Lords Sitting of 4 July 1968

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

POST OFFICE GIRO SYSTEM AND CIVIL SERVANTS' PAY
LORD AIREDALE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they can confirm the truth of a report in the Press on June 26 that:
"The Treasury has agreed to weekly paid civil servants getting an extra shilling a week if they agree to have their money paid through the Post Office Giro system. This will boost the Giro in its initial period of operation …"
and if so, whether they regard this as an instance of fair competition between the banking activities of the State and of private enterprise.]
LORD BESWICK: My Lords, this matter has been under consideration but no decision has yet been made. The position of weekly paid civil servants who may prefer other methods of payment is being borne in mind.
LORD AIREDALE: My Lords, I am obliged to the noble Lord for that Answer. May we be assured that weekly paid civil servants may bank where they like without fear of being made worse off than their colleagues who bank with the State?
LORD BESWICK: My Lords, I do not think anyone has ever suggested anything to the contrary.

ST. KITTS AND ANGUILLA
LORD SORENSEN: 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 is the present position in St. Kitts; whether any British citizens are now detained there; and whether Her Majesty's Government have been able to assist in the settlement of the political difficulties affecting that island.]
THE MINISTER OF STATE FOR COMMONWEALTH AFFAIRS (LORD SHEPHERD): My Lords, responsibility for the internal government of St. Kitts lies with the State Government. No United Kingdom belongers are now detained there. The principal political difficulty affecting St. Kitts stems from the attempted secession of the island of Anguilla from the State of St. Kitts-Nevis-Anguilla, and in this matter, as my noble friend will know from a Statement which has just been made by my right honourable friend the Commonwealth Secretary, Her Majesty's Government have made available a senior British civil servant in Anguilla, one of whose tasks is to assist all concerned in working towards an agreed long-term solution.
LORD SORENSEN: My Lords, while thanking my noble friend for his reply, may I ask him whether he would agree that the position in St. Kitts is somewhat tragically farcical; and, in the circumstances, if he can say whether the senior civil servant is making any progress towards some amicable arrangement between the larger and the smaller islands so that they will avoid this stupid fragmentation?
LORD SHEPHERD: My Lords, clearly fragmentation is undesirable. I wish I could say to my noble friend that some progress has been made, but I fear that this has not been the case.

DISARMAMENT: SOVIET MEMORANDUM
3.10 p.m.
LORD ROWLEY: 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 is their policy with regard to the nine-point disarmament memorandum recently received from the Soviet Government.]
THE MINISTER OF STATE FOR FOREIGN AFFAIRS (LORD CHALFONT): My Lords, we are carefully studying this memorandum, which sets out the Soviet Government's views on the measures that should be agreed following the conclusion of the Non-Proliferation Treaty. Her Majesty's Government's own views on future arms control and disarmament objectives were explained by my right honourable friend the Minister of State with special responsibility for disarmament matters in another place on June 19. We regard the Non-Proliferation Treaty as the first essential step in achieving the end of the nuclear arms race, and progress towards general and complete disarmament. We shall press at the Eighteen-Nation Disarmament Committee for urgent work to be done, both on further measures in the nuclear field to follow up the Treaty and also on conventional disarmament problems.
LORD ROWLEY: My Lords, in view of the unlikelihood of arriving at agreement on the nine points in Mr. Kosygin's memorandum, is it the intention of Her Majesty's Government to seek to achieve partial measures of disarmament, such as the freezing of the production of nuclear weapons and the reduction of nuclear stockpiles, the banning of underground tests and the total abolition of the use and production of chemical and bacteriological weapons?
LORD CHALFONT: My Lords, my noble friend has raised four specific points and one general one. So far as the general point is concerned, I would say that we are interested in moving towards general and complete disarmament by stages—that is, by the practical stages of achieving measures of arms control which appear to be practicable at the time.
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So far as the specific points hat he has raised are concerned, the reduction of stockpiles of nuclear weapons is, as my noble friend will know, an existing American proposal as well as appearing in a slightly different form in the nine points of the Soviet Government's proposals, and we welcome the interest which the Soviet Government have shown in making progress in this respect. We hope that we shall be able to make such progress.
On the questiton of the limitation and reduction of strategic nuclear delivery systems—the "freeze", as I think he called it—this, of course, is again a pi oposal made, I think two or three years ago, by President Johnson, and the fact that the Soviet Union now seems to be interested in this as well leads us to hope that we will make progress in that field, too. On the question of a comprehensive test ban, I think my noble friend is aware of our views on that. We regard it as a very important objective of our policy. He will know that the main difficulty here is the question of international inspection, and I hope that we shall be able to resolve that difficulty in the course of the forthcoming Geneva talks.
Finally, on the question of chemical and bacteriological weapons, it is indeed our hope that the Eighteen-Nation Disarmament Committee will consider, among other urgent matters, what can be done in regard to chemical and biological weapons. I think what we really need to do is to bring up to date and strengthen the existing Geneva protocol.

PRICES AND INCOMES BILL
3.13 p.m.
LORD BESWICK: 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.—(Lord Beswick.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL OF LISTOWEL in the Chair.]
Clause 1:
Continuation of Part II of Prices and Incomes Act 1966
1. So long as this section has effect, sections 7 to 22 of the Prices and Incomes Act 1966 shall continue in force without any extension

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by Order in Council under section 6 of that Act of the period for which they were brought into force under that section.
THE CHAIRMAN OF COMMITTEES: Before I call Amendment No. 1, I should point out to the Committee that if this Amendment is agreed to I may still call Amendment No. 2 by reference to the decision on Amendment No. 1.
LORD ERROLL OF HALE LORD ERROLL OF HALE moved to leave out "7 to 22" and insert "7(1) (2) and (4), 10 and 17 to 21". The noble Lord said: I beg to move Amendment No. 1 on the Marshalled List. I should perhaps explain to noble Lords that we on this side of the Committee have selected only a relatively small number of Amendments. They are, in our opinion, either those which we hope the Government will see fit to accept or those designed to elucidate some of the more obscure points in this Bill concerning which we did not get full explanations during the Second Reading debate.
LORD BESWICK: May I interrupt? Would the noble Lord agree that it would be for the convenience of the Committee if we took Amendments Nos. 1 and 3 together for the purpose of the discussion? They could of course, be moved separately.
LORD ERROLL OF HALE: If that would be for the convenience of noble Lords, then I should be content to follow the suggestion made by the noble Lord, Lord Beswick. I may have one or two suggestions for grouping other Amendments later on; but we can discuss that when we come to them. Although I am speaking to both Amendments, when it comes to voting we are in fact considering only Amendment No. 1. The purpose of Amendment No. 1 is to delete the references to all price and income freeze and penalty sections in Part II of the 1966 Act. It was debated in another place, but what we feel is that the compulsory powers to control prices and incomes should be opposed both on principle and also because past experience has proved them to be ineffective.
During the freeze and the period of severe restraint from July 20, 1966, until June 30, 1967, weekly wage rates went up by 3·8 per cent., and hourly rates by 3·9 per cent. This was, in fact, not very much less than in the same period in
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1961–62, when we had what one might call the Conservative freeze, or "pay pause" as we called it, and which had no compulsory powers behind it. The figures show that the effect of the freeze was merely to postpone wage increases but not to prevent them. Between July, 1966, and January, 1968, weekly wage rates went up by 8 per cent. and hourly rates by 8·4 per cent.; while between July 1961 and January, 1963, a comparable period, weekly rates rose by 5·7 per cent. and hourly rates by 6·5 per cent. We were able to get all that was needed without the compulsory powers that the Government now seek to have.
The N.I.E.S.R., the economic body, has commented and confirmed that the effect of these proposals has been only to postpone and not to prevent increases in wages. As they said in their February Journal, the rise in earnings between April, 1966, and October, 1967, was
"if anything, fractionally higher than the rise during the previous roughly comparable periods of rising unemployment and low economic activity."
We make our case for deleting these items in the 1966 Act on the grounds that compulsory powers are not necessary; the same effect can be achieved by a genuine voluntary pay pause.
The other Amendment that we are considering is Amendment No. 3. This raises a slightly different point, although a related one. The Bill contains powers to impose penalties on trade unions and on other persons who strike in support of a wage settlement forbidden under the Act. This can lead not only to severe fines but also, ultimately, to the imprisonment of trade unionists. This is, in our view, quite an unspeakable doctrine for any British Government of any political Party to adopt. We may at times get angry with what the trade unionists or shop stewards do, but I think the concept of actually putting trade unionists in prison for having brought about strikes in opposition to a wage freeze proposal is something that nobody in this country could tolerate.
This has been debated extensively in another place. The Government have said that the powers have never been used and that they are sought only as a kind of long-stop. But if they are never going to be used, why insert those kind of powers into the Bill and thus cause

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more trouble, mutual suspicion and other adverse factors in the economy to-day? Also, of course, it would be difficult to define just what was the cause of the strike. A particularly interesting example of one pay freeze case was that of the Longbridge car delivery drivers who, noble Lords may remember, refused to carry return loads and to fulfil other parts of their agreement with the employers while their pay increase was by order frozen. The question of prosecutions arose, and I understand that the details were sent to the Attorney General. In fact, no action was taken against these drivers because there was no proof that the drivers' action was intended to force the employers to pay a particular increase.
This difficulty could arise in any future similar situation because the strike or the go-slow, or whatever it was, could always be represented as a dispute over matters other than pay in order to avoid the risk of prosecution. So, in my view, it is an unrealistic additional penalty to impose, one which the Minister in another place has said it is never intended should be used; and I suggest that it would go some way towards easing the strained relations between the Government and the trade unions if at this late stage the Government could accept our Amendment, which is designed to deal with those particular penalties. I beg to move.
Amendment moved—
Page 1, line 7, Lave out ("7 to 22") and insert ("7(1) (2) and (4), 10 and 17 to 21").—(Lord Erroll of Hale.)
3.21 p.m.
LORD BESWICK: I was expecting members of the Committee to rise up and follow the noble Lord who made a very concise case in favour of his Amendments. I am bound to say, however, that although normally I am all in favour of brevity, I do not really think that the noble Lord told the Committee just how seriously these Amendments, if carried, would torpedo the whole Bill which we passed without a Division only the other week. This Amendment really would knock the bottom out of the Bill. The noble Lord gave, an assurance to the Committee that, for wider national considerations, he was not proposing to oppose this Bill. But if he succeeded in
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getting his Amendments carried, the husk of the Bill which' would go forward would not meet the national needs, and the noble Lord knows it.
The noble Lord said that compulsory powers would be removed. Let us see in a little more detail just what would be removed. If we excluded Section 7 from the 1966 Act we should exclude the statutory notification of increases in prices or charges. Does not the noble Lord want us to have the power to require notification of price increases? Is lie really against this? In view of what he said, I cannot believe twat he does not want us to have these powers. Section (7)(3) requires a standst;11 for 30 days. No one has really put up a great argument against the statutory power to ask that there should be a standstill for 30 days on certain price increases. Does the noble Lord really want that to be struck out of a Bill against which he did not vote on Second Reading?
Sections 8 and 9 of the Act, which he is proposing that we should delete, provide powers to impose standstills on prices and charges in association with and with reference to the N.B.P.I. Section 12 regarding the notification of increases in a company's distribution was, he agreed, working very well on L kind of voluntary basis. The noble Lord accepted that this was one item which was going to work satisfactorily. Does he really want to strike this out? And so one could go on right up to Section 22 which he would leave out. The only power that would remain would be that in Section 7, allowing Orders to be made requiring notification of increases in prices and charges, but without any standstill. What kind of a Bill 'would this be? What sort of arrangement should we have if there was power to require notification of an increase but that was all one could do about it? There would be no purpose in having any legislation at all. I cannot believe that the noble Lord really thinks that that kind of shadow power would have any real relevance to the economic situation with which vie are now faced.
If we exclude Sections 8 and 15 of the 1966 Act, we also destroy the powers of Sections 1 to 3 of the 1967 Act to impose or extend a standstill following an adverse report by the N.B.P.I. That

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means to say that, even assuming we retained power to refer an increase to the N.B.P.I., and if this objective and professional body, after due examination, said that there was no case for an increase, if the noble Lord insists on excluding these Sections, nothing could be done about it. We should have a situation in which the N.B.P.I., which I know is a body for which the noble Lord and others have considerable admiration, having considered the increase referred to it, might say that it was unjustified and an unmerited increase; yet there would be no other action which the Government could take. Surely the noble Lord does not want us to be left with a situation of that kind.
The noble Lord also made some passing reference to his objection to statutory control in general. May I just say that I agree with him. If we could have a situation in which everything was entirely voluntary, it would be much more satisfactory. Of course a world of that kind would be a lovely world in which to live at the present time but we are not putting forward proposals in this Bill as a matter of dogma or principle. It is alien to the sort of Socialist society that I, at least, want to see. But if we are going to look after the economic conditions which the noble Lord knows, and I know, have not been created by this Government alone, we must have some powers of this kind. If a voluntary system worked, we should welcome it, and if, as the result of experience that we get under the provisions in this Bill, a voluntary system can later be shown to stand a chance of working, no one would be happier than my right honourable friend who is really responsible for the Bill. But at the present time a voluntary system is not workable, and I think that what was said by the noble Lord's colleague Lord Molson, and by the noble Lord, Lord Henley, when we discussed this on Second Reading was very impressive and convincing. I hope that the noble Lord will consider what was said by one of his independently-minded colleagues and will feel that it would be wrong to press this Amendment to a Division.
It may be said that we have not the powers in this Bill that we had in the previous Bill but I think that here there
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is a separate and special consideration. We are working in a period following devaluation which presents its opportunities, but also its special difficulties. We admit that because of devaluation there will be an increase in prices—no one has denied this. An estimate has been given of an overall figure of something like 5 per cent., but the acceptance that there will be a general overall increase of about 5 per cent. makes it all the more essential that when there is an unnecessary increase, the Government should have power to deal with it. Clearly any unnecessary increases at the present time have to be dealt with.
I hope that my noble friend Lord Brown will have something more to say about prices when we discuss the later Amendments which the noble Lord, Lord Erroll of Hale, will probably be moving. But surely the noble Lord would now agree with me that we have not done too badly on the regulation of prices. There has been a readiness to co-operate on the part of industry and commerce, and it would be wrong if those who have been ready to co-operate see what I call the anti-social characters in our midst benefiting from a situation in which there was no reserve power; and I hope that for that reason, too, the noble Lord will be able to accept that there is a need for this statutory power.
The noble Lord said something about the possibility that trade unionists would go to prison. I do not take that too seriously. I do not feel that he was aching in sympathy with the people who in future are likely to go inside. That is a situation which is unlikely to arise. However, on the question of some kind of interference or intervention, of some kind of umpiring of the weight of increases, as foreseen in this Bill, what I would ask noble Lords opposite is this: do they accept that there is no need for anything at all in the way of supervision, or control, or umpiring of wage increases? The trade unions have accepted a need in principle. We have a T.U.C. Committee now working on vetting wage claims and they have been doing a magnificent job. Once we accept that in a modern society there must be some attempt to control, to regulate, to adjust, wage claims as a matter of principle, surely it is better to have that principle applied. Surely it is better to take such

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power as will ensure that it is applied fairly. And that is what is proposed in this Bill.
I say again about the statutory powers we propose to lake in this Bill that although they are there, up to now we have been able to rely upon voluntary cooperation. I am told that in only five cases has it been necessary to impose a statutory standstill on wage increases while they were under investigation. In all other cases, the trade unions concerned have co-operated in this policy.
With the first Amendment we agreed to take the third, which, as the noble Lord rightly says, gives power to exact penalties. It puts sanctions behind the other power. So clearly does one hang on the other that I do not feel it necessary to go into detail. We cannot have one clause that says certain things shall be done unless there follows some indication of the sort of sanctions which can be applied, if the law is not accepted. Therefore, we need some penal powers. But there are no new penal sanctions in this Bill. Nothing additional is being written into the law of this land, about punishing anyone, that was not in the previous Bill that was accepted by both Houses of Parliament. Clause 1 simply keeps in force those powers already established in the 1966 Act until the end of 1969.
Although the noble Lord said that trade unionists can be put into prison, I think he knows that that is not a fair description of the situation. The basic sanction, both on wages and prices, relates directly to the actions of employers, because it is they who may act in breach of statutory requirement. It does not relate to the trade unions. What the Bill says is that if a trade union uses its power to compel or attempt to compel an employer to act illegally, then sanctions can be applied to the trade union. But there is no direct sanction upon the trade unions so far as this is concerned. In practice, even though we had the situation in which there was an attempt to compel an employer to break the law—there is no need to go into details because the noble Lord is well aware of them—a trade unionist would have to be very clever indeed to get himself into prison under this provision of the Bill. As a matter of fact, this is wholly a
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mare's nest. I hope that, if the noble Lord and his colleagues accept that the purpose of the Bill fits the economic requirements of the nation at the present time, he will be ready to withdraw his Amendment and allow the Bill to go forward as something which can be worked.
THE EARL OF DUNDEE: The noble Lord has put forward a vigorous argument to the effect that the incomes policy, which in principle many of us on both sides of the House are agreed on, cannot really be effective without the sanctions which we are questioning in these two Amendments. I could not help wondering, all the time the noble Lord was putting forward these arguments in a most persuasive way, why he a id his Party never put them forward, and in fact suggested that they would do nothing of the kind in the General Elections of 1964 and 1966, in both of which they strongly repudiated the idea that they would reinforce an incomes policy by having these compulsory powers. It was not until four or five months after they had got a large majority and were secure against having another Election for a long time—in July, 1966—that they brought in these compulsory powers, to which we are now objecting and which we have always been against.
The noble Lord reminded us that we said we were not going to vote against this Bill, because we did not think it right to oppose what the Government believe to be an essential part of their economic policy for trying to put our economic affairs right. That is quite true, but we are suggesting to the Government that it would be a better policy without these compulsory powers. We had a voluntary incomes policy in 1962 when the National Incomes Commission was set up. I would remind noble Lords opposite that their Party did not support us, nor did the trade unions support us, on grounds which I think were flimsy and insubstantial. When they brought in their incomes policy in 1965, we supported them, and we thought that as they had the support of the trade unions therefore this policy under the Prices and Incomes Board was more likely to work than under the National Incomes Commission, which did not have trade union co-operation and support.

