Lords Sitting of 27 May 1968

Preamble
The House met at half past two of the clock: The LORD CHANCELLOR On the Woolsack.
Prayers—Read by the Lord Bishop of Manchester.

FUTURE OF BRITISH HONDURAS
LORD BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government, arising from the rejection of the arbitrator's scheme for settling the dispute between Guatemala and British Honduras, what action they are taking to ensure the economic viability and security of British Honduras.]
THE MINISTER OF STATE FOR FOREIGN AFFAIRS (LORD CHALFONT): My Lords, we have given and continue to give substantial development aid to British Honduras. We are always ready to discuss with British Honduras ways and means of strengthening its economy and to look at any request for assistance in the promotion of its economic development. With regard to defence, Her Majesty's Government will continue to be responsible for defence arrangements as long as British Honduras remains a dependent territory.
LORD BROCKWAY: My Lords, while thanking my noble friend for that Answer, may I ask him whether the Government would consider two proposals: first, that there should be a conference of the ex-British Colonies in the Caribbean with British Honduras to consider the economic development of the whole area; and secondly, in view of the Monroe Doctrine, whether there could be discussions with the Government of the United States of America regarding the frontiers of British Honduras?
LORD CHALFONT: My Lords, of course the Government will consider, as they always do, the constructive suggestion of my noble friend.

LONDON TELEPHONE DIRECTORY
2.38 p.m.
LORD DENHAM: 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, in view of the almost universal criticism of the proposed abolition of the London Telephone Directory, they are now reconsidering this proposal.]
BARONESS PHILLIPS: My Lords, the Government do not accept that there has been almost universal criticism of the plans for new London telephone directories. There has been some controversy, largely due to misunderstanding of the details. By 1975, with the very rapid growth in the number of subscribers, the present directories would more than double in size. This has caused the Post Office to examine alternatives to the present directory arrangements which would meet the needs of subscribers and might offer some advantages to them. Research into the way in which present subscribers use the number information services led to the evolution of a plan to provide each user with a single directory about the size of the existing London A-D book. This would be specially compiled to provide him with virtually all the information he needs—not only information about his own neighbourhood, but also about installations in the whole of London such as railway termini and hospitals. The proprosed plan will be the subject of an independent public opinion survey before an irrevocable decision is taken.
LORD CONESFORD: My Lords, is there any other capital city in the world that does not publish an alphabetical list of its telephone subscribers?
BARONESS PHILLIPS: My Lords, I cannot give that information to the noble Lord, but I think he will recognise that there has been a growing number of subscribers. In my own recollection—which does not go back very far—the size of the book has changed considerably over the last 10 or 15 years. There has been a constant change.
LORD DENHAM: My Lords, is the noble Baroness aware that if the Post

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Office think that this proposed proliferation of telephone directories is going to be helpful to the general public, they are almost alone in that view?
BARONESS PHILLIPS: My Lords, the noble Lord is entitled to his point of view, but I think he would have to produce substantial evidence to prove it.
LORD CARRINGTON: Why?
BARONESS PHILLIPS: Because I have studied the papers as carefully as has the noble Lord, and to make a categorical statement that there has been universal criticism—
LORD DENHAM: Almost universal.
BARONESS PHILLLIPS: —needs to be substantiated.
BARONESS BURTON OF COVENTRY: My Lords, is my noble friend aware that there certainly has been practically universal criticism of this? Is she further aware, or are the Government aware, that no subscriber in London wishes to have 36 telephone directories at home, which is what they will need? Can my noble friend give any justification as to why in the future, in addition to having telephone charges increased, if subscribers wish to telephone somebody in another borough—information which is already in the present books—and know only the name of that person they should have to pay ls. for the information?
BARONESS PHILLIPS: My Lords, in the first place, the noble Baroness was probably not present when I replied to a Question on directory inquiries a few days ago. There would not be a charge for the service, except in the case of a substantial search. In other words, if you were able to produce the name and address, and you merely wanted the telephone number, there would be no charge. The charge would be imposed if a substantial search was involved. In the second place, I cannot imagine that the noble Baroness speaks for every subscriber in London, because I do not see how she could have carried out this research in time. If a subscriber needs to have all these directories he will be able to have them. I know personally that I have not every number that I should like, because I constantly need a
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number in Surrey, Kent, Essex or Hertfordshire. One cannot have all these numbers.
BARONESS BURTON OF COVENTRY: My Lords, may I ask my noble friend whether she is aware that if I wish to telephone a Mr. Smith who lives in another borough, and I do not know his address, this will be a reckonable charge for which I shall have to pay ls.?
LORD MOLSON: My Lords, if the noble Baroness replying to the Question is not satisfied that certain noble Lords have expressed public opinion on this subject, would she state what procedure the Post Office will adopt in order to ascertain the general view of London telephone subscribers before this radical change is made?
BARONESS PHILLIPS: My Lords, I think that perhaps the noble Lord did not hear what I said, and I will repeat that the proposed plan will be the subject of an independent public opinion survey.
LORD NEWTON: My Lords, can the noble Baroness say how long the Post Office esimate it will take before one gets an answer from directory inquiries when this new system is working?
BARONESS PHILLIPS: My Lords, I have already said this, but I will repeat it; and I made a spot check last weekend in anticipation of a comment of this kind. The directory inquiry service is highly efficient, and if you were to make a comparison with other telephone services, I think it would be interesting to find out just how quickly you would receive a similar reply in other countries.
LORD NEWTON: Of course it is efficient, my Lords, but I am asking how efficient it will be when people do not have the full list of names.
LORD GLADWYN: My Lords, perhaps the noble Baroness would like to hear from some noble Lords who sympathise with this scheme and think that on the whole it would be a good one.
BARONESS PHILLIPS: My Lords, I am grateful for that remark. May I repeat that this is not actually happening next week. It is not in fact planned to start until 1970.
BARONESS GAITSKELL: My Lords, would my noble friend ask the Postmaster General whether he is aware that New York, which has about the same population as London, has one telephone directory?
LORD CROOK: My Lords, would the noble Baroness investigate and discover that in New York there are in fact five directories? The one on the hotel table is the directory which covers Manhattan, but there are four other directories of the same size.
LORD ROWLEY: My Lords, while I do not want to get involved in this controversy, may I ask my noble friend whether she will consider what I hope is a constructive suggestion; namely, that without deviating from the main policy of the Postmaster General consideration could be given to having a special directory just for the Central London district?
BARONESS PHILLIPS: My Lords, I think I can assure the noble Lord that when this scheme is put forward for discussion it will be just what the noble Lord has described. While the directory will be for the neighbourhood, it will embody also the places for which one is likely to need to find a telephone number quickly, such as railway stations, hospitals and so on. That is part of the scheme.
LORD ST. HELENS: My Lords, would the noble Baroness be kind enough to make it clear whether or not this is an alternative scheme? Because in the week-end newspapers there was the implication that the subscriber would be able to choose to have the new scheme or, alternatively, to retain the existing, but rather enlarged, telephone directories.
BARONESS PHILLIPS: My Lords, as I understand the position the subscriber will be able to choose whether he wants only the neighbourhood directory or whether he would like all the directories—in other words, the 36 to 40 volumes.
LORD STRABOLGI: My Lords, may I ask my noble friend what research is being done into embodying in the existing directory, further abbreviations, and also additional columns, so that London could retain a one-volume directory—as indeed
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is done in New York, as my noble friend Lady Gaitskell pointed out?
BARONESS PHILLIPS: My Lords, I will take note of that and will refer the suggestion to my right honourable friend. I cannot answer for him, of course, but I will let the noble Lord have an answer in due course.
THE PAYMASTER GENERAL (LORD SHACKLETON): My Lords, I am quite sure that every one of your Lordships feels absolutely passionately on this subject but there will not be time For us all to take part in the discussion to-day. Therefore I think we might move on to the next Question.

