Lords Sitting of 31 May 1967

Preamble
Reassembling after the Whitsun Recess, the House met at half past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Ripon
The LORD WROTTESLEY—Sat first in Parliament after the death of his brother.

FUTURE BUSINESS
LORD SHEPHERD: My Lords, with permission I wish to make a short Business Statement in relation to providing an opportunity for your Lordships' House to discuss the Middle East situation. Such an opportunity will be provided by a Government Motion to be taken tomorrow, Thursday, at 3 o'clock. This makes it necessary for the Committee stage of the Fugitive Offenders Bill to be postponed until Monday, June 12. In the circumstances, I hope that the House will agree that on Tuesday of next week, when we take the second day of the Committee stage of the Criminal Justice Bill, the House should sit late, when dinners will be provided.
So far as to-day's business is concerned my noble friend Lord Walston will be making a Statement on the Kennedy Round at a convenient moment after 3.30 p.m.

NEWQUAY URBAN DISTRICT COUNCIL BILL [H.L.]
Read 3a, and passed, and sent to the Commons.
SOMERSET COUNTY COUNCIL BILL [H.L.]
Read 3a, and passed, and sent to the Commons.

BUSINESS OF THE HOUSE
2.37 p.m.
THE LORD PRIVY SEAL (THE EARL OF LONGFORD)THE LORD PRIVY SEAL (THE EARL OF LONGFORD) moved that Standing Order No. 41 (No two stages of a Bill to be taken on one day) be dispensed with for the purpose of allowing the Shipbuilding Industry Bill to be read a first and second time this day; and that the Bill be taken first of the Orders of the Day. The noble Earl said: My Lords, I beg to move the first Motion that stands in my name on the Order Paper.
My Lords, the House will have heard the sad and shocking news of the grievous loss to the noble Lord, Lord Harlech, the Deputy Leader of the Opposition. Membership of this House brings us all close together, especially in such an hour as this, and the hurt of one of us affects us all, particularly those of us who knew Lady Harlech, one so young in life and with so much before her, who has been so tragically struck down. We all know the great services rendered by Lord Harlech as our Ambassador to the United States. Moreover, we all recognise the immense

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contribution of Lady Harlech to this country and to the cause of Anglo-American relations. I am sure that I speak for all in all quarters of the House when I send to Lord Harlech our deep sympathy, and assure him on behalf of us all that our thoughts are, and always will be, with him and his family.
Moved, That Standing Order No. 41 (No two stages of a Bill to be taken on one day) be dispensed with for the purpose of allowing the Shipbuilding Industry Bill to be read a first and second time this day; and that the Bill be taken first of the Orders of the Day.—(The Earl of Longford.)
LORD CARRINGTON: My Lords, we on this side of the House should like to join most particularly in what the noble Earl the Leader of the House has said, to express appreciation for the way that he said it, and also, with him, to send our sympathy to Lord Harlech.
LORD BYERS: My Lords, we, too, were deeply shocked this morning to read the news of this tragedy. We on these Benches should like to be fully associated with what has been said by the two noble Lords who have preceded me, and to offer our sympathy to Lord Harlech and his family at this most distressing time.
On Question, Motion agreed to.

BUSINESS OF THE HOUSE
LORD SHEPHERD: My Lords, on behalf of my noble friend Lord Longford, I beg to move the second Motion standing in his name on the Order Paper.
Moved, that Standing Order No. 34 be dispensed with on Monday next so as to allow the Lord Chancellor to move his Motion relating to Consolidation Bills before the Second Reading of the Sea Fisheries (Shellfish) Bill.—(Lord Shepherd.)
On Question, Motion agreed to.

FISHING VESSEL GRANTS BILL
Brought from the Commons, endorsed with the Certificate from the Speaker that the Bill is a Money Bill within the meaning of the Parliament Act 1911, on
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Tuesday last, and printed, pursuant to Standing Order No. 45; read 1a

SHIPBUILDING INDUSTRY BILL
Brought from the Commons on Friday the 12th instant, and printed, pursuant to Standing Order No. 45; read 1a.
Then, Standing Order No. 41 having been dispensed with (pursuant to Resolution):
2.41 p.m.
THE PARLIAMENTARY UNDER-SECRETARY OF STATE FOR COMMONWEALTH AFFAIRS (LORD BESWICK): My Lords, I beg to move that this Bill be now read a second time. In 1964 this House debated the Shipbuilding Credit Act under which credits totalling £75 million were provided to finance the purchase of ships by British owners. This Bill, three years later, provides for grants of about £5 million, together with loans of £32½ million and up to £200 million in Government guarantees, for British ship purchases. The 1964 credit scheme was intended to provide a breathing space in which our shipbuilders would be able to strengthen their competitive power. In fact by the end of 1964 it was already clear that these hopes were unlikely to be fulfilled and in February, 1965, the Government set up the Shipbuilding Inquiry Committee under Mr. Reay Geddes, the Managing Director of Dunlops, to recommend steps which both sides of the industry and the Government should take to make the industry competitive in world markets.
The present Bill follows the acceptance by both sides of the industry of the Geddes Report's proposals for restructuring the industry under what the Bill calls "grouping schemes", and for the redeployment of the industry's physical and human assets—what the Bill calls "the reorganisation of resources". It is a plan with a timetable designed to put the industry on to a viable basis by 1970. The assistance provided under the Bill is to be administered by an independent Shipbuilding Industry Board and at each stage it will be the responsibility of the Board to satisfy itself that appropriate progress is being made towards grouping and the reorganisation of resources before assistance is given.
Clause 1 accordingly provides for the establishment of a Shipbuilding Industry

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Board as an independent statutory body, consisting of not less than three nor more than five members. This Board has already been set up on a non-statutory basis and has begun its preparatory work, and was recommended in the Geddes Report. The Chairman is Sir William Swallow, lately Chairman and Managing Director of Vauxhall Motors, Ltd.; and the other two members are Mr. J. Gormley, of the National Union of Mineworkers and Mr. A. E. Hepper, of Thomas Tilling Group, who is at present seconded to the Department of Economic Affairs for service as one of the Government's industrial advisers.
Under Clause 1 the Shipbuilding Industry Board is not only to concern itself with the administration of financial assistance to individual firms or groups but is empowered to carry on other activities designed to promote the industry's competitive ability. It is, of course, in the individual firms that the main battle to make the industry competitive will have to be won, and it is on this that the Board will have to concentrate its attention. But there are matters which can conveniently be dealt with on a national basis by and for the industry as a whole: for example, standardisation, more adequate statistical information on turnover and productivity, market studies and such subjects as health and safety codes which have a significant hearing on industrial relations. Provided that these other activities are in support of the efforts of individual firms to become more competitive and do not divert attention from them, the Government believe that it will be helpful for the Board to have power to initiate, stimulate and assist action of this kind.
Clause 2 enables the Board to contribute to the cost of consultants on grouping schemes within a maximum figure of £150,000. Some noble Lords may be aware that preliminary steps towards grouping have already been taken. While the Geddes Committee was still at work two yards on the Lower Clyde came together, and shortly after the Committee had reported the Swan Hunter shipbuilding concern joined up with the large ship-repairing organisation, Smiths Dock. In both cases the firms recognised that these were only preparatory moves towards grouping of the type the Committee proposed. In recent weeks five firms on the Upper Clyde have set up a consultant
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working party by arrangement with the Shipbuilding Industry Board to examine possible grouping arrangements in this area. A similar working party has also been established by five firms on the Wear, and further consultant studies are likely to be undertaken before long. These studies are all being planned or undertaken in the hope that they may qualify for assistance under Clause 2 if this Bill is passed.
Clause 3 concerns the reorganisation of resources, a process which is likely to involve considerable costs, whether by way of actual expenditure or because of the firm's inability to make the best use of its resources during the process of reorganisation. It will be seen that a limit of £5 million has been set for grants of this kind. Most of the assistance under this Bill—and in particular the grants under Clause 3—is not intended to help firms do what they would have to do anyway in their own interest as a condition of survival. It is to be concentrated in support of that extra effort needed to bring about big changes in the general structure of the industry which will make our shipbuilding industry as a whole more competitive. For the Government accept the basic thesis of the Geddes Report; namely, that the future of the industry depends on the leadership of the new groups, the formation of which is the primary objective of this Bill.
I should, however, draw the attention of the House to the fact that the Bill also covers the manufacture of main engines. Much of our capacity for the manufacture of ships' main engines has grown up within the shipbuilding industry, and there are a number of what are known as composite yards comprising both a shipyard and an engine works. In recent years a number of these engine works have produced only one or two a year. The works have been largely engaged in engine installation and all kinds of jobbing engineering work. The manufacture, assembly and testing of main engines have recently represented only a small proportion of the business of a number of these so-called engine works. The Geddes Committee believed that main engines could not be economically and efficiently produced in these circumstances and recommended that the manufacture of main engines

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be segregated from shipbuilding and concentrated in a very much smaller number of main engine shops—possibly only three or four—each with the kind of output which would make efficient production possible. Although this rationalisation might be achieved through the grouping of the companies, the resulting rationalised production facilities would not be organised like a shipbuilding group, and grouping is not a necessary prerequisite to rationalisation as is the case with shipyard groups. This is why grants in respect of the reorganisation of resources are not limited to groups in the case of engine manufacturing, as they are in shipbuilding.
Clause 4 enables the Board to make loans, not exceeding £32½ million in total, to assist reorganisation. In the case of shipbuilding groups and main engine manufacturing firms the loans may be for any of the undertaking's purposes; that is to say, either for working capital or for specific projects. On the other hand, in the case of shipbuilding firms which have stayed outside any grouping, the loans may be only for the specific purposes set out in the clause. These provisions for grants under Clause 3 and for loans under Clause 4 follow the recommendations in Chapter 26 of the Geddes Report. In both cases the responsibility for considering grant or loan applications has been put on the Shipbuilding Industry Board as the Report recommended, although each grant or loan will require the approval of the Minister of Technology so as to secure proper Parliamentary control of this assistance to the industry.
In Clause 5 the Bill departs from the Geddes Report, but only in a technical respect. The Report envisaged that the loans for which provision is made in Clause 4 might be for periods of up to 15 years, and it recommended that the Board should be entitled to make them interest-free in the first two or three years. The Government accepted this proposal in principle, but considered that it would be better to empower the Board to make grants in relief of interest so that the monetary value of this concession should be brought into the open. Clause 5 provides accordingly.
Clause 6 again involves a departure from the Geddes Report, though no fun
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damental difference in principle is involved. The Report concluded that nationalisation or State participation in individual firms was not essential, as some had suggested, so far as the competitive success of this industry was concerned. The Government considered, however, that it might be helpful to the Board to be able to provide loans under arrangements which enabled their conversion into an equity holding or to subscribe to a firm's shares instead of providing a loan, and this is what this clause provides. It will be for the Board, subject to the Minister's consent, to decide the terms on which to provide capital assistance.
There are two main advantages, as the Government see this arrangement. Some firms may do very well financially as a result of the reorganisation assisted by these loans, and the Government believe it to be only right that the public purse which provided the assistance should have the opportunity to share in any resulting profits. Secondly, the Board may decide that in a particular instance it needs to play an active role in securing management changes, and that its ability to secure such changes would be improved if it were a shareholder rather than merely the provider of loan capital. Some may say that some firms will welcome this as opening up the possibility of getting capital by way of equity more cheaply than they could by way of loans. But this is certainly not the Government's intention. Their object is to ensure that the Board can make the terms most likely to enable the public to participate in profits resulting from public expenditure, and not to find a way of giving the industry capital at little or no cost to the firm concerned.
I now come to Clause 7, the last important clause in the Bill. It enables the Minister of Technology to give guarantees to facilitate the financing of ships by British owners from British yards, subject to the liability under guarantees not exceeding £200 million at any one time during the four to five years for which the scheme is to run. At first glance this may appear similar to the 1964 credit scheme. It is not so in a technical sense, because in 1964 the loans were made by the Government, whereas under this clause the Minister will give guarantees in much the same way as the Export Credits Guarantee Department gives them in