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But it was not until more than a year later that an element of compulsion was introduced. I would ask the noble Lord to consider again whether he really thinks that an incomes policy is going to be more successful with these compulsory powers. The noble Lord referred to a speech on Second Reading of a noble friend of mine, who supported the principle of compulsion, and pointed out that my noble friend was against the compulsory control of rents in this Bill. What he tried to put to the Government was that this just shows how one kind of restraint or compulsion leads to another. We cannot have these powers without other controls which will grow and accumulate. The effect of these controls is to prevent economic growth, which I have always said and believed is one of the essential conditions needed to make an incomes policy successful. We believe that an incomes policy can succeed if there is economic growth, if we can get rid of restrictive practices, and if you can have more competition than we have now. We do not believe that either a voluntary policy or a compulsory policy restraining incomes can succeed if the economy is going to be put in a straitjacket, which is what the Government are doing. We are asking them to relax that stringency which we believe to be contrary both to the principles of justice and good economics.
LORD BLYTON: I have listened to the noble Earl, Lord Dundee, with great interest. He said that it was not in the Election Manifesto of 1966. But I remember quite vividly Sir Winston Churchill in another place, when we were arguing the nationalisation of steel and the mandate, saying: "It does not matter what you put in your Election Address. We must meet the contingencies that arise when we have power." So I suggest to the noble Earl opposite that the argument that he has put forward to-day is most seriously counterbalanced by what Sir Winston Churchill said in another place.
I think this is a political game that is being played by the Conservative Party; and this is the game as I see it. They are dead against sanctions on prices and dividends. They do not want their business associates to go to the Prices and Incomes Board. They know that
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there is opposition in a section of our Party to the sanctions embodied in this Bill, so they take the line, first: "We are opposed to prices being controlled, and we are opposed to the P.I.B. approving dividends." So they say: "We must attack this Bill, and then we shall get the trade unionists abstaining in the House of Commons when this Amendment goes back, and somebody can move against it," in the hope that the Government will be defeated on major policy. That is the political strategy of the Tory Party in the context of the P.I.B.
So far as sanctions are concerned, if 250,000 miners go on strike for a pay increase there are not sufficient gaols in this country in which to put them. They must be treated with some common sense. These "ghosts" created by the Conservative Party about crushing the poor trade unionist are, in the present context of politics, just a lot of propaganda, in an attempt to get power. I put this point quite seriously to your Lordships. If we are living beyond our income and cannot pay the wages because we are not yet getting growth, in this free-for-all that is advocated by the Party opposite the big unions will get on but the old-age pensioner on a fixed income will get nothing. I listened to the noble Lord, Lord Erroll of Hale, last week talk about Mr. Hambro's increase in wages being referred to the P.I.B., and I was really distressed to hear it. Nevertheless, that is what we mean by a free-for-all. If we are going to have a decent society—and I mean a decent society—in order that people may have a fair share of growth and production, we have to see that the weakest get the same share as the strongest; and because this Bill at least gives us some hope of achieving that ideal, which I believe in, I hope that we shall support it.
3.44 p.m.
LORD INGLEWOOD: I do not suppose that I am the only noble Lord who finds the first part of this Bill, and this first Amendment, with so many references, extremely complicated to understand. It is inevitably so. I listened with great care to the noble Lord, Lord Beswick, because I thought he would explain to us clearly what the Government were asking us to support here. Frankly, at the end of his speech I was not very

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much clearer. The reason why I have now risen is to ask a quite simple question: whether the noble Lord can make really clear to me what is the Government's policy in this matter. I hope he is not going to say that this is just a political point. It has a political content in it, but it is so important that I should like him to make it clear.
Is it the fact that, up to a short time ago, the Government were against all prices and incomes policies of any kind? Then there was policy "Mark II" (as I may call it), when they supported voluntary measures. Then we had "Mark III", which was a voluntary measure supported by an element of compulsion. Now we have "Mark IV", which has an increased measure of compulsion. If I am wrong, will the noble Lord please tell me; and if I am right, will he also please tell me? And I am not going to ask what policy "Mark V" may be.
3.47 p.m.
LORD SORENSEN: It is with some temerity that I intervene, quite briefly, for I have not been a trade unionist for many years, though once upon a time, believe it or not, I was a member of the Dockers' Union—a very incongruous description of myself. I do not wish to take up the latter part of the discussion, but shall confine myself to an interesting observation made by the noble Lord, Lord Erroll of Hale. He was obviously concerned, as indeed we all are, about the prospect of the imprisonment of trade unionists. This is, of course, in contrast to the indifference of many of his forbears to the imprisonment of trade unionists years ago. But we live and learn and progress, and we are very glad that to-day there are so many enlightened Conservatives who, like Lord Erroll, are deeply concerned about this grim prospect.
What I should like to hear from the noble Lord, merely by way of enlightenment, is whether or not it is true that his own Party, through their Leader and others, have made it quite clear that if they were returned to power they would introduce legislation to curb the power of trade unionists, particularly those who go on unofficial strike. Is it not true that in those statements there is the implicit assumption that the legislation they would introduce would apply penal sanctions to all those who disobeyed the law in
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regard to the enforcement of contracts and agreements between trade unions, on the one hand, and the employers' federations, on the other? If that be so, and if in consequence numbers of trade unionists defy the law and presumably, in the ultimate may be sent to prison, would his deep concern be as great then as it is now? I should be glad, for the purposes of consistency, if the noble Lord could enlighten me in that respect.
LORD CITRINE: I was unable to be present on the Second Reading debate, but I was impressed by the words which appeared early on in the speech of the noble Lord. Lord Beswick. He said:
"It would be difficult to call this a popular measure. Indeed, if ever there was a case of a Government determined to do their duty, as they see it, in the interests of the nation, and regardless of electoral consequences, then this is such a case."—[OFFICIAL REPORT, 27/6/68; cot. 1564.]
I think that is putting in a nutshell the problem with which your Lordships are faced.
At first sight, I was under the impression that the purpose of the Amendment which has been moved by the noble Lord, Lord Erroll of Hale, had some bearing upon electoral consequences, and putting the Party that he represents in the position of being the standard bearers of liberty and freedom, as opposed to the compulsory desires of the Labour Movement. Indeed, I have heard it argued that, as a consequence of anything approaching a system of socialism, the element of compulsion would have to be applied to all sections of the community. I cannot help feeling that the Amendments are concerned more particularly with preserving the voluntary principle in the realm of prices and their effects on the business community, than they are with the position of the trade unions and the workers generally.
It is a terrible decision for any Government to have to make, that if certain things take place contrary to a law which has been passed by Parliament, workers or persons infringing that law shot Id be dealt with criminally under the law. I remember that in the various appeals which were made during the period of the wages pause, the wages freeze, and that circle, as it were, of indications of Government policy which they hoped would succeed by the voluntary method

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there were no specific references to restrictions on the business community and on incomes other than wages and salaries such as now appear in this legislation and in its predecessors.
I cannot help reaching the conclusion—I do so regretfully—that this is a false issue which is being raised by the Opposition. They know full well in their hearts that a system of voluntary restraint in the realm of wages and salaries, in particular—and, judging from what one has read, in the realm of high salaries and high incomes—can result only in a free-for-all. I can conceive of nothing which could more speedily wreck our economy than a return to the free-for-all, where the determining factor would be the power of an organisation and not the equity of the case of the country's economic prosperity.
Your Lordships' House has on many occasions been regarded by its Members, and particularly by those on the opposite Benches, as a body which thinks objectively on this range of questions and as a body which decides matters on the merits and free from political bias. I cannot help wondering what reasoning noble Lords opposite adopt to lead them to the conclusion that a system of voluntary restraint can succeed in present circumstances. There must be sanctions. There is no escape from that. After my long association with the trade union movement, I have reached this conclusion only after very anxious and searching thought.
I cannot see what will be the end of it. Let us suppose that the country returns to a free-for-all and that there is no element of compulsion on any section of the community in respect of incomes and prices. What will happen? Does anybody really believe that there will be voluntary restraint, particularly on the part of organisations which are bitterly opposed to the policy? I think that it is most irresponsible to try to take out of this legislation powers which any Government must possess at some stage. I cannot avoid the conclusion which was reached, evidently, by the noble Lord, Lord Sorensen, that the intention is, if and when it becomes necessary to return to a free-for-all, for the Conservative Party to do their best to see that the powers of one of the contenders in that
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free-for-all are weakened beyond measure. My Lords, I hate to say these things. I look at the Benches opposite and see men whom I have admired in the past for their objectivity and fairness. I am sorry that they are now advocating a policy which they must know in their hearts cannot succeed but will lead to chaos and industrial strife.
3.54 p.m.
LORD BESWICK: My Lords, I am sure that the whole House is greatly impressed by what the noble Lord, Lord Citrine, has just said. No one has had a greater experience than he in these affairs. Your Lordships' House must pay attention to him when he says that, in the present situation, he is prepared to accept the statutory provision for which we are now asking.
I was greatly impressed by the Second Reading debate, when, after all the furore in the other place, some noble Lords opposite were prepared to say that in their view their own Party were wrong and that what the Labour Government were doing was right. The official spokesman of the Liberal Party in your Lordships' House, despite the line which had been taken in the other place, was also prepared to be counted as one of those who believed that, in the present situation, it was necessary for the Government to have this kind of power.
I am sorry that the noble Lord, Lord Inglewood, does not understand the policy the Government are pursuing. It has been expounded often enough. There was a long debate in the other place. There has been a Second Reading discussion in your Lordships' House. There has been a White Paper, a copy of which I am prepared to send to the noble Lord, which spells out in detail what the Government propose. There has also been a General Considerations Order, which embodies the provisions of the White Paper, but which no one in your Lordships' House took the trouble to challenge. The Order was subject to the Negative Resolution procedure, but no one thought it worth while to pray against it. There have been ample opportunities to find out just what the Government are proposing. It is therefore not justifiable for the noble Lord to say that he does not understand what the policy is.
On Clauses 1 and 2 I agree with the noble Lord (having spent a good many

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hours last night trying to get the cross-reference) that it is difficult to follow exactly what is intended. I started this afternoon by seeking to explain Sections 7 to 22 of the 1966 Act. I think that it was on Section 11 that I began to think that I was boring the House, and I skipped it until Section 22. I am prepared to go through the list if the noble Lord wishes; otherwise I will send him a copy of the 1966 Act which the noble Lord. Lord Erroll, was able to get without my assistance last week.
My Lords, it has been said that past experience shows that wage demands can be restrained by a voluntary system; and percentages have been quoted—for example, by the noble Lord, Lord Erroll. I am interested in this and should like to get at the truth of the matter. I, too, have asked for figures. One answer can be found by comparing certain figures with certain periods. If another comparative period is taken, another answer is found. The case advanced by noble Lords opposite, and by the Opposition in another place, rested on the findings of a survey carried out by the Economic Institute. The result of that survey does not prove the case which noble Lords opposite seek to prove. It shows that there has been an increase in prices, but it does not prove that the increases are the result of a failure of our wages policy. Other factors are involved.
It is relevant to read to noble Lords opposite, if they are so confident in the findings of this authoritative and independent body, what is said on page 30 of the survey:
"The paramount need in 1968 and 1969 is to let devaluation work; and, given this need, it is unsafe to let the competitive margin be eroded."
This is what the Bill is about. We seek to ensure that our competitive margin is not eroded by creeping wage increases. The survey continues:
"Under these circumstances, the Government cannot wait for the possible gradual evolution of a central collective bargaining system. It will probably need to take more immediate steps to slow down the rise in incomes. One MOW, the Government could make is to strengthen the N.B.P.I. as a weapon for restraint. It could lengthen the period of statutory delay for claims referred to the Board."
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That is what the survey concludes, and that is roughly the conclusion which is embodied in this Bill.
One other point in answer to the noble Earl, Lord Dundee. He said that what the Opposition wanted to see was a growing economy. He implied that we do not want to see that, but of course we do, and that is why the emphasis has shifted to productivity. Productivity is the keynote here and the fact is—and I hope we shall get agreement from the Benches opposite on this—that productivity is a word which is now much more readily understood in the factories up and down the country, both on the management side and on the union side. They art genuinely trying to get agreements which take into account the benefits of productivity, and if they can come forward with an agreement which shows that unit costs are not increased because productivity has been increased there will be nothing which will contravene the provisions of this Bill. I hope that, on considering all these matters, noble Lords opposite will see fit not to press their Amendment.
THE EARL OF DUNDEE: Your Lordships will probably feel that we have discussed these two Amendments sufficiently. Our debate has been partly almost a reflection of the Second Reading of the Bill and I want only to make three short points. First, the noble Lord, Lord Beswick, quite rightly said just now that if you take different periods of figures for wage increases you can come to different conclusions because one period will give a different result from another. Of course that is always true and it is one of the difficulties about using statistics, but the ponit which my noble friend Lord Erroll was making, and which was made by the National Institute of Economic and Social Research, is this. They took a good many periods, some of which might seem to result in one conclusion and some in another. The case they made out was that the last period, from July, 1966, until January, 1967, had not prevented but had only delayed a rise in wages, and I think it showed that if you took the period of restriction plus the period that followed in each cas3 the result was very much the same. It is worth making that point.
The noble Lord, Lord Sorensen, again raised the question of the intentions of

