Lords Sitting of 27 July 1967

Preamble
The House met at a quarter past eleven of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.
Prayers—Read by the Lord Bishop of Wakefield
The Earl of Denbigh—Sat first in Parliament after the death of his father.

ALGERIA: DETENTION OF BRITISH PILOTS
11.21 a.m.
LORD ROWLEY: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what information they have with regard to the continued detention of the two British pilots in Algeria.]
THE MINISTER OF STATE FOR FOREIGN AFFAIRS (LORD CHALFONT): My Lords, Her Majesty's Government are continuing to make repeated efforts to get the pilots released. I regret that no reply has yet been received to the representations made by the Swiss Ambassador, who protects our interests in Algeria, or by Her Majesty's Consul-General. The Swiss Ambassador, for whose efforts on our behalf I think the House would wish me to express gratitude, submitted on July 25 an urgent request for an audience with the Algerian Foreign Minister. He is repeating his request daily, but he had had no positive answer up to 6 p.m. yesterday evening.
LORD ROWLEY: My Lords, may I ask my noble friend whether it is a fact that the two Spanish police officers have now been released? If this be so, is it not becoming more and more frustrating that the Government of Algeria should keep these two British pilots in detention, without offering any explanation to Her Majesty's Government and without making any charges against them? Will not the Government instruct the noble Lord, Lord Caradon, to urge the Secretary-General of the United Nations to send a special emissary to Algiers in the
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name of the United Nations to secure the release of these two men; and, if he fails, to call a meeting of the Security Council and report the matter to them?
LORD CHALFONT: My Lords, our information confirms that the two Spanish guards have been released and have returned to Majorca. Of course it is frustrating that these two men continue to be held, apparently without any intention to bring charges against them. I can only repeat that we have made continuing representations to the Algerian Government, and we continue to do so through the Swiss Ambassador. We have indeed been in touch with my noble friend Lord Caradon, and the possibilities of action of this sort through the United Nations are by no means ruled out. But Her Majesty's Government believe that we should for the moment continue to press our representations through the Swiss Ambassador who looks after our interests there.
LORD OAKSHOTT: My Lords, it is not so much frustrating as outrageous that we can get no satisfaction, through the help of the Swiss Government, from the Government of Algeria. Is there really no way by which, for an act which has been universally condemned, these people can now be publicly arraigned before the United Nations?
LORD CHALFONT: My Lords, I think it would be unprofitable to go into an exchange of adjectives, such as "frustrating" and "outrageous." We have made our representations about this, and the views of Her Majesty's Government are well known. There is in fact no existing machinery through the United Nations, which would have to be something connected with Human Rights machinery of the United Nations, and there is, I fear, no existing machinery for bringing this matter before a court of the United Nations. A suggestion has been made by my noble friend which may be followed up, but the simple answer is that all we can do in a case like this is to continue to make representations through whatever diplomatic channels are open to us.
EARL JELLICOE: My Lords, I should like to put just two questions to the noble Lord. In the first place, following what the noble Lord, Lord Rowley, has said, given the fact that the two

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Spanish guards have been released, have the Government received any information from the Spanish authorities about the circumstances in which this act of piracy took place? Secondly, is he aware that there is growing anxiety in this country about the inability of Her Majesty's Government, in this and other cases, to protect the elementary rights of British subjects?
LORD CHALFONT: My Lords, so far as the Spanish guards are concerned, it is possible, now that they have been returned to Spain, that the Spanish Government may be able to throw further light on the actual circumstances of this affair. We have, as yet, received no information about this from the Spanish Government. So far as the second part of the noble Earl's question is concerned, I can only say that I know of no other way in which a civilised Government can bring pressure to bear on a Government behaving like this except through whatever diplomatic channels are open to them and through the United Nations. I have said that no machinery exists in the United Nations, and I should be grateful to know what action the noble Earl would propose other than continuing to bring the strongest pressure to bear through diplomatic channels. I personally can think of no other way.
EARL JELLICOE: My Lords, may I ask the noble Lord one simple question? Have Her Majesty's Government asked the Spanish Government for a report on this case?
LORD CHALFONT: We have not been in touch with the Spanish Government since—
SEVERAL NOBLE LORDS: Why not?
LORD CHALFONT: If I may just finish my answer to the question, perhaps it will become clear. We have not been in touch with the Spanish Government since the release of the guards. It is possible now, as I say, that the Spanish Government will be able to throw further light on what happened, and I can assure the House that Her Majesty's Government will not let this particular channel of obtaining information go unexplored.
EARL JELLICOE: My Lords, I must point out that Her Majesty's Government
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still remain in diplomatic relations with the Spanish Government.
THE MINISTER WITHOUT PORT FOLIO (LORD SHACKLETON): My Lords, if I may intervene, the noble Earl is not in a position to point out anything. He must ask a question.
LORD OGMORE: My Lords, may I ask the noble Lord what is the position with regard to the British aircraft concerned in this episode, and whether the Government have taken up the matter of the British aircraft with any of the international air organisations?
LORD CHALFONT: My Lords, as the House will know, the British aircraft, which is a privately owned one, is in Algeria with the pilots, and we have made representations for the return of the aircraft, as we have for the release of the pilots.
LORD ROWLEY: May I ask my noble friend whether he would clarify something he said in reply to my Question? He would not suggest, would he, that under the United Nations Charter the Secretary-General has no power to send a special emissary to make investigations into any situation which, for example, is a threat to international peace, or which may lead to international friction.
LORD CHALFONT: No, my Lords, I would not make any such suggestion. I was merely pointing out that under the existing human rights machinery there is no way of bringing this matter before the United Nations. Of course, the Secretary-General has the right to appoint an investigator in a case like this; but I should point out, I think, that the appointment of an investigator is one thing but getting him into Algeria to examine the situation may be quite another.
LORD RUSSELL OF LIVERPOOL: My Lords, may I ask the noble Lord whether he can give your Lordships' House an assurance that steps will now be taken immediately to get in touch with the Spanish Government in order to get this information, instead of just getting up and saying, "We have not heard", or "We have not yet approached them"? I hope the noble Lord realises that not only your Lordships' House but the whole country is absolutely disgusted with what is going on at the present moment.
LORD CHALFONT: My Lords, I can only say that Her Majesty's Government share the disquiet of noble Lords about this whole business. I would ask the House to be assured that we are not treating this matter at all lightly, but, as I have said many times before, we have to take account of the diplomatic means that are open to us. We do not propose to use any means that are not diplomatic in this particular case. So far as obtaining further information from the Spanish Government is concerned, this again is a matter of diplomatic channels and diplomatic relations. Other factors have to be taken into account, but I can assure the House that we will consider very urgently the desirability of asking the Spanish Government to let us have what information they possess.
EARL JELLICOE: My Lords, in view of what the noble Lord has said, may I ask whether Her Majesty's Government will take the simple diplomatic step of asking the Spanish Government for information about this case?
LORD CHALFONT: Yes, my Lords, we will ask the Spanish Government to give us what information they have about this case. I am not entirely sure that they will be able to throw much more light on it than there is at the moment; but I agree that there is no harm in trying.
LORD SALTOUN: My Lords, I have listened to the noble Lord with considerable sympathy. Is it not rather dangerous at this stage even to hint that there may be difficulty in getting an emissary of the United Nations into Algeria? Surely, an emissary of the United Nations must be received wherever he goes. Even to hint that there may be difficulties appears to me to be dangerous.
LORD CHALFONT: My Lords, I am sorry if the noble Lord thinks it dangerous to hint at this possibility; but I can only say that in the world as it is today it is not by any means certain that anybody can gain access to the facts of a case like this. The difficulty of Her Majesty's Government in getting access to the pilots and information about the case surely demonstrates that fully.
EARL FERRERS: My Lords, can the noble Lord assure the House that charges are not going to be preferred against these
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pilots, in view of the fact that one of the Sunday newspapers indicated that charges may be preferred?
LORD CHALFONT: My Lords, Her Majesty's Government have no information that the Algerian authorities plan to bring any charges. As I said in reply to a Question on July 18, the pilots themselves have told the head of the British Interests Section that they have had no indication that they are likely to be charged.

CARE OF DISCHARGED HOSPITAL PATIENTS
11.33 a.m.
LORD AMULREE: 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 will advise that doctors responsible for the discharge of patients from hospital will state, in the medical notes on discharge form, whether the patient requires continuing nursing care, care provided by the welfare and other departments, or can lead an independent, normal life.]
LORD BESWICK: My Lords, hospital authorities have been advised of the action to be taken before patients are discharged. A standard form is recommended for use in notifying the general practitioner of his patient's forthcoming discharge, and this contains a section for the hospital doctor to indicate future treatment or other recommendations. Hospitals are also advised, where appropriate, to consult the local health authorities (and, if necessary, the Ministry of Labour resettlement officer) at an early stage, notifying them of impending discharge 48 hours in advance. Thus provision is made for the notification of the need for continued nursing care, or care provided by welfare or other departments, to those concerned with the aftercare of patients.
LORD AMULREE: My Lords, I should like to thank the noble Lord for his satisfactory reply.

THE MIDDLE EAST: UNITED NATIONS AND CEASE-FIRE LINE
LORD ROWLEY: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government to what extent the cease-fire line between Israel and her Arab neighbours is now under the supervision of United Nations Observers.]
LORD CHALFONT: My Lords, the fronts between Israel and her Arab neighbours now all appear to be under supersion by United Nations observers.
LORD ROWLEY: My Lords, may I ask my noble friend whether any report has been received from General Bull, Chief of the United Nations Observer Corps, as to whether there is any evidence of a likely clash between the forces of Israel and Egypt over the use of the Suez Canal?
LORD CHALFONT: My Lords, the reports that we have, or that are available to us, about this—the latest of them being a report circulated to the Security Council on July 24—said that General Bull had confirmed that no incidents had taken place between July 13 and that day (July 24) on the Israel-Syria sector and that in the Suez sector the situation remains generally quiet on both sides.
BARONESS SUMMERSKILL: My Lords, may I ask my noble friend whether he has seen the picture and the article in The Times this morning on the conditions obtaining on the Allenby Bridge? Can he say whether the exit of Arabs to Jordan is as great as it was a few weeks ago or whether it has slackened off?
LORD CHALFONT: Yes, my Lords, I have seen the picture and the article in The Times. So far as our own information is concerned, we believe that the flow of refugees has lessened. We understand that some people are returning to their homes; but there remains a very considerable and substantial refugee problem which we shall do all we can to help to solve.

AGE OF MAJORITY: MINORS IN THE SERVICES
11.36 a.m.
LORD GRANVILLE-WEST: My Lords, with permission I beg leave to ask, on behalf of my noble friend Lord Brockway, the Question standing in his name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government when the Defence Ministry will reach a decision on the recommendations made by the Lord Chancellor's Committee on the Age of Majority so far as they refer to the service of minors in the Armed Forces.]
THE MINISTER WITHOUT PORTFOLIO (LORD SHACKLETON): My Lords, as your Lordships are aware my honourable friend the Minister of Defence for Administration is examining the question of boys' service in the Armed Forces. He will of course take into account the report of the Committee on the Age of Majority which he has only recently received. I am unable to forecast when my honourable friend will announce a decision, but I know that he will do so as soon as possible.
LORD GRANVILLE-WEST: My Lords, may I, on behalf of my noble friend, thank the noble Lord for his Answer.

BILLS AND THE ROYAL ASSENT
LORD SHACKLETON: My Lords, before my noble friend the Government Chief Whip, with permission, informs the House on certain matters of business, perhaps your Lordships will allow me to say something about the form of the Royal Assent which is due to be notified later today. I think your Lordships were expecting—and certainly it had been our intention—that this should take place in the traditional form. As your Lordships know, there is a very important debate in another place; and there is a general desire, which we have discussed through the usual channels, to avoid an interruption to that debate. It has therefore not been possible to arrange for the traditional Royal Commission today. There will, of course, be

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a Royal Commission in the traditional style at the end of the Session in the autumn. I very much regret the change of plan because, although the undertakings were of a general kind, I think there is no doubt that the House was entitled to expect that the Royal Assent would be notified in the traditional form at the end of this Summer Session. I should like to apologise to your Lordships that this has not been possible.
EARL JELLICOE: My Lords, I am grateful to the noble Lord for his statement. I share his regret. It is true that we had understood that we should be witnessing this traditional ceremony in its traditional form at the end of each term. But if the Government get their Parliamentary programme into a complete muddle, and if they publish a Defence White Paper which invites a Vote of Censure, then of course it is understandable that they have to rearrange their programme. I hope that this will not be a precedent for the end of next term and that the Government will be able to honour the undertaking which we had been led to believe they had given.
LORD BYERS: My Lords, I too should like to ask that we should not lose the traditional Royal Commission. But I think we understand that, as a matter of courtesy, it would be quite wrong to insist that the other place should interrupt a vital debate on an occasion of this kind. But I hope this will not become a precedent.
LORD SHACKLETON: My Lords, I am much obliged to noble Lords, although the noble Earl could not resist what I thought was an irrelevant "dig". The fact is that the House of Commons are liable to have a censure debate at any time. This is not something which is within the control of the Government; but I do not think we want to waste time on that. On the question of the undertaking, it was in general terms. It was, I think, anticipated that there would be rather more Royal Commissions in the traditional style in the first year than perhaps may follow in subsequent years. We certainly anticipate that there will be a Royal Assent of this kind at the end of the Session in October. While, clearly,
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we shall have to look at this, I note that noble Lords have said that they hope this is not to be a precedent.
EARL ST. ALDWYN: The noble Lord said that he thought there would be a Royal Commission in October. May I point out that as I understand it there has to be one in October, because the new form is applicable only to the Royal Assent to Bills and not to Prorogation.
LORD SHACKLETON: My Lords, I am sorry if I used a loose expression. There will be one in the traditional style at the end of the Session in the Autumn.
LORD BYERS: May I ask the noble Lord whether he can give any indication of the time at which the Royal Assent may be expected today?
LORD SHACKLETON: My Lords, I should think it will be either at the end of business—it depends on how much progress is made—or perhaps, if we have finished the Companies Bill, before we get on to the Unstarred Questions. This is a matter which we can discuss through the usual channels. I know that my noble friend has been giving thought to it.

COURSE OF BUSINESS
LORD BESWICK: My Lords, with permission I should like to make a short business Statement. It is intended—or perhaps I should say it was intended—to take all the business standing on the Order Paper, up to and including the Road Traffic Regulation Bill, before lunch, together with the consideration of the Commons Message on the Criminal Justice Bill, which will be taken immediately after the Consolidated Fund (Appropriation) No. 2 Bill. It is hoped that the House will adjourn at approximately 1 p.m. and will meet again at 2 p.m. for the consideration of the Commons Amendments to the Companies Bill.

HOUSE OF LORDS OFFICES
Order of the Day read for the consideration of the Fourth Report from the Select Committee.
The Committee's Report was as follows:
1.—PRINTED PAPERS
The Committee considered Peers entitlement to these publications and existing practice in regard to distribution and circulation.
They recommend that the attention of the House should be drawn to the following statement of rules and practice.

(i) PAPERS. In principle Peers are entitled to draw from the Printed Paper Office, free of charge, such parliamentary papers and other publications as they clearly require in order to discharge their parliamentary duties.

(ii) This means, in practice, the working papers of the House (Minutes, Bills, amendments, marshalled lists of amendments, Hansard, etc.), papers published by Command, papers laid pursuant to Act or Measure, and returns to an order of either House. The more expensive non-parliamentary publications, such as Official Histories, are not supplied free without the specific authority of the Clerk of the Parliaments.

(iii) Peers are entitled to one copy of any Command Paper, Act Paper, or Paper printed pursuant to an order of either House; and further copies, if they can show that they require them for the discharge of their parliamentary duties.

(iv) Peers are entitled to one copy of both the Lords and the Commons Daily Hansard; if they have spoken in a Debate, they are entitled to draw up to six copies of the Lords Hansard concerned.

(v) If Peers require further copies of non, parliamentary papers, Command Papers, Act Papers or Hansards, Bills and amendments, they may order these from the Printed Paper Office and such papers will then he dispatched to them, together with an invoice, by Her Majesty's Stationery Office.

(vi) POSTAGE. While no charge is made to Peers for the postage of papers sent to them from the Printed Paper Office, Peers do not enjoy the right to have posted to third parties from the Printed Paper Office copies of papers to which they are entitled. The official frank in the Printed Paper Office is reserved for official correspondence and for forwarding papers to Peers themselves. It is not available to Peers for their own correspondence.

2.—PARLIAMENT OFFICE AND LIBRARY
The Clerk of the Parliaments informed the Committee of the appointment of Mr. J. A. Vallance White as a Senior Clerk in the Parliament Office from 1st April, 1967.
The Committee were also informed of a review of certain posts in the Parliament Office and Library and authorised:—

(a) an allowance, and subsequent regrading for the Assistant Librarian;

(b) the regrading of one Clerical Officer post to Executive Officer in the Accountant's office;

(c) the payment of a secretarial allowance to Mrs. N. Willbourne, the Personal Assistant to the Law Lords, personally, with effect from the 1st July, 1967;

(d) the retention of the allowance to the Head Office Assistant; and

(e) the retention of two posts of Record Office Assistant in lieu of two posts of Paperkeeper.

3.—REVISED SCALES OF PAY AND SPECIAL PAYMENTS
The Committee sanctioned the application of D.E.O. (67) (Pay) No. 18 dated 23rd June, 1967—Messengers, Paperkeepers, etc. Classes revised scales of pay to analogous grades of the staff of the House of Lords.
The Committee also authorised the application of E.C. No. 1/66 introducing new grades of Personal Secretaries and Senior Personal Secretaries, Scales of Pay, Conditions of Service, etc. to applicable staff of the House of Lords.
The Committee sanctioned special payments to the Hansard Editors and Reporters and to the Doorkeepers in respect of additional duty performed during the period to the end of the present Session.
4.—SUPPLEMENTARY ESTIMATE
The Committee approved the presentation of a Supplementary Estimate for the year 1967–68 to meet the expenses of Peers travelling abroad as members of a Parliamentary delegation.
5.—DEPARTMENT OF LORD GREAT CHAMBERLAIN AND SERJEANT-AT-ARMS
The Committee were informed of the temporary employment of an additional Personal Assistant for one week and authorised the appropriate rate of pay.
6.—RETIREMENTS
The Committee sanctioned the payment of the following Superannuation awards under the Superannuation Act, 1965:—

(a) Pension and Additional Allowance to Mr. Edward Henry Stephen Divers, Head Office Assistant who retires on the 2nd November, 1967.

(b) Pension and Additional Allowance to Mr. Horace Anderson Martins, Senior Office Assistant, who retires on the 13th November, 1967.

(c) Gratuity to Mrs. Dorothy Emily Sadd, Housemaid, who retired on the 27th May, 1967.

THE CHAIRMAN OF COMMITTEES (THE EARL OF LISTOWEL): My Lords, I beg to move that the Report be now considered.
Moved accordingly, and, on Question, Motion agreed to.
THE CHAIRMAN OF COMMITTEES: My Lords, I beg to move that the Report be agreed to.
Moved, That the Report be agreed to.—(The Earl of Listowel.)
On Question, Motion agreed to.

CONSOLIDATED FUND (APPROPRIATION) (No. 2) BILL
Read 2a (according to Order): Committee negatived.
Then, Standing Order No. 41 having been suspended (pursuant to the Resolution of July 14), Bill read 3a, and passed.

VESSELS PROTECTION BILL
Brought from the Commons; read 1a, and to be printed.
POLICE (SCOTLAND) (No. 2) BILL [H.L.]
Returned from the Commons, agreed to.
ROAD TRAFFIC (DRIVING INSTRUCTION) BILL
Returned from the Commons with the Amendments agreed to.

CRIMINAL JUSTICE BILL
11.45 a.m.
Returned from the Commons with certain of the Amendments agreed to; one other Amendment agreed to, with Amendments, and with a consequential Amendment; one other Amendment disagreed to, with Amendments to the words so restored to the Bill, and the remaining Amendments disagreed to, with Reasons for such disagreement.
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE, HOME OFFICE (LORD STONHAM): My Lords, I beg to move that the Commons Reasons for disagreeing to certain of the Lords Amendments, the Commons Amendments to certain other Lords Amendments, and the Commons consequential Amendment be considered forthwith.
Moved, That the Commons Reasons for disagreeing to certain of the Lords Amendments, Commons Amendments to certain other of the Lords Amendments and the Commons consequential Amendment be considered forthwith.—(Lord Stonham.)
LORD BROOKE OF CUMNOR: My Lords, I must voice the strongest possible protest against this timing. It is treating your Lordships' House with disrespect.
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The Commons considered your Lordships' Amendments yesterday, starting at 4 p.m. and going on until some unspecified time in the morning; so much so, that we have not even the advantage of the Commons Hansard for the proceedings in another place on one of these Amendments to which the Commons have disagreed. It will be within the knowledge of the Government that my noble friends and I have taken a responsible attitude to the consideration of this Bill, and I believe that we have effected great improvements in it. I am well aware that it is no part of the responsibility of the noble Lord, Lord Stonham, that so disgraceful a timing is arranged. It is a direct consequence of the mismanagement of Government business at the end of this Session; and here again, neither the former Chief Government Whip in this House nor the present one bears responsibility. The responsibility lies elsewhere. But I sincerely trust that this procedure, too, is not going to be taken as a precedent and that we shall never again have to consider Commons Reasons for disagreeing to Lords Amendments at a time when not even the Commons proceedings on the Amendments in question are available.
LORD LEATHERLAND: My Lords, is it proper for Members of this House to criticise the manner in which the other place carries out its business?
LORD FERRIER: My Lords, I should like to say a word from the Back Benches in support of what has been said by my noble friend Lord Brooke of Cumnor. I think it fair to say that those of us who give of our time to the business of this House are fully justified in saying that to be treated in this way is almost ludicrous. To have Amendments presented to us without even a Hansard to show what was said on them makes a nonsense of attending your Lordships' House, and I should like to add my protest to the protest made by my noble friend Lord Brooke of Cumnor.
LORD STONHAM: My Lords, I think we all agree that it is much to be regretted that we have now to consider this matter at least without having had an opportunity to read the discussions in another place which took place in the early hours of the morning. Nevertheless, I do not

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accept from the noble Lord, Lord Brooke of Cumnor, that this is mismanagement. We are here in the position of considering the Commons' views on a Bill to which we, your Lordships, made 262 Amendments after they had been consolidated. This is a matter which I think always affects your Lordships' House, unfortunately, at the approach of the Summer Recess. It is certainly something which should be avoided if at all possible, and it might well have been that this urgency could have been avoided if we had agreed to sit another week. But I remember that when this was discussed by my noble friend Lord Shepherd, when he was Chief Whip, there was no desire on the part of the House as a whole that we should sit another week. Much as I regret the circumstances which have been complained of, I feel that this is a situation which was inevitable.
On Question, Motion agreed to.

LORDS AMENDMENT
[References are to Bill (237) as first printed for the Lords]
[No. 1]
Clause 15, page 13, line 11, at end insert ("or detention in a detention centre")
The Commons disagreed to this Amendment for the following Reason:
Because it would be undesirable to exclude from the benefits of the clause persons who have been sentenced to detention in a detention centre.
LORD STONHAM: My Lords, I beg to move that the House doth not insist on its Amendment No. 1 to which the Commons have disagreed.
Moved, That this House doth not insist on the said Amendment.—(Lord Stonham.)
LORD BROOKE OF CUMNOR: My Lords, this is a matter arising out of questions of bail. Clause 15 places certain restrictions on the refusal of bail, and when the Bill was earlier before your Lordships' House I said that there seemed to me to be much to be said for the general purpose to which this clause is directed. The nub of the matter is in subsection (5)(a) of Clause 15. That subsection relieves from the prohibition on the granting of bail cases where a person is charged with an offence punishable by that court by imprisonment for a term of not less than six months and it appears to the court that he has been previously sentenced to imprisonment or borstal training or detention in a detention centre.
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The words "or detention in a detention centre", to which the Commons have disagreed, were added in your Lordships' House, because it appeared to a majority of your Lordships that magistrates ought to have a discretion to remand a man in custody if he has already served a detention centre sentence. This was opposed by the Government on the ground that there was a fundamental difference between a detention centre and borstal or prison. I would say that to the ordinary young man both borstal and detention centre appear to be incarceration. I find it impossible to understand why discretion should be granted to the magistrates to remand somebody in custody if he has served a sentence of a month's imprisonment but should be withheld from them if he has served a sentence of three or six months in a detention centre.
As I said in the debate which led to a Division on this matter there was a sincere division of opinion between the two sides of the House. I have the support of no less an authority than the noble and learned Lord the Lord Chief Justice, who should know what he is talking about in these matters of the administration of the criminal law. Neither he nor I could see any reason why discretion should be withheld from magistrates in a case of this sort. The Commons have thought otherwise, however, and I would not advise your Lordships to stage a quarrel with another place over a matter of detail of this character. Nevertheless, I am quite clear in my mind that the Government have committed an error of judgment here, and if we agree to the Commons decision, we can do so only with great regret.
LORD STONHAM: My Lords, I very much regret to hear from the noble Lord that he feels that the Commons have been guilty of an error of judgment and that he would accede to this Motion only with a great deal of regret. I agree that there is a sincere difference of opinion here. But the noble Lord must be aware that there is a great difference between a detention centre and borstal. It is true that they are both places of incarceration, but in the main a detention centre sentence is for three months and a borstal sentence is for a maximum of two years; and there is a total difference in the régimes. We have too few detention centre places. Magistrates are

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most anxious to use them, rather than send boys for borstal training or to prison. That is evidence that they, at least, are aware of the great difference between the two régimes.
The point on which I know your Lordships are in agreement with the Government is this. We are all anxious, where it is possible, to avoid subjecting young people to the contamination of imprisonment by remanding them in custody for short periods. We are here discussing the question of the discretion of magistrates to grant or withhold bail. The clause limits their discretion. All of us deplore the fact that out of 35,000 remands in custody more than half of them are not subsequently sent to prison, and we all agree that discretion should be limited in some respect, in order to enable us to reduce that unhappy number who go to prison and are contaminated, as is subsequently proved, unnecessarily.
Not only is there a distinction between the régimes in detention centre and in borstal, but we are preserving that difference. The whole object of this is to prevent these boys, who have committed comparatively minor offences—if they have committed any more serious offence the point does not arise—from being sent to prison by, as it were, a side wind. While I regret this difference of opinion which exists between us, I am completely convinced that the Government are right in this matter and that events will prove it.
On Question, Motion agreed to.

LORDS AMENDMENT
After Cause 23, insert the following new clause—
Extension of Costs in Criminal Cases Act 1952
(".—(1) Subject to the following provisions of this section the Costs in Criminal Cases Act 1952 shall apply to proceedings for dealing with an offender under section 6, 8 or 9 of the Criminal Justice Act 1948 (probation orders and orders for conditional discharge), and to proceedings under section 31(1) of this Act for dealing with an offender in respect of a suspended sentence, as if the offender had been tried in those proceedings for the offence for which the order was made or the sentence passed.
(2) The provisions of the said Act of 1952 other than section 6 (costs as between parties) shall apply with all necessary modifications to proceedings in which it is alleged that an offender required on conviction of an indictable
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offence to enter into a recognizance to keep the peace or be of good behaviour has failed to comply with a condition of that recognizance, as if that failure were an indictable offence committed in the same place as the offence of which he was convicted.
(3) Where any proceedings mentioned in either of the foregoing subsections take place before a court of assize or quarter sessions and the fund out of which the costs of those proceedings fall to be paid by virtue of that subsection is maintained by a local authority other than the authority for the local government area in which that court is held, those costs shall—

(a) be paid in the first instance by the local authority for that area; and

(b) be recoverable, together with such sum (if any) in respect of the expenses of holding that court as may be determined in accordance with regulations made by the Secretary of State under section 18(3) of the Criminal Justice Administration Act 1962 (contributions to certain costs), from the local authority maintaining that fund.

(4) Where proceedings under section 8 of the Criminal Justice Act 1948 for dealing with an offender subject to a probation order or an order for conditional discharge, or under section 31(1) of this Act for dealing with an offender in respect of a suspended sentence take place before a court of assize or quarter sessions before which the offender is convicted of an indictable offence committed during the operational period of the sentence, or by which he is sentenced for any such offence after being committed for sentence to that court, the costs of those proceedings shall be treated for the purposes of the Costs in Criminal Cases Act 1952 as part of the costs of the proceedings in which he was convicted or sentenced.
(5) Where any proceedings mentioned in subsection (1) of this section take place before a magistrates' court and relate to an order made or a sentence passed for an offence committed outside the local government area for which are for part of which that court acts, the offence shall be treated for the purposes of section 7(1) of the said Act of 1952 (local funds out of which costs are to be paid) as having been committed in that area.
(6) In this section 'local authority' means the council of a county or county borough or the Greater London Council, 'local government area' means a county, county borough or Greater London and 'operational period' has the same meaning as in Part II of this Act.")
The Commons agreed to this Amendment but proposed the following Amendments thereto.
[No. 2.] Line 32, leave out from ("proceedings") to ("under") in line 34 and insert ("for dealing with an offender under section 8 of the Criminal Justice Act 1948 (commission of further offences by probationers and persons conditionally discharged) or proceedings.")
[No. 3.] Line 38, after ("during") insert ("the period of probation or conditional discharge or".)
LORD STONHAM: My Lords, with permission, I beg to move that the House doth agree with the Commons in their Amendments Nos. 2 and 3 to the Lords' Amendment. These are two Amendments to a Government clause which was inserted in the Bill in your Lordships' House and which the Commons accept but to which they have made these two drafting Amendments. Subsection (4) of the clause deals with the costs of proceedings in which an offender subject to a probation order or order of conditional discharge is dealt with for the original offence or in which an offender is dealt with in respect of a suspended sentence by a court of assize or quarter sessions which has convicted the offender of an indictable offence or sentenced him for such an offence committed during the operational period of a sentence. The words "operational period of a sentence" are appropriate only to a suspended sentence and it is necessary to refer in addition to an offence committed during the period of probation or conditional discharge.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Stonham.)
LORD BROOKE OF CUMNOR: My Lords, we on this side of the House see no objection to the Government in another place taking steps to make further Amendments to a Government new clause which they inserted themselves in your Lordships' House.
On Question, Motion agreed to.

LORDS AMENDMENT
[No. 4]
Clause 30, page 21, line 35, leave out from beginning to end of line 31 on page 22
The Commons disagreed to this Amendment, but amended the words so restored to the Bill as follows:
[Nos. 5–8]
Page 21, line 36, leave out ("for an") and insert ("in respect of one")
Page 22, line 13, after ("of") insert ("corective training")
Page 22, line 27, leave out subsection (6)
Page 22, line 29, leave out ("so made") and insert ("made by the Secretary of State under this section")
[No. 9]
The Commons made the following consequential amendment to the Bill—
Page 114, line 27, after ("words") insert ("thirty or")
11.59 a.m.
LORD STONHAM: My Lords, I beg to move that the House doth not insist on its Amendment No. 4 to which the Commons have disagreed.
Moved, That this House doth not insist on the Amendment to which the Commons has disagreed.—(Lord Stonham.)
LORD BROOKE OF CUMNOR: This is much the more serious part of the Commons Message. No doubt because the Commons are sending this back with further Amendments, no Reason is given for their disagreement. Nevertheless, I think it is plain on the facts and in the light of the debate we had in your Lordships' House. I do not demur at all at Lord Stonham's having moved this Motion without further explanation, because no doubt he wishes first to hear what I have to say. We are here considering suspended sentences. I think I made clear when we were in Committee on this Bill that I was entirely in favour of an experiment which suspended sentences, as were most of your Lordships who spoke from both sides of the Committee, including the noble and learned Lords, Lord Dilhorne and the Lord Chief Justice, and other considerable authorities. But what we could not accept was that a magistrates' court should be deprived of all discretion and should be forced by the Government to suspend any sentence of not more than six months, unless certain conditions were fulfilled which are set out in the various paragraphs to subsection (3) of the Clause.
Because we felt so strongly that the magistrates should have a discretion, and were capable of using their discretion, we in your Lordships' House took out subsection (3) and certain consequential subsections from this Bill, and the Commons now wish to restore them, with a number of, if I am not mistaken, drafting Amendments. No doubt if there is anything more than drafting in the Amendments set out in the Commons Message, the noble Lord, Lord Stonham, will explain them.
It is common ground that we are dealing here with something like 5,900 cases a year, and the Government's intention all the way through has been to ensure that in all such cases, which on past experience amount to about that annual

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number, the magistrates shall be compelled, even if they do not think fit so to do, to suspend the sentence of imprisonment. The Magistrates' Association, who perhaps are as well qualified as anybody to pronounce on this matter, are opposed to the Government upon it; so is the noble and learned Lord, the Lord Chief Justice, with his great responsibilities and knowledge in this field, and I know that he personally feels most concerned about the action taken in another place yesterday. He is concerned not on any Parliamentary or political grounds but because he feels that this is a blow at the maintenance of law and order, and it is an action to which the Government have been led by administrative considerations, which have overridden the responsibility they should feel for the maintenance of law and order.
As I explained in Committee, we are now going to have the position where a man can be tempted by other wrongdoers with the argument that it will be all right for him to join in with them because he will not get more than six months, and it will not mean going to prison, anyway. That is exactly the sort of situation which a responsible Government ought not to allow to arise in days like these, when, by common consent, crime is far too rife, and far too many weak characters are being tempted by more experienced criminals into criminal ways. What will happen—and I must say this with all the strength at my command—is that in any case where the magistrates are convinced that the man ought to go to prison forthwith and the sentence ought not to be suspended, they will commit him to quarter sessions, who have power to impose a longer sentence. No purpose whatever will be served by compelling them to do that. It will further burden the work of quarter sessions and it will further crowd the prisons, because the accused man will receive a longer sentence.
Again, if the noble Lord, Lord Stonham, suggests that this is only a debating argument, let me remind him that my words on this point were strongly endorsed by the noble and learned Lord the Lord Chief Justice in his speech in Committee. I understand—and I do not think this figure was denied by the Government—that some three-quarters of the 5,900 persons concerned in a normal
1128
year would in fact be eligible for a longer sentence. So in no less than three-quarters of these cases it will be open to the magistrates to commit to quarter sessions for a longer sentence, where they are absolutely convinced that the man ought to go to prison immediately and that his sentence ought not to be suspended.
As I said in our earlier proceedings, the right course to be followed here is that strong guidance should be given to magistrates—which I am sure the noble and learned Lord the Lord Chief Justice would be willing to give—and that people should not be sent to prison for short sentences unnecessarily I feel that strongly; and I feel it extremely strongly in the case of people who have never suffered a prison sentence, because I believe that for those who have never been in prison the thought of imprisonment has a substantial deterrent value which ought not to be jettisoned except where the man concerned has behaved so seriously that an immediate prison sentence is unavoidable.
I think, as I have said, that the Government here are marring a valuable innovation by over-enthusiasm. They are granting to the courts this new power of imposing a suspended sentence, and thereby giving greater flexibility to the courts. That, I am sure, is right. But having done that with one hand, with the other they are taking away the flexibility from the magistrates' courts and saying that where the sentence is not more than six months it must be suspended, even though the magistrates who have heard the case are convinced that the man should go at once to prison. I am certain that the courts should have as wide as possible a variety of courses open to them. I am equally certain that neither the Home Secretary, the Government, another place, nor, with respect, your Lordships' House, is as well qualified to say what precisely should happen to a particular accused person who has been found guilty of an offence as the court which has tried him, which has seen and heard him, and which has full knowledge of all the facts known about him, the offence and the circumstances.
If the Government insist on restoring this removal of discretion from the magistrates' court, it must be for one of two reasons: either the Government think

1129
that the magistrates are not doing their duty, or are not capable of doing their duty, in a responsible way, or alternatively—and I think this is the real reason—the Government have decided that the prison population must be reduced at all costs, even if this means that justice fails to be done; even if it means that the general public will be exposed to crime from which they might otherwise have been protected. The Government are taking a very grave decision here. I have little doubt that, after some years' experience, it will be clear to everybody that this decision should be reversed in the public interest.
But, in the meanwhile, I do not want to lose the Bill. Nobody wants to lose the Bill. I am anxious for this Bill to reach the Statute Book as soon as possible. Here there is a deep difference of opinion, and I know that, not necessarily my words, but the sentiments which I have expressed, would be endorsed by the noble and learned Lord the Lord Chief Justice, who has expressed to me his personal regrets that he is not able to be present here to-day to say what he thinks about this decision. But the decision must be, I regret, accepted. My words will be on record, and though I think your Lordships must accept the Commons view, I am quite sure that before many years are out it will be necessary to reverse this ill-advised decision.
House adjourned during pleasure and resumed by the Lord Chancellor.
12.11 p.m.
LORD STONHAM: My Lords, I agree with the noble Lord, Lord Brooke of Cumnor, that this is by far the most important of the matters on which the Commons have disagreed with your Lordships. I also agree with the noble Lord in his concluding words, in recommending your Lordships to accept the view the Commons expressed last night. I completely disagree with almost everything else that the noble Lord said, and I will say why as briefly as I can.
The noble Lord said that this, in the main, deals with subsection (3) of clause 30 in the Bill, as we originally considered it. First of all, I want to make the point on this clause that we are not considering
1130
people with a criminal record. We are not withdrawing from magistrates discretion with regard to the grant of bail for such people. We are not withdrawing from magistrates discretion with regard to the grant of bail for people who have committed, or are alleged to have committed, the more serious offences. Very briefly, I will read these exceptions to mandatory suspended sentence,
"the act or any of the acts constituting that offence consisted of an assault on or threat of violence to another person, or of having or possessing a firearm, an imitation firearm, an explosive or an offensive weapon or of indecent conduct with or towards a person under the age of sixteen years".
Similarly, the discretion of the magistrates is retained if the accused person has served, or has since the commission of the offence served, a sentence of imprisonment or borstal training. Therefore, it is clear that we are not considering people with bad records. We are not considering people who have committed the more serious offences.
The noble Lord said—and I was not quite clear whether he gave it as his own view or was expressing the view of the noble and learned Lord the Lord Chief Justice—that this is a blow to the maintenance of law and order to which the Government have agreed for administrative reasons. It is true that if this measure of the Government is carried it will have the very desirable effect of reducing the number of people sent to prison for short periods. That is by no means—certainly in my personal opinion—the most important part of this provision. We are agreed—we have been agreed all the time—that short sentences of imprisonment should be avoided if at all possible. No one is more fervently in agreement with that than the noble Lord, Lord Brooke of Cumnor, because of his own experience as Home Secretary. He said so on Second Reading and subsequently. We are all agreed in welcoming the provisions in the Bill for suspended sentences—all of us. They are still in the Bill: that is, discretionary suspended sentences, not just of six months, but up to two years. Everyone agrees with this.
So the only point at issue is the proposal whether or not we should, for certain classes of offenders, withdraw a magistrate's discretion not to suspend a

1131
sentence for up to six months' imprisonment, and we want to make it mandatory that he will have to suspend the sentence. This is in the case of a first sentence of imprisonment. The person concerned has not got a record. It is only in the case of a first sentence of imprisonment. The words that this is "a blow to the maintenance of law and order", in my submission, is an abuse of language, whoever used the language.
The noble Lord, Lord Brooke of Cumnor, said that magistrates will commit to quarter sessions because they are absolutely convinced that the people before them should be sent to prison. In 1958 your Lordships passed the First Offenders Bill, which puts on magistrates the duty of not sending to prison first offenders if they can find any other means of dealing with them. But in every one of the eight or nine years since the passage of that Bill, 7,000 first offenders have been sent to prison—not all of them, of course, for short sentences; some first offenders commit serious crimes and have to be sent to prison for long periods. But the great majority of first offenders sent to prison were sent for short sentences. In other words, the magistrates decided, on the severity of their crime, that they should spend that time in prison. The magistrates have had that discretion all those years, and in my view, not the majority of magistrates, but those who have sent people to prison in that way have shown a very poor use of that discretion.
What are the kind of people who get sent to prison for short sentences? They are not all like this, but there was a mother of three children, a first offender, a shoplifter, sent to prison for three weeks. Would any noble Lord think that that was the way a magistrate should exercise his discretion? The woman was guilty, but just think. A railwayman steals a packet of cigarettes: six months. Just imagine the consequences. These things happen. I am quoting actual cases, and you can read of them in the papers every week. If we do not send these people to prison but give them another chance—sentence them and suspend the sentence, so that if during a period of one to three years thereafter they commit another offence they can be obliged then to serve the sentence
1132
originally imposed—can it be sensibly argued that this is a blow to the maintenance of law and order? I should have said that it was a step towards a civilised society, and no mean step at that.
The noble Lord, Lord Brooke of Cumnor, said that if the Lord Chief Justice had given strong guidance to the magistrates it would have been effective. In 1948 we had—
LORD BROOKE OF CUMNOR: My Lords, may I just correct that? I did not say, if he had given strong guidance to the magistrates it would have been effective. I was speaking about the future, and not the past.
LORD STONHAM: My Lords, I understood that the noble Lord was speaking about the future, and I apologise if my words in any way created a wrong impression. Let me start again. The noble Lord, Lord Brooke of Cumnor, said it would have been better, rather than to have the measure we want, to suggest or to ask the noble Lord the Lord Chief Justice to give strong guidance to magistrates, and that he thought that would be effective. In 1948 we had another Criminal Justice Bill, which was enacted under a Labour Government, and, greatly to my regret, we provided in that for preventive detention, whereby men get sentences of up to fourteen years for stealing a bottle of milk. We are ending that in this Bill, with the complete approval of every noble Lord in the House, and not least the noble Lord, Lord Brooke of Cumnor.
But it has taken us a long time to abolish preventive detention. As long ago as 1962 everybody realised it was a complete failure, and judges were still sending people to long sentences—a minimum of seven years, a maximum of fourteen years—for utterly trivial offences. So the noble Lord, Lord Brooke of Cumnor, when he was Home Secretary, set up a Committee to consider this, and he adopted their recommendations. All that time men were still going to prison, and the noble and learned Lord the Lord Chief Justice sent out a Practice Guidance. That is the firmest possible guidance that can be given to his fellow judges, and this advised them not to send men to prison on preventive detention. They still do so. Therefore the guidance was not effective.

1133
No, my Lords; the Government think that this mandatory suspension is crucial. It is a vital part of the plans for a reduction of the number of unnecessary short-term prison sentences, and for the enlargement of non-custodial treatment for the reduction of recidivism and the reduction of crime. When a man goes to prison for the first time he is not only contaminated, he is not only well on the road to recidivism, but he is labelled for the rest of his life, and there follow all the social consequences to his family and himself. If he has committed a severe crime he must go to prison, and the other uncovenanted benefits must accrue to him also, but if he is a first offender who has committed a less serious offence then the Government say he should not go to prison. If he merits a sentence of only six months or less, that sentence should be suspended so as to give him another chance.
We have had this nine years' experience of magistrates using their discretion in the matter. Naturally, by no means all first offenders get shorter sentences even if it is a first prison sentence it is not always a short one. The people with longer sentences would not be affected by mandatory provisions. But the substantial majority of first offenders—thousands of them—are sent for short sentences. As the noble Lord said, probably 5,900 people are covered by these provisions, and the mandatory suspension would ensure them a second chance and would keep most of them crime-free for the rest of their lives. We can say that from our experience.
All this is weighed against the single factor of the limitation of a magistrate's discretion to send such people to prison and not suspend their sentences. Surely there can be only one answer; and just as the noble Lord, Lord Brooke of Cumnor, said that his words are on the Record and will be seen in years to come, so my words will also be on the record, and although it may not be given to me to see the result I am confident that those who read my words now and who see the result in 10 to 15 years' time will know that those words were justified.
On Question, Motion agreed to.
LORD STONHAM: My Lords, with the leave of the House, I beg to move that the House doth agree with the Commons in their Amendments, Nos. 5 to 8,
1134
to the words so restored to the Bill. As the noble Lord, Lord Brooke of Cumnor, surmised, these are really drafting Amendments, but they must be explained. They are designed to make it clear beyond doubt that the mandatory provisions will apply to cases where a court passes consecutive sentences of imprisonment. I am now speaking to Amendment No. 5. These are cases where a court passes consecutive sentences of imprisonment which are individually for six months or less but which in aggregate exceed six months. It is believed that this is already the position under the Bill as it stands, but Clause 87(2) might appear to put the matter in some doubt. It could be suggested that the mandatory provisions should not apply to consecutive sentences totalling more than six months, but if the provisions were not applied to these sentences there could be a real danger that courts would impose consecutive sentences in order to avoid having to suspend a shorter sentence, and that is something which it is desirable to avoid.
Amendment No. 6 is a drafting Amendment. It is a curious position but in fact it is possible for a person to be sentenced to corrective training without having previously served a borstal or a prison sentence. I am sure your Lordships would agree that it would be inappropriate for such a person to get the benefit of the mandatory provisions for suspended sentences. Corrective training is, of course, abolished by the Bill, with general agreement, but there will still be people who have in the past served a sentence of corrective training but not one of imprisonment or borstal. With regard to Amendment No. 7 the position is that Amendment 167, to Clause 84, provides that any order made under the Bill by statutory instrument, may be varied or revoked by a subsequent order, Subsection (6) of Clause 30 consequently becomes unnecessary. Amendment No. 8 is consequential.
Amendment No. 9 gives effect to a suggestion made by the Magistrates' Association. Section 110 of the Magistrates' Courts Act 1952 empowers a court
"that has power to commit to prison a person convicted of an offence"
to order him instead to be detained for one day in the court-house or a police

1135
station. The Amendment enables this power to be used in cases where a sentence of imprisonment proper would have to be suspended under Clause 30. I beg to move that this House doth agree with the Commons in the said Amendments.
Moved, That this House doth agree with the Commons in the said Amendments, Nos. 5 to 8.—(Lord Stonham.)
THE LORD CHANCELLOR (LORD GARDINER): My Lords, if no noble Lord objects, I will put Amendments Nos. 5 to 8 together.
LORD BROOKE OF CUMNOR: My Lords, I have only one point to raise. Thanks to the extreme shortness of time for examining these Amendments I am quite unable to understand why Amendment No. 9 is consequential. I will, of course, accept the statement of the noble Lord, Lord Stonham, that it is, but it seems to me most extraordinary that we have to amend a clause relating to the detention of offenders for one day in a court-house or police station because we have proposed to agree to these other Amendments in Clause 30. Naturally I have not given the noble Lord notice of this question—I could not have done so—and I have not had time to discover the reason for myself. I do not wish to press it now, but maybe subsequently he will let me know the reason.
LORD STONHAM: My Lords, in some ways I am in even greater difficulty than the noble Lord, Lord Brooke of Cumnor. Since we adjourned last night I have been to Sunningdale to talk to the County Councils Association and therefore have not been able to get any papers in regard to this point, but it seems to me this is fairly clear. The position is that under the 1952 Act there is the power, as the noble Lord is aware, to commit to prison a person convicted of an offence but to order him instead to be detained for one day. As I understand it, here would be these difficulties over the suspended sentence which arise from that. If that is still not clear, I will certainly write to the noble Lord about it, but it seems to me a point of detail which has been previously overlooked and which should be put right.
On Question, Motion agreed to.
LORD STONHAM: My Lords, this Amendment is consequential. I beg to
1136
move that this House doth agree with the Commons in their consequential Amendment, No. 9.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Stonham.)
On Question, Motion agreed to.

