pound"—do not apply with anything like the same force to those countries as they do to the United Kingdom. If the Government feel, as I believe they cannot fail to feel, that there is great weight in the associability and convenience arguments which the noble Lord, Lord Redmayne, and others have advanced for the 10s./ cent system, yet maintain that the international argument for the pound outweighs these other arguments, I would earnestly urge them, even at this late hour, to consider the pound/mil system, which I believe comes nearer to meeting all the essential requirements than any other system.
The C.B.I. are giving further and very careful consideration to the proposals
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in the White Paper in the light of their previous survey and meetings of trade associations which took place last week, and the subject will come before Grand Council again next month. No doubt some of your Lordships will have seen in the Press a reference to a letter sent by the President of the C.B.I. to the Chancellor on Thursday last. For the record, I should like, if I may, to read that letter so that the record may be complete, and any possible misunderstanding avoided. The terms of that letter were these:
"Decimal currency. Since receiving your letter of November 21st, 1966, we have been studying the White Paper and engaging in further consultation with our membership. This consultation is not yet completed and the C.B.I. Council will be considering the matter again on February 15th. Meanwhile, however, I think I should let you know that it has become quite clear that the Government's present proposals are very widely opposed in industry on three grounds.

"(1) There has been since we addressed you on the subject last summer, a noticeable shift of opinion in favour of 10s. instead of the pound as the major unit, other things being equal.

"(2) The Government proposals do not achieve true decimalisation, involving as they do the use of a fraction (the new halfpenny) or a third column of decimals.

"(3) There has all along been a strong body of opinion in favour of the retention of a halfpenny equivalent for reasons set out in our submission of last summer.

"Clearly, to reconcile all these three requirements in one system is no easy matter, and indeed the 10s./cent system as now being advocated by the Consumers Council and others does not do so for it does not provide the halfpenny equivalent. We are therefore not yet in a position to make firm counterproposals to you, though I hope we may be after our Council meeting on February 15th.
"In view of the public interest in the C.B.I.'s views on this issue, I am proposing to make this letter public tomorrow."
I cannot, of course, anticipate what the C.B.I.'s final view may be, but I can state my personal belief that if the Government were to be convinced that, important as the national case for the pound is, that case is outweighed by the arguments that have been adduced in favour of the 10s./cent (or preferably 10s./half-cent system), then I believe industry would support it. But if the pound is to be retained, then I believe industry would prefer the pound/mil system, and personally I think they would be wise to do so.
7.54 p.m.
THE EARL OF DUNDEE: My Lords, I am sure we all regret that the noble Lord, Lord Fraser of Lonsdale, a most persistent interrogator on this subject, is not here. He must have put down at least a dozen Questions and Motions on it during the last two Parliaments. His first Question on this subject arose out of a private report by the Associated British Chambers of Commerce in conjunction with the British Association for the Advancement of Science, which was published in April, 1960. It was not a Government report, and the Government were very glad it was not, because they particularly wanted chambers of commerce and everybody concerned in commerce and industry to say what they wanted of their own accord; they did not want the initiative to come from the Government iself. This Committee interrogated practically every chamber of commerce and trade association and professional association throughout the country, and found that there was a very heavily preponderating opinion in favour of a decimal currency; and that was the main question, the main point of the inquiry.
As for the point which we are discussing to-day, of all the people who indicated their support for a decimal coinage, 37 per cent. were in favour of the pound/cent, 27 per cent. in favour of the pound/mil, like my noble friend who has just spoken, and 21 per cent., the vanguard, the most progressive, were in favour of the 10s./cent system. But of course they were not asked to give particular attention to that; the main question was, "Are we to have a decimal coinage?", and at that time all the weight of inertia was on the side of keeping £. s. d. There were a lot of very lively periods of questioning during 1960 in this House about the report and the Government's attitude to it, and finally a debate on November 10. which the noble Lord, Lord Shepherd, mentioned, and he was good enough to refer to my speech; I did speak on behalf of the Government. He said that he thought I looked on this subject at that time as a kind of hot potato. I can assure him that that was not at all the way I looked or felt about it; I thought it was most interesting.