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the Conservative Party about trade unions, which he implied were putting them in much the same position as they are putting people in who do not agree to wage agreements now. I do not think this is so because what our proposals seek to do is simply to enable contracts to be made legally between trade unions and the people with whom they bargain, in exactly the same way as any ordinary business contract is enforcible in law between the noble Lord and myself or between any two citizens of this country. We are not proposing to impose any more burdensome control than that.
LORD ROWLEY: Will the noble Earl give way? Is it not the fact that in the event of these contracts being entered into, and in the event of the breach of those contracts, there may well be a criminal sanction as a result?
THE EARL OF DUNDEE: No more than in any case of a breach of civil contract.
LORD SORENSEN: May I supplement my noble friend's insistence. I thoroughly appreciate the argument here, but if this became law any trade unionist or body of trade unionists who defied the law would then be guilty in the eyes of the law and therefore subject ultimately to imprisonment.
THE EARL OF DUNDEE: He would be no more guilty than any business or professional man who enters into a contract with another man and then breaks it.
LORD MITCHISON: May I ask the noble Lord one question? Am I right in understanding that, while the Party opposite would not go right back to the Tolpuddle Martyrs, they would like to go back to the Taff Vale judgment?
THE EARL OF DUNDEE: I know the noble Lord is often out of date in his views, and when the noble Lord, Lord Sorensen, was speaking about the desire to imprison trade unionists, which he alleged was felt by some members of our Party, I wondered whether he was going back to the Tolpuddle Martyrs because I could not think of any later examples than that.
My other point concerns the interesting speech made by the noble Lord, Lord
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Citrine. It seems to me that the whole of his argument led to the conclusion that these compulsory sanctions ought to be permanent. This Bill only goes up to 1969. I believe the Government would have liked it to go up to 1970, and some of your Lordships who spoke on Second Reading would have liked it to go as far as 1971. But now it seems to me that the arguments put forward by the noble Lord, Lord Citrine, if they are followed, lead to the conclusion that these compulsory clauses should not be dropped in 1969, 1970 or 1971, but should be a permanent part of our Statute Law.
LORD CITRINE: I am sorry to intervene, because I know how hateful it is to disturb someone's line of thought, but what the noble Earl has just said presupposes that this country will be in a permanent state of crisis.
LORD ST. OSWALD: Only so long as the present Government last.
LORD CITRINE: These are crisis measures, measures of an exceptional and temporary character, as the Government have repeatedly stated to be the case. They may have to last as long as the crisis lasts—I do not know about that. But to say that I suggested they should be of a permanent character is utterly wrong.
THE EARL OF DUNDEE: I am glad to hear that the noble Lord does not want to make them permanent. But that still seems to me to be what his argument is leading to, if they will only be applied in a crisis, unless the noble Lord thinks that under his Government the crisis will be permanent, which indeed it may be if their present policy is continued. But since the noble Lord, Lord Beswick, has assured us that in his view this Amendment would torpedo the policy of the Government, we do not intend to press it. We certainly want to give the Government every chance of unimpeded action to do what they think right to get us out of the economic mess which, in our view, they have got us into. Therefore, we will do not more than record our view that their present policy is not likely to have that result. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
Clause 2 agreed to.
Clause 3 [Increase in length of standstill under Prices and Incomes Act 1967]:
4.9 p.m.
LORD ERROLL OF HALE LORD ERROLL OF HALE moved, in subsection (2), to leave out "eleven" and insert "seven". The noble Lord said: In moving this Amendment I should like to suggest to your Lordships that it might be convenient if we were to take also Amendments Nos. 5 and 6, and possibly 7.
LORD BESWICK: I quite agree.
LORD ERROLL OF HALE: I am glad to have the agreement of the noble Lord to enable us to have a slightly wider discussion, rather than a somewhat repetitive discussion on the related points. In directing the attention of your Lordships to this group of Amendments, I would remind noble Lords that the maximum period of delay for wage and price increases under the 1967 Act is seven months: one month while the Minister considers whether to refer the case to the P.I.B., three months while the Board prepares its report, and in cases where the Board submits an adverse report, a further three months imposed by an earlier Order subject to Negative Resolution.
This clause as it is now drafted would increase the maximum period, in cases where the P.I.B. report is adverse, to twelve months in total. Subsection (4) would permit this extension to be made in the case of Orders already in force before the passing of this Bill, thus extending the freeze for up to a further five months beyond the period for which it was originally intended to last.
The first three of the Amendments, Nos. 4, 5 and 6, have as their object to reduce this maximum period of delay from 12 months to 8. The Government in another place claimed that the longer period of delay was now necessary in order to cover the whole of what they call the post-devaluation period. We are opposed to this on the ground that it represents a further extension of control beyond that properly covered by the Bill itself; and in particular there is a particularly undesirable form of unfairness involved because there is an exemption in the case of those workers who are covered by cost-of-living sliding-scale agreements and who under the terms of the White Paper—which, of course, is not a law, but is a
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sort of useful work of reference—will be allowed increases over the 3½ per cent. maximum per year if this is needed to keep pace with the rise in the index of retail prices. This particular group of workers are insulated, through having been covered by a cost-of-living index sliding-scale, from the effects of devaluation and the other price increases to which everyone else is also subject. So the longer the standstill powers go on, prolonging the freeze, in other words, the greater the unfairness of this provision as between one group of workers and another. The three Amendments, Nos. 4, 5 and 6, would remove this injustice and set matters right.
The fourth Amendment of this group, that is to say No. 7, has the purpose to limit to seven months in the case of orders made before the passing of this Bill. The reason for that limitation is that otherwise the subsection would allow the Minister to extend the orders for a further five months after they were originally intended to expire. This is a serious matter, because in our belief the power to extend existing freeze orders would constitute a most objectionable retrospective extension of powers under the earlier Act. The Government's intention might well be to extend the freezes already applied in the case of, for example, some of the municipal bus workers, the Bristol dock workers, the Scottish draughtsmen and others who are already the subject of orders under the 1967 Act, which can now be extended under the 1968 Act by a further 12 months, thus making the freeze for these classes of people very much longer than the Government had powers to make it under the 1967 Act or the powers they are proposing to take under the 1968 Act, unless these are modified in the manner suggested by our Amendments. I beg to move.
Amendment moved—
Page 2, line 13, leave out ("eleven") and insert ("seven").—(Lord Erroll of Hale.)
LORD BESWICK: The noble Lord, Lord Inglewood, has left the Chamber; otherwise I think he would have had an even greater grievance about the complexity of the Amendments in this Part of the Bill than about the earlier Part. If I am not able to take up all the points the noble Lord made in his speech, it is because I had some other representations being made to me at the same time.

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May I say what the effect of this Bill will be so far as the existing provisions of the 1966 and 1967 Acts are concerned. The 1966 Act gave the original power; the 1967 Act extended it. The 1968 Act has the following effect: standstills extended after an adverse report by the N.B.P.I. may run for 11 months from the date of reference to the N.B.P.I. instead of six months; standstills imposed after an adverse report by the N.B.P.I. may run for eight months from the date of the order instead of three; standstills may be imposed under paragraph (b) at any time up to 11 months from the date of publication of the reference to the N.B.P.I. instead of six months as at present.
The effect of the Amendments which the noble Lord is moving is that instead of the 11 months which we are suggesting in the first case he would extend the six months to seven months. In the second case he would extend it from three months to four months; in the third case from six months to seven months. If we are going to make any changes, I think the noble Lord would agree that it is really playing at shops, to suggest that we should have legislation just to put on this additional month's extension. This really does not match up to the situation that we have to face. Briefly, we are now saying that we are dealing with the economic situation which follows devaluation, the consequences of which we want to be able to deal with for a period up to certainly the end of 1969, and to suggest that we should go to the trouble of asking your Lordships to pass further legislation to give an extra month is surely not being reasonable.
The noble Lord also asked about the special provisions in this Bill, which, as he said, might have the effect of catching a standstill order which expires after this Bill reaches the Statute Book. There is an interregnum when the provisions of the present legislation, or orders passed under the present legislation, will come to an end and before any fresh orders are issued under the new legislation. As a matter of general principle, not because there is any specific agreement in mind, it is thought reasonable that we should have power to ensure that there is not a sudden break as from three months to eleven months. At the present time there
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is a power of standstill for three months and the standstill period will be one of eight months.
If this Amendment were accepted, then we should have a situation under which those having agreements which have been referred to the Board and the period of which expires before the coming into operation of this Bill will then be free to press their claims; they will be free to go above the criterion which we say is fair and reasonable to all concerned. But then the following fortnight we should have a situation in which another group of workers would be caught by the provisions of this Bill, and we say it would be unfair that those whose agreements, for one reason or another, came to a conclusion in the middle of July should not be on the same basis as those who may have an agreement coming to a conclusion at the end of August or who may indeed be caught by the new provisions of this Bill. That is why we think there should be some power to the Minister to have this application, and I hope the noble Lord will think it is not an unreasonable power to grant to him.
LORD ERROLL OF HALE: I am grateful to the noble Lord for what he has said by way of explanation. It looks a little as though our Amendments go a little wide, but on the other hand the noble Lord has failed to satisfy us on the unfairness that will be caused in some of the cases I mentioned. I should like to suggest to the noble Lord that he might undertake to consider the few cases which might be caught unfairly, and between now and Report stage we could perhaps hope that the Government would put forward an Amendment which would save any appearance of injustice to those who might be, to use the word colloquially, unfairly caught, as against the vast majority of people for whom it will be level treatment all round.
LORD BESWICK: I cannot undertake to bring forward any other legislation, because the only way of getting fairness is by having this power in the Bill. But if the noble Lord is so concerned about, as he named them, the busmen in the Midlands, what I can say is that talks are now taking place, and have been taking place for some little time, in the hope of getting an agreement under the reference to and the report from the

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Board. I hope that there will be an agreement, and that the provisions of this Bill will not apply at all.
LORD ERROLL OF HALE: In agreeing, with permission of noble Lords, to withdraw the Amendment to-day, I would say that we intend to study this matter a little further. In the absence of an Amendment put forward by the Government on Report we may table one ourselves.
Amendment, by leave, withdrawn.
Clause 3 agreed to.
Clause 4 [Power to require reduction of prices or charges]:
4.22 p.m.
LORD ERROLL OF HALE LORD ERROLL OF HALE moved, in subsection (1), after the second "charges", to insert:
"except in so far that they shall apply only to retail margins of goods which are covered by resale price maintenance arrangements".
The noble Lord said: I seem to be on my feet for most of the afternoon. In moving Amendment No. 8 I should like to ask noble Lords if they would find it convenient to take Amendments Nos. 9, 10 and 11 at the same time.
THE MINISTER OF STATE, BOARD OF TRADE (LORD BROWN): I should find that rather diflicult.Certainly we could deal with Amendments Nos. 8 and 9 together, but to debate those Amendments with Amendment No. 10, seems a little difficult to me. So far as I can see, these two groups are quite contrary.
LORD ERROLL OF HALE: Would the noble Lord like me to deal with Amendments Nos. 8 and 9 now, and then Amendment No. 10 separately? Then what about Amendment No. 11?
LORD BROWN: I think it would be more simple to have a discussion on Amendments Nos. 8 and 9; then on Amendment No. 10, and then on Amendment No. 11.
LORD ERROLL, of HALE: Then I will do that.
THE PAYMASTER GENERAL (LORD SHACKLETON): We are always in this difficulty even when it is necessary to take Amendments separately. I am quite sure that the noble Lord should feel free, if he wishes, to go beyond the Amendments and to refer to later Amend-
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ments. From my own reading of them I share the view of my noble friend that it will be necessary ultimately to settle them separately.
LORD ERROLL OF HALE: I think it is the wish of the Committee that we should talk about them separately, as well as settling them separately—that is to say, to have three debates on Clause 4, taking Amendments Nos. 8 and 9 together, and then Amendment No. 10 and then Amendment No. 11, and then to settle them individually.
LORD BROWN: I do not want to put the noble Lord in difficulties. I am quite prepared to deal with them in the way he wishes. I did think it would be simpler if we followed my course, but I leave it to him.
LORD ERROLL OF HALE: That is most accommodating of the noble Lord. Knowing that his briefing is probably far more extensive than mine I think it will probably help him if we split up these Amendments, and he can speak in accordance with the advice that he has received. So, with the agreement of your Lordships, I will deal first with Amendments Nos. 8 and 9.
Amendment No. 8 has as its purpose to limit the power to refer retail prices to the Board, for consideration of a reduction in price, to those goods which are still covered by resale price maintenance. This is an attempt on our part to show Her Majesty's Government that retail price increases should be considered, if they are to be considered, separately from increases in the prices ex-works or by manufacturers. In all cases, except where there is resale price maintenance, there is of course fierce competition between retailers, and that in itself keeps down the retail margins. But where there is resale price maintenance, by definition the retail margins are fixed in fact by the manufacturer, and of course that gives him an opportunity, if he so wishes, to increase the return to the retailer. So we think that this power to refer retail prices to the Board should be restricted to gods still covered by resale price maintenance agreements.
The other Amendment, Amendment No. 9, deals with the power to require the Prices and Incomes Board to consider whether prices or charges referred to them should be reduced, and, if the

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Board so recommend, to make orders directing that they should be reduced. This is a new power, and one that was not included in previous Acts. It is one to which, I should point out, the Confederation of British Industry, although broadly in favour of legislative powers to control prices and incomes in present circumstances, are strongly opposed. They do not see, nor do I, how this can be made to be an effective measure, because it will take a long time to bring it into operation, and the powers under the Bill may well have expired before any substantial reductions can be brought into effect.
We suggest in our Amendment that the retail prices of goods for which there is no resale price maintenance or recommended selling price should be excluded from reference to the P.I.B. for consideration of price reduction. We believe that the forces of competition between retailers will be sufficient to ensure that these margins are kept down, and that to take this power is an unnecessary complication. It shows that the Government fail to appreciate how competition works in this country, and in my belief it is unlikely that they will ever use this power. We suggest that it should be restricted in the way suggested by Amendments Nos. 8 and 9, the first of which I now beg to move.
Amendment moved—
Page 3, line 25, after ("charges") insert the said words.—(Lord Erroll of Hale.)
4.27 p.m.
LORD BROWN: I was a little surprised to read the substance of these Amendments because, as the noble Lord has said, it would limit the power of the Government to refer to the Prices and Incomes Board the great bulk of retail prices, since the coverage of retail prices and resale price maintenance or recommended prices is a quite small proportion of the whole retail prices. The noble Lord is fully aware that we live in a period when we are urging our manufacturers to export more. Indeed, I have christened him on one occasion "the redoubtable Lord Erroll" owing to his great efforts on behalf of exports, for which I am always grateful. If firms in fact do so, there may be instances when a few of the firms who are not helping in this great export drive will take advantage of the home market.
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I do not agree with the noble Lord that that state of competition in the retail trade is such as to ensure that on all occasions retailers will not be able to increase their margins to an extent which would be unjustified in any circumstances one can think of. And although I should not expect this power to be used on a large number of occasions—because there is good will among retailers, and we are dependent largely on them—I nevertheless think that we must be able to deal with a few who are going to take advantage of the current situation. To deprive the Government of powers with regard to the great bulk of retail prices would, I think, in current circumstances, be disastrous, because it would lead to some being able to take advantage of the situation. We should then have the well-known psychological situation in which those who would have otherwise held to the line, so to speak, of reasonable retail margins say: "Well, these people have been playing hell with prices. The Government apparently are unable to do anything about this. Is it right for us to penalise ourselves on the basis of our withholding when these other people get away with it?" This is always the way the rot sets in. In these circumstances, I hope that the noble Lord will withdraw this Amendment, because I think it would introduce an undesirable situation. It is a simple matter to give the Government these powers, and I think that their main effect will come not so much in their use as from their existence.
LORD ERROLL OF HALE: I thank the noble Lord for what he has had to say. I feel slightly inhibited from comment because some of my comments will arise on discussion of Amendment No. 10. In the circumstances, I beg leave to withdraw Amendment No. 8.
Amendment, by leave, withdrawn.
4.31 p.m.
LORD ERROLL OF HALE LORD ERROLL OF HALE moved, in subsection (1), after the first "prices or charges" to insert:
"and if the Board recommends that there should be a reduction in all or any of the prices or charges, the Board shall consider also whether there should be a reduction in the resale prices of the goods concerned, and if the Board thinks fit, include in the Board's report recommendations for the reductions of such prices".
The noble Lord said: I beg to move Amendment No. 10 on the Order Paper.