LORDS AMENDMENTS
[Nos. 10–12]
Clause 69, page 54, line 32, leave out ("imprisonment for a term not exceeding six months or")
Clause 69, page 54, line 33, leave out ("£200") and insert ("£50")
Clause 69, page 54, line 33, leave out ("or both")
The Commons disagreed to these Amendments for the following Reason:
Because the Amendments would reduce the penalties imposed by the clause below the level which the Commons consider appropriate.
LORD STONHAM: My Lords, with the leave of the House, I beg to move that this House doth not insist on Amendments Nos. 10, 11 and 12, to which the Commons have disagreed.
Moved, That this House doth not insist on Amendments Nos. 10, 11 and 12, to which the Commons have disagreed.—(Lord Stonham.)
LORD BROOKE OF CUMNOR: My Lords, these Amendments are all linked together, and they derive, I think, from Amendments moved by my noble friend the Duke of Atholl when we came to the subject of shot-guns. We had lengthy, some might say inordinate, discussions, on this Part of the Bill, partly because it seemed to be not quite in keeping with the rest of the purpose of the Bill. At a relatively early stage of those discussions, which were prolonged both in Committee and on Report, my noble friend moved these Amendments because he thought, at any rate in relation to the clauses as they then stood, that the penalty provisions were excessive. By common consent we have improved the clauses, and in addition to that I, as an ex-Home Secretary, am perhaps a little more inclined than most to side with what is evidently the Government view, that the Home Office must keep the maximum penalties for varied offences proportionately in line as far as possible. I think there was a great deal to be said for my noble friend's Amendments, certainly in relation to the clause as it first stood, but in view of what has

1137
happened since, and in view of what is clearly the Government's view, that the penalties here should be the same as those laid down by Parliament as maximum penalties under the Firearms Act, I would not advise your Lordships to dissent from what has been done in another place.
On Question, Motion agreed to.

LORDS AMENDMENT
[No. 13]
Clause 71, page 56, line 23, leave out subsection (3)
The Commons disagreed to this Amendment for the following Reason:
Because the subsection removed by the Amendment confers powers which experience may show to be necessary to secure enforcement of the law relating to firearms and introduces the necessary flexibility into the rule-making powers conferred by the Firearms Acts.
LORD STONHAM: My Lords, I beg to move that this House doth not insist on Amendment No. 13, to which the Commons have disagreed.
Moved, That this House does not insist on Amendment No. 13, to which the Commons have disagreed.—(Lord Stonham.)
LORD BROOKE OF CUMNOR: My Lords, on this Amendment we are under a particular handicap, because the proceedings in another place must have occurred as recently as after 10.30 last night, and consequently we have no Record of the Commons proceedings on the Amendment. I do not know whether there was a Division in another place or not. Fortunately, there is a relatively long explanation of the Commons' decision, and here again I would not advise your Lordships to hold out against another place.
This was an Amendment, if I remember correctly, that was moved by myself, though it had been tabled by my noble and learned friend, Lord Dilhorne; he happened not to be in his place at the time, and I moved it on his behalf. I still think it shows that the Government did not do sufficient preparatory work on their proposals relating to shot-guns, because even now it appears that they are not sure whether photographs will be necessary in relation to shot-gun certificates. I deduce that from the Commons' Reason, which says:
"Because the subsection removed by the Amendment confers powers which experience may show to be necessary …'
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Considering the long period of gestation of this Bill, I should have thought that by this time the Government could have decided whether or not it was necessary for an applicant for a shot-gun certificate to have to go through all the tedious paraphernalia of providing a kind of passport photograph and getting his identity certified by an independent person. This is just the sort of power which ought not to be given to the Government unless the case for it is proved; and the Corn-finitely that we were going to do a thing not been proved, but that experience may show it to be necessary. There it is. I regret this decision, too, but I advise your Lordships to accede to it.
I can only express my thankfulness that it was not decided in another place to reverse your Lordships' decision to the effect that a child of 13 presented with a shot-gun should not be considered as committing a criminal offence. When it is said that Amendments carried in your Lordships' House on a Division are always of null effect because they are invariably reversed by another place, at any rate we can claim for ourselves in this instance that a thoroughly sensible decision carried here on a Division has been accepted by the Commons.
LORD STONHAM: My Lords, the generosity which the noble Lord, Lord Brooke of Cumnor, has shown throughout our exchanges this morning deserted him at the last moment, because he did the Government less than justice over the Amendments with regard to the child of 13 to which he referred. The noble Lord is surely aware that in accepting these Amendments I gave an assurance that they would not be interfered with and that they were fully agreed.
The reason why this permissive power is still permissive and may still not be used is the very best of reasons; namely, that this suggestion was made by an interested organisation, who suggested that it would be a good thing if power were taken to have photographs on certificates. We have not yet discussed it. The noble Lord will be aware that we really cannot discuss this finally with interested organisations until the Bill becomes an Act and the Home Secretary has the rule-making powers for which he asks. There is nothing wrong with that, and it would be quite wrong to say definitely that we were going to do a thing

1139
when in fact we are still deferring a decision until we have had the discussions.
One other point makes this Amendment quite essential, and that is the Secretary of State's power to make different provision for different cases in both the firearm and shot-gun certificate system. That bath water went out with the baby when this Amendment was carried. We certainly need these powers of making different provision for different cases, short-term certificates, for example, for an application for overseas visitors staying here more than 30 days compared with standard three-year certificates for residents and so on. These powers are essential, and they will be used wisely.
On Question, Motion agreed to.

SEA FISHERIES (SHELLFISH) BILL [H.L.]
12.40 p.m.
Order of the Day for the House to be put into Committee (on Re-commitment) read.
Moved, That the House do now resolve itself into Committee.—(Lord Walston.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD STRANG in the Chair.]
THE DEPUTY CHAIRMAN OF COMMITTEES: This Bill has been amended by the Joint Committee on Consolidation Bills, but there are further Amendments to be made in Committee. I shall therefore go through the Bill in the usual way.
Clauses 1 to 16 agreed to.
Clause 17 [Taking and sale of certain crabs and lobsters prohibited]:
THE PARLIAMENTARY SECRETARY, BOARD OF TRADE (LORD WALSTON): These Amendments are not of very great weight, but I think they are valuable. Their object is to remove a discrepancy between the maximum penalties for taking spawn carrying crabs and for taking spawn carrying lobsters. The penalties relating to crabs date from 1877, and are £2 for a first offence and
1140
£10 for a subsequent offence. Those relating to lobsters date from 1959, and are £100 for a first offence and £200 for a subsequent offence. Therefore, as your Lordships will see, the discrepancy arises from the passage of the years, and also from an accident of drafting by which lobsters have attracted a penalty designed for more serious offences.
I can assure your Lordships that those penalties in no way reflect Her Majesty's Government's view either of the biological relative importance of crabs and lobsters, or indeed of their gastronomic value. The Law Commissioners recommended that these penalties should be assimilated, and the fines now proposed are £25 for a first offence and £50 for a subsequent offence. These are in line with current penalties for similar fishery offences, and I trust that your Lordships will agree to them. I beg to move.
LORD HAWKE: Before the noble Lord sits down, can he tell us what is the offence? Is it eating the things?
THE DEPUTY CHAIRMAN OF COMMITTEES: Perhaps I may first put the Amendment.
Amendment moved—
Page 13, line 36 leave out from ("offence") to the end of line 38.—(Lord Walston.)
LORD HAWKE: I was asking the noble Lord whether he could tell us what the offence is. He gave us the amount of fines but we do not know what the offence is.
LORD WALSTON: I am sorry; I had assumed that the noble Lord might have read the Bill. The offence is taking lobsters.
LORD HAWKE: Catching them?
LORD WALSTON: Catching them.
On Question, Amendment agreed to.
LORD WALSTON: I beg to move the next Amendment.
Amendment moved—
Page 14, line 9, leave out from ("offence") to the end of line 11.—(Lord Walston.)
On Question, Amendment agreed to.
LORD WALSTON: I beg to move the next Amendment.
Amendment moved—
Page 14, line 12, leave out ("also").—(Lord Walston.)
On Question, Amendment agreed to.
LORD WALSTON: I beg to move the last Amendment.
Amendment moved—
Page 14, line 13, leave out ("forfeit") and insert ("a fine not exceeding, in the case of a first offence, £25 and, in the case of a second or subsequent offence, £50, and the court by which the offender is convicted may order the forfeiture of").—(Lord Walston.)
On Question, Amendment agreed to.
Clause 17, as amended, agreed to.
Remaining clauses and Schedules agreed to.
House resumed: Bill reported with the Amendments.
Then, Standing Order No. 41 having been suspended (pursuant to the Resolution of July 14), Report received; Bill read 3a.
THE LORD CHANCELLOR: My Lords, as your Lordships appreciate, this Bill was an experiment in the field of consolidating our Statute Law to enable Amendments of a rather wider character than usual to be made. I only mention it now because on Second Reading of the Bill some disquiet was expressed in some quarters of the House at this innovation. The whole House agreed that we should try it as an experiment to see what happened.
In point of fact, our most experienced Joint Committee on Consolidation Bills has had no trouble with it at all, except on the one point which was the subject matter of the Amendments just moved by the noble Lord, Lord Walston, which, on the whole, they thought it preferable to leave to the House rather than to deal with themselves. But it is a Bill which has been open in this House, as of course in another place, to amendment at any stage, and there has been no loss of Parliamentary control in any way. I venture to express the hope that this experiment having been successful it may lead to our being able to consolidate our Statute Law in a rather wider field than we have been able to do before. I beg to move that the Bill do now pass.
Moved That the Bill do now pass.— (The Lord Chancellor.)
On Question, Bill passed, and sent to the Commons.

MATRIMONIAL HOMES BILL [H.L.]
12.47 p.m.
Order of the Day read for the consideration of the Commons Amendments.
BARONESS SUMMERSKILL: My Lords, I beg to move that the Commons Amendments be now considered.
Moved accordingly, and, on Question, Motion agreed to.

COMMONS AMENDMENTS
[The references are to Bill 107 as first printed for the Commons]
[Nos. 1 and 2]
Clause 1, page 1, line 10, at end insert ("(in this Act referred to as 'rights of occupation')")
Clause 1, page 1, Line 17, leave out ("under this section")
BARONESS SUMMERSKILL: My Lords, with the leave of the House I beg to move that this House doth agree with the Commons in their Amendments Nos. 1 and 2. In speaking to these Amendments it may be for the convenience of the House if I speak also to Amendments Nos. 5, 7, 9, 10, 11, 12, 15, 16 and 22. By defining "rights of occupation" in Amendment No. 1, it becomes unnecessary elsewhere in the Bill to refer to such rights as being rights "under this section"—that is, at present, Clause 1—and the remaining Amendments accordingly leave out these words.
Moved, That this House doth agree with the Commons in the said Amendments.—(Baroness Summerskill.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 3 and 4]
Clause 1, page 2, line 2, leave out first ("and")
Clause 1, page 2, line 2, after ("children") insert ("and to all the circumstances of the case")
BARONESS SUMMERSKILL: My Lords, with the leave of the House I beg to move that this House doth agree with the Commons in their Amendments Nos. 3 and 4. Amendment No. 3 is introductory to Amendment No. 4. Clause 1(3)

1143
provides that on an application for an order declaring, enforcing, restricting or terminating rights of occupation under the Bill, the court may make such order as it thinks reasonable having regard to the conduct, needs and financial resources of the spouses and the needs of any children of theirs. Amendment No. 4 makes it clear that the court may also have regard to all the circumstances of the case.
Moved, That this House doth agree with the Commons in the said Amendments, Nos. 3 and 4.—(Baroness Summerskill.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 5]
Clause 1, page 2, line 5, leave out ("under this section").
BARONESS SUMMERSKILL: My Lords, Amendment No. 5 is consequential. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Baroness Summerskill.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 6]
Clause 1, page 3, line 3, leave out second ("or") and insert ("and").
BARONESS SUMMERSKILL: My Lords, this Amendment makes the last part of Clause 1(7) read:
"any yard, garden, garage or outhouse belonging to the dwelling house and occupied therewith"
instead of "or occupied therewith". I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Baroness Summerskill.)

COMMONS AMENDMENT
[No. 7]
Clause 1, page 3, line 7, leave out ("under this section").
BARONESS SUMMERSKILL: My Lords, I beg to move Amendment No. 7.
Moved, That this House doth agree with the Commons in the said Amendment.—(Baroness Summerskill.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 8]
Clause 1, page 3, line 10, leave out ("section 2 below provides") and insert ("provision is made by section 2 of this Act").
BARONESS SUMMERSKILL: My Lords, this is a drafting Amendment. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Baroness Summerskill.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 9–12]
Clause 2, page 3, line 16, leave out ("under section 1 above ")
Clause 2, page 3, line 25, leave out ("under section 1 above")
Clause 2, page 3, line 34, leave out ("under section 1 above")
Clause 2, page 3, line 45, leave out ("under section 1 above")
BARONESS SUMMERSKILL: My Lords, I beg to move Commons Amendments Nos. 9 to 12.
Moved, That this House doth agree with the Commons in the said Amendments.—(Baroness Summerskill.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 13 and 14]
Clause 2, page 4, line 6, after ("shall") insert ("for so long as the estate or interest surrendered would have endured if not so surrendered")
Clause 2, page 4, Line 7, leave out ("thereto") and insert ("to the other estate or interest")
BARONESS SUMMERSKILL: My Lords, Clause 2(4) provides that where the matrimonial home is held under a lease the charge for which Clause 2 provides cannot be lost by the surrender of the lease to the freeholder. Amendment No. 13 has the effect of making the charge on the freehold last only so long as the lessee's interest would have lasted if it had not been surrendered. Amendment No. 14 is consequential upon the previous Amendment. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendments.—(Baroness Summerskill.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 15 and 16]
Clause 2, page 4, line 9, leave out ("under section 1 above")
Clause 2, page 4, line 37, leave out ("under section 1 above")
BARONESS SUMMER SKILL: My Lords, I beg to move Commons Amendments, Nos. 15 and 16.
Moved, That this House doth agree with the Commons in the said Amendments.—(Baroness Sumerskill.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 17]
Clause 2, page 4, line 40, at end insert—
("(8) Where a spouse's rights of occupation are a charge on the estate or interest of the other spouse, and that estate or interest is the subject of a mortgage within the meaning of the Law of Property Act 1925, then if, after the date of creation of the mortgage, the charge is registered by virtue of subsection (6) above, the charge shall, for the purposes of section 94 of that Act (which regulates the rights of mortgagees to make further advances ranking in priority to subsequent mortgages), be deemed to be a mortgage subsequent in date to the first-mentioned mortgage.")
BARONESS SUMMERSKILL: My Lords, this Amendment meets a point raised by the Committee of London Clearing Bankers. The effect of the new subsection is that any further advance made by a mortgagee will have priority over the wife's charge if the mortgagee was under an obligation to make a further advance, or even where he was under no such obligation provided he did not have actual notice of the charge by searching at the Land Registry before making the advance. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Baroness Summerskill.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 18]
After Clause 2, insert the following new clause—
Restriction on registration where spouse entitled to more than one charge
(". Where one spouse is entitled by virtue of section 2 above to a charge on the estate or interest of the other spouse in each of two or more dwelling-houses, only one of the charges to which that spouse is so entitled shall be registered in accordance with subsection (6) or (7) of that section at any one time, and if any
1146
of those charges is registered in accordance with the said subsection(6) or (7), the Chief Land Registrar, on being satisfied that any other of them is so registered, shall cancel the registratioin of the charge first registered.")
BARONESS SUMMERSKILL: My Lords, the object of this new clause is to make it clear that the spouse entitled to a charge by virtue of Clause 2 of the Bill may not register such a charge against more than one dwelling-house at the same time. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Baroness Summerskill.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 19]
After Clause 2, insert the following new clause—
Contract for sale of house affected by registered charge to include term requiring cancellation of registration before completion.
(".—(1) Where one spouse is entitled by virtue of section 2 above to a charge on an estate or interest in a dwelling-house and the charge is registered in accordance with subsection (6) or (7) of that section, it shall be a term of any contract for the sale of that estate or interest whereby the vendor agrees to give vacant possession of the dwelling-house on completion of the contract that the vendor will before such completion procure the cancellation of the registration of the charge at his expense:
Provided that the foregoing provision shall not apply to any such contract made by a vendor who is entitled to sell the estate or interest in the dwelling-house freed from any such charge.
(2) If, on the completion of such a contract as is referred to in subsection (1) above, there is delivered to the purchaser or his solicitor an application by the spouse entitled to the charge for the cancellation of the registration of that charge, the term of the contract for which subsection (1) above provides shall be deemed to have been performed.
(3) This section applies only if and so far as a contrary intention is not expressed in the contract.
(4) This section shall apply to a contract for exchange as it applies to a contract for sale.
(5) This section shall, with the necessary modifications, apply to a contract for the grant of a lease or underlease of a dwelling-house as it applies to a contract for the sale of an estate or interest in a dwelling-house.")
12.54 p.m.
BARONESS SUMMERSKILL: My Lords, the object of this clause, which was inserted at the suggestion of the Law Society, is to give protection to a person

1147
who has agreed to buy with vacant possession a dwelling-house against which a charge is registered under Clause 2 of the Bill. Subsection (1) of the new clause accordingly provides that it is to be a term of any contract for sale with vacant possession that the vendor will, before completion of the contract, procure at his own expense the cancellation of the registration of any charge under Clause 2. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Baroness Summerskill.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 20]
After Clause 2, insert the following new clause—
Cancellation of registration after termination of marriage, etc.
(".—(1) Where a spouse's rights of occupation are a charge on the estate or interest of the other spouse in a dwelling house and the charge is registered in accordance with subsection (6) or (7) of section 2 above, the Chief Land Registrar shall, subject to subsection (2) below, cancel the registration of the charge if he is satisfied—

(a) by the production of a certificate or other sufficient evidence, that either spouse is dead, or

(b) by the production of an official copy of a decree of a court, that the marriage in question has been terminated otherwise than by death, or

(c) by the production of an order of the court, that the spouse's rights of occupation constituting the charge have been terminated by the order.

(2) Where—

(a) the marriage in question has been terminated by the death of the spouse entitled to an estate or interest in the dwelling house or otherwise than by death, and

(b) an order affecting the charge of the spouse not so entitled had been made by virtue of section 2(2) above,

then if, after the making of the order, registration of the charge was renewed or the charge registered in pursuance of subsection (3) below, the Chief Land Registrar shall not cancel the registration of the charge in accordance with subsection (1) above unless he is also satisfied that the order has ceased to have effect.
(3) Where such an order has been made, then, for the purposes of subsection (2) above, the spouse entitled to the charge affected by the order may—

(a) if before the date of the order the charge was registered in accordance with sub-
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section (6) or (7) of section 2 above, renew the registration of the charge, and

(b) if before the said date the charge was not so registered, register the charge in accordance with the said subsection (6) or (7).

(4) Renewal of the registration of a charge in pursuance of subsection (3) above shall be effected in such manner as may be prescribed, and an application for such renewal or for registration of a charge in pursuance of that subsection shall contain such particulars of any order affecting the charge made by virtue of section 2(2) above as may be prescribed.
(5) The renewal in pursuance of subsection (3) above of the registration of a charge shall not affect the priority of the charge.
(6) In this section 'prescribed' means prescribed by rules made under section 19 of the Land Charges Act 1925 or section 144 of the Land Registration Act 1925, as the circumstances of the case require.")
BARONESS SUMMERSKILL: My Lords, the object of subsection (1) of this clause is to facilitate the cancellation of a charge by the Chief Land Registrar when the rights of occupation protected by the charge have come to an end. Although rights of occupation are normally brought to an end by divorce or by the death of the spouse legally entitled to the dwelling-house, such rights may nevertheless continue after the termination of the marriage if the court has made an order to that effect. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Baroness Summerskill.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 21]
After Clause 2, insert the following new clause—
(".—(1) A spouse entitled to rights of occupation may by a release in writing release those rights or release them as respects part only of the dwelling house affected by them.
(2) Where a contract is made for the sale of an estate or interest in a dwelling house, or for the grant of a lease or under-lease of a dwelling house, being (in either case) a dwelling house affected by a charge registered in accordance with subsection (6) or (7) of section 2 above, then, without prejudice to subsection (1) above, the rights of occupation constituting the charge shall be deemed to have been released on the happening of whichever of the following events first occurs, that is to say, the delivery to the purchaser or lessee, as the case may be, or his solicitor on completion of the contract of an application by the spouse entitled to the charge for the cancellation of the registration of the charge or the lodging of such an application at Her Majesty's Land Registry.
(3) A spouse entitled by virtue of section 2 above to a change on an estate or interest of the other spouse may agree in writing that any other charge on, or interest in, that estate or interest shall rank in priority to the charge to which that spouse is so entitled.")
BARONESS SUMMERSKILL: My Lords, this new clause put it beyond doubt that a spouse may release his or her rights of occupation under the Bill. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Baroness Summerskill.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 22]
Clause 3, page 6, line 19, leave out ("under section 1").
BARONESS SUMMERSKILL: My Lords, I beg to move Commons Amendment No. 22.
Moved, That this House doth agree with the Commons in the said Amendment.—(Baroness Summerskill.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 23]
Clause 4, page 6, line 29, at end insert (",and shall come into operation on such date as the Lord Chancellor may by order made by statutory instrument appoint.")
BARONESS SUMMERSKILL: My Lords, this Amendment postpones the operation of the Bill to a date to be appointed by the Lord Chancellor. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Baroness Summerskill.)
THE LORD CHANCELLOR: My Lords, this might be a convenient point at which to make some observations. As the House knows, this is a Private Member's Bill which has throughout been welcomed by the Government. But, for reasons which I will explain in a moment, I should like to make repeat observations on the Bill which were made by my right honourable friend the Solicitor General in another place on July 21. He said:
"I would like to refer to one matter which has arisen during the discussions on the Bill. The hon. Member for Crosby, and others, and some outside the House, have expressed a certain amount of apprehension about what will be the position of solicitors
1150
who have to advise their clients after the Bill becomes law. Where, for example, a solicitor is advising the husband, will he be under a duty to advise the wife, even though the wife may not herself be his client?
"It is not possible for the promoters of the Bill, or the Government, to say what view the courts may take of the duty of a solicitor in an individual' case should one ever arise, but it is evident that the courts would be bound to have regard to the facts of the case, as was pointed out by my hon. Friend in Committee. If a solicitor is consulted by the husband alone, it seems to me that it will be very difficult to argue that the solicitor owes any duty to the wife to inform her of her rights under the Bill, still less to protect them by the registration of a charge.
"If solicitors were consulted by both husband and wife it might come to be regarded as a duty to inform the wife of rights conferred on her by the Bill, but it by no means follows that he should go on to advise the wife to register a land charge if the solicitor had no reason to suppose that the marriage was anything but a happy one.
"This is borne out by the fact that solicitors at present do not appear to regard it as their duty to advise husbands and wives to take a conveyance of the matrimonial home in their joint names, although the advantages of doing so may be thought to be even more important than those attached to the registration of a class F land charge, not least because of the considerable saving in Estate Duty in the event of the husband dying first.
"It seems to me that in the case of the results of occupation conferred by the Bill a solicitor, like any other person, is entitled to take account of the practical realities of the situation with which he has to deal and should be under no obligation to advise a wife to register a charge when there is no reason to suppose that the marriage is likely to go, wrong."—[OFFICIAL REPORT, Commons, cols. 2736–37.]
I have asked your Lordships to be good enough to allow me to quote those words in order that I may say that I agree with them. The object of this Bill, if I may remind the House, is to enable a wife if her husband deserts her, or to enable the court if it thinks fit, to secure to the wife the continued possession of the matrimonial home with the children and prevent a deserting husband from selling the house over her head.
Since the Bill was before your Lordships' House a difficulty has arisen because the Law Society have taken fright at an observation made in your Lordships' House by the noble and learned Lord, Lord Denning, when he said, as I understood, that he hoped that all wives,

1151
from the start of the marriage, would at once rush to register a charge in accordance with their rights under the Bill. Any observation made by that noble and learned Lord is always regarded with veneration, but I am bound to make it plain that that is not the intention of the Bill; nor should I think that it was at all a good idea.
It is not intended that houses of married couples who are living happily together should be subject to charges on the Land Register by the wives. Indeed, it would place the staff of the Land Registry in considerable difficulties if they in fact did so. I do not think, therefore, that solicitors need be in the least apprehensive that, where they are dealing with husbands and wives who are living happily together, it is their duty to advise a wife to rush off and register a charge. I have ventured to say so much in order to minimise the effect of the observation which the noble and learned Lord, Lord Denning, made without, it may be, having given much consideration to what might have been the consequences of what he was saying on the conduct of solicitors.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 24]
In the Schedule, page 7, line 15, leave out ("for valuable consideration").
BARONESS SUMMERSKILL: My Lords, these words are unnecessary because the definition of a "purchaser" in Section 20(8) of the Land Charges Act makes it clear, in any event, that a purchaser means a purchaser for valuable consideration. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Baroness Summerskill.)
On Question, Motion agreed to.
1.2 p.m.
BARONESS SUMMERSKILL: My Lords, with the permission of the House, may I make a few final comments on this Bill and say how delighted I am to think that it will receive the Royal Assent to-night? I must confess that when my noble and learned friend who sits on the Woolsack referred to the comments of the noble and learned Lord, Lord Denning, I recalled that when he made those comments I applauded them. But the last
1152
thing I want to do is to cause administrative difficulties anywhere and to swamp the Land Registry. I simply hope that, probably from the newspapers, the women of the country will learn of their rights and of this new contribution to social legislation which will remove the legal disabilities of so many married women.
As a feminist, I am delighted that soon this measure will be on the Statute Book. But of course a Private Member cannot pilot a Bill through Parliament without the help of the expert—the expert who can help to draft it and to advise one through every stage. Therefore, I should like to pay tribute to the wonderful work of the Law Commission, whose Second Report came out two days ago. We have there men and women who are anonymous, but who are working very hard to improve our laws.
Then, of course, another place presents a difficulty to a Member of this place. I have observed through the years, when I have introduced Private Members' Bills, that your Lordships never look over your shoulder—at least, hardly ever—and are prepared to listen to a case with sympathy and understanding. If then you do not agree with it you reject it. Nevertheless, one always feels here that noble Lords listen without saying, "There is a small minority in my constituency who will not like this; therefore I shall reject it", or, "It will not look well in the newspaper if it appears that I have approved it". So I always find that when one is expounding a new measure here one is treated courteously and kindly by the House.
But it is a different proposition in another place, and one is faced with having to find somebody who not only has knowledge and experience but also has sympathy with the cause. So I should like to pay tribute here to the wonderful, brilliant young lawyer, Mr. Peter Archer, the Member of Parliament for Rowley Regis and Tipton, who successfully conducted this Bill through the Commons and who on Committee stage did not have an easy time. I am very grateful to him. Last, but by no means least, I should say this to my noble and learned friend who sits on the Woolsack. Without his continuing help and encouragement and expert assistance, I should never have seen this Bill to a

1153
successful end. May I thank him from the bottom of my heart for what he has done for me and for the women of the country?

ROAD TRAFFIC REGULATION BILL [H.L.]
1.5 p.m.
Order of the Day read for the consideration of the Commons Amendment.
THE LORD CHANCELLOR: My Lords, I beg to move that the Commons Amendment be now considered.
Moved accordingly, and, on Question, Motion agreed to.

COMMONS AMENDMENT
[The references are to Bill 303 as first printed for the Commons]
Schedule 6, page 106, line 9, at end insert—
("THE CIVIC AMENITIES ACT 1967
In section 25 for the words from 'sections' to '1960', where last occurring, there shall be substituted the words 'sections 20, 52 and 53 of the Road Traffic Regulation Act 1967',")
THE LORD CHANCELLOR: My Lords, I beg to move that this House cloth agree with the Commons in their Amendment. This is a Consolidation Bill, and all this Amendment does is to add to Schedule 6, "Consequential Amendments", an Amendment of Section 25 of the Civic Amenities Act 1967. The Bill for that Act was passed only on Monday and the Amendment could not, therefore, be made before. The Amendment is needed because Section 25 refers to three sections of Road Traffic Acts which will be repealed and re-enacted in the Consolidation Act, and as both Bills may receive the Royal Assent on the same day, and I understand will do so to-day, one cannot safely rely on Section 38(1) of the Interpretation Act to effect the substitution for the reference to those three sections of a reference to the corresponding provisions of the Consolidation Act. The Amendment makes the substitution. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
On Question, Motion agreed to.
[The Sitting was suspended at 1.7 p.m. and resumed at 2 p.m.]

SUEZ CANAL
LORD WINDLESHAM: My Lords, I beg leave to ask the following Question of which Private Notice has been given:
To ask Her Majesty's Government whether they will make a Statement about the opening of the Suez Canal to international shipping.
THE LORD PRIVY SEAL (THE EARL OF LONGFORD): My Lords, my noble friend Lord Chalfont will be replying to this Question in a Statement at a convenient moment after 3.30 p.m.

COMPANIES BILL [H.L.]
2.2 p.m.
Order of the Day read for the consideration of the Commons Amendments.
THE MINISTER OF STATE, BOARD OF TRADE (LORD BROWN): My Lords, we have already had a short debate on the amount of time available to your Lordships' House to consider the 351 Amendments which have been moved to this Bill in another place since it left here on January 31. I sincerely hope that it will be unnecessary to go over the ground then covered, and in pursuit of that aim I should like to apologise to the House for the deplorably short time now available for consideration of these Amendments. We have done our best to compensate for the unfortunate position in which the House has been placed by making available as much explanation as possible before to-day.
In fact, the task before us is not, I think, nearly as formidable as might appear from the sheer number of Amendments to be considered, because so many of them fall into groups associated with changes having the same end in view. I trust that this will become clear as we proceed with our task. In order to facilitate our task, we shall be asking the House to debate some large groups of Amendments, and to agree to our moving certain consecutive Amendments en bloc. A list of the proposed grouping of consecutive Amendments is available in the Printed Paper Office.
The Government are exceedingly anxious that all these Amendments be accepted to-day, in order to avoid the

1155
three months' delay which would otherwise arise in bringing into force those Amendments concerned with the control of insurance and the detection of fraud. In the interests of speed, therefore, I and my noble friends will make our initial explanations of these Amendments as brief as possible, and will reserve our longer comments only if these are called for in discussion. I beg to move that the Commons Amendments be now considered.
Moved, That the Commons Amendments be now considered.—(Lord Brown.)
LORD DRUMALBYN: My Lords, the noble Lord said that we have already debated these circumstances but, of course, technically he is not correct. A statement was made, and some observations were made on that statement. In spite of the apology that the noble Lord has offered to the House, I do not think we can pass this Motion just like that because, after all, we are being asked to consider 352 Amendments, including 42 clauses—or we may say 40 clauses if we make allowance for the fact that in one case three new clauses do duty for one in the original Bill. The first Sitting day on which these Amendments were available to your Lordships was Monday of this week, so few noble Lords here will have had more than three days to examine them.
This, of course, is no fault of Members of the Government who sit in this House, who I acknowledge with gratitude have done their utmost to help noble Lords interested to have some idea of what they are expected to consider this afternoon. But I think that at the present time we are sometimes apt to lose sight of what Parliament is for. It is not enough for legislation to be carefully considered by Departments. The whole point of bringing legislation before Parliament is that in Parliament there is a wide cross-section of people with a wide variety of interests who are able to bring their particular points of view and their particular experience to bear on the legislation that is presented to them. If they do not have sufficient time to consider that legislation beforehand, the whole purpose of Parliament is frustrated.
My Lords, there are two democratic principles here which I believe are being
1156
violated. The first principle is that Parliament ought not to be asked, except in an unforeseeable emergency, to pass legislation which it has not had an opportunity to examine carefully. The second principle is that neither House ought to be asked to consider, still less to pass, legislation which it has no opportunity of amending or rejecting—apart, of course, from the Parliament Act. We may be told that we are perfectly free to amend or disagree with any of the Amendments before us provided we are prepared to accept the consequences, one of which is that, since the Government have so arranged business that there is no time left before Parliament rises for the other place to consider any Amendments your Lordships may make, the Bill could not then become law until the end of October—and we are told that the Government want the powers conferred in the Bill now. Of course, in such circumstances the Government must bear the entire responsibility if the Bill does not pass before the House rises, but this Government are already notorious for not accepting responsibility for the consequences of their own mismanagement.
In these circumstances, in view of the way this House has been treated, it would be entirely justifiable for your Lordships either to decline to accept this Motion, or else to treat the whole proceedings in the way that the Leader of the House in another place must obviously have intended; namely, as a pure formality. Her Majesty's Opposition do not consider that such a course, though justifiable, would be right. The proper thing to do is to consider these Amendments to see whether, in all the circumstances, they are acceptable to your Lordships. But for the Government to assume in advance that this is so would not be right. At best, that is taking a big risk.
My Lords, since we have only one day in which to examine these Amendments, I would suggest that it would be idle to try to examine every Amendment in this House to-day; and I agree with what the noble Lord has said, that we should try to take them in batches. We have no option but to allow many of these Amendments to be taken formally, even though it might have been possible to improve them. This is all the more regrettable in that nine of the new clauses,

1157
admittedly including two very short ones, came to Parliament for the first time on Report stage in another place; and that of the 303 Amendments, as distinct from new clauses, on the Order Paper at that stage, well over half were put down by the Government.
What makes the total of 40 or so new clauses all the more astonishing is that we were assured by the noble and learned Lord on the Woolsack on December 19 that the scope of the Bill was disclosure, and such matters as provisions with regard to insurance companies, in which field—that is, insurance—recent events, he said, have particularly shown urgent need that the law should be amended at once. He said that the Government would welcome any Amendments which were designed to improve the existing Bill but not, he hoped, to extend it. That may be found in column 1939. Then, in column 1943 he said that if we expanded the Bill in this House the Government would have to reconsider whether, after all, they could go further with the Bill beyond this House.
Now we have 40-odd new clauses, and we shall see when we come to the Amendments, that the scope and content have been extended quite considerably, in particular by the inclusion of new investigation clauses in Part I, and by the extension of the powers of the Board of Trade to investigate the affairs of insurance companies to cover all companies—something we were told would be reserved for the second Bill to be brought before Parliament in a subsequent Session. Then, Part II, which deals with insurance, has been turned upside-down by a completely new definition of "classes". All this makes nonsense of the noble and learned Lord's claim that any legislation on company law brought before your Lordships must be most carefully prepared.
I certainly cannot congratulate the Government on their handling of this Bill, but I hope that the arrangements we propose for handling it to-day will commend themselves to your Lordships. If your Lordships accept this Motion to-day, we on these Benches propose to concentrate on discussion of matters most of which would involve a series of Amendments; and I have given notice of them to the noble Lords opposite. We
1158
could discuss this proposal, I would suggest, on the first of the Amendments on which it arises. We are indebted to the noble Lord, Lord Shepherd, and to the Board of Trade for providing us with a mass of material which would have received close attention had there been more time. Apart from this, I should be content to allow intervening Amendments to be taken in between, and, of course, any noble Lord would be free, naturally and as always, to question any particular Amendment he chooses. If we deal with the Amendments in this way we shall, I think, make the best of our time and mitigate in some measure the Government's miserable mismanagement of this Bill.
LORD BYERS: My Lords, I do not propose to repeat the protest I voiced when the Statement was made from the Government Benches the other day. I realise that there is some urgency to get this measure accepted and on to the Statute Books, because, as I understand it, of the shaky nature of a number of companies, particularly in the insurance world, but I suggest to the Government that this state of affairs might have been better dealt with by confining the urgent measures to a separate Bill, so that we could have had more time to deal with this voluminous Bill. I am afraid that if we are not careful we are going to allow a number of bad points to get on to the Statute Book. I feel that we require full notice of the intentions of the Government with regard to the next Bill dealing with companies, so that we can put proper Amendments forward. In the circumstances, I think that what the noble Lord, Lord Drumalbyn, has suggested—that we concentrate on the major points—is right; but I am afraid that what happens normally in cases of rushing through legislation is going to happen again. We are going to have bad legislation on the Statute Book, and instead of saving time we are going to take more time to put it right in the future.
LORD ERROLL OF HALE: My Lords, I would apologise to noble Lords for arriving somewhat late. I wish only to add to what was said earlier, that we are in this difficulty: that while we appreciate the need for the Bill's passage, we deplore the fact that we are not able to give proper consideration to the

1159
Amendments. It is only because the Government have made representations to us of the great urgency to secure the Royal Assent that we are submitting ourselves to a procedure which I believe remains an affront to Parliament.
On Question, Motion agreed to.

COMMONS AMENDMENTS
[The references are to Bill 178 as first printed for the Commons]
[No. 1]
Clause 3, page 2, line 30, leave out paragraph (b) and insert—
("(b) if it be incorporated in Great Britain and if it be registered in England and the company be registered in Scotland (or vice versa), the country in which it is registered, and if it be incorporated outside Great Britain, the country in which it is incorporated; and ").
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR SCOTLAND (LORD HUGHES): My Lords, with Amendment No. 1 can be grouped Amendments Nos. 6 and 8. I beg to move that the House doth agree with the Commons in Amendment No. 1.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Hughes.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 2]
Clause 3, line 13, leave out from ("Trade") to end of line 14 and insert ("agree that the information need not be disclosed").
LORD HUGHES: My Lords, with Amendment No. 2 are grouped Amendments Nos. 9, 10 and 13. I beg to move that the House doth agree with the Commons in their Amendment No. 2.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Huges.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 3]
Clause 3, page 3, line 33, leave out ("advantage's being") and insert ("the fact that advantage is").
BARONESS PHILLIPS: My Lords, I beg to move that the House doth agree with the Commons in their Amendment No. 3.
Moved, That this House doth agree with the Commons in the said Amendment.—(Baroness Phillips.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 4]
Clause 3, page 3, line 41, leave out subsection (7).
LORD BROWN: My Lords, in moving Amendment No. 4 I seek to discuss Amendments Nos. 12, 92, 114, 131 and 317. These Amendments are concerned with the withdrawal from the Bill of the Amendments inserted in this House concerned with no-par-value shares. In another place at Committee stage the Amendments inserted to deal with these no-par-value shares were omitted. My right honourable friend said in Committee:
"The view we really take … is that a technical case can certainly be made out, but we are not convinced that the technical case is sufficiently clear.…"
Noble Lords are already aware that this measure also involves changes in four or five other Acts, and changes, possibly in tax laws, too. To make certain that the changes introduced in the Bill were consistent with the consequential changes in other Acts, it would have been necessary to consider those other changes also. Otherwise it might have been found later that changes to the Bill were not apposite.
These are some of the reasons why the Amendments introduced here were deleted in another place. However, my noble friend has indicated his readiness to introduce these changes into the next Companies Bill which the Government intend to enact before the end of this Parliament. In the light of these comments I would ask your Lordships to accept these Amendments, and I beg to move that the House doth agree with the Commons in Amendment No. 4.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Brown.)
2.17 p.m.
VISCOUNT ECCLES: My Lords, the history of these Amendments is going to be remembered with sorrow by those who care for the standards of legislation for which the British Parliament has become famous. Of course, the Government have the right, the power and the duty to remove from a Bill any Amendment which they conceive to be prejudicial to the Bill concerned. No one disputes that. But hitherto it has been thought that a Government also have the duty to give consistent and

1161
cogent reasons for the rejection. Amendments from any quarter were to be treated on their merits; and that was—and, I hope, will one day be again—an essential feature of government in this country by discussion and consent.
Here we have a proposal to introduce a system of no-par-value shares which had twice been recommended by influential Committees appointed by the Government of the day; and, at any rate, the Report of the Jenkins Committee, was very carefully considered and appreciated by the present Government. No public disapproval has been voiced against this system of no-par-value shares. In this House the Amendments were supported from all sides. Why then did the Government refuse to accept them? We have had a number of different reasons. The main reason, advanced by the noble and learned Lord the Lord Chancellor, was that the Government had decided in no circumstances to enlarge the Bill. The merits of the Amendments introducing new aspects of company law were therefore not to be discussed, and in this House the Government refused to discuss either the merits of these Amendments or the drafting of them.
This highly dictatorial attitude was, as your Lordships know, objected to in the Division Lobbies. We were also told that the consequential changes in other Statutes and in taxation required by a system of no-par-value shares had not yet been worked out. We met that objection by inserting into the Bill a clause which gave to the President of the Board of Trade the power to delay the coming into operation of this system until after these changes had been made in a future Finance Bill. I must say that I thought the Government's arguments about the consequential changes were very thin. As I think I have already told your Lordships, I gave notice to the noble and learned Lord the Lord Chancellor, before Christmas, that we intended to put down an Amendment introducing no-par-value shares when the Bill came before this House. We have had eight months, even if we go no further back than last December. There has been plenty of time to work out these changes, but in fact the Government have not been willing to do it.
The Government also hinted that there was some kind of bargain with the Back-
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Benchers in another place that they must hold back from putting down Amendments to enlarge the scope of the Bill and that, if they did, no Amendment from the Opposition to do something of the same nature would be allowed. This kind of bargain I consider very bad legislation. When the Bill reached another place nothing was heard of the restlessness of Back-Benchers to enlarge its scope and put down new provisions, and I cannot now easily believe that there was anything much in this argument. Indeed, the first spokesman in another place changed the ground for rejecting these Amendments. This is what Mr. Darling, the Minister of State said:
"There may well be a case for altering our company law to provide for the issue of no par value shares. We do not deny that. If the issue is properly discussed in Parliament—it has not been properly discussed yet—there may, under this Government, be a majority opinion in favour of the issue of no par value shares. But it is a matter which we would like to have discussed, and, if need be, we shall play our part in making sure it is discussed. What has happened in this case is that, without adequate Parliamentary discussion, provisions for the issue of no par value shares were put into the Bill in another place, and put into it in such a way that neither the advocates of no par value shares in the other place nor those of us who have to deal with the problem here can be sure that the drafting of the Bill on the matter is satisfactory."—[OFFICIAL REPORT, Commons Standing Committee E. col. 154, 2/3/67.]
My Lords, that is a shocking thing to say. If there was no discussion it was the Government who did not allow discussion. Your Lordships discussed no-par-value shares in this House and no one from the Government Front Bench ever referred to the drafting of our Amendments. This is one of the few occasions which I can remember when very serious work has been put in on the drafting of long Amendments on the advice of the very best lawyers in the City of London, and not one single minute has been spent by the Government in discussing the drafting of the Amendment.
I do not think there could be any argument more out of place to-day than that an Amendment must not be proceeded with because there is no time for discussion. What are we doing to-day? We are to pass 300 Amendments with far less discussion than was given to the Amendments on no-par-value shares. My Lords,

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there is one standard of legislation for Government Amendments and another standard for Amendments proposed from any other quarter of the House.
Of course, Mr. Jay, President of the Board of Trade, did not stand by all these flimsy far-fetched arguments put up by his colleagues. With a charming candour (and I was glad that the noble Lord, Lord Brown, read out his words) Mr. Jay told the Commons (col. 182, 7/3/67):
"The view we really take"—
of course he had to say that, it was high time someone said what the view really was—
"… is that a technical case can certainly be made out but we are not convinced that that technical case is sufficiently clear, or that the claim is sufficiently pressing, to justify making the change in this Bill."
Later on, the President said (col. 184):
"… although there is a technical case, it has not been made out with any clarity or cogency for making a change at this stage."
I do not know how much more time we were expected to spend in your Lordships' House making out the technical case. I thought it was made out by the noble Lord, Lord Polwarth, and other noble Lords on the other side of the House with extreme clarity and cogency, which of course was not the opinion of the President of the Board of Trade.
The Amendments have to come out, not because there was anything wrong with the system of no-par-value shares, but because, unless they had been put in by the Government, they could not be considered a pressing matter; and Parliament must learn its lesson not to challenge the view of the Labour Government on what is pressing and what is not. My Lords, this is a story of bad manners and bad legislation, and I do not know which I dislike more. I hope that the Ministers concerned realise that this is something which will long be remembered—particularly the manner in which it was done—by those who care about Parliamentary government. I have listened to what was said by the noble Lord, Lord Brown, and I must accept his undertaking that in the next Bill in the next Session these Amendments will appear again. It will be a matter of very great interest to us all to see whether in fact the Government are going to make much change in the drafting which was
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so carefully prepared by such very eminent lawyers.
LORD ERROLL OF HALE: My Lords, before we part with this subject may I say that I was most interested to hear what the noble Lord, Lord Brown, had to say about the next Bill. It was always to come in the next Session, but now he says that it will come before the end of this Parliament. I would point out to my noble friend Lord Eccles that we have no assurance that we are to get the next Companies Bill in the next Session, but only in the life of the present Parliament. I shall be very interested to see whether it comes even during that period. I hope that the noble Lords opposite, and the noble and learned Lord the Lord Chancellor, will pay special heed to what my noble friend has said about the manners of legislating, as well as making sure that the legislation is good.
2.27 p.m.
LORD BROWN: My Lords, I want to make a very brief comment on what was said by the noble Viscount, Lord Eccles. The argument I have used in this House is directed to the complexity of the consequential legislation arising out of the whole business of no-par-value shares. This has been put on one side as not being a serious argument, but I would draw the attention of the House to the fact that the last Government, in 1957, I think, studied this matter seriously. If my memory is correct, they gave an undertaking that the whole matter of the introduction of no-par-value shares and the examination of the consequent legislation—which was regarded at that time as a complex matter—would be examined in due course. The fact is that it has not been examined. I am not criticising the past Government for this, but merely drawing attention to the fact that there is some evidence of the complexity of this measure contained in that little story of what happened in the last Government.
If I may I will leave the matter there as I should prefer to rest the case for the withdrawal of these provisions from this Bill more on that argument than any other. I am sure that the noble Viscount will agree, despite his enthusiasm for no-par-value shares—which I have already agreed would be a useful

1165
measure—that it is not a matter of great urgency. It is a matter of presentation of information rather than anything which affects the security of our economy and so on, and therefore not so important as the insurance provisions and provisions with regard to fraud. I think that too little account has been taken of the argument put forward by the Government, and I will, so to speak, rest my case there.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 5]
Clause 4, page 4, line 2, leave out ("in") and insert ("comprised in the equity share capital of")
LORD BROWN: My Lords, in moving that the House doth agree with the Commons in Amendment No. 5, I would seek permission to speak also to Nos. 7 and 11. Clause 4 requires a company to give information about another company if it holds more than 10 per cent. of the other company's shares of any class. Amendment No. 5 changes the condition to any class of equity share. Amendment No. 7 states that the company must give information of non-equity holdings in the other company if it holds 10 per cent. or more of the equity share capital of the company. Amendment No. 11 adds a definition of equity capital, which appears in the original Act. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Brown.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 6–13]
Clause 4, page 4, line 7, leave out from ("meeting") to end of line 9 and insert—
("(a) the name of that other body corporate and—

(i) if it be incorporated in Great Britain and if it be registered in England and the company be registered in Scotland (or vice versa), the country in which it is registered; and

(ii) if it be incorporated outside Great Britain, the country in which it is incorporated.")

