Lords Sitting of 5 July 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 Derby.

ELVINGTON COUNTY PRIMARY SCHOOL, EYTHORNE
2.36 p.m.
LORD PARGITER: 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 Department of Education and Science will give authority for the Kent County Council to proceed immediately with the rebuilding of the Elvington County Primary School, Eythorne, which has for a long time been in a dilapidated and to some extent dangerous condition.]
BARONESS PHILLIPS: My Lords, the Kent authority have submitted this project for the 1969–70 major school building programme which my right honourable friend the Secretary of State for Education and Science is currently considering. He hopes to announce the programme shortly.
LORD PARGITER: My Lords, while thanking my noble friend for that reply, may I ask whether she is aware that even if approval is given to this rebuilding it will be some two years before the school is ready for occupation again? Is she further aware that it was built in 1928 almost entirely of matchboarding, as a purely temporary measure; that rebuilding actually commenced before the war and was stopped, obviously, because of the war; that nothing has been done since; that the electrical wiring, for example, which was estimated to have 20 years' life is now 40 years' old; that the school is heated by combustion stoves—
SEVERAL NOBLE LORDS: Order!
LORD PARGITER: And whether or not—
THE LORD PRIVY SEAL (THE EARL OF LONGFORD): My Lords, I think I must ask my noble friend whether he is putting a question.
LORD PARGITER: My Lords, I am asking my noble friend whether she is aware of these conditions and whether, having regard to all these circumstances and the fact that the chief fire officer has reported adversely on the school, something may be done to expedite this rebuilding and bring it into a much earlier programme.
BARONESS PHILLIPS: My Lords, my right honourable friend the Secretary of State is aware that the physical conditions in the existing building are very bad, and the Kent authority have taken steps to implement the recommendations made by the county fire officer following his recent inspection of this school. I will convey the facts that my noble friend has now given to the House to my right honourable friend, but he is well aware of the conditions obtaining in the school.

B.E.A. PASSENGER AIRCRAFT
2.38 p.m.
THE EARL OF KINNOULL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they can make any further statement on the decision, urgently required, to order new passenger aircraft for B.E.A.
THE PARLIAMENTARY SECRETARY BOARD OF TRADE (LORD WALSTON): My Lords, since your Lordships' debate on May 9, both B.E.A. and the Board of Trade have carried their economic studies further. As your Lordships are aware, there are major financial and practical problems, and in any case it is necessary to have regard to the proposed European airbus, which itself is the subject of a meeting later this month between British, French and German Ministers. I am very conscious of the difficulties facing B.E.A. and hope that it will soon be possible to reach a decision.
THE EARL OF KINNOULL: My Lords, while thanking the noble Lord for his reply may I ask him whether, in the event of the A.F.V.G. project being cancelled, the European airbus project will be in danger of the same fate?
LORD WALSTON: My Lords, I can assure the noble Earl that there is no connection between these two projects. The outcome of the European airbus project will be decided entirely independently and is, as I have said, the subject of discussions to be held between our own Minister and the German and French Ministers later this month.
EARL JELLICOE: My Lords, in view of the great urgency of this matter may I ask the noble Lord whether he can hold out any hope that the decision will be taken and announced before the Summer Recess?
LORD WALSTON: No, my Lords; it would not be right for me to say categorically that a decision will be taken. As the noble Earl will be aware, it must depend to a large extent on the decisions taken in regard to the European airbus, and therefore we are not entirely our own masters in this matter. The meeting will be taking place later this month, and in the light of the outcome of that meeting a final decision will be taken on the other matter. But whether it will be possible to make an announcement before the Recess I cannot say.

WATER SUPPLIES AND LEAD PIPING
2.40 p.m.
LORD DOUGLAS OF BARLOCH: 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 any steps are being taken to limit the lead content of drinking water to the International Standard Limit of the World Health Organisation, namely 0·05 milligrams per litre (approximately one ten-thousandth of an ounce per pint).]
THE PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (LORD KENNET): My Lords, the responsibility
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for securing a supply of pure and wholesome water lies with the statutory water undertakers. As to safeguards against an excessive lead content and other impurities, my right honourable friend's predecesors for many years have advised undertakers to carry out chemical examinations of the water they supply; and they do so. Where they consider that the nature of the water demands it they reduce the acidity by alkali treatment; or they can prohibit, by means of bylaws, the use of lead pipes. Moreover, an independent check is performed by medical officers of health who take their own samples to test water purity. My right honourable friend considers that adequate safeguards exist and that the water supply underakers are well aware of the existence of this problem. He therefore sees no case for prescribed standards. I am, of course, aware of the correspondence on this subject in the Lancet; but since the chemistry involved is rather complicated, I suggest to my noble friend that I should write to him in greater detail.
LORD DOUGLAS OF BARLOCH: My Lords, may I ask my noble friend whether his reply indicates that in fact the water supplies of this country conform to the recommendations of the World Health Organisation, or are very near to them?
LORD KENNET: My Lords, it is difficult to answer "Yes" or "No" to that question, because the variable in this matter is not so easily controlled at the level of how much lead there is in the water but rather at the degree of acidity of the water, since it is acidity in the water which is capable of dissolving the lead in the pipes, and there may be lead pipes anywhere.
LORD SALTOUN: My Lords, may I ask the noble Lord a question in this connection? This information is rather surprising to me, because I have always understood that it is pure water that dissolves lead and that the best way to stop water taking up lead was to adulterate it a little. Is that not the case?
LORD KENNET: My Lords, I said that the chemistry was complicated. While I am ready to do my best to pursue this matter this afternoon, I would suggest that if I write to my noble friend to answer his Question more fully perhaps I could send the noble Lord a copy of it.
LORD DOUGLAS OF BARLOCH: My Lords, may I ask my noble friend whether it is not the case that the ability of the human body to excrete lead is extremely limited and that comparatively small amounts will build up to a toxic level; and is that not the purpose of the Standard Limit of the World Health Organisation? Secondly, does it not appear from recent papers in medical journals that lead poisoning is more common than might be supposed and that cases might remain undetected for many years, and perhaps for ever?
LORD KENNET: My Lords, it is true that it has been known that cases have gone undetected, but I would not agree that the recent reports of three cases, spread over a good many years, which appeared in the Lancet indicate a high incidence of this condition.
LORD LEATHERLAND: My Lords, in view of this Question, I wonder whether my noble friend could give the public an assurance that even though there may sometimes be slight impurities in the water, there is sometimes arsenic even in beer, and that in both cases there is no danger to the public if they consume them.
LORD KENNET: My Lords, here we are talking about the general level of purity of British water supplies, and I can give the House and public the assurance that it is not had and is getting better all the time.
LORD DOUGLAS OF BARLOCH: My Lords, may I ask my noble friend whether, in this connection, it is not necessary to have regard to other sources of intake of lead, such as lead additives in motor fuels and lead deposits from polluted atmospheres?
LORD KENNET: My Lords, that is another question, of which I should require notice.
BARONESS SUMMERSKILL: My Lords, I wonder whether the noble Lord could say how many areas have introduced by-laws to prohibit the use of lead pipes.
LORD KENNET: Not without warning, my Lords.

THE ANGLO-FRENCH VARIABLE GEOMETRY AIRCRAFT
BARONESS PHILLIPS: My Lords, at a suitable time after 3.30 p.m. my noble friend Lord Beswick will be making a Statement on the Anglo-French variable geometry aircraft.

PRICES AND INCOMES ACT 1966 (COMMENCEMENT OF PART II) ORDER 1967
2.44 p.m.
LORD SHEPHERD LORD SHEPHERD rose to move, That the Prices and Incomes Act 1966 (Commencement of Part II) Order 1967, be approved. The noble Lord said: My Lords, I beg to move that this Order be approved, and in doing so may I also move the second Motion standing in my name on the Order Paper:
"That this House takes note of the Prices and Incomes Policy of Her Majesty's Government."
My Lords, I have always sought to be frank with your Lordships. Some weeks ago I drew attention to the congested state of business for July, and I think it was generally agreed that this was usually so in July, though some occasions were worse than others. I am quite frank when I say that this year congestion is particularly bad. I hope that we shall have completed some 102 Acts of Parliament this Session, and this will, of course, be a great credit to the House, and particularly to the noble Lords who will sit out the late hours during July. I commence with this explanation to explain why we are taking this Order this afternoon, and why I issued a House of Lords Paper detailing the Prices and Incomes (No. 2) Bill which is at present before another place. Both the Order and the Bill need to be passed by the Summer Recess, since Part IV of the Prices and Incomes Act 1966 lapses on August 11.
Apart from that, there are other important Bills yet to come. I hope to persuade the House not only to take the Order to-day but also to have a wide-ranging debate on the Government policy in the field of prices and incomes, and in particular the proposed legislation. I hope that, by so doing, we may perhaps agree that when the Bill comes to your

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Lordships' House we can take the Second Reading fairly formally. And since the details of the Bill are now before the House in the form of a White Paper, I hope that it will then be possible to take the Committee stage fairly shortly after the Second Reading.
Certainly we will use italic notices in our daily Notices and Orders of the Day so that noble Lords may be well informed of the proposed dates, and I hope to make a Statement some time next week. I think I should also say that if noble Lords wish to put down Amendments on this House of Lords White Paper they can do so, and the Amendments will be printed and distributed in the usual way. If this course is acceptable to the House—and I sincerely hope it is—it will be possible to phase other business, and we can make the most use of the available time between now and the end of July. In concluding this explanation I think I should make it quite clear that the Order stands by itself, and that, while the Bill is closely related, in that it strengthens Part II of the Act which is activated by this Order, I am not asking the House in any way to approve the House of Lords White Paper.
Almost a year has now elapsed since we discussed the prices and incomes policy. That was before the enactment of the present Act. The need for legislation applying to prices and incomes was being considered in the shadows of a deep, severe national economic crisis, with very heavy pressure on sterling. Your Lordships were mindful of the problems that confronted previous Governments in trying to deal with inflationary pressures. Everyone was well aware of the surge in prices and incomes during 1964 and 1965, and of course in previous periods. The policy of prices and incomes pursued after 1964 was not intended to be a short-term policy from which one could expect immediate or large results. It represented the initiation of a longer-term effort, in the closest consultation and co-operation with managements and the unions, to develop an effective policy on a voluntary basis which was bound to require important changes of attitude.
This is not to say that the results of the tripartite co-operation were fruitless. The machinery for a voluntary early-warning system was worked out and has proved itself under the strains of the
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past year of standstill and severe restraint, although one must recognise that the Government have had the wide reserve powers of Part IV of the Act. The Government, management and the unions have been able to hammer out agreement on the considerations relevant to prices and incomes behaviour. But, of course, in the application of these considerations progress was far from satisfactory, and the increases in incomes particularly were out of line with the trend of growth of real national output.
The twin aims last July were a reduction in the inflated level of demand and the obtaining of a breathing space from the unduly rapid rise in money incomes. The series of economic measures has achieved the first of these aims. I need hardly reiterate the results in terms of improvement of our balance of payments, including the progress made towards repayment of our external debt, but I may say that whereas in 1964 the deficit on visible trade alone was some £543 million and in 1965 some £269 million, it was reduced again in 1966 to some £110 million. For the first quarter of 1967 the deficit was some £19 million, seasonally adjusted, as compared with the average quarterly deficit in 1966 of some £28 million.
Turning to the response to the call for a standstill, I cannot help but recall the words of the noble Lord, Lord Erroll of Hale, on August 3 last year, when he said:
"It is still very much in the balance whether there will be this degree of voluntary cooperation."—[OFFICIAL REPORT, Vol. 276 (No. 48), col. 1338.]
Few noble Lords, few who were concerned, would have disagreed with the noble Lord at the time. There were some 6 million workers who, under settlements already made, were expecting an increase in pay or a reduction in hours, or both, during the twelve months after July 20, 1966. These workers were being called upon to forgo the implementation of their agreement for some six months.
Although the Government had sought the wide reserve powers of Part IV, it was clear that the success of a standstill would depend on the extent of voluntary co-operation. It is now beyond dispute that there has been an overwhelming response to this call for a standstill and severe restraint. The credit for this lies

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with management and the unions and the ordinary folk throughout the community. There has been a remarkable recognition of the national interest in a situation where the Government were taking severe measures to restore the basis of viability to our balance of payments. The full statistics for the first half of 1967 are not yet available, but it is clear that support for the policy of severe restraint has been widespread. The index of hourly wage-rates rose between December, 1966, and May, 1967, by nearly 2 per cent. but, of course, much of this increase was in consequence of the implementations of commitments that had been deferred under the standstill. I will return to this point in a moment.
It has been said that the standstill has not been applied to prices because prices continue to rise while pay has been held down. The movement of prices and pay should be considered together over the whole period since July 20, 1966. Between July and December, 1966, the retail price index rose by just under 1·5 per cent. and the hourly wage rate index was virtually unchanged. But between December, 1966, and May, 1967, the retail price index rose by under 1 per cent. while the wage rate index rose by nearly 2 per cent. Of course, no one likes to see prices rising while one's pay is stationary, but it is misleading to talk of a failure to exercise proper surveillance over prices. I need not remind your Lordships of the considerations involved in dealing with prices which are determined by world market conditions and by other seasonal factors. The economic measures taken in July included some which led to increases in prices—the purchase tax regulator and the increase in certain postal charges, to name a few. The Prime Minister made this explicitly clear on July 20 when he referred to the criteria for prices under the standstill. Of the 2½ per cent. increase in the retail price index since July, 1966, about 1 per cent. has reflected these measures and the effect of selective employment tax. Much of the remainder has been due to seasonal increases and higher rents and rates.
It is clear that the manufacturers have co-operated properly in standstill and severe restraint. Under the early warning arrangements proposals for price increases have been notified and have been fully examined, and in a number of
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important cases increases have been deferred for some months—for example, in the case of bread, flour and beer—or have been postponed for the duration of the standstill or severe restraint.
The charge has been made that the standstill and the severe restraint periods have been wholly negative. I well recall those, in particular the noble Lord, Lord Byers, who expressed their anxiety that there would be discouragement in the field of negotiations to raise productivity. During the first six months, quite naturally, there could be no increases, whatever the circumstances might be; but during the period of severe restraint there was special provision for the implementation of new settlements under genuine productivity agreements, and since January, 1967, some 250 productivity agreements, covering over 100,000 workers, have been accepted under the criteria of Command Paper 3150.
Your Lordships will be aware, too, of the valuable work carried out this year by the National Board of Prices and Incomes in the study of productivity and pay. Their Report has now been issued and will no doubt be studied by all those who are interested.
There is another vital aspect in which the policy has not been negative; namely, the treatment of the lower-paid worker. It has been our aim to encourage priority for the consideration of the needs of the lowest paid workers, and the practical evidence of this can be summed up in the fact that since the beginning of the period of severe restraint increases in pay have been approved under the criteria for lowest-paid workers in industries employing some 2 million workers.
It is clear that the prices and incomes policy during the past year has been highly effective and, above all, that it has commanded widespread support, in spite of misgivings about the nature of the powers taken by the Government. The fact about the extent to which Part IV powers have been used speak for themselves. I give them because we have not had the opportunity of debating the various Orders that have been made by the Government. Fears were expressed in your Lordships' House some twelve months ago about trade union leaders going to prison. Fourteen orders

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only have been made with regard to pay dealing with some 36,000 workers out of a total of some 23 million workers in this country. I suggest that that in itself is evidence of the widespread voluntary support of our working folk.
Part IV will lapse automatically on August 11. There is no question of the Government seeking to extend the Prices and Incomes Act on the lines of Part IV. There will undoubtedly be a testing time ahead now that the period of severe restraint has come to an end, but the policy in the coming twelve months is not intended to be one of severe restraint under another name. But it is a policy for moderation in prices and incomes, with a return to basically the criteria which had been worked out by management and by the unions earlier last year.
The important difference is that for this next year the prime interests of economic recovery and the strengthening of the balance of payments require that nobody shall have an automatic right to a minimum increase in income. As the White Paper made clear, the Government accept the desirability of maintaining priorities for encouraging settlements which promote productivity and which improve the relative position of lower-paid workers.
The Government believe that it is now right to return to a situation in which any reserve powers over prices and in-comes should be related to the process of examination by the National Board for Prices and Incomes. The powers under Part IV are totally different, because they are exercisable under the Government's own hand outside the process of reference to the National Board. The limited powers which the Government are now seeking are not within this process of reference to the Board.
Before I come to the proposals, I should like to say something about the basis of our recent discussions with the C.B.I. and T.U.C., and particularly with the latter, because there are those who have sought to establish that the Government and the T.U.C. are poles apart about the development of a productivity, prices and incomes policy. These discussions have shown that there is a great deal of common ground between the three parties. All recognise the need for moderation
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in the coming year. The C.B.I. and the T.U.C. have accepted that decisions about prices and incomes should be related to the interests of the community as a whole—the third party to the agreement. There is no question of the Government seeking to impose a rigid policy on management and unions. The Government's aim is to work as quickly as possible towards the operation of an effective voluntary policy—recognising the determination of the C.B.I. and the T.U.C. to play their full part.
The main difference, particularly with the T.U.C., has been over the retention for a limited period of reserve powers. The Government have carefully weighed the views of industry, but they remain convinced that some limited powers should remain available in reserve to help to move from the rigorous restraint of the past year to the more flexible arrangements in line with longer term aims of policy.
The Government have warmly welcomed the main steps now taken by the T.U.C. to develop their wage-vetting machinery. This is one of the most notable steps in trade union history and one which reflects a growing understanding of the need for a more effective policy on prices and incomes. I would remind your Lordships of the report by the T.U.C. to their conference of executives last March, when they made it clear that:
"Governments are entitled and indeed required to ensure that the attainment of these objectives (i.e. national economic and social objectives) is not jeopardised by selfish pursuit of sectional aims."
I will now turn to the Order and to the White Paper containing details of the Prices and Incomes Bill. In the White Paper, Prices and Incomes Policy after June 30, 1967, the Government announced their intention to activate Part II of the Prices and Incomes Act 1966. They are now doing so after consultations with the T.U.C. and the C.B.I. as is required under Section 6 of the 1966 Act. The Order is now before your Lordships' House. It provides for Part II to come into force in a period of 12 months beginning August 12, 1967. That is when Part IV of the Act lapses. The Order is required to be approved in draft by both Houses of Parliament. The new powers conferred on the Government by Clauses 1, 2 and 3 I of the Prices and Incomes (No. 2) Bill,

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which are designed to provide a limited strengthening of the powers in Part II for a period of 12 months, are also intended to come into effect on August 12.
Part II of the 1966 Act gives the Government power to make orders requiring the notification of proposed increases in particular prices or charges, or increases in company distributions, or, in particular, of pay claims or awards and settlements, and for a temporary standstill to be imposed on the implementation of proposed price increases, awards and settlements referred to the National Board for Prices and Incomes.
Part II provides for an early-warning period of up to 30 days during which the proposed price increases, awards and settlements can be considered by the Government, and a further standstill of up to three months on the implementation of a price or pay increase which is referred to the Board. A standstill of up to three months can also be imposed on prices and pay proposals which have been referred to the Board but have not been subject to compulsory notification. In either case the stand-still is terminated at once on the publication of the Board's report. There is no statutory bar to the implementation of a price or pay increase regardless of the Board's findings. The Government have made it clear that they intend in practice to rely to the fullest extent possible on the arrangements for voluntary early-warning, and orders will not be made under Part II requiring statutory notification in any sector covered by the voluntary arrangements unless it appears to be necessary to maintain the effectiveness of these arrangements.
The purpose of Clauses 1, 2 and 3 and the Schedule to the Bill is temporarily to strengthen the provisions of Part II. The powers conferred by these clauses are fundamentally different from those conferred by Part IV of the 1966 Act. Under Part IV it has been possible by order to prohibit any proposed price or pay increase and, where an increase has been implemented, to enforce a return to the level ruling before July 20. These powers have been available for use by the Government at their discretion over the whole field of prices and incomes, but the powers conferred by this Bill, while they are important additions to the powers of Part II, are tied to the references to and the recommendations
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by the Board in the particular case involved.
Clause 1 enables the Government to delay the implementation in part or in whole of a price or pay increase for a further period up to three months after the Board has reported—and I stress the fact that this is where such further delay is recommended by the Board. The maximum period of standstill under this clause is six months from the date of the reference to the Board, so that in some cases where statutory notification is required the total standstill could be for seven months. The power to extend the standstill after the Board has reported will, it is hoped, help to ensure that the parties concerned will have the opportunity to pay due regard to the Board's recommendation. It is important to note, however, that it will be for the Government to decide, in the light of the Board's recommendations, whether to use these powers. They are free to exercise the powers either in a manner less restrictive than recommended by the Board, or not at all. In any event, by virtue of the provisions of the Schedule to the Bill they cannot take action which is in any way more restrictive than the recommendation of the Board. Under the provisions of Part II, a standstill can be imposed only in cases where a price or pay increase has not already been implemented.
Clause 2 enables the Government temporarily to suspend the implementation of a price or pay increase within three months of its implementation, either at the time it is referred to the Board, or subsequently if it has already been referred to the Board on the basis of a voluntary standstill and the parties implement it while the Board is still preparing its report. In either case, the standstill will remain in force until the Board's report is published, or until three months after reference to the Board, whichever is the earlier. But it may subsequently be extended, under Clause 1, if the Board's report so recommends.
Clause 3 enables the Government by order, after publication of the Board's report, to suspend a price or pay increase which does not accord with the recommendations of the Board, provided that the order is made within six months from the date of reference to the Board. An

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order may impose a standstill for up to three months.
Clauses 2 and 3 have been included to enable the Government to rely to the maximum extent on voluntary early warnings in the standstill arrangements. They provide only for powers which can be used to ensure that the working of the voluntary prices and incomes policy is not frustrated by the actions of those who refuse to observe its requirements. They are, in fact, an alternative to making orders under Part II requiring compulsory notification in all cases.
The Schedule contains a number of provisions relating to the operation of powers conferred by Clauses 1, 2 and 3. Among other things it provides that orders made under these clauses may not be more restrictive than the recommendations in the relevant report of the Board, and that such orders may be made only after the parties have had an opportunity to make representations.
It will be noted that Clause 6 provides that Clauses 1 to 3 of the Bill are to come into force on August 12, 1967. No order or direction can be made or given under Clauses 1 to 3 after August 11, 1968, and there is no provision for the renewal of these powers after that date. However, as was envisaged in the First Secretary's statement in another place on April 17, the Schedule provides that orders made under Clauses 1 to 3 before August 11, 1968, may continue in force beyond that date, subject to their maximum duration as limited by the clauses themselves.
Clauses 4 to 5 will come into force on the enactment of this Bill. Clause 4 modifies and clarifies the 1966 Act in a number of respects. In particular, it makes clear that the temporary prohibition on the implementation of awards or settlements under Part II applies in respect of any period before the standstill began, and that any contractual liability to pay an increase in respect of any period of prohibition does not automatically revive at the end of the period.
I now come, my Lords, to Clause 5, which I think is of particular interest. The principal purpose of Clause 5 is to give employers a defence against legal actions for the recovery of pay increases contractually due but withheld during
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the periods of standstill and severe restraint. The success of an incomes standstill has to a considerable extent been due to the voluntary withholding of such increases by employers, and to the express or implicit acceptance of this position by the employees. In this set of circumstances there would be obvious difficulties if some employees sought to secure back payment of increases, after the end of severe restraint, by court action, or threat of court action, against their employer. It is, of course, of national importance that the benefits of the standstill and severe restraint periods should not be eroded, which they might well be if widespread retrospective payment of increases withheld in accordance with the requirements of national policy were to take place.
I appreciate that I have already spoken longer than I intended, but in fairness to the House, and in view of the fact that I hope we shall be taking the stages of this Bill fairly quickly, I think that I ought to take a few moments longer to speak specifically about subsection (7) of Clause 5. Clause 5 does not introduce any new principle. Your Lordships will recall that Section 30 of the Prices and Incomes Act passed last year was intended to provide a defence for employers against liability for breach of contract where pay increases were withheld from employees. The protection in that section is, however, available only in certain circumstances. In particular, it is available only in relation to pay due for the period after October 6, 1966, when Part IV was brought into force. Moreover, the protection is available only where the employer has given statutory notice in accordance with Section 30(2) of the 1966 Act. Many employers have, understandably, been unwilling to issue formal notices of this kind when their employees have, in practice, accepted a deferment. But the fact remains that where there is a contractual right to deferred increases, actions for recovery of the back pay can be instituted at any time within six years of the date of deferment.
It is important to bear in mind that Clause 5 relates only to the withholding of pay increases due in the period from July 21, 1966, to July 1, 1967, or before July 20, 1966, and not actually paid on that date. The clause does not prohibit