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I was rather concerned when the noble Lord said that some of our Amendments appeared to him to be contradictory. They are not, of course, because we are not to know until the arrival of a particular Amendment whether previous Amendments have been accepted or not, so we have put down a fairly broad sweep of Amendments, never being quite certain which we are going to get and which we are not. The purpose of Amendment No. 10 is to show up what I believe is a very real weakness in this part of the Bill, because the Government claim to be controlling prices for the consumer, but in fact it is manufacturers' prices only that are covered by an ordinary reference to the P.I.B. The fact is that the Prices and Incomes Board is unable to consider and make recommendations on retail prices, including margins, without a specific and separate reference to the Board.
While I think it would he a mistake to increase the Government's powers to refer retail prices to the P.I.B., the fact that references at present exclude retail prices I think makes a mockery of the Government's claim to be restraining prices to the consumer as distinct from restraining prices which are charged by manufacturers to retailers. The control over manufacturers' prices could, of course, help exports, as indeed the noble Lord, Lord Brown, mentioned in the debate on the previous Amendment—and I should like to thank him for his kind remarks about my small contribution to the export drive. But if that is to be so, then an increase in retail margins would, in fact, absorb purchasing power which is, we know, one of the objectives of the Chancellor of the Exchequer. So by holding down manufacturers' prices it would help exports, let the retail margins rise if the Government wish, and thus achieve the Chancellor of the Exchequer's objective.
But of course that is not a concept which is publicly accepted by Her Majesty's Government, although it is quite clear it is part of the strategy, and to that extent we should not press this Amendment because it will achieve what the Chancellor of the Exchequer wants. On the other hard, the Government in the Bill as it is at present constructed is, I think, in a very weak position to say that it is controlling prices for the con-
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sumer because that it is not doing, unless it also makes individually in each case a separate reference to the retail margins which must be separately reported on by the Prices and Incomes Board. This is the main purpose of tabling Amendment No. 10, so that the matter can he seen in a clearer light than I think is at present the case. I beg to move.
Amendment moved—
Page 3, line 25, after ("charges") insert the said words.—(Lord Erroll of Hale.)
LORD BROWN: I am sorry that the noble Lord took a little amiss my suggestion that these Amendments were contradictory. I am still puzzled because the previous two Amendments, so far as I could see, sought to exclude the Government from referring to the Prices and Incomes Board retail prices in certain categories. This Amendment seeks to insist on any occasion when the Minister refers the manufacturer's price to the Prices and Incomes Board, that, notwithstanding any comment he may choose to make about looking also at the retail prices, the Prices and Incomes Board are bound to consider the retail prices of those manufactured goods at which they are looking, and if they see fit they must make a recommendation to the Minister. This is why I thought they seemed contradictory.
I am not against the fundamental basic purpose of the Amendment, but I think it is unnecessary. The noble Lord suggested that manufacturers' prices only are to be controlled by reference to the Prices and Incomes Board, and by inference not retail prices. This is not so. There may be some misunderstanding here. There is every possibility of retail prices being referred to the Prices and Incomes Board for a recommendation to the Minister as to whether those retail prices are appropriate in the light of the mark-up which has been added to the manufacturer's price. The legislation is quite clear on the matter. The criteria of reference, it is quite clear, includes in their ambit submitting a reference of retail prices. But I do not see that it is necessary to enact that whenever the Minister refers manufacturers' prices to the Prices and Incomes Board the Prices and Incomes Board must always also review retail prices, because if they are always to do so—and in many cases it will be clear they are doing so

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when it is not necessary to do so—it will prolong the whole business of review very substantially indeed, because these matters take time.
The review of retail prices is in any case, I freely admit, a difficult matter. So I think that we shall get the effect of the noble Lord's Amendment; that is, we shall get reference of retail prices where, in fact, it is considered to be appropriate, and we shall not get it where it is time consuming and inappropriate. Whereas if we accept the noble Lord's Amendment we shall have time wasted and we should be referring too many retail prices where it was quite unnecessary to do so.
The noble Lord made one further comment on the disinflationary effect of rising prices. Of course he is partially right there, though not altogether, because not all the results of rising prices go straight to the Exchequer; some of them are let loose. But the fact of the matter is this. If, as he said in discussing the previous Amendment, we are to be placed in a position where some few may take advantage of an economic situation which we have all got to fight our way out of, notwithstanding the fact that higher prices can be disinflationary, it is essential to stop this "free for all" in terms of prices being allowed to develop among manufacturers or retailers; and if we are to ensure the drive for exports, which is going very well, then we must have justice among these people who could possibly damage that drive. It is for that reason that we must control and stop unwarranted increases in prices, whatever their broad economic effect, for the sake of the general morale of industry, the retail and distribution trades and the export drive. In the light of these comments it may well be, in the light of the explanation I have given, that the noble Lord now realises that this Amendment is not as essential as he thought when it was drafted, and I hope he will be able to withdraw it.
LORD ERROLL OF HALE: I must admit that I am not happy about the explanation, because I think there is a very serious point here. The Government say we can look at manufacturers' prices in certain cases, or we can look at retailers' prices in certain cases, or
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look at the way the mark-up goes, but it will very often be a waste of time to do both.
LORD BROWN: May I butt in? The noble Lord has given two alternatives. There is also a third. We can ask the Prices and Incomes Board to look at the manufacturers' prices and, at the same time, to look at the retail prices; that third one is not excluded, and that may be the point of misunderstanding.
LORD ERROLL OF HALE: If I have it right the Board can be asked to look at the retail prices, which would include the manufacturers' prices in the survey, or it could look at manufacturers' prices alone, or look at retailers' margins alone. There are virtually three alternative ways of doing it. It follows that if one is looking only at manufacturers' prices and holds them down, as in the case of the report which was published yesterday on cocoa, sweet and chocolate prices, that is no guarantee to the public that the prices in the confectioners' shops will be held down unless a separate reference is made to the National Board for Prices and Incomes covering retail margins in chocolate and confectionery. So that here is a good example where the Government are aiming at showing that they can keep prices down. They have received from the N.B.P.I. a report saying that manufacturers' prices must not go up, but even if that report is enforced or acted on in agreement with manufacturers it is no guarantee to the public that the prices of sweets in the shops are going to stay down. It will therefore be necessary to have another examination by the Board of retailers' margins in the confectionery trade. It looks as though the report will achieve only a very limited part of what presumably is its main objective. I hope the Government will look at this matter again and perhaps clarify it on Report. If we could have an undertaking that that will be done, I should be happy to withdraw the Amendment.
LORD BROWN: I do not want to prolong the discussion. Obviously we can look at it again, but I do not think that is necessary. The Minister concerned has to consider these matters carefully, and in considering whether he should make a reference of particular manufacturers' prices to the N.B.P.I., he

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would also consider whether at the same time there was a prima facie case for considering the retail price of the same article. It is open to him to do all these things.
Possibly the noble Lord is worried that the Government intend to attack the price structure of the manufacturer and to shrug their shoulders over the price margins of retailers. That is not the case. In the Bill as it stands, the Minister has power to do what he wants. It is the intention to protect the public from unjustified price increases all along the line. The Minister has all these powers, without having to carry out a double investigation which at times will be quite unnecessary. I hope that the noble Lord will not insist upon further consideration being given to this matter. I assure him that the Government have power to do what he wants, and that in appropriate cases they will use this power.
LORD CARRON: I welcome the indication by the noble Lord that he will give further consideration to the Amendment put forward. The assurance that there is power to carry this policy through is helpful. But I should like to stress that the matter of prices causes great concern to people in general. Price rises affecting the individual who is purchasing goods in the shops are of the first importance to him. The success of the prices, incomes and productivity policy, a policy which I strongly support, is governed in large degree by the level of prices. Although I hope that the Amendment will be withdrawn, I should still welcome the Minister's assurance that this matter will be given very close scrutiny.
LORD BROWN: I can certainly give an assurance that we will look at this Amendment again. I do not want to hold out too much hope of a reconsideration for the reasons I have given; but it would be discourteous for me not to say that the matte; will be considered. I give that assurance.
LORD SOMERS: Would not the noble Lord agree that wholesale prices and retail prices are inevitably bound up together? Imagine what happens if a retailer receives a statement from a wholesale supplier saying that as from next month the price will be so much more. Naturally, the retailer will have
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to increase his price. I cannot see how there can be any alteration in the one without there being an alteration in the other. It is almost impossible to consider one without the other.
LORD BROWN: If you cannot consider one without the other, then the noble Lord's difficulty has been resolved. If the N.B.P.I. recommended a reduction of price by the manufacturer and this was brought about by Order, then there would be an automatic reduction in the retail price, which is what the noble Lord wants. In fact I do not think this is strictly true, but a reference of a manufacturer's price to the Board is not done in a vacuum. There are possibilities of discussions with the major retail organisations, and if an Order goes a rough reducing or restricting a price increase discussions can take place and can lead to reassurances from retailers that if prices are held or brought down there will be no increases in margins. Is it then worth while making a reference of that matter to the Board with all the delay which would be entailed? If it is necessary, the Government have power to do so. I do not think that it is necessary to double-up on the process and to bring in a rather bureaucratic situation so that every time you do one thing you have to do the other, quite apart from whether, in the judgment of those who investigate the matter, it is necessary.
LORD ERROLL OF HALE: I thank the noble Lord for all he has had to say. I should like to look at what he has said and consider it. I am not wholly satisfied, but so that we may proceed with our business, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn
4.45 p.m.
LORD ERROLL OF HALE LORD ERROLL OF HALE moved, in subsection (3), after "subsection (2) above", to insert:
"nor shall it restrict a price or charge to a level lower than that prevailing immediately prior to the last increase in the price or charge before the reference under subsection (1) above was made."
The noble Lord said: One of the problems in connection with price reductions —and this is a new power—is how far the Government might wish to go in enforcing a price reduction. As the Bill stands, the Government could have an

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investigation made, and a price reduction recommended by the Board and enforced by the Government with its statutory powers could bite a lot deeper than the previous price level before the increase which was the cause of the investigation being made. I know that it is an important aspect of Government policy to try to secure these price reductions, but we must also consider the importance of giving some degree of certainty and confidence to industry, any part of which at any time may find its pricing policy being investigated by the Board with the possibility of severe reductions in price being enforced later on. I suggest that the Government would be able to achieve their main objective if they were to accept this Amendment, the effect of which would be to restrict any reductions to those ruling before the increase which in itself gave rise to the inquiry. In that way industry would have some confidence that these powers would be used in a reasonable way. The Government, on the other hand, would still be able to prevent price increases above the previous ruling level before they had this power. I beg to move.
Amendment moved—
Page 4, line 5, after first ("above") insert the said new words.—(Lord Erroll of Hale.)
LORD BROWN: With respect to the noble Lord, this Amendment ignores the fundamental relationship between costs and prices which it has been an essential part of Government policy to stress. The criteria for price reductions are set out in the White Paper, and the N.B.P.I. are required to have regard to Schedule 2 of the 1966 Act in their investigations. These criteria broadly require reductions where overall costs are decreasing and where profits are based on excessive market power. Thus, if an undertaking's costs have declined below the level prevailing immediately prior to the last price increase before its prices were referred to the Board, the Board might well recommend that its prices should be reduced below that particular level and that the Government should not be precluded from requiring a reduction to the same extent.
May I simplify the point by saying that if we pass this Amendment we shall open up the possibility not only that
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the Orders would be too little on a minority of occasions, perhaps very exceptional occasions, but we should also open up the possibility of a serious form of chicanery. It is going to be difficult for the Government to keep an eye on every price increase. One of the smart ways of evading the situation would be to try to get a price increase through and very shortly afterwards, before it was detected, to introduce another price increase. If you did that and had two price increases in a short period, both of which were wholly unjustified, then the effect of this Amendment would be to say that, whereas a Government directive based on the advice of the N.B.P.I. could take away from the retailer or manufacturer the last of those price increases, the first one would have to remain sacrosanct. I do not know whether the noble Lord has seen the possible effect of this Amendment, but I hope that, in the light of the fact that this is really a very dangerous avenue for chicanery (which I think was the word I used earlier) he will see fit to withdraw his Amendment.
LORD ERROLL of HALE: The noble Lord displays his usual ability to detect chicanery and roguery in the industrial and business community, and I have to concede that it would be possible for a firm to do that. But no big, reputable firm would do anything of that sort, because it would not be in the interests of its customers or of its future business relationship with them. So it is really a very theoretical exercise which the noble Lord has "cooked up" in order to defeat my very modest Amendment. However, we have to put up with that sort of thing. I am sure he got great pleasure out of finding a new way of defeating this poor man on this side of your Lordships' House.
I suggest that, in order to get round this difficulty which looms so large in the noble Lord's thinking, one could say that it would have to be a price increase made before this Bill became an Act, and one could sweep into consideration any price increases—whether one, two, three or four—made after the Royal Assent was given to this Bill. In that case, one would be able to deal with the rogues such as the noble Lord has described, and, at the same time, all manufacturers would know that prices ruling on the date of the Royal Assent

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to this Bill were the base line, so to speak, in their own price structures.
The noble Lord also said that he thought there would be some drastic decreases in costs, which might justify a considerable fall in price below the level ruling, say, to-day. Here again I think the noble Lord is in a dream world, because every business is to-day struggling against a very large number of price increases quite beyond its own control. The great struggle is to keep prices down in the face of price increases for fuels and, in many cases, raw materials, and particularly Government impositions, such as the increased burden of selective employment tax. So to talk about being able to find large cost decreases is just living in a dream world. That position just does not exist, and is not likely to exist in this country until we have a Conservative Government back in power.
Having said that, I hope that if I withdraw this Amendment the noble Lord will look at the possibility I suggested earlier, that at least the Government should not go back behind the passage of this Bill into an Act for seeking price decreases. In that way he would get around the difficulty of the "rogues" he has talked about, and would give some practical certainty to the vast majority of honest and well-intentioned firms. Am I not to have that assurance?
LORD BROWN: I would leave the matter like that. The noble Lord will have his little political foible on this. I am almost hesitant to answer, because I like to let him have his pleasure; and, as he knows, he pleases me exceedingly on other occasions with his visits abroad. But since he has insisted on my answering him, may I point out—although I do not wish to accuse him of insincerity—that he knows a great deal about industry and knows perfectly well that, in spite of the fact that basic costs of raw materials, and indeed forms of taxation, and salaries and wages are rising, technological change sometimes brings about drastic reductions in the cost of production of goods. We should be in a very sorry way if the price of all goods went up every time the cost of wages, salaries, fuels or raw materials went up. Prices fall at times, in spite of the rising costs of some of the elements, because engineers
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and scientists are clever people. As I say, the noble Lord knows this perfectly well, and to get up and say that there is no possibility of the cost of anything coming down until a Conservative Government are elected is just political stuff. Honestly, are we not above that sort of thing? I never mix economics with politics, and I always thought the noble Lord was the sort of man who avoided that.
I am sorry that he got me on my feet, and I am bound to leave it in that way. If he wants me to think about it, may I point out that the argument I gave him about the "chicanery" course which his Amendment opens up is not the only one. There is the other argument I gave him: that cases will arise where, owing Lo technological innovation and a whole host of other matters, it may be reasonable to suggest that a manufacturer brings his price down more than the last increase. I admit that that is unusual, but why should a Government who are trying to maintain a fair economic situation deprive themselves of the opportunity of doing that in the exceptional case? Why is he so anxious, if indeed there is no chance of costs falling during the period of the Labour Government, to protect a manufacturer who will never be attacked if his costs never fall? I am saying that costs might fall, but he denies it. I think he is wrong in denying it, and the Government need this power. I think the Bill as it stands is correct, and I do not think that the noble Lord has faced the two arguments which I put forward against his Amendment. I think he accepted one of them, but looked upon it as a sort of trick which I had "cooked up". However, it is a very real thing, and the other argument is also valid. So I hope the noble Lord will not press this Amendment.
LORD ERROLL OF HALE: I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 4 agreed to.
Clauses 5 to 8 agreed to.
Clause 9 [Restriction on rent increases under regulated tenancies]:
THE DEPUTY CHAIRMAN OF COMMITTEES: I must inform the Committee that if Amendment No. 12 is agreed to I cannot call Amendment No. 13.
4.57 p.m.
THE EARL OF DUNDEE THE EARL OF DUNDEE moved, in subsection (5), to leave out "exercisable by statutory instrument, which shall be subject to annulment in pursuance of a", and insert "subject to affirmative" [resolution]. The noble Earl said: I do not want to start a discussion on the general subject of rents, but Clause 9 introduces new powers which are not contained in any Prices and Incomes Act. This clause restricts the rents of privately owned accommodation let under regulated tenancies and endows the Government with very sweeping powers for adapting and modifying the provisions of the Rent Act by means of regulations made under this clause. It would thus enable the Minister to set aside the provisions for settling fair rents which have been made under the Government's own Act.
The Bill as it stands provides that this can be done by Statutory Instrument, unless it is thrown out or annulled by Resolution—that means under the Negative Resolution procedure. My first Amendment, No. 12, proposes that the procedure of an Affirmative Resolution should be substituted. I think it is right to make sure that if these very wide powers are given to the Minister to supersede the provisions of the Rent Act they should be debated by Parliament before they take effect. Under the Negative Resolution procedure it is quite possible that they may never be debated. On the other hand, the Affirmative Resolution procedure would ensure that they were, as I think they ought to be.
We thought that Amendment No. 13, which could not be moved if Amendment No. 12 were carried, might be an alternative more acceptable to the Government. In that Amendment we propose that the Order should lie on the Table for 28 days and should then expire unless approved by a Resolution of each House of Parliament. I should be quite willing to let the Government choose between these two Amendments. I hope they will consider at least one of them favourable, and I beg to move the first one.
Amendment moved—
Page 9, line 26, leave out from ("be") to ("resolution") in line 27 and insert ("subject to affirmative").—(The Earl of Dundee.)
THE PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (LORD KENNET): I see the force of what the
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noble Earl is saying. One must be careful to avoid the risk of amending Statute Law in any meaningful sense by regulations, and one must always be sure that Parliament has good opportunity to discuss any regulations which are of substantial content and which otherwise go undiscussed. There are two reasons against proceeding in the way the noble Earl's Amendments suggest. One is practical, and the other is not so much a reason against proceeding that way as a defence of the preferability of proceeding the way the clause as unamended proposes. If the first—Amendment No. 12—which we are talking about, is adopted and we have the Affirmative rather than the Negative procedure, we are up against the fact that there is a complete freeze on increases in the rents in question until the regulations come into force to break that freeze. The Bill says "Freeze", and only the regulations can show the way to thaw out of the freeze—by these phased stages with which the Committee is familiar.
The Government intend to have regulations ready to be laid immediately the Bill comes into operation. If they are subject to the Negative Resolution procedure they may come into force at once but will, of course, be subject to annulment in pursuance of a Resolution by either House. But if the regulations are made subject to the Affirmative Resolution procedure, as the Amendment proposes, they will not come into effect until approved by each House. One must think now of what would have to be done before they could be approved by either House. They would need first to be referred to the Select Committee on Statutory Instruments in the Commons and to the Special Orders Committee in this House, and after these Committees had reported a Resolution would have to be debated and passed in each House approving the regulations. I do not know how long all this would take, how long it normally takes, but it is clearly a matter of months rather than weeks, and during that time none of the rents affected could be increased at all, even to the extent which will be allowed in the regulations. It seems clear to the Government that this is bound to cause confusion to everybody and injustice in particular to landlords.
I think it is very natural for the Committee to expect in these circumstances —that is, circumstances of Negative