Clause 4, page 4, line 14, leave out ("or of other classes") and insert ("(whether or not comprised in its equity share capital), or of other classes (whether or not so comprised),")
Clause 4, page 4, line 24, leave out from ("and") to end of line 28 and insert—
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("(i) if it be incorporated in Great Britain and if it be registered in England and the company be registered in Scotland (or vice versa), the country in which it is registered; and

(ii) if it be incorporated outside Great Britain, the country in which it is incorporated; and")

Clause 4, page 4, line 38, leave out ("consent to the information's not being disclosed") and insert ("agree that the information need not be disclosed")
Page 5, line 10, leave out ("advantage's being") and insert ("the fact that advantage is")
Page 5, line 24, at end insert—
("( ) In this section 'equity share capital' has the meaning assigned to it by section 154(5) of the principal Act.")
Page 5, line 25, leave out subsection (8). Clause 5, page 5, line 44, leave out ("consent to the information's not being disclosed") and insert ("agree that the information need not be disclosed")
BARONESS PHILLIPS: My Lords, with permission, I beg to move that this House doth agree with the Commons in Amendments Nos. 6 to 13.
Moved, That this House doth agree with the Commons in the said Amendments.—(Baroness Phillips.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 14–18]
Clause 6, page 6, line 3, leave out ("be shown")
Clause 6, page 6,line 6, leave out paragraph (a) and insert—
("(a) if one person has been chairman throughout the financial year, be shown his emoluments (unless his duties as chairman were wholly or mainly discharged outside the United Kingdom), and if not, be shown with respect to each person who has been chairman during the year, his emoluments so far as attributable to the period during which he was chairman (unless his duties as chairman were wholly or mainly so discharged) ")
Clause 6, page 6, line 9, leave out ("of all the directors") and insert ("with respect to all the directors (other than any who discharged their duties as such wholly or mainly outside the United Kingdom), be shown")
Clause 6, page 6, line 17, leave out subsection (2) and insert—
("(2) If, of the directors of a company (other than any who discharged their duties as such wholly or mainly outside the United Kingdom), the emoluments of one only (so far as ascertainable from information contained in the company's books and papers or obtainable by right by the company from him) exceed the relevant amount, his emoluments (so far as so ascertainable) shall also

1167
be shown in the said accounts or in a statement annexed thereto; and if, of the directors of a company (other than any who discharged their duties as such wholly or mainly outside the United Kingdom), the emoluments (so far as so ascertainable) of each of two or more exceed the relevant amount, the emoluments (so far as so ascertainable) of him (or them, in the case of equality) who had the greater or, as the case may be, the greatest shall also be shown in the said accounts or in a statement annexed thereto.")
Clause 6, page 6, line 35, at end insert ("(other than contributions paid in respect of him under any pensions scheme)")
LORD BROWN: My Lords, I beg to move that this House doth agree with the Commons in their Amendments Nos. 14 to 18 inclusive. At the same time I would seek permission to speak to Amendments 20, 21, 23, 24, 25 and 64. Clause 8 of the Bill releases companies from providing data on salaries of over £10,000 per annum if those receiving them work mainly overseas. The first purpose of the Amendments is to make exemptions applying to the disclosure of salaries of chairmen and directors working mainly overseas. The second purpose is to exempt from inspection the contracts of employment of those directors mainly working overseas. The third purpose is to exclude from emoluments subject to publication under Clause 6 those contributions paid by a company in respect of any director under a pension scheme.
It has been pressed upon the Government in another place that the inclusion for the purpose of publication of emoluments of contributions made under a pension scheme is not reasonably possible, because it is not always possible to divide up sums put aside for pensions between the individuals receiving them, and if the procedure at present in the Bill were to continue there would be a disparity between some emoluments which contained personally attributable pension sums and others which did not. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Brown.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 19]
Clause 6, page 7, line 3, at end insert—
"(5A) A company which is neither a holding company nor a subsidiary of another body
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corporate shall not be subject to the requirements of this section as respects a financial year in the case of which the amount shown in its accounts under section 196(1)(a) of the principal Act does not exceed £7,500.").
LORD BROWN: My Lords, in moving that this House doth agree with the Commons in Amendment No. 19, I seek the House's permission to speak also to Amendments Nos. 22, 38, 39, 46 to 50, 116, 280, 281, 302 and 303. Clause 37 permitted unquoted companies to leave out of the accounts and directors' report filed with the Registrar of Companies information about directors' and senior executives' emoluments required by Clauses 6, 7 and 8 and Section 196 of the Companies Act 1948 and analysis of turnover and profitability required by Clause 17.
The clause was deleted at Report stage in the House of Commons. A number of changes, have, however, been made to the Bill to exempt small companies from certain disclosure requirements. Thus companies which are not members of a group are exempt from the requirements in Clauses 6 and 7, provided that the aggregate remuneration of the directors does not exceed £7,500 a year. Such companies whose turnover does not exceed £50,000 a year are exempt from the requirement to disclose turnover or the analysis of turnover and profitability between differing activities; companies (other than holding companies) with a turnover of £50,000 (instead of £20,000 as originally provided for) will not be required to disclose exports, nor will holding companies presenting consolidated accounts if the group turnover does not exceed £50,000. It should be noted that where a company qualifies for one of these exemptions it can omit the information from its accounts entirely; that is to say, not only the accounts filed with the Registrar but the accounts circulated to members. I beg to move.
ed, That this House doth agree with the Commons in the said Amendment.—(Lord Brown.)
2.39 p.m.
LORD DRUMALBYN: My Lords, we regard this as an important series of Amendments, partly because it includes the abolition of Clause 37, which was inserted in your Lordships' House and deals with the exemption of unquoted companies from having to attach a copy of

1169
the directors' report to their annual return. It is not worth while going over the arguments we had, but I should like to ask the noble Lord whether he can give us any idea of the number of companies involved. He put up the argument that there were some unquoted companies of very considerable substance, and that for that reason he could not accept the Amendment. It would be interesting to know how many unquoted companies there are with, shall we say, a turnover of £250,000.
It is all a question of what level is fixed for exemption. We have not any real figures on this, and I doubt whether the Government have either. I believe that they have some estimates based on a sample that has been taken, but I wonder whether the noble Lord can tell us what is the basis of the level of £50,000 that has been chosen in these Amendments. How many companies will fall below this level? Of those companies, how many are trading at all? It is difficult to say. No doubt a good many of the retail companies will be excluded from this—and this, of course, was one of the arguments which we put forward before. But I am not at all certain that all the independent retail establishments with only the one shop will be excluded from this level. I am, of course, talking more of the traders in the high streets of the small towns, which have a turnover of anything between £30,000 and £150,000 a year. I would ask the Government particularly to watch how this works. If they are going to introduce another Bill in a couple of years, they will by that time have a good deal of evidence on which to draw.
The other matter that I think is important when fixing a figure is that, at a time when values are changing fairly rapidly, the figure soon becomes out of date. We shall have the same problem when we come to consider the minimum assets required in the insurance provisions. This is a difficult problem. But the figure we put into the Bill now will be unrealistic in a few years' time if the present trends continue. Some measure has to be devised for dealing with this. I should have thought it was advisable, in putting figures of this kind into the Companies Bill, to make provision at this time. But the least we can ask is that consideration should be given to this, and to the best
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means of making such provision, so that when we come to the next Bill this can be inserted.
We naturally welcome the concessions, in so far as they go. We do not think they go far enough, and we think that the Government should watch this most carefully to see whether there is any real advantage being derived by the economy through the disclosure of these figures. My noble friend said at an earlier stage:
"The last thing we want to do is to present a whole horde of figures that are going to be of practically no use at all except to individuals who are studying for their Ph.D. as a source of material on which they can make theses."
This is not what is required by the economy. Certainly this will require further effort, and we doubt very much whether that effort will be justified in any way by the results that will be achieved.
LORD CHORLEY: My Lords, I should like to put a slightly different point of view from that which the noble Lord opposite has been putting. I dare say he will say: "That chap over there has been concerned with supervising these Ph.Ds., and it is impractical." But I hope that this is not altogether so. It seems to me a pity, so to speak, that this concession has been made. I think that the more information which is available in the business world, the better. While I have not had a great deal of experience in the actual practical handling of company work, as a lawyer one cannot study the law reports without realising that these very small companies are—and this is a point which I made on an earlier stage of the Bill—frequently used as a vehicle of oppression by dominant personalities, who often treat the company as if it belonged to them. I think the more information that is available to the unfortunate widows, and others, who often are very much oppressed and cannot get effective legal assistance because of the absence of information, which often exists in these cases, the better things will be. These people would be better off, and more able to protect their interests, if this sort of information were made available. Therefore, I am a little sorry that this concession has been made, and I certainly should not like it to go further.

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I do not want to go over the main emphasis of the speech I made on Second Reading, but it has always seemed to me that the privilege of incorporation was too easily acquired: and I think this was the view of the Jenkins Committee. It would be better if the people who run the small liability companies were confronted with difficulties, in the way of disclosure of information and that sort of thing, which would drive them out of the area of incorporated associations and back into that area in which business is done by partnerships, and in which it is not so easy to adopt oppressive tactics towards people, so to speak, peripherally interested, but so often financially very much interested, in the concerns of a company. Therefore, I take a different view about this from the one expressed by the noble Lord opposite.
LORD HAWKE: My Lords, perhaps I may support one portion of the view of the noble Lord, Lord Chorley. It is something which I put forward on Second Reading, when I was briefed by a very able Chancery lawyer on the subject; namely, that the Government, before the next Company Bill comes along, should see whether they cannot find a new animal, something that is not a partnership and is not an incorporated company. It is really ridiculous that one's baker, butcher and so on, with a turnover of £10,000, £15,000 or £20,000, should be a limited liability company and have to go through the same motions as I.C.I.
LORD BROWN: My Lords, I do not want to prolong the discussion other than to say that the criterion of turnover and aggregate now proposed in these Amendments is a somewhat more objective means of differentiating between companies—on the ground that it differentiates on terms of criteria and of size—than the old one of trying to differentiate on the ground as to whether it was a private company or a quoted company. I will not say any more on that.
The noble Lord, Lord Drumalbyn, has asked me to comment on the basis upon which this figure of £50,000 turnover was selected. I am the first to admit that it is somewhat arbitrary. One is in the old
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position of not knowing which comes first, the hen or the egg. If we had information about the turnover of companies in this country we could probably make a wiser choice as to the limit at which to set the size of the company in terms of turnover; but at the present stage we do not know. However, the best estimate that we are able to make about this matter—and I cannot vouch for the accuracy of this estimate because of the difficulty of making it—is that this criteria of £50,000 turnover will probably exempt 350,000 companies out of the 540,000 on the register.
The noble Lord has also asked the Government to watch how this works out, with a readiness to change the figure if it does not appear to work out satisfactorily. I am quite happy to give that undertaking, although I think it would probably take a little longer than he expects to get relevant figures, because of the fact that many of these figures will not appear for something like 18 months after this Bill is enacted.
He has also asked me to comment on the effect of inflation on figures of this sort in legislation. The Government are concerned generally about this. Inflation is bringing all sorts of quantitative money figures, inserted in legislation in a situation where they no longer have the results they were supposed to have when the legislation was drafted; and it is a matter for consideration, although I cannot promise action in the near future. The noble Lord, Lord Hawke—
LORD DRUMALBYN: My Lords, the noble Lord is not suggesting that one single solution can be found for these problems everywhere. All I was suggesting was that a solution should be found for the problem so far as this particular legislation was concerned. I think the noble Lord is being very optimistic indeed if he thinks there is a possibility of finding one general solution that will cover the whole spectrum, from social legislation to Companies Bills.
LORD BROWN: My Lords, I do not want to go into the matter. As it happens, I have some personal ideas on it which I had probably better not give voice to here at this stage. Personally, I do not think the matter is as difficult as some might feel. No, I am not suggesting it should cover the whole gamut of legislation. But if one were to introduce a

1173
principle of this sort it would be wise to make it cover a large spectrum. There would be no point in making it cover one piece or one clause of the Bill.
The noble Lord, Lord Hawke, has raised the issue of the need for what was called "a new animal". That was discussed on this Bill at Second Reading, and I believe in the Committee stage too. I would make it clear that the Government have undertaken to introduce a second Companies Bill during the life of this Parliament. The possibility of a third Bill, which would consider issues of this sort, is' under consideration, but it is unlikely that it will be produced in the life of this Parliament. This is a very big issue indeed—to consider a new form of company and the many other bigger issues that have been raised in this House around the whole subject of company legislation—and it is certainly not a matter that could be foreseeably drafted in the form of legislation in the next year or two.
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 20–25]
Clause 6, page 7, line 4, after ("section") insert—
("(a)").
Clause 6, page 7, line 10, at end insert ("and
(b) 'the relevant amount'—

(i) if one person has been chairman throughout the year, means the amount of his emoluments;

(ii) if not, means an amount equal to the aggregate of the emoluments, so far as attributable to the period during which he was chairman, of each person who has been chairman during the year.").

Clause 7, page 7, line 30, leave out ("and (5)") and insert ("(5) and (5A)").
Clause 8, page 8, line 16, after ("subsidiaries)") insert ("and").
Clause 8, page 8, line 19, leave out from ("tax") to ("and") in line 20.
Clause 8, page 8, line 22, leave out from ("cash") to end of line 24.
BARONESS PHILLIPS: My Lords, with permission, I will formally move Amendments Nos. 20 to 25 en bloc. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendments.—(Baroness Phillips.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 26]
Clause 10, page 9, line 38, leave out subsection (4).
LORD WALSTON: My Lords, coupled with this Amendment are a very large number of subsequent Amendments in the Schedules which, when the time comes, I will move formally. As it is, I do not propose to speak at any length on this Amendment, unless noble Lords would like me to amplify any of my short remarks. Noble Lords will remember that the Jenkins Committee recommended that the accounts of a company should be required to include a summary, covering the five financial years ending with the date of the balance sheet, of issued share capital and reserves, annual profit before and after tax, annual dividend and turnovers. The Bill as at present before your Lordships provides for just that. But subsequently a joint committee of leading accountancy bodies and various other experienced people have pointed out that, although the proposal was welcome in principle, there are very considerable practical difficulties in drawing up such a summary, and possibly these practical dfficulties had not been taken into account in drafting the Bill. Therefore, while I still feel that the proposal is a sound one—and I hope that many companies who do this already will continue to do this sort of thing—the purpose of these Amendments is to leave out all references of summary from the Bill. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Walston.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 27]
Clause 13, page 12, line 2, at end insert ("provided that the condition mentioned in the foregoing subsection with respect to shares and debentures is satisfied at the time of his appointment.").
LORD WALSTON: My Lords, one of the consequences of the abolition of the status of exempt private companies is that all companies will be required to have auditors with the qualifications which are now required of the auditors of public or non-exempt private companies. Some of the present exempt private companies at the moment have auditors who are not

1175
qualified for the appointment, and so will have to appoint new auditors. Clause 13 contains a number of transitional provisions in order to give companies in this position time to do what is required of them. The intention is that these transitional provisions should be available only to a company which continues to have the characteristics of an exempt private company. But the effect of this intention was not in the subsections in the form in which they left the House of Lords. This Amendment repairs that omission, and therefore I hope your Lordships will agree to it. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Walston.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 28]
Clause 13, page 12, line 3, leave out ("section 161(2)(b)") and insert ("subsection (2)(b) or (3) of section 161").
LORD WALSTON: My Lords, this Amendment has a bearing on the previous Amendment which I have just spoken to. An exempt private company, unlike other companies, may appoint as auditor a person who is the partner of, or in the employment of, an officer or servant of the company. For example, a company may appoint as auditor the partner of an accountant who is one of its directors. This privilege will cease with the abolition of the status of "exempt private company", but subsection (3) is intended to permit it to continue for four years. I hope that that gives sufficient explanation of this Amendment, and that your Lordships will agree to it as being a practical one designed to carry out the wishes of your Lordships. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Walston.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 29–32]
Clause 13, page 128, line 7, leave out ("immediately before his appointment") and insert (",on that day,")
Clause 13, page 128, line 7, leave out ("was") and insert ("is").
Clause 13, page 128, line 7, line 8, at end insert ("the condition mentioned in subsection (1)
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above with respect to shares and debentures is satisfied.")
at end insert ("at the time of his appointment and, if this Act had not passed, the said subsection (3) would not operate to disqualify him for appointment")
BARONESS PHILLIPS: My Lords, with permission, I should like to move en bloc Amendments Nos. 29 to 32. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendments.—(Baroness Phillips.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 33]
Clause 15, page 14, line 26, leave out ("eight") and insert ("nine").
LORD HUGHES: My Lords, with Amendment No. 33, I wish to associate Amendments 45, 52 and 130. I beg to move Amendment No. 33.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Hughes.)
LORD DRUMALBYN: My Lords, does the noble Lord wish to give an explanation of the series at this point, or to wait till we come to No. 45?
LORD HUGHES: My Lords, I shall be quite happy to do it at this time. I understood that this was one on which the noble Lord changed his mind and agreed to permit it to be dealt with formally. Amendments Nos. 33, 52 and 130 are incidental to No. 45. The purpose of the new clause in Amendment No. 45 is to require disclosure in a directors' report of numbers employed and the total wages and salaries bill. The requirement is, however, limited to companies employing more than 100 people. I think that the best way in which I could give information on this matter is to repeat what my right honourable friend the President of the Board of Trade said in another place on Second Reading. He used these words:
"I must also advise the House that I have decided in the course of the Bill's passage that, in the interests of industrial efficiency and modernisation generally, we ought to add one more item of disclosure to those in the Bill; that is a record of the total manpower employed by the company concerned, and of

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the total wages and salaries bill. In the National Conference on Productivity held by the Prime Minister last September, the view was strongly expressed from both sides of industry that such disclosure would be a further spur to industrial efficiency; and the C.B.I. supports this.
I therefore intend to move an Amendment in Committee to this effect, but to limit this obligation to companies employing more than 100 persons, so as again to avoid imposing excessive extra paper work on small companies where the information might be of least public value."—[OFFICIAL REPORT, Commons, col. 364; 14/2/67.]
The clause as it now appears before us in Amendment No. 45 gives effect to that intention expressed by my right honourable friend on Second Reading in another place.
3.2 p.m.
LORD ERROLL OF HALE: My Lords, I am naturally grateful to the noble Lord for his explanation of the key Amendment No. 45, which is preceded by the paving Amendments on which this debate is now about to take place. Both I and my noble friend, Lord Drumalbyn, will have a great deal to say on this subject, because in our opinion it is a ridiculous, useless and unnecessary addition to the Bill. Furthermore, if it had been necessary it could have been put in when the Bill was originally presented in this House, but it was introduced at a later stage. We happen to know that the Board of Trade themselves did not want it; that it was forced upon them by the Department of Economic Affairs, and that it will not help national efficiency or anything else. It was merely said in another place that at a Prime Minister's Conference on Productivity both sides agreed that this would be an aid to national efficiency. We know how these conferences are arranged and rigged so that agreement is obtained over a wide field of related matters. This one is slipped in, and the feeling is, "It is not worth having a row over this particular one, because it is time to get away at the end of the day "—and so on. No case has been made out that this information is necessary in the interests of national efficiency.
Then we are told that it should not apply to companies having fewer than 100 employees, because of the additional paper work that it will impose upon them. But, of course, the additional paper work is just as burdensome to larger companies,
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pro rata to the number of their employees, as it is to the smaller companies. This idea that because a company is big it can just take on any amount of additional paper work is ridiculous. I congratulate the Government on at least realising that they are imposing an additional burden of paper work. This is not a contribution to national efficiency at all. Far from it. It provides for a series of out-of-date, generalised figures which will be of little use to anybody in any Department of Government or in private life. The Government have not made out a case for it at all. It is not relevant to company legislation. The whole thing could have been obtained by means of an order under the Statistics of Trade Act 1947, which they have conveniently forgotten for this purpose.
The Government are going to have great difficulty in extracting all the information and collating it when they get it, because all the directors' reports will be presented at different times of the year, in different forms, by the various chairmen of the companies and stored away in Companies House; and it will have to be extracted individually, case by case, because it cannot be computerised. Therefore the information will not be made use of at all. But this great mass of material has to be collected and the paper work done, which is admitted by Her Majesty's Government to be a severe burden on small companies. This paper work will have to be carried out year after year, simply at the whim of a few old boffins in the Department of Economic Affairs. That is what it amounts to. No case has been made out for this, and for the Government's saying that they must have the Royal Assent to this Bill to-night we should have divided on this Amendment and sent the clause back to the Commons for re-examination. What we object to is that there has been no proper consideration of this clause in your Lordships' House, and we have no time to consider it now properly, or to amend it—and by that I mean the power to amend. We are deprived of the power to amend this clause.
We have been treated to a most flimsy explanation, merely a quotation from what a Minister said in another place. No clear justification has been given for this ridiculous unnecessary imposition upon companies in this country. We

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deplore it; and were it not for the greater issue at stake, namely, the need for the Royal Assent to-night, we would have thrown this ridiculous clause out and sent it back to the Department of Economic Affairs, where it properly belongs.
LORD CHORLEY: My Lords, the noble Lord, Lord Erroll of Hale, with typical truculence, if I may be allowed to say so, has condemned out of hand this important provision in the Bill. He speaks for himself and some of his noble friends behind him, but after all it was agreed at a very important conference at which business interests of great moment were represented, and the Prime Minister himself was present, and it is in accordance with the whole trend of modern company law, which has been directed more than anything else to the disclosure of important information, not only about the actual affairs of companies, but of information which is of the very greatest value to those on whom we have to rely—the economists.
SEVERAL NOBLE LORDS: Oh ! The economists.
LORD CHORLEY: It is all right for noble Lords opposite to laugh, but the whole government of this country, and not only of this country but of every country in the modern civilised world, is to a large extent based on the advice of economists. The science of economics is one of the great modern sciences. It is all very well for noble Lords opposite to laugh out of hand, but they know perfectly well that when they are in power they consult economists. The control of the country's industry and economic affairs is to a very large extent based on the expert advice that the Government receive from the economists, and I deplore this quite gratuitous attack upon this important class of experts, coming from the Benches opposite, which is based on nothing but prejudice and ignorance.
LORD HAWKE: My Lords, I think the noble Lord is under some misapprehension. The figures which the economists want in order to run the economy of the country are already contained in the Statistical Digest. Presumably they get those figures from some authoritative source, and therefore I do not see that it is necessary to have this particular clause in the Bill. I have no doubt that the
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noble Lord will find it valuable in his particular academic studies, but I do not think it will be the slightest use to any Government Department.
Among other things, a half-time person counts as one. It is impossible to compare the output per employee, for instance, between two businesses, one of which is run by half its employees on half time and the other all on full time. It would be a statistical distortion, and would merely add to the work of the persons in the firm. What is more, it will add to the work of the auditors, who are already in terribly short supply in this country. Everything in the director's report has to be verified by the auditors, and this will amount to many thousands of man hours by chartered accountants and will be an appalling wastage of time.
LORD DRUMALBYN: My Lords, I wonder whether I might put this point to the noble Lord, Lord Chorley. I am quite certain that if he made more careful inquiries he would find that the language used by my noble friend in regard to this clause was nothing to the language used by some of those on his own side about it. There is of course a place for information of this kind. As my noble friend Lord Hawke has said, this information is available, but not necessarily from company to company.
What are we being asked to do? We are being asked to put in accounts figures that have to deal purely with the number of employees. It has nothing to do with accounts. In addition to that, of course, there has to be added the figure of the total wages, presumably with the object that you then divide the one into the other and say that over the year there have been 363·567 employees on average and you divide those into x, x being the total amount of the wages. What sort of figure are you going to get out of that, and what on earth is the use of it? This is why we are objecting to this. It is a perfectly useless figure to put in. I should not have thought that it will give a great deal of trouble, but it is totally out of place, with no importance and no significance. If this is to be done at all, it should be done in the "Neddies". They should make comparisons, as they do, not necessarily by companies, so that comparisons can be made of total wages costs in certain

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given activities. Here again I hope the noble Lord will have a very close look at this. These figures may be used for facile and totally irrelevant and misleading comparisons. I hope the Department will look to see how misleading these comparisons can be and when the new Bill comes forward they will abandon them.
3.11 p.m.
LORD HUGHES: My Lords, I am not convinced that the noble Lord, Lord Erroll of Hale, was as truculent as my noble friend Lord Chorley thought he was, because it seemed to me that in spite of his violent language he was not able to keep the smile from his face. He has an advantage over me. My experience of Prime Ministers is confined to the present one, so when he claims he has knowledge of the way Prime Ministers' Conferences may be "rigged", he at least had experience of a number of them, and the breadth of his experience I must concede. When he went on to talk about his inside knowledge that this came from the D.E.A., and that the Board of Trade did not wish it, again I must concede that his contacts with the D.E.A. are closer than my own. He may or may not be right; I am not in a position to argue. But I can argue when he misuses the way in which I quoted my right honourable friend.
The noble Lord said the President of the Board of Trade had admitted that this was excessive extra paper work putting an additional burden on people. What I did say, in quoting the President of the Board of Trade, was that this obligation was limited to companies employing more than 100 persons, so as to avoid imposing excessive extra paper work on small companies, where the information might be of the least public value. He completely ignored the last part of the statement. It may be justified to ask people to do additional work if the results which come from it are justified in the public interest. I admit that in these matters it can only be a matter of the opinion of the Government of the value of the information they are getting, against the opinion the noble Lord expressed of its lack of value. If he is right that the D.E.A. are the power behind the throne in this matter, and if he and his noble friends are equally right that the statistics which the D.E.A. are seeking
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are already there in information available to the Department, it makes me wonder whether his source of information is as reliable as he thinks it is. I doubt whether the D.E.A. would go to all this bother to get the Board of Trade to do something it did not want to do in order to provide the D.E.A. with information they already have. I doubt it very much.
LORD POLWARTH: My Lords, may I submit two points on this? First, there is the one put by my noble friend Lord Hawke, concerning the additional burden on auditors which is being added to the many already imposed by this Bill and the previous recent Statutes on taxation. Secondly, I am entirely in favour of the provision of adequate and accurate statistics in the right form and in the right place. I submit that the companies' accounts are not the right place. Nor can a figure which, for example, lumps in one average every salary in the company, ranging from the general manager to the lady who makes the tea, be of any conceivable value statistically.
LORD ERROLL OF HALE: Are we to have a reply?
LORD HUGHES: My Lords, with respect (and the noble Lord, Lord Polwarth, knows the respect in which I hold him), except for the reference to chartered accountants he has not raised a point not already raised by the noble Lords, Lord Erroll of Hale and Lord Hawke. He sought to reinforce the point made by Lord Hawke. But as the value or otherwise of the criticism depends on the value we place on the information, and I have already admitted there must be a difference of opinion as to what that value is, I do not think I can usefully add anything to what I have already said.
LORD BRECON: My Lords, would the noble Lord not agree that companies already make voluminous reports to the Board of Trade every year, and if this information is not already given there could it not be asked for in future reports and let the Board of Trade collate these, rather than give it in the annual report.
LORD HUGHES: My Lords, it is true that the Board of Trade have at the present time samples of this information, but not in the comprehensive form which this Amendment will make possible.
LORD HAWKE: My Lords, is it not correct that an enormous proportion of the trade of the country is carried on by companies employing less than 100 persons. They are not to get information from these. Surely the information from 99 companies employing 100 persons is just as valuable as the information from one company employing 9,900 persons.
LORD HUGHES: My Lords, in the light of experience the Government might arrive at the conclusion that the noble Lord, Lord Hawke, is right, and if so we should lower the figure.
LORD CHORLEY: My Lords, might not a sensible man deduce from the fact that as the Board of Trade already have samples of this information, now that they want it comprehensively it shows they think it is of great value to them.
LORD DRUMALBYN: My Lords, an ex-cathedrâ statement has been made by the President of the Board of Trade that this is in the interests of industrial efficiency and modernisation. May I ask a simple question: how is it?
LORD HUGHES: My Lords, the noble Lord, Lord Drumalbyn, like his noble friend Lord Erroll of Hale, has had experience of the Board of Trade, and I am quite certain that there must have been many cases, when they were at that office, on which they would have been quite unable, without notice, to get up and say the particular use to which the information they had obtained might be put at any given time. But I do suggest, as a general answer to his question, that it is bound to be of value in the attempts to improve the economy to have the maximum amount of information on employment in the country with the minimum of inconvenience to the individual companies concerned, because the efficiency of this country depends more and more on the extent to which its manpower is put to the best possible use.
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 34–36]
Clause 16, page, 14, line 40, leave out ("those assets") and insert ("such of those assets as consist in interests in land")
Clause 16, page 14 line 42, leave out ("thereof as shown") and insert ("at which they are included")
Clause 16, page 15, line 2, leave out ("contain particulars of that difference") and insert
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("indicate the difference with such degree of precision as is practicable")
LORD HUGHES: My Lords, with the permission of the House I will move Nos. 34, 35 and 36 en bloc. I beg to move that this House doth agree with the Commons in the said Amendments.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Hughes.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 37]
Clause 16, page 16, line 45, leave out from body") to ("to") in line 46 and insert—
("(4) An interest in shares or debentures which, under the provisions of this Part of this Act referred to in paragraph (e) of subsection (1) above, falls to be treated as being the interest of a director shall be so treated for the purposes of that paragraph, and the references in that paragraph")
LORD HUGHES: My Lords, with Amendment No. 37 I wish to associate Amendments 79, 80 and 127. The substantive Amendments are Amendments 79 and 80. Amendment No. 79 extends the provisions under Clause 24 to the spouses and the children of directors. Clause 24 prohibits a director of a company from buying an option on the shares or debentures of his company or of any other body corporate which is a subsidiary of the company or the holding company of the company or a subsidiary of the company's holding company. This clause extends the prohibition so that it also applies to the spouse of a director and to a director's infant children. For example, the wife of a director is prohibited from buying an option on the shares of the company of which her husband is a director.
Subsection (1) states that Clause 24 shall apply to the spouse or infant child of a director as it applies to the director. It is a defence for a person charged with an offence under Clause 24 as applied to prove that he did not know that his spouse or parent was a director of the company in question. Subsection (2) includes step-children and adopted children. Subsection (2) of Clause 24 states that a person in accordance with whose directions or instructions the directors of a company are accustomed to act shall, for the purposes of the clause, be deemed to be a director of the company. Such

1185
a person is also deemed to be director for the purpose of this clause. My Lords, I beg to move Amendment No. 37.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Hughes.)
3.22 p.m.
LORD DRUMALBYN: My Lords, I understand we are discussing these Amendments en bloc. Of course we have no observations on Amendment No. 37; but I think we ought not to part with Amendments Nos. 79 and 80 without some discussion.
LORD HUGHES: My Lords, I deliberately did not say anything about Amendment No. 80, which is of course associated but is slightly different. Noble Lords may think that I should speak at this time to Amendment No. 80, and they may wish to take these Amendments together. I will adopt whichever course is convenient to your Lordships.
LORD DRUMALBYN: My Lords, I think it would be better to take Amendment No. 80 when we come to it, in order that we do not get confused between these two clauses. The point here is that the spouse or child in whose name an option is taken is deemed to be, or will be, guilty of an offence unless that person can prove that he or she had no reason to believe that, in this case, the husband or the father had been or was a director of the company. Surely this cannot be adequate.
We are totally in sympathy with the purpose of this clause to avoid evasion. In fact, one wonders whether it goes far enough. But surely if a person is going to be charged with an offence, that person must have knowledge of that offence. It is quite wrong to say that somebody has constructive knowledge merely because, let us say, the wife knows that her husband is a director of a company. Wives do not know all the things that directors or their husbands do in companies. Why should they know this particular thing? If the director takes an option in his wife's name, how can she possibly know about it? And why should she be convicted of an offence unless she does have knowledge that this has happened? I am not sure that this is satisfactory. I should be grateful if the noble Lord could give us a further explanation.
LORD HUGHES: My Lords, I think the point which the noble Lord has raised is perfectly understandable. But we must not assume that in every case where there is reason to suspect that something wrong has been done, it will necessarily go to the courts. The cases where it will go to the courts are obviously those where there appear to be reasonable grounds for believing that an offence has taken place. So we must, in the first instance, accept as common sense that the obviously innocent cases will never get near the courts; and we must accept that there are obviously cases where this offence could be committed in innocence and where, therefore, it is a complete defence that the wife or child did not know that the husband or father was a director of the company.
Take the case of a child. It might be that, notwithstanding what I have said, a case reaches the courts and the argument is put forward that the child or the wife was in fact an innocent party—this is the more serious of the points which the noble Lord raises. I should like to point out that, particularly in relation to the child, in practice, where the offence by an innocent child had been procured by his father, the father would be charged as an accessory and the court would obviously be in the position to assess quite clearly that the guilt rested with the father as the accessory, and not with the child who had been innocently procured to do this.
The noble Lord said that there could be a case for extending this provision. In fact, in another place it was suggested: why stop at a wife or child? Why not a brother, a mother, a father, a cousin?—going through the whole range of relatives. Obviously, there is a distinction between a wife or child, on the one hand, and a brother on the other. It is a fairly narrow line to draw but the links in a family between a husband and wife, on the one hand, and between a father and his children (and, remember, they have to be under the age of 21) are normally closer than they would be with other members of the family; and it seemed to be a reasonable point at which to draw the line.
I hesitate, when such a term as "ex cathedrâ" has been applied to the words of the President of the Board of Trade to quote him again, but I think that

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either he or the Minister of State at the Board of Trade said on this subject, quoting, perhaps appropriately, from the lines of a hymn:
"One step enough for me".
3.27 p.m.
LORD CHORLEY: My Lords, perhaps I may add a word to what my noble friend has said. Anybody who has had any practical experience of the administration of the law, not only in respect of companies but in other branches, knows perfectly well that it is one of the most common dodges of the unscrupulous person, whether a company director or a businessman who is getting near to bankruptcy, to put shares or other property into the name of his wife or of his children. The advantage of that from the point of view of the fraudulent man is obvious and clear, as is the obvious disadvantage to the community, and particularly to the people who are doing business with that company or with that man as a partner or as a private businessman.
But when the matter comes to be threshed out in a court of law, the task of proving that the wife is cognisant of this is difficult, and the same applies in regard to the children. This is not peculiar to company law. There are numbers of cases where the normal rule that a person who affirms must prove do not hold in English law, because of the considerable practical difficulty of laying down any such rules. I suppose one of the commonest examples is that of a man who is charged with receiving stolen goods, well knowing them to have been stolen. It is difficult to prove affirmatively that a man found in possession of stolen goods knew at the time when he got them that they had been stolen. The simple method is to put on him the job of proving to the jury, or of satisfying the jury, that he was an innocent holder of the goods. It is obviously common sense, and has been the law of England for a long time. Surely, then, this is one exemplification of that quite commonsense rule. In a case such as this, the wife or the child is obviously the person who should satisfy the judge or the official in charge of the investigation that she or he did not know the actual facts of the matter. That should be quite easy and is the common sense of the matter.
LORD ERROLL OF HALE: For once I agree with the noble Lord, Lord Chorley. The whole crux of the matter is that if a man is seeking to evade knowledge of share transactions or putting the shares into the hands of the spouse or child, what matters is whether the spouse or child knows that the shares are being so put in their names. It is the same principle as receiving stolen goods, well knowing them to have been stolen. What is so faulty in the present situation is that the spouse or child is to be found guilty, even when the spouse or child has no knowledge of the fact that they have received shares for the purpose of evasion of this sort. That is what is wrong, and that is where the legislation does not go far enough and is not competent. I would urge noble Lords opposite, in considering their next Companies Bill, to pay particular heed to the noble Lord, Lord Chorley, and also to what was said by my noble friend, Lord Drumalbyn.
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 38 and 39.]
Clause 17, page 17, line 3, after ("company (") insert ("being one subject to the requirements of paragraph 13A of Schedule 8 to the principal Act but")
Clause 17, page 17, line 8, leave out from first ("of") to (") that") in line 9 and insert ("sub-paragraph (2) of that paragraph")
LORD HUGHES: My Lords, with your Lordships' permission, I will take Amendments Nos. 38 and 39 together. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Hughes.)
LORD ERROLL OF HALE: We are moving so rapidly it is difficult to keep pace with what is going on. Am I correct in assuming that these Amendments deal with classes of turnover? If not, may we be told what they deal with?
LORD BROWN: The Amendments dealing with classes of turnover arise, to begin with, on Amendment No. 40.
LORD HUGHES: Amendments Nos. 38 and 39 are consequential on Amendment No. 19. It was one of the list grouped with that Amendment. I hesitated because we had been rather sidetracked from our original purpose. We were going to discuss Nos. 79 and 80

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as a group, but we will come back to No. 80 later on when we actually reach it.
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 40–44.]
Clause 17, page 17, line 9, after ("that") insert (", in the opinion of the directors,")
Clause 17, page 17, line 15, after ("classes") insert ("(describing them)")
Clause 17, page 17, line 31, after ("that") insert (", in the opinion of) the directors,")
Clause 17, page 17, line 38, after ("classes") insert ("(describing them)")
Clause 17, Page 18, line 1, at end insert (", in the opinion of the directors,")
LORD BROWN: My Lords, Clause 17 requires the director's report to state the division of turnover and profits between the different classes of business. Amendments Nos. 40 to 44 inclusive make quite explicit the original intention: that is, that the number of different classes and the split between them and their differential profit contribution is to be stated "in the opinion of the directors". Amendments Nos. 41 and 43 correct a drafting omission, and will make certain that the different classes of business are in fact described and not merely stated as classes. My Lords, I beg to move.
ed, That this House doth agree with the Commons in the said Amendments.—(Lord Brown.)

SUEZ CANAL OBSTRUCTIONS
3.33 p.m.
LORD CHALFONT: My Lords, with your Lordships' permission I should like to repeat a Statement which is being made in another place by my right honourable friend the Foreign Secretary on the situation in the Suez Canal. The Statement is as follows:—
"As the House is aware, the Canal is blocked between Port Said and Ismailia, as well as to the south of Ismailia, and it is also obstructed between the Great Bitter Lake and Suez. There has been no change in this situation since I last reported to the House. I deplore that no steps have yet been taken by the United Arab Republic authorities, whether alone or in conjunction with others who are willing
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to help, to start work on clearing the obstructions. The continued failure to take these steps is clearly contrary to the intentions of the Constantinople Convention of 1888.
"This is not a matter which affects this country alone. I am in close touch with the Governments of other countries affected and am considering with them how we can create conditions to get the Canal opened as soon as possible to the shipping of all nations. I have myself discussed this matter with Doctor Fawzi and with Mr. Eban.
"I have also made it clear in the United Nations General Assembly that in our view any settlement of the problems of the Middle East must cover the right of free and innocent passage through the Canal. As the House knows, the United Nations is urgently tackling these problems; and in this connection the stationing of United Nations Observers in the Canal area is a useful first step."
Lords that is the end of the Statement.
LORD WINDLESHAM: My Lords, the House will be interested to hear that Statement, and we are grateful to the Minister for repeating it. Noble Lords will be delighted to hear about the strength of the Foreign Secretary's own personal protest to Dr. Fawzi and Mr. Eban. I should like to ask the Minister two things. The first relates to the question of relieving and replacing the crews of the four British ships in the Great Bitter Lake. These crews have now been there for nearly two months. Has any progress at all been made in getting these people out, even if the ships themselves have to remain there for a while? Secondly, could we be given any information on reports which suggest that the main channel South of the Great Bitter Lake is not, in fact, effectively blocked; that there is a tug boat sunk in it, but that the main channel of the canal might well be free. If we could be given any further information on those two points, should be grateful.
LORD CHALFONT: My Lords, in regard to the first point put by the noble Lord, the crews of the British ships in the Great Bitter Lake have now been visited and we understand that they are in reasonably good spirits and in good

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health. They are getting their mail. We are taking steps to maintain contact with the Egyptian authorities about a relief for these crews. I understand that arrangements for a relief are under way and we hope to have further information about that soon. In regard to the blocking of the channel South of the Great Bitter Lake, we are informed that it is physically blocked, although the possibility of making the removal of that obstruction a priority over all the others is under consideration.
LORD CHORLEY: My Lords, does not the noble Lord think that the time has now come when these great international waterways, on which so much of the commerce of the world depend, should be transferred to the United Nations, so that individual countries like the U.A.R. should not of their own volition be able to hold up the commerce of the world in this way?
LORD CHALFONT: The actual business of transferring international waterways to the United Nations would raise certain difficulties. All I can say is that Article I of the Constantinople Convention lays down that the Canal shall be open in time of war, as in time of peace, to every vessel, and that the Canal should not be subjected to blockade. What is happening now is clearly in contravention of that international Convention.
LORD WAKEFIELD OF KENDAL: My Lords, is it possible to state how soon free passage will be available through the Canal once the political difficulties have been resolved; that is to say, how long will it take for the physical work to be done to enable free passage to take place?
LORD CHALFONT: I regret that I cannot give the noble Lord a very satisfactory answer to that question. There are various estimates about the time it would take in practice to remove the ships and other obstacles in the channels. As he points out, the immediate difficulties and the important difficulties are political. I am sorry, but I cannot give any really useful estimate of the time it would take physically to remove the obstacles after the political difficulties have been settled.
LORD WINDLESHAM: My Lords, is it a fact that the time problem is an acute one, in that there have been reports that the regular dredging has been discontinued? If that is so, the longer it takes to get the ships out the greater the problem will be if the dredging has not been taking place.
LORD CHALFONT: My Lords, certainly that is so. If indeed dredging has stopped—we have no firm information about that—then of course the silting up of the Canal will continue while the block ships remain there, and the navigation of the Canal will become that much more difficult. For that reason we are trying to get the political difficulties removed as quickly as we possibly can.
BARONESS EMMET OF AMBERLEY: My Lords, could the Minister tell us whether it is a fact that a ship has recently come out from the southern part of the Canal without any difficulty at all, and that really the blockage there is neither here nor there; it is entirely a political factor?
LORD CHALFONT: My Lords, my information—although I will certainly check this to see that it is correct—is that there is a physical obstacle between the Bitter Lake and the South end of the Canal. It may conceivably be that a ship has emerged from the South end of the Canal, but if my information is correct it could not have come from the Bitter Lake. But, as I say, I will check my information to make sure that that is correct.

PROROGATION AND STATE OPENING
LORD BESWICK: My Lords, I hope it may be for the convenience of the House if I make a short statement about the "spill-over" period in October, and about the Prorogation and State Opening of Parliament. As my predecessor has already announced, the House will reassemble on Monday, October 23, subject to the progress of Business. Prorogation will take place on Friday, October 27. The State Opening of Parliament by Her Majesty the Queen will take place on Tuesday, October 31.