I explained to your Lordships that the reason why the committee, or the
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majority rather, preferred the pound, although the South Africans preferred 10s., was that the pound was a unit of reserve currency (my own private opinion was that this was simply a form of numismatic snobbery rather typical of the English, and I still think so). But I did say this, which I should just like to remind your Lordships of:
"Your Lordships will observe that in this Report it is recommended we should maintain the pound sterling"—
and I gave the Committee's reasons.
"I do not quite know whether they have thought out the corollaries which follow from that—namely, that if you retain so large a unit as the pound, you must forfeit some of the conveniences which you will gain by having a decimal currency."
I concluded by saying:
"what we could easily do to make it more convenient would be to halve the size of the pound."—[OFFICIAL REPORT, Vol. 226, cols. 492 and 496, 10/11/60.]
I went on to say that the South Africans have a 10s. pound. I thought, in view of the noble Lord's reference, I was entitled to remind your Lordships of these passages in my speech which are relevant to this debate to-day.
LORD SHEPHERD: My Lords, the noble Earl followed the advice of my Prime Minister; he kept his options open.
THE EARL OF DUNDEE: I have seldom heard of any Minister in your Lordships' House who can do anything else. But I shall perhaps refer to that point again in a minute, although I do not propose to speak for very long.
A year after that debate, in 1961, which was a shorter interval than sometimes happens, Mr. Selwyn Lloyd, who was then Chancellor of the Exchequer, announced that he thought it would be a good thing to have a decimal currency and he was setting up the Halsbury Committee to advise the Government how to do it. We had quite a debate in this House when that Committee was set up, in reply to the Statement. I remember the noble Lord, Lord Shackleton, asked could we not have a duodecimal currency, which he thought was much better. That is not relevant to this debate, but I would say, in passing, that I entirely agree with the noble Lord, Lord Shackleton, that a duodecimal system would be much the most convenient and scientific thing. You would have to make your

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arithmetic duodecimal as well; it would also be more convenient. But I am afraid other countries would have to do it, too. The truth is that nearly everybody in all countries is really much too indolent to eradicate the arithmetical concepts they have implanted in them in their youth and substitute new ones. Since we are the most backward country of all in adopting the decimal currency—I think every major country in the world has done so except us—perhaps it might not be too good if we were to try to leap ahead and go duodecimal when everybody else is only decimal.
LORD AIREDALE: My Lords, does the noble Earl remember that it was I who gave the noble Lord, Lord Shackleton, his opportunity, by asking the original Question to which Lord Shackleton's was a supplementary question? We were both in favour of the duodecimal system.
THE EARL OF DUNDEEYes, my Lords. I am sorry I omitted to give the noble Lord credit for that. But let us all try to make duodecimal speeches only two minutes longer than my noble friend Lord Carrington.
The Halsbury Committee reported in September, 1963. I think it was a good Report and one upon which I should like to congratulate the noble Earl. He will, of course, understand that on occasions like this nobody ever has any time to say how good a Report is; they have only time to mention the few points with which they want to disagree or which they want to criticise.
My criticisms of the Halsbury Report were, first, that on the domestic side I did not think it gave quite enough weight to the economy and needs of the small shopper. I know that the noble Earl intended to do so. He said in his speech this afternoon, quite rightly, that a housewife who was shopping would not have to make a calculation every time she made a small purchase, translating the price into the old currency and then back again; she would always know that 30 cents were more than 20 cents. But that is not quite the point which some of us have in mind and which is that, on the whole, the pound/cent/half-cent system which the Government have adopted in this Command Paper is more likely to pull prices of small purchasers a little
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upwards than the alternative which my noble friend Lord Redmayne has been advocating; and we believe—infact, it is admitted—that it would save a great deal of money in the cost of transition, although the amount of saving is not easy to measure.
