Lords Sitting of 6 March 1967

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

PROPOSED MID-WALES NEW TOWN
2.36 p.m.
LORD MOYLE: 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 have considered the consultants' proposals made to the Secretary of State for Wales for a mid-Wales new town; and whether they have reached any decision.]
BARONESS PHILLIPS: My Lords, consideration of the consultants' proposals has now reached an advanced stage. My right honourable friend the Secretary of State for Wales will be making an announcement about the Government's policies for Mid-Wales in another place on March 15. I cannot anticipate to-day what he may say.

PRIVATE PLACES OF ENTERTAINMENT (LICENSING) BILL [H.L.]
Report of Amendments received (according to Order).

AGRICULTURE BILL
2.37 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Walston.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL OF LISTOWEL in the Chair.]
Clause 1:

PART I

  LIVESTOCK AND MEAT MARKETING
  The Meat and Livestock Commission
  1.—(1) There shall be established a body to be called the Meat and Livestock Commission (in this Part of this Act referred to as "the Commission") having the general duty of promoting greater efficiency in the livestock industry and the livestock products industry, and the particular functions specified in Part I of Schedule 1 to this Act, as well as the other functions conferred by this Part of this Act.
  (2) In carrying out their functions the Commission shall have regard to the interests of consumers as well as to the interests of the various sections of the livestock industry and the livestock products industry.
  (6) Nothing in this Part of this Act shall be construed as authorising the Commission to engage in the business of buying and selling livestock or livestock products, except so far as is reasonably necessary for, and incidental to, the discharge of other functions of the Commission.
  LORD WISE LORD WISE had given Notice of several Amendments to subsection (1), the first being to leave out "general". The noble Lord said: I beg to move Amendment No. 1 standing in my name on the Marshalled List. The first five Amendments are to be moved by myself, but I do not propose to keep the Committee very long in moving them. It is significant that there are a fair number of Government Amendments in the Marshalled List, which I think proves that the Bill needs amending in many particulars. I imagine that we shall be expected to agree to the Government Amendments, and I hope that the Government will reciprocate by accepting some of the others which are to be moved from either side of the House.
  May I take Amendments Nos. 1 and 3 together? They touch more or less

  1209
  upon the same points. They both seek to leave out a word in subsection (1). The first, in line 10, is the word "general"; the second, in line 12, the word "particular". Both words appear to me to be superfluous. They seem to restrict the duty imposed upon the Commission. The Commission should be able to carry out the duties for which they are being established, without modification. The word "general" seems to have a limiting effect, and something useful which the Commission may be able to do in the interests of the community could rightly be considered to be a duty of the Commission in the ordinary way, but not considered to come within the loose wording of the expression "the general duty". The inclusion of the word "general" might open up a series of arguments as to whether or not the Commission were acting within their powers and duties. A duty is a duty; it requires no modification or expansion.
  In the same way, the use of the word "particular" seems unnecessary. The functions of the Commission are specified in Part I of Schedule I and elsewhere in Part I of the Bill. The word "particular" seems to suggest some limitation of the powers of the Commission. I see no reason for its inclusion, and its omission might save long discussions and arguments in the future as to its meaning. I am all in favour of charity as better than uncertainty. I beg to move the first Amendment.
  Amendment moved—
  Page 1, line 10, leave out ("general").—(Lord Wise.)
  THE PARLIAMENTARY SECRETARY, BOARD OF TRADE (LORD WALSTON): I have listened with interest to my noble friend, and I am glad to say I do not think there is any matter of principle between us here. In spite of that, however, I must say, in all honesty, that I do not think his Amendments will help either his cause or mine. Amendment No. 1, together with Amendment No. 3, would, if agreed to, omit a distinction which we think is worth making in this case. The duty placed on the Commission to promote the efficiency of the livestock and livestock products industry is a general duty, and it is wider
  1210
  than the particular functions actually specified in Schedule 1 and elsewhere in the Bill.
  This statement of the Commission's general duty, together with subsection (2), helps to define not only what the Commission should do, but also their general objectives, and I think that the use of the words "general" and "particular" in this subsection helps to bring out this distinction and to make the meaning clear. I therefore hope that the noble Lord will not press his Amendments.
  LORD WISE: In view of what the Minister has said I will, with the leave of the Committee, withdraw the Amendment.
  Amendment, by leave, withdrawn.
  LORD WISE LORD WISE moved, in subsection (1), after "livestock industry" to insert "including marketing". The noble Lord said: I beg to move Amendment No. 2. This is a slightly different Amendment from Nos. 1 and 3, so I think it better to move it separately. The words "Meat Marketing" are set out in large type in the heading of this Part of the Bill, but the subject does not seem to be referred to again until Clause 25, when it is dealt with in the definitions. It is such an important matter, so far as livestock is concerned, that it should be recognised in this clause of the Bill. The expression "livestock industry" is not in common usage, and the tying up of marketing with it in this subsection would make it quite clear that marketing was to be an essential part of the Commission's activities. I will enlarge upon this when we discuss Amendment No. 5. This is a quite simple Amendment, but in my view an important one, and I hope that the Minister will accept it.
  Amendment moved—
  Page 1, line 11, after ("industry") insert ("including marketing").—(Lord Wise.)
  LORD WALSTON: I am sorry to disappoint my noble friend, again on a matter which is not one of principle. It really rests on the definition of the term "livestock industry". This, of course, is defined in Clause 25(2), from which it will be seen that it:
  "means all the activities comprised in the production, marketing and distribution of livestock in Great Britain …"

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  It follows that the reference to the livestock industry in Clause 1(1) already includes a reference to marketing. Therefore I hope that your Lordships and my noble friend will agree that it would be unnecessary duplication to add the words "including marketing", as this Amendment proposes. I hope that my noble friend is satisfied that the point he wishes to clarify by his Amendment is already made completely clear by the subsequent wording which I have quoted.
  LORD WISE: I am well aware that the word "marketing" is described in connection with the livestock industry in Clause 25(2); but I am afraid I do not see eye to eye with my noble friend, because I think that it is such an important part of the Bill that it should be included in the first clause. However, in view of what has been said, I do not propose to divide the Committee on this Amendment, but will, by leave, withdraw it.
  Amendment, by leave, withdrawn.
  2.47 p.m.
  LORD WISE LORD WISE moved, in subsection (2), after the first "of" to insert "producers and". The noble Lord said: Here again, I wish to insert a few words. The inclusion of the reference to producers would at least put them on a par with consumers. This is not a consumers' Bill, and Part I is concerned mainly with livestock production and distribution, and kindred products. This Part of the Bill deals with production and distribution of the farmers' products, and not with consumption. This is not a food Bill; it is an agricultural Bill. It may be that at some time a new Ministry of Food will be set up. That Ministry could, and would, safeguard the interests of consumers. The Ministry should be a separate entity and not form a part of, or be a poor relation to, the Ministry of Agriculture, as it is at the moment. In the case of this clause it is invidious to single out the claims of consumers without any direct reference to those of producers who are, in my view, the senior partners in this Bill. Again, this simple addition of two words would put the matter right. I beg to move.
  Amendment moved—
  Page 1, line 16, after ("of") insert ("producers and").—(Lord Wise.)
  LORD ROYLE: I am a little concerned as to why my noble friend is limiting this Amendment to producers and coupling them with consumers. Would it not have been a good idea if he had also remembered that there are other people involved in the meat industry as well as the producer and the consumer?—I refer to the distributor. If we are legislating along the lines of the Meat and Livestock Commission, I would suggest to my noble friend that the distributors ought certainly to have equal consideration to that given to the producers. Therefore, while I have some sympathy with him in trying to extend the words of the clause in this particular respect, I feel that he is being quite unfair in seeking to bring the producers into the clause without considering also the distributors.
  The other matter I should like to mention is that Part I of the Bill provides for the establishment of advisory committees, which will meet with the Commission with the object of finding out the best means of dealing with livestock of livestock products. I notice that among those advisory committees the producers have a quite adequate representation, and I should have thought that that in itself was sufficient to ensure that the Meat and Livestock Commission will consider the points of view of the producer. That being so, with the greatest respect to my noble friend I do not regard this Amendment as necessary.
  LORD WALSTON: My noble friend Lord Royle has made my task easier by pointing out, perhaps not quite explicitly but certainly in a very convincing way, the difficulties into which one runs if one singles out any particular section of the industry which is engaged in the whole gamut of producing, processing and distributing livestock. I believe that we should undoubtedly get into difficulties if we singled out simply one section, albeit a very important one. I would take issue with my noble friend Lord Wise when he refers to the producers as being the "senior partners" in this matter. They are the first partners, in that they must come first. Obviously, if the farmer does not produce meat there will be no animal for the slaughterer to kill, there will be no carcase for the butcher to cut up or to sell, and there will be no meat for the housewife to eat. To that extent

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  it is right to say that the producer is the number one partner, but I should not go along with my noble friend in saying that he was the senior partner.
  I would remind my noble friend Lord Wise that the term "livestock industry" is already defined in subsection (2) of Clause 25. The definition refers to:
  "… all the activities comprised in the production, marketing and distribution of livestock in Great Britain …".
  which covers all these aspects. Clause 1(2) already requires the Commission to have regard to the interests of the various sections of the livestock industry, and, as my noble friend Lord Royle has pointed out, there are advisory bodies to help in doing this. It is quite clear from the definition which I have just quoted that this includes the production interests. Therefore, I suggest to your Lordships that the proposed Amendment would do no more than duplicate something which is already in the subsection. So once more I would ask my noble friend not to press this Amendment.
  LORD WISE: In view of what the Minister has said, and as I am a very friendly sort of person, I will, with the permission of the Committee, withdraw the Amendment.
  Amendment, by leave, withdrawn.
  LORD WISE LORD WISE: moved to delete subsection (6) and to substitute:
  "(6) The Commission shall be authorised to engage in the business of buying and selling livestock or livestock products as is necessary for the discharge of the functions of the Commission."
  The noble Lord said: On this particular Amendment I shall not perhaps be quite so friendly. I consider that Clause 1(6) is a negative and unsatisfactory subsection. How can one decide whether a position has arisen which is:
  "incidental to the discharge of other functions."?
  I seek to give to the Commission the power to buy and sell livestock, if necessary. If this power were to be carried out in the interests of producers—and I must admit, in view of what my noble friend Lord Royle said, that I am concerned primarily with the interests of the producers—it could stabilise livestock prices at market auctions, ensure a fair price and create competition among other would-be purchasers.
  One of the greatest worries and uncertainties of a farmer's life is the fluctuation of prices at cattle markets. If the Commission could rectify this, it would be doing a great service to the farming industry. If the buying and selling were carried out by the Commission, there need be no loss to the community and the margin of profit could be kept at a reasonable figure. In regard to other farming industries, products are bought and sold by commissions and boards in this way. It would also protect producers against auction rings and non-bidding arrangements by dealers and others. I want a fair deal for the producer.
  I would refer the Committee to Clause 45(4), which deals with the functions of a Rural Development Board, which may acquire, sell, farm, let or otherwise deal with land. Those are pretty comprehensive functions given to a board of possibly less importance in this Bill than the Meat and Livestock Commission. The powers of the Rural Development Boards go even further. They have a positive power—a power which is denied to the Meat and Livestock Commission—to acquire by agreement any farming business or any dead or live farm stock. That the power should be given to one and denied to another in the same Bill is not rational, logical or sensible. The Rural Development Board can buy as well as sell. This Amendment has been put down with a view to improving the Bill, and seeks to put something alive into that part of the Bill with which I have dealt. At present, in my view, it is deadly dull. I hope the Minister will accept the Amendment.
  Amendment moved—
  Page 2, line 34, leave out subsection (6) and insert the said new subsection.—(Lord Wise.)
  LORD ROYLE: On this occasion I want to support my noble friend in his Amendment. As some of your Lordships know, I have been engaged in the retail meat industry for at least 35 years of my life, and during that period I have had opportunities to see many of the difficulties which prevail in the industry, particularly with regard to fluctuation of prices. Throughout the whole of my trading life I have always been concerned with this aspect of the meat trade. For example, noble Lords

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  who are agriculturists know better than I that in the spring time there is a shortage of cattle. Before the cattle go out on to grass after they have been indoors for most of the winter, there is real shortage and scarcity, and throughout that period of the year meat prices are enhanced tremendously.
  In these days, when we are so concerned about the cost of living, these increased prices must be borne in mind all the time. In fact, during that part of the year it puts a great deal of meat out of the range of the working-class housewife. On the other hand, in the autumn, when the cattle have been on grass for some months, there is something in the nature of a glut, and meat prices come tumbling down. I believe that this is not right for the producer or for the distributor, and it is unfair to the consumer. I have always hoped for a system which will do away with this fluctuation and give a uniform level of prices as near as possible throughout the year.
  During the war and during the period of control I had an appointment with the Ministry of Food. Therefore, I was able to see at very close hand everything which had to do with the working of the control system. I know that we then had rationing, and that in these days there is no question whatever of returning to that. But, for all that, what came out of the war-time control was the wonderful system of the Ministry, as it was then—not a Commission as envisaged in the Bill—buying the whole of our livestock and meat needs, whether it was home produced or imported. The Ministry were therefore during that time able to ensure a very even distribution. They were the people, who sold meat to wholesalers, and ultimately to retailers, and both the wholesaler and the retailer had his own organisation for purchasing purposes. This did away with a great deal of the fluctuation, and, in my estimation, a great system was established at that time.
  I have always felt that it would have been a very desirable thing for the whole of the industry, as well as for the nation as a whole, if we could have preserved that controlled system of purchasing by the Ministry—or in this case the Commission—letting them sell directly to those who have to distribute. I am quite sure
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  of this, because I have witnessed so much of it. For example, I have seen cattle passing through three and four different hands before they reach the butcher, each buyer taking a section of profit, and ultimately bringing to the consumer meat at a higher price than it need be. I always advocated that the system I have referred to should be allowed to continue in the days when we were getting away from rationing, bringing something much more sensible into the distribution of meat and livestock.
  It is because of this that I have so much sympathy with my noble friend Lord Wise. I am quite sure that he approaches this question in a very different way from mine. He approaches it, and quite rightly, from the point of view of the producer. But I am sure that there would be something of tremendous advantage to everybody concerned, whether producer, distributor or consumer, if the Government decided to make this very important change in the Bill. I know that the Commission which were set up with the purpose of looking into meat and livestock reported against this, but, at the same time, I feel that they ignored something which was very important. I should have been much happier with this Bill if the Livestock Commission had power to purchase and to sell and—I go further—to purchase all and to sell all. I am quite sure that we should then have had a much better meat and livestock industry. Therefore, I want to support my noble friend, appreciating to the full that this would be putting into the Bill something very different from what is envisaged at the moment, but, at the same time, something which would be of tremendous advantage to the community as a whole.
  LORD WALSTON: My noble friend Lord Wise said at the outset that he was not going to be so friendly this time, but he has himself so well under control that I think it would take a very shrewd ear to detect any note of unfriendliness in what he said. May I say straight away that there is a considerable amount of doubt as to the effect of this Amendment? It is doubtful whether it would give a general authority to the Commission to engage in trading, but it would probably widen their scope for trading and it could open the door for pressure on them to submit development schemes

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  under Clause 9, to permit them to undertake trading functions for the better organisation and development of the industry. As at present drafted, the Bill prohibits the Commission from trading except where this is reasonably necessary for, and incidental to, the discharge of their other functions; so that they could, for example, buy livestock or meat for use in their research and development work, but they would not be permitted, say, to undertake support buying.
  My noble friend Lord Wise called in aid the Rural Development Boards, and suggested that because they were given wide powers there was no reason why the Livestock Commission should not have similarly wide powers. With the greatest respect, I think that that is a dangerous argument. The powers of all the different bodies which are proposed in the Bill, or elsewhere, are put forward not because of precedent, not because other bodies have them, but simply because it is considered that these powers are the minimum necessary for the proper exercise of their function. If it is felt, as we feel, that the Rural Development Boards need certain powers, then they are incorporated in the Bill. If it is felt that the Livestock Commission need different powers, then different powers are incorporated. I say quite frankly that I have a great deal of sympathy with the point of view put forward by both my noble friends, and simply looked at in abstract I should have been very happy to see in the Bill provision for some form of trading on the part of the Livestock Commission. But unfortunately, or perhaps fortunately, we cannot look at these matters in the abstract. We have to look at them realistically, to see how they will work out in practice.
  My noble friend Lord Royle reminded us of the war time and the immediate post-war provisions. I agree with him that they worked admirably, and if similar circumstances were to arise they would provide us with a first-class blue-print of how to set about the problem. But, of course, conditions to-day are very different indeed, as my noble friend rightly reminded us. There is no question of meat rationing or anything of that sort, and the whole pattern of trading has developed a very long way from what it was in those days. I say this only to show your Lordships that there was very close consideration of all these points
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  when the Bill was being drafted, and very careful consideration was given to whether the Commission's powers should be extended to provide for some form of centralised trading, perhaps including support buying.
  But the final conclusion which was reached, as was said in the White Paper on the Marketing of Meat and Livestock, was that meat has special features which together distinguish it from many other agricultural commodities, and make such trading by a central body extremely difficult properly to implement. After all, we know that meat is a highly perishable product, that it requires expert handling, and that there are no generally accepted standards of description or of quality. Also we know—and my noble friend has reminded us of this—that supply and demand fluctuate very widely, and to quite a considerable extent they fluctuate unpredictably.
  The practical problems of maintaining and operating machinery for this purpose are, in my view, too great and the costs are too high for such benefits as might accrue. If it were something which was going to be used day in, day out, week by week, month by month, the setting up of such facilities which are an essential part of trading powers would be warranted. But when, as I think both my noble friends would suggest, this is to be used only in rare circumstances to even out fluctuations or other variations, one would have very heavy overheads which would be warranted for only a very short period in any one year, and possibly in certain years not at all.
  However, I would remind your Lordships that the proposals in this Bill do not in any way ignore the problem of supply and demand fluctuations. After all, it is proposed to give the Commission a number of practicable and worthwhile functions which should go a very long way towards reducing the risks of major gluts and shortages, and therefore should help to bring a very fair degree of stability to the market. These proposals include the encouragement of fair and effective contracts, the improvement of market intelligence and market forecasting, and measures to increase competition at the retail stage and thus to make retail prices react more quickly to alterations or changes in supply so that major gluts and shortages have less

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  opportunity to develop. In this way, the Commission will be able to influence demand by means of consumer advice and education and by various activities designed to increase demand for home-produced meat.
  In the longer run, of course, livestock improvement and research into production methods—and also, for example, into methods of preservation of meat—will also improve matters very significantly; and this is probably where the Commission's greatest benefit will come, both to the producer and to the consumer. All these functions taken together will, I believe, bring about a far closer relationship of supply and demand than there is at the present time, and that is precisely what we all want. Our proposals for bringing this about are simple and practicable, and I believe they will be effective. In my view, and in that of the Government, it is not possible to say the same for any proposals for large-scale trading by the Commission. I therefore ask your Lordships not to accept this Amendment.
  LORD WISE: First of all, I wish to thank my noble friend Lord Royle for the support which he gave me. He related matters which were within my knowledge, as I was farming two big farms during the war period and I then considered that the Ministry of Food were the best customers of agriculture, and the most satisfactory customers. I am disappointed in what the Minister has said. He referred to many points about the function of the Commission which are not the crux of the matter. The crux of the matter is that we want better marketing facilities. We do not want advice; we want the facilities to carry out the job in the interests of those who produce the livestock of this country and help to feed this country.
  I wish my noble friend would rise when I sit down and would agree to take this back for further consideration. It is important—very important, in my view—and I feel so keenly about it that at the moment I cannot withdraw my Amendment. I hope the Minister will take it back; and, if the wording is not right, the Government can bring it back with new wording. But the point is that I want the Commission to have the power to go into the markets and stabilise them
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  for the benefit of those who get their living through the markets.
  On Question, Amendment negatived.
  Clause 1 agreed to.
  Clause 2 agreed to.
  LORD NUGENT OF GUILDFORD LORD NUGENT OF GUILDFORD had given Notice of his intention to move the insertion of a new clause after Clause 2. The noble Lord said: Since I put this new clause down on the Order Paper, I have seen that the noble Lord, Lord Walston, has put down an Amendment to insert a new clause which substantially covers the point which I was seeking to secure in my new clause. There is one point in his version of the new clause which I do not find acceptable, and I have put down a manuscript Amendment to that, of which I think he has had notice. In the circumstances, I will not take up the time of the Committee explaining my new clause, and will not move it now, but I shall speak to the new clause moved by the noble Lord when it comes before us later.
  Clauses 3 to 6 agreed to.
  Clause 7 [Systems of classifying meat and codes of practice for butchers]:
  3.18 p.m.
  LORD ROYLE LORD ROYLE moved to leave out paragraph (b). The noble Lord said: I am sorry to be talking so often, which is not my usual custom, but this Part of the Bill is one which arouses a lot of interest in my mind. I beg to move the first of the two Amendments standing in my name, but perhaps it would be for the convenience of your Lorships if I spoke to them together because the second is purely consequential.
  During the Second Reading debate of this Bill I was not able to be in your Lordships' House, and I therefore did not have the opportunity at that time of expressing my full support of Part I of this Agriculture Bill. I think it is an excellent Bill in most respects, but I have just one or two reservations. The first of them I expressed on the last Amendment, moved by my noble friend Lord Wise, but this one is purely and simply from the point of view of the distributors, of which I know something. I am concerned about paragraph (b) in subsection (1) of Clause 7, and I object to it because, as

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  I have already said, of my very close relationship to the trade over very many years. I want to say to the Government as strongly as I possibly can that to put this paragraph into operation is completely impracticable. I believe that it cannot possibly be enforced without an army of inspectors and without a great deal of hardship to honest traders.
  May I read the words concerned, so that what I have to say might be perfectly clear to your Lordships? Subsection (1) says:
  "With a view to assisting persons buying meat by retail the Commission may compile—

  (a) systems of classifying meat and of marking and labelling it in accordance with the classification, and