COMPANIES BILL [H.L.]
3.42 p.m.
Consideration of Commons Amendments resumed.
LORD ERROLL OF HALE: My Lords, we on this side of the House are grateful to the Government for putting in these Amendments as a result of our instigation. They make it quite clear where the responsibility lies, and it is up to the directors to decide what are substantially different classes of turnover. But, of course, it remains an unsatisfactory arrangement, in that while some companies at present show up the division between classes of turnover, it is to be left to the directors' discretion to decide whether they are in one class of business or two classes of business, which will lead to considerable confusion. For example, one firm of chain stores or supermarkets could decide that they are in only one class of business, while another, similar firm may decide that they are in ten different classes of business, as they have ten different departments in each store.
So there will be no uniformity, no standardisation of practice, and it is very doubtful whether much will be achieved by the inclusion of this clause in the Bill, even though it has been improved. It remains an unsatisfactory arrangement to be put into statutory effect. The position would be much better left as it is at present, where those directors who wish to make the information available to shareholders may do so, rather than attempt to make it a statutory requirement but failing, at the same time, to define it except in terms of "the opinion of the directors".
LORD BROWN: My Lords, I agree with the noble Lord that in a sense this clause is very unsatisfactory, because it is so arbitrary in its application. Nevertheless, it has been for some time a recommendation of the London Stock Exchange that this information should be given. The Government believe that it is sound to have this in the Bill as a means of encouraging firms more and more to give this information, which it is so desirable should be in the hands of shareholders.
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 45–50.]
After Clause 17, insert the following new clause—
Directors' report to state average number, by the week, of employees and the amount, by the year, of their wages.
(".—(1) If, at the end of a financial year, a company does not have subsidiaries, there shall be contained in the directors' report relating to that year a statement of—

(a) the average number of persons employed by it in each week in that year; and

(b) the aggregate remuneration paid or payable in respect of that year to the persons by reference to whom the number stated under the foregoing paragraph is ascertained.

2) If, at the end of a financial year, a company has subsidiaries, there shall be contained in the directors' report relating to that year a statement of—

(a) the average number of persons employed between them in each week in that year by the company and the subsidiaries; and

(b) the aggregate remuneration paid or payable in respect of that year to the persons by reference to whom the number stated under the foregoing paragraph is ascertained.

(3) The number to be stated under subsection (1)(a) above shall be the quotient derived by dividing, by the number of weeks in the financial year, the number derived by ascertaining, in relation to each of those weeks, the number of persons who, under contracts of service, were employed in the week (whether throughout it or not) by the company and adding up the numbers ascertained, and the number to be stated under subsection (2)(a) above shall be the quotient derived by dividing, by the number of weeks in the financial year, the number derived by ascertaining, in relation to each of those weeks, the number of persons who, under contracts of service, were employed between them in the week (whether throughout it or not) by the company and its subsidiaries and adding up the numbers ascertained.
(4) The remuneration to be taken into account for the purposes of subsections (1)(b) and (2)(b) above is the gross remuneration paid or payable in respect of the financial year; and for this purpose 'remuneration' shall include bonuses (whether payable under contract or not).
) This section shall not apply to a company if the number that, but for this subsection, would fall to be stated under subsection (1)(a) or (2)(a) above is less than 100, nor shall it apply to a company that is a wholly owned subsidiary of a company incorporated in Great Britain.
(6) For the purposes of this section, no regard shall be had to a person who worked wholly or mainly outside the United Kingdom.
(7) In this section, 'wholly owned subsidiary' shall be construed in accordance with section 150(4) of the principal Act.")
Clause 19, page 19, line 11, after ("company") insert ("subject to the requirements of paragraph 13A of Schedule 8 to the principal Act")
Clause 19, page 19,line 15, leave out ("Schedule 8 to the principal Act") and insert ("that paragraph")
Clause 19, page 19, line 16, leave out ("£20,000") and insert ("£50,000")
Clause 19, page 19, line 25, leave out ("unless") and insert ("except in a case in which")
Clause 19, page 19, line 27, after ("goods") insert ("or a case in which the company submits in respect of that year group accounts prepared as consolidated accounts in respect of itself and all its subsidiaries and the turnover (so far as stated therein in pursuance of the said paragraph 13A) does not exceed £50,000")
LORD BROWN: My Lords, I beg to move.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Brown.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 51]
Clause 19, page 19, line 41, at end insert—
("(4) The foregoing provisions of this section shall not require the disclosure of information in the director's report of a company if the directors thereof satisfy the Board of Trade that it is in the national interest that the information should not be disclosed.")
LORD BROWN: My Lords, the purpose of this Amendment is to permit the directors of a company not to give information about exports in their report, if they satisfy the Board of Trade that it is in the national interest that the information should not be disclosed. The Government consider that cases where disclosure of a company's exports would be injurious to the national interest would be rare, but since it is clearly difficult to prove that those cases can never occur they have decided to provide an exemption. The exemption will be given only very sparingly when there is the strongest evidence that disclosure would prejudice the national interest. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Brown.)
LORD DRUMALBYN: This, of course, is a concession, but again we are not
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quite certain that it goes far enough. The type of case about which we spoke when the Bill was last before the House was that of a relatively small company with, perhaps, one export market where disclosure would give a great deal of information about the activities of that company. I should not have thought that this was a particularly rare circumstance. The object must be not to give away to international competition information which is of advantage from the point of view of our balance of payments. That being so, I doubt whether the noble Lord was right in saying that applications would be particularly rare, and I should have thought that, so long as the applications are justified and can show that disclosure would adversely affect the balance of payments, it was in the national interest to grant those applications. Therefore, I hope that when he says that the power will be used sparingly, he does not mean to contradict that proposition, which I think would commend itself to the whole House.
LORD ERROLL OF HALE: My Lords, I would only add to the excellent point of view put forward by my noble friend, that we deplore that although the Government have given a concession, it is only in respect of the national interest. We should have liked it to go far enough to cover damage to the interests of the company—not just damage to the national interest. It does not seem to matter whether the company's interests are damaged; that appears to be of small account, compared with the importance of disclosure of a figure for which we find it very hard to see the justification. Have the Government no concern for the well-being of the individual companies whose interests may be adversely affected by the publication of this information?
LORD BROWN: My Lords, the Government feel that the interests of companies in this country which are trading overseas are identical with the national interest. Therefore, the noble Lord should be reassured that if a company can prove that its export interests will be damaged by disclosure, it will be construed as being in the national interest also.
On the point raised by the noble Lord, Lord Drumalbyn, let me assure him that what I have said in explanation of this clause is in no way an attempt to give a

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concession and then to take it back again. If it can reasonably be shown that the interests of the company will be damaged by the disclosure of this information, then it will be granted exemption. But the purport of my remarks was to convey the fact that we have had a number of cases presented to us as samples, and the reasonableness of the case has not by a very long way always been proven. I shall be very interested to see whether there really are cogent cases, where it can be proved that there would be damage to their interests. But we shall see.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 52]
Clause 20, Page 19, line 42. after ("inclusive)") insert ("and section (Directors' report to state average number, by the week, of employees and the amount, by the year, of their wages)")
LORD BROWN: My Lords, I beg to move that the House doth agree with the Commons in this Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Brown.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[No. 53–58]
Clause 24, page 20, line 41, leave out from second ("of") to ("or") in line 45 and insert ("relevant shares or a specified amount of relevant debentures")
Page 21, line 2, leave out ("any such") and insert ("relevant")
Page 21, line 2, line 3, leave out ("any such") and insert ("relevant")
Page 21, line 2, line 8, leave out ("any such") and insert ("relevant")
Page 21, line 2, line 9, leave out ("any such") and insert ("relevant")
Page 21, line 2, line 15, at end insert—
("( ) In the foregoing subsection—

(a) "relevant shares", in relation to a director of a company, means shares in the company or in any other body corporate, being the company's subsidiary or holding company or a subsidiary of the company's holding company, being shares as respects which there has been granted a quotation on a stock exchange (whether with Great Britain or elsewhere); and

(b) "relevant debentures", in relation to a director of a company, means debentures of the company or of any other body corporate, being the company's subsidiary or holding company or a subsidiary of the company's holding company, being debentures as respects which there has been granted such a quotation as aforesaid.")

LORD BROWN: My Lords, with the permission of the House I will speak to Amendments Nos. 53 to 58 inclusive. This clause is concerned with the prohibition on a director buying options on shares in or debentures of his company, its holding company or its subsidiaries. The Amendments restrict the prohibition on buying these options to options on quoted shares or quoted debentures. In other words, if the Amendments are passed, these restrictions will no longer apply to unquoted shares or unquoted debentures. I beg to move that the House doth agree with the Commons in the said Amendments.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Brown.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 59–63]
Clause 25, page 21, line 27, leave out ("its registered office") and insert ("an appropriate place")
Clause 25, page 21, line 32, at end insert ("and all copies and memorandums kept by a company in pursuance of this subsection shall be kept at the same place.")
("(1A) The following shall, as regards a company, be appropriate places for the purposes of the foregoing subsection namely,—

(a) its registered office:

(b) the place where its register of members is kept (if other than its registered office);

(c) its principal place of business, provided that that is situate in England, in a case in which the company is registered in England and in Scotland, in a case in which the company is registered in Scotland.

(1B) Every company shall send notice to the registrar of companies of the place where copies and memorandums required by subsection (1) above to be kept by it are kept and of any change in that place, save in a case in which they have at all times been kept at its registered office.")
Clause 25, page 21,line 33, leave out ("the foregoing subsection") and insert ("subsection (1) above")
Clause 25, page 21,line 43, at end insert (", and, if default is made for fourteen days in complying with subsection (1B) above, the company and every officer of the company who is in default shall be liable to a default fine")
LORD WALSTON: My Lords, with permission, I should like to speak to Amendments Nos. 59 to 63 inclusive. Clause 25 requires a company to keep copies of certain of the contracts of service of its directors with the company, and to make these copies available for

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inspection by members of the company. As drafted the clause requires the copies to be kept at the company's registered office. It has been represented by various people with considerable practical experience in these matters that some companies regard these contracts as being confidential, so far as anyone other than a member of the company is concerned, and therefore, in order to ensure that they are kept in a place suitable for their confidential nature, they are frequently kept in the custody of a responsible officer of the company, such as the company secretary, and such an officer may from time to time not in fact work at the company's registered office. We accept this commonsense attitude, and these Amendments are designed to take account of this view. I beg to move that the House doth agree with the Commons in the said Amendments.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Walston.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 64.]
Clause 25, page 22, line 7, after ("kept") insert—

("(a) a copy of, or memorandum setting out the terms of, a director's contract or a copy of, or memorandum setting out the terms of, a variation of such a contract, so long as the contract (as made or varied) requires him to work wholly or mainly outside the United Kingdom; or

(b)").

LORD WALSTON: My Lords, I beg to move that the House doth agree with the Commons in this Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Walston.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 65.]
Clause 26, page 22, line 15, at end insert ("and to any exceptions for which provision may be made by regulations made by the Board of Trade by statutory instrument.")
LORD WALSTON: My Lords, this Amendment requires that a director of a company should notify that company of any interest he has in the company's shares or debentures, or in the shares or debentures of other companies in the
1200
same group. The rules in Clause 27 give a wide meaning to the expression "being interested in shares or debentures", and there is a possibility that some of the interests to be notified will not in fact be of much interest. If these interests can be identified, it is clearly better that they should be excluded for the purposes of the clause. This Amendment, No. 65, will make this possible, since it makes the obligations imposed on directors by the clause subject to any exceptions for which provision may be made by regulations made by the Board of Trade by Statutory Instrument. I beg to move that the House doth agree with the Commons in this Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Walston.)
LORD BOOTHBY: My Lords, perhaps I may ask the noble Lord, Lord Walston, whether he could give the distinction between, or an explanation of, the words "interest" and "ownership", because I think it is rather important.
LORD WALSTON: I think that if the noble Lord studies the Bill he will discover the legal distinction between those two words; and perhaps it would be for the convenience of the House if he made that discovery himself rather than if I quoted it to him.
LORD BOOTHBY: I will try.
LORD ERROLL OF HALE: I think we can say that this Amendment represents a modest improvement in the Bill. But can the noble Lord say whether the Statutory Instrument will be subject to the Affirmative or the Negative Resolution procedure?
LORD WALSTON: Without actually looking it up, I cannot say. I believe it is the Negative Resolution procedure; but I will let the noble Lord know.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 66]
Clause 26, page 22, line 35, leave out ("any such shares or debentures") and insert ("shares in, or debentures of, the company or any other body corporate, being the company's subsidiary or holding company or a subsidiary of the company's holding company").
LORD WALSTON: My Lords, this is a purely drafting Amendment. I beg to

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move that the House doth agree with the Commons in the said Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Walston.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 67–71]
Clause 26, page 23, line 19, leave out ("seven") and insert ("fourteen")
Clause 26, page 23, line 22, leave out ("seven") and insert ("fourteen")
Clause 26, page 23, line 30, leave out ("seven") and insert ("fourteen")
Clause 26, page 23, line 32, leave out ("seven") and insert ("fourteen")
Clause 26, page 25, line 16, leave out ("seven") and insert ("fourteen")
LORD WALSTON: My Lords, with your Lordships' permission I should like to speak to Amendments Nos. 67, 68, 69, 70, 71, 84, 85, 86, 87, 88, 89 and 90 at the same time, and to move Amendments Nos. 67 to 71 inclusive. In spite of the number of Amendments that there are here, this is a very simple and, I think, worthwhile change. Under Clause 26 directors are required to notify their company within seven days of an interest in shares or debentures, or of the occurrence of an event related to such an interest, while Clause 29 requires a person interested in 10 per cent. or more of the voting shares of a quoted company to notify the company, also within seven days, of an interest in the shares or the occurrence of an event related to such an interest. These Amendments lengthen the time which is allowed from seven to fourteen days. I beg to move that the House doth agree with the Commons in the said Amendments.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Walston.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 72 and 73]
Clause 27, page 26, line 19, at end insert ("or of any class of its members.")
Clause 27, page 26, line 20, after ("meeting") insert ("or of his having been appointed by a corporation to act as its representative at any meeting of the company or of any class of its members")
LORD WALSTON: My Lords, I beg to move that the House doth agree with the Commons in these Amendments.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Walston.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 74–78]
Clause 28, page 28, line 5, leave out from ("that") to ("in") in line 7 and insert ("the entries therein against the several names inscribed therein appear")
Clause 28, page 28,line 23, leave out from ("shall") to ("and") in line 24 and insert—

"(a) if the company's register of members is kept at its registered office, be kept there;

(b) if the company's register of members is not so kept, be kept at the company's registered office or at the place where its register of members is kept;")

Clause 28, page 28,line 30, at end insert— ("(7A) The company shall send notice to the registrar of companies of the place where the said register is kept and of any change in that place, save in a case in which it has at all times been kept at its registered office.
(7B) Unless the said register is in such a form as to constitute in itself an index, the company shall keep an index of the names inscribed therein which shall—

(a) in respect of each name, contain a sufficient indication to enable the information inscribed against it to be readily found; and

(b) be kept at the same place as the said register;

and the company shall, within fourteen days after the date on which a name is inscribed in the said register, make any necessary alteration in the index.")
Clause 28, page 29, line 3, after ("£50") insert ("if default is made for fourteen days in complying with subsection (7A) of this section, the company and every officer of the company who is in default shall be liable to a default fine")
Clause 28, page 29,line 4, leave out ("or (4)") and insert ("(4) or (7B)")
LORD HUGHES: My Lords, might I suggest that Amendments Nos. 74 to 78 be taken en bloc? Associated with them are Amendments Nos. 93, 94, 97 and 99. With permission, I beg to move that the House doth agree with the Commons in Amendments Nos. 74 to 78.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Hughes.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 79]
After Clause 28, insert the following new clause—
Extension of section 24 to spouses and children
(".—(1) Section 24 of this Act shall apply to—

(a) the wife or husband of a director of a company, not being herself or himself a director of that company; and

(b) an infant son or infant daughter of a director of a company, not being himself a director of that company;

as it applies to the director; but it shall be a defence for a person charged, by virtue of this subsection, with an offence under that section, to prove that he had no reason to believe that his spouse or, as the case may be, parent, was a director of the company in question.
(2) In this section, 'son' includes step-son and adopted son, 'daughter' includes stepdaughter and adopted daughter and 'parent' shall be construed accordingly, 'infant' means in relation to Scotland, pupil or minor, and a person deemed for the purposes of the said section 24 to be a director of a company shall be deemed also for the purposes of this section to be a director of the company.")
LORD HUGHES: My Lords, this is Amendment No. 79. I beg to move that the House doth agree with the Commons in the said Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Hughes.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 80]
After Clause 28, insert the following new clause—
Extension of section 26 to spouses and children
(".—(1) For the purposes of section 26 of this Act—

(a) an interest of the wife or husband of a director of a company (not being herself or himself a director thereof) in shares or debentures shall be treated as being the director's interest, and so shall an interest of an infant son or infant daughter of a director of a company (not being himself or herself a director thereof) in shares or debentures; and

(b) a contract, assignment or right of subscription entered into, exercised or made by, or grant made to, the wife or husband of a director of a company (not being herself or himself a director thereof) shall be treated as naving been entered into, exercised or made by, or, as the case may be, as having been made to, the director, and so shall a contract, assignment or right of subscription entered into, exercised or made by, or grant made to, an infant son or infant daughter of a director
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of a company (not being himself or herself a director thereof).

(2) A director of a company shall be under obligation to notify the company in writing of the occurrence, while he or she is director, of either of the following events, namely,—

(a) the grant to his wife or her husband or to his or her infant son or infant daughter, by the company, of a right to subscribe for shares in, or debentures of, the company; and

(b) the exercise by his wife or her husband or by his or her infant son or infant daughter of such a right as aforesaid granted by the company to the wife, husband, son or daughter;

stating, in the case of the grant of a right, the like information as is required by section 26 of this Act to be stated by the director on the grant to him by another body corporate of a right to subscribe for shares in, or debentures of, that other body corporate and, in the case of the exercise of a right, the like information as is required by that section to be stated by the director on the exercise of a right granted to him by another body corporate to subscribe for shares in, or debentures of, that other body corporate; and an obligation imposed by this subsection on a director must be fulfilled by him before the expiration of the period of fourteen days beginning with the day next following that on which the occurrence of the event that gives rise to it comes to his knowledge.
(3) A person who fails to fulfil, within the proper period, an obligation to which he is subject by virtue of the last foregoing subsection, or who, in purported fulfilment of an obligation to which he is so subject, makes to a company a statement which he knows to be false or recklessly makes to a company a statement which is false, shall be guilty of an offence and liable—

(a) on summary conviction, to imprisonment for a term not exceeding three months or to a fine not exceeding £200, or to both;

(b) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine, or to both.

(4) The rules set out in section 27 of this Act shall have effect for the interpretation of, and otherwise in relation to, subsection (1) of this section, and subsections (9) to (13) of section 26 of this Act shall, with any requisite modification, have effect for the purposes of this section as they have effect for the purposes of that section.
(5) In this section, 'son' includes step-son and adopted son and 'daughter' includes stepdaughter and adopted daughter, and 'infant' means, in relation to Scotland, pupil or minor.
(6) For the purposes of section 28(1) of this Act, an obligation imposed on a director by this section shall be treated as if imposed by section 26 of this Act.")
LORD HUGHES: My Lords, it was agreed that I should say something about

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this Amendment when we came to it. This Amendment extends Clause 26 to spouses and children. Clause 26 is concerned with any interests a director has in the shares or debentures of his company or any other company in the group to which it belongs. It is also concerned with contracts entered into by a director to sell any of those shares or debentures, with rights granted to a director to subscribe for any of those shares or debentures, and with the exercise or assignment of such a right by a director. In general, Clause 26 places an obligation on a director to inform his company of his interests and of any changes in them, of the contracts he enters into, of the rights granted to him, and of his exercise or assignment of those rights.
There are two exceptions. When the grant of a right to subscribe is made by the director's company and relates to shares or debentures in that company, it is assumed that the company does not need to be informed that it has made it. Similarly, it is assumed that the company does not need to be informed of the exercise of such a right. The effect of the new clause is to treat as an interest of a director in such shares or debentures an interest which, in fact, is that of his spouse or infant child. Similarly, a contract entered into by a wife or infant child of a director, or a right granted to one of them, or exercised or assigned by one of them, is treated as entered into by, or granted to, or exercised or assigned by, the director. The new clause therefore places a further obligation on a director. It does not place an obligation on his spouse or infant child. I beg to move that this House doth agree with the Commons in their Amendment No. 80.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Hughes.)
LORD HAWKE: My Lords, I should like to ask one question. In a great many cases the spouse will not know that the shares have been put in her name. Can she in any way be charged with an offence if the director commits the offence of not notifying the company?
LORD DRUMALBYN: My Lords, the closing words of the noble Lord's speech made clear the difference between this case and the one we were dealing with previously. In this case it is the
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director who is obliged to notify, and therefore it is the director against whom proceedings will be taken in the event that the provisions of the clause are not complied with. This, of course, is right in principle. Again I am concerned with the defences available. I can see that there is going to be an investigation and that proceedings will not be taken if the investigator is satisfied that there has not been an offence or, at any rate, if he is satisfied that there has not been a wilful offence. I dare say that is right. The trouble is that the investigator may not believe what is said.
The difficulty in this case—which is different from the last—is that a husband's and wife's affairs may be separate. It may be that the husband has no knowledge of his wife's holdings, or that a wife's affairs may be dealt with for her by her stockbroker or solicitor and she may merely be given a statement of her interests at the end of the year. The director may have no knowledge, until that statement comes along, that he has committed an offence.
This, again, is a case of creating offences where the offender has no knowledge of his committing them. I agree that one must cover all cases; but I should have thought it possible to draft the clause in such a way as to give a clear defence if there were absence of knowledge. If the investigator is not satisfied that the director had no knowledge and took proceedings, it should be possible for the court to accept this as a defence. At the present time it does not seem as if the court could do so.
LORD HAWKE: My Lords, may I put a further question? Is the wife who is living separately from the husband legally a spouse under this particular provision?
THE MARQUESS OF ABERDEEN AND TEMAIR: My Lords, is not this information available in the share register?
LORD HUGHES: The noble Lord, Lord Boothby, was about to rise; but if he will permit me to do so I merely want to say that I did not hear what it was the noble Marquess said.
THE MARQUESS OF ABERDEEN AND TEMAIR: My Lords, I asked if this information was not available in the share

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register in the company's offices and also in many stockbrokers' offices.
LORD BOOTHBY: My Lords, all I wanted to say was that in many cases husbands do not know what shares their wives own. The noble Lord, Lord Drumalbyn, said that the husband would know at the end of the year. If his wife buys shares through her stockbroker I do not see why he should ever know. She sticks to them and does not tell him anything about it. I should be sorry if the director of a company whose wife bought some of his shares because she thought he was a good director was "had up" by the investigator, because the husband did not know that she had bought the shares. Most women do not tell their husbands what shares they buy.
LORD HUGHES: My Lords, without venturing into the field of Lord Boothby's extensive knowledge of what wives tell their husbands, I should like to answer two questions. First, the point made by the noble Lord, Lord Hawke, about the wife's not knowing about the shares in her name. The position is that the obligation is on the director; and, in the circumstances to which he referred, the wife would not have committed any offence. The second point, also raised by the noble Lord, Lord Hawke, was that the director might not know what were his wife's holdings. It was at this point that we had the benefit of Lord Boothby's extensive knowledge. The position is that the director has to report what he knows of his wife's holdings. If he does not know, he cannot report; if he cannot report, he does not commit an offence. The noble Marquess said that this would surely be obvious from the list of shareholders. It will not always be obvious. There may well be a director named Mr. Robert Brown. We must not assume that every Mrs. Robert Brown with shareholdings is necessarily his wife.
LORD BOOTHBY: In any case, my Lords, you can buy through a nominee.
LORD DRUMALBYN: My Lords, I hesitate to interrupt the noble Lord but, before he sits down, may I point out that he says categorically that the director has to report what he knows of his wife's holdings. But that is not what the Amendment says. The Amendment says:
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"an interest of the wife or husband of a director … shall be treated as being the director's interest …"
It says nothing about whether he knows it or not.
LORD HUGHES: Yes, my Lords; but the point is that if a director is not aware of a holding which his wife has he obviously cannot report it, and, in not reporting it, he has not committed an offence. Therefore he could not possibly be the subject of a charge.
LORD CHORLEY: My Lords, I am not sure that that is right. Certainly the criminal law of this country knows more and more of a doctrine of absolute responsibility without any requirement of a guilty mind. It may be that this is one of those cases. I have some knowledge of these subjects, but I should not like to express a strong opinion about this point. I think there is a possibility—though it is not a matter likely to arise often—of a director being held to be responsible without his having any knowledge. I do not think a director can be expected to make a regular search through the entire register of the company which, very often, can run into tens of thousands of names. He would have to employ two or three private secretaries to make such a constant search.
This is one of the difficulties which arise because of the extreme haste with which this Bill is being passed. It is the sort of point that the draftsman himself would have noticed had he been given time. This type of legislation—and I do not want to repeat what I said the other day—is of great importance to the structure of industry and commerce in this country in the way it is organized, and it ought not to be passed in this very rapid way. These are just the sort of points which eventually come before the courts, and judges will say, with the greatest reluctance, "These words clearly establish an absolute responsibility on this man. That he did not know anything about it is neither here nor there: he is to be held guilty". This I think emphasises what was said by some noble Lords opposite and by myself the other day when we were told that we were to deal with these 300 Amendments in one afternoon. I hope that when the next Companies Bill comes along in a year or so, some of these

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matters will be looked at again very carefully. It is not right that a director should be held criminally responsible—because that is the effect of this provision—unless in fact he has a guilty mind.
LORD FERRIER: My Lords, I agree with the noble Lord, Lord Chorley. I cannot see the point made by the noble Lord, Lord Hughes. At the bottom of page 9 of the Commons Amendments there is a defence in the other direction:
"it shall be a defence for a person charged, by virtue of this subsection … to prove that he had no reason to believe that his spouse … was a director …"
LORD ERROLL OF HALE: That has nothing to do with it.
LORD FERRIER: But that is the other way.
LORD HUGHES: My Lords, the information which I gave so specifically was given because I received a very specific note from the Box that that was the case. Therefore the draftsman had no doubt when wording the matter as he did that he was not placing the director in this difficulty. I should like to direct the attention of your Lordships to page 11 and Amendment No. 80. At the top of that page the last words of subsection 2(b) are:
"…and an obligation imposed by this subsection on a director must be fulfilled by him before the expiration of the period of fourteen days beginning with the next day following that on which the occurrence of the event that gives rise to it comes to his knowledge."
What I said was that if a man does not have knowledge of a situation, he cannot create an offence, because the obligation is to do this within this short period after it comes to his knowledge.
LORD CHORLEY: My Lords, that is probably quite a sound point. The difficulty is that we are confronted with a whole page of this and we are given 24 hours, in effect, to study it. I was kindly presented with a copy the other night, but we all know that yesterday there was a very important Bill before your Lordships' House, and one cannot sit up the whole night studying these things. This is not the only Amendment which takes a whole page in length. I hope, and I think, that probably what the noble Lord has said is right, because knowledge is
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obviously necessary. Without knowledge you cannot have a guilty mind. But it emphasises the great difficulty noble Lords have to digest all this in the very short space of time we have at our disposal.
LORD DRUMALBYN: My Lords, I am much obliged to the noble Lord, Lord Hughes, for clarifying the point.
LORD HUGHES: My Lords, I am obliged to the noble Lord, Lord Drumalbyn. This, I must admit, is part of the difficulty under which we are labouring. Noble Lords on both sides of the House are bound to raise queries on points to which the answers are in the Amendment. But they have not found the answers simply because they have not had time to look at the Amendment, and we must accept responsibility for that.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 81]
After Clause 28, insert the following new clause—
Investigation of share dealings
(".—(1) If it appears to the Board of Trade that there are circumstances suggesting that contraventions may have occurred, in relation to shares in, or debentures of, a company, of section 24 or 26 of this Act or of subsection (2) of section (Extension of section 26 to spouses and children) of this Act, they may appoint one or more competent inspectors to carry out such investigations as are requisite to establish whether or not contraventions have occurred as aforesaid and to report the result of their investigations to the Board.
(2) The appointment under this section of an inspector may limit the period to which his investigation is to extend or confine it to shares or debentures of a particular class or both.
(3) For the purposes of any investigation under this section, section 167 of the principal Act (which imposes on officers and agents of bodies being investigated the duty to assist inspectors) shall apply, but with the substitution, for references to any other body corporate whose affairs are investigated by virtue of section 166, of a reference to any other body corporate which is or has at any relevant time been the company's subsidiary or holding company or a subsidiary of its holding company and with the necessary modification of the reference, in subsection (3), to the affairs of the company or other body corporate, so, however, that it shall apply—

(a) to members of a recognised stock exchange or of a recognised association of dealers in securities who are individuals and to officers (past as well as present) of members of such an exchange or association who are bodies corporate;

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(b) to holders of licences granted under section 3 of Prevention of Fraud (Investments) Act 1958 who are individuals and to officers (past as well as present) of holders of licences so granted who are bodies corporate; and

(c) to any individual declared by an order of the Board of Trade for the time being in force to be an exempted dealer for the purposes of that Act and to officers (past as well as present) of any body corporate declared by an order of the Board of Trade for the time being in force to be such a dealer;

as it applies to officers of the company or of the other body corporate.
(4) The inspectors may, and, if so directed by the Board of Trade, shall, make interim reports to the Board, and, on the conclusion of the investigation shall make a final report to the Board.
(5) Any such report shall be written or printed, as the Board may direct, and the Board may cause it to be published.
(6) Section 175 of the principal Act (saving for solicitors and bankers) shall have effect as if the reference to the foregoing provisions of Part IV of that Act included a reference to this section.
(7) The expenses of an investigation under this section shall be defrayed by the Board of Trade out of moneys provided by Parliament.
(8) In this section, 'recognised association of dealers in securities' means any body of persons which is for the time being a recognised association of dealers in securities for the purposes of the Prevention of Fraud (Investments) Act 1958.")
4.15 p.m.
LORD HUGHES: My Lords, I beg to move Amendment No. 81.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Hughes.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 82.]
Clause 29, page 31, line 8. at end insert—
("( ) An interest for the life of himself or another, of a person under a settlement in the case of which the property comprised therein consists of, or includes, shares, being a settlement with respect to which the following conditions are satisfied, namely,—

(i) that the settlement is irrevocable; and

(ii) that the settlor has no interest in any income arising under, or property comprised in, the settlement;")

LORD BROWN: My Lords, I beg to move that this House doth agree with the Commons in Amendment No. 82. In moving this Amendment I should like
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to discuss, with the permission of the House, Amendment No. 91. Clause 29 calls for disclosure of major interests in quoted companies voting shares. The Amendments add to the list of exemptions from disclosure life interests of persons under certain types of settlements, because such exclusion is unlikely to lead to an evasion of the useful intent of the clause. These life interests which are excluded are ordinary life interests, and the settlor has no interest in any income from or property in the settlement.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Brown.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 83.]
Clause 29, page 31, line 20, leave out paragraph (d) and insert—
("(d) any such interests, or interests of such class, as may be prescribed for the purposes of this paragraph by regulations made by the Board of Trade by statutory instrument;
and a definition of a class of interests for the purposes of regulations made under paragraph (e) of this subsection may be framed by reference to any circumstances whatsoever.")
LORD BROWN: My Lords, I beg to move that this House doth agree with the Commons in Amendment No. 83. This is a minor Amendment. The clause requires a person who has an important interest in the voting shares of a quoted company to notify the company of the interest and any change in it. The Amendment widens the interest which may be prescribed and makes clear that "prescribed" means prescribed by Statutory Instrument.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Brown.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 84.]
Clause 29, page 31, line 33, leave out ("seven") and insert ("fourteen").
LORD BROWN: My Lords, I beg to move Amendment No. 84.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Brown.)
On Question, Motion agreed to.
LORD DRUMALBYN: My Lords, if it is convenient we should be quite happy to take Amendments Nos. 85 to 99 together.

COMMONS AMENDMENTS
[Nos. 85–99.]
Clause 29, page 31, line 37, leave out ("seven") and insert ("fourteen")
Clause 29, page 32, line 9, leave out ("seven") and insert ("fourteen")
Clause 29, page 32, line 15, leave out ("seven") and insert ("fourteen")
Clause 29, page 32, line 24, leave out ("seven") and insert ("fourteen")
Clause 29, page 32, line 29, leave out ("seven") and insert ("fourteen")
Clause 29, page 33, line 6, leave out ("seven") and insert ("fourteen")
Clause 29, page 33, line 15, at end insert ("and 'settlor' has the meaning assigned to it by section 403 of the Income Tax Act 1952")
Clause 29, page 33, line 16, leave out subsection (11).
Clause 30, page 33, line 32, leave out from ("that") to ("in") in line 34 and insert ("the entries therein against the several names inscribed therein appear")
Clause30, page 34, line 1, leave out ("company's registered office") and insert ("place at which the register required to be kept by the company by section 28 of this Act is kept")
Clause 30, page 34, line 5. after first ("inspection") insert ("but save in so far as it contains information with respect to a company for the time being entitled to avail itself of the benefit conferred by section 3(3) or 4(3) of this Act").
Clause 30, page 34, line 8, at end insert ("but in so far as it contains such information shall not be open to inspection.")
Clause 30, page 34, line 8, at end insert—
("(5A) Unless the said register is in such form as to constitute in itself an index, the company shall keep an index of the names inscribed therein which shall—

(a) in respect of each name, contain a sufficient indication to enable the information inscribed against it to be readily found; and

(b) be kept at the same place as the said register;

and the company shall, within fourteen days after the date on which a name is inscribed in the said register, make any necessary alteration in the index.")
Clause 30, page 34, line 9, leave out from beginning to ("on") in line 10 and insert ("As regards so much of the said register as is required to be open to inspection, any member of the company or other person may require a copy of it, or any part of it,")
Clause 30, page 34, line 18, leave out ("or (3)") and insert ("(3) or (5A)")
LORD WALSTON: My Lords, I beg to move Amendments Nos. 85 to 99 inclusive.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Walston.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 100–107]
After Clause 30, insert the following new clause—
Power of Board of Trade to present winding-up petition or petition under section 210 of the principal Act in consequence of investigation, &c.
(".—(1) If, in the case of any body corporate liable to be wound up tinder the principal Act, it appears to the Board of Trade from any report made under section 168 (inspectors' report) of that Act or from any information or document obtained under Part IIA of this Act or section 18 or 19 of the Protection of Depositors Act 1963 that it is expedient in the public interest that the body should be wound up, the Board may, unless the body is already being wound up by the court, present a petition for it to be so wound up if the court thinks it just and equitable for it to be so wound up, and, accordingly, paragraph (d) of the proviso to subsection (1) of section 224 (provisions as to applications for winding-up) of the principal Act shall have effect with the substitution, for the reference to section 169(3) of that Act, of a reference to this subsection.
(2) If, in the case of any such body corporate as aforesaid, it appears to the Board of Trade from any report made or information or document obtained as aforesaid that its business is being conducted in a manner oppressive to any part of its members the Board may (in addition to, or instead of, presenting a petition under the foregoing subsection) present a petition for an order under section 210 (alternative remedy to winding up in cases of oppression) of the principal Act, and, accordingly, subsection (1) of that section shall have effect with the substitution, for the reference to section 169(3) of that Act, of a reference to this subsection").
After Clause 30 insert the following new clause—
Repeal of section 169(1) and (2) of the principal Act, and consequential modification of section 170(1)(a) thereof
(". The following provisions of the principal Act shall cease to have effect, namely,—

(a) subsections (1) and (2) of section 169 (duty of Board of Trade in certain cases after an investigation to refer to the Director of Public Prosecutions or the Lord Advocate, and duty of Director of Public Prosecutions on a reference by the Board of Trade); and

(b) in section 170(1)(a) (persons liable to repay the Board of Trade expenses of and incidental to an inspection), the words ' by the Director of Public Prosecutions or by or on behalf of the Lord Advocate'.")

After Clause 30, insert the following new clause—
Fresh powers of Board of Trade to bring civil proceedings on behalf of body corporate
(".—(1) If, from any report made under section 168 of the principal Act or from any information or document obtained under Part IIA of this Act or section 18 or 19 of the Protection of Depositors Act 1963 it appears to the Board of Trade that any civil proceedings ought in the public interest to be brought by any body corporate, they may themselves bring such proceedings in the name and on behalf of the body corporate.
(2) The Board of Trade shall indemnify the body corporate against any costs or expenses incurred by it in or in connection with any proceedings brought by virtue of the foregoing subsection.
(3) Section 170(1)(a) of the principal Act shall have effect as if the reference to any person who is ordered to pay damages or restore any property in proceedings brought by virtue of section 169(4) of that Act included a reference to any person who is ordered to pay the whole or any part of the costs of proceedings brought by virtue of subsection (1) of this section, and section 170(3) of that Act shall have effect as if the references to subsections (4) and (5) of section 169 of that Act included references respectively to subsections (1) and (2) of this section.")
After Clause 30, insert the following new clause—
Extension of Board of Trade's power of investigation under section 165 of the principal Act
(". Sub-paragraph (i) of paragraph (b) of section 165 of the principal Act (by virtue of which paragraph the Board of Trade are empowered to appoint one or more competent persons to investigate the affairs of a company if it appears to them that there are circumstances suggesting, inter alia that its business is being conducted with intent to defraud its creditors or the creditors of any other person or otherwise for a fraudulent or unlawful purpose or in a manner oppressive of any part of its members) shall have effect as if, after the words 'is being', there were inserted the words 'or has been'; and the power of the Board under that paragraph shall be exercisable with respect to a body corporate notwithstanding that it is in course of being voluntarily wound up.")
After Clause 30, insert the following new clause—
Power of inspectors to secure attendance of persons for purposes of investigation
(". Section 167 of the principal Act (which imposes on officers and agents of bodies being investigated the duty to assist inspectors) shall be amended as follows:—

(a) in subsection (1), after the words 'to produce to the inspectors all books and documents of or relating to the company or, as the case may be, the other body corporate which are in their custody or power', there shall be inserted the words
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'to attend before the inspectors when required so to do'; and

(b) in subsection (3), after the words 'refuses to produce to the inspectors any book or document which it is his duty under this section so to produce', there shall be inserted the words 'refuses to attend before the inspectors when required so to do'.")

After Clause 30, insert the following new clause—
Amendments of provisions as to expenses of investigations
(".—(1) Section 170 (expenses of investigation of company's affairs) of the principal Act shall be amended as follows.
(2) The word 'and' at the end of paragraph (b) shall be omitted, and for paragraph (c) there shall be substituted the following paragraphs:—
(c) any body corporate dealt with by the report, where the inspector was appointed otherwise than of the Board's own motion, shall be liable, except so far as the Board otherwise direct; and
d) the applicants for the investigation, where the inspector was appointed under section one hundred and sixty-four of this Act, shall be liable to such extent (if any) as the Board may direct'.
(3) In subsection (2), for the words 'paragraph (c)' there shall be substituted the words 'paragraphs (c) and (d)'.
(4) In subsection (4)—

(a) for the words 'paragraph (c)', where first occurring, there shall be substituted the words 'paragraphs (c) and (d)';

(b) for the words from 'the said paragraph (a) or (b)' to 'as the case may be' there shall be substituted the words 'any of the said paragraphs shall be entitled to contribution from any other person liable under the same paragraph'.")

After Clause 30, insert the following new clause—
Power of inspector to inform Board of Trade of matters tending to show commission of offence
(". An inspector appointed under section 164 or 165 of the principal Act may at any time in the course of his investigation, without the necessity of making an interim report, inform the Board of Trade of matters coming to his knowledge as a result of the investigation tending to show that an offence has been committed.")
After Clause 30, insert the following new clause—
Extension of Board of Trade's powers of investigation to certain bodies incorporated outside Great Britain
(".—(1) Sections 165 to 171 and 175 of the principal Act shall apply to all bodies corporate incorporated outside Great Britain which are carrying on business in Great Britain or have at any time carried on business therein

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as if they were companies registered under the principal Act, but subject to such (if any) adaptations and modifications as may be specified by regulations made by the Board of Trade.
(2) The power to make regulations conferred by this section shall be exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.")
LORD BROWN: My Lords, I beg to move that this House doth agree with the Commons in Amendment No. 100, and I wish also to speak to Amendments Nos. to 107, 118 and 342. Nine of these clauses, and relate to the Companies Act 1948, with regard to the investigation of companies by inspectors appointed by the Board of Trade, and with the new Part IIA conferring powers on the Board of Trade to make investigations themselves. They are intended to speed the handling of suspected fraud.
Amendment No. 100 extends the power of the Board to petition for a winding-up order from companies advertising for deposits for insurance business to any company at all. Amendment 101 leaves the decision whether or not the Board or the Director of Public Prosecutions institutes criminal proceedings to be arranged between the Board of Trade and the Director of Public Prosecutions. Amendment 103 widens the Board's powers to bring civil proceedings on behalf of a body corporate. At present the Board's powers are limited because they can do so only on the basis of an inspector's report, or for the recovery of damages or for misapplied or wrongfully retained property. These conditions are nullified by the Amendment.
Amendment 103 permits the appointment of inspectors when it is felt that a company has been, rather than is being, conducted fraudulently, or when it is in liquidation. Amendment 104 makes it an explicit duty of officers of a company being investigated to attend before inspectors. Amendment 105 makes it possible for the Board to recover the expense of an investigation in wider circumstances than is now the case. Amendment 106 enables inspectors to pass information to the Board more quickly and without observing certain formalities. Amendment 107 enables the Board to appoint inspectors to investigate companies registered overseas and operating in the United Kingdom. Amendment 118 makes clear
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that answers given to inspectors appointed by the Board under the several sections of the principal Act may be used in evidence and thus clears up uncertainty on the point. Amendment 342 repeals certain provisions made redundant by the foregoing new clauses. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Brown.)
4.20 p.m.
LORD DRUMALBYN: My Lords, these are important clauses. I have heard two comments on them. The first is whether they are really necessary: they are such small extensions, if they are extensions at all, that they are already covered by existing legislation. The second is that if these clauses can now be put forward, the astonishing thing is that they were not put forward when the Bill first came before your Lordships' House. For my part, I do not object to them—the purposes they have in mind are very necessary—but I should like to raise one or two points about them.
By Amendment No. 104 it is made an offence to refuse to attend before an inspector when required to do so. This can be an important point. I should have thought that the right phrase would have been "failing without reasonable cause to attend". There must be a positive act of refusing to attend before anybody can be said to have refused to attend. In No. 105, so far as I can see, the expression,
"for the words from ' the said paragraph (a) and (b)' …"
means including "from", whereas when we normally say the word "from" we mean the words coming after. This is an Amendment to the principal Act and no doubt it will be correctly read because nothing else could be meant; but it appears to me to be wrong. In my experience it is desirable that an inspector should be able to draw attention to an offence in the course of an inspection, rather than wait until the inspection has been completed. This provision is very useful.
I should like to ask the noble Lord about the admissibility of evidence. He has explained it to me, but it would be as well to have it said publicly. Section 167 of the principal Act says that

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the answers of a person examined by an inspector may be "used in evidence against him". The usual phrase is "used in evidence". The ordinary lay reader would think that the phrase, "used in evidence against him", would exclude the using of evidence in his favour, should it turn out to be in his favour.
LORD CHORLEY: My Lords, may I answer the noble Lord's last point? Every policeman is strongly warned against using that phrase in the way in which it is used in musical comedies and elsewhere. If he were to go into a witness box to give evidence and said that he cautioned a man in that way, he would be rapped over the knuckles by any judge who tried such a case. He must say, "used in evidence", and that is where he has to stop.
I should like to say how much I welcome these clauses, and though I do so with perhaps more enthusiasm than the noble Lord, Lord Drumalbyn, I am dubious whether some of them carry the powers of the Board of Trade much further. The inadequacy of the powers of the Board of Trade in these matters has been known to all company lawyers for a long time and has been commented on in textbooks and articles. We had the impression that for a long time the Board of Trade were not very anxious to increase their powers. I think that goes back to the early days in the development of company law, when the Board of Trade were rather quiescent about these matters and regarded themselves as under no obligation to take an active part and only to come in when pushed to do so. But I think that that attitude has been changing. It has certainly been becoming clear to the business world and to the public that the powers of the Board of Trade in connection with some recent scandals have been altogether lacking. No doubt that is why at this late stage these Amendments have been put in.
During the time this Bill has been going through Parliament, officers of the Board of Trade have been holding discussions with knowledgeable lawyers who have been concerned in some of these investigations as to the direction in which their powers might be improved and strengthened. These discussions have been contemporary—indeed, that is prob
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ably the main reason why we have these Amendments now. The important thing is that we have them. I am sure that if they are used by the Board of Trade effectively and with enthusiasm that will make a tremendous amount of difference to the investigations which the Board are bound to be called upon to conduct from time to time.
LORD BROWN: My Lords, I am grateful for the support of my noble friend Lord Chorley. May I assure him that the urgency under which we have been proceeding this afternoon must be some evidence of the desire of the Board of Trade to use these powers vigorously. The noble Lord, Lord Drumalbyn, was good enough to give me notice of the points he was going to raise, which has been very helpful, because they are rather technical. I will refer to the notes I have been given, though I am not quite sure that I understand them myself.
The noble Lord is arguing that Amendment No. 104 may be unfair in that it provides for the punishment of persons who refuse to attend before an inspector, when required to do so, whatever the circumstances. This is not the real effect of the clause. A person who refuses to attend is punishable under Section 167 of the Companies Act in like manner as if he had been guilty of contempt of court. The law of contempt of court in relation to the non-attendance of witnesses provides for the case where there is a reasonable excuse for absence. Sickness, inability to travel, the argument that a proper sum was not tendered to the witness for his expenses—all these are examples of excuses recognised as valid excuses for absence.
The second point the noble Lord raised was in connection with the drafting of Amendment No. 105. This is a technical matter very nearly beyond my comprehension. I hope that the noble Lord understands it better than I do. When an Amendment is made in a Bill to a Statute to leave out a phrase in that Statute, it is usual to identify the phrase to be omitted by quoting the opening and closing words of the phrase. This is not the case when an amendment to a Bill itself is proposed in the House leaving out a phrase in the Bill. In that case, the phrase is identified by quoting the

