Lords Sitting of 22 February 1968

Preamble
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Oxford

VIETNAM: UNITED KINGDOM AID TO CIVILIANS
3.7 p.m.
LORD SANDFORD: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government why they think £250,000 is a sufficient contribution from this country to ease the civilian suffering in South Vietnam.]
THE MINISTER OF STATE FOR FOREIGN AFFAIRS (LORD CHALFONT): My Lords, Her Majesty's Government's primary concern has been to provide immediately effective assistance not only financially but in other ways as well. Our efforts have been warmly welcomed in Vietnam.
LORD SANDFORD: My Lords, I thank the noble Lord for that reply so far as it goes, but it does not really answer my Question, which was: why do the Government think that the sum of £250,000 is a sufficient contribution from this country?
LORD CHALFONT: My Lords, I think we have to look at this question both in terms of the need in Vietnam, which is great, and in terms of what we can do to meet that need in the light of our resources. Our view is that skilled manpower, backed up by necessary supplies, is the main requirement, rather than just money, and we think that the most useful form of help will be to increase the deployment and scope of our medical team in Saigon. As the noble Lord will know, qualified personnel, especially doctors, ready to go to Saigon are not easily found, but we are engaged in increasing the size of our medical assistance to Vietnam at the moment.
THE EARL OF DUNDEE: My Lords, can the noble Lord say whether any other countries besides ourselves and America have made any contribution towards this aid, and, if so, how much?
LORD CHALFONT: My Lords, I am afraid that I cannot give the answer to that question "off the cuff", so to speak, because it is slightly wide of the original Question, which is about aid given by Her Majesty's Government. But I can find that out, and I will let the noble Earl know.
LORD DERWENT: My Lords, can the noble Lord say whether this £250,000 covers the cost of men and supplies that we are sending, or is it quite separate?
LORD CHALFONT: My Lords, part of the £250,000 is designed to cover the cost of some supplies and some personnel we are sending. But we really have to look at this problem not only in terms of the need in Vietnam but also in terms of what we can afford to provide.
LORD MOYNIHAN: My Lords, I have four supplementary questions which I should like to ask the noble Lord on this subject. The first is this. Is he aware that Aid Estimates to South Vietnam from the Ministry of Overseas Development for 1967–68 already run to £367,000, and that the £250,000 will be extra? Secondly, is the noble Lord aware that there are many of us who feel that this sum is insufficient? Thirdly, why is there no Government aid to aid civilians suffering in North Vietnam? Fourthly, is it the Government's view that women and children bleed, feel pain and suffer less if they live under a Communist régime?
LORD CHALFONT: My Lords, it would take me a little time to sort out the four questions the noble Lord has asked. I think the first question was one about which I can say I am grateful to the noble Lord for asking it, because it points out that the £250,000 is an extra contribution, in addition to the normal overseas aid. I am aware that a number of noble Lords think that this is insufficient. I can only return to my former answer, which is that we must here reconcile need and resources. So far as the last two questions are concerned, I think that the last question, certainly, was intended to be rhetorical, and I shall

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treat it as such. Of course we have no such belief, if I understood the noble Lord correctly. Perhaps I had better make it clear: we do not think that people suffer less in this kind of operation because they are under a Communist régime. Of course everybody suffers equally and everybody suffers awfully. Whatever may be the facts about the aid we supply to Vietnam, we should like, as everybody in this House would like, to see this awful war brought to an end as soon as possible.
THE EARL OF DUNDEE: My Lords, is there not a great deal more suffering under a Communist régime?
LORD MOYNIHAN: My Lords, may I thank the noble Lord for the three perfectly satisfactory replies he gave and repeat the fourth question—it was in fact the third in the order in which I gave them. Why is there no Government aid to aid civilians suffering in North Vietnam?
LORD CHALFONT: My Lords, I think the difficulties implicit in this Government's giving aid to the people who are suffering in North Vietnam are obvious enough without my having to elaborate them in your Lordships' House.
LORD MOYNIHAN: My Lords, may I ask the noble Lord whether he is aware that the Vietnam Disaster Emergency Committee have managed to get £50,000 to go to the Red Cross organisation of the National Liberation Front and North Vietnam through the Russian Red Cross? It is possible for the Government to do something along those lines?
LORD CHALFONT: My Lords, I must confess that I was not aware of that, and I am grateful for the information, but I prefer not to comment on it any further at this stage.
LORD BYERS: My Lords, would the noble Lord not agree that suffering knows no frontiers?
LORD CHALFONT: Yes, my Lords.
BARONESS LLEWELYN-DAVIES OF HASTOE: My Lords, in view of what
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he said about the shortage of doctors, is my noble friend aware that if there were more money available there would be many people willing to go there?
LORD CHALFONT: My Lords, I am not sure that I entirely take the point of my noble friend's question. I think that even if there were more money we should still find it difficult to obtain qualified people to go. The fact is that, money or no money, it is difficult to find qualified doctors and nurses who are prepared to go to Saigon. I am delighted to know it, if in fact there are more people who are prepared to go, but so far we have found considerable difficulty.
BARONESS LLEWELYN-DAVIES OF HASTOE: My Lords, perhaps I can help my noble friend.
LORD CHALFONT: I should be most grateful.
LORD SANDFORD: My Lords, may I return to my original Question for one final supplementary question? Is it not true that our total aid programme now amounts to about £200 million? Would the noble Lord not agree that £250,000 is a very small portion of that? Is there any other country among those we already help which has suffered longer or suffered more than South Vietnam, and in the light of that can he really justify such a small contribution?
LORD CHALFONT: My Lords, the question of overseas aid and programmes for development and other aid is not simply one of suffering. Other factors have to be taken into account, and the question of changing the direction and the emphasis of overseas aid is not one that can be tackled easily and overnight. A great number of factors have to be taken into account. We believe at the moment that the amount we have allotted is relevant to the need and to our resources, but I would add that the Chief Medical Adviser to the Ministry of Overseas Development, Dr. Liston, is coming back from Saigon, I think to-day, and he will be making detailed recommendations to the Minister of Overseas Development.

PROPOSED CONFERENCE ON EUROPEAN SECURITY
3.15 p.m.
LORD BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what action is being taken to implement the terms of the joint communiqué issued at the end of the talks in Moscow between the Prime Minister and Mr. Kosygin endorsing the proposal for a conference on European security to which all the countries of Europe should be invited to send representatives.]
LORD CHALFONT: My Lords, in the joint communiqué issued at the end of the Prime Minister's talks in Moscow it was reaffirmed
"that a conference on European security could be valuable subject to the necessary preparation",
and that it was
"important that all the countries of Europe should be among the participants".
We are in touch with our allies about the best way to make further progress.
LORD BROCKWAY: My Lords, while welcoming that Answer, may I ask whether any consultation has taken place with the Soviet Union before this welcome declaration, and particularly whether any consultation has taken place with Western European countries, either through NATO or outside NATO, to press this idea; and in particular, in view of the fact that the Warsaw Pact nations have indicated their support for this proposal and are now meeting in conference, whether Her Majesty's Government will make some declaration which would facilitate this proposal?
LORD CHALFONT: My Lords, we are of course aware that the Warsaw Pact countries are in consultation at the moment. There has not been any further contact with the Soviet Government about bilateral discussions on this proposal. I think the Prime Minister made it clear in his Statement in another place on January 25 that we are not seeking to establish any special position for ourselves
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in this respect, and that we shall want to discuss this in close consultation with our allies before going back to consult with the Soviet Union. Of course, we are, and we shall be, in touch with our Western allies to see how this proposal can be further developed.
LORD BROCKWAY: My Lords, again while thanking the noble Lord for that answer, can he say what specifically has been done on this tremendously important proposal since the decision to communicate with our allies in Western Europe, in view of the fact that the Warsaw Pact Powers have indicated their support for the proposal?
LORD CHALFONT: My Lords, I can only say that we have been in close consultation with some of our allies in Europe. I know my noble friend will not ask me to go into detail on what are so far confidential consultations with our allies.
LORD GLADWYN: My Lords, would not the noble Lord agree that such a conference would be quite useless without the participation of the United States of America?
LORD CHALFONT: My Lords, I think Her Majesty's Government are entirely in sympathy with the noble Lord's question. We continue to regard United States participation from the outset in any such conference as being essential. The United States shares with the Soviet Union, France and Britain special responsibilities for the German question, and Berlin in particular, and in view of that we believe the United States to be vitally involved in the problems of European security.

POSTAL SERVICES WITH EASTERN EUROPE
3.18 p.m.
LORD INGLEWOOD: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what discussions have been taking place over the last twelve months with the countries of Eastern Europe—including the Soviet Union—with a view to effecting an improvement in both directions in the postal services.]
LORD SORENSEN: My Lords, the countries of Eastern Europe, including the U.S.S.R., are, like this country, members of the Universal Postal Union whose aim is to secure the improvement of the postal services throughout the world and to promote international postal collaboration. Meeting of the councils of the Union, in which this country and some of the countries of Eastern Europe have taken part, have provided a number of opportunities over the last twelve months for multilateral discussions aimed at improving the postal services.
LORD INGLEWOOD: My Lords, I thank the noble Lord for that full explanation, but may I also ask him to represent to his colleague responsible that the postal services between London and the principal cities and countries of Eastern Europe are a great deal slower than the services between, say, London and Athens and the principal cities of the Eastern Mediterranean, where the distances are greater. Since efficient and speedy postal services are important in the interests of trade, quite apart from the personal relations aspect, will he do what he can to see that these services are improved, because there really is room for improvement.
LORD SORENSEN: My Lords, I will certainly convey the noble Lord's question and remarks to the right quarter. My information is that very few complaints have actually reached us on this matter. There have been some complaints, but very few considering the large volume of correspondence involved. Bearing in mind what the noble Lord has said, I will certainly see that this is conveyed to the appropriate quarter.
LORD INLGEWOOD: My Lords, would the noble Lord not agree that because these services are used in a very limited way it is not surprising that he has had very few complaints? Will he please look into this again, because a delay of five, six or seven days between London and one of the capitals of the Eastern European countries, which is quite normal for an ordinary letter, is really not acceptable in the 1960s.
LORD SORENSEN: My Lords, I am sure the noble Lord will appreciate that the fault does not necessarily lie on this side.
LORD INGLEWOOD: I did not suggest it does.
LORD SORENSEN: It may be on the other side. Certainly I will see that the noble Lord's observations are conveyed to the appropriate quarter. When I spoke of the small number of complaints, that is comparatitve. It does not matter what the number of complaints is; it is the proportion of those complaints to the total volume of correspondence, and it is important to remember that, compared with what they might be, the number of complaints is relatively small.
LORD ST. HELENS: My Lords, may I suggest to the noble Lord that he should concentrate on bringing about an improvement in postal services here at home?
LORD SORENSEN: My Lords, I do not think the noble Lord can suggest; he may ask, and I understand that is what he is doing. That also I will convey to the right quarter.

FIREARMS AMNESTY AND DISPOSAL OF WEAPONS
3.22 p.m.
LORD SWANSEA: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what steps they are taking to publicise the latest amnesty for firearms and shot-guns; whether they are aware that among firearms and shot-guns handed in during an amnesty there may be items of some value; and whether they will give instructions to police forces that firearms and shot-guns so surrendered shall first be offered for sale to registered dealers before steps are taken to dispose of them by other means.]
LORD BOWLES: My Lords, the amnesty is being publicised by prominent Government advertisements in the national Press and sporting journals, a distribution of 700,000 leaflets, and announcements on the radio. My right honourable friend the Home Secretary has made arrangements with the police for the preservation of any antique weapons or other valuable items which can be

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preserved in national collections. It is not intended that any of the illegally held firearms handed in during the amnesty should be offered to the trade. Shotguns, to which the amnesty does not apply, may be sold privately and to the trade without restriction before May 1. Any shot-guns handed in to the police will be offered to the trade before destruction.
LORD SWANSEA: My Lords, while thanking the noble Lord for that part of his reply dealing with antique weapons and shot-guns, may I ask why Part I firearms should automatically be destroyed? Is he aware that many are in good working order and would command a good price in export markets? Could not Part I weapons, firearms, be sold to registered dealers on the understanding that they would not be sold on the home market?
LORD BOWLES: My Lords, my right honourable friend the Home Secretary agreed that the arrangements for the present amnesty should be similar to those obtaining in 1965. Suggestions made by the trade at that time that amnesty weapons should be available to dealers for export purposes were firmly rejected. The arguments were roughly these: it is inconsistent with the purpose of the amnesty, which is to take firearms out of circulation and not to export them to other countries with the possibility that they might come back. Also, in the earlier amnesty members of the public who had handed in their weapons in good faith complained when they later saw them on sale in this country. Thirdly, I suggest that it would be quite wrong that arms handed in in this country should be handed over to other countries where criminals might get to work in a way we are trying to stop here.
LORD SWANSEA: My Lords, while applauding the Government's reasons for wishing to take these firearms out of illegal circulation, if they are returned to legitimate circulation why should they be any more likely to fall into the hands of the wrong people than other firearms already held by dealers as part of their stock?
THE EARL OF MANSFIELD: My Lords, arising out of the original reply, does not the noble Lord agree that it is a great waste that excellent weapons
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should be destroyed? Could not these suitably be issued to police forces or other sections of Her Majesty's Forces, or put on sale to responsible people? Is it not a fact that the person who hands in a firearm for which he has no certificate has no reason to feel aggrieved that it should be afterwards displayed for sale, because he has no right to have it in the first place; he is himself a potential criminal, even if gaining the benefit of the amnesty. Is it not a mistake to waste these excellent weapons when there are opportunities for disposing of them to the public advantage?
LORD MITCHISON: My Lords, without going into the niceties of the Theft Bill, would it not be rather odd to requisition arms for one purpose and then to sell them?
LORD BOWLES: My Lords, that is exactly what I said a few minutes ago. The whole importance and object of this exercise, the three months or four months amnesty, is that these firearms should be taken out of circulation in this country. Many people who have a firearms certificate obviously are not criminals and could go on holding them. Those who do not have certificates have been asked to hand their firearms in. I think the noble Lord will remember, from the debate we had on Part V of the Criminal Justice Act last year, that quite tremendous figures were shown as to the increase in crime and indictments in the years from 1961 to 1967.
THE EARL OF SWINTON: My Lords, may I support my noble friend in the suggestion that instead of destroying these weapons they should be held so that they can be available for the police? There could be no objection to that, and there seems to be a tendency, probably a very wise one, on the part of the Government to arm the police; it may become more and more necessary. Why cannot these guns be held by the Government in case they wish to issue arms to the police?
LORD BOWLES: My Lords, I am quite certain that if my right honourable friend, the Home Secretary felt the police were short of these kinds of firearms he would certainly see that those which were useful to the police would not be destroyed.
LORD SALTOUN: My Lords, can the noble Lord tell me why the height of the possessor of the arms is material as to his eligibity to possess it or not? On my certificate there was a careful inquiry as to my height.
LORD BOWLES: My Lords, as the noble Lord knows, this has nothing to do with shot-guns at all.
VISCOUNT MASSEREENE AND FERRARD: My Lords, I still cannot understand why these firearms cannot be sold to members of the public who have a firearms certificate.
LORD BOWLES: My Lords, I do not know how many people with firearms certificates have firearms, but I dare say there is a limit to the firearms covered by one certificate.
VISCOUNT MASSEREENE AND FERRARD: No.
LORD BOWLES: Well, it is about time there was.

THE EASTER RECESS
LORD BESWICK: My Lords, at a convenient moment after 3.30 p.m. my noble friend the Leader of the House will be repeating a Statement to be made in another place on Asian immigration. Afterwards I shall be repeating a Statement on the third London Airport.
It may be for the convenience of the House if I inform your Lordships that subject to the progress of business it is intended that the House should rise for the Easter Recess on Wednesday, April 10 and return on Tuesday, April 23.

AGRICULTURE (MISCELLANEOUS PROVISIONS) BILL
Brought from the Commons; read 1a, and to be printed.

TRANSPORT HOLDING COMPANY BILL
3.30 p.m.
LORD HILTON OF UPTON: My Lords, I beg to move that this Bill be now read a second time. It is the intention that I should make the opening speech and that my noble friend Lord Shepherd should wind up and reply to
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points made during the debate. The Transport Holding Company were set up by the Transport Act of 1962 with defined objects including the management of securities in various transport undertakings, both in the passenger and goods fields, which were vested in them by virtue of the Act. In common with the nationalised transport Boards, the Holding Company were given powers to borrow from the Minister, but a statutory limit was set on their borrowing powers. The Act provided that the amount owed by the Company should not be greater than £30 million. Since then the Holding Company have used these powers in pursuit of their business interests. The House will remember that the Company were given a duty to behave as if they were a commercial enterprise, and various acquisitions of securities have been negotiated, notably, perhaps, the acquisition of a 75 per cent. interest in the Tayforth Group of road haulage companies in 1965.
As a result, the limit of these borrowing powers has been approached. Already, £20 million has been lent to the Company and the balance will be needed for normal investment purposes this year. I should remind the House, however, that the Company have carried out their duty to behave as a commercial enterprise to such good effect that they have consistently made profits, and have paid surpluses into the Exchequer annually over and above the interest on their capital.
In the course of the last year the Holding Company have planned a substantial extension of their interests in the field of road passenger transport. A very large independent operator in Yorkshire, the West Riding Automobile Company Limited, was acquired last September, and in November the T.H.C. reached agreement with the British Electric Traction Company Limited for the purchase of the B.E.T.'s shares in bus companies. The price agreed between the two in respect of the ordinary shares was about £35 million, and part of the agreement was an undertaking by the T.H.C. to make similar offers for the minority shareholdings in these companies. It is largely in order to finance the completion of this deal that the increased borrowing powers sought in this Bill are needed.

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It might assist the House if I were to set out the background to the agreement which has been reached with the British Electric Traction Company Limited. To do this it is necessary to go back to prewar days when, as a direct result of the Railway Road Transport Acts of 1928, the four main-line railway companies acquired substantial shareholdings in most of the large bus companies operating stage and express services in Great Britain. Then, after the war, came the Transport Act of 1947 which established the British Transport Commission. The Commission took over not only the railway companies but also the substantial investments which the railways had in bus companies which by then had formed themselves into three major groups; in England and Wales the Tilling and British Electric Traction Groups and, North of the Border, the Scottish Bus Group.
The British Transport Commission during the first two years of their existence negotiated the purchase of the shares they did not already own in both the Tilling and the Scottish Bus Groups, making the companies wholly-owned subsidiaries of the Commission. Discussions were also held about the possibility of buying the remaining shares in the B.E.T. Group, but at the time these were not brought to a successful conclusion. But the British Transport Commission did hold a substantial number of shares in bus companies in the British Electric Traction Group. Indeed, in the majority of cases their shareholding equalled that of the British Electric Traction Company. These shareholdings passed to the Transport Holding Company when they were set up under the 1962 Act.
The Transport Holding Company therefore had considerable shareholdings in each of the individual companies in the British Electric Traction Group, in some cases as much as 50 per cent. But although the Holding Company invariably nominated directors to the Boards of these companies, effective control of company policy remained with the British Electric Traction nominees. This remains the situation up to the present time. However, your Lordships are aware of the far-reaching changes in the pattern of public transport which the Minister of Transport has proposed. The main points were set out in the White
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Paper Public Transport and Traffic which was published last December. While details of these changes were being worked out, the Board of the Transport Holding Company came to the view that there would be commercial advantages in acquiring the remaining share in the British Electric Traction Group of companies. They felt that the already large public stake in the bus industry, something over £100 million, could best be safeguarded in the changed circumstances after the reorganisation if they had sole effective control of the bus interests of the Group and were thus able to make the savings from rationalisation which would not otherwise be possible.
The Board of the T.H.C. therefore asked the Minister of Transport whether she would agree to ask Parliament for the increased borrowing powers which they would need to undertake for an acquisition of this size. The Minister authorised the T.H.C. to enter into negotiations with the British Electric Traction Board. In doing so she had in mind both the desirability of completing the process of bringing the main network of bus services into public ownership and also the operational savings which the Transport Holding Company believed to be possible.
I think it is important that the House should be clear on just how these savings will arise. The Transport Holding Company control some 14,000 buses, the British Electric Traction Group another 11,000 buses. It is nowhere contended that it is more economical to control 25,000 rather than 14,000 or 11,000 buses in one operational unit. Indeed, many noble Lords will be aware that it is the opinion of some experts in the field that the optimum size of any bus undertaking is probably not more than 800 to 1,000 vehicles and in some areas perhaps even less. It is alleged that advantages of scale diminish rapidly above this figure. But there is an important difference between the number of buses controlled by a company and the size of the operating units which it chooses to run. Both the Transport Holding Company and the British Electric Traction Group operate through locally based subsidiary bus companies, and it is not intended that this practice should generally be changed. But there are savings to be made where the routes of some companies meet, or even overlap, particularly where

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it is practicable and operationally sensible to transfer buses and routes from one company to another. The Transport Holding Company, when they control all the main bus companies in England and Wales, will be able to make these adjustments so that anomalies which occur on the borders between bus undertakings' operating areas can be minimised. They will also be able to make other organisational improvements which they consider to be possible as a result of almost doubling the size of the fleet they own.
When the deal is completed over 90 per cent. of the British bus industry, at least in so far as it is concerned with the provision of ordinary stage services, will be in public hands. But it would be wrong to regard this as a major issue of principle. For many years now by far the greater part of the network of bus services in this country has been in public ownership of one sort or another—either municipally owned, or owned by the Transport Holding Company or by the London Transport Board. And in recent years the viable provision of stage bus services has become a more and more difficult proposition. Over the years costs have steadily increased, not least because of increases in wages in what is a highly labour intensive industry, and coupled with this there has been the rapid growth in car ownership and car use. So as costs have mounted year by year the number of potential bus passengers has fallen. It has therefore become increasingly difficult to maintain services and to make profits. Indeed the recent White Paper Public Transport and Traffic said quite clearly that our major bus network could no longer be regarded as a suitable field for private enterprise activity, where the operator's first responsibility is to his shareholders.
Of course, we have not yet reached a position where it is impossible to run bus services which pay. Far from it; most municipal undertakings break even, taking one year with another, and the Transport Holding Company have also aimed successfully at making a small return on capital employed, as have the bus companies in the British Electric Traction Group. But the bus industry is no longer an area in which large profits can be made. I hope, too, that your Lordships will not claim that the Government,
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in agreeing to this extension of public ownership, will be eliminating competition from the bus industry. There has been no meaningful competition in the bus industry since 1930. In the main, companies have operating rights over particular routes. These rights are given to them by the grant of road service licences by the Traffic Commissioners, and other operators are then not permitted to run buses along those routes in direct competition. But the various routes and services over which companies have virtual monopoly rights were settled many years ago, and in many areas no longer correspond to the most sensible or rational approach to transport problems.
The Traffic Commissioners also control bus fares. This simple fact seems to have escaped some speakers on this subject in another place, where it was suggested that there was an element of trickery, bordering on sharp practice, in that the price to be paid for the British Electric Traction shares was agreed before the Government's plans for various forms of future financial assistance for the bus industry, as set out in the Transport Bill, were published. I am sure that your Lordships are well aware that the object of this Government help is to keep fares down and so help to make public transport more attractive, not to put profits up. So it is unlikely that the bus interests of the British Electric Traction Group would have become more profitable.
In any event, the agreed price of £35 million was a negotiated figure, expressed as £34 million for net assets and £1 million as compensation in respect of special factors arising out of the separation of the bus interests from the remainder of the British Electric Traction undertaking. In the Holding Company's view, this figure represented the underlying value of the B.E.T. interest in the assets taken over. An assessment of current values could not, in the circumstances, have been done by individually valuing the assets concerned. The method adopted was to uplift the book values of the fixed assets in the balance sheets of the various companies concerned in order to reflect the differences between historic cost and current values. Nothing has been included for goodwill. A purchase on assets value was regarded by the Holding Company as being commercially sound,

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because they considered that, provided the control of fares continued to be exercised in a reasonable way, profits sufficient to remunerate the capital outlay could be earned.
Your Lordships will have noticed that the Holding Company announced last week the prices to be offered to outside shareholders in the bus companies concerned as soon as this Bill is enacted. The amount payable, assuming that all shareholders accept, will be of the order of £10 million, with another £1 million in respect of preference shareholdings, so that in sum total the take-over of the bus interests in the B.E.T. Group will cost the Holding Company about £46 million.
When added to the £30 million borrowings which, as I have explained, will be required to be taken up in full by the Holding Company before the end of 1968, we find the total borrowing comes to £76 million. Why then does this Bill seek to extend the borrowing powers of the T.H.C. to £100 million? The reason is that the Government do not want to put the Holding Company in a financial straitjacket. We consider it prudent to provide in this legislation a sufficient margin to cover all possible borrowing commitments up to the end of 1969, by which date we expect the Holding Company to have been dissolved, as is provided for in the Transport Bill now before another place, consequential upon the formation of the National Freight Corporation, the National Bus Company and the Scottish Transport Group. We have accordingly provided powers to enable the Holding Company to borrow a further £24 million. It does not follow that this money will be used, but it is right that it should be there to enable the Holding Company to take any commercially desirable opportunities for further expansion of public ownership in the transport field over the next two years and also to provide a margin for unforeseen contingencies.
I now turn to the other purpose of the Bill, which is to remove any doubt about the powers of acquisition of securities given to the Holding Company under the 1962 Act. This is thought to be necessary because, although the Transport Holding Company have been making purchases of shares ever since they were established under the 1962 Act—and the Board
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of the Company have been in no doubt about their power to do so—it has been suggested that there is an ambiguity in the wording of subsection (6) of Section 29 of the 1962 Act. This gives the Company power to subscribe for, exchange and acquire the securities of companies. But the power is limited, in that it may do these things only
"with the object of holding and managing the securities vested in the Company."
The Minister has been advised that there is some element of doubt about the precise construction to be placed on this provision. It is right that any such doubt should be removed.
It is quite clear that there was no doubt in the minds of either the Government or the Opposition of the day when the 1962 Act was passed. Neither this Government, nor the previous Conservative Administration, have ever seen fit to question the Holding Company's interpretation of their powers—and these powers have been exercised under both Governments. But because of the size of the present transactions, and because it is always right that the slightest doubt about the powers of a nationalised board to acquire privately-owned assets should be resolved, the Government have decided to clarify the position. And if it is right to remove the doubt now, it is equally right that we should make it clear that previous transactions of this nature have also been perfectly valid.
Your Lordships may wonder why this Bill has been brought forward ahead of the Transport Bill itself. It is important that the acquisition of the British Electric Traction bus interests should be completed as soon as possible so as to remove the uncertainty which exists at present and so that management can get down to the detailed job of improving the organisation and the services. The acquisition cannot take place until statutory authority for the necessary extra borrowing by the Transport Holding Company has been obtained. If the appropriate provisions had been included in the Transport Bill they would not become law before the late summer at the earliest, and the prolonged period of uncertainty would be damaging to the future prospects of the bus companies concerned. It would also have left the private shareholders in these companies in a prolonged state of suspense. I hope, therefore, that