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respect of exports. The loans will come from the banks, and the Government are grateful to them for agreeing to make loans available against these guarantees at the same rate as for medium-term loans under E.C.G.D. guarantees—at present 5½ per cent. The essential point of this scheme is that the guarantees can be made available only if the Shipbuilding Industry Board so recommends, having taken into account the considerations in subsection (3) of the clause. In short the guarantee provision is used to reinforce, rather than weaken, the assistance provided under the other clauses of the Bill for the reorganisation of the industry which, as we believe, is essential to its future competitive strength.
I do not wish to detain the House on the remaining clauses. Provision is made for reports to Parliament, for the dissolution of the Board and for the Bill's application to Northern Ireland. I would only draw attention to Clause 11 which provides for the establishment of a Shipbuilding and Ship Repairing Council during the period of reorganisation, as a means of consultation between the Board and the two sides of the industry both on the Board's own work and on any other matter affecting the industry's prospects.
Two general questions which noble Lords may wish to ask are why this industry should be picked out for this assistance, and whether this assistance will succeed in making the industry competitive. Shipbuilding is, of course, one of our traditional industries on which our greatness and prestige was based. It supplies the Royal Navy with the ships required for our defence. Although it is not now a big industry, it also provides business to many supply industries, and its own direct employment is concentrated in those areas which particularly need to maintain and increase employment opportunities, especially the North-East, Scotland and Northern Ireland. But all these are in a sense secondary considerations, for unless the industry increases its competitive power it will be a source of weakness to the country and to the economy of those areas in which the shipyards are situated.
If they thought there were no hope of British shipbuilding becoming competitive, the Government would be proposing quite different measures designed
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to facilitate the declining years of a once-great industry. But the Government believe that the Geddes Report provides the necessary plan for success and that the assistance provided under this Bill gives the industry the necessary support in reorganising itself to meet world competition. But it is on the will and efforts of those in the industry, management and workers alike, that success will ultimately depend. It is to them that the Bill presents both an opportunity and a challenge: and it is in the belief that the right and proper role of the Government is not to relieve this or any other industry of the need to be competitive but rather to lead and assist the industry to meet the competitive challenge that I ask the House to give this Bill a Second Reading.
Moved, That the Bill be now read 2a.—(Lord Beswick.)
2.58 p.m.
LORD DRUMALBYN: My Lords, I am sure the whole House is grateful to the noble Lord for his survey and presentation of this Bill. It has been introduced to your Lordships' House in circumstances of rather unusual haste. We fully recognise the need for getting it on to the Statute Book as quickly as possible, but we hope that it will not be treated with indecent haste. In particular, I hope that between now and the next stage an opportunity will be given for those noble Lords who have practical experience, either as suppliers or customers or indeed as producers in the shipbuilding industry, to consider the Bill in more detail on the Committee stage.
It can hardly be disputed that British shipbuilding as an industry is not as healthy as we should like it to be. It is not just that since 1955, while world output has increased nearly 2¾ times its level then, British output has declined by over a quarter, and the British share has dropped from 28 per cent. to 8 per cent. of world output; and that despite the fact that £60 million had been spent by the industry in the ten years following 1955, so that in the opinion of the Geddes Committee
"in general the British shipbuilding industry is not behind its competitors, so far as modern equipment is concerned";
despite the fact also that £75 million was made available to British shipowners to encourage them to buy British-built

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ships; and despite the fact that export credits were improved to make it easier for the industry to sell abroad. Indeed, in 1965, when the effect of the £75 million credits had started to wear off, 62 per cent. in tonnage terms of the industry's orders came from overseas purchasers.
At the time when the Geddes Committee was appointed, the United Kingdom's share of world output was 10 per cent. Since then, our output has remained almost stationary, while world output has risen by 40 per cent. In terms of orders placed last year, the situation is still more serious. Last year, little more than one-fortieth of world orders, in terms of tonnage, were placed in this country; and the ships that were built here were showing very little profit. A year ago the Geddes Committee said in paragraph 528:
"… it is at present the level of profitability in the industry which jeopardises its survival and not a shortage of orders ".
Now, it seems, from the first quarter's figures, it is both.
Nevertheless, the Geddes Report, together with its acceptance in broad terms by the Government, gave the industry new hope. Both the employers and the trade unions welcomed the Report. A Joint Industry Consultative Committee was set up to promote effective co-operation within the industry last May, and a Shipbuilding and Ship Repairing Council was set up in February in anticipation of the Bill. The Shipbuilding Industry Board, to which this Bill will give a proper statutory basis, a month ago reported some progress, as the noble Lord said, towards the grouping of major shipbuilding firms, which the Report recommended.
Grouping by itself will not necessarily make shipbuilding more profitable. It is by no means always the case that the formation of larger groups of industry results in a decline in costs or in better performance. But with the help of a fresh infusion of capital it could strengthen the industry financially. Most of all, it could give the industry the renewed confidence that can come from the feeling of a fresh start, provided that the industry as a whole, including its British suppliers and its labour force, recognises the problem to be faced; namely, to make British shipbuilding
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competitive in every way—in cost, design, delivery, and so on—and to restore its profitability.
As to cost, the task is formidable. Paragraph 131 of the Geddes Report says:
"The reduction in ship costs needed to make Britain competitive is some 15 per cent.…",
and then it goes on to look for economies. It is suggested that the cost of steel, which accounts for about one-fifth of the cost of merchant ships, might be reduced by 10 per cent. I hope the noble Lord will tell us what prospect there is of that saving for shipbuilding being effected. There is nothing new in price differentials for heavy plate. As the Report says, in 1931 the differential in favour of shipbuilding was over 20 per cent.
Then there is the cost of marine engines, to which the noble Lord referred. Here the Report recommended that some four groups should be formed concentrating wholly on the production of marine engines and operating separately from the shipbuilding yards. I should like to ask the noble Lord what proportion of the profits of existing marine engine suppliers comes from the production of engines other than marine engines. The Report gives no indication of this. For my part, I regard with some reserve the somewhat theoretical arguments in Chapter II, but that is no reason to object to the inclusion of marine engine manufacturing in Clause 4 as eligible for loans to facilitate grouping, provided—and this is an important proviso—that too great an insistence is not placed on the new groups confining their activities solely to marine engines. But again I would ask what saving the Government estimate can be obtained in this way.
The Report also suggests that savings may result from standardisation of equipment, better buying and stock-keeping which larger groups of shipbuilding firms, if efficiently run, could make possible. The reason why I have dwelt on this aspect is that, as the Report says:
"Nearly three-quarters of the final cost of most ships represents bought-in materials and components …"
It is obvious that if a reduction in ship costs of 15 per cent. is to be obtained, the bulk of it must come from that three-quarters rather than from the remaining quarter.

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The Geddes Committee seem to have been greatly influenced in their findings by the fact that in both Japan and Sweden over 70 per cent. of total launchings in 1964 were accounted for by firms which launched over 250,000 tons, whereas more than 250,000 tons was launched by no firm in Britain—or, for that matter, in Germany, which last year launched more tonnage than we did. In Japan, the larger firms consisted of groups of undertakings—marketing and design, as well as research and development, being usually the responsibility of the headquarters of the group. Accordingly, the Committee based most of their recommendations for Government action on a policy of encouraging groupings. They recommended a Shipbuilding Industry Board, the main purpose of which would be to nurse such new groupings by transitional grants, by loans and other methods to help groups to buy out recalcitrant companies; to provide additional working capital and to assist reorganisation by enabling groups to lay out their building facilities afresh, especially for fitting out; to provide amenities and improved working conditions for the labour force; and also, it necessary—and I hope very much that it is "if necessary"—to provide new headquarters buildings. The Geddes Committee did not altogether exclude non-conforming companies from access to loans, as they did to grants, but they suggested that they should not be eligible unless they applied by October 1, 1967. The Bill seems to be rather more favourable to such companies remaining outside groups, but no mention is made of a special time limit for application. I should like to ask the noble Lord whether he can confirm that they will be able to apply at any time during the life of the Shipbuilding Industry Board; and, if not, what time limit is to be placed. The Government have accepted the recommendations of the Committee as to the maxima of loans and grants to be made available, but have wisely, I think, left the Shipbuilding Industry Board more flexibility in the matter of loans than the Committee suggested.
There are, however, two main aspects of the Bill in which the Government have departed from the recommendations of the Committee. First, the Committee
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recommended that, purely as a temporary measure, and in order to provide the optimum flow of work during the transitional period, the Shipbuilding Industry Board should be empowered to give shipbuilders credit facilities of up to £30 million for ships ordered by British shipowners on the same terms as those now available for those ordered by foreign shipowners. Instead, the Bill enables the Minister, on the recommendation of the Shipbuilding Industry Board, to guarantee bank loans, as the noble Lord said, of up to a total of £200 million outstanding at any one time on orders placed after February 15, 1967, by United Kingdom shipowners in United Kingdom yards. There is no reference in the clause to the transitional character of the arrangement, but presumably it will lapse with the expiry of the Act in 1970 or 1971. Is this the intention of the Government?
At present, British shipowners have been discouraged from buying British-built ships because the kind of credit terms which foreigners can get were not available to them for British-built ships, but were available if they ordered foreign-built ships. That does not seem sensible, given the international character of the market for ships. But the Bill places conditions on the availability of such guarantees. That is in subsection (3) of Clause 7. First, as laid down in the Bill, the firm from which the ship is ordered must have put into effect a reorganisation of the resources used by them since the commencement of the Act, or have made satisfactory progress in planning for such reorganisation; and it is also necessary that that reorganisation has led, or is likely to lead, to increased efficiency in the use of those resources. Second, the order must be consistent with, or must contribute to, that increased efficiency.
My Lords, I shall be grateful if the noble Lord will try to justify this discrimination between British shipbuilders in the matter of guarantees. Firms which have already reorganised, or do not need to reorganise, will be at an unfair disadvantage in securing orders from British shipowners—but not, of course, from foreigners—in comparison with firms who only start to reorganise after the commencement of the Act. Surely that is wrong.