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words immediately before and those immediately after the phrase. I hope that the noble Lord will not question me further on that, because I have not grasped its implications, and it needs a good deal of thinking about.
The third point raised by the noble Lord was the question of the Amendments which put those giving answers to questions asked by inspectors in a position where their answers could be used as evidence against them. It is a fact, I am informed, that in English law there is a time-honoured principle that, in general, answers given by people in giving evidence, and in other situations, cannot be used against them unless the law states that they can. Thus, wherever the law tends to be silent on this point it is open to assume that the principle stands, and therefore that their answers cannot be used in evidence against them. If it is intended that the answers may be used against them, it is necessary to state so. In the case of answers that can be used in their favour, there is no law saying that evidence given cannot be used in favour of a witness, and it is never necessary to make comment on this in a Bill. I hope that those answers satisfy the noble Lord.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 108]
Leave out Clause 31.
LORD BROWN: My Lords, I beg to move that this House doth agree with the Commons in Amendment No. 108.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Brown.)
LORD DRUMALBYN: This is an Amendment to leave out Clause 31, which is the clause dealing with
"Disclosure of Companies, as regards certain Gifts of Money for charitable Purposes, of Amounts thereof and Identities of Donees or Purposes of Gifts."
This was a clause put in at the instance of my noble friend Lord Polwarth. My noble friend had moved an Amendment to a clause, and this clause was brought forward in place of that. The point here is quite simply that when this Bill first came before this House it had a provision dealing with a combination of political and charitable contributions, which is a matter still covered by Clause 18, and
1222
in this case both political and charitable contributions exceeding £50 in value had to be declared. A list of political contributions had to be provided under Clause 18, and a list of charitable contributions under Amendment No. 108. The truth is simply that the decision to put in charitable contributions at all was intended as a justification of the decision to put in the political contributions. It was, so to speak, to soften the blow and make the thing look a little more respectable. Now that the clothes have been taken off, the political contributions stand in their stark nakedness as a purely political measure.
LORD ERROLL OF HALE: My Lords, it is an impressive commentary on this Government that they come along full of pious intentions that all charitable contributions must be disclosed, without even taking the trouble to find out in advance the enormous amount of additional work that will be imposed on all the companies concerned. Despite the fact that we made representations in your Lordships' House, the Government remained adamant. Then, when they really start looking at it, they see the enormity of their actions, and they remove the clause. We are grateful that they have removed the clause. We hope they will learn from their bitter experiences, so that when they prepare the next Bill they will not resort to the same sort of insulting and incompetent procedures.
LORD BROWN: My Lords, I do not want to prolong this discussion, but I must comment that the noble Lord has overlooked the fact that in the discussion on what I may call the abortive Bill of 1964 in another place it was the Opposition who proposed that lists of charitable contributions should be included.
LORD ERROLL OF HALE: Not by the Opposition Front Bench.
LORD BROWN: No. Nevertheless, it was Opposition speakers from the Back Benches. It was because of their pressure that the Government moved and put in this clause about charitable contributions. I am happy to see it removed, because I agree that it was put in as a measure of equity, because political contributions appear. I do not feel the slightest bit ashamed of the fact that political contributions have to appear. I feel it is just and proper that in a society of this sort

1223
political contributions made by companies should be shown. I think the lessons of pre-war Germany alone are sufficient to indicate what can happen when these things get out of hand. I am not ashamed of the clause itself, but I am happy that charitable contributions are dealt with as they are in this Amendment.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 109]
Clause 32, page 36, line 31, at end insert—
("bearing the same stamp as if they were contained in a deed").
LORD BROWN: My Lords, with your Lordships' permission, I ask leave to move this Amendment, but to speak to a large number of Amendments.
LORD DRUMALBYN: My Lords, if I may interrupt the noble Lord, may I suggest that we treat stamp duties separately from fees? One is under the control of the Board of Trade, and the other is not. This would mean, I think, that Amendments 109 and 112 should be taken together. We have no objection to these Amendments and are prepared to take them formally.
LORD BROWN: My Lords, I therefore formally move that this House doth agree with the Commons in the said Amendment, No. 109.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Brown.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 110]
Clause 32, page 37, line 43, at end insert—
("(.) In this section, 'prescribed' means prescribed by regulations made by the Board of Trade by statutory instrument.")
LORD HUGHES: My Lords, Amendments Nos. 110 and 113 are minor. They make it clear that the use of the word "prescribed" in the clause means "prescribed in statutory instruments made by the Treasury". I beg to move that this House doth agree with the Commons in the said Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Hughes.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 111]
Clause 33, page 38, line 31, leave out from first ("to") to end of line 33 and insert ("the condition of the company as to those matters which will obtain upon its re-registration").
LORD HUGHES: My Lords, I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Hughes.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 112]
Clause 33, page 40, line 9, at end insert—
("( ) In section 112 of the Stamp Act 1891 which charges a duty on the capital of limited liability companies), the first reference to a company to be registered with limited liability shall be construed as including a reference to a company to be re-registered in pursuance of this section with such liability.")
LORD BROWN: My Lords, I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Brown.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 113]
Clause 33, page 40, line 9, at end insert—
("( ) In this section, 'prescribed' means prescribed by regulations made by the Board of Trade by statutory instrument.")
LORD HUGHES: My Lords, I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Hughes.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 114]
Leave out Clause 35.
LORD WALSTON: My Lords, I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Walston.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 115]
After Clause 35, insert the following new clause—
Power of Board of Trade to require company to abandon misleading name.
(".—(1) If, in the opinion of the Board of Trade, the name by which a company is

1225
registered gives so misleading an indication of the nature of its activities as to be likely to cause harm to the public, they may direct it to change its name.
(2) A direction given under this section to a company must, if not duly made the subject of an application under the next following subsection to the court, be complied with within a period of six weeks from the date of the direction or such longer period as the Board of Trade may think fit to allow.
(3) A company to which a direction is given under this section may, within a period of three weeks from the date of the direction, apply to the court to set the direction aside, and the court may set it aside or confirm it; and, if it confirms it, it shall specify a period within which it must be complied with.
(4) If a company makes default in complying with a direction under this section, it shall be liable to a fine not exceeding £5 for every day during which the default continues.
(5) Subsections (3) and (4) of section 18 of the principal Act (consequences of change of name under that section) shall have effect as if references therein to that section included references to this section.")
LORD HUGHES: My Lords, this Amendment has associated with it Amendment No. 121. Amendment No. 115 is the insertion of a new clause, and Amendment No. 121 leaves out Clause 42. This has to do with requiring a company to abandon a misleading name. Clause 42 was inserted in this House and widened the existing limited powers of the Board of Trade to direct a company to change the name by which it had been registered. This was deleted in another place and replaced by a new clause designed to remedy some of the drafting weaknesses which were discovered in the original Clause 42. The Board of Trade have, under Section 18(2) of the Companies Act 1948, the limited power to direct a company to change the name by which it is registered. The direction must be made within six months of the date on which the company was registered by the name it is required to change, and the ground for the change must be that the name is too like that of another company that was registered before the company whose name is to be changed so registered.
The Jenkins Committee made a number of recommendations about names, including, in paragraph 456 of their Report, a recommendation that the Board of Trade should be empowered to direct a company to change its name at any time if the name has become misleading in such a manner that it is likely to cause
1226
harm to the public, but there should be a right of appeal to the court. The Jenkins Committee envisaged that the power would be used very sparingly. That is in paragraph 454. The new clause implements the Jenkins recommendation in paragraph 456. The remaining recommendations in the Jenkins Committee's Report on names will be considered in the context of the next Companies Bill.
The new clause differs in the following ways from the original Clause 42. This referred to a name which conveyed a false or misleading indication of a company's activities or of the nature of the goods supplied or the services performed. The new clause refers only to a company's activities, since it is thought these words are sufficiently wide to embrace giving a misleading impression of the goods or services supplied or performed. The original clause provided for a statutory notice of intention to make a direction to a company to change its name, and a statutory right to the company to make representations. Since the company is to be allowed to appeal to the court, it seems unnecessary to provide a statutory right to make representations to the Board of Trade. The Board of Trade would never, of course, make a direction without communicating with the company concerned. The original clause provided for appeal to the High Court. This would mean that the appeal would have to be heard by the Divisional Court. The new clause provides for the appeal to be made to the court having jurisdiction to wind up the company, usually a Chancery Court of the High Court.
The new clause makes some changes in the time allowed for a direction to take effect, and the time during which any appeal must be lodged. The original clause imposed a fine of £5 a day for default. This could have been read as a mandatory fine of £5. The new clause follows the more usual form of permitting a fine not exceeding £5 a day.
The clause also makes a change of substance by requiring there to be harm to the public before the Board's directions may be made. The requirement that a company name must give so misleading an indication of its activities as to cause harm to the public was added for the simple reason that names of many

1227
existing companies could be held to convey a misleading indication of their activities: for example, Army and Navy Stores, Limited; British Electric Traction, Limited. It would be unreasonable to require such companies to change their name merely because they were out of date, or to empower the Board of Trade to force them to do so. The clause therefore gives the Board a more limited power to give a direction to a company to change its name only if it is so misleading as to cause harm to the public. My Lords, I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Hughes.)
LORD CHORLEY: My Lords, I think the words are "likely to cause harm", which is rather different.
LORD DRUMALBYN: My Lords, perhaps I may be allowed to say a word about this Amendment which, as the noble Lord says, substitutes a new clause, and puts it in a slightly different place, for a clause introduced from this side of the House in the earlier stages of the Bill. I can say on behalf of my noble friend Lady Elliot of Harwood and myself that we are very glad indeed that the Government have agreed to retain this clause, which was so strenuously resisted by the noble and learned Lord on the Woolsack at an earlier stage, not on its merits, but because he thought that it was not suitable to this Bill. I am very glad, and I thank the Government very much for including this clause. I think they have done right to put it in. It was there, and obviously it would have been a mistake to take out a clause which can do some good between now and when the next Companies Bill appears. With the re-drafting of it, I have no quarrel. I only wonder whether, when we come to the Protection of Consumers Bill, regard will be had to these words:
"so misleading as to cause harm to the public",
which seem to me quite a good formula. I quite agree with the Government that merely to mislead, if no harm results, is not a particularly odious thing to do, and certainly ought not to be followed by any heavy penalties.
I have no other comments on the Amendment, except to say that I was very glad that the noble Lord was able to
1228
give the assurance that, in cutting out the requirement in the existing clause, the Board of Trade should allow the person against whom it is proposed to make a direction to make representations to them before the direction is made. The noble Lord has given an assurance that the Board of Trade would never make a direction without communicating first—I take it that he meant "first"—with the company concerned. I welcome this, and I thank the noble Lord for his careful explanation of it.
LORD HUGHES: My Lords, I am very grateful for the way the noble Lord has received this clause. Of course, the Government have never maintained that the Opposition is always wrong. All we have said is that, in our opinion, they are much more frequently wrong than right.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 116]
Leave out Clause 37.
LORD HUGHES: My Lords, I beg to move Amendment No. 116.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Hughes.)
On Question, Motion agreed to.
4.47 p.m.

COMMONS AMENDMENT
[No 117]
After Clause 37, insert the following new clause—
Fees
(".—(1) For references in section 425 of, and Schedule 14 to, the principal Act to Schedule 12 to that Act there shall be substituted references to Schedule (Fees to be paid to the registrar of companies) to this Act.
(2) The Board of Trade may by regulations made by statutory instrument alter the said Schedule (Fees to be paid to the registrar of companies) so as to increase or decrease the amount of a fee payable to the registrar, and any reference in the principal Act to that Schedule shall be construed as a reference to that Schedule with any alterations made by regulations for the time being in force under this subsection.
(3) No regulations shall be made under the last foregoing subsection increasing a fee unless a draft of the instrument containing the regulations has been laid before Parliament and has been approved by resolution of each House of Parliament.
(4) A statutory instrument containing regulations made under subsection (2) of this section none of which increases a fee shall be subject to annulment in pursuance of a resolution of either House of Parliament.")
LORD BROWN: My Lords, in moving Amendment 117, I should like also to discuss Amendments 126, 128, 129, 265, 318 and 343 to 345 inclusive. These Amendments are all concerned with financial matters, changing the scale of fees. I will simply confine myself, so far as possible, to an explanation of how the new fees differ from the current fees. Amendments 117 and 318 set up a new Schedule, and they raise the fees payable to the Registrar of Companies as follows. Registration fees: the old minimum fee was £2 and applied to capital of companies up to £2,000. The new minimum is £20, and there is thus a basic addition of £18. The old scale of fees increased by decreasing increments as the amount of the capital was raised. These increments remain unchanged, so where the maximum registration fee was £50, under the current scale, for capital of £525,000 and over, it has now become £18 more; that is, £68. So, although the scale has gone up very largely for the companies of very small capital, it has cone up only, I submit, to a trifling extent for the larger companies.
In the case of companies registering without a share capital, perhaps it is only necessary to say that the basic fee has gone up again by £18. That makes a minimum fee of £20 as against £2, and the maximum fee has become £38 as compared to the current figure of £20. There are a number of complex situations, such as that where a company reregisters under Clause 33 and is limited by guarantee, but which also has a share capital. This company will pay whichever is the highest registration fee.
A limited company re-registering as unlimited pays £5. For the registration of the annual return of companies the fee is increased from 5s. to £3. Registering a change of name by a special resolution is increased from 5s. to £10—and perhaps a word of explanation is needed here. This sharp increase is to prevent the registration of companies wholesale under the 5s. fee while this Bill is in passage through the House, and selling these cheaply-bought registrations to others when the Bill has passed, when, of course, the registration fee will be much higher. Those who bought them would probably want to change the name and the £10 fee for the registration of the change of name will, we hope, inhibit the whole forestalling
1230
practice to which I have referred. I should add that no fee will be required by the Registrar if, by inadvertence, the first name that a company chose to register itself by has to be changed for reasons under the Companies Act.
The remaining Amendments, Nos. 343, 344 and 345, are all consequential on the introduction of the new scale of fees, and make additions to the list of enactments for repeal in Schedule 7 of the Bill. I beg to move Amendment No. 117.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Brown.)
LORD DRUMALBYN: My Lords, I should like to thank the noble Lord for that explanation. Of course, reading it just on the figures, this is about as wonderful an example of regressive taxation as one could possibly find. However, we quite understand the reasons for it: that the Government wish to cut down the extent to which companies are, shall we say, unnecessarily, and sometimes even deviously, formed, and that they want to reduce so far as possible the abuses of transferring the purchase of companies and so forth. We have no objection to this at all. I simply wish to ask one question, and that concerns the powers to alter the fees from time to time. I understand that this is to be done by Statutory Instrument, subject to Affirmative Resolution of the House. I do not think there are any further comments I wish to make on this Amendment, except a question that we shall be coming to, about the re-registration of companies—unlimited as limited, or limited as unlimited. I did not quite follow whether or not the noble Lord said that these fees would apply in both cases.
LORD BROWN: My Lords, I am afraid that I cannot, offhand, answer the noble Lord's question.
4.55 p.m.
LORD CHORLEY: My Lords, I should like to say a word or two on this, because it is an important matter. One quite understands and agrees with the view that these registration fees, which have remained at the same figure ever since the great Companies Act of 1861, require revision. That is good. But it seems to me that there is an element of taxation in this. I do not know what are the costs that have to be met, but these fees

1231
for registering companies and other commercial documents ought to be calculated simply to meet the costs. In the old days I think it was the accepted policy that commercial transactions should be taxed, and bills of exchange were taxed. In the great commercial currency which was provided by the business community itself one had, in effect, to pay a tax to the State for providing it with the currency by means of which the commerce of the country was conducted. It was the same with bills of lading and charterparties, by means of which the great marine trade of this country—the greatest in the world—was conducted.
However, during the last twenty years or so, very properly, this outlook has been completely changed. These taxes on bills of exchange and on charterparties and bills of lading, marine insurance policies and many other types of commercial activity—which, as I say, had been taxed on the basis of the documents that were essential to the proper carrying on of these businesses—have been removed, and it seems to me that the element of taxation contained in this is a regressive step, I do not know what are the costs involved, and it might be rather difficult to break down the costs of the actual business of registering companies and re-registering the changes; but on any basis it seems to me that the fees now being imposed will bring in twice as much as the costs are likely to come to.
This step is defended on another ground; namely, that if these much higher fees are charged they would frighten people off from forming limited liability companies; and the Jenkins Committee suggested that this should be done. I think it is a very clumsy method of dealing with these companies, in which both the noble Lord, Lord Hawke, and I are interested. Trying to stop people from forming these smaller companies in this way, by taxing them out, is in my submission the wrong way of going about it. I am sorry that this clumsy method has been adopted in this case, rather than the much more sensible one, in my contention, of altering the structure of the trading organisations on which the business of this country is carried on. I think these are points of some substance, although I am not prepared to object to the actual figures contained here, since
1232
it is extremely difficult to analyse them when one is confronted with them in a hurry.
I should like to ask the noble Lord who is in charge of this Bill about a point to which I have not been able, in a very cursory glance at these new fees to discover the answer. There are many companies which are formed, particularly companies formed by guarantee, which are are in effect charitable. Some years ago I had a part in forming a company limited by guarantee for the purpose of running a law periodical, which I think has been much esteemed by the law schools in this country. That could be done very cheaply indeed, because the registration fees were small. I am not sure whether the situation is still the same now, or whether, under these new arrangements, it will be made onerous for small groups of people who wish to form companies limited by guarantee and who wish to get the advantage—and it is a very real advantage for many charitable and semi-charitable objectives of this kind—of this sort of organisation. I should like to ask how far they will be prevented by much larger fees, or whether the result of this is that there is not very much change. I should be grateful if the noble Lord would inform me on that point.
LORD BROWN: My Lords, to deal first of all with Lord Chorley's point, the further investigation into the whole structure of Company Law may indeed throw up different means of limiting the registration of large numbers of small companies, but in the meantime this new scale of fees is at least a deterrent to a practice which I think all concerned agree is objectionable. This Amendment deals simply with scales of fees, and does not basically in any way alter the structure of the law with regard to who shall be charged, in what proportion. It alters the whole proportion of all the fees, rather than altering differential charges between one type of company and another. The noble Lord, Lord Drumalbyn, asked what the fees are for re-registering a limited company as unlimited. I am sorry I was not able to give the answer straight away. It is difficult to grasp the details of this long series of Amendments. The answer is that the fee for re-registering a limited company as unlimited is £5 and the fee for re-registering an unlimited company

1233
as limited is the same as for a new company.
LORD CHORLEY: My Lords, is the noble Lord able to tell me about the charge for registering a company limited by guarantee?
LORD BROWN: My Lords, the charge for registering a company limited by guarantee is the same as it has always been under the Companies Act, except for the fact that the scale of fees has gone up basically from £2 for up to 25 members to £20, and correspondingly at the top of the scale, where the fee has become £30 instead of £20. There is no difference in the governing principle: simply a basic change in the fees.
LORD CHORLEY: My Lords, it is a very substantial increase. It is ten times higher and it could make quite a difference to some people wishing to establish an organisation of this kind.
LORD DRUMALBYN: My Lords, in relation to what the noble Lord, Lord Chorley, was saying may I ask the noble Lord whether he would confirm that the amounts of the receipts had fallen far short of the costs? And would he also confirm that by far and away the bulk of the increases come from increases of the registration of the annual returns—I think it is in the ratio of something like three to one, as compared with the registration of companies. In so far as the Government are carrying out the recommendations, therefore, of the Jenkins Committee—or in fact they are a little short of that, because the Jenkins Committee recommended £25 for registration and the figure here is £20—the revenue raised would not go far enough. It is true that they are increasing by a very large proportion the fee for the registration of annual returns, which they may be able to justify by the time it has remained at that for some time; but all the same it does seem rather more than necessary for the purpose.
LORD BROWN: My Lords, I am grateful to the noble Lord for giving the indications he has. I confirm that the present situation is that the income from the fees for registration of companies falls substantially short of the expense of carrying out the duties of the office. It is also true that the revenue from new fees will be greater than the expense of the
1234
office, but until we get a provision in these Bills which enables us to alter figures automatically the expenses of running the register of companies will probably rise, while the fees meanwhile will remain stable, so that it is a wise provision for the future.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 118]
After Clause 38, insert the following new clause—
Admissibility in evidence of certain matter
(". An answer given by a person to a question put to him in exercise of powers conferred by—

(a) section 167 of the principal Act (as originally enacted or as applied by section 172 of that At or section (Investigation of share dealings) of this Act); or

(b) general rules made under section 365(1) of the principal Act for carrying into effect the objects of that Act so far as relates to the winding up of companies;

may be used in evidence against him, and a statement required by section 235 of the principal Act (statement of company's affairs to be made to official receiver) may be used in evidence against any person making or concurring in making it.")
LORD HUGHES: My Lords, I beg to move that this House doth agree with the Commons in Amendment No. 118.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Hughes.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 119]
Clause 39, page 45, line 9, at beginning insert—
("( ) Notwithstanding anything in subsection (2) of section 63 of the principal Act, no company need forward to the registrar of companies a printed copy of a resolution authorising an increase of its share capital, if instead it forwards a copy in some other form approved by the registrar.")
LORD HUGHES: I beg to move that this House doth agree with the Commons in Amendment No. 119.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Hughes.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 120]
Leave out Clause 41.
5.7. p.m.
LORD HUGHES: My Lords, with Amendment 120, it will perhaps be convenient to discuss Nos. 256, 257, 258 and 259. Clause 41 dealt with exemptions from prohibitions imposed by Section 434 of the Companies Act 1948, and the formation of partnerships with more than 20 members. This clause is now replaced by the new clause in Amendment 257, which makes only minor drafting changes which exempt certain professional partnerships from the limitation imposed by Section 434 on having more than 20 members.
Another new clause (Amendment No. 258), added by the Commons, removes a similar limitation imposed by the Limited Partnerships Act 1907. A further new clause (Amendment No. 256) modifies the ban imposed by Section 429 of the Companies Act 1948 on the formation of banking partnerships with more than 10 members, and the new clause (Amendment No. 259) provides that the whole of the new part of the Bill dealing with partnerships shall not apply to Northern Ireland. I beg to move that this House doth agree with the Commons in Amendment No. 120.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Hughes.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 121]
Leave out Clause 42.
LORD HUGHES: My Lords, I beg to move that this House doth agree with the Commons in Amendment No. 121.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Hughes.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 122–124]
Clause 44, page 47, line 35, leave out ("22 (both inclusive)") and insert ("17 (both inclusive), (Directors' report to state average number, by the week, of employees and the amount, by the year, of their wages), 18 to 22 (both inclusive), (Power of Board of Trade to present winding-up petition or petition under section 210 of the principal Act in consequence of investigation, etc.), (Fresh powers of Board of Trade to bring civil pro
1236
ceedings on behalf of body corporate) and (Power of inspector to inform Board of Trade of matters tending to show commission of offence)")
Clause 44, page 47, line 38, after ("to") insert ("17 (both inclusive), (Directors' report to state average number, by the week, of employees and the amount, by the year, of their wages) and 18 to")
Clause 44, page 47, line 40, at end insert— ("( ) in the case of sections (Power of Board of Trade to present winding-up petition or petition under section 210 of the principal Act in consequence of investigation, &c.), (Fresh powers of Board of Trade to bring civil proceedings on behalf of body corporate) and (Power of inspector to inform Board of Trade of matters tending to show commission of offence), were included amongst the sections of that Act so specified which relate to investigations.")
LORD BROWN: My Lords, I beg to move that this House doth agree with the Commons in Amendments Nos. 122, 123 and 124. They are purely consequential Amendments.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Brown.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 125–131]
Clause 46, page 49, line 8, leave out ("3") and insert ("4".)
Clause 46, page 49, line 13, at end insert ("and Schedule (Fees to be paid to the registrar of companies) thereto".)
Clause 47, page 49, line 17, after first (`and" insert ("sections (Extension of section 24 to spouses and children), (Extension of section 26 to spouses and children), (Investigation of share dealings),")
Clause 47, page 49, after ("34") insert ("and section (Fees)")
Clause 47, page 49, line 18, after ("Act") insert ("and Schedule (Fees to be paid to the registrar of companies) thereto.")
Clause 47, page 49, line 21, after ("inclusive)") insert ("(Directors' report to state average number, by the week, of employees and the amount, by the year, of their wages")
Clause 47, page 49, line 28, leave out paragraph (d)
LORD BROWN: My Lords, I beg to move that this House doth agree with the Commons in Amendments Nos. 125 to 131 inclusive.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Brown.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 132]
After Clause 48, insert the following new clause—
Classes of insurance business relevant for purposes of Part II, and definitions thereof
(".—(1) The classes of insurance business relevant for the purposes of this Part of this Act are industrial assurance business, liability insurance business, marine, aviation and transport insurance business, motor vehicle insurance business, ordinary long-term insurance business, pecuniary loss insurance business, personal accident insurance business and property insurance business.
(2) In this Part of this Act, "industrial assurance business" has the meaning assigned to it by section 1(2) of the Industrial Assurance Act 1923.
(3) In this Part of this Act, "liability insurance business" means the business of effecting and carrying out contracts of insurance against risks of the persons insured incurring liabilities to third parties, not being risks arising out of, or in connection with the use of, motor vehicles or out of, or in connection with the use of, vessels or aircraft or risks incidental to the construction, repair or docking of vessels or aircraft.
(4) In this Part of this Act, "marine, aviation and transport insurance business" means the business of effecting and carrying out contracts of insurance—

(a) upon vessels or aircraft, or upon the machinery, tackle, furniture or equipment of vessels or aircraft:

(b) upon goods, merchandise or property of any description whatever on board of vessels or aircraft:

(c) upon the freight of, or any other interest in or relating to, vessels or aircraft;

(d) against damage arising out of, or in connection with, the use of vessels or aircraft, including third party risks;

(e) against risks incidental to the construction, repair or docking of vessels, including third party risks;

(f) against transit risks (whether the transit is by sea, inland water, land or air, or partly one and partly another), including risks incidental to the transit insured from the commencement of the transit to the ultimate destination covered by the insurance; or

(g) against any other risks insurance against which is customarily undertaken in conjunction with, or as incidental to, the undertaking of such business as falls within this definition by virtue of any of the foregoing paragraphs.

(5) In this Part of this Act, "motor vehicle insurance business" means the business of effecting and carrying out contracts of insurance against loss of, or damage to, or arising out of or in connection with the use of, motor vehicles, inclusive of third party risks but exclusive of transit risks.
(6) In this Part of this Act, "ordinary long-term insurance business" means business of any of the following kinds, namely,—

(a) effecting and carrying out contracts of insurance on human life or contracts to pay annuities on human life;

(b) effecting and carrying out contracts of insurance against risks of the persons insured sustaining injury as the result of an accident or of an accident of a specified class or dying as the result of an accident or of an accident of a specified class or becoming incapacitated in consequence of disease or of a specified class, being contracts that are expressed to be in effect for a period of not less than five years or without limit of time and either are not expressed to be terminable by the insurer before the expiration of five years from the taking effect thereof or are expressed to be so terminable before the expiration of that period only in special circumstances therein mentioned; and

(c) effecting and carrying out contracts of insurance, whether effected by the issue of policies, bonds or endowment certificates or otherwise, whereby, in return for one or more premiums paid to the insurer, a sum or a series of sums is to become payable to the insured in the future, not being such contracts as fall within either of the foregoing paragraphs;

but does not include industrial assurance business.
(7) In this Part of this Act, "pecuniary loss insurance business" means the business of effecting and carrying out contracts of insurance against any of the following risks, namely,—

(a) risks of loss to the persons insured arising from the insolvency of debtors of theirs or from the failure (otherwise than through insolvency) of debtors of theirs to pay their debts when due;

(b) risks of loss to the persons insured arising from their having to perform contracts of guarantee entered into by them;

(c) risks of loss to the persons insured attributable to interruptions of the carrying on of businesses carried on by them or to reductions of the scope of businesses so carried on:

(d) risks of loss to the persons insured attributable to their incurring unforeseen expense; and

(e) risks neither falling within any of the foregoing paragraphs nor being of a kind such that the carrying on of the business of effecting and carrying out contracts of insurance against them constitutes the carrying on of insurance business of some other class.

(8) In this Part of this Act, "personal accident insurance business" means the business of effecting and carrying out contracts of insurance against risks of the persons insured sustaining injury as the result of an accident or of an accident of a specified class or dying as the result of an accident or of an accident of a specified class or becoming incapacitated in consequence of disease or of disease of a specified class, not being contracts falling within subsection (6)(b) above.
(9) In this Part of this Act, "property insurance business" means the business of effecting and carrying out contracts of insurance against risks of loss of, or damage to, material property, not being risks of a kind such that the business of effecting and carrying out contracts of insurance against them constitutes marine, aviation and transport insurance business or motor insurance business.")
5.10 p.m.
LORD WALSTON: My Lords, I beg to move that this House doth agree with the Commons in Amendment No. 132, and with it I think it would be convenient, although it is rather a mouthful, to speak to some 55 other Amendments. They are Nos. 132 to 137 inclusive, 139, 140, 141, 143, 152 to 156 inclusive, 158, 159, 160, 162, 164, 165, 169, 170, 171, 179, 181, 183, 184, 186, 216, 228, 229, 230, 232 to 236 inclusive, 238, 239, 241, 244, 246, 247, 266, 320, 322, 323, 325 to 330 inclusive, 347, 348 and 349.
Your Lordships should not get distressed by this great number of Amendments, because a large number are consequential, and I shall not have to speak at any great length on each and every one of them. The main object of this group of Amendments is to extend the Board's supervision to all classes of insurance business. I am quite sure that, particularly in view of relatively recent events in the insurance world, there will be general agreement among your Lordships that the objectives at least of these general clauses and Amendments in particular are desirable and much in the public interest.
It is necessary, in my view, to move these Amendments in order to make the new control powers introduced by the present Bill effective over the whole range of insurance business conducted by the insurance companies. At the same time, the Amendments regroup and redefine the classes of business. The most significant Amendments are Nos. 132, 135, 165, 238, 239, 244 and 246, which introduce seven new clauses. The substantive Amendment is Amendment No. 132, which is supplemented by Amendment No. 238. The other Amendments are largely consequential.
Briefly, the seven new clauses will have the following main effects. The new clause under Amendment No. 132 makes Part II of the Bill apply to all classes of insurance. Six of the existing classes under the 1958 Act are redefined so as
1240
to take in, together with two new classes, the types of insurance to which supervision is now extended. This extension is needed so that the new system of authorisation introduced by Clause 50 as replaced by Amendment No. 135 comes into effective operation. The extension also takes account of the growing importance of various types of insurance not previously supervised. As examples of that, I would cite credit insurance, and possibly glass insurance, plate glass insurance, burglary insurance when the insurance is against burglary only and not, as is more usually the case, against fire and theft.
The definitions which are now adopted do not in fact differ much from the former ones, and they have the additional advantage of enabling Her Majesty's Government to conform with the recommendation by the Organisation for the Economic Co-operation and Development that class definitions should be based on an agreed standard classification. This is a considerable advantage.
The new clause under Amendment No. 238 qualifies the class definitions so as to enable companies whose policies in one particular main class embrace risks of another class written as incidental to the main risk without requiring an authorisation from the subsidiary class; in other words, it is a simplifying clause which will make the efficient operation of the insurance companies somewhat easy.
The new clause under Amendment No. 239 exempts from the operation of Clause 49 and of the principal Act, bankers who carry on one of the new insurance classes known as "pecuniary loss insurance business" in the course of their banking business, because it is not really felt appropriate that such bankers should be supervised. So that again is what one might call a relaxing Amendment.
The new clause under Amendment No. 244 is no more than one which facilitates the transitional period and provides for transition. The new clause under Amendment 246 is also a transitional provision needed to prevent any dislocation of the business of those insurance companies which carry on only classes of business to which the principal Act does not apply until the Bill is enacted, and which are expressly precluded by the wording of their memoranda of association from

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carrying out any class of insurance business to which that Act, or any enactment amending or extending that Act applies.
LORD DRUMALBYN: My Lords, would the noble Lord say which Amendment he is referring to now?
LORD WALSTON: My Lords, this is Amendment No. 246.
LORD DRUMALBYN: My Lords, with respect to the noble Lord, he did not list that among the clauses that he was dealing with.
LORD WALSTON: My Lords, apologise to the noble Lord. It is not for me to suggest that perhaps I spoke too fast, and therefore he was unable to take it down.
LORD FERRIER: My Lords, the noble Lord said "249".
LORD WALSTON: My Lords, all I can say is that it is on the piece of paper from which I read; but it is perfectly possible that in this long list I did skip over No. 246.
LORD DRUMALBYN: My Lords, with respect, it is not on the list. I have the list also. It comes much lower down the list, and I was hoping to raise that separately.
LORD WALSTON: My Lords, then there must be more than one list. I can assure the noble Lord that it is on the list from which I read, and my suspicion is that I did read it out. Would the noble Lord rather I did not proceed with it? It is most germane to this particular group of Amendments. It is not in fact an Amendment of enormous substance but is a facilitating Amendment, which is designed to make life easier for the companies which are affected by this Bill as a whole, and to ease their path during what might otherwise be an awkward transitional period.
There are, as noble Lords well realise, certain companies whose memoranda of association define within fairly close limits the type of business they can undertake, and as the result of this Bill they may feel that they wish to enlarge the scope of their business. This will entail extending their memoranda of association. This will take a little time, and the sole object of this clause is to enable them to carry
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on business during such time. I do not know whether that is a sufficient explanation to encourage the noble Lord to let me deal with these clauses together. But if he is not satisfied now or at a later stage, I will withdraw Amendment No. 246 from this group and speak to it when it takes its turn in the list.
LORD FERRIER: My Lords, I am sorry to interrupt the noble Lord. Amendment No. 246 seeks to insert another clause after Clause 87. I cannot quite make it follow. Is it correct that it is Clause 87?
LORD WALSTON: It certainly inserts a new clause, and I think the noble Lord is right in saying that it occurs at that point. I see that Amendment No. 246 is that, "After Clause 87 insert the following new clause", which reads:
"Any provision of a company's memorandum of association that expressly precludes it from carrying on insurance business of any class shall cease to have effect."
That is one to which I am speaking.
LORD FERRIER: Yes, my Lords, but if one refers to Clause 87 it does not seem to fit in.
LORD WALSTON: Amendment No. 246 is to be inserted after Clause 87, and is to be a new clause.
LORD FERRIER: I am sorry, I still cannot make it make sense.
LORD WALSTON: My Lords, I am sorry that my explanation is not sufficiently clear to the noble Lord, but I hope that, even if the actual position in the list is unclear, the meaning and the scope of the Amendment is clear. It is more important what it does rather than where it actually appears in the Bill. If it is not clear to the noble Lord, undoubtedly he will let me know in due course where it is not clear and I will try to clarify the position further. Then there is a further new clause under Amendment 135 which is simply a replacement of Clause 50, which is a redrafting Amendment; and a further drafting Amendment, which is the new clause mentioned under Clause 165. All the other very long list of approximately 50 Amendments are purely consequential on one or other of these clauses. I beg to move that this House doth agree with Commons Amendment No. 132.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Walston.)
LORD DRUMALBYN: My Lords, I have expressed condolences with the noble Lord for having had to move such an enormous collection of Amendments which would have made a Bill in themselves. I think that he has answered most of the queries I had in mind, particularly that Amendment No. 135 makes no alteration in substance at all in the existing Clause 50. This was a clause which was the subject of a good deal of misapprehension at the time as to what had and had not to be authorised. I think we have now got it clear, although I am bound to say that, comparing the existing Clause 50 and the new clause, I was not at all certain that there were no changes of substance. I am glad to have his assurances that there are not.
On this particular clause I am afraid that I have not been able to understand the noble Lord's explanation of the new clause in Amendment No. 246. I still fail to understand how it is right to secure a temporary provision to enable a company whose memorandum of association expressly precludes that company from carrying on insurance business to carry it on. It seems to be a very curious provision to make in order to achieve a purely temporary effect. But there it is. I do not think there is anything we can do about it now, but I am not at all sure that this was the right way of going about this particular provision.
Dealing with this series of Amendments as a whole, they represent not only quite an extension of the Bill, but a considerable alteration in the concept of the Bill and the classes of insurance in general. I am bound to say that this is such a fundamental change that it is one we feel ought to have been thought of before the Bill was introduced in the first place, rather than at this stage. It may be that this was done in response to representations which were made after the Bill came into effect. I suspect that that is not so, and that it was done as a result of second thoughts in the Board of Trade. I think that this is regrettable. The main reason why it got a place in this Session's legislation at all was because of the insurance aspects, and one
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would have hoped that this part of it had been, to use the noble and learned Lord the Lord Chancellor's words, carefully prepared in advance of its being brought before us. It is an extraordinary series of Amendments, and I do not think it reflects the greatest credit on the Government's management of business.
LORD CHORLEY: My Lords, I think Amendment No. 246 is intelligible, although I have not done a geat deal of research into it. In earlier times different sorts of obligation in respect of giving security were imposed on different types of insurance company. When they were formed, companies had to put the type of business they were going to do in the memorandum of association. I imagine that they wished to preclude themselves from entering upon certain areas of insurance which would have attracted obligations with which they did not wish to comply. Therefore, it was quite sensible to say: "While we have set up this company for the purpose of conducting certain types of insurance, we do not intend to conduct other types of insurance, and we preclude ourselves from doing so". If the noble Lord looks at the actual words, he will see that it talks about a "class"—that is to say, insurance business of any class. This surely means an area of insurance such as accident insurance, or whatever it may be.
The obligations imposed under the Bill are quite different. It is quite reasonable to say that, as these obligations are quite different from the old ones which the organisers of a company had in mind when they excluded that particular class of insurance from the business they intended to do, if they had had to comply with the obligation laid down in the present Bill they would not have made that exclusion. It seems not unreasonable that there should be an omnibus clause of this kind which gives power to do this, instead of having to go through all the rigmarole of special resolutions, and so on, in order to alter the objects for which the company is now going to operate. This is a simple and sensible way of handling that particular problem. That is what occurs to me on a rather cursory examination of this matter. It may be that that it is not right, but it seems to me a reasonable explanation.
LORD FERRIER: My Lords, I think I have the point.
LORD CHORLEY: My Lords, with regard to the general group of clauses, they are very valuable indeed. They fall into line with the extended powers of the Board in relation to inspections, which we were discussing earlier. Some of the recent scandals in connection with insurance have brought very much into the limelight the fact that the control over insurance has been altogether inadequate. There has been, indeed, no control over insurance within living memory, and particularly on the security side the requirements were most inadequate. If you compare what was laid down in the Act of Parliament with what was required at Lloyd's (the way in which they built up security in that institution was a model in this respect), the position is very much exemplified: in much the same way as the Stock Exchange have to a very large extent led Parliament in the requirements which now appear in the Companies Bill.
It is high time that very much tighter control was exercised over the business of insurance, because there is hardly anybody in the country who is not insured in one way or another. It is right that an area of business in which the social implications, as well as the economic ones, are so tremendously widespread, and so tremendously important to the great mass of the citizens, should be very carefully looked after by the organs of the State. That certainly was not done, and this Bill goes at any rate some distance towards doing that.
It is true that this has been introduced at a very late stage in this Bill but, as we all know, better late than never! I am inclined to think that there was a certain amount of hurry about this in the first instance, and this Bill has been worked over in the Board of Trade. As I said earlier, I know that they have been in consultation with commercial lawyers in regard to many of the matters which appear in this Bill, and it is clear that during these last weeks they have succeeded in working out a very much more effective system of control than was provided in the Bill when it first came before your Lordships' House. I think it is a good thing that that should have been done, and I welcome this group of clauses.
LORD HAWKE: My Lords, I think this will be the most convenient opportunity to make a few short remarks at large on this part of the Bill. It deals
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reasonably effectively with certain of the risks to the general public—the risks of fraud and failure—though I am still doubtful whether the margin of £50,000, et cetera, is a wide enough one. When the long list of new clauses started to unfold before my eyes, my hopes were raised that they might deal with the two very grave risks to the general public which I mentioned on Second Reading. But I am afraid that when I had got to the end of them my heart sank, because it never touched them at all.
I refer, first, to the risk which anybody may run if he moves somebody else's car from one corner of the road to another, and happens to injure somebody on the way. He may be financially ruined because that car may not be insured for any driver, and he may have no knowledge whatsoever of that. Secondly, if any of us accept a lift as passengers in a car, and then, through an accident, happen to be crippled for life, we may never know whether we can get any compensation, because we have no means of knowing whether the car has been insured in respect of passengers. Those are the points which I think are most urgent for the protection of the public, and I trust that Her Majesty's Government will do something about them in due course.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 133]
Clause 49, page 50, line 4, leave out from ("class") to end of line and insert ("relevant for the purposes of this Part of this".)
LORD WALSTON: My Lords, I beg to move No. 133.
Moved, That this House cloth agree with the Commons in the said Amendment.—(Lord Walston.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[Nos. 134–137]
Clause 49, page 50, line 15, leave out from ("was") to end of line 18 and insert ("carrying on in Great Britain insurance business (whether of that class or not)")
Clause 50: Leave out Clause 50 and insert the following new clause—
Authorisations for purposes of section 49
("—(1) In the case of insurance business of each class relevant for the purposes of this Part of this Act (other than industrial assurance business), the following shall, by virtue of

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this subsection, be authorised to carry it on in Great Britain, namely,—

(a) an incorporated company which, immediately before 3rd November 1966, was carrying it on in Great Britain;

(b) a registered society which, immediately before that day, was so carrying it on; and

(c) an unincorporated body of persons which, immediately before that day, was so carrying it on:

(not being, as the case may be, a company, society or body that was then carrying on business in contravention of section 2(1) of the principal Act) and, in the case of industrial assurance business, the following shall, by virtue of this subsection, be authorised to carry it on in Great Britain, namely—

(i) an incorporated company which, immediately before 3rd November 1966, was carrying it on in Great Britain; and

(ii) a registered society which, immediately before that day, was so carrying it on;

(not being, as the case may he, a company or society that was then carrying it on in contravention of the said section 2(1)).
(2) Subject to the following provisions of this Part of this Act, the Board of Trade may, in the case of insurance business of each class relevant for the purposes of this Part of this Act (other than industrial assurance business), authorise the following to carry it on in Great Britain, namely,—

(a) an incorporated company;

(b) a registered society; and

(c) an unincorporated body which, immediately before 3rd November 1966, was carrying on in Great Britain insurance business (whether of that class or not);

and may, in the case of industrial assurance business, authorise an incorporated company and a registered society to carry it on in Great Britain.")
Clause 51, page 51, line 25, leave out ("the last foregoing section") and insert ("section (Authorisations for purposes of section 49) of this Act")
Clause 51, page 51, line 30, leave out from ("Britain)") to ("business") in line 33 and insert ("general")
LORD WALSTON: My Lords, I beg to move Amendments Nos. 134 to 137 inclusive.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Walston.)
On Question, Motion agreed to.
5.35 p.m.

COMMONS AMENDMENT
[No. 138]
Clause 51, page 52, line 41, leave out from ("Britain") to end of line 43.
LORD WALSTON: My Lords, with your Lordships' permission I should like to couple with this Amendment some other Amendments, but fortunately this time only two others: Amendments Nos. 151 and 231. As at present worded, Clause 51(5) entitles the Board of Trade to authorise an insurance company not having the requisite solvency margin or paid-up capital to carry on insurance business if the Board are satisfied: first, that the authorisation is required for the purpose only of carrying on a limited category of insurance business, or of insurance of a limited class of persons; and, secondly, that the company does not carry on or propose to carry on in Great Britain any other insurance business.
The restriction imposed by this second condition would prevent the concession being applied in the case of a small company which was already authorised to carry on one limited class of business, such as windscreen insurance (which falls within the definition of motor vehicles insurance business), and which might wish to extend its business in order to carry on another limited, and to some extent allied, category of business, such as plate glass insurance business, which at the present time falls within the definition of property insurance business. Amendment No. 138 removes this restriction. Amendment No. 231 effects an identical Amendment to Clause 79(1), and allows the Board in similar circumstances to grant the concessions described in that clause.
The new clause introduced by Amendment No. 151 will enable the Board to restrict an authorisation under Clause 50 to a specified limited category of business or to the insurance of a limited class of persons, in those cases where the Board are satisfied, in accordance with Clause 51(5), that the financial standards set by Clause 51 need not be met because of the limited business to be undertaken; in other words, where it is only a small amount of business that is proposed to be done, but not if it is a major extension. A company which secured an authorisation under these less onerous conditions would thus be bound to make new application if it subsequently decided to extend its business beyond the limits originally agreed. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Walston.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 139–143]
Clause 52, page, 53, line 1, leave out ("50"), and insert ("(Authorisations for purposes of section 49)")
Clause 52, page, line 3, leave out from ("of") to ("unless") and insert ("any class")
Clause 53, page 53, line 12, leave out ("50") and insert ("(Authorisations for purposes of section 49)")
Clause 52, page, line 18, after ("directions"), insert ("or instructions")
Clause 54, page 53, line 29, leave out ("50") and insert ("(Authorisations for purposes of section 49)")
LORD WALSTON: My Lords, I beg to move Amendments Nos. 139 to 143 inclusive.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Walston.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 144–150]
Clause 54, page, 53, line 32, leave out from ("body") to ("all") in line 33
Clause 54, page, 53,line 41, leave out from beginning to end of line 9 on page 54 and insert—

("(b) a requirement that assets of the company, society or body to a value not less at any time than the amount of its domestic liabilities at that time shall be maintained in the United Kingdom;

(c) a requirement that assets of the company, society or body of a specified description, free from any mortgage or charge and to a value not less at any time than which ever is the greater of the following amounts, that is to say, the amount of a specified proportion of the domestic liabilities of the company, society or body at that time, and £50,000, shall be maintained in the United Kingdom and that those assets, or, in the case of any of them to which there are documents of title, those documents, shall be held in the custody of a person approved for the purposes of this section by the Board of Trade.")