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Resolution procedure—that they should have an outline of what the Government intend to put in the regulations. This has been given to the House of Commons by the First Secretary, and I will repeat virtually what he said here. There would be four elements in the regulations. First, the limit on a rent increase for the first year after registration would be 10s. per week. Second, any significant balance to bring the rent up to the fair rent level as registered would be split between the two succeeding years if the regulations were still in force for that rent at the end of the first year. Third, increases due to higher rates and cost of services would be exempt—and whether an increase is due to higher rates is, of course, a matter which is not open to dispute; whether it is due to the cost of services is a matter which would be settled either by the contract between landlord and tenant or by rent officer determination. Fourth, the scheme would come into operation immediately the Bill becomes law and would apply throughout the country irrespective of rateable values within the familiar Rent Act limits. That is the practical reason against doing it by Affirmative Resolution, and much of it will also apply when we come to discuss the alternative Amendment, No. 13.
THE EARL OF DUNDEE: I hope the noble Lord may agree to discuss the two together. I think it would save time. I am grateful for his explanation on the first one, but I should like to hear what he says about the second, and I have no more to say about it.
LORD KENNET: Willingly. The difficulty about the second (and it is a difficulty rather of the same nature) is that I am advised it is not at all clear from the way this Amendment is drafted whether the 28 days are just calendar days or whether they are sitting days of Parliament—and, of course, the Committee does not need reminding that we are, we hope, already within 28 sitting days of the end of this Session. So if all this is to be held over until next autumn, I think this may have an effect which would be very undesirable. It may be that the noble Earl will tell me that he meant 28 calendar days, and, if that is so, then that is that. But even in the case of 28 calendar days we are still up against the
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point that we—I beg the noble Earl's pardon; it is the other way round in this case. It comes into effect at once and then goes out of effect after 28 days unless it is explicitly confirmed by Parliament.
It seems to the Government that for the rather small advantages to be gained by this increase in perfection of democratic procedure, which I admit it is, it would be tempting providence, given the congestion of Parliamentary business that there is at the moment, to do it in this way. We are all rather subject to sudden shifts in the necessities of the timetable in both Houses; we are very much subject to a dependence upon each other as between the two major Parties in both Houses; and I, for one, should not like to entrust the entire future of this rent-phasing scheme to the ability of the Government and Opposition to find time to get on with it within the 28 days. I am worried about that, and I must say that frankly to the Committee. Also, of course, there is the point about the Recess, that, as drafted, it could mean 28 sitting days of Parliament.
To turn to the minor constitutional point which the noble Earl raised, about whether we might find that we are amending a Statute in these regulations and that therefore it ought to be done by Affirmative Resolution procedure and not by Negative Resolution procedure, I think it is true, first, that one should avoid amending a Statute by regulation at all; and, secondly, that if one is carrying any permanent, real or substantial change into Statute Law then certainly it should be done by Affirmative Resolution, as the first Amendment proposes. But it seems to the Government that a temporary expedient like the present Bill is substantially different from rewriting the Rent Act for all time by regulations. We are not doing that: we are simply slowing down the rent increases more or less as an emergency measure and for a limited period, and in this case the regulations should not be regarded as having that kind of fundamental effect on the Rent Act which would justify their being subjected to Affirmative rather than Negative Resolution procedure.
THE EARL OF DUNDEE: May I ask the noble Lord one question? Suppose, under the Bill as it stands, when they are

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subject only to annulment by Negative Resolution, the regulation was made in, say, the middle of August. Would it still be possible to have a Negative Resolution moved if Parliament was not meeting until October? Would there be anything to stop that?
LORD KENNET: I speak subject to correction, and I will correct myself later this afternoon if I get it wrong; but it would of course be possible to carry a Resolution under the Negative Resolution procedure when Parliament next met. These things have to lie on the Table for so many sitting days.
THE EARL OF DUNDEE: In these circumstances, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 9 agreed to.
Clause 10 [Restriction on increases in local authority rents]:
5.10 p.m.
LORD ILFORD LORD ILFORD moved, in subsection (1), at the beginning to insert "Subject to subsections (12A) and (12B) of this section". The noble Lord said: I beg to move Amendment No. 14, which stands in my name and in the name of my noble friend Lord Molson. This Amendment and the next three Amendments, Nos. 15, 16 and 17, deal with the rents of houses belonging to the local authorities. They are at first sight a little complicated, but I think I can tell the Committee quite shortly what the local authorities are asking in this Amendment.
Clause 10 of the Bill provides that:
"… it shall not be lawful for a local authority to charge in respect of any houses to which this section applies rents exceeding the former rents, unless the increases accord with proposals submitted to and passed by the Minister …"
That means that the local authorities have to get the approval of the Minister for any increases in their council house rents. The local authorities are responsible for a very large number of weekly tenancies. The Greater London Council which I take as an example, are responsible, I think, for something like 225,000 weekly tenancies and about 15,000 tenancies of other types. The Council are constantly carrying out on their property improvements of different sorts. If in the case of all these houses where they carry
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out improvements they have to obtain the approval of the Minister, it will involve a very considerable volume of administrative work, both for the Council and for the officers of the Ministry. The result of their labours is likely to be that the Minister would approve of rent increases in respect of the proposed improvements.
What the local authorities are asking in these Amendments is that where a rent increase is based upon the cost of an improvement they should be entitled to increase the rent to cover the cost of the improvement without having to seek the approval of the Minister. The Greater London Council make it a rule, before they increase a council rent in respect of improvements, to obtain the approval of the tenant and his agreement to the rent increase which will cover the cost of the improvement. I have no doubt that that is done by other local authorities as well; but it appears to be the case that if some procedure of that sort is adopted there is really no reason why the local authority should not be permitted to increase its rents by the sum required to meet the cost of the improvement.
I think that that really puts the point which I desire to put to the Committee. If an application has to be made to the Minister in respect of every one of these improvements, it will, as I say, involve a very considerable volume of work both for the staffs of local authorities and for the staff of the Ministry. I hope that it may he possible for the Government to agree to this relatively small Amendment and so make the great volume of work which will otherwise have to be undertaken unnecessary. I beg to move.
Amendment moved—
Page 10. line 1, at beginning insert ("Subject to subsections (12A) and (12B) of this section").—(Lord Ilford.)
LORD KENNET: The noble Lord has spoken to Amendments Nos. 14 and 17 together, and I propose to follow him in that. I should first inform the Committee that identical Amendments were moved and rejected in the House of Commons on Report. I am very much in agreement with a great deal of what the noble Lord has said. It would be absurd to bring to an automatic standstill all local authority rent increases after improvements; but this is simply a question of where we put it. The Minister

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already has powers under subsection (1) of this clause to except by direction from the limitations of the clause rent increases in such cases as the noble Lord prescribes. It seems to the Government far better that excepted cases should be dealt with by direction than that they should be written in detail into the Statute in case experience should show that some variation ought to be made. If you are "lumbered" with a definition in the Statute you cannot very easily make a variation.
The Greater London Council are at present being consulted about the content of the direction which the Minister will make under Clause 10, including the classes of rent increases which might be excepted from this clause without affecting the fundamental purpose of the clause. It will be obvious to noble Lords on all sides of the Committee—and I agree with this—that there is a case for excepting by direction rent increases related to the cost of improvements. The Housing Ministers will consider this favourably when they have received the views of all the associations concerned. I hope that, with these assurances, the noble Lord may be prepared to withdraw his Amendment.
LORD ILFORD: Am I right in thinking that it is the intention of the Minister to give directions to deal with this question of improvements?
LORD KENNET: It is the intention to give directions to except certain classes of rent increase. It appears to me likely that among those classes, as I have said, will be rent increases related to cost of improvements. I am not at present free to say that he intends to do so whatever happens, because he has not completed his consultations.
LORD ILFORD: I think I agree with what the noble Lord said, that directions are the right way to deal with this. I will withdraw the Amendment in the hope that the Minister will give an appropriate direction for dealing with this matter.
Amendment, by leave, withdrawn.
5.18 p.m.
LORD MOLSON LORD MOLSON moved, in subsection (7), to leave out "two months elapse"
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and insert "one month elapses". The noble Lord said: I think it might be convenient if I spoke to Amendments Nos. 15 and 16 at the same time, if that is agreeable to the Committee. I beg to move Amendment No. 15. The purpose of this is to reduce from two months to one month the time during which the Minister may consider these matters without issuing a direction. Under the Bill as drafted, if he has not given a decision before the end of two months then he is deemed to have given his consent. The purpose of these two Amendments is to reduce that period of time from two months to one month. This is an Amendment that I am moving on behalf of the Greater London Council, who are of the opinion that this is really too slow a process.
Apart from the time taken at the outset to prepare and submit all the information which must be submitted to the Minister he has, under the clause, two months in which to make a decision. The local authorities will need anything from two to three months to prepare and issue the notices of increase when they have been agreed by the Minister. Under the provisions of the Rent Act 1957, these cannot become effective for a further minimum period of four weeks; and, as I understand it, in this Bill there is nothing to reduce that additional period. The period is likely to be even longer if the local authority is introducing a new rebate scheme.
The Greater London Council are trying to devise a satisfactory new rebate scheme and it is the policy of Her Majesty's Government to encourage rebate schemes. This always involves a good deal of discussion and investigation in order to ensure that the rebate applications are all investigated and amounts calculated in time to operate simultaneously with the increases in rent. This is a very long time, and the lapse of every week during which increases of rent do not take place results in a heavy loss to the housing fund, and consequently places an additional burden on the rates. I hope the Government will consider that this is not an unreasonable Amendment. It is not directed against the spirit of the Bill, but is an attempt to speed up the procedure, which in any case will be fairly lengthy. I beg to move.
Amendment moved—
Page 11, line 37, leave out ("two months") and insert ("one month").—(Lord Molson.)
LORD KENNET: No, the Government do not consider the Amendment unreasonable in any way and would willingly accept it were it not for the fact that one cannot promise that there may not be hard cases and exceptionally complicated ones. There is no doubt that the Minister will normally reach a decision on these proposals well within the two-month period and probably within a month. A month would be the normal time. But I do not think that the Minister would welcome being bound by Statute to do that in every conceivable case, first, because unusually complex proposals for rent increases—and sometimes they are terribly complex—may call for longer examination than the normal; and also there is the fact that these applications will bunch at certain times of the year, and with the need to keep down the number of civil servants it may be physically impossible for them to be dealt with within a month at the "bunching season". Because of difficulties caused by one or two really "tough nuts" in the way of complications cropping up at the "bunching season" when applications are coming in in their hundreds, I would ask the noble Lord to consider withdrawing his Amendment.
LORD MOLSON: I think the noble Lord has given a reasonable answer. I am glad to have an assurance that in all normal cases the Minister would expect to be able to give a decision in less than a month. I realise that there may be some particularly difficult cases, and if they coincide with a very large number of applications, it may be impossible for the Ministry to deal with the matter in time. Having regard to the assurance which the noble Lord has given, that there will be no avoidable delay in dealing with these matters, I beg leave to withdraw the Amendment.
Amendment, by leave withdrawn.
Clause 10 agreed to.
Remaining clauses and Schedules agreed to.
House resumed: Bill reported, without amendment.

MEDICINES BILL
5.25 p.m.
LORD KENNET: My Lords, this Bill is really no more and no less than a measure of consumer protection. We have recently had the Health Service and Public Health Bill, and within the last few days I have repeated a Statement in this House which the Minister of Health made in the House of Commons about the Sainsbury Report. So it may clarify a complex situation if I say, first of all, what the Medicines Bill does not do. It is not about the Health Service; that was the other Bill. It is not about the price of drugs; that was in the Sainsbury Report, and the Minister's Statement has said what he proposes to do about it. What it is about is the safety, efficacy and quality of drugs, and the descriptions and advertisement of drugs, whether the drugs are prescribed or consumed within the Health Service or without and in both human and veterinary medicine. It is also about the incorporation of medicines in animal feeding stuffs.
My Lords, as we all remember, the thalidomide tragedy gave us a severe jolt about the arrangements we had for protecting people against inadequately tested drugs. After that we had the Report of Lord Cohen of Birkenhead, that there ought to be a voluntary system for seeing that new drugs were safe and that, in time, a statutory system should be devised. And this is what happened. For four years we have had the Safety of Drugs Committee under Sir Derrick Dunlop, and on the animal side we have had the Voluntary Veterinary Products Safety Precautions Scheme. This Bill, which follows a White Paper published late last year, now moves the whole thing over on to a statutory basis. I do not think anybody has doubted that it would be right to go statutory as soon as we had enough experience of the voluntary arrangements to know we were on the right tack. The voluntary arrangements have worked well, but we cannot leave it at that, for two particular reasons. First, although the great bulk of the British pharmaceutical industry has conducted itself responsibly and has been amenable to this voluntary system of control, yet there have been one or two fringe firms which make the Government

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feel that it would be safer to have a Statute up their sleeves; and secondly, we are among the few technically advanced countries in the world which have no statutory controls, and this poses certain problems in talking to other countries about this whole field of medical safety.
Part I of the Bill, accordingly, establishes a Medicines Commission and provides for establishment of certain other expert committees. The House is bound to want to know why the Bill does not give the Medicines Commission all the executive powers which the Sainsbury Report recommended it should have. Let me take this opportunity, which is the first I have had since I started talking about health matters in this House, to add my thanks to those expressed by everyone else to my noble friend Lord Sainsbury for chairing the Committee which drew up the Report bearing his name. The answer to this question is that as we are dealing here with statutory compulsions with the underlying threat—which I am confident will always remain underlying but it just might not—of criminal proceedings, the Government have thought it better to abide by the British tradition that the making of statutory regulations should be in the hands of a Minister responsible to Parliament. So far as the exercise of these powers go, therefore, the Commission is to he advisory, as are the specialist committees to which the Minister will be able to turn for advice on particular categories of this immensely wide and complex technical field.
Part II of the Bill says that new medicinal products may not be marketed or imported without a "product licence", and may not be subjected to clinical or field trials, which normally precede marketing, without a clinical or field trial certificate. And not only this, no firm may manufacture or sell by wholesale medicinal products without being licensed in general to do so. Part II also provides for transitional arrangements to bring medicinal products, which are already on the market, within the licensing system as time goes on. The Minister may not refuse a licence for any product on grounds of safety, efficacy or quality without referring the matter to the appropriate expert committee, though he may, and will, as the expert committees build up a
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body of doctrine, which will be available to him, grant licences without referring. When he proposes to refuse a licence, there is provision for a hearing or written representations. And finally, of course, there is appeal to the High Court on points of law. This Part of the Bill incorporates suggestions made by the Council on Tribunals.
Parts III to VI, inclusive, of the Bill amend and codify the existing law of medicines, which is at present scattered about among many Statutes, and particularly those of 1933, 1941, 1955 and 1956, and the corresponding Scottish and Northern Irish legislation.This Bill applies to the United Kingdom. The basic premise of these Parts of the Bill is that it is no longer enough to treat drugs and medicines as simple commodities like any others which can be left to ordinary commercial pressures, except in the case of certain ones long established as dangerous. Among the revisions in these Parts, I am glad to be able to say that the ordinary chemist in the chemist shop is no longer to be known to the law as an authorised seller of poisons, but will become "a person lawfully conducting a retail pharmacy business", which sounds a bit nicer. Certain drugs, which people normally and properly buy for themselves when they feel like it, will be able to be sold in any shops. They will be listed in a general sale list Order. There are corresponding provisions for veterinary medicines. The Bill will confer powers on the Minister to regulate the labelling of medicines as sold or dispensed, a power which is wide enough to cover the labelling of dispensed medicines.
Part VI of the Bill deals with advertising and makes it a criminal offence to advertise a medicine in a way which is false or misleading. One of the most important clauses in the Bill is Clause 89. This deals with advertising and promotion aimed by the pharmaceutical industry at doctors, dentists and vets. Under them, no manufacturer may address an advertisement or send a promotion representative to a doctor, dentist or vet. about any given medicine that is the subject of a product licence until he has already sent to him a data sheet. The form of this data sheet will be laid down by regulations, and it will be required to set out objectively the basic particulars of the substance as; regards its composition, its