When I asked a Question about this last May, the noble Lord, Lord Bowles, I think, mentioned only £4½ million. That is the figure that is quoted for a certain class of business computers; but there are a lot of other savings given, some of which would be temporary during the transition, and others possibly permanent. My noble friend Lord Redmayne has dealt with that quite fully, and also with the great saving in calculation which you would have in having so many denominations the same as they are now. The sixpence would be the same. That, I think, would be the greatest loss under the other system, because so many slot machines are adapted to it. You would still have the half-crown and the florin. The only detail with which I did not quite agree with my noble friend Lord Redmayne was that I think I would call the cent a penny, anyhow. In point of fact, the Americans often do call their cent a penny. It is worth 0.85 of our penny, and since all our white and copper coins are, anyhow, only a token coinage whose intrinsic value has no necessary relation to their currency value, a new penny equal to 1.2in value of our present money could be of exactly the same dimensions as the old penny, so that none of the penny slot machines would have to be altered. I think there would be a large domestic saving.
With regard to the other end of the denomination, I agree with my noble friends Lord Carrington and Lord Sherfield that it would probably be a good thing to call the 10s. unit a new pound. I know that people act through force of habit. The noble Earl, Lord Halsbury, made a great point of this, that in South Africa they still go on valuing things in pounds. This is not surprising, since they have had the 10s. unit for only six or seven years. I am sure that we shall go on doing so by force of habit, which people often do for a long time, sometimes more than a lifetime. Whenever I get a bill from doctors or lawyers they do not calculate in pounds, they always calculate in

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guineas—a form of nostalgia which is appreciably to their advantage.
Externally, the criticism which I had of the Committee's Report was that they were rather too much influenced by what I call the forces of inertia—those who do not want to change because the pound has been such a magnificent international currency for so long, and those advisers who were perhaps too apt to get anxious and nervous that some nominal change would destroy or diminish confidence. The noble Lord, Lord Shepherd, said that the Government did not attach so much importance to this as did the Report. I thought, by the way, that was a curious argument, because I had always thought that there was absolutely nothing to be said for the Government's proposal except that we were afraid that it might diminish foreign confidence in the pound sterling, and that on balance domestically the case was pretty well unanswerable for the 10s. system.
But the noble Lord argued with some conviction that to reduce our standard unit from 20s. to 10s. might have the effect of destroying confidence among people who did not understand what was happening. I have never been able to see the force of that. It is not as if you are dealing with people like Sarah Gamp or little Tom Noddy. Even if you were, I believe that they would understand it between now and 1970, if they thought about it enough. I absolutely agree with the Minute of Dissent. I can see no reason at all why any trader or foreign banker should have the slightest diminution in his confidence in British currency by the mere fact of the unit being divided by two.
What did rather suggest to me that confidence might be destroyed were the reasons which the noble Earl's Committee gave for believing that we could safely abolish this unwanted, troublesome, inconvenient half-cent in a generation's time. If your Lordships look at paragraphs 353 to 360 of the Report, and also at paragraphs 55 to 57 entitled "A lasting system", you will see that it is here argued that there will be so much inflation within the next 25 years that we shall easily be able to abolish this unwanted half-cent which upsets the neatness of our decimal currency. I wonder which is most likely to destroy confidence,
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a 10s. pound, whose value we are determined to maintain, or a 20s. pound which we openly proclaim will depreciate so much in value in the next 25 or 30 years that we shall be able to abolish the half-cent. Remember that the half-cent which we are going to abolish is worth 50 per cent. more than the present American cent. The new penny under the pound/cent scheme proposed by the Government will be worth 2·4 pence—that is, three times as much as the American cent. This excrescence, the half-cent, worth 1·2 pence, is worth 1½ American cents, and to say that your currency is bound to be inflated so much that this coin can easily be abolished would I think be a greater danger to confidence in sterling than establishment of a 10s. pound.
The noble Earl, Lord Halsbury, pointed out that since the 8th century there has been a tremendous decline in the value of our money, but of course it is not at all constant. If one looks at the centuries one finds that in the last two or three centuries of the Middle Ages from 1250 to 1500, the value of English currency was pretty constant; and the mediaeval Kings before Edward VI who debased the currency did so for very good reasons, although they are often condemned by rather ignorant historians for doing it. Their idea was reflation; there was not enough silver to fulfil the needs of the country. It was perfectly right to debase the currency, just as we think it right to reflate our currency now when there is a shortage of credit. The great inflation came after the huge inflow of gold and silver from America in the reign of King Edward VI and Queen Elizabeth.