Clause 54, page 54, line 13, at end insert—
("(1A) A requirement imposed by virtue of paragraph (b) or (c) of subsection (1) above may either be so framed as to come into effect immediately after the day on which it is imposed or he so framed as to come into effect after the expiration of a specified period (or such longer period as the Board of Trade may allow).
(1B) Assets of a company, society or body held in the custody of a person shall he taken to be held by him in compliance with a re- 1250
quirement imposed by virtue of paragraph (c) of subsection (1) above if, but only if, they are assets in whose case the company, society or body has given him written notice that they are to be held by him in compliance with such a requirement or they are assets into which assets in whose case the company, society or body has given him such written notice have, by any transaction or series of transactions, been transposed by him on the instructions of the company, society or body; and documents of title to assets of a company, society or body held in the custody of a person shall be taken to be held by him in compliance with such a requirement if, but only if, they are documents in whose case the company, society or body has given him notice that they are to be held by him in compliance with such a requirement.")
Clause 54, page 54,line 18, leave out subsection (3) and insert—
("(3) The Board may rescind a requirement imposed under this section if it appears to them that it is no longer necessary for the requirement to continue in force, and may from time to time vary any such requirement (other than one imposed by virtue of paragraph (b) of subsection (1) above).")
Clause 54, page, 54, line 19, at end insert—
("(3A) When the Board impose under subsection (1)(c) of this section a requirement on a company, society or body, or rescind or vary a requirement so imposed, they shall forthwith serve—

(a) except where the requirement is one imposed on a registered society (other than one registered in Northern Ireland), on the registrar of companies;

(b) in the said excepted case, on the appropriate registrar as defined by section 73(1) of the Industrial and Provident Societies Act 1965;

written notice stating that fact, and, in the case of a notice of the imposition of a requirement, setting out the terms of the requirement, in the case of a notice of the rescission of a requirement, identifying the requirement, and in the case of a notice of a variation of a requirement, identifying the requirement and setting out the terms of the variation.
(3B) A notice served in pursuance of the last foregoing subsection on the registrar of companies shall be open to inspection, and a copy thereof may be procured by any person on payment of such fee as the Board may direct; and every document purporting to be certified by the registrar of companies, or by a person appointed in that behalf by the President of the Board of Trade, to be a copy of such a notice shall be deemed to be a copy of that notice and shall be received in evidence as if it were the original notice, unless some variation between it and the original be proved.
(3C) Section 71(1) of the Industrial and Provident Societies Act 1965 (which empowers the Treasury to make regulations respecting inter alia, the inspection of documents kept by the appropriate registrar under that Act) shall have effect as if the reference to documents so kept included a reference to notices served in pursuance of subsection (3A) above on the appropriate registrar.")
Clause 54, page, 54, line 19, at end insert—
("(4A) In this section any reference to a domestic liability is a reference to a liability arising under a contract made in the United Kingdom, or under a contract of insurance made elsewhere, being a contract of insurance in whose case, if only one premium is payable thereunder, the premium, or, if more than one premium is payable thereunder, any of the premiums so payable, is payable or has been paid in the United Kingdom; and in computing the amount of any liabilities for the purposes of this section, all contingent and prospective liabilities shall be taken into account, but not liabilities in respect of share capital.")
After Clause 54, insert the following new clause—
Provisions relating to assets subject to certain requirements imposed under section 54
(".—(1) No assets held in the custody of a person in compliance with a requirement imposed by virtue of paragraph (c) of section 54(1) of this Act, and no documents so held in compliance with a requirement so imposed shall, so long as the requirement is in force, be withdrawn from the custody of that person except with the written consent of the Board of Trade.
(2) If a mortgage or charge is created by a company, society or body at a time when there is in force a requirement imposed on the company, society or body by virtue of paragraph (c) of section 54(1) of this Act, being a mortgage or charge conferring a security on any assets which are held in the custody of a person in compliance with the requirement or on any assets documents of title to which are so held in compliance with the requirement, the mortgage or charge shall, to the extent that it confers such a security, be void against the liquidator and any creditor of the company, society or body.")
5.39 p.m.
LORD WALSTON: My Lords, here, again, I would ask your Lordships to agree to my speaking to several other Amendments; namely, Nos. 144 to 150 inclusive, No. 180, No. 182, No. 185 and No. 187. The purpose of these Amendments is to provide an additional safeguard, for United Kingdom policyholders, which I think noble Lords will agree is a desirable aim, by empowering the Board of Trade to require that the company's liabilities to the United Kingdom policyholders be backed by assets in the United Kingdom, and that a specified proportion of those assets (or the documents of title relating to them) should be held in custody in the United Kingdom by "a person"—and that, of course, would include a bank—approved by the Board of Trade. A second purpose is to go as far as possible to meet a particular objection of the British Insurance Association to the wording of the existing clauses.
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As worded at the present time, Clauses 54(1)(b) and 65(1)(b) would give the Board power to require an insurance company to maintain in Great Britain a specified proportion or value of its assets. The power could be used only during the first five years after the issue of an authorisation, or when it appeared that there was a risk of the company becoming insolvent. So it is either the young companies or companies about which there is a legitimate doubt. There was a serious attempt to meet the objections that the British Insurance Association put forward. In fact, they were the subject of Amendments in your Lordships' House earlier on, but those Amendments were withdrawn, I am told, on the understanding that the Government would try to find a more satisfactory formula. However, drafting problems have proved extremely difficult, as we warned at the time, and in the event no solution has been found which would both provide the powers at present contained in Clauses 54 and 65 and, at the same time, meet the B.I.A.'s objection in its entirety. Your Lordships will realise that we have to hold the balance between the reasonable wishes of the reputable insurance companies for the efficiency of their business and the protection of the policyholders in the case of companies which are somewhat less reputable.
As at present worded, these clauses provide in one respect greater powers than are really needed, and accordingly we can go some way to meet the B.I.A.'s fears of our encouraging the imposition of excessive localisation of funds overseas by limiting the Board's powers simply to requiring companies to maintain here assets of no greater value than the company's liabilities in the United Kingdom. Here, perhaps, I may point out that the liabilities are those defined in the 1958 Act—in fact, in Clause 13, subsection (2). On the other hand, we must retain the power to require the maintenance of assets, or the documents of title thereto, in specified custody. We must know where they are. This is to prevent insurance companies from being set up in the United Kingdom with a share capital which is either illusory from the start or, even if it is real, quickly removed outside of the country. Of the various ways of remedying this situation, the most practical is that which empowers the Board

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to require that assets in the United Kingdom of an amount related to the company's liabilities in this country (with a minimum of £50,000) should, during the first five years of the company's life, be held in approved custody.
Amendment No. 144 removes the present limitation whereby the Board's use of the powers provided within Clause 54(1) cannot be applied for any purpose other than that of
"securing the proper conduct of the business of the company …"
It is good to remove this limitation, I suggest, because of the changes in the nature of the requirements introduced by these Amendments, and I believe that the domestic creditors will be adequately protected in this way. As to Amendment No. 145, the substitution of "United Kingdom" for "Great Britain" has been made and put in at the request of the Northern Ireland Government. Amendment No. 146 makes it incumbent on the insurance company to notify the authorised custodian in writing that the assets are to be held by him in compliance with a requirement imposed under Clause 54(1)(c). This is to meet the case where the custodian was the insurance company's normal bankers, and where it would be necessary for the bankers to distinguish between the assets which they were holding in their capacity as bankers to the company rather than as authorised custodian.
The new clause introduced by Amendment No. 150 would, under subsection (1), allow the withdrawal from custody of the assets referred to in the proposed new subsection only where the written consent of the Board of Trade has been obtained; and subsection (2) would have the effect of nullifying any mortgage or charge by the insurance company on assets which were held, or the documents of title to which were held, in custody under the requirements of Clause 54(1)(c) as amended. In order to protect a mortgagee, or a potential mortgagee, Amendments Nos. 148 and 185 were made following a suggestion by the Opposition in Committee in another place, so that arrangements could be made to warn prospective mortgagees when certain assets of an insurance company were the subject of a requirement under the clauses to which I have already referred. The
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Amendments require the Board of Trade to put a notice giving details of the imposition, recission or variation or any such requirement on the public file of the insurance company, and this, of course, is open to inspection by the public. My Lords, I beg to move that this House doth agree with the Commons in the said Amendment.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Walston.)
LORD CHORLEY: My Lords, I think we should all agree that this is a very valuable group of clauses, in so far as it goes. What I am not quite clear about—it may be that I am wrong, and I should be glad to have the Government's view about it; if I am right there is not much we can do about it—is as to whether this is sufficiently tied up. What I am particularly worried about is this period of five years during which the assets are to be held in approved custody. The noble Lord said that the object of this was to cover the period while the insurance company was getting on its feet. I can understand that; but what has happened in a number of cases is that it is not a company which is getting on to its feet but a company which has been on its feet which is bought up.
This happened both after the First World War and after the Second World War. It happened to a number of companies of some prominence in the insurance world which had at some time had large businesses but in which, during the war years, things went wrong; and the same thing might happen even in peace years. After the First World War, at least, there were two, if not three, important companies bought up by rather speculative groups of people in the City; and I think it happened once or twice after the Second World War, too. The result was that they did insurances on a very unsound basis. In particular, after the First World War, there was an enormous increase in motor car insurance, on which the premiums are not easy to calculate. Certainly in those cases—and I remember them very well, because it was when I was first practising at the Bar—there were some very serious losses which occurred throughout the country.
I do not see that that position is tied up by this group of clauses. It may be

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that I am wrong. A company might get itself well established and then be taken over in the way which has become very familiar to us in connection with the take-over of companies by a group of people who are not very scrupulous. They might be companies which were not sufficiently firmly established, although by this time the five years has expired, after which, apparently, the assets no longer have to be held at the bank or otherwise kept in approved custody.
How is this to be dealt with? I appreciate that the Board of Trade are given powers, in cases where they are satisfied that the company is shaky, to call upon it to provide security. I am not altogether clear how far this goes, but in this type of case an organisation like the Board of Trade is apt to move rather slowly. It may be that the company had been ordered to be wound up by the court, possibly before the Board of Trade made the order; and certainly before the company in question had succeeded in providing the security that the Board of Trade had ordered them to provide. This strikes me as being a possible weakness in this arrangement. I should be glad to have the Government view about it. If in fact it is a possible weakness, perhaps it could be borne in mind to be put right in the Bill that we hope to have later on.
LORD DRUMALBYN: My Lords, I wonder whether I could make one or two observations. I should have thought that what the noble Lord, Lord Chorley, has in mind is covered by the necessity to notify any change of ownership. This raises an important point. It is that all the Amendments made—indeed all of the Bill—is going to place a great deal more responsibility for insurance on the Board of Trade than they have at the present time. This was a matter that we discussed at an earlier stage. Many of the Amendments that are here before us are clearly going to involve the Board of Trade in employing people with a very considerable experience of insurance, and in expanding very rapidly their insurance department. The House has not heard about this, and it seems to me that this is a matter of which we ought to take cognizance when we are dealing with these Amendments. That is the main
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point I wanted to make. There is only one rather grumpy observation that I should like to make. It is that, Clause No. 182 is pretty ghastly. There are about 24 lines, purely of reference upon reference. I wonder whether it is really necessary to draft it in this way. I cannot possibly let that kind of clause go past without protest.
LORD WALSTON: My Lords I will reply briefly. It is unusual for the noble Lord, Lord Drumalbyn, to be grumpy. I think that if he skims, rather than reads carefully, through Clause No. 182, he will be less grumpy. I am assured that it is the most effective and clear way of expressing the intention of the Bill.
LORD DRUMALBYN: May I say that if you believe that you would believe anything.
LORD WALSTON: My Lords, my words were, "I am assured"; there was no committal on my part. With regard to the point of the noble Lord, Lord Chorley, I am grateful to the noble Lord—I can almost call him "my noble friend"—Lord Drumalbyn. He answered the question so effectively. Clause 65 is the answer to this. There has to be a notification of change of ownership; and if there is good reason to believe that the company is likely to become insolvent, that there is a risk, the Board of Trade has power to act. All through this Bill, and particularly in these clauses which deal with insurance companies, we have to hold this balance between protecting the public against the unscrupulous and the inefficient and in not interfering unduly with the reputable and efficient. If we gave complete protection to the public there would necessarily be a great deal of interference with people who need not be interfered with. If we gave a full and desired degree of freedom to the reputable companies then there would be a smaller degree of protection to the general public against the others. We have attempted and, I believe, succeeded, in holding the balance here. With regard to the extra work imposed upon the Board of Trade, that is true: there will have to be a strengthening of the Department. I am sure there will be a strengthening not only in numbers but in the quality of numbers.
LORD BOOTHBY: My Lords, I think this is a good Bill. I have supported it all through. It is necessary and desirable. I think it has been hurriedly drafted, although that is neither here nor there. But I am a little worried about not only the extra work to be imposed on the Board of Trade but the extra burden of work to be imposed upon every single company in this country. I wonder whether the Government would have a look at this point, just to see whether they can ease the burden not only on the Board of Trade but on companies in general; because they really will be required to do a tremendous amount of extra work.
LORD CHORLEY: My Lords, may I say how grateful I am to the noble Lord opposite and also to my noble friend? Actually, what he said was, in effect, what I was saying. I was aware that there was this power in the Board of Trade to make an order; but that is not necessarily the solution to this problem. For example, a company which is a going concern is taken over; all its insurances are going on and the agents up and down the country continue to write new insurance. It is during this gap that the assets have gone. You cannot expect the Board of Trade to discover until a certain amount of time has elapsed that the new management is shaky. When it does so, then the necessary routines are to be gone through. The noble Lord opposite, as an ex-Minister, is well aware of how slowly the machinery of a Government Department grinds.
It seems to me that it would be very much better if these assets were kept in the safe custody of the bank, or where-ever it may be, indefinitely, and not just for the period of five years. I am sure there is a sensitive period during which it might be that large numbers of people might find their policies were no longer of any value, and that serious accidents and tragedies would occur which they would find were not covered. All this business we have had during the last year—we have had reports of it in the newspapers—would be repeated. There would be the same public dissatisfaction; and we should then be told that this Bill was not effective.
LORD DRUMALBYN: My Lords, may I ask whether the noble Lord is suggesting
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that each time there is a change of ownership of an insurance company—and this may be the right solution; I do not know—a fresh authority would have to be obtained? I think this is the logical outcome of what he is saying.
LORD CHORLEY: If the assets had to be kept at the bank, not only for five years but during the time that the company was in fact writing insurance, then when it was taken over by some other company they would have to replace them before they could be allowed to take over the management. In effect, the new owners would have to give the security needed. The security is not enormous when one considers the underwriting commitments of the average insurance company. It seems to me that it ought to be maintained indefinitely. People doing this sort of business are being given a very valuable area in which to operate. It does not seem to me out of the way to require that they should secure themselves. At Lloyds, by a very ingenious and not too complicated system, this has been very much more effectively covered than we are doing it in this Bill.
LORD MCCORQUODALE OF NEWTON: My Lords, I wonder whether one general observation might come in at this stage. I am entirely in agreement with these Amendments to strengthen the law about insurance; indeed I am sure that the whole House is. But I think there is one danger. There may be so much publicity about everybody being protected, every insurance company being perfectly safe, and all the rest of it, that the obligation on the individual to take the same care in the future as in the past that his insurance is placed, not wherever he thinks right, but with some care, may go by the board. I think it would be a pity if that impression got about and nobody took any care in the future, because it is quite impossible to protect everybody from the fruits of their folly.
On Question, Motion agreed to.
6.0 p.m.

COMMONS AMENDMENTS
[Nos. 151–187]
After Clause 54, insert the following new clause—
Power to impose restrictions on company benefiting by virtue of section 51(5)
(".—(1) An authorisation under section (Authorisations for purposes of section 49)

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of this Act in whose case section 51 of this Act does not apply to the issue thereof may contain provision imposing on the company, society or body with respect to which it is issued either or both of the following obligations, namely—

(a) to refrain, in the course of carrying on business of the class to which the authorisation relates, from insuring persons other than of a specified class; and

(b) to refrain, as aforesaid, from insuring persons against risks other than of a specified class.

(2) An obligation binding on a company, society or body by virtue of the foregoing subsection may be discharged by the Board of Trade, if it appears to them to be no longer necessary for the obligation to continue in force or may be varied at any time by them.")
Clause 55, page 54, line 22, after ("business") insert ("relevant for the purposes of this Part of this Act")
Clause 55, page 54, line 23, leave out ("50") and insert ("(Authorisations for purposes of section 49)").
Clause 55, page 54, line 5, leave out ("50") and insert ("(Authorisations for purposes of section 49)")
Clause 55, page 54, line 9, after ("business") insert ("relevant for the purposes of this Part of this Act")
Clause 55, page 54, line 9, leave out ("section 50(2)") and insert ("subsection (2) of section (Authorisations for purposes of section 49)")
Clause 55, page 54, line 14, after ("on"), insert ("of")
Clause 55, page 54, line 37, leave out from beginning to end of line 25 on page 56 and insert—

("(a) the restriction appropriate to the carrying on by an insurance company of industrial assurance business is that the company shall not effect a contract of insurance on human life or a contract to pay an annuity on human life;

(b) the restriction appropriate to the carrying on by an insurance company of liability insurance business is that the company shall not effect or vary any such contract of insurance as is mentioned in subsection (3) of section (Classes of insurance business relevant for purposes of Part II, and definitions thereof) of this Act;

(c) the restriction appropriate to the carrying on by an insurance company of marine, aviation and transport insurance business is that the company shall not enter into or vary any such contract as is mentioned in subsection (4) of that section;

(d) the restriction appropriate to the carrying on by an insurance company of motor vehicle insurance business is that the company shall not enter into or vary any such contract as is mentioned in subsection (5) of that section;

(e) the restriction appropriate to the carrying on by an insurance company of ordinary long-term insurance business is that
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the company shall not effect a contract of insurance on human life or a contract to pay an annuity on human life or any such contract as is mentioned in paragraph (b) or (c) of subsection (6) of that section;

(f) the restriction appropriate to the carrying on by an insurance company of pecuniary loss insurance business is that the company shall not enter into or vary any such contract as is mentioned in subsection (7) of that section;

(g) the restriction appropriate to the carrying on by an insurance company of personal accident insurance business is that the company shall not enter into or vary any such contract as falls within subsection (8) of that section; and

(h) the restriction appropriate to the carrying on by an insurance company of property insurance business is that the company shall not enter into or vary any such contract as is mentioned in subsection (9) of that section.")

Clause 56, page 57, line 5, leave out ("50") and insert ("(Atithorisations for purposes of section 49)")
Clause 56, page 57, line 7, after ("class"), insert ("relevant for the purposes of this Part of this Act")
Clause 56, page 57, line 9, leave out ("or")
Clause 56, page 57, line 11, after ("class"), insert ("so relevant")
Clause 56, page 57, line 12, leave out first ("or")
Clause 56, page 57, line 19, leave out ("section 50(2)") and insert ("subsection (2) of section (Authorisations for purposes of section 49)").
After Clause 56, insert the following new clause—
Alteration of scope of the principal Act
(".—(1) Subsection (1) of section 1 of the principal Act (which provides that, with certain exceptions, that Act shall apply to all insurance companies which carry on with Great Britain insurance business of all or any of the classes specified in that subsection) shall have effect with the omission of the words from "of all or any of the following classes" to the end of the subsection.
(2) In consequence of the foregoing subsection and of the classification of insurance business effected by section (Classes of insurance business relevant for purposes of Part II, and definitions thereof) of this Act, the provisions of the principal Act specified in column 1 of Schedule (Amendments of Insurance Companies Act 1958 consequential on sections (Classes of insurance business relevant for purposes of Part II, and definitions thereof) and subsection (1) of section (Alteration of scope of the principal Act) of this Act) to this Act shall have effect subject to the amendments respectively specified in relation thereto in column 2 of that Schedule; and, for the purposes of those provisions, as amended by that Schedule, the expression "ordinary long-term insurance business" shall have the meaning assigned to it by subsection (6) of section (Classes of insurance business relevant for purposes of Part II. and definitions thereof) of this Act.
(3) Subsection (3) of the said section 1 (which requires certain companies carrying on insurance business outside Great Britain to be treated for the purposes of that Act as if they were carrying on such business in Great Britain) shall cease to have effect.")
After Clause 57, insert the following new clause—
Reduction of maximum intervals between actuarial valuations required by section 5 of the principal Act
(". As from the expiration of the period of two years beginning with the day on which this Act is passed, section 5(1)(a) of the principal Act (which, as amended by this Act, imposes on an insurance company to which that Act applies which carries on industrial assurance business or ordinary long-term insurance business the requirement that it shall, once in every five years or at such shorter intervals as may be prescribed by the deed of settlement of the company, or by its regulations or byelaws, cause an investigation to be made into its financial condition, including a valuation of its liabilities, by an actuary) shall have effect with the substitution, for the reference to five years, of a reference to three years.")
Clause 58, page 58, line 42, leave out ("so given") and insert ("given in a statement or report so annexed")
Clause 58, page 58, line 42, at end insert—
("( ) The proviso to subsection (3) of section 34 of the principal Act (which excepts regulations made under the said section 9 from the requirement of that subsection that a statutory instrument containing regulations under that Act shall be subject to annulment in pursuance of a resolution of either House of Parliament) shall not apply to regulations made under the section substituted for the said section 9 by this section.")
Clause 59, page 59, line 11, leave out from ("no") to ("other") in line 12 and insert ("insurance business")
Clause 60, page 59, line 20, leave out from ("of") to ("may") in line 21 and insert ("insurance business")
Clause 60, page 59, line 23, after ("on"), insert ("such")
Clause 60, page 59, line 24, leave out from ("prepare") to end of line 25 and insert ("the prescribed statement of business of that class, being, if a form is prescribed for the statement, a statement in the prescribed form")
Clause 60, page 59, line 25, at end insert—
("( ) The Board of Trade may, on the application or with the consent of an insurance company, modify, in relation to that company, the requirements of the foregoing subsection for the purpose of adapting them to the circumstances of the company.")
Clause 63, page 60, line 42, leave out from ("1965") to ("shall") in line 1 on page 61.
Clause 63, page 60, page 61, line 2, leave out ("so kept") and insert ("kept by the appropriate registrar under that Act")
Clause 64, page 61, line 12, after ("on"), insert ("(whether within or outside Great Britain)")
Clause 64, page 61,line 17, leave out from the beginning to first ("the") in line 18 and insert ("its first financial year")
Clause 64, page 61, line 25, leave out subsection (2).
Clause 64, page 61, line 35, leave out from ("one") to ("Act") in line 36 and insert ("which, immediately before the passing of this Act, was carrying on (whether within or outside Great Britain) business which then constituted general business for the purposes of the principal")
Clause 65, page 62, line 12, leave out from beginning to end of line 23 and insert—

("(b) a requirement that assets of the company to a value not less at any time than the amount of its domestic liabilities at that time shall be maintained in the United Kingdom;

(c) a requirement that assets of the company of a specified description, free from any mortgage or charge and to a value not less at any time than whichever is the greater of the following amounts, that is to say, the amount of a specified proportion of the domestic liabilities of the company, society or body at that time, and £50,000, shall be maintained in the United Kingdom and that those assets, or, in the case of any of them to which there are documents of title, those documents, shall be held in the custody of a person approved for the purposes of this section by the appropriate authority.")

Clause 65, page 62, line 31, leave out ("specified in section 1(1) of the principal") and insert ("relevant for the purposes of this Part of this")
Clause 65, page 62,line 37, at end insert—
("( ) Subsections (1A) and (1B) of section 54 of this Act shall have effect for the purposes of this section subject to the modifications that, in the said subsection (1A), for the reference to paragraph (b) or (c) of section 54(1), there shall be substituted a reference to paragraph (b) or (c) of subsection (1) of this section, and, for the reference to the Board of Trade, there shall be substituted a reference to the appropriate authority, and, in the said subsection (1B), for the reference to paragraph (c) of section 54(1), there shall be substituted a reference to paragraph (c) of subsection (1) of this section; and section (Provisions relating to assets subject to certain requirements imposed under section 54) of this Act shall have effect where a requirement is imposed by virtue of paragraph (c) of subsection (1) above as it does where a requirement is imposed by virtue of paragraph (c) of section 54(1) of this Act, subject to the modifications that, for any reference to paragraph (c) of the said section 54(1), there shall be substituted a reference to paragraph (c) of subsection (1) of this section, and for the reference to the Board of Trade, there shall be substituted a reference to the appropriate authority.
Clause 65, page 62, line 39, leave out from ("no") to ("other") in line 40 and insert ("insurance business")
Clause 65, page 62, line 43, leave out ("specified in section 1(1) of the principal") and insert ("relevant for the purposes of this Part of this")
Clause 65, page 63, line 2, at end insert—
("(3A) When the appropriate authority imposes under subsection (1)(c) of this section a requirement on a company or rescinds a requirement so imposed, it shall forthwith serve—

(a) except where the requirement is one imposed on a registered society (other than one registered in Northern Ireland), on the registrar of companies;

(b) in the said excepted case, on the appropriate registrar as defined by section 73(1) of the Industrial and Provident Societies Act 1965;

written notice stating that fact and, in the case of a notice of the imposition of a requirement, setting out the terms of the requirement and, in the case of a notice of the rescission of a requirement, identifying the requirement.
(3B) Subsections (3B) and (3C) of section 54 of this Act shall have effect for the purposes of this section subject to the modification that, for any reference to a notice served in pursuance of subsection (3A) of that section, there shall be substituted a reference to a notice served in pursuance of the last foregoing subsection.")
Clause 65, page 63,line 6, leave out from ("no") to ("other") in line 7 and insert ("insurance business")
Clause 65, page 63, line 10, at end insert ("and "domestic liabilities" shall be construed in accordance with section 54(4A) of this Act")
LORD HUGHES: My Lords, Amendments Nos. 151 to 187 are a large group of formal Amendments consequential or minor, and non-controversial in their nature. With permission I beg to move this group en bloc.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Hughes.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 188–213]
Clause 67, page 64, leave out lines 2 to 16 and insert—
("The Board of Trade may at any time, if they think there is good reason so to do, give directions to any such body as follows, namely—

(a) a company formed and registered under the Companies Act 1948;

(b) an existing company within the meaning of that Act;

(c) a company to which the said Act of 1948 applies by virtue of section 378 thereof or which is registered under that Act by virtue of Part VIII thereof;

(d) a body corporate incorporated in, and having a principal place of business in, Great Britain, being a body to which any of the provisions of the said Act of 1948 with respect to prospectuses and allotments apply by virtue of section 435 of that Act;

(e) a body corporate incorporated outside Great Britain which is carrying on business in Great Britain or has at any time carried on business therein;

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(f) a body other than as aforesaid, and whether incorporated or not, which is, or appears to the Board to be, an insurance company to which the Insurance Companies Act 1958 applies")

Clause 67, page 64, line 20, leave out from beginning to ("on") in line 21 and insert ("or may at any time, if they think there is good reason so to do, authorise any officer of theirs,")
Clause 67, page 64, line 24, leave out from ("may") to end of line 25 and insert ("specify")
Clause 67, page 64, line 26, leave out ("provisions of this section") and insert ("subsection")
Clause 67, page 64, line 35, after ("by") insert ("or by virtue of")
Clause 67, page 64, line 42, after second ("is"), insert ("or was at any time")
Clause 67, page 65, line 15. at end insert—
("( ) A statement made by a person in compliance with a requirement imposed by virtue of this section may be used in evidence against him.")
Transpose Clause 67, as amended, to after Clause 89, as Part IIA of the Bill.
Clause 68, page 65, line 37, leave out from ("any") to ("until") in line 39 and insert ("such criminal proceedings as are mentioned in subsection (1)(a) or (aa) of the next following section (being proceedings to which the books or papers are relevant)")
Transpose Clause 68, as amended, to after Clause 89 as Part IIA of the Bill.
Clause 69, page 66, line 8, after ("section"), insert ("or under section 18 (power of Board of Trade to require production of documents) or 19 (entry and search of premises) of the Protection of Depositors Act 1963")
Clause 69, page 66, line 13, leave out from ("the") to second ("or") in line 14 and insert ("Companies Act 1948, the Insurance Corn-panics Act 1958, the Protection of Depositors Act 1963 or this Act"
Clause 69, page 66, line 17, at end insert—
("(aa) with a view to the institution of, or otherwise for the purposes of, any criminal proceedings pursuant to, or arising out of, the Exchange Control Act 1947;")
Clause 69, page 66, line 20, leave out ("this Part") and insert ("Part II")
Clause 69, page 66, line 25, leave out from ("Board") to end of line 32 and insert—
(") (d) with a view to the institution by the Board under section (Fresh powers of Board of Trade to bring civil proceedings on behalf of body corporate) of this Act of proceedings with reference to the body or otherwise for the purpose of such proceedings instituted by them under that section;
(e) with a view to the institution by the Board of proceedings for the winding-up under the Companies Act 1948 of the body or otherwise for the purposes of proceedings instituted by them for that purpose.")
Clause 69, page 66, line 32, at end insert—
("or
(f) for the purposes of proceedings under the last foregoing section")
Clause 69, page 66, line 43, leave out ("not") and insert ("other than one")
Clause 69, page 66, line 43, after ("business"), insert ("(as defined by section 1(2) of the Industrial Assurance Act 1923)")
Clause 69, page 67, line 2, leave out ("and")
Clause 69, page 67, line 4, at end insert (", the Treasury and an officer of theirs")
Clause 69, page 67, line 6, after ("business,") insert ("(as so defined)")
Clause 69, page 67, line 10, leave out ("and an officer of his") and insert (",an officer of his, the Treasury and an officer of theirs")
Transpose Clause 69, as amended, to after Clause 89 as Part IIA of the Bill.
Clause 70, page 47, line 14, leave out ("principal Act") and insert ("Insurance Companies Act 1958")
Clause 70, page 47, line 14, at end insert ("and no direction shall be given under subsection (1) or authorisation conferred under subsection (2) of section 18 of the Protection of Depositors Act 1963 after the passing of this Act")
Transpose Clause 70, as amended, to after Clause 89 as Part IIA of the Bill.
LORD BROWN: My Lords, I beg to move, with the permission of the House, Amendments Nos. 188 to 213. In doing so, I also seek permission to speak to Amendments 189 to 213 inclusive; 217, 221 to 225 inclusive and 251 to 255 inclusive. In all, therefore, I shall be speaking to 37 Amendments. All these are broadly concerned, in one way or another, with the prevention, detection, investigation and prosecution of fraud. I will deal first with the least important Amendments. Nos. 195, 197, 210, 213 and 225 all relate to the transfer of the positions of various clauses, and can therefore be considered virtually as drafting Amendments. Nos. 191, 205 and 208 are all essentially drafting Amendments. Clauses 67, 68 and 69 are concerned with the production of documents, entry and search of premises and provisions for the securing of information. Each has been extended or strengthened by some of the group of Amendments to which I am speaking. Amendments Nos. 198, 199, 201, 202, 204, 211, 212 and 217 are all consequential to these alterations to Clauses 67, 68 and 69.
I now move to the more important Amendments, having so far dealt with 20 out of the 37. Amendments Nos. 188, 189, 190 and 192 are all concerned with the Amendment of Clause 67, which itself is concerned with the power of the Board of Trade to require the production of documents. As drafted, Clause 67 would
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apply only to insurance companies. These Amendments extend Clause 67 so that it applies to all companies and will give the Board of Trade powers which it possesses at present only in relation to deposit taking companies and insurance companies.
These new powers enable the Board of Trade, if they think there is good reason to do so, to give directions to companies or bodies corporate to produce specified books or papers, or to authorise one of the Board's officers to require the company to produce papers that he may need. They also will enable the Board of Trade to appoint inspectors, or present a petition for the company to be wound up. Amendment No. 193 enables inspectors to require an explanation of a company's books or papers from past employees as well as from current employees.
Regarding Amendment 194, the new clause under Amendment No. 180 made it explicit in relation to Section 167 of the principal Act that statements made by persons properly questioned under the section by a duly appointed inspector could be used in evidence against them. Amendment No. 194 introduces the same provision into the operation of Clause 67. Amendment No. 196 is essentially a drafting Amendment which adopts for Clause 68 the definition appearing in Clause 69. That is clearer than the definition which appears in the clause as it stands. Amendments Nos. 200, 206, 207 and 209 permit disclosure to the Treasury of information obtained under Clause 67 or 68 for the purposes of any necessary criminal proceedings under the Exchange Control Act. Amendment No. 203 repairs an omission, because Section 1 of Clause 69 fails to list, as one of the purposes for which information may be disclosed, the disclosure to a justice of the peace to satisfy him that premises may contain documents that have not been disclosed on demand.
Amendment No. 251 is a new clause which makes the furnishing of false information under Clause 67 an offence, and provides penalties. Amendment No. 252 is a new clause which extends parts of Clause 38, dealing with the maximum lapse of time for bringing proceedings under the Companies Act 1948 from six months to three years, into operation in relation to offences under Part IIA of the Bill. Amendment No. 253 is a new

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clause. Section 175 of the Companies Act 1948 protects solicitors from having to disclose privileged information, or bank documents, relating to a customer who is not under investigation, and the new clause provides a similar protection to solicitors and bankers under Part IIA of the Bill. Amendment No. 254 is a new clause defining books and papers in the same way as in the original Act. Amendment No. 255 is a new clause, and it states that Part IIA of the Bill shall not extend to Northern Ireland. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Brown.)
LORD DRUMALBYN: My Lords, I should like to thank the noble Lord for his explanation. The Amendments contain some important clauses. This group, among other things, includes the penalty clauses. There has been some criticism in that the penalties—considering that we are introducing new penalties—are not sufficiently heavy compared with the change in the value of money. One has to bear in mind that some of these frauds can be extremely damaging, and the penalty of two years on indictment is perhaps not enough; nor, for that matter, is a penalty of £200 or three months on summary conviction. I wonder whether the noble Lord could say something about this aspect of the matter—what further consideration was given to this, and whether he is satisfied that the present penalties proposed are in line with the general level of penalties at the time. Perhaps I may add that I understand that the whole question of penalties is being considered at present, and I wonder whether these penalties will be considered in conjunction with those already existing.
LORD BOOTHBY: My Lords, before the noble Lord, Lord Brown, replies, may I say one word? I have been a Member of one or other of the Houses of Parliament for 43 years, and I have never known any parallel situation to this one. We are now being asked to consider, in a single day, 350-odd Amendments to a Bill. I would make an appeal to the noble Lord that he should ask the Parliamentary draftsman to draft better Bills in future, because any Bill that requires over 350 Amendments after it is brought
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to this House has no justification whatsoever. It is asking too much of Parliament.
LORD BROWN: My Lords, I note the point raised by the noble Lord, Lord Boothby. I have already apologised to the House for having put your Lordships in this situation. I am sorry about it. I will not again go into the reasons which place the Government in this position. I can assure the noble Lord, Lord Drumalbyn, that the Government are seriously concerned about the matter he raised. It is under consideration in relation to this Bill, and though it was felt that it was not possible to introduce Amendments at this stage, no doubt something will be done in the second Companies Bill which is to come. It is a matter of concern to the Government, and has been under discussion.
LORD CHORLEY: I should like to say to the noble Lord, Lord Boothby, that it is not fair to blame the Parliamentary draftsmen for what has happened.
LORD BOOTHBY: Whom do you blame?
LORD CHORLEY: My Lords, the Government are to blame. The Parliamentary draftsmen have to do what they are told, and draft a Bill according to instructions.
On Question, Motion agreed to.
6.11 p.m.

COMMONS AMENDMENTS
[Nos. 214–260]
Clause 71, page 67, line 17, leave out subsection (1) and insert—
("(1) Every insurance company to which the principal Act applies which is a body corporate shall, upon a person's becoming or ceasing to be, an officer of the company, or acquiring or relinquishing control of the company, be under obligation to notify the Board of Trade in writing of that fact and of his name, and every insurance company to which the principal Act applies which is not a body corporate shall, upon a person's becoming or ceasing to be, an officer of the company, be under a corresponding obligation.")
After Clause 71, insert the following new clause—
Obligation of person who acquires or relinquishes control of insurance company to notify it of that fact.
(".—(1) A person who acquires or relinquishes control of an insurance company to which the principal Act applies, or if it is a body corporate, of another body corporate which is its holding company (within the meaning of the Companies Act 1948), shall, before the expiration of the period of

1269
seven days beginning with the day next following that on which he does so, notify the company in writing of that fact and, if he fails so to do, shall be liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine, or to both;

(b) on summary conviction, to imprisonment for a term not exceeding three months or to a fine not exceeding £200, or to both.

(2) Subsection (4) of section 71 of this Act shall have effect for the purpose of this section as it has effect for the purposes of that section.")
Clause 72, page 68, line 5, leave out ("50") and insert ("(Authorisations for purposes of section 49)")
Clause 72, page 68, line 11, leave out paragraph (b).
After Clause 72, insert the following new clause—
Penalty for non-compliance with Part II of the principal Act
(".—(1) An insurance company which makes default in complying with a requirement of this Part of this Act, being a default for which no express penalty is provided, or makes, after the passing of this Act, default in complying with a requirement of the principal Act shall be guilty of an offence and liable, on summary conviction, to a fine not exceeding £200.
(2) Section 26(2) of the principal Act (default by a company in complying with a requirement of that Act, if continued for three months after notice thereof, to be a ground for winding up the company) shall cease to have effect.")
After Clause 72, insert the following new clause—
Penalty on industrial assurance company for non-compliance with enactments relating to industrial assurance.
(".—(1) An industrial assurance company (within the meaning of the Industrial Assurance Act 1923) which, after the passing of this Act,—

(a) contravenes or fails to comply with any of the provisions of the Industrial Assurance Act 1923, the Industrial Assurance and Friendly Societies Act 1948 or Part VI of the Reserve and Auxiliary Forces (Protection of Civil Interests) Act 1951, of regulations made for the purposes of section 8 of the said Act of 1948 or of regulations made under section 57 of the said Act of 1951;

(b) contravenes or fails to comply with any directions given under the Industrial Assurance Act 1923 by the Industrial Assurance Commissioner;

(c) contravenes the proviso to section 1(1) of the Industrial Assurance and Friendly Societies Act 1929 (which proviso limits the sums which may be insured or paid for funeral expenses);

(d) fails to comply with a claim made in accordance with the provisions of subsection (1) of section 3 (rights of certain
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endowment policies) of the last-mentioned Act; or

(e) issues such a premium receipt book as is mentioned in subsection (3) of the last-mentioned section which does not comply with the provisions of that subsection;

shall, subject to the next following subsection, be guilty of an offence.
(2) Such a company shall not be guilty of an offence under this section consisting in its insuring in contravention of subsection (2) of section 2 of the Industrial Assurance and Friendly Societies Act 1948 (power to insure life of parent or grandparent for not more than £30) if it is proved that, owing to any false representation on the part of the proposer, the company did not know that the insurance was in contravention of that subsection.
(3) A company guilty of an offence under this section shall be liable, on summary conviction, to a fine not exceeding £200.
(4) So far as regards section 3(1) of the Industial Assurance and Friendly Societies Act 1929, this section shall not prejudice any liability of a company subsisting otherwise than by virtue of this section.")
After Clause 72, insert the following new clause—
Penalty on friendly society for offence under Industrial Assurance Act 1923.
(".—The maximum penalty that may be inflicted on a society registered under the Friendly Societies Act 1896, being a friendly society within the meaning of that Act, for an offence under the Industrial Assurance Act 1923 committed after the passing of this Act shall, instead of being a fine not exceeding £100 or, in the case of a continuing offence, a fine not exceeding £50 a day during which the offence continues, be a fine not exceeding £200; and accordingly, section 39(1) of the said Act of 1923 shall, in relation to an offence under that Act so committed by a society so registered, being such a friendly society as aforesaid, have effect with the substitution, for the proviso thereto, of the following proviso:
'Provided that the maximum penalty that may be inflicted for an offence under this Act shall be a fine not exceeding £200'.")
Clause 73, page 68, line 38, leave out from ("of") to ("who") in line 39, and insert ("any such body as is mentioned in paragraphs (a) to (e) of section 67(1) of this Act or a body other than as aforesaid, being an insurance company, to which the Insurance Companies Act 1958 applies ")
Clause 73, page 68, line 42, leave out ("company") and insert ("body")
Clause 73, page 69, line 2, leave out ("company") and insert ("body")
Clause 73, page 69, line 8, leave out ("who is")
Transpose Clause 73, as amended, to after Clause 89 as Part IIA of the Bill.
Clause 74: leave out Clause 74.
Clause 76, page 70, line 43, after ("directions"), insert ("or instructions")
Clause 79, page 71, line 18, leave out ("or of a registered society") and insert
(",of a registered society or of an unincorporated body of persons")
Clause 79, page 71, line 19, leave out ("or society") and insert (",society or body")
Clause 79, page 71, line 24, leave out ("or society") and insert (",society or body")
Clause 79, page 71, line 26, leave out from beginning to ("and") in line 28
Clause 79, page 71, line 31, leave out ("or society") and insert (",society or body")
Clause 79, page 71, line 36, leave out ("or society") and insert (",society or body")
Clause 79, page 71, line 38, leave out ("or society") and insert (",society or body")
Clause 79, page 71, line 42, leave out ("or society") and insert (",society or body")
Clause 79, page 72, line 2, leave out ("or society") and insert (",society or body")
After Clause 79, insert the following new clause—
Power of Board of Trade to adapt section 3 of the principal Act.
(".—(1) The Board of Trade may, on the application or with the consent of an insurance company to which the principal Act applies,—

(a) by order direct that, for the purposes of section 3 of that Act (separation of funds relating to certain classes of business) in its application to the company, insurance business of a kind specified in the order, not being ordinary long-term insurance business, shall be treated as being such usiness; or

(b) by order direct that, for the purposes of that section in its application to the company, ordinary long-term insurance business of a kind so specified shall be treated as not being such business.

(2) An order under this section may be revoked at any time by the Board of Trade.")
After Clause 79, insert the following new clause—
Circumstances in which persons carrying on insurance business of certain classes are to be taken as not carrying on also such business of other classes.
(".(1) For the purposes of this Part of this Act, a person shall not be taken to carry on liability insurance business by reason only of the incidental inclusion, in a contract of insurance whose principal object is to insure a person against risks of a kind such that the business of effecting and carrying out contracts of insurance against them constitutes property Insurance business, of provision whereby he assumes liability against the risk of the person insured incurring liabilities to third parties.
(2) For the purposes of this Part of this Act, a person shall not be taken to carry on marine, aviation and transport insurance business by reason only of the incidental inclusion, in a contract of insurance whose principal object is to insure a person against risks of a kind such that the business of effecting and carrying out contracts of insurance against them constitutes insurance business of some other class, of provision whereby he assumes a liability of a kind whose assumption by itself in a contract of insurance would make that contract such a one as is mentioned in subsection (4) of section (Classes of insurance business revelant for Purposes of Part II, and definitions thereof) of this Act.
(3) For the purposes of this Part of this Act, a person shall not be taken to carry on motor vehicle insurance business by reason only of the fact that goods, merchandise or property upon which a contract of insurance is effected by him (being goods, merchandise or property on board of a vessel or aircraft) consist of, or include, motor vehicles.
(4) For the purposes of this Part of this Act and of sections 3, 5 and 11 of the principal Act, a person shall not be taken to carry on ordinary long-term insurance business by reason only of the incidental inclusion in a contract of insurance whose principal object is to insure a person against risks of a kind such that the business of effecting and carrying out contracts of insurance against them constitutes marine, aviation and transport insurance business, motor vehicle insurance business or property insurance business, of provision whereby he assumes liability against the happening of personal accidents (whether fatal or not).
(5) For the purposes of this Part of this Act, a person shall not be taken to carry on pecuniary loss insurance business by reason only of the incidental inclusion, in a contract of insurance whose principal object is to insure a person against risks of a kind such that the business of effecting and carrying out contracts of insurance against them constitutes marine, aviation and transport insurance business, motor vehicle insurance business or property insurance business, of provision whereby he assumes liability against such risks as are mentioned in paragraphs (c) and (d) of subsection (7) of section (Classes of insurance business relevant for the purposes of Part II, and definitions thereof) of this Act.
(6) For the purposes of this Part of this Act, a person shall not be taken to carry on personal accident insurance business by reason only of the incidental inclusion, in a contract of insurance whose principal object is to insure a person against risks of a kind such that the business of effecting and carrying out contracts of insurance against them constitutes marine, aviation and transport insurance business, motor vehicle insurance business or property insurance business, of provision whereby he assumes liability against the happening of personal accidents (whether fatal or not).")
After Clause 79, insert the following new clause—
Exception for bankers
(".A person who carries on pecuniary loss insurance business solely in the course of carrying on banking business and for the purposes of that business shall be excepted from the operation of section 49 of this Act so far as regards such insurance business, and the principal Act shall not apply to a person by reason only that, in the course of carrying on banking business and for the purposes of that business, he carries on such insurance business")
After Clause 79, insert the following new clause—
Power of Industrial Assurance Commissioner to exempt Northern Irish collecting societies from provisions of Industrial Assurance Acts 1923 to 1958.
(".—(1) The Industrial Assurance Commissioner may, on the application of a collecting

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society registered in Northern Ireland, by order exempt it from any provision of the Industrial Assurance Acts 1923 to 1958 if he is satisfied that the existence of a provision of an enactment of the Parliament of Northern Ireland renders it unnecessary for the first-mentioned provision to apply to the society.
(2) The Industrial Assurance Commissioner may by order revoke an order made under the foregoing subsection with respect to a society, but the revocation shall not take effect until—

(a) such period as may be specified in the order (which shall not be less than the four weeks next after the making thereof) has expired; and

(b) notice that the order has been made has been published in the London and Edinburgh Gazettes;

and where he does so he shall, within the three days next after doing so, give written notice to the society that he has done so.")
Clause 80: leave out Clause 80.
Clause 81, page 72, line 20, leave out from ("in") to ("to") in line 21 and insert ("section 49(2)(b) and section (Penalty on friendly society for offence under Industrial Assurance Act 1923) of this Act and section 1(1A) of the Industrial Assurance Act 1923 references.")
line 22, leave out ("a reference") and insert ("references")
After Clause 86, insert the following new clause—
Temporary limitations of effect of alteration of scope of the principal Act
(".—Notwithstanding anything in this Act—

(a) until such day as the Board of Trade may by order (made by statutory instrument) appoint, section 4 of the principal Act shall apply only to companies to which it would have applied had this Act not passed;

(b) until the expiration of the period of one year beginning with the day on which this Act is passed, section 3 of the principal Act (separation of funds relating to certain classes of business) and section 11 thereof (amalgamations and transfers) shall have effect as if this Act had not passed; and

(c) until the expiration of the period of two years beginning with the day on which this Act is passed, section 13 of the principal Act shall have effect as if this Act (with the exception of sections 51 and 64 thereof) had not passed, and the references, in section 55(1)(b) of this Act, to general business shall be construed accordingly;

and nothing in this Act shall have effect in relation to the winding up of an insurance company commenced before the passing of this Act.")
After Clause 86, insert the following new clause—
Saving for discharge of liabilities lawfully assumed before passing of this Act
(".—A company, society or body shall not be taken to carry on insurance business in contravention of section 49 of this Act by reason only of its carrying on business for the
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purpose of discharging liabilities lawfully assumed by it before the passing of this Act.")
After Clause 87 insert the following new clause—
Revocation of provision of companies' memorandums of association restricting carrying on of insurance business
(".—Any provision of a company's memorandum of association that expressly precludes it from carrying on insurance business of any class shall cease to have effect.")
Clause 88, page 74, line 7, leave out ("Schedule") and insert ("Schedules (Amendments of Insurance Companies Act 1958 consequential on section (Classes of insurance business relevant for purposes of Part II, and definitions thereof) and subsection (1) of section (Alteration of scope of the principal Act) of this Act) and").
Clause 89, page 74, line 15, leave out ("74") and insert ("section (Penalty on industrial assurance company for non-compliance with enactments relating to industrial assurance)".)
Clause 89, page 74,leave out lines 35 to 43 and insert—
("(b) sections (Penalty on industrial assurance company for non-compliance with enactments relating to industrial assurance) and (Penalty on friendly society for offence under Industrial Assurance Act 1923);
(c) section 76, so far as it relates to offences under subsection (4) of section 49 consisting in carrying on business in contravention of subsection (3) thereof and offences under section (Penalty on industrial assurance company for non-compliance with enactments relating to industrial assurance);
(d) section 77, so far as it applies section 38(2) to offences specified in the last foregoing paragraph;
(e) section 81, so far as relates to the Industrial Assurance Act 1923;
(f) section (Power of Industrial Assurance Commissioner to exempt Northern Irish collecting societies from provisions of the Industrial Assurance Acts 1923 to 1958);
(g) section 83 and Schedule 5, so far as they relate to the Industrial Assurance Act 1923;")
Clause 89, page 74,line 44, at end insert 'and
("( ) section 86(2), so far as it defines 'registered society' and 'director', and section 86(3)".
After Clause 89 insert the following new clause—
Penalisation of furnishing false information under Part IIA
("(1) A person who, in purported compliance with a requirement imposed under section 67 of this Act to provide an explanation or make a statement, provides or makes an explanation or statement which he knows to be false in a material particular or recklessly provides or makes an explanation or statement which is so false shall be guilty of an offence.
(2) A person guilty of an offence under this section shall be liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine, or to both;

(b) on summary conviction, to imprisonment for a term not exceeding three months or to a fine not exceeding £200, or to both.")