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therapeutic purpose, its side effects, and any necessary warning. If it does not do so, it will not be a data sheet under this Bill and the manufacturer will be in breach of the law if he advertises the product or promotes it to the doctor or vet. Clause 90 says that the Minister may call for copies of any advertisement to be submitted to him.
Part VII of the Bill gives the Medicines Commission the responsibility of producing future editions of The British Pharmacopoeia and enables them to publish from time to time material about medicines and things used in medicine. I should not like this provision to go by on Second Reading without remarking that the General Medical Council, under the chairmanship of the noble Lord, Lord Cohen of Birkenhead, agrees with this change of responsibility. The Pharmacopoeia has been produced under the aegis of the General Medical Council for over 100 years, during which time it has earned a remarkable standing throughout the whole world of medicine.
Part VIII of the Bill contains the enforcement provisions, which we can examine in Committee, and provision for extending the Bill to cover devices of one sort or another used in medicine and surgery and products which are not normally medicines but which may be promoted for medicinal uses, such as medicated toilet articles, antiseptics, and so on. Health foods, unless they are promoted as medicines, do not come under the Bill. In this Part, too, is a provision to bring, for instance, antibiotics used in horticulture or as food preservatives under statutory control where there is a risk to human or animal health.
I do not think that I need detain the House with any account of the Minister's intentions with regard to appointments to the Medicines Commission or to the expert committees. We have at present a voluntary system which is working well, and it is the purpose of the Minister to preserve that full and frank dialogue between the professional staff of the Departments and the industry which has characterised our arrangements so far. His appointments will be made after full consultation with appropriate parties and will be made in the desire to continue
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that atmosphere of co-operation and at the same time to provide the increased degree of protection to the consumer; namely, to the sick of this country, which it is the purpose of this Bill not so much to achieve, since in a great measure it already exists, but to consolidate beyond all doubt.
The Bill was in Committee in the House of Commons for 20 Sittings, and I should inform the House that as a result of this constructive examination certain Amendments are still being drafted, which I shall put down in good time for our later stages. I beg to move that the Bill be now read a Second time.
Moved, That the Bill be now read 2ª —(Lord Kennet.)
5.36 p.m.
LORD NEWTON: My Lords, I am sure that the whole House will be grateful to the noble Lord, Lord Kennet, for the succinct and clear manner in which he has explained the main provisions of this Bill, which is a pretty long and complicated one. The noble Lord did not say very much about the background of it—there was no reason why he should—but I would emphasise that the need for new drugs legislation has been recognised, certainly by Government Departments, for many years.
As long ago as 1958, the Ministry of Health were seeking the reactions of interested parties to a proposal to coordinate the existing legislation on drugs and to add some stricter controls. In 1959 the Poisons Board expressed concern about the lack of control over some potent medicines, and it was already suspected that the Therapeutic Substances Act of 1956 would soon become inadequate for its purpose. But, of course, as the noble Lord said, it was the thalidomide tragedy of 1962 that clinched the matter, if I may put it in that way. At that time it fell to me to announce to your Lordships' House the setting up of a joint sub-committee of the English and Scottish Standing Medical Advisory Committee, under the chairmanship of the noble Lord, Lord Cohen of Birkenhead, to look into the situation. Later it again fell to me to announce the recommendations of the noble Lord and his colleagues, and the Government's decision upon them; and

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still later to announce the appointment of the Dunlop Committee on the Safety of Drugs.
Contrary to fears expressed at that time, the latter part of 1962—fears, I may say, expressed by some noble Lords and Ladies: but no names, no pack drill!in practice, the voluntary vetting system operated by the Dunlop Committee has worked remarkably well, as the noble Lord said, thanks largely, I believe, to the full co-operation of the pharmaceutical industry. The noble Lord made a qualifying observation about what he called one or two "fringe" firms. I am bound to say that I did not know about that, and although I naturally accept what he says, on the whole I think that the industry has cooperated pretty well with the Dunlop Committee and ought to receive credit for it.
Nevertheless, it has been accepted all along—at any rate, ever since 1962—by the Minister, by the noble Lord, Lord Cohen of Birkenhead, and his colleagues, and by the Dunlop Committee, that a voluntary system of vetting patent medicines could be only temporary, and that there would have to be new legislation dealing with the safety, efficacy, quality, prescriptions, advertisements, and all the other relevant matters. Indeed, in the last few months before I left the Ministry of Health, at the end of March, 1964, I was given the task of struggling through a whole forest of paper in order to try to think up a framework or a policy for a new Bill. So obviously I cannot be anything but benevolent in general towards this Bill; and I feel pretty sure that a Bill on these lines would have emerged at this time, or at about this time, whatever the Government of the day.
It is an extremely comprehensive Bill—I doubt whether it could have been more comprehensive—and I think it right that it should be. But, of course, the implementation of all its provisions will entail a considerable extension of bureaucratic activity, and that is something which in principle is to be regretted, at any rate, by me. Unfortunately, I cannot see how one can mount a massive protective operation of this kind—and it is a massive protective operation—except in a bureaucratic setting.
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I suppose that the fundamental necessity for legislation of this nature springs from the attitude of the general public towards the National Health Service. The public seem to feel that, as they have a right to the medicines, appliances and services supplied by the National Health Service, they are going to have them if they want them, even if they do not need them. I heard recently from a friend of mine who is a dentist an example of this attitude, at any rate in the field of medicine, of wanting something because you have the right to it. I think this example is a good illustration, although the anecdote refers to a time before the commencement of the National Health Service. It was a few years after the war.
A patient came to this dentist and said: "I have just been demobilised from the Navy. Under the terms and conditions of my service, I am entitled to a free set of dentures, and I have come to you for them." The dentist said: "Very well; let me have a look at your teeth." Apart from a few holes that needed filling, he found that the man had a pretty good mouthful of teeth; and he told him so. The man said: "Never mind about that. I am entitled to a new set of dentures, and I want to have them." There was a certain amount of argument, and then the dentist in the end said: "You go away and think about it, and then come and see me again." The man went away, but he returned and said: "I have thought about it, but I am going to stick up for my rights. I want my dentures."
LORD KENNET: He wanted them to keep coal in.
LORD NEWTON: I do not know what he wanted to keep in them. Anyway, reluctantly the dentist pulled out all his teeth and gave him new dentures.
BARONESS SUMMERSKILL: He was a very bad dentist, then.
LORD NEWTON: I do not know about that. I must say that if I had been the dentist I should probably have let him keep his own teeth and given him any old pair of dentures to take hone and keep in a paper bag. But perhaps that might have been unethical.
It has often been said before, my Lords, and I believe it to be true, that we are

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something of a nation of hypochondriacs. To the casual expression: "Hello; how are you?", too often one finds one gets a pretty lengthy reply, going into all the symptoms. I think we are a nation of medicine drinkers and pill swallowers, and perhaps over-medicated. If we are, then I should have thought that for this state of affairs the medical profession must accept some responsibility. At any rate, I am sure that a good many doctors would agree that it can be easier and quicker to prescribe a bottle of coloured liquid or a box of pills than to explain to the patient that he does not need treatment at all and that it would be wiser to leave it to Nature.
It seems to me that the public not only expect modern medicines to be available and efficacious for almost any malady or ailment that they can contract, but expect that these modern medicines should be absolutely safe. This, I suppose, is really crying for the moon, because, as I understand it, if a drug is absolutely 100 per cent. safe, and there is not the smallest risk of any undesirable side effects, then that drug is probably not a very potent one. So I suppose the most that one can hope for is to ensure by all reasonable means that all drugs produced are made to be as safe as possible. This, after all, is one of the main purposes of this Bill, and I do not see why the Bill should not achieve it.
I do not know how many noble Lords present have read right through the Bill —it certainly took me a long time to do so—but if one does, one is immediately struck by the fact that it contains a great deal of enabling power. I wish that it did not contain so much enabling power. But, even so, I think that here again quite inevitably there is a mass of detail, some of it fairly small. I do not propose on Second Reading on a Thursday afternoon to go into the details.
I would conclude by saying that I wish this Bill well. I think it goes a long way in following the recommendations of the Sainsbury Report, but not the whole way. I shall look forward to hearing what the noble Lord, Lord Sainsbury, has to say about that. It is undoubtedly a better Bill than it was when it was introduced into the other place. Very sensibly (and the noble Lord, Lord
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Kennet, mentioned this) the Minister in the other place made a number of concessions; and I gather from what the noble Lord said that we may have a few more here. It seems to me that in the end the success or failure of the Bill will turn on the regulations and orders that will flow from it, and on the manner in which those regulations and orders are interpreted and exercised. So we shall just have to hope for the best, also keep a wary eye open.
5.49 p.m.
LORD SAINSBURY: My Lords, I am speaking in the debate on this Bill because a Medicines Commission was one of the main recommendations of the Committee of which I had the honour to be Chairman. I should like to take this opportunity, on behalf of the Committee, to thank my noble friend Lord Kennet for the tribute he paid to the work of the Committee. I should like also to apologise for not being in the House when the noble Lord moved the Second Reading, but I was attending a Committee of the House in a Committee room.
As is clear from its Report, the Committee attached great importance to the establishment of such a body as the Medicines Commission. It felt very strongly the need for the supervision or control of the introduction, promotion and marketing of ethical pharmaceutical products. I welcome the fact that the Bill provides for such supervision. As Sir Derrick Dunlop has said:
"Modern medicines are such potent weapons —like atomic energy, powerful for good but also powerful for evil—that the responsibility for their safe production and use can no longer be left entirely to the manufacturer or prescriber."
I am bound to point out, however, that my satisfaction is somewhat tempered by my reservations about the status, structure and duties of the Medicines Commission as proposed in the Bill.
During the course of its work, the Committee was greatly impressed by the evidence of some sections of the medical profession, which showed that on the whole doctors would have far greater confidence in the Commission if it was independent, and seen to be independent, of the Government in its day-to-day working. Although we accepted that, for constitutional reasons, the licensing

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authority should be the Minister, we recommended the setting up of a strong independent Commission which, apart from advising the Minister on licensing and other matters, would have a number of clearly defined executive, as opposed to advisory, functions, such as the control of advertising and the classification of medicines. These functions would be performed independently of the Minister and the Commission would have its own powers of enforcement.
The Medicines Commission proposed in the Bill follows closely the White Paper (Cmd. 3395) published before the Sainsbury Report. It is an advisory body with very little statutory independence. It has no powers of enforcement and all its functions are exercised through the Minister of Health, who takes responsibility for them. I recognise that there is room for difference of opinion, that these differences are strongly held and that there are powerful arguments for both points of view. I appreciate that critics of the Commission proposed in our Report fear that it might be excessively bureaucratic, which could lead to undue delay in clearing new medicines, and that its independence could result in the exercise of power without responsibility to Parliament.
However, having given consideration to everything that has been said in favour of the Medicines Commission proposed in the Bill, I still feel that there are two reasons why an independent Commission would be preferable. The first is because it would probably find it easier to gain the confidence and co-operation of the medical profession, which is so vital for its success. The second reason is because I feel that decisions relating to medicines should be taken by a body with professionally qualified people, in the best interests of the health of the nation.
Another important difference between the Minister's Medicines Commission and that envisaged in our Report concerns the status and duties of committees serving the Commission. We recognised that because of the heavy duties of the Commission, expert committees to advise on specific aspects of its work—such as the safety of drugs, their classification and so on—would have to be set up. Such committees, we felt, should be appointed by the Commission, should work in close co-operation with it and should provide it with the assistance necessary to enable
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members of the Commission to make the right decisions.
According to the Government proposals, however, these committees, of which there will be a very large number, will be appointed by the Minister in consultation with the Commission. The advisory committees, such as those concerned with licensing and the general sales list, will work more or less independently of the Commission and will send their recommendations direct to the Minister. The Commission itself will be concerned with these problems only if there is an appeal against a decision by the Minister. In these circumstances it seems inevitable that what influence there will be outside the Ministry will lie with the committees. In paragraph 334 of our Report we said:
"We have been struck by the absence of any co-ordinated structure for dealing with matters concerning medicines."
No doubt these committees will be highly expert in their field, but they will not be in a position, even with the heir of the Commission as envisaged in the Bill, to provide such a structure.
I welcome the clauses of the Bill which deal with controlling advertising and sales promotion, for I am convinced that there is an overwhelming case for some statutory control. In paragraph 228 of the Sainsbury Report, dealing with promotional literature sent to G.P.s by pharmaceutical firms, we stated:
"The British Medical Association told us that the main disadvantage to doctors was the absence of any 'independent medical control or scrutiny over the literature'."
I stress the word "independent". I am, therefore, a little surprised that the Bill does not specifically appoint this task to the Commission or to one of its committees.
No doubt the Minister of Health will be able, under Clause 3, to consult the Commission on this and related matters, but I feel that it is an important enough problem to be made the responiibility of a separate committee. In any case, I hope that the new controls will be strictly enforced, for only if this is done will doctors take promotional literature and advertising more seriously, which may in time lead to a reduction the volume of material pushed through the G.P.'s letter box.
As noble Lords will no doubt know, there has been in existence for some

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years a standing joint committee on the classification of proprietary preparations which is now known by the name of its present Chairman, the MacGregor Committee. I am sure all noble Lords will agree that it is only right that I should add my tribute to that which has already been paid to the valuable work done in an earlier period under the chairmanship of the noble Lord, Lord Cohen of Birkenhead.
I am disappointed that the Government have not yet reached a final decision as to whether the activities of the committee will be brought under the ægis of the Commission. Its work in classifying medicines according to their efficacy has an important role in helping doctors to prescribe to the best advantage of their patients, and I, and the committee over which I presided, were strongly of the opinion that this work should be continued. The classification of medicines is of great value, and in my view it should be done in complete independence by the professionally qualified Medicines Commission. In conclusion, in spite of these reservations I welcome the Bill. It is a much needed measure and I hope that it will have a speedy passage through all its stages in your Lordships' House.
6.2p.m.
LORD SHAWCROSS: My Lords, I must, at the very outset of the remarks I am about to address to your Lords-ships' House, declare an interest. I have associations with the pharmaceutical industry. In particular I am the Chairman of a pharmaceutical company operating in this country and in the United States of America. In view of some of the things that were said by the noble Lord, Lord Sainsbury, perhaps I ought to say that I by no means apologise for my connection with the industry. Although the pharmaceutical industry is one which appears to arouse great emotions in the minds of those who like to regard themselves as members of the intelligentsia,and who appear to think that it ought to make more discoveries and no profits at all, in fact no industry—and I proudly include my own company in this —has made a greater contribution to the wellbeing of mankind than the privately conducted pharmaceutical industry.
If the noble Baroness, Lady Summerskill, will cast her mind back
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over thirty years she will agree what a dramatic change in the health of this nation, and in large parts (although not yet of all) of the world has taken place in that time. Thirty years ago I believe tuberculosis was killing off over 30,000 people in this country alone. Unfortunately, it still is killing great numbers in other countries not yet so fortunately placed. In this country the death toll from that disease has now become exceedingly slight. Thirty years ago, I think diphtheria probably accounted for 4,000 or 5,000 deaths each year; nowadays it accounts for none. Endocarditis was uniformly fatal; infantile mortality was about three times what it is to-day.
A little while ago a very distinguished Member of your Lordships' House, and a distinguished leader of his profession, the noble Lord, Lord Platt, in the Harveian Oration that he delivered this year, pointed out that the major contribution to the dramatic advance which has been made in these matters in the field of chemical therapy since the war had been made by these much-abused pharmaceutical companies.
LORD SAINSBURY: My Lords, I do not want to interrupt the noble Lord, but I was not clear, when he referred to me in his opening sentence, whether he was suggesting that due and appropriate tribute had not been paid in the Sainsbury Report for the advances of the pharmaceutical industry over the last 30 years. In fact we clearly stated that in an industry where there is innovation and research the profits have to be appropriate to the research.
LORD SHAWCROSS: My Lords, I was referring not to the Report of the Sainsbury Committee but to the noble Lord's speech. If I may say so, with great respect to him, the noble Lord seems to have become something of an advocate for the Report of his Committee. Different views are held about this. An older school of thought considered that it would perhaps be wiser, where there was a Committee of this kind, or a Royal Commission (and this is the view that I myself have taken), that once the Report had been made the Chairman and members of the Committee should remain a little outside the battle and leave others to judge whether or not the Report was right. However, I was criticising nothing in the noble Lord's Report; I