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the payment of such increases, nor does it give any right of recovery of remuneration actually paid. What it does is to affect the position in relation to contractual liability in relation to what has actually taken place over the last 12 months. It does not alter the situation except to recognise in law the deferments which have already taken place.
Your Lordships will have noticed that it is proposed that the protection afforded by Clause 5 should be effective even to the extent of proceedings instituted before the enactment of the Bill. To this extent the provisions contain a retrospective element, but this is subject to two very important qualifications. In the first place, the clause cannot provide a defence in any legal proceedings instituted before June 5; that is, the date of publication of the Bill. Any proceedings started after that date are likely to be with the express intention of "beating the gun" before Clause 5 can be enacted. If there were a rush of such cases, clearly there would be a serious risk of undermining all the benefits about which I have spoken, and it would certainly have serious effects and consequences for the great majority who have loyally abided by the requirements of the policy and would feel that they were put at a disadvantage compared with those who were not prepared to co-operate.
The second important qualification is that the clause cannot be effective, even in cases instituted after June 5, where judgment has actually been satisfied in whole or in part before the enactment of the Bill; that is to say, there could be no question of setting aside judgments where the money has actually been paid. The Government regret having to introduce a measure involving retrospective operation on pending proceedings, but, as the House is well aware, there are statutory precedents for this, and it is only in these exceptional circumstances that we have felt it right to do it in this case.
Perhaps I should stress that the Government are not seeking to reverse the Court of Appeal's recent decisions in the cases of Griffiths v. The Metropolitan Police District Receiver or of Allen v. Thorn Electrical Industries Limited. Although those judgments were not made until after publication of the Bill on
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June 5, the proceedings had been pending for many months, and the judgments have already been satisfied; that is, the money has been paid to the employees concerned. I should, however, explain to those noble Lords who may not have followed these court cases that the Court of Appeal's decisions are in fact of very limited application. They affect the interpretation of a minority of the Orders under Part IV of the 1966 Act.
My Lords, I hope I have covered this Order, and explained the details of the Bill contained in the White Paper. I get no joy from having to ask your Lordships to accept this class of legislation, and certainly it is repugnant to my Party; but in all the circumstances I do not believe we have an alternative. There are some who say that we should run our economy in such a way that we do not really need a prices and incomes policy, but I think those who have considered the recent past—since the last war, shall we say—will recognise that unless we have some orderly control in our incomes, in relation to our national output, we shall have no alternative but to take other measures which can result only in a much larger number of unemployed than we have experienced this year—perhaps a figure comparable to that in 1962–63; and none of us would wish to see that. Certainly, those measures would have a very savage effect upon those we might call our weaker brethren and those who live on fixed incomes.
I believe that if we can gain some 12 or 24 months, moving from this period of standstill to severe restraint, if we can have some orderly progress, we shall then be able to obtain a voluntary, co-operative prices and incomes policy, controlled and organised by management and by the trade unions; and since both those bodies now recognise that there should be a third party—that is, the consumer—within their agreements, I believe we could see a stable development in our economy in that particular field.
My Lords, in a few days we shall have an opportunity to discuss, under the Finance Bill, many other aspects of our economic policy. I do not pretend that the prices and incomes policy is the panacea for our economic difficulties, but I do believe that unless we can achieve a solution in this field none of the other

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steps that we are taking will bring the end that we wish to see. It is with some degree of regret that I move this Order, but I certainly move it with the conviction that we have no other alternative at this present stage. My Lords, I beg to move.
Moved, That the Prices and Incomes Act 1966 (Commencement of Part II) Order 1967, be approved.—(Lord Shepherd.)
3.25 p.m.
LORD ERROLL OF HALE: My Lords, I am sure that all your Lordships would wish me to thank the noble Lord who has just sat down for an extremely lucid speech and a very clear explanation of the White Paper. I would only say to noble Lords that if we do not understand it now, certainly it is not the fault of the noble Lord, Lord Shepherd, who explained it so clearly and lucidly to us. I should also like to say that I wholeheartedly endorse the noble Lord's proposals for dealing with the Bill when it actually comes to us from another place.
To me, one of the most interesting features of this Chamber, having served so long in another place, is the flexibility of our procedure which, as the Summer Recess approaches, enables us to abandon certain formulae and to compress our business so that we are able to get a move on without having to face the awful prospect of sitting into August, as we did last year. So I hope noble Lords, particularly those on this side of the House, will agree with me when I suggest that we should support the noble Lord's proposal for the expediting of the Bill when it comes our way. The noble Lord told us that something like 102 Bills had been passed through Parliament in this Session.
LORD SHEPHERD: My Lords, if we achieve our end, we shall have reached that number.
LORD ERROLL OF HALE: Let us say some 90 by now. The noble Lord seemed to take some pride in this fact. I can assure him that we on our side view the situation with the utmost dismay. Of those 102, I would say that at least 100 are bad Bills; most of them are quite incomprehensible, and those which are not incomprehensible are unnecessary.
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Before I turn to the subject of the Bill itself, I think there is one feaure in the noble Lord's comments on the situation in general that I really ought to mention to your Lordships; that is, the pride which the noble Lord took in the improvement of the adverse balance of payments situation. I would have preferred the noble Lord to have given due credit to a factor which was quite outside the control of Her Majesty's Government; namely, the alteration in the terms of trade from 1964 to April of this year. During that time, export prices rose by something like 8 per cent., whereas import prices rose by only 1 per cent.; the resulting benefit to the balance of payments running at the rate of £300 million a year in Britain's favour.
This is a very fortunate windfall, and the Government, and indeed the country, were fortunate that there should have been a windfall of this size at this time. But do not let the Government take credit for this windfall, because if they do they will only be deceiving themselves. I listened to the noble Lord very carefully, and while I noticed that he did not in fact take full credit for the improvement in the balance of payments situation, I am very afraid that his colleagues in the Government might take the credit when in fact we have gained a windfall benefit at the expense of the less-developed countries who are selling their products to us.
Now I want to turn to the events which led up to this Bill which we are virtually discussing to-day, because I think it is important to look at the history of events in the last 18 months or so. During the last Election, we had a number of responsible statements made by the then Government on the subject of prices and incomes. Mr. Wilson, in Election Forum on March 10, 1966, said:
"As to the idea of freezing all wage claims, salary claims…I think this would be monstrously unfair."
He won the Election on April 1, appropriately enough, and then we began to see events take shape.
Here, I should like to reassure noble Lords in all parts of the House that when things go wrong it is never the fault of the present Government. I hope that I shall not at any stage this afternoon attach any blame to the Government for things which have gone wrong. It is always

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somebody else's fault, and, in any case, they never make any mistakes themselves. So, naturally, when in May, 1966, there was a seamen's strike, it was not the Government's fault—it was those naughty seamen who upset Britain's trading position; seamen who, probably in the main, had voted for their own Labour Government. And so we soldiered on into July, and we were assured by Ministers at that time that there was no need to take any further economy measures; that everything was perfectly all right. It was such bad luck for the Government that there were some disgusting people who went and sold sterling forward—and did it on such a scale that even the Prime Minister had to become aware of the situation. The Bank had been coping manfully with the situation by supporting the forward pound, which they had never had to do before in their whole history. It was the seriousness of the forward situation that compelled the crisis and panic measures of July, 1966—which included, for good measure, a backward swipe at the surtax payer in respect of his earnings in the previous year.
So we come to July 21, when we had placed on us both a squeeze and a freeze; and in August, 1966, the No. 1 Bill of this series was passed. A great deal was said at the time about the principle of voluntary co-operation; and I think the noble Lord opposite is not quite entitled to make the claim he has of voluntary co-operation. I have never thought much of the principle of voluntary co-operation if you have a big stick behind you to knock those into shape who do not choose to co-operate voluntarily. It is rather like saying that the speed limit of 30 m.p.h. on the roads is a voluntary one, but that if you exceed it you will be arrested and fined. That was the situation in respect of that Act. There were some who did not co-operate; and what happened? Orders were issued against them. There were no fewer than 14 of them in respect of wages claims and only one in respect of prices—and that in the field of laundry charges. That shows, in fact, how much the Government are really concerned with the relative order of importance of the country's economic affairs. They took a great bang at the laundry industry. That was their contribution towards economic stability in 1966–67. So do not let us believe too much this story of voluntary co-operation.
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It was voluntary only because the Government had powers of compulsion under the Act and did not hesitate to use them, whenever they wanted to.
We naturally wondered how long this was going to last. We were told it was going to last for only one year and that the Act was going to die in August of this year—
LORD SHEPHERD: Part IV of the Act.
LORD ERROLL OF HALE: Yes, my Lords, Part IV. But some of us had our anxieties about the next stage, and we looked around and naturally turned to what Ministers were saying at the time. Mr. Wilson, on October 6, on the B.B.C. programme "24 Hours", was asked by Mr. Harris whether there would not have to be a continuation of the powers of the Act. Mr. Wilson answered:
"In terms of legislative powers, No."
My Lords, I know that television is a difficult medium and Ministers, perhaps, should not be chased too much on exactly what they say during such interviews. So let us turn to Mr. Stewart who by then was Minister of Economic Affairs. Speaking in his own constituency, Fulham, on October 17, 1966, Mr. Stewart said:
"To be exact",
the powers
"expire on August 11, 1967, and there is no intention of prolonging or renewing them."
That seemed pretty definite. So we soldiered on during the winter. The squeeze was operating, industry was despondent, unemployment rose. We were told that the freeze was needed in order to prevent unemployment, but in fact we had unemployment and the freeze and the squeeze as well. Production was stationary or falling; the National Plan was quietly scrapped, embalmed by Mr. Stewart's expert team of embalmers; and the balance of payments was saved by the fortuitous windfall of a change in the terms of trade. Looking back, we see it is clear now that it was the squeeze that did the job and that, basically, the freeze was unnecessary. Even so, it worked imperfectly.
The selective employment tax (a bad device on its own) was nevertheless accepted as being one of the many charges that could be passed on to the customer.

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Typically, it was one of the nationalised industries who first took advantage of this loophole and put a surcharge on all bills in British Railways hotels, thereby setting a fashion that everybody copied. Also there was the disturbing feature which I might describe as the "side-slip" where employees were leaving one firm to go to another where the rate for the same job was actually higher; and employees in the other firm moved back to the first firm who, in their turn, could offer a higher rate for a new employee. There has been a substantial degree of increased remuneration through this form of job-swapping in categories where particular skills were in short supply, whether shorthand-typists, telephone operators, draughtsmen, or what you will. There has been a considerable degree of salary inflation in that way, with people needlessly changing their jobs in order to get more money.
My Lords, there was a glorious moment of light relief about which I should remind your Lordships. It was in regard to poor Miss Lee and her pay rise that never was. There she was, promoted from being Parliamentary Secretary to Minister of State, confidently thinking she was going to get the rate for the job; which she did not. Noble Lords opposite dissent; but it was quite clear, because it would have been announced at the time that she was not to get the pay rise. But it was only announced 48 hours later, when my colleagues in another place raised the issue. Now that the period of complete freeze is over, I hope that her great, serious and real contribution to culture will be recognised and that she will be allowed to have one of the many flexible rates now permitted for the office of Minister of State.
LORD SHEPHERD: My Lords, knowing that the noble Lord is a generous man, particularly where ladies are concerned—and, certainly Miss Jennie Lee does not need a great deal of protection from me; she can quite well look after herself—I think we should put it on record that when my right honourable friend was appointed to the new post she was in the United States, a few thousand miles from London. I think it is on record that she was not consulted; she was merely informed of her appointment.
LORD ERROLL OF HALE: I still do not know that that invalidates what I have said; but I will accept what the noble Lord has said.
Having been told that there was to be no further legislation, we now find that along comes the No. 2 Bill which we have to-day in White Paper form—and next summer, the No. 3 Bill. Unlike the No. 1 Bill, this Bill, I think, really does depend on voluntary co-operation, because, at best, it merely confers on Her Majesty's Government certain delaying powers. If I have understood the noble Lord aright, if a proposed increase is voluntarily notified to the Government they can, if they wish, refer it to the P.I.B. and await its judgment. Whatever the P.I.B. decide, there can be a further delaying period only of something like three months. So it is no more than a vessel of delay. It is a Bill whose powers can be used only sparingly, it is not to result in a complete overloading of the work of the P.I.B., a Board which has a relatively small staff and which is already engaged on a number of long-term investigations. But the fact remains that if the Government were to be swamped with applications, they would either have to accept them or let them through, because only a small minority could be referred to the P.I.B., even if its staff were to be increased as rapidly as possibly.
The question therefore arises: how effective is any delaying procedure likely to be? The Times yesterday had a very serious article under the heading "Prices dam may be about to burst". It says:
"Early signs of a long-predicted across-the-board upward movement in consumer prices were detected yesterday as housewives started their first shopping week since the Government's six-month period of severe restraint came to an official end … A not untypical selection of varied products affected by manufacturers' recommendations of higher shop prices effective yesterday or at the week-end include …"
Then followed a long list of products with the names of which I will not weary your Lordships, for the list is extensive and detailed. It goes from Vaseline to chocolate biscuits, with a whole range of products in between.
LORD SAINSBURY: My Lords, I do not like to interrupt the noble Lord, but could he, for our enlightenment, not read

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the list but tell us the number in relation to the 2,000 to 3,000 items stocked by the average food store?
LORD ERROLL OF HALE: This was only the first list but it included at least some dozen products of every-day use. They include things such as Scott's Porridge Oats; Ocean Preserving; "Epicure" branded pickle products—a complete range, doubtless of great interest to the head of a famous store whose contribution to this debate later this afternoon I am sure we shall eagerly await. The Times goes on to say:
"There is plenty of evidence that manufacturers generally are preparing for a round of pent-up price rises".
I think that answers the noble Lord, it is not just two or three in a matter of two or three thousand; it is a matter of hundreds.
THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR COMMONWEALTH AFFAIRS (LORD BESWICK): My Lords, it is an answer to noble Lords on that side of the House, too.
LORD ERROLL OF HALE: Yes, my Lords. So we have the prospect of a prices dam about to burst, with the Government unable to control the situation with the powers that they are about to ask your Lordships to concede to them.
LORD PARGITER: My Lords, may I ask the noble Lord whether he is speaking from fact or conjecture?
LORD ERROLL OF HALE: My Lords, I am speaking on such facts as are available at this moment; namely, that a number of manufacturers have already announced their increased or recommended prices, and it is known that many others are proposing to do so. I should have thought that fairly reliable evidence of a trend about which we ought to be aware, and which we should take into consideration in studying whether or not this Bill is likely to be effective in its purpose.
To-day, we read that the Government, as evidence of their concern in the matter, are considering setting up a number of prices commandos who are going to rush into the shops and investigate price increases. That surely shows that the Government are taking the matter seriously,
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even if the noble Lord is not. But what on earth these commandos are going to do when they have had their little shopping spree in various supermarkets and the like, I do not know: they have no power to act at all.
LORD SHEPHERD: My Lords, perhaps the noble Lord, Lord Erroll of Hale, can help us, since he appears to be complaining that the Government have not taken powers. With his experience at the Board of Trade, what would the noble Lord recommend we should do in these circumstances?
LORD ERROLL OF HALE: My Lords, I was coming to that question, and the answer will probably take the form of my peroration—if I am not too "longwinded". I would also say it is quite plain that the Government have no possible solution, because Mr. Austen Albu, when a Minister, said: "I believe it is impossible to control prices, except for one or two". So the noble Lord, Lord Shepherd, will find that he will get very little support from his own economic Ministerial colleagues, past and present.
We are being invited to-day to discuss, with a view to passing it later, a Bill with no teeth in it; a Bill which can achieve very little and which is merely a façade. It is a sorry little Bill, and I, for one, believe that it is doomed to failure. But I am quite sure that next summer up will come the noble Lord with Bill No. 3, and there will be very good reasons why, although there was never going to be another one, there should in fact be one. This time, of course, the villains of the piece will be the oil prices, and Britain's deteriorating balance of payments. We shall be told it is these that necessitate further measures of economic stringency: next year, maybe, the corner will be turned; but this year we must have a further period of restraint—with voluntary co-operation, of course. Nevertheless, the Government must have reserve powers to deal with those who fail to co-operate.
If I sound cynical, my Lords, or sarcastic, it is because I heard all this before, in the period of the last Labour Government. This was the sort of stuff we heard from 1948 to 1951, and we are now going through it all over again. It is like some of those tired old films we see on television. The only difference is

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that we cannot switch off this Government until the next Election.
What is wrong? Why have we this sense of lassitude, of ennui, throughout the economy? Why are industrial investments so substantially down, and the forecast down, according to the Board of Trade's own estimates? The fact is, in my belief, that Her Majesty's Government are pursuing the wrong objectives. While they preach expansion they act to stop or hinder people from doing what they want to do. This is the trouble. The Government think that by stopping people from spending their holiday money abroad—to take a light-hearted example—they are going to save money. It never seems to occur to the Government that the maximum becomes the minimum. Someone who would have taken £40 abroad, now takes £50. A businessman who used to go abroad with what he needed now takes the £20 a day to which he is entitled, and probably spends it.
The whole attitude is one of stopping people. Stop them from building offices in London, for all good reasons maybe—but stop them. Stop them from having the investment allowances, which they liked, and make them have investment grants instead. Stop people from making capital gains if they are able; and if they are successful in doing that, take away the money. Let them earn more—oh, yes!—but make quite sure that it is well and truly taxed; and then have the impertinence to tell the recipient that surtax is not a deterrent from further activity! It does not make sense. It is actions of this sort that lead to the sense of lassitude and ennui in the economy, and in the course of a brief speech I can give only one or two examples.
We, as a Conservative opposition, have a clear and constructive alternative, but I do not see why, every time the Government get themselves in a mess, we should have to burn the midnight oil working out an alternative. I remember that at the time when the selective employment tax was imposed people said: "What would you do?" And I said. "Well, we would not introduce the silly thing." That is our alternative in many cases. We have a clear and constructive alternative, but, as the noble Lord said, we are to have a general economic debate on the Finance Bill, so I will reserve for
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that occasion what I should like to say. However, I would say this now. We believe that it is the duty of the Government of the day to create the right economic conditions, conditions in which people feel that they can get a bit more for doing a bit more and will not have it all taxed away. We believe that there should be more competition, not less; that we should not be afraid to let the inefficient firms go down, and, if necessary, let inefficient workers lose their jobs, for the time being, until they are retrained.
We believe that not only should ordinary savings be encouraged, but people should be encouraged to put their money into risk investment. It is rare to-day to see a new issue of ordinary shares. The Government's fiscal and other arrangements have made it practically impossible for a company to raise money in this way. So there is another channel for the enterprising which has been closed off. We on this side of the House believe that there should be lower taxation both on the individual and generally. Is it fully realised in your Lordships' House that the Labour Government, since they came to office, have taken away from the public an additional £1,000 million in increased taxation? Where has all the money gone? They would find it very difficult to explain where it has all gone, but we know that it has been taken from us—I repeat: an extra £1,000 million since the Labour Government came to office. It has disappeared in additional taxation.
We also believe that there should be a new deal for the trade unions. I accept that they have co-operated with the Government—and so they should: they support Labour Governments, and they ought to co-operate with them. But that should not disguise the fact that a new deal is required for trade unions. This has been detailed by us in our Election Manifesto and in the speeches of my friends subsequently. There is no time to go into that in detail.
LORD COOPER OF STOCKTON HEATH: My Lords, could the noble Lord, Lord Errol of Hale, give us some indication? I have read the documents and I find it difficult to understand them.
LORD ERROLL OF HALE: No, my Lords; I will not go into detail. I have

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been on my feet for nearly half-an-hour, and I said that I could only sketch out the alternatives. But a new deal for the trade unions is one of our proposals. Another point is that Government expenditure simply must be reduced; and of that there is no sign. Let the people spend the money as they wish, and not have it taken away from them by the Government and spent as the Government think best.
My Lords, I have done my best to give, briefly, what will be our constructive alternative proposals to the present economic situation—the situation which noble Lords opposite have said necessitates this Bill. All I can say to your Lordships is that I think we ought to let the Government have their little Bill. It will be a dead letter in a few months.

THE ANGLO-FRENCH VARIABLE GEOMETRY AIRCRAFT
3.50 p.m.
LORD BESWICK: My Lords, with permission I should like to repeat a Statement made by my right honourable friend the Minister of Defence in another place. The Statement is as follows:
"The French Government have informed Her Majesty's Government that they have decided that for budgetary reasons they must withdraw from the Anglo-French variable geometry aircraft project. They have been forced to take this step solely because of the pressure on their budget for a number of years ahead; full agreement was reached on the specification, the development cost, and the production cost of the aircraft. M. Messmer has assured me that the decision will have no effect on the French attitude towards the other projects, both civil and military, on which agreements have already been reached, or indeed towards the possibility of further collaboration in the future.
Her Majesty's Government have received this decision with great regret. It raises a number of fundamental issues. We are now giving urgent consideration to alternative ways of replacing the V bombers in the conventional role in the mid-seventies, including the possibility of collaboration with other countries. In the meantime, in order
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to preserve as wide a range of options as possible we are authorising British firms to carry out a project study on a variable geometry combat aircraft to a modified specification. Exploratory talks with potential partners will be held as soon as possible.
I will, with permission, circulate in the OFFICIAL REPORT the joint communiqué reporting the outcome of my meeting last week with M. Messmer which is being issued this afternoon.
The communiqué referred to was as follows:
"Mr. Denis Healey, Secretary of State for Defence, Mr. Stonehouse, Minister of State for Technology, and M. Messmer, the French Minister of Defence, met in London on 29th June.
2. M. Messmer informed the British Ministers that the French Government had been forced to make a number of budgetary economies and in particular in the defence field to withdraw from the Anglo-French variable geometry aircraft project which was being negotiated.
3. This decision, which has been taken on purely financial considerations, has no effect either on the agreements already reached on the other aeronautical programmes, or on the possibility of new agreements.
4. The Ministers signed supplement number three to the Memorandum of Understanding of 17th May, 1965, authorising the second stage of the development programme for the Jaguar.
5. The Ministers decided to hold a meeting in September to discuss the progress of the collaborative helicopter programme."
EARL JELLICOE: My Lords, I am grateful to the noble Lord for repeating that Statement, but I must say straight away that it is a sorry one. It is grave in its implications for our defence posture in the 'seventies; it is grave in its potential impact on future collaboration on advanced projects with our neighbours; it is grave for the British aircraft industry. And it is grave, not least, for the Government and the Secretary of State for Defence. It means, in fact, the complete collapse of Mr. Healey's longer-term plans for military aircraft. I need only remind your Lordships that this joint project was proudly proclaimed by Mr. Healey in his 1966 Defence White Paper as being the goal, both operationally and industrially, of our long-term aircraft programme.
Quite clearly, we shall have to debate this important Statement in the near

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future. No doubt we shall have an opportunity later this month if, as I trust we can, we then discuss the last instalment of the Government's series of White Papers on Defence. In the meantime, I should like to put two questions to the noble Lord. First, can he categorically assure the House that the other agreed Anglo-French aircraft projects are in fact going ahead full blast? I ask this in view of the rather careful wording of the Statement on this point and in view of Press speculation that the Anglo-French helicopter deal is turning sour. I do not necessarily give credence to that myself, but I should be glad of a satisfactory assurance, if the noble Lord can give it to us.
Secondly, I must confess that I am puzzled by what the noble Lord said about alternative ways of replacing the V-bomber in its conventional role. Surely the noble Lord would agree with me that the original specifications for the British version of this aircraft—the Anglo-French variable geometry aircraft—covered a far wider role. Does this phrase mean that the modified specifications—I am glad to see that a project study is going to be carried out—will in fact be down-graded?
LORD BESWICK: My Lords, I agree with the noble Earl that this is an unfortunate Statement, but, of course, we are dealing with a situation which he will recognise is not of our making. I can give the noble Earl the assurance that he asks. I am glad to give it to him. I, too, have read the extraordinary report in the Daily Telegraph this morning. I should be most distressed to feel that there has been anything of a "tit-for-tat" as a result of a decision made by the French on this one aircraft. That report in the Daily Telegraph, I am assured, is wholly false and I am surprised that a paper of its reputation should have published it. So far as the future is concerned, I note what the noble Earl says about a debate. No doubt it can be arranged. I think I had better leave until that debate any consideration of what is entailed about the future of the V-bomber or its replacement.
LORD GLADWYN: My Lords, are the Government really convinced that a replacement of the nuclear V-bomber in the 'seventies could, in our present
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economic conditions, really be considered as what is called a credible deterrent from the political point of view? If not, among other alternatives that they are now considering, would they not also consider that of not replacing the nuclear V-bomber force at all?
LORD BESWICK: My Lords, I think that that is a leading thought which the noble Lord would do well to develop in the debate which we have been promised by the Opposition. It raises an aspect of the matter beyond the immediate situation.
LORD ST. OSWALD: My Lords, in the opening words of the Statement just read out by the noble Lord we heard that the French Government had decided, for budgetary reasons, that they could not continue. Can the noble Lord give us an assurance that they are only budgetary reasons?
LORD BESWICK: My Lords, that is an assurance which I am entitled to give. As the noble Lord will see from the communiqué when it is published, the French have agreed that this is the reason. Moreover, at the meeting which took place between the Secretary of State and M. Messmer, in May, when specifications were agreed, there was then absolutely no question of any hesitation on their part in regard to specifications, and we had no reason to think at that time that they would not find the aircraft project acceptable to them.
LORD MERRIVALE: My Lords, could I ask the noble Lord two questions? On November 30 last in another place, the Minister of Aviation, Mr. Mulley, announced that the Government were very well advanced in contingency planning should the Anglo-French V.G. aircraft project be cancelled. Can the noble Lord say what has been achieved so far in that respect, particularly with regard to the project study, now to be set up, being able to proceed rapidly? Secondly, may I ask with whom these exploratory talks are to be held? Can the noble Lord tell us who these potential partners are to be?
LORD BESWICK: I do not have the statement to which the noble Lord referred before me and will not therefore comment on it. So far as potential partners are concerned, I was referring to

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industrial firms, not overseas partners; but, of course, if we decide to go ahead with an aircraft of our own then we should hope that it would be possible to find potential partners, possibly on the Continent, for such a project.