NIGERIA: SAFETY OF BRITISH CITIZENS
LORD BEAUMONT OF WHITLEY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what steps they are taking to safeguard British citizens resident in Biafra, in view of the fact that two business men, mistaken for mercenaries, were recently beaten up by Federal troops.]
LORD CHALFONT: My Lords, the Acting High Commissioner in Lagos last week sought and received renewed assurances from the Federal Nigerian Government that every effort would be made to safeguard British nationals in the secessionist areas. Representations were immediately made to the Federal authorities about the maltreatment of Mr. Blakely and Mr. Downing, and I am assured that strict instructions have been given to the troops concerned that expatriates should not be harmed.
LORD BEAUMONT OF WHITLEY: My Lords, while thanking the noble Lord for his satisfactory Answer, may I ask whether we are co-operating with the other eight countries which have nationals in Biafra in the safeguarding of the interests of foreign nationals?
LORD CHALFONT: My Lords, our contact has been exclusively with the Federal authorities. We have given them lists of names of our nationals and their

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whereabouts, so far as they are known to us, and we have received the required assurances from the Federal authorities.

MEDWAY WATER (BEWL BRIDGE RESERVOIR) BILL [H.L.]
Read 3a, and passed, and sent to the Commons.
THAMES VALLEY WATER BILL
Read 3a, with the Amendments, and passed, and returned to the Commons.
FELIXSTOWE DOCK AND RAILWAY BILL
Read 2a, and committed to the Committee on Unopposed Bills.
AIR CORPORATIONS BILL
Read 3a, and passed.

MAINTENANCE ORDERS BILL
BARONESS EMMET OF AMBERLEY: My Lords, I beg to move that the Report of Amendments be now received. May I take this opportunity of thanking the noble Lord, Lord Stonham, the Minister in charge, for the assistance he has given me, and the noble Lord, Lord Shackleton, the Leader of the House, for keeping me so constantly in mind that it has made it possible to pass this Bill to-day? And may I thank your Lordships for suspending the Standing Order in order to make it possible? I beg to move that the Report of Amendments be now received.
Moved, That the Report be now received.—(Baroness Emmet of Amberley.)
On Question, Motion agreed to.
Then, Standing Order No. 41 having been suspended (pursuant to the Resolution of May 21), Bill read 3a, with the Amendments, and passed, and returned to the Commons.

HEALTH SERVICES AND PUBLIC HEALTH BILL
2.51
LORD BESWICK: My Lords, I beg to move that the Report of Amendments be now received.
Moved, That the Report be now received.—(Lord Beswick.)
On Question, Motion agreed to.
LORD BESWICK: My Lords, the House has been so speedy in its consideration of the items on the Order Paper that my noble friend Lady Phillips is not readily available, but if it is possible for the House to concern itself for a moment or two with a careful study of the Order Paper, I am sure my noble friend will be here. She has been apprised of the situation.
LORD NEWTON: My Lords, I am sure we are all most grateful to the noble Lord for filling the breach so well. Now that the noble Baroness has returned, I wonder whether I could ask if she went to make a directory inquiry?
LORD LEATHERLAND: My Lords, is this not one of the disadvantages of unduly shortening our speeches?
Clause 25:
Extension of power of user by Crown of patented invention to user for certain services provided under Part IV of 1946 Act and 1947 Act
25. The powers exercisable in relation to a patented invention under section 46 of the Patents Act 1949 by a government department Or a person authorised by a government department shall include power to make, use, exercise and vend the invention for the production or supply of drugs and medicines required for the provision of pharmaceutical services under Part IV of the 1946 Act or Part IV of the 1947 Act, general medical services thereunder or general dental services thereunder, and any reference in that section or in sections 47 or 48 of the Patents Act 1949 to the services of the Crown shall be construed accordingly.
BARONESS PHILLIPS BARONESS PHILLIPS moved to leave out from "services", where that word first occurs, to "and", and to insert:
"general medical services or general dental services".
The noble Baroness said: My Lords, I apologise to the House. With permission, I will speak to Amendments Nos. 1, 2, 4 and 6. The purpose of these Amendments is to extend the provisions of

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Clause 25 to the Health Service in Northern Ireland and, as a consequential Amendment, to adjust the position of the clause in the Bill. As noble Lords will appreciate, it would no longer be suitable for Part I but should be included in Part IV as a provision applying to the United Kingdom as a whole. The Patent Act 1949 extends to Northern Ireland, and it seems right that as far as application to the health services is concerned there should be uniform provision in the United Kingdom. The Government of Northern Ireland wish this clause to apply equally to the Northern Ireland health services as it would to those in Great Britain, but in view of Section 4(13) of the Government of Ireland Act 1920 they could not legislate for Northern Ireland in this respect. We propose that the necessary provision be made in the clause which is now being considered. I beg to move.
Amendment moved—
Page 20, line 10, leave out from ("services") to ("and") in line 12 and insert the said new words.—(Baroness Phillips.)
LORD NEWTON: My Lords, I have no objection to the noble Baroness's proposal, but I must point out to her that the fact that she is seeking to do this now is yet more proof that this clause was never properly considered by the Government and ought never to have been in the Bill at all.
On Question, Amendment agreed to.
BARONESS PHILLIPS: My Lords, I beg to move Amendment No. 2.
Amendment moved—
Page 20, line 15, at end insert—
("() In the foregoing subsection references to pharmaceutical services, general medical services and general dental services shall be construed as referring to services of those respective kinds under Part IV of the 1946 Act, Part IV of the 1947 Act or the corresponding provisions of the law in force in Northern Ireland.").—(Baroness Phillips.)
On Question, Amendment agreed to.
LORD OGMORE LORD OGMORE moved to leave out Clause 25. The noble Lord said: My Lords, I beg to move Amendment No. 3. Your Lordships will recall that the original Clause 25 was inserted in another place after very scrappy debate. It could not be considered at all on Second Reading, it was not considered in Committee,
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and it was as a result of a Back Bench Amendment that, after a most reluctant speech, the Minister of Health accepted it. He has since stated that he accepted it on account of the vagaries of the Parliamentary timetable. He obviously did not accept it on account of the merits of the Amendment; indeed it has no merits at all.
The fact that the Government were unprepared for it and, as I think, against it in reality, is shown by the fact that when it came up here we had an intimation from the noble Baroness, Lady Phillips, that she would put down an Amendment to it on Committee stage; and she put down and moved an Amendment on Committee stage which considerably altered its scope and widened it, although she did not feel it necessary to inform the House of this situation. It widened it very considerably, and it was only because of my questions in the course of the discussion that we were informed of that fact. Then the Committee passed it without Division. It has not been allowed to remain in that position, for to-day, on Report stage, yet another Amendment has been put down to this particular clause. So we are in fact in effect considering a clause that neither House of Parliament has ever considered before in its present state, which seems an odd way of conducting business of this type.
I do not want to go through all the factors—many of your Lordships know them and you have heard me state them before—but there are one or two matters I should mention. First of all, I consider it was a breach of faith by the Minister to accept this clause at all, because he promised he would discuss the Sainsbury Report recommendations with the industry before a decision was taken and he did not do so, but just accepted this Amendment. It is highly undesirable, I would suggest, for new patent law to be passed by Parliament before the Banks Committee, which is now considering patent law as a whole, reports.
Then, again, undoubtedly it has had a grave effect on confidence in the pharmaceutical industry, and some effect on confidence in industry as a whole if patents can be seized in this way. There is already a voluntary price-fixing arrangement. Companies cannot charge what they like by any means; they have