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your Lordships will agree that this Bill should pass quickly through this House, so that the freely negotiated commercial contracts which have been entered into subject to its passage can be completed. I beg to move.
Moved, That the Bill be now read 2a.—(Lord Hilton of Upton.)
3.51 p.m.
LORD NUGENT OF GUILDFORD: My Lords, may I thank the noble Lord, Lord Hilton of Upton, for his lucid and interesting account of this Bill, and congratulate him on making it sound both simple and innocuous. Indeed, if anything could make this Bill respectable it would be his own agreeable personality, but I am afraid that in fact nothing could make it respectable. It really is a wretched partisan little measure, and noble Lords opposite well know this. The Government are asking us to agree to provide an extra £70 million which will go to the Transport Holding Company, the primary purpose of which is to buy out the holdings of the privately-owned B.E.T. at £35 million and to pay off the minority shareholders at £11 million and I thank the noble Lord, Lord Hilton, for giving us that figure. In other words, it is to provide £46 million in order to buy out the privately-owned and privately-controlled section of the bus industry, consisting of some 25 privately-operated companies with 11,000 buses.
As the noble Lord has told us, the Government's objective is to form a national bus company, and this—let us make no bones about it, whatever anybody may call it—is to be a new nationalised industry and is to meet the Minister of Transport's ruling that "public transport is not a suitable field for private profit-making". Well, that is her opinion. I am bound to say that it is not mine. The noble Lord has explained the history and has given us some of the Government's reasoning, and, in particular, has explained how he believes the formation of this national bus company will make for rationalisation of operation and economies in practice. He has not dealt with the question of how the £52 million will be spent, and what effect it will have on national resources, to which I want to refer. Despite the very pleasant manner in which the noble Lord advanced his arguments,
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they really do not hold water for one minute when they are critically examined, as I intend to examine them.
Before I turn to a critical examination of the arguments, I should like to remind your Lordships of the circumstances in which the Second Reading of the Bill was taken in another place. It will, I think, emphasise the objections which my noble friends and I feel to the Bill. This Bill was taken on January 16 in another place. That was the day on which the Prime Minister announced the drastic cuts which the Government had decided upon to support devaluation—cuts of £325 million in 1968–69 and £441 million in 1969–70. Those are cuts which cut deeply into national policies cherished on both sides; cherished, indeed, with regard to defence and foreign policies abroad and social policies at home. Incidentally, they include cuts of some £94 million in Government spending on motorways and other roads over the next two years.
It is against that sombre background of heavy sacrifice all round that the Government now ask the taxpayer to find an extra £70 million, in order to realise a Socialist dream of creating a national bus company. That is the perspective in which we are being asked to look at this Bill. Let us look again at the Government's claim that the formation of this national bus company will make for rationalisation and economies. The present system of regulating passenger transport services has lasted well; it has lasted over thirty years and, in my opinion, it is an extremely sound, practical system. It has stood the test of time. It consists of a system of traffic engineers appointed by the Minister of Transport, who license bus operators to work on routes applied for. They also approve fare levels, time-tables et cetera. Most valuable, the Traffic Commissioners are the independent tribunal to which private individuals, local authorities, anybody, can make their objections and complaints about the services or the lack of them, and their independent status is a most valuable safeguard to the whole travelling public.
I suggest that their very great powers are both comprehensive and adequate. In practice, this means that they are able to preserve the difficult, loss-making rural bus services by allowing the urban bus

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operator protection on his profit-making urban routes, on condition that he continues to maintain his loss-making rural routes. In practice, this system, which of course covers both the privately-owned and the publicly-owned bus services, has been very successful in keeping the rural bus services working extremely well on the whole, and has integrated those services to give the travelling public a good service.
I have a great deal of personal experience of this matter, because when I was a Member of another place I had in my constituency the outer part of the London Transport Executive service and that of one of the subsidiaries of the B.E.T. Both of them were good services, but believe me, my Lords, when it came to asking for minor adjustments there was no doubt at all which was the most responsive—the private Southdown service every time. But neither in the noble Lord's speech to-day, nor in the arguments advanced in another place, has there really been an effective critique to show in what respect this system is falling down. It really is working remarkably well, and the obligation is on noble Lords opposite—on the noble Lord, Lord Shepherd, in winding-up, if he can—to show what is wrong with the existing service that this innovation will improve.
The noble Lord, Lord Hilton, was very frank, and I thought wisely so, in admitting the weight of the arguments that a very large fleet does not necessarily reduce operating costs. I daresay that noble Lords opposite will have read the interesting paper by Mr. Glasborows, the technical research chief of the Transport Holding Company, which he gave to the Public Transport Association last year, in which he analysed the operation and management of bus companies in very great detail. He showed from his research on a number of municipal undertakings that the larger the undertaking became the more expensive was the operation per car mile. I am glad to hear that the noble Lord opposite accepts this.
But I should like to go one stage further than that. Experience has clearly shown with the London Transport Executive that with a gigantic single operation of that kind, publicly-owned, there are massive management difficulties. I would
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be the first to recognise that, in the London Transport Executive, the structure of transport, the bus services and the Underground rail services are probably the best in the world. But the quality of the management is depressingly weak, and the labour relations are depressingly poor.
There is no doubt at all that, as the years have gone by, the leadership in that Executive has become weaker and weaker. The comment of the Select Committee on Nationalised Industries, of which the noble Lord, Lord Popplewell, was Chairman at the time, was, "Too little and too late". The general impression was that the Executive had got progressively more and more out of touch with the vast kingdom it was supposed to control; and gradually, of course, the services deteriorated with it. I really fear that this National Bus Company, although it will try to keep the structure of the individual operating companies, will gradually deteriorate into the same condition; that inevitably the authority of the managers of the individual companies will be overridden, and the decisions will be pushed back up to the top, or indeed to the Minister of Transport herself, or himself, in the future, and that it will gradually reach the same state of rigidity as the London Transport Executive has reached.
Inevitably wage costs will rise as the staff demand that all be paid the, level of the highest wage structure. Indeed, this was the attraction implied by the Minister at the last Labour Party Conference, and which went down so well with the trade union delegates in her audience. There is no doubt that the expectation is there, and will materialise just as soon as this happens; and it follows that operating costs and fares will rise. I would say that initiative will wither and waste will grow, just as it has in the case of the London Transport Executive. The elimination of the private sector will mean that no one wilt any longer be dependent on results for a living; and losses will in future be borne by the taxpayer or ratepayer, or both. We have seen all this happen. The stimulating influence of the management will perish—and that is the position of private management; they perish if they fail to show energy and initiative to meet the travelling public's need in rapidly

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changing circumstances—and will be lost for ever.
Certainly I agree with the noble Lord, Lord Hilton of Upton, that there is no direct competition between private bus services and public bus services, but there is indeed a very strong competition between the private sector bus services and the public bus sector services; and the fact that the private sector is there provides an invaluable competitive spirit running right through the whole bus industry. Now this is to go.
THE MINISTER OF STATE FOR COMMONWEALTH AFFAIRS (LORD SHEPHERD): My Lords, could the noble Lord help me? Where is this element of competition between the private and the public bus sectors?
LORD NUGENT OF GUILDFORD: My Lords, the competition is in the quality of management. If the noble Lord is familiar with the bus industry, he will know very well indeed how keen the competition is between the private sector and the municipal sector in order to give equally good service and get equally good results. It is very strong indeed.
LORD SHEPHERD: My Lords, the noble Lord would also agree, would he not, that these companies are operating in different places and in quite different circumstances in terms of traffic congestion and the like? Therefore, there is not this strict comparison or competition which the noble Lord is suggesting.
LORD NUGENT OF GUILDFORD: I am afraid the noble Lord, Lord Shepherd, was not listening to my speech. I acknowledged to start with Lord Hilton's point that there is no direct competition, and I was explaining the competitive spirit that there was. If the noble Lord is not able to recognise the value of that, I must just sympathise with him. I am sure my noble friends on this side recognise it.
LORD POPPLEWELL: My Lords, the noble Lord has referred very much to the difficulties of London Transport in its labour relations, into which both he and I conducted an Inquiry. Will he not also make some references to the difficult labour relations that there are
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with the Midland Red and Northern General, which come under B.E.T., which is now to be dealt with by this Bill? The difficulties in labour relationships are not just one-sided. I know the noble Lord wants to be fair, and I sincerely hope he will be, so I suppose he will be referring to the difficult labour relations in the case of these particular companies, too.
LORD NUGENT OF GUILDFORD: My Lords, this is an industry, as all of us who are familiar with it know, where the labour relations are difficult, but I think I should be safe in saying that the labour relations in the case of the London Transport Executive are the worst.
LORD POPPLEWELL: Oh, no!
LORD NUGENT OF GUILDFORD: If I may continue with my speech, I should like to make the point that in our recent debate on the problems of running nationalised industries noble Lords on all sides discussed—and I think a large measure of agreement was shown—the massive and the largely unsolved problems of management in the nationalised industries, and we all had various suggestions to make as to how they might be overcome. It really seems to me to be lunacy to-day to create another of these massive problems in a particularly difficult and fast-changing industry, in which, as noble Lords have rightly said, labour relations are particularly difficult. I would hazard this opinion to noble Lords. There is probably no advanced country to-day which has the problems of the universal motor car and modern traffic conditions which would not welcome a private operator, with private capital and 70 years' of experience of running bus services, coming in to operate a wide range of public bus services for them. Yet here is this Government extinguishing the last major private operator in this country. To my mind, this is a most regrettable step.
I should now like to deal with an argument which was expanded at length in another place, but which I think deserves to be dealt with here. That is the effect of this extra £70 million, which we are being asked to approve, on our finances as a whole. This is going to make an immediate demand for £46 million to be spent. This £70 million—let us have no

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doubt about this—will be provided from the Consolidated Fund, and therefore either the taxpayer will pay it direct (it will presumably appear as an additional "below the line" item in the Budget) or the Government will have to resort to the printing press, with a deficit. One way or the other, the public are going to pay.
The point I want to deal with is this. How is this immediate expenditure of £46 million to be reconciled with the Government's pronounced policy of drastic economy of public expenditure? When this £46 million is paid out to the E.E.T. and the minority shareholders, they are not going to put it into the bank and forget it; nor are they going to lend it to the Government. That is very unlikely. They will either reinvest it directly by developing new businesses themselves, in which case they will spend large sums of money on new plant and equipment and labour—and much of the new equipment, of course, will be imported—or they will make takeover bids for existing businesses or industries in order to reinvest and rebuild their structure. If they make takeover bids and buy other businesses, in each case the vendor will receive the cash, which he will either reinvest or spend on capital goods, or some of it will come out in cash, and so on. However this finally works out, an extra £46 million will have gone into circulation, and will sooner or later be exerting its demand on national resources, capital goods, consumer goods and labour. There can be no doubt, my Lords, that this Bill is in direct and outright conflict with the Government's declared policy of drastically cutting back public expenditure, and I hope that the noble Lord, Lord Shepherd, who I see making some notes, will deal with this very important point.
I would remind noble Lords that in another place the Government were given a chance to redeem the financial horror of this Bill. A Conservative Amendment was moved in another place to instruct the Transport Holding Company to sell off the Thomas Cook Travel Agency, with a capital value of probably £20 million to £30 million. That would have paid the greater part of the purchase money required for B.E.T., and would have done so without making any further demands on the national economy at this time. That would have been
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genuine. So far as I know—and the noble Lord, Lord Shepherd, will tell me if I am wrong—there is no doctrinaire Socialist commitment to nationalise travel agencies. Everybody knows that Thomas Cook came into Government hands entirely fortuitously, as a war-time accident. The shareholding fell into the hands of the enemy, and, after the war, this naturally fell into the hands of the Government. So the ownership of Thomas Cook is really quite unrelated to any broad nationalisation plan that the Government can claim to have. This reasonable proposition of raising the money was put to the Government, but they turned it down on the ground that what they have they hold.
I must say to my noble friends on the Conservative Benches that I very much regret that I must advise them that we should not divide against this Bill. As the noble Lord, Lord Hilton of Upton, indicated, it must be regarded as part of the Government's transport policy for which they can claim an electoral mandate. But I must also say this to the Government. Nobody outside Parliament or inside Parliament who takes an intelligent interest in this Bill is persuaded for a minute either that it is not in flagrant conflict with the declared policy of stringent economy or that it will not weaken the general tone of management in the passenger transport business. It clearly has no other motive than the nationalisation of the bus industry. On its merits it certainly should not go on the Statute Book; certainly not now, when the need is for a broad rational policy that will unite all sections of the nation. I say this to noble Lords opposite in all sincerity; the short-term gain of Party satisfaction will be heavily paid for at the price of long-term Party reputation if they proceed with it. I strongly urge the noble Lord, Lord Shepherd, to advise his Ministerial colleagues to withdraw this Bill.

COMMONWEALTH IMMIGRATION: AMENDING LEGISLATION
4.12 p.m.
THE LORD PRIVY SEAL (LORD SHACKLETON): My Lords, with permission I should like to repeat a Statement which my right honourable friend the

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Secretary of State for the Home Department has just been making in another place about Commonwealth immigration. The statement is as follows:
"The Government have watched with great concern the rapid departure from East Africa of holders of United Kingdom passports, and their arrival in this country. As the House knows, Mr. Malcolm MacDonald has recently visited Kenya where he has had full discussions about this problem with President Kenyatta and the Kenyan authorities. The Government have also been closely in touch with the Governments of India and Pakistan. During the last three months over 7,000 immigrants have arrived from East Africa, which is more than for the whole of 1966. The signs are that if no action were taken the flow would increase at an even faster rate. This sudden arrival of large numbers of people is placing a serious strain upon the services of those areas where they decide to settle. Whilst the Government is extremely reluctant to interfere with the arrival of persons holding United Kingdom passports, nevertheless it is necessary for the inflow to be brought under control.
"A Bill will be presented tomorrow bringing under immigration control citizens of the United Kingdom holding United Kingdom passports who have no substantial connection with this country, for example, by birth or paternal parentage. This legislation will not only apply a control to the present rush of immigrants from East Africa; it will also extend to persons in other parts of the world who have hitherto been similarly exempt from United Kingdom immigration control.
"There will be a special allocation of 1,500 vouchers a year for such persons. Voucher holders will of course be entitled to be accompanied or joined later by their dependants. In this way it will be more possible for immigrants from East Africa to arrive here at a rate at which they can be absorbed into the community. The effect will be that those wishing to come will have to wait their turn.
"The Government have also reviewed the existing scheme of employment vouchers and my right honourable
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friend, the Minister of Labour, will be announcing changes that are being introduced. These will be designed to reduce the present long waiting lists, to adapt the scheme more closely to this country's economic and social needs, and to see that as far as possible immigrants with special qualifications do not find themselves unable to secure jobs appropriate for those qualifications.
"The Bill will also contain provisions for dealing with the problem of clandestine immigration by Commonwealth citizens. It will make clandestine entry an offence, and there will be provision for substantial penalties for those convicted of smuggling in immigrants unlawfully. The period of 24 hours after landing within which an immigrant can be required to submit to examination by an immigration officer will be extended to 28 days.
"The Bill will curtail the right of dependent children, up to the age of 16, to join a single parent in this country. The original provision was intended to ensure the unity of the family but the Government has been concerned by the great increase in arrivals of children at or about school-leaving age, seeking work and often coming to live in an all-male household. The existing right of dependent children to join both parents in this country remains unaltered. Next week I shall lay before the House as a White Paper a draft of instructions to immigration officers setting out how they are to exercise discretion to admit children to join a single parent. It will also include instructions that they are not in future to admit dependent fathers below the age of 65. The present minimum age for admission is 60. Enforcement has been difficult, and some men enter at younger ages in order to take employment here.
"Finally, the legislation will give power to require that dependants can be asked to undergo medical examination at the ports of entry, and subsequently to report to the medical officer of health for treatment.
"The Government are satisfied that these measures are necessary in fairness to the people of this country and in the interests of equitable treatment for the citizens of the Commonwealth

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as a whole. The Government's purpose is to create a climate in which good community relations in this country can be fostered."
That concludes the Statement made in another place by my right honourable friend the Home Secretary; but it may be for the convenience of the House if I inform your Lordships of the proposed programme for the Immigration Bill next week. Your Lordships will, I am sure, appreciate the great urgency of this Bill. It is anticipated that we shall receive the Bill on Wednesday evening from another place and we then propose to ask the House to suspend Standing Order No. 41, and, if the House agrees, we hope to take the Bill through its remaining stages—if necessary through all its stages, depending on the hour that the Bill reaches us—on Thursday, February 29.
LORD BROOKE OF CUMNOR: My Lords, may I thank the noble Lord the Leader of the House for repeating that Statement made by the Home Secretary in another place? Is he aware that there will be a widespread welcome for the decision of the Government to take emergency action to deal with the difficult situation that has been occasioned by the Kenya Government embarking on a policy which can only be described as racial discrimination? Is he also aware that the further proposals for amending the Commonwealth Immigrants Act 1962 are largely taken from the speeches of my noble friend Lord Derwent and myself in the debate on the Expiring Laws Continuance Bill in this House three months ago, though they fall far short of the thorough-going review of the future population composition of this country which some of us have been pressing on the Government for some time as being absolutely necessary? I feel sure that on behalf of my noble friends I can say that the Opposition appreciate to the full the urgency of this Bill, while reserving our right to examine it in detail, because this is going to be an important measure. Can the Leader of the House say whether a further statement promised by the Minister of Labour, which may be of a detailed character, will be available to your Lordships' House fairly soon?
LORD BYERS: My Lords, while thanking the Minister for making that Statement in your Lordships' House, may
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I say that we on these Benches regard it as a disturbing one? We realise that something has to be done, and we realise the reasons why it has to be done with such urgency, but we shall want to study the details of the Bill particularly to see that there is proper provision made for such things as appeal procedures. In view of the pledges which were given by the former Colonial Secretary in a previous Conservative Government in, I think, 1963, may I ask the Leader of the House whether the Government will do their utmost to involve other countries—it is welcome to know that India and Kenya are involved—so as to ensure that no Kenyan Asians or others covered by this Statement face the prospect in the future of being stateless persons? This would be something for which we could not take responsibility in this country.
LORD SHACKLETON: My Lords, if I may reply now to the two noble Lords who have spoken, may I first thank them both for their remarks. I am in substantial agreement with what they have said, although I should not like the noble Lord, Lord Brooke of Cumnor, to think that he and his noble friend Lord Derwent have a monopoly of wisdom in these matters. Certain of the developments and tendencies have been apparent to many of us. It is a very difficult situation, and I wholly agree with the noble Lord, Lord Byers, that this is a disturbing Statement. But it is one that the Government have felt compelled to make, and I am sure that most of your Lordships would feel that it was compulsion rather than desire which has driven us to adopt a measure of this kind.
My Lords, there will be an opportunity to examine the clauses as soon as the Bill is tabled. I do not think we shall find that they are too complicated, but of course we must look at them. I recognise the noble Lord's concern in this matter. Obviously with every day that goes by the situation becomes more serious, and that is why we wish to treat the matter with urgency. The noble Lord, Lord Brooke, asked me about the statement by the Minister of Labour. I am sorry that I cannot say when it will be made, but I will inquire and let him know personally in relation to the discussions on this Bill.
LORD BROCKWAY: My Lords, while reserving any further comments until the Bill is introduced, may I ask my noble friend these questions? First, is it not a fact that when independence was given to Kenya in 1963 the pledge was given to Asians who did not accept Kenyan citizenship that they would be permitted to come to this country under a United Kingdom passport? Secondly, is it not also the case that the Indian Government, of which Pandit Nehru was then the Prime Minister, supported by Mrs. Indira Ghandi, now the Prime Minister—and incidentally by myself—urged the Indian community to take Kenyan citizenship? Thirdly, is it not the fact that the great pressure now resulting from Asians coming from Kenya is due to the panic warnings given by Mr. Duncan Sandys and other colleagues about the probability of legislation being introduced? Finally, while the Commonwealth Immigrants Act was defended on the grounds that it was non-racialist, because it referred to all Commonwealth immigrants, are not these proposals entirely racialist, entirely based on colour, because they are applied only to Asians and those of colour, and not to white people?
LORD SHACKLETON: My Lords, I will do my best to answer my noble friend Lord Brockway, who clearly has been more deeply concerned and more involved in these affairs than I have. Certainly it is true that British nationality was allowed to those who did not take Kenyan nationality. I think I ought to make clear—and I should have made this clear earlier to the noble Lord, Lord Byers—that there is no question of losing their nationality. This is the basic dilemma that confronts us, and why it is so vital that we get the right sort of machinery. What is proposed is that a queue shall be established which we hope will be more orderly and provide a more orderly situation than exists at the moment. I would rather not comment on the actions of Mr. Duncan Sandys in this area. I suspect that they are a good deal more embarrassing to the other side than to this side of your Lordships' House; and in a matter in which we wish to co-operate sensibly I would rather not pursue that more fully.
I must at once say to my noble friend Lord Brockway that this is not racialist, and it is unfortunate to attach that term
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to this measure. The essence of this measure relates to those who are sometimes called "United Kingdom belongers". Those who belong to the country and have their associations with it are naturally those we should expect to come here. These particular citizens in Kenya are not U.K. belongers and never have been. I must make clear that this Bill and its provisions will apply to all U.K. citizens, wherever they may be, within the terms of the Bill as it is produced. The fact that they will apply mainly to those who are of a different colour is because it will apply to those who have not been belongers to the United Kingdom. I assure the noble Lord that the Bill is not drawn in racialist terms as he suggested.
My Lords, the important point is that we are determined, and indeed it is vital, that this country shall make a success of its race relations. It is a highly delicate and difficult area. My right honourable friend the Home Secretary hopes soon to extend the provisions of the Race Relations Act. We must be realistic in this matter. I cannot imagine a more difficult decision that the Government have had to take than this one, and I ask noble Lords to consider the consequences of the rush to this country and our ability to absorb it. It is not merely the happiness of white citizens of the United Kingdom that is at stake; it is the happiness of our fellow citizens who are themselves Asian or coloured.
BARONESS GAITSKELL: My Lords, arising from what the Leader of the House has just said, and while viewing with a certain amount of sadness the Statement he has made, may I ask my noble friend and the Government, particularly when they are dealing with the abuses that arise from dependants, or so-called dependants, coming to this country, that they will allow proper and real dependants, the real children of immigrants who are here, to enter this country? It seems to me that that is the basis of healthy integration which is necessary for the immigrants who are already here.
LORD SHACKLETON: I entirely agree with my noble friend. In fact the ratio at the moment is that for every one voucher holder there are something like three dependants. The purpose has

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always been to avoid the splitting of families. A certain amount of deliberate family splitting is going on already, but there is certainly no intention to change the general policy. My noble friend will see, when she looks at the Bill and we explain how it operates, that her sentiments are fully taken into account.
LORD KILBRACKEN: My Lords, could my noble friend say whether the restriction applies to citizens of the Republic of Ireland?
LORD SHACKLETON: My Lords, we have common citizenship with the Republic of Ireland and that puts us in a different situation, but I am embarking on a field with which I am not so familiar as my noble friend Lord Stonham is, so I had better be careful. Perhaps the noble Lord, Lord Brooke of Cumnor, has the answer.
LORD BROCKWAY: My Lords, while appreciating sincerely the difficulties which Commonwealth immigrants cause in this country, particularly in the spheres of education and housing, may I ask whether the Government will take into consideration that the Asian children who come from Kenya have English as their mother tongue and would not cause difficulties in education, and that they are living according to European standards and so will not cause the difficulties which have arisen in housing and in other respects?
LORD SHACKLETON: My Lords, it seems to me that my noble friend is approaching this problem from a class basis. I hope he will not take this too much to heart, but he made a case on particular grounds. It does not significantly alter the problem. I appreciate that many of these Asians are English-speaking and that quite a lot have skills we would wish to have here. It is simply a matter of the rate at which this country can absorb them without danger to our own national multiracial unity within this country.
LORD CONESFORD: My Lords, in view of the great amount of business before the House this afternoon, would it not be better, whatever our views, to await the Bill?
BARONESS ASQUITH OF YARNBURY: My Lords, may I ask for one clarification
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from the noble Lord the Leader of the House? Did I understand correctly that white Kenya citizens holding British passports are to take their place in what he called "the queue" with others?
LORD SHACKLETON: My Lords, it entirely depends on whether they fall within the definition of United Kingdom belongers, which is not, I may say, a phrase which appears in the Bill. They may or may not fall within the category of the Bill, but it is intended to apply to all, regardless of colour, and if the noble Baroness will await the Bill, she will have an opportunity to pursue that point.
BARONESS ASQUITH OF YARNBURY: My Lords, I am not familiar with the term "United Kingdom belongers" and I shall be grateful, if not now then later, to have a more precise definition of it.
LORD FARINGDON: My Lords, would my noble friend not agree that the position of these Asians coming from Kenya is rather special, both on account of their British passports and on account of the fact that they are being driven out of their own land and will not have anywhere to lay their heads? Has it occurred to Her Majesty's Government that it might be possible temporarily to reduce the flow from other sources where the need is not so urgent?
LORD SHACKLETON: My Lords, I very much take my noble friend's point. They are in a special category, because they are United Kingdom citizens. This is what makes this particular problem so much more painful May I say to my noble friend that the Government have wrestled with this problem in every sort of way, including the way in which he is looking at it, but it has been decided—this is the present view of Her Majesty's Government—that it would be undesirable to reduce the number of vouchers that are at present available to Commonwealth citizens. I do apologise to the noble Baroness for the word "belonger", but I think it is one of those ugly words whose meaning, however, is quite self-evident.
BARONESS ASQUITH OF YARNBURY: My Lords, I regret that it is not so. I never heard it before and I dislike it. I should welcome a definition. I think that in a proposed Bill of Parliament we

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are justified in asking for an accurate definition of a term which is going to determine the destiny of thousands of people to whom we have an obligation.
LORD BROOKE OF CUMNOR: My Lords, is the noble Lord the Leader of the House aware that my noble friends and I are wholeheartedly behind the Government in their desire declared in this Statement to create a climate in which good community relations in this country can be fostered? May I venture to suggest that our next step should be to examine together the Commonwealth Immigrants Act and how it can best be amended to achieve this end?