Mention of Elizabeth reminds me that on the Royal Exchange there is an inscription to her honour saying "monetam in justum valorem restituit"—that she restored money to its true value. But, of course, she did nothing of the sort. She did call in some debased currency at one time, but there was roaring inflation going on for the whole of her reign. Then in the 18th and 19th centuries again we had fairly stable prices, except in the Napoleonic wars. In the First World War, prices went up and then went down again after 1920. It is only now, after the Second World War, that in spite of all our modern

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technique we seem unable to prevent their going up continuously. It is rather a confession of failure and weakness to say that we think we must resign ourselves to the probability that it is going to go on for ever.
THE EARL OF HALSBURY: My Lords, the noble Earl will find a graph of the purchasing power of money from A.D.800 to the present day on page 197 of the Report. He will see that it is an inexorable trend.
THE EARL OF DUNDEE: I do not think it is at all even. Some parts of it shows a much steeper trend than others; some are flat, and there are some parts of the graph which go down. Prices went down a lot after the Napoleonic Wars and again after the First World War. The 1935 level is much lower than the 1920 level. If your Lordships will look at the curve carefully, you will see that.
I think the fact is that people do not always start making their views known—my noble friend Lord Redmayne made a strong point on this—on this kind of subject until they are really brought up against something which is actually going to be done by the Government. I raised a Parliamentary Question last May about this, asking whether the Government would not reconsider the case for a 10s. unit of currency. There did not seem to be anything like the support for it then which there obviously is now. People were not nearly so keen on it then. I wish we could have had this debate before this Command Paper was published. On the other hand, I ask myself whether, if it had not been published, there would have been so much interest. Would there have been a debate or would so many of your Lordships have spoken? It is only now, after the Government have made plain their proposals seven weeks ago, that this growing volume of interest, mostly, I claim, in favour of the 10s. unit, has made itself vocal.
I do not expect any Minister in this debate to say anything different to-night. I only ask them to think and ask their colleagues to think again about it. I would ask them to consider the enormous preponderance of opinion which has been expressed in this debate to-day, and also the growing volume of pressure which is,
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now being shown by businesses, Chambers of Commerce, the Confederation of British Industries, and trade unions all over the country. I ask them to think wisely and to think well about this before they and their colleagues become irrevocably committed to a solution which I believe to be second best.
8.16 p.m.
THE PARLIAMENTARY SECRETARY, MINISTRY OF PUBLIC BUILDING AND WORKS (LORD WINTERBOTTOM): My Lords, I am certain that we are all most grateful to the noble Lord, Lord Redmayne, for giving us the opportunity of discussing the Government White Paper on the decimalisation of the pound. I hope he will accept my apology if I appeared to have let my attention lapse during his peroration. I know that he will acquit me of discourtesy when I tell him that in fact my noble friend and I were saying what a strong case he was presenting—a strong case in a limited field. I think the weakness of the case put against the Government's proposal is that it simply treats this nation as if it were a nation of shopkeepers—as if shop keeping and nothing else was the problem in front of us. We have other problems to settle and to face, and I shall touch upon this later in my speech.
Before I turn to the general argument of the debate I should like to refer to the speech made by the noble Earl, Lord Halsbury. He has a unique knowledge of the subject, and it is because of the work done by the Committee of Inquiry under his chairmanship that we are able to debate this subject this afternoon and this evening on the basis of a thorough, indeed scholarly, study of all the relevant considerations. I believe, and I think many noble Lords believe too, that the report of his Committee is a classic of its kind.
SEVERAL NOBLE LORDS: Hear, hear!
LORD WINTERBOTTOM: The noble Earl, Lord Halsbury, gave us a masterly exposition of the case for the pound, and having listened to his speech I myself was much strengthened in my belief in the rightness of the Government's case. We are all grateful to him and to his Committee for the work which they have done, and in particular I personally should like to thank him for the delightful

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way in which he argued his case. He made the dismal science seem as light as a soufflé it was a very welcome change.