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to go before an experienced official of the Ministry of Health and with him work out a voluntary price which shall be charged for the particular goods in question. At the present moment the Government are not quite satisfied with this arrangement. In fact a discussion is going on between the industry and the Government for a more official system—not so much a voluntary system but a more official system. The Government now come in with this big stick and, as it were, "clobber" the industry on the head during the progress of the discussions, which seems to me quite improper and irregular.
Moreover, there is the effect on the inventor. This clause is not going to encourage inventors to invent. This country has always been very fruitful in invention but very bad in development. So far as inventors of all kinds are concerned, it is not going to encourage them to go in for the considerable work and efforts and also imagination that is needed if a patent is to be successful. Then, unfortunately, there is no doubt that our practice is being followed by other nations, particularly nations of the Commonwealth, and this, I believe, will be greatly to the disadvantage of British industry as a whole. The Amendment that was included on the Committee stage, on the Motion of the Government, means that the pharmaceutical industry will be the only private sector industry which in times of peace is to suffer the sale of its inventions, patented goods, to wholesalers, retailers and consumers. This power will be given to the Government, and by the Government to a third party.
To those of your Lordships who may not have followed this discussion before, I must explain that the object of the clause, as amended, is to enable the Government to seize, or perhaps one should say to disregard, the patents of any particular product which they require for the National Health Service. This has never before been done in this way in legislation related to a particular industry. Previously, under the Patents Act 1949, there was a power in case of need, as in the case of war or the threat of war, or some circumstance of that kind, whereby the Government could take patents where they felt it was necessary
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for the public good. One quite understands that it is right that this should be done, as, for example, in 1940, or in 1914, if a war is in the offing, and when it might be absolutely necessary to have a particular gun, for instance the Bofors or the 3.7, one of the finest guns in use in the last war. In a case such as that the Government must have power to provide for the manufacture of those weapons, even though sometimes, when it is in the hands of foreigners, the patent has not yet been dealt with. In other words, they should be able to get on with the production, and the matter of the patent can be sorted out later. One quite understands that that is a serious situation and that the Government should have such power.
In 1949, the Labour Government of the day felt that this was a reasonable proposition and they took that power. I believe that it is a reasonable proposition in case of war. But that is quite different from the case of a National Health Service product, in regard to which the Government feel that they want to seize or disregard a patent. They can make arrangements through brokers to obtain the particular product from overseas, perhaps from some country where there is no Patent Law or where the actual processes are nothing like so careful as they are here, and thus can disregard the British patent altogether and bring in large quantities from abroad.
As a result of the Amendment introduced by the noble Baroness on Committee not only is this possible but, although I do not know how they propose to do it, they can proceed to set up a brokerage and wholesale system, and possibly a retail system, to sell large quantities of materials which they bring in. They may well have to make arrangements to sell the materials through chemists' shops.
Again, not only are the Government to be responsible for all this, but they are to be responsible for the security of the particular product. As we know, although a sample product may be up to standard when you inspect one particular part or a small portion of it, it can be quite different when it arrives in bulk. I know this from my experience in a

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company of which I am a director. There, enormous care is taken not only in regard to research into a product, but even in the packaging of it. If you go into the factory you will find that the product is being packaged in an area which is completely shut off and where you are not allowed to go. This is to ensure that no foreign bodies can get into the product through the air or in some other way. It is sealed off. It must be absolutely inviolate and the product must be of a certain and consistent standard. That is another point: it must be consistent, otherwise when medical practitioners prescribe a particular product they will not have the assurance that it is so.
That is all I wish to say to-day. I hope that your Lordships will feel that a matter like patents, a most technical subject affecting the whole of our trade both at home and abroad, and all sorts of British manufactures, would be much better dealt with by Parliament on the suggestion of the Government when the Banks Committee has reported, when the whole of the evidence that is now being put before that Committee has been considered and the Committee have made a Report, and that Report is presented to Parliament.
If at that time they feel that a provision of this kind is desirable, then no doubt Parliament will take that into consideration. But to put this sort of clause into a Bill which is concerned mainly with providing beds in hospitals, whether certain hospitals shall be teaching hospitals, and who should be the governing body of hospitals, seems to me to be ludicrous. We in this House particularly are trying to clean up the law and to make it more consistent and more "get-at-able". Nobody in his senses will ever look in a Bill of this kind for a complicated provision as to patents. For all those reasons, I ask your Lordships to support me and to agree with my Amendment to leave out Clause 25. I beg to move.
Amendment moved—
Leave out Clause 25.—(Lord Ogniore.)
THE LORD CHANCELLOR (LORD GARDINER): My Lords, I should tell your Lordships that if this Amendment is agreed to, I shall not be able to call Amendment No. 4.
3.7 p.m.
LORD NEWTON: My Lords, I am not going to repeat at any length the objections of my noble friends and myself to Clause 25, partly because the subject has been dealt with by the noble Lord, Lord Ogmore, in terms with which I am largely in agreement, arid also because we have discussed Clause 25 before. Briefly, our reasons arc these: first, that like the noble Lord, Lord Ogmore, we object to the fact that this clause was inserted into the Bill in the way it was in another place, all the more because at that time the Minister of Health knew and admitted that the clause was unsatisfactory. So in Committee the noble Baroness had to move to take out the whole clause. This afternoon she is seeking to amend it yet again. As I said just now, this seems absolutely clear evidence that this matter was never properly considered by the Government and that they never intended it to be in the Bill at all. It seems to me that it is contemptuous of the Government to treat the House in this way.
The second objection is that it is quite obvious, as the noble Lord, Lord Ogmore, has said, that the subject matter of this clause was not discussed in detail with the industry, and that in consequence a clear promise to the industry was broken. The noble Baroness did her best in Committee to explain this away. I do not want her to think that I am blaming her in any way at all. I am not. She is not the Minister of Health; she is just his mouthpiece in this House, and a most charming one, too. But she anticipated that I should not find her explanation convincing, and I am afraid I did not.
Our third objection is that there really was no need whatsoever to rush this clause through Parliament like this. There is not any urgency about this. I agree with the noble Lord, Lord Ogmore, and I said on Committee, that the Government really ought to have waited for the Report of the Banks Committee on the Patent system and Patent Law. Everyone to whom I have talked about this and who knows about patents, accepts, as I believe the Minister does, too, that the Banks Committee will report on the whole question of this use of patents for services of the Crown. So to jump the gun like this, as the Government have