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The second departure from the Committee's recommendations is in Clause 6 which enables the Shipbuilding Industry Board, with the consent of the Minister, to acquire an equity in a shipbuilding group or company instead of, or as well as, making a loan. As the noble Lord has stated, the Committee considered State participation in the form of partial ownership which they said "has some characteristics in common with all nationalisation", and rejected it. In paragraph 333, they said:
"We have made our recommendations on the basis that there will be a high degree of co-operation on the part of the industry with the Board, and in these circumstances we are not recommending nationalisation or State participation as necessary to the improved competitiveness of the industry."
It is possible to argue, as the noble Lord said, that a group might prefer to receive Government money in return for a share in the equity; and well they might, for it would relieve them of a fixed charge. Perhaps also they might feel that if the Shipbuilding Industry Board participated in the ownership it would be more likely to treat them more generously. But it is for that very reason that it seems wrong to give this option. Their competitors would be bound to suspect that the Shipbuilding Industry Board would be more favourably inclined to a firm in which it had an interest, whether or not the suspicion was justified. The Shipbuilding Industry Board should not be exposed to such suspicions.
My Lords, how unsound the proposal is is revealed in Clause 10 (7) which makes it clear that the Minister must pay into the Exchequer out of moneys provided by Parliament—that is, out of his Annual Vote—a sum equal to that paid for the shares. I invite the noble Lord to tell the House how much is provided in the current Vote of the Ministry of Technology for this purpose.
LORD BESWICK: My Lords, I am sorry, but I did not quite follow the noble Lord. Would he define the purpose to which he referred?
LORD DRUMALBYN: My Lords, if the noble Lord will look at Clause 10(7) he will see that it says:
"Where under an agreement made by virtue of section 6(1)(a) of this Act indebtedness in respect of any amount is discharged by the
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issue of shares, the Minister shall out of moneys provided by Parliament pay into the Exchequer a sum equal to that amount, and subsection (6) of this section shall apply to any such sum as it applies to a sum which represents repayment of the principal of a loan made by the Board."
If I understand that aright, it means that the Exchequer issues the loan. Then the Shipbuilding Industry Board buys the shares; but the Minister must pay to the Exchequer the equivalent of the sum he has already had advanced from the Exchequer. In other words (if I am right in my reading of the subsection), he must give it in the form of an Annual Vote out of moneys provided by Parliament. I do not know whether it means that; but it certainly looks as if it does. I should be grateful if the Minister could tell me whether or not that is so. Quite apart from this, it surely would be wrong if a group or company eligible for financial assistance under the Bill were to be refused it merely because they refused to concede a share in the equity to the Shipbuilding Industry Board. I do not think that anybody in any part of the House would disagree that that would be wrong.
My last point relates to the requirement that grants and loans must have the approval of the Minister. The whole justification for the outlay of up to £37½ million—not a small sum—is:
"to promote the ability of the shipbuilding industry to compete in world markets ".
It cannot go on competing unless it becomes more profitable; and certainly not on the present scale. Better marketing under group arrangements will be of no avail unless the ships that are built are competitive and profitable. Time and again the Committee emphasised that profits will depend mainly on reducing costs. I have already dealt with some aspects of that.
My Lords, where lies the greatest scope for reducing costs? Surely, in better industrial relations and a better use of human resources. In paragraph 106 of their Report the Committee said:
"Capacity in fact is determined at any time by the supply of the scarcest factor, and there can be little doubt that this is now manpower."
What manpower there is should surely be more efficiently used. As to attracting more, the Committee said, in paragraph 416:
"The growth of competitiveness is the surest way for the industry to offer attractive regular employment to a substantial labour force,

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with the possibilities of a career for those who desire it."
First, therefore, the chapters on Industrial Relations should be implemented. It is no use pumping public money into an industry unless its greatest weakness is remedied. I therefore ask the noble Lord this direct question: Will the Minister withhold his approval for grants and loans unless progress has been made, and looks as if it will continue to be made, in industrial relations?
The main recommendations of the Committee were that new national negotiating and consultative machinery should be established; that yard agreements and productivity bargains should aim at a reduction in unit costs, and that unions should review their organisation, staffing and relationships, with a view to the reduction of the number of unions, possibly to five. I hope that the noble Lord will be able to tell us what progress has been made here and what is in prospect. We all want to see in these islands a prosperous shipbuilding industry. But it is only by a concerted effort of will, and by co-operation on the part of all concerned, that this will come about. Without it, there is little point in this Bill. The justification for this Bill must be in the hope that it will help to bring about this co-operation. But a heavy responsibility rests on the Government so to use the powers in this Bill as to bring it about—a responsibility which they are sharing with. but not handing over to, the Shipbuilding Industry Board; for they retain powers of direction and consent.
So, my Lords, in giving support to this Bill from these Benches, subject to the reservations which I have expressed, I would draw attention to the strong words of the Geddes Committee, in paragraph 501 of their Report:
"Therefore we propose that the Government should not commit itself to this temporary assistance unless the industry indicates its own willingness to make the necessary adaptation, and that steady progress by the industry be a condition of the extent of the assistance given within the proposed ceiling figures."
And the most important of the adaptations, in my view, lies in industrial relations. While on purely economic grounds there may be no case for retaining a shipbuilding industry in Britain at any particular level, or at all, if national resources could be better em-
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ployed, I cannot conceive that the greatness and even the independence of this country could endure without a strong shipbuilding industry—strong, competitive and profitable. I hope that this temporary measure will achieve its purpose.
3.19 p.m.
LORD BARNBY: My Lords, I should like to welcome the underlying principles of this Bill; indeed, I would congratulate the Government on having decided that something ought to be done about this industry; but my support would be subject to the reservations that my noble friend on the Opposition Front Bench has just expressed. This, I think, is the second industry of its kind which has been tackled by legislation, excluding the nationalised industries. It may well be that in future such projects as these could, with propriety, be applied to some other industries of a fragmented character which may temporarily be experiencing difficulties and unemployment because of the poor results of the operators. Two major attacks have been made on the cotton industry where there is redundancy. but that was achieved not quite in the way intended but more particularly by an accelerated flow of imports.
I would ask the Minister, in respect of the shipbuilding industry, whether he is able to expand somewhat on the reason why it was not possible to incorporate into this intention some part of the operations of the previous shipbuilders' mutual association. That seemed to make good sense as it achieved a substantial reduction in the redundancy which existed at the time. If my memory serves me aright, it was the efforts of Sir James Lithgow, who had the most modern yard in the country and who, before anybody else, was willing to sacrifice his yard, that got the acceptance by the industry of that principle. It seemed to have the effect of persuading all the members of the industry to make some contribution and sacrifice to the general aim.
The other point on which I hope the Minister may expound is in relation to Clause 7. As he explained, provision is made for loans up to a large amount, but the period or the limit of the loan is not specified, so far as I can ascertain from reading the Bill. My purpose is to ask whether the Minister can say something with regard to the Export Credits

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Guarantee Department. Hitherto in respect of shipbuilding, as is the case in other operations overseas such as civil engineering work, long-term credits—up to ten years, I believe—have been granted. I have never been able to understand how it is that what in substance means sales made abroad under the advantage of these long credits did not have an adverse effect on the balance of payments. It may be that the Minister can explain how it is that in this Bill, instead of being committed to a long term like that, loans are to be made internally, but will yet attract repayment for the ships, when they are delivered, in advance of what would be the case if, as previously, they were subject to the provisions of the Export Credits Guarantee Department on an extended term; because the difference could be substantial.
In my last remarks I would voice what I think all your Lordships hope: that the imposition by the Government on this great industry, or the offering to it, of a definite new modus operandi, will afford a good example to other industries in dealing with what we have been given to understand is one of the handicaps in shipbuilding—namely, controversy over lines of demarcation. If the provisions in this Bill help to achieve progress in resolving those distressing difficulties my gratitude to the Government will be all the greater for their having seen their way to introduce a measure with this underlying principle.
3.25 p.m.
THE MARQUESS OF ABERDEEN AND TEMAIR: My Lords, I had not intended to take part in the debate on this Bill, but I should like to say how, from my long personal experience in shipbuilding, I welcome first the Geddes Report and its application by the Bill. It is hoped that we shall have further discussions on the Bill at a later stage, but the reason I venture to make a few remarks now is that I started my working life as a member of the shipwrights' trade union, and I often claim that I have never been able to find anyone else who actually did the same work of bending iron shrouding to twin-screw ships going to the Far East where at that time iron was thought to be better than steel.
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One learns to improve upon that sort of thing as the years go by.
A very important point in respect of shipbuilding which I have always before me is that it engages such a number of other industries. It is not merely the question of the main engines. Every part of the ship provides work for other industries—engineering, structural engineering, woodworking and so on. We shall never get back to the times about which I speak when I was a member of the shipwrights' trade union and when the output of ships from the Clyde was equal to the output in the whole of the rest of the world. We have lost that position because other people have started from "scratch" whereas we had to improve on what we started doing, which was building wooden sailing ships. So we have a number of trade unions with their lines of demarcation to-day. I support the Bill and I hope it will receive close attention. One point which has been mentioned is that the Geddes Report avoids any idea of the nationalisation of the industry, though financial help is to be given from public resources by the Government.
3.27 p.m.
LORD BESWICK: My Lords, I am grateful to the noble Lord, Lord Drumalbyn, the noble Lord, Lord Barnby, and to the noble Marquess, Lord Aberdeen and Temair, for the welcome they have extended to the Bill. I should like particularly to thank the noble Lord, Lord Drumalbyn, for the constructive way he examined the proposals in it. As I understood him, the noble Lord gave notice that there would be a much more thorough examination of those proposals during the Committee stage. I accept the warning he has given, and if he will allow me to do so I think I can better serve his purpose by regarding some of the questions put to me this afternoon as advance notice of the sort of points he proposes to raise on Committee stage. Perhaps we may have a more useful discussion if I leave some of them until I have had an opportunity to study rather more carefully some of the rather complicated points posed to me this afternoon.
The noble Lord asked about steel and the possibility of a price differentiation for the steel used in shipbuilding. He is, of course, quite right: the Geddes Committee recommended that there should be