I now turn to the arguments put forward in the debate. The case against the decision to go for the pound/cent/half-cent is due to an assessment on which we differ because we assess the reaction of unsophisticated people to our proposals somewhat differently. We are thinking, as was the noble Baroness, Lady Elliot of Harwood, who put the case extremely well, of the simple housewife thinking of making both ends meet, the woman in the shops, on the bus, having to cope with a price system in this new currency. If we take this entirely narrow view, the case put forward by the noble Lord, Lord Redmayne, and many other speakers to-day is a very strong one indeed.
There would be many advantages in the10s. decimalisation system, if we were living and operating in a closed economy. But we are not. We are operating a currency which is a reserve currency, and in this factor we differ entirely from Australia and South Africa. Their currencies are not reserve currencies. For their internal reasons it was clearly desirable to decimalise on a 10s. basis. This would have no impact on other currencies or on the standing of their own currencies in the world, and they were therefore able to go ahead.
But the easy way open to them is not open to us, because we are dealing with other unsophisticated people, the unsophisticated people abroad who use the pound as their unit of exchange; and from his very wide experience my noble friend made this abundantly clear. I think it was the noble Lord, Lord Shefield, who rather minimised this point. He said that the amount of business done in pounds by unsophisticated people is small, but I would not agree. Anyone who has seen the trade done in West Africa by the market-mammy, for instance, realises that vast sums of money change hands with no bookkeeping at all. Like my noble friend, I am reasonably satisfied that, however successful we may be in this country in explaining to our people the exact meaning and significance of our actions, we shall find it impossible to explain to these people the reasons
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why they are suddenly dealing with a new unit worth only half of what they were dealing in before.
LORD CARRINGTON: My Lords. I wonder whether I might interrupt the noble Lord. I understood him to say—I hope I did not hear him wrongly—that the Australians and the New Zealanders and the South Africans, because they did not have an international currency, had decided, and rightly decided, that from their internal point of view it was right to have a 10s. system. This is what the noble Lord said. I listened very carefully, and I think my noble friend will bear me out. Why, then, in paragraph 12 of the Government's White Paper do the Government say:
"It would be wrong to assume that the Government's decision…was based primarily on the 'international case' "
and that the decision was really taken primarily for reasons of sterling as a domestic currency?
LORD WINTERBOTTOM: My Lords, I think I said a "reserve currency", but let me take the point. I would not necessarily agree completely with that assessment, for there is a very interesting change in the balance of the argument as time passes. Some people stress the importance of compatibility and associability. Some people stress the importance of maintaining the value of the pound as an international currency. In point of fact, I was coming later in my discussion in a sense to disagree in very substantial measure on paragraph 12, and to turn much more to Chapter VII of the original Halsbury Report where the case for the strong, heavy pound is made.
LORD CARRINGTON: My Lords, I do not want to press this matter, but is the noble Lord really telling us—and he is defending the Government's case now on this assumption—that their own White Paper is wrong in paragraph 12?
LORD WINTERBOTTOM: Not at all. There are many more factors in the argument besides a single paragraph, and I am trying to answer the debate as a whole. I am accepting that if we had a closed currency there are many advantages in accepting a 10s. system, but in my view an international currency demands that the pound should retain its value. Perhaps the noble Lord will

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permit me to use the arguments in Chapter VII of the Halsbury Report, which I believe are very weighty. I believe that noble Lords have, to suit the convenience of their argument, discounted the importance of this particular factor.
I should like to quote two paragraphs from the original Halsbury Report. First of all, there is paragraph 257 dealing with evidence given by Sir Geoffrey Crowther, which says:
"We should, perhaps, make one thing quite clear. It was not suggested to us that an alteration in our main unit would be widely taken for devaluation or that it would by itself precipitate a devaluation. Sir Geoffrey Crowther, in personal evidence to us, did, however, come close to suggesting in the following way the existence of a link between the two ideas:
'It would be felt that, if the British were now willing to alter the value of the £ for one reason, they might be willing enough to do it in another way for other (and perhaps more pressing) reasons…
A number of other witnesses were probably referring to the same idea when they emphasised the conviction with which the Swiss monetary authorities had held, over past decades, to the doctrine of no change whatever' in the value of the Swiss franc, even in an upward direction."