PRICES AND INCOMES ACT 1966 (COMMENCEMENT OF PART II) ORDER 1967
3.58 p.m.
Debate resumed.
LORD HENLEY: My Lords, may I bring your Lordships back from that statement on defence to the prices and incomes policy? First of all, may I congratulate the noble Lord, Lord Shepherd, on having so skilfully brought together the three things we are talking about to-day—the Order, the White Paper on the Government's No. 2 Bill and the Motion to take note of the Government's policy on prices and incomes? We are having what in fact is a Second Reading debate on the Prices and Incomes (No. 2) Bill, but we are able to range far and wide and discuss not only what is in the Bill but what is not in it.
May I start off by saying a word or two about the Order and the No. 2 Bill which we shall be getting shortly? First of all, Liberals accept the machinery that is in this Bill and in the Order. I do not go entirely with the noble Lord, Lord Erroll of Hale, as to the previous history which led up to this state of affairs; nor can I go with him any way in his chief criticism of the Bill, which really is that it should contain no sanctions. It seems to me that there is nothing incompatible in having a voluntary system and, at the same time, having an ultimate sanction to prevent those clever boys who think that they can get away with things to their advantage from doing so. Any voluntary system must have sanctions of this kind. After all, a social club has sanctions, and that is a voluntary association, if ever there was one. If a member of a social club chooses to behave in an outrageous way to the detriment of his fellow members, then an ultimate sanction comes down on his head. This is what the Bill is doing, and it seems to me to be reasonable. It applies not only to the employers, but also to the unions.
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I do not feel that the Bill will be a dead letter. I thought that the noble Lord, Lord Erroll of Hale, in his admirably racy speech, was a bit rough. It is, after all, a piece of machinery. The noble Lord may disagree with the Government for having got into the jam which necessitated them taking this action in the first place; but the Government having taken the action, I disagree with the noble Lord's version of the history. This is a piece of machinery, and it seems to me to be a perfectly reasonable piece of machinery. As I think one of my honourable friends in another place said, it is a perfectly civilised piece of machinery. I say that in spite of the fact that the noble Lord, Lord Shepherd, said that he moved the Bill with some reluctance, and even went so far as to say that he moved it with some repugnance. I do not think he need have felt that. It seems to me, so far as it goes, to be a perfectly well balanced piece of legislation. It is adequately safeguarded.
I welcome Clause 5, particularly subsection (7), as probably most of us do. I do not see why the noble Lord, Lord Shepherd, should have any great regret or repugnance about it. It is a fair and reasonable piece of machinery for what it is supposed to do, which is to provide the transition from the stringency of pre-last year, as a result of the Government's prices and incomes policy, and as such, it seems to me all right. But—and this is where I think we on these Benches feel a certain uneasiness, and indeed a disquiet—we feel that we are still getting nowhere in the whole problem of pay structure. Pay structure is really the central problem of the two things we are discussing; namely, the Order and the Bill.
On the other aspects covered by the noble Lord, Lord Erroll of Hale, such as the Government's own expenditure and the rise in prices, I should prefer to talk about those when we come to the Finance Bill in a week's time. I want to talk now about our disappointment at the fact that we do not seem to be getting anywhere with regard to this central point of pay structure. I say, also with regret, that getting nowhere seems to be one of the things which happens so much with this Government. So many people

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who voted for this Government expected certain things to happen which just are not happening. That is exactly the case with regard to this problem of pay structure. The Government have taken action in a number of different ways, but all the actions that they have taken—mostly small ones—seem to us on these Benches to have distorted the economy and shown no evidence anywhere of increased productivity.
I think it is reasonable to claim—and this is what the noble Lord, Lord Shepherd, said—that the Government's prices and incomes policy has so far done well, in that it has weathered this storm of crisis of July, 1965, and I think it is too early to expect the sort of results which we on these Benches wished and are disappointed have not been achieved. On the question of pay structure, and the matters that go with it—balance of payments, inflation and productivity—I think a case can be made for saying, as the noble Lord said, that it has proved itself. It has been highly effective, and some progress has been made; and some of the statistics which the noble Lord, Lord Shepherd, put forward as to prices, as well as support for the voluntary system, impressed me. Nevertheless, we on these Benches feel that the Government have, in effect, merely bought time, and that they do not seem to know what to do. It might be asked whether any of us know what to do. The problem is extremely complicated. The attempt which the Conservative Government made earlier was even more of a failure than they suggest this Government's attempt may well be. So it is not a problem that is easy to solve; and I should be the last to suggest that we on these Benches would solve it better than anybody else. But what one is doing is trying eventually to hammer out some way of getting to the bottom of the problem.
This Bill is said to be the beginning of a return from the necessary compulsion of last July. I accept that that compulsion was necessary, although I am not sure how far some of my noble friends would go with me in that respect. Nevertheless, one can cover oneself by saying that the Government should not have got into this position in the first place. Therefore, I can say that I think the Government did the right thing last July.
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The noble Lord, Lord Shepherd, asked for an orderly 12 to 24 months, which is what this Bill is designed to cover, and he pointed out that support for the severe restraint has been widespread. Indeed, his figure of 14 Orders really shook me. It is a remarkable thing; I had no idea it was so small. But, again, this is a transitional policy; it is a stop-gap. The noble Lord, Lord Erroll of Hale, says: "Here we are with the No. 2 Bill; next year we shall have the No. 3 Bill." I hope he is not right or, at any rate, that when the No. 3 Bill comes along it will show the sort of wider strategy to the whole problem that we need. The Government assure us that their prices and incomes policy is not a substitute for this wider strategy, and that this Bill only prepares us for the return to the point the Government's prices and incomes policy reached last July. I hope that this is true, because if the noble Lord, Lord Erroll of Hale, is right, that this is going to be one among a whole series of Prices and Incomes Bills, this would not be what we want to see. We want some sort of wider strategic policy.
The Government want this scheme to be voluntary and effective. So do we all. The noble Lord, Lord Shepherd, said that there had been an overwhelming response in this direction. I agree with him; I think there has been. I believe that it should be voluntary, and I disagree with the noble Lord, Lord Erroll of Hale, in saying that there is incompatibility in the voluntary system having a sanction. Nor—and I say this with some backward glances to my own Benches—is "voluntary" in any way synonymous with a free-for-all. A free-for-all really is something which I feel only the dinosaurs want. I would also go further, in the context of dinosaurs, and say that the voluntary system is not synonymous, either, with the ganging up of the employers and unions to milk the public. I think the Government have this in mind, and have very strongly in mind that there is a third partner in any negotiations: not just the unions and the employers are involved, but also the public.
As regards a voluntary system (and this is where we are getting down to the problems that bother me so much, because I do not know the answer, and one

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can only pose the question), can an effective voluntary system be devised which prevents this aspect of negotiations, which seems to me to be a built-in part of the inflationary spiral? I refer to this collusion between the employer and union to milk the public. I cannot help the feeling, reading between the lines, that this is exactly what the employers and the union delegations do when they confront the Prices and Incomes Board. I say, "reading between the lines" because I have no evidence of it; but that is how it appears to me sometimes. It is rather like the medieval barons carving out the fiefs among themselves: the over-mighty subjects confronted by a powerless king. I know that the Government are fully aware that there is this third party. Whether the Prices and Incomes Board is the powerless king, or whether the public is the powerless king, I do not know. But, somehow or other, these two over-mighty subjects have to be got under control; and until that happens this inflationary spiral—and they are the chief cause of it—will continue.
That, of course, is the central argument against the old free collective bargaining system: that it is not, in fact, bargaining between equals, but a collusion between employers and unions to hold the public to ransom, and a collusion also in fact to present a united front to the Prices and Incomes Board. As I say, I think the Government are fully aware that this is a very important point. I suggest that it is a central point of the inflationary spiral.
The question then arises, how to devise a system which can overcome this. The Government have put forward a system which I suppose is called one of central direction. There are so many difficulties in the problem of a system of central direction that quite a number of people, who are not necessarily dinosaurs, have rejected it. The difficulties are really technical difficulties: difficulties as to whether in fact it is impossible to devise a kind of national grid for wages. There are so many different complexes coming in that this cannot be done. There is the difficulty of collusion beforehand. There are all the pitfalls that appear in trying to devise productivity agreements. Productivity agreements sound so easy—and we on these Benches are always talking about productivity agreements—but
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when it comes to trying to negotiate a productivity agreement all sorts of apparently insuperable problems, as noble Lords opposite will know only too well, begin to appear. I do not mean the obvious problems like devising some scheme of "blackmail" vis-à-vis a restrictive practice which ought never to have cropped up, or problems as to who deserve productivity bonuses and who do not, and the difficulty about making a straight estimation of what the future is going to be. Problems like this are all very difficult. Trying to devise a national grid for wages is also so difficult that some people have almost despaired of it.
One can swing slightly towards the central direction system; and, without being a dinosaur, one can swing slightly towards the other system—some sort of half-way house in which the old system of free collective bargaining is not left as a free-for-all, but is modified and safeguarded in such a way that it might still go on working. I think that although a very strong case has been made out against the old free collective bargaining system, it has not been totally demolished; and in so far as it has not been totally demolished there may be scope for reforming it in some other way which might well be better, and possibly more elastic, than a central direction system.
Some of my colleagues have suggested that there might be bargaining in two ways. It might be possible to have the basic wage negotiated at industrial level, where agreement reached would apply only to people on the minimum: there would be no straight increase across the board for people not on the minimum. But fringe benefits, variations in pay, overtime rates, and all matters of that kind, would be negotiated at plant level. I have no experience of this kind of negotiation, and I do not know whether it would be possible; but on the face of it it does not sound unreasonable. Indeed, if it were adopted it would cut out some of the very strong inflationary pressures for these rather over-simple straight increases across the board. That would deal with the inflationary aspect of it.
As to the other aspect, the prevention of collusion between the employer and union, I think again that one might build into this reformed form of the old free collective bargaining system some kind of anti-social practices court, which would

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run on the same sort of lines as the Restrictive Practices Court—something with teeth, which would effectively prevent this sort of collusion; and, at the same time, one might have some kind of supervisory board representing the public interest. The Government themselves would possibly help in providing research on the statistical side of the labour market, which would be of very great assistance.
The Government may say, and supporters of the central directive system may say, that this is just as easy to do in a central direction system. I do not know. I think that my colleagues are swinging the other way. They would prefer to try to reform the old system, with safeguards. Most important, so far as social justice is concerned (I am inclined to think that this comes into using the free collective system instead of the central one), you can probably achieve what you want in regard to social justice by means of taxation and security payments, rather than by straight wage increases across the board, large amounts of which go to people with no dependants and no very great responsibilities. So much for the egalitarian side of social justice. So far as the qualitative side of social justice is concerned—what is the value of this job as against that, and what is the value of so-and-so's contribution?—all I can say is that this is so difficult a problem that it rather reminds one of what Hamlet said in another context: "If we all got our deserts, which one of us would escape a whipping?" So far as trying to assess the value of anybody's qualitative contribution is concerned, it is so difficult to do that I think perhaps one should leave it alone—it is not something that would fit into a national grid—and try to get the same result by removing obvious injustices.
So much for the two possible ways in which one approaches that central point of the prices and incomes policy, which really is wage structure. You can look at it either way. You can probably make either of those systems work, with good will. But both of them must have teeth. So far as "taking note of the Government's Prices and Incomes policy" is concerned, as the Motion asks the House to do, what we feel (in spite of all the kind things, I hope, that I have
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said about the Bill, so far as it goes) is that we are very disappointed that the Government have not in fact got farther than they have done. We have had an admirable Statement of Intent, and we have had a bit of stop-gap tinkering; but I think the Government have been in long enough now to get back to something rather better.
4.20 p.m.
LORD CHAMPION: My Lords, at the beginning of this debate we had an excellent and informative speech by my noble friend, Lord Shepherd, which gave the House the information necessary for a serious consideration of the matters that are before us to-day. Then we had from the noble Lord, Lord Erroll of Hale, the delightful "cheeky chappy", frothy sort of speech that we have come to expect from him, always entertaining to listen to but seldom having very much body in it, rather like the froth on a very poor glass of beer. Following that we have had the speech from the noble Lord, Lord Henley, which I thought certainly was quite sensible in parts. I did not quite follow him in his reference to the free-for-all and the dinosaurs, but if the dinosaurs did have a free-for-all, they expired—they are no longer on the earth—and I imagine that if we, in our society, attempt to get back to anything like a free-for-all we, too, shall expire.
Criticism of the Government's incomes and prices policy seems to me to come ill from those who, in a long period in Government, failed to solve this problem—and it is a very serious problem—the problem of incomes and prices. I do not blame them for their failure. The simple fact is that no advanced industrial country in the world has yet been able to solve completely this great problem—and it undoubtedly is a great problem. I recognise, of course, that it is the job of the Opposition to oppose, but I think in addition to opposing and making the sort of speech we heard to-day from the noble Lord, Lord Erroll of Hale, it is their task to put forward serious alternatives that will stand up to examination, and I honestly do not think that the suggestions made by the noble Lord in the closing paragraphs of his speech would for a moment bear serious consideration.
What I am going to say to-day will have greater reference to the income,

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or wages, side of the problem than to prices. I rather hope to hear from my noble friend, Lord Sainsbury, on that aspect of the policy which we are now considering. Twenty years ago, in a paper written for a Labour Party group in the other House, I said:
"There is an urgent necessity for a recognition of the need for a short-term and a long-term policy which will ensure overcoming our immediate maldistribution of labour and will provide a means of solving the labour and wage problems that are the inevitable concomitant of full employment."
Re-reading that, I realise that it was hardly a notable example of good English, but the sense of it was just about right, for the problems of full employment are vastly different from the problems in a situation where there is massive unemployment.
The twenty years that have intervened since I wrote those words have proved beyond a shadow of doubt that I was right: that full employment brings problems—problems of discipline in industry, problems for the employers, problems for trade unions—which we scarcely dreamed of in the years between the wars. This is something that we are attempting to tackle. I know that in the period 1945 to 1950 Sir Stafford Cripps, by a combination of the force of his personality and using the allegiance which the unions felt they owed to the Labour Government, did, for a period during the post-war Labour Government, succeed in checking the wage-price spiral. Inevitably, under the pressures which every intelligent observer understands, eventually the walls of restraint burst and we were back in the inflationary spiral. This is not only a wage-price spiral; it is also a wage-wage spiral. Perhaps I should explain that the wage-wage spiral is the leapfrogging which takes place when one union jumps over the back of another union in securing wage concessions, and the other then has its turn; and this leapfrogging can, and does, take place quite apart from the pressures imposed by the upward movement of prices.
Since 1964 the Government have, by their prices and incomes policy, made a brave attempt at solving what has up to now proved to be an intractable problem. I make no pretence, and I am sure the noble Lord, Lord Shepherd, would make no pretence, that the Government have
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solved the problem, but by the Declaration of Intent of 1965, the setting up of the Prices and Incomes Board and the Prices and Incomes Act 1966, and especially the drastic powers contained in Part IV of that Act, they have given us a pause. It is only a pause. But it was not only those powers that held back the flood, because the powers were taken at a time when the general public was heartily sick of the existing situation, and so there was a general social consent, besides which there was also an act of self-discipline by the unions.
Here I would completely disagree with the noble Lord, Lord Erroll of Hale. There was an act of self-discipline by the unions, despite the fact that the Government had taken reserve powers. That self-discipline was amply demonstrated by the noble Lord, Lord Shepherd, this afternoon, when he said about Part IV, that
"Fourteen orders only have been made dealing with pay covering some 36,000 workers out of a total employed population of some 23 million."
The general atmosphere prevailing and the courageous Act of 1966 enabled trade union leaders to resist the pressures which understandably build up behind them—and just how great those pressures can be is known to everyone who has ever held a responsible position within a trade union. Here I am sure my noble friend, Lord Cooper of Stockton Heath, who holds such a position would agree with me. I think that my noble friend Lord Shepherd was right to claim on behalf of the Government that up to now there has been a fair measure of success flowing from the Government's policy. But from the Declaration of Intent to the Order in Council which we are considering to-day is very much in the short term only. To bring about a generally accepted and demonstrably long-term solution of the prices and incomes problem is the task facing us all to-day.
Freezes are usually followed by floods. I am not sure whether the noble Lord, Lord Drumalbyn, used those actual words when we were discussing this matter once before, but he certainly used words very similar to those. I agree with him absolutely that there is always the danger, when we have had this sort of thing, that eventually, when there is a thaw, there will be the sudden flowing of waters leading to floods. The question

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at this moment is will the dam of trade union restraint burst under the pressures already building up and will our condition soon be as bad as, or worse than, it was before the measures to which I have already referred, came into being? Now the real test begins. Within our sort of society compulsion of the kind contained in Part IV of the 1966 Act can be used for only a limited period, and I think the Government were right to recognise that fact and to act in the light of it. We have had a pause, but where do we go from here?
The T.U.C. is in process of developing its own system for securing notification and the vetting of wage claims. I wish the T.U.C. well in that great task, but one wonders whether the channels of general consent within the individual trade unions which make up the T.U.C. have been dug deep enough to enable that body to exercise the necessary authority. We have to remember in this connection that the Trades Union Congess has no power whatsoever to instruct the individual unions affiliated to it. The T.U.C. can provide the central leadership, but it cannot control the policies of the individual unions. I am hoping that out of this attempt by the T.U.C. at securing a rational wages policy will emerge not purely an advisory body, as it is at present, but one with a much greater degree of real authority. I understand that the T.U.C. does not favour the implementation of Part II of the 1966 Act, but I should have thought that the little additional time and discipline provided by the Order in Council, and the powers under the Bill which will eventually come to this House, will give the T.U.C. and the individual unions a little more time for doing what I have called "digging the channels of consent" a bit deeper than they are at the moment. I hope, too, that the T.U.C. will be able to help to develop a pay structure, the sort of pay structure mentioned by the noble Lord, Lord Henley. This is a wages policy. A wages policy includes and must, of course, contain a rational and generally accepted pay structure within it.
In the meantime the criteria for incomes behaviour set out in Command 3235 and the guidance on productivity agreements given by the Prices and Incomes
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Board appear to me to be just about right. But in connection with the productivity agreements I would utter this word of caution. Everyone concerned must always take into consideration the fact that not all works or industries can raise their productivity and so their wage packets, by work study, work measurement, work standards and the like. In certain types of industry the raising of productivity is comparatively easy, given the right atmosphere; but those engaged in other types of industry and the services cannot be expected to stand idly by when others are leaping ahead in their living standards—their living standards leaping ahead, that is, as a result of productivity agreements. I recognise that we have to take other things also into consideration. The demonstration, as mentioned by the Prices and Incomes Board, that a part of the result of the productivity agreements is being devoted to lower prices or the maintenance of existing prices will not be enough to keep those not directly affected quiescent. They just will not stand idly by when they see others' standards of living leaping ahead.
It is true that Article (vi) of the guide lines of the Prices and Incomes Board says:
"An agreement covering part of an undertaking should bear the cost of consequential increases elsewhere in the same undertaking if any have to be granted."
That is excellent, as far as it goes; but the consequential increases elsewhere will stretch out far beyond the individual undertaking. To take that into consideration must somehow be the task of a body, such as I hope the T.U.C. will develop into, or perhaps the Prices and Incomes Board. That is to say, there must be a body capable of considering the effects as a whole and having the power to keep such advances under some sort of control.
I must briefly mention the fact—I suppose it is so self-evident that I scarcely need to do it, but I feel I must—that if we do not somehow manage to resume a reasonable rate of growth in our economy, the task of securing an accepable wages and incomes policy is going to be rendered well-nigh impossible. I need not overstress this. The noble Lord, Lord McCorquodale of Newton, shakes his head.
LORD MCCORQUODALE OF NEWTON: My Lords, I nodded my head.
LORD CHAMPION: My Lords, I should have said that; I should have said it was a friendly, acquiescing nod, which I welcome from the noble Lord, having regard to his knowledge of this whole matter. I hope I have put that right.
LORD ROBERTSON OF OAKRIDGE: My Lords, would the noble Lord allow me to intervene with a question? Bearing in mind what he has just said, does he feel that the prophecy that has been made by the Government with regard to the rise in wages during the coming year, which is at least twice as large as the prophesied rise in the rate of productivity, has been a helpful thing for the trade unions?
LORD CHAMPION: My Lords, it inevitably raises difficulty for the trade unions. I am not at all happy about it, I must admit. But I would also agree with something which I heard the noble Lord, Lord Boothby, say in this House recently: that a moderate inflation is inevitable, or seems to be inevitable in a situation in which there is prosperity of the whole country. I hope we shall get over that eventually, because inflation is so disastrous for certain people. I think our experience in the past is that a moderate degree of inflation has always accompanied prosperity in any country. But I just do not like it and hope we shall be able to find some means of avoiding any inflation because of the difficulties it brings.
The Government have undoubtedly suffered in popularity as a result of their incomes and prices policy. If they do succeed in this policy, even if they lose the next Election as a result, the country, in my opinion, will still owe them a great debt of gratitude, if we can solve this seemingly intractable problem. I end by wishing the Government well in this difficult task to which they have set their hands.
4.38 p.m.
LORD MCCORQUODALE OF NEWTON: My Lords, if I may say so, the whole House is indebted to the noble Lord, Lord Shepherd, for the admirable way in which he explained this measure and the reasons behind it, which the Government have announced in so many
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different bits of paper that it was difficult to gather them all together. We then had what I thought was a delightful, amusing and very "meaty" speech from the noble Lord, Lord Erroll of Hale. But as he seemed to be in a matter of some collusion with the noble Lord, Lord Champion, about when to leave this Chamber I do not think I had better pursue that further.
We had from the noble Lord, Lord Henley, criticism of the Government because they had not got anywhere, but then (I say this without wishing to cause any offence) he himself did not seem to get anywhere in his speech either, except to ask quite a number of questions to which he gave us no answers. I would take him up on one point. He made much If fear of collusion between the trade unions and the employers to rob the general public. But who are the trade unions and the employers? They are the general public. The trade unionists and their wives and families are, I suppose, 20 million or 25 million—more than half the population. There are I do not know how many shareholders in public companies in this country—one million or more with their wives and dependents. Indeed, they are the public. I think this nonsense about the collusion between the two sides of industry to sweat the public should be condemned once and for all. I have been in industry for forty years, and in my opinion it is quite nonsense and I have never heard a single substantiated case of it. I am sorry to get slightly hot under the collar, but I do object to industry being slandered in this way.
LORD HENLEY: My Lords, will the noble Lord allow me to interrupt him? What I stressed also—and possibly this was the more important part—was that although I had no evidence, I suspected from reading between the lines that there is a tendency for employers and unions to get "in some sort of cahoots" between themselves to decide what exactly they were going to say to the Prices and Incomes Board.
LORD MCCORQUODALE OF NEWTON: Well, my Lords, the noble Lord may have quite a bit of information about that. I have none. But from what I know of the behaviour of the British Employers' Confederation, in the old days, and the C.B.I. now, and the

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T.U.C., although we do agree on many important matters they are largely agreements in common sense and are not agreements to sweat or persecute any third party.
The noble Lord, Lord Champion, made one of those attractive, reasonable speeches which this House has come to expect from him, and which I think everybody enjoyed. I should have liked to be able to criticise it, but I cannot really find anything much in his speech with which I did not cordially agree, and I hope that it will be studied and read in certain quarters because it gave both management and trade unions some wise advice as to the future.
The White Paper on Prices and Incomes which the Government presented in March is, of course, the basis of this debate. The Government told us about the Orders and the Bills that provided the background for our proceedings, and I must confess at once that this statement was largely platitudinous, although many of the platitudes were quite unexceptionable. But even if I say that I think that Mr. George Woodcock was too hard on it when he described it as, "a plaything, a bauble". I think it has some substance in it, though possibly not so much as the Government hoped. Nevertheless, the White Paper was a useful guide for this next year; and I hope, as I think we all do, that some effect in steadying and moderating any excesses in demand both in regard to prices or incomes may be the result of it. If it does that, then it has my modified blessing.
But if I may say so in passing, there is one phrase in this White Paper to which I take exception. I think it deserves close attention. Possibly it slipped in by mistake, but I think it needs criticising and considering. On page 5 of the White Paper (Cmnd. 3235), which was presented in March, and which is the subject of this debate, paragraph 19, talking about incomes, says:
"… the continuing objective of the incomes side of the policy is to develop effective arrangements for ensuring a closer relationship between the overall growth of money incomes and the growth of national output"—
of course, we all agree on that—
"to raise productivity and efficiency"—
which I think goes without saying. Then it says:
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"and to promote social justice".
That at first sight sounds quite reasonable, but I think we should look into it a little more closely. Social justice in relation to wages and salaries has, I would suggest, almost a sinister ring. Surely history shows that in this connection social justice all too easily means the superseding of a pattern of economic rewards resulting from the play of markets courses and the efforts of people, by a pattern which is dictated by the preference of politicians. For who else is in a position to judge, and to enforce what they think is social justice?
I consider that this might be a most important step, if it were seriously undertaken, towards what has been well described as that most tyrannical of societies where all social values are dictated and subscribed to by politicians. I think that when the Government put this in, they were thinking about people on very low incomes. But social justice is not something that can be established by law in regard to wages and incomes, and yet remain a free country.
It will be recalled that the Prime Minister at the General Election, I think on March 10, 1966, said:
"I don't think that you can ever legislate for wages increases … once you have the law prescribing wages I think you're on a very slippery slope. It would be repugnant, I think, to all parties in the country".
The Prime Minister makes some sensible and pregnant remarks. I think the great criticism, if one criticises these things, is that they so often do not get any further. But in this case I am quite sure he is right; yet three months later we had, and had to have—I am not denying it—the squeeze, the freeze, and all the unpleasant things which the economic crisis compelled upon us.
But now that we come to another stage I think we should clearly distinguish between the freeze, the stop and the period of severe restraint. What we are coming to now I would call perhaps the minimum freeze, or the minimum restraint, or, as is perhaps the popular phrase in these days, the mini-restraint. As I say, I do not myself criticise the Government for taking drastic measures last July. If criticism lay, it lay of course in permitting conditions to get so out of hand that the emergency came about.