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done, seems to me not only to be discourteous to Mr. Banks and his Committee but also imprudent—and the Government have been wasting some of their own time, I should have thought.
Finally, my Lords, although, as I said the other day, I agree with the Report of the noble Lord, Lord Sainsbury, that for the protection of the taxpayers there must in the last resort be some procedure to which Ministers have recourse if the dispute between the Government and the industry cannot be resolved, I still think that the procedure laid down under Section 46 of the Patents Act 1949 is too arbitrary to have as a permanent instrument on the Statute Book for use in time of peace. That is why I tried in Committee to move a number of Amendments to remove the arbitrariness of what the Government propose. It offends my sense of justice that when the Government have been party to a dispute with the industry, then at the end of the day the Government come down and are the judge in their own cause. There is no need for it and there ought to be some sort of reference to an independent tribunal or arbitrator before Section 46 is invoked. But unfortunately it is only too apparent, to me at any rate, that when we were discussing this clause in Committee the Government had no sympathy whatever with what I consider to be a most important principle of justice. It is for these reasons and because I cannot see that anything can be gained by trying to move further Amendments, that I must advise my noble friends to support Lord Ogmore if he takes this matter to a Division.
3.13 p.m.
LORD FRASER OF LONSDALE: My Lords, I hope to persuade the Government to withdraw the clause or the House to pass this Amendment, and I propose to argue some reasons why this should be done in the national interest. May I first declare an interest? I have for some thirty years been a director of one of the major pharmaceutical manufacturing companies, and that is why I venture to put forward a view which is of long standing and, I hope, well thought out, and which I shall hope briefly to argue. I must go back very briefly to the time when Mr. Powell was the Minister of Health in 1961. He then took power, and
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exercised it, to buy drugs in the cheapest European market because those drugs were patented here, and he hoped to, and did, save some of the taxpayers' money in the National Health Service. That, in itself, would be a good aim for any Government—to save money in the National Health Service or in any other service—but of course one has to count the cost, and it is on that question that I want to address myself.
Following upon Mr. Powell's action, a company called Pfizer brought a case which came to the House of Lords in 1965, and by three votes to two their Lordships upheld the Crown. The consequences of this have been bad for the national interest; not only bad for the companies concerned, but bad for the Health Service, bad for the health of the people, and bad for the country. The reason is that it was an encroachment upon the responsibility of boards of directors to direct that research should go on—very expensive research in some cases—in order to find new and most valuable drugs. This encroachment has been bad enough, and now Clause 25 proposes a further encroachment.
I understand, none better, that we are on the horns of a dilemma where, if we do nothing at all, we leave the Patent Law unaffected with its restrictive qualities. On the other hand, if we do what is proposed to be done, we engage in a further encroachment in a most valuable field for the nation's health. I will not shirk the profit issue because I know that that is a matter of urgent interest to many and a significant matter in the politics of to-day. If a company does not make a profit it cannot undertake research, it cannot pay good wages, it cannot pay good taxes, and perhaps it cannot survive. If, therefore, it can be shown that the research is of value, it is wise and well that the company should make a profit. I might also add that if the shareholders receive encouraging dividends they are encouraged to put more money into the company which, in turn, enables it to do even better in its research, its exploitation and its circulation of these valuable drugs when discovered.
My Lords, as in other fields, "many are called but few are chosen". A medicine company, a pharmaceutical manufacturer, has to engage in extremely expensive research employing the finest

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brains in the country and considerable and high expensive apparatus, and it has to examine literally thousands of chemicals and variations of chemical products with the hope perhaps of finding one valuable drug. Of course, the many explorations and experiments that have to be made must be paid for out of the profits on the one valuable, satisfactory, proven drug. Therefore the profits on the said drug when it comes to be sold in its early stages must be high. If looked at alone, they may appear to some to be so high as to be beyond reason, but if looked at in the light of the whole circumstance I have described they may be utterly reasonable, because if the many experiments that have failed are not paid for by the successful one, which is very rare, then further future experiments will cease, and if noble Lords will put themselves in the position of the member of a board who is required to make the decision in this matter they will see that it is the balance of profit at the end of the year which must be taken into account rather than the particular profit on a particular medicine or range of medicines.
May I examine what a patent is? A patent has two functions. One is to give the owner of the rights declared under the patent some monopoly, some rights which he can exercise exclusively, in order that he may get a profit and a return on the investment which he has made in his experiment. Another consequence of a patent is to lay bare the process, or chemical or idea which underlies any new device or invention so that all the world may know and copies—if not copies which invalidate or offend the patent, then similarities—may be made. In the whole history of the Patent Law there are not more than a handful of master patents which can be said to have held up for any length of time the development of any art or movement in science. Master patents are exceedingly rare. The effect of a patent is first to give a short-term protection; and, secondly, to lay bare what is being done so that others may find ways of doing it by variations, by going round the corner, by producing similar products or products which will have a similar effect and which will not offend the patent. There are therefore two provisions of
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the patent, both of which are taken into account.
It may be said that, in the short term, the owner of the right may hold the nation up to ransom by asking too high a price or by refusing to work the patent in the national interest. There is existing legislation under the Patent Law which enables the Government to bring pressure to bear in such a case. It should not be beyond the wit of man to provide a method of appeal should the matter be blocked and require resolution. Various suggestions have been made, one of which was emphasised in the excellent letter written to The Times on Friday by the noble Lord, Lord Shaw-cross, and supported by two other letters in The Times to-day.
Clause 25 is a further encroachment on the rights of patent owners or future patent owners. Its effect is not going to be so much that of protecting the public interest as to curtail investigation and research and thereby vilify the public interest. In fact, there is at present an extremely satisfactory arrangement between the trade and the Ministry of Health whereby any dispute about prices can be resolved. If in any particular case it should come to the point that the dispute cannot be resolved, then a suggestion such as that made by my two noble friends might well be adopted. The Government may say, "we want this power as a kind of long-stop. We do not, of course, intend to use it, and we will be most moderate and reasonable in our use of it." But the very existence of it is an inhibition in the board-room to further expenditure on research. I cannot emphasise too strongly the requirement that every incentive should be placed on every board in these matters to spend as much as possible on research in order that Britain may be the owners and possessors, through the individuals and companies concerned, of new medicines of great value in the treatment of various diseases and conditions.
I believe without fear of contra fiction that if we pass Clause 25 it will be bad for a good trade with a very fine reputation, bad for experiment and research, had for the National Health Service and bad for Britain. For those reasons I earnestly hope that the Government will withdraw this clause—a clause which