I think the noble Lord, Lord Redmayne, and the noble Lord, Lord Sherfield, stood this argument on its head. I believe it to be valid. I believe that the pound suffers from time to time quite unusual pressures and that very small elements cause panic in the money world. I think this argument is valid and must be considered.
If we turn to an earlier paragraph in the same Chapter we find that that says:
"Our witnesses strongly emphasised that, in matters of international finance, fear of loss predominated as a motive over hope of gain; perhaps because gains were generally a matter of slow accretion while losses might be sudden and acute. The nature of those engaged in it was, therefore, for good or ill, conservative. Fear of fundamental change and fear of loss were, if not synonymous, closely related in their minds. The likely reactions of those who held, or traded in £s, to the replacement of this currency unit by some other, had to be regarded against this background."
If I correctly understood the noble Earl, Lord Halsbury, in his argument, he again did not overweight the international case. Nevertheless, he said that his Committee considered it to be sufficiently valid to be argued carefully in this particular Report and to influence certain members
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of the Committee towards the retention of the pound. For this reason, this was one of the many factors which finally decided the Committee in making up their mind. Although that may seem to clash with paragraph 12 of the White Paper, it is nevertheless an important factor in this argument.
LORD CARRINGTON: My Lords, may I have just one more "go" at the noble Lord? I hesitate about this, but, as I understood him, he said that if one were worrying about one's internal currency, and worrying about that alone, then it was right to choose the 10s. system.
LORD WINTERBOTTOM: No.
LORD CARRINGTON: The noble Lord did say that. With great respect that is what he said. But if he means that, he must base his case then on the international currency argument. Yet paragraph 12 of the White Paper says:
"It would be wrong to assume that the Government's decision…was based primarily on the 'international case' "
How does the noble Lord reconcile this different point of view?
LORD WINTERBOTTOM: My Lords, it is a most important factor. I should find it difficult, not being an expert in the field of economics, to say what was the prime factor deciding all the issues. It strikes me that there have been three factors under discussion: the factor of the greater ease of transition with the 10s. new pound; the factor of international confidence; the historic factor mentioned by the noble Earl, Lord Halsbury, arising from the inevitability of inflation.
May I just answer the noble Earl, Lord Dundee, on one small point? I think that life without inflation might be even more difficult than life with inflation. I would perhaps commend to him that very interesting section in Lord Keynes's book on money where he described the advantage which this country gained from the inflation which followed the infusion of Spanish gold into the Western World.
To revert to the noble Lord, Lord Carrington, however, I find it difficult, as a layman, to assess which of the factors under discussion is the prime one. Nevertheless, I argue strongly that international considerations, in a country

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with an international reserve currency, must be of very great importance. In point of fact, my noble friend made five points supporting on internal grounds the importance of retaining the pound at its present value, and perhaps I may be allowed to disagree with the noble Baroness, Lady Burton of Coventry, when she argued that it was somewhat stuffy, and wrong, to try to retain the pound because it would confuse the study of documents relating to the past—old balance sheets, old White Papers and the rest. I would disagree with my noble friend because I think incompatibility of records is a very important factor. This was a point made by my noble friend, and it is worth careful study. I can see very serious mistakes being made from time to time due to a change in the value of the unit.
I shall now try to answer one or two points arising from the debate. Perhaps I might turn first to various points made by my noble friend Lady Burton of Coventry, who claimed complete ignorance and then showed that she had done her homework with meticulous care. I do not know whether this is cricket; but certainly she put some questions that demand an answer. A very important one, I think, was the inflationary effect of a system in which the value of the smallest unit was 1·2d. This may be correct; it may be a heavy minor unit. On the other hand, whichever system we accept—and we are discussing only two systems to-night—the smallest unit is the same; that is, 1·2d. We are in fact not discussing the alternative to these two put forward by the noble Lord, Lord Sinclair of Cleeve, who is arguing for a much smaller unit. We are arguing, in fact, for a choice between two systems, the minimum unit in both of which is 1·2d.; so unfortunately there is no choice here.