THIRD LONDON AIRPORT: SITING INQUIRY
4.36 p.m.
LORD BESWICK: My Lords, with permission, I should like to repeat a Statement made by my right honourable friend the President of the Board of Trade in another place on the Government's proposals for a third London Airport. The Statement is as follows:
"As the House knows, my right honourable friend the Minister of Housing and Local Government has consulted local authorities and other bodies about a realignment of the runways of Stansted, and we have now studied all the replies. These raise certain new considerations. Although realignment would greatly reduce the number of people seriously affected by noise, it would affect many people who had neither the occasion nor the opportunity to object at the original inquiry. Moreover, those consulted have argued that the traditional land requirement and provision for expansion to a four runway airport amount to such a radical departure from the earlier proposals as to constitute virtually a new project.
"In the light of these considerations, and the continued public concern about the Stansted decision, and the general welcome given to the proposals in the Town and Country Planning Bill for dealing with cases of this type, the Government have decided to refer to an Inquiry, which will take place in public, the question of the siting of the
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third London airport. This will be a far wider Inquiry than that proposed in the Report by the Council on Tribunals. It might take the form of a Planning Inquiry Commission, duly constituted after the Bill has become law, or some other form. We would wish to discuss the exact form of the Inquiry with the Opposition, bearing in mind the need to proceed with all reasonable speed. Meanwhile we shall not proceed with the Special Development Order for Stansted.
"I hope the House generally will welcome the Government's readiness to attend in this way to both local opinion and public opinion generally."
EARL JELLICOE: My Lords, I am grateful to the noble Lord for repeating this important Statement. I am even more grateful, as I am sure are many of your Lordships and many people outside Parliament, for the terms of the Statement itself, and I should like to congratulate the Government on their complete, if somewhat belated conversion. This is an illustration of the fact that even very stupid Governments are sometimes capable of doing quite sensible things. It is also a vindication of the usefulness of your Lordships' House and of the view expressed in our debate two months ago, I think almost unanimously, that the Government should constitute a new and really wide-ranging Inquiry into this matter. That debate was in no wise a Party political one, and rightly so, since this is not a Party political matter. That being so, I think that we all welcome what is said in the Statement about consultation as regards the form of this new Inquiry, and I think, too, that we should wish to endorse the need to proceed in this matter with all reasonable speed.
Could I put this one question to the noble Lord? Am I right in assuming from the terms of the Statement that the Inquiry will be empowered to inquire into the pros and cons of sites alternative to Stansted? Again, I should like to congratulate the Government on their complete capitulation in this matter.
LORD BESWICK: My Lords, if I may answer the noble Earl, I agree with him absolutely about this not being a Party matter though I am bound to say that I find it difficult to reconcile that view

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with his use of the word "stupid". As for the question he asks, I am glad to confirm that the proposed Inquiry will be able to range over a much wider field than the question of Stansted. It will be open to discuss all matters, including timing, access and costs.
LORD BYERS: My Lords, I would not dream of criticising the Government for changing their minds on the rare occasions when they change them in the right direction, but following on what the noble Earl, Lord Jellicoe, said, may I ask whether the terms of reference are still wide enough? The reference is still to a third London Airport. Should it not be wide enough to examine a third international airport for the United Kingdom? And may I ask whether the Government will give an undertaking at some time that they will accept the findings of the Inquiry?
LORD BESWICK: My Lords, as to the terms of reference, I am sorry that the noble Lord is disagreeing with them, because they have not yet been decided.
LORD BYERS: Perhaps I may correct that. The noble Lord has referred in the Statement to the third London Airport. My point is that we ought to be looking for a new international airport for the United Kingdom. It may not be London.
LORD BESWICK: I still say that the terms of reference have not yet been decided and they will be a matter of consultation with others. Although we are considering here a third London Airport, I do not believe there has been any real objection to the definition of the problem. There no doubt will eventually be the need—and I think the White Paper referred to it—for another United Kingdom airport, but there is also no doubt that a third London Airport is needed.
VISCOUNT DILHORNE: My Lords, while welcoming the Statement made by the Government, I should like to do something that I do not think I have ever done before, and that is to congratulate the Government on their decision. May I ask the noble Lord to make two things clear? First of all, the form of the Inquiry is of great importance. I welcome the fact that there will be discussion with the Opposition about it,
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but could the noble Lord say that there will be some discussion with those who have taken such an active part heretofore in relation to this matter—for instance, the county councils involved—because the more agreement that can be obtained now as to the form of the Inquiry and the terms of reference, the better. Will the noble Lord say that the terms of reference will be discussed with the Opposition and with others affected? If I may, I should like to join in the hope that now that this decision has been taken the matter will be got on with without any unnecessary delay.
LORD BESWICK: My Lords, I am grateful to the noble Viscount for what he has said, and the spirit in which he has said it. I am sure—and I have always accepted this—that the criticisms that he has made have been made in the best spirit and in order to establish the truth; and that has also been my approach to this matter. As to the scope of the consultations, I cannot of course commit the Government to consult with every local authority. I am not certain how we define "opposition" in this context, but I agree with the noble Viscount that, having decided to establish the Inquiry, it is absolutely essential to ensure that it commands public confidence. I will see that what he has said about consulting others is considered.
BARONESS BURTON OF COVENTRY: My Lords, as Chairman of the Council on Tribunals, I welcome the Statement, and should like to ask this supplementary question. Will this Inquiry be a statutory one?
LORD BESWICK: My Lords, my noble friend has imported this question of the Council on Tribunals. I should like to make it clear, as she has mentioned her position on that Council, that this decision, which we have now taken, is in no way connected with the Report of the Council on Tribunals. So far as her question is concerned, the authority of the Inquiry will, of course, depend upon its form, and that has yet to be decided and will not be decided until after the consultations that I have mentioned.
LORD MITCHISON: My Lords, will the scope of the Inquiry include the urgency of the needs of B.E.A.? That is

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a matter which was thought to be very relevant at an earlier stage.
LORD BESWICK: My Lords, I agree that this question of the time-scale is vitally important, and nothing that has arisen in any way suggests that the Government have been wrong in laying down the time-scale which was talked about earlier. All I can say now is that the Inquiry will be conducted with all possible speed consistent with ensuring public confidence.
LORD MITCHISON: My Lords, with respect, this is not the point. Will my noble friend say whether the scope of the Inquiry will include the urgency of the needs of B.E.A.?
LORD BESWICK: My Lords, I think I said in answer to an earlier supplementary that the scope of the Inquiry will consider all matters, including timing, cost, siting and access.
LORD BUTLER OF SAFFRON WALDEN: My Lords, is the noble Lord aware that those who have been in on this from the beginning, and who have pressed for a further Inquiry, are very much gratified by the Government's decision?
LORD BESWICK: My Lords, I am sure that what the noble Lord has said will be music to the ears of many.
LORD SILKIN: My Lords, may I say that there will be great joy in Heaven over this decision? My noble friend has said that the Opposition will be consulted; and he has also said that this is not a Party political matter. Noble Lords on this side of the Chamber have also been opposed to this scheme. Would he also consult with some of us on this side about the terms of reference, as we are equally concerned?
LORD BESWICK: My Lords, I am sure that we have to be sensible about this. Without making any commitment about formal consultation, I am sure it will be possible to hear as well the points of view of experts like the noble Lord. May I also express satisfaction that there will be joy not only in Saffron Walden, but in Heaven?
LORD LEATHERLAND: My Lords, I should like to congratulate my noble
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friend and the Government on the decision at which they have arrived. I say that as one who addressed your Lordships at great length when we debated Stansted earlier. Just as my noble friend Lord Silkin says there will be great joy in Heaven, there will also he great joy in Essex which, but for this decision, would have been the other place.
LORD CONESFORD: My Lords, may I also say how welcome the Government's decision is? But I should like to ask the noble Lord, when he is considering the terms of reference, to look further at the point made by the noble Lord, Lord Byers. Of course, the interests of London are important, but calling the thing in advance the third London Airport may appear to many people to beg some of the most vital questions. It has led many who are taking part in the controversy to say that it must automatically be within a certain distance of London and arbitrarily to exclude other points. Would it not be better to ask where our next great international airport should he situated? That is the thing to be investigated, and a great many questions are begged if you call it the third London Airport.
LORD BESWICK: My Lords, I am sure that what has been said by the noble Lord who has gone, and by the noble Lord who remains, will be considered, though I must say that a good deal has already been said and written about this problem. There is a need for consideration of a new United Kingdom airport, but no one so far has doubted that there is a need for a third London Airport, and that is what we are now considering.
LORD MACPHERSON OF DRUMOCHTER: My Lords, as I led the debate in this House on this subject, I should like to take this opportunity of congratulating the Government on their decision, which I think is a real act of statesmanship.
LORD BESWICK: My Lords, I must again just take the time of the House to say how appreciative I am, and I am sure the Government as a whole will be, at the spirit that has been shown. I hope that what has been said here this afternoon will be a happy augury for the success of the proposed Inquiry.

TRANSPORT HOLDING COMPANY BILL
4.50 p.m.
Second Reading debate resumed.
LORD HURCOMB: My Lords, I am well accustomed to waiting for the bus, and if it is not too trivial a matter for your Lordships to return to, I should like to say a word or two about certain aspects of this Bill. I would not dispute the force or importance of many of the points which the noble Lord, Lord Nugent of Guildford, made. But I think there are answers to many of them, and for my part, looking at the matter historically, as I feel bound to do, I feel that the acquisition of the principal remaining private interest in public passenger transport by the already nationalised group, which it is one of the main objects of this Bill to finance, is a logical and, in this direction, almost a culminating step in a long process.
Your Lordships will, of course, have an opportunity of considering the whole question of public passenger transport when the Transport Bill reaches this House. I confess I am not very clear as to what the future of that transport is intended to be. If a huge national bus company is now created, will it again be split up under the various area schemes into a number of component parts? Much of that is not very clear to me. But I should have thought that the difficulties could be avoided if the organisation in the immediate future is kept sufficiently loose.
Perhaps your Lordships will permit me to explain why I regard this Bill as a natural development. Thirty years ago many transport men and many managers of transport undertakings, both private and municipal, were themselves agreed that the time was ripe over wide areas for merging some of the local tramway and bus undertakings in larger bodies. It would have been in the interests of economy and of efficiency, and it would have contributed to the convenience of the travelling public to do so. But the most formidable lion in the path, or at least the lion with the loudest roar, was the acute jealousy which prevailed among adjacent local authorities, and, apart from London, nothing in fact was done.
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The Transport Act 1946 provided a machinery whereby areas could be specified and schemes submitted by the British Transport Commission, with a view to establishing new authorities in which undertakings in the hands of municipalities and of the private interests would he merged. Why then did no such schemes come into being? The Minister himself had power to specify areas and to require submission of schemes to him, though I do not recall that he ever made such a request to the Commission. The Commission itself made some moves towards the preparation and submission of such area schemes, particularly in the area of the North-East coast, which looked promising. But the procedures were elaborate; opposition was likely to be strong, and there was always, of course, the possibility that rationalisation of local government boundaries would soon go some way towards rationalising local transport.
We came, however, to the conclusion—and I certainly came to this conclusion—rightly or wrongly, as time went on, that the then Minister, to whom the schemes had to be submitted, and the Government to which he belonged, let alone their successors, would not in the last resort be prepared to coerce important municipalities or to face the Special Orders Procedure in Parliament to which their own orders would have been subject. Whether this was an error of judgment I do not know, and if it was I cannot, as Chairman of the Commission, disclaim my share of responsibility for it, and for not pressing matters to an issue. But it would be a mistake to think that the British Transport Commission did nothing in this field; and this is where our action is closely relevant to the present Bill.
In the review of public passenger transport which they were required to make, the British Transport Commission in their very early days thought it would be a sound initial approach to the problem of reorganisation if they could acquire the whole interest in those privately-owned groups which were willing to negotiate with them and in which they already had a 50 per cent. interest inherited from the railway companies. We quickly came to terms with the Tilling organisation and with Scottish Motor Transport, and had the backing of the Government

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of the day in issuing the transport stock required for this purpose. The noble Lord, Lord Hilton, said that we had discussions with the British Electric Traction Company. I do not recall that we had any prolonged or serious discussions because, as I said just now, I was anxious to proceed as far as possible by agreement. But it is quite true that at a later stage I did have talks with Mr. Hartley Drayton about a closer association between his undertaking and our own. They were confidential, and I can say nothing more about them. But we took over these two very large groups, Tilling's, which represented most parts of England, and Scottish Motor Transport, which had almost a monopoly in Scotland.
The management of these new interests presented no difficulty. We left management to the local concerns, subject only to the use of common services and such general direction as their previous owners had insisted upon. In effect, the Commission acted as a holding company. We did not try to centralise, and had no wish to do so, and I should have thought that that is part of the answer to the very forcible criticisms Lord Nugent made as to what may happen if the process of taking over the private interests in which the nationalised undertaking already had a 50 per cent. share was completed. I feel myself that those difficulties could be avoided.
But, of course, I cannot dispute the risk that, once an undertaking is nationalised, labour pressures may be increased. It has been said, in answer to that point: what about Midland Red?—that it is not altogether one way. That argument Lord Nugent has pressed. But I think the experience of the last twenty years has shown that a public passenger transport undertaking can be efficiently managed in public hands, can earn satisfactory revenues, and I see no reason myself why that should not be true if the present acquisition is sanctioned financially by Parliament. I said we did not come to terms with the B.E.T., but, for my own part, and speaking for myself—I cannot claim to recall the views of my colleagues at this stage—I did not, and I do not, consider that we were in any way failing in our duty because we did not, or could not, immediately gobble up B.E.T. as
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well as the other two great private interests.
I knew from my own past official experience and from my own use of their services as a citizen that the B.E.T. companies, like Southdown and Midland Red, were extremely efficiently managed. They were by no means devoid of a proper sense of duty to the public, and they were ultimately under the control of the Traffic Commissioners. I should like to say how much I agree with the noble Lord, Lord Nugent of Guildford, in what he said about the efficiency of that type of administration and control through the Traffic Commissioners. I had a great deal to do with the choice of the original team and I followed their work for a great many years with the closest interest.
On top of all that, speaking of B.E.T., as a 50 per cent. shareholder we could feel satisfied with the return which we received from our investment, and perhaps, again speaking for myself, I thought there might be something to be said for running these two systems of complete ownership and 50 per cent. ownership side by side for a little longer. So, to cut a long story short, we left well alone. But now circumstances have changed. Some of the gilt may be off the gingerbread, and indeed some of the subsidiary undertakings apparently have difficulty in running their rural services any longer at a profit. It is my view, although many of your Lordships will disagree with me, that if they have to be given public money they should, together with their more profitable activities, be in public hands.
I assume, of course, that the price now being paid for B.E.T. is just and fair to both sides; that the Government are satisfied that they are not paying too much and that the company is being fairly treated. In these matters there is always the possibility mat the Government may pay one lot of interests on the profits of the past and another lot of interests on the prospects for the future, with the result that the capitalisation of the Government organisation tends to get overloaded. But here there must have been close bargaining. I think the Government must be assumed to have safeguarded their own interests, and, so far as the company is concerned, surely

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the answer to any doubts on that score is that they have agreed and accepted the terms.
I hope I have not dwelt too long upon the past, but I submit that, so far as a large part of the financial provisions contained in this Bill is concerned, they represent a logical development in the evolution of the organisation of public passenger transport in this country. There is nothing revolutionary about the proposal. It is not even a 100 per cent. proposal; it is taking only the remaining 50 per cent. of what the nationalised undertaking already has, and in that respect I think there is no alternative but to accept these terms as just carrying further the action taken by the British Transport Commission twenty years ago.
Now, as we know, the Minister has far more ambitious plans. If she gets the authority to proceed with them which she is now seeking from Parliament in another Bill, she will wisely have cleared her path, when she comes to face the municipal lions, by having led captive already the only large remaining non-municipal member of her menagerie. I feel inclined to wish her luck when she comes to face the construction of these future schemes, which, as I said, are really only carrying on a process which many people thought should have been begun thirty years ago and which were carried a considerable way twenty years ago but which have since marked time.
5.37 p.m.
LORD TEYNHAM: My Lords, this is a very small Bill with two clauses, but I suggest it has very great and grave implications. Before referring to these matters perhaps I should disclose that I have an interest, as I am a director of one of the British Electric Traction Companies—Southdown Motor Services Limited—which is, if I may say so, one of the best and most efficient bus companies in the country. Fifty per cent. of it is owned by British Rail, and we get on very well indeed.
This Bill is closely linked with the Transport Bill which is now in Committee stage in another place and which sets out the establishment of a national bus company, to which the assets and liabilities of the Transport Holding Company will be transferred. Under Clause 50 of the Transport Bill, the Transport
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Holding Company is going to be dissolved. Therefore we are being asked by the Bill which is before the House to-day to increase the borrowing powers of a company which is already in a shadowy condition. I think it is astonishing that at a time when Her Majesty's Government are pleading for financial restraint in all quarters of the public and private sector they should bring before the House a measure to spend a further £70 million of public money. Some £46 million of this money is to be paid out to shareholders, which will undoubtedly increase inflation in the country.
Does the Minister in charge of the Bill really think, for example, that it is a good thing to cut the road building programme in order to nationalise buses and coaches? The investment of the British Transport Commission, and later the Railway Board, in the British Electric Traction Group of buses has worked well for over twenty years. Why do Her Majesty's Government want to change it? I am afraid I cannot accept that this change is merely a culminating step, as has been suggested by the noble Lord, Lord Hurcomb. It is much more than that, and I would say that the whole conception of the Bill is hostility to private enterprise, and not to increase efficiency.
I suggest it is no argument to say that as 80 per cent. of the bus services are now run by public organisations it would be much better and more efficient to have all of them under public ownership. What we on this side of the House should like to know from the Minister is why he thinks they will run better, more efficiently or more cheaply than by private enterprise? Is there any justification for assuming that public ownership has provided a better bus service? I suggest that Her Majesty's Government so far have failed to provide this evidence. In fact, the right honourable lady, the Minister of Transport, in her White Paper, used these words:
"The main network of public transport is no longer an appropriate activity for private companies ".
What an extraordinary statement to make! And on what is it based? I can see no justification at all for that statement, and I do not think it has ever been proved. Now we are going to have a national bus company which will have

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no private enterprise against it to keep it on its toes. The Minister of State in another place said:
"The great advantage is that there will be economies. We will be joining bus companies together and getting a better yield ".
Her Majesty's Government must be aware that the head of economic research at the Transport Holding Company, the Company which is to purchase the British Electric Traction shares with this borrowed money, has made it quite clear publicly that he does not agree with the statement in the White Paper which reads:
"In many of these areas the efficiency of bus operation is hampered by the small size of the undertakings."
The head of economic research has stated that:
"If efficiency is to be measured by costs, there is no evidence that larger undertakings reduce costs."
I would ask: How blind can a Government become not to examine more closely the experience and statements of their own specialised people? Have they neglected to study the economic research figures from the Transport Holding Company, indicating quite clearly that with a fleet of 30 buses the average working expenses per car mile is 37d., and for fleets between 31 and 60 buses the figure rises to 39·4d., and at 1,000 buses the figure is 46d. These are certainly very illuminating figures. There is no doubt whatever that an increase in the size of the undertaking will not reduce costs; in fact the evidence available really points the other way.
My Lords, this is not a Bill to provide money for improving the efficiency of our bus transport system. It is a Bill, I must say, based on doctrinaire Socialism and hatred of private enterprise. It is nothing more than that. Her Majesty's Government have frequently said that the whole of the scheme is to be on a commercial basis. I would say that everything points to the opposite direction. Whichever way you look at it, the money under this Bill will have to be raised at a high rate of interest at the taxpayers' expense. Against this, what is the present return on the capital to be invested in British Electric Traction shares? I think it is well known to most of your Lordships that it is approximately 5¼ per cent. I suggest to your Lordships that it is hardly a good commercial transaction to borrow money
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at 8 or 9 per cent., as interest rates are at the present time, and to receive 5¼ per cent. in return.
I would add that there is a very much more serious aspect to the already agreed purchase of the British Electric Traction shares. I wonder how many of your Lordships are aware that Her Majesty's Government, having done away with investment allowances in 1966, in 1967 negotiated to buy out the largest private bus operator, and then within a few weeks after agreement as to the purchase price announced that investment allowances are to be restored. I suggest that your Lordships consider what would have been the effect on the profitability of the transaction if beforehand Her Majesty's Government had informed the B.E.T. shareholders that it was their intention to bring back the 25 per cent. investment grant for buses. I am afraid I really fail to understand the explanation of this matter by the noble Lord, Lord Hilton of Upton, and I listened most carefully. In the City of London we have a word for such commercial transactions of which your Lordships must be well aware. I would say further only one thing. I think Her Majesty's Government should regret, and I go so far as to say be ashamed, to bring forward such a Bill at the present time of financial stringency, and it should never have reached your Lordships' House.
5.14 p.m.
LORD POPPLEWELL: My Lords, the opposition to this Bill in this House from noble Lords opposite is exactly similar to the opposition put forward in the other place. Noble Lords opposite claim this is a Socialist doctrinaire line of approach. I think your Lordships must be convinced that the only argument advanced against this Bill up to now is Tory doctrinaire policy against public ownership. This seems to stand out a mile. No argument has been put in this House, and, after reading the debate in the other House, I would say no argument has been put forward at all except from doctrinaire private enterprise lines as to why this Bill should not be approved.
I would rather commend your Lordships to the very thoughtful speech of the noble Lord, Lord Hurcomb, who has considerable experience, as we all know, in this line of approach. How true it

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was when he said the 1947 Act gave powers with a view to developing a publicly-owned bus service; but the nature of those powers was such that it demanded consultation with various areas and various undertakings before a scheme could be produced. I know so well the conversations that took place in the North-East, which it was thought would be a good experimental starting-off point. One of my oldest friends, Alderman Clydesdale, at that time a member of Newcastle City Council, opposed a nationalised public bus service, ardent Socialist though he was, and I know how in his later years he regretted very much the line that he had taken. I think we may take Lord Hurcomb's words that this Bill is a logical development of the principles that were accepted in the 1947 Act as a true statement of fact. It is very regrettable that the principles of that 1947 Act could not be and were not followed up after 1950, with the advent of a Labour Government. But with a majority of only six they had very little elbow room. They were defeated in 1951 and we know what has happened since, with the advent of successive Conservative Governments, who have done their utmost to prevent publicly-owned undertakings, particularly transport, being a success. Everything it was possible to shed from the publicly-owned transport undertakings which was showing a profit was unloaded under the auspices of the Conservative Party Government, and the publicly-owned undertakings were left with the bare bones. This is an historical fact. Wherever we look we see this.
One was not at all surprised to hear Lord Nugent of Guildford's opening remarks that nothing would make this Bill respectable; that it is a partisan measure. The whole of his line of argument against the Bill was partisan. The partisanship is not one-sided, if it exists on this side at all.
LORD DERWENT: My Lords, of course the argument was partisan because we dislike the Bill. It does not necessarily make it Party partisan.
LORD POPPLEWELL: Then that is accepted; the only argument that can now be advanced against the Bill is a partisan argument. It is not a question of merits or logical development or
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national interest. It is a Tory partisan argument against the Bill. I am grateful to the noble Lord, Lord Derwent.
LORD DERWENT: My Lords, I wish the noble Lord would not misrepresent what I said. I said the Bill is argued against because it is a bad Bill. The argument is partisan in that sense. If that means being partisan, then we are partisan.
LORD POPPLEWELL: My Lords, the words are on record and will, I am sure, be quoted in the future.
LORD DERWENT: Not misquoted, I hope.
LORD POPPLEWELL: The words are on record and will be quoted quite a lot in the future. The noble Lord, Lord Nugent of Guildford, made big play, as he has done on more than one occasion, of a particular reference in a report—he was a member, and I myself way chairman, of the body concerned—drafted in connection with London Transport, because it highlights bad labour relations. There was a sentence in that particular report that referred to labour relations and the difficulty of labour relations. I think it is as well to get this point on record, because this has been used far too often to imply that there were really bad labour relations in London Transport. The particular aspect criticised so much was labour relations at shed level, depot level, regarding rosters. This is not uncommon to London Transport. I agree that there was need for a big improvement of labour relations, in particular in relation to the institution of new rosters at depot level.
LORD NUGENT OF GUILDFORD: My Lords, may I interrupt the noble Lord for a moment? The criticism went far beyond that. It was dealing with the great problem of getting the staff generally to drop their restrictive practices in order to push on with the modernisation of the services. This was the major problem.
LORD POPPLEWELL: My Lords, the Report is there for anyone to read, and the evidence is there for anyone to read; and while in all modernisation schemes, whether they be public or private, there are certain difficulties that arise on both sides, this is the normal sequence. Because these difficulties arose with London

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Transport so far as the institution of a new type of service is concerned, that is not uncommon to London Transport. It is part of an industrial development that has been taking place for many years, as the noble Lord knows.
The main criticism centred on the labour relations on this depot and rostering business. This is indeed common to bus services as a whole throughout the country. Midland Red, which I have quoted, has had considerable difficulty about this; the Northern General has had particular difficulty; Ribble have had particular difficulties. This is an automatic development, and not only those undertakings, but most municipal undertakings from time to time have considerable difficulties about these rostering developments which take place. Therefore, I think this should be taken in its correct perspective.
The noble Lord, Lord Nugent, also twitted the Government for cutting down on the road programme by something like £90 million in the next few years. At the same time, your Lordships must be fully aware that the road programme, even with these cuts, is running at the highest level it has been at any time—roughly £270 million a year. This is nearly double what the Conservative Party left us when the Government took over in 1964. These things must certainly be taken in their correct perspective.
Now if I may turn to the Bill, first of all let me say how much I welcome it. It is most refreshing to receive what, in effect, is an additional borrowing powers Bill in which permission is asked to borrow additional capital to develop a publicly owned undertaking. Particularly since 1953 we have been used to the Minister of Transport repeatedly coming to the House and asking for additional borrowing powers in order to meet a deficit which had been created by Conservative Party policy. Up to 1953 the British Transport Commission, as envisaged by the noble Lord, Lord Hurcomb, and the Government of the day, was able to show a complete profit. From 1953 onwards the deficits commenced, and the Conservative Government of the day had repeatedly to come to the House to ask for additional moneys, to go into the open market to borrow money at a high percentage to
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pay the interest on money borrowed at a low percentage. It was a question of paying up to 6⅞ per cent. on money previously borrowed at 3½ per cent. Therefore, it is indeed refreshing for a borrowing powers Bill of this description to come before Parliament with a view to seeking a development of the publicly owned undertakings.
Instead of those undertakings being the whipping boys, as it were, on behalf of the sacred name of private enterprise, and private enterprise getting all the profits, for the first time we are now asking Parliament to approve this additional £70 million in order that the Transport Holding Company may develop still further its policy. This is most refreshing, and it highlights decidedly the differences there are between both sides in this Chamber.
No matter what may be said, I think events have proved that there is no competition. There is no private enterprise competition in so far as bus services are concerned. Attempts have been made by the noble Lord, Lord Teynham, and other Conservative speakers, to assert that there is this element of private enterprise in bus services. Where exactly is it? Before bus services can charge their fares they have to go to the Traffic Commissioners; they have to prove the need for the route; and objections take place on both sides before a monopoly, as it were, is given to a certain undertaking to run on the particular route. This having been done, the fares are then decided; and any bus service company wishing to increase its fares has to approach the Traffic Commissioners before they can do so. Is there any competition in that? Where does the competition lie? Many different bus groups are running in certain areas, and your Lordships must be well aware that there is no "competition" as I understand the word. When my noble friend Lord Shepherd asked where competition came in, of course members of the Opposition were not able to give any reply.
Remember, my Lords, bus services are not an industry. Buses and transport comprise a service. I think the nation has to realise more and more that it is a service as distinct from an industry; and if it is a service it has to face up to the needs of the country as a whole. Where

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private bus services are running on uneconomic rural routes to-day, we see the services being withdrawn as quickly as possible. There are repeated appeals to the Traffic Commissioners to be allowed to give up a service because it is not profitable. The Traffic Commissioners have difficulty in trying to maintain a service in these areas. Surely, this does away completely with the old idea of competition in that particular direction; but it highlights the service nature of transport. I am delighted that the Transport Holding Company is extending the logical development, as the noble Lord, Lord Hurcomb, said, of the principles accepted by the 1947 Act. Although considerably mutilated by the Conservatives when they were in power, the principles still remain.
In regard to the question of the £35 million, I was delighted to hear that the assessment in the agreement with B.E.T. regarding the compensation to be paid to them, is based upon the actual value of assets, with just £1 million for compensation. The question of the good will, and the question of different values where previous payments of compensation have been made, appear to have gone by the board. I much prefer this question of payment according to a reasonable assessment of values. With these words, I thoroughly welcome this Bill, and sincerely hope that it will go on the Statute Book as quickly as possible in order to allow the Transport Holding Company to complete its negotiations with the B.E.T.
5.30 p.m.
THE EARL OF KINNOULL: My Lords, the noble Lord, Lord Popplewell, I think accused some of my noble friends on this side of the House of not producing any new arguments in relation to this Bill. Perhaps I could say that I did not detect any new argument in Lord Popplewell's speech. In fact, we heard many of the arguments in his last major transport speech. But, worse than that, most of his arguments did not seem to appertain to this Bill at all.
I should say at the outset, as other noble Lords have said, that I am wholly against the proposals of this short financial Bill because at present, when the country's economy is so strained, it is foolish, reckless and imprudent to ask Parliament to approve the raising of a further £70 million to control bus services
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which are at present doing neither harm to the community nor harm to the economy. I believe that this proposed public investment, whose terms we all knew were agreed even before it came before the other House, will prove a bad investment and is no more than a narrow, idealistic political decision equal in its wastefulness only to the groundnuts scheme.
I should like to concentrate on just two of the many aspects of the Bill. The first is the concept of integration, and what we understand by it. The term "transport integration", as I understand it, is a system which links up road, rail, water and air services, and which offers a continuity and balance of service for both passenger and freight. For the ordinary passenger this concept means that his travelling connections from, say, rail to bus are so organised that the least inconvenience is caused and the greatest efficiency is obtained. This applies also to the freight services. All too often today one finds this concept not being fulfilled by public transport. It is not an uncommon experience to arrive at a station, to get out of the train, and to hurry to catch a municipal bus, just in time to see its tail light disappearing in the distance, and then to find that the next bus is not due for an hour. It is this type of co-ordination which we went to see improved. It does not need a Transport Bill to do this. One noticeable gap in the Goverment's integration policy for transport is the complete absence of account being taken of air services. I hope that when the noble Lord, Lord Shepherd, replies he can say why this has not been included in the Transport Bill.
I am a believer, unlike perhaps some of my noble friends on this side of the House, in fair competition between the major inland transport services, and that many of the hidden subsidies should be balanced up so that each can play their part. Where I disagree completely with this Government's transport policy is where competitive alternative services are abolished, where freedom of choice is eliminated, and where a bureaucratic dictator is perhaps set up to order how and when passengers may travel. This concept of transport monopoly, like so many other monopolies, will, I am sure, never prove workable or acceptable.