21
new price arrangements for shipbuilding steel as an essential preliminary, as the Committee thought, to their programme for the industry. But, as the noble Lord will recall, they recommended that there should be a commercial negotiation between the shipbuilding industry on the one hand and the steel-producing industry on the other. There have been discussions, and there has been some progress towards a new basis for the industry, but the fact is that as yet there has been no conclusion to the discussions about the possibility of a special price for steel for this industry. Therefore, I am not able to give the noble Lord any further information, other than to say that the discussions still continue.
I was also asked about the time limit for guarantees provided in the Bill. The answer to that is that there will be no further guarantees after the life of the Shipbuilding Industry Board though the term of the guarantees will extend beyond that and will be of the order of eight years.
LORD BARNBY: My Lords, are we to understand from that that the mechanics of the Export Credits Guarantee Department will no longer be aplicable to shipbuilding?
LORD BESWICK: NO, my Lords, the noble Lord should not understand that. This Bill will make no difference at all so far as export credit guarantees are concerned. There will be no new guarantees under the Bill when the Board comes to an end but, of course, there will be a continued existence of the agreements reached during the life of the Board. And, as I have already said, it is expected that the average term for these guarantees will be of the order of eight years.
The noble Lord also asked whether the guarantees under Clause 7 would be dependent upon grouping schemes. The answer is that they will not, but the noble Lord will see that in subsection (3) of the clause specific reference is made to the necessity for the reorganisation of resources. It would be held as essential that there should be more efficient use of the resources at the disposal of any one concern, whether it be a new group or not. I hope that the noble Lord would agree that there is a necessity for shipbuilding concerns in this country to get a better
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utilisation of the resources at their disposal. The view of the Government is that there is not a single yard in this country at the moment which does not need to carry out some reorganisation to get the maximum utilisation of the resources at their disposal.
LORD DRUMALBYN: My Lords, this is an important point. If this is so, it means that a discrimination is drawn between those firms which reorganise and those which do not, perhaps because they do not need to or because they may have already done their reorganisation—a discrimination which does not exist in the supply of ships for export, for which export credits can be obtained whether or not the builders reorganise. If we divide the industry into half for export and half for home, it will mean roughly that half will be on a discriminatory and half on a non-discriminatory basis. I am not sure that that is justifiable.
LORD BESWICK: My Lords, the noble Lord may not be sure that it is justifiable, but the Geddes Committee and the Government, having looked into this industry, have come to the conclusion that there is no one part of it that is not capable of improvement. The whole essence of this discrimination is that Government moneys will not be forthcoming unless there is some evidence that the company concerned is prepared to put its own house in order. If it was in the sort of order which the noble Lord has indicated, there would be no purpose in this kind of special financing. I repeat that the loans will be given only on the recommendation of the Board. If the Board came across a company which could show that its yard was in such perfect order that no further reorganisation was required, there is no reason why they should not be forthcoming in the way of a recommendation. But the expectation is that in every case there will have to be some undertaking that the company is prepared to improve the use of the resources at its disposal, even though it is not necessary to have a wider linking with other companies.
The noble Lord, Lord Barnby, asked me about National Shipbuilders' Security Limited. As I recall, that was a body which in the 'thirties, when some of us were just entering politics, was concerned to put yards into "mothballs".

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Its principal contribution was to close down yards. The Geddes Report says that closures in themselves do not help the basic problems of the industry. We want to be more constructive and give an incentive on a discriminatory basis to yards to improve their efficiency.
LORD BARNBY: My Lords, perhaps the noble Lord's memory is better than mine. My recollection was that certain yards were definitely eliminated, and that formed the basis for comparable arrangements with regard to redundancy payments in other industries.
LORD BESWICK: My Lords, as we have seen in recent weeks, it may well be that some closures are necessary, but the essence of this Bill is to get efficiency of yards rather than their elimination. Although rationalisation is called for, we hope that the emphasis will not be on "mothballing", as was the case in the 'thirties.
The noble Lord asked about loans for the main engine side of the industry. The way in which he put the question was whether there was any evidence that a reorganisation would produce any improvement of efficiency, and he asked whether I could quantify these results. The noble Lord was inclined to think that the Geddes Report is too theoretical so far as the examination of the main engine firms is concerned. It is possible that the Report is theoretical, but I must say that the Committee's theory was simple and appropriate.
I am not able to give the noble Lord any figures as to the expectation of savings, but if a firm is turning out only two or three engines a year—as I understand was the position before—it seems very unlikely that it is using its facilities to the utmost or on the most efficient basis. In such a case, some element of reorganisation is essential. I have not heard this disputed before. I frankly say that I cannot quantify the results in the shape of any figures of ultimate costs.
The noble Lord also asked about the provision in the Bill for shareholding participation by the Government. I was not surprised to hear that the noble Lord had his fears about this. I thought that one of the fears he expressed was reasonable: the fear that assistance might be withheld unless a firm was prepared to
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accept assistance on an equity basis. I should like time to consider this point, so that I can let the noble Lord have a more definite answer than I can give to him at the present time. Beyond that, I can only repeat what I have already said: that the intentions of the Government are above board. The object was simply to enable money to be advanced in such a way that if there were expectations of profit the public purse should be able to share in those expectations; and, secondly, that it would enable the Shipbuilding Board to take a more active part in any reorganisation in certain cases.
The noble Lord stressed—and I thought quite rightly—that, ultimately, if we were to get a saving in production costs and the utmost efficiency in the shipbuilding industry, we had to get the maximum use of human resources and the best possible human relations in the industry. I agree with the noble Lord that this is an industry with a long history of unfortunate labour relations, which only recently have shown signs of being put on to a new and better basis. I agree with the noble Lord that this is an essential factor in the whole problem. But I think he will agree with me that there is nothing worse, so far as labour relations are concerned, than the niggling feeling that men are being asked to give of their services and their labour in an industry which is inefficiently organised, and when the basis is unsound. While I agree that we must get an improvement in labour relations, I believe also that we shall not secure the sort of labour relations and the use of human resources that we want unless the structure of the industry is basically efficient. It is because we believe the provisions of this Bill will enable the restructuring to proceed on the right lines that I am asking the House to give it a Second Reading.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

TRADE NEGOTIATIONS: THE KENNEDY ROUND
3.43 p.m.
THE PARLIAMENTARY SECRETARY, BOARD OF TRADE (LORD WALSTON): My Lords, with the permission of the House, perhaps at this stage I may repeat a Statement which has just

25
been made in another place by my right honourable friend the President of the Board of Trade. The Statement is as follows:
"The essential elements of agreement in the Kennedy Round of trade negotiations were reached on May 15. The Secretariat of the GATT are now engaged in compiling the detailed results of the bargains made both multilaterally and in the numerous bilateral negotiations between individual participating countries. I shall in due course present to Parliament a White Paper setting out these detailed results so far as they affect this country. In the meantime, I can give the House a general account of what has been done.
"Reductions in industrial tariffs will be very substantial. So far as can be judged now, the average reductions made by the major trading countries in their tariffs on industrial goods will be over 35 per cent. This compares with the average of about 7 per cent. achieved in the previous Dillon negotiations completed in 1962. The bilateral arrangements between the United Kingdom and the European Economic Community, the United States and Japan provide for reciprocal reductions which are estimated to average 37 per cent., 38 per cent. and 33 per cent. respectively and affect well over 70 per cent. of our exports to them. British exporters will also benefit from reductions in most favoured nation tariffs negotiated bilaterally between other participants. Large reductions in chemical tariffs have been agreed, and the United States has undertaken to seek legislative authority for the abolition of the American Selling Price system which affects trade in benzenoid chemicals. As a contribution to the final settlement, which called for concessions from all the main participants, the United Kingdom agreed to reduce both its ad valorem and specific duties on iron and steel by 20 per cent.
"The world-wide reductions in tariffs will begin to be made in 1968 and will normally be spread over five stages.
"A new code of practice for dealing with allegations of dumping has been agreed which should be of considerable benefit to British exporters.
"For the first time in the history of such negotiations, the Kennedy Round
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settlement includes a substantial agricultural element. The essentials of an agreement covering trade in cereals have been agreed. These provide for minimum and maximum prices for wheat; the minimum price is above that of the existing international Wheat Agreement, but below current price levels. They also provide for a food aid programme totalling 4½ million tons a year for the benefit of the developing countries. The British contribution to the cost of this programme will be 5 per cent.
"The less developed countries should gain considerably from the settlement, which included reductions of barriers to trade in tropical products, primary materials and manufactured goods of interest to them.
"I regard the outcome of these protracted negotiations as highly satisfactory and of great advantage to British industry. The high degree of success achieved must be attributed to the wisdom and patience of the negotiators, and particularly of the Director General of the GATT, who played a vital part, notably in the final stages."
LORD DRUMALBYN: My Lords, I should like to thank the noble Lord for the Statement he has just made. I suppose the broad lines of it were already known from what has been said in the Press, but from what the noble Lord has told us to-day it is none the less welcome. This has been a long haul, stretching over something like four years. The outcome, which came at the last moment, was due, as the noble Lord said, very much to the Director General of GATT, and I should like to join with the noble Lord in expressing the great appreciation that is felt of his efforts to secure this general agreement.
It would be inappropriate for me to go into any detail on this, particularly as we are to have a White Paper, and perhaps, if necessary, we can have an opportunity of discussing it. However, I should like to ask one question. The noble Lord said that the world-wide reductions in tariffs will begin to be made in 1968, and will normally be spread over five stages. Does that mean that each stage is an annual one, or will it take a much longer time, or possibly a shorter time than five