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I agree most sincerely with the noble Lord, Lord Shepherd, that the trade unions, the employers, manufacturers and industry generally, played their part in the freeze, to a large extent voluntarily, and in the way that we would expect everybody in this country to behave in a state of emergency, because whatever the Government, when we are in an emergency the country really does its best to put it right. But the period of restraint and the activation of Part II which these proposals bring about exactly contradict what the Prime Minister had in mind. They set out to fix and to legislate for State-administered wage increases, which the Prime Minister specially singled out as being impossible. We shall have such a system with us for another year. It is going to be very difficult. I am not going to condemn it, because anything which could introduce moderation must have our support; but I do not think it is a very good idea. I believe that it promotes injustice in the name of social justice. I believe that it bites arbitrarily, unevenly, and I am not sure that it is going to do anything like the Government hope it will do.
Both the Confederation of British Industry and the T.U.C. pressed the Government, when the crisis was over, to get out of the way and let the T.U.C. try out their brave vetting system, and to let manufacturers, commerce, and the like, restrain dividends and prices, so that the Government themselves could concentrate on creating the proper economic climate, under which these things might work. I say most sincerely that the T.U.C. deserve considerable credit for pledging themselves to do their utmost to make this voluntary vetting system—and it is a most difficult task—a success. It has got off to a good start, and I hope that it succeeds.
May I digress for a moment to say something about my own experience and pass to more controversial ground? When I came back to Parliament just after the war I was privileged to have many conversations on these subjects with my old war-time chief, Mr. Ernest Bevin, for whom I had the highest regard. He passionately believed in free negotiating machinery between employers and trade unions, to which of course he had given a great deal of his life. As many of your Lordships know, one of his proudest boasts was that he had never in the
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whole of his industrial life gone back on any agreement he had made.
He saw quite clearly that after the war, in conditions of full employment, to which the noble Lord, Lord Champion, has referred and to which we all subscribe—and nobody in his senses wants to go back to the pre-war conditions, which some of us knew in our constituencies in the 1930s—the trade unions were going to be much stronger from a bargaining point of view than the employers. He feared that this strength, if wrongly used, might wreck the system. Indeed, he strongly urged me, when I left Parliament, to do all I could with the old British Employers' Confederation to strengthen the employers' side in their bargaining power with the trade unions. He saw the danger which is at the root of a great number of our economic troubles at present: the imbalance between the great strength of the trade unions—a strength which they have rightly built up, especially in the war—and the employers, in times of full employment. But while we have full employment and the T.U.C. and the trade unions are above or outside the law, it is very difficult to combat this danger.
I have come to the conclusion, having studied the question over many years—and I believe (though I have no inside knowledge) the majority of the Royal Commission are likely to come to a similar conclusion—that the trade unions must come under the law and be legally responsible for their actions in these modern times. We are not back in the old Taf Vale days, in the year 1906. We are now surely in an adult world in which the trade unions are one of the strongest forces in the land. I do not believe that they need any longer to be in this exceptional position, as if they are frightened of the law. I believe that they should be legally responsible for their actions and that their collective agreements should in equity be legally enforceable by both sides in the industrial world. I believe that we are the only industrial country in the world where the trade unions are in this position vis-à-vis the law. I am convinced that, in practice, the legal framework would be a help, not a handicap, to both sides in achieving sensible, honourable, voluntary relationships in industry. It must encourage more thoughtful and responsible actions

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by both sides or both parties to any bargain. At present, no less than 90 per cent. of the stoppages in this country are unofficial. Powers of this sort under the law by the trade unions might enable them to deal with the stoppages in a way which they cannot at present.
Speeches by senior Ministers and the relaxations in this Bill have tended to suggest that our financial and economic crisis is past, or almost past. This is not so. If Mr. Stewart's estimate of a 6 per cent. rise in the scale of wages and earnings over this year is correct, then, coupled with all the difficulties overseas, in the Middle East, in Rhodesia and in other parts of the world, which cause pressures on our balance of payments, I believe that we are not yet by any means out of the wood. I urge the Government to take the necessary steps in time to see that we do not drift back into the position from which the freeze and the squeeze has just brought us clear. If and when we do get through these troubles—and we shall get through in the end; this country always does—I am quite sure that the Government's duty is to maintain the proper economic climate in the country and to allow the trade unions and the employers, both under the law, to return to a system of voluntary industrial negotiations which has served us well in the past and, with it proper understanding that education has given us, will serve us well in the future.
4.59 p.m.
LORD COOPER OF STOCKTON HEATH: My Lords, I, too, should like to pay my tribute to the noble Lord, Lord Shepherd, for the manner in which he introduced this complicated matter. But, as a practising trade union officer, I cannot help but take note of some of the advice we have had and to comment upon it. The noble Lord, Lord McCorquodale of Newton, referred to the strength of the British trade union movement. I do not really see how one assesses this strength; I think that the public are getting a little confused on the matter. We are certainly nothing like as strong as the Swedish trade union movement. We do not represent much more than 50 per cent. of the work-people in this country. I should like to see the unions much stronger, so that
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they could be more representative of work-people. The real point is not the strength of the trade unions, but the social aim to which all Parties pledged themselves during the war—to do all they could to provide full employment. There is an indirect strength which flows from that, but it is not the organised strength of the trade unions.
The noble Lord, Lord Erroll of Hale, referred to the "new deal" for the unions. That is a little wide of this debate, and the time to talk about that will be when the Report of the Royal Commission comes up for consideration. But, so far as I can understand it, the "deal" that the noble Lord wants to give us would be a case of encumbering us with his help. I do not think the trade union movement is asking for any help in this direction. The question of responsibility was referred to, but under any examination the trade union movement will prove to be a very responsible body indeed. I can elaborate that point. In the post-war period of full employment we have had an indirect power. A trade union cannot be in a better position to negotiate than when everybody is employed, and anybody who has had the experience of negotiating when there are 2 million unemployed will understand the point. So we have been in a very strong position. But centrally—and this is the important point—we have had enough sense to know that when the ball is at our feet we shall bring the whole economy down if we kick it too hard. We fully understand this, and during the whole of the post-war period we have behaved in a very responsible manner.
In this debate we are asked to take note of the prices and incomes policy of Her Majesty's Government, and therefore I should like to refer to the Command Paper which was published in March where the immediate aim of the Government's policy was set out in paragraph 4. The Paper states that the first objective is:
"to create conditions favourable to sustained economic growth and to avoid the 'stop-go' cycle."
I accept the warning, which has just been uttered again by the noble Lord, Lord McCorquodale of Newton, that it is already estimated that by existing commitments earnings will go up this year by about 6 per cent., and that a 3 per cent.

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increase in productivity is hoped for. We now have this very real difficulty in the Middle East, and there is the trouble about oil which could easily seriously affect our balance of payments. It may well be, as the noble Lord, Lord Erroll of Hale, says, that this can cause future difficulty for us, but it is not of the Government's making. This is one of those outside, fortuitous things which happen and which have a serious bearing on what trade unions and employers ultimately have to negotiate about.
For a short time I belonged to what is referred to as "the other place". What went on there was cut-and-thrust, but here—there are ladies here, so I cannot say that we are gentlemanly, but the kid gloves are on. Now and again there is the odd aberration here, and colleagues who were in the other House are sometimes as political as ever they were. But I am sure that this is the value of the Lords. We are gradually getting more trade unionists in here, which is a good thing in establishing a balance. I see captains of industry on both sides of the House, and this is all to the good. But there is a difference in the confidence of the politician as to how he is going to sort things out.
I think our position in this country, if we can only rally and organise ourselves, is absolutely marvellous, because there is a willingness on the part of both the T.U.C. and the C.B.I. to do all they can to get this country economically viable. But when you start talking about how to do it—I was sitting on "Neddy" this morning, and the day before we had a joint meeting with the C.B.I.—you come up against difficulties. As we all know, in recent years we have had two plans, and other plans are being considered now, all with a different basis. How are we to do it? The noble Lord, Lord Erroll of Hale, alleges—I do not know whether it is true—that the export market has moved in our favour. Nevertheless, British industry—and it is British industry which in the last resort sells the goods—has done a good job. If it is quite as easy as the noble Lord suggests, we should have done a lot more. But we do not want to be critical about this matter. British industry has done a marvellous job on export growth in recent years, but not good enough to get over the awful trouble of having these balance of payments crises from time to time.
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The next objective of the Government, as set out in paragraph 4 of the Command Paper, is:
"To work as quickly as possible, consistent with the considerations set out in (i), towards the operation of an effective policy on a voluntary basis in agreement particularly with the Confederation of British Industry and the Trades Union Congress."
Set against that—and this is the subject upon which I want to spend my time—is the attitude of the trade unions, and the T.U.C. in particular. There is no doubt about where they stand; they want "voluntaryism", and they want it absolutely. This has been made quite clear and is understood, and the wish of the Government that we should work towards "voluntaryism" has been well expressed in speeches by the Prime Minister and by the First Secretary of State. The Government have paid tribute, as has also been done this afternoon, to both sides of industry who have worked and given every endeavour in support of the whole policy. I think I should pronounce here that it is not just an incomes policy; it is a productivity, prices and incomes policy.
LORD McCORQUODALE OF NEWTON: My Lords, I wonder whether I may interrupt. I hope the noble Lord will agree with me that in spite of this working together there has been no collusion to "sweat" third parties, as was suggested.
LORD COOPER OF STOCKTON HEATH: My Lords, I understood the comment of the noble Lord, Lord Henley. This is a new situation, and this is the trouble when we are moving into new situations all the time, especially on this subject. When the Prices and Incomes Board—and they are feeling their way—set up about six to eight hurdles over which you have to jump before you can get a productivity agreement approved, it forces employers and work-people almost into a straitjacket of negotiations, because though they may negotiate freely they know that ultimately they may well have to go to the Prices and Incomes Board to justify that agreement. Therefore, they have to look into factors of justification to which they normally would not have regard, and about which there may be great merit. This is not a plot against

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the community, but it is rather interesting. This is my theme. As I see industry, employers and labour are coming together more and more, as they must do, and we appreciate that they must do, if we are to get out of our difficulties.
As a measure of the way management and work-people have worked together on restraint, we find that wages hardly moved at all during the period of the six months' standstill, and during the whole of 1966 dividends were just less than they were in 1965. This gives us a reasonable measure of how genuine the effort has been. But throughout this policy the T.U.C. have said that the restraint can work only on the basis of consent, and they have always resisted legal provisions. When the first restrictions came in, in, I think, September, 1965, the T.U.C. accepted the equivalent of Clause 2, but the argument now is that, having had long experience, they feel that it is better to be completely free and not to have this reserve legislation.
The main preoccupation of the T.U.C. in regard to the incomes policy, however, is with the development of a long-term policy. Generally, we take the view that few people now argue against having a productivity, prices and incomes policy. Although I appreciate what the noble Lord, Lord McCorquodale of Newton, has said about his town in regard to collective bargaining, I do not feel that either the employers or the trade unions in this country can take pride in the post-war achievements in negotiation. Because, as the noble Lord, Lord Henley, has said, it is not happening just now; it has been happening since 1945—a distorted wage pattern; and with every phase of wage increase that wage pattern has become more and more distorted.
This may well seem self-criticism, but there is much more to it than that. Because of full employment, as everyone knows, we have had areas in this country in which there has been an excessive shortage of labour, with the inevitable result that without the trade unions' lifting their hands wages in those areas have gone up; and we have had other areas where there has been excess labour and where, therefore, the wages have not moved. I have often said—I say it without fear of contradiction,
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and it can be confirmed by a little search—that often it is the case that a man's wages are dependent on where he lives, and not on what his job is. In this country, for the same job there can be £5 a week difference in wage, according to the geographical area in which a man lives. I call that a distorted wage pattern; and I would say that under a voluntary system neither the employers nor the trade unions can get out of that. This is the market controlling the situation. "Leapfrogging" has been referred to, but in many other ways it would be difficult, unless you can get comprehensive control, national control, over collective bargaining. That is the only way.
LORD HENLEY: My Lords, would the noble Lord agree that we might have the best of both worlds by having the basic rate agreed at industry level and fringe benefits and all other minor changes negotiated at plant level? This, of course, would get over what the noble Lord has been saying about the regional differences.
LORD COOPER OF STOCKTON HEATH: For many other reasons I think we are going to turn back again and move from the centre to the plant level. But, again, we cannot talk of British industry wages like this, because if we take one industry, such as engineering, with perhaps 3½ million people, we see that their basic rate did not mean anything, and everything was negotiated on the shop floor. On the other hand, if we take other industries, like the chemical industry, we find that they had a pretty tidy pattern nationally, and therefore the shop floor became less significant. But it is very difficult to generalise. But I will just proceed on the objectives of the T.U.C., which I think the House will find of interest because it gives an indication, at least, of how people are thinking. Whether it is the perfect answer, whether it is going to work, is another matter, but it is an indication of how people are thinking.
First of all, the T.U.C. were able to get approval for their proposed scheme of dealing with wages at a conference of executives of unions held in March of this year; and it was approved by 90 per cent. Roughly, this is their positive approach to this problem. The T.U.C. would want, in the autumn of every year, to have discussion with the Department

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of Economic Affairs—and this, I think, is about the place where community interests can be brought into consideration. They would also wish to have discussions with the C.B.I.; and the purpose of these discussions would be very similar to the exercise that takes place in Sweden every other year, I think it is—namely, to try to make a reasonable assessment of what the economy can afford by way of incomes distribution. They would not take any power away from any of the unions from the point of view of collective bargaining. All they would expect the unions to do would be to behave in a civilised manner and conform to the collective view of what is reasonable from the point of view of the economy—and they want to operate this system without any form of legal sanction.
As I have said, they would give this consideration in the autumn of the year. They would take their views for collective consideration to the whole of the executives of the unions, as they have been doing lately; and this would be in the following spring. Then, if that was approved by the unions—and this is the control—if the unions, collectively through their executives, accepted the assessment worked out by the T.U.C., then the T.U.C., through its Incomes Policy Committee, would endeavour to implement this kind of arrangement.
I do not want to go into a lot of detail, but in this there is a great prospect for the social justice that was referred to by the noble Lord, Lord McCorquodale of Newton; and, in fact, it can be demonstrated that in the standstill and in the period of severe restraint the lower paid have been catching up. For instance, the Prices and Incomes Board have issued a report on Government manuals which is rather a dramatic thing and which has now been implemented. It will mean considerable increases for those who have up to now been regarded as low-paid workers. They have also issued a report with regard to municipal employees and gas, water and electricity employees. They are very interesting reports, and show very good and positive work by the Prices and Incomes Board.
To come back again to the policy of the T.U.C., they would envisage, first, a conference in the autumn, followed by a meeting of executives in the spring to
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approve what they have decided. Now this policy, which has been accepted by the trade union movement and therefore will be attempted, will give an indication only this coming autumn, and will be approved only in March of next year. I am not making a clever point, but am simply saying that without the proposed legislation we are in No-man's-land. There is no T.U.C. policy. We are trying to carry out the Prices and Incomes Board's standard through the T.U.C. but, if I may say so, with much more flexibility, because I believe that our General Secretary is absolutely right when he says that we understand this job better than anybody else; we have been doing it for many years. People must not minimise the detail of difficulty that exists in the industrial scene; and this will never be done by legislation.
On the other hand, my personal view is that I go with the T.U.C. collectively 100 per cent. for "voluntaryism". I would fight to the last ditch for "voluntaryism". However, there is this problem. I thought Part IV had been activated only five times, but I think it was said to be fourteen times; but it is a very small number, affecting only a very limited number of people. So again the voluntary system did extremely well. I think the object of the Government has been made clear: that in activating Part II they feel they are contributing to a long-term solution by putting a prop underneath the T.U.C.'s policy during the period when the T.U.C.'s policy is finding its feet.
I have referred to the dangers of inflation in the present year, and it is going to be a great problem to hold the fort, if I may put it that way. It would be a tragedy if, after the wage standstill, or the incomes standstill, and then the period of restraint, the whole thing "bust" and we went back to square one. If we did, we should probably have to start the process all over again, and that would be awful. So my view—and I say it very sincerely—is that no well-conducted union has anything to fear from Part II. The policy the T.U.C. are operating now is a policy that any trade union can easily be made aware of, because it means this at the present time. If a trade union wants to promote a case, it first puts that case to the T.U.C., who make a judgment on it. If the union gets approval by the

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T.U.C., it has nothing to worry about. But if it does not get approval and ignores the T.U.C., and goes ahead with an extravagant claim, what is to be done in face of that kind of behaviour? In my view, this is a form of anarchy which we cannot afford in our industrial situation at the moment. Therefore, while the T.U.C. go for absolute "voluntaryism"—and, after all, we are a negotiating body, so we still keep a little bit up our sleeve—nevertheless, for my part, I do not feel strongly against the Government for taking and providing this reserve power.
I have spent most of my time describing the endeavours of the T.U.C. in what is a dramatic revolution in thought and action in relation to wage determination. I appreciate all that the noble Lord, Lord McCorquodale of Newton, has said, but I firmly believe we are moving in very considerably changing times. If we are to give our workpeople full employment and security, I think the community are entitled to expect in return that the workers should accept a measure of restraint—not that they should be pushed too far, but that they should be willing to accept improvements which are relevant to the need to increase production. If we stick to that principle, then I think there is a chance that we shall get through our difficulties. In this brave new world I would fight, as I have said, for consent and the voluntary principle; but should this fail, I think the Government, any Government, are entitled to powers to make their intervention possible.
5.21 p.m.
LORD SAINSBURY: My Lords, in a debate such as we are having this afternoon it is difficult not to mention points that have been covered by previous speakers. I therefore apologise for so doing. Further, I am very conscious of the fact that I follow my noble friend who is one of the great trade union leaders of the present time and that, in my turn, I am followed by the noble Lord, Lord Citrine, one of the great trade union leaders of an earlier period. Therefore, I have a sense of humility and the feeling that perhaps I should not talk about a wages or incomes policy at all.
My Lords, I strongly support the Government's prices and incomes policy; I believe that such a policy is essential if
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we are to eliminate our balance-of-payments deficit and to achieve a steady economic growth. As has been pointed out several times during the course of the debate, the prices and incomes policy has three phases: first, total freeze; secondly, severe restraint; and, thirdly, the phase we are now entering into, one of moderation. The first two phases, in my opinion, have achieved considerable success. The noble Lord, Lord Erroll of Hale, whose speech was aptly and very kindly referred to by my noble friend Lord Champion, tried hard to show that the prices and incomes policy so far has not brought any real results. In spite of his usual debating skill, he did not make out a very convincing case—and this is not really surprising, because the facts are not on his side.
What are the facts? They are that between July, 1966, and May, 1967, prices rose by less than 2½ per cent. in spite of the effects of increased taxation, compared with approximately 3½ per cent. in the previous corresponding period. Earnings in the same period rose by less than 1 per cent. Let us turn our minds back. How different a picture is this from the one that faced us in the debate on the July measures! Then, hourly earnings were up by 10 per cent., and prices by 4½ per cent. But statistics are only part of the story. I believe that on both sides of industry there has been an acceptance of the need to restrain inflation and a constant willingness to try to work out, with the Government, the best means of achieving this end. The deterioration in industrial relations, so frequently predicted by opponents of the prices and incomes policy, did not materialise. This is vividly illustrated by the figures showing the numbers of days lost through strikes between July, 1966, and May, 1967, as published in the Ministry of Labour Gazette.
But our success so far does not mean that we can now relax. We are entering a period of re-inflation, and in these circumstances it is in my opinion important to have an effective long-stop procedure. Only this can ensure that those who co-operate are not put at a disadvantage by those who may not; for if they were, voluntary co-operation by the great majority would be put at risk and the present controlled re-inflation could turn into a run-away boom. As your Lordships know only too well, this would

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hinder our progress towards achieving a long-term balance of our external account. The Order and the new Prices and Incomes Bill are part of the Government's policy for the period of moderation. This entails, as has been stated frequently this afternoon, a move back to the voluntary system or as The Times said in a recent editorial, the phasing-out of compulsion.
My Lords, I need not go into the proposed procedures to halt increases, but the National Board for Prices and Incomes has the key role to play, and it is opportune now to pay tribute to the valuable work that they have already done. As the Economist states in its latest issue:
"One of the most promising institutional creations of the last three years is the Jones's Board. Its reports have begun to instil more realism into at least some thinking about wage claims."
Obviously, no incomes policy can succeed without the confidence of the trade unions. To retain this confidence, the incomes policy from now on must be consistent with a reasonable annual rise in money incomes; but that rise must not be such that it endangers the competitiveness of British goods in foreign markets. And a rise in money incomes will endanger the competitiveness of British goods in foreign markets unless we get an annual increase in productivity. We shall not get this increase in productivity if we do not have the confidence, not only of the trades unions, but also of industry. It is only when industry has confidence in the future that private investment grows. Investment incentives help, but they do not do away with, or in any way lessen, the importance of business confidence.
We also have to consider the other side of the coin, which is the general stability of prices. This is a different, and perhaps more difficult, problem than that of incomes. To my knowledge, no Government spokesman has ever suggested that under the prices and incomes policy no prices would go up. What they have said is that there has to be sound justification for increases. I believe that the compulsory notification system has been effective in preventing unjustified increases. Certainly in respect of food, about which I claim to have some special knowledge, there has been a long period of stability, with increases balanced by
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decreases, so that the average housewife's shopping basket differs very little in cost from a year ago.
In conclusion, my Lords, may I say that we must never lose sight of the fact that the prices and incomes policy is part of a much wider economic policy, which includes the work of the Monopolies Commission and the Restrictive Practices Court; changes in the industrial structure brought about by the Industrial Reorganisation Commission; special help for the Development Areas; the work of the little "Neddies", and the work of the Ministry of Technology. These are all aspects of this wider economic policy and I believe that profound changes are taking place that bode well for Britain's industrial and economic future.
5.32 p.m.
LORD CITRINE: My Lords, while the debate has been continuing, and in the light of what other speakers have said, I have been busy tearing up the notes I had prepared. The very thoughtful speech from the noble Lord, Lord Sainsbury, to which we have just listened, is an indication of what I would call the depth of the matter which we are discussing to-day. I am going to try to concentrate on two main points. The first is the need for the Government's reserve power, and the second is whether this is, in effect, a purely temporary expedient which can be abolished in the course of a few years. We have known the basic problem certainly since 1951, with the warning that Mr. Gaitskell, then Chancellor of the Exchequer, gave to the T.U.C. that we were paying ourselves more than we were earning and so were causing inflation and rising prices. This has been reinforced many times by statesmen and Chancellors of the Exchequer, and various expedients have been used to try to secure some measure of restraint on those who were pressing for higher incomes unaccompanied by a corresponding increase in national production.
I remember the "Three Wise Men" appointed by the Conservative Government. They were men experienced in their own particular professions and from time to time they issued what in my opinion were reasoned, intelligent reports. They were trying sincerely to grapple with what, up to now, has proved a problem almost impossible of solution. I did

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not notice any marked effect upon any section of the community from any of the various appeals and warnings that were issued over the whole period—as I say, certainly since 1951—including the reasoned statements from the T.U.C. as to the dangers caused by the absence of restraint and the continuation of inflation. The trade unions certainly exercised more restraint as an organised body than was discernible among income receivers in other quarters; but, none the less, it cannot be argued that a system of completely voluntary restraint, without any kind of power in the possession of the Government, has succeeded.
After thirteen years of attempts by the previous Government to grapple with this problem without very much success we had a change of Government. The new Government recognised right from the beginning that they could not rely on the effectiveness of a purely voluntary restraint and that they would have to have some power. They did not want power to exercise rapidly or arbitrarily but to use if the necessity revealed itself. They took power in reserve, and the question is, has that succeeded? I believe the answer is that it has succeeded in retaining a better balance between national production increase and increases in incomes to a far greater extent than was expected. I do not say that it has eradicated the differences, but certainly the progress in that direction was greater than with any previous policy. I do not speak now with any idea of securing political kudos or anything of that kind, but after looking at the matter as a purely social and economic problem.
My Lords, I declare my faith, such as it is. I do not believe any policy of any Government of this country can succeed in maintaining the balance about which I have spoken unless some power resides in the Government. When the Government exercise that power we shall be able to judge whether it is an evil thing which ought to be stamped on by the community, or whether it is an essential and wise thing to possess.
In any community there is an unresponsive—I was almost going to say an anti-communal—body of people. Sometimes they are organised. It is for that type of person and that kind of
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organisation that this power is so clearly needed. All this has been stated in White Papers, and goodness knows! where, but at the same time it does not appear to be fully appreciated; and the assumption is that the Government somehow want power for its own sake. I do not believe that at all. I understand the objection to compulsion. No one likes compulsion. No one in any community, either as individuals or as members of an organisation, likes being told what to do; or that there should be the power to compel people to do certain things which they may dislike. Employers do not want Government interference, but do they believe that this problem can be solved without some measure of Government interference? Trade unions do not want Government interference, but at least they have created a voluntary system which so far has worked reasonably well.
I would not pin my faith on any voluntary system in this connection, but at least some attempt has been made, and we should be able to judge its effectiveness in the next year or so, or possibly within the next few months. I am satisfied that without the Government possessing power in reserve—and I emphasise in reserve—this system could not possibly succeed. The Government want a voluntary system, and they will do everything they can to work towards a voluntary system; but they cannot abandon their intention of having some power in reserve.
As to my second point: is this a purely temporary expedient? I do not suppose that any of us can say with authority "Yes" or "No" to that question. I cannot escape the conclusion that we are somehow groping for a solution to this problem; nor can I believe that any single measure such as this can be wholly and completely effective in dealing with a major problem and those that arise from it.
I sometimes wonder by what mechan ism we can effectively control incomes and prices. Reference has been made to this by the noble Lord, Lord Sainsbury. When I think that in two world wars Governments failed to keep prices in check as they thought they should be, I ask myself the question: is this a possibility? What size of organisation do we need? Can the Prices and