After Clause 89, insert the following new clause—
Application for purposes of Part IIA of certain provisions of Parts I and II
(".—(1) Subsections (2) to (5) (both inclusive) of section 38 of this Act shall apply to, and in connection with, summary proceedings for offences under Part IIA of this Act and to informations relating to offences thereunder which are triable summarily as they apply to, and in connection with, such proceedings for offences under the Companies Act 1948 and Part I of this Act and to informations relating to offences thereunder that are triable summarily.
(2) Sections 75, 76 as read with 86(3) and 78 of this Act shall have effect in relation to offences under Part IIA of this Act as they have effect in relation to offences under Part II of this Act.")
After Clause 89, insert the following new clause—
Saving for solicitors and bankers
(".— (1) Nothing in Part IIA of this Act shall compel the production by a solicitor of a document containing a privileged communication made by or to him in that capacity or authorise the taking of possession of any such document which is in his possession.
(2) The Board of Trade shall not, under section 67 of this Act, require, or authorise an officer of theirs to require, the production by a person carrying on the business of banking of a document relating to the affairs of a customer of his unless either it appears to them that it is necessary so to do for the purpose of investigating the affairs of the first mentioned person or the customer is a person on whom a requirement has been imposed by virtue of that section.")
After Clause 89, insert the following new clause—
Interpretation of Part IIA
(" .—References in this Part of this Act to books or papers shall be construed as if they were contained in the Companies Act 1948.")
After Clause 89, insert the following new clause—
Extent of Part IIA
(".—Part IIA of this Act shall not extend to Northern Ireland.")
After Clause 89, insert the following new clause—
Exemption from prohibition imposed by section 429 of the Companies Act 1948, of banking partnerships with more than ten members.
(".—Section 429 of the Companies Act 1948 (which prohibits the formation of a company, association or partnership consisting of more than ten persons for the purpose of carrying on the business of banking unless
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it is registered as a company under the Companies Act 1948, or is formed in pursuance of some other Act, or of letters patent) shall not prohibit the formation of a partnership consisting of not more than twenty persons each of whom is for the time being authorised by the Board of Trade to be a member of a partnership formed for that purpose and consisting of not more than twenty persons.")
After Clause 89, insert the following new clause—
Exemptions from prohibition imposed by section 434 of the Companies Act 1948 of the formation of partnerships with more than twenty members.
(".—(1) Section 434 of the Companies Act 1948 (which prohibits the formation of a company, association or partnership consisting of more than twenty persons for the purpose of carrying on a business (other than the business of banking) for gain as therein mentioned unless it is registered as a company under the Companies Act, 1948 or is formed in pursuance of some other Act or of letters patent, or is such a company as is therein mentioned working mines within the stannaries) shall not prohibit the formation—

(a) for the purpose of carrying on practice as solicitors, of a partnership consisting of persons each of whom is a solicitor;

(b) for the purpose of carrying on practice as accountants, of a partnership consisting of persons each of whom falls within either paragraph (a) or paragraph (b) of section 161(1) of the Companies Act 1948;

(c) for the purpose of carrying on business as members of a recognised stock exchange, of a partnership consisting of persons each of whom is a member of that exchange.

(2) The Board of Trade may by regulations made by statutory instrument provide that the said section 434 shall not apply to the formation (otherwise than as permitted by virtue of the foregoing subsection) for a purpose specified in the regulations, of a partnership of a description so specified.
(3) In this section 'recognised stock exchange' means any body of persons which is for the time being a recognised stock exchange for the purposes of the Prevention of Fraud (Investments) Act 1958, and 'solicitor', in relation to England and Wales, means solicitor of the Supreme Court, and, in relation to Scotland, means a person enrolled or deemed to have been enrolled as a solicitor in pursuance of the Solicitors (Scotland) Act 1933.")
After Clause 89, insert the following new clause—
Exemptions from prohibition imposed by section 4 of the Limited Partnerships Act 1907 of limited partnerships with more than twenty members.
(".—(1) So much of section 4(2) of the Limited Partnerships Act 1907 as provides that a limited partnership (other than a partnership carrying on the business of banking) shall not consist of more than twenty persons shall not apply—

(a) to a partnership carrying on practice as solicitors and consisting of persons each of whom is a solicitor;

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(b) to a partnership carrying on practice as accountants and consisting of persons each of whom falls within either paragraph (a) or paragraph (b) of section 161(1) of the Companies Act 1948;

(c) to a partnership carrying on business as members of a recognised stock exchange and consisting of persons each of whom is a member of that exchange.

(2) The Board of Trade may by regulations made by statutory instrument provide that so much of section 4(2) of the said Act of 1907 as provides that a limited partnership (other than a partnership carrying on the business of banking) shall not consist of more than twenty persons shall not apply to a partnership (other than one permitted by virtue of the foregoing subsection) carrying on business of a description specified in the regulations, being a partnership of a description so specified.
(3) In this section 'recognised stock exchange' and 'solicitor' have the same meanings respectively as in section (Exemptions from prohibition imposed by section 434 of the Companies Act 1948 of formation of partnerships with more than twenty members) of this Act.")
After Clause 89, insert the following new clause—
Extent of Part IIB
(".—This Part of this Act shall not extend to Northern Ireland.")
Leave out Clause 90.
LORD HUGHES: My Lords, with the permission of the House I will move en bloc that this House doth agree with the Commons in Amendments Nos. 214 to 260. All these Amendments are either consequential or not controversial.
Moved, That the House doth agree with the Commons in the said Amendments.—(Lord Hughes.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 261]
After Clause 90, insert the following new clause—
Board of Trade's certificate that a person is a hanker to be conclusive evidence of that fact for the purposes of the Moneylenders Acts 1900 to 1927.
(".—(1) A certificate given by the Board of Trade that they are satisfied that a person can properly be treated for the purposes of the Moneylenders Acts 1900 to 1927 as being a person bona fide carrying on the business of banking shall, for those purposes, be conclusive evidence that he is so carrying on that business.
(2) If, upon an application (made before the expiration of the period of six months beginning with the day on which this Act is passed) for the issue of a certificate under the foregoing subsection, the applicant satisfies the
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Board of Trade that he can, as respects a period before the issue of the certificate (whether beginning before or after the passing of this Act), properly be treated for the purposes of the said Acts as having been a person who was bona fide carrying on the business of banking, they may certify that they are so satisfied (specifying the period in question), and the certificate shall, for those purposes, be conclusive evidence that, as respects that period, he was so carrying on that business.
(3) A certificate given under subsection (1) above with respect to a person may be revoked by the Board of Trade if they cease to be satisfied as respects him as mentioned in that subsection, but the revocation shall be without prejudice to the effect of the certificate as respects any period before the revocation.")
6.12 p.m.
LORD BROWN: My Lords, the purpose of Clause 90 is to deal with the uncertainty, illustrated by the United Dominion Trust v. Kirkwood case, felt by some banks as to whether they can safely rely on the exemption gfiven by Section 6(d) of the Moneylenders Act 1900 to a person bona fide carrying on the business of banking. If the clause were to become law, every person who wished to be exempted from the Moneylenders Act as a banker would have to satisfy the Board of Trade that he should be so exempted. The established banks object to the clause on the ground that, whatever may be necessary to meet the difficulties of some banks, the clearing banks and the established merchant banks are satisfied with the exemption given by Section 6(d) and do not wish to see it replaced by an exemption dependent on the consent of a Government Department.
I will not go into the reasons for their feeling that. The Government propose to meet the objection made by the established banks by substituting for Clause 90 a new clause. I am not sure whether that is sufficient information, but if your Lordships' require further explanation I will give it. I beg to move that this House doth agree with the Commons in the said Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Brown.)
LORD DRUMALBYN: My Lords, the noble Lord has not referred to the fact that subsection (3) still enables the Board of Trade, once they have given a certificate, to withdraw it just as easily as they give it. I do not want to go into all the

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difficulties, but I think that this is something that has to be watched carefully. Parliament does not readily give authority to a Department to withdraw a permission to trade in any particular sphere when that permission has been allowed. I still think that, somehow or other, we have to devise means by which this can be done in a manner that is not only fair but also appears to be fair.
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 262–351]
Clause 91, page 75, line 39, leave out ("as regards Great Britain").
After Clause 91, insert the following new clause—
Extent of Part III
" —This Part of this Act shall not extend to Northern Ireland.")
Clause 95, page 76, line 40, leave out from ("Assurance") to ("1948") in line 41 and insert ("Acts 1923 to").
Clause 96, page 77, line 4, after ("inclusive)",) insert ("and Schedule (Fees to be paid to the registrar of companies)")
Clause 96, page 77,line 6, leave out from first ("and") to ("may") in line 7 and insert ("Part II of this Act, Schedule (Amendments of Insurance Companies Act 1958 consequential on section (Classes of insurance business relevant for purposes of Part II, and definitions thereof) and subsection 1 of section (Alteration of scope of the principal Act) of this Act) to this Act and Part I of Schedule 5 hereto ")
Clause 96, page 77,line 14, at end insert—
("( ) The provision of the Industrial Assurance Act 1929 specified in column 1 of Part (Repeal in Industrial Assurance Act 1929) of that Schedule shall, to the extent specified in column 2 of that Part, be repealed at the time specified in column 3 thereof")
Clause 96, page 77,line 16, leave out ("Schedule 7") and insert ("that Schedule")
Clause 96, page 77,line 19, at end insert—
("( ) The provision of the Industrial Assurance and Friendly Societies Act 1948 specified in column 1 of Part (Repeal in Industrial Assurance and Friendly Societies Act 1948) of that Schedule shall, to the extent specified in column 2 of that Part, be repealed at the time specified in column 3 thereof;
("( ) The provision of the Reserve and Auxiliary Forces (Protection of Civil Interests) Act 1951 specified in column 1 of Part (Repeal in Reserve and Auxiliary Forces (Protection of Civil Interests) Act 1951) of that Schedule shall, to the extent specified in column 2 of that Part, be repealed at the time specified in column 3 thereof: ")
Clause 96, page 77,line 25, leave out ("the provision") and insert ("each of the provisions")
Clause 96, page 77,line 27, after ("specified",) insert ("in relation to it")
Clause 96, page 77,line 28, after ("time") insert ("so")
Clause 96, page 77,line 39, leave out ("Act 1923 ") and insert ("Acts 1923 to 1948 and to the Reserve and Auxiliary Forces (Protection of Civil Interests) Act 1951")
Schedule 1, page 78, line 5, leave out from ("1") to end of line 6.
Schedule 1,Page 80, line 45, after second ("of"), insert ("fixed")
Schedule 1,Page 81, line 16, leave out paragraph 11.
Schedule 1,Page 82, line 23, after ("of"), insert ("provision for")
Schedule 1,Page 82,Line 24, after ("charged") insert ("by way of proviison")
Schedule 1,Page 82,Line 26, after ("revenue"), insert ("by way of provision ")
Schedule 1,Page 82,line 43, leave out ("the following sub-paragraphs") and insert ("sub-paragraphs (2) to (4) below")
Schedule 1,Page 83, line 7, at end insert—
("( ) A company shall not be subject to the requirements of this paragraph if it is neither a holding company nor a subsidiary of another body corporate and the turnover which, apart from this sub-paragraph, would be required to be stated does not exceed £50,000.")
Schedule 1,Page 83,line 18, leave out paragraph 17.
Schedule 1,Page 84, line 15, after ("10"), insert ("and")
Schedule 1,Page 84,line 16, leave out from ("(8A))") to ("and") in line 17.
Schedule 1,Page 84,line 20, after ("13"), insert ("and")
Schedule 1,Page 84,line 20, leave out from ("14") to end of line 21
Schedule 1,Page 84,line 34, after ("8"), insert ("and")
Schedule 1,Page 84,line 35, leave out from ("11") to end of line 36.
Schedule 1,Page 84,line 39, at end insert ("but, where in its balance sheet reserves or provisions (other than provisions for depreciation, renewals or diminution in value of assets) are not stated separately, any heading stating at an amount arrived at after taking into account a reserve or such a provision shall be so framed or marked as to indicate that fact, and its profit and loss account shall indicate by appropriate words the manner in which the amount stated for the company's profit or loss has been arrived at")
Schedule 1,Page 85, line 8, after ("of"), insert ("Part I of")
Schedule 1,Page 85,line 11, after ("7"), insert ("and")
leave out line 12.
Schedule 1,Page 85,line 15, leave out from ("12") to end of line 16 and insert ("and paragraph 13A")
Schedule 1,Page 85,line 43, leave out from beginning to end of line 5 on page 86.
Schedule 2, page 86, line 20, leave out ("11A") and insert ("11")
Schedule 2, page 86,line 21, leave out ("14A ") and insert ("14 ")
Schedule 2,Page 92, line 5, after second ("of "), insert ("fixed ")
Schedule 2,Page 92,leave out lines 35 to 47.
Schedule 2,Page 92,line 5, after ("of "), insert ("provision for ")
Schedule 2,Page 92,line 6, after ("charged "), insert ("by way of provision ")
Schedule 2,Page 92,line 8, after ("revenue "), insert ("by way of provision ")
Schedule 2,Page 92,line 21, leave out ("the following sub-paragraph ") and insert ("sub-paragraphs (2) to (4) below ")
Schedule 2,Page 92,line 29, at end insert— ("(5) A Company shall not be subject to the requirements of this paragraph if it is neither a holding company nor a subsidiary of another body corporate and the turnover which, apart from this sub-paragraph, would be required to be stated does not exceed £50,000.")
Schedule 2,Page 95, leave out lines 11 to 29.
Schedule 2,Page 98, line 39, after ("10 "), insert ("and ")

AFTER SCHEDULE 3
Insert the following new Schedult—

("FEES TO BE PAID TO THE REGISTRAR OF COMPANIES

PART I

TABLE OF FEES

Matter in respect of which Fee is payable

Amount of Fee

For registration on its formation under the principal Act of a company as one limited by shares, registration under that Act in pursuance of Part VIII thereof of a company as one so limited (not being a company in whose case the liability of the members thereof was, before registration in pursuance of that Part, limited by some other Act or by letters patent) or re-registration under the principal Act in pursuance of section 33 of this Act of a company as one limited by shares.

If the nominal capital does not exceed £2,000, the sum of £20.

If the nominal capital exceeds £2,000 but does not exceed £5,000, the sum of £20 with the addition of £1 for each £1,000 or part of £1,000 of nominal capital in excess of £2,000.

If the nominal capital exceeds £5,000 but does not exceed £100,000, the sum of £23 with the addition of 5s. for each £1,000 or part of £1,000 of nominal capital in excess of £5,000.

If the nominal capital exceeds £100,000, the sum of £46 15s. 0d. with the addition of 1s. for each £1,000 or part of £1,000 of nominal capital in excess of £100,000.

For registration on its formation under the principal Act of a company as one not having a share capital, registration under that Act in pursuance of Part VIII thereof of a company as one limited by guarantee and not having a share capital or re-registration under that Act in pursuance of section 33 of this Act of a company as one so limited and not having a share capital.

If the number of members stated in the articles does not exceed 25, the sum of £20.

If the number of members stated in the articles exceeds 25, but does not exceed 100, the sum of £20 with the addition of £1 for each 25 members or fraction of 25 members in excess of the first 25.

If the number of members stated in the articles exceeds 100 but is not stated to be unlimited the sum of £23 with the addition of 5s. for each 50 members or fraction of 50 members after the first 100.

If the number of members is stated in the articles to be unlimited, the sum of £38.

Schedule 2,Page 98,line 40, leave out from ("(8A))") to ("and") in line 41.
Schedule 2,Page 98,line 44, after ("13"), insert ("and")
Schedule 2,Page 98,line 44, leave out from ("14") to end of line 45
Schedule 2,Page 98,Page 99, line 23, after ("8"), insert ("and")
Schedule 2,Page 98,line 24, leave out from ("11") to end of line 25
Schedule 2,Page 98,line 28, at end insert ("but, where in its balance sheet reserves or provisions (other than provisions for depreciation, renewals or diminution in value of assets) are not stated separately, any heading stating an amount arrived at after taking into account a reserve or such a provision shall be so framed or marked as to indicate that fact, and its profit and loss account shall indicate by appropriate words the manner in which the amount stated for the company's profit or loss has been arrived at").
Schedule 2,Page 100, line 2, after ("of"), insert ("Part I of")
Schedule 2,Page 100,line 4, after ("7"), insert ("and")
Schedule 2,Page 100,line 5, leave out from ("11") to end of line 6.
Schedule 2,Page 100,line 9, leave out from ("12") to end of line 10 and insert ("and paragraph 13A")
Schedule 2,Page 101, leave out lines 27 to 34.
Schedule 2,Page 101,Leave out Schedule 3.

Matter in respect of which Fee is payable

Amount of Fee

For registration on its formation under the principal Act of a company as one limited by guarantee and having a share capital, or as an unlimited one having a share capital, registration under that Act in pursuance of Part VIII thereof of a company as one so limited and having a share capital or re-registration under that Act in pursuance of section 33 of this Act of a company as one limited by guarantee and having a share capital.

The same amount as would be charged for registration if the company were limited by shares or the same amount as would be so charged if the company had not a share capital, whichever is the higher.

For re-registration of a company under the principal Act in pursuance of section 32 of this Act.

£5.

For registration of an increase in the share capital of a company.

An amount equal to the difference (if any) between the amount which, were the company being registered on its formation under the principal Act, would be payable by reference to its capital as increased and the amount which, were the company being so registered, would be payable by reference to its capital immediately before the increase.

For registration of an increase in the membership of a company limited by guarantee or an un-unlimited company.

An amount equal to the difference (if any) between the amount which, were the company being registered on its formation under the principal Act as a company limited by guarantee or as an unlimited company, would be payable by reference to its membership as increased and the amount which, were the company being so registered as such a company, would be payable by reference to its membership immediately before the increase.

For registration of a copy of an annual return or copies of documents delivered to the registrar of companies in compliance with section 410 of the principal Act.

£3.

For entering on the register the name of a company assumed by virtue of the passing of a special resolution by virtue of section 18(1) of the principal Act.

£10.

PART II

LIMITATIONS ON OPERATION OF PART I

1. Where in the case of a company limited by guarantee and having a share capital or an unlimited company having a share capital, an increase of share capital is made at the same time as an increase of membership, the company shall pay whichever fee is the higher, but not both.

2. The total of the fees to be paid by a company by reference to its membership shall in no case exceed £38.

3. The total of the fees to be paid by a company by reference to its share capital or of the fees to be paid by it by reference to its membership and the fees to be paid by it by reference to its share capital, shall in no case exceed £68.

4. In determining what fee (if any) is to be paid by a company upon an increase in its membership it shall be assumed, for the purpose of the application of the foregoing provisions of this Part of this Schedule, that the amount that would be payable by it by reference to its membership immediately before the increase has been paid, and in determining what fee (if any) is to be paid by a company upon an increase in its share capital, it shall be assumed, for that purpose, that the amount that would be payable by it by reference to its capital immediately before the increase has been paid.")

SCHEDULE 4
Page 104, line 27, at end insert—
("Section 449 … Power to enforce orders.")

AFTER SCHEDULE 4
Insert the following new Schedule—
("AMENDMENTS OF INSURANCE COMPANIES ACT 1958 CONSEQUENTIAL ON SECTION (Classes of insurance business relevant for purposes of Part II, and definitions thereof) AND SUBSECTION (1) OF SECTION (Alteration of scope of the principal Act) OF THIS ACT

Provision amended and Subject-matter thereof

Amendment

Section 3 (separation of funds relating to certain classes of business).

In subsection (1)(b), for the words 'two or more of the said classes' there shall be substituted the words 'both the said classes'.

In Subsection (5), for the words 'life assurance business, industrial assurance business, bond investment business and employers' liability insurance business' there shall be substituted the words 'ordinary long-term insurance business and industrial assurance business'.

Section 5 (periodic investigation of certain companies by actuary).

In subsection (1), for the words 'life assurance business, industrial assurance business or bond investment business' there shall be substituted the words 'ordinary long-term insurance business or industrial assurance business'.

Section 11 (provisions as to certain amalgamations and transfers).

In subsection (1), in paragraphs (a) and (b), the words 'or employers' liability insurance business' shall be omitted and, in the proviso, the words 'carrying on life assurance business or industrial assurance business', the word 'that', where secondly occurring, and the word 'life', where last occurring, shall be omitted, and after the words 'in the company' there shall be inserted the words that is attributable to the carrying on of ordinary long-term insurance and industrial assurance business'.

In subsection (2)(b), the words 'except in relation to a transfer of employers' liability insurance business' shall be omitted, and for the words 'sinking fund or bond investment' there shall be substituted the words 'or capital redemption'.

Section 33 (interpretation).

In subsection (1), immediately before the definition of 'chairman' there shall be inserted the following definition:—

'"capital redemption business" means such business as, by virtue of paragraph (c) of subsection (6) of section (Classes of insurance business relevant for purposes of Part II, and definitions thereof) of the Companies Act 1967, falls within the definition in that subsection of ordinary long-term insurance business',

in the definition of 'general business', the words 'of a class or classes specified in section one of this Act' shall be omitted, in the definition of 'long-term business', for the words 'business of all or any of the following classes, namely, life assurance business, industrial assurance business and bond investment business' there shall be substituted the words 'business of either or both of the following classes, namely, ordinary long-term insurance business and industrial assurance business', for the definition of 'policy', there shall be substituted the following definition:—

'policy—

(a) in relation to ordinary long-term insurance business and industrial assurance business, includes an instrument evidencing a contract to pay an annuity upon human life;

(b) in relation to insurance business of any other class (except capital redemption business) includes any policy under which there is for the time being an existing liability already accrued or under which a liability may accrue; and

(c) in relation to capital redemption business, includes any policy, bond, certificate, receipt or other instrument evidencing the contract with the company',

and, in the definition of policy holder', for the words 'bond investment business' there shall be substituted the words 'capital redemption business', immediately before the word bond ', where secondly occurring, there shall be inserted the word 'policy', and for paragraphs (a) to (c) there shall be substituted the following paragraphs:—

'(a) in relation to such ordinary long-term insurance business or industrial assurance business as consists in the granting of annuities upon human life, includes an annuitant; and

(b) in relation to insurance business of any kind other than such as is mentioned in the foregoing paragraph or capital redemption business, includes a person to whom, under a policy, a sum is due or a periodic payment is payable'.")

Schedule 5, page 104, line 38, after ("(6)") insert ("at the beginning there shall
Schedule 5, page 104,line 41, at end insert—

Provision amended and Subject-matter thereof

Amendment

("Section 6 (statements of business by Committee of Lloyds, &c.)

In subsection (1), for the words 'under and for the purposes of subsection (6) of section one of this Act' there shall be substituted the words 'for the purposes of Part II of the Companies Act 1967'

Section 13 (margin of solvency for general business].

In subsection (2)(b), the words '(whether or not being insurance business of a class specified in section one of this Act)' shall be omitted.")

Schedule 5,Page 105, line 13, at end insert—

("Section 24 (bond investment companies).

For the words 'bond investment business' there shall be substituted the words 'capital redemption business in the case of which the premiums in return for which a contract is effected are payable at intervals of less than six months'.")

Schedule 5,Page 105, line 13,at end insert—

("Section 32 (expenses).

In subsection (1), the reference to the Act shall include a reference to Part II of this Act.")

Schedule 5,Page 105, line 13,leave out lines 17 to 19.
Page 105,line 20, column 2, at beginning insert—
("In paragraph 7, in the proviso, for the words 'life assurance fund' there shall be substituted the words 'ordinary long-term insurance fund'.")
Schedule 5,Page 105, line 38, at end insert—

("Schedule 3 (rules for valuing policies and liabilities).

In paragraph 3, for the words 'a bond investment policy' there shall be substituted the words 'a capital redemption policy'; in paragraph 4, for the words 'a current fire, accident, motor vehicle, marine, aviation or transit policy' there shall be substituted the words 'a current policy of any kind other than a life policy or a capital redemption policy'; and in paragraph 5, for the words 'a periodic payment under an accident or motor vehicle policy' there shall be substituted the words 'a periodic payment under a policy, being a payment in respect of personal injury or of disease'; and paragraphs 6 and 7 shall be omitted'.")

Schedule 5,Page 106, line 32, leave out ("for the references")
Schedule 5,Page 106,line 34, at end insert ("for the references to a company there shall be substituted
Schedule 5,Page 107, line 30, at end insert—

("16 & 17 Geo. 5. c. 9.

The Economy (Miscellaneous Provisions) Act 1926.

In section 13, subsection (2), and, in subsection (4), the words from the beginning to 'and thereafter'.")

("19 & 20 Geo. 5. c. 28.

The Industrial Assurance and Friendly Societies Act 1929.

Section 3(5).")

Schedule 5,Page 107,line 31, column 3, at beginning insert—

("Section 53(6).

In section 329, the words 'with or without hard labour'.

In section 438, the words 'with or without hard labour'.")

("In section 124(1), in the proviso, the words from 'and (d)' onwards.")

Schedule 5,Page 108, column 3, leave out line 7 and insert—

"In section 3, in subsection (1), the words 'Subject to the provisions of this Act'; in subsection (2), the words 'Subject as aforesaid'; and subsections (3) and (4)."

be inserted the words 'With the exception of section 6(1) thereof and")
Schedule 5,Page 107,line 34, leave out from ("of") to end of line 35 and insert ("any class")
Schedule 5,Page 107,line 36, leave out first ("and")
Schedule 5,Page 107,line 38, at end insert ("and the words 'in respect of insurance business of any class specified in section one of this Act' shall be omitted")
stituted references to a collecting society and for the references")
Schedule 6, page 107, line 30, column 3, at end insert ("In Schedule 1, the entry relating to section 21")

Schedule 6, page 107,leave out line 8 and insert—

("In section 33, in subsection (1), the definition of interest ', and subsection (5).

Section 34(4).")

Schedule 7, page 108,line 22, at end insert—

("PART (Repeal in the Industrial Assurance and Friendly Societies Act 1929)

REPEAL IN THE INDUSTRIAL ASSURANCE AND FRIENDLY SOCIETIES ACT 1929

Provision

Extent of Repeal

Time at which Repeal is to take Effect

Section 3.

Subsection (1) in so far as it penalises industrial assurance companies, but except in relation to failures by them occurring before the passing of this Act.

The passing of this Act.")

Subsection (4) in so far as it penalises such companies, but except in relation to issues of premium receipt books before the passing of this Act.

Schedule 7, page 109, line 15, at end insert—

("Section 169.

The whole section.

The passing of this Act.

Section 170.

In subsection (1)(a) the words 'by the Director of Public Prosecutions or by or on behalf of the Lord Advocate'.

Schedule 7, page 109, line 27, at end insert—

("Section 425.

In subsection (1), the proviso.

The expiration of the period of three months beginning with the day on which this Act is passed.")

Schedule 7, page 109,line 30 at end insert—

("Section 454.

In subsection (2), in paragraph (a), the words from 'the Twelfth Schedule' to 'that Schedule'.

The expiration of the period of three months beginning with the day on which this Act is passed.")

Schedule 7, page 110, line 16, at end insert—

("Schedule 12.

The whole Schedule.

The expiration of the period of three months beginning with the day on which this Act is passed.")

Schedule 7, page 110,line 21, at end insert—

("PART (Repeal in the Industrial Assurance and Friendly Societies Act 1948)

REPEAL IN THE INDUSTRIAL ASSURANCE AND FRIENDLY SOCIETIES ACT 1948

Provision

Extent of Repeal

Time at which Repeal is to take Effect

Section 16.

Subsection (2) so far as relating to industrial assurance companies, but except in relation to contraventions or failures occurring before the passing of this Act.

The passing of this Act.")

("PART (Repeal in the Reserve and Auxiliary Forces (Protection of Civil Interests Act 1951)

REPEAL IN THE RESERVE AND AUXILIARY FORCES (PROTECTION OF CIVIL INTERESTS ACT 1951)

Provision

Extent of Repeal

Time at which Repeal is to take Effect

Section 57.

Subsection (5) so far as relating to industrial assurance companies, but except in relation to contraventions or failures occurring before the passing of this Act.

The passing of this Act.")

Schedule 7, Page 110,line21, leave out lines 28 to 30.
Schedule 7, Page 110,line21,leave out lines 34 to 40.
Schedule 7, Page 111, line 16, at end insert—

("Section 33.

In subsection (1), the definitions of 'accident insurance business', 'bond investment business', 'employers' liability insurance business', and 'fire insurance business'; the definition of 'life assurance business', except for the purposes of section 29(8) of the Finance Act 1966; the definitions of 'marine aviation and transit insurance business' and 'motor vehicle insurance business'; and, in the definition of 'court', the words 'except in the provisions of this Act relating to deposits'. Subsections (2), (3) and (4).

Section 34.

In subsection (3), the words 'or subsection (3) of section thirty-three thereof'.

Section 35.

Subsection (2).")

Schedule 7, Page 111, line 20, column 2, leave out ("paragraph 11") and insert ("paragraphs 11 and 12").

Schedule 7, Page 111, line 32, at end insert—

("Section 15.

In subsection (1), the words 'Subject to subsection (3)' and paragraphs (b), (c) and (d), and subsection (3).

The passing of this Act.")

Section 20.

The whole section.

LORD HUGHES: My Lords, with the permission of the House, I beg to move that this House doth agree with the Commons in Amendments Nos. 262 to the final Amendment, No. 351. All these Amendments are either consequential or are not controversial.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Hughes.)
LORD DRUMALBYN: My Lords, is this to be taken as an Amendment to the speech of the noble Lord, Lord Boothby?
LORD HUGHES: My Lords, it may be noted that I arranged matters with the noble Lord, Lord Boothby, in advance.
On Question, Motion agreed to.
6.16 p.m.
LORD CARRINGTON: My Lords, I do not think that, as Leader of the Opposition in this House, I ought to let this Bill go without saying a word about the way in which this House and Parliament have been treated. This afternoon's proceedings have been a charade.
LORD BOOTHBY: A farce!
LORD CARRINGTON: I agree with the noble Lord, Lord Boothby—a farce and a charade. I greatly admire my noble friend Lord Erroll of Hale and Lord Drumalbyn who, in the space of a very few days, have been compelled to examine 351 new Amendments including 43 new clauses. Most of these were inserted on Report stage in another place and therefore were not capable of amendment in another place. All of them came up to

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this House and we have had to discuss them in one afternoon. It may be thought that perhaps we have not spent so long as we should have in discussing these Amendments, but anybody who knows anything about Parliamentary business, or about the way Bills are discussed in this House, knows that it is essential for an Opposition to consult the professional bodies who are available and who have expert knowledge—in this case, such bodies as the Institute of Directors and the C.B.I. In the short time available, it was almost impossible to do that, and I congratulate my noble friends on doing the best they can. Does the noble Lord, Lord Walston, think this funny?
LORD WALSTON: My Lords, I was taking up what the noble Lord said about "the best they can".
LORD CARRINGTON: My Lords, I do not happen to think it is funny. I think that it is a complete contempt of Parliament. It is not the way to legislate. There has been no time for any amendment. I must ask the noble Lord the Deputy Leader of the House to assure the House that this sort of procedure will not take place in future. My noble friends and I are greatly concerned, and as a Parliamentarian I am really angry at it.
LORD SHACKLETON: My Lords, I certainly do not take the noble Lord's remarks lightly. Whatever else I may feel, we have at least had the pleasure of his strongly expressed eloquence, and I certainly do not resent the way he puts these matters. I do not think that the noble Lord wants me to go over again the details of the eloquent defence of my noble friend Lord Shepherd, who is now in sunnier, but I think not cooler, climes than we are in at the moment.
I will certainly give a personal assurance to noble Lords opposite that I shall do my utmost, and I give this assurance to my noble friends on this side of the House, who have also had to bear a difficult brunt. I express my gratitude to noble Lords on both sides of the House. We have asked a lot of them, as we have of the Hansard writers and the staff. It is true that in previous years we have sat later. On this occasion we are as anxious as anyone to try to meet the wishes of your Lordships with
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regard to the holiday. I would say to the noble Lord, Lord Carrington, that I have noted what he has said. I do not think that your Lordships will want to pursue this discussion any further. We have some Scottish Business which (though perhaps I should not suggest this) should interest the noble Lord, Lord Boothby, and I hope that we can now proceed. With that assurance, I should like to wish noble Lords a very pleasant rest after their labours.
LORD SILKIN: My Lords, I agree with every word that the noble Lord, Lord Carrington, said. I have said them myself in the years gone by; in fact, I have made about 13 similar speeches at about this time of year. The trouble is not with the Government. I do not think it is fair to blame the Government, unless perhaps they are too ambitious in trying to get too much legislation through in too short a time. I think it is time that we began to look at our procedure more carefully, so that we are not put in this position year after year. So long as we maintain the present kind of procedure we are going to find ourselves clogged up every July. The Commons take up time and go into these things meticulously.
The noble Lord said yesterday that it does not appeal to him that we should point out that they have gone into these things meticulously and that to a certain extent we might accept their investigation. I agree with him that we have a duty as well, and we are not able to do our duty. However, it is no good railing against the Government and trying to get assurances from them so long as we have not gone into the whole system. I hope that we shall, and that we shall try to find some solution for this. It may be that starting legislation in this House more than we have done would help towards a solution. This Bill, of course, was started here, but perhaps we should do much more of it. I would ask my noble friend, not to give assurances that this state of affairs will not happen again, because it will, but to impress on the Government that something fundamental and basic must be done if we are not going to be put in this position every year.
LORD SHACKLETON: My Lords, I am sure we do not want to prolong this irregular debate. Every word that has

1295
been said has been carefully noted. I certainly cannot promise that we shall not have trouble in the future: I am really too new as Deputy Leader, and I certainly should not wish to bind my noble friend Lord Beswick. I can only say that we will, at least, use our best endeavours, as the noble Earl, Lord St. Aldwyn, and my noble friend have done in the past. My noble friend Lord Silkin made some interesting points, but I do not think this is the moment to discuss them.

WATER (SCOTLAND) BILL
6.22 p.m.
Order of the Day read for the consideration of Commons Reasons for disagreeing to certain Lords Amendments.
LORD HUGHES: My Lords, it may be for the convenience of the House if I move this Motion formally, so that the main discussion can take place on the next Motion. I therefore beg to move that the Commons Reasons for disagreeing to certain of the Lords Amendments be now considered.
Moved, That the Commons Reasons for disagreeing to certain of the Lords Amendments be now considered.—(Lord Hughes.)
On Question, Motion agreed to.

WATER (SCOTLAND) BILL

  LORDS AMENDMENTS
  [The references are to Bill (231) as first printed for the Lords, The Commons Reason is printed in italics]
  [Nos. 1–3]
  Schedule 1, page 22, leave out lines 20 to 23.
  Schedule 1, page 22,leave out line 27.
  Schedule 1,page 23, line 24, at end insert—

  ("10A.

  The Orkney and Zetland water Board

  Limits of supply of:—

  Kirkwall Town Council

  Orkney County Council

  Stromness Town Council

  Lerwick Town Council

  Zetland County Council")

  The Commons disagreed to these Amendments for the following Reason:
  Because the Amendments would deny to the North of Scotland the benefits which would derive from the establishment of a regional water board covering the four counties of Sutherland, Caithness, Orkney and Zetland.
  LORD HUGHES: My Lords, I beg to move that this House doth not insist on its Amendments to which the Commons have disagreed. This matter was debated on Monday night in another place. I think it is fair to say that no new points emerged. The Opposition in another place repeated their contentions that the wider amalgamation reflected the Government's passion for uniformity; that the difficulties of communication would cause serious inconvenience, and that, on the analogy of what has happened with the fire service, it would lead to increased costs. These are all points which were made in discussion in another place before the Bill came to us. They are points which were made, I might almost say, time and time again in your Lordships' House when the Amendments to which the Commons disagree were inserted.
  Whatever may have been said, with complete justification, about the lack of time to consider the Amendments which we have had from another place on the Companies Bill which we have just finished, no one can say that the position of the Orkney and Shetland Water Board has not been adequately discussed, because there has been very full discussion in both Houses. The fact remains that at the end of all this discussion the Opposition are of one point of view and Her Majesty's Government are of another. The Commons have stated that their Reason for disagreeing with the Lords' Amendments is that
  "the Amendments would deny to the North of Scotland the benefits which would derive from the establishment of a regional water board covering the four counties of Sutherland, Caithness, Orkney and Zetland."
  Moved, That this House doth not insist on the Amendments to which the Commons have disagreed.—(Lord Hughes.)
  6.26 p.m.
  THE EARL OF DUNDEE: My Lords, it is with very deep and bitter sorrow that we have learned of the decision of the Government to disagree with these Amendments giving independence in the administration of their water affairs to Orkney and Shetland, and of the determination to force through their own proposals in defiance of all reason and all common sense. I do not suppose there are a lot of people in England, and I

  1297
  sometimes think not a great many in Scotland, who know or care a great deal about these remote northern islands, and when something which is blatantly stupid and unfair is done in regard to their administration there is, of course, all the less likelihood of a general movement of indignation against it. But I must say that I do not think I have ever read a more derisory and contemptible collection of reasons for disagreeing with your Lordships' Amendments than those which were given on Monday night to another place by the Minister of State.
  The Minister referred to a joint non-Party letter appealing to reason and good sense which was published a few weeks ago in The Times by Members from all Parties and in both Houses, and he said that there were a number of errors in that letter which it was his duty to point out. The letter had said that the authority would be administered from Wick, and the Minister replied that it would not necessarily be administered from Wick; that it might occasionally be administered from somewhere else, or that it might even be administered from a number of places, the Board moving like a kind of circus from one island to another. I wonder whether it has ever occurred to the Government that if it is hopelessly inconvenient to get from Shetland to Wick, it is equally inconvenient to get from Wick to Shetland. And as for moving from one point to another, that may be very amusing if they were exhibiting some kind of entertainment, but when they are discussing seriously the administration of water, I do not see how it would greatly add to the economy and administration, or to its efficiency, that it should be moved about in this manner. It would be not perhaps much more inefficient, but about equally inefficient, to a permanent administration at Wick or any other place.
  Then the Minister of State went on to refer to the statement in this letter that
  "the combination of a water authority between Orkney, Shetland, Caithness and Sutherland would be as sensible as combining Cumberland and Cornwall."
  I cannot refrain from quoting his comment on this. He said:
  "What is meant by that is beyond my comprehension. If it is meant to refer to geographical distance it might have a point, but I do not see its relevance."—[OFFICIAL REPORT, Commons; 24/7/67, col. 213.]
  1298
  I wonder what else he thought it could have referred to except geographical distance. Of course, the signatories of this letter, I admit, were wrong in saying that it would be as sensible as combining Cumberland and Cornwall. What they ought to have said was that it would be very much more sensible to combine Cumberland and Cornwall than to combine the Islands with the mainland in the North of Scotland. If you have to go from Cumberland to Cornwall, even if you conscientiously observe the latest speed limits prescribed by the Minister of Transport, if you start early enough you can easily motor there in one day. To get from Shetland to Wick, or vice versa—it does not matter which—takes three days.
  LORD BOOTHBY: My Lords, there are aeroplanes.
  THE EARL OF DUNDEE: And the aeroplanes do not always fly. And when they do fly, where do they go? They do not go to Wick; they go to Aberdeen, and then you have to travel all the way from Aberdeen to Wick. That is why it takes three days to get there. As for the expense, it is much less expensive to travel, whether by car, train or any other method, from Cornwall to Cumberland than it is to travel from Shetland to Wick.
  LORD STRATHCLYDE: My Lords, the ships do not often sail. Often they do not sail from the Shetlands either to Wick or to Aberdeen. It is one of the most treacherous seas in the world, and the storms are terrific. So how people get there in the winter months, goodness only knows! They cannot fly and they cannot go by sea.
  THE EARL OF DUNDEE: That is very true, and I hope that my noble friend, one of the signatories to this letter, may perhaps say a word to support what I am saying in a few minutes, because the lack of comprehension which we have encountered about this really is monstrous.
  Then the Minister of State goes on to say that in the other water authorities, like Argyll, Ross and Cromarty and Inverness, there is only 1 per cent. or 1½ per cent. of the population of Scotland, and about the same percentage would be contained in a combination of Caithness,

  1299
  Sutherland, Orkney and Shetland. We all understand the arguments for regionalisation. If you combine contiguous land areas together which have the same collection—two or three watersheds all contiguous—it is clearly more sensible to combine them in one water authority. But population is not the only consideration. Surely, however many, or few, people happen to live in these Islands has no relevance at all to the sense, or nonsense, of trying to combine them with landward areas which are three days distant in travelling time.
  Then the Minister tried to make a point which perhaps we should answer. It was said in this letter that the Government at one time, recognising the common sense and unanimous wishes of the Island local authorities, proposed a certain course, which afterwards they went back on. The Minister was at great pains to point out that at this time, on March 31, the local authorities were not unanimous. Let me just remind your Lordships why they were not. When this was discussed in another place in Committee, the local authorities and all the people of Orkney and Shetland naturally desired to keep their own two water boards—which is much the best solution, because Orkney and Shetland are a very long way from one another—one in Shetland and one in Orkney.
  When the Member for Orkney and Shetland moved an Amendment, which he did very strongly and emphatically on this subject, the Minister gave what I would certainly have regarded, and what any Parliamentary person in either House would have regarded, as a very satisfactory reply. He said that, when the Member for Orkney and Shetland heard what was proposed, he would be quite happy. So he withdrew his Amendment, thinking it was going to be all right.
  Then they had this meeting on March 31 at St. Andrew's House, attended by representatives from Orkney, Shetland, Caithness, Sutherland, Ross and Cromarty. The compromise proposal put forward was that if Ross and Cromarty would agree to combine with Caithness and Sutherland, making one big mainland block, and if Orkney and Shetland would agree to combine in one Island block, then the Government would consider favourably agreeing to this as a
  1300
  compromise settlement. Naturally, at that meeting the representatives from the Islands were not unanimous. They said, "We have got to go back and consult with our people about this." It had taken them by surprise. When they all went home they at first were not agreed on this solution, as one can well understand. But they were afterwards unanimous in saying that anyhow they wanted to be independent of the mainland and that, in order to please the Scottish Office, although they did not think it was the right solution but a very second best solution—in order to satisfy this inordinate devotion to uniformity the Scottish Office insisted upon—they would, although at some inconvenience to themselves, agree to a combined board for Orkney and Shetland if they were left independent of the mainland; and for the last two or three months they have been unanimous on that.
  But what happened? Ross and Cromarty would not hear of being compulsorily amalgamated with Caithness and Sutherland. I need not go into why they would or would not. They said they would not. The Scottish Office agreed that they need not if they did not want to, but they said, "Because Ross and Cromarty would not agree to make this nice big mainland unit, therefore we will not allow Orkney and Shetland their local government independence. We must have this big collection of areas, whether they are contiguous or not contiguous, somewhere in the North of Scotland. So we shall insist upon Orkney and Shetland joining up with Caithness and Sutherland, because Ross and Cromarty will not do so". This is the kind of reason one might expect to hear in a Gilbert and Sullivan opera, or in a story in Alice in Wonderland, but not, my Lords, on a serious piece of legislation which Parliament is supposed to consider in a spirit of sense and reason.
  In spite of all these hopes that were raised, first in the mind of the Member for Orkney and Shetland, which were ruthlessly dashed to the ground, and then afterwards in the minds of all of us, by this meeting at St. Andrew's House, the Government at a late hour on Monday night have insisted on using their majority. If your Lordships read the debate you will perhaps form the conclusion that not