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The other point I should like to raise is the matter of rural bus services and the T.U.C.Cs. The noble Lord, Lord Shepherd, and the noble Lord, Lord Hilton of Upton, will know that ever since the bus services were considered as an alternative service to the rail service, and ever since rail closures took place there have been constant complaints from users. But although complaints by users of rail services can go before T.U.C.Cs., complaints by users of bus services cannot. This matter was raised by the T.U.C.C. in their last Annual Report. I should like to ask the noble Lord why the powers of the T.U.C.Cs. cannot be extended to include bus services. Surely, if one were to give T.U.C.Cs. this extended responsibility it would give them a better picture of the transport facilities in their area.
This Bill is the forerunner of the major Transport Bill, and is, I fear, only a taste of what its "big brother" will give us in time to come. The Bill is seeking public money to purchase what is generally admitted to be a diminishing asset, and at a price which one is quite incapable of judging as good or bad. It purchases these assets not in a spirit of friendly negotiations between two completely free parties, but in a spirit of determined persuasion which, if unsuccessful, will lead to the use of the iron glove—compulsory purchase powers. The asset which it is to purchase is already wholly-owned by British Transport Holdings, which has received a reasonable return both in interest and in service for many years. Yet its purpose is to hand over the running of this asset from a tried and trusted management to a totally inexperienced National Bus Company.
With these considerations in mind, I should like to end by asking the noble Lord one simple question which I hope he will be able to answer in his reply. What are the economic assessments which have been made by the Government before they commit this £46 million of public money in buying out the B.E.T. interests and their subsidiaries, and what annual return do the Government expect to make on this investment?
5.36 p.m.
EARL FERRERS: My Lords, we have before us this afternoon a tiny Bill, but a
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Bill whose deficiency of size does not reflect its magnitude of effect. It is indeed a Bill of two clauses, one of which is the Title, but it nevertheless enables the Government to borrow £70 million for the nationalised bus companies. I know that noble Lords opposite will not be surprised to know that this Bill has not been received with great acclaim on this side of the House. Indeed, even the gentle words which the noble Lord, Lord Hilton, used to introduce the measure could not have deceived even him that by introducing this measure he had a tiger by the tail.
I was interested in the speech of the noble Lord, Lord Popplewell. He must have pleased his Front Bench, since he at least gave them great support. It must have been encouraging for them to hear at least one lone bird singing their praises. One would have thought that with a Bill of such great magnitude, involving the nationalising of buses, they would have succeeded in getting some other supporters, rather than just one, to support this great cause. However, perhaps they are not quite as enamoured as the rest of their Front Bench. The noble Lord, Lord Popplewell, complained that we on this side of the House were objecting for purely partisan reasons. He said he had read the proceedings in another place in Hansard and had found no arguments put forward why this Bill should not go through. That is a curious argument for suggesting that therefore a Bill should go through. I could not help feeling that the noble Lord must have read the Hansard of another place with his eyes shut, because it was loaded with arguments why this Bill should not go through and why it was unacceptable to many people.
I shall merely keep my arguments down to four this afternoon, and perhaps the noble Lord would like to know at least four reasons why I do not like the Bill. First, I believe that it is unnecessary; secondly. I believe that it is wildly inflationary; thirdly, I believe that the timing of the Bill, if timing means anything at all, is quite disastrous; and, fourthly, I believe it is playing Party politics. I have yet to hear one reasonable and cogent argument to show that the buses at present under private ownership will he run better under public ownership from the point of view of the

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users, of the community in general, and indeed from the point of view of efficiency.
The noble Lord, Lord Hilton of Upton, very sensibly avoided the pitfall of saying that by nationalising these buses we should be getting economies of scale. As my noble friends Lord Teynham and Lord Nugent of Guildford pointed out, that argument was blown to pieces by Mr. Glasborow, who showed that, on the whole, the larger the undertaking the more expensive becomes the running of the buses. What then is the argument for making an even larger unit, when the Government themselves recognise that this certainly will not make running the buses any cheaper and will probably make them more expensive? The noble Lord, Lord Hilton, said that there would be rationalisation and a tidying-up of routes, and that we should do away with overlapping. But the Traffic Commissioners are here at the moment to prevent just that from happening, and they have always done their jobs very effectively. I cannot believe that it is therefore necessary to spend £70 million in order to achieve that.
LORD SHEPHERD: My Lords, may I correct the noble Earl? It is not £70 million in order to buy out B.E.T.
EARL FERRERS: My Lords, the noble Lord accused my noble friend of splitting hairs. I think he could possibly be accused of doing the same thing. The Bill is for £70 million.
LORD SHEPHERD: My Lords, I must correct the noble Earl. There is a vast difference—it is not splitting hairs—between £46 million and £70 million.
EARL FERRERS: My Lords, the Bill refers to £70 million, but I accept the point of the noble Lord.
I think the noble Lord, Lord Hilton, said something about the value of this large public holding, the Transport Holding Company, being safeguarded from the inevitable changes in the bus industry which lie ahead, and that this Bill would do that. I find that a wholly unconvincing argument. He never said how that would be achieved, and yet that was adduced as being an argument for the Bill. I cannot see that these privately operated companies,
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which are mostly doing an excellent job of work on slender profit margins, can be expected necessarily to do better or to run more efficiently if they are put into one large national bus company.
If one looks back, as my noble friend Lord Nugent of Guildford suggested—and I think he was right to suggest that —to January 16, which was only a month ago, one realises that it was the day on which the Prime Minister, after searching investigations, announced a whole series of Government cuts because of the dire state of the economy. Your Lordships will not need reminding of the defence cuts, the education cuts, the cuts in the Health Service, the prescription charges, the cuts in the road building programme and so forth. That was at 2.30 p.m., and at 4.30 along came the Government to ask Parliament in another place to give a Second Reading to a Bill to allow them to borrow a further £70 million in order to nationalise the buses. I am bound to say that this kind of thing, and this kind of timing, make people incredulous of the Government's real intention and determination to cut their own spending, and therefore of the need of the general public to cut theirs. When people see the Government embarking on expenditure of this magnitude and spending sums of money which are utterly unnecessary, it makes them feel that the situation cannot be so bad, and they ask why they should pull in their horns.
Everyone knows the huge difficulty which any Government have in curtailing expenditure in fields where policies are already in operation. To stop work on a half-built hospital or a half-built road is obviously ridiculous. But the one thing that a Government can do is at least to delay, if nothing else, the commencement of new policies involving expenditure. Therefore the mere timing of this Bill, irrespective of its merits or demerits, must surely rank as injudicious in the extreme.
I know it can be said that Government expenditure of this type, when assets are being transferred from one source to another, is totally different from that incurred when real calls are being made on capital, labour and materials. I accept that it is different, and that where capital, labour and materials are purchased as a direct result of Government expenditure

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the effect on the economy is more obvious. But, equally, I believe that it is one of the most dangerous arguments to be used, and one that is used far too frequently nowadays, to say that the Government can embark on expenditure such as this, and of this magnitude, without its really affecting the economy at all. Of course it affects the economy. Where is the £70 million coming from? Does it come from taxation, does it come from printing Treasury Bills, or is it going to be borrowed at 7 per cent. or 8 per cent. to produce a return of only 5¼ per cent., as my noble friend Lord Teynham said? What happens to the difference of 2¾ per cent.? Where is the £70 million going to?—or if the noble Lord would prefer me to be a little more accurate, where is the £46 million going to? It is going to the Transport Holding Company and thence, by devious routes and via the British Electric Traction group, to shareholders.
What do the Government think the shareholders are going to do with this new-found hard cash? The noble Lord makes a yawning expression as if this is irrelevant, but it is not irrelevant. What are the shareholders going to do with this money? They are not going to put it under their beds and take it out of circulation. Presumably it may be used for purchasing other shares, where it will compete with other capital, or it may be used for other general forms of expenditure. But whatever the choices open, and whichever choice is eventually made by the individual shareholders, that sum of money is going to find its way into the economy by one way or another at a time when that is highly undesirable, and, in its way, it can only be inflationary.
One feels that all this is being done in order to fulfil the political ambition which was put forward by the Minister of Transport, that we should have a truly Socialist transport policy. I do not blame her for having political ambitions of this nature; indeed, I think it is right for such political ambitions to be held. I only wish I thought those ambitions were the right ones. But what I believe is wrong is that this Bill, which is not going to result in greater efficiency but is going to involve extra and unnecessary Government expenditure should be introduced at a time when, of all things, Government
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expenditure should be kept to the absolute minimum.
The only thing I find it possible to commend in this Bill—and this is outstanding and I do commend it—is its brevity. I commend this to the Minister and suggest that she looks at it again in conjunction with the Transport Bill. Perhaps she might be so impressed with the success and the extent of this Bill that she will be minded to put down an Amendment to the Transport Bill to leave out everything after Clause 2.
5.49 p.m.
VISCOUNT MASSEREENE AND FERRARD: My Lords, I do not intend to delve too deeply into the pros and cons of the nationalisation of the buses and coaches, and particularly into the immediate purpose of this Bill which is to enable the Transport Holding Company to complete the purchase of shares in the British Electric Traction bus group. But before I leave the question of the pros and cons of having a nationalised bus company, I should just like to draw attention, as several other noble Lords have done already, since it cannot be emphasised too much, to the paper that Mr. Glasborow, the head of the Economic Research Unit of the Transport Holding Company, presented to the Public Transport Association. Your Lordships had the statement quoted to you so I will not quote it again. But I would just say that the most important point in that statement was that he said that there was no evidence, so far as he could see, that the larger the size of the undertaking the greater the efficiency and the greater the saving in cost. He also went on to say that there was no evidence that, in relation to buses or transport generally, the public preferred a large undertaking. My Lords, we have had the evidence of the railways to bear that out. I would not think that the nationalisation of the railways had been an unqualified success. We have far higher fares; and certainly there is no evidence of greater efficiency. Nor is there any evidence that the public prefer the nationalised railways to the old private companies.
However, what I am really concerned about regarding this Bill is how it affects the economic welfare—the survival, in fact—of our country. Several other noble Lords have drawn attention to this

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aspect, but I want to quote a few figures. In my speech in the economic debate a month ago, when speaking on the cuts, I drew attention to the fact that to all intents and purposes the first cuts of £320 million planned for 1968 were in fact being swallowed up. As I pointed out at that time, we had just had Supplementary Estimates through Parliament amounting to £120 million. I then went on to point out that for the next year, 1969, when the estimated cuts were £400 million odd, the increase in public expenditure that had already been estimated before those cuts were made was going to swallow those cuts to the extent of £800 million odd. I think that was the figure I quoted at that time.
Since that debate, the Treasury have presented some further Supplementary Estimates for the financial year, and those Estimates, which have been presented during the last four weeks, come to £562 million. I have to be fair, of course. There has been £120 million saved elsewhere, so one has to deduct that. Your Lordships can do the sum yourselves, but it is about £440 million. Now this is a very serious matter, because the £300 million cuts have completely gone. They have vanished, like Alice through the looking glass. They are not there. I quite understand that, in Supplementary Estimates, Parliament is meeting the bill for policies already decided upon, but it is nevertheless a very serious matter.
It is extraordinary that we had all this wailing and gnashing of teeth—with such headlines in the Press as "Cabinet in crisis", and so on—over these cuts of £300 million, but now when we have £440 million increased expenditure added by these Supplementary Estimates nobody raises a murmur. I have not seen or heard it mentioned at all in the Press or anywhere else. It is quite fantastic. Really, the Government's economic policy reminds me of an American barn dance that was rather popular in this country about twelve years ago. I think it went something like, "You take one step forward and two to the rear". The Government's economic policy is akin to that. I would have hoped that, with public expenditure in 1968 of £15,378,000 million—I am sorry; £15,378 million—
LORD LEATHERLAND: My Lords, can the noble Viscount assure us that he has that figure right, after all? He seemed to have some difficulty with it. Perhaps he would repeat the last one.
VISCOUNT MASSEREENE AND FERRARD: Yes, my Lords. It is £15,378 million.
LORD LEATHERLAND: But the noble Viscount said "thousand million". I thought he had gone wrong somewhere. He must be careful with his noughts. If he were to issue bus tickets like that he would soon be in trouble.
SEVERAL NOBLE LORDS: Order, order!
VISCOUNT MASSEREENE AND FERRARD: The Government do not split hairs over a few million. Anyway, it is the astronomical figure of over £15,000 million. I should have thought that, with that astronomical figure of expenditure and with the cuts swallowed up, the Government would have been only too anxious not to embark on any further unnecessary expenditure. But, no. Here we have this proposal to borrow another £70 million. Really, my Lords, the Government remind me of a bankrupt staying in the Ritz Hotel and saying that he owes so much that a little extra on the bill is neither here nor there. This is really the rake's progress: it is not responsible government.
I could have some sympathy with this Bill if it was a viable enterprise, but we have no evidence to support that. I believe my noble friend Lord Teynham said that the current income return on bus companies was 5½ per cent. The bank rate is 8 per cent., so presumably the Government cannot borrow this money under 8 per cent.—at least, not legally, although I suppose that in certain circumstances Governments can do things which private people would perhaps call illegal. Anyway, they cannot borrow it, or I cannot see how they can borrow it, at under 8 per cent. You cannot call that a viable enterprise. Of course, it may well be that the bus companies may increase their returns when they are nationalised. That may well be; but the whole evidence is against it. And, as I have heard other noble Lords say, with the increasing ownership of the motor car it would appear that the bus companies are a declining service.

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There is one other aspect of this Bill that worries me, and that is the extra £24 million. Of the £70 million, £46 million is going to B.E.T. and there is, I understand, going to be this £24 million for contingencies and such like. It is the contingencies which worry me, because of course that is a very wide term, and it is obvious that this money is going to be used for the nationalisation of other bus companies. It probably will not stop there because this Bill, in company with the Transport Bill, will give the National Bus Company vast powers. It will be able to have garages, repair shops, taxis, factories for manufacturing cars, and in fact any form of manufacturing that it desires to embark upon. It is just another instance of using the taxpayers' money—money created by private enterprise—to compete unfairly with that sector of the economy, the private sector, which produces the wealth of the nation. The noble Lord, Lord Shepherd, sighs; but it is a completely true economic fact.
LORD SHEPHERD: My Lords, I want to help the noble Viscount. If he had heard the speech of his noble friend Lord Nugent of Guildford, he would have realised that while Lord Nugent said that there was a degree of competition in the sense of the relationship of one management and another, he also admitted that there was no competition between the publicly-owned and the privately-owned bus companies.
VISCOUNT MASSEREENE AND FERRARD: But, my Lords, I am speaking in the wider sphere. As I pointed out, this Bill will give the National Bus Company power to manufacture cars, to have machine shops, and so on. Strictly, of course, it will not happen immediately, but it will certainly happen in the future, because this additional expenditure creates a precedent. This is a partisan measure of the Socialists. I have already said that, in the midst of this economic crisis, I consider it irresponsible.
What are people abroad going to think, those who have lent us money? What will they think when they see another Government measure designed further to increase borrowing and, as has been pointed out by my noble friend on my right, to put more money into the already overheated economy at home? As my
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noble friend has said, the £46 million that is to be paid to the shareholders is not going to be put under their mattresses; it is going into the economy. This is just another indication that this Government—and I know this is phrasing it strongly—put their Marxist philosophy before the real economic interests of the nation.
6.2 p.m.
LORD DERWENT: My Lords, I will not detain the House for long, because I find this Bill far too depressing to spend much of my valuable time on it. It is ill-timed; it is unduly expensive, and this House can do nothing to alter it. So all I shall do is briefly to recapitulate some of the arguments—which I repeat are not Party arguments, but are partisan because we hate this Bill—that have been so ably put forward by noble Lords on this side of the House. I should also like to ask one or two questions, questions which have been asked before to-day, which were asked in another place, in the hope that the noble Lord, Lord Shepherd, when he comes to reply, will be the first Minister to make any attempt to answer them.
This question of the Bill being ill-timed is important. The Government had asked us, the taxpayers, to try not to spend any money even if we thought it fairly necessary, if we could possibly help it—unless it helped exports. I am absolutely astonished that no Minister has yet got up and used the argument that this Bill will help exports—at least they have not tried that one on us. Yet at the moment when the Government asked us, and rightly, not to spend money, they announced certain cuts, so-called, that they were going to make. They came to Parliament to ask to borrow up to another £70 million for matters which I suggest are not as urgent as all that in the present economic climate. And that is the point, the present economic climate.
I am sorry, but I find this shocking. I was shocked as soon as I heard of it. I know it is part of the Transport Bill; but it is not necessary to do it in this way and it is not necessary to do it at this moment. Parts of the Transport Bill, should it become law (though I hope it will not) will not come into operation for some considerable time. To do this at this moment, in my view is an absolute insult to the taxpayers. It is

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asking them to do something that the Government are not prepared to do. But worse is to follow. This was a month ago. During this month it has become quite apparent that the figures for the Government cuts given at that time are in large measure "phoney". There will not be any saving at all. The use of the word "cuts" is also "phoney". All it means is that the Government are going to try not to increase their expenditure this year to the same extent as they had intended. That, in this Government's parlance, is a cut. May I go into this question of figures again. The noble Lord got somewhat heated—
LORD SHEPHERD: I did not get heated.
LORD DERWENT: If the noble Lord did not get heated, he at least was deliberately misunderstanding. As I understand it, there are £35 million for the shareholders of B.E.T. I think we are agreed on that figure. But I was somewhat amused by the noble Lord, Lord Popplewell, raising the wonderful question of the value of the assets. I do not know whether I dare say so to the noble Lord, Lord Hurcomb, but I thought he was being a little naïve when he said that this was an ordinary transaction as between willing partners. He did not use quite those words—
LORD HURCOMB: My Lords, I was careful not to use those words. All I said was that the terms had been agreed and accepted.
LORD DERWENT: That is true, my Lords. But under what conditions? The assets were valued by the purchaser. They were not agreed; they were valued by the purchaser. Before the seller was approached the Government were told the price that was going to be offered. All was settled by the purchaser, and the seller was told that that was the price. He was virtually told at the same time that if he did not accept it then there would be a take-over under the Transport Bill. That is the actual position. The noble Lord shakes his head. But he cannot deny that that was the situation. That is quite clear.
I should like to ask a question in regard to the next section of the £70 million, the section for the minority shareholders. I was not quite clear from the
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noble Lord's opening speech whether the £11 million is the actual figure which is now known or whether it is an estimate. If it is the actual figure, then this is the first time we have heard it. It is remarkable that when this was dealt with in another place apparently no costing had been done as to what prices would he offered for the minority shareholding. That is an extraordinary way of conducting a takeover bid. Let us accept that figure, I am taking it that that is the exact figure. That leaves £24 million, a "floater", a blank cheque, which Parliament is being asked to produce, and I shall have something further to say about the blank cheque aspect shortly.
My Lords, the noble Lord, Lord Popplewell, was very scathing when it was pointed out that to cut the road programme, having postponed much of it last year, was an odd way to behave, when it is agreed in every country—and, I think, agreed on both sides of your Lordships' House—that improved roads are to the commercial benefit of the whole country. I do not know whether any noble Lord is prepared to argue about it, but that is so. Yet there has been a cut. And we are now setting out to nationalise the buses which, I suggest, is certainly not going to be a commercial success for the country. So my noble friend was quite right to point out that this was an odd thing to do at this moment. We all know, of course, that these cuts were not thought out. They were made "across the board" so that no Minister should feel unduly unhappy.
We are going into this business as a country. I say "as a country", because the money is not the Government's money. This business of running all the buses all over the country is coming in the next Bill, at a time when, as the Minister of State said—and I give his own words:
"The growth of private car ownership has led to a continuous fall in the demand for bus services."
That is the time when the country is going into this rather extraordinary business. And, my Lords, what a way to raise the money! Not by taxation, because that would be too unpopular with the taxpayer. But the taxpayer will have to pay for it all the same. It has been pointed out that the current return on

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these bus services which are being taken over is 5¼ per cent. The money will be borrowed at somewhere between 7 per cent. and 8 per cent., probably nearer 8 per cent., and so there will be a loss. Where is the loss met from? From the Transport Holding Company's profits. Who do the Transport Holding Company's profits belong to? The taxpayer. The profits belong to the taxpayer, however much people may try to disguise it, and so the taxpayer is going to pay for the borrowing at 8 per cent. and the receiving of 5¼ per cent. I must say that in ordinary business that would be an odd thing to do.
There has been a great deal of talk—I am glad to say not by noble Lords opposite to-day, but in the other place from Ministers—about all this making good commercial and operating sense. That phrase cropped up all the time, and we should like an explanation of it. There was a tremendous amount of talk by Ministers about all this making good commercial and operating sense. We have had absolutely no explanation of that phrase from anyone, particularly the reference to "commercial sense". There undoubtedly will be a loss shown in the next few years by operating on this scale with no competition, and I shall have a word to say about competition in a moment. There will certainly not be a great profit, and it cannot be called good commercial and operating sense. I wonder whether the noble Lord will explain to us what that means.
What does the Minister herself know about commerce or bus operating? Yet she has made clear in the big Transport Bill that she is going to be the "big boss". Everything is going to be referred to Whitehall. She says, "The Minister will decide—the Minister will decide". My Lords, as sure as night follows day, in the not far distant future this enormous organisation which she will be setting up will be rigid and run by the Minister's stooges in London. It has happened before time and again. I think that the real question we want to ask ourselves is, why is all this necessary now—"necessary"; I do not mean "advisable"—at this very awkward moment? That is the question which I would ask the noble Lord, because the answer has not been given.
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My Lords, may I say a word about this floating credit of £24 million? Apparently, that is included in case the Transport Holding Company wishes to buy up any other bus company. But is not this a rather exhorbitant figure to ask of Parliament at this particular moment? The Holding Company has used—I think my figures are correct—£21 million of its extra loan powers since 1962, when it was set up. I am well aware that it was set up by a Conservative Government, but apart from the fact that anything we do is first-class, this sort of thing ought to be looked at every few years whoever may have set it up. I am advised that £21 million is the figure which has been borrowed since 1962, of which over half, £11 million, has been used since the end of 1966. Now the Holding Company has one year to run, and we are being asked to give it further powers to borrow £24 million, which is more than it has spent in the last six years—and this for one year.
What is this figure, my Lords? There has been no explanation, and I think it is outrageous that the taxpayer should be asked to give these facilities when quite likely the money will be spent without any reason being given at all. This "floater" ought to be cut out of the Bill, and I hope that the Government will still think again. They must have some leeway, but that is far too big a figure for one year, and it ought not to be there. In my submission, the Government have made out no case for buying B.E.T. at this moment. They do not need this very large "floater"; it is simply a figure. This is inefficiency.
If it is of any interest to the Government, I will tell them one of the reasons why at this moment they are so unpopular in the country. I do not think that even noble Lords opposite would suggest that they are riding on the crest of the popularity wave. The explanation is that at last it is sinking into the minds of the taxpayers that this is a spending Government; that the taxpayers are not consulted, and that under this Government taxpayers' money is something to be spent and not to be saved. Here again in this Bill is another example of that.
We are now on the way to the nationalisation of the buses, if the Minister can