27
years, to bring the whole thing into operation? The only other point is this. I am sure we all welcome the new code of practice for dealing with allegations of dumping. I would hope that the United States Government will be successful in persuading Congress to abolish the American Selling Price system.
LORD BYERS: My Lords, I, too, welcome the Statement and would express congratulations to the participants in the Kennedy Round negotiations on achieving such a successful result. I should like to ask one question on the new code of practice for dealing with allegations of dumping. Can the noble Lord give any indication as to when those details may be published?
LORD PARGITER: My Lords, before my noble friend replies, could he say a little more about the reduction of ad valorem and specific duties on iron and steel, and what we get, particularly from Europe, in respect of that?
LORD WALSTON: My Lords, the questions get more difficult as we go on. To deal first with the points raised by the noble Lord, Lord Drumalbyn, the answer is that this is in five annual stages, and it is the hope that by 1972 the whole of the Kennedy Round Agreement will be put into practice. So far as dumping is concerned, this is, as the noble Lord well knows, a highly complicated matter, and I hope that this will be one of the matters that will be dealt with and explained fully in the White Paper which will be published as soon as possible. The complexity of the subject is one of the reasons why the White Paper is not available at present.
With regard to my noble friend's question about iron and steel concessions, it is not possible simply to say that in return for this we receive that. The whole matter was a complex system of bargaining, in which major concessions were made by all the participating countries; and reduction in iron and steel duties was a very large part of our own contribution to those concessions. I think the important thing to emphasise is this very considerable 35 per cent. reduction in the tariffs which affects approximately 70 per cent. of our exports to the major trading countries, and that clearly will be of enormous benefit to the whole of
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British trade. So, even though we have made concessions, we must remember that we cannot in any bargaining get everybody else to make a concession and make none ourselves. I am satisfied that we have a good bargain out of this.
LORD BLYTON: My Lords, is my noble friend aware that I should like to congratulate everybody in the negotiations on the Kennedy Round? It is an outward looking thing in the economic field. Can he tell us why we should therefore pursue the Common Market negotiations?
LORD DRUMALBYN: My Lords, I wonder whether I might ask the noble Lord one more question. When the White Paper is published, will it say how the interests of Commonwealth countries which enjoy tariff preferences in this country are affected on those preferences?
LORD WALSTON: My Lords, that will certainly be set out in the White Paper. There are considerable benefits to Commonwealth countries in reductions in tariffs from countries other than ourselves. I can assure the noble Lord that their interests have by no means been forgotten. I think one can safely say that in most cases they are fairly well satisfied.
I am grateful to my noble friend Lord Blyton for his kind remarks and for his added congratulations. It is certainly true that the Kennedy Round is an outward looking achievement. It will promote world trade, and we hope that any future negotiations of any associations elsewhere will have an equally happy result.
LORD BLYTON: Our Government were against it.
THE EARL OF SWINTON: My Lords, I do not know whether it is possible—not in the White Paper, but in some other document—to show how the rate of duty, after this Round is over, compares with rates of duty under the Common Market. It would be an extremely interesting comparison to see, if it is at all possible to give it.
LORD WALSTON: My Lords, I will certainly bear that in mind. We do not want to make the White Paper too voluminous; we want it primarily to show what has in fact been achieved by

29
the Kennedy Round. But I think the noble Earl's suggestion is very valuable.
THE EARL OF SWINTON: My Lords, I think it would be quite inappropriate to put that information in the White Paper, which will deal with what has been achieved. On the other hand, it would be extremely useful to know—perhaps it could be done through some public relations document of some kind—how the two compare.
LORD HAWKE: My Lords, did the discussions embrace also the internal taxation policies of any of these countries?—because the internal tax levied on tropical produce by some of the continental countries is much more devastating to the economy of the tropical country than are tariffs.
LORD WALSTON: NO, my Lords, they dealt with tariffs and similar types of restriction on imports. That was all that was dealt with.
LORD BROCKWAY: My Lords, could my noble friend say whether the advantages extended to the Republic of South Africa, which afterwards withdrew from the Commonwealth, are to be maintained?
LORD WALSTON: My Lords, with great respect, I do not think that that is a question which arises from this Statement or, indeed, came into the Kennedy Round.

MARINE, &c., BROADCASTING (OFFENCES) BILL
3.55 p.m.
Report of Amendments received (according to Order).
THE LORD CHANCELLOR (LORD GARDINER): My Lords, I think I ought to point out to your Lordships that Amendment No. 1 pre-empts Amendment No. 2. If, therefore, Amendment No. 1 is carried, Amendment No. 2 cannot be moved.
Clause 5:
Prohibition of acts relating to matter broadcast from ships, aircraft, etc.
5.—(1) A person who does any of the acts mentioned in subsection (3) below, and, if any intent or circumstances is or are specified in relation to the act, does it with that intent or in those circumstances, shall be guilty of an offence if—
30
(a) he does the act in the United Kingdom or external waters or in a ship registered in the United Kingdom, the Isle of Man or any of the Channel Islands or an aircraft so registered while the ship or aircraft is elsewhere than in or over the United Kingdom or external waters; or
(3) The acts, and, where relevant, the intent and circumstances, referred to in subsection (1) above are the following namely:—
(f) publishing any advertisement relating to a station from which broadcasts are made as aforesaid or are to be so made or the times at which any broadcasts are to be so made.
(5) For the purposes of this section advertising by means of a broadcast shall be deemed to take place as well wherever the broadcast is received as where it is made.
VISCOUNT COLVILLE OF CULROSS VISCOUNT COLVILLE OF CULROSS moved, in subsection (3)(f), to leave out from the first "made" to the end of the subsection. The noble Viscount said: My Lords, my noble friend Lord Drumalbyn and I have put down two alternative methods of dealing with the problem that arises under Clause 5(3)(f).
LORD SORENSEN: My Lords, may I suggest to the noble Viscount—he may have been about to suggest it himself—that we might take the first five Amendments together. If it is more convenient to the House and to him, I shall be pleased to do so.
VISCOUNT COLVILLE OF CULROSS: My Lords, I am obliged to the noble Lord. He in fact took the words out of my mouth. It seemed to my noble friends and myself that this was a matter that certainly ought to be discussed again. Your Lordships may recall the brief debate that took place on the Committee stage. On that occasion the noble Lord, Lord Sorensen, expressed himself as being concerned about this particular point; and he also—and this I was extremely glad to hear—appreciated that this is intended to be a constructive move on the part of my noble friend and myself. He went so far as to say that the wording on that occasion—it was dealt with by my noble friend Lord Denham—might have some merit. In those circumstances, I should have expected the Government to put down an Amendment on the Report stage. They have not done so, but I do not suppose there is anything sinister in that.

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The problem was set out before, and it is simply this. As the Bill stands at the moment it deals with advertisements relating to a pirate radio station. Although to the outward eye, when one first looks at the Bill, there is nothing of great significance in the word "advertisement", and it might be expected to be the ordinary sort of advertisement, it became quite clear at an early stage in another place that the Government intended the word to have a rather wider usage. That being so, it has been the view of my noble friend and myself ever since that we ought to try to be more specific about what exactly is meant, and that the drafting of the Bill ought more accurately to reflect what the Government had in mind.
The difficulty is this. I understand that certain items which might ordinarily be thought to be editorial comment of one sort or another may be considered to be offensive within the terms of this subsection; and, of course, as a result prosecutions may follow. It is quite true that they would take place only at the instance of the legal authorities, the Attorney General and his opposite numbers in Scotland and Northern Ireland. But, nevertheless, it must be clear that the Press want to know what they can safely publish and what they cannot. I think it is incumbent upon the Government to say a little more about the situation on this point than has been previously said at any rate in this House. I shall leave my noble friend Lord Drumalbyn to deal with his own suggestion, and perhaps he can say—I think it goes a little further than mine—to what extent that is so.
So far as my own two Amendments, Nos. 1 and 4, are concerned, they are intended—and I hope they are not too obscurely drafted—to pick upon the point about details and times of the broadcasts, and to include that as part of the meaning of "advertisement", so it will be caught by the penal clauses of the Bill; and also to specify rather more carefully what sort of editorial comment shall be an offence. I have done my best to take the words used in the Committee stage by the right honourable gentleman the Postmaster General and have put them in what seemed to me, at any rate, to be perhaps a not wholly inappropriate legis-
32
lative form. If they are accepted, then I think we may know where we are. Otherwise—and this was the point Lord Denham made in Committee—the only possible result will be that there will have to be test cases before anybody is sure.
It cannot be desirable that, in a matter of what I believe to be considerable public interest, the Press will not know where it stands until a criminal prosecution has been brought, either successfully or unsuccessfully, possibly after an appeal to a higher court, taking, it may be, six or seven months. In the mean-while, no doubt the public will want to know whether this Bill has been successful or not. Supposing it is not successful, and supposing certain radio stations still continue to broadcast. I am not saying that I advocate it, but supposing it is the case. Will the Press be able to say so or will it be caught? This is the sort of practical problem that will arise, and if we do not change the wording in subsection (3)(f) I think there will be very great uncertainty indeed.
I shall be extremely interested to hear what the noble Lord, Lord Sorensen, has to say about this. I hope he will have had an opportunity now fully to consider this point and that he will be able to give some view on which, if either, of our wordings is correct. Possibly he may be able to make some suggestions himself, since we still have the opportunity to amend the Bill at the Third Reading stage. I beg to move.
Amendment moved—
Page 5, line 34, leave out from ("made") to end of line 35.—(Viscount Colville of Culross.)
LORD DRUMALBYN: My Lords, as we are discussing all these Amendments together it may be convenient for me to indicate the lines along which my mind worked in putting down' these Amendments. There is, I believe, no statutory definition of an "advertisement" in general, although there are many interpretations for the particular purposes of different Acts. "Advertisement", therefore, is rather like the elephant: you know what it is, but you cannot describe it. However, it may be of interest to your Lordships to know that there is one definition which has been given a good deal of currency and