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was referring to what I am sure was not intentionally a disparagement of the industry, but at any rate a slight implication which I thought I felt in the noble Lord's speech. I would add that it was always the view of the Medical Research Council, certainly when I was the Chairman of that body, that the pharmaceutical industry was the best placed to undertake the direct research for new drugs and, of course, to undertake the consequential development work.
Having said that, I am the more glad to be able to welcome, almost without reservation, this important new Bill. I think it was desirable to bring the hitherto perhaps rather obsolete and, in some respects, rather fragmented legislation relating to medicine up to date, and to this extent to consolidate it. And although we all, I think, recognise that the Dunlop Committee—and I should like to pay a warm tribute to that Committee, and in particular to its; Chairman, Sir Derrick Dunlop—achieved in its informal and voluntary procedures very great success in promoting its objective of securing the safety of drugs. We have rather a genius, perhaps, in this country for doing that kind of thing in a way that is voluntary, informal and often illogical, yet successful. Although one must recognise the success of the Dunlop Committee I think that on balance it was right to fall into line with the procedures followed in other countries and to adopt a statutory system. It may well be that in the course of time that may lead to some degree of reciprocity in the international arrangements in regard to these matters.
I am glad, on the other hand, that the Minister has not thought it right at this time to include within the strict procedures of the new system medicines intended for export. That does not mean, of course, that we shall export to foreign countries products which we do not think are safe for this country. It means merely that this very useful export trade—I mean useful economically to us, and from a health point of view to other countries —will not be exposed Ito double standards in the country of production and the country of use.
I personally welcome the constitution of the Medicines Commission and the status which this. Bill gives to it. I am not able to follow the noble Lord, Lord Sainsbury, in the views which he ex-
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pressed about this aspect of the Bill. I think it was right to establish a Commission, highly powered, containing, I have no doubt, people of the greatest distinction, but in the end responsible to Ministers who themselves are responsible to Parliament, rather than to establish a new and independent body, inevitably bureaucratic and exercising power without responsibility. Tie confidence which the Commission enjoys with the medical profession or with the industry will depend much more upon the composition and membership of the Commission than upon its technical status.
Nor am I going to follow the noble Lord in his animadversions on advertising. I am quite sure that the provisions of the Bill are appropriate and that the Minister, with the advice of the Commission where this is called for, will deal in a sensible way with the matter. I sometimes think that in all this talk about advertising of pharmaceuticals we underrate the intelligence of the doctors who receive the advertisements.
I believe that the Medicines Commission can play a most important part in all these procedures, provided always (and here I draw on my earlier experience in the Medical Research Council) that the Commission is not only conscious of its function of exercising the regulatory and therefore restrictive powers in dealing with drugs, important as this function no doubt is, but also seeks to exercise a positive and active role in encouraging and helping the development of new and improved drugs: drugs which may prove of incalculable advantage to mankind and, I am sure, will some day, perhaps before too long, conquer the still dread diseases which have so far not been overcome by chemotherapeutic methods.
I am very glad to see that the Commission, being constituted in the way it is, is entitled to be consulted by Ministers—in other words, that Ministers are obliged to consult it in some of the matters to which the noble Lord, Lord Sainsbury, referred, such as the establishment of the various expert committees, and also in regard to matters of subsidiary legislation. I am glad also that under this Bill the interests likely to be affected must also be consulted. I am quite sure that the Minister recognises that not only in the

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medical profession but also in the industry—and I speak with some inside knowledge of the industry—there is a great body of expertise which, if the system is to work at all, must be brought into active co-operation with the Government in framing the detailed controls for which the Bill provides.
But having said all this, and paying, as I do, the warmest tribute to the Minister and to the general purposes of this Bill, and even to the machinery it establishes, I must add that there remain some points which ought to be examined in Committee, and I was glad to hear the noble Lord, Lord Kennet, say that there are some matters on which it is intended to be put down Amendments. I do not propose to deal with any but one of these matters, for they are in the main matters of detail—drafting, clarification, and the like.
One of those matters, however, is a matter of principle, not indeed for this Ministry, and not affecting in the least the purpose of this Bill, but of importance from a much broader and constitutional point of view. We who are lawyers, or concerned with the machinery of government or with constitutional matters, have a growing anxiety about the way in which the rights of the citizen are increasingly interfered with otherwise than by judicial procedures. I beg noble Lords on the Government Benches to believe that in saying this I am not in the least making a partisan point. Noble Lords on the Government Benches as individuals are just as much concerned with the maintenance of individual rights and liberties as anyone else. The trouble is that, collectively, Governments—and I am using the word in the plural and not the singular—too often sacrifice this concern for the individual on the altar of departmental expediency.
In recent years the policies of Governments have shown a growing tendency towards authoritarianism; and one aspect of this Bill illustrates, I do not say in a glaring or vicious way, the pattern to which in this country, over a number of years now, we have gradually become, or are becoming, conditioned. Decisions affecting the private rights of a particular citizen are taken secretly, without reasons being given, by some faceless
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member of the bureaucracy, and with no appeal. This pattern looks unjust, and quite often it is unjust.
Then, of course, there is this growing tendency, this technique of imposing this policy or that policy on the mere ipse dixit, the say-so, the dictat, of some Minister without legislative authority at all. One is becoming painfully familiar with the system of some ministerial pronunciamento, "Do this, or else…". This is government by intimidation and whether these methods relate to planning or to patents, to passports or to pharmaceuticals, they are a form of dictatorship. As I said, I do not suggest for a moment that this Bill contains any particularly vicious example of that, but the time has come to call a halt to it. And this Bill presents an opportunity to get back to the rule of law in regard to some of these matters, and without detracting in the slightest degree from the purpose of the Bill itself.
Under the Bill, as your Lordships will have seen, the licensing authority—which is a grandiose expression euphemistically describing the Ministers—may grant licences for clinical or field trials, or for marketing. They may vary licences; they may revoke licences in regard to medical products. This power may, of course, involve a drastic interference with the rights of private people; and it may also interfere with the rights of the public to have access to particular medicines. One remembers a very famous instance of this being debated in this House some years ago. I do not dispute that a power of this kind ought to exist and is necessary. Certainly it is. But the producer and the public are entitled to know the reasons for its exercise and to have a right of appeal.
The procedure under this Bill is quite elaborate. It may involve going before a Committee, then going before a Commission, and perhaps subsequently going before a person appointed by the Minister to hear representations. That is the old familiar device of appointing an inspector to report on the matter and then disregarding his report—as in the case of Stansted the other day, except that here the inspector's report is not to be published at all, so that nobody except the Minister and the licensing authority knows what is in it. It may be

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said that these procedures contain a kind of inbuilt system of appeal. Not so, my Lords. The public are entitled to know the reasons behind the advice given and the eventual decision made. At no stage in the procedures laid down by this Bill (and here perhaps the noble Lord, Lord Sainsbury, will agree with me —though I do not know, because he favours greater power for the Commission than I do) is any opinion given by an expert Committee or a Commission binding upon the Minister; nor is the report of the person who hears the representation binding upon the Minister. At no stage is there any right of public appeal.
This business of administrative decisions taken wholly or partly behind closed doors, and with no reasons given, is really not good enough; and it is not in the least necessary in this Bill. There should be a right of appeal to the courts on known facts and stated reasons. These cases will depend greatly upon expert evidence, and of course the courts have a special expertise in assessing the weight to be given to expert evidence. It may well be that only one case in one hundred would go to appeal. All the less reason, I venture to say, for not allowing the ordinary processes of law, openly conducted, to operate. The establishment of an open and public right of appeal, either to the High Court or even, if it were thought better, to an independent tribunal—if one must have another of them, although the court is there—from decisions given under Clause 20 of this Bill would in no way impair its operation when it becomes an Act, and would leave those concerned with its administration at least to feel satisfied that, although the decision may have gone against them, the rule of law was operating. I hope that the Minister will give consideration to an Amendment on those lines on the Committee stage.
6.22 p.m.
LORD FRASER OF LONSDALE: My Lords, I declare an interest, being a director of a pharmaceutical company. In another place there was an amiable Second Reading debate upon this Bill. The Minister of Health made a speech in which he gave substantial and strong assurances as to the moderation which would be exercised in carrying out the
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great powers which the Bill confers upon him and upon his opposite numbers in Scotland and Northern Ireland. But we ought to be aware how great these powers are.
There is the power to appoint a Commission, and the requirement that it should be consulted; but obviously no requirement that its advice should be taken. That would not be possible, I suppose. But if the Commission continues to give him adverse advice which he does not like, then what does he do? He can reduce its numbers; he can increase its numbers; he can alter its terms of reference—all without coming back to major legislation. He has to lay an Order, and it is an Affirmative Order. But everyone of us knows how difficult Orders are: what a small safeguard they are for liberty, or even for good sense, because they have to be taken or left; they cannot be amended. I hesitate to use the word, because I am sure Mr. Robinson would not do this, but the Minister can "pack" this Committee if he just does not like it. He just fixes it, by reducing its numbers, or increasing its numbers, or altering the personnel, or the rules. He takes an Order down to the House, and the majority in another place, which now has the ear of about one-third of the voters, can make sure that it becomes the law. This is not right, and I hope that support may be found for some Amendments which will deal with this matter in Committee.
My other objection is the one which has been voiced so exceedingly well by the noble Lord who has just spoken. He has said it so much better than I could have done and therefore I shall not go over the ground, except to say that I, too, think there should be a right of appeal. Probably there will not be justice in some case here and there; and certainly justice will not be seen to done unless there is provision for an appeal. In particular, I would stress the point made by the noble Lord, that the fact of the existence of this appeal machinery would require that the reason for the rejection of a licence or the amendment of a licence would have to be stated. I think that is most important.
Finally, with the noble Lord, Lord Newton, I would say that we in this country are getting into the habit of setting up the most enormous pieces of

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bureaucratic and governmental machinery. I am not saying that there are not some mistakes made in the pharmaceutical business, as in every business. I am not saying that a watch must not be kept upon quality, claims and methods of manufacture and selling. But the fact is that we are going to have an enormous machine imposed upon us; and we have not been told by the Minister in either House what it will cost. One of its effects will be to slow up the process of bringing useful drugs to patients who need them, to slow up the whole business of manufacturing and selling, thereby impeding business at home and harassing export business.
I think it was the noble Lord, Lord Shawcross, who said that he was glad exports were excluded. I am not sure quite how to read this clause or this aspect of the Bill. It is true that exports are in one sense excluded from licensing. A product can be refused a licence here to be sold in the United Kingdom but it cannot be refused a licence to be sold overseas. But it cannot be sold overseas if it has no background market here. So it is not quite true to say that exports are not affected. They will be affected by the slowing up process, as well as by the interfering process; and the taxpayer will pay. I wonder whether a better system of control might not be to prosecute where faults occur rather than to try to foresee them in every case. Caveat emptor was a pretty good rule. I wish I could commend it to civil servants and to noble Lords on the Front Bench opposite.
6.28 p.m.
LORD CHORLEY: My Lords, I should like to apologise for not being in my place at the time when my name was reached on the list of speakers. I had an engagement of a public character in another part of the Palace which I had to fulfil, and which prevented my getting here in time. I do not want to say a great deal in this discussion this afternoon. This is not a matter with which I have been a great deal concerned. Looking through the Bill, I find myself much in sympathy with its objects and I am quite sure that it will be an improvement, indeed a landmark in the progress of social medicine in this country. We in this country have been much worried
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over these last years by thalidomide and other matters of that kind, which have, I think, brought it home to the great mass of the people that much tighter control, indeed control of the kind which is envisaged in this Bill, is necessary. But I do not really wish to discuss general problems of this kind.
There is one aspect of this matter which I think has not been touched upon, so far as I have been able to gather, in the speeches which have been made this afternoon, that is, the tremendous power which this Bill will put in the hands of the Pharmaceutical Society in many ways. A very important part of the Bill, of course, is the control which it entrusts to the Pharmaceutical Society in the shape of powers of inspection and administration of much of the machinery which is established by the Bill. I have no doubt that the gentlemen who run the Pharmaceutical Society will do their best to carry out their duty in a way which respects the rights of the shopkeepers and others over whom they will be given a good deal of power, but it may be that lower down in the ranks that duty will not be observed in the same kind of way.
I have been interested for quite a long time in herbalists. I suppose you could say that it is from the herbalists that the modern pharmacist has grown; but in growing out of the herbalist the pharmacist has departed a good long way from his original forbears. Certainly in some parts of the country there has been a certain amount of hostility between the two. I have myself come across instances where herbalists have not been altogether fairly treated locally as a result of interventions by pharmacists.
I am not at all satisfied with the safeguards which exist in the Bill at the present time. Herbal medicine is a very valuable part of medicine. Years ago the local herbalist used to have his part to play in the general pattern of medicine. He has to some extent died out. I remember as a young man coming from a rather old-fashioned part of the country where the local "bone-setter" was something of a surgeon; and out of his work, of course, the modern science of orthopædic surgery has to a large extent grown. The famous Sir Herbert Barker's family were famous "bone setters" in South Westmorland, and in the small towns there was always a herbalist whose

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herbal remedies were highly thought of and formed part of the pattern, so to speak, of medicine in those country districts. There, too, it was a business which had often been handed on from father to son. The man I have in mind was a very wise man with a considerable knowledge of these valuable remedies, and a man who was trusted, and trusted with justified confidence by his patients.
One of the encouraging features in recent times in this country has been, to some extent, a return to herbalism, and one meets people—rather like the "composters" in agriculture who object to chemical manures and insist on vegetative manures—who will take only herbal medicines. I do not belong to this fanatical brigade in any sort of way and have enormous admiration of the chemical medicines which have been built up with such skill over the years.
I do a good deal of travelling abroad, and I have been very impressed by how, in many parts of the Continent, particularly, perhaps, in Germany, Austria and parts of Switzerland, the herbal remedy is still tremendously used and has its place, so to speak, in medicine which it has rather lost in this country. At the same time, in the present generation the herbalists in our country have been building themselves up again. The modern herbalist is highly trained in his profession, and certainly I think has not received sufficient attention in the Bill which is before your Lordships this afternoon. I gather that the Government themselves realise that this is so, and some Amendments have already been accepted in another place which go some distance to improve the position, and that other Amendments may be moved at a later stage in the passage of this Bill through your Lordships' House. However, I have no doubt that a good deal further alteration is needed in order that the position of the herbalists may be effectively safeguarded. I felt that it was only right that I should make these points on the Second Reading in order to be in a position to move the necessary Amendments when the Committee stage is reached.
6.36 p.m.
LORD SEGAL: My Lords, I feel I ought to confess at the outset that I have no interest to declare. I have not been
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engaged in medical practice now for something like close on thirty years, and have long ago passed the statutory retiring age. I feel that there is little prospect, even if I had the desire to do so, of my being able to return to medical practice in the future. All that one can perhaps claim to do is to be available sometimes in an emergency, for better or for worse, if one happens to be on the spot anywhere when one's services may be needed. I am sure that I am voicing the feelings of a good many other Members of this House when I say that we listened with rather doubtful approval to the intervention of the noble Lord, Lord Shawcross, when he took exception to my noble friend Lord Sainsbury standing before your Lordships' House as an advocate on behalf of his Committee's Report.
LORD SHAWCROSS: Would the noble Lord forgive me. If I used language which suggested that, I was mistaken. I do not think I took exception to it; I said that I regretted it. I think this is entirely a matter of personal taste. I regret it because I think it is sometimes counter-productive for a Chairman of a Committee to become an advocate for his Report. The good Report is really its own best advocate, that is all. I did not intend to take exception or suggest that there was any impropriety in it.
LORD SEGAL: My Lords, in fully accepting the noble Lord's intervention, may I say that I am sure he is absolutely right in his approach to the Report of the noble Lord, Lord Sainsbury, from a legalistic point of view. I will not refer to his own declaration of interest in the subject we are discussing because again, as we all realise, it was made in absolute good faith and with a genuine desire to assist the work of this House on the eve of its approaching the Committee stage.
We are dealing here with a problem which cannot be approached exclusively on a commercial or a legalistic or governmental basis. We are dealing here with the unassessable elements of human suffering, of the unpredictability of human illness. I confess that I believe from his appearance the noble Lord, Lord Shawcross, may have been singularly fortunate in the rare occasions when he has had contact, not with the pharmaceutical industry but with the medical profession. I feel we ought to pay tribute, the highest