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get the legislation through. When has a nationalised industry ever paid? In the end the taxpayers always pay. Where there is no competition there is no efficiency. In spite of what was said by the noble Lord, Lord Popplewell, competition in management is very important in this industry. In a short time there will be no competition in management. Everyone will be looking after his own job, but it does not go for efficiency. Finally, may I say one word of comfort to your Lordships. If this Bill and the next Bill go through the Minister of Transport, of whom we are all so fond, will be able to say that at last we have a Socialist transport policy. And, my Lords, speaking as a taxpayer, I say, "God help us!"
6.19 p.m.
LORD SHEPHERD: My Lords, seeing the noble Viscount, Lord Mills, across the Floor, I must admit that this seems rather like old times. I am sure that the noble Viscount will remember that he and I crossed swords on this very subject six years ago when he, as the Minister responsible in your Lordships' House, piloted the Bill which set up the Transport Holding Company. I have refreshed my memory about the speeches which the noble Viscount made, and one of the matters on which he placed great emphasis in his speeches, and a very special thing which he, and presumably his colleagues in the Conservative Government of the day, had in mind was the administrative ability of the Transport Holding Company to look after the various companies that were subsidiary to them. Unlike their colleagues in another place, noble Lords opposite have not said one word of praise for the operational management of the Transport Holding Company. Their friends in another place paid tribute, and I should like to pay tribute, to the Company, because what the noble Viscount, Lord Mills, had in mind has come about in fact. They have administered their organisation with the highest degree of commercial ability.
LORD DERWENT: You are doing away with them.
LORD SHEPHERD: If the noble Lord will just be quiet, I am giving praise to a machinery which was set up by a Conservative Government. I should like to spell out what the company has been
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able to do because this is important in the light of our belief that it is capable of being the holding company of a much larger organisation. Up to the present the Holding Company have b it-rowed some £21 million and have paid interest to the Treasury on all sums they have borrowed, and, on top of that, during the four years for which I have the figures, they made a profit of some £45 million. I should not have thought that such a company could be said to have failed, or that the noble Viscount, Lord Mills, would ever feel disappointed in the Company in whose creation he played such a great part. The Transport Holding Company has proved itself to be a very efficient body.
It has been said that this Bill is a Socialist pipe-dream and that it is being brought about because of Socialist philosophy. I will freely admit that six years ago, from the Benches opposite, I was advocating this very process of development into the field of bus transport. I believe that I was right. I believe that the noble Lord, Lord Hurcomb, was right about the inevitability in the growth of public transport in this field. I think that I shall be able to show that this is not a Socialist pipe-dream. I should like to read to your Lordships from a letter addressed to Sir Reginald Wilson by the Minister of Transport on December 20, 1967, and I would be happy to place this letter in the Library. My right honourable friend said:
"Earlier this year you told me that your Board considered the circumstances were such that it might be desirable for the Transport Holding Company to seek to acquire full control of the B.E.T. group of bus companies, in the great majority of which the Transport Holding Company already had large shareholdings, equal in fact to that of the B.E.T."
The initiative did not come from my right honourable friend the Minister of Transport. It came from this commercial organisation set up by the noble Viscount, Lord Mills. Therefore I suggest that, even though this proposal may be in tune with our Socialist thinking, the origin of it came from this commercial organisation set up by a Conservative Government.
I would now, if I may, deal with the financial position before I deal with some other matters. The noble Lord, Lord Derwent, was closer to the right figures than some other noble Lords. The £21 million borrowed up to the present has

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been used not only for the purchase of companies, but also to provide new fixed assets, the purchase of new vehicles and other things, which any commercial company requires if it is to develop and go forward. I doubt whether there is any large commercial concern in this country which is not forced to borrow or have an overdraft from the bank from time to time.
LORD DERWENT: I was not criticising it.
LORD SHEPHERD: I am making the point because it was suggested that this was some strange organisation to whom money meant nothing, and I am suggesting that they are operating on a commercial basis. The sum of £35 million is for the purchase from the B.E.T. company of the shares in its subsidiary bus companies; £1·3 million is for the preference shares, and £9·4 million for the private shareholders in the subsidiaries. The noble Lord wanted to know why these figures were not available when the Bill was in another place. They have only just been decided by negotiation.
The noble Lord, Lord Derwent, said that this deal was imposed on B.E.T., that the only people who were concerned to place a value on the shareholdings were the purchasers and that they had more or less put a shotgun to the directors' heads. I know the noble Lord, Lord Teynham, and some more of his colleagues, and I do not believe that any of these gentlemen would have acceded to something for which they were responsible to their shareholders by the shotgun method. The fact is that this was a free negotiation between the management of the Transport Holding Company and B.E.T. They had as their advisers two of the most prominent and respected private banking organisations, who have had great experience in the valuation of property and shares.
LORD NUGENT OF GUILDFORD: My Lords, I thank the noble Lord for giving way. May I remind him that the Minister had already announced last autumn that she was going to give the P.T.A.s power to acquire compulsorily the bus undertakings they needed to reorganise their services, so that B.E.T.
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knew they were under threat of extinction anyway, and therefore had no alternative but to make the best terms they could.
LORD SHEPHERD: My Lords, perhaps the noble Lord finds himself in the position I find myself in sometimes when I get on my feet too quickly. I have not come to the P.T.A. I will show that the particular reference of my right honourable friend to the P.T.A. might well have no direct reference to the attitude of the directors of B.E.T. The point is that the figures were negotiated by the two boards with two most respected and experienced private banks who had had a great deal of experience in this field.
To return to my figures, there is a balance left of some £33 million. The Transport Holding Company believe that they will need £9 million during this year for capital purchases and for fixed assets such as vehicles, ships and the like. This leaves a figure of some £24 million, which we believe is necessary for contingency planning up to the end of 1969. I believe this is a reasonable sum to meet the likely contingencies. There are certain bus companies which are already making approaches to the Transport Holding Company, offering to sell their shares; and there are also road haulage companies who are of a like mind. It was in 1964 that the Transport Holding Company made their first purchase of private companies, and that, of course, was during the period of office of noble Lords opposite. There was no suggestion then that the Transport Holding Company should not buy private companies.
I should like now to deal with the point that was made as to the possible effect on our economy—although I am bound to say to the noble Viscount, Lord Massereene and Ferrard, that while I have come prepared on most occasions to deal with a wide subject I could not possibly go into a wide-ranging economic discussion about Treasury loans, and the like.
LORD NUGENT OF GUILDFORD: My Lords, would the noble Lord deal with the point that I made: that the Minister had already announced last autumn that she intended to give the P.T.A.s powers to take up all the bus companies they wanted to, so that all

629
these people knew that if they did not agree they would be made to.
LORD SHEPHERD: I hope the noble Lord does not think that I have a repution for dodging an issue. I intended to deal with the P.T.A.s in reply to the noble Lord, Lord Hurcomb. What he wanted to know was the effect of setting up the national bus company, and particularly that of future planning, especially in the conurbations. I was intending to deal with that; but if I should forget, I am sure the noble Lord, Lord Nugent of Guildford, will remind me.
I thought the important point made by noble Lords opposite was that at this very moment of time when we are seeking to hold public expenditure in check we were involved in this scheme. I am bound to say that I find very strange, coming from noble Lords opposite, this sudden urgency to reduce public expenditure. If I did my researches since 1964, I could find many occasions on which noble Lords opposite en masse have all trooped in on issues which would have involved this country in infinitely larger fields of public expenditure than we ourselves would ever dream of undertaking. In fact, I would say to the noble Lord, Lord Derwent, that we have cut public expenditure from the programme planned by noble Lords opposite if they had been returned in 1964. We are very conscious of the effect of public expenditure, and this has been very much in our mind.
To suggest that this particular operation in itself is inflationary really means that noble Lords have not looked at the facts. This sum of money, this £46 million if we refer to the B.E.T. deal, would clearly come from the Consolidated Fund; and every one of us knows that the Consolidated Fund is raised on the gilt-edged market and from National Savings and the like. It is also raised by taxation. All these operations are, in fact, withdrawing free money from the market. We use the Consolidated Fund in the field of public expenditure. This sum, in our view, is being invested to purchase a series of companies.
It is perfectly true that the money returns to what some noble Lords refer to as a sort of open market; to the shareholder. But the noble Lord, Lord Teynham, knows perhaps better than I do the role and field of operation of the B.E.T. He might like to be reminded,
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if he needs to be, of the statement in the Financial Times, in which the directors of the B.E.T. say:
"The directors are reported to have said in their letter that over a reasonable period the resources released by the sale can be employed to better advantage in new, business enterprises and in expanding existing interests than if they remain locked up in the bus companies."
Those are the words of the directors of the B.E.T., and it is quite clear that in their own particular field of operation this money will be invested to the national good. Is it to be said that it is inflationary if this money were to be available to be used for the purchase of new machinery or for new manufacturing capacity? Certainly it puts pressures on our manufacturing capability. But surely we all realise that what we need is new machinery; therefore, if this money is available for that, clearly it is being used to the best advantage.
The noble Lord, Lord Nugent of Guildford, I thought, indulged in not a partisan speech, but one of sheer knocking. He made a scathing and bitter attack on the management of the London Transport Board and presumably of the other nationalised industries. So far as he was concerned, all the companies that are in private enterprise have clean and virile hands. If that is so, all I can say to the noble Lord is that he knows less about industry and trade than I do. I do not say that nationalised industries are all perfect. I wish to heaven that all our private companies were perfect; but that is far from being the case. It is true that there has been criticism of the London Transport Board management in various fields. I wonder whether the noble Lord, Lord Hurcomb, would agree with me that a lot of the trouble of management in the London Transport Board is a sense of disillusionment in trying to carry out a public transport organisation with pressures all around them that make it pretty well impossible for them to provide fares and services that meet the public demand. I believe that that is one of the basic problems of the London Passenger Transport Board.
If I may say so to the noble Lord, Lord Nugent of Guildford (and perhaps I may then deal with the P.T.A.s), I think that one of the most, I will not say remarkable, but satisfying things is that the Conservative Greater London Council have agreed

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in principle to take over the responsibility of the London Passenger Transport Board.
LORD NUGENT OF GUILDFORD: My Lords, may I intervene? Could the noble Lord tell us the terms, and if they asked that the whole of the capital structure should be written off first?
LORD SHEPHERD: I said that we have agreed in principle. We are now seeking—I do not know what the noble Lord, Lord Derwent, is smirking about. I thought this was a serious debate. Certainly the noble Lord, Lord Nugent of Guildford, asked me a serious question. I said that we have agreed in principle. The details of such a change are tremendous, and it is not done overnight. To me the most significant thing is that there is a recognition by the Greater London Council and by London Passenger Transport Board that until the authority who is responsible for the traffic and the road planning and all those other aspects that have an effect upon the buses is also responsible for the operation of the public transport services, this problem will never be dealt with. I remember arguing this point many years ago when I sat on the other side of the House, because it seemed to me to be so obvious. This is why we have taken the view that we should create the Passenger Transport Authorities, so that there is a direct responsibility on the bodies in the locality which are responsible for traffic and road building to participate in planning and deciding how the public transport services are to be run.
I think this approach holds out the best hope for dealing with the transport problems, not only of London but also of our great conurbations. This has been the view of my right honourable friend the Minister of Transport from the beginning, and I should have thought those who believe, as I do, that the local authorities have a great part to play, would welcome this opportunity and this challenge. The noble Lord, Lord Nugent of Guildford, is quite right: when my right honourable friend said that she intended to pass the transport undertakings in these conurbations to the passenger transport authority and the passenger transport executive, in the vast majority of cases these will be the existing local authority bus undertakings.
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It is certainly true, as the noble Lord, Lord Nugent of Guildford, can see in the Transport Bill, that the national bus company, which will be the offshoot coming from the Transport Holding Company, will have a responsibility to cooperate with the P.T.A.s, and there may be at some time an interchange of vehicles and fixed assets between one and the other, in order that there should be a tight yet, on the other hand, flexible transport unit, taking into account not only the conurbations but all those more rural districts surrounding the conurbations. The noble Lord may say that this may have appeared to be a threat to the B.E.T. and to others, but it was perfectly clear, at least to me, that the national bus company, when it came into being, would be more of a partner with the passenger transport authorities than be absorbed into them.
The noble Lord, Lord Nugent of Guildford, said that, apart from the question of labour, this new creation, particularly as we should be bringing together two separate organisations, would have a major effect upon wage rates, and that this would naturally force up fares. Perhaps since he left the other place the noble Lord has lost his touch or lost his connection. The fact is that both the T.H.C. and the B.E.T. busmen are in the company sector of the bus industry. They all receive the same rates of pay, and therefore the bringing together of these two organisations will in no way affect the rates of pay of one set of bus drivers or the other.
LORD NUGENT OF GUILDFORD: My Lords, may I intervene and put another point? I think the noble Lord's excellent memory is failing. One of the principal points made by his right honourable friend the Minister in this connection was that the formation of the national bus company would be giving a greater uniformity of working conditions, not only in wage rates but in a whole lot of other benefits. She made that point strongly. That confirms the point that I was making.
LORD SHEPHERD: My Lords, at present I am dealing only with pay. This was the point made by other noble Lords: that because of increased wages there would be increased fares. There may well be improvements in standards and

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conditions of work, and I myself should not have thought that that was something one would decry. I think it is a good thing. Perhaps if we brought them closer together many of our present difficulties in regard to labour relations and the like would disappear.
I think the noble Lord, Lord Teynham, drew my attention to the fact that it was in 1966 that the investment allowances were lost and that the investment grant suddenly became available after the agreement between the T.H.C. and B.E.T. The noble Lord will remember that the allowances disappeared under a Finance Act, and it applied to every conceivable organisation in this country. We were looking at new methods of investment stimulation. But, my Lords, we brought in the investment grant to the bus companies for one purpose; namely, to give assistance to at least keeping in check the rise in fares and the like, which could well have come about as a result of the increased salaries paid to busmen and the fuel bill, increased through taxation. There was nothing sinister in this matter. I am sure the noble Lord will accept that.
LORD TEYNHAM: My Lords, would the noble Lord not agree that it would have been more beneficial and more fair to let the shareholders of B.E.T. know before the agreement was made that this investment allowance was coming back?
LORD SHEPHERD: My Lords, even I, as a Minister who usually has his ears fairly close to the ground, do not hear everything that is going on, and in this particular field it is difficult to divulge such information. But I asked my advisers this morning the question whether, if this information had been available, it would have had any effect upon the price that would have been agreed by B.E.T. and T.H.C., and I have been informed that because of the manner in which the value of the company was arrived at, any effect would have been so marginal that in terms of the total figure it would have been very small indeed.
The noble Earl, Lord Kinnoull, at least is with me. He believes in coordination of transport. I am glad to see that he is a convert in that connection, although he regrets that competition is now disappearing. But I think he will now accept that apart from competition
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in the production of balance sheets and trading accounts there is no real competition in the bus industry. In fact, one can say that the profits which these companies make, whether they be public or private, depend to a certain extent upon their efficiency, but more on the way in which the Traffic Commissioners decide what shall be the fares. This is based upon the view that there should be a reasonable return, and they reckon some 8 or 9 per cent. on capital. This is the way in which the fares have been decided. It is interesting to see—and I hope noble Lords will give credit for this—that B.E.T. have earned some 9 per cent. on total capital employed over recent years, and the Transport Holding Company have earned the same percentage. Although it varies slightly between England and Scotland, on average it is the same.
There is no reason to believe that the profitability of the B.E.T. companies will be lost because of this amalgamation. I suspect, as was the case in the past, that the men who now are the management of the Southdown Bus Company, to which the noble Lord, Lord Teynham, referred, will remain. So far as I understand the position, there is no intention, by this amalgamation, to make larger operating units. I agree with noble Lords opposite that there is an optimum size in a bus operation. There is some informed opinion that it should be 800 to 1,000 vehicles. We had some figures quoted that showed it was cheaper to operate bus companies of 30, but nobody would suggest that we could have such types of companies operating in our big conurbations. Therefore, while we are bringing together these two organisations with some 25,000 vehicles it is certainly not the intention that we should try to operate this as one mammoth organisation, but to operate it as the T.H.C. have operated in the past, through subsidiaries, and they have as much experience of doing this as B.E.T.
The noble Lord, Lord Nugent of Guildford, naturally could not resist bringing up Thomas Cook's. They have done very well. I do not see why, because this organisation is in tourism and banking and is nationally owned, and because it is making us a profit of some £1·7 million a year on net assets of some £5 million—although because of its

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banking interest naturally it has other great sums available to it—we should suddenly make it available to private industry. Let us hope we have some competition in this field between publicly-owned companies and private industries.
My Lords, I seem to have been speaking for quite some time. I hope I have answered a reasonable proportion of all the questions put to me. I am bound to say I felt very much in tune with the noble Lord, Lord Hurcomb, that this is an inevitable further stage in the development of transport. What we are seeking is the provision of a public transport service that is available at reasonable rates to ordinary people who may decide that they do not wish to use their own private motor car or who may not be able to own a motor car. It has wider aspects because it has a direct impact upon our industrial efficiency and industrial development. I believe this is a commercial operation. As I said at the beginning, this is not just a Socialist pipe dream. It was initiated by businessmen of a commercial organisation which was set up by that very tough businessman, the noble Viscount, Lord Mills.
VISCOUNT MILLS: My Lords, since the noble Lord has been good enough to mention my name, I should like to tell the House why. The reason we set up the Transport Holding Company was because a Commission had been created, it had been running for some time and it had far too much to do. Its mind could not be on the railways, which was the asset which was losing so much money, and therefore we created the Transport Holding Company. What I regret is the timing of this Bill. I think it is the wrong time. I think the public will feel it is the wrong time. That is really all I want to say.
LORD SHEPHERD: My Lords, if the House will permit me, the noble Viscount drew my attention to the one point made to which I did not reply, the question of timing. It is perfectly true that the bringing together of B.E.T. and T.H.C. will make the operation of the Transport Bill easier; that is still, in terms of being implemented, some years away, although the Bill should be passed this year. There had been this agreement with the shareholders, the Board of B.E.T. and also the
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private shareholders of the subsidiaries. I think it would have been very unfair, and certainly it would not be up to City ethics, if having made an agreement we were not prepared to find the money to carry out that agreement. That is the basis of this timing.
VISCOUNT MILLS: My Lords, I suggest that that has applied to many things to which the Government have set their hand and from which they have had to withdraw.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

CIVIL EVIDENCE BILL [H.L.]
6.54 p.m.
THE LORD CHANCELLOR (LORD GARDINER): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(The Lord Chancellor.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD GRENFELL in the Chair.]
Clause 1 [Hearsay evidence to be admissible only by virtue of this Act and other statutory provisions or by agreement]:
THE LORD CHANCELLOR THE LORD CHANCELLOR moved to leave out subsection (2). The noble and learned Lord said: Your Lordships may remember that on the Second Reading the noble and learned Lord, Lord Wilberforce, expressed the view that Clause 1(2) for its complication was worthy of a Finance Bill. I said I was glad to hear him say that, because I myself found it very difficult to understand. I have come to the conclusion that it is not really necessary. The purpose of the subsection is to make it clear that a statement which fails to qualify for admissibility under one statutory provision is not thereby prevented from qualifying under another. Clause 1(2) is intended to remove any possibility of conflict between a provision (such as Clause 2(2)) which makes admissibility subject to the court's discretion and one

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which makes the same statement admissible as of right.
It is not very likely, though it is theoretically possible, that such a situation could arise; a possible instance, I suppose, would be afforded by an out-of-court statement amounting to an admission, but this is expressly dealt with by Clause 9(5). However, even in the case of such an out-of-court statement not expressly covered by Clause 9(5) there seems to be no possibility of such a conflict. Those provisions (for example Clause 2(2) and Clause 4(2)) which make admissibility discretionary operate on statements made admissible "by virtue of this section" and cannot therefore affect the admissibility of a statement by virtue of some other enactment. Moreover, Clause 1(1) states in terms that a statement shall be admissible to the extent that it is admissible by virtue of any provision in Part I of the Bill or any other statutory provision. In view of these unambiguous words, there appears to be no need for subsection (2). I beg to move.
Amendment moved—
Page 1, line 13, leave out subsection (2).—(The Lord Chancellor.)
LORD WILBERFORCE: Having expressed myself with some vigour about this subsection on the Second Reading of the Bill, I feel I should be ungracious if I were not to express gratitude to the noble and learned Lord the Lord Chancellor for now consenting to its removal. While I still consider that the Bill as a whole and in many other respects is needlessly complicated, certainly one welcomes this effort at simplification, because it at any rate indicates to those of us, and I think there are many, who consider that most of our legislation is drafted in too tortuous or elaborate terms, that our views may be shared in high places in certain respects. Having heard the Lord Chancellor's statement as to the lack of necessity for this subsection, a view with which I entirely agree, I certainly welcome and would support the Amendment for its deletion.
VISCOUNT COLVILLE OF CULROSS: I would only briefly echo what the noble and learned Lord, Lord Wilberforce, has said. I think in view of a number of factors, one of which I should like to
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mention in a moment, the simpler we make Part I of this Bill the better.
On Question, Amendment agreed to.
On Question, Whether Clause 1, as amended, shall stand part of the Bill?
VISCOUNT COLVILLE OF CULROSS: It might be appropriate at this stage to raise one of the points where this Bill departs from the recommendations of the Committee presided over by the noble and learned Lord, Lord Pearson. The clause starts "In any civil proceedings", and this means that the rules of evidence which are contained in Part I of this Bill will be applicable in the magistrates' courts.
In paragraphs 48 to 52 of their Report on Hearsay Evidence in Civil Proceedings, the Committee presided over by the noble and learned Lord advised that this should not be so, and they have really taken two points as underlying this reason—possibly three points, but two seem to me to be of particular importance. The first point is that it is not going to be easy to establish the rules, or indeed any sort of cohesion in the application of the rules, where the discretion of the court is involved, as is the case; and the noble and learned Lord the Lord Chancellor has already mentioned the fact.
The second point is that of the difficulty of providing for the procedural safeguards, which are of course to be dealt with under Rules of Court for the High Court and the county courts and, I would expect, in other necessary tribunals. The Committee in its Report pointed out that a number of the civil jurisdictions of the magistrates are not really such as to give rise to the type of evidential problem with which this Part of the Bill deals. Nevertheless, there are points of civil jurisdiction, such as the work of the domestic court in guardianship and affiliation, and particularly in matrimonial cases, where their work is of the same character as civil litigation conducted in the High Court, or now in the county courts.
I was looking at the Rules at the back of Stone to see whether there was already anything which appertains to this question of evidence. Of course, it is quite true that the Evidence Act 1938, as I understand it, applies in the magistrates'

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courts. Then the Report of the Committee drew attention to the fact that the sort of matters with which that Act deals do not often arise in magistrates' courts. But I should think that the sort of matter with which this Bill deals may easily arise. Therefore, if we are to have a Bill which goes against the recommendation of the Committee, I think it would be useful if the noble and learned Lord the Lord Chancellor could tell us, at any rate in outline, what he is proposing to do in order to get over the practical difficulties which the Committee have pointed out. I can, for instance, see nothing in the Magistrates' Courts (Matrimonial Proceedings) Rules 1960 which is helpful. It may be that an Amendment should be put in there. Equally, the short passage in the Magistrates' Courts Rules of 1952, Rules 55 to 57, really has nothing at all which is relevant to this matter.
I would not know in the least what the noble and learned Lord has in mind by way of a possible amendment of these Rules. I cannot believe that anything nearly so complicated as would be required for the High Court is going to be workable in the magistrates' courts, particularly when some of the people concerned are not legally represented at all. I really think that we ought to have an explanation of this matter before we pass this clause in its present form. I hope, therefore, that the noble and learned Lord the Lord Chancellor will be able to enlighten me. I may have to trouble your Lordships by returning to this matter at a later stage, but I think it would be useful if the noble and learned Lord could give some sort of outline of what he has in mind.
7.4 p.m.
THE LORD CHANCELLOR: Of course, the whole question whether the Bill should extend to magistrates' courts was always a matter of opinion. The Committee made that clear. On balance, they recommended that, for the time being at any rate, the present Rules of Evidence with respect to hearsay should continue to apply in civil cases heard in magistrates' courts. They say:
"In reaching this conclusion we have been influenced by the fact that the Criminal Law Revision Committee are currently reviewing the rules of evidence in criminal cases."
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As I understand it from inquiries which have been made, those recommendations are likely to include features which will make them unsuitable for civil proceedings. Moreover those with great experience of civil proceedings in those courts have expressed the view that the Law Reform Committee's proposals would be suitable for magistrates' courts, and that it would be better to apply them than to leave magistrates' courts, when exercising civil jurisdiction, to be governed by Rules of Evidence which would no longer be applied in any other tribunal. It would mean, for example, that it would be the only court left in which the Evidence Act would apply. I agree that rules would be necessary, but I should think they would be of a much more limited character than those in High Courts proceedings.
The only occasion that it is likely to arise in civil proceedings in magistrates' courts is, for example, in regard to statements by doctors. But there should be no difficulty in applying these new hearsay provisions to that matter. One usually gets a date which is fixed well ahead in the magistrates' court—certainly more than seven days—and it is just this sort of thing which, unless there is any real dispute on it, ought to be dealt with in this way rather than a doctor having to come to Court only to find that his attendance is unnecessary. The only other proceedings in which I think such evidence might well be needed is in proceedings for rates, for example, where already, as I understand, some rates are dealt with by computers. I imagine some rules will have to be made to cover that. There is not usually much difficulty.
Then, of course, there is the Bankers' Books Evidence Act. There again, if you have once got a bank statement in evidence it is in effect up to the other party to challenge it, which is not always easy. Still, you can put in your own cheque book and counterfoils, and you will be able to put in the cheque book and counterfoils of a third party. So there will be a necessity for rules; but I imagine that they will be of a much simpler character than those which may become necessary in the higher courts.
Clause 1, as amended, agreed to.
Clauses 2 to 4 agreed to.
Clause 5 [Admissibility of statements produced by computers used for purposes of any regular activities.]:
7.7 p.m.
VISCOUNT COLVILLE OF CULROSS VISCOUNT COLVILLE OF CULROSS moved, in subsection (4)(d), to leave out from "contents" to the end of the paragraph, and insert:
"may, subject to disclosure in any certificate made under subsection (3)(b) above or in evidence of the respect in which the computer was not operating properly or was out of operation, be disregarded."
The noble Viscount said: This is the clause in the Bill which deals primarily with the computers to which the noble and learned Lord the Lord Chancellor has just referred. I was most interested to hear what he said about rules about computers being made for magistrates' courts. But I do not want to pursue that point at this moment. I should like to deal with the matter on a rather more general basis.
The subject matter of this Amendment relates to one of the prerequisites in Clause 5(1) which has to be shown before the product, the print-out of the computer, may be admissible as evidence of any fact stated therein. It has to be shown that at the time when the document was produced—for this purpose, as I understand it, the document is either a print-out or a transcript of what comes out of the computer for the purpose of the specific case—the computer was operating properly; and then, in order to avoid a great deal of wasted time on the part of the people who run computers, in large companies or indeed in computer bureaux, there is a provision in subsection (3)(b) whereby the fact that the computer was operating properly can be given by certificate. That certificate is, I think, open to challenge, but in the first place it can be given by certificate.
Then in subsection (4)(d) there is the provision which says that if the computer was not operating properly, or was out of operation in any respect which did not affect the production of the document or the accuracy of its contents, that fact would be disregarded. The effect of this, as I understand it, is that the person who gives the certificate has only to say, "The computer was operating properly". He has not to give any notice at all of any respect in which it was not operating properly or was out of operation if he
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thinks that this did not affect the accuracy of the product. The question of whether it did or did not affect the accuracy of the product is a matter which may be extremely relevant.
I know but little of the computer world, but from such little knowledge as I have gathered I understand that there is all the time a search going on for new methods of making computers securely accurate. All sorts of counter checks are built into the electronic process itself. They take different forms, and no doubt there are sometimes more than one in a given machine. But I should have thought that it is perfectly possible that the view of the computer operator would be wrong that the thing which had gone wrong with his computer at the relevant time was not such as to affect its accuracy. It would be highly relevant to the person against whom this evidence was being used to have the opportunity to discover that there was something wrong with the computer at the time and to check whether this affected the, accuracy of the information produced by it.
I suggest therefore that, instead of giving the discretion to the operator of the computer when he produces his certificate, whereby if he thinks it right he can completely withhold the information that there was something wrong with the computer from the adverse pasty, he should have to show that there way something wrong and explain what was wrong. It may be that this will be accepted by the adverse party and that nothing more will be made of it, but it will put the adverse party on notice that there is a possible cause of inaccuracy.
I appreciate that the last thing we want to do in considering the admissibility of computerised evidence in civil proceedings is to make it too difficult to bring it in at all. This point was made by the noble and learned Lord on Second Reading. These are bound to be complicated machines, and I do not suppose they will get any simpler. If we are going to have a prerequisite of this sort, we must be careful to consider whether, while at the same time making it a proper prerequisite, we can give the other side the due opportunity it should have to check whether the prerequisite is fulfilled or not. I do not believe that this is necessarily the right way of drafting the matter, but I wish to draw attention