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was inserted without consultation, without consideration, and at the very last minute. It is a classic example of the criticism which is now being levelled at Parliament from various quarters as to the way in which encroachments and other handicaps upon business and industry and upon the export trade, which is so badly needed by this country, are being exercised by Her Majesty's Government. Therefore, I hope that the Government will withdraw the clause or that the House will vote for this Amendment.
3.25 p.m.
BARONESS SUMMERSKILL: My Lords, I adopt an entirely contrary attitude to that of the noble Lord. I am asking the House to-day to accept this clause. At least the noble Lord who has just spoken was completely honest. He declared his interest. He said that he had been a director of a pharmaceutical firm for many years. The noble Lord, Lord Ogmore, also declared his interest. Therefore, I would ask the House to consider that the two longest speeches which we have heard on this subject cannot have been objective.
SEVERAL NOBLE LORDS: Nonsense!
BARONESS SUMMERSKILL: Certainly it is true that if one has an interest in a matter, it is very difficult to be objective; one is much more likely to be subjective. This is an important point.
LORD NEWTON: My Lords—
BARONESS SUMMERSKILL: My Lords, the noble Lord and I have discussed this matter before. I am sure there is nothing new that he can say.
LORD NEWTON: My Lords, I should like the noble Baroness to be quite clear that I have no interest whatever in the pharmaceutical industry.
BARONESS SUMMERSKILL: My Lords, if the noble Lord had listened to me with the same attentiveness as he displayed when he suddently jumped to his feet, he would have heard me say that the two longest speeches on this subject had come from noble Lords who have an interest in this matter. I attach great importance to that fact.
I hope that the House will not be diverted on this occasion by some talk
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of procedure. This is no new matter. It has come up in this House and in another place time after time during the last 20 years. Each successive Minister of Health of whatever Party (I emphasise that this is not a Party question), has found himself frustrated by being unable to reduce the drug bill in the National Health Service, a bill which soars every year in relation to the cost of each item which appears on an E.C.10 prescription form. Chairmen of the Public Accounts Committee, including the present Prime Minister, when he was its Chairman, have brought up this matter. They have asked for officials from the Ministry of Health to go before the Committee to explain why this huge amount of money is being taken out of the public purse and why there is not some restraining influence. Every method has been adopted. It was suggested time and again that the pharmaceutical industry would respond to some voluntary arrangement. So a voluntary scheme was drawn up, and the pharmaceutical industry has pledged itself to honour it. But still the costs soar.
Why is this? If noble Lords look in their medicine cupboards, they will find little boxes, pots and bottles labelled with different names. Every one of the pharmaceutical firms is churning out—"churning out" is the only expression for it—year after year, tablets, powders, mixtures.
LORD FRASER OF LONSDALE: My Lords, will the noble Baroness—
BARONESS SUMMERSKILL: No, my Lords. I have listened quietly to the noble Lord. So many of these mixtures have the same basic elements, but one has only to inject a few perhaps harmless substances for an industry to say, "Now, we can call it by a different name."
LORD FRASER OF LONSDALE: My Lords, will the noble Baroness be so courteous as to give way for one minute? This is not what we are talking about at all. We are not talking about open sellers. We are talking about the rare prescription drug; and she knows that as well as any doctor.
BARONESS SUMMERSKILL: My Lords, I listened to the noble Lord carefully. He knows the question as well as I do, and he himself talked about the huge profits. He was talking about precisely the same thing as I was. I, as a

973
doctor, am perhaps adopting a different attitude, because I know precisely how the pharmaceutical firms in this country bring pressure to bear on the doctors to prescribe dozens and dozens of different proprietary drugs every year. Doctors are persuaded that a certain drug will have a somewhat different effect. They are persuaded by men who call themselves medical representatives—that is a euphemistic term for commercial travellers—of the pharmaceutical industry. In the British Medical Journal this week a doctor has written to other doctors and said, "A good idea is to put up a notice saying, 'No medical representatives seen'." The doctors have now got to that stage, because their time is so wasted by these men who bring in these different drugs with new names, many of which, as your Lordships know, are inadequately tested. Indeed, as we talk here to-day the thalidomide trial is being opened in Germany.
Now, why do doctors prescribe these drugs? My only indictment of my profession is that many doctors are gullible, over-worked and tired. A commercial traveller comes in and says, "This is the latest thing which this firm has produced." The doctor looks at it and looks at the glossy advertisements, which are excellent, and then he quickly writes it down. Your Lordships may say, "Well, he has to, has he not, because there is no alternative?" The alternative, my Lords, is this. Years ago, when we were faced with this problem, the Ministry of Health produced for every doctor a little book called the National Formulary, which gives a simple equivalent of many of these proprietary drugs but costing only a fraction of the amount. Doctors themselves never take these proprietary drugs; they take the National Formulary drug, which is the simple equivalent, because they know that it is equally effective.
The pharmaceutical industry in America is colossal, because for some reason or other the average American is very health conscious. The profits of the pharmaceutical industry there are quite colossal, and every big United States firm has now established a subsidiary in this country. Time after time, there is told the story that we have heard this afternoon, that so much is spent on research. But a disproportionate amount is spent
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on research, and not every firm spends money on research. Great research is done in this country in the hospitals and the medical schools. Who discovered penicillin? It was one of our wonderful doctors, standing in a simple little laboratory in St. Mary's Hospital, who recognised a mould. A great deal of the research is useful, but compared with the profit it is nothing—a mere drop in the ocean.
If your Lordships really want to hear an indictment of the pharmaceutical industry (because there is little to choose between the Americans and the British) I invite you to read the wonderful report of that great Senator, Senator Estes Kefauver, who unfortunately is now dead. The scandal—and it is a scandal—was so great in the United States that the Government set up a Committee or which he sat as Chairman. His indictment of members of the pharmaceutical profession for exploiting the people was really outstanding.
After many years of trying every other method our Government set up, a little while ago, another Committee of which the Chairman was the noble Lord, Lord Sainsbury. Its terms of reference were to examine the relationship between the pharmaceutical industry and the National Health Service. That Committee sat for a very long time, taking evidence from individuals and from industries, and it examined every aspect of the matter. The Committee finally came to the conclusion that a provision such as your Lordships are being asked to support in Clause 25 is one which would help the Ministry of Health to protect the public purse. Therefore, I ask your Lordships to realise this afternoon that you are not suddenly being asked to do something new. You are being asked to do something which, perhaps in only a small measure, will prevent this gross exploitation of the National Health Service.
VISCOUNT ADDISON: My Lords, I should like strongly to support every word the noble Baroness has said. I myself have an interest in this matter, as chairman of a hospital authority that has a budget amounting to very nearly £50 million every year, of which the drug element is greater and greater every year. Unless something is done to help to curtail it, the increasing size of the