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I think is regarded as being up to date. The 1964 edition of the Encyclopædia Britannica says:
"An advertisement is a form of paid public announcement intended to promote the sale of a commodity or service; to advance an idea or bring about some other effect desired by the advertiser."
I notice that in another place the Minister said that an advertisement need not be paid for. In a sense, that is true—but only in one sense: only if the publisher himself has a direct interest. In that event he in fact becomes the advertiser. So he is then in the same position as the person who erects an advertisement in his own garden. He is not paying for it, but there is a value attaching to it.
The way in which the Government appear to have proceeded is to leave the whole matter vague, in the hope that people will all be very careful what they say. I think I ought to warn the Government—and I have not an interest to declare, because although I have to deal with advertising I have no financial interest in it. In fact, it was the Press Council who asked me to interest myself in this matter, and I think I ought to warn the Government that it is most unlikely that the Press, with its strong tradition of complete freedom of expression and conduct, would be likely to feel in any way bound by what they said or reported in the way of news, editorial comment, and the like. In fact, if it is left vague they may do exactly the opposite, and they may be inclined to be provoked into giving rather more attention than they would otherwise do to the very matters to which the Government would not like undue publicity to be given.
The points I had in mind were the following. Paragraph (f) of Clause 5(3) refers to:
"publishing any advertisement relating to a station from which broadcasts are made as aforesaid or are to be so made or the times at which any broadcasts are to be so made."
I think that is quite clear. Then we go on—and I quite see the difficulty of the Government here. The timetables of the B.B.C. and the I.T.A. are published in the newspapers. These are not advertisements. They are not paid for, and they are published by the newspapers strictly on the basis that they are news; otherwise, they would not publish them. In the battles of the 1920s the B.B.C. were not prepared to pay for advertisements,
34
and Lord Reith thought that these time-tables ought to be published, and so eventually the Press decided to publish them, but strictly on the understanding that they were news and not advertisements.
I can see the difficulty of the Government in this connection. For example, the newspapers might think it proper to publish the timetables and details of the programmes as news, without being paid for them at all; and the Government do not want that. That is why in my Amendment I have made it quite clear that instead of saying "any advertisement" of the times at which broadcasts are to be so made, the Bill would say "any intimation or other indication of", and so on. I would commend that Amendment in particular to Her Majesty's Government because it seems to me to be a good one.
Doubtless it is not only the times at which the broadcasts are to be made that the Government do not want published, and therefore my second Amendment seeks to add, after the words:
"the times at which any broadcasts are to be so made"
the words:
"or of the content or other particulars of any broadcasts which are to be so made."
We then come to Amendment No. 5, which perhaps I may discuss at the same time. This accepts the ordinary usage of the word "advertisement" but extends it to cover hand-outs; in other words, it covers not only a paid-for advertisement but a hand-out made by, or on behalf of, any of the operators: and not merely by them, but also on behalf of them. Handouts prepared by public relations firms, and the like, nowadays are not advertisements, and if they are published they do not form advertisements in any usual sense of the word. The Press will publish them only if it considers that they are worthy of publication for their news or editorial value.
I can see the difficulty in which the Government find themselves here, too, and my object is to help them, if I may presume so to do from the Opposition Benches, by trying to cover this particular point without in any way impinging on the freedom of the Press. I think the freedom of the Press to report that somebody has fallen off a rock at one of these stations, and to report news and make editorial

35
comment, ought to be preserved, and I have not attempted to cover the reporting and criticism of programmes. I am somewhat in two minds as to whether it would be right to try to do so, but it is quite certain that only if the newspapers were receiving some kind of consideration for publishing articles—in other words, if the newspapers had shares in one of the illegal broadcasting outfits, or received any kind of consideration whatsoever (and in that case I am inclined to think it would then become a paid advertisement), would they come within the ambit of the Act.
I hope that I have made clear the purpose of my Amendments. I think it is extremely important to maintain the complete freedom of the Press to comment and report, and to let the Press know exactly where they stand in this matter.
LORD SORENSEN: My Lords, I should like to assure the noble Viscount, Lord Colville of Culross, and the noble Lord, Lord Drumalbyn, that I am most grateful to them for putting down these Amendments and also for giving some reasons for them beforehand. I am particularly grateful because it helps me to fulfil an assurance which I believe I gave in the last discussion which we had on this matter, that at a later stage we should be able to discuss precisely the matters which have been discussed to-day. I am also grateful that all these Amendments, covering the same subject and with the same intention, are being taken together.
Throughout the course of this Bill various ways of re-drafting or amplifying paragraph (f) of Clause 5(3) have been considered. Here I would say I fully appreciate that the Amendments put down are of a constructive nature, and I share the apprehension of noble Lords, particularly in regard to the possible restriction of the freedom of the Press. The object in each case has been to remove any uncertainty which may arise from the absence of any definition of the word "advertisement" for the purposes of the Bill, but they have all highlighted the difficulties of trying to predetermine the issue for every particular circumstance. I confess I was surprised to find that there was no adequate definition of the term "advertisement", and although reference has been made to the Encyclopædia Britannica I am not par-
36
ticularly impressed by that definition. It is after all, only the definition of one man or group of men in the background.
I should have thought that in some circumstances it is possible to envisage gratuitous advertisement, appearing not for any pecuniary advantage or remuneration at all but simply for interest on the part of the editor. Be that as it may, the Government have considered this matter very carefully indeed, and after prolonged thought they are of the opinion that, for reasons I will elaborate in a moment or two, it is better not to attempt to alter the existing wording of the Bill under which the interpretation of the word "advertisement" is quite deliberately left, in the ultimate, to be determined by the courts.
Perhaps it would be helpful if I enlarged on this point and explained the problems involved, though some have been touched on already. The European Agreement requires its signatories to legislate against
"the provision of services concerning advertising for the benefit of the stations".
This paragraph is intended to implement that provision. However, it is not the Government's intention to penalise the publication of editorial comment or of genuine news items concerning the pirates, both of which could not be regarded as other than normal activities of the Press. It is on this point that the Amendments put down by the noble Viscount, Lord Colville of Culross, and the noble Lord, Lord Drumalbyn, seem to be defective. I say that with all due respect, because I repeat that what has been said in regard to these Amendments not only is constructive but also contains, I think, certain substance. Nevertheless, on balance, after much consideration, the Government have decided that it is better not to attempt to alter the existing wording.
The problem is to penalise anything which is published for the purpose of promoting the interests of the pirate stations without at the same time encroaching on the right of the Press to publish genuine editorial comment or genuine news items concerning the stations. There we are all at one. It was argued in another place that the contents of a newspaper could be divided into three categories: news, comment and advertisements, though sometimes they overlap, as all categories are

37
apt to do. But the issue is not quite so simple as that, as I am sure most people appreciate. If we relied on that sort of categorisation we should merely be inviting the pirates to get their advertisements disguised as editorial comment. Obviously the reputable newspapers—and I will not specifically designate which they are—would not allow that; but there would be nothing to stop newspapers and other publications of another kind from doing it.
There is at least one newspaper devoted entirely to promoting the activities of the pirates. I have a copy on the seat behind, though I will not give it any free advertisement. No doubt it would be possible for such a newspaper to be published after this Bill came into force—a newspaper or journal, that is to say, having no connection with the pirates which could be demonstrated in a court of law. Advertisements for the pirates could easily be dressed up as comment or news items, without destroying their effect as advertisements, if the publishers merely had to get round a form of words. This is the difficulty, which I fully appreciate has been recognised by noble Lords and others, including indeed the Government itself, and the Postmaster General in particular. They have considered alternative ways of drafting the paragraph. Some of these alternatives have left loopholes, and some have gone too far in the opposite direction so that they would penalise genuine comment or news items. The noble Lord, Lord Drumalbyn, has posited that announcements should be penalised only if
"issued by or on behalf of any person who procures the making, or makes or is to make, any such broadcast as is referred to in that paragraph".
This would catch a direct advertisement made by a pirate, provided it could be proved that he had made it. However, it would not prevent advertisements in the sort of newspaper I have just mentioned, issued by people who do not themselves procure illegal broadcasts but who fully support those who do.
LORD DRUMALBYN: My Lords, would the noble Lord forgive me? I am not certain that he has quite got the point of Amendment No. 5. The advertisement is dealt with firmly in paragraph (f) already—"publishing any advertise
38
ment"—and Amendment 5 merely extends. It does not define it, it does not limit it; it is an extension of the usual meaning of "advertisement".
LORD SORENSEN: My Lords, I thank the noble Lord for his intervention. If he will allow me to go on, it may be that his point is covered. If not, he can return to the criticism. I have already said that there is no intention on the part of the Government to suppress Press freedom to state their views, however much we may disagree with them, or to prevent them from publishing news items of general interest to their readers. But we wish, and indeed are bound, to stop them from providing a free advertising service for the pirates. If the noble Lord will allow me to continue, it may be that his points are covered in part, but I am most willing, of course, for him to criticise further if he feels he must or that my reply is inadequate. Such advertisements would promote the interests of the pirates, but would not be offences under these Amendments. However blatant they were, provided the publisher could not be proved actually to be in league with a pirate station or one of its agencies he would have nothing to fear.
Indeed, the more one thinks about this problem the more one realises that the closing words of Amendment No. 5 would make the prohibition on advertising almost impossible to operate, except in the very few cases where a publisher could be shown to have received payment for advertising a pirate station's programme. In fact, the conclusion to be drawn from the difficulties which arise when one tries to draw a dividing line between advertisements, however disguised, on the one hand, and, on the other hand, news items, however favourable to the pirates, and make the division one which will hold good in all cases, is that this is a matter which must most appropriately ultimately be left for the courts. The factor which decides whether an item is an advertisement or not is its intended effect on its readers, and it will be far fairer to rely on the judgment of the courts in particular instances than to attempt to establish a delimitation for all time—an attempt which would at best be only an approximation.
I should like at this stage to refer, briefly and separately, to Amendments Nos. 1