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Incomes Board, with its present staff, which I think is not much more than a skeleton one and which so far has done some useful work, deal with the whole range of prices that exist over all the various commodities? The best it can do is what accountants do with balance sheets of big companies: make tests and operate on those. I am puzzled on this question of how far this machinery or any others can become effective in the realm of prices.
Can we all be sure that we can surmount our temporary difficulties unless we find the good will in all quarters of the community? Are we sure that we are not entering on a system which may have all the ingredients of permanence, of a system of collective bargaining and of regulating the income of the community? I am not sure of it. I cannot see that for all time we have settled the balance-of-payments problem. I cannot see that we can sacrifice some means of ensuring that increases in national production and in income are kept in proper balance. Therefore, while I hope that it will not be necessary to introduce the battery of measures to deal with this problem that was mentioned by a speaker in another place during the debate there, I am by no means convinced that that is not the case. We may have to go far more thoroughly into this general problem than anything we have done up to now. I am not talking for the purpose of frightening the trade unions or anybody else. I am simply trying to point out that this is a profound problem which, in my judgment, will be with us for a very long time. Therefore, I would not encourage the assumption that this is a purely temporary expedient. We are probably at one stage in a much longer range policy.
While I have had sufficient connection with politics in the course of my life, and while I have been a firm adherent of the Labour Party all these years, and have believed basically in its measures, I cannot understand why we are all so polemical about this problem and approach it from a purely Party point of view. It is basically an economic problem, a social problem, and I hope that we shall find some means of facing these things free from the trammels of Paryt politics. I have not seen much signs of it. I have seen some attempts to capitalise the prejudice that exists among
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trade unions against any form of Government intervention. Perhaps we shall reform some time. I have assumed that this House is more of an objective body than another place, and as a Member of your Lordships' House I congratulate myself on that. But I think that we are dealing with the imponderable. As I said earlier, we are groping. Nobody knows the answer, I am sure of that. Time will be needed, and perhaps trial and error on a large scale will be necessary before we have found the means of dealing with what seems to me to be a most intractable problem.
5.45 p.m.
LORD REDMAYNE: My Lords, I had not intended to intervene in this debate and I shall be brief. I came down to the House in the hope of hearing more details about prices rather than incomes. I have been disappointed. But prices are only the child of incomes, and it was to be expected that the debate should take that line. My attention has been drawn to this strange story of "price control commandos" which I read in the newspapers this morning, and I think it fair, as nothing was said about this except a passing reference by my noble friend Lord Erroll of Hale, to ask the Government for some information. I admit that it was a newspaper story, but it bears all the stamp of having come from the public relations officer of one or other Department of the Government.
The proposal is that there should be mobile teams to investigate retail price increases on the spot. The Financial Times and The Times had the story in much the same terms. I do not doubt that it has some fairly solid foundation, and has been in the minds of the Government. I should like to know whether there is truth in it, and the details of it. Of course, it could have been put out simply to counter-balance, without much foundation, a statement in The Times on Monday that there was a large number of price increases in the pipeline. Although one does not doubt that that story was well founded, I do not believe—and the noble Lord, Lord Sainsbury, said something of the sort—that a very large number of increases are now in the offing. But if the story is based on some truth, it is fair to ask the noble Lord, Lord Winterbottom, what are the likely mechanics of such a

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scheme. What does "on the spot investigation" mean? What sort of powers are these teams likely to be armed with? How is it proposed that the price increase of any one article in retail stock can be investigated without reference to a large number of articles of the same class? How would such teams take account of the wide variation of other factors which may force retailers to increase their prices?
I would also ask whether these teams will be sufficiently instructed to take account of the many ways in which Government policy has put retail prices under pressure, notably by S.E.T. and the loss of investment allowances and, in local government, disproportionate increases in rates. If this job is to be done at all, it will need a great number of teams to achieve any effect. It will be interesting to know to what extent that is being planned, or whether in fact this is only a propaganda exercise as a counterbalance to actions the Government are taking in the incomes field and really will not amount to very much at all. On the other hand, these teams could fulfil a useful purpose if they were sympathetic to the retailers' problems, really looked at them with unbiased judgment, and were prepared to take a broad view of the many factors which lead to price increases. The report in the Financial Times stated that the D.E.A. will study this proposition with care in order to be sure that there is no risk of antagonising the C.B.I. I should like to ask the noble Lord what it has to do with the C.B.I., as opposed to the distributive trades. It seems to me that that remark proves that the story came from Whitehall and not from any other source.
I suspect the noble Lord will say that he is unable to give me an answer; and I do not blame him. I know he will do his best. I hope, however, that he will not leave it at that. If I may say so without grave disrespect to the Government, "kite-flying" is one of their major hobbies, and it has greatly increased during the term of this Government. I consider that all Ministers replying to a debate of this sort should be able to say what kites are flying, who is flying them, and why.
I conclude by saying that if there is anything in this story perhaps the noble
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Lord, if he cannot give an answer, will see that the answer is made known both to me and perhaps to the House in some way very soon. If this scheme is going forward in any form there should be adequate consultation, not with the C.B.I. but with the distributive trades, both through the new consortium of those trades which has just been formed and through the E.D.C. for the distributive trades which has proved a good friend to us. The noble Lord, Lord Sainsbury, referred to that E.D.C. It is, as I say, of great benefit to the distributive trades which I for one should like to acknowledge.
5.52 p.m.
THE EARL OF DUNDEE: My Lords, my noble friend Lord Erroll of Hale has expressed our acceptance of the business arrangements in regard to this measure and subsequent measures on prices and incomes. I think perhaps it should be added that we hope this will not be regarded as a precedent in future, because it really would be better if arrangements could be made to introduce measures of every kind in either House at the right time. However, we accept this arrangement now.
I have often said, both from the opposite side of the House and from this side, that I wish we could discuss this question of prices and incomes and inflation without any overtones of Party politics. And I think perhaps the noble Lord, Lord Champion, was feeling the same thing when he said in his peroration that if the Government could succeed in solving this prices and incomes question, they would have done a great work, even although as a consequence they lost the next General Election. It really is all wrong that Parties should have to discuss this in the context of winning and losing General Elections.
When we brought in our National Incomes Commission, a long time ago, we had a good deal of opposition and no support from the trade unions. The reason given by the trade unions for this was, I think, a mistaken one. They said that the National Incomes Commission was not empowered to deal with dividends and profits, whereas, in fact, it was expressly empowered to deal with dividends and profits in the Statutory Instrument by which it was set up. Now

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the present Government have had the great advantage of having the support of at least half of the trade union movement. Mr. Frank Cousins and his followers have proved to be in a minority, though a substantial one. I am afraid that even Mr. George Woodcock has recently expressed some pretty disparaging comments about this Bill. But, at least, the trade unions are cooperating in the Government's Prices and Incomes Board, and I think this is a great gain. But we are still heavily handicapped by fears of Party gains or Party losses in connection with this. I do not think it would be unfair to describe this Bill—indeed, it would be only a plain statement of fact—by saying that it is a continuation, which we were told last autumn would not be necessary, of a policy which the Prime Minister said at the General Election would not be adopted. That is about the best you can say for the Bill.
I do not believe that any prices and incomes policy will succeed unless it is accompanied by measures to promote economic growth, by measures to increase competition and make it more keen, and by the elimination of restrictive practices. We must get rid of the idea, which is held by a lot of people—not only by wage earners—that everybody has a kind of natural right, whatever happens, to an increase of 2½ per cent. every year, or something like that, and that if they do well and produce more, they should get more than what is regarded as the normal thing. There is no normal thing. We have no natural right to get an increase of wages or incomes of any kind every year if it is not accompanied by more productivity, which does not necessarily mean more production, or more production, which does not necessarily mean more productivity. It is better to have both at the same time.
I hope the Government will not think that I am mocking them or trying to speak in any irreverent tone when I say that what we need is a National Plan designed to promote economic growth. In the six years when I happened to be in the last Government, from 1958 to 1964, I thought we did quite a lot of rather good planning; and although we were always told by our opponents that industry was stagnating, during those six years our gross national product increased
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by 25¼ per cent. When our opponents came in, I genuinely hoped that they would produce a good National Plan. I thought that the Plan they produced—and it was produced about eight months after it was supposed to begin—was not very much more than an estimate that we would increase our gross domestic product in the next six years by 25 per cent., which was actually a fraction less than the amount by which it had increased in the previous six years, which we have always been told by the authors of the Plan was a period of stagnation. But for the first year, 1965, the growth was only 2½ per cent., and for last year only 1½ per cent. So now we have had one-third of the time with only one-sixth of the growth.
I think this is all vitally relevant to the question of prices and incomes. You will not be able to keep control of prices and incomes if you do not have growth. You will have to appoint more people to try to prevent rises in wages and prices, until you reach the stage when half of the people will be employed in trying to prevent the other half from getting more money. What you want is more incentives to earn, and less punitive taxation.
As for competition, one thing has been done. We have had what you might call a half Kennedy Round—I think rather more than half, though not quite so much as the late President Kennedy proposed in the last year of his life. Now, at last, after all these years of difficult discussion, this much has been agreed to. Its effects may not be felt for a little time, but when they are felt it will, I hope, produce healthy and salutary competition to a far greater extent than we have now.
But let us remember this. My noble friend Lord Erroll of Hale quite rightly pointed out that the improvement in our balance of trade in the last year or two had been due to improvements in what we call the terms of trade: that is, we have imported cheaper primary commodities, and industrial products we export have earned higher prices. But now, what the great trading nations of the world are all trying to do, in co-operation with each other, is not only to have more competition, which will mean that export prices for our goods will be keener and may have to come down; they are also trying to keep up the prices of primary

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products like wheat, under the International Wheat Agreement, because our experience has always been that, in the long run, if producers of primary products do not earn enough they cannot buy the exports of the industrial countries, and you have a world decline in trade. So, although it is temporarily advantageous to a country like Britain, in the long run it is better to have fair prices. And that may not be so good for our balance of payments next year.
Finally, on restrictive practices I should like at least to pay a tribute to the Minister of Transport on the stand which she has taken about liner trains, and I hope that she will be successful in getting back the business for the railways. But I must conclude by saying that you will not make a success of your prices and incomes policy unless you have the courage to deal with restrictive practices. That, I think, will need legislation; and it is my belief that compulsory legislation, although it may be unpopular, to bring an end to restrictive practices will do vastly more good to our economy than compulsory legislation to restrict prices and incomes, which is not accompanied by the necessary measures for accelerating our economic growth.
6.2 p.m.
THE PARLIAMENTARY SECRETARY, MINISTRY OF PUBLIC BUILDING AND WORKS (LORD WINTERBOTTOM): My Lords, I am glad that my noble friend Lord Shepherd has returned in time so that I may add my congratulations to those voiced by speakers from both sides of the House on the very useful framework that he provided for our debate. His speech was a great help to me in getting my thoughts into perspective, and I am glad that the House has also recognised this.
I am certain that the noble Lord, Lord Erroll of Hale, will not be surprised if I start my reply to the debate with a platitude. One of the recurring problems that all Governments, and all political Parties have had to face, and one that has provided political ammunition during the last three General Elections, has been about the means of achieving economic growth without excessive inflation, and without the customary
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balance-of-payments crises that seem to afflict us when our economy gets on the move. This has all been said before—I admit this—but the problem seems intractable, and has still to be solved. I know that the Party opposite have wrestled with this, with some successes and many failures, and I think the sense of the House is that the problem is not new and very difficult indeed to solve.
The noble Lord, Lord Henley, posed questions but said that he could not find the answers. Nevertheless, I think his questions produced a series of suggested answers from around the House which indicated a certain consensus on the direction in which we ought to travel. I will not particularly react to the pleasure of the noble Lord, Lord Erroll of Hale, in twitting us for perhaps not succeeding on every occasion when we tried to do something. But I should like to comment on one point he made, because I think it a serious one and one that is worth discussing. He brought to the notice of the House the fact that the improvement of our balance-of-payment, position is in part due to an improvement in the terms of trade. I do not know what was his source of information. My source, it seems, was probably the same as his own, which was a leading article by Samuel Brittain in the Financial Times.
The author of that article, I think, said that we have moved in the correct direction to the tune of £550 million, of which £300 million came from an improvement in the terms of trade, £100 million from our control of capital movements, and £150 million from the slowing down of the economy. So £250 million of the favourable movement was a result of squeeze policies, and £300 million from the shift in the balance of the terms of trade. I think the noble Lord is quite right to draw this to the attention of the House. We cannot and must not be complacent, particularly when, out of the blue sky, events such as the Arab/Israeli war blow up. We can always run into trouble from factors outside our control, and we must have sufficient reserves within our economy—and reserves powers of the Government—to enable us to face these unexpected difficulties.
In that same article Brittain infers that our prices and incomes policy had overall

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little effect on the improvement in our balance-of-payments position—which we must all admit is very substantial and very welcome. But I think we should say at this point that it was not without at least an indirect effect. Part of the problem last summer was a loss of confidence abroad in the economy of this country. There had been a long period of rapidly rising wage rates, and rapidly rising prices, and I believe it was the fact that the Government were willing to take very unpopular measures to put this matter straight that had a great effect on confidence abroad and effected a return to this country of substantial funds which had left it for a time. So I think this policy was of real value at that time.
The other aspect of value must be a long-term one. We are really entering into a period of re-thinking and of re-education of both management and the trade unions, to try to adapt ourselves to the economic situation which is creating great problems for us while at the same time bringing benefits. The fact that both management and trade unions, when negotiating for wage increases, now have to think in terms of productivity is one of the very valuable aspects of this policy. Productivity—again, an overused, platitudinous word—increased productivity, is entirely necessary if we are to recover our place among the competing nations of the world. I am certain that the prices and incomes policy has this extremely valuable by-product, in forcing both sides of industry to think about the implications of what we are trying to do.
We have had some extraordinarily fascinating speeches from men who were involved in this business of actually carrying into effect the policies of the Government under Part IV, and who will be doing so in the coming year under Part II. We have had speeches from three trade unionists, from an industrialist, and from the head of one of the largest retail organisations in the country; and I think that there was a very substantial measure of agreement between them all. None of them, I think, really liked Government compulsion. Everybody wanted to get back to voluntary co-operation and collective bargaining. Again and again the question had to be asked: Is this an impossible ideal? Can we really take the Government out of this particular field and, with new procedures devised by the
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T.U.C. and the C.B.I., leave trade unions and management to hammer out their own incomes and prices policy without the Government intervening?
I think that the noble Lord, Lord Citrine, was the most pessimistic. In his speech he posed it as a question, but the answer he gave was that in the background there must be powers and that we should be foolish to assume that one day those powers will wither away. Some other noble Lords were perhaps a little less pessimistic. The noble Lord, Lord Cooper of Stockton Heath, described the steps being taken for the trade union movement itself in the autumn of each year to relate the possible wage negotiations in the coming year with foreseen increases in the gross national product, and then to have detailed discussions with individual unions in the following spring. This idea is, I think, based on experience—admittedly on the experience of the Swedes—but it is not an idea plucked out of the blue. And it is one which, indeed, might accelerate the departure of the Government from the front of the stage even if, for some time in the future, they still remain lurking in the wings.
If the trade union movement can make this preliminary economic assessment each year there is no doubt in my mind that the claims put forward will be reasonable and much more capable of settlement by negotiation. But even the noble Lord, Lord Cooper of Stockton Heath, was quite certain that the Government had to retain powers during the coming year, until August. 1968, because even if the trade union movement does create an effective organisation within the coming year, the fruits of that cannot be harvested until 1968, and the Government must hold the reins until that time. I think that is generally agreed.
Whether or not by 1968 we shall have a further Prices and Incomes Bill is in the lap of the gods. I would not rule it out; I only hope that the experience of the coming year will make it unnecessary. I have been warned by the noble Lord, and so I will not make forecasts; but I think we shall have done well if experience in the coming year enables us, by the autumn of next year, to rely completely on a voluntary system. Nevertheless, it is worth trying,

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and, as we have heard to-day, both sides of industry are getting down to the job to see whether there can be a full return to the voluntary principle.
I think there was one measure of agreement in that everybody was agreed that something which the Labour Government had created was not bad; namely, the Prices and Incomes Board. In fact the noble Lord, Lord Sainsbury, paid tribute to the Board, and I am certain that its members will welcome that, because they must have been carrying a very heavy burden over the past year. I think the point made by the noble Lord, Lord Erroll of Hale, about their being overworked may be valid. I think it was the noble Lord, Lord Citrine, who said they were working with a skeleton staff. Perhaps we shall have to put a little fat on their bones, but I feel that in Mr. Jones, assisted by his team, we have found someone with an analytic mind who is trying to help us peer into the jungle which at the moment is preventing us from moving forward.
Also, as again noble Lords have said, it would be churlish not to pay tribute to those many millions of citizens, whether on the side of management or of the unions, who either have positively helped, or at least have refused to hinder, the Government's policies. The statistics given by my noble friend of the number of Orders that have been made and the very limited opposition by industrial action to Government policies reflect, I think, great credit on the trade union movement, and indeed, on the men and women of this country.
I share the view held by the noble Lord, Lord McCorquodale of Newton, and the noble Lord, Lord Cooper of Stockton Heath, that we have great reserves of strength in this country. The fact that both the trade union movement and the Confederation of British Industry are largely agreed on their objectives is surely a very great strength. The argument is about means and not ends, and I believe that it would not be too much to say that possibly the collaboration between the two sides of industry in this country is as close and fruitful as anywhere in the world. We argue freely and strongly, but, after all, that is our custom; and having heard various speakers in the debate to-day I
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feel that in due course we shall find at least partial solutions to our problems, or at least solutions that will enable us to hasten a little more quickly than we are at the moment.
May I answer a specific point made by the noble Lord, Lord Redmayne? I am rather glad that he raised the question of prices. The only other speaker who touched upon it was the noble Lord, Lord Sainsbury, and I think possibly the reason is that the prices aspect of this policy has gone remarkably smoothly—indeed, surprisingly so. However, when the noble Lord, Lord Redmayne, raised the question of "price commandos", as he saw he caught me somewhat unprepared. Fortunately I can give him a partial answer to-day, and there will be an appropriate time during the debates on the Bill when perhaps he can be given a fuller answer. I have been told that there are no firm plans for any developments on the lines which he has read about in the papers. I am not clear where the Press stories originated, but what is a fact—and I think I can commit the Department of Economic Affairs on this—is that no new arrangements would be contemplated without full discussion with the organisations concerned.
My Lords, we have come to the end of an interesting and valuable debate. We have a lot of work to do at the Committee stage, because although the Bill is a short one I find the clauses are complex and I fear that they will take quite careful explaining. Nevertheless, I think that all these discussions have shown a remarkable unanimity, and I hope that as the work progresses we shall gain experience of how to bring the natural demands of the trade unions and the growth of the national product in harmony, so that the Government can recede further and further from the front of the stage. While I believe that there will always be a place somewhere on the stage, even if only in the prompter's box, for the Government, nevertheless I believe that by the end of next year, if we progress as we have done in the past year, we shall be close to a voluntary system of bargaining and many of these irksome controls will have gone. That is my hope; it is the hope of my colleagues, and if we proceed steadily on the road on which we have already started I believe that that hope will be fulfilled.
6.19 p.m.
LORD SHEPHERD: My Lords, before the Question is put I should like to say that I was in some slight embarrassment when I returned to the Chamber and found that the noble Earl, Lord Dundee, was about to sit down and that my noble friend was about to speak. I should like to express an apology to those noble Lords I have been unable to hear. Unfortunately I find, as Government Chief Whip and as spokesman for the D.E.A., that there is a tendency for the duties to conflict, and I have been at the other end of the building to see whether some arrangement could be made to deal with our heavy programme of business later this month.
I was very grateful indeed to the noble Lord, Lord Erroll of Hale, and the noble Lord, Lord Henley, for their agreement to the use of our flexible rules in this House, as clearly the employers and the unions who may be involved in some difficulty should have their minds put at rest as soon as possible. I hope to be able to make a statement shortly as to the timing and progress of this Bill in your Lordships' House. May I therefore conclude by thanking all noble Lords who have taken part. If I did not hear them I shall certainly read what they said, and I shall certainly make sure that my right honourable friend the First Secretary sees the speeches that have been made this afternoon.
On Question, Motion agreed to.
LORD SHEPHERD: My Lords, in the circumstances I beg leave not to move the Motion on the prices and incomes policy that stands in my name on the Order Paper.

COUNTRYSIDE (SCOTLAND) BILL
Brought from the Commons; read 1a, and to be printed.
POST OFFICE (DATA PROCESSING SERVICE) BILL
Brought from the Commons; read 1a, and to be printed.

FUGITIVE OFFENDERS BILL
6.22 p.m.
Order of the Day for the Third Reading read.
THE LORD CHANCELLOR (LORD GARDINER): My Lords, I beg to move that this Bill be read a third time. As has been made clear throughout the proceedings on the Bill in both Houses of Parliament, its primary purpose is to implement the agreement reached at the Commonwealth Law Ministers Meeting at Marlborough House a year ago as to the arrangements which should in future govern the surrender of offenders between the independent countries of the Commonwealth. In arriving at that agreement, which was completely unanimous, the Law Ministers of the Commonwealth naturally gave considerable thought to the problem of political offenders, because in the Fugitive Offenders Act 1881, which has hitherto governed the return of offenders within what used to be the Empire, there are no safeguards whatsoever for political offenders as is customary in normal extradition law.
This is understandable in the circumstances of 1881, when the Act was passed, and when the countries of what is now the Commonwealth were all parts of one empire, with even less autonomy and independent authority than most of our remaining dependencies have to-day. And the Government, of course, recognise that where two countries acknowledge the same sovereignty and one is responsible for the other's defence, they stand in a special relationship to each other, and different considerations arise in relation to offences such as treason and espionage than in the case of two entirely independent countries. It is for that reason that the Bill provides, in relation to the dependencies, that Clause 4(1) shall not operate in its entirety, and the Secretary of State is accordingly free to surrender persons to dependencies in respect of offences of a political character, although, by reason of subsection (3) of Clause 9, he does not have to do so.
But the position as regards the independent countries of the Commonwealth is quite different. These countries, which were once part of one empire, now form a loosely-knit brotherhood of

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separate sovereign States, admittedly with a great deal in common, including, for the most part, a mutual heritage of law, but with the right to negotiate among themselves whatever arrangements for the return of offenders, including political offenders, they may consider appropriate. What they decided they wanted were the provisions set out in the Scheme, published at the conclusion of the Commonwealth Law Ministers' Meeting as Command Paper No. 3008, which we are now introducing into our law in this Bill. And, as regard political offenders, the provisions in Clause 4(1) of the Bill reproduce exactly the agreement contained in paragraphs (1) and (2) of Clause 9 of the Scheme.
It has been contended, in particular by the noble Lord, Lord Brooke of Cumnor, that the Commonwealth Law Ministers were mistaken in reaching an agreement in these terms and that the whole matter should be renegotiated, and it is therefore important to consider how it came about that this agreement was arrived at and why it is unlikely that further negotiation would achieve any different conclusion. In the first place the original memorandum which Lord Brooke of Cumnor caused to be circulated to the Commonwealth when he was Home Secretary in March, 1964, and which gave rise to the Commonwealth Law Ministers' discussions, put forward the following proposal in paragraph 10:
"It is therefore proposed that, subject to what is suggested below, the Agreement should contain a provision, comparable with those in the Extradition Act 1870 and in the European Convention on Extradition, prohibiting rendition for an offence of a political character."
The attention of the Commonwealth was specifically directed therefore to the safeguards for political offenders contained in Section 3(1) of the Extradition Act 1870, where it says:
"A fugitive criminal shall not be surrendered if the offence in respect of which his surrender is demanded is one of a political character …".
And also to Article 3(1) of the European Convention on Extradition, which is in roughly the same terms. And that was the foundation of Clause 9(1) of the Scheme, which has become Clause 4(1)(a) of the Bill. It is Article 3(2) of the European Convention on Extradition which goes on to deal with the possibility
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of a person's being prosecuted, punished or prejudiced on account of his race, religion, nationality or political opinions, and it was that provision, rather than the more limited provision in our own Extradition Act that the Commonwealth Law Ministers unanimously thought it right to include in Clause 9(2) of the Scheme, and which now appears as paragraphs (b) and (c) of Clause 4(1) of the Bill.
The reason why the independent countries of the Commonwealth wanted this is not far to seek. We were informed at the Commonwealth Law Ministers Meeting that a number of countries of the Commonwealth had already introduced, or were in process of introducing, legislation which had the effect of specifically precluding the surrender of political offenders, even to other Commonwealth countries. And, in the case of Malta, Section 44(2) of their Constitution itself provides that no person shall be extradited for an offence of a political character. The guiding principles were thus laid down for many member States. In addition to the countries which had already enacted safeguards before the Conference, which included Ghana, India, Sierra Leone, Uganda, Tanzania and Kenya, two other countries, Australia and Nigeria, have recently passed legislation in conformity with the Scheme. I see no hope of persuading these countries that they were, each and every one of them, wrong in having these safeguards, which we invited them to introduce, and that they should now change their minds. Indeed, the Government would regard it as most unfortunate if this country were to take the lead in suggesting departures from the Scheme having the effect of whittling away traditional safeguards of individual liberty which the Commonwealth has agreed to preserve. It is wrong I suggest to assume that provisions of this kind, which have formed the basis of extradition law for a long time past, act as a blanket protection for all persons who commit dastardly crimes and plead a political motive. As the decisions of the courts in the cases of Meunier and Schtraks, to mention only two, make quite clear, this is not the case. There must be a genuine political motive for a fugitive offender to be able to secure the protection which the safeguards provide.