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drug element will have an effect on the other parts of the hospital authority's budget, such as nursing and so on. I feel that the Government should strongly resist the Amendment, and that anything which can be done to try to curtail the rising drug bill is worth while, even if it may be sometimes a little beyond the ordinary course of practice in some trades. But I think that nobody in the pharmaceutical industry would complain that his profit has been very severely cut, at any rate so far, by the activities of the Ministry of Health.
3.37 p.m.
LORD SEGAL: My Lords, I ask noble Lords on the other side of the House to realise that this is in no sense a Party issue, and I am sorry that those who have some misgivings about the case put forward by those who have declared an interest are all on only one side of the House. Quite frankly, one fully recognises that they are not speaking from personal motives, but because they feel a direct responsibility to the shareholders whose interests they have to protect.
I appeal to noble Lords on the other side of the House to give just a little more careful consideration to the wider issues involved. I know of their interest in research, but I still have some doubt in my mind whether the research always comes first; whether, in some instances, it is not the fact that dividends have to come first, because of responsibility to shareholders. I am afraid that in some cases research may take a second and subsidiary place in the interests of the pharmaceutical manufacturing companies. I should have the greatest sympathy with the case of noble Lords opposite—and we on this side can respect it from every point of view—were it not that in this case the interests of sick people happen to be involved. I have nothing against profits as such. I think that where they encourage initiative, where they encourage research there is a great deal to be said for them; but not at the expense of people who happen to be ill. There one has to have some reserve and exercise some qualification.
My noble friend Lady Summerskill mentioned that penicillin, one of the greatest discoveries in the history of medicine, was not discovered on the initiative of the
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pharmaceutical companies. No less great is the case of insulin, which has been responsible for saving thousands, if not possibly millions, of lives. That discovery was initiated in the research laboratories of the University of Toronto, and in the early stages no private company, no pharmaceutical manufacturer, had any interest at all and certainly no part in its discovery. I mention these two instances as perhaps the greatest discoveries in the field of medicine, certainly during this present century.
The other point that I should like to make is this. A strong case has been made out for a right of appeal—a right of appeal by the manufacturers and a right of appeal on the part of the Ministry. But I would ask noble Lords: what right of appeal has a patient who is involved in the use of these drugs? He is entirely under the care of his doctor; and I think it is of vital importance that a doctor should be absolutely free to prescribe, according to his own judgment, without any thought of the cost of drugs, what he considers best in the interests of his patient.
What are the facts? Because of the enormous cost of the drug bill to our National Health Service, every doctor today is under a restraint exercised by the Ministry of Health. His quantities of drugs are scrutinised; the frequency with which he prescribes is scrutinised; and his total drug bill is scrutinised. Returns are made by him periodically; all his prescriptions are carefully analysed, and the costs are set against him—and adoctor can be made liable for the cost of drugs which he has himself prescribed, not in his own interests, not because he has some vested interest in what he is doing, but simply because he has served the interests of his patient, in an attempt to get him well as quickly as possible. It is, of course, in the interests of the country as a whole that a doctor should not be restricted in any way in his prescription of drugs. I speak here from a great deal of personal experience, because at one period I had to deal with cases of over-prescribing on the part of doctors who were penalised because they thought, according to their own judgment, they were doing what was best in the interests of their patients.
I should very much like Members opposite to consider that whereas the

977
drug manufacturers have Members of this House who are able to protect their interests, there is really no-one here, except the doctors or those who work on our Hospital Boards, who is able to put forward the interests of the patient. So far from being an encroachment on the rights of patent holders, as was put forward by several Members on the opposite side of the House, I believe that this particular clause, if retained as the Government wish it to be retained, would be directly in the wider interests of the drug manufacturers, because they would feel that, instead of having a vested interest in disease, they would have an opportunity to serve the interests of the sick people of this country. That is why I hope that the whole House will pause, will hesitate, before depriving the Government of the ultimate right, in the interests of the patients, of the sick people of this country, to the final possibility of being able to bring some pressure to bear where costs are known to be excessive, as a restraint upon unduly excessive profits, thereby benefiting the interests of those who stand in greatest need of these drugs, the sick people of this country.
3.44 p.m.
LORD AUCKLAND: My Lords, if it is true that this is developing into a political dog-fight I regret it as much as anyone and I certainly do not intend to increase the political heat, but I would draw your Lordships' attention to paragraph 265 of the Sainsbury Report. In the interests of time, I will not quote the whole paragraph, but the gist of it is that it refers to the fact that the Banks Committee is looking into the problem of patents and urges that the result of those inquiries should be awaited before action is taken. At least, that is how I read the Report; but it is in print for all to see. Therefore, on those grounds alone, leaving aside the merits or otherwise of the subject we are discussing, surely that is one very good reason for not rushing our fences, which is what will happen if this clause goes through.
I would say one word about sales promotion, because I am the associate director of a company which has done a certain amount of training in the pharmaceutical industry. I may say that I have not been concerned in this personally. It
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may be true that some companies have pushed their sales promotion too far. That happens in every company, whether you are selling brushes or whether you are selling soup. There is a tendency, perhaps, towards over-selling. But I know that in the vast majority of pharmaceutical companies to-clay the training of their sales representatives is every bit as full and as selective as it is in any other company. Therefore, I do not think that criticism of the sales promotion activities of the pharmaceutical companies these days is as justified as many people make out. I have visited a number of pharmaceutical companies, I have seen the research carried out and I have myself posed searching questions. However, solely on the grounds of paragraph 265 of this Report, which seems to sum up the whole argument around which this afternoon's discussion is centred, I urge the Government to have second thoughts.
3.48 p.m.
LORD SAINSBURY: My Lords, during the Committee stage I explained how the Committee of which I was the chairman came to their unanimous recommendation, No. 11, to extend Section 46 of the Patents Act to the general pharmaceutical service, and I have no intention of encroaching upon the patience of your Lordships' House by making the same speech a second time. I would add, however, that it was a unanimous recommendation; that there were people of all Parties and of none on the Committee; and that we had the advice of a very eminent patent lawyer who was also on the Committee.
I listened with the greatest attention to the speeches made on the Committee stage and to those made this afternoon, but I am still brought up against the problem of negotiation between the Departments of Health and the pharmaceutical industry—or, rather, the particular firm. In the past we have been faced with a deadlock. Under the voluntary price regulations scheme, after lengthy negotiations we have been faced with deadlock; and we were convinced that the Ministry needed a weapon of last resort. We were also convinced, after endless discussion and the endless hearing of evidence, that the negotiating weights between the Department, on the