  (b) standard codes of practice for the way in which meat is cut for sale by retail and for the way in which the cuts of meat are described,

  and may take such steps as appear to them appropriate to encourage the use of the systems of classification and standard codes in all retail meat undertakings."
  This sounds all very well, but it is quite impossible, in my view. I have no objection to paragraph (a)—I believe that qualities should be very definitely stated at all stages in the distribution of meat—but standard cutting is another matter altogether. Customs vary considerably from district to district. I am sorry to be so technical, but the cutting of meat is something I understand. I suppose it is true to say that during the 22 years that I have been a Member of either one House on another I have been the only Member who was a butcher. Therefore, perhaps I might be forgiven for dealing with these technical matters and pointing out the snags which are involved. Descriptions of meat, of all kinds of cuts, vary considerably, for example, between London and many parts of the North—Lancashire and Yorkshire in particular—and some butchers in Lancashire would not have a clue about descriptions of meat as sold in the southern parts of England.
  In a previous Amendment I referred to war-time controls. During that period the Ministry of Food were compelled to issue very different lists in various parts of the country because of the variety of customs which prevailed and because people in the North of England did not understand the terms that were used in the South. Butchers cut carcases in different ways in different parts of the
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  country. With this commodity, we are not dealing with cans and packets that can be lifted from the shelf. Butchers have the task of changing a carcase of meat, which might weigh 600 lb., into half-pound steaks; we have to turn a 50 lb. lamb into lamb chops. This is quite unlike the experience of the grocer, lifting cans and packages from the shelf and handing them over the counter or, in the case of the large multiple stores, putting them on a shelf from which customers can help themselves.
  A butcher must do his cutting in accordance with his type of trade. I want to suggest to my noble friend that standardisation would interfere with costing, very much to the detriment of the consumer. In working class districts—I hesitate to use the term, but noble Lords know what I mean—there is a tremendous demand, dictated largely by the pocket and because of the conditions under which people live and work, for stewing and boiling meat; whereas in other districts, very often to the horror of the butcher, people seem to be able to think of nothing but fillets of steak, roasting meat and beautiful lamb chops. Therefore, the butcher's work must be adjusted accordingly—not only from the viewpoint of different cutting but from the viewpoint of districts where different types of people reside. There is also the problem—and I do not know how the Commission are going to get over it—of the desire for bone-in and bone-out.
  I want to suggest to the Government that in these matters the butchers must have as much flexibility as they can. Laymen do not understand that no two carcases are alike. We are not dealing with motor-car parts. When the meat trader buys a carcase of meat he must sell every part of it—quite rightly—to his own advantage so far as his profits are concerned. He must get the whole of that carcase sold before he can proceed on another one. In my view any compulsion of method would bring the law into disrepute. Regulations on cutting would interfere with the consumers' liberty of choice. Housewives who know what they are buying go to a butchers and ask that meat shall be cut in a certain way to suit their particular requirements. I do not believe that any commission or any Government Department can lay down that the housewife shall

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  be prohibited from asking that the meat shall be cut as she desires. I do not believe the State has any right to interfere with the craftsman's skill, for the industry in which I was engaged was a real craft industry: and a very difficult one at that.
  No other country in Europe—I know little about America—lays down these restrictions and limitations. I believe that the Government are placing an imposition on the retail meat trade by giving the Commission this power. I know the Bill merely says, "the Commission may …"; but why put it there at all if there is no thought or intention of doing it. I believe it is a real imposition on the trade to attempt to compel them to cut meat in a specified way laid down by a Commission somewhere in Whitehall. I beg to move.
  Amendment moved—
  Page 8, line 31, leave out paragraph (b).—(Lord Royle.)
  VISCOUNT MASSEREENE AND FERRARD: I came in a little late and did not hear what the noble Lord said in the earlier part of his speech. I should like to support the Amendment. It appears to me that if the Bill is not amended in the way the noble Lord desires it is bound to bring the law into disrepute. How can one ensure that the thousands of butchers and their employees are going to cut the standard cuts as laid down? It appears to be quite impracticable. I should also like to say that it appears to me to work against the interests of the consumers. I do not know whether the noble Lord has, already said this—perhaps I ought not to have intervened without hearing the whole of his speech; but he spoke such sense that I felt I had to support him—but in different parts of the country housewives like their joints cut in different ways. For example, some people prefer bone-in and others bone-out. I think it would be a mistake to restrict butchers in this way; and therefore I very strongly support the noble Lord in his Amendment.
  BARONESS ELLIOT OF HARWOOD: I, too, should like to support the noble Lord because I think that the cutting of meat is very different in Scotland from cutting in parts of England, and very different in Lancashire and Yorkshire from that in Devon and Cornwall.
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  While I am all for classification, marking and labelling so that people know what they are buying, I think it is a different matter to suggest that everybody should buy the same. I intervene also because, although the noble Lord, Lord Royle, may be the only butcher here, I venture to think that I am one of the only Peers able to cut up a carcase. I have done this many times, and I tried to teach other noble Lords when they came to stay with me. I know the extraordinary variety of joints which one can have when cutting up a piece of mutton or lamb, or whatever it may be, and I think that people must be allowed this variety.
  I know that the Royal Commission were very keen about this. I support their view from the point of view of the consumer, that what is required is an accurate description of what one is buying. But I do not think that anyone would want all consumers to have to buy the same cut. I think that the point made by the noble Lord, Lord Royle, is a very good one, provided that the consumer is safeguarded to the extent that he knows what cut he is buying, that it is accurately described, and that he is not, so to speak, being "led up the garden path" by the butcher trying to sell him a piece of meat which is wrongly described. I think that is quite wrong; but that everyone should have to buy the same cut, or the same weighed cut is, I am sure, a mistake, and I hope that this will be looked at again.
  3.31 p.m.
  BARONESS GAITSKELL: I should like to support the Amendment of my noble friend Lord Royle. It seemed to me that his speech was absolutely full of commonsense—and I speak entirely for the housewife. We should need an army of inspectors to see that what is proposed in the Bill was done. There seems to me no reason why the Amendment should not be accepted by the Government.
  BARONESS HORSBRUGH: I also should like to support the Amendment of the noble Lord, Lord Royle. When I see a piece of meat in a butcher's shop, I like to ask the butcher whether he will cut off a little bit "there"—and I show him where I want it cut. Most butchers will do this. The proposal in the Bill seems to me to mean that you will have to have a particular piece of meat cut in a particular shape, and that consumers will

  1225
  have no choice at all. I am entirely in favour of a standard of quality, but the housewife should be able to go into a shop and tell the butcher what she wants—even though, unlike my noble friend Lady Elliot of Harwood, she may not be able to cut up a carcase herself. Most butchers will cut what a housewife wants, and I think that a housewife should have what she wants and not what the Commission want.
  LORD NUGENT OF GUILDFORD: I should like to say a word in this interesting debate in which the noble Baronesses have played such a notable part following the very interesting speech of the noble Lord, Lord Royle. I should have thought that there were two separate points here. The noble Lord's Amendment about classification seems to me to be in a different category from the second Amendment which refers to standard codes of practice for the methods of cutting up meat.
  Regarding the second Amendment, I should have thought it extremely unlikely that the Commission would ever be rash enough to try to put out a code, but on the general approach to this clause I should like to give a little support to the noble Lord, Lord Walston, because I think that he may need it. The Commission should try to assist the trade as a whole so that meat is classified in a way which makes it easier to buy; and of course it is easier to produce if there is a closer definition of what kind of carcase is wanted. I think the clause is generally acceptable, because it is entirely permissive and advisory. The Commission "may" introduce the schemes. In line 35 it states:
  "… to encourage the use of the systems of classification …"
  It is entirely permissive. I should like to see the Commission—not immediately, but eventually—come forward with a scheme of classification, at least in the initial stages.
  Some interesting work has been done recently by Newcastle University who have been making a survey of the distributive system with the intention of trying to identify what are the particular tastes of housewives in different parts of the country; what kind of carcase the meat comes from, and what kind of productive systems will best get the meat into the distributive system and on to the counters.
  1226
  To a very large extent this survey confirms exactly what the noble Lord, Lord Royle, has told us: that there are regional differences; that cuts are differently named in Liverpool and London; that cuts at the wholesale stage and at the retail stage are differently named; that prices for the same qualities vary again from Liverpool to London, or Newcastle to London, and that there are different modes of cutting in these different centres. These are the facts of this immensely variegated trade, but there is no doubt that it would be a help to have some classification, say, for tenderness, which is probably one of the few qualities which cannot be observed. One can identify leanness at sight, and all butchers know that in the main the demand is for lean meat.
  LORD ROYLE: If the noble Lord will permit me, I should like to make it quite clear that I have no quarrel with classification at all. That is not what I am suggesting should be cut out of the Bill. It is the codes of cutting that I am against.
  LORD NUGENT OF GUILDFORD: Then I am with the noble Lord. I do not personally object to that remaining in the Bill, if the noble Lord, Lord Walston, can defend it, but it will not be very easy for him to do so. I agree with the noble Lord, Lord Royle, that, certainly at present, a uniform code of cutting would be impossible. It would be quite incomprehensible and inapplicable, and I should think that the Commission would be very unwise to introduce it. But on the general approach, there is no doubt that the Commission should try to identify and to define more precisely in terms of the market what kinds of carcases are wanted.
  To-day the production of beef is coming more into the hands of very large-scale producers who want to know what type of beef to breed and what system of management to employ in order to get just what the market wants, and I think this general approach is helpful. I feel there is no great harm in subsection (1)(b), but if the noble Lord, Lord Walston, thinks it desirable to keep standard codes of practice in the Bill, I hope he will have some very cogent reasons for doing so, because I think it would be extremely difficult for the Commission ever to employ them.
  LORD BALERNO: It had been my intention to keep silent during the discussion on the first Part of this Bill, but I was completely fascinated by the eloquence of the noble Lord, Lord Royle, about the mystique of the butcher. Never have I heard it better or more clearly expounded than by the noble Lord. But I sometimes wonder how much the butchering trade has profited from having this wonderful, perhaps almost incomprehensible, mystique. I am surprised that my noble friend Lady Elliot of Harwood should have fallen into the trap so neatly laid for her by the noble Lord, Lord Royle.
  The point I should like to make in support of the noble Lord, Lord Nugent of Guildford, is that the word is "codes" and not "code." It is not a question of having one single code of practice, but that it might be necessary to have different codes of practice for different parts of the country, and if the Commission were to embark on this for the more difficult and vaguer forms of butchering—though I very much question whether they would do so in the immediate future—I am sure that the matter would be adjusted territorially, and that we in Scotland would be allowed to retain our curiosities, such as the gigots. But before we can classify we must have some form of code practice. It will be a long time before that can come for ordinary cuts in the fresh meat trade, but I suggest that very early in their career the Meat Commission will be faced with this problem as regards pre-packed meat, which can be described and classified, and as regards bacon, the cuts of which can be precisely determined. For that reason, I am afraid that I cannot support the noble Lord, Lord Royle, in his Amendment. And I have the further reason that in the United States and Canada the Governments have gone a long way in classification, though perhaps not so far as is envisaged in this Bill for the Meat Commission. Perhaps the Commission might send there and inquire how it is done.
  LORD WALSTON: My noble friend Lord Royle started by apologising for speaking too often. I think that the debate (if that is the right word for it) which has taken place as a result of his remarks proves that there was no need
  1228
  whatever for that apology. Without trespassing on the grounds of the noble Lord, Lord Carrington, as to the true functions of this House, I am certain that one of our functions is to provide an opportunity for those who really know what they are speaking about to express their views, and the expertise of my noble friend on this matter has been of the greatest help to us, as was that of his fellow butcher (if I may call her that), the noble Baroness, Lady Elliot of Harwood. While I am mentioning individual names, may I say that I think it would be a brave butcher indeed who would presume to refuse to give the noble Baroness, Lady Horsbrugh, any bit of meat to which she pointed her finger, whatever any Government or Commission might ordain.
  I cannot help thinking that there has been a good deal of misunderstanding about the purpose of this clause. I freely admit that it may be due to bad drafting. The Amendment proposed by my noble friend would omit the provisions in Clause 7 empowering the Commission to compile, and encourage—and I emphasise the word "encourage"—the use of standard codes of practice for the cutting of meat into retail cuts and for the naming of these cuts. I could not accept the Amendment, because I believe that these provisions offer real opportunities for improvements in the industry's efficiency and for giving greater assistance and satisfaction to consumers, as the noble Lord, Lord Balerno, has so rightly pointed out. We accept that some differences in cutting methods, and consequently of the names given to the cuts, are laid down by local preferences and methods of cooking. But many differences in cutting practices are disappearing and, with them, some of the reasons for differences of names. The Government take the view that there is a strong case for reducing these differences where they are not justified by variations in local circumstances. In the long run, this will simplify retailing. And from the customer's point of view it will mean that she can be assured that what she is getting when she asks for a particular cut is consistent and is cut to a standard. I am sure that even the three noble Ladies will agree with this and that the fourth noble Lady who is a member of the Party would also agree, is she were here.

  1229
  What appears to me to be the real point of my noble friend's Amendment is the fear, which some butchers have expressed, that they may be forced into practices which are inappropriate to their local needs and circumstances. My noble friend spoke of a whole army of inspectors who would be needed to see that the rigid ruling laid down by the Commission had been carried out. That is where the misconception of this clause comes in. In the first place, the codes must be prepared in consultation with the trade, as laid down in Clause 2. Furthermore, there is no provision whatsoever for adoption of the codes to be made compulsory, so that no one can be forced to do anything. It is purely a voluntary matter. The proposals will not be mandatory upon all butchers, who will not have to adopt these standards if they do not want to do so.
  Moreover—and this is a point which does not seem to be generally understood—the proposals do not mean that there cannot be more than one code of practice applicable to different styles of cutting, just as there are varying codes of practice for bacon-curing—for example, for Wiltshire curing or for Ayrshire roll bacon. Nor will there be attempts merely to standardise the names given to cuts if the Commission, after consulting trade and consumer interests, are satisfied that on balance it is better not to do so. In short, I suggest to my noble friend that the fears of the trade about these provisions are entirely misplaced.
  Certainly there are practical difficulties that would have to be overcome before codes could be developed. But if unjustifiable and misleading variations in cutting and naming can be discouraged, we shall then be in a position where the consumer can have far greater assurance of service from a butcher who cuts and names his meat in accordance with the standards laid down in the codes. Although it is not proposed to make the use of codes compulsory, there will be a considerable incentive for butchers to adopt them and in this way attract customers. The many thousands of reputable butchers in this country will have nothing to lose from endorsement by the Commission of practices which they already follow.
  1230
  I hope that these explanations have allayed the fears which have been expressed by my noble friend and by other noble Lords, and that he will now be prepared to withdraw this Amendment.
  LORD ROYLE: I confess at once that I am greatly comforted by what my noble friend has said. When he talks about the codes being purely voluntary and not mandatory, and about many codes being allowed; and when he uses and stresses the word "encouragement" rather than enforcement—all these give me a great deal of comfort. If I have done nothing else but get my noble friend's statement on record for the future, I feel that I have accomplished something, and, more in sorrow than in anger, I beg leave to withdraw my Amendment.
  Amendment, by leave, withdrawn.
  Clause 7 agreed to.
  Clause 8 agreed to.
  Clause 9:
  Powers to meet future developments in livestock and livestock products industries
  9.—(1) With a view to enabling the livestock industry and the livestock products industry to carry out such changes as the Commission may consider to be necessary or expedient, the Commission may submit to the Ministers a scheme (in this section referred to as a "development scheme") for the purpose of conducing to the better organisation, development or regulation of any section of the livestock industry or the livestock products industry.
  (2) A development scheme may make provision for the rationalisation or concentration of a section of either industry, including in particular—

  (a) provisions compelling or encouraging the elimination of excess capacity,

  (b) provisions compelling or encouraging a reduction in the number of undertakings engaged, and

  (c)provisions requiring permission to be given for the setting up of a new undertaking or the relocation of an existing undertaking.

  3.50 p.m.
  LORD NUGENT OF GUILDFORD LORD NUGENT OF GUILDFORD moved to add to subsection (2):
  "Provided that no provision having compulsory effect shall come into force before the expiration of five years after the coming into force of this section."
  The noble Lord said: I beg to move Amendment No. 9. This Amendment would have the effect of suspending for

  1231
  five years the compulsory powers which the Bill provides for the Commission to apply to schemes which they may promote. This was the most fiercely contested clause in another place, and outside Government circles I think it received no support anywhere. It brought about, in my experience, the unique achievement of uniting all the 18 different national organisations that take part in this diffuse trade. I have never known them united on anything before, but every one of them has protested to Ministers that this is entirely objectionable to them. The only people who have not protested are the National Farmers' Union, who of course are protected in other ways under the 1947 and 1957 Acts.
  The fact is that this is a most objectionable power which the Government are proposing to give to the Commission. My Amendment does not seek to remove this power altogether; it seeks only to make a marginal reduction of what is provided in the Bill by suspending its effect for the first five years. The whole trade are frightened of this provision of compulsion because they simply do not know what is in store for them. They do not know who the members of the Commission will be, and they do not know, because Ministers have not been able to tell them, how these powers might be used to affect their businesses. All they can see from the terms of the Bill is that the Commission could put up a scheme which would oblige the trade to rationalise their business, either by closing down individual businesses or, in one way or another, by affecting the livelihoods of their tens of thousands of members throughout the country.
  I see that the Minister in another place tried to comfort the opponents of this provision by explaining that the Commission would not be able to introduce a compulsory scheme by their own wish, but would have to submit it to the Minister of Agriculture, Fisheries and Food, and the Minister would then have to move an Affirmative Order in Parliament before the scheme could be brought into existence; and it was maintained that this would be a substantial safeguard. I am bound to recognise that it has some value as a safeguard, and, in principle, it is a substantial safeguard. But, in practice, the vote of the
  1232
  Government in the Commons, certainly under the new régime, with the Prime Minister requiring an automatic vote from his supporters, would automatically ensure that the Commission and the Minister would get their scheme. Very little comfort is to be gained from the value of this safeguard.
  When this matter was discussed in another place the Government used their majority, both in Committee and on the Report stage, to maintain the compulsory powers in the Bill: and because it is obvious that the Government have made up their mind that they want to keep this in the Bill, I have not sought directly to reverse it and take the compulsory powers out, but have only sought by this relatively small Amendment to suspend the application of such a scheme for the first five years. I do it in this way because I believe that a Meat and Livestock Commission is a good innovation, and that in the long term it will have a most valuable function to perform for this most complicated industry. But I am quite sure that its path to success is going to be a long and difficult one, and its first task will be to learn all about this immensely complex industry. An interesting speech like that of the noble Lord, Lord Royle, this afternoon is just one facet of this complicated industry. The first job of the Commission will be to try to win the confidence of the hundreds of thousands of men and women who work in the industry.
  All I am trying to do is to give the Commission—the noble Lord's Commission—a clean start, and no more, so that for the first five years, at any rate, they shall not be trammelled up with the possibility of compulsory powers. I should think that it is exceedingly unlikely, if the noble Lord is able to get the right kind of chairman and members, that the Commission will ever put up compulsory schemes. For my part, I cannot see a compulsory scheme working in this industry. But, in any event, if we make sure that they cannot for the first five years, we shall ensure that they really understand the complexities and problems they are dealing with before they consider doing this. That is the basis of my Amendment, and I earnestly hope that the noble Lord will take it in good faith.
  I should like to add a word or two about the structure of the industry in order to make plain to your Lordships its vast and complex nature. Starting with the farm, with which most of us are very familiar, the next stage is the auction; the next stage is the slaughterhouse; the next stage is the wholesaler, and the last stage the retailer. Between these different stages there are all kinds of complicated sub-stages. Each one of these stages is divided up into literally thousands of different private businesses, all interlocked and related to each other. If one were setting out to devise a structure for producing and distributing meat, one certainly would not devise something like this.
  The noble Lord, Lord Royle, spoke earlier about the attractions of the Ministry of Food structure in war time, and this I recognise. But that structure is completely impossible in times of a sufficiency of supply in order to give housewives choice over the counter. As soon as there is to be choice over the counter, there has to be flexibility right through the whole system back to the farm. This is why, some 13 years ago, we decided that to give that choice we must dismantle the State trading system which we had in war time and get back to a free market system, which, on the whole, has worked extremely well.
  It was interesting to us all to see that the Verdon-Smith Committee, with the extremely acute and penetrating mind of its chairman, came to the conclusion, after a thorough examination of this extraordinary structure, that, despite all the defects in it—and, Heaven knows!, there are plenty of them—it was still the best system that we could have, and the right thing to do was to set up a national body to look after it, guide it and gradually develop it over the years. All the attractions of theoretical schemes, which would get all the meat on the hook so that you can really see what you have before you sell it, must break down on the gigantic practical difficulties of handling a very perishable product in literally thousands of different cuts all over the country.
  Referring to the Verdon-Smith Committee, it is relevant to remind the noble Lord—I think he knows it already—that that Committee specifically advised against giving the Commission compulsory powers. I hope, therefore, that the
  1234
  noble Lord will have that point in mind in considering my Amendment. On the whole, this system succeeds in getting the meat on to the counter fresh and relatively cheap—certainly cheap when compared with European prices—and this is the flexibility that we wish to continue.
  There is a further point here. It is known to all in the industry—and I do not doubt that the noble Lord, Lord Royle, will agree with me here—that every investigation that Governments have set up to look into the margins on which the various stages of the industry operate has confirmed that these margins are small. On the whole, they are smaller than most distributive industries work upon, and the industry is intensely competitive. I know personally—and I dare say other noble Lords do—groups of farmers who have tried to go into the wholesale meat business in recent years in order to market their own meat, as they hoped, more successfully, but instead, without exception, they have "burnt their fingers". They have discovered that this is an intensely expert and highly competitive trade and it is much better to leave it to the professionals to handle. In this trade it is far easier to make a loss than a profit.
  I am going into this in a little detail because I wish to make the point that there is no need for rationalisation in this trade. The penalty for inefficiency is rapid insolvency, and to think that the Commission will need to set up a scheme which will compel the closing down of a business is quite contrary to the whole experience of the trade. In fact, they are much more likely to need additional funds in order to support particular sections of the trade to whom they introduce schemes, such as national codes of cutting, and so on, where they think they might make improvements if they get these innovations introduced. This really is how the trade lives. It is highly competitive and many newcomers who enter it go out of business very fast.
  This applies also to the slaughterhouse position. There are large numbers of private slaughterhouses still working and playing an essential part in the system. The last thing I wish to see is these closed down, and I hope the noble Lord, Lord Walston, will confirm that he does not want to see it either. Surely the right