It may be heavy; but, on the other hand, it is probably controllable, because it must be remembered that we are not going to rush into the system; we are going to achieve the new pattern after a period of preparation. I foresee that the Prices and Incomes Board will in fact be consulted by the Decimal Currency Board, and that there will be a period of transition when prices are
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brought into such an alignment that the transition to the new currency will be made comparatively easy. I am equally certain that those firms which are competitive and forward-looking will in fact do what my noble friend suggested—that is, round up their prices downwards. I am fairly certain that this will happen. So although it will bring problems, I think the problems are not insuperable.
Then, again, my noble friend Lady Burton of Coventry, raised the point of entry into the Common Market, as I think did the noble Lord, Lord Sherfield. Just as I believe that the problems that we are discussing are those to be faced by unsophisticated people, when we enter the Common Market the question of what part the pound will play in it will be studied by sophisticated people. I do not believe that whether the pound is a 20s. pound or a 10s. pound will in fact influence this issue at all. I think that is something outside the main ambit of the debate.
I turn now to the noble Lord, Lord Sinclair of Cleeve. The noble Lord has a great deal of sympathy from me. In my own ponderings on the subject (which, may I say, were very superficial) I came upon the pound/mil as perhaps the easiest and simplest way of achieving decimalisation. The units concerned were small, and therefore the distortion was not very great. For this reason, I thought there were substantial advantages in the system; but I am afraid that, in a speech which I found well-informed and illuminating, the noble Lord had lost his battle before to-day's particular skirmish took place. Nevertheless, I personally found his speech most interesting, as I am certain did other noble Lords.
May I conclude by summarising the Government's position? First, we do not for one moment accept that the difficulties of the transitional period will be anything like as great as the critics of the pound make out. They are trying to frighten people by making them believe that they will forever be required to do difficult conversion sums in mental arithmetic. Nothing will be further from the truth. The Decimal Currency Board will, when the time is ripe, launch a massive campaign of public education. There will be posters, broadcasts, lectures and

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films; there will of course be dual-price labels in the shops; and every householder in the land will have a conversion table.
I should like to hear at some time the views of the noble Lord, Lord Carrington, on "Decimal Dan" and the pleasures of entering upon the conversion of currency in Australia. I believe the actual conversion was quite a gay affair. Something like that will happen in this country. As my noble friends have said, people from all walks of life in this country are now accustomed to going to Europe for their holidays and to dealing with unfamiliar currencies and unfamiliar coins in unfamiliar languages, and 1 feel it is an insult to their intelligence to suggest that they cannot cope with the transition, given all the aids which the Decimal Currency Board will provide when the time comes.
Secondly, the Government recognise that the various currency systems which have been put forward each have their advantages. They also have their disadvantages. The Halsbury Committee went into all of these with great care. The majority of members recommended in favour of the system which the Government have decided to adopt. As has already been made clear, the Government's approach is not identical with that of the Halsbury Committee, but their conclusion is the same as that of the majority; and obviously there would have had to be very strong arguments the other way for the Government to take a different view.
After listening to the debate this afternoon, perhaps I can put the Government's position in this way. All the systems that have been discussed have advantages and disadvantages. The Government's duty is to weigh all these cooly and disinterestedly, and to come to a final decision. As my noble friend Lord Shepherd has already said, the Government cannot please everybody. I do not say this in sorrow or in anger, but as a statement of objective fact. The point is that the various advantages and disadvantages of various systems affect different interests in different ways, and it is right and proper that each interest should speak up for itself—and certainly various interests have spoken for themselves to-day. But the interests of the retailer are different from
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the interests of the consumer. The interests of the bankers are different again. So also are the interests of the business machine manufacturers, the slot-machine manufacturers or the large commercial and industrial concerns. Whatever the decision, some interests will be affected adversely and some will benefit. This is a fact of life, and nothing can change it—not even if the Government had taken the coward's way out and decided to do nothing.
Perhaps at this point I might answer my noble friend Lady Burton of Coventry. No compensation will be paid, and the actual costs will be borne where they fall, Nevertheless, if there are any exceptional cases and extreme hardship, an approach can of course be made to the Decimal Currency Board.
BARONESS BURTON OF COVENTRY: May I say to my noble friend that he has got it wrong? I did not think the Government would meet the costs. What I asked him was whether he could offer any information as to whether those industries which were faced with the largest conversion costs probably stood to gain the most in the long run.