979
one hand, and the industry, on the other, were not evenly balanced, and that is why we made this recommendation.
I think that we on this side of the House are entitled to ask this question of the Conservatives on the Opposition Benches. They have some expectation at least of being in power perhaps one day; whereas the chances of others in opposition are somewhat more remote. Are they saying in fact—because this is the real difference between us—that Section 46 of the Patents Act should never have extended the uses of the Crown to the hospital service in 1961?
LORD NEWTON: My Lords, my response to the challenge of the noble Lord, Lord Sainsbury— for he directly asks me this question—is to say that I would save the time of the House by asking him to read to-morrow in Hansard what I have said this afternoon and what I said on the Committee stage.
LORD SAINSBURY: My Lords, I have the greatest respect for the noble Lord, Lord Newton, and I know that he is very knowledgeable on all matters dealing with health. I know that he did not go into the Department of Health until 1962; but he must have known then the great difficulties that can arise in the matter of negotiation. I never thought that I should live to see it, but on this occasion I agree with Mr. Enoch Powell. I believe that the facts justify his use of the section.
My Lords, I want to move now to a point of logic. If, in the interests of the taxpayer, to safeguard the taxpayers' money, to be fair to both the individual firms and to the public interest, it is right to extend the uses of the Crown to the hospital service, then to my way of thinking it is undoubtedly logical to extend the use to the whole service which was brought into being under the same Acts. Therefore, I strongly recommend your Lordships to leave on one side the question of research. We all know of the very valuable research that is done by certain firms in the industry; we know the contribution that that research has made to the healing and to the saving of life, and in our Report my Committee pay tribute to the industry. But there is ample provision in the voluntary price regulations to cover the question of
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genuine research costs. This is a power which I believe the Ministers and the Department of Health should have as a last resort. I hope, therefore, that your Lordships will reject Lord Ogmore's Amendment.
3.54 p.m.
LORD FERRIER: My Lords, I had hoped that we should not be going over so much of the old ground as we have done. It is with reluctance that I ask for your Lordships' patience. I am in a peculiar position, in that I am not a chemist; I am an industrialist. It so happened that I was retired from India in 1951 and became chairman of a pharmaceutical company. I think I was invited to become so because of my expertise as an industrialist and as one expert in man management. I was in that position for 12 years, but resigned some years ago, so that I no longer have any executive connection with the industry. It therefore occurs to me that I am in a peculiar position to answer in some measure what has been said opposite in criticism of this remarkable industry which I was proud and thrilled to serve, and in which I found an interest of the deepest emotional sort. The noble Lord, Lord Segal, said that the doctors' main interest is in his patient. Of course, it is! But the main interest of the pharmaceutical manufacturer is in the patient.
BARONESS SUMMERSKILL: Oh!
LORD FERRIER: My Lords, the noble Baroness laughs. But this is the case. It is obvious that what pays is good medicine. That the noble Baroness laughs, justifies my getting on my feet to protest at what has been said opposite. It has been deeply wounding to anybody who, like myself, has served in this splendid industry. Imputations have been made about noble Lords on my right and left because they are interested. Is there any rule against a noble Lord coming to your Lordships' House with the expertise he possesses to lay before your Lordships the facts of the case?
LORD SEGAL: My Lords, would the noble Lord forgive me for interrupting? Would he not agree that research in medicine should be kept entirely free from the question of profit or cost or

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dividends, in order to achieve satisfactory results?
LORD FERRIER: No, my Lords; I would not agree in any way. The company with which I was concerned had been in Scotland for many years. This group of companies had been in the closest association with the Edinburgh medical school—they made the first chloroform used by Dr. Simpson in the middle of the last century. The question of research is entirely a matter for the manufacturer. The noble Lord, Lord Fraser, touched on a matter not mentioned in the previous exchanges, the question of disclosures of inventions in terms of the patent. This is a very interesting and complex matter. As the noble Lord, Lord Auckland, has explained, the Sainsbury Report pointed out how complex it is.
This matter of research is of such complexity that, whereas pure research from the medical angle can come from the medical school, research on what is possible in terms of pharmaceutical development and chemical compounds can go hand in hand with that in the care of the industry. I hesitate to go over old ground, but as I said previously on Committee stage, Pfizer's expenditure in research is greater than that of all the British pharmaceutical industry put together. What British industry spends is small compared with world expenditure.
But to come to the point made by the noble Lord, Lord Sainsbury, in asking us on this side whether we agree with Mr. Enoch Powell's action in 1961, I roundly say that I do not; that I never did; that I said so then and say so to-day. We were wrong then and we should be wrong to-day. I do not mind saying that if, when my Party are in power, any such proposal were to be put on the Statute Book—because I trust your Lordships will reject it to-day—I should leave the Party and go to the Cross-Benches. This is a political matter. It is no use saying that it should not be regarded as a Party matter. This proposal, admittedly initiated by Mr. Enoch Powell, is a bludgeon with which to drive a wedge into the very foundations of our way of life.
SEVERAL NOBLE LORDS: Oh!
LORD FERRIER: Noble Lords may laugh. But this game has gone on too
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long. Not only has the clause bee -I slipped in on the quiet; but as it was in the case of Enoch Powell, so it is to-day. If you start interfering with an individual's freedom to patent his invention and to profit thereby; and if, because it makes a profit you say that he must not do that, then that is quite wrong. And for anybody who has read the papers in connection with the Pfizer case to say that they were not justified in challenging the price proposed is also quite wrong. They were entitled to say so.
My Lords, for the benefit of those who were not at the Committee stage, may I say that it is fair to repeat that one of the proposals made by the noble Lord, Lord Newton, was that there shot Id be a system for arbitration. The Government rejected that. If we appeal to logic and to fairness, would it not have been possible to accept this middle course; namely, that there should be a provision—as there is in the French Patent Law—whereby if the State acquires an interest in a patent, compensation is referred to an independent body? This would be fair, and I do not think that any reasonable man would reject it. I believe that the clause, as it stands, is wrong. I believe that it was wrong when Section 46 was used in 1961, and I hope that that we shall carry Lord Ogmore's Amendment. I shall go into the Lobby with him.
4.2 p.m.
LORD PLATT: My Lords, I wonder whether your Lordships' House would accept a little cooling medicine from the Cross-Benches? There are only one or two things which I want to say, briefly, and the first is about research. An enormous amount of modern medical discovery has come from the pharmaceutical industry (in which I have no financial interest whatsoever) and there is no gainsaying this. I am old enough to remember the discovery of insulin by a medical student—against a good deal of or position, may I say. But it had to be developed in collaboration with the industry. The cure of pernicious anemia was worked out by some lucky accidents in an academic department. The discovery of the active principle was worked out in the laboratories of the pharmaceutical industry. We have heard of penicillin which was discovered accidentally by dear Alex Fleming. But penicillin was not developed for ten years, and when Florey and Chain