  1235
  thing to do is to establish the right standards of hygiene and handling and then leave the economic forces to determine which ones shall continue to exist and which shall go out of business.
  With regard to compensation, I should have been far happier if the noble Lord had not drawn the compensation terms so tightly. As the Bill is drafted, compensation for a business which is closed down under a compulsory scheme has to come out of the central fund which is provided for out of the levies which the trade itself has to pay, and it seems rather hard that the trade should have to furnish a fund in order to enable the wholesale closure of its own members. This is really the classical tradition that when the moment comes one has to apply to one's own lips, the poisoned chalice. I have not sought to move an Amendment to the compensation clauses because it would be touching the Commons' Privilege and would undoubtedly get short shrift there, but it is because the trade is being made to provide its own compensation that I think it is even more necessary to introduce a safeguard to ensure that the Commission do not consider putting up a scheme of this kind in the early days. I feel this is most formidable and I earnestly hope noble Lords will accept this Amendment. I beg to move.
  Amendment moved—
  Page 10, line 30, at end insert the said proviso.—(Lord Nugent of Guildford.)
  4.4 p.m.
  THE EARL OF SWINTON: I hope the noble Lord, Lord Walston, who after all is himself a keen and able agriculturist, will accept this Amendment. It does not say that compulsion is never to be used. I hope it never will be, but what are we doing here? We are setting up a Commission which I am sure will be highly competent, but one of the tests of the Commission is that nobody on it is to have any interest in agriculture. One might almost say that nobody on it is to know anything about agriculture. The members are to be completely independent. I am not quarrelling with that, because if we are to have an independent Commission then we must have people who are independent of any interest in the industry. However, we do want this
  1236
  Commission to have the good will of everybody engaged in the industry, and things are not too easy in farming today.
  Great efforts have been made to respond to what I think is a sound policy of the Government, and I know from my own experience how important it is to have co-operation between holdings, but I also know what an enormous amount of money is involved in this. One amalgamates several holdings, puts up large buildings and adopts things such as new storage facilities for barley, and so on. All this is sound and economic, but the whole of the capital has to be found by the man who is doing the farming. The Government want his co-operation. After all, he may know as much about it—certainly in the initial stages—as the Commission. I hope very much that the noble Lord will not give the Commission these powers at the start. As my noble friend said, I doubt whether a wise Commission will ever wish to use them, or will ever need to use them. In agriculture a number of people tend to be conservative (with a small "c") but at the same time they are doing extraordinarily efficient farming at their own cost. There is a good deal of suspicion about compulsion, and certainly to give this Commission compulsory powers is not the way to start it off.
  Why cannot the noble Lord accept this Amendment, and put up tentative plans voluntarily in the first instance? If they are good plans, I am perfectly certain the industry will carry them out. I know we shall be told that of course it will be all right and the Commission will behave sensibly. I may have said that as a Minister fairly often, but I never got away with it, and I ought not to have got away with it because one has to legislate for odd people as well as for superlatively good ones. We get Ministers who are as sensible as the noble Lord, Lord Walston, but on the other hand I have seen people in the Ministry of Agriculture, Fisheries and Food who certainly do not possess the necessary qualities.
  If we tell a man that he has to shut down a large part of an undertaking into which he has put a great deal of money it is going to be costly for him, and, after all, there is always the sanction that if people are producing too much they will stop producing. I wish the Government

  1237
  would realise that the law of supply and demand applies to those of us who put our money into business and into farming, and that if we find we are producing something which is not wanted then we reduce our production of that commodity and produce something else. For all these reasons, I hope the Government will accept this Amendment, and I am quite sure the noble Lord will be doing the Commission a real service if he does not put compulsion in at the start.
  EARL FERRERS: I should like to support my noble friend Lord Nugent of Guildford in this Amendment because I think he has put a formidable case. I do not like Clause 9, for the very reason that it allows the Commission to "compel and encourage", and it seems to me sinister that the Government have chosen that way of placing those two words. One would have thought they would have said "encouraging" first and "compelling" afterwards. One wonders why they have chosen to put these two words in that particular order. The Bill gives the Commission powers to make:
  "provisions compelling or encouraging the elimination of excess capacity".
  This is not the elimination of excess meat; it is the elimination of the excess capacity to deal with it. In other words, presumably, possibly, slaughterers or wholesalers. What else does it mean?
  Again, paragraph (b) refers to:
  "provisions compelling or encouraging a reduction in the number of undertakings engaged…"
  That can mean only putting a person out of business. I may be wrong, and I should be grateful if the noble Lord would enlighten us upon it. What is the meaning of the word, "undertaking", because, as I see it, an "undertaking" can be any link in the chain from the farmer right down to the retailer. It can be a farmer, a butcher, a wholesaler, an abattoir, a retailer, a slaughterer; any of these particular people run undertakings, and under this particular clause the Commission can compel any of these people to go out of business. I think this is a very unsavoury aspect of it.
  What, therefore, is the purpose of this clause? It has been said, both on Second Reading here and in another place, that the reason is that we must give the Commission plenty of powers to cope with any
  1238
  unforseen circumstances that may appear in the future. Frankly, I do not believe that is a good enough excuse. For this kind of clause to be included, the Government must have in mind some specific idea. If they have a specific example, will the noble Lord tell us what it is. If they have not a specific example, it seems to me that these powers are unnecessary. I seriously doubt whether control is the right way to deal with a perishable commodity.
  My noble friend Lord Nugent of Guildford has said that this is a very tenuous market, and anyone who has had anything to do with it knows that the price of meat fluctuates violently up and down, both daily and within the day; and this is, of course, done by competition and by the operation of the law of supply and demand. After all, nobody wants to be left with a hunk of decaying meat on his hands, and if the Government are to eliminate competition and replace it with controls, this possibility becomes very much greater.
  The meat trade is very alive and alert, and very sensitive to the fluctuations of supply and demand. I should have thought that every encouragement should be given to people, whether big or small, whether the large chain store or the small individual butcher, to enter this trade, to keep it alive and keep it sensitive, and so to make the business of supplying meat all the more competitive and all the more vigorous.
  As I see it, this clause proposes to replace that competition with controls, and is giving the Commission powers to put a person out of business. I think that these are crippling powers; they are powers to cripple the individual and deprive him of his livelihood. All my noble friend is doing by this Amendment is to say: "Let the Commission first start by encouraging; and if, after five years, they find that all their encouragement and exhortation have proved useless, they may have to compel". I should have thought that in all the circumstances that was the most modest Amendment, and I hope the noble Lord will say that he can accept it. I should not like to be a producer, a retailer or a butcher who was compelled to go out of business by a Commission having all the powers which this Meat and Livestock Commission are to

  1239
  have, and I should have thought that their encouragement would be sufficient.
  4.15 p.m.
  LORD WALSTON: We started with the sweet reason of the noble Lord, Lord Nugent of Guildford, followed by the honeyed words of the noble Earl, Lord Swinton, and then we came to the blunt phrases of the noble Earl, Lord Ferrers, all in their different ways singing the same song. In effect, they were saying of the clause: "This is not all that bad. The Commission as a whole are fairly reasonable; we do not even mind their having compulsory powers one day, but we do not want them to have them to-day. They must wait five years, and then we are prepared to give them the powers sought."
  I think I should say straight away that I am unable, and unwilling, to accept the Amendment. I hope your Lordships will bear with me if I explain why. You will appreciate, from what has been said in another place—and I am sure most of your Lordships will have read the Report of the proceedings—and from what has been said elsewhere, that it is the intention of Clause 9 to provide powers to allow the Meat and Livestock Commission and the industry to meet future developments by submitting to Ministers and to Parliament schemes to bring about the better organisation, development or regulation of the industry. And it is important to realise that, and always to bear it in mind. Listening to some of the phrases used by some of the noble Lords who have just spoken, one might have got a quite different impression.
  One would have thought that the Livestock Commission, instead of being a body of reasonable people set up to promote the efficiency of the livestock industry in all its aspects, with the object ultimately of giving the consumer better quality at lower price, and thereby helping the producer to get a better living, and helping all the people who come in between—a body with strictly limited powers, subject, in this particular instance at least, to the very detailed control of the appropriate Ministers and of Parliament itself—was an autocratic, dictatorial and completely autonomous body set up with the express idea of antagonising the industry and ruining certain members of it. I know your
  1240
  Lordships had no intention of giving that impression, but I am afraid that some people, listening to some of the phrases used, might have gained that impression.
  I want to emphasise that the Livestock Commission are there to help the whole industry and, in the final analysis, the consumer in this very complex and complicated matter. The noble Lord, Lord Nugent of Guildford, used a phrase, to the effect that, "If one were starting from scratch one would not devise a complex and complicated structure like this." Indeed, he almost went so far as to suggest that it was an unnecessarily complicated structure; he said he would have devised a simpler one had he had an opportunity—and I wish he had—many years ago to do so. But I would suggest to the noble Lord that the more complex an industry is—and we all agree it is highly complex—the less the Commission must be fettered at this stage by being told just what they can and what they cannot do. The industry must have the maximum degree of freedom to get on with its job, subject to the overriding authority, first of the Ministry, and ultimately of Parliament.
  With the greatest respect to the noble Earl, Lord Swinton, with his very great experience in these matters, I would take issue with him when he says that one must legislate for odd people. With the greatest of respect, I would say that in legislating for the powers of a Commission to be set up by Her Majesty's Government one must not legislate in the expectation that the members of that Commission are going to be odd people. One must expect them at least to be ordinary, intelligent, common-sense people—
  THE EARL OF SWINTON: Even those people do very odd things.
  LORD WALSTON: Even those people do very odd things from time to time, that is perfectly true. But it must be remembered that they have not only the normal checks, due to inertia that exists in any Government or quasi-Governmental body, but also the checks of Government Departments and of Parliament. This clause has been deliberately drafted to meet as wide a range of eventualities as possible, and it therefore contains very broad powers. It would permit a development scheme to include

  1241
  certain types of compulsory provisions. I do not deny that for a moment. This is an essential part of this scheme. But we must get these powers in perspective, and we must remember the safeguards which are built into this scheme and which the noble Lord, Lord Nugent of Guildford, mentioned in passing; in particular that any development scheme would require approval by Affirmative Resolution of both Houses of Parliament.
  From the way the noble Lord, Lord Nugent of Guildford, spoke, I was glad to realise that he was confident that five years from now we should have the same Government as we have today. But whatever Government may be in power, they have the ultimate authority in deciding whether or not the proposals put forward by the Livestock Commission are reasonable and workable. I am quite certain that no scheme would be able to go through all the procedures laid down in Schedule 2, and become law, unless it was a good scheme and one that commanded a pretty wide measure of support.
  It is in this context that Lord Nugent of Guildford's Amendment should be viewed. I certainly do not accept that there is any justification for including an embargo for five years of the kind he proposes. The powers can be used only for the improvement of the industry. That is provided in the clause, and they are properly safeguarded. If these powers can be used only for the improvement of the industry, what the noble Lord is here suggesting is that the industry should not be improved for five years. We say to your Lordships that if the Livestock Commission, plus the Minister, plus Parliament, feel that a certain compulsory proposal is in the interests of the industry, and will improve it, it is right that it should be put into force at any time which the Commission considers reasonable.
  The noble Lord, Lord Nugent of Guildford, says No; even though the Commission believe that a certain scheme, involving compulsory powers, is desirable for the improvement of the industry after three years, after four years, after four-and-a-half years; even though that scheme has been properly put out by its experts, has been approved by the Minister of Agriculture, and accepted by both Houses of Parliament, it should not
  1242
  come into force at once but must be delayed until the five years are up. That is a completely untenable and unrealistic attitude to adopt. After all, this is a rapidly changing industry, both in structure and in method. Who can say at this moment whether a scheme containing certain compulsory provisions for rationalisation or concentration of the industry will or will not be appropriate to the needs of the industry in a year or two's time? I do not think that even the noble Lord, Lord Royle, with all his experience, would be prepared to do that. Certainly I should not be prepared to do so, particularly as this period of change is likely to be of vital importance to the development of the industry for a great many years ahead.
  I do not want your Lordships to misunderstand me on this aspect. What I have said does not mean that I have any specific scheme in mind, or that I think there will necessarily be need for such a scheme. I answer the noble Earl, Lord Ferrers, categorically by saying that there is no such scheme in mind in Whitehall, or elsewhere. All I am saying is that the Livestock Commission, when set up, must not be hampered and fettered by having these reserve powers, if they are considered necessary, denied to them for a period of five years. I therefore ask your Lordships not to accept this Amendment which would in my view make Clause 9 far less adaptable to meet the needs of the industry during this very important period.
  LORD NUGENT OF GUILDFORD: May I thank the noble Lord, Lord Walston, for his very informative reply, but express my regret that it was so negative in its final outcome? I think that, in order to try to build up some sort of argument for himself—which he was hard put to do—he had to distort the picture completely by indicating that no improvement could take place in the industry except by compulsion; and of course that simply is not true.
  LORD WALSTON: May I correct either myself or the noble Lord, Lord Nugent of Guildford. Whatever I may have said, that was certainly not my intention. There are many ways in which the industry can be improved without the use of compulsory powers. This is merely one of the many methods open to the

  1243
  Commission, and I do not see why we should pick just one and deny it to them.
  LORD NUGENT OF GUILDFORD: I must thank the noble Lord for giving me my case, which is that in their early years the Commission would do much better to proceed by voluntary methods. And I am quite sure that is right. The Commission will have a very difficult job to learn all about the industry, keep in touch with it and win its confidence. When they do decide to start a scheme they should try it first on a voluntary basis, on the lines of Clause 7. This is the
  Resolved in the affirmative, and Amendment agreed to accordingly.
  Clause 9, as amended, agreed to.
  Clauses 10 and 11 agreed to.
  Clause 12 [New provision for payment of beef cow subsidies]:
  LORD HILTON OF UPTON LORD HILTON OF UPTON moved, in subsection (1), after "calf" to insert:
  1244
  right way to start. They will also need to undertake a great deal of research, because very little is known about most of these things. I am quite sure that it would be a mistake even to consider a compulsory scheme in the first five years. I am sorry that the noble Lord was wholly unable to accommodate us, and I must advise my noble friends to divide on the Amendment.
  4.28 p.m.
  On Question, Whether the said Amendment (No. 9) shall be agreed to?
  Their Lordships divided: Contents, 59; Not-Contents, 35.

  CONTENTS

  Aberdeen and Temair, M.

  Dilhorne, V.

  Jessel, L.

  Abinger, L.

  Drumalbyn, L.

  Kilmany, L.

  Albemarle, E.

  Dudley, L.

  Mar, E.

  Allerton, L.

  Dundee, E.

  Massereene and Ferrard, V.

  Ampthill, L.

  Ebbisham, L.

  Merrivale, L.

  Ashbourne, L.

  Eccles, V.

  Molson, L.

  Atholl, D.

  Elliot of Harwood, Bs.

  Nugent of Guildford, L.

  Blackford, L.

  Emmet of Amberley, Bs.

  Oakshott, L.

  Bradford, E.

  Falkland, V.

  Rathcavan, L.

  Bridgeman, V.

  Ferrers, E.

  St. Aldwyn, E. [Teller.]

  Brooke of Ystradfellte, Bs.

  Foley, L.

  St. Helens, L.

  Buccleuch and Queensbury, D

  Fortescue, E.

  Sandford, L.

  Buckton, L.

  Greenway, L.

  Selkirk, E.

  Carrington, L.

  Grenfell, L.

  Somers, L.

  Clwyd, L.

  Grimston of Westbury, L.

  Strange of Knokin, Bs.

  Crawshaw, L.

  Hacking, L.

  Swinton, E.

  Daventry, V.

  Horsbrugh, Bs.

  Thurlow, L.

  Denham, L. [Teller.]

  Howard of Glossop, L.

  Vivian, L.

  Derwent, L.

  Ilford, L.

  Windlesham, L.

  Digby, L.

  Jellicoe, E.

  NOT-CONTENTS

  Addison, V.

  Faringdon, L.

  Phillips, Bs. [Teller.]

  Archibald, L.

  Gaitskell, Bs.

  Royle, L.

  Arwyn, L.

  Gardiner, L. (L. Chancellor.)

  St. Davids, V.

  Blyton, L.

  Henderson, L.

  Shackleton, L.

  Bowles, L. [Teller.]

  Hilton of Upton, L.

  Silkin, L.

  Brockway, L.

  Hughes, L.

  Stow Hill, L.

  Burden, L.

  Hunt, L.

  Strang, L.

  Campbell of Eskan, L.

  Iddesleigh, E.

  Summerskill, Bs.

  Champion, L.

  Latham, L.

  Walston, L.

  Chorley, L.

  Lindgren, L.

  Williamson, L.

  Collison, L.

  Maelor, L.

  Wootton of Abinger, Bs.

  Crook, L.

  Pargiter, L.

  "or has, in the opinion of the appropriate Minister, been brought into a herd to replace one which has borne a calf."
  The noble Lord said: I beg to move Amendment No. 10, the purpose of which is to remove a limitation which Clause 12, as at present drafted, would impose on the arrangements for paying the subsidy. Clause 12 provides for payment of the beef cow subsidy introduced by the Government last year. Pending

  1245
  passage of the Bill, the subsidy is being paid under the authority of the Appropriation Act. The intention is that subsidy should be paid on cows which on a prescribed date are comprised in regular herds maintained over the year primarily for the purpose of breeding calves for beef. As drafted at present, the clause would enable payment to be made on a replacement animal that had been brought into a herd during the year to replace a cow, provided that the replacement was itself a cow or, although a heifer at the time it joined the herd, became a cow by bearing a calf by the prescribed date. But the clause as now drafted would preclude payment of subsidy on a heifer replacement which was in the herd on the prescribed date but had not had its first calf by that date. Thus we could have a situation where, for example, a spring-calving heifer brought into a herd during the autumn to continue the calving pattern of a cow which it replaced, would not be eligible.
  The Amendment is designed to prevent anomalies of this kind arising. When the appropriate Minister considers that a heifer in a herd on the prescribed date is a proper replacement for a cow which has left the herd, then subsidy may be paid. There will thus be no question of a farmer, who has had a cow, reared a calf from it and replaced it with a heifer which will continue the breeding cycle for the next year, losing subsidy simply because his pattern of calving and replacement does not fit in with the date prescribed for administrative purposes. The Amendment is designed to meet the practical conditions of husbandry and management in beef herds, and I hope it will be acceptable to your Lordships. I beg to move.
  Amendment moved—
  Page 15, line 31, after ("calf") insert the said words.—(Lord Hilton of Upton.)
  LORD ROYLE: May I say one word on this? I am delighted to see the definition that a "cow" means "a female bovine animal which has borne a calf." My deep regret is that it does not go further and say that a heifer is a female bovine animal that has not borne a calf. I should like to get away from the term "cow heifers" about which we have
  1246
  heard so much in the past. I regret that the definition has not gone further.
  LORD NUGENT OF GUILDFORD: I should like to thank the noble Lord, Lord Hilton of Upton, for his explanation of the meaning of this Amendment. I welcome the Amendment as a valuable slight extension, which will prevent an unwelcome anomaly occurring.
  On Question, Amendment agreed to.
  Clause 12, as amended, agreed to.
  Clause 13 [Levy on industries to meet Commission's expenses.]:
  4.40 p.m.
  LORD NUGENT OF GUILDFORD LORD NUGENT OF GUILDFORD moved after subsection (1) to insert:
  "() in this section the expressions 'livestock' and 'livestock products' include home-produced and imported livestock and home-produced and imported livestock products."
  The noble Lord said: The object of this Amendment is a simple one. It is to empower the Commission to impose a levy on imported as well as home-produced livestock. I noticed that during the Committee stage of this Bill in another place the Minister there explained that the Bill provided already that the Commission have power to impose a levy on imported as well as home-produced livestock, although it does not specifically say so. Therefore my Amendment is not altering the substance of the Bill, but simply seeks to alter the presentation.
  I should make plain that I have an ulterior motive in seeking to do this, because I want the Commission to design their system of levy so as to cover all livestock, imported as well as home produced. It seems to me that if this is not done, the home-produced carcases will be at a price disadvantage as compared with imported meat if it is levy free. Therefore, I should like to see these additional words included in order to bring to the attention of the Commission when they are designing their levy scheme the fact that they can extend the levy to cover imported as well as home-produced carcases. I hope that the Minister of the day will have the wisdom to approve the scheme in that form. I beg to move.
  Amendment moved—
  Page 17, line 8, at end insert the said subsection.—(Lord Nugent of Guildford.)
  LORD BALERNO: I should like to support my noble friend as strongly as possible on this point. It is important for the Commission to be quite clear on this, otherwise one can see points being raised in dispute afterwards. Therefore, it is most important that it should be explicit in the Bill. This is the only way in which one can get equity for the home producer.
  LORD WALSTON: I am glad that my own advice is similar to that of the noble Lord, Lord Nugent of Guildford, to the effect that, as the Bill is at presnt drafted, a levy under Clause 13 would be competent to cover traders in respect of imported livestock and livestock products just as it would be in respect of home-produced products. So far, at least, we are in complete agreement, which is a pleasant situation to be in. I would go on from there to say that, as a means of permitting such a levy, this Amendment is unnecessary. In moving the Amendment, the noble Lord was honest enough to say that that was not really his objective. But I want to make it quite clear that the Government have no intention that such a levy should be imposed upon imported meat. I will come to the question of imported livestock in a moment, but first of all I shall try to dispose of the question of meat.
  It is true that imported meat may to some limited extent benefit from the work of the Commission, but it would not benefit from any of the functions relating to livestock production and slaughter. But it would be extremely hard to assess the amount of that benefit, and it is very difficult to envisage a levy of more than a very small sum on traders who are actually handling imported meat. This would be quite disproportionately expensive to collect, since there would have to be separate machinery for collection. So the net benefit to the Commission, after paying the cost of collection, would almost certainly be negligible. We therefore concluded that, in practice, a levy on imported meat would not be worth while.
  If I may come to deal with imported livestock, here one has a different situation since such livestock would undoubtedly benefit from a wider range of the Commission's functions, and the collection of a levy on such stock would not
  1248
  need any separate machinery. It would be collected in exactly the same way as the levy on home-produced stock. Moreover, to a large extent it is not possible to draw a clear line between imported and home-produced livestock since imported livestock would include the stores "imported" from Northern Ireland as well as those from Eire—stores on which a large sector of our cattle-fattening industry depends. It would therefore be inappropriate at this stage to say that imported livestock should or should not be subject to a levy. Such a levy might very well be appropriate, but, as I have said, we have concluded that a levy on imported meat would be unwise. I hope that the noble Lord, having received this explanation, will be prepared to withdraw his Amendment.
  LORD NUGENT OF GUILDFORD: I must thank the noble Lord, Lord Walston, for his explanation of his policy, and I recognise that we are not arguing about that because I cannot here determine what his policy is in that matter. All that I am trying to do is simply to put this explicitly in the Bill. I am not persuaded that it would not be better to be in the Bill, and even if the Government have made up their mind now not to impose a levy on imported carcases, and have not made up their mind about imported livestock, I still should like to see it in the Bill. I should have thought that it looks right in the Bill, and that the Bill would be better for it. Although I am not going to ask noble Lords to press this to a Division to-day, as I do not feel it is a matter of sufficient substance, I hope that the noble Lord will confer with his advisers, and perhaps with the Minister of Agriculture, in the interval before Report stage to see whether it might not be included in the Bill. There cannot be any objection to it in principle because the Bill already implies it; it is only a matter of presentation. In that spirit, I beg leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  4.49 p.m.
  LORD ROYLE LORD ROYLE moved to add to the clause:
  "() Notwithstanding the preceding provisions of this section, no charges under a levy scheme shall be imposed twice on the same carcase or any part of a carcase upon which a levy is imposed."
  The noble Lord said: This is a very simple Amendment, and I hope my noble friend will be able to accept it. It is a matter of making quite sure that there shall be no duplication in regard to levies. This kind of Amendment was moved in another place on Report, and the main objections to it were, first, that the levy would actually be imposed on persons and not on carcases; and, secondly, that to operate such an Amendment would mean restricting the method of imposing a levy solely to the imposition at the point of slaughter. I would attempt to counter that argument which the Minister then put forward by saying that, although the levy is strictly imposed on the person, it is the person in relation to the carcase or part of a carcase. Therefore this is merely a matter of terminology.
  What is to be created again is a financial levy imposed on the same piece of meat on more than one occasion. This does not preclude other methods of imposing a levy, apart from that at the point of slaughter. The present P.I.D.A. levy scheme, for example, is imposed by deduction from the subsidy, and there is no reason why that method should not be used. There are other methods also which could be used for imposing a levy.
  I would point out to my noble friend that in the wholesale market, and in a great market like Smithfield in London, the custom is for carcases or even quarters of beef to be sold between one wholesaler and another. In some cases, the second wholesaler, the jobber, might conceivably cut up a carcase or a quarter of meat before it is passed on to the retailer. These are the problems, in a complicated trade such as this is, which make it just possible if great care is not taken for a levy to be imposed, quite accidentally, more than once. Therefore, I beg to move the Amendment in the hope that it might clarify the position, and I ask my noble friend whether he would be prepared to agree to this subsection.
  Amendment moved—
  Page 18, line 39, at end insert the said new subsection.—(Lord Royle.)
  LORD WALSTON: This Amendment is similar to Amendments which have been discussed in another place, and I had hoped that what was said then would have cleared up what I think one can
  1250
  justly describe as misunderstandings. Perhaps we are a little unfortunate over this matter of double-charging, though I doubt very much whether there is, in fact, any real problem here. But in so far as there appears to be a problem, I think it arises because, as a result of representations from the meat trade and other interests—and we always do our best to listen to representations made from such knowledgeable people—the provisions of the Bill have been considerably widened.
  From the very beginning no secret has been made of the fact that we think the most practicable and equitable method of imposing the levy lies in a single payment on all animals when they are slaughtered. That would appear to be the logical and simple way of imposing it. But the various interests concerned asked us not to rule out the possibility of splitting a single payment of this kind; for example, between producers and the trade. The Government accepted this, they listened to the representations of the interests concerned, and Clause 13 was drafted specially in order to make such a split possible. I am advised that the effect of my noble friend's Amendment is somewhat ambiguous, that it would probably prevent a scheme from providing for payments in relation to a carcase coming from more than one source, and it is clear that many of the interests concerned would therefore oppose such an Amendment.
  So much for the effect of the Amendment. If I may, I shall add a comment on what I assume is really the intention behind the Amendment, that is to say, to ensure that a scheme with unfair provisions involving double-charging could not become law. The implication is that at some stage in the course of consideration of the draft scheme by the interests concerned, the Commission, Ministers and Parliament, the possibility of double-charging became apparent, and that the scheme would then need to be revised to conform to the provision which the Amendment proposes to add to the Bill.
  But, surely, if the possibility that a draft scheme would permit double-charging became apparent, no one would be prepared to approve the scheme in any case, whether double-charging were expressly prohibited in the Statute or not.