LORI) WINTERBOTTOM: That is what I am informed.
BARONESS BURTON OF COVENTRY: I thank my noble friend.
LORD WINTERBOTTOM: The Government's duty, therefore, is to hear all the arguments, to weigh the advantages and the disadvantages and to take a decision in the interests of the country as a whole. This is what they have done. I think that at this point I should answer the noble Lord, Lord Redmayne, and tell him that in fact paragraph 11 of the White Paper is Government policy. The decision is that the advantages of retaining the familiar pound are decisive. The noble Lord asked this question at the beginning of his speech, and asked whether it was irrevocable. The position of Her Majesty's Government is that the retention of the 20s. pound is firm.
LORD REDMAYNE: My Lords, I am sorry to interrupt, but this is most important. Does the noble Lord mean that it is not subject to the final approval of Parliament?
LORD W1NTERBOTTOM: Of course, my Lords, everything is subject to the

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final approval of Parliament. This is how we work the system. But the Government opinion is quite firm.
LORD REDMAYNE: A scandalous thing!
LORD WINTERBOTTOM: After listening to the debate this afternoon, I am left with two important considerations in my mind. The first is the advantages of retaining our existing major unit, the pound.
In my view, not nearly enough account has been taken of the disadvantages and inconvenience of changing it. The second is the importance of a durable currency system, a case argued very convincingly by the noble Earl, Lord Halsbury, at the end of his speech; and that was a factor which, to my mind, weighed most heavily with him. The Government consider that it is for those who advocate abandoning the pound as the major unit to make out their case. They have attempted to do so to-day; and I, personally, am not convinced by it. That being so, the country's interests are best served by refraining from arguments that merely go over ground which has already been thoroughly explored and obscure the main objective, which must be to make a success of the task of changing over to the decimal currency system.
The message that I should like to see go from here this evening, with the influence of this House behind it, is that the interests of the country will be best served by making this operation a success, and that the time has now come to get down to carrying out the enormous task that lies ahead. That is the important factor in all this. We have a very great job to do and only four years in which to do it. We have the actual technical business of providing a new currency, and we have the problem of informing public opinion of all aspects of the subject. From that point of view, to-day's debate has been of great value. However, my own belief in the final argument has not been altered by the case made by the opponents of the 20s. pound.
LORD RAGLAN: My Lords, before the noble Lord sits down, could he answer one question? Is it the Government's intention to abolish the guinea or will the guinea abolish itself under the new system?
LORD WINTERBOTTOM: My Lords, I should imagine that the guinea will become decimalised: that it will be 1.05 of a pound, though I am certain that doctors and lawyers will continue to charge in guineas.
8.42 p.m.
LORD REDMAYNE: My Lords, I do not want to prolong this debate, but I should like to make just two or three comments on what has happened. There have been some remarkably interesting speeches—not, in that sense, from the Government Front Bench. I was very disappointed in the noble Lord, Lord Shepherd, who came down to this House not in the least anxious to listen to any argument at all. He had quite flatly decided that there was no give in the Government position. What is the use of Parliament in that sort of case? I was most intrigued by the noble Lord, Lord Winterbottom, who on his own responsibility I think—this was before he got on to his brief—did what the Financial Times said the Government were going to do: that is, being defeated on the domestic issue, to go back on to the international case. I can assure him that if the Government are going to take that line in another place they will not get very far with it.
I thought that really the most scandalous statement I have heard made from a Government Front Bench in the 16 years I have spent in one or other Houses of Parliament was this proposition made by the noble Lord, Lord Winterbottom, that in point of fact Paragraph 11 of the White Paper means nothing at all; that in point of fact, the Government are completely decided to stick to their line and the question of Parliamentary approval is simply an empty formality. It is no use the noble Lord, Lord Shepherd, shaking his head. This is precisely what was said, and precisely what will appear in the OFFICIAL REPORT to-morrow. I am reluctant to introduce any note of heat in this debate at this last moment; but if that is the way in which this Government are going to treat Parliament—apart from Party politics—it ought to be published in every newspaper in the land as being the most crying scandal in the whole of our constitutional history. I beg leave to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.