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Finally, if two countries have a close political or defence relationship which causes them to consider that their mutual interests could be harmed if Clause 4(1) were to operate between them without modification there is in Clause 16 of the Scheme, and again in Clause 2(3) of the Bill, power to modify those provisions by way of bilateral agreements. The sort of case I have in mind is that of Australia and New Zealand. Whether we shall think it right to exercise that power in agreement with certain of our Commonwealth partners remains to be seen. But it is there if we do.
Adequate powers to protect the legitimate interests of the States of the Commonwealth exist, therefore, alongside the safeguards for political offenders. Even so, those safeguards follow a pattern which other countries have already thought it right to make the basis of their law without their becoming places of refuge for assassins and other types of political gangster, and I feel sure that the fears that have been expressed about this happening are greatly exaggerated. There can be no doubt that this Bill, which recognises the changing needs of a changing Commonwealth, is a very necessary measure. The agreement, which it is designed to implement, constitutes a milestone in inter-Commonwealth co-operation in that field of criminal law, and I trust that the House will recognise just how much has been achieved here and give this balanced but laudably liberal measure an unopposed Third Reading. My Lords, I beg to move that the Bill be now read a third time.
Moved, That the Bill be now read 3a.—(The Lord Chancellor.)
6.32 p.m.
LORD BROOKE OF CUMNOR: My Lords, we are all grateful to the noble and learned Lord the Lord Chancellor, for his summary of the Bill and of its history. I shall take up but a few minutes. It is certainly not my intention to oppose the Bill. Indeed, as the noble and learned Lord indicated, in a sense this Bill is my god-child, because it is based on a memorandum which was sent out at my direction in 1964 to all the countries of the Commonwealth and which formed the basis of discussion at the Commonwealth Law Ministers' conference that
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followed. I do not think that there is any dissension anywhere about the need for, and the importance of, modernising the old 1881 Fugitive Offenders Act. The only substantial difficulty arises over political offences and political offenders. With respect, it is not quite correct for the Lord Chancellor to say that the 1881 Act contained no safeguard whatever for political offenders, because undoubtedly the Home Secretary would have decided that it was not just to send back to be tried in his own country a political offender who was charged with seeking to get rid of an undesirable régime which had been established, perhaps by force of arms, in his own country, and who certainly would not have received a fair trial had he gone there.
What happened to change the situation during the Commonwealth Law Ministers' conference was that these two new provisions, paragraphs (b) and (c) of Clause 4(1), were introduced into the Scheme. They were not in my original Scheme, and if the courts are willing to operate them I think that they are a considerable improvement: that is to say, a person is not to be returned if
"the request for his return (though purporting to be made on account of a relevant offence) is in fact made for the purpose of prosecuting or punishing him on account of his race, religion, nationality or political opinions; or (c) that he might, if returned, be prejudiced at his trial or punished, detained or restricted in his personal liberty by reason of his race, religion, nationality or political opinions".
I am inclined to think that that is the effective protection which political offenders need and should have. We have never before had anything like that in our law, and I find it difficult to think of anybody deserving of political asylum in this country who would not be safeguarded by those two paragraphs. That is why I have changed my mind since 1964 and have come to the conclusion that it is not desirable to exclude from all possibility of return every person who is accused of an offence of a political character, and I take the view that the Extradition Act 1870 ought to be revised in this respect.
I cannot help thinking that the Government are somewhat complacent about the situation they are creating here. I can illustrate it best by using the example I used on Second Reading: that if the

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murderer of President Kennedy—undoubtedly that was a political murder—had escaped and had later been identified in this country, he could not, under the 1870 Act, have been extradited to the United States to stand his trial. We should have had to live with him, and he could have enjoyed political asylum here. I believe it would have horrified the British public, and it would have cast the most intense strain on Anglo-American relations. That would have been the result of the 1870 Act, and I think it is an undesirable result.
What the Government are doing in the Bill now before us is to reproduce for the Commonwealth that same undesirable, and I believe thoroughly dangerous, situation that exists for foreign countries under the 1870 Act. My best hope is that further thought will be given, as the noble and learned Lord suggested during the earlier proceedings of the Bill, to unifying the two codes for the Commonwealth and for foreign countries, because, as I think both he and I agree, there is no substantial reason now why there should be different codes in this respect for foreign countries and for Commonwealth countries. In that review, further thought can be given to this question of exclusion of political offences.
Every one of us is desirous that political asylum should be available in this country to those who have been seeking to restore proper democratic rights in another country, whether foreign or Commonwealth, by the overthrow of a tyrannical régime. But I believe that nobody in this House or elsewhere is anxious that political asylum should be given in this country to someone who has murdered, let us say, the President of India. That is the dilemma we are in; and I believe that some more precise definition of "political offence" is required so that we shall have the right demarcation line drawn.
I moved an Amendment in Committee to omit the paragraph relating to offences of a political character. I withdrew it after a debate and I did not move it again on Report, largely because I assured the noble and learned Lord the Lord Chancellor that I fully appreciate the difficulty of the Government in this matter. I only hope that they, for their part, will appreciate the potential danger
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in the situation now created. Had an Amendment to alter the Bill in this respect been carried, it would have been very difficult to go back to the Commonwealth Law Ministers and seek quickly to arrive at a new agreement. The Government were inevitably bound, for the time being at any rate, by the outcome of those Commonwealth Law Ministers' conferences. I am prepared to take my share of the responsibility for the organisation and eventual calling together of those conferences. I hope that the area of risk will be reduced by the British Government reaching agreements with some Commonwealth countries, under subsection (3) of Clause 2 of the Bill, of a character that may make the exclusion of political offences not an absolute exclusion. I trust that, whatever is done, it will safeguard the right of political asylum for those who genuinely might suffer in a way that would appal the British public were they returned to stand their trial in a country whose standards of justice were not the same as ours, or whose Government was not as democratic as ours.
When the noble and learned Lord speaks of political asylum as the traditional safeguard of personal liberty, I am absolutely with him, if he is speaking of the normal case of political asylum. But I am sure that he and others will recognise that the phrase "political offence" is very wide and that there are cases where it would be extremely hard for a court of law not to rule that a murder had been a political offence, though everybody in this country and in the other country would regard it as having been a dastardly murder. We are all in this difficulty together. My fear is that a situation may arise, when this Bill becomes law, that will create the most terrible tension between ourselves and some other Commonwealth country, arising out of the absolute exclusion from this Bill of offences of a political character.
However, I accept the Government's difficulty as something which cannot quickly be remedied. I welcome the steps which have been taken to revise the 1881 Act, and I venture to think that we can all join in hoping that the view of the Government, that the risk of a situation such as this arising is a slender one, will prove to be justified. It is a slender one,

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but should it arise the repercussions of it and the emotions aroused by the event might be terrible. It is for this reason that I have thought it right at each stage of the Bill to call attention to the difficulty, and I believe that I have been only doing my duty in so acting.
6.44 p.m.
LORD ROWLEY: My Lords, I find myself substantially in agreement with what the noble Lord has just said, but I was astonished when he said that undoubtedly most people consider that the assassination of President Kennedy was a political crime. I should not have thought that was the view of most of the American lawyers to whom I have spoken; nor is it my own view. Does the noble Lord suggest that if a person in a high political position is assassinated that is, ipso facto, a political crime? It may be that the person who committed the assassination is a lunatic. Surely the noble Lord is not suggesting that it has been established that President Kennedy's assassination was a political crime.
LORD BROOKE OF CUMNOR: My Lords, if I may reply to the noble Lord, it is certainly not for me to pronounce on that, and under this legislation it would be for a court of law to pronounce upon it. But I am quite sure that the noble Lord will appreciate not only that there are a good many people who believe that it was a political crime, but also that a similar tragedy might occur in which there was no doubt whatever that the crime was of a political nature. That establishes my point.
6.46 p.m.
THE LORD CHANCELLOR: My Lords, I have been most interested in what noble Lords have said. Of course, the difficulty of the noble Lord, Lord Brooke of Cumnor, is that when he was Home Secretary his reputation was such that when he said to the Commonwealth, "This is what you ought to do," they all said, "If he says this is what we ought to do, we had better do it." Now, unfortunately, that everybody has acted on it, the noble Lord has changed his mind. This makes things in a sense a little difficult.
I feel that the noble Lord is being unduly pessimistic. It would be difficult to find a definition of "political offence".
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We have never had one. The law has worked all right without it. Circumstances change and are so variable that I should have thought this was just the sort of thing that was best left to the courts. And the noble and learned Lord, the Lord Chief Justice, has said that he does not anticipate any more difficulty in the future than he has had in the past.
I know that all through the noble Lord has been oppressed with the thought that somebody like the President of India might be murdered and that his murderer might come here. I am not at all clear why such a man should come here. There are many countries with the same sort of laws as the European Convention. There are many countries which have abolished capital punishment and which are much nearer to India than we are. There does not seem to be any particular reason why he should come here. It is clear from the cases which have already been decided that the court does not asume that because the person murdered is an eminent politician, therefore it is a political offence. On the contrary, the decisions show that the courts take some satisfying that a violent crime of that kind is a political offence.
Where the noble Lord and I have throughout been agreed is in thinking that there is a great deal to be said to-day, having regard to the changed nature of the Commonwealth, for having one law which applies to all countries. It may be that one day this Bill, when it is an Act, and the Extradition Act may be married together; but extradition is so much a matter of agreement that I should have thought the time it would take to negotiate everything with all the countries concerned would be very considerable. I do not forget the points which the noble Lord raised during our discussions on this Bill as to respects in which he considers that the British Nationality Act needs an overhaul, and I know that is very much in the mind of my right honourable friend the Home Secretary. We have had a very interesting time during our discussions on this Bill, and if the noble Lord, Lord Brooke of Cumnor, has enjoyed it as much as I have, then I shall be happy about it.
On Question, Bill read 3a, with the Amendments, and passed, and returned to the Commons.

WIRELESS TELEGRAPHY BILL
6.50 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Baroness Phillips.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD OAKSHOTT in the Chair.]
Clause 1 agreed to.
Clause 2 [Notification and recording of transactions]:
On Question, Whether Clause 2 shall stand part of the Bill?
LORD DENHAM: This is a clause which puts an obligation on television dealers to inform the Post Office of the names and addresses of people to whom they sell or hire television sets, so that the Post Office can catch licence evaders. It is obviously much better in cases like this to deter than to punish. If this clause is to have a deterrent effect as well as a punitive one, it must be made clear to potential licence evaders that under the provisions of this clause they will almost certainly be caught.
Will Her Majesty's Government make arrangements for a notice to be printed and displayed in television shops, something on these lines?:

WIRELESS TELEGRAPHY ACT 1967
We are now required by law to forward the names and addresses of all those who hire or buy television sets to the Licensing Department of the Post Office."
This would make the dangers of licence evasion known to those most likely to incur them. It would also have the added benefit of being a safeguard to retailers, as it would make clear to their customers that they are giving these details to the Post Office as a result of a statutory obligation, and not just through a desire to do some sort of gratuitous informing. I do not, of course, expect an answer on this subject from the noble Baroness, but I should be most grateful if she would put this point forward.
BARONESS PHILLIPS: I am grateful to the noble Lord, Lord Denham, and
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I shall certainly put it to my right honourable friend. It is not an Amendment in the sense that the noble Lord needs a reply, but it seems to me eminently practicable, so I shall certainly pass it on.
Clause 2 agreed to.
Clauses 3 to 14 agreed to.
Clause 15 [Short title, citation, interpretation and extent]:
6.53 p.m.
LORD AIREDALE LORD AIREDALE moved, in subsection (1), to leave out "Wireless Telegraphy" and insert "Television and Radio". The noble Lord said: This is an Amendment to the Short Title. I hope I am right in thinking that the purpose of a Short Title to an Act of Parliament is to give people some clue as to what the Act of Parliament is about. I have read this Bill, and I hope I am right in thinking that it is about television and radio, but I should not have thought that the average person reading the title "Wireless Telegraphy Bill" would suppose that it was about television and radio.
We have had Wireless Telegraphy Bills on the Statute Books since 1904. In those days wireless telegraphy consisted of sending messages by wireless from person A to person B, from point X to point Y. It was 16 years before public sound broadcasting began, and I think it was 32 years before public television services began. I should have thought that "wireless telegraphy" meant to-day, to the average person, very much what it meant to the average person in 1904, and would not mean "television and radio". We pioneered television—this great marvel of recent years. We started it, we started the first public television broadcasting service. We have nothing to be ashamed about; we have no need to wrap up this great marvel in a brown paper parcel and label it "Wireless Telegraphy".
Unless we break away some time soon from this rapidly becoming obsolescent expression of "wireless telegraphy" we never shall manage to break away, because the next time television comes before Parliament in some Bill the Parliamentary draftsman will say, "Well, they were still calling it wireless telegraphy in 1967 and nobody made a fuss." So we shall "get stuck" with this antiquated expression forever, if we are not careful.

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I respectfully submit that now is the time to break away. Here we have a Bill about television and radio, so let us call it the "Television and Radio Bill", and then when people read the Short Title they will have a clue what the Bill is about. I beg to move.
Amendment moved—
Page 12, line 6, leave out ("Wireless Telegraphy") and insert ("Television and Radio").—(Lord Airedale.)
LORD STRABOLGI: I should like to support the Amendment which has been so ably moved by the noble Lord, Lord Airedale, and I have very little to add to the strong arguments which he has advanced. It is important that we should amend this Bill and bring it into line with current usage. I doubt whether anybody under the age of 40 now uses the word "wireless"—it is always radio—just as I doubt whether anybody under the age of 40 uses the word "gramophone". They always call them record players now. Like the noble Lord, Lord Airedale, when I first saw this Bill on the Order Paper I had not the remotest idea what it was about. I thought it had to do with wireless transmission. I had no idea that a great deal of it referred to control over the sale of radio and television sets. I hope that the Government will consider this point because, after all, the public will be affected by this Bill. The television and radio dealers have a good deal of work to do under it, and unless the Bill is amended in this way they will have no idea that it is the kind of Bill which is going to affect their business in the future.
LORD SOMERS: The noble Lord has just said that nobody under 40 uses certain terms, and he seems to imply that if you are over 40 you are necessarily out of date and possibly inaccurate. I am sorry he thinks that, because if that is so a very large proportion of your Lordships' House must be extraordinarily inaccurate and out of date.
BARONESS PHILLIPS: I should like to thank the noble Lord, Lord Airedale, and the noble Lord, Lord Strabolgi, for the clear and concise way in which they have made their points in connection with this Amendment. Merely in passing I would say, as one over 40, that "wireless" never seemed to me a very
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accurate description of something which was a mass of trailing wires. But that is a slightly different subject. For most people the expression "television and radio" means broadcast television and broadcast sound radio, but "wireless telegraphy", as defined in Section 19 of the 1949 Act and also in the present Bill, means much more. I think I tentatively suggested this on Second Reading. For instance, it includes aeronautical navigation transmission systems and point to point data transmission, so that "television and radio" would not be an acceptable substitute. Moreover, strictly speaking it would be saying the same thing to refer to "television and radio" in the Bill. Although for most people "radio" means broadcast sound radio, to the experts it includes television, which is one form of radio. Her Majesty's Government feel that, in all, it is better to stick to the expression "wireless telegraphy" in the Bill.
The noble Lord, Lord Airedale, pointed out in his speech on Second Reading, and again to-day, that the expression "wireless telegraphy" went back to the Wireless Telegraphy Act 1904. Although this is true, the Act of 1904 was superseded by the 1949 Act, which introduced a radically new definition of "wireless telegraphy". So the present use of the expression really goes back only to 1949, and not 1904. I wonder whether, having heard this, the noble Lord, Lord Airedale, would be prepared to withdraw his Amendment.
LORD AIREDALE: I am much obliged to the noble Baroness for her reply. What I should like to suggest is this. I do not know whether the Government plan to have a separate Report stage if no Amendments are accepted to-day, but assuming that they do, then I would suggest that I withdraw this Amendment now and that we should all think about it before Report stage. If that is acceptable, I am agreeable to withdrawing the Amendment now.
BARONESS PHILLIPS: I am in somewhat of a dilemma. Although I feel that I can safely promise the noble Lord that we shall think about it, I am not quite certain that our thoughts will produce a reply different from the one I am giving now. I am being quite honest about this. We shall certainly be having

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a Report stage, and I shall certainly ask my right honourable friend to think about it.
LORD AIREDALE: On that assurance, I am very pleased to beg leave to withdraw the Amendment now.
Amendment, by leave, withdrawn.
Clause 15 agreed to.
The Schedule [Notifications and Records]:
7.3 p.m.
LORD DENHAM LORD DENHAM moved, in Part I, to leave out paragraphs 3 to 6 and to insert:
"3. The address of the premises at which the set is to be installed or to which it is to be delivered, if different from above."
The noble Lord said: This Part of the Schedule lists the information that must be sent by a television dealer to the Post Office licensing authority within twenty-eight days of each sale or letting. This will involve extra work for the dealer, which will be of no advantage to him. If we are going to saddle the dealer with this obligation, I think it is encumbent on us to make it as easy as possible for him. The Post Office will want to know details of hiring or buying transactions so that they can check up on whether the buyer or hirer has a television licence. All the information the Post Office can possibly need for this is the date of the transaction, the name and address of the buyer or hirer and, in case he is not getting the set for himself, the address at which it is to be installed. Also, perhaps, in case there is to be a different licence rate for colour, they may want information as to whether the set is capable of receiving colour. The other information for which it is proposed to ask under this Schedule is how payments are to be made, whether a hire-purchase company is involved and who actually installs the set. All these points are to my mind irrelevant at this stage.
If the licence inquiries sent out by the Post Office to the new owners of sets are unsuccessful, and if further proceedings need to be taken, all the additional information will be available from the records required to be kept under Part II of the Schedule. Is it fair to ask for all this information about every
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sale when it will be needed in only about 1 per cent. of the cases, and when in the case of this 1 per cent. it can easily be obtained later from the other records? To ask at the first stage for the information I seek to exclude will make unnecessary work both for the retailer and for the Post Office in having to go through these other details to get what they actually need. I beg to move.
Amendment moved—
Page 13, line 7, leave out paragraphs 3 to 6 and insert the said new paragraph.—(Lord Denham.)
BARONESS PHILLIPS: I should like to thank the noble Lord, Lord Denham, for his courtesy in discussing this with me previously. I have had the opportunity of passing on his comments to my right honourable friend, who appreciates very much the noble Lord's help with this Bill.
In order to explain Her Majesty's Government's attitude to this Amendment, I should like first to describe to the Committee the way in which the Postmaster General plans to arrange for the provision of notification and record forms to dealers. He intends to supply pads of forms to dealers, the pads containing, alternately, notification and record forms. The dealer, on completing the notification form—the first form in the pad—will, on the undercopy, the record form beneath it, have automatically provided himself with a record of the particulars required to be recorded within 28 days of the date of the transaction. The forms will be in simple and straightforward language. For instance, they will ask the dealer to write down only the address where the set has been installed if it is a different address from the customer's address. There will be full and simple instructions at the front of the pads about how to complete the forms.
The forms will be prescribed by the Postmaster General by Statutory Instrument in accordance with Clause 2(3) of the Bill. My right honourable friend's Department have already had discussions with the representative trade associations about the details of the forms. They will discuss the details further with them before the final version of the forms is settled. Dealers will, in accordance with

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subsection (4) of Clause 2, not be compelled to use the Postmaster General's forms for their records of transactions—the subsection allows them to use any other form which enables the matters required to be recorded to be readily ascertained—but if they do use the Postmaster General's forms they can be sure that they will be complying with the Bill; and it has been made clear in my right honourable friend's discussions with the trade associations that a great many dealers will find this system of using undercopies of the notification forms the most convenient one. The pads will of course be provided free of charge, and postage on them will be prepaid. I think this arrangement will, in spirit if not in letter, fit in with the suggestion advanced by the noble Lord, Lord Denham, during the debate on the Second Reading of the Bill, that special record books should be provided for dealers.
Her Majesty's Government are completely at one with the noble Lord's desire that the requirements of the Bill should be made as simple and as easy as possible for dealers to meet, and the contents of Part I of the Schedule were arrived at after quite thorough discussions between the Post Office and the representative trade associations. The conclusion my right honourable friend drew from these discussions was that on balance it would cause dealers the least trouble if they were asked to notify at the outset the particulars described in paragraphs 3 to 6 of Part I of the Schedule. Paragraphs 3 and 4 will enable the Post Office to know whether the transaction was one of a continuing type—a credit sale agreement, a hire-purchase agreement or a rental agreement—and, if so, whether to address themselves to the dealer or somebody else, such as a hire-purchase finance company, for any further information required about the transaction under Clause 3 of the Bill. It would plainly be a waste of time for the dealers, no less than for the Post Office, if these inquiries were addressed to people who cannot answer them; and that is the reason for paragraphs 3 and 4.
In summary, the purpose of paragraphs 3 and 4 is to put the Post Office in the position where it can direct future inquiries straight to the particular organisation which will have the answers, rather than
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to a dealer who, though he concluded the initial transaction, retains no further interest in it. But for these paragraphs of the Schedule he would have to look through old records to find to whom he should refer the Post Office's inquiry. For these reasons, I feel no doubt that the trade associations would on balance prefer the arrangements provided in the Schedule as it stands.
Paragraphs 5 and 6 ask for no more information than the noble Lord's Amendment, and they limit the request for information to circumstances in which the dealer must know the answer. If the noble Lord's Amendment were accepted, the Bill would require the dealer to notify the Post Office of the address at which the set was installed or delivered, even if he did not know it. For example, a customer might take the set away in his car, and the dealer would not then know where it was to be installed or delivered. I can assure the noble Lord that the form which my right honourable friend intends to prescribe will be easy to follow and will not be in the precise but perhaps sometimes difficult language necessary in an Act of Parliament. I am hoping that, having heard these explanations, the noble Lord will not find it necessary to press his Amendment.
LORD DENHAM: I am grateful to the noble Baroness for that full explanation. I am not entirely happy about all the answers I have been given; I have a sneaking suspicion that the Post Office already may have printed the forms and that is why they do not want to alter them. At this late hour I do not intend to press this Amendment, and I beg leave to withdraw it.
Amendment, by leave, withdrawn.
LORD DENHAM: If the Committee will allow me to do so, it would be convenient to speak to Amendments Nos. 3, 4, 5 and 6 together. They are all on the same point and are very minor drafting Amendments. As Part II of the Schedule is written, it is almost impossible, the first time one reads it, to understand what certain parts of it mean. On a second reading one begins to understand it. My wording will make it clear and, I hope, will make it understandable at a first reading. It will also make it more accurate; for when the form is filled in, the set will either already have been

719
installed or be due to be installed in the future. It seems to me unlikely that it will be being installed at the moment that the form is filled in—and especially so in a one-man business. I beg to move.
Amendment moved—
Page 13, line 31, leave out first ("is") and insert ("has been").—(Lord Denham.)
LORD STRABOLGI: I should like to support this Amendment. I think the argument that the noble Lord put forward has a great deal of weight, and I agree with what he said about the wording. I cannot understand this wording; it does not seem to have any grammatical sense at all. I quote Paragraph 4:
"If the set is or is to be installed by the dealer or another person to his order …"
I cannot understand that; and I agree that the substitution of the words "has been" for "is" would greatly improve the drafting of the Bill and make it much more intelligible to the general public.
BARONESS PHILLIPS: If I may, I will reply to all the Amendments in the name of the noble Lord, Lord Denham. These Amendments are useful improvements to the drafting of Part II of the Schedule. I thank the noble Lord for putting them down and I am happy to advise the Committee to accept them.
On Question, Amendment agreed to.
LORD DENHAM: I beg to move Amendment No. 4.
Amendment moved—
Page 13, line 32, leave out first ("is") and insert ("has been").—(Lord Denham.)
On Question, Amendment agreed to.
LORD DENHAM: I beg to move Amendment No. 5.
Amendment moved—
Page 13, line 34, leave out first ("is not") and insert ("has not been").—(Lord Denham.)
On Question, Amendment agreed to.
LORD DENHAM: I beg to move Amendment No. 6.
Amendment moved—
Page 13, line 34, leave out third ("is") and insert ("has been").—(Lord Denham.)
On Question, Amendment agreed to.
LORD DENHAM: I had not the opportunity of thanking the noble Lady for accepting the Amendments. I do so now. I am most grateful.
BARONESS PHILLIPS: I am not quite certain whether I can speak at this point. Perhaps I may do so with the permission of the Lord Chairman and the Committee. As the Committee has amended the Bill in this way, it would seem that corresponding Amendments will be needed in Part I of the Schedule, which we have already discussed; but perhaps we can put that right at a later stage.
Schedule, as amended, agreed to.
House resumed: Bill reported with Amendments.