  1251
  This would be an administrative nightmare for the Commission, obviously objectionable to the interests concerned, and equally abhorrent to Ministers and to Parliament. Therefore, in my submission such a scheme would have no chance of becoming law, whether or not the Statute expressly prohibited it. In practice, therefore, if there is any danger of double-charging, it arises not so much from the possibility of a deliberate provision in a levy scheme, but because of some flaw in the scheme itself; and a provision of the kind proposed in the Amendment would no more prevent this than would any statement made by me at the present time.
  To sum up, this Amendment would have the undesirable, though, I am quite sure, unintended effect of ruling out any form of levy scheme which allowed for payments in respect of a single carcase being split between two persons. It would be ineffective in preventing any accidental double-charging which might arise from a flaw in the levy scheme. Also, as a means of preventing deliberate double-charging, or even just as a statement of intention, in my view the Amendment is unnecessary, since in any case there would be no question of a scheme with such a provision becoming law. I therefore hope that my noble friend will not press this Amendment.
  LORD ROYLE: My noble friend speaks much more quickly than I think, and I must confess that I do not have a clue what he has been talking about. But as the matter is not of very great importance and we can probably get over it, I will read with great care what he has said and will consider the situation before Report stage. Meanwhile, I beg leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Clause 13 agreed to.
  Clauses 14 to 20 agreed to.
  Clause 21 [Inquiries by Commission]:
  LORD NUGENT OF GUILDFORD LORD NUGENT OF GUILDFORD moved to insert after subsection (1):
  "() The Chairman at such inquiry shall be appointed by the Lord Chancellor and shall be a barrister, advocate or solicitor of not less than 10 years' standing and shall be assisted by such members of the Commission as the Commission may nominate."
  The noble Lord said: The effect of this Amendment would be to provide that at an inquiry held by the Commission the Chairman should be a qualified barrister, advocate or solicitor of not less than 10 years' standing, appointed by the Lord Chancellor. The Bill as drafted provides that the Chairman of the Commission shall always take the chair at inquiries. That has the advantage that naturally the Chairman knows all about the subject under inquiry. Part of the object of holding such an inquiry is to carry public confidence, and quite the worst way of doing that would be to have as its Chairman the Chairman of the statutory body which is itself carrying out the inquiry. I should have thought that all experience had shown that by far the best way of winning public confidence was to have an independent qualified Chairman, which is really the basis of my Amendment. I know that this Amendment was moved in another place and was rejected, but I feel that it is a good point and I hope that the noble Lord, Lord Walston, will look at it again and not simply reject it.
  In most inquiries—I accept, perhaps, not all—inevitably in the nature of things the Commission will themselves be heavily involved in the matter under inquiry. Therefore, they will have a case to put before the inquiry in the same way as the complainant or the other parties who come to the inquiry. Presumably in those cases there will be witnesses from the Commission who will come and make out their case. This will be an informal kind of inquiry, although it will be set up under an Act of Parliament. But it will inevitably give the impression, since it will have in the chair the Chairman of the Commission as one of the parties involved, that the Chairman is both plaintiff and judge in his own cause. Therefore, as a device for winning the confidence of the public, it really would be hard to design a worse one. This would be the same as if, in the case that is now before the nation of the "D" notice inquiry, the Prime Minister, instead of appointing Lord Radcliffe as chairman, had decided to take the chair himself. It would be completely ridiculous and laughable, and yet this is really what the Government are commending to us.
  There is a secondary point which is just worth making, and it is that having

  1253
  an experienced lawyer in the chair ensures that the order of an inquiry is properly observed, that witnesses give their evidence in an orderly fashion and that the whole thing is conducted in a satisfactory way. I think that from every point of view it has been found—by, after all, many years of experience—that this is the best form for such inquiries, and I urge the noble Lord, Lord Walston, to accept this Amendment as being a very sensible one. I beg to move.
  Amendment moved—
  Page 22, line 35, at end insert the said new subsection.—(Lord Nugent of Guildford.)
  5.2 p.m.
  EARL FERRERS: May I support my noble friend Lord Nugent of Guildford in this Amendment, because I think the Amendment is good and is also important. He has said that, as it stands at the moment, it gives the impression that the Meat and Livestock Commission will be acting both as plaintiff and as judge in its own case, and I think that this is very true, because the Bill says:
  "The Commission may hold such inquiries as they consider necessary or desirable for the discharge of any of their functions".
  One can well visualise a certain case coming about in relation to Clause 9, which we were discussing earlier. I do not wish metaphorically to rub the noble Lord's nose into Clause 9, but the fact is that the Commission may wish to reorganise some of the functions of the meat trade, and that reorganisation may put a person out of business. This person may rightly object, and so an inquiry would be held. The person being put out of business would be represented at the inquiry, and against him would be representatives of the Meat and Livestock Commission; but the chairman of the whole inquiry would be someone representing one side in the dispute. I think this would be an unsatisfactory state of affairs, and that it would be in the interests of everyone that an impartial chairman should be there so that fair play not only can be known to be done but, as usual, can be seen to be done.
  LORD WALSTON: I fully appreciate the motives which have prompted both noble Lords who have spoken to this Amendment. They are admirable motives, but I myself believe that they are based on a misconception of the type of
  1254
  inquiry for which this clause provides. The noble Lord, Lord Nugent of Guildford, said that the chairman of the Commission would be both plaintiff and judge, and he compared it to the "D" notice proceedings: but the inquiries referred to in this clause are in no way designed to penalise any person who comes before the inquiry to give evidence; they are simply to ascertain facts. It is not correct to say, as the noble Earl, Lord Ferrers, suggested, that if there was a question of closing down a certain section of the industry there would be an inquiry at which both sides were heard and the chairman, having himself been the plaintiff, would then make his decision. That is not the way this would operate, as I explained when we were discussing an earlier Amendment. There are other procedures after a recommendation has been made by the Livestock Commission for any such drastic action.
  The object of these inquiries is solely to enable the Commission themselves to find out what the situation in any given section of the industry is at any given moment. They will therefore be concerned essentially to obtain information in order to enable the Commission to discharge their functions properly. As I say, there is no question at all of the inquiry penalising or prosecuting witnesses, or making judgments in individual cases. Therefore, while of course the interests of witnesses must be safeguarded, it would in my view be entirely inappropriate to demand or to make provision for an independent legal chairman. These inquiries will be technical rather than legal in character.
  LORD NUGENT OF GUILDFORD: May I interrupt the noble Lord for one minute? I wonder whether he could give us an instance of the kind of subject that might be inquired into, so that we could perhaps be the better able to follow him.
  LORD WALSTON: That is a little difficult to do off the cuff, but I would imagine that the type of inquiry envisaged here would be some investigation to gain information about, for example, the cuts of meat that are required and are desirable in certain areas. The Commission would then be empowered to summon witnesses to come and tell them how they cut up lamb in

  1255
  Lancashire, beef in Warwickshire, and so on. It is that type of case I have in mind. For that, a legal chairman would be entirely inappropriate, and there would be no question of any need to safeguard witnesses.
  These inquiries will of course be only a small part—I guess a very small part—of the general process by which the Commission acquire their information. Even then, most of the inquiries which the Commission pursue are likely to be on an informal and voluntary basis, and the provisions for a summons and for the taking of evidence on oath would be used in only very special cases where more formal proceedings were necessary. The Commission, of course, would have legal advice to ensure that the proper procedures were followed when subsections (2) and (8) were being used, and witnesses would at all times have the right to be represented legally.
  Furthermore, to bring in an independent legal chairman specially for an inquiry in which a summons had to be issued would obviously interrupt the Commission's progress in gathering information. However eminent the independent chairman, it would not be conducive to efficiency to introduce him at what would probably be quite a late stage in the course of the consideration of a particular subject. He would inevitably be unfamiliar with the subject matter—which, incidentally, all concerned have agreed is extremely complex, as the noble Lord himself pointed out on an earlier occasion—and would tend to give the proceedings a legal emphasis which, in my view, would be inappropriate to their purpose or their circumstances.
  The Government fully recognise the fears of some members of the meat trade that they would be put on trial, as it were, before the Commission, but I hope I have made very clear to the meat trade that there is no question whatsoever of any inquiry putting individual traders in peril in this way. These are not disciplinary inquiries, or inquiries at large. They are—and under subsection (1) can only be—"for the discharge of any of" the Commission's functions. That puts the emphasis on finding the technical facts, and on ensuring that when the Commission act it is on the basis of
  1256
  knowledge about what is going on in the industry.
  I hope I have allayed the noble Lord's fears, and have convinced him that, while I share entirely with him the desire—indeed, the insistence—that justice must always be seen to be done, this is not a question of doing justice between one side or another in a dispute, but merely of gathering information for the proper discharge of the Commission's functions.
  BARONESS ELLIOT OF HARWOOD: May I just ask one question? I have listened to the explanation which the noble Lord, Lord Walston, has given; but the same clause later refers to the summons specifying the hour and the day, et cetera, and further on it says:
  "Within fourteen days of service of a summons under this section, the person served may appeal to the High Court …"
  From the words used in these later subsections it does not look as though the Commission are going to inquire merely into whether or not meat is being cut up in a particular way in Liverpool or in London. We are here dealing, according to this very Bill, with summonses which involve the High Court, and so on. I am sure that anyone who thinks that he is being wrongly summoned or wrongly dealt with can simply go to the courts under Common Law; nevertheless from the wording of Clause 21 it looks as though a good deal more is involved than just collecting a little information for the ordinary working of the Act.
  LORD WALSTON: Perhaps we have erred here in safeguarding the individual unduly, and therefore raising unnecessary fears. The example I gave "off the cuff" to the noble Lord was of the type of thing that might take place. One could go on to say, for instance—and again I am thinking as I speak; which is not to suggest that I frequently speak without thinking—that there might be an inquiry into retail margins. One or two individual butchers might decide that they do not want to give information for personal reasons of one sort or another. The majority may willingly give information, but there might be a minority who would stand out. There are powers to force those people to come and give evidence. Then, if they believe their liberties are being infringed they have the right to appeal to the High Court, which means

  1257
  a Judge in Chambers, a simple procedure. It is still with the hope of eliciting information for the proper functioning of the Commission and not in any way to assess blame or to penalise. I hope that that explanation is satisfactory to the noble Baroness.
  EARL FERRERS: I, too, have listened with interest, and I should like to push this a trifle further. The noble Lord said that this kind of inquiry was not the type of inquiry to which I had referred, deciding whether or not a person should be put out of business. That may be so. I am glad to know that that is not so. But one can visualise, for instance, a situation where the Meat and Livestock Commission had in its wisdom taken a survey of an area and considered that there were, let us say, for want of a better illustration, too many abattoirs in the area for their successful operation and that the number should be reduced. The Meat and Livestock Commission may call an inquiry and invite people to come and give information as to how many bullocks a week they were slaughtering. In fact, under the next subsection they could subpoena them and they would have to come, including, possibly, the rather smaller slaughterer who would have to give information which may result in his being put out of business—the decision for doing so having been taken in the light of information given at the inquiry. What one is really doing is making it entirely legal for the small producer (or the large producer who thinks he may be penalised as a result of the decision) virtually to put the knife in the hands of the person who is going to slit his throat. I am not convinced in my own mind that such an inquiry should be headed by one who has a loaded interest; namely, the Chairman of the Meat and Livestock Commission.
  LORD NUGENT OF GUILDFORD: I was about to thank the noble Lord, Lord Walston, for the answer he has given us, but I think he will have sensed from the words of my noble friends, Lady Elliot of Harwood and Lord Ferrers, that we do not feel very happy about this. While we understand the advantages in having the Chairman of the Commission conduct a technical inquiry, the noble Lord's second illustration—and again I can understand the
  1258
  necessity for an inquiry into, say, retail margins—takes us into a different field, one where the living of the butcher concerned may be at stake (or he may think so), and it becomes rather an inquisitorial inquiry if the Chairman of the Commission himself with the powers that this clause gives him is in the chair. I am bound to say that I feel uneasy and unclear about the form of this clause, and not very clear about how the noble Lord intends the Commission to work. I feel that what would be most helpful would be an informal discussion with the noble Lord between now and Report stage so that he could tell us, in more detail than is possible in debate, exactly how this will work and the nature of the inquiry. We could then consider whether or not to put this Amendment down on Report stage. On that basis, I beg leave to withdraw my Amendment.
  Amendment, by leave, withdrawn.
  Clause 21 agreed to.
  Clause 22 [Dissolution of Pig Industry Development Authority]:
  On Question, Whether Clause 22 shall stand part of the Bill?
  LORD NUGENT OF GUILDFORD: May I just say one word on P.I.D.A.? It has done a noble job for the pig industry under the admirable leadership of the chairman, Sir Richard Verdin, and with the distinguished membership of my noble friend Lord Balerno. Its work has not been dramatic, but I feel that it should have a word of praise before passing into limbo. It has done ten years of very valuable work in the breeding, management and marketing of the pig industry, and this has already yielded valuable results. Now, as P.I.D.A. is merged into the Commission—and I am sure this is a correct decision by the Government—the results of its activities will be immensely valuable for the Commission to take over and to build on as they phase it in with the development throughout the whole livestock industry. I should like to put on record my praise to the board and the officers of P.I.D.A. for the valuable job they have done.
  LORD WALSTON: I am grateful to the noble Lord, Lord Nugent of Guildford, for what he has said. We certainly echo it from this side. P.I.D.A.—and that

  1259
  means its members: the board, the chairman and those working with it—has done a great job in helping the pig industry attain still higher standards. Although its formal work will shortly come to an end, I am sure the members will all realise that their true work will continue, in a new guise but largely with the same people and with a much wider scope than in the past. I am certain that the new Meat and Livestock Commission will benefit greatly from the experience and expertise that P.I.D.A. has acquired during the past ten years. I hope that none of those formerly, or still associated with it will feel that they are being pushed into the limbo of forgotten things, but rather that they will be the catalyst that will stimulate the larger, wider-ranging Meat and Livestock Commission to progress even more rapidly than would otherwise be the case.
  Clause 22 agreed to.
  Clause 23
  Power of entry
  23.—
  (2)An authorised officer entering any premises by virtue of this section may take with him such other persons as may appear to him necessary.
  EARL FERRERS EARL FERRERS moved to leave out subsection (2). The noble Earl said: This Amendment is quite simple. It possibly reflects the slight nervousness that some of us feel over the inquisitorial powers of the Commission. This particular subsection allows an authorised officer to take into any premises anyone whom he may choose. This may be fine for the Commission, but it may be very unsatisfactory to the person whose premises are being entered.
  Frequently, information and data of a confidential nature is held in these places—possibly information about market trends or sale prices, and so forth, which could well prove to be of commercial use to a rival competitor. It is not impossible to imagine an inspector taking with him, to help him in his inquiries, somebody expert in one specific part of, say, the butchery trade. Under the provisions of the Bill this person could be engaged in a private business; or he might be a person whose business could
  1260
  be advantageously affected by information which he might obtain in the course of his inquiries. If it is necessary for an authorised officer to take someone else with him, there is nothing to stop him from taking another authorised officer, and one would have thought that that would be preferable. The fact that the Government felt it necessary to put in this subsection indicates that they have in mind the possibility of an authorised officer taking with him someone who has superior knowledge or is more expert than the authorised officers. Such people could well be engaged in a rival business. This seems to be undesirable and I hope, therefore, that either the noble Lord will accept the Amendment or he will be able to give a very good reason why he feels it necessary to retain the subsection in the Bill. I beg to move.
  Amendment moved—
  Page 24, line 42, leave out subsection (2).—(Earl Ferrers.)
  5.22 p.m.
  LORD WALSTON: Once again I have a great deal of sympathy with what the noble Earl is getting at in this Amendment, because I do not think any of us would be happy about any unnecessary invasion of privacy. Nevertheless, as Ministers have explained when discussing similar Amendments in another place, the powers contained in subsection (2) are essential to the efficient operation of the Commission's activities. It has been emphasised that we should expect the occasions on which authorised officers of the Commission exercised their powers of entry under the provisions of this clause to be very few, and the occasions on which they took other persons with them to be even fewer. So this power is not something that one would expect to see widely used or gravely abused. I should expect the Commission to keep a very close eye on the way in which the powers were used, just as the Ministers themselves keep similar powers under close control. I do not think there is very much objection or complaint about the way in which such ministerial powers are used. I agree entirely with the noble Earl that they must not be abused; but they are essential.
  Subsection (2) is needed because it will sometimes be necessary, as the noble Earl suggested, for authorised officers of the Commission to take with them on a