  1301
  all the Members who voted were particularly well versed or particularly interested for the moment in the subject; but I do not want to go into the proceedings of another place in too great detail. They have, by a not very big majority, steamrollered their proposals, against all the dictates of reason and of common sense, for no reason whatever that I can make out, except that of a senseless devotion to uniformity. There is no good reason that has been given—none. And this decision, my Lords, which the Government have the power to insist on, will leave a sense of deep and permanent bitterness in the minds of the people of Orkney and Shetland. It will also leave a sense of deep disillusionment in regard to the ability and the capacity of the Scottish Office to administer our affairs.
  6.40 p.m.
  LORD STRATHCLYDE: My Lords, in referring to the reasons why another place disagreed with this House in the Amendments we made, my noble friend has said that they were derisory. I think that, but for the courtesy which this House generally extends to another place, one could have used words a good deal stronger than that. We were told by the noble Lord that the reason was that of denying the benefits. On the last occasion when we talked of this matter I asked the Minister what those benefits were. He was unable to say that there was any benefit at all, other than to give the House figures with which he was supplied at the last moment, as to the benefits which would accrue as a result of the water rate being lower in Orkney and Shetland, if this combination were to go ahead, than it would be if they were left on their own. Despite that, the Islands have made it abundantly clear that they would much rather be left by themselves than have that benefit. Whether one can calculate with any degree of accuracy what the situation will be after this combination takes place, I do not know. Nor do I know where the figures came from; or how they were arrived at. We have not been told that, and altogether it seems to me to be absolutely outrageous that the ridiculous suggestion contained in the last four lines should be allowed to stand. I think it is absolutely nonsensical.
  There is one other question I should like to put to the noble Lord. As far as I know, the "North of Scotland"
  1302
  refers—geographically at least—to the mainland of Scotland. How does it come about that Orkney and Shetland come under the title "The North of Scotland"?
  LORD HUGHES: My Lords, perhaps I could answer that point quite simply. It has never at any time been suggested that Orkney and Shetland are not part of the Kingdom of Scotland; and as they are the most northerly part of the Kingdom of Scotland, under any sort of logic they must be accepted as being in the North of Scotland.
  LORD STRATHCLYDE: My Lords, the noble Lord may satisfy himself as to that. They may have been part of the Kingdom of Scotland, but in that case why not say so? Certainly geographically they are not part of Scotland. It is only in the last 200 or 300 years that they have come under the Scottish tongue, as the noble Lord knows perfectly well.
  LORD HUGHES: My Lords, that may be, but they are part of the country of Scotland. They are the most northerly part of Scotland, and if at this stage we have to go back a period of 300 years to find reasons for disagreeing with the Commons, we are getting pretty hard pressed.
  LORD STRATHCLYDE: My Lords, my noble friend has already pointed out to the noble Lord that he himself knows quite well why we disagree with these reasons that are before us, and I should not be surprised if, in his heart, the noble Lord sympathises with us.
  LORD HUGHES: My Lords, I answered only that one point. With regard to the reasons to which the noble Lord has referred, I will deal with them when I reply to the debate generally. It seemed to me that this point was so far wide of the mark that it ought not to be allowed to go further.
  LORD STRATHCLYDE: My Lords, I hope the noble Lord will be able to tell us something about these benefits. The Northern Islands may be part of the Kingdom of Scotland, but they are certainly not part of Scotland generally. I agree most strongly with everything that my noble friend has said as to the ridiculous nature of the Reasons which we are given on the paper before us.
  LORD BOOTHBY: My Lords, in reply to my noble friend Lord Dundee, I should like to say that I am not entirely unfamiliar with these regions, because at the age of 23 and in the year 1923 I stood as a Parliamentary candidate for Orkney and Shetland. They made the fatal mistake of not electing me, but I came fairly near it. The noble Lord, Lord Hughes, will no doubt be astonished to hear that I think he is right. I agree with him. I think that uniformity, to a considerable extent, is now necessary in a modern community. It is no good saying any more that Orkney and Shetland are out of reach. It will always be a rough voyage for my noble friend Lord Strathclyde from Scrabster to Kirkwall, because the Pentland Firth is a pretty rough crossing. But one can get aeroplanes from Aberdeen to Wick, and Wick to Kirkwall, and on to the Shetlands. These are pretty quick and pretty good. I think it is a wise thing to consolidate these counties.
  I should like to say one other thing. It is no good telling any Orcadian or any Shetlander that they are not part of Scotland, because they are. They are right in it, and they would not want to be anywhere else. They are Scots and they are proud of being Scottish. There was a claim in Shetland about 500 years ago that they were Danish, but they are much happier being Scotsmen. They are real, good Scotsmen in Orkney and Shetland, and I believe that there will be no difficulty in regard to this. I am in favour of it. I am sorry to go against my noble friend, but I really think this is the right answer to the problem, and I should like to assure my noble friend Lord Hughes of my almost impassioned support.
  BARONESS ELLIOT OF HARWOOD: My Lords, I should not have entered into this discussion in order to prolong it if it had not been for the words of my noble friend Lord Boothby. I know of his interest in Orkney and Shetland, and I know that many years ago he was a candidate for Orkney and Shetland; and so no one could say that he does not know something about them. But he does not live there now. He has nothing to do with local government there, and he does not have the slightest knowledge of what is happening there. He does not know the strong feeling
  1304
  there is. If local government is to be democratic and—as I think the Government are anxious it should be—an effective and strong voice of the views of the people, then there is no doubt at all that as regards Orkney and Shetland and the water supply, they are anxious—that is not a right word; they are really furious at the idea that they will be tied to the mainland, for the excellent reason that it will make everything much more expensive for them.
  LORD BOOTHBY: My Lords, there is nothing about Orkney and Shetland that I do not know.
  BARONESS ELLIOT OF HARWOOD: My Lords, I know that. I have already said that the noble Lord was once, many years ago, a candidate for Orkney and Shetland—
  LORD BOOTHBY: And I have been there since.
  BARONESS ELLIOT OF HARWOOD: No doubt on odd occasions the noble Lord has been there, but we who signed that letter and who have been in discussion with the present Member of Parliament for Orkney and Shetland, Mr. Jo Grimond, know that this is a matter on which they feel passionately. No one can say that there is anyone in the country more aware than Mr. Jo Grimond of what is wanted by his constituents in Orkney and Shetland. He knows that they want their own water supply not tied up to the mainland and therefore made very much more expensive and difficult to organise; and involving the representatives of Orkney and Shetland in having to travel down to the mainland, which they definitely do not want to do.
  I am very surprised at this scheme, as I admire enormously the way in which the noble Lord, Lord Hughes, understands local government in Scotland. He has himself been engaged in it, and indeed was for many years the Lord Provost of Dundee. I am surprised that he has allowed himself to be overruled by colleagues who, from the point of view of tidiness, perhaps, or some other absolutely unnecessary criterion, have persuaded him that it is a good idea to do something in the teeth of the opposition of the elected—and democratically elected—members of, first, the local authorities,

  1305
  and, secondly, the Member of Parliament who represents them in the House of Commons.
  I feel very disappointed because I believe, knowing that Lord Hughes feels very strongly in favour of local government, that he has allowed himself to be overruled by people in interests which are not the interests of Orkney and Shetland. After all, that is what we are interested in—doing something for Orkney and Shetland. In spite of what the noble Lord, Lord Boothby, says, this is not in the interests of Orkney and Shetland. This is in the interests of some centralised authority which wants to make a tidy pattern and bring this matter down into a group which has really no geographical liaison with Orkney and Shetland at all. I oppose this very strongly. We can do nothing to-night. It is the last hour or so of this present term, and there is nothing one can do except protest on behalf of those in Orkney and Shetland who are very much opposed to this arrangement.
  LORD HENLEY: My Lords, I should like to support the noble Earl, Lord Dundee, in what he said. I do not want to review the arguments. They have been gone over very fully, in the other place, and on Second Reading and Committee stage here, and the noble Earl has given them a full covering to-night. The noble Baroness, Lady Elliot of Harwood, says there is nothing we can do except protest, but if the noble Earl were to wish to divide the House on this issue I should be only too delighted to join him.
  LORD FERRIER: My Lords, I had not intended to join in this discussion, because it is four or five years or more since I was in Shetland, but I was provoked by what was said by the noble Lord, Lord Boothby, and the noble Lord, Lord Hughes. Shetlanders do not regard themselves as Scotsmen: they call themselves Shetlanders. They are nearer to Norway than to Aberdeen. I feel that some of the things that have been said here to-night are not correct, and we are fully justified in protesting, as the noble Baroness has done, about this extraordinary move on the part of the Government, which has only one benefit, as I see it; and that is that it
  1306
  will increasingly provoke the dislike of this Government's management of this sort of affair.
  LORD MCCORQUODALE OF NEWTON: My Lords, having some interest in Ross and Cromarty, might I be allowed to ask why Ross and Cromarty were listened to and allowed to opt out of the scheme put up by the Scottish Office, and Orkney and Shetland penalised thereby? Was it for some political reason—possibly, representation; or what other reason? Was it that Orkney and Shetland were thrown over because of the wishes of Ross and Cromarty?
  6.55 p.m.
  LORD HUGHES: My Lords, like the noble Lord, Lord Henley, I do not wish to go again over all the arguments. However, as in another place the Opposition denied to my right honourable friend the Minister of State an opportunity to reply to the debate, and what he said in that debate has been the main theme of the remarks of the noble Earl, Lord Dundee, I think it would be wrong, even at this stage, if I did not take advantage of the opportunity of replying to some of the things which were said—and with complete sincerity: of that I have no doubt—but which are completely misguided and wrongly represent the attitude and the point of view of Her Majesty's Government. In fact, if it were not that I were completely convinced of the sincerity of what has been said by noble Lords opposite, I should not have used the words "wrongly represent": I should have used the word "misrepresent" what the Government have done. But I do not use that word, because it would connote an intention to deceive; and there is no such intention, I know.
  I will refer first to the last point, raised by the noble Lord, Lord McCorquodale of Newton, who asked why Ross and Cromarty were allowed to opt out when Orkney and Shetland were not. This, I think, was the first point on which the noble Earl, Lord Dundee, was not fair to Her Majesty's Government, because he quoted what the Minister of State had arranged at the meeting on March 31. May I remind him of what that arrangement was? If Ross and

  1307
  Cromarty would join with Caithness and Sutherland, and if Orkney and Shetland would join together, the Government would depart from the proposals of the Advisory Committee to that extent. The conditions were never fulfilled, because Ross and Cromarty, which under the Advisory Committee's proposals was to have a separate water board, decided that it did not wish to join with Caithness and Sutherland. There was no question of Ross and Cromarty opting out. Ross and Cromarty elected to adhere to what the Advisory Committee recommended.
  That brings me to the second point of wrong viewing of the Government's attitude. The noble Earl, Lord Dundee, said that the Government had "steamrollered" their proposals through, against the dictates of common sense. One of the things which noble Lords opposite have completely ignored in their argument is what was the origin of this proposal. The Government did not think up the idea of Orkney and Shetland being on their own. The Advisory Committee, which included engineering, financial and legal experts, made a recommendation on the way in which the water services should be organised in Scotland; and the recommendation of that Committee was that Orkney and Shetland and Caithness and Sutherland should form one Board. The Government accepted that recommendation. To talk about the Government's "steamrollering" their proposals through against all the dictates of common sense; to describe the proposals which the Government have accepted as being stupid and devoid of common sense, is not, I would suggest, the best way of getting the free services of professional people on Advisory Committees.
  BARONESS ELLIOT OF HARWOOD: My Lords, may I ask the noble Lord whether, in his experience, the words of Advisory Committees take precedence over those of the elected members for an area such as Orkney and Shetland, who from the very beginning have said, and said unhesitatingly, that they were opposed to this scheme? It seems to me that is a very undemocratic point of view.
  LORD HUGHES: My Lords, I do not think so in the slightest, but I will come to that point. I think the noble Baroness
  1308
  has fallen into a trap of her own creation. I could not understand the arguments of the noble Lord, whom, against all conventions, notwithstanding the rough treatment he gave me to-night, I should like to refer to as my noble friend Lord Strathclyde. He was very hard put to it to argue that at this late stage he has discovered that Orkney and Shetland are not part of the North of Scotland. He is still the Chairman of the North of Scotland Hydro-Electric Board, and if there is any group of people who have made greater claims upon the noble Lord to give them a supply of electricity in the North of Scotland than the people who live in Orkney and Shetland I should like the noble Lord to rise now and name the people who have pressed him more hardly.
  LORD STRATHCLYDE: My Lords, the noble Lord is quite correct. Like everyone else, they want electricity, and they are quite entitled to have it. That is no argument for saying that geographically the North of Scotland includes Orkney and Shetland. The people of Orkney call themselves Orcadians, not Scotsmen, as the noble Lord well knows.
  LORD BOOTHBY: They do not. They call themselves Scotsmen.
  LORD HUGHES: My Lords, in all the years when the noble Lord was denying electricity to some of the people of Orkney and Shetland, he never at any time advanced the argument, "You are outside my bailiwick; you are not in the North of Scotland". If he had thought about that, it might have made life easier for him. The noble Lord was unfair—and this is unusual for him—in one sense. He said that I had advanced only one reason of benefit to Orkney and Shetland, and that I quoted some figures—he knew not where they came from; he knew not how they had been worked out. He implied that in any event he did not believe them and that they were produced at the last minute. I would remind the noble Lord that these figures were given, not as part of the argument which I advanced but in response to a question which he put forward on the subject of cost.
  This brings me to the point of the noble Baroness. She said, without giving any justification for the statement, any

  1309
  more than anyone else did, that it would be more expensive for Orkney and Shetland to have their water in this way than if they were left on their own. The facts do not justify this. Orkney and Shetland will have a cheaper water supply under this scheme than if they had a Board on their own.
  LORD STRATHCLYDE: My Lords, I said that. The noble Lord will agree that I referred to the figures that the noble Lord had given and said that the only benefit was that they would get a cheaper water rate, which they did not want; they would rather be by themselves.
  LORD HUGHES: My Lords, the noble Lord did not quite say that. He said that that was the only reason I advanced, and it was not. I am making it clear that I produced these figures in response to a question which he put on the financial benefits which would accrue. But the financial benefits are not the only benefits, and they were not the benefits which persuaded the Advisory Committee to recommend that there should be a combined Board. The Advisory Committee recommended it on the basis that there would be a better all-round service for Orkney and Shetland as well as for Caithness and Sutherland if there was a Board of this kind.
  The final point is the one which the noble Baroness made and which was the subject of an interjection by her; namely, did I think that the advice of an Advisory Committee was sufficiently strong for the Government to override the democratic views of a local authority and its elected representatives? This happens from time to time. Do noble Lords opposite think that in these proposals which are going through, with this the only Amendment moved against it in your Lordships' House, that every local authority in Scotland which has its own water undertaking at the present time came and volunteered to the Government that they wanted to be part of these water boards? I could name a considerable number of local authorities in Scotland who want to remain on their own. I could start with the City of Edinburgh. Every local authority which thinks that in the first instance its water will be cheaper if it remains on its own than it would be if it joined in, had primary objections to joining. So there were many objections. We do not argue that every
  1310
  local authority which comes into these proposals will immediately have a cheaper water supply. What we do believe is that every local authority, without exception, will in the long run have better and cheaper water supplies than if they remain fragmented in 199 separate water undertakings.
  If we are to accept the point of view that it is a reasonable argument against regionalising water supplies or anything else that the people in a particular area want to do that, why was there only an Amendment for Orkney and Shetland? Why not an Amendment for every small burgh that wanted to remain on its own; for every single county that wanted to remain on its own; for the City of Edinburgh which wanted to remain on its own, and for the county of Kincardine which did not want to be divided between two water boards? These were all things in regard to which the recommendations of the Advisory Committee went against the first choices of the local authorities concerned. But if a country is to progress, it cannot progress on the basis that everybody is going to opt out of what is going to be for the greatest good of all, because they see, either temporarily or permanently, an advantage to themselves. This is what has been sought for the counties of Orkney and Shetland. It is not reasonable that this should be done.
  My final point is that I do not think that noble Lords opposite do a service to Orkney and Shetland—I am most grateful to my noble friend, Lord Boothby, for his intervention on this point—to create the impression that Orkney and Shetland are so remote that you cannot get from Shetland to the mainland of Scotland in less than three days. Orkney and Shetland do expect from time to time to increase their revenue through the tourist trade. I hope that these remarks are not given undue publicity.
  THE EARL OF DUNDEE: My Lords, on that point, nobody said that you cannot get to the mainland. They said that you could not get to Wick in three days, which is a different matter. You have to go to Aberdeen first—
  LORD BOOTHBY: My Lords, that is not true.
  LORD HUGHES: My Lords, that is not the case. The noble Lord, Lord Boothby, drew attention to the fact that there are air services to Wick. I have flown from Wick to Orkney and I have flown from Orkney to Wick, and I do not know—
  THE EARL OF DUNDEE: But not to Shetland.
  LORD HUGHES: But you can go from Shetland to Orkney. You do not need to go from Shetland to Aberdeen in order to get to Wick. I know it is a good thing to exaggerate one's case in order to help it, but it is not going to help Orkney and Shetland to create the impression that the normal journey to Wick takes three days. I will admit that in the worst possible circumstances in the winter this could happen, but it is a less common thing—I think that is the fairest way I can describe it. But to argue the case for legislation of this sort on the basis that it takes three days to get from Shetland to Wick is no service to the Shetland Islands.
  I know that the noble Lord and the noble Baroness speak the truth when they say that these people do not want these proposals. I should be quite wrong if I attempted to dispute that. This is probably the one thing in many years upon which they are united. It has almost united the Orkneys and the Shetlands; I say "almost", because of course they have no enthusiasm for that. But the fact that they are united in something which is wrong is no reason for doing it. This is, therefore, my answer to the noble Baroness: that it is not good democracy to depart from the interests of a large number for the demands, even although it is not for the benefit, of a small number.
  I will close by reminding your Lordships of what the noble Lord, Lord Strathclyde, said when I gave him the financial answer, and the remark which he has repeated tonight: that the people of Orkney and Shetland are saying, "We do not care if it is going to cost us more to be on our own. We want to be on our own." That is the answer to the point which has been made that the Government are thrusting something upon Orkney and Shetland which is not to their benefit. It may not be to their pride, but it will be to their benefit.
  7.9 p.m.
  THE EARL OF DUNDEE: My Lords, if I may, with the leave of the House, say one more word, it is simply that in what the noble Lord, Lord Hughes, has just said, in his winding-up remarks, there is nothing to which I can take exception. He is entirely correct in his account of what happened on March 31. Ross and Cromarty were not opting out of anything; they were merely asked to do something which had not been proposed. What we have objected to is not that they refused to opt out, but that their willingness to come in should have been made a condition for giving Orkney and Shetland a Board which, although it was inconvenient to themselves they agreed to for the sake of uniformity. It was a very flimsy reason for the Government to say they cannot do what Orkney and Shetland want because Ross and Cromarty will not do something which they had not originally been asked to do but were asked to do as a condition of Orkney and Shetland being given independent administration.
  The noble Lord is also correct in saying that the proposal was made by the Advisory Committee. We agree with that and cannot go into that now. We went into it at Committee stage in your Lordships' House, and my noble friend Lord Lothian quoted a very significant passage of a general nature from the report of the Committee which had a bearing on this matter. But it is the Government who must take the responsibility for the particular proposals of the Committee, which I still think, in this instance, were entirely unreasonable and mistaken.
  With regard to my noble friend's question about expense, again I would not dream of going into any criticism of the basis of the figures which the noble Lord, Lord Hughes, gave to my noble friend a few weeks ago. I would only say that, although my noble friend may accept them, the people of Orkney and Shetland do not think they are going to get cheaper water. They may be wrong, but they see that Caithness has the highest water rate in Scotland and they think that their own rates will go up in order to help the rates of Caithness. That is their view.
  We have done our best in this matter. We have given every opportunity to another place to reconsider what we believe

  1313
  to be a thoroughly bad and foolish decision which we bitterly regret. But if we were to insist on this Amendment, we know well that the only result would be that in a few months it would come back again and no difference would be made. We have enabled all reconsideration to be given by another place. Unfortunately the other place has not taken advantage of that. We can do no more than say that we have done everything which is constitutionally practicable to achieve common sense and we bitterly regret the decision of the Government and of the other place.
  On Question, Motion agreed to.

GIBRALTAR: REFERENDUM AND FINANCIAL AID
7.15 p.m.
LORD MERRIVALE LORD MERRIVALE rose to ask Her Majesty's Government whether they would be prepared to review the financial aid given and state the support proposed if the majority of the people of Gibraltar vote in the Referendum to retain the link with Britain, in view of the changed circumstances which could arise out of the threatening implications of the aidemémoire of the Spanish Government to the British Government on 3rd July 1967, and given the present critical circumstances of Gibraltar whether they would not agree that the constitutional discussions which are proposed with their representatives should be of a wider nature than would appear intended. The noble Lord said: As Spain is increasingly moving along the cruel path of demoralisation with regard to the community of Gibraltar, I trust your Lordships will agree that it is right that, on this last occasion, we should discuss the matter before the Referendum, some of their problems should be aired this evening and that certain assurances should be sought from Her Majesty's Government.
The noble Lord, Lord Beswick, will be aware that on July 3 this year the Spanish Government in their aide-mémoire rejected the Government's proposal of June 14 last to hold a Referendum in Gibraltar in September. If I may paraphrase some remarks in the aide-mémoire, it went on to say that should the British Government persist in this decision the Spanish Government will feel itself without any further obligation
1314
towards Gibraltar. I should have thought that that was a threat in anybody's understanding. Therefore, I plead with the noble Lord to give a categorical assurance that Britain is prepared to guarantee an injection of capital aid which will ensure that Gibraltar can remain economically independent of Spain if the majority of the people of Gibraltar vote in the referendum to retain the link with Britain, should Spain—and I stress the word "should"—increase the pressure. I am not asking that the Minister should give an assurance that there should be a review of financial aid if the people of Gibraltar vote for retaining the link with Britain, but only if Spain increases the pressure as a result of the Referendum, thus occasioning further economic difficulties for Gibraltar. The noble Lord will be well aware that over the past few months, and even past years, Spain has constantly been increasing its strangulation of Gibraltar both from an economic point of view and from the aspect of communication with the outside world.
If we may consider the statement which the noble Lord, Lord Beswick, made on April 13 last to the effect that on the previous day an order had been published in Madrid establishing a zone in the immediate vicinity of Gibraltar in which all flying would be prohibited, that order in Madrid has made investors outside Gibraltar very loath to invest there. This restriction has also been responsible for the suspension of the development project planned by Messrs. Hood's of Wolverhampton. This project, as mentioned in the Financial Times of October 28 last year, as part of the gradual disengagement of the Rock's economy from Spain, was for a scheme costing over £1 million to form a little Gibraltar Riviera, including the construction of 100 chalets to be let to tourists. I am not saying anything new when I say that Gibraltar needs tourists as well as it needs more hotels. But not only has all residential development been halted by these Spanish restrictions upon overflying and so on, but so has hotel development been halted. I understand that £300,000 has been earmarked—I should like to say "allotted"—by Her Majesty's Government for capital development, and I believe that sum is mainly for hotel construction. Under present conditions this is a totally inadequate amount.
Therefore, I would ask the Minister, in view of the special circumstances prevailing in Gibraltar, to give very careful consideration to subsidising hotel construction on the Rock on a larger scale than is at present envisaged. I am asking for this on account of the present economic difficulties of Gibraltar. In other words, I ask Her Majesty's Government favourably to consider increasing the percentage of Government money which is to be provided for the development of hotels. I ask this since I believe that such a percentage increase would make a considerable difference in attracting the right sort of developer. Therefore, I was surprised and disappointed to read in Hansard of another place on July 25 this year a Government statement to the effect that Her Majesty's Government had allocated £600,000 to enable a start to be made on an expanded development programme up to 1970, as laid out in the Government of Gibraltar plan. But that is the same £600,000 which was mentioned by the Colonial Secretary Mr. Fred Lee on November 3 last year.
But—and this is the important point—since the statement of November 3 conditions have changed, and they have changed to the detriment of Gibraltar, particularly since the overflying ban by the Spanish Government. As I understand it, this amount of £600,000, like the £300,000 which I mentioned earlier, is to come out of the £2,500,000 which is the total amount to be provided for the expanded development programme. It seems that under the conditions at present prevailing in Gibraltar, Her Majesty's Government should raise their sights a little and possibly consider increasing the amount, which is to be spread over the period to 1970, from £2,500,000 to £3 million.
As I said earlier—and I would stress this—development is halted on account of the latest Spanish air traffic restrictions. In this context of a higher percentage of Government funds being provided for desirable development, and with a view to assisting it, I should like to ask the noble Lord whether consideration could be given to speeding up the relinquishing of some Ministry of Defence land on the western side, so that it could be developed to provide a strong tourist attraction.
As the Spanish aide mémoire states that holding a Referendum is contrary to the wishes of the United Nations (this is the Spanish point of view, and not my point of view or that of Her Majesty's Government) can the noble Lord say whether the very reasonable suggestion by the noble Lord, Lord Rowley, last week, that the United Nations Secretary-General should send a representative during the Referendum, has been implemented, and whether a reply has been received from the Secretary-General?
Various rumours are going round Gibraltar at the moment, and these have been mentioned in the local Press; for instance, that the Spanish labour force employed in the docks will be withdrawn after the Referendum; and that the Algeciras-Gibraltar ferry will no longer call at Gibraltar. Finally—I do not think this is a rumour, but it is a worrying thought which should be most carefully considered by Her Majesty's Government, because it fits into the Spanish pattern of slow strangulation of Gibraltar and its economy—there is the question of Spanish interference with the boundaries of Gibraltar's territorial waters. Therefore, will the Minister give a categorical assurance that Her Majesty's Government will not tolerate in the future any hindrance of free access by sea to the port and harbour of Gibraltar?
Access by air is already hindered by the air traffic restrictions and by crosswinds. For instance, on account of these crosswinds B.E.A. flights on June 10, July 8 and July 15 this year were diverted to Tangier, Malaga and Tangier respectively. Is it not feasible to believe that this coming winter, when Tangier airport is closed at night, the Spanish Government may endeavour, by a tightening up of the air traffic restrictions, to force diverted aircraft to land in Spain at Malaga? In other words, we could be playing into Spanish hands.
Regarding the need to maintain effectively and even to develop existing communications to and from Gibraltar, which are so essential to the Rock's survival, to the strengthening of its economy and to its development as a tourist centre, I should like to refer again to a point which I made on March 9, 1966. I should add that this suggestion has the wholehearted backing of the

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Gibraltar chamber of commerce, as well as of the members of the United Kingdom Mission of the Federation of Commonwealth Chambers of Commerce when they went out to Gibraltar; namely, the idea of some air link with Portugal.
As the noble Lord will no doubt be aware, trade is building up between Gibraltar and Portugal. Such an air link would be an added facility for tourists to visit the Rock and also to visit Portugal. On March 9 of last year, the noble Lord, Lord Walston, at column 1205 of Hansard said:
"British European Airways is an independent Corporation, and it is for the Corporation to fly where it considers its duties and its financial profit is likely to take it."
Might I respectfully ask the noble Lord, Lord Beswick, whether a different yardstick could not be applied in the very special circumstances existing in Gibraltar? The link for which I am asking is more than just a service for purely social reasons or reasons of profitability. I believe this to be a means of opposing the stranglehold of Spain.
As B.E.A. would have to make an application to the Air Transport Licensing Board before the Board of Trade could apply to the Portuguese authorities, would the noble Lord consider taking the initiative with B.E.A. in this matter? On March 9, 1966, the noble Lord, Lord Walston, said that perhaps my remarks would be considered by B.E.A. Maybe they have been but, so far as I know, no action has yet been taken in this matter. Perhaps the noble Lord, Lord Beswick, would be willing to see whether Her Majesty's Government could take some initiative in this circumstance. This could be either a London-Gibraltar service, calling at Lisbon in both directions, or an extension of the London-Faro service, going on to Gibraltar, or purely a Gibraltar-Faro service.
Finally, I should like to turn to the last part of my Question. On July 19 the noble Lord, Lord Beswick, said:
"I do not think that such an exceptional arrangement "—
he meant a Round Table Conference—
"would be suitable or necessary in the present circumstances of Gibraltar."—[OFFICIAL REPORT, col. 254.]
What I am asking Her Majesty's Government to do is to consider to-day that
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after the Referendum there should be some form of discussions, which would be a reflection of, or would give effect to, the present feelings of every Gibraltarian; in other words, that both the political and economic aspects of their situation should be considered, for they are uppermost in their minds at the moment.
The decision which the people of Gibraltar will be asked to take in September is a political decision, which must of necessity have economic repercussions. The noble Lord, Lord Beswick, said last week that the Government envisage that the discussions will be held in Gibraltar. Are the Government proposing to send someone of the calibre of Sir Hilary Blood, or some Government nominee? I imagine that I am right in assuming that a constitutional conference, as such, is not proposed, for I presume that would be held in London. In order to allay the fears of some Gibraltarians who feel that a Government nominee's report would facilitate arbitrary decisions being taken by Her Majesty's Government, with no opportunity for consideration, debate or amendment by Parliament, would the noble Lord reconsider his previous statement on this matter? For if the people of Gibraltar vote for retaining their link with this country, surely that will entail recognition by Her Majesty's Government that the 1964 Constitution Order should be looked at again in the light of present economic conditions and restrictions.
My Lords, surely members of a Round Table Conference could look closely at and report on all these aspects. Most of the terms of reference of the Malta Round Table Conference would, it seems to me, be appropriate. They could, for instance, be amended as follows:
"To consider constitutional and related questions arising out of a majority decision for a free and voluntary relationship between Gibraltar and the United Kingdom; to consult representatives of all shades of political opinion and such other persons as may seem fit to them; to report their conclusions and recommendations."
My Lords, if the noble Lord looks at the report of the Malta Round Table Conference he will see that economic development in this case is related to constitutional changes, and I should have thought this applies perfectly in the situation that

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will arise after the Referendum in Gibraltar. I cannot see why the noble Lord will not admit that there might be, that there could be, or that there is a relationship such as I have said.
In conclusion, wider-based discussions would surely give the required flexibility, and I would plead with the noble Lord to give some encouragement this evening to the people of Gibraltar, so that they may be assured that if they vote for retaining their link with this country, and if, because of this, Spain increases its pressure, Her Majesty's Government will take the necessary steps to safeguard their economic future.
LORD GRANTCHESTER: My Lords, before the Minister replies, may I ask him if he would say whether the meetings between Her Majesty's Government and the Government of Spain have come to a complete end, or deadlock?
7.34 p.m.
LORD BESWICK: My Lords, first of all, may I say that we must all admire the persistent way in which the noble Lord, Lord Merrivale, represents the viewpoint of some of the people of Gibraltar in this House. He has put forward a number of questions this evening, and, quite frankly, I cannot answer all the detailed questions which he has put to me. I have not had notice of all he was going to say; but I will undertake to look at what he has said and I will write to him further if I cannot answer all his points. The noble Lord, Lord Grantchester, asked me about the position with regard to Spain. There is at the moment (shall I call it?) a pause. Each side, I suspect, is waiting for the other to make another move. So far as the particular discussion about the air space is concerned, that is a matter which is being referred to the International Civil Aviation Organisation at Montreal.
The noble Lord, Lord Merrivale, himself put questions which fall into two parts, economic and constitutional, and I should like first to deal with the economic. Let me first say to him—and I say it in, I hope, a friendly way—that I think he would not be doing the people of Gibraltar a service if he allowed the impression to grow that they were becoming disturbed by Spanish propaganda and were in doubt about the validity of the assurances of support for Gibraltar which
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Her Majesty's Government have given. We have made our position regarding aid and support for Gibraltar perfectly explicit. I add only that assurances are rather like paper currency: if they are issued in too great a volume they are devalued. Moreover, it would be a mistake to overstate the vulnerability of the economy of Gibraltar.
The bread and butter of Gibraltar is the naval dockyard, as the noble Lord knows, and the activities of the Service Departments. These provide about 60 per cent. of the national income of Gibraltar. The Gibraltar Government's Development Plan for the years 1967–70 is primarily devoted to the maintenance of the dockyard and other key industries at the present level by ensuring an adequate supply of skilled labour. It provides for the building of houses, of which about 50 a year will be available for skilled immigrants to take the place of Spanish men in key posts who are lost by natural wastage. Our military activities in Gibraltar are not vulnerable to Spanish action.
The second main source of income, as the noble Lord himself indicated, is the tourist industry, and there is hope that a thriving industry, based more on holidays within Gibraltar and less on transit visitors, can be developed. The Gibraltar Development Plan acknowledges this. It includes expenditure of nearly £250,000 on improvements to the amenities, and some of these improvements are already under way, financed by Colonial Development and Welfare grants. It is also the Gibraltar Government's intention to stimulate private investment, not merely by the recently introduced taxation concessions to private investors but by Government expenditure to assist the private sector, especially in the hotel field. Over £300,000 has been earmarked by the Government for this purpose.
LORD MERRIVALE: My Lords, may I interrupt the noble Lord a moment? I understood it was £300,000, and the noble Lord says it is over £300,000. That is encouraging. To what extent is it over the £300,000? Because, as I mentioned, the £300,000 is not sufficient at the moment.
LORD BESWICK: I would rather leave it at that figure. Obviously, I do not think that it is a very large amount over that £300,000.

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Despite what the noble Lord says about the recent discouragement, although the number of tourists entering Gibraltar is falling the time they spend in Gibraltar is not. The length of time spent by tourists in Gibraltar is increasing as holiday habits change. The number is still low and the amount of time they spend is still too low—it is between two and three nights each on average, as I understand it—but this can be further increased as the awareness of what Gibraltar has to offer is increased and the improvement in facilities begins to show. Many things could be done to increase the tourist industry in Gibraltar, and it was for this reason that the Gibraltar Government, financed by our own Ministry of Overseas Development, recently appointed a Director of Tourism. Mr. Scrace has now taken up his appointment, and results will no doubt soon begin to show.
I should mention the aid we have already given or promised. Gibraltar is by no means bankrupt, and our only support for the budget has been two special grants, in 1965 and 1967, of £100,000 each, to help with special expenditures arising out of the Spanish measures. Our capital assistance has been a £1,000,000 allocation of grant money for the years 1965–68, and an Exchequer Loan of £200,000, which the Gibraltar Government intend to use to finance the extension of their public utilities. More recently, the Gibraltar Government prepared their supplementary development plan for the four years 1967–70, which envisaged a total expenditure of £3,871,000, of which £2,500,000 would require finance by other means than loans. The then Colonial Secretary announced in November, 1966, as the noble Lord said, that the British Government supported the general objectives of the plan, and allocated £600,000 to enable a start to be made on it.
On October 31 the Foreign Secretary said in another place:
"Let me therefore make it quite clear that it remains the firm intention of Her Majesty's Government to sustain Gibraltar in her present difficulties, and if we think that further financial aid is needed for that purpose we will provide it".
This is a pledge that we are carrying out in practice.
The noble Lord referred to the threatening implications of the Spanish Government's
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aide-mémoire of July 3. I suppose he was alluding in particular to the final paragraph, which said, in translation:
"If Her Majesty's Government proceed with their unilateral decision of 14th June, 1967, they will have embarked on a course contrary to that indicated by the United Nations, with all the consequences which that entails. The Spanish Government will then be under no obligation towards Gibraltar, for Great Britain will have violated Article X of the Treaty of Utrecht and the question of sovereignty will have been reopened."
Her Majesty's Government will, of course, make their views known on the Spanish aide-ménoire through diplomatic channels in the usual way. It would not be appropriate for me now to suggest what the implications of this passage may be. Whatever they may be, however, there is no need or justification for my adding to what my right honourable friend the Foreign Secretary said last October about supporting the people of Gibraltar.
It would not be profitable for me to speculate on the possible scope or effect of any measures which the Spanish authorities might see fit to take with the aim of inconveniencing Gibraltar and damaging its economy if a majority of the people of Gibraltar vote in the Referendum for retaining their links with Britain. If the economy of Gibraltar were to suffer further restrictions, we should then confront a new situation which Her Majesty's Government would then consider, in close consultation, as is customary, with the Government of Gibraltar.
The noble Lord asked questions about the constitutional aspect. To put the matter into perspective I might remind the House of the terms of the Statement regarding the Referendum which was made here on June 14. It included the following words. It said that if the majority of the people of Gibraltar voted
"to retain their link with Britain with democratic local institutions and with Britain retaining its present responsibilities … we will regard this choice as constituting in the circumstances of Gibraltar a free and voluntary relationship of the people of Gibraltar with Britain. We will thereafter discuss with representatives of the people of Gibraltar appropriate constitutional change which may be desired."

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I said, "with representatives of the people of Gibraltar". I made it clear then, and I do so again, that that would include representatives of all shades of opinion in Gibraltar. I do not believe, and I said this at the time to the noble Lord, that a round table conference in this case is the right way of going about things. The Malta Round Table Conference was a special conference held to meet the exceptional circumstances of Malta arising from the proposal that Malta should be integrated with the United Kingdom and represented here in Parliament at Westminster. The Round Table Conference with members of all Parties was in that circumstance thought to be appropriate to that particular situation. The case of Gibraltar is different. Frankly, we do not see any necessity to widen the nature of these discussions. They are wide enough to cover all the needs of the situation.
LORD MERRIVALE: The economic needs too?
LORD BESWICK: All the needs of the situation. If I were the noble Lord I should read that in conjunction with the assurance given by my right honourable friend the Foreign Secretary. I was asked a specific question about lands held by the Ministry of Defence and the possibility of making them over for tourist purposes. The fact is that we have had no specific requests by the Gibraltar Government for the release of these lands: but if a request were made we should, of course, consider it.
LORD MERRIVALE: My Lords, they cannot make a request because all development has been halted on account of the air ban restriction.
LORD BESWICK: The noble Lord asked me if it would be possible for the land to be made available. What I said is that if such a request were made it would be considered. He asked a number of questions about air links. I cannot answer them "off the cuff". I will look into these matters. Finally may I say that the people of Gibraltar themselves, and the Legislative Council, as the noble Lord knows, have welcomed the holding of these constitutional discussions, and I should have thought we must now await
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the Referendum and its results, and then ensure the most fruitful constitutional discussions.

ROYAL ASSENT
7.45 p.m.
THE LORD CHANCELLOR: My Lords, I have to notify the House that, in accordance with the Royal Assent Act 1967, the Queen has signified Her Royal Assent to the following Acts:

Appropriation,

Sexual Offences,

Public Works Loans,

Post Office (Data Processing Service),

Bermuda Constitution,

Anchors and Chain Cables,

Antarctic Treaty,

Welsh Language,

Irish Sailors and Soldiers Land Trust,

Fugitive Offenders,

Civic Amenities,

Road Traffic (Amendment),

Aden, Perim and Kuria Muria Islands,

Wireless Telegraphy,

National Insurance,

Greenwich Hospital,

Matrimonial Homes,

Road Traffic Regulation,

Police (Scotland),

Water (Scotland),

Road Traffic (Driving Instruction),

Criminal Justice,

Companies,

Ministry of Housing and Local Government Provisional Order Confirmation (Greater London Parks and Open Spaces),

British Railways,

British Transport Docks,

Port of London,

Kingston upon Hull Corporation,

Rhymney Valley Sewerage Board,

Somerset County Council,

Portsmouth Corporation,

Dartford Tunnel,

Essex County Council (Canvey Island Approaches, etc.),

London Transport,

Manchester Corporation.

PRESERVATION OF HISTORIC BUILDINGS
7.47 p.m.
BARONESS PLUMMER BARONESS PLUMMER rose to ask Her Majesty's Government whether they are yet in a position to say what provision will be made in the Town and Country Planning Bill for the preservation of places of historic or architectural interest, and whether they will make a Statement. The noble Baroness said: My Lords, I beg to ask the Question standing in my name on the Order Paper. Would my noble friend agree how real is the importance and beauty of our historic town and countryside houses and the part they play in tourist attraction? Is he also aware of the growing concern over the loss of listed buildings every year?—reminding him of his statement last summer that listed buildings were being lost at the rate of 400 a year. The recent Civic Amenities Bill binds local authorities to designate conservation areas and attend to the preservation and enhancement of their character in exercising their planning functions, and it also gives local authorities power to purchase a house for preservation purposes and to carry out emergency repairs at their own expense to unoccupied houses.
I see from the recent White Paper on Town and Country Planning that further provisions for the protection of buildings of historic and architectural interest will be announced later and will be included in the Town and Country Planning Bill. Has my noble friend any news of these? Much has already been done, and this country, happily, is not among the laggards in protecting its architectural heritage; but we are still very conscious of the fact that fine old houses and fine old towns are going all the time and that so much more remains to be done.
THE PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (LORD KENNET): My Lords, I am grateful to the noble Baroness for asking this Question at this moment—the very last item of business, not on the last day of the Session but on the last day before the holidays. I entirely agree with the noble Lady about the importance of the matters comprehended in her Question and would confirm that the Government welcome the
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changes proposed in Part I of the Civic Amenities Act which was recently before your Lordships' House and has received the Royal Assent, as my noble and learned friend the Lord Chancellor has just told us, to-day. My right honourable friend the Minister of Housing and Local Government, in conjunction with the Secretary of State for Wales, will shortly be communicating with local authorities about the implementation of the Bill, and I hope that the Government and local authorities will, together, be able to move in this way towards a steady improvement in the arrangements for preserving this part of our heritage.
At the same time, as the White Paper on Town and Country Planning indicated, we believe that some further strengthening is needed in the law. The basis on which the protection of historic buildings rests is, of course, the statutory lists prepared by the Ministry of Housing and Local Government of buildings of special architectural or historic interest. It has been, as your Lordships know, an immense task which has taken very many years to complete, but we have recently made a great effort to speed things up—and with some success. At the end of 1964 25 per cent. of the local authority areas had not got their statutory lists. To-day there are fewer than 4 per cent. who have not, and I am able to say with some confidence that the issue of statutory lists covering the whole of England will have been virtually completed by the end of this year. The lists include more than 100,000 buldings, apart from the supplementary lists, which do not have statutory force but cover approximately another 100,000. The process of listing can, however, never be finished because we must constantly be revising the lists to keep them up to date with physical changes and changes in public taste.
My Lords, the noble Baroness asked specifically whether there was yet news of the Planning Bill, as the White Paper on Town and Country Planning said there would be. I am now in a position to announce that the Government intend to make five changes in the law concerning the preservation of listed buildings. They are as follows. First: At present, anyone who wants to demolish or alter a listed building has to give six months' notice of

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his intention to the local authority. If the local authority does not put on a building preservation order and get it confirmed by the Minister in that time, he is free to go ahead. If the local authority does put on a building preservation order, the owner of the building may appeal against it to the Minister; and even if he does not appeal against it to the Minister the latter must specifically confirm it. In either of these cases the Minister often has to set up a local inquiry to go into objections. When a building preservation order is confirmed it does not mean that it is impossible to demolish or alter that building; it simply means that the owner must have express permission to do so. For this permission he can apply to the local authority, and, if it is refused he can again appeal to the Minister, in which case there may be a second local inquiry. So it can happen that there are two local inquiries going into exactly the same case.
This is a cumbrous procedure and the Government propose to simplify it by running the two stages into one. The Town and Country Planning Bill, which it is my right honourable friend's intention to introduce, will provide that the mere fact of listing will have the same effect as a building preservation order does at present; that is to say, anyone wishing to demolish or alter a listed building must apply to the local authority for express permission to do so, and, if he is refused it, may appeal to the Minister. This reform will eliminate a great deal of time-wasting, expense and confusion, and will provide more effective control.
Second: The main cause of the loss of listed buildings is decay, and in some cases (about which there has been publicity recently) the decay has been not unwelcome to the owner of the listed building, who wanted nothing so much as to demolish it and develop the site. At present, if the owner of a listed building wilfully damages it in such a way as to accelerate decay—for instance by removing a tile from the roof, so letting the rain in—local authorities already have the power to make him reinstate
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the damage. But if he just stands aside and lets the wind blow the tile off, the local authority has no power to make him replace it. Subject to detailed consultations which are still going on, it is my right honourable friend's intention to give local authorities that power. It will enable them to require the owner of a listed building to carry out specified repair works within a specified time, and if he does not, to do the work themselves and recover the cost from the owner. There will be provisions for appeal against the exercise of these powers—for instance, if the owner claims that he cannot afford it, or that the works required go beyond the simple purpose of preserving the building.
Third: At present it is possible for local opinion to be unaware, until it is too late to make representations, that there is a proposal to demolish, or alter, a listed building. This may be preventing the growth of an informed interest in the amenities of our towns and villages so the Government will provide that a local authority which receives such a proposal must advertise it in the local Press.
Fourth: Is an administrative reform to speed up the listing process itself. It is that the responsibility for transmitting the notice of listing to the owner of a property should be transferred from the Minister to the local authority.
Fifth: For unavoidable reasons a few listed buildings must continue to be demolished, and it is proposed to provide that the owner in such cases must allow the recording of the building before it is demolished.
My Lords, the Government have had evidence that willing buyers of listed buildings sometimes arrive just too late to save them. We are therefore considering what machinery can best be provided to remedy this situation. My right honourable friend, the Secretary of State for Scotland will be consulting in due course the local authority associations and other bodies concerned in Scotland, with a view to including similar provisions in the new Scottish planning legislation foreshadowed in the White Paper.