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and 4 put down by the noble Viscount, Lord Colville of Culross. The Government considered that wording very carefully, but concluded that by prohibiting any announcement of the details of any broadcast made by a pirate station these Amendments also would penalise genuine newspaper reports of a broadcast made by a pirate station. Under the Bill as it stands it would fall to the courts to decide whether anything published about a pirate station was or was not an advertisement; and it is the Government's view, after detailed consideration and much advice, that the courts, and the courts alone, are able to do this. Unlike Parliament, which has to legislate for every conceivable situation, the courts determine matters like this in relation to the facts of each individual case, and it is only in relation to the facts of the particular case that it is possible to determine whether something which is published about a pirate station is or is not an advertisement. In most cases of genuine news or comment, of course, the problem will not even arise, since no case will be taken to the courts unless the prosecution considers that it can satisfy the court that what was published was an advertisement. And the publisher has nothing to fear unless he chooses to sail close to the wind by advertising the stations under the guise of news or comment.
I do not know whether I have satisfied noble Lords. Certainly I am prepared to listen to further comment on their part. But I hope that at least it indicates on the part of the Government an attempt to meet their point, one with which the Government are as much concerned as are the Opposition. There is this quite genuine desire to safeguard the legitimate freedom of the Press. In those circumstances, I would urge the House that Clause 5 should stand as drafted, but of course I am open to further comments by noble Lords.
4.22 p.m.
VISCOUNT COLVILLE OF CULROSS: My Lords, I hope that under this procedure that we adopted my noble friend Lord Drumalbyn may, by leave of the House, be allowed, if he so desires, to have another word, although at the present moment we are discussing only my Amendments. May I say that I greatly
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welcome what the noble Lord, Lord Sorensen, has said about this, and the great detail which he has given as to his reasons for rejecting, or suggesting the rejection of, these Amendments. However, he made one or two significant points, and perhaps I can deal with them on the basis of my own Amendments.
First of all, I think the only criticisms he made of the form of my Amendments were two. First, he suggested that when I referred to the details of the broadcasts I ought to have put it as future broadcasts, whereas I have made it general so that it would cover past broadcasts. This is a pure drafting matter, and I think could quite easily be set right. He then said that in paragraph (b) of Amendment No. 4 the matter was defective, though he did not say in what way. He has admitted that there is going to be uncertainty. He has admitted that under the Bill as drafted the situation should and can be dealt with only by the courts: they alone can say what is or what is not an advertisement.
The noble Lord went on to say that there is this safeguard: that the prosecution will not bring a case unless it thinks that it can satisfy the court that an advertisement has in fact been made. How on earth can the prosecution suppose beforehand that it will be able to do that?—because until the courts have decided a number of cases, nobody knows, least of all the prosecution, or any Member of this House, or indeed anybody, what "advertisement" is going to be held to mean under this Bill. It is no safeguard whatever to say that a prosecution will be brought only if those prosecuting think that they have the right proof, because the offence itself is not defined.
It is all very well to say that newspapers will get into trouble only if they sail "near the wind", but even on a summary conviction on this particular offence there is a fine of £400 or a maximum of three months imprisonment, or both, while for conviction on indictment there is provision for an unlimited fine or imprisonment for a maximum of two years, or both. Then if your Lordships look at Clause 6(2) you will see that, if it is a newspaper that is prosecuted, the director or the manager or the secretary, or whoever it may be, is the person who

41
may be subject to these penalties. This is a severe penalty, and I have no doubt that it is perfectly right for these offences. But it requires a certain amount of consideration before we leave it upon this basis.
Could I ask the noble Lord to consider one other matter? In the course of his speech he twice used an expression (I think what he was saying was that this was what the Government wanted to catch): "material which is intended to promote the interests of the station, or which promotes the interest of the station". I particularly noticed him using that expression twice. That is precisely what my Amendment says will be caught, and I have not heard any criticism of that particular phrase in my Amendment. It may be that there is none. The noble Lord did not really go into that aspect. I can see that it is possible that he would criticise the proof of the intention. I had expected him to do so. But he did not mention that as a difficulty, and although it may still be a difficulty, I suppose that at the moment the Government are satisfied with that particular part of it.
Is the situation not this? As the noble Lord said, we have genuine apprehension that there will be difficulties about this provision. Is it too late to have one more look at this? I can assure the noble Lord—and I am sure that I speak also for my noble friend Lord Drumalbyn—that I shall he prepared to do anything I can to help in trying to get this matter right. I know that there have been a number of attempts at drafting this clause, but I do not believe that we ought to despair where there is an accepted difficulty. I would ask the noble Lord to have one more look at this point, because there is another stage at which the Bill can be amended. Would he say that afterwards we can perhaps get together and try once more to see whether this problem can be solved in a satisfactory manner? I do not know whether the noble Lord would be prepared to give that assurance.
LORD STRABOLGI: My Lords, I should like to support what the noble Viscount, Lord Colville of Culross, and the noble Lord, Lord Drumalbyn, have said, and in spite of the full and reasoned argument of my noble friend Lord Sorensen, I believe that the position is
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by no means clear. As I understood it, my noble friend Lord Sorensen said that it was the wish of the Government not to inhibit or curtail free editorial comment. Then he went on to say that, on the other hand, they were against editorial comment when this was put out by a paper which had an interest in the subject concerned. I think the dividing line is going to be difficult to define. My noble friend Lord Sorensen said that this should be defined in the courts. But is it not unfair on the Press that they should be so inhibited in this way that any comment they make will be in danger of being taken to court? It would seem to me to be a definite infringement of the liberty of the Press to comment editorially on such matters as they think fit. It is not yet an offence to listen to pirate radio, but if this Bill is not amended it might be and could be made an offence to comment on it in any way. I hope that the Government will consider this matter carefully before Third Reading. I remember the late Lord Jowitt saying, "When in doubt, put it in the Bill". I commend this view to the Government.
LORD LEATHERLAND: My Lords, my noble friend Lord Strabolgi speaks as a really great authority on the question of advertising. I know little about advertising, but for well over forty years I was intimately concerned with the editorial side of the production of a daily newspaper, and I know the difficulties which newspapers have every night in deciding what shall go in the paper and what shall stay out. A good many of the grey hairs that I bear at the moment are evidence of the trials and tribulations I had night after night when I was the person responsible for producing the paper at night, and for putting our five or six nightly editions to bed.
I do not think one can get over the trouble which newspapers have with regard to legal restrictions. There is the question of libel, which crops up five or six times a night on any daily newspaper. I am particularly interested in this question of libel because in the whole of my newspaper career I never landed my proprietors in a libel action—I inherited one, but I never of my own action landed them in a libel. But in my very young days—this will perhaps be outside the knowledge of many of your Lordships—I was a close friend of

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the late Sir Artemus Jones who was involved in the famous Jones v. Hulton libel case. He and I often used to have a chat over a cup of tea in my house in Cheshire about the intricacies of the libel laws. He learned plenty about it because the Hulton Press landed themselves into having to pay him a very handsome sum.
We ought to leave the question of defining "advertisements" as it is in the Bill and leave it in due course for the courts to decide what is and what is not an advertisement. In my long newspaper experience I always understood that an advertisement is something which is paid for. On the editorial side we were a1-ways watching for crafty industrialists and shopkeepers who were trying to get information into the editorial columns of the newspaper without paying for it, but we never regarded that kind of thing as a bona fide advertisement. If any of your Lordships were to go along to a newspaper office and say, "I want to insert an advertisement", the first thing the newspaper would say to you is, "Well, the advertisement will cost you so much" It might clarify the phraseology of the Bill if my noble friend were able to insert the word "paid", so that the Bill referred to "paid advertisement" rather than to "advertisement", especially as the word "advertisement" has apparently never been the subject of legal definition.
There are, of course, borderline cases. I remember over forty years ago when, as a young reporter on a provincial weekly newspaper, it was my job, among many others, to report the funerals of the week in our town of 35,000 inhabitants. In addition to the bare facts of the funeral, it was the custom for my newspaper to print lists of people who had sent wreaths together with the appropriate sympathetic inscriptions. We used to charge a shilling a line for all these wreaths. The principle followed was that if an undertaker said, "I want you to insert 20 wreaths at a shilling a time", we said in our editorial matter, "The funeral arrangements were efficiently carried out by Mr. So-and-So of Mill Street"; but if the undertaker did not consent to pay for any wreaths, we merely said "The funeral arrangements were carried out by Mr. So-and-So." There are borderline cases between what is a paid advertisement and what is not. I
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believe that if we were to insert the word "paid" before the word "advertisement" it might help to clarify the matter to some extent.
I was delighted to hear from my noble friend that it is not the intention of the Government to penalise the publication of news items concerning these pirate stations. It would have been quite outrageous had the Government tried to ban the publication of the shooting incident involving a well known pirate radio owner and a person who came to complain about something to him a few months ago. That obviously was straight, hard news which any newspaper ought to be entitled to publish.
There is another borderline possibility in this matter. What is the situation if a newspaper announces as part of an editorial story the fact that a certain pirate radio is to reproduce the recorded version of what we know as the film Ulysses, which has had a certain amount of Press attention just recently? I know that the oral side of the film is the attractive part—to some decadent people, of course—but if after reviewing the film, as many newspapers have done this morning, they were to announce that a certain pirate station was to give a recording of the sound track of that film the following morning in a broadcast, would the newspaper be free to do so or would it be penalised? It is these borderline cases which are going to cause trouble. I do not think we should have much fear about hand-outs from the pirate radio companies. If there is one thing that a news editor can smell a mile off it is an official hand-out either from a Government department or from a commercial undertaking.
I was rather doubtful about the expression used by the noble Lord opposite that we should "Let the Press know where they stand". I do not think that one can let the Press know where they stand without, perhaps by inference, introducing some degree of control over the Press. The Press has to be left to use its own common sense and make its own judgments night by night on story after story that drops from the "tape", without any guidance from the Government as to "where they stand". We have heard a great deal recently about "D" notices, which were attempts to let the Press know where they stood. We know that there

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has been a good deal of trouble about this, and nothing like unanimous support for this well-intentioned effort by the Government to let newspapers "know where they stand". Newspapers on the whole are produced by fairly competent people, people who have to exercise intellectual courage of a high order night by night, and they have to take the decisions. Sometimes they will be wrong, sometimes they will be right. They will be well advised by a barrister who sits in every editorial department of a newspaper every night. They will receive that barrister's advice and the editor in charge will either accept that advice or overrule it in the interests of what he thinks his newspaper readers should know.
There is some element of doubt as to what constitutes an advertisement and what does not. To some extent that element of doubt could be minimised by the use of the word "paid" in the Bill, but on the other hand ultimately the question is one which must be settled by the High Court. It has never been settled in the past, and it has to be settled some time in the future. There is an old saying in the newspaper industry "When in doubt, leave out". I am quite sure that that is the mood in which most newspaper executives will approach news items about this subject if this Bill goes through, as I hope it will, with perhaps the small Amendment which I have suggested.
LORD SORENSEN: My Lords, on both sides of the House there is evidence that we are still not clear in our minds as to the meaning of the word "advertisernent". If only there could be some authority adequately to define or describe "advertisement", a great many of our difficulties this afternoon would disappear. For instance, the noble Lord, Lord Leatherland, gave the definition, "Something for which payment is made" I have already pointed out that it is possible to advertise something without any anticipation of pecuniary gain. Be that as it may, I am impressed by what noble Lords have said on this matter, particularly as they were, I believe, all at one in their hope to see this Bill pass into law and to satisfy ourselves on this particular point. Therefore, there is no need for further argument on my part if I say that I am quite prepared on my own responsibility to see that this matter
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is considered very carefully indeed. I thank noble Lords earnestly for the suggestions which they have made and for their efforts in this matter. In those circumstances, perhaps a great deal of time might be saved if the noble Viscount will agree temporarily to withdraw the Amendment.
VISCOUNT COLVILLE OF CULROSS: My Lords, if I may by leave say one more word, I am very grateful to the noble Lord for what he has said. There is just one further thing which I forgot to say at an earlier stage. Perhaps we shall have an opportunity to discuss it again, but I should like to say it in the House at this stage. The difficulty about saying, "Get the courts to decide this", is that if these matters are dealt with by the magistrates they are not reported. It is nowhere to be found in any journal unless you are very lucky. If the matter goes to quarter sessions, again it is not reported unless you are very lucky.
In both of those cases it is quite probable that no reason for the decision will have been given. The case will have been either proved or not proved, and the man found guilty or not guilty or whatever it may be, and no reasoned argument which one can look at will be set out anywhere. If the matter is tried on Assize it may with luck be reported. There may he a summing-up reported in the Law Reports which one can then look at. The only real way to get this before the courts and get a decision will be to take it on appeal or on case stated to the Divisional Court. But this may take some time, and it will then be specifically related only to the facts of that case.
Will the noble Lord consider that, because it is a real difficulty? It is all very well to say, "Let the courts consider it", but how is one to get any sort of common approach by the courts and how is one to discover, even if the courts have decided a case on the point before, what it is they have decided and why? This is a real difficulty and perhaps this might also be considered.
LORD SORENSEN: My Lords, I assure the noble Lord that it will be considered. But, on the other hand, for my own information—for I am very ignorant on these matters in some respects—may I ask him whether it is not highly likely that in the case of a decision made by a court at