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  visit someone who might well be an expert, and who would be able to act as a witness and provide corroborative evidence in any subsequent legal proceedings that might prove to be necessary. On the basis of the Ministry's experience I expect that it will sometimes happen that a witness is needed urgently. In other cases it may be necessary for a headquarters officer to be accompanied by a local officer. The effect of the Amendment would be to prevent persons from accompanying authorised officers unless they were already authorised officers of the Commission or could be specially authorised for this purpose. In practice, the Commission would be faced with the alternative of either arranging for all authorised officers to work in pairs, which would clearly be uneconomic, or giving a much more general authorisation to a very much larger number of officers who would need to use the powers only very rarely. I suggest that neither of these developments would be desirable, and that the second would be directly contrary to the purpose behind the noble Earl's Amendment, which is to keep a close central control and limitation on the use of the powers.
  The subsection does not extend powers of entry to persons at large. It does not give carte blanche to anyone to walk into private business premises. It is confined to permitting an officer, who is himself thought to be sufficiently responsible to be authorised to exercise powers of entry, to take someone else with him. There are not to be two entries, but one entry; but it is to be of two people instead of one person. If the officer is responsible enough to be authorised to exercise powers of entry, surely we can expect him to be responsible enough to exercise with equal discretion a power to take in the other person. I do not think that the noble Earl would seriously suggest that a responsible officer who had this authority to enter on his own would be likely to bring in a business rival to gain information which would be of benefit to the second person in his own business enterprises. It is, I grant, legally conceivable, but I do not think that, in practice, it is conceivable.
  EARL FERRERS: I think that the noble Lord has slightly misconstrued the point. He said that he did not think
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  the officer would bring in a person to gain information. Of course I do not think the officer would deliberately do that. What I had in mind was the possibility that the other person, as a result of going into the premises, might gain information. That would not be the object of his visit but the information could be used in a prejudicial manner.
  LORD WALSTON: I should think that an officer having sufficient responsibility to be allowed powers of entry would be sufficiently aware of the rivalries which might exist in these different enterprises to enable him to avoid making such a mistake. If by any chance he did fall into that trap, I should certainly expect his superiors to take steps to see that it did not happen a second time.
  In this connection, too, it is worth emphasising that both the officer and the person accompanying him would be bound by the provisions of Clause 24 relating to the disclosure of information; so that the other person would be, as it were, under a seal of professional secrecy with regard to any information which he might acquire as a result of his entry.
  I hope that I have been able to convince the mover of the Amendment, and your Lordships, that we are all on the same side in this matter. The Government do not wish to have unfettered powers of entry. This is something which will be very closely and jealously guarded, but it is a practical and common-sense way of obtaining sufficient control without undue delays or paraphernalia. I hope that the noble Earl will now be prepared to withdraw his Amendment.
  VISCOUNT MASSEREENE AND FERRARD: May I ask the noble Lord a question? He has been speaking about "such other person". Subsection (2) refers to "such other persons". Is there to be any limit on the number of people whom an officer can take into premises? As the subsection is worded, it appears that an officer could take in twenty people with him, if he wanted; or perhaps 100. I should like some clarification about that from the noble Lord. Why is the word "persons" used?
  LORD WALSTON:The short answer to the noble Viscount is that an officer will be authorised to take in with him one person.
  EARL FERRERS: I am grateful to the noble Lord for his explanation of the subsection. I understand the points which he has made, but I am bound to say that I am not wholly happy about the situation, for the reasons I have given. I cannot help feeling that if it is a matter of obtaining evidence or corroboration, or of having witnesses, as the noble Lord suggested, it would be more satisfactory if the authorised officer took a colleague with him. One still wonders what kind of inquiry will require a witness with superior knowledge, knowledge that an authorised officer does not have. However, the noble Lord has done his best to give an assurance that this power will not be abused. I sincerely hope that it will not be, because if it is confidence will go completely. I beg leave to withdraw my Amendment.
  Amendment, by leave, withdrawn.
  Clause 23 agreed to.
  Clauses 24 and 25 agreed to.
  Clause 26 [Grants for amalgamations and boundary adjustments]:
  On Question, whether Clause 26 shall stand part of the Bill?
  5.30 p.m.
  LORD NUGENT OF GUILDFORD: Clause 26 is the first clause of Part II on farm structure. I am sure that noble Lords recognise its importance. I certainly welcome the principle of giving grants for amalgamations, but I have a major question which I wish to put to the noble Lord, Lord Walston, one which gives great anxiety throughout the farming world.
  The trend in post-war years has been for bigger units. By their farms becoming larger, farmers can get full advantage of modern machinery and methods. This trend has been going on quite satisfactorily. As the noble Lord knows, in his part of the world, East Anglia, some very big units have been formed, running up to 10,000 acres. This has resulted in extremely efficient cereal production. I think that it would be right to claim that our cereal producers now are the most efficient in Europe. I applaud the Government's recognition in this clause of the wisdom of encouraging amalgamations—at any rate, the smaller ones—in the way they
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  propose to do. It is a fact that with reduced profit margins, which has been the trend, unless there can be a bigger volume of production a farmer cannot get a living out of his holding.
  This is all fine. However, the point I have to put to the noble Lord is that there is a major inconsistency in Government policy. Their fiscal policy is apt to have exactly the opposite effect to what Clause 26 sets out to do. In the past year, as I expect the noble Lord knows, farmers have become aware of the devastating effect upon their farms of the combination of capital gains tax and corporation tax, on top of estate duty when they die. They realise that their farms will inevitably be broken up on their deaths in order to pay the enormous taxes which this Government have imposed.
  This unpleasant pressure was recently emphasised at the Oxford Farm Conference, with which the noble Lord has been connected in the past with such distinction. If he was not there, I do not doubt that he has read the papers and will know that the most telling paper at that high-powered conference was a paper by an accountant, Mr. Canamile, under the title, Pronouncing on the Future. He cited what he regarded as the typical farm of 400 acres—a fair-sized unit, though not big compared with the East Anglian units. He postulated that it was bought in 1955 for £40,000—that is, at £100 an acre, which would be about the right figure. Twenty years later, in 1975, the farmer dies. The lecturer computed that at the normal rate of appreciation of land values which has been going on over recent years, the estate duty and capital gains tax together could be no less than £82,000. It would be completely impossible to pay this off out of profits by instalments over the permitted period subsequent to the farmer's death and it would be equally impossible for the farmer to have accumulated an annual sinking fund out of profits during those twenty years sufficient to meet this huge liability.
  The result is that there are two choices before the executors, the widow and the family. The first is to sell the whole farm and rent it back, if they can, but that is not easy, indeed seldom possible, and if it is being done generally, it certainly will not be possible. The second

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  choice is to sell off a piece of the farm in order to pay off this huge debt to the Inland Revenue. In this case, they would have to sell off about half of the farm. This example is fairly drawn and moderate in terms. There would be many farmers' estates, much bigger than this, which would give far more dramatic results, but I think that this example is all the more cogent for this moderation.
  The simple truth is this—and I put this most cogently to your Lordships—that Government policies have now reached the point where the liquidation of capital is so severe that it far outweighs all prospects of the formation of capital. As the noble Lord, with his expert knowledge of farming, knows, it is impossible to operate a farm without large amounts of capital. It follows that most medium-sized and large-sized farms are inevitably going to be broken up in the coming years. This point has, as the saying goes, been taken on board by the farming community now, and they feel intensely depressed.
  Therefore I put this question to the noble Lord. In putting this admirable provision in Clause 26 on the Statute Book, what is the Government's answer to this major point, that their fiscal policies are going to have a shattering effect on the size and structure of farms over the coming years? How do the Government propose to deal with this? Clause 26 could not begin to. If it is the Government's wish that farms should be brought up to the most economic size possible, how are the Government going to meet this? Is it to be done by wider extension of the provisions of Clause 26? I really think that the noble Lord owes us an answer to this.
  THE DUKE OF BUCCLEUCH AND QUEENSBERRY: May I add a few words on this important matter? I think it is being widely realised that while in this Bill the Government are arranging a beneficial increase in the size of farm holdings in order to make them more economic and more productive, their other policies are moving harmfully in the opposite direction. I expect that the noble Lord will have received, or will have seen, strong representations from many organisations, including the National Farmers' Union, and I hope that he will support their requests in any
  1266
  discussions with the Chancellor of the Exchequer.
  I submit that there is a real problem here which requires attention in the immediate future. It may apply more to owner-occupiers, but it goes wider than that. We know that capital investment and expenditure are urgently needed for farm operations and equipment. Yet in different forms of new taxation the Government are nibbling all along the line, and are reducing what is available, overlooking the costs on the land, including the provision of houses, buildings and other things, which increase just as fast, or almost as fast, as the value of the land that is taxed. It may not matter to Parliament whether so-and-so is unable to make a profit on his farming, but it is important from the economic point of view of the country that farmers should have an opportunity to grow food profitably, and that proprietors should not be prevented from doing their share of the capital expenditure by the removal of what is needed to spend on the land.
  EARL FERRERS: The point which my noble friend Lord Nugent of Guildford and the noble Duke have made needs strongly underlining. This clause does a great deal for farming. On Second Reading I gave an example of what is happening, whereby the Ministry of Agriculture, Fisheries and Food are paying grants to farmers joining together, whereas the Chancellor of the Exchequer is deliberately splitting them up. These two policies are working in absolutely diametrical ways. My noble friend Lord Nugent of Guildford has asked the noble Lord, Lord Walston, to say exactly what is the Government's idea, and what is going to happen. Are farms to be encouraged to get bigger—which is economically sensible, and which the Minister is encouraging in the Bill—or are they to get smaller?—which is precisely the effect the Chancellor of the Exchequer is having with his capital gains tax and death duties. There should be a clear line on which farmers and landowners can go. At the moment there is no clear line, because the policies of the Government are working in opposite directions.
  LORD WALSTON: I should dearly love to spend many hours discussing these matters with noble Lords, and perhaps we can do so on some other occasion.

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  To-day I shall have to confine myself to answering their very real points as briefly and as clearly as I can. The short question, put succinctly by the noble Earl, Lord Ferrers, was: What is the Government's policy? Is it to encourage (as I think he said the Minister is attempting to do in the Bill) farms to get larger, or is it (in the noble Earl's words, as the Chancellor of the Exchequer is attempting to do) to encourage them to get smaller? Oddly enough, the Government are somewhat less dirigisté in this matter than noble Lords opposite appear to want us to be. We do no say that such and such is the correct size for a farm; that a farm of 500 acres must get larger and become 750 acres, or a farm of 1,000 acres must become 1,500 acres, or whatever it may be. We believe that the force of economic circumstances, the ability of the farmer himself and all these other things are the right guide as to what is the correct size of farms at that level. What we are doing in the Bill, and in this clause, is to ease the otherwise rugged path which economic forces impose upon some farmers, so that instead of slowly going bankrupt, slowly withering away, and slowly undermining their capital and the country's capital, they are enabled to get out of farming with the least loss of economic resources to the country and the least amount of human suffering to the farmers themselves.
  For all this talk about the 1,000 acre farms in East Anglia, these provisions apply to the small marginal farms of 10, 15, 40, and perhaps 50 acres. So we are really talking about entirely different things. The type of amalgamation which will take place under this scheme is not the type of amalgamation which will be seriously affected by estate duties, capital gains tax, and the rest of it. Also, to get this matter in proportion, it must be remembered that, in spite of the growth of large farms, and the larger number of large farmers that are coming along, speaking from memory, the average size of a farm in England to-day is somewhat below 150 acres. So there are relatively few farms of this great size where the matter of estate duties, capital gains tax and the rest comes in.
  I would, however, agree with the noble Lord, Lord Nugent of Guildford, that undoubtedly efficiency is increased as
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  units get larger up to a certain unspecified point; and it is hard for anybody to be dogmatic as to what that point is. I think it is significant to the noble Lord's argument—it in no way supports it, but, on the contrary, refutes it—that this type of argument has been used over many years. When estate duties were first introduced, and were strengthened as time went on, it was said: "This will cause the break-up of large estates and make farming less efficient. It will make the units smaller, and make us less competitive". In fact, for one reason or another, we know, as the noble Lord has said, that the trend has continuously been, over the years that these penal death duties have been in operation, and getting more penal every year, under almost every administration—
  LORD NUGENT OF GUILDFORD: I am sorry to interrupt the noble Lord, and possibly upset his argument. However, the two new features which are really causing the calamity are, on the one hand, the capital gains tax and, on the other hand, corporation tax, most of these farming companies being treated as closed companies. It is the combination of these two on top of estate duty that will cause the calamity.
  LORD WALSTON: That does not upset my argument. The noble Lord need have no compunction about interrupting. The point is that over the years, in spite of the cries of woe that we have been hearing for a long time, the size of farms has become larger, British agriculture has got stronger, and our position, both internally and externally, has become more competitive. So far as the specific points which have been raised are concerned, there are various facts which I should like to bring to your Lordships' attention. First of all—and, unfortunately, I have not the exact figure in my head—there is an exemption from capital gains tax to agricultural holdings up to a certain figure, which I believe (I shall be corrected if I am wrong) is £10,000. This therefore exempts a large number of holdings—admittedly small holdings—and plays some part in the argument.
  Secondly, the interesting figures which the noble Lord quoted from the Oxford Farming Conference compare the value

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  of the land as between (I think it was) 1955 and 1975. In fact, as the noble Lord knows full well, when capital gains tax is assessed, it is based on the value in 1965 when the Act came into force. Therefore, it is misleading to refer to 1955; and I think the noble Lord will agree that the capital value of land, for one reason or another, has not risen significantly over the past two years. Therefore, there may well be some advantage to an estate that there is capital gains tax. There may even be a capital loss in this, and the estate duty and the total tax payable may be thereby reduced. So it is not a picture of unadulterated gloom here. It is perhaps paradoxical that a drop in the value of some of your major assets is a matter for rejoicing rather than for pain.
  Let me remind your Lordships, also, that after capital gains tax has been assessed the actual estate duty payable is reduced by that amount. So the tax is not added on top of estate duty. It could happen, and very often does, particularly in the case of large estates, that it results in a lesser liability to estate duty than if there had been no capital gains. Thirdly, let me remind the noble Lord that payment of the tax on gains accruing on land on death may be spread over eight years. Therefore there is a fairly generous treatment for land to enable a working farmer to pay the tax out of profits. Admittedly he would have to live more leanly in order to do this, but at least it does not present the inheritor with the stark alternative of having to sell his land and get out because there is nothing else that he can do.
  With regard to corporation tax, I am not really sure that this is the right place to discuss it in all its complicated details. I will simply say that relatively few farms in this country are companies of the kind which are liable to corporation tax; and although undoubtedly it affects some of them, it in no way affects them all.
  I have one further point. If the noble Lord is advocating that agricultural land, or agricultural holdings or farms, should be exempt from capital gains tax, what in fact would be the result? Clearly, the result would be that more people—particularly rich people—would want to put their money into agricultural land in order to minimise their liability to estate duty. There would be a greater demand for
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  land, without, of course, an increased supply. As a result, prices would rise, and therefore the level of estate duties and death duties would rise, too, and the position of to-day's owner of land would in no way be any better than it is under the present system.
  All I can say to the noble Lord, and to those who have supported him in this matter, is to repeat what I said at the beginning: that the Government are perfectly prepared to allow the large farmer to grow larger or to grow smaller; to divide his farm up among individual members of his family in any way that his lawyers, accountants or anybody else advise him so to do. The Government are prepared to allow him to become a private company, a partnership or anything else he likes. There is complete freedom within the law to do any of those things, and if the farmer thinks he will become more efficient by so doing then I say: good luck to him! The clause we are discussing is designed solely to make amalgamation easier among those people who are hovering on the edge of amalgamation, because we believe that this is a socially desirable objective and, at the same time, in the economic interests of both agriculture and the country.
  5.54 p.m.
  LORD MOLSON: As I listened to the penetrating questions asked by my noble friends on this side of the Committee, questions really dealing with the high policy of the Government as a whole, and to what extent the right hand of the Chancellor of the Exchequer knows what the left hand of the Minister of Agriculture, Fisheries and Food is doing, and to what extent they are in conflict with each other, my heart went out in sympathy to the Parliamentary Secretary to the Board of Trade, who was being called upon to try to give an explanation. After listening to him for the last ten minutes or so, I was filled with admiration at the ingenuity with which he skated round all the penetrating questions which had been asked. It was a good opening gambit to say that this Government are less "dirigisté" than the Conservative Party might have supposed. But I would point out to the Parliamentary Secretary that the word, "diriger" has two different meanings. One, of course, is "dirigisté", in the sense in which he used the word, of a Government giving

  1271
  detailed indications to all people inside the country as to what they are to do. But "diriger" also means "to steer", and what we should like to know is in what direction the Government are steering.
  Are they steering in the direction of larger and more viable agricultural units, or are they really, for socialistic and ideological reasons, perfectly prepared—not deliberately to break up estates, but to view with complete indifference the fact that estates will be broken up by the effect of the taxation which is being imposed upon them? After all, in law individuals are expected to intend the natural and probable consequences of their actions. And although the Parliamentary Secretary to the Board of Trade may feel it a little hard that the same criterion should be applied to the Government of which he is a member, I think it is only reasonable that this should be so.
  When he concluded his speech by saying that the Government are perfectly prepared to allow farms and estates to grow larger or smaller in accordance with the forces operating upon them, he seemed to have forgotten that the policy of his right honourable friend the Chancellor of the Exchequer has been greatly to increase the burdens upon land, with the almost inevitable consequence that when the owners of these estates die, the estates will have to be broken up. He went on to suggest how this burden might, in some degree, be reduced. For instance, death duties could be spread over seven years; and, as he said, farmers will have to live more leanly during the intervening time out of the profits of those years, and they are expected to try to pay off the large capital sums which the taxation that has been imposed will oblige them to pay.
  I quite realise that the Parliamentary Secretary is hardly in a position to give an authoritative answer as to what the policy of the Government is going to be. He rightly confined himself to the comparatively modest proposals of this Bill, which are intended to deal with small farms. But it is impossible to deal with agriculture and to draw a distinction between the small farms which this Bill will try to amalgamate and enlarge and all the farms in the country which, because of the death of the owners of the estates, may become liable to death duties, with the result that they have to be broken
  1272
  up. This is an extremely serious matter, and I quite realise that it is a major matter of policy. I should like once more to congratulate the Parliamentary Secretary upon the ingenuity with which he concealed the fact that neither he nor the Government is in a position to explain in what direction they are trying to go.
  LORD NUGENT OF GUILDFORD: I should like to thank the noble Lord, Lord Walston, for the answer which he gave. My noble friend Lord Molson has already commented on it.
  Clause 26 agreed to.
  Clause 27:
  Grants for individuals relinquishing occupation of uncommercial units
  27.—(1) The appropriate Minister may in accordance with a scheme make a grant by way of a lump sum payment or an annuity to or for the benefit of an individual who in prescribed circumstances relinquishes his occupation of an uncommercial unit of agricultural land—
  (a) where the relinquishment of all or any part of that uncommercial unit is effected as part of an amalgamation to which a scheme under section 26 of this Act for the time being applies, or
  (4) Grants shall not be payable under this section to any one individual in respect of more than one uncommercial unit, and a scheme under this section shall contain provisions for securing that the amount of the grant payable in respect of an uncommercial unit occupied by more than one individual is an amount which is not more than approximately equivalent to the amount which would be payable if it had been occupied by a single individual.
  THE DUKE OF BUCCLEUCH AND QUEENSBURY THE DUKE OF BUCCLEUCH AND QUEENSBURY moved, in subsection (1), after "occupation", to insert "or tenancy". The noble Duke said: In the first place I must declare an interest in the subject. There is agreement that it is sensible to assist the voluntary amalgamation and reorganisation of small farms which are now clearly uneconomic in their present form and acreage, and some financial inducement is offered to occupiers to encourage them to give up. I am sure that all who are concerned in agricultural advancement will wish to help in the establishment of better units, and I hope to find out more clearly what are the best ways in which maximum efficiency can be achieved.
  Not very much information was given on Second Reading about these important

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  clauses, and when I put the Amendment down I was not quite sure whether the proposals were intended mainly for small farms in owner-occupation or for every small and uneconomic holding, and how much they will be applicable—and are intended to be applicable—also to tenants of rented farms on agricultural estates. I was not sure whether the word "tenancy" was needed or would be helpful as well as "occupation". Keeping in mind the requirements of the regulations, it appears that the procedure must be complicated, and that, with the subsequent restriction, can be discouraging. I understand that it is intended that landowners should co-operate actively in the carrying out of the proposals, but it seems that they will have to continue to do more by voluntary amalgamations without grants in view of these regulations. If so, the progress may not be as rapid as is desired, but it would seem to be advisable not to impede them by too much restriction.
  I should like, as an example, to refer to a type of farm holding which was formed many years ago by the splitting up of large arable farms into small tenanted holdings of 50 acres or less. Few of these can now be a success and gradual amalgamations are now taking place. I presume it is within the national policy now that proprietors should endeavour to build them up more rapidly into fewer and larger units, even though they were split up before by Government action. Am I correct in the interpretation that a farm tenant will be entitled to outgoer grant or pension provided the proprietor respects the restriction on subsequent sale of the holding, even though he does not ask for or accept any grant for the amalgamation of the holding? Since putting down the Amendment I have had more information about the working, and I am sorry if I have gone rather too wide, but I should like to ask whether "occupation" in line 4 of Clause 27(1) includes "tenancy" or whether more attention should be given to the word "tenancy" as well as "occupation". I beg to move.
  Amendment moved—
  Page 31, line 4, after ("occupation") insert ("or tenancy").—(The Duke of Buccleuch and Queensberry.)
  LORD WALSTON: I am glad to be able to tell the noble Duke that this clause as drafted does provide just what he wishes it to; in other words, that "occupancy" does in fact include "tenancy". It is the Government's intention that the person who can qualify for grant is the person who has the right to farm the land, and this will be made clear in the scheme itself. Therefore, whether a man is owner-occupier or tenant he will be entitled to the grant provided the other requirements are fulfilled. I hope that that is the assurance the noble Duke wants, and in the circumstances I hope he will withdraw his Amendment.
  THE DUKE OF BUCCLEUCH AND QUEENSBERRY: I beg leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  6.3 p.m.
  THE DUKE OF ATHOLLmoved to leave out subsection (4). The noble Duke said: This is a simple Amendment which I have no intention of pressing in any way at all, because I do not think if I did it would serve the purpose I want to serve, but I should like to raise a small point on this subsection. I gather it is the intention of the Government to pay grants for amalgamation in the form of both a lump sum and an annuity based on the acreage that the farmer concerned has given up in order to facilitate the amalgamation. In many cases small farmers have farmed two or three units and those units may not even be contiguous. Although two or three units might sound very grand, in fact in many cases they amount to only thirty or forty acres all told, and this is still, of course, a hopelessly uncommercial farm within the definition of Clause 39.
  I should therefore ask the noble Lord, Lord Walston, whether this subsection is intended to enable these farmers to claim an annuity on only one unit or on all units provided they give them all up together, or whether this subsection is designed to stop a farmer, having been paid his grant for amalgamation, from taking on another equally uneconomic farm and two or three years later coming along and saying once again, "I wish to be paid for assisting an amalgamation by giving up a unit." If it is the latter case that the clause is designed to stop, I think