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to the position to see whether the noble and learned Lord might not feel that something could be done about it. I beg to move.
Amendment moved—
Page 5, line 19, leave out from ("contents") to end of line 20, and insert the said new words.—(Viscount Colville of Culross.)
THE LORD CHANCELLOR: What the noble Viscount has said seems in principle to be right. His purpose, as I understand it, is to ensure that, if the computer has been defective, the party's opponent is made aware of it so as to be able to use that knowledge in appropriate circumstances to dispute the reliability of the record. I do not want to repeat what the noble Viscount said; it seems to me to be right in principle. He went on to say that the drafting may not be perfect; that also has been suggested to me. But if the noble Viscount will withdraw the Amendment, I undertake to prepare what I hope will be an improved draft and to put it down on Report.
VISCOUNT COLVILLE OF CULROSS: I am very much obliged to the noble and learned Lord. I gladly beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
VISCOUNT COLVILLE OF CULROSS VISCOUNT COLVILLE OF CULROSS moved, in subsection (5), to leave out "section" and insert "Part of this Act". The noble Viscount said: With the leave of the Committee, I should like to take with Amendment No. 3, Amendment No. 6. Amendment No. 3 is a paving Amendment for No. 6, although No. 6 is related to a different clause.
I would ask the Committee to look at Clause 8(1) and to compare it with Clause 5(1). Before I get on to the question of discovery, I feel that there is a possibility of difficulty arising in the process of rule-making under this Bill. The admissibility of computerised evidence is said in Clause 5(1) to be governed by rule-making powers of the court. It
"shall, subject to rules of court, be admissible …".
That is a completely general statement and it would not tie down the rule-makers in any way if they thought that they had to bring out new rules to cope with a new situation brought about by a
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technological advance, or if they had got it wrong in the first place. But then it would be seen that in the extremely important provisions of Clause 8, although it is true that in subsection (3)(c) there is provision for differentiation in these rules to meet different circumstances, nevertheless Clause 5 of the Bill is in principle governed by the provisions in Clause 8, since it says so in Clause 8(1). Therefore, when one is looking at the whole of the computer department of this Bill separately from the other and perhaps slightly less difficult aspects of it, one wonders whether there might not be provisions in Clause 8 which will tie the hands of the rule-making body in a way in which they would not be tied if all references to Clause 5 and computers was left out of the subsequent clauses which provide for rule-making powers and if rule-making authorities were left to themselves to construct their rules with a free hand in Clause 5 itself. I think that this is a point well worth considering.
The point in Amendment No. 6 arises out of the special difficulties which I envisage will turn up in the realms of computers. I do not suppose that rule-making powers, discovery and inspection of documents, is strictly in order on this Bill, but it may be convenient to deal with that. Order 24, Rule 9 of the Rules of the Supreme Court, says:
"A party which has served a list of documents on any other party must allow the other party to inspect the documents referred to in the list and to have copies thereof."
Suppose that the only information available in the plaintiff's case is contained in a computer. It may well be that the complete print-out of the computer has not been made, or on the contrary it may be that a complete print-out has been made but contains a good deal of material which is not relevant to the case. It may also be that the form in which the material is available is not understandable to the adverse party without the plaintiff or his experts translating it into some sort of English, since the material might consist of magnetic tapes, films, or something of that nature. I feel that the rule of the Supreme Court is not altogether apt in its present form to deal with computers.
Then there is another point in Rule 14, Order 24 which is even worse. It deals

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with the production of business books, which is directly relevant to the question of computers. It provides that the business books may, instead of being brought in their original form, be dealt with by means of a copy of the entries to be supplied, which may be verified by an affidavit by some person who has examined the copy with the original books. Then sub-rule 2 says:
"Any such affidavit shall state whether or not there are in the original books any and what erasures, interlineations or alterations".
That is not the way in which computers work. Many computers start off with a basic piece of information—for instance, how much I owe to a large shop. Every time I do another transaction with the shop, they erase completely from the tape the previous entry and the computer replaces that by another one showing the up-to-date information. I am told that they by no means always get it right, but that is perhaps beside the point. There really is no provision whatever in the computer world for looking at the business book to see whether there have been any erasures, interlineations or alterations, because a computer is so devised that it automatically disposes of any such thing.
Now how, in the course of the conduct of a case, is one to be able to go behind the product of the computer as it finally emerges after a number of transactions have been considered and dealt with by it, and when the previous situation before any of these transactions took place has been altogether erased? Will there be the coding and the programing which was fed into the computer, as well as the initial entries, perhaps in card form or something of that nature, available? I think not, because I imagine that in a large number of cases, if you are going to have a computer at all the whole object will be to get rid of all that paper—indeed, there may never be any at all. It may be done automatically by the computer, simply by sending it a message along a wire, and there may never be any pieces of paper at all.
How are we going to be able to deal with this aspect of computerised evidence? I frankly have no idea, but I believe it is a matter of the greatest importance when one is considering the
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admissibility of that final bill which the computer producers and says is what I had in the shop. How am I to go behind it and see how it was made up, and check whether or not the computer has put it down right? It will be interesting if the noble and learned Lord can give us some views, even if they are only provisional ones, first of all on whether the existing rule-making powers are wide enough to deal with this subject at all; and, secondly, and perhaps much more important, if we are going to have computer evidence admissible at all under this Bill, on how he actually thinks some of those difficulties are going to be overcome. I beg to move.
Amendment moved—
Page 5, line 21, leave out ("section") and insert ("Part of this Act").—(Viscount Colville of Culross.)
THE LORD CHANCELLOR: I am sorry that I cannot be equally accommodating about this Amendment. Of course, the rule-making powers are of the widest possible description and, obviously, rules will have to be made. But this is not a Bill dealing with matters of practice and procedure in the Supreme Court; it is strictly a Bill dealing with the admissibility of evidence. The two difficulties which I feel about the noble Viscount's proposal are, first, that it would be going beyond the normal functions of discovery to require a party who has in his possession information which is not readily intelligible on which he does not himself seek to rely, to do more than make it available as it stands to his opponent. Where, for example, you have in your possession a document in a foreign language you must disclose the document, but you are under no obligation at all, if your opponent does not speak that foreign language, to translate it for him. The party disclosing it cannot be compelled under the existing rules to furnish such things.
Secondly, the compulsory disclosure of such devices as magnetic tapes or discs would raise considerable problems, because it would be impossible, in the absence of a transcript, to ascertain what parts were relevant, and "blanket disclosure" might mean that the party was compelled to disclose all sorts of matters which, had they been contained in written documents, he could have covered up

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I appreciate that modern methods of recording information may in due course require the Rule Committee of the Supreme Court to consider whether the current rules of discovery need amendment. These rules operate on "documents" which are not defined in the rules, but are generally construed as meaning writings, pictures or plans readily intelligible by sight.
It is understood that the rule has been used to compel disclosure of a tape recording, though whether or not that was right is not for me to say. But whether the rule should be extended to cover, with suitable safeguards, magnetic tapes and so on, is a matter which the Rule Committee will no doubt have to consider. But the Amendments are, I submit, unnecessary for this purpose, since the rule-making power under the Act is already wide enough. Finally, it is relevant that Part I of the Bill is not concerned with discovery but with the admissibility of evidence. The Amendments would introduce matters which are, to a large extent, really outside the scope of the Bill. It is for those reasons that I advise the Committee not to accept the Amendment, though I hope the noble Viscount may be prepared to withdraw it.
LORD AIREDALE: I feel that we ought to be a little careful here. We are treading upon new ground. I cannot feel that the analogy with foreign languages, which was put forward by the noble and learned Lord the Lord Chancellor, is a very happy one. After all, with almost any foreign language that one can think of there are people available to translate it into English, but I rather doubt whether, at any rate so far, computer language—that is to say, the form in which information is fed into a computer and the form in which it comes out of a computer—is necessarily intelligible to anybody except the person who operates that particular computer.
I think it would be very unfair to produce a sheet of gibberish to the lay mind and to say, "That was what was fed in and here is the sheet of gibberish that came out. You must work out for yourself what it means." It might be quite impossible for the other party to work out what it means. It might be possible only if the party operating the computer himself produced a translation.
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Therefore I feel that we have to be careful here and that the foreign language analogy is not quite fair.
VISCOUNT COLVILLE OF CULROSS: I am not very happy about this, I am afraid, but I am grateful to the noble Lord, Lord Airedale, for supporting me. I appreciate what the noble and learned Lord says about the subject-matter of the discovery and inspection being a little outside the terms of the Bill, but the way I put it is this: if you are going to say that in certain circumstances the printout of a computer is to be admissible as evidence, what you are doing, and very rightly, is saying that modern methods of business accounting and business bookkeeping are to be able to be used in the courts, because that is the way that a great many people are going to keep their records. I think it was the noble and learned Lord, Lord Wilberforce, who drew attention in the Second Reading debate to the fact that an increasing number of business concerns are going to have nothing but computerised records. That is going to be a growing fashion and no doubt an extremely efficient way of doing business.
In an ordinary action, where book-keeping is done in a ledger or in any other form which can be read, there is the possibility that you will be able to look at the entries which were made and upon which the case is being rested by the other side. But if there is nothing in the way of records except a computer, how on earth will you ever be able to challenge the final output, the figure that it produces or whatever it may be, in a complicated case, unless we think about the methods by which discovery and inspection are to be achieved? I think—and I do not know what the Committee thinks about this—that before we allow the print-out of the computer to be admissible at all, we ought to examine the other parts of the processes of law, to see whether or not there will be insuperable difficulties if we prima facie allow the computerised evidence to come in.
It is in that context that I am asking the noble and learned Lord to be a little more forthcoming. He said, and I quite appreciate this and I think it is exceedingly important, that if you allow discovery to go too far the adverse party is going to find out a great deal more than he ought to. Of course, that is a

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grave danger and it ought to be provided against. It ought to be thought about at this stage, when we are dealing with Clause 5 of this Bill. We ought not to say, "This is something which will have to be dealt with in due course by some rule-making committee when the problem crops up." I do not believe that that is right. I believe we ought to deal with the matter now.
The other point which the noble and learned Lord made was this. Why should the person who has the computer have to provide a transcribed copy of its contents? You do not have to do so if the document is written in a foreign language. The noble Lord, Lord Airedale, produced a very good answer to that point. The product of that computer has emerged only because it was the result of information fed in in a particular form. You cannot work a computer unless you have a coding system and a program—which, incidentally, is spelt with only one "m", I believe. You cannot work it without that, and the result of the computer is wholly meaningless unless you know what those initial stages of the process were.
Now, even if the document, in the form of a tape or a pile of punch cards, is going to be given to the other side as such, the other side cannot possibly turn that into a transcript unless they go back to the party whose computer originally produced it, or into whose computer it was fed, because it will have to be checked back with that other party. Where is the saving of cost in requiring the party who wishes to look at this computer to beaver away with his own experts when he either gets absolutely nowhere or, even if he does get somewhere, he has to take it back to be rechecked by his opponents' experts who know how the computer works in the first place? I should have thought there was everything to be said for making the person who relies on a computer in business recording produce the thing in a form in which it can be understood. He will have to do it anyway in due course, so why not do it in the first place?
I am afraid I am not at all content with the answer the noble and learned Lord gave about this. I hope there will be an opportunity, while this Bill is
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going through Parliament—and I hope particularly in this House—for a lot more thought to be given to this. There are, it is certainly true, consequential difficulties to admitting computer evidence, but to judge by what the noble and learned Lord said I do not think they have been thought out at all. Would the noble and learned Lord give me an undertaking that rather more study will be given to this sort of aspect? I will certainly withdraw the Amendment if he will say that; but I do think I ought to press him a little on this.
THE LORD CHANCELLOR: I appreciate very much this very interesting discussion, but where the noble Viscount will I hope renew the discussion will be at the meetings of the Rule Committee. This Amendment is not one which says, "We must put this in the Bill; we do not want to leave it to the Rule Committee". This Amendment is one which merely provides a power which is already there, for rules of court to be made. The existing power is wide enough to make the rules. I could understand that there might be some argument for saying that this should be in the Bill, although I should not agree with that myself for two reasons: first, because it would really be outside the scope of the Bill—discovery rather than admissibility of evidence; and secondly because this is something new; it is developing. If we get a rule wrong, we can put it right. That is very much easier than if we put something into an Act of Parliament and then want to alter it.
But in any case the noble Viscount is not suggesting that we should put it into the Bill, but in the rules. I agree that it does want a great deal of thinking about before rules of court are made. I quite agree with that. If a million facts are stored in a computer, which may very well be the case, and you do not know until you have the whole thing recorded whether or not there is anything relevant to an issue in an action, it would really be an intolerable burden to have it all recorded in a form that people could read, because the amount of records which can be got out of a computer is extraordinary. There can very well be stored in a computer all the sentences of all the courts in all the criminal cases for a year. We have in fact had this done in relation to all the magistrates'

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courts in the case of the six simplest kinds of driving offences, and the sheets and sheets of paper are of terrific quantity. Nobody knows until the right button is pressed what is going to come out. I quite agree that in both ways there are difficulties to be considered, and I very much hope that the noble Viscount may be able to attend the meetings of the Rule Committee when they consider these very important questions.
VISCOUNT COLVILLE OF CULROSS: The noble and learned Lord flatters me too much. I know far too little about computers to be able to do this. I make the single point, before I withdraw this Amendment, that this Bill will become an Act, and it will say, "Computerised evidence is admissible". Simultaneously with that, there must be adequate rules to deal with that situation. It may be that they have not been worked out now, but we must have an undertaking I think—and I know this Bill can be brought into force in different bits—that before this bit comes into force there will be rules covering the sort of things (I know they are terribly difficult) that both the noble and learned Lord and I have been talking about. I am sure this will be so, and on that basis I beg leave to withdraw this Amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 5 shall stand part of the Bill?
LORD WILBERFORCE: I should like, if I might, to make a few observations on this very important clause, not in relation to any particular suggested change, but perhaps in relation to its place in the Bill. The first point I should like to make is similar to that which I made in relation to Clause 1, which is that it is a very complicated clause. It certainly enables computer evidence to be brought in, but it hedges it around with a very elaborate procedure. Three conditions in subsection (2) have to be complied with. It is necessary to produce a certificate in accordance with subsection (3); and then there may be rules—there no doubt will be—which will introduce other complications and which may involve the attendance or the potential attendance of persons concerned with the making, recording or production of statements, as suggested in Clause 8(2)(a).
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The point is this. This may be inevitable at the present stage, which is rather experimental, but personally I should very much hope that the stage would come, and that the noble and learned Lord the Lord Chancellor might perhaps indicate that he would not resist the stage coming, when some much simpler version of this procedure might be acceptable. In the United States, and I think also in other places where computer evidence is used, it is a matter of routine. There is a simple provision saying that evidence derived from computers may be received in the same way as business records, very much in the same way as in this Bill—in Clause 4 and other parts of it—it is being made much easier simply to produce a business record as such and to leave it at that, subject always, of course, to its being challenged and subject to the supervision of the judge. So I would hope that, before long, once this has got going and is understood, we should be able to substitute a much simpler provision, simply saying that evidence derived directly or indirectly from computers in the form of information should be acceptable in the courts. That is the first point.
The second point which I should like to raise on this clause relates to the definition of "computer", on which I have had some very helpful correspondence with the Department of the noble and learned Lord the Lord Chancellor. I should be very grateful if he would perhaps indicate that he still considers that the existing definition is satisfactory. It is in Clause 5(5). The point on which I still feel a little doubt is whether the expression "for storing and processing information" is right, because according to advice I have received the important character and feature of these devices lies more in the processing than in the storing. Indeed, one is often told that one should not refer to computers at all, although it is a convenient and popular expression; that if one wants to be accurate one should refer to "data processing devices" rather than to "computer devices".
A great many business firms, as I understand it, use a computer or a data processing machine simply for processing. One has files or cards, and the device takes the files, goes through them, works upon the information in them, and produces a result—sometimes erasing, as the

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noble Viscount said, what is actually in the files. But the point is that no separate process of storing is carried out. I should like reassurance, if that is possible, that this expression "storing and processing" does not introduce a superfluous element into the definition.
The third point—I do not know whether the noble and learned Lord can give us information about this; I regret that I have not given him notice of the point, and he may wish to consider it, but it would seem to be of some importance—is whether Clause 5 applies to foreign computers, or computers outside this country. If one looks at Clause 20 of the Bill, it is said that this Bill is not to extend to Scotland or to Northern Ireland, and there are reasons given for that. One would think it certainly desirable that, as regards proceedings in English courts, it should be possible for businesses in Scotland to provide evidence through a computer. I should think that was desirable also in relation to American businesses or Continental businesses. But whether that is possible under this clause, I confess I do not know. If it is, it may be that some special provision may have to be made when it comes to making the rules of court for giving effect to it. But it would seem to be necessary to be clear one way or the other whether this is limited to the device in this country or whether it would apply to devices wherever they come from. I should be grateful if the noble and learned Lord could give us any information on that point.
THE LORD CHANCELLOR: On the first point, I would entirely agree that the simpler the thing the better it is. It is a little more complicated than perhaps I should have liked. We shall have, I suppose, to try it and see. This is one of the reasons why I am against trying to deal with matters of discovery in the Bill. It is our habit in matters of procedure to be pragmatic. We try something; and we see how it actually works.
With regard to foreign computers, I do not think there is anything in the Bill which makes it inapplicable to a foreign computer; but I have not had occasion to consider that before, and if I may I will. As to storing and processing, I am informed that the difficulty is that if you say "storing" this would apply to every file, and if you say "processing" it
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would include typewriters. You would then have a clause which would apply to a great many things which are not computers at all. I will look into the point raised by the noble and learned Lord, Lord Wilberforce, as to a computer which takes a file and extracts information from it. I will certainly consider this point again. As I am at present advised, the difficulty about saying "storing or processing" is that you would have a section in an Act which applies to a good many things which are not computers at all.
Clause 5 agreed to.
Clauses 6 and 7 agreed to.
Clause 8:
Rules of Court
8.—
(2) Rules of court made in pursuance of subsection (1) above shall in particular, subject to such exceptions (if any) as may be provided for in the rules—
(a) require a party to any civil proceedings who desires to give in evidence any such statement as is mentioned in that subsection to give to every other party to the proceedings such notice of his desire to do so and such particulars of or relating to the statement as may be specified in the rules, including particulars of any person who was in any manner so specified connected with the making, recording or production of the statement; and
VISCOUNT COLVILLE OF CULROSS VISCOUNT COLVILLE OF CULROSS moved to add to subsection (2)(a), "or with the processing of the information upon which the statement is based". The noble Viscount said: I am not surprised that, in the course of dealing with my points on discovery, the noble and learned Lord (as indeed I did myself) forgot the general point that I was making about the double rule making powers under Clauses 5 and 8. But the matter turns up again in relation to this Amendment. I can see that if you look at Clause 8(2),(a) and try to envisage what is the proper notice, and later counter-notice, procedure to make, if you leave out computers altogether you have here a very reasonable statement of principles on which the rules ought to go. But the moment that you complicate the matter by including within this subsection, and within the general principle on which the rule-making body has to go, the whole concept of the notice system for hearsay consisting of computerised

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evidence, I think there is room for doubt whether the paragraph is drawn widely enough.
What is being done here is to say that rules of court shall be made to require a party who wants to give his hearsay evidence to give notice to the other side and to give certain particulars. Those particulars are to be specified and they can include particulars of any person who was, in any matter specified in the rules, connected with the making, recording or production of the statement. The statement, if we are dealing with a computer case, going back to Clause 5(1), is contained in a document. Then if we look at Clause 10, the document is the printout of the computer. So we have here somebody who is involved in the making, the recording or the production of the final statement.
In the case of computerised evidence I do not think that goes far enough. The noble and learned Lord himself said yesterday, when he was dealing with computers in an entirely different field, where they were identifying objects in space, that he would not like to guarantee that they were always infallible. Well, they are not. There are at least two sources of fallibility in computers, one of them being a matter of mechanical error and the other a matter of human error. If you wish to pin-point the mechanical error, you may have to do it in the way that we have already discussed. If you wish to deal with the human error, then there is not only the person in charge of the machine—I suppose he would be the proper person of whom notice would be given in accordance with this paragraph—at the time that the document which is actually going to be used in the court is produced; it is also very relevant to know what his predecessor did; because the man in charge of the computer when it actually produces the evidence may have been there for only two days. It may be that for the whole of the time when the information was being fed into the computer which built up the statement that is finally taken out, the computer was in the charge of somebody else. It is that other person who is going to know whether somebody has come down and fed some bogus programme into the computer or has fiddled about with it so as to falsify it.
If you draw the rules in accordance with this paragraph, it may be—and I want to protect this situation—that they will not be wide enough for the rule-making body to ensure that when a person puts forward his computerised evidence he also gives notice of, at any rate, a reasonable selection of the people who have been in charge of the computer during the whole of the relevant period—not just at the time when the document came out, but during all the previous period. They may not have to be called, but it is important that the person who is to cross-examine on this evidence should be able to have the opportunity to check back on its accuracy. As I said on Second Reading, he cannot call a witness and cross-examine him, even if he finds out who was the previous person in charge of the computer. He can subpoena him; but then he is his own witness, and he cannot cross-examine him unless he gets a ruling that the man is hostile.
What is required here is sufficient breadth—I do not think it need be spelled out in the Bill; I am sure that we shall be empirical about it—in the rule-making provisions to enable the rules to cover the sort of thing that I have been talking about. There are two ways of doing it: either to make sure by broadening this paragraph or—and this may be better—leave out the reference to Clause 5 in Clause 8 and in Clause 6, and leave the thing to be done by special computer rules made under Clause 5. At any rate, I believe that there is here a practical problem to be dealt with. I beg to move.
Amendment moved—
Page 7, line 44, after ("statement") insert the said words.—(Viscount Colville of Culross.)
LORD AIREDALE: I support this Amendment. Surely the difficulty that one is up against with computers is that if you ask a computer a silly question you get a silly answer, but you may not know it. If you have an intelligent witness in the witness box and you ask a silly question, his answer will probably show up the silliness of the question. It is very important, therefore, when you are working with computers, to be quite sure that the person feeding the information into the computer was not subject at that moment to some human failing which will

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lead the computer to produce an inaccurate answer which nobody is going to be able easily to discover—because there is no apparent different in the behaviour of a computer when it produces a stupid answer from when it produces a sensible one. That seems to me of importance here. It is very important indeed not only to know as is stated in Clause 5(1)(a), that the computer was operated properly at the time, but to know that the person who fed information into it was operating properly at the time. That is what I think we have to guard against and why it is important to know about the people who fed the information in and who were operating the computer before the information eventually emerged.
7.50 p.m.
THE LORD CHANCELLOR: I have no real objection to this in principle. I am still a little hesitant about making things too complicated, and with reference to the observations of the noble Lord, Lord Airedale, I think that we ought to remember two things. One is, as I understand, that it is infinitely more difficult to forge a computer record than any ordinary ledger because there has to be several people in it at the same time. Secondly, while, of course, computers can make mistakes, business firms do not spend tens or hundreds of thousands on a machine which is not accurate; therefore there is much less reason why they should be. It is only that we are new to computers and they all sound frightfully complicated, as indeed they may be. No doubt when a firm gets its first computer something may well go wrong, but in general it is much less culpable and there is much less need to check a computer than almost any other form of record.
But I agree with the general proposition that the people responsible for translating the original information into computer language ought to be included. It is, however, for consideration whether Clause 8(2)(a) as drafted does not meet the point made by the noble Viscount, because "production of the statement" is a phrase wide enough to cover everything from the initial supplying of the information to the final print-out. I would invite the noble Viscount to consider that, and to withdraw his Amendment on the undertaking that we can both consider whether any express additional
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words are needed. If they are, then an Amendment, either in this form or some modified form, can be put down again on Report stage.
VISCOUNT COLVILLE OF CULROSS: Would the noble and learned Lord also like to deal with my point about taking out altogether from Clauses 6 and 8 the references to Clause 5, and leaving it for general powers to make rules under Clause 5 itself?
THE LORD CHANCELLOR: Could I consider that at the same time?
VISCOUNT COLVILLE OF CULROSS: I entirely agree with that approach. I should like to consider it too, but I think that what I am asking for is reasonable. I am not asking for any complication; I specifically do not want that. All I am asking is that the rule-making powers should not be so restricted by some words which unfortunately do not wholly apply to computer worlds that we shall find that we cannot cover it without amending legislation. I am only asking that that situation should be safeguarded. If the noble and learned Lord will look at it in that way, I will gladly ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
VISCOUNT COLVILLE OF CULROSS VISCOUNT COLVILLE OF CULROSS moved, in subsection (2)(b), to leave out "cannot reasonably" and insert "is shown not to be able reasonably to be". The noble Viscount said: This is a similar point. I know very well that the words in paragraph (b) are taken out of, I think, the Criminal Evidence Act 1965 and that they were put in because of difficulties which arose in a case called Meyers v. The Director of Public Prosecutions. But again I am dubious whether they are altogether right in the very special context of computers. This is another instance where it may well be that the noble and learned Lord the Lord Chancellor, will find it is better to have a special computer rule-making clause all by itself, and leave the ordinary situations with which this Bill deals to be governed by the same rules as appear in the 1965 Act. It is for consideration.
The difficulty, I think, is this: in this very special computer context all that the person who does not wish to have his computer manager appear at the court has to say is, "This was one of an