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possible tribute, to my noble friend Lord Sainsbury just precisely because he approaches this problem with a depth of feeling, with some degree not only of profound human understanding but, let us admit it, also of human emotion, which one cannot divorce entirely in dealing with the subject of human illness and the development of drugs to alleviate it.
It would be a very sad day for this country and for the interests of patients in this country if medical research were left exclusively in the hands of the pharmaceutical industry. We ought to give due recognition to the fact that medical research in its most outstanding achievements has been initiated simply by the strivings and the inquiries of the human mind, especially of the professionally-trained human mind, without any regard to commercial advantage or material gain. We ought to recognise this as an absolutely essential factor in dealing with a subject like the Medicines Bill. In America the whole industry has become highly over-commercialised, and severe restraints have had to be imposed on allowing the commercial aspect of the industry there to be given too free a rein. Therefore, I welcome this measure as a first major attempt, and a long overdue attempt, to rationalise the industry and to bring to bear some badly needed measure of control so as to avert human tragedy which could easily be involved if commercial interests were allowed to operate unrestrained.
I should like briefly to refer to a very important recommendation, No. 13, of the Sainsbury Committee on branded pharmaceutical products. It is generally admitted that branded products, where they already exist, should remain under their branded names, not only for the maintenance of the export market, but also for the enormous amount of good will which is attached to them. But a clear case has yet to be made out for any new pharmaceutical products licensed by the new licensing authority appearing under new branded names. The facts for and against their adoption should be carefully weighed. New goods appearing under new branded names may be more convenient for doctors to prescribe, though this is very doubtful, but we have to agree that this is not necessarily the case; and nor does it follow that new goods appearing under an ap-
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proved name would necessarily be more inconvenient for doctors to prescribe. They need not appear under their full pharmaceutical name, nor need they necessarily be given in a conveniently abbreviated form. What type of name is desirable for any new product to be given, while retaining it in a convenient form for prescribing, and ensuring that it does not suffer in its export sale, has yet to be decided. It is most important that the manufacturer's name should be retained, whether in full or whether by initials, if only to make it easily identifiable and easily dispensed.
A highly satisfactory answer could be found if the licensing authority were to revert to an old custom of giving any new product the name or initials of the manufacturer and following it by a designated number. Instances could be multiplied from Salvarsan 606 in the early days for the treatment of syphilis by chemical agents, to a more recent example in our own times the M and B 693 brand of sulphonamide, which was the pioneer of its group. These numbers become fixed almost at once in the mind of the prescribing doctor, and the initials of the manufacturer ensure that only a drug of proved efficacy, prescribed by a firm of repute, should be handed out to the patient.
This also preserves the anonymity of the drug, in certain cases where its identification ought to be withheld from the patient. I see no reason whatever why a licensing authority should not revert to this practice for any new drug approved by it for prescription by a doctor, or for exporting, to the fullest extent, without detracting in any way from the convenience of the doctor, in the best interests of the patient, and to the fullest advantage in the competitive export markets. I should like to ask the noble Baroness in her reply to state specifically the objections against reverting to the formerly well-established practice of designating drugs—certainly new drugs —by a number. I conclude by saying that this Bill is long overdue and, apart from certain minor adjustments, ought to receive the warmest approval from all sides of your Lordships' House.
6.47 p.m.
LORD AUCKLAND: My Lords, generally speaking this Bill must command a wide welcome, though I would

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register a mild protest at its having reached this House so late in the Session. I certainly do not blame those concerned with the Bill this evening, but this is a very complex Bill, with 128 Clauses and 8 Schedules, and I should have thought it would have been an ideal Bill to start in this House. I hope that in future consideration will be given to starting legislation of this kind here, because this House is uniquely qualified to give much more detailed attention to the very technical implications of this Bill than is likely to be possible at this stage of the Session.
It seems to me, as a layman in these matters (I am not a director of any pharmaceutical company, though I have visited a number and seen the various processes), that Clause 2, which sets up the Medicines Commission, is one of the mainstays of the Bill. There were long discussions in Committee in another place on this matter, and at this hour I shall not go into it at length. But we should like to know—and in Committee we shall have to go into this more thoroughly—what are to be the powers of this Commission. According to the Bill, the composition of the Commission is to be not less than eight, and there is no specified maximum. Amendments were put down in another place in an effort to achieve some specified number, but they were withdrawn.
The anxiety which many people may reasonably feel is about what the Commission is going to do. The Report of the Sainsbury Committee, which is a model of clarity, even if some of its recommendations do not universally commend themselves, seems to me to recommend very wide and sweeping powers for this Commission. They range from the safety of drugs to marketing, sales promotion and so on. I am not suggesting for one moment that the present ethics of marketing and sales promotion are anything like perfect, but I am not at all sure, having seen some of them carried out, that they are quite so bad as certain people have tried to suggest. After all, our export record in the pharmaceutical industry, as has been shown by the recent Report of the N.B.P.I., is second to none. And that would not be the case if the marketing of those involved in it were as bad as has been suggested in some quarters. I
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hope—and perhaps the Government can give some indication on this, if not to-night then during the later stages of the Bill—that at least the present terms of reference of this Commission will be limited to safety and quality, rather than include the very much more technical implications of marketing. It seems to me that this requires a much more expert set-up than I understand to be envisaged from the terms of reference of the Medicines Commission.
My Lords, I fully support the idea of having a Commission of this kind and I am sure that the Minister, who is well-respected and experienced in the medical profession, will insure that men—and, I hope, women—of the right calibre will serve on it. But I am a little concerned that the chairman is to be appointed from within the members. I wonder whether this is not a case for an independent chairman, particularly as it seems that the Commission's terms of reference may well be very wide. However, those are matters which can be probed during later stages of the Bill.
There are one or two other points that I should like to raise at this stage. First of all, there is the question of the general sale list. How is that list to be compiled? I am rather worried at the numbers of drugs which can be obtained from slot machines. Possibly "drugs" is too strong a word for some of the items, but there are a number of commodities, such as cascara, which appear to be readily obtainable, and which ought not to be, particularly if children, or even teenagers, get their hands on them, because they can be ill-used. Such commodities as aspirin may well be a different matter. But not being a doctor, I shall certainly avail myself of any correction which may be offered on that remark. However, as a vice-president of ROSPA, I am naturally particularly concerned with safety matters, especially at a time when we have a problem of drug addiction, although when we talk of "addiction" we usually have in mind other drugs. But some kind of guidance as to the types of drugs on the general sale list could be of some help.
This Bill is necessary. The powers contained in it are very wide, and I hope that we shall be accorded ample time for its remaining stages. I also hope that, in the very technical implications of this

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Bill, we shall have the benefit of the advice of noble Lords who are versed in medical drugs.
6.56 p.m.
BARONESS ELLIOT OF HARWOOD: My Lords, I do not propose to take up more than a very few minutes of your Lordships' time. I speak to-night as Chairman of the Consumer Council at the time when the Sainsbury Report, in which the Council took a keen interest, was published, and I should like to add my support to the Bill which we are discussing to-night. When I was Chairman, the Council welcomed the Report and also welcomed the Bill which is largely based on that Report. But there are one or two points that I should like to mention in this Second Reading debate to-day.
The first is that in the membership of the Commission, and of the Committees which are being set up under Clauses 2 to 5, there should be someone who represents the users of medicines. If all the other interests, including the pharmaceutical industry, are to be represented on the Commission, I think that someone who represents the consumers of the medicines should also be included. A list is given of interests which the Government are to consult and Government Departments are included. But I should like to suggest that, when the Minister is consulting such organisations and Departments, he should consult either the Consumer Council or the Patients' Association. They might be considered useful organisations, not only for consultation but for providing membership of the appropriate committees—such committees as deal with labelling or advertising—for I believe that the Government would get valuable help from representatives of those bodies.
Advertising brings many complaints to my office from consumers, often complaints of a medical or quasi-medical nature. The Council is very glad that the Minister will have power under this Bill to deal with those complaints. There was a suggestion in the Sainsbury Report that the Commission should have power to monitor advertisements. I am sure that that would be helpful and it would prevent the abuses which can arise through exaggeration in advertising.
The only other matter that I want to mention is the question of clinical trials.
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There have been occasions, no doubt very rare, when patients have been the subject of clinical trials without being consulted. I have had one or two letters suggesting that such trials were made without the knowledge or consent of the patient. I am sure that that rarely happens—indeed, doctor friends have assured me that it happens very seldom—but it should always be the policy to get a person's consent before any trial of that kind takes place. Therefore, speaking purely and simply for those who are, as it were, on the receiving end of this Medicines Bill, I hope very much that the noble Lord and the Government will remember, when they are setting up the machinery of this Bill, that the people I have mentioned can make a valuable contribution and consider whether there should be some representative on the committees of the consumer end of the product.
6.59 p.m.
BARONESS SEROTA: My Lords, this Bill has had a gratifying reception from all parts of your Lordships' House this evening—warmer, possibly, from some sections than from others. But there appears to be general agreement on the need for some control and regulation at this stage in the development of the pharmaceutical industry. All noble Lords have agreed that, although this is a complex, difficult—and indeed a very long—piece of legislation, it is a necessary one to which we attach very great importance, and one to which we shall need to give very careful consideration in its other stages as it proceeds through the House.
As I listened to the debate, I thought there was one possible exception to this general agreement; namely, the noble Lord, Lord Fraser of Lonsdale, with whose views I must confess I could not find myself in agreement. The principle of waiting until disaster occurs has surely been illustrated to be highly dangerous in this field, where human life and happiness are clearly at risk. Reference has already been made by the noble Lord, Lord Newton, and others to the thalidomide tragedy in 1962. The noble Lord, Lord Fraser of Lonsdale, has no doubt seen and tried to help the children who now live to bear witness to the results of that tragedy. We see them in our children's homes; we see parents having to cope with the upbringing of

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severely handicapped children. Surely we cannot wait until we have other similar tragedies before providing a full and comprehensive statutory framework for the control of the safety, efficacy and quality of the drugs supplied, as the noble Baroness, Lady Elliot, so rightly said, to all of us who are the consumers of drugs throughout this country.
The noble Lord, Lord Newton, reminded us at the outset of this debate of the history of events leading up to this Bill and of his particular part in its development. He was a member of the Government at that time; and it is very pleasing to the Government to know that the Opposition is with us in this particular endeavour and will support the Bill through its various stages. Almost every noble Lord who has spoken made some reference I and quite naturally so in view of its importance for the future) to the status, standing, powers, composition and functions of the Medicines Commission. We all of us listened, with the greatest interest, and indeed with the greatest respect, to the remarks of the noble Lord, Lord Sainsbury, who chaired the Committee whose valuable Report we have all read with such very great interest. There is, I think, between him and my right honourable friend, a genuine difference of opinion on this matter. None of us would wish even perhaps to attempt to persuade Lord Sainsbury to change the view that he came to, together with members of his Committee after a very long period of careful consideration.
My right honourable friend, and indeed Her Majesty's Government, for the reasons given in another place and also here to-day by my noble friend Lord Kennet when he introduced the Bill, consider that the Medicines Commission as constituted and as provided for in this Bill should be an advisory body to the Minister responsible to Parliament and therefore answerable to Parliament for its actions. I have no doubt that the points that were made in this debate on different aspects of its powers and functions, and on the way in which it will work in relation to the expert committees that are to be set up, will be fully explored on Committee stage; but on this general point of principle of the standing and status of the Commission
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I myself join with those noble Lords, including the noble Lord, Lord Shawcross, who took the view that ultimately its standing will depend on the quality of its membership. I am sure it is the intention of my right honourable friend, when appointing the Commission, to bear in mind all the comments that have been made on its composition; both here and in another place.
The noble Lord, Lord Sainsbury, apart from the one particular reservation which he made very clear to us, gave his support to the Bill, particularly in relation to advertising and sales promotion. But I am afraid I could not myself agree quite so warmly with the comments of the noble Lord, Lord Shawcross, as I could with those of the speaker who preceded him, particularly when he made what I thought were some somewhat sweeping generalisations about the procedures which the Bill provides for representations against proposed decisions under the licensing scheme. Here again, we shall be able to deal in greater detail with this particular point of his concern in Committee. I am sure the noble Lord is aware, having real the Bill, that the conclusions of the Commission have to be given to the applicant for a licence under Clause 21(6); that the reasons for the final decision by the licensing authority also have to be given under Clause 20(5), and that the appeal in Clause 99 to the High Court on the points of law also exists if there has been non-compliance with the requirements of the Bill. It is the view of my right honourable friend that these are adequate safeguards against the misuse of the procedures embodied in the Bill, and we can discuss them further in Committee, when there will be proper opportunity to ventilate the concerns of the noble Lord, Lord Shawcross, in some greater detail.
My Lords, the noble Lord, Lord Chorley, expressed his concern about the position of those who place their faith in the use of herbal medicines—which, after all, were traditionally the predecessors of modem medicine. There are, as we know, some people who still believe in the value of these traditional remedies, and the Bill makes special provision for them. I am sure the noble Lord will agree that when this Bill was

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proceeding through its various and somewhat lengthy stages in another place considerable attention was paid to this particular sphere of interest. A number of Amendments were introduced which improved the Bill in this respect. Consultations are still proceeding, and the Government intend to put down further Amendments as a result of further consideration of this particular aspect of the Bill. I hope that the noble Lord, Lord Chorley, will participate fully in those considerations when we come to the appropriate clause at the Committee stage.
The noble Lord, Lord Segal, also welcomed this Bill, and, from his distinguished experience in the field of medicine, touched on the question of branded products, suggesting that we might move instead to a numbering procedure. He probably knows (although one quite appreciates why he wished to air the point at this particular stage) that the Medicines Bill which we are considering to-day does not cover the question of branded names. This particular point was dealt with by my noble friend Lord Kennet in a Statement he made in the House on June 24, and no doubt the noble Lord, Lord Segal, will bear that in mind when he comes to think further on these matters. I would make only one point to him in passing: the very number of drugs that exist in this country to-day would be a cause of considerable difficulty if we started using numbers rather than some other form of identification. I understand that some 600 to 900 new drugs are produced each year, and those of us who have difficulty with decimals, and who are in any event fearing the onset of decimal coinage, might have even greater difficulty if his proposal were introduced.
LORD SEGAL: My Lords, will my noble friend forgive me? I hesitate to interrupt her. What I suggested was that the number attributed to the drug should be combined also with the initials of the firm which was marketing it.
BARONESS SEROTA: The noble Lord, Lord Segal, is far more familiar with these matters than I am, and I am sure that he will find adequate means to ventilate this particular suggestion, since it is not really a subject that falls within the confines of this Bill.
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My Lords, I hope that I shall not be accused of being biased, but I confess that I found the speech of the only noble Baroness to speak in this debate, Lady Elliot of Harwood, one of the most interesting of all, because, as usual, she went right to the heart of the problem leading us back to the intitial remarks of my noble friend Lord Kennet when he opened this debate—namely, the position of the consumer. The primary object of this Bill is to protect the consumer, and, in addition, to give him confidence in the drugs which are prescribed to him or are available on the open market. The noble Baroness suggested that means should be found of involving consumers in the work of the Medicines Commission. There are a number of ways in which this could be done, and she suggested that my right honourable friend might possibly wish to consult certain consumer bodies in this field—the Patients' Association, for example.
We are all consumers of drugs at some time or another, and in regard to the point made by the noble Lord, Lord Newton, at the outset when he mentioned his fear that we are becoming a nation of pill-takers, I can only say that the true answer here probably lies not in negative control but in positive health education. We listened to the suggestions of the noble Baroness, Lady Elliot of Harwood, with great interest and I am sure that my right honourable friend will read this debate and take note of her comments. I do not pretend that it will be easy to find appropriate consumer representations in this field; but the point has been made most effectively, and due note will be taken of it.
My Lords, I hope that I have covered the matters raised in this general debate. We shall be able to continue our discussions on this difficult and complex Bill further, and in greater detail when we reach the Committee stage. To the noble Lord, Lord Auckland, I would say that, as is the practice of this House, we hope to have adequate time to consider it in all its detailed clauses. There will be no attempt, even if such a thing were possible in this House, to rush it through. The main purposes of the Bill have been ventilated in this debate. It is a measure that will bring our medicines legislation up to date without restricting new developments in the future. It has been

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generally welcomed, and all are concerned to improve the nation's health and to develop new means of doing this, while at the same time ensuring the public safety. The Medicines Bill will embody in a statutory framework the successful practice which has been built up through the voluntary system that has been developed in recent years.
On Question, Bill read 2ª, and committed to a Committee of the Whole House.

FUTURE BUSINESS
7.12 p.m.
LORD BESWICK: My Lords, it may be for the convenience of the House if I say, following the exchanges that we had yesterday about the Transport Bill, that it has now been agreed that we should not take that Bill on Monday, but should concentrate on completing the Town and
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Country Planning Bill. It is then intended, if the Theatres Bill is not completed to-morrow, Friday, that we shall conclude the Committee stage on Monday next.
EARL ST. ALDWYN: My Lords, I am grateful to the noble Lord for making that Statement. Should I be right in assuming that it is not intended that this House should sit after 4 p.m. to-morrow, Friday?
LORD BESWICK: My Lords, my view is that it will be for the general convenience of all concerned if we rise at 4 o'clock to-morrow.

BRITISH RAILWAYS BILL
Reported, with Amendments.
House adjourned at thirteen minutes past seven o'clock.