  1275
  the Government are right to put it in. If it is the former case of the farmer who farms two or three units and is to get an annuity on only one, I hope they will reconsider the wording of this subsection so that he will get the annuity on all farm units, regardless of how many he has, if together they are uneconomically small. I beg to move.
  Amendment moved—
  Page 31, line 39, leave out subsection (4).—(The Duke of Atholl.)
  LORD WALSTON: I am grateful to the noble Duke for raising this point, because I think there will be others besides himself who are not entirely clear about the provisions of this subsection. I can give the noble Duke both the assurances he wants. It is laid down in this subsection that a person shall not be entitled to receive outgoer's grant in respect of more than one uncommercial unit; in other words, having once received a grant for an uncommercial unit he cannot go back and buy another one and claim it again. The purpose of the grant is to enable him to re-train or re-settle or retire and not to go on cashing in year after year. I can assure the noble Duke on that point.
  Similarly, I can assure him that, provided the outgoing owner-occupier or tenant, or whatever he may be, is running two or even more very small holdings as one unit and gives them all up at the same time, he will receive such compensation as is due to him in respect of his whole unit, which will be considered as one unit even though the parts are a few miles apart. I think this gives the noble Duke the assurance he requires, and I hope he will feel his Amendment is not necessary.
  THE DUKE OF ATHOLL: I thank the noble Lord for the assurance and beg leave to withdraw the Amendment. Perhaps I may add that I wish to say something on the Question, Whether the clause shall be agreed to?
  Amendment, by leave, withdrawn.
  On Question, Whether Clause 27 shall stand part of the Bill?
  THE DUKE OF ATHOLL: I should hate to ask the noble Lord to divulge anything that his right honourable friend the Chancellor of the Exchequer might be
  1276
  proposing to do in the Budget, but I should like to make a plea that, if this clause is really going to have the success I think we all hope for, the lump sums payable under this clause should not be subject to capital gains tax, and even more important, in my view, that the annuities paid to those farmers who retire should not be taxed as unearned income but taxed at the earned income rate. This, I agree, will probably not be important in the majority of cases, but there may be certain cases where this will be a fairly important factor and definitely assist several very small farmers to retire. With that plea, I would ask him to consider this matter and pass on that request to his right honourable friend. I fully realise that he will not be able to tell me anything about it this evening.
  LORD WALSTON: The noble Duke is the soul of tact and kindness in this matter. I will happily see that my right honourable friend the Chancellor of the Exchequer is fully aware of this point, which is a very worthwhile one, and I hope that it may add some influence to those who decide these matters.
  Clause 27 agreed to.
  Clause 28 [Loans to assist amalgamations and boundary adjustments.]:
  On Question, Whether Clause 28 shall stand part of the Bill?
  THE DUKE OF ATHOLL: Clause 28 gives the Minister power to make loans to assist amalgamations. So far, I think, there has been remarkably little indication what rate of interest these loans are likely to carry. I was wondering if the noble Lord could enlighten us whether these loans are likely to be at what might be described as the "going rate" that a bank would charge or whether they would be at a somewhat less fearsome rate, because if it is at a going rate they will not have any effect at all. But if they are at a somewhat less fearsome rate, I think that they will have quite considerable effect.
  LORD WALSTON: I am afraid that I am not in a position to enlighten the noble Duke on this matter. I have no doubt that before anybody wishes to make application for such a loan he will be made very well aware of what rate of interest he is to pay for it.
  Clause 28 agreed to.
  Clause 29 agreed to.
  Clause 30:
  Grants for long term improvements for the benefit of agricultural land
  30.—(1) With a view to assisting in the making of long term improvements for the benefit of agricultural land the appropriate Minister may make out of money provided by Parliament grants towards the cost of such improvements of a kind described in Schedule 4 to this Act as he may approve for that purpose.
  (4) The appropriate Minister shall not approve any improvement unless he is satisfied—
  (c) that the improvement is such as a prudent owner-occupier would be willing to make, having regard to its cost and to all other circumstances, but disregarding benefits derived from the improvement other than the benefit in the farming of the agricultural land.
  6.14 p.m.
  LORD CRAWSHAW LORD CRAWSHAW moved, in subsection (1), to leave out "long term improvements" and to substitute:
  "improvements with an estimated useful life of five years or over".
  The noble Lord said: I beg to move the Amendment standing in my name. I wish to draw particular attention to those improvements which are mentioned in paragraph 1 of Schedule 4, which covers the larger type of constructional improvement possible to farmsteads around farm houses. I am aware that the Amendment may appear a little shortsighted, but my intention is simply to try to make agriculture more flexible. Building to last a lifetime was the policy of our forbears, but I do not believe that that would be possible to-day, because of the rapid changes in farming technique. For instance, we at home have separate stalls for work horses and other buildings that are now out-dated and quite unsuitable for any form of conversion. Again, many ranges of buildings are designed for the smaller farms and are not suitable for the proposed schemes for amalgamation which we have been just discussing. These amalgamations will, of course, be a continuous and gradual process.
  My contention is that when applications for grants are being considered less emphasis should be placed on the more elaborate buildings of steel and concrete and the like. Even if an expensive single-
  1278
  span covered yard can in theory be used for several purposes, the site itself may not be suitable for a variety of purposes. For instance, a milking set-up may need to be surrounded by grass, and corn storage by arable land. At this moment, when capital is short, and when farmers have had two exceptionally wet seasons, I feel it would be wiser to encourage cheap and simple buildings. Cheap and simple need not mean shoddy, and the agricultural land service of the Ministry of Agriculture can ensure this before approving a grant. I feel that if this sort of building were formulated it would be a valuable outlet for home-grown timber.
  Such things as second-hand railway sleepers can be extremely effective and not unsightly. Many such buildings could well last ten, fifteen or fifty years or more. But their useful life might only be five years. I should like to feel that anything erected with a grant could pay for itself in five years, because of the rapid changes that are taking place in agriculture at present.
  I have studied this particular problem in this country and in the United States during the past year and I have seen all sorts of milking parlours, feedlots, grain and sileage stores, piggeries, et cetera. I have seen cattle housed at £120 per head and £20 per head. My conclusion is that we must do all we can to keep capital costs down from the point of view of the taxpayer, the Exchequer, and the farmers.
  Amendment moved—
  Page 36, line 2, leave out ("long term improvements") and insert ("improvements with an estimated useful life of five years or over").—(Lord Crawshaw.)
  LORD WALSTON: I am afraid that, in spite of the cogency of Lord Crawshaw's arguments, I am still unconvinced that the Bill should be amended in the way he desires; in other words, that farm improvements with an estimated useful life as short as five years and up to ten years should rank for grant. Let us look at the real purpose of this scheme. It is in fact to encourage improvements which will benefit the agricultural land concerned as distinct from the business operated on that land. What is more, it is intended that the benefits to the land should endure so as to be available to a

  1279
  succession of occupiers over a somewhat longer term.
  As your Lordships are aware, under the previous legislation for this scheme, one of the statutory tests was that the improvement must be such as a prudent landlord would carry out. That came in for a great deal of criticism because there are many things that a good farmer would wish to carry out but which a prudent landlord would consider unwise. There were, therefore, certain schemes desirable from the agricultural point of view which were not included in this scheme. But because it was the prudent landlord which was the criterion in such cases, it was felt that a man would look for the return on his investment by way of increased rent which would last for at least 15 years.
  Under the present Bill, however, the prudent landlord is replaced by a prudent owner-occupier, who may be expected to write off his investment rather more quickly. The term has been reduced to ten years. This is a substantial change, a change which I think your Lordships agree is a change for the better. But I do not think it would be right to go below this period. Of course, we are aware that there are many low-cost buildings which can be erected and will serve a useful purpose, and whose capital cost can be recovered over their shorter life. But to admit buildings of this kind as permanent improvements would change the whole character of these grants. I hope that, in view of what I have said, the noble Lord will realise that his Amendment could not be accepted without distorting the whole purpose of this scheme and necessitating further substantial changes, and that he will therefore feel able to withdraw it.
  LORD CRAWSHAW: I must thank the noble Lord for his answer. I simply wanted to draw attention to this particular point in farming, which I expect all your Lordships are aware of in any event. In the circumstances, I am happy to ask leave to withdraw.
  Amendment, by leave, withdrawn.
  6.20 p.m.
  LORD MOLSONmoved, in subsection (4)(c), after "circumstances" to insert "including planning requirements". The
  1280
  noble Lord said: I beg to move the Amendment standing in my name. I drafted this Amendment with the hope of raising again a point which was raised both in Committee and at the Report stage in another place. I have drafted it in a slightly different form. I see that my noble friend Lord Ferrers has the Amendment following this one, which I think deals with the same point, and it may well be that the two Amendments taken together would be more effective than either of them alone.
  I have in mind particularly cases where planning authorities are able to impose the requirement in National Parks and places of outstanding natural beauty that particular materials should be used in order to preserve the character of the countryside. These planning rules apply in the Peak District and in the Lake District. One of them, a requirement which is of great importance, but which imposes considerable additional expense, is that a farmer or landowner who wishes to re-roof a barn is not allowed to use asbestos which is much the cheapest form of roof, but is required to use particular materials. It appears to be only fair and reasonable that when someone lives and works in a National Park and is required by the planning authority to build up to a higher standard than would be required for purely agricultural purposes, the grant from the Government, which is payable in respect of the agricultural benefit which he seeks to obtain, should include also the extra cost which is involved in complying with the requirements of the planning authority.
  In another place it was stated that, under the Agriculture Act 1957, if the owner or occupier of a building incurred expenditure over and above what was required for purely agricultural purposes, no grant was payable. It was claimed on behalf of the Government that under this Bill there is an improvement because, under the wording of this clause the grant may be paid in respect of the agricultural benefit which is obtained, but not in respect of the additional expenditure which is required in order to comply with the requirements of the planning authority.
  I am not at all clear as to what exactly is the position, because the explanation given in the Committee stage does not appear to me to be wholly consistent with

  1281
  what was said by the Parliamentary Secretary on January 17 at col. 261 in the Report stage. As he is a Minister, under the Rules of your Lordships' House I think I am entitled to quote the exact words that he said. They were:
  "On the other point, I said that where there is a statutory requirement and where the work gives a reasonable agricultural benefit in relation to its cost, we will pay grant on the full cost."
  Whether there is a distinction drawn between a statutory requirement and a planning requirement, I do not know; but in view of the fact that planning requirements perhaps have to be made by delegated legislation under the authority of the Statute, I should have thought that that covered the point. But that is not what was generally understood, and the Amendment which had been moved in the hope of obtaining from the Government a concession upon that matter was in fact withdrawn.
  Therefore, in the first place I would ask the Parliamentary Secretary to explain clearly the meaning of this Bill. If as at present drafted it does not include the provision that I am asking for, I hope he will be prepared to accept Amendments to give that effect. It seems to me quite illogical and unreasonable that, where a farmer is farming in one part of the country where he is not required by a planning authority to build to specially costly standards, he can receive a grant in respect of the whole of his expenditure, but if he is farming in a National Park, in one of the particular areas which are subject to these planning rules—he has no option in the matter; he is obliged to incur this additional expenditure—that under the Statute, as I understand it, and under this Bill as at present drafted, he will not be able to obtain a grant in respect of the additional expenditure imposed upon him by the planning authority. I beg to move.
  Amendment moved—
  Page 36, line 39, after ("circumstances") insert ("including planning requirements").—(Lord Molson.)
  6.26 p.m.
  LORD CHORLEY: I should like to support the noble Lord in this moderate attempt to help those who are concerned with farm buildings in these particularly sensitive parts of the country. As I
  1282
  understand it, under the original Act of 1949 which established the National Parks and brought them within the planning Act in respect of these sorts of matters, the National Parks, wherever they came into existence, were wholly protected. But a little later on—I think it was by an Order made in 1950 in respect of agricultural buildings—these restrictions were removed, apart from certain special areas to which the noble Lord has referred, particularly the Peak District Park and the Lake District Park, and I rather think Snowdonia where there are certain additional restrictions.
  As to the addition of the words "including planning requirements", I am not really clear how far this goes, and whether in fact it will help any other National Parks apart from those to which the noble Lord has referred. I should like to ask the Minister's opinion about this matter. It seems to me, at any rate, and I think to all those who are concerned with the National Parks movement, that in these most sensitive parts of the country there ought to be additional safeguards which are in fact being imposed, certainly in the Lake District, by the Joint Planning Committee of the three counties which are concerned with the Lake District National Park. Apart from those which have been specially mentioned, those powers do not exist for the other National Parks, and if possible I should like to have the other National Parks protected in this way.
  Whether the Amendment will go so far as this is not clear to me, and I should be glad if the Minister would give us an assurance on that part, certainly in regard to these three particular National Parks which are, in a sense, more important than the others—the Lake District, Snowdonia and the Peak District. It is really most important that requirements in regard to repairs and alterations to be carried out in the local materials should be enforced, and that those owners and farmers who are required to live up to these high standards should have reasonable financial assistance in doing so. I hope that the result of the noble Lord's Amendment will be to ensure that that is done.
  LORD BALERNO: I should like to support the Amendment of my noble friend Lord Molson, and to extend it

  1283
  beyond just the National Parks. So far as Scotland is concerned, under the previous legislation which this Bill supersedes, this point has been looked after very well. In view of the fact that the noble Lord, Lord Hughes, is sitting opposite, I should like to cite my own personal case, which involved the re-erection of a dairy cow byre beside a 17th century house. When it was put to the Department of Agriculture that for the sake of amenity the byre should be reconstructed in stone as it was before at additional cost, there was no difficulty in increasing the amount of grant in proportion to the additional cost of the stonework. So the point has already been conceded by this Government on past legislation, and one would hope that it will be continued into the future.
  LORD WALSTON: I do not know whether the noble Earl, Lord Ferrers, wishes to move his Amendment now together with this one, or whether he would rather deal with it separately?
  EARL FERRERS: The point I wish to make is rather different from that in the present Amendment, and if I may I will move it separately.
  LORD WALSTON: Yes, of course. While I cannot promise to accept this Amendment, I hope that what I have to say will convince the noble Lord, Lord Molson, and others who have supported him, that in fact the Bill as at present drafted goes a very long way to meet his very reasonable requests. All of us have the greatest sympathy with those who want to see the amenities of the countryside preserved so that ugly farm buildings, however economic and efficient they may be, are not put up in places where they will spoil the beauty of the countryside. Similarly, we do not want to see a farmer or a landowner penalised by the fact that his farm happens to be in one of those areas of particular beauty so that he has either to pay more for his buildings or not put them up at all.
  Without going into a great deal of complication on the drafting of this matter, I would remind your Lordships that the earlier Act, the 1957 Act, laid down that grants could only be paid for improvements which would normally be made by a prudent landlord. A prudent landlord is a man who insists on getting
  1284
  a reasonable return by way of increased rents on the capital which he puts out in new buildings. Unfortunately, it is virtually impossible for a prudent landlord to expect that he can extract a higher return from his tenant because he puts up attractive buildings in costly material rather than the cheapest form of building. It was therefore necessary, as a result of that Act, to turn down many applications for better quality buildings, and it was sometimes even impossible to pay even a part of the grant.
  Under this Bill the position is entirely different, because the criterion is not now the prudent landlord, but the prudent farmer, the owner-occupier. Therefore, one is presented with the problem—let us take as an example the National Parks—of the prudent farmer who wants to put up a new cowshed and who is debarred from doing so unless he constructs it in certain expensive materials. The criteria we have to follow then is whether in this case this prudent owner-occupier will say, "I will not put up the building at all; it is not prudent to do so", or, "I will still put up this building even though I shall have to pay more, as it is still worth my while to do so". If we are satisfied that the latter is the case, the grant has to be made to the full amount because it is an essential part of the building which the prudent owner-occupier feels should be constructed. In other words, in such a case, where expensive materials may be a statutory requirement, we shall approve the cost in full if we are satisfied that a prudent owner-occupier, given the choice between building in that way and not being allowed to build at all, would incur the higher cost for the sake of the benefit of the farm.
  I can assure the noble Lord, Lord Molson, that any planning requirements are always among the circumstances which we take into account in deciding whether or not a prudent owner-occupier would make a given improvement in the way he proposes. These requirements may bear on whether he can make the improvement at all, and will certainly affect its reasonable cost. Even where we are forced reluctantly to the conclusion that the agricultural benefit is too small to justify the full cost, we shall in future under the provisions of this Bill, though we were debarred from doing it

  1285
  under the provisions of the previous Act, be able to make some contribution where before we should have had to reject the application outright.
  What this Amendment appears to be seeking is that we shall pay not just on that part of the cost which can be justified agriculturally, but on the total cost in all cases. Whatever may be the aesthetic merits of these very expensive buildings, it would be wrong, I am afraid, to agree to grant-aid them automatically, however small the agricultural benefit. What we propose in the present Agriculture Bill will enable us to go a long way in the direction the noble Lord wishes. In other words, where we are satisfied that it is agriculturally desirable that the building should be put up, the extra cost of complying with the planning authority's requirements or the Statutory regulations or the National Park requirements, will in most cases, not inevitably in every case, be met in full. I hope that, in view of this explanation, the noble Lord will agree to withdraw the Amendment.
  LORD CHORLEY: May I repeat the question I put to the Minister? What I am not clear about is whether this applies throughout all the National Parks, or whether it applies only to the three National Parks in which there are special requirements as to the exteriors of agricultural buildings. My noble friend has not answered that.
  LORD WALSTON: I apologise to my noble friend. It applies wherever the type of construction and the use of materials is imposed upon the owner of the land by the fact that he is in a National Park, or because of various planning legislation. If he happens to be in a National Park where there are no such regulations and it is not incumbent upon him by law or by Statute to use particular materials, but it is only advisory, then it does not apply.
  LORD CHORLEY: I am much obliged.
  LORD DERWENT: The point is not quite clear to me. It may be that the planning authority will have means of insisting without there actually being a local by-law. That can occur in certain buildings, and presumably then the grant would be made towards the full cost.
  LORD WALSTON: Yes; where the alternative with which the owner-occupier or would-be builder is presented is the alternative either of building in a certain specified more expensive form or not building at all, then in general, subject to the reservations I have made, the extra cost will be met.
  LORD MOLSON: I am very much obliged to the noble Lord. In order to clarify the point, may I say that under the Town and Country Planning (General Development Order) 1963 agricultural buildings throughout the country were exempted from planning control. But in the case of certain areas in the National Parks, under the operation of the Town and Country Planning (Landscape Areas Special Development) Order 1950, various restrictions were applied in the three National Parks—the Peak District, the Lake District and Snowdonia. It is really with regard to the obligatory conditions which are applied there that I was moving my Amendment. I was doing so on behalf of the Friends of the Lake District and various other amenity societies, and I shall naturally inform them fully of what the Parliamentary Secretary has said.
  I must naturally reserve my right on their behalf to raise the matter again on Report stage, but my first impression is that the Parliamentary Secretary has made quite clear what I think, after fairly deep study of the proceedings in another place, was very obscure. I am extremely grateful to him for doing so, and my own impression is that the answer which he has given is wholly satisfactory. In view of those facts, I ask your Lordships' leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  6.41 p.m.
  EARL FERRERS EARL FERRERS moved, in subsection (4)(c), to leave out from "circumstances" to the end of the subsection. The noble Earl said: Having been invited by two noble Lords to address the remarks which I was going to make on this Amendment to another one, dealing with something totally different from what I have in mind, I have become thoroughly nervous as to whether my interpretation of the Bill is right—and, of course, it could well be wrong. I put this Amendment down for two reasons, one of which was to find out exactly the meaning of the words which

  1287
  I have suggested should be excluded. The second reason is that if they mean what I think they mean, then they should be excluded.
  If the Amendment were accepted, the subsection would read:
  "The appropriate Minister shall not approve any improvement unless he is satisfied…

  (c) that the improvement is such as a prudent owner-occupier would be willing to make, having regard to its cost and to all other circumstances."