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any level it would at least be reported to the Postmaster General? Obviously he would take steps to see what was the result of the judgment, and that would be recorded. Therefore, it would surely be made available to all those who were legally interested in the matter.
VISCOUNT COLVILLE OF CULROSS: My Lords, I think that many of those who appear before magistrates' courts would very much like to have the reasons for the decisions. But that does not necessarily mean that those reasons are always given, and even if the Postmaster General knows, he is not the Press, and it does not follow that anybody else would know. I do not want to take up any more time on this, and I am most grateful for what the noble Lord has said, because there is a real difficulty. I shall be very glad to beg to withdraw this Amendment, but shall seek leave to discuss it later.
Amendment, by leave, withdrawn.
Clause 6:
Penalties and legal proceedings
6.—
(3) Proceedings for an offence under this Act may be taken, and the offence may for all incidental purposes be treated as having been committed, in any place in the United Kingdom.
4.43 p.m
VISCOUNT COLVILLE OF CULROSS VISCOUNT COLVILLE OF CULROSS
moved to insert at the beginning of subsection (3):
"Save for an offence under this Act committed upon land in the United Kingdom,"
The noble Viscount said: My Lords, this is another point which was raised by myself on Committee stage, and the noble Baroness, Lady Phillips, dealt with it in a very helpful way. I am extremely glad that the noble and learned Lord the Lord Chancellor is here on this occasion, because I believe that there is a broader principle than that incorporated in the Amendment to the Bill itself which should be dealt with. What I suggested in Committee was that, apart from the case of offences committed outside territorial waters, the ordinary rules as to where the case is to be heard and the jurisdiction of the court should apply. Of course, this would have the effect of
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seeing, among other things, that cases which ought to be tried under Scots law or Northern Irish law are so tried and are not dealt with in another part of the British Isles.
I need hardly say that I accept the assurances of the Government that there will not be any "funny business" about that. But the fact remains that, as I understand the answer of the noble Baroness on the last occasion, even inside territorial waters there is considerable doubt about who has jurisdiction, and there may be even more doubt in Scotland than there is South of the Border. Therefore, if nothing else has been achieved by the discussion on this point I think it has raised the somewhat important case of what is the correct procedure and how it is to be fully implemented where offences are committed in territorial waters. I think that some general discussion ought to take place, not on this occasion but on some other occasion, because of the difficulties which have been thrown up by the drafting of this clause.
Accepting that there are difficulties about territorial waters, I go back to the last case which was dealt with on the previous occasion. If the offence is committed on land—and I hope that "upon land" can only mean upon land, and cannot also include any offences committed in territorial waters—there are perfectly good, ordinary rules which determine the venue and the court which has the jurisdiction. The rules in Scotland are different from those in England, but since there are perfectly ordinary rules which apply to criminal law in every case, why must there be an exception here? I do not believe that this is a good precedent.
We are saying that because prosecutions will take place only at the instance of the Attorney General, in England—or of the procurator fiscal, in Scotland, or the Attorney General in Northern Ireland—then we do not need to bother about the ordinary rules of venue and about which court has jurisdiction. If we apply this in every case, where are we going to get to with the rules of jurisdiction and venue? Why must there be some exception from these eminent authorities? I see no reason whatever for it and, if no practical difficulty is envisaged about dealing with Scottish cases under Scottish

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law and English cases under English law, why on earth should there be any refusal on the part of the Government to accept that the ordinary jurisdiction should apply to those cases which are committed on land?
I know what tends to happen in cases of this sort. We shall get a complicated matter, perhaps arising on the high seas or on land, and it will then be said (and this has happened before, even in my short knowledge of Parliament): "Parliament allowed it to happen in the Marine, &c., Broadcasting (Offences) Act 1967, so why should they object to it now?". At any rate, let it not be said that I did not object, even if my objections are overruled. I consider that the noble Lord, if he will be so good, ought to make out a case as to why, in the case of offences committed on land, the ordinary rules will not do. If he will do that to my satisfaction then of course I shall be content. But So far nothing that has been said, either in this House or in another place, has really cleared up this point. I beg to move.
Amendment moved—
Page 6, line 21, at beginning insert the said words.—(Viscount Colville of Culross.)
4.45 p m.
LORD SORENSEN: My Lords, I am obliged to the noble Viscount for dealing with this matter, and again of course there arises the question of definition. An Amendment similar in intent was discussed in detail in Committee. It was explained then that any well-meant attempt to modify subsection (3) of Clause 6 would merely open up loopholes for the pirates to exploit. The attempt represented by this proposed Amendment illustrates this very point.
The essence of the Amendment is that it seeks to distinguish between offences committed on land and those committed elsewhere. At first sight this seems quite unobjectionable, but when we come to consider what is to be understood by "upon land" the difficulties begin to appear. For instance, are sandbanks considered to be land, even though they may be submerged at certain states of the tide, and even though the general rules of venue do not specifically confer on any courts jurisdiction to deal with offences committed on them out to the limits of territorial waters, and even be
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yond? One can think of other circumstances in which it might be difficult for the courts to determine whether an offence was or was not committed on land. Barges lying in the mud of an estuary might present similar difficulties.
The Amendment also seeks to distinguish between offences committed in the United Kingdom and those committed elsewhere, but in the drafting of this Bill great care has been exercised to ensure that in no important matter will it be necessary for the courts to determine just where the outer boundary of the area connoted by the expression "the United Kingdom" lies. This has been done for the very good reason that in the present state of the law there is scope for dispute as to just where that boundary lies and as to the jurisdiction of particular courts over all places within it. The pirates have already shown themselves to be experts at exploiting such uncertainties and ambiguities.
So, my Lords, even this very brief Amendment would introduce two quite separate areas of uncertainty for the courts to wrestle with and for the pirates to exploit—what is meant by "upon land", and what is meant by "in the United Kingdom"? As was explained during the Committee stage, the purpose of subsection (3) is not to enable offences committed in one part of the country to be prosecuted in another part. Offences under the Bill committed in Scotland will be dealt with in Scottish courts according to Scottish criminal procedure and rules of evidence. I am glad to note that the noble Viscount—at least, I understood him to say this—appreciated that that was the genuine intention of the Government. On that point, therefore, surely no great difficulty arises.
The purpose of the subsection is to prevent offenders from broadcasting on waters round our shores under cover of the uncertainty of the general law as to the jurisdiction of courts and the means of process relating to offences committed on those waters. It is because of this uncertainty that the subsection is needed and must be so worded as to leave no room for argument. This of itself, I admit, is a very difficult thing to do. I hope I have demonstrated how this very well intentioned Amendment, which appears on the face of it to confine the exception which it creates to offences committed on

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the mainland, could nevertheless lead to difficulties in enforcing the provisions of the Bill in relation to the activities of the pirates in offshore waters. The declared intention of some of the pirates is to exploit every legal uncertainty and every loophole to enable them to carry on their activities. It would serve them, therefore, to amend the subsection in such a way as to assist them to do so. I only hope that what I have now said meets, at least in some measure, the points raised by the noble Viscount.
VISCOUNT COLVILLE OF CULROSS: On the contrary, my Lords, it does nothing of the kind, because, in my respectful submission, the point has not been fully worked out by the noble Lord. Would the noble Lord consider this case? He spoke of a sandbank. Let him imagine a sandbank off the coast of Suffolk. Now there is some doubt whether this is land within the United Kingdom or not; nevertheless, the case is taken in the petty sessional division of Felixstowe, to take a case in point. The defence says: "This is not land within the United Kingdom at all. This is a sandbank within territorial waters." The prosecution then says: "Very well; if it is your contention that this is in territorial waters, there is jurisdiction in any court in the United Kingdom, not excluding the petty sessional division of Felixstowe. Therefore, whatever way the argument is taken by the defence, there is still jurisdiction in this court". The noble Lord does not seem to have taken this point at all.
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Furthermore, the noble Lord did not comment in any way—I appreciate this is not a Committee stage, when we are allowed to make more than one speech, and perhaps I can discuss this with him again afterwards—on the general difficulty about territorial waters. I would not expect him to have any brief upon this point to-day, but I hope he recognises that what he is saying deals with only a very small part of a much wider problem, and that if the law on the jurisdiction as to offences committed in territorial waters in general were satisfactory, we should not be having this difficulty in this Bill. I hope, therefore, that there are two points upon which he will have an opportunity to think further before we finally say goodbye to this Bill.
As I say, I am afraid of this provision as a precedent. I see no reason why, just because we are up against some cunning people who wish to take any opportunity given to them to evade the full strictures of the Bill, we should depart from what are well-established rules of drafting and well-established principles of jurisdiction unless it is proved that we have to—and the noble Lord's example, in my opinion at any rate, seems to be the very contrary to that sort of proof. Nevertheless, if the noble Lord will allow me at any rate to discuss it with him privately if necessary afterwards, I will for the moment withdraw the Amendment.
Amendment, by leave, withdrawn.
House adjourned at five minutes before five o'clock.