DANGEROUS DRUGS BILL
7.15 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Stonham.)
On Question, Motion agreed to.
House in Committee accordingly.
[The Lord OAKSHOTT in the Chair.]
Clause 1 [Registration of dealers]:
On Question, Whether Clause 1 shall stand part of the Bill?
LORD SANDFORD: I rise to raise two matters on which I think I did not get entirely satisfactory answers at the Second Reading. One matter is, I think, for the attention of the noble Lord, Lord Stonham, and the other for that of the noble Baroness, Lady Phillips. This Bill is called the Dangerous Drugs Bill; but no drugs are specified by name in it. They are all scheduled in the principal Act, the Dangerous Drugs Act. But we know from what the Minister of Health said in Standing Committee G on April 20 (column 18) that he intends to specify heroin and cocaine, at any rate to start with, in the regulations that will be brought into force under the powers conferred by this Bill. We know there is a special case for starting with those particular drugs; but I think the impression has already been created, and is gaining ground in the Press and elsewhere, that

721
other drugs contained in the Dangerous Drugs Act are, for this reason, somehow less dangerous.
There have been suggestions on radio and on television that cannabis, in particular, and its derivatives—marijuana, for example—are really quite all right, quite tolerable. My information is that this is not so. I mentioned this fact on Second Reading and I believe there is every reason to keep these drugs in the Schedule of the Dangerous Drugs Act and treat them as dangerous drugs. At Second Reading the noble Baroness, Lady Phillips, kindly offered to have a private talk with me about this matter. There are few people in your Lordships' House with whom I should more enjoy a private talk; but that is not the point. The point is that I was asking the Government to make a public, authoritative statement now about this particular drug and other drugs which, although not covered by this Bill, are quite as dangerous from other points of view.
A Standing Advisory Council on Drugs Dependence does exist. It was described by Miss Bacon at Second Reading on April 6 in another place as being well-established under the new chairmanship of Sir Edward Wayne. Surely this is the time when the advice which is being tendered to the Government on matters like this should be made public. I think the passage of this Bill is the moment for Her Majesty's Government to make public some of the advice they are getting particularly on this point.
Now I will turn to the second matter. I do so with no apology that it is not dealt with in this particular clause, because it is to do with treatment centres, which also are not actually mentioned in the Bill, but, as the noble Lord explained when he introduced the Second Reading, the provision of treatment centres, their equipment and staff, is the linchpin of the whole scheme. Without treatment centres nothing can be done under the Bill and the regulations cannot be brought into force. It will be useless—indeed, fatal—to bring them into force before the treatment centres are available.
During the Second Reading debate on the 20th June last I said in my speech (column 1284) that my information was that the hospitals' response to H.M. (67)
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16, the memorandum from the Minister asking for the provision of treatment centres, gave considerable cause for misgiving; and we ought to hear, before giving approval to the Bill, what progress has been made in this matter, and what are the prospects and what are the Government's plans for ensuring the provision of rehabilitation hostels to match the treatment centres. In her response, the noble Baroness, Lady Phillips, said (column 1316), that she thought your Lordships would not want to know. I think that was a misjudgment and, not unnaturally, she got into hot water with the Press for saying this. They described it as dodging the issue. I myself would not perhaps have used those words, but I have given the noble Lady notice that I was going to raise the issue to-day, and I hope that, before we go further with the Bill, she will give us further details on this subject.
Since then there have been articles, notably the one in last Sunday's Sunday Telegraph, reporting more fully some of the misgivings which I have heard expressed about this scheme; for instance, that in the opinion of the journalist concerned these treatment centres will be in operation for only two hours a week. That would be quite inadequate and not the slightest good. But if it is true, how could the Minister, in answer to a Question asked last Monday in another place, say:
"In-patient services for heroin addicts are available in all, and out-patient services in 12 regional hospital board areas…"[OFFICIAL REPORT, Commons, 3/7/67; col. 1238.]
It may be true: I hope that it is. But what exactly is meant by this statement? What do the services consist of? How many addicts are actually receiving regular treatment at the present time at the centres? When will the centres be able to cope with, say, the 650 heroin addicts said to be known to the Home Office in January of this year? What happens if a general practitioner rings up a hospital and asks that an addict be admitted? Can the addict be accepted straight away? What is the actual situation?
I wonder whether the noble Baroness realises—I feel sure that she does—just how critical will be the stage we shall enter, when this Bill becomes law, before

723
the regulations are bought into force and the treatment centres are ready. At present, treatment is in the hands of a handful—or fewer than a handful—of dedicated general practitioners and others, who are doing their best to handle these very demanding patients in the course of their work. They believe, and they have reason to believe, that when the Bill is passed, and when, in due course, the treatment centres are ready, their right to prescribe for heroin and cocaine addicts will be taken away by the regulations which will be brought in under the provisions in the Bill. Their reason for believing this is the statement made by the Minister of Health in Standing Committee G on April 25 (column 53), that general practitioners will not be licensed under the regulations.
Is it really sensible to jettison by this legislation all the precious skill and experience which exist at present and have been built up? Such skill and experience are not readily available in the hospitals. The people who are doing the little work that is already going on there have little experience in handling these matters. Unless those people who are handling and treating addicts at the moment are given more consideration, there will be little incentive for them to carry on their good work and every reason why they should drop it straight away. All the more reason, then, not only for considering their point of view, to see whether it is possible to find some framework in which they could co-operate with the treatment centres, but also for getting on with the centres and for us to be informed at this stage of the proceedings on the Bill exactly what is being provided and what is the official attitude towards the provision of rehabilitation centres.
7.25 p.m.
LORD AMULREE: I should like to support a great deal of what has been said by the noble Lord, Lord Sandford. Like him, I was disappointed at what the noble Baroness said when replying to the speeches made on Second Reading about the provision of the treatment centres. I do not know what number will be available. As I said in my speech on Second Reading, I know of two London teaching hospitals where there are facilities. I have been told that four
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more will be available very soon, but I have no idea whether that is true, or when the centres will start to operate. I think that is a point on which we should like a good deal more information from the noble Baroness. As the noble Lord, Lord Sandford, has said, the treatment centres are the key to the whole matter, so I hope that we shall be able to get a little more information on that very important point.
There is one question that I should like to ask, and I think that this is the right time to do so. I did not give the noble Baroness notice of my intention to ask this question, and so I do not expect her to be able to reply now. It refers to the people who can carry out the treatment. The noble Lord, Lord Sandford, referred to the general practitioners who, we think, will not be allowed to continue to give treatment. But suppose a patient is being treated by a consultant psychiatrist, will the psychiatrist be allowed to continue the treatment, or will the patient automatically be transferred to a treatment centre? If that is so, I think that we shall run into trouble. As I mentioned during the Second Reading debate, these drug addicts are rather difficult people to pin down, and they like a certain amount of continuity in their treatment. If there is a patient who is being successfully treated by a consultant psychiatrist now, I trust that the psychiatrist will still be able to carry on with the treatment when the Bill becomes law.
LORD SEGAL: While I fully agree with everything that has been said by the noble Lord, Lord Sandford, and by the noble Lord, Lord Amulree, I tend to the view that this problem is one of such extreme urgency that the emphasis must be laid first of all on control by means of notification. I would even accept that, once notification had been made compulsory, doctors and specialists who receive licences should be allowed to carry on with the treatment to which the addicts have become accustomed, even if it is no more than control. I therefore suggest that licences should be issued as liberally as possible, so that an appreciable number of general practitioners, who already have experience in the handling of these addicts, may receive licences from the recognised authority.

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It may be necessary to grant them on a temporary basis, to tide over the immediate phase, when, as I believe, the number of notifications may be so high that the specialists designated and licensed by the central authority may not be sufficient to cope with the flood of notifications.
There are two matters that I should like my noble friend to make clear. It was recommended by the Brain Committee that access to the list of notifications should be made available to doctors at all hours of the day and night. I hope that that recommendation will be observed and facilities made available to doctors who may be confronted with an emergency case. An addict may suddenly present himself to a doctor, and the doctor should have ready access to the list of notified addicts so that he can make sure that the addict is not already receiving treatment from another specified and licensed doctor.
The other point which I think it would be helpful if my noble friend would make clear is this. Is there to be a definite provision that the list of addicts notified will not be made available to any person other than a doctor? It seems to me that unless this is definitely specified it will be possible that knowledge that someone has been notified as an addict may leak out and be put to some improper use. There is a latent fear in the minds of many addicts that the fact that they have been notified may be taken advantage of by someone who ought not to be given access to that information.
At one time I thought that an addict could be notified not by name but by means of a number, parallel somewhat to the notification existing at present in the case of venereal disease. The more I thought about it, the more I realised that this is not a true parallel, because notification of venereal disease is a purely medical problem, whereas the notification of addicts may in some cases have possible criminal implications. So I should like my noble friend to make clear that the list of addicts notified to the central authority will not be made available to anyone who is not a fully qualified doctor.
7.22 p.m.
LORD STONHAM: I am bound to point out that this is a Committee stage,
726
and that we appear to be in grave danger of having a second Second Reading before we have even considered the first Amendment. I am sure that my noble friend and I are anxious to give the maximum possible information, but in 22 years of Parliamentary experience I have never known a Motion, That the clause stand part to give rise to a Second Reading debate of this kind. I shall do my best to answer the points raised, but I hope that we do not have a debate of this kind every time we have a Motion, That the clause stand part.
Although this Bill is my responsibility as representative of the Home Secretary, obviously there is a clear division of responsibility between the Department responsible for the enforcement of the Act and the Ministry of Health, which will be responsible for what I regard as treatment. Therefore I will answer some of the points raised and leave it to my noble friend Lady Phillips to answer the questions on treatment. I hope that your Lordships will not mind my reading a few words from Clause 1, which says:
"Without prejudice to the generality of section 11 of the Dangerous Drugs Act 1965 … the powers of the Secretary of State under that section (which authorises the making of regulations for preventing the improper use of drugs) shall include power to make regulations—".
That is virtually what we are talking about, and the drugs referred to are given in Part I of the Schedule to the principal Act.
It will be within the recollection of the noble Lord, Lord Sandford, that in my Second Reading speech I made it clear that my right honourable friend proposes to make regulations in relation to the hard drugs, the drugs of addiction, heroin and cocaine. The noble Lord mentioned cannabis, which I am advised is not a drug of addiction, but I agree with him that the use of this drug is greatly increasing. Sir Joseph Simpson, the Metropolitan Police Commissioner, in his report to-day to the Home Secretary, refers to the rise in the use of drugs and in crimes of violence as being, unfortunately, the two noteworthy developments of the past year. Of course, the question of cannabis is a serious one, and I deprecate any Press suggestions to the contrary. But I want to make it clear that it is not the present intention to use this Bill, when it becomes

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an Act, to make any change as compared with the Drugs (Prevention of Misuse) Act 1964 in dealing with cannabis.
This drug, which is also known as Indian hemp, marijuana and "pot", is scheduled under the International Convention on Narcotic Drugs 1961, to which Her Majesty's Government are party. Strict control is applied to the drug by Part I of the Dangerous Drugs Act, which reflects the requirements of this Convention, most of which have been a feature of dangerous drug law since this drug was placed under international control in 1928. I am advised that there is virtually no medical and scientific use for the drug in this country.
The law was strengthened in the Dangerous Drugs Act 1965, when it was made an offence to permit premises to be used for smoking cannabis and an offence intentionally to cultivate the cannabis plant. There is probably more traffic in and consumption of cannabis than of any other drug under international control, but in this country, as in other parts of Western Europe, cannabis smoking has become extensive only very recently. Before the war it was no problem. Yet last year there were over 900 convictions involving cannabis. We have no long or clear experience from which to judge the effect of this drug or its links, if any, with other forms of drug abuse. Expert opinion in this country, as elsewhere, seems to be somewhat divided about the danger of cannabis smoking. That may be partly due to our lack of experience, but it may also be due to the general lack of clear information about the experience elsewhere Cannabis indeed is a drug about which there is a considerable area of no knowledge.
On the other hand, the World Health Organisation, the International Narcotics Bureau and the United Nations Narcotics Commission all consider that the consumption of this drug is harmful to the individual and society, and that international control should be maintained. For this reason, cannabis is now banned in virtually every country in the world and could not be freed from that ban in one or two countries without consequences to all, as all are bound up in this.
Having regard to the circumstances which I have described, the Government are convinced that the first, the essential,
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starting point before action is a careful assessment of all that is known about this drug. Although there must be a fairly lengthy study, I am glad to be able to tell the noble Lord that his suggestion was adopted two months ago, and that an Advisory Committee on Drug Dependence, under the chairmanship of Sir Edward Wayne, has been studying for two months and is still studying the pharmacological, legal and social aspects of the cannabis question. Obviously their report will be of the greatest importance. But until the Committee have made their report and are able to offer comprehensive advice it is premature to consider whether any, and if so what, amendment in the law should be made. But the study that we have invited is evidence of our determination to ascertain the facts and to do whatever is necessary.
The other point with which I would deal is that raised by my noble friend Lord Segal with regard to anonymity in respect of drug addicts; that is, the addicts to the hard drugs who will be affected by this Bill. I would say at once what I said on Second Reading, that the opportunities of the fact of notification will be completely safeguarded by the Official Secrets Act, and there will be no disclosure except to a doctor who is attending on the addict and who seeks from the central authority confirmation whether or not he has been notified. It is at that stage that the central authority, after suitably satisfying itself that the inquiry is genuine, will put the inquiring doctor in touch with the doctor who made the notification, and will then leave the two doctors to exchange information in accordance with their professional ethics.
It is difficult to see how we could introduce anonymity into a procedure of this kind. Even if we had a series of numbers, we must somewhere relate the numbers to names and, so far as the doctors are concerned, the names to the persons, or perhaps the persons to the names. If my noble friend is concerned with anonymity during treatment, I will gladly consult my right honourable friend the Minister of Health to see to what extent this is possible. But there seem to be difficulties. One is that young, unstable addicts of the kind with whom we are dealing to-day tend to move from one area to another; and we must have a system of identification to prevent them

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from obtaining prescriptions from two centres at the same time, or even from a centre and a general practitioner.
Another difficulty is that if the addict who is being treated at an out-patient centre is to have the help in his social difficulties which may eventually lead him to seek cure by in-patient treatment, then the out-patient staff must feel encouraged to arrange for other local agencies, and indeed social workers, to take an interest in his case. My noble friend mentioned V.D. I think I should agree with him that in this respect the addict is not at all like the patient who seeks treatment for V.D. But social help will do no good if it is thrust on the addict. On the other hand, I am not sure that it would be wise for the treatment centre to leave the addict to ask for any help with his social activities or to approach the whole matter as though his addiction were a social stigma. For a minority perhaps addiction seems a stigma. But I should have thought that, for the majority, living rootless on the fringes of society, we should do better to show recognition that they have a problem in which we have an interest and a desire to help.
In other words, I think the answer to my noble friend is that we should preserve the confidentiality of central records, on the lines I have mentioned, but extend as widely as we possibly can the network of help available to addicts who can be persuaded to take advantage of it. I hope that, so far as those two points are concerned, I have done something to answer them, and I will now leave the rest of the field to my noble friend Lady Phillips.
7.45 p.m.
BARONESS PHILLIPS: I am glad that the noble Lord, Lord Sandford, has asked this question, supplemented by the noble Lord, Lord Amulree, because it provides me with an opportunity to make a personal apology in respect of what some seem to have regarded as evasion. I may say that I will never do this again, but there has quite frequently been free criticism of the length of speeches. And on the occasion of which I am speaking I had been on my feet for 40 minutes—I timed this in Hansard. Each stage of a Bill in your Lordships' House is carefully examined and, if I dare suggest it (I am
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a little recalcitrant), I think we sometimes do repeat ourselves, and it seemed to me that noble Lords in the House at that time would perhaps have preferred to go and have their tea. I am sorry to say that my simple action, which was that of courtesy, has been misconstrued into evasion and dodging the issue; and, apparently, I almost brought down the Government. I am sorry for this.
I would say that I have never evaded even the most difficult question with which I have been confronted personally, and the Government had no reason to. I am bound to say to the noble Lord, Lord Sandford, that, while I apologise humbly to him, to the noble Lord, Lord Amulree, and to those of your Lordships who were in the House at the time—and I recollect that it was not many more than about six—I do not feel myself under any compulsion to answer to the Press. The Press of this country have a complete freedom of expression, and they utilise it. I should not like to say that they are always completely accurate. They appear in this particular case to have been flying a few kites, and I do not find myself under any obligation to reply to the particularly pompous article referred to by the noble Lord, Lord Sandford.
Having said that, I will now deal with the treatment centres, and if this reply seems a little lengthy, I can only say that it is because the matter is one on which your Lordships have asked for a lot of information. Perhaps before I do this I might say to both noble Lords that my noble friend Lord Stonham did make it clear on Second Reading that the existing machinery would be in being until new machinery was introduced. I think those were his actual words, which I repeated, and perhaps I can give your Lordships an assurance from the words of my right honourable friend in another place, who said:
"I am satisfied, and I have already made it clear, that we shall not bring in the regulations prohibiting prescription by general practitioners for addicts until we are satisfied that the hospital facilities are adequate."—[OFFICIAL REPORT, Commons, col. 1239, 3/7/66.]
I hope noble Lords will accept this.
As to the form hospital treatment centres will take, I have discussed this subject with my right honourable friend the Minister, and he has incorporated the

731
advice of medical experts in a memorandum of guidance issued to hospital authorities in March. This recommends that in-patient treatment for the withdrawal of heroin be provided for small groups of patients, usually not more than 12, in mental illness hospitals or psychiatric units of general hospitals. Treatment in small groups is to be preferred, because patients and staff are better able to help each other, there is less likelihood of drugs being brought in to addicts, and there are more favourable conditions for research. It may be considered desirable to treat separately heroin addicts and patients addicted to other drugs or to alcohol, or to separate the younger heroin addicts from the older ones. Arrangements for treatment are a matter for clinical discretion and accommodation will need to take into account possible subdivisions of this kind.
For addicts who are unwilling for the moment to accept withdrawal treatment—and these are expected to be the majority—the Ministry's memorandum recommends the provision of out-patient services. The aim is to contain the spread of heroin addiction by continuing to supply this drug where necessary in the smallest quantities considered advisable by the hospital doctor, and to persuade addicts as far as possible to accept withdrawal treatment. The out-patient clinics will provide medical supervision including attention to those physical illnesses to which addicts are prone. Addicts will usually be separated from other patients by treating them either at different times or in different premises.
The treatment and supervision of addicts is demanding and time-consuming and it is important that the load should be shared among the hospitals, especially in London, where there are most addicts. The plan is for the psychiatric hospitals in and around London to provide most of the in-patient services, and for the London teaching hospitals and psychiatric departments to provide most of the outpatient services, although some hospitals will provide both. All out-patient clinics will, of course, be linked with in-patient services, either at the same or at another hospital. Noble Lords will be delighted to know that there are now in operation eleven out-patient clinics in London, and
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plans for four other centres are under urgent discussion.
I should now like to mention the results which the Ministry hope to see from these new arrangements. Authority to administer, prescribe and supply heroin will be confined to licensed doctors at a relatively small number of centres. Addicts will be identified and checked against the central records to ensure that they are not being treated at more than one centre. The Ministry do not, however, expect identification cards to be issued to addicts. Where a supply of drugs is authorised by a hospital doctor and it is appropriate for a retail chemist to do the dispensing, new precautions will be adopted to prevent a patient from misusing the prescription. The addict who is not willing for the time being to accept withdrawal treatment will usually be invited to enter hospital for a short period in which dosage may be accurately assessed. By these means, excessive prescribing should be reduced and perhaps eliminated, and the spread of addiction checked—a substantial gain. For those who are addicted, medical supervision at out-patient clinics by psychiatrists should lead to more addicts agreeing to accept withdrawal treatment; also to greater specialisation, and to opportunities for research, so that more effective methods of treatment can be developed.
I think we all recognise that withdrawal treatment is not in itself a cure. Physical dependence on a drug may be removed fairly easily, but psychological dependence is more persistent and carries with it the possibility of relapse, which is a characteristic of addiction. While there is clearly a need for some form of treatment after withdrawal in hospital, the form it should take is less certain. This stage is conveniently described as rehabilitation, but the problem of providing effective rehabilitation is a very difficult one. The Minister has arranged two conferences on the subject: the first with psychiatrists and the second with voluntary bodies and local authorities. There seems to be support for the idea that after completing withdrawal treatment in hospital addicts would benefit from staying in hostels in which they could receive social support and some continued medical supervision while going out to work. But it also seems,

733
most unfortunately, that only a small minority of addicts who undertake withdrawal treatment can be expected to complete a period of rehabilitation. In view of this, it seems appropriate to make no initial large-scale provision of hostels for addicts, but instead to build on the experience of a few experimental hostels. Several of these have been started by voluntary bodies, as we know and as was discussed on Second Reading, and the Government welcome this initiative.
On the relationship and timing of events, the Government have it in mind to bring the notification regulations into operation in the autumn. Before then they hope to have set up a panel to advise doctors who are in doubt whether a patient is an addict, to have introduced in connection with the central records of addicts a special scheme for the identification of heroin addicts which will be used by the treatment centres, and to have introduced, also in the treatment centres, new precautions against the misuse of prescriptions. It is hoped to bring the prescribing regulations into operation early next year. Before then adequate treatment facilities must be provided, arrangements made for the transfer of addicts from general practitioners to hospitals, and for the licensing of doctors at treatment centres to administer, prescribe or supply restricted drugs. I hope I have given your Lordships an outline of the work of treatment centres and what they hope to achieve.
I believe that one further question was put by the noble Lord, Lord Segal, on the 24-hour service for doctors, and this appears to be related to the suggestion that there should be a 24-hour service in hospitals. My right honourable friend has been considering this, but he does not feel justified in making this a standard arrangement, although he would, of course, welcome a 24-hour service at any hospital which was able to provide it. It may be of interest to noble Lords to know that in Birmingham the hospital out-patient clinic is not open for 24 hours a day, and in at least one hospital in London a weekly clinic appears to provide a satisfactory service. I will endeavour, after I have studied Hansard, to obtain further answers to any points that have been missed, and I am sure we shall return to this matter at the next stage of the Bill.
LORD SANDFORD: I am sure we are most grateful to the noble Lady for adding that considerable amount of information on this question of treatment centres, but I assure her that we will pursue this matter at a later stage, because a great deal of what she said about treatment centres was no more than a précis of the Hospital Memorandum, No. 6716, to which I referred. What we are interested in is not what the Minister of Health's plans are, but how they are being carried out; and I am sure the noble Baroness will be the first to admit that we have not much extra information about that. Nevertheless, we are grateful for what we have had. We are also most grateful to the noble Lord, Lord Stonham, for his statement about cannabis, which I am sure all noble Lords will agree is very helpful at this stage.
Clause 1 agreed to.
Clause 2 [Investigation of contraventions of regulations]:
7.57 p.m.
LORD STONHAM: I beg to move Amendment No. 1. This is purely a drafting Amendment.
Amendment moved—
Page 3, line 17, after first ("or") insert ("referred").—(Lord Stonham.)
LORD AIREDALE: I appreciate that this is only a drafting Amendment, an Amendment to a paragraph only two lines long. I am sorry that the paragraph still will not be word perfect. It uses the expression "referred back to the tribunal". If "referred" means—
LORD STONHAM: I am not sure of the line to which the noble Lord is referring.
LORD AIREDALE: I am referring to line 16, where the paragraph uses the expression "The case be referred back to the tribunal". If "referred" means "sent back", what does "referred back" mean? I suspect the intended meaning is "referred again", and I look forward to a Lib-Lab pact on the Report stage, at which we may make this very short paragraph word perfect.
LORD STONHAM: I can hardly wait.
On Question, Amendment agreed to.
Clause 2, as amended, agreed to.
Clause 3 agreed to.
LORD STONHAM LORD STONHAM moved, after Clause 3, to insert the following new clause:
Safe custody etc. of drugs

" .—(1) The Secretary of State may by regulations make provision—

(a) for requiring precautions to be taken for the safe custody of drugs of any description specified in the regulations which are kept on premises of a description so specified;

(b) for requiring the keeping of records of drugs in respect of which such precautions are required to be taken;

(c) for the inspection of any precautions taken or records kept in pursuance of this section; and

(d) as to the manner in which drugs are to be packed for sale by a person who, within the meaning of the regulations, is a manufacturer of drugs or a dealer in bulk in drugs.

(2) Regulations under this section may provide that such of the requirements imposed by virtue of paragraph (a) above as may be specified in the regulations shall not apply to drugs kept on premises occupied for the purposes of his business by such a person as is mentioned in paragraph (d) above; but the Secretary of State may, by a notice in writing served on such a person in such manner as may be specified by regulations under this section, specify the precautions or further precautions to be taken for the safe custody of any drugs specified in the notice which are kept on premises so specified and occupied by him as aforesaid, and the precautions specified in such a notice shall be deemed to be required by regulations made in pursuance of the said paragraph (a).

(3) Regulations under this section may also provide that where a person of a kind mentioned in section 1(2) of the Drugs (Prevention of Misuse) Act 1964 is convicted of an offence against the principal Act consisting of a contravention of regulations under this section the Secretary of State may, by a direction given in such manner and after such consultations (if any) as may be specified in the regulations, provide that the said section 1(2) shall not apply to that person while the direction remains in force.

(4) Without prejudice to the provisions of section 5(2) of this Act, section 14 of the principal Act (which relates to the entry and search of premises to obtain evidence of offences) shall have effect as if the reference to Part III of that Act in subsection (1) included a reference to this section and as if references to Part I of the Schedule to that Act included references to the Schedule to the said Act of 1964; and section 16(2) of the principal Act (which among other things limits the penalty in respect of an offence relating to the keeping of books which was committed through inadvertence) shall have effect as if the reference to the keeping of books included a reference to the keeping of records in pursuance of paragraph (b) of subsection (1) of this section.

736

(5) Nothing in this section shall be construed as derogating from the provisions of any other enactment relating to matters in respect of which provision may be made under this section.

(6) In this section 'drug' includes any drug to which Part I of the principal Act applies and any substance for the time being specified in the Schedule to the said Act of 1964".