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enormous number of very small transactions which either are done as a matter of course and routine, and nobody could be expected to remember them at all, or else there is nobody who does them at all; the whole thing is completely automatic; and I have nobody in my employ who will be able to help you about the process whereby a particular entry in which you are interested got into the computer's information system".
I can easily imagine that this would in fact be so. But what one is going to ask for, I suspect, if one wishes to challenge the accuracy of the computer print-out, is not necessarily for somebody who has a specific memory of a specific punch card that was put into it some day eighteen months or seven years before the case, but somebody who was in charge of the operation of the computer, as the noble and learned Lord himself said, at the relevant period. It is the method by which the programing and the coding is done and the information fed into the machine which is relevant here, just as much as an exact memory of the specific occasion upon which the data accrued or when it was actually registered in the inside of the computer. Therefore I do not think that the exact wording of the Criminal Evidence Act 1965 is apt for this special context.
If the other party, the computerised party, wishes to be difficult, or wishes actually to suppress the fact that there has been something wrong in the operation of his computer, he can perfectly well say under this formula, "Yes, I have a manager, he was there at the time, but there is no reason to suppose that he can remember anything about this particular transaction". And who is going to be able to disprove it? The whole system of this paragraph, so far as I can see, makes this counter-notice more or less conclusive. What I am asking for, at any rate in this sort of case, is that the person should be produced unless it can be shown by the person who wishes not to produce him that there is some reason why he should not come. I do not know whether that is the right way to do it; it may be better to have a special rule for computers; but at any rate I think it is another point for consideration, and I beg to move.
Amendment moved—
Page 8, line 8, leave out ("cannot reasonably") and insert ("is shown not to be able reasonably to be").—(Viscount Colville of Culross.)
THE LORD CHANCELLOR: I should have thought that this Amendment was unnecessary, because the wording of Clause 8(2)(b) is unambiguous as it stands. It follows exactly the Criminal Evidence Act 1965 and it already places the burden on the party who wishes to show that the witness either is unavailable or cannot be expected to remember the relevant events. If it is desired to insist at the interlocutory stage on evidence being given to show that the person concerned cannot reasonably be expected to remember the relevant facts, Clause 8(2)(b) as drafted would enable rules to be made for this purpose.
VISOUNT COLVILLE OF CULROSS: I am sorry to interrupt the noble and learned Lord, and I think that may well be so, but I am saying that the test is wrong. The proper test in this case is not just that a person should not reasonably be expected to remember facts; he should be, and may properly be, expected to remember the situation or the general orders which he was given. He may not remember the facts, but it may be highly relevant that he should remember the exact situation.
THE LORD CHANCELLOR: I feel that we are making it ever more and more complicated. I am quite prepared to consider this point, but I should not have thought that on the wording of Clause 8(2)(b) as it stands any Amendment was really necessary.
VISCOUNT COLVILLE OF CULROSS: I hope that the noble and learned Lord will take this point into account when he does what he says and considers whether we should take computers out of Clause 8 altogether. Perhaps when the noble and learned Lord reads what I have said it may occur to him that I am not just splitting a hair about this matter and that there is a certain amount of substance in what I am saying: that this is not the right test when it comes to people remembering about computers. If that is so, something may have been gained. I hope that I may leave it to the noble

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and learned Lord at the moment to consider, and meanwhile I beg leave to withdraw—
LORD AIREDALE: Before the noble Viscount moves to withdraw the Amendment, may I suggest that the sort of question you want to ask a person feeding information into the computer is, "When you fed the information in, did you remember that the year 1956 was a leap year?", because if that is forgotten, every single one of the computer's calculations for 1956 will be wrong. That is the sort of thing we want the witness to be sure of when he is asked whether he fed proper information into the machine.
THE LORD CHANCELLOR: I think that if he did that, he would not be there any longer.
LORD AIREDALE: This is a case that happened. Someone forgot that a certain year was a leap year and the whole of the calculations were completely wrong.
VISCOUNT BARRINGTON: Am I right in saying that an answer may be extremely accurate but at the same time may be misleading and silly even, unless the question is explained to the computer? To take an example, if there was a question of the number of white men, it would have to be explained to the computer that a "white man" does not mean a white man. A computer to which it had not been explained that it meant pinkish-brown, would give an extremely inaccurate answer. It may be a frivolous example, but it is one somebody might be more likely to overlook. It must be very complicated.
VISCOUNT COLVILLE OF CULROSS: I think that, nevertheless, I will beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 8 agreed to.
Clause 9 [Admissibility of certain hearsay evidence formerly admissible at common law]:
THE LORD CHANCELLOR: This Amendment is consequential on the omission of Clause 1(2). I beg to move.
Amendment moved—
Page 10, line 35, leave out from beginning to ("it") in line 36.—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 9, as amended, agreed to.
Clause 10 [Interpretation of Part I, and application to arbitrations, etc.]:
THE LORD CHANCELLOR: If I may I will discuss this Amendment and Nos. 9 and 12, which go together. The purpose of these three Amendments is to make the wording of paragraph (d), and of references to that paragraph elsewhere in the subsection, reflect more clearly the fact that paragraph (d) covers not only cinematograph films and videotapes but also microfilms and other "still" negatives. The first Amendment makes it clear that paragraph (d), as distinct from (b), is not concerned with photographic prints, which are intended to be looked at in their existing form, but with devices from which readily intelligible pictures can be reproduced. The two linked Amendments reflect the fact that a "paragraph (d) document" may embody either a single visual image (that is to say, a microfilm or other "still" negative) or several such images (that is to say, a cinematograph film of videotape). Hence, the first of these Amendments makes paragraph (d) refer to a device embodying "one or more" visual images, and the second Amendment makes the definition of a copy of such a document include a "reproduction or still reproduction", since "still reproduction" is not a felicitous phrase when one wants to refer to a print of a microfilm or other "still" negative. I beg to move.
Amendment moved—
Page 11, line 11, after ("film") insert (", negative").—(The Lord Chancellor.)
VISCOUNT COLVILLE OF CULROSS: This is one of the Amendments the noble and learned Lord promised to make to Clause 10. I should not be greatly surprised if other Amendments to this extremely difficult definition were to turn up in the course of the passage of the Bill through Parliament. I am sure that this is a good series, and I welcome it.
On Question, Amendment agreed to.
THE LORD CHANCELLOR: This is a drafting Amendment, the second of those to which I have just referred. I beg to move.
Amendment moved—
Page 11, line 11, after ("which") insert ("one or more").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: This Amendment is linked with the Amendment to Clause 10, page 11, line 18, "leave out ('only') and insert ('but not (c)')". These Amendments cure a minor drafting defect in Clause 10(1), which results from the definition of "copy" being made dependent, in appropriate cases, on whether the relevant document falls within paragraph (c) or paragraph (d) of the definition of "document". These definitions are intended to deal separately with first, "audible" documents, of which transcripts of the sounds are copies; secondly, films and video-tapes, of which still prints are copies; and, thirdly, combined films, etc., and sound tracks, of which transcripts together with still prints are copies. It is, however, possible that a document which fell within paragraph (d) might also fall within paragraph (b) (photographs); a reproduction of the image embodied in such a document ought to be a "copy" and it is therefore more accurate to speak of such a document as "falling within paragraph (d) but not (c)" rather than as "falling within paragraph (d) only". The second of these two Amendments does this and, for the sake of consistency, the first Amendment makes a corresponding change in the definition of copies of "audible" documents. I beg to move.
Amendment moved—
Page 11, line 16, leave out ("only") and insert ("but not (d)").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: This is the second of the two Amendments to which I have just referred. I beg to move.
Amendment moved—
Page 11, line 18, leave out ("only") and insert ("but not (c)").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: This follows on Amendment No. 8. I beg to move.
Amendment moved—
Page 11, line 19, leave out ("still reproduction of the") and insert ("reproduction or still reproduction of the image or").—(The Lord Chancellor.)
On Question, Amendment agreed to.
8.7 p.m.
VISCOUNT COLVILLE OF CULROSS VISCOUNT COLVILLE OF CULROSS moved, in subsection (1)(d), after "not" to insert "or, if the image or images can be interpreted only when reduced into words or figures, a transcript thereof". The noble Viscount said: This Amendment relates to a point I raised on Second Reading. When the noble and learned Lord the Lord Chancellor wrote to me about it, he said, not altogether surprisingly, that he was not sure what I had been talking about, and I am not sure that I know now. But still I wish to ask him a question.
I believe that there is a method of computerisation which is called electronic beam recording. I have not had an opportunity to find out exactly what it does. It may be that this succeeds in reproducing upon a microfilm an exact reproduction of a document, so that when the relevant pieces of the microfilm are reproduced the document can be read. On the other hand, it may be that what it does is to break down words into some sort of light impulses which are then put upon a film which can eventually be turned back into language. A television cathode ray bombards a screen with a series of dots. It may be that this does the same sort of thing. If it does, the production of a recording is not immediately readable or intelligible when it comes out at the end. Although it is within paragraph (d) and it is one of the visual types, it would not be any use to produce a copy of the microfilm. It would have to be translated back into the sort of language from which the original process had transformed it.
Whether or not I am right in supposing that the latter is what the electronic beam recording does, it seems to me possible that there will be invented during the lifetime of this Bill some process which will use a form of visual image or impact or impression in such a way that we shall not be able to understand it from the film or print of that process alone without further interpretation of the message it is trying to put over; and unless we do something to expand the definition in Clause 10, I believe that we may be left with a case in which some incredibly complicated and efficient new type of computer cannot be used in court because the Civil Evidence Act 1968 does not contain a definition wide enough for it.

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There are two possibilities here: either it exists now or in the future. In either case, I admit that I have not drafted my Amendment correctly. But, at any rate, I hope that the noble and learned Lord saw before this debate what I was getting at and can give me some sort of answer. I beg to move.
Amendment moved—
Page 11, line 20, after ("not") insert the said words.—(Viscount Colville of Culross.)
THE LORD CHANCELLOR: I gather the sort of thing that the noble and learned Viscount has in mind, and I should really like to consult my experts on electronic beam recording. I think that an Amendment is not really necessary, because it seems to me that the sort of thing that the noble Viscount has in mind would fall within Clause 10(1)(c), not paragraph (d), because the "data" embodied are "non visual": the marks (whether punctured holes or other devices) may be visible, but the "data" are not apparent to the eye. As long as the document is within paragraph (c) a transcript would be within the definition of "copy". I should, however, like to consider it. These are difficult matters. The noble Viscount may like to consider what I have said to see whether it makes sense, and, if I may, I will consider the matter again and take further advice.
VISCOUNT COLVILLE OF CULROSS: The last thing that I should wish to suggest is that anything that the noble and learned Lord says does not make sense. But I did consider this carefully to see whether I thought a machine of the type I am talking about fell within paragraph (c). It is quite true that if you interpret the words "non-visual" in one way it may be so, but I should have thought it much more natural to say that something which appeared as perhaps a row of dots on a microfilm was visual. After all, you see it. It is, as are all the other things in paragraph (d), of the type of film, a microfilm, which is in the visual department of this definition. Although I have no doubt that the courts would manage to worm their way round the difficulty somehow, it seems to me to be so much better not to have litigation about whether this particular type of computer produces a document within Clause 10 of this Bill when it becomes
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law. It would be much better to try to get a definition a little wider at this stage in order to avoid all that trouble. I am glad the noble and learned Lord will do as he said; I will certainly do the same, and perhaps we can come back to the point on a later occasion. Meanwhile, I beg to withdraw the Amendment.
Amendment, by leave, withdrawn.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved in subsection 1(d), after "enlarged or not," to delete "and". The noble and learned Lord said: This Amendment is a little more complicated. It is a paving Amendment anticipating the Amendment to Clause 10, page 11, line 22. These Amendments make it clear that a party who has microfilmed an original written document can, subject al ways to authentication in a manner approved by the court, prove a statement contained in that document by producing not the microfilm itself but an enlarged reproduction made from it. This is an important point, because one of the main objects of the wide definition of "copy" in Clause 10(1) is to enable free use to be made of microfilm enlargements.
In most cases a microfilm will itself constitute a record within the meaning of Clause 4 and will therefore be admissible under that clause to prove a statement contained in it. It would follow that an enlargement of the microfilm would be a "copy" within Clause 10(1), as now drafted, and therefore admissible by virtue of Clause 6(1) to prove the statement. But this will not always be the case; if the microfilm does not constitute a "record" within Clause 4, then it is doubtful whether Clauses 6(1) and 10(1) would permit a statement contained in the original written document to be proved by the production of an enlargement from the microfilm. It is true that the microfilm itself would be a "copy" of the original written document, but the enlargement would be a copy of a copy of that original and the Bill does not permit proof by production of a copy of a copy. In the case of a microfilm, this would be most inconvenient since the microfilm itself is not easily legible and to require its production would be both tiresome and unhelpful. What is needed is a provision enabling the enlargement to be produced in court.
The Amendments achieve this object. Their effect is that where a document which is not itself a film, et cetera, has been filmed (and this includes microfilmed) then a reproduction, whether enlarged or not, of the images embodied in the film is included in the definition of a "copy" of the original document. I have for some time felt that I should have gone to a computer school for at least a month before introducing this Bill. I beg to move.
Amendment moved—
Page 11, line 20, leave out ("and").—(The Lord Chancellor.)
VISCOUNT COLVILLE OF CULROSS: If these two Amendments will achieve that object it seems to me to be a work of veritable genius. I do not understand in detail what the noble and learned Lord has said, but I shall be very interested indeed to read it in the morning.
On Question, Amendment agreed to.
THE LORD CHANCELLOR: This is the Amendment that is linked to the last one. I beg to move.
Amendment moved—
Page 11, line 22, at end insert ("and in the case of a document not falling within the said paragraph (d) of which a visual image is embodied in a document falling within that paragraph, a reproduction of that image, whether enlarged or not.").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 10, as amended, agreed to.
Clause 11:
Convictions as evidence in civil proceedings
11.—(1) In any civil proceedings the fact that a person has been convicted of an offence by or before any court in the United Kingdom or by a court-martial there or elsewhere shall (subject to subsection (3) below) be admissible in evidence for the purpose of proving, where to do so is relevant to any issue in those proceedings, that he committed the conduct on which the conviction was based, whether he was so convicted upon a plea of guilty or otherwise and whether or not he is a party to the civil proceedings; but no conviction other than a subsisting one shall be admissible in evidence by virtue of this section.
VISCOUNT COLVILLE OF CULROSS VISCOUNT COLVILLE OF CULROSS moved, in subsection (1), to leave out "or by a court-martial there or elsewhere". The noble Viscount said: It may
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be with a sigh of relief that the Committee can leave the subject of computers and, indeed, Part I of the Bill. I have now set down to Clause 11 and Clause 13 a number of Amendments which are really all on the same point, although I think they have slightly different emphasis in the two different clauses, to draw attention to, and to seek some explanation from the noble and learned Lord about, the other respect in which this Bill differs from the Law Reform Committee's recommendation.
It will be recalled that in paragraph 18 of their Report (Cmnd. 3391) and the rule in Hollington and Hewthorne they recommended—and again it was a matter of balance of judgment—that the provisions about the admissibility of previous convictions should apply when the conviction was before a court, but not when it was before a court-martial or before a foreign court. The Bill, of course, says that if the conviction is subsisting it is admissible. The noble and learned Lord has a little difference, I think, to make now—it is not going to be admissible if the conduct upon which it was based under his Amendments to come are the fact—but I do not think that it makes any appreciable difference for this purpose. It is going to be evidence of those facts in a subsequent civil proceeding. The Committee said that they did not consider that a conviction before a foreign court should be susceptible of this treatment, and that in those circumstances a person who wishes to prove the facts would have to start all over again without being able to rely on foreign conviction.
Then there comes the difficulty of the court-martial, and in this the Government have reversed the balance of judgment to which the Law Reform Committee came. I think that before the Committee is invited to accept this change I should like to ask the noble and learned Lord a little about the reasons which underlie the Law Reform Committee's own balanced judgment on the matter. What they said was that they were not imputing anything against courts-martial; they were not saying there was anything wrong with courts-martial. There were two reasons. First of all, courts-martial in this country do not as a rule involve the sort of cases which are liable to lead to a tort or a contract action afterwards; they chiefly deal with military

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offences in whichever Service they occur. Then they say that when courts-martial take place abroad they are done under English rules of law, but it is perfectly possible that there it will in fact concern a matter and concern facts which could be the subject, possibly, of a future civil action in this country. But they then say that what their draft Bill provides would lay an unreasonable burden upon the defendant.
The defendant would, if the Bill is to apply to courts-martial as well as to convictions in front of an ordinary court in this country, have the burden of disproving the conviction. His opponent would simply have to put up the conviction in front of the court-martial and that would be admissible as evidence of the facts, unless the defendant could prove that that conviction was wrong and the facts did not lead to that conclusion. In order to be able to do so he would very likely have to go abroad and collect a number of witnesses to enable him to discharge that onus of proof. I think it was for that reason, so far as courts-martial abroad are concerned, that the Committee came to the view that it should be for the plaintiff to bring all the evidence he wished to satisfy the court and prove his case, and not for the defendant to show that it did not.
There must have been some consideration in the minds of Her Majesty's Government which led them to abandon this balance of judgment. Perhaps the Law Reform Committee were wrong about the number of offences upon which civil actions could take place which were dealt with by courts-martial in this country. Perhaps they were wrong about the difficulties of obtaining witnesses, but I do not think we should leave this matter as it is.
I wish to say only one other thing. I do not believe that necessarily quite the same considerations apply to the defamation situation dealt with in Clause 13. It seems to me to be possible, although perhaps not very logical, to leave courts-martial out of Clause 11 but still to say that so far as Clause 13 is concerned they will be conclusive. As I understand Clause 13, in any event it will not be possible for the defendant to disprove the conviction, and therefore the practical difficulty about bringing witnesses back
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from abroad does not arise. But I think that perhaps it would be better to consider the two together rather than separately. I shall be grateful if the noble and learned Lord the Lord Chancellor can deal with the main proposition, and then mention the case of defamation. I beg to move.
Amendment moved—
Page 12, line 6, leave out ("or by a court-martial there or elsewhere").—(Viscount Colville of Culross.)
THE LORD CHANCELLOR: I think it would be difficult to split the thing in two. I am sorry that the noble and learned Lord, Lord Pearson, is no longer here, because we are dealing with one of the only points on which this Bill differs from the recommendations of his Committee. The only grounds on which the Committee said they came to their conclusion were, first, that in the United Kingdom courts-martial are mainly confined to the trial of offences against military law, which would really involve only the same issues as civil actions; and so far as courts-martial abroad are concerned they were influenced by the practical difficulty confronting a party who wished to challenge a conviction but could only do so if given an opportunity to cross-examine the witnesses who gave evidence.
No doubt these are weighty arguments, but against them it may be urged, as the Committee themselves recognised, that courts-martial are as reliable as other criminal courts, and in the opinion of many people are even more favourable to the accused—certainly in the facilities for reviewing a court-martial conviction, either on appeal or through Service machinery, because the sentence has to be confirmed and the proceedings reviewed at that point, and then later one can go to the Courts-Martial Appeal Courts.
Secondly, there is an important difference between courts-martial, whether sitting at home or abroad, and foreign courts, in that the former apply English law, and in particular follow the English rules of evidence. Thirdly, I think the Law Reform Committee may well have underestimated the proportion of trials by court-martial in the United Kingdom for what are offences against the ordinary criminal law. Usually, in fact, when some

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question arises nearly all the witnesses are back in this country, and it is always easy for the Services to bring people home, but the Committee—I hesitate to say this in the absence of the noble and learned Lord, Lord Pearson—when they said that there are very few civil cases, they are nearly all criminal cases, I rather believe were thinking of their own experiences.
VISCOUNT COLVILLE OF CULROSS: Surely the noble and learned Lord must mean "military" rather than "general criminal"?
THE LORD CHANCELLOR: Yes, I mean that. But it may be the Committee were relying on their own recollection of Service days or of Judge Advocates during the war, because actually last year there were altogether under 3,000 courts-martial, and over 1,100 of them were civil cases.
VISCOUNT COLVILLE OF CULROSS: But, with great respect to the noble and learned Lord, they cannot have been civil cases.
THE LORD CHANCELLOR: Yes, I do mean civil cases—well, not courts-martial, but for civil offences.
LORD AIREDALE: I think the noble and learned Lord means non-military criminal offences.
THE LORD CHANCELLOR: I am much obliged to the noble Lord. But this is an entirely different picture from that which the Committee had. So, taking all those things into account, we decided in this way—allowing for the fact that the Services made it plain that they regarded it as a great slight on courts-martial that they were treated differently.
VISCOUNT COLVILLE OF CULROSS: I am grateful to the noble and learned Lord for that. I have no doubt that the noble and learned Lord, Lord Pearson, will read what he has said in Hansard and will be able, if he wishes to do so, to comment on it later. Could the Lord Chancellor just tell me this. Has he any sort of breakdown of the nonmilitary criminal offences which were committed and were tried by courts-martial in the list that he has mentioned?
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I would not have any idea what sort these are—whether they are the sort that would be likely to give rise to civil liability, or whether they would be the sort of non-military criminal offences which do not really affect the issue.
THE LORD CHANCELLOR: I have the breakdown of the figures of the last two years for the Navy, the Army and the Air Force, but I have no list of the actual offences. I have no doubt I could obtain it and I will write to the noble Viscount and let him have that information.
VISCOUNT COLVILLE OF CULROSS: I would be very much obliged to the noble and learned Lord, and I should like to study that. Meanwhile, I beg to withdraw this Amendment.
Amendment, by leave, withdrawn.
8.28 p.m.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in subsection (1), to leave out "whether he was so convicted upon a plea of guilty or otherwise and," and insert "that offence". The noble and learned Lord said: This is the last really complicated Amendment and it is rather tedious because it is all a question of terminology. One hesitated to differ very much on any point from the clauses put forward by the Committee, but the phrase "committing the conduct" has been found very complicated, and this is an attempt to get rid of it.
Perhaps I may take this Amendment together with Amendments 19 and 20. Their object is twofold. In the first place, they are intended to improve the language of the Bill, first by getting rid of the rather cumbrous expression "committed the conduct" and thus enabling the definition of "conduct" in Clause 18(2) to be omitted; and, secondly, by enabling a latent ambiguity in Clause 12 to be resolved while keeping the language used in Clause 11 in step with that used in Clause 12 as proposed to be amended.
The substance of the Law Reform Committee's recommendation on which Clause 11(1) is based is that proof of a previous conviction should be evidence of the convicted person's guilt. The natural way of giving effect to the recommendation would be to provide that
"the fact that a person has been convicted of an offence .. shall be admissible in evidence

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for the purpose of proving … that he committed that offence …"—
which is what Clause 11(1) will provide if the Amendment to subsection (1) is made. As drafted, Clause 11(1), following the draft clauses annexed to the Committee's Report, makes the conviction admissible to prove that the person concerned "committed the conduct on which the conviction was based".
The reason for using this expression is that in many cases—for example, "running down actions" following the defendant's conviction of a driving offence—it is the defendant's bad driving that is relevant, not whether it was correctly adjudged by the criminal court to amount to "dangerous" or "careless" driving. The defendant should not be able to avoid the effect of Clause 11 by arguing successfully in the civil action that the magistrates should have convicted him of "careless" and not "dangerous" driving, when the issue in the civil action is whether he was negligent because he drove too fast. The use of "committed the conduct" was intended to avoid this possibility. But in practice it would not exist; if the conviction were, as is proposed, made evidence that the defendant committed the offence of dangerous driving, he would, to displace the evidential effect of the conviction, have to "prove the contrary"—that is, that he was not guilty of dangerous driving—by virtue of Clause 11(2), and this he could in practice do only by calling direct evidence of what happened.
Moreover, as drafted, Clause 11(1) may be difficult to apply where the criminal conviction could have been based on a finding that any one or more of a number of incidents was proved. If, for example, A is convicted of having assaulted B at a given time and place, B may have given evidence that A struck him a number of blows, one of which did serious injury for which a civil action is subsequently brought. A may, in the criminal proceedings, have admitted striking B but deny having struck the blow which did the injury. In such a situation, unless the criminal court's decision clearly shows precisely what the court found proved, it may be difficult to show precisely what aspect of A's conduct was the basis of the conviction. To provide, therefore, that the conviction is to be evidence that A "commited the conduct on which it
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was based" may be asking Clause 11(1) to do more than it can reasonably be expected to do.
Accordingly, even if Clause 11 is considered by itself, there are persuasive arguments for abandoning "committed the conduct on which the conviction was based" in favour of "committed that offence". But the same arguments are still more powerful when applied to the analogous provisions in Clause 12. There a finding of adultery or an adjudication of paternity is made evidence that the person concerned "committed the conduct on which the finding or adjudication was based". So long as the subsequent proceedings are concerned only with proof of an act of adultery, this expression (though not very elegant) achieves its purpose. But it is not at all clear that it makes an adjudication of paternity evidence of the fact of paternity, and this ambiguity is brought out in Clause 12(2)(b), which makes certain documents admissible to identify the "conduct on which the finding or adjudication was based". One cannot identify an act of paternity. It is therefore in any event desirable to amend Clause 12 to resolve this ambiguity by providing in terms that a finding of adultery or adjudication of paternity is to be admissible as evidence that the person concerned committed the adultery to which the finding relates or was the father of the child in question. This is done by the Amendments to Clause 12. "Committed the conduct" cannot be retained for Clause 12, and this fact strengthens the argument for substituting a more readily understood and less cumbersome expression in Clause 11.
A further advantage of the Amendments is that they enable the definition of "conduct" in Clause 18(2) to be omitted. The object of this definition was to avoid any possibility of "conduct" being construed as excluding any relevant mental element in relation to a criminal offence. If Clause 11(1) is, as is proposed, to refer to the commission of an offence, it will necessarily connote the relevant mental element. I beg to move.
Amendment moved—
Page 12, line 9, leave out from ("committed") to ("whether'') in line 10 and insert ("that offence").—(The Lord Chancellor.)
VISCOUNT COLVILLE OF CULROSS: I think it is very valuable to have a full

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explanation of the reasons why the Government wish in this respect to depart from the drafting of the Committee's little Bill at the back of their Report. I find the argument wholly convincing. It is much more subtle than anything I should have thought of, but it sounds to me right and I would support it.
On Question, Amendment agreed to.
THE LORD CHANCELLOR: This Amendment is consequential on No. 17. I beg to move.
Amendment moved—
Page 12, line 18, leave out from ("committed") to end of line 19 and insert ("that offence unless")—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: This Amendment is also consequential on No. 17. I beg to move.
Amendment moved—
Page 12, line 22, leave out ("conduct") and insert ("facts").—(The Lord Chancellor.)
VISCOUNT COLVILLE OF CULROSS: There are a number of Amendments which the noble and learned Lord has on this point. I recognise them as all being the same. I do not know whether it would be permissible to put them en bloc.
THE LORD CHANCELLOR: Those were the ones, Nos. 17, 19 and 20.
On Question, Amendment agreed to.
8.35 p.m.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved after subsection (3), to insert:
"(3A) Where in any civil proceedings the contents of any document are admissible in evidence by virtue of subsection (2) above, a copy of that document, or of the material part thereof, purporting to be certified or otherwise authenticated by or on behalf of the court or authority having custody of that document shall be admissible in evidence and shall be taken to be a true copy of that document or part unless the contrary is shown."
The noble and learned Lord said: This Amendment enables a properly authenticated copy of a complaint, information, and so on, to be put in evidence for the purpose of identifying the facts on which a criminal conviction was based. The Amendment is necessary because without it it might be difficult for a party seeking to rely on a previous conviction to
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identify the relevant facts. Proof of the conviction itself presents no difficulty, because under current legislation a conviction before a court in any part of the United Kingdom can be proved by a certificate signed by the appropriate officer of the court. But the relevant enactments do not apply to the documents which initiate criminal proceedings, and to obtain the originals might be inconvenient or even impossible. A criminal court might well be unwilling to release its original records, particularly for the purpose of a civil action in another part of the United Kingdom, but there can be no objection to a properly authenticated copy being made available and admitted in evidence. The wording of the Amendment is based on paragraphs 12 and 13 of Schedule 1 to the Land Commission Act 1967. I beg to move.
Amendment moved—
Page 12, line 33, at end insert the said new subsection.—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 11, as amended, agreed to.
Clause 12:
Findings of adultery and paternity as evidence in civil proceedings.
12.—
(2) In any civil proceedings in which by virtue of this section a person is proved to have been found guilty of adultery as mentioned in subsection (1)(a) above or to have been adjudged to be the father of a child as mentioned in subsection (1)(b) above—

(a) he shall be taken to have committed the conduct on which the finding or adjudication was based, except in so far as the contrary is proved; and

(b) without prejudice to the reception of any other admissible evidence for the purpose of identifying the conduct on which the finding or adjudication was based—

(i) in a case falling within subsection (1)(a) above, the contents of the petition or summons presented, and of any decree or order made, in the matrimonial proceedings in question, and the judgment of the court therein, shall be admissible in evidence for that purpose; and

(ii) in a case falling within subsection (1)(b) above, the contents of the complaint, summons or writ and of any order made in the affiliation proceedings in question shall be admissible in evidence for that purpose.

THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in subsection (1), to leave out "conduct on which the finding or adjudication was based", and insert:
"adultery to which the finding relates or, as the case may be, is (or was) the father of that child".
The noble and learned Lord said: This drafting Amendment is linked with two other drafting Amendments, Nos. 24 and 25, and it resolves the ambiguity latent in the words "committed the conduct" in Clause 12(1), whose purpose I have explained. Perhaps these Amendments could be put en bloc.
Amendments moved—
Page 13, line 24, leave out from ("the") to ("whether") in line 25, and insert the said new words.
Page 13, line 35, leave out from ("the") to ("the") in line 37, and insert ("adultery to which the finding relates or, as the case may be, to be (or have been) the father of that child, unless").
Page 13, line 40, leave out ("conduct") and insert ("facts")—(The Lord Chancellor.)
On Question, Amendments agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in subsection (2) to leave out subparagraphs (i) and (ii), and insert:
"the contents of any document which was before the court, or which contains any pronouncement of the court, in the matrimonial or affiliation proceedings in question shall be admissible in evidence for that purpose."
The noble and learned Lord said: This Amendment substitutes, for the specific classes of documents at present set out in Clause 12(2)(b)(i) and (ii), a general formula providing for the documents connected with the previous matrimonial or affiliation proceedings which are to be admissible for the purpose of identifying the facts on which a finding of adultery or adjudication of paternity was made. As drafted, Clause 12(2)(b)(i) and (ii) make admissible for the purpose of identifying the relevant facts—(a) a petition, summons, decree, order or judgment in a matrimonial cause, and (b) a complaint, summons, writ or order in affiliation proceedings. To cover all relevant documents these formulas would anyhow have to be expanded to cover all the "pleadings" and other documents that might go to form part of the court record in English, Scottish or Northern Irish proceedings. Although it would no doubt be possible to make a complete and exhaustive list
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of all such documents currently in use, this would not be convenient and would not cater for future procedural changes whereby some entirely new type of document came to be used.
The formula in the Amendment is comprehensive and is intended to avoid these possible inconveniences. It makes admissible any document which was as before the court and any document containing a "pronouncement of the court" this latter phrase is apt to cover both a formal decree or order and a reasoned "judgment" or "opinion"—which is the corresponding Scottish term. The new subsection (3)(a), which is inserted in Clause 12 by the Amendment to Clause 12, will make properly authenticated copies of these documents admissible to prove their contents. I beg to move.
Amendment moved—
Page 13, line 42, leave out from beginning to end of line 7 on page 14 and insert the said new words.—(The Lord Chancellor.)
On Question, Amendment agreed to.
8.40 p.m.
THE LORD CHANCELLOR: This Amendment provides for the use of properly authenticated copies to prove the contents of documents made admissible to identify the facts relevant to a finding of adultery or an adjudication of paternity. The new subsection achieves this in the manner already discussed under Amendment No. 21. I beg to move.
Amendment moved—
Page 14, line II, at end insert—
("( ) Subsection (3A) of section 11 of this Act shall apply for the purposes of this section as if the reference to subsection (2) were a reference to subsection (2) of this section.")—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in subsection (4), to leave out "in the Court of Session". The noble and learned Lord said: Perhaps I may take Amendments Nos. 28 and 29 together. This is where the noble Viscount will have an advantage over me, because I am in the middle of Scots Law, which I know nothing at all about.
These Amendments bring within the definition of "matrimonial proceedings" for the purposes of Clause 12 consistorial actions in the sheriff court as well as in

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the Court of Session, but exclude from that definition actions in either court for "non-permanent" alimony. The body of the Report of the Law Reform Committee makes no specific references to findings of adultery made in proceedings in Scotland, but it is evident from the draft clauses annexed to the Report that the Committee were in favour of treating such findings, if made in proceedings in the Court of Session, on a par with such findings made in matrimonial causes in the High Court (or in a county court under the Matrimonial Causes Act 1967). The Committee proposed expressly that their recommendations should not apply to findings of adultery made by magistrates' courts in England for the reasons given in paragraph 36 of the Report; namely, that,

(a) in those proceedings an alleged adulterer is not made a party, has no right to take any part and is not always given notice of the complaint, etc., in which adultery is alleged against him; and

(b) unlike the High Court trying matrimonial causes, magistrates' courts are under no duty to enquire into the truth of any allegation made.

The sheriff court in Scotland is not the equivalent of a magistrates' court in England. If a consistorial action (that is, an action affecting the status of parties with regard to marriage) is raised in the sheriff court, and an allegation of adultery is made in that action, the alleged adulterer has a right to be added to the proceedings as a party and to contest the allegation. Sheriff court proceedings are, therefore, more akin to matrimonial proceedings in the High Court than to such proceedings in a magistrates' court in England.
A further factor is that the current Law Reform (Miscellaneous Provisions) (Scotland) Bill, which I think has just been introduced in another place, contains provisions corresponding to Clauses 11 to 13 of the Bill. The provision (Clause 11) corresponding to Clause 12 does bring in findings of adultery in consistorial actions whether in the Court of Session or the sheriff court, subject to the exceptions specified in the definition of "consistorial action" in Clause 13(2) of the Scottish Bill, which is reproduced in the second of the Amendments to which I am referring. If, therefore, sheriff court proceedings are not included in Clause 12,
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the law of England will be out of step with the law of Scotland. Although, therefore, it can be argued that sheriff court findings are not altogether the equivalent of findings made by the High Court or the Court of Session, the advantages of bringing them within Clause 12 appear to outweigh the disadvantages. The first Amendment brings them in by omitting the qualification on the meaning of "consistorial action" imposed by the words "in the Court of Session".
However, it would not be appropriate to bring within Clause 12 every kind of action which may be classified as a "consistorial action" (whether in the Court of Session or the sheriff court) and the corresponding provision in the Scottish Bill (Clause 13(2)) expressly excludes, as does the second Amendment with which I am dealing:
"an action of aliment only between husband and wife raised in the Court of Session or an action of interim aliment raised in the sheriff court".
The need for this exclusion stems from the fact that without it "consistorial action" would be capable of including actions for "non-permanent" aliment: the statutory definition in Section 19 of the Conjugal Rights (Scotland) Amendment Act 1861 does include such actions, although they are not within the definition given in Walker's "Evidence", 1964 edition at page 166.
Actions for aliment fall into two classes: first, actions for "permanent" aliment, which are comparable to proceedings for judicial separation and maintenance and involve a preliminary conclusion for separation or adherence; and, secondly, actions for "non-permanent" aliment, which involve no such conclusion because in theory the aliment is granted only pending the determination of the parties' rights. In the latter class, unlike in the former, a decree may be pronounced although the action has not been substantiated by sufficient evidence. These actions proceed as ordinary actions in the Court of Session or, if the proceedings are in the sheriff court, a decree may be granted in an undefended case without any evidence having been led. Thus, a finding of adultery in such actions may not have been established by the same strict standards of proof as are required in a true consistorial action. Such a finding has therefore no

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special evidential value and should not come within either Clause 12 or the corresponding provision of the Scottish Bill. Accordingly, the second Amendment expressly excludes these actions. I apologise to the Committee for having dealt with this rather fully; but where one is departing in any case at all from a Report of a body like the Law Reform Committee, I think it right that exactly what we have done should be on record. I beg to move.
Amendment moved—
Page 14, line 15, leave out ("in the Court of Session").—(The Lord Chancellor.)
VISCOUNT COLVILLE OF CULROSS: I am grateful to the noble and learned Lord for his explanation. Any alleged advantage that I may have in this matter is in fact non-existent. But although I am quite unable to comment intelligibly upon these two exclusions, which are highly technical matters, I should have thought it no insult to the magistrates' courts and the procedure which governs them South of the Border to say—this is really the principle of the Amendments—that cases before the sheriff courts, where the adultery is in fact proved in the proper way, with the parties all having the opportunity to be there and to dispute it, should be brought within the scope of this admissible evidence. Therefore, I would support this Amendment.
On Question, Amendment agreed to.
THE LORD CHANCELLOR: This is the other Amendment I was discussing originally. I beg to move.
Amendment moved—
Page 14, line 16, at end add ("and in this subsection 'consistorial action' does not include an action of aliment only between husband and wife raised in the Court of Session or an action of interim aliment raised in the sheriff court.").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 12, as amended, agreed to.
Clause 13 [Conclusions of convictions for purposes of defamation actions]:
THE LORD CHANCELLOR: This Amendment and Amendment No. 31 are again "committing the conduct" Amendments I beg to move.
Amendment moved—
Page 14, line 30, leave out ("conduct") and insert ("facts").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: The same observation applies to this Amendment. I beg to move.
Amendment moved—
Page 14, line 32, leave out ("that conduct") and insert ("those facts").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: This Amendment and Amendment No. 35 are drafting Amendments, consequential on Amendment No. 21. I beg to move.
Amendment moved—
Page 14, line 37, leave out ("(4) and") and insert ("(3A) to").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: This is the Amendment to which I have just referred. I beg to move.
Amendment moved—
Page 14, line 39, at end insert (", but as if in the said subsection (3A) the reference to subsection (2) were a reference to subsection (2) of this section.").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 13, as amended, agreed to.
Clause 14 [Privilege against incrimination of self or spouse]:
8.48 p.m.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in subsection (1), to leave out the first "Any" and insert "The". The noble and learned Lord said: I think this is the last Amendment on which I need say more than a few words. This Amendment and Amendment No. 37 are paving Amendments anticipating the new subsection (2A) inserted by the Amendment to Clause 14, page 15, line 24. These two drafting Amendments are intended to clarify the effect of extending the general privilege against self-incrimination to cover incrimination of a spouse.
Clause 14(1) is intended to confer a general privilege against incrimination of a spouse co-extensive with the general provision against self-incrimination. It follows that if in a particular case the

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privilege against self-incrimination is taken away, then the privilege against incrimination of a spouse should also be taken away. It can be argued that, as drafted, Clause 14 already has this effect, on the ground that subsection (1) (b) operates only where there already is a privilege against self-incrimination. But this is not altogether clear, since it can equally be argued that to take away only the existing general privilege against self-incrimination in a particular case would not ipso facto take away the new general privilege against incrimination of a spouse conferred by Clause 14(1).
Accordingly, the first two Amendments make it quite clear that Clause 14(1) is dealing with the general privilege; and the new subsection (2A) provides in terms that any enactment negativing the privilege against self-incrimination also negatives the privilege against incrimination of a spouse. A further advantage in so providing is that there are some dicta which might constitute authority for the proposition that the privilege against incrimination of a spouse subsists at Common Law. If so, it is all the more necessary that it should be taken away wherever the privilege against self-incrimination is taken away.
Also, in its present form Clause 14 is not entirely satisfactory as a support for those Amendments to existing enactments contained in the Schedule which would make those enactments expressly negative the privilege against incrimination of a spouse. It will be more convenient for the practitioner if these Amendments are made, because they will make it immediately clear without reference to Clause 14 what effect the enactment in question is to have as a result of Clause 14. Subsection (2A) justifies their inclusion in the Schedule. I beg to move.
Amendment moved—
Page 15, line 4, leave out ("Any") and insert ("The")—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: I dealt with this Amendment under the previous Amendment, No. 36. I beg to move.
Amendment moved—
Page 15, line 22, leave out ("such a right as is") and insert ("the right").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: I dealt with this Amendment also under Amendment No. 36. I beg to move.
Amendment moved—
Page 15, line 24, at end insert—
("(2A) In so far as any existing enactment provides (in whatever words) that in any proceedings other than criminal proceedings a person shall not be excused from answering any question or giving any evidence on the ground that to do so may incriminate that person, that enactment shall be construed as providing also that in such proceedings a person shall not be excused from answering any question or giving any evidence on the ground that to do so may incriminate the husband or wife of that person.")—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: If the Committee would agree to take Amendments Nos. 39, 40 and 41 together, it would be convenient since they are all consequential.
THE CHAIRMAN OF COMMITTEES (THE EARL OF LISTOWEL): I can only take the next two Amendments. Amendments 39 and 40 have been moved en bloc.
THE LORD CHANCELLOR: My Lords, I beg to move.
Amendments moved—
Page 15, line 25, at end insert ("that")
Page 15, line 27, leave out from beginning to ("provides") in line 31 and insert—
("(b) provides as mentioned in subsection (2A) above, further").—(The Lord Chancellor.)
On Question, Amendments agreed to.
Clause 14, as amended, agreed to.
Clauses 15 and 16 agreed to.
Clause 17 [Consequential Amendments relating to privilege]:
THE LORD CHANCELLOR: This Amendment is consequential on Amendment No. 38. I beg to move.
Amendment moved—
Page 18, line 34, after ("(2)") insert ("(2A)").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 17, as amended, agreed to.
Clause 18 [General interpretation, and savings]:
THE LORD CHANCELLOR: This is a drafting Amendment consequential on

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the Amendments to Clauses 11, 12 and 13. I beg to move.
Amendment moved—
Page 19, leave out lines 12 to 14.—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 18, as amended, agreed to.
Remaining clauses agreed to.
Schedule agreed to.
LORD AIREDALE: We owe an apology to the noble and learned Lord the Lord Chancellor for having criticised his use of the expression "civil offence". If my memory serves me correctly, the words "civil offence" appear in the Army Act itself in contradistinction to a military offence. I do not think we ought to have questioned those words.
THE LORD CHANCELLOR: I am grateful to the noble Lord for what he has said. That was my recollection. But when the noble Viscount said what he did, I thought I must have been wrong, because there is provision in the Army Act making any civil offence a military offence.
VISCOUNT COLVILLE OF CULROSS: Ignorance is no excuse on my part, but I think that the way we put it was clearer.
House resumed: Bill reported with the Amendments.

COMMONWEALTH TELECOMMUNICATIONS BILL
8.56 p.m.
LORD SORENSEN: My Lords, I wish that I could have mercy on noble Lords who still remain, but unfortunately I have my duty to do. They will understand that this speech has to be made for the benefit of those noble Lords who no doubt will spend part of their day tomorrow reading my speech in the House of Lords Hansard, and also for a large number of people in other parts of the Commonwealth. I understand that my words will be read by many of our fellow citizens of the Commonwealth in all parts of the world, which is a rather flattering thought. I am sorry that I shall take a little longer than I might perhaps wish. In order to assist noble Lords, I will accelerate my speech as much as possible,
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which may make it difficult for the poor reporters and noble Lords to follow me, but it will play its part in other ways.
My Lords, I beg to move that the Bill be now read a second time. The prime purpose of the Bill is to give legislative effect in the United Kingdom to a Commonwealth commitment concerning changes in the present Commonwealth Telecommunications partnership. Some of these changes have taken place already, some are due to take place. I anticipate the noble Lord opposite asking me exactly why there should be this change. I can supply him with the answer forthwith, and this no doubt will help him to abbreviate even more the speech he will make later on. The reasons are as follows. Members of the existing Board, being in London and away from their own Administrations through no fault of their own, often have to refer back to their Governments before they give advice. The great increase in partner Governments resulted in some Governments of newly independent countries being unable to find representatives with telecommunications experience to reside permanently in London. While recognising the valuable work performed by the Board, the Commonwealth Governments consider that it will be better to have a dispersed body consisting of senior telecommunications officials actually serving in the telecommunications administration of the countries whose Governments they represent. By this means it was hoped that they would be in closer touch with their Governments and in a better position to give them advice. Indeed, this Bill, which I shall briefly explain, arises out of a conference which has been held on this matter.
Noble Lords who are unfamiliar with the administrative mechanism of the Commonwealth telecommunications system, may be interested to hear something of its history. The first submarine telegraph cables were laid a century ago, and some continue to give good set vice. Outside Europe, the beginning of the century saw the agreement of the Governments of the United Kingdom, Canada, New Zealand and certain of the Australian States to lay and operate a cable spanning the Pacific. From this comparatively small partnership, using a single medium of communication, has sprung a

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network of telegraph and radio links enveloping all save two Commonwealth countries. Those two countries operate their external telecommunications outside the common-user system. I should perhaps explain that the partnership is not concerned solely with the transmission of messages between one Commonwealth country and another Commonwealth country, but is also concerned with messages between a Commonwealth country and a non-Commonwealth country. Indeed, it is of financial advantage to the partnership that such traffic should pass over as much of the Commonwealth network as may be operationally reasonable and convenient. It is also open to partners to exclude from the partnership arrangements, by mutual consent, certain of their services; and some services have been so excluded. Generally the excluded services are those to contiguous countries.
The expansion of telecommunications services and a continuing community of interest, which found expression first in Imperial and later in Commonwealth conferences on communications over the years, came at last to fruition in the Commonwealth Telegraphs Agreements of 1948 and 1963.
In those countries which have acceded to the Agreements, the installations which are used for external telecommunications are owned by individual Governments or their operating agencies. These installations are used co-operatively and the mutual indebtedness of the partners is settled by means of a wayleave accounting scheme. This is a departure from the normal international method of accounting, which is called a "parcours" system. May I say that I was not quite sure what that meant, and on looking in the dictionary I found that it really means one of three things: distance covered; route, course, path; or golf course. The last is quite remote from the significance of the word as now used, except that I notice that golf courses and telecommunications have tees. Be that as it may, the revenue on each call or message between two countries is divided between the administrations which handle it.
The wayleave method is quite different and extremely complicated. I hope your Lordships will exempt me from the need
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to explain all the details, and I am sure you will give your hearty assent to that. Briefly, the basic principle is that the Commonwealth partners keep all the revenue from traffic they put on to the common-user network and then share the total costs. From the gross revenue certain terminal charges are deducted. What is left is declared as wayleave revenue. The aggregate expenses of the partnership are then divided between them in proportion to their wayleave revenues. Thus, if a country's wayleave revenue is, say, 6 per cent. of the total wayleave revenues, it bears 6 per cent. of the total expenses.
These financial arrangements are administered by the Commonwealth Telecommunications Board, which was set up in London in accordance with the Commonwealth Telegraphs Agreement, 1948. But this is not the Board's sole function. It is also expected to make recommendations to the partners on such telecommunication matters as may be remitted to it. The Chairman of the Commonwealth Telecommunications Board is appointed jointly by partner Governments, each of which may also appoint its own member. In addition, the British Government appoints a member to represent those territories not directly represented by other members.
Since 1949 the Board has met at least once a fortnight under a number of distinguished Chairmen, of whom the first was the noble Lord, Lord Reith. I am sure that noble Lords will join me in paying tribute to past and present Chairmen and members of the Board and thanking them for their efforts over the years. I have no doubt that all other Commonwealth Governments will wish to be associated with the British Government in these sentiments. The present Chairman is Sir Dawson Donaldson, and I feel sure that we are all grateful to him for agreeing to extend his service with the Board until next year when he returns to his native New Zealand. All of that could obviously not have been omitted from my speech.
The Commonwealth Telecommunications Board is obliged to make an annual report to the partner Governments, and noble Lords may wish to know that a copy of the Report for 1966–67 was placed in the Library of the House at the beginning of this week. For all the

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good work that the Commonwealth Telecommunications Board has achieved, however, it has become clear in recent years that the present administrative arrangements will no longer serve. The nature of telecommunications has changed, and the Commonwealth itself has changed. Some partners, particularly the newer members of the Commonwealth, have experienced difficulty in providing members with the requisite telecommunications background, and in keeping them permanently in London.
For these and other reasons, the Commonwealth Telecommunications Conference held in London in 1966 recommended that the present arrangements associated with the partnership should be changed. These detailed recommendations have been accepted by all Commonwealth Governments, and I should like now to outline the changes which have already been made or which are imminent.
There is now a Commonwealth Telecommunications Organisation, with an agreed constitution and made up of three organs. The most important of these is the Commonwealth Telecommunications Conference, which is to meet every three years. Attendance at the Conference is not confined to partner Governments. The second body in status is the Commonwealth Telecommunications Council, which is to meet not less frequently than once a year and comprises the representatives of the partner Governments. Between meetings of the Council, representatives are expected to conduct its affairs by correspondence. Thirdly, there is to be established in London a Commonwealth Telecommunications Bureau, or Secretariat, which will operate under the control of the Council.
The Council has an executive function and also the advisory function which is to be relinquished by the Commonwealth Telecommunications Board. The secretariat activities of the Board will be assumed by the new Commonwealth Telecommunications Bureau, together with the administration of the existing financial arrangements of the partnership. The Council has already met twice, but the Bureau is not yet in existence. It is hoped to have a nucleus of the Bureau in being by October this year, to work in harness, as it were, with the Board until the latter body is wound up at the end of March next year.
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So far as the Commonwealth Telegraphs Agreements are concerned, their purposes will then either be spent or superseded, and it is expected that they will be terminated by agreement. Also at the end of March, 1969, another agreement will come into force to perpetuate the existing financial arrangements. If I may recapitulate in order to dispel any possible confusion there will therefore be two agreements, the one to terminate the Commonwealth Telegraphs Agreements of 1948 and 1963; the other to carry on the present financial arrangements.
I turn now to the human side of these changes. Your Lordships may feel some concern for the future of the members and staff of the Commonwealth Telecommunications Board. The members of the Board are, of course, the responsibility of their own Governments. Some of the staff are on secondment from the Post Office and will return there, and there is reasonable confidence that other staff will be absorbed info the Bureau. I am sure that noble Lords will be gratified to learn that the Council has agreed not only to assume responsibility for the payment of pensions to pensioners of the Board, but also to safeguard the pension rights of those now serving with the Board.
Finally, I come to the Bill itself. Clause 1 of the Bill provides that the Commonwealth Telecommunications Bureau shall have the legal capacity of a body corporate. This is to enable the Bureau, through the General Secretary as its head, to have the legal capacity to buy or rent property, engage staff and in other ways to go about its business in a legally responsible fashion.
Clause 2 of the Bill provides for the repeal of those sections of the Commonwealth Telegraphs Act 1949, and the First Schedule to that Act, under which the Commonwealth Telecommunications Board was established. Clause 2 also provides for the removal of the Commonwealth Telecommunications Board from the First Schedule to the House of Commons Disqualification Act 1957. This is obviously consequential on the dissolution of the Board, but there is no need for the Commonwealth Telecommunications Bureau to be mentioned in substitution for the Board for the Bureau

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is not, unlike the Board, a body with members. It is proposed that Clause 2 shall come into force on the day on which it is intended the Board shall be dissolved, for the legal capacity of the Board will have to be preserved to the end of its life.
This Bill provides a small yet vital element in the administrative arrangements of a changing, and increasingly important, Commonwealth telecommunications system, which is a unique and valuable instrument of Commonwealth co-operation. My Lords, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Lord Sorensen.)
9.9 p.m.
LORD DENHAM: My Lords, your Lordships will, I am sure, join me in thanking the noble Lord, Lord Sorensen, for the clarity of the detail of his description of this Bill, and also in congratulating him on the speed with which he carried it through. It is not a very easy matter to say at speed "Commonwealth Telecommunications Conference" as many times as he managed to do it with as few mistakes.
Whenever one hears the Commonwealth mentioned in the news nowadays it always seems to be because of some disagreement between its members; but the great value of the Commonwealth is in the many ties, some relatively minor,
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some hidden, which exist and flourish. They receive little publicity, but they contribute in a very real sense to bridging the economic, racial and ideological differences which plague the world. The Commonwealth Telecommunications Board (or the Council and Bureau, as it will become) is perhaps one of the most valuable of these organisations, dealing as it does with facilitating the flow of information between every continent.
We on these Benches welcome Her Majesty's Government's intention to implement the recommendations made by the Commonwealth Telecommunications Conference in March, 1966. We are very pleased to know that Commonwealth conferences on telecommunications will be held every three years and we hope that the new Bureau and Council will continue the valuable work of the Board and that the structure will add to the effectiveness of its work.
LORD SORENSEN: My Lords, I thank the noble Lord very much for the brevity and the eloquence of his speech.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

BRIGHTON MARINA BILL
Reported from the Select Committee, with Amendments.
House adjourned at eleven minutes past nine o'clock.