  This seems entirely reasonable, but the Government have qualified this by the addition of the words:
  "but disregarding benefits derived from the improvement other than the benefit in the farming of the agricultural land."
  My interpretation of these words—and the noble Lord will correct me if I am wrong—is that they are put in in order to exclude payment of a grant to what are commonly known as "intensive" agricultural buildings. If this is so, one wonders why a more specific description of intensive buildings has not been given.
  One knows, of course, that broiler houses are intensive buildings; one knows that battery houses are intensive buildings. But buildings such as piggeries were never in the past described as "intensive" buildings, although nowadays, when 400 or 600 pigs are kept in one building, it is quite posible that it could be described as an intensive building. Then one comes to cowsheds and cow yards and parlours, all of which are subject to the farm improvement grant, although in many ways they are intensive buildings and are likely to become more so. One wonders, therefore, whether it is right to exclude intensive buildings from the farm improvement grant.
  As regards the problems which these intensive buildings have created, one has merely to look at the rating of them. And here I must declare an interest, because I have intensive buildings which have been rated; and they are rated because they have no direct connection with the agricultural land upon which they are used. If a man has, for instance, a poultry house and allows his birds to walk out on the land, then this is perfectly all right from the point of view of rates, and he does not have to pay rates because the poultry house has a direct connection with the land, since
  1288
  the birds walk out on it. But if he is efficient, and keeps his birds in the house because they do better that way, then this is described as having no connection with the agricultural land and the building is therefore rated.
  But what is the value of any animal, be it a bird or a pig, or a cow walking upon the land, if it is not for the muck which a bird, pig or cow drops upon the land? The typical situation is that, if a man runs his farm inefficiently, and has his birds or pigs depositing their muck individually and inefficiently by themselves, then he is not rated. But if the birds or animals drop their muck efficiently in one place, and the muck is carted on to the land, he is rated. I feel that this same principle is being used in this Bill by the words which I have suggested should be eliminated, because it seems to me that the intensive buildings are deliberately being excluded from receiving the farm improvement grant.
  The Government have made a very significant change in this Bill by allowing the farm improvement grant criterion to be changed from the prudent landlord test to the prudent owner-occupier test. Many improvements went by default previously, because the Ministry of Agriculture said, "This is not what a prudent landlord would do", though it may well have been what a prudent farmer would do. If a farmer put up an intensive building, it was a typical example of the sort of case in which the Ministry could say, "A prudent landlord would not put up this building, and very few have done so." But when the test becomes that of the prudent owner-occupier it is a very different matter, because this is the kind of building which a prudent owner-occupier would put up, should put up and will put up.
  I think it highly likely that in the future each farm will have upon it an intensive unit, which is just as important, from the point of view of running the farm, as are its extensive uses; it is merely a different facet of the whole farming enterprise. I should have thought that if we were trying to improve agriculture and to improve its structure, intensive buildings should not be specifically excluded. After all, this is going to be the pattern of farming, whether one likes it or not. I know that there are many noble Lords, and many people in

  1289
  the country, who do not like intensive buildings and intensive livestock farming; but that is a totally different matter. Intensive farming is something that has come to stay, and if this Bill is to be forward-looking, as the Government wish, I should have thought it must include intensive buildings.
  I quite see that the Government cannot give grants, and should not give grants, for buildings which are intensive buildings but which are erected on individual sites having nothing whatever to do with any farming land. But where a building is put up on a piece of farming land, as a facet of the farming enterprise which goes on upon that land, then I think that it should be included. The object of my Amendment is not to include such buildings but to ensure that they are not specifically excluded, which, as I see it, the paragraph as drafted will do. I beg to move.
  Amendment moved—
  Page 36, line 39, leave out from ("circumstances") to end of line 41.—(Earl Ferrers.)
  LORD WALSTON: I must confess that I was taken in by the noble Earl's Amendment. I thought it referred to something very similar to that which the noble Lord, Lord Molson, was raising. But he has made it very clear that that was not the case, and he has made his point very forcibly and with great clarity.
  I would say, first of all, that this scheme does not provide grants for specialist equipment for livestock businesses that do not depend on farming the land but depend in purchased feedingstuffs—the factory type of farming. They are excluded from this scheme. But I agree entirely with what the noble Earl has said about the future of farming, about looking forward and about the importance of these schemes. It is for that reason that, although such completely specialised buildings as factories, divorced from the agricultural land, are excluded from this scheme, they do qualify for the investment grant made under Clause 31. Therefore, although they appear to lose out on this particular clause, they are included in the general ambit of the Bill.
  The reason is that these grants are intended to encourage the modernisation of basic farm buildings, which are part
  1290
  of the farm unit as a whole. Piggeries can qualify if the farm produces enough feed. What happens if a farm produces enough feed but elects not to use that feed but to buy some other feed is a question which has to be resolved; but I imagine that, so long as it could produce enough feed, that qualifies it for this particular grant. But for the purely intensive business, where one needs very little land—and indeed where it could be run without the land itself—I would suggest to the noble Earl that the investment grant seems more appropriate to what is in fact a business investment rather than the farm improvement grant under this particular clause. So, although this clause does not go as far as he would like it to, I hope the noble Earl will agree with me that the Bill as a whole provides for these very examples that he has given us.
  LORD BALERNO: Before the noble Lord sits down, may I ask him whether it is not proper agricultural use if the land is able to make proper use of all the dung that is produced by the intensive unit; and whether that is not the proper measure, rather than whether the land is able to raise the grain or the feed for the animals? After all, there are modern ways of organic irrigation whereby virtually the whole of the dung and the whole of the virtue of the dung can be put back on to the land. Indeed, it may be the salvation of certain types of light soil farming to be able to do that; it can be an integral part. But, to my mind, the criterion should be whether the dung produced by an intensive unit can be profitably used on the land.
  LORD NUGENT OF GUILDFORD: I should like to support my noble friend Lord Ferrers on the point that he has made, and bring in with it, if I may, a reference to the very cogent point made by my noble friend Lord Crawshaw, because I think these two things are related. As the noble Lord, Lord Walston, well knows, the trend to-day is to these intensive methods of stock-keeping. Not only is this so in the case of pigs and poultry, but also now, of course, beef lots are appearing in this country; there are intensive methods of keeping sheep and there is zero grazing for dairy cows. These are, in appropriate circumstances, the most economic methods of livestock keeping,

  1291
  and I am sure it must be the concern of the Ministry of Agriculture to see them encouraged rather than discouraged.
  In many cases the point made by my noble friend Lord Crawshaw is of course applied in practice. To-day farmers often find it far better value to put up one of these cheap, light-weight buildings with a short life, and forego any prospect of grant, whether they could get it or not, because the capital cost is so much lower, it fully meets their purpose and they can write it off very quickly—over five years, or over five to ten years at the very outside. This is the trend, and I am sure that the noble Lord, Lord Walston, is aware of it. This is what is going to give us the most economic production, because, apart from labour costs, capital costs are a very heavy part of the total cost of production.
  If I may say so in passing, the investment grant is not really very much consolation because, after all, the investment allowance has been taken away, so in many cases we have been given something which is worth less than what we had before. But, if I may return to the substance of my comment, it is that the time has come to take an independent look at this farm improvement scheme. So much has happened in these last tenor twenty years, especially in the last ten years, since the scheme was introduced, and the speed of change is so rapid, that I think consideration should be given to whether the farm improvement grant scheme is now being applied in exactly the best way to suit the development of our farms in the most economic fashion.
  I wondered whether the noble Lord would consider—or, rather, would ask the Minister of Agriculture to consider—setting up an independent Departmental Committee to examine this problem, to see what the right balance is to meet the the economic trend of farm development, on the one hand, and, on the other hand, to satisfy the very proper considerations of securing that the fixed equipment that is put on the farm is going to be something of, I was going to say permanent, but at any rate of semi-permanent value to the farm. There is a real problem here, and I think this would be the right way to tackle it. It is more than time it was tackled in this way, and it would
  1292
  be very helpful. I should be very grateful if the noble Lord would consider this approach.
  LORD MITCHISON: I hesitate to intervene in an agriculture debate, and this is not of course a discussion of the very difficult rating problems about this kind of farming. This is simply a discussion of what is to be done by way of improvements for the benefit of agricultural land. Listening to the noble Lord who has just been speaking, I noticed that from time to time he seemed to me, from the question of the improvement of land, to get on to the question of agricultural production, which, whatever its merits one way or another, hardly arises, I think, in that form when what we are considering is grants for the benefit of agricultural land.
  I have been listening to this debate for some time, and I am a little puzzled that nobody has yet referred to Schedule 4, which gives some pretty clear illustrations of what can be done under this clause. It is in fact a limiting Schedule to say what can be done. I do not want to waste the time of the Committee now by discussing the matter in detail, but I hope that when the Government are considering it they will remember both the broad purpose of the clause and the way in which questions of this sort are treated in Schedule 4 itself, which enumerates the kind of improvements that can be dealt with under this clause.
  Again without going into it in detail, it seems to me that such paragraphs in Schedule 4 as No. 5 and both parts of No. 16—those in particular but the others in general—throw considerable light on the broad intention of the clause, and that if it were to be extended as suggested by the speeches that have been made as much as by the Amendment itself we should really be going beyond it and crossing the narrow and difficult line between the improvement of the land and the improvement of agricultural methods. Your Lordships will notice a reference to new methods in one of the paragraphs in Schedule 4.
  7.0 p.m.
  LORD WALSTON: On this Amendment we have heard a great deal to make us think. I was particularly impressed by what the noble Lord, Lord Balerno, said. I would agree with him

  1293
  that the criterion, if it is to apply as it should, to the improvement of the land, can equally well be, shall we say, a market garden which produces no feeding stuffs but keeps pigs in order that the dung may go out to improve the land although the food is bought from outside. As the Bill now stands I do not know whether this would be included or not; I think not. Therefore, I would suggest to the noble Earl that he withdraw his Amendment and that we consider its implications in the light of the debate which has just taken place.
  LORD NUGENT OF GUILDFORD: Would the noble Lord be good enough to say that he would invite the Minister of Agriculture to give further consideration to this point?
  LORD WALSTON: Yes, I will certainly do that also. I apologise for not mentioning it earlier. I would also go so far as to say—and it is indicated in the Bill by the reduction of the 15-year period to 10 years—that we realise that the life of buildings for improvement is undoubtedly shorter than it was. I think the whole of agriculture suffers from having buildings built far too permanently; we are now saddled with 50year-old buildings. Whether in fact the ten-year period is the correct minimum I should not like to say. My own impression is that at this stage we should not go less than 10 years; although we may do so later. I think the noble Lord's suggestion of a committee to inquire into this is a valid one which I should pass on.
  EARL FERRERS: I am grateful to all noble Lords who have taken part in this discussion. I think it has been very interesting and also very important, for this is a completely new side of agriculture to which we are coming. I am grateful to my noble friend Lord Balerno for re-emphasising the tremendous value which the dung and the muck from intensive buildings have on the land; because here there is a specific connection between intensive buildings and the land. The noble Lord, Lord Walston, said that from the point of view of a piggery you would get a farm improvement grant if you used the corn from your land; but he doubted by implication whether you would do so if you bought your corn and took the muck on to the
  1294
  land. This seems to be quite ridiculous. By using the corn you are taking something from the land; if you purchase concentrates and put the muck on to the land you are giving something to it.
  From the point of view of the rating of intensive buildings, the only trouble is that the value of the muck was described by the noble and learned Lord, Lord Denning, when he gave his judgment—and it went all the way up through the courts—as de minimis. That may have been so in that particular case; but I think it is wholly wrong if, as a result of that judgment, it should be considered that muck on the whole from intensive buildings when applied to agricultural land is de minimis. I do not think this would necessarily obtain. I should like to support the suggestion of my noble friend Lord Nugent of Guildford, that possibly a departmental committee should look into this problem. It is a very real problem and one that is likely to become more acute as time goes on. I beg leave to withdraw my Amendment.
  Amendment, by leave, withdrawn.
  Clause 30 agreed to.
  Clause 31:
  Grants towards expenditure on fixed equipment, etc., and improvements for purposes of agricultural businesses
  31.—(l) The appropriate Minister may, out of money provided by Parliament, make to any person a grant towards expenditure incurred by that person on or after 17th January 1966 in or towards—
  (a) providing or installing fixed equipment, fixed plant or fixed machinery for use wholly or partly for the purposes of an agricultural business, or
  7.6 p.m.
  BARONESS ELLIOT OF HARWOODmoved in subsection (1)(a) to leave out the first "fixed". The noble Baroness said: I move this Amendment—there are six Amendments omitting the same word—because I want to have a discussion on this whole matter. I think it is something which is worth looking at. One of the main objects of the Bill—and it has been stressed throughout—is to modernise agriculture. From the debate which has just taken place, to which I listened with interest, I think everyone realises that we are talking now of an industry which is eager to modernise,

  1295
  eager to take on new ideas and new methods, and an industry which is doing so, in my opinion, faster than the Ministry of Agriculture are drafting their Bills. I think that the trouble with the Ministry of Agriculture—much as I love it; for I spent a lot of my life happily in close association with it—is that it still very often thinks in terms which belong to a year or two ago, or even more.
  I was interested in what the noble Lord, Lord Walston, said at the end of his remarks. He said that agriculture was suffering from too permanent buildings. Things go on for so long, and some of us have not the capital needed to scrap and rebuild. I wish to bring before the Committee this evening the matter of describing machinery. Clause 31 of the Bill describes how you can get assistance towards machinery, all of which must be fixed. In Clause 32 there are two items specified for grant which are anything but fixed. I suggest that the word "fixed" is old-fashioned, outdated and altogether unsuited for use in a Bill which is designed, and rightly so, to modernise agriculture. One of the biggest changes in my lifetime as a farmer—and I am sure this applies to many noble Lords—has been the development of machinery. Every year something new comes up, every year some inventive person produces a new or better type of machinery. One has only to think back for a moment to things like the immovable threshing machinery inside the great stone buildings, and then to look at the modern methods which one uses for harvesting. One only has to look back at dairy farming, at the old-fashioned byres where the cows came in, were milked and went out. Now one sees the milk parlours, the mobile milk parlours of to-day.
  Then there is the question of climate. As the noble Lord, Lord Hughes, knows, this is one of the biggest problems of farming in the North; one is for ever struggling against rain. One of the methods by which one can now combat some of the downpours from which we suffer—particularly in August, when one wants to get on with the haymaking—is to have a strong blower or drier which one can put into the fields, push with a tractor and take all over the place. It is an extremely useful machine in helping
  1296
  one counter the effects of the weather. About five years ago it was impossible to get a drier which was not fixed in a barn; you took the corn into the barn and used the blower to dry it in the barn. To-day, the ingenuity of man is such that this blower can be carted around and used all over the place. It is every bit as effective as before—if not more so—and it is movable. If it were fixed in the barn, as it used to be, it would rank for a grant, but because it is 100 per cent. more useful, because you can push it around, it does not rank for the grant.
  I am sorry that the noble Viscount, Lord Stone haven, is not present. During the Second Reading debate he said that he had installed some new machinery on one of his farms, and was able to obtain grant aid in respect of one part of it but not in respect of another, simply because of the idiosyncrasy about this definition of "fixed" machinery. Nowadays it is possible to get one drier which may be used in two or three silos. In the old days the driers were fixed. Admittedly they ranked for grant, but because they were fixed it was necessary to use a blower for each silo. I could go on talking for a long time on this subject, but I am addressing Members of your Lordships' House who are interested and know about farming, so I need not to elaborate the point.
  The fact is that nowadays every invention which results in the modernising of machinery makes it easier to use the machinery. It is possible to move machinery about the farm, and that makes it infinitely more valuable. We hope that this Bill will become a really modern Act of Parliament, but here we are faced with this restriction on grant aid because it may be given only in respect of machinery which is fixed.
  During the Second Reading debate I was told that the line had to be drawn somewhere and that it was not possible to have all machinery ranking for grant. That may well be so, but I suggest to the noble Lord that the Ministry should look at this point and decide that there are more machines which might be added to the category referred to in Clause 32, where tractors and harvesters are specified. Both, of course, are movable, and both rank for grant. Driers, fans and silos might be included in that category

  1297
  as well as other machinery of the same type which is essential for modern farming. In my opinion, it should all rank for grant aid.
  Capital expenditure on these items is extremely high. It costs between £700 and £800 to acquire a movable blower, but it can be used for far more purposes on the farm. It would cost the same if the blower were fixed in a barn. It would then be possible to obtain a grant in respect of it, but it could not be used half as much. This is a matter to which I should like to draw the attention of the Minister and his Department. Here we are suggesting something which would be of enormous benefit, and the acceptance of the Amendment would show that the Ministry recognise the revolution which is going on in respect of farming machinery. When I read the clause I asked myself whether the Government realise what is happening every year; that a real revolution is going on. What is the point of having a Bill with all these clauses init when you do not recognise what is happening in this world of mechanisation?
  Other points have been made on this subject. Noble Lords have referred to new types of farming, including intensive poultry and pig production, which is all part of the farming revolution. The whole thing has got to the point where movable machinery is a current investment for all modern farmers. Nobody would dream of buying fixed machinery if it was possible to obtain movable machinery. It would not make sense. I think that the criterion that the grant shall be paid only in respect of fixed machinery is extraordinarily out of date. I hope that the Minister will consider this matter, because the inclusion of the word "fixed" makes the Bill look very old-fashioned. Every year, every day, new and more important things are being invented which farmers want to use.
  What is more, we in this country are well ahead in the production of farm machinery—hence our huge export trade; and it will not help that trade if people are not encouraged to use modern machinery. No one will be prepared to buy old-fashioned machinery merely because that is the only way to obtain a grant. I want the Minister to realise that here we are on a very good wicket.
  1298
  We are beating the world and our exports are tremendous. I should like to see the investment grant given in respect of the most modern machinery.
  My suggestion is that we omit the word "fixed" and refer to grants towards essential machinery. In any case, in ten years' time there will be hardly anything which is fixed anywhere, except, perhaps, the roof over one's head. But, as has been said, even the roof could be pulled down when it decays; so that even the roof may not be a fixture for more than the next five or ten years. Changes are being made all the time. I beg the noble Lord to ascertain whether or not the Minister will reconsider this clause and redraft it in a way that will bring it up to date in respect of machinery in the farming world. I beg to move.
  Amendment moved—
  Page 38, line 11, leave out first ("fixed")—(Baroness Elliot of Harwood.)
  7.15 p.m.
  LORD MITCHISON: With great respect to the noble Baroness, I am afraid that her Amendment is hopelessly wide. I think she realises it, and I shall take but a minute to give her an illustration. At present, as I see it, a fixed shelter or shed might attract a grant if used for an agricultural purpose. The noble Lady would include equipment which is not fixed and used wholly or partly for an agricultural purpose. I suggest that that would include—at any rate in the case of a bald farmer—an umbrella.
  BARONESS ELLIOT OF HARWOOD: The noble Lord, Lord Mitchison, has not looked at the clause to which I am speaking. It does not refer to umbrellas; it refers to machinery which is essential to the modernisation of agriculture. The noble Lord may or may not be a farmer, but I would say this to him. When it is suggested that one should modernise one's farm and then, in answer to an application for a grant for a blower, or something like that, one is told, "If it is fixed you will get a grant, but if it is not, you will not", all I can say is that one is being asked to do something which is so old-fashioned as to be useless.
  LORD MITCHISON: I would not pretend that an umbrella is "plant" or "machinery". But I think that it is "equipment".
  BARONESS ELLIOT OF HARWOOD: No, it is not. The noble Lord is wrong.
  THE DUKE OF ATHOLL: I should like to support my noble friend Lady Elliot of Harwood, even if the definition did include umbrellas. I think that most farmers would appreciate the inclusion of umbrellas during some of our summers. But I should like to support my noble friend for a reason which I do not think she has mentioned. Partly due to Government policy, and partly due to economic circumstances, farms are getting bigger the whole time. We have not yet seen the effect of capital gains tax which will no doubt tend to reduce this trend; but certainly at the moment farms are getting bigger the whole time. The bigger the farm, the more essential it is that the equipment on it should not be fixed. It is thoroughly uneconomic to cart an enormous tonnage of oats or barley from one end of the farm, perhaps four miles, to where a drier is. It would be far easier to cart the blower the four miles on a tractor to where the barley happens to be grown. I hope that the Government will consider this point. The Amendment may go too far, and may include things which the Government definitely do not want to include. I suspect that a farmer's motor car could be included were the Amendment to be accepted. But I think the Government might make the Bill less restrictive than it is by deleting this provision that a grant is available only for fixed machinery.
  LORD BALERNO: Coming from the same cold and wet part of Scotland as the noble Baroness, Lady Elliot of Harwood, I should like to support what she has said. I detect from debates in another place that this matter has already received very sympathetic consideration by the Government. The difficulty seems to be one of semantics and of getting a definition. The Government agree, particularly in the case of driers, that it is an advantage to have a drier which can be moved from one bed or silo to another, and not a separate drier for each position, which adds considerably to the cost and will, if this is done by the farmer, add to the amount of Government grant. I suggest that instead of the word "fixed" we might use the word "static". If we use "static" and then define it as "machinery which when in use is in
  1300
  a fixed position"—that is, machinery which cannot be used when it is in motion—we shall have a quite precise definition. Therefore, it cannot be a tractor or any of the main range of farm machinery. It seems to me not too difficult a definition, and that it goes a long way towards meeting what I know is the general desire of the Government to help farmers.
  As I am speaking, may I ask a question on another point on these grants? In future they are to be direct grants for improvements instead of income tax rebates. The question I should like to ask the Government, which I have not seen debated anywhere, is whether these direct grants would be permissible in the Common Market. If we joined the Common Market should we have to revert to income tax rebates to get the same payments back to the farmer? I am almost certain that income tax rebates will come within the scope of the Common Market regulations, but these direct grants might well be excluded. So ought we not to have another look at this in regard to the Common Market regulations? I apologise for bringing up this question without notice.
  EARL FERRERS: I think that the noble Baroness has a good point here. On the last Amendment, the noble Lord, Lord Walston, said that buildings were being made to last too long. A building needed to last only ten years because, after ten years, it would be no longer suitable for what would then be required of it. This is the case with a great deal of equipment nowadays. The purposes for which it is required are relatively small. It seems extraordinary that when there is a chance of extending the use of equipment farmers should not be able to do so, or indeed should be penalised for doing so.
  I was looking through the Farmers Weekly last week and cut out an advertisement which said, under a big photograph:
  "Lister moisture extracting unit—patented. With wheels for mobility, £706; as fixed equipment, £670".
  So the machine with wheels costs £36 more, but does not count for grant, which would be to the tune of £125. The man who buys his machine with wheels for mobility has to pay about £200 more than the one who buys a fixed machine. That seems to me a pity.
  7.24 p.m.
  LORD HUGHES: As the noble Baroness, Lady Elliot of Harwood, has said, she has been in correspondence with me on this subject for some time. In fact I have with me, to refresh my memory, copies of the correspondence, which I find consists of three comparatively long letters from the noble Baroness and three comparatively short ones from me—because one does not take so long to say, "No" as one takes to put up reasons for saying, "Yes". In the course of that correspondence I told the noble Baroness what the Government's intention was in introducing investment grants. It was simply to provide and distribute a sum which was broadly the equivalent in value of the old investment allowances.
  If we are to increase the number of items of equipment which can count for grant, obviously it is not going to be possible unless we do one of two things—either increase the total amount of money to be distributed or decrease the rate of grant payable. I can assure your Lordships that under existing circumstances the first is a non-starter. The amount of money which will be available will be related broadly to the amount which was available under the old scheme. Having decided that, we had to find the best way of distributing it. Naturally the Government did not do this off their own bat. There were consultations with the farming and land-owning organisations. It was felt that the best way to start was to find out which were the most important and widely used pieces of equipment which could be aided, and aided at a reasonable percentage, which I would remind your Lordships is just now 10 per cent., but will be temporarily increased in 1967 and 1968 to 12½ per cent.
  The noble Baroness referred to Clause 32 and the two items of mobile equipment which are added there. This brings me to the point made by the noble Lord, Lord Balerno, about defining the equipment as "static" instead of "fixed". This does not really help. The reason why harvesters and tractors were brought in for grant was that, after allocation had been made on items of fixed equipment, there was some other money available and it was agreed between the interests concerned that the best way of using it was to help to provide the most widely used pieces of mobile equipment—tractors and harvesters.
  1302
  What also influenced the decision was that tractors and harvesters could be easily policed because they are subject to an Excise licence. As soon as one imports into grant-aided pieces of equipment something which is mobile but not easily checkable, one introduces into the whole operation a policing expense which would add to the administrative costs a considerable amount of money which under the present set-up goes directly in grants. The ideal position when a given sum of money is to be spent is that the greatest possible percentage should go to the farmer and the smallest possible percentage to administering the scheme.
  It is wrong to conclude, as I think the noble Baroness has done, that because the Government are not giving grant for certain pieces of equipment, we do not approve of them. There is much which is being done in farming and elsewhere of which the Government fully approve but to which the Government do not give grant. We accept that the equipment to which the noble Baroness referred is extremely useful and frequently secures economies in investment and the use of manpower, but we cannot distribute the money available in the way which is most acceptable to the farming community as a whole if we bring in a range of mobile equipment.
  The noble Duke said he suspected that if this were done it would be too wide. This, of course, is the difficulty. Once you go beyond the type of equipment requiring an Excise licence how do you make a distinction? Obviously if we are going to make the grant much less than 10 per cent.—if it is getting down to an average of 5 per cent. grant, or 7½ per cent. grant—in many cases it will not be worth operating, and we should be depriving many farmers of the opportunity of getting a share of this money. For these reasons, I must advise your Lordships that in the view of the Government movable equipment other than tractors and harvesters must remain in that category.
  Before I conclude, I would say that it is quite obvious from the remarks of certain noble Lords that they are not thinking of the effect that they might have on Scotland's tourist industry. The noble Baroness, Lady Elliot of Harwood, indicated a heavy downpour in August; the noble Duke, the Duke of Atholl,