The noble Lord said: I beg to move the new clause as printed on the Order Paper. Your Lordships will recall that, on Second Reading, I said:
"My right honourable friend the Home Secretary has for some time felt concern about the inadequacy of present arrangements for the safekeeping of drugs in the premises of manufacturers, wholesalers and pharmacists. When addiction is increasing, and abuse of soft drugs appears to be widespread, the need for effective security becomes vitally important".—[OFFICIAL REPORT, 20/6/67; col. 1280];
Before I comment further on the inadequacy of the present security powers, I should like to make it clear that, so far as hard drugs are concerned, the pharmaceutical industry has complied most responsibly with the strict requirements laid down by the Home Office, and there is no evidence—I should like to repeat that: there is no evidence—of diversion of hard drugs from trade channels.
To some extent the inadequacy of present powers is this. Broadly speaking, the Dangerous Drugs Act, 1965, gives the necessary powers by regulation and licensing to impose requirements for safe keeping and record keeping of hard drugs. The weakness is that the power to inspect to ensure compliance with the requirements does not extend to all premises where drugs may be kept.
The position with soft drugs, however, is altogether different. There are no provisions whatever in the Drugs (Prevention of Misuse) Act 1964—that otherwise so excellent Act—to require or enforce safe keeping by any of the persons authorised under that Act to have possession of soft drugs. Because of the terms of Section 12 of the Dangerous Drugs Act 1965, "soft" drugs cannot be scheduled under that Act. The only way in which safe keeping of "soft" drugs could be required would be by regulating their "storage" as listed poisons under the Pharmacy and Poisons Act 1933, and even then the powers of inspection would be very limited. I need not remind the House that penalties for

737
offences against the 1965 Act, the 1964 Act and the 1933 Act are all different.
I shall be moving later on a new clause providing the police with powers of search on suspicion, and I shall hope to convince your Lordships that this is essential if the police are to make an effective effort against trafficking. That effort, however, would be frustrated if the standards of safe keeping of drugs by those who have legitimate possession are not tightened up. For some time, the police have been very concerned about pilfering of "soft" drugs. Last year, with the full co-operation of the Association of the British Pharmaceutical Industry and the National Association of Pharmaceutical Distributors, the Home Office collected information about the security arrangements of all manufacturers and dealers registered under the 1964 Act. The Home Office Drugs Branch inspectors also visited selected premises to observe current practice. This survey showed that while security standards in a number of firms were high, safeguards against theft or pilfering of "soft" drugs in a number of others were ineffective or even nonexistent.
The police have also been worried about pharmacy-breaking. In 1966 there were at least 60 cases of pharmacy-breaking in London, 35 in Manchester, 25 in Lancashire and 14 in Liverpool. Well over half a million tablets were stolen. In some areas it has been quite clear that pharmacy-breaking has been a significant source of local drug abuse. Accordingly, the representative bodies of the pharmaceutical industry and the pharmacists have been consulted, and general agreement has been reached on the principles of the new clause which I am moving to-day. Its general purpose is to give the Secretary of State a comprehensive power to impose a unified code of requirements for safekeeping, record keeping and packaging of "hard" and "soft" drugs, and to empower the police and persons authorised by the Secretary of State to enter premises to see that the requirements are complied with. The new enabling powers will allow my right honourable friend opportunity to impose or modify controls as the situation develops.
The initial intention is to make regulations applying to the premises of retail pharmacists and to give appropriate
738
notices to manufacturers and wholesalers who handle "soft" drugs in large quantities. The clause provides appropriately flexible powers. Under subsection (1), for example, it will be possible to make different regulations for different classes of premises and for different drugs and preparations, and to exclude particular drugs and preparations and classes of premises from control. The representative bodies have emphasised the need for new controls to take account of the variety of local circumstances which may be met within the thousands of retail pharmacies in this country, and of course in the premises of manufacturers and wholesalers.
It will be the Government's intention, as I made clear during my speech at Second Reading, to have the fullest consultations with the interested organisations before any new requirements are introduced. We have, of course, had consultations already and we have reached agreement in principle, but there will be full consultations about detail. The Association of the British Pharmaceutical Industry is already preparing a Code of Practice which should be of great assistance in considering the question of the statutory notices. Our aim will be to hammer out really effective arrangements. This is not a "window dressing" exercise. We are not looking for controls for controls' sake. We mean business, and I am sure that the representative bodies, who have given such ready and full co-operation in reviewing present controls, understand this very clearly.
I ought perhaps, by way of clarification, to add a word about enforcement although, of course, we have no reason to think that the industry or pharmacists will not co-operate to the full in whatever controls are imposed. In the first place any breach of, or failure to comply with, a regulation will be an offence against the principal Act and liable to the penalties provided in the section. In other words, the sanctions for safekeeping of "soft" drugs will be brought up to the level of those already existing for "hard" drugs. But there will be another possible sanction namely, the withdrawal of a licence or registration, as the case may be, or removal of authority to possess "hard" or "soft" drugs. It is already the position under the principal Act and Regulation 22 of the Dangerous Drugs (No. 2) Regulations that the Secretary of State has

739
power to withdraw authority to possess dangerous drugs if a person has been convicted of an offence against that Act. Subsection (3) of the Amendment makes provision allowing him in effect to withdraw from any person authority to possess "soft" drugs conferred by Section 1(2) of the 1964 Act.
I do not want to mislead your Lordships into thinking that the formulation of controls over either "soft" drugs or their safe keeping will be an easy matter. The number of tablets legitimately produced and prescribed is enormous. In the United States the law does not yet regulate the safekeeping of these drugs. We have a large problem to tackle, therefore, but with the help of the industry and other interested bodies we are confident that we can raise the present standards of security in a substantial way and so reduce the thefts which form a substantial source of supply for the traffickers. Above all, by taking these powers to integrate control over "hard" and "soft" drugs within the legitimate channels, the Government feel that it may be easier in the future to consider more diverse treatment of the social and medical problems presented by "hard" and "soft" drugs should the need for this arise. I beg to move.
Amendment moved—
After Clause 3, insert the said new clause.—(Lord Stonham.)
LORD DERWENT: In self-defence, may I say that in 1964 it was not so apparent that this kind of legislation would be so urgent and necessary in 1967. But it is urgent and necessary. One might have had a little doubt about this clause if the noble Lord had not said that the pharmaceutical industry and the pharmacists were to be consulted. That being so, from this side of the Committee we most sincerely welcome this clause.
On Question, Amendment agreed to.
BARONESS PHILLIPS: With permission I will take Amendments Nos. 3, 4 and 6 together. Clause 4 enables regulations under the principal Act to provide that: (a) the contravention of particular regulations shall not constitute a criminal offence under Section 13 of that Act; and that (b) the provisions relating to tribunals and advisory bodies shall apply
740
to any proposal by the Secretary of State to withdraw authority to prescribe, possess, supply or otherwise deal in drugs conferred by regulations made under that Act.
These Amendments are consequential on Amendments to page 4, lines 17 and 22. They provide that regulations for the purposes of Clause 4 should be made, not under the principal Act, but under the Bill. Regulations under the clause dealing with safe custody will relate, not only to 1965 Act drugs, but also to 1964 Act drugs, and it would be inappropriate to make these regulations under the former Act. Clause 4 as proposed to be amended would also relate to 1964 Act drugs, and it is appropriate therefore to provide that regulations under that clause are to be made under the Bill. I beg to move.
Amendment moved—
Page 4, line 7, leave out from beginning to ("provision") and insert ("The Secretary of State may by regulations make".)—(Baroness Phillips.)
On Question, Amendment agreed to.
BARONESS PHILLIPS: I beg to move.
Amendment moved—
Page 4, line 9, leave out ("that") and insert ("the principal").—(Baroness Phillips.)
On Question, Amendment agreed to.
8.10 p.m.
LORD STONHAM LORD STONHAM moved, in paragraph (b)(i), after "State" to insert:
"to give a direction in pursuance of subsection (3) of section (Safe custody etc. of drugs) of this Act or".
The noble Lord said: Subsection (3) of the new clause which your Lordships have just accepted enables regulations made by virtue of that clause to include provision that where a person of a kind mentioned in Section 1(2) of the Drugs (Prevention of Misuse) Act 1964 is convicted of contravention of such regulations the Secretary of State may, by a direction, provide that Section 1(2) of the 1964 Act shall not apply to that person while the direction remains in force; that is to say, may remove his authority to possess substances scheduled under that Act.
Clause 4, paragraph (b), enables regulations under the principal Act to apply the provisions relating to tribunals

741
and advisory bodies (with such modifications as may be specified) for the purposes of regulations under the Act generally, and in particular to any proposal by the Secretary of State to withdraw authority to prescribe, possess, supply or otherwise deal in drugs conferred by regulations made under that Act. This Amendment extends the proposals to which, by regulations made by virtue of Clause 4, as amended by Amendments Nos. 3 and 4 (and as it will be amended by Amendment No. 6), the provision relating to tribunals and advisory bodies may be applied, so as to include any proposal by the Secretary of State to give a direction as provided by subsection (3) of the new clause.
Thus, it will be possible, if desired, to establish, by regulations, a common procedure for dealing, by means of the tribunal and advisory body machinery, with any proposal in effect to withdraw a practitioner's authority to prescribe, possess, supply or otherwise deal in drugs scheduled under the principal Act or, if he is made subject to regulations about safe custody of drugs and is convicted of contravening such regulations, to possess substances scheduled under the Drugs (Prevention of Misuse) Act 1964. This is the necessary provision, looking forward. I beg to move.
Amendment moved—
Page 4, line 17, after ("State") insert the said words.—(Lord Stonham.)
On Question, Amendment agreed to.
LORD STONHAM: I beg to move Amendment No. 6.
Amendment moved—
Page 4, line 22, leave out ("that") and insert ("the principal ").—(Lord Stonham.)
On Question, Amendment agreed to.
LORD STONHAM LORD STONHAM moved to insert after paragraph (b):
"(c) for the application of any of the provisions of this Act, the principal Act or regulations under either of those Acts to servants or agents of the Crown, subject to such exceptions, adaptations and modifications as may be so specified."
The noble Lord said: As your Lordships will be aware, in the absence of express provision the Crown is not bound by the principal Act. But the Government consider it desirable, for the effective organisation of the new arrangements
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proposed for notification of addicts and prescribing for addicts, that medical officers in special hospitals, the Prison Service and the Armed Forces should be under the same statutory obligations as other practitioners as regards these requirements. It is conceivable, however, that circumstances may arise in which it would be appropriate to apply other regulations or substantive provisions to these medical officers and to other persons employed in the service or acting on behalf of the Crown. Accordingly, this Amendment enables regulations made under the principal Act or the Bill to be applied to servants or agents of the Crown with adaptations.
As your Lordships will be aware—or at least Ministers and ex-Ministers will be aware—at a later stage of this Bill a noble friend who is a Privy Counsellor will state that he has it in command from Her Majesty to acquaint the House that Her Majesty, having been informed of the purport of the Dangerous Drugs Bill, has consented to place her interest, so far as it is affected by the Bill, at the disposal of Parliament for the purposes of the Bill. I beg to move.
Amendment moved—
Page 4, line 22, at end insert the said paragraph.—(Lord Stonham.)
LORD DERWENT: I imagine that this is somewhat unusual; in fact I should think very unusual. I have never seen it happen before, but I think it is absolutely necessary.
On Question, Amendment agreed to.
LORD STONHAM: This is a paving Amendment to Amendment No. 10, the definition of "drug" in Clause 5. I beg to move.
Amendment moved.
Page 4, line 22, at end insert—
("( ) In this section 'drug' includes any drug to which Part I of the Principal Act applies.")—(Lord Stonham.)
On Question, Amendment agreed to.
Clause 4, as amended, agreed to.
LORD STONHAM LORD STONHAM moved, after Clause 4, to insert the following new clause:
Further powers to search and to obtain evidence
" .—(1) If a constable has reasonable grounds to suspect that any person is in possession of a drug in contravention of the

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principal Act or regulations thereunder or in contravention of the Drugs (Prevention of Misuse) Act 1964, the constable may—

(a) search that person, and detain him for the purpose of searching him;

(b) search any vehicle in which the constable suspects that the drug may be found, and for that purpose require the person in control of the vehicle to stop it;

(c) seize and detain, for the purposes of proceedings under either of the Acts aforesaid, anything found in the course of the search which appears to the constable to be evidence of an offence against either of those Acts.

(2) Nothing in subsection (1) of this section shall be construed as prejudicing any power of search or any power to seize or detain property which is exercisable by a constable apart from that subsection.
(3) In subsection (1) of this section 'drug' includes any drug to which Part I or Part II of the principal Act applies and any substance for the time being specified in the Schedule to the said Act of 1964.
(4) Section 14(2) of the principal Act and section 3(1) of the said Act of 1964 (which provide for the issue of a search warrant authorising any constable named in the warrant to enter and search premises in connection with suspected offences under those Acts) shall have effect, in their application to Northern Ireland, with the omission of the words 'named in the warrant' and, in their application otherwise than to Northern Ireland, with the substitution for those words of the words 'acting for the police area in which the premises are situated'; and at the end of section 15 of the principal Act (which provides for the arrest of a suspected offender who may abscond or whose name and address are not known) there shall be inserted the words 'or if he is not satisfied that a name and address furnished by that person as his name and address are true'".
The noble Lord said: I beg to move the new clause after Clause 4. Your Lordships will remember that on Second Reading I gave notice of intention to introduce this Amendment, and said that the Government were determined to look after the pedlars and pushers; we were not going to let them get away with it. This clause, which has four main purposes, is the fulfilment of that proposal. It gives the police power, where they have reasonable grounds to suspect that drugs, whether hard or soft, are unlawfully possessed, first, to search the person concerned and secondly, to search any vehicle in which the drugs are suspected of being. Thirdly, it will remove the requirement to name in a search warrant under the 1965 or 1964 Act the individual officers who will execute it, and fourthly, it will
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empower a constable to arrest a suspected offender if he is not satisfied that the name and address provided by him as his name and address are true.
It may be convenient if I dispose first of subsection (4) of the clause, which deals with the last two purposes I have just mentioned. The requirement to name police officers in drug search warrants first appeared in the Dangerous Drugs Poisons (Amendment) Act 1923. Home Office records do not disclose why. It may be, as the noble Lord, Lord Derwent, surmised a few minutes ago, that in 1923 it was not envisaged that search warrants would be used to authorise police raids of the kind or on the scale familiar to-day. Nowadays, when large numbers of police may have to be employed, it is a needless and unwelcome complication to have to decide in advance which officers will be taking part. If a further raid is to be made on the premises during the one-month validity of the warrant it is often difficult, because of changes in duty rotas, for the same officer to be available. A second raid therefore may have to be carried out by fewer officers or a second warrant obtained.
At Second Reading I referred to this requirement as an "anachronism". I should perhaps have said "anomaly", because this requirement is not common to search warrants generally. The Amendment will, in fact, bring the practice as regards drug warrants into line with other warrants. It will not have any prejudicial effect either upon the significance of warrants generally or upon the exercise of police powers there-under. I think, if your Lordships agree, that this anomaly should be removed. The concluding part of subsection (4) does no more than bring the restrictions imposed on powers of arrest by Section 15 of the principal Act into line with those imposed by Section 3 of the Drugs (Prevention of Misuse) Act 1964.
I turn now to the major provisions in the clause. Most features of drug trafficking are well known. The evil has spread widely. It is not only around the cafés—or "caifs", as I think they are often called—clubs and dance halls of towns and cities. Coastal resorts, even camping areas, are visited by the pedlars and pushers, some of them sleeping rough, others delivering the goods well concealed in their vehicles. However loosely the

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supply is organised, the places where drugs can be obtained seem to be well known in most localities, and they are also well known to the police. It is a very large problem, complicated by the ease with which drugs can be concealed.
As the police have accumulated evidence of the extent of drug abuse and the increase in trafficking, they have become more and more concerned about their lack of powers to deal with it. Their difficulty is this. If they make an arrest they can, under Common Law, make a search. If they do not make an arrest, they can search a person or his property only with his consent or under a warrant. However, under Section 15 of the 1965 Act, or, as the case may be, Section 3 of the 1964 Act, a constable cannot make an arrest unless he has reasonable grounds for believing that that person will abscond unless arrested, or if the name and address of that person are unknown to him and cannot be ascertained by him. In other words, before the constable can make first his arrest and then a search, he has not only to have reasonable grounds to suspect that the pusher is in unauthorised possession of drugs, but must also have reasonable grounds for suspecting that he will abscond or has given false particulars of his name and address.
A number of chief constables have reported that experienced traffickers are very conversant with the limits of police powers and refuse voluntarily to satisfy the police that they are not in unauthorised possession. In this case they get away with it because the police are either placed under undesirable restraint, or tempted to take a chance in making an arrest. If they take a chance like that and they are wrong, it has severe consequences, and rightly so, for the police.
In a few areas—and London is a prime example—there are local Act powers which have enabled the police to get over this difficulty. For 128 years under the famous Section 66 of the Metropolitan Police Act 1839 the police have been empowered to:
"stop, search and detain any vessel, cart or carriage, in or upon which, there has been reason to suspect that anything stolen or unlawfully obtained may be found, and also any person who may be reasonably suspected of having or conveying in any manner anything stolen or unlawfully obtained".
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The Central Drugs Branch of the Metropolitan Police estimate that the majority of arrests they have made—they had nearly 3,000 drug cases last year—follow from the exercise of the power to stop and search under Section 66 and that the majority of searches made under this power result in an arrest. This indicates both the importance of the power to stop and search and the fact that it is used only when there is very good reason to use it.
The Association of Chief Police Officers have recently made a full review of the adequacy of police powers in relation to the drug problem. They feel strongly that to deter pushers and enforce restrictions on unauthorised possession of drugs the police everywhere should be given power to stop and search suspected persons and vehicles. The Government recognise fully that to extend police powers in this way is a serious matter, but we must balance the seriousness of the drugs problem against the potential for infringing individual liberty. I gave some truly alarming figures at Second Reading to show the trends in addiction, and in convictions under the 1964 and 1965 Acts. These trends are continuing, and are likely to do so unless we take action to check them.
I have recently seen suggestions that the drug problem is being exaggerated. I think that those come from some newspaper reports referred to by my noble friend Lady Phillips. Some people say that more harm than good will be done if police powers are strengthened. The idea seems to be that the new powers of search may bring the police into undesirable conflict with drug takers, some of whom have declared their habit to be neither damaging to themselves, nor to society. One aspect of that argument is, of course, important. We cannot hope to control abuse of drugs without having a proper recognition of the dangers of drugs and the case for control. There is another point which must be recognised: that the drug taker is not a man apart. He does not get his drugs like manna from Heaven. He depends on a pusher, a supplier, at consumer level. It would not be wise, therefore, or realistic to ignore the drug taker in looking for the pusher.
I must draw your Lordships' attention to an alarming trend—the age of the victims. Between 1960 and 1962 there were only two known heroin addicts under 19 years of age in this country. In 1965, five years later, 19 came to notice at the age of 17, 5 at 16, and 8 at 15. That was a total of 32 at aged 17, or under. Last year, in 1966, 68 came to notice aged 17, 26 aged 16, 17 aged 15 and one aged 14, a total of 112. There was one aged only 14—an addict to heroin.
Somewhere behind every one of these young people was a pusher and a supply. No one doubts that, as compared with heroin, a far greater number of young people have had experience of cannabis or amphetamines. The Government believe that there is a strong public demand that young people should be protected from the pushers and pedlars who exploit them. And we are convinced that the best way of affording that protection is to enable the police to play their part, by giving them the powers to stop and search, as provided in the Amendment.
All experience suggests that the most effective way of apprehending pushers—the pedlars' lieutenants—is by finding them in "possession". That is still the position. In fact pushers are hard to distinguish from their clients; they do not necessarily have large quantities of drugs in their possession at any one time. In addict circles the client is often the pusher as well. We cannot easily separate the two. They often get "hooked" and stay "hooked" together. The clients of to-day may well be the pushers of to-morrow, such are the rewards, the abominable, filthy rewards, of the drug traffic. But that is no argument for not pursuing the pusher.
The problem we have to realise, and towards which we must look ahead, we may get some idea of if we read the remarkable articles published last week in the Evening Standard about the half-world of the young "hippies" in California. The half-world!: it seems to me to be no world at all, and the difference appears to be as between us and the inhabitants of Mars. I think your Lordships will be as much concerned as I am that such a phenomenon should not arise here. That is not because those of us who were born in the reign of the Seventh
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Edward, or the Fifth George, do not want to understand young people. It is not because we do not admire them and have no affection for them, because we have. It certainly is not because we do not understand them. We want to do these things because they are the future; because in whatever difficulties they encounter we do sympathise with them and we want to help. That is our standpoint to-day with drugs.
The problem in Britain is already serious and it is growing. In balancing the seriousness of the problem against the slight possible risk of misuse of police powers there can surely be no question about the decision we must take. Your Lordships may remember earlier in the Session agreeing that it was reasonable to provide similar police powers of search for the protection of eggs of rare wild birds from egg thieves. I am confident you will agree that we should provide the same police powers to protect the lives of human beings, mostly young ones, from the attacks of the drug traffickers. I beg to move.
Amendment moved—
After Clause 4 insert the said new clause—(Lord Stonham.)
8.30 p.m.
LORD DERWENT: I am extremely grateful to the noble Lord, Lord Stonham, for his speech, and I shall take only a minute or two to make a few comments. There have been criticisms, though not in your Lordships' House, that this new clause has nothing to do with the Bill; that it deals with police powers and not with the medical profession. Whether that is true or not, I believe that Her Majesty's Government are absolutely right to take the first opportunity of bringing this new clause into some Bill, and this seems to be a very good vehicle for it. As regards subsection (4), which does away with the naming of the constable in the warrant, the noble Lord referred to it as an anachronism or an anomaly. I would prefer to call it simply nonsense.
As the noble Lord said, we must do our best to stop this traffic if we can. When I say "stop", I am not talking about dealing with addicts; I am talking in particular about stopping the "pushers" getting new clients. At the moment the police have not the powers to do what they ought to do. A great

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deal of "pushing", particularly in the early stages, is done on the street corner. The policeman may be watching, but he may not be close enough to see what is being passed. He knows very well what is going on, but there are difficulties about arrest and search. Therefore, it is absolutely essential to stop this "pushing". The numbers of "pushers" are growing very fast, and it is essential that the police should have these powers. I seldom think that anything which is done by this Government is ever right, but because of this new clause I forgive them nearly all their sins.
LORD SEGAL: Before we pass beyond this clause, I should like at the outset to make it quite clear that I am wholly in support of the Government in adding these provisions. I think that everything possible ought to be done to strengthen the hand of the police in every way to stamp out this traffic. Having said that, I should like to ask my noble friend about paragraph (a) of subsection (1). That says:
"search that person, and detain him for the purpose of searching him".
I confess that I am a little uneasy that, as the wording stands at present, it gives full power to the police to search a person in the open street; and the noble Lord, Lord Derwent, has just mentioned that a great deal of the traffic in these drugs takes place on street corners. It is somewhat undesirable that a police constable should have the power to search, or insist on searching a person in the open street, if he so judges it necessary. Equally, I am a little uneasy whether a person would be committing an offence under this clause if he were to refuse to be searched in the open street, and whether he should not always be given the alternative of saying that he would rather accompany a police constable to the police station, and in that way not be considered in any way interfering with the duties of the police. I do not want to dwell on this matter too much, but there is no parallel with the right of search in the case of the eggs of rare wild birds. Birds' eggs of that species are not usually found in crowded streets.
I should like my noble friend to make it clear that anyone who objects to being searched by a police constable in
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the open street should be quite free to say, "I would rather accompany you to a police station and put myself fully at your disposal", and by such action should not be guilty of committing an offence. There is the possibility that on his way to the police station he may by some means or other divest himself of some drugs which are concealed on his person; but I think that a police constable ought to be well on the look out for that; and even if he is not, if he eludes the police constable or throws away some of the drugs, or gets rid of them somehow, I think that it is a risk worth taking rather than that people should be subjected unnecessarily to interference in an open street.
LORD DERWENT: Before the noble Lord, Lord Stonham, answers, may I say that I have had a little experience of these matters—not experience of having been searched myself, but experience gained during my time at the Home Office. One of the main points to be borne in mind is that the person concerned may have two or three pills of some kind in his pocket which you cannot prevent his throwing away unless you search him. The process of searching in the street sounds rather like a case of standing in the middle of Piccadilly Circus. But when the police are going to search someone they do not search a person in the middle of the street; it is often carried out in a doorway. I think they must have this power of immediate search, otherwise there would be no evidence against a man and the drug would be disposed of.
LORD STONHAM: The noble Lord, Lord Derwent, has given part of the answer, and we must leave to the police the carrying out of the powers which we give them. I cannot see that the power of search which your Lordships have discussed over the last two years in respect of valuable eggs of rare wild birds is any more an infringement of liberty than the power to search for dangerous drugs. I refuse to accept that difference. Nor is a power of search any greater if it is carried out at the foot of a fir tree in a Highland in Scotland than if it is done at the foot of Eros in the middle of Piccadilly. It is the same thing. I would remind my noble friend that in Metropolitan London we have had this power, in effect, for 128 years, and the police have exercised this power.

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It is not only a matter of a physical search, but the request, "May I see what is in your bag?". If the person concerned says, "No, but I will accompany you to the police station", or if he refuses, the police officer in London will then invite the person to accompany him to a police station. Many respectable people who have nothing wrong in their bag go to the police station and open it, or again, if they are perfectly respectable and have nothing to conceal, they do not mind opening the bag in public. That is how this is done now. The police do not want to create a disturbance in this matter, but if a police officer is as certain as he can be that he has had a "pusher" under observation and has seen what he thinks may well be drugs pass, he will only be doing his duty under the Bill, if it becomes an Act, if he stops that person and asks him to show what is in his pockets or in his bag.
LORD SEGAL: While I fully accept my noble friend's explanation—and I do not wish to press this matter—may I say that the reason I raised it was because I was a witness in a provincial town of a young girl who was stopped by the police with a request to produce cigarettes which she happened to have on her. This took place in a crowded street, and my impression was that it was a highly undesirable incident. I think that the girl in question would have been only too willing to accompany the police constable to the station, where the same search could have been conducted more thoroughly and under conditions rather more conducive to secrecy, and in the absence of unnecessary publicity. I am wholly in sympathy with the object of this clause, but we ought to try to avoid—and I am sure the police themselves would fully co-operate in this—sometimes unpleasant incidents which need not necessarily occur.
LORD SOMERS: I am wholly in favour of this new clause, but I should like to ask the noble Lord how the constable is to be able to tell whether the pills that he finds, which may be only two or three in number, are
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dangerous drugs or merely medicinal pills which any person may carry on him.
LORD STONHAM: Of course that is a risk but, as I explained to the noble Lord, when this Bill becomes an Act it will cover both 1964 and 1965 drugs—hard and soft drugs. That is a very wide range, and it will certainly cover what I broadly referred to as the amphetamines. A policeman may actually see them passed, or he may overhear one of these descriptions. The fraternity have various names for these drugs; some names are more powerful than the drugs. But the police know these things, too, and if they hear that kind of conversation and see things passed there is a reasonable assumption that that is what they are. After all, the police have been doing these things for a long time. A few years ago, before the new Act, you might have asked, "How is it that the police always know that the pieces of paper which they saw passed from one man to another were betting slips?" But they did know, and when they took them along to the station so they proved to be. They are very experienced people.
I agree entirely with what my noble friend Lord Segal said. I am quite sure that these duties will be carried out properly. I was puzzled by the example my noble friend gave of a girl, because there are so few places in the country, apart from Metropolitan London, where powers similar to the Metropolitan Act exist. While I cannot possibly comment on a single case which he saw, I would take leave to suggest that it would be most unusual as well as undesirable, on my noble friend's description.
On Question, Amendment agreed to.
Clause 5 [Interpretation, etc.]:
8.43 p.m.
LORD STONHAM: This Amendment alters the definition of "drug", so as to omit the application of the definition to Clause 4. The Amendment is consequential on the inclusion of further definitions of "drug" in the new clause about safe custody and also about search. But it is really a consequential Amendment. I beg to move.
Amendment moved—
Page 4, line 27, leave out from ("Act") to end of line 29.—(Lord Stonham.)
On Question, Amendment agreed to.
Clause 5, as amended, agreed to.
Remaining clauses and Schedule agreed to.
House resumed: Bill reported, with Amendments.

UNFIT HOUSES
THE EARL OF KINNOULL: My Lords, in view of the lateness of the hour, I propose, with the permission of the House and with the consent of the noble Lord, Lord Kennet, to withdraw my Question to-night, and to replace it on the Order Paper for to-morrow's proceedings, when I hope it may come on at a more popular hour.
LONDON TRANSPORT (No. 2) BILL
The Chairman of Committees informed the House that the opposition to the Bill was withdrawn: the Order made on June 13 last discharged, and Bill committed to the Committee on Unopposed Bills.
UNIVERSITY OF ASTON IN BIRMINGHAM BILL
Reported, without amendment.
BRITISH RAILWAYS (No. 2) BILL
The Queen's consent signified, and Bill reported, with Amendments.

BRUNEL UNIVERSITY BILL
Returned from the Commons, agreed to.
House adjourned at sixteen minutes before nine o'clock.