  1303
  referred to "the wet weather we are accustomed to get in Scotland"; and the noble Lord, Lord Balerno, said, "coming from another wet part of the country". I wish to make it quite clear that it does not rain all summer in Scotland, even in particular parts of it.
  LORD NUGENT OF GUILDFORD: I should like to congratulate my noble friend Lady Elliot of Harwood on moving this Amendment, and my noble friends who supported her. I must say to the noble Lord, Lord Hughes, that I did not find his answer very convincing. His argument that it would be unduly expensive administratively to have the additional burden of checking mobile machines if the grant were extended to them seems to be a most feeble argument to come from the Government Front Bench. This form of grant was decided upon by the Government as a matter of major policy, to take the place of the old investment allowances, which were quite simply administered by the Inland Revenue at no cost at all.
  For some reason, which has never been convincing to me, the Government decided to make this change, and if it is more expensive to administer, that is what we always told them it would be, and it would have been better to have stuck to the old arrangement. Under the old arrangement these mobile machines qualified for income tax investment allowances in so far as the farmer concerned could satisfy the Inland Revenue inspector that the equipment was required for the farm. They are now losing it. So it is completely inequitable, quite apart from all the other arguments that have been adduced. The noble Lord says that it is the broad intention of the Government to see that this scheme replaces the benefit that farmers were getting before, but it just does not do this because the administrative arrangements are that much less efficient. The responsibility for this is with the Government.
  I warmly support my noble friend Lady Elliot of Harwood on the general argument that she has put before the Committee. The trend is to use mobile equipment wherever possible, so that it can be used as much as possible. In case the noble Lord, Lord Mitchison, is still feeling anxious about his umbrella, he is an even cleverer man than I thought
  1304
  if he can persuade an Inland Revenue inspector that this is a necessary part of farming equipment. If he can do that, good luck to him. Everybody knows that what my noble friend has said is right: that wherever possible one tries to avoid fixed equipment because it is limited in use.
  When the Government decide to make a major change in policy, and remove one form of benefit through the income tax allowance which we had in the past, and give a new one, it seems most unfortunate that they should cut off from benefit a considerable range of equipment which is the part in which modern developments are taking place. I should certainly advise my noble friend, if she decides to withdraw the Amendment now, to come back to it again on the Report stage.
  LORD HUGHES: Before the noble Lady returns to it, I must correct a misapprehension under which the noble Lord, Lord Nugent of Guildford, appears to be labouring. I did not say that it was costing more to administer the present investment grants than it did to administer the previous scheme. I advanced two reasons for not doing what the noble Lady asked: first, that if we were to bring in these pieces of mobile equipment, the percentage grant would be diminished on all items, because there would be many more items coming into it; and, secondly, that the cost of administering a scheme with all these items in it would be much greater than the cost of administering the Government's scheme.
  It is really late in the day to start arguing the merits of investment grants as against income tax allowances, but there are obviously two points of view about this among the farmers. Those who were receiving the full benefit of investment allowances because they were in the proper tax bracket perhaps preferred the other scheme. But there are a number of farmers who will get better benefits under grants, because they did not participate under tax allowances which were previously available. The fact is that the Government sought to make certain in their scheme that the total sum available continued to be available, although it did not follow that it was the same farmers who were receiving it.
  BARONESS ELLIOT OF HARWOOD: I must say that I am disappointed with the reply from the noble Lord, Lord Hughes. In answer to his last words about the total amount of grant, all I can say is that it is a pity that it is not more, because if it were it would be of much greater use. I do not want to argue the merits of income tax allowances versus investment; there are too many sides to it. I must say that I have yet to find anybody who prefers this, but there may be some who do. But in my part of the world, where such a large area is farmed, the income tax rebates were much more popular. However, as I say, I do not wish to argue that point.
  But on the question of saying that a grant is payable in respect of an old-fashioned piece of machinery which is static (which is what the Government are saying), I would say this. The inspector who came to look at my blower said to me: "Lady Elliot, if only you had screwed it to the floor, I could have given you a grant; but because you pull it about with a tractor, I cannot." That is a premium on screwing it to the floor. It is a great pity that a new Bill which encourages people to do new things should, at the same time, contain Clause 31, which is definitely going to encourage people to do something out of date and old-fashioned, because that is the only way in which they will get a grant. It is all very well for the noble Lord to say to us that we cannot have any more money. But the Government are going to give money under this scheme to people to put in machinery which is out of date. That is the answer.
  LORD HUGHES: The only reason I seek to interrupt the noble Lady is that I do not wish to appear to be depriving her of the last word, and if I interrupt her she can answer me. We on the Government side do not accept that "fixed" necessarily means "old-fashioned" and that "mobile" necessarily means "progressive". There are cases where, obviously, a piece of mobile equipment, such as the mobile blower to which the noble Lady referred, is much more suitable. But that is only one item of equipment, and over the wide field "fixed" equipment is by no means a piece of old-fashioned equipment. So we must not be led into the mistake of thinking that
  1306
  "fixed" is "old-fashioned" and "mobile" is "up to date".
  BARONESS ELLIOT OF HARWOOD: On that I disagree with the noble Lord, and I should like the Ministry of Agriculture, Fisheries and Food to look at this matter again. I do not believe that in twenty years' time the machinery for which grants are given to-day—that is, fixed machinery—will be in use. By that time everything will be constructed so that it can be used universally. I am not discussing buildings, but referring to machinery. And here, in this 1967 model of a Bill, we are asked to approve a piece of legislation which refers to the type of machinery which, in terms of the motor car world, probably would be way back about 1920. It is quite clear that it did work in the past, but it does not work so well now.
  I do not propose to press this Amendment to-day, because I agree with the noble Lord, Lord Mitchison, that it is too wide, but it has brought the discussion that I wanted to the notice of the noble Lord. I warned him that I was going to do this, so he was not taken by surprise. I am attracted by the suggestion made by the noble Lord, Lord Balerno, that we should use the word "static" and see whether something of that kind could go into the Bill, rather than the Amendment I have moved. I will certainly consider this at the next stage, but I believe that, everything considered, the Ministry of Agriculture, Fisheries and Food should have a good look at this whole matter and not just say that this is something for which they cannot make arrangements in this Bill. Finally, may I say that I am delighted to hear that it does not rain in Dundee, because in my experience it rains in Dundee as much as it does in the Borders.
  LORD HUGHES: I was not saying that it never rained in Dundee, but that it does not rain any more in other parts of Scotland.
  BARONESS ELLIOT OF HARWOOD: I beg leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  7.43 p.m.
  THE DUKE OF ATHOLLmoved, in subsection (1)(a), after "agricultural" to insert "or silvicultural". The noble Duke said: First, I think I should declare an interest. If the Government were to

  1307
  accept this Amendment it would obviously benefit me to a certain extent financially, and I feel that I must declare this fact. I also think that it might be for the convenience of the Committee if we were to consider at the same time Amendments Nos. 27 and 28, as they are all on the same point.
  If this Amendment were carried, machinery used for forestry as well as for agriculture could be eligible for the grants which we have just been discussing. In support of this Amendment I should like to quote what the noble Lord, Lord Rhodes, speaking on behalf of the Government, said on the Industrial Development Act (as it now is) in reply to an Amendment moved by my noble friend Lord Drumalbyn, who was trying to bring forestry within the provisions of that Bill. I may say that your Lordships were good enough to approve that Amendment, but unfortunately another place had different ideas. The noble Lord, Lord Rhodes, said:
  "The scope of the present Bill is, broadly, to provide investment incentives for industry in the sense of manufacture, construction and mining. The Bill is not designed to provide incentives for agriculture, horticulture or forestry, which might be described as the cultivation and harvesting of crops. Now we made it quite clear in the White Paper on Investment Incentives that separate arrangements are being made for agriculture as a key sector of economic activity. Provision for investment grants for agriculture and horticulture is made in another Bill which is at present before the House of Commons and will in due course come before the House of Lords. It is on that Bill that attention as regards this particular subject, which comes outside the scope of this present Bill, should be focused."—[OFFICIAL REPORT, 2/8/66, col. 1263.]
  I am doing exactly as we were instructed by the noble Lord, Lord Rhodes—I am trying to focus it on this Bill. The Government have apparently forgotten that we might perhaps focus it on this Bill. It is essential for private forestry to have confidence in the Government, and they are rapidly losing it at the moment. Before this Government came into power forestry received investment allowances; now, apparently, it is to get absolutely nothing.
  The pool to which the noble Lord, Lord Hughes, has referred, although it included forestry before, does not appear to have enough in it to include forestry now. This is remarkable, as he said that
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  the pool was more or less the same. I have yet to meet anyone who has benefited from the new system, except perhaps some small farmers, and the amount of investment in plant which they make is minute. I have been into this with a certain amount of care, and even an industry in a development area was better off under the old system than under the new. The only industries which benefit are those which were not in the old development areas and are now in the new development areas; and the noble Lord, Lord Hughes, will no doubt produce this as one reason why he cannot accept this Amendment.
  I think it is unfair that forestry should be cut out of this so-called "pool". In forestry one has to budget sixty years ahead, and the budgeting was based on the fact that we received a certain amount of aid towards this sort of equipment, preferably by tax allowances or otherwise by direct grants. I should also like to point out to the noble Lord, Lord Hughes, that thanks to this change the Government are having the use of this money for approximately a year longer than they did under the old system, under which income tax allowances were offset against the tax which one had to pay straight away. So at the very worst the Government ought to have been a shade more generous, instead of which they appear to me to have been much more mean. Therefore I think that this Amendment is a fair one; that it will go some way towards restoring confidence in the private sector of the forestry industry, and that it ought to be accepted by the Government. I beg to move.
  Amendment moved—
  Page 38, line 13, after ("agricultural") insert ("or silvicultural").—(The Duke of Atholl.)
  THE EARL OF DUNDEE: I should like to say one thing in support of this Amendment. It is a little suggestive of sharp practice, although I am sure it is not so in fact, that we should first of all be told that this could not come under the Industrial Development Act because it was going to be in the Agriculture Bill, and now we are told that it cannot be in this Bill, for some reason that we have not yet heard.
  Of course it is likely that this Amendment will not be consistent with the

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  Commons Financial Resolution. However, that is no reason why it should not be discussed in your Lordships' House, and the Government would then be able to move a new Financial Resolution in another place, if they thought it right. I hope we shall have from the Government some indication that forestry—which we thought was going to be encouraged when this Government came into office—is not going to be the one thing left out in the cold.
  LORD HUGHES: In moving this Amendment the noble Duke ranged over a wide field, including the Industrial Development Act, the previous Amendment, and some other things as well. In one way I am glad that he did so, because in replying to the previous Amendment I omitted to reply to a pertinent question put to me by the noble Lord, Lord Balerno, and which could perhaps equally well apply to grants under this Amendment. The noble Lord asked whether grants would be permissible in the Common Market. I can give him a simple, but completely unsatisfactory, answer. We do not know. We understand that the Six spend a good deal of money on grants to improve farm efficiency, so we hope they will be permissible. I cannot take it any further than that.
  I am not in the same position as the noble Duke, for he has gone back and looked at the debate on the Industrial Development Bill and is seeking to found on that for the Amendment which he is now moving. For that reason, I am quite certain that he will not be very happy about what I am about to say, because I am going to say what he suspected I would say. That is, the position of forestry in relation to investment grants was considered when the House was considering the Industrial Development Act. The decision of Parliament on that occasion was that the grants would not be extended to forestry. It was explained then, so I am assured, that the Government had considered the present system of assistance to forestry and had concluded that it would not at present be justified in supplementing this by something comparable to the special arrangements for agriculture. To admit forestry to that grant would in fact go beyond the scope and intention of this clause.
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  The considerations which apply to agriculture are essentially different from those relating to forestry which by its very nature is a long-term activity. A long time must pass before trees planted now can make any contribution to import saving, and it is doubtful whether any increased production would be achieved in existing woodlands if that grant were available. Having said that, however, as the noble Earl, Lord Dundee, knows, I am in complete agreement with him in seeking to expand forestry as much as possible both in the Forestry Commission sector and in the private sector, because I think it has a great deal to offer for the future development of the economy of the country in general and of Scotland in particular. But I am very sorry that on this Amendment the most I can say is that we will watch the position very carefully, and I hope with that somewhat faint assurance, I must admit, the noble Duke will feel able to withdraw his Amendment, which I am quite unable to accept.
  THE DUKE OF ATHOLL: I cannot say that I am altogether happy about that assurance. It seems very long term, and the noble Lord, Lord Hughes, has made no attempt to explain why forestry should not share in this pool, except that he says it will make no difference to the immediate outlook for forestry in this country. I agree that if you go into a form of culture which has a 60-year cycle, as on the whole forestry does—even pulp mill timber has a 25-year cycle—it is obviously not going to make a great deal of difference to our balance of payments to-day, to-morrow or next year if a grant is given to increase and mechanise forestry. But it does seem to me very short sighted, and I am very surprised the noble Lord should try and defend it on those lines.
  Since the noble Lord does not seem to think that the noble Lord, Lord Rhodes, gave us that encouragement—which I assure him he did, although he qualified it slightly afterwards—I would quote the noble Lord, Lord Shepherd, who said exactly the same four columns later:
  "Is it not a fact that the Ministry of Agriculture has been paying out grants consistently over many years for the future development of the forestry industry?"—(col. 1267.)

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  This was his reason why we could not have grants under the Industrial Development Bill, because it came under the wing of the Ministry of Agriculture. We now have a Bill which appears to have emanated from the Ministry of Agriculture who seem to be equally disinterested in forestry, except to make absolutely sure that none shall take place in the areas of the Rural Development Boards.
  I must say that the noble Lord has not convinced me that we should not do this, and the only reason why I propose withdrawing this Amendment is that I suspect that it might involve a Money Resolution, and I should hate to cause a row with the House of Commons over a comparatively small thing like this; also, the noble Lord has said he will keep his eye on the position. I think he should also try and introduce a Bill to do something about it as quickly as possible. I beg leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  On Question, Whether Clause 31 shall be agreed to?
  THE DUKE OF ATHOLL: I would raise one point. Industrial grants are taking eighteen months to be paid. Could the noble Lord tell us whether they anticipate that grants under this Bill for agricultural purposes will take as long, or whether farmers might get them rather more quickly and thereby not be out of pocket for quite so long?
  LORD HUGHES: I think the furthest I can go is to give an assurance that we will not delay any more than absolutely necessary.
  Clause 31 agreed to.
  Clause 32 [Grants towards expenditure on agricultural tractors and harvesters]:
  On Question, Whether Clause 32 shall be agreed to?
  LORD BALERNO: May I ask the Minister a question relating to forage harvesters? One can have a forage harvester as well as a cereal harvester. Most of the forage harvesters are pulled by tractors and therefore do not qualify under the Vehicles Excise Act 1962. But there is a type of forage harvester which would qualify under that Act, and that is the self-propelled lawn mower, provided it collected the crops. It would qualify
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  under the Vehicles Excise Act and it would also be technically a forage harvester. I wonder whether Her Majesty's Government are aware of this point, and if they are, whether this was their intention, provided of course it was a farmer who used the forage harvester on his own farm.
  LORD HUGHES: The fact that the noble Lord did not give me notice of that question gives me reason to believe he did not seriously expect to get an answer to it to-night. I will, however, look into it and let the noble Lord know in due course.
  Clause 32 agreed to.
  Clauses 33 to 35 agreed to.
  Clause 36 [Supplemental provisions as to grants under Part II and application of capital on works there under]:
  7.58 p.m.
  EARL FERRERS EARL FERRERS moved, after subsection (5), to insert as a new subsection:
  "() Whenever a person having a limited interest in agricultural land or in the rents and profits until sale of such land pays any yearly or other periodical payment due under a mortgage or charge created under the Agricultural Credits Acts, 1928 and 1932, or either of such Acts, or the Improvement of Land Act, 1864, that person shall be entitled to recoupment, out of such land or the proceeds of sale thereof or out of capital monies subject to the trusts of the settlement affecting such land, of such part of such yearly or periodical payment as represents repayment of capital."
  The noble Earl said: This is quite a simple point although it looks rather complicated, and I hope it will give the Government a chance to show how conciliatory they are. It deals with one specific type of complication. Many farms are improved by finance from the Agricultural Mortgages Corporation or the Land Improvements Company. This entails paying back the capital and the interest in annual instalments. Where, however, land is settled land the trustees of the settled land offer the land as mortgage to the Agricultural Mortgages Corporation or the Land Improvements Company, who in turn produce the capital, and the tenant for life has to pay back both the capital and the interest out of his own private money, and he cannot be recouped from the capital of the trust.
  At the end of the period of payments the land which resides in the hands of

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  the trustees is benefited by the improvement which the tenant for life has paid for out of his own money. The effect of this is one of two things. First, there is the possibility the improvement will not be done; and secondly, if it is done, the tenant for life suffers because he has been depleted of his own money. His direct successor may not suffer because he will have the advantage of the improvement if he inherits the land, but the other children of the tenant for life will suffer by virtue of the fact that his money has been used for this purpose. But there is another quirk to this. If the loan is for a period of, say, 20 years, and the tenant for life wishes to redeem the loan after, say, 7 years, he will have paid seven annual instalments. The redemption figure, which represents the 13 instalments that would have been paid if he had continued with the agreement, can be recouped out of the capital of the trust, but the 7 instalments which have already been paid cannot.
  This is an anomaly which I believe is not in the interests of the life tenant or the life tenant's successor, the trustees of the land in question—or, indeed, of the Government. It is highly likely that at the time when the Settled Land Act of 1925 was considered it was anticipated that repayment of such a loan by instalments was a proper charge against the settled fund. Unfortunately, when it came up for interpretation it was held that the word "redemption" referred to the compounding of all future payments, and that the tenant for life was not entitled to be recouped out of capital money in respect of the payments which he had already made. This is an uncontroversial Amendment which I believe can be only in the interests and to the benefit of all concerned. I hope that the noble Lord will feel able to accept it. I beg to move.
  Amendment moved—
  Page 43, line 20, at end insert the said subsection.—(Earl Ferrers.)
  8.3 p.m.
  LORD WALSTON: The noble Earl has introduced this Amendment by saying that it is a simple matter. He has certainly expounded it with great clarity, but I must confess that, to me, it is a somewhat complicated matter, although one of very considerable importance, not only, in certain cases, to the estates them-
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  selves but to the beneficiaries, and also to agriculture. Therefore, it is appropriate that it should be considered when we are discussing this Bill.
  The difficulty which the Amendment seeks to remove is caused by the wording of Section 73(1)(xiii) of the Settled Land Act, 1925, the effect of which, as the noble Earl has pointed out, is to prevent the use of capital money arising from a settled estate for the repayment of rent charges by instalments. I understand that this provision has a particularly unfortunate effect in the case of improvement rentcharges resulting from loans for improvements made for agricultural purposes.
  As the noble Earl has pointed out under Section 3(2) of the Agricultural Credits Act 1932, such loans can, if secured by a mortgage which is repayable by instalments, be treated as an improvement rentcharge. But the Act of 1925 has been held, as the noble Earl has reminded us, not to permit the application of capital money under it to the repayment of such charges. This is because the 1925 Act limits the use of capital monies in this context to redemption of a rentcharge and under a recent judgment, to which the noble Earl has referred, the word "redemption" has been held to refer to a compounding of future payments and not to the capital element in the normal periodic payments. The result is that repayments of capital instalments by the tenant for life must be found either out of his income or out of free capital, and this, of course, has discouraged tenants for life from borrowing money for agricultural improvements.
  It may well be that it was Parliament's intention that Section 73 of the 1925 Act should have reproduced the effect of Section 1 of the Settled Land Acts (Amendment) Act 1887. That Act included not only redemption but also any other provision for the payment of rentcharges, and so would have enabled instalments towards repaying rentcharges to be paid out of capital. Normally, a statutory defect of this kind ought to be put right for all purposes. But, of course, that is not possible in an Agriculture Bill. One can argue that it is not right under an Agriculture Bill to attempt to put right in a specific area something which applies to a far wider area. The noble Earl does not hold that view, and I share his opinion.

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  This Bill affects the productivity of the land. The present Amendment seeks to remedy matters, so far as agricultural estates are concerned. I think it would be a pity to miss the chance of correcting this anomaly at least within the field covered by this Bill, and I hope your Lordships will agree. The Government are therefore prepared to accept this Amendment in principle, if that is the wish of the Committee. We should, however, like an opportunity to consider the precise wording and placing of the Amendment in the Bill, and perhaps we can arrange to do that at some later stage.
  EARL FERRERS: I am extremely grateful to the noble Lord. As his speech progressed I thought that I was going to be disappointed; then, all of a sudden, at the end the rabbit came out of the hat. I am grateful to him, and on his assurance that he would like to discuss it, I will withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Clause 36 agreed to.
  LORD WALSTON: Perhaps this would be an appropriate moment to resume. Therefore, I beg to move that the House do now resume.
  Moved accordingly, and, on Question, Motion agreed to.
  House resumed.

GLASGOW CORPORATION ORDER CONFIRMATION BILL
Brought from the Commons; read 1a, and (pursuant to the Private Legislation Procedure (Scotland) Act, 1936) deemed to have been read 2a and reported from the Committee.

TEACHERS OF NURSING BILL
Brought from the Commons; read 1a, and to be printed.
House adjourned at eight minutes past eight o'clock.