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took it over and worked out some better ways of producing it, industry was immediately concerned again before it could be produced. All the later antibiotics, I think without exception, have been discovered in the laboratories of the pharmaceutical industry, to say nothing of modern as well as ancient anesthetics and tranquillisers, and a whole host of other drugs. So we must not get this out of focus.
I think we have got rather far from the issue. For me the issue is not whether the pharmaceutical industry should make the enormous profits which it unquestionably does, but whether putting this clause in this Bill is the right way to deal with it. Speaking from these Benches I am not yet convinced that this is the right way to deal with the situation. I should like to see a great deal more consideration given to it in a different way, perhaps with a view to bringing in some different kind of safeguard in the nature of arbitration or something of that kind.
LORD CONESFORD: My Lords, I should like to support this Amendment. Let me say at once that I neither have nor ever have had any interest whatsoever in the pharmaceutical industry, but I have had some interest in Patent Law and the law of copyright; not from ever having practised in these particular branches of the law but because from 1951 to 1955 I was a Minister in the Board of Trade, the Department concerned with those two aspects of the law.
I was convinced that the Government were unwise to include this clause in the Bill by a letter from the noble and learned Lord, Lord Shawcross, which appeared in The Times a few days ago. I respect the attitude and the arguments put forward with such feeling by the noble Lord, Lord Segal, but I do not regard them as arguments for extending Section 46 of the Patents Act 1949 without any further inquiry. The noble Lord, Lord Sainsbury, asked whether we challenged the very existence of that section. I should certainly not be in a position to do so, because I was a member of a Government which certainly tolerated its existence on the Statute Book for a considerable time; but when the noble Lord says that it is obvious that we ought to extend its application without any
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further argument or inquiry, he does not convince me at all.
I agree with what was said by the noble Lord, Lord Ogmore, when moving this Amendment. Reference has been made by several noble Lords to the Banks Committee. I think that the Banks Committee are considering a matter very relevant to what we are considering now. It seems to me extraordinary that the Banks Committee should be considering this very subject, and that, before we hear the views of that Committee, and know the effect that evidence may have upon them, we should decide this matter in this way despite all the arguments put forward. The noble Lord, Lord Segal, said that surely we ought to disregard patent rights when we think of the merits. Perhaps I misunderstood him, but I thought that in his view the interests of the patient were so great that any claim that we were unjustly extending interference with patent rights did not carry much conviction.
LORD SEGAL: My Lords, I thank the noble Lord, Lord Conesford, for giving way. I wish to make clear that the interests of the patient must always demand that a doctor should have the unrestricted right to prescribe what he thinks is in the interests of his patient, regardless of the cost of the drugs involved.
LORD CONESFORD: My Lords, I do not see anything in the opposition to or advocacy of this clause that has the slightest bearing on what a doctor should prescribe. I may have misunderstood the point, but I cannot see that there is anything to stop a doctor from prescribing what he wishes.
LORD SEGAL: My Lords, I am exceedingly sorry, and I hope that the noble Lord will forgive me for intervening again. I endeavoured to make clear that the doctor was under severe restraint, severe penalties, for prescribing for a patient just because of the cost of the drugs involved. Surely this is a matter which bears directly on the clause which the Government wish to see retained, enabling them in the last resort to exercise some control over the cost of drugs directly in the interests of the patient.
LORD CONESFORD: Yes, my Lords. In other words, a doctor, while having the legal right to prescribe anything he likes, may find himself prescribing something much too expensive because of the operation of the Patent Law. If the noble Lords says that, that shows that an extension such as is proposed in the clause ought to be further examined. If he says that the case for such a clause ought to be further examined, 1 would not question it. What I do question is disregarding or extending interference with patent rights without inquiry. If I may give a parallel—I do not want to develop it, because I do not want to extend the debate—copyright is not unlike patents in certain respects. Many people who wish to confer a benefit on very poor nations may think that a very good way to cheapen books might be to disregard the copyright of authors. In fact, there has been a recent example where that was attempted. That is extremely undesirable. I do not believe that, in dealing with patents or with copyright, we ought to disregard the legal rights of the copyright-holder or patent-holder, or disregard the latter's objection to an extension of the operation of Section 46 of the 1949 Act without the inquiry which I thought was now taking place.
I understood from the noble Lord, Lord Ogmore, from the noble Lord, Lord Shawcross, in his letter to The Times, and from other speakers that this very subject is now being inquired into by an expert committee. I shall vote for the deletion of this clause, not because I take the view that something may not ultimately be required—on that I have an open mind—but because I think it undesirable to make a questionable and hotly contested extension of the application of this section before we know the views of the Committee inquiring into the subject.
LORD COLERAINE: My Lords, in order to put myself straight with the noble Baroness, Lady Surnmerskill, I must explain that I, too, take a subjective view of this problem—in other words, I have an interest in the pharmaceutical industry. After listening to the noble Lord, Lord Platt, I have no reason to apologise for such an interest. I suppose that most of us, in our views on
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public questions, are more subjective than we imagine. Certainly, if the speech of the noble Baroness was an example of objectivity, I think that I must get myself a new dictionary.
There are only two points that I want to make now, and both of them arise out of what was said by the noble Lord, Lord Sainsbury. He said that his Committee was absolutely unanimous on this point. That is obviously a factor which should weigh heavily with us, but it is not the only factor. The noble Lord and his Committee were concerned with the pharmaceutical industry alone, and this question of patents and the kind of intrusion which the Government should be able to make into patent rights concerns a far wider field than the pharmaceutical industry; it concerns industry as a whole. Since the Banks Committee is considering these matters in this wider context, it seems absurd that this point should be forced into this Bill at this particular time.
The other point I should like to take up is this. The noble Lord, Lord Sainsbury, said that in his view the negotiations by the Ministry and the industry were apt to come to a deadlock, and it was necessary that the Ministry should have a weapon of last resort.
LORD SAINSBURY: My Lords, I did not want to imply, and I thought I had not, that this was a general occurrence: it was a very rare occurrence, which had happened in the past and could happen again. The majority of agreements between the Health Department arid the industry are settled after due negotiation. But we were thinking in terms of a possible deadlock in a very small minority of cases.
LORD COLERAINE: My Lords, I am grateful to the noble Lord for putting me right if I have expressed wrongly what he was saying. But the point I put to him is this. Clearly, there is the possibility, to put it no higher, that he envisaged. I think that the Ministry, representing the taxpayer—representing, if you like, the patient—should have in reserve some power to resolve that deadlock. But what seems to me to be quite unconscionable is that they should have this particular power, and that they should be, as the noble Lord, Lord Newton, said, Judge in a case in which the Ministry

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itself is vitally interested. I cannot see why there should not be some tribunal, distinct from the industry and distinct from the Ministry, to which these rare cases should be referrred.
It is all very well to say that this power will not be used, but it is there as a threat, and I suggest that a threat in reserve is always a threat in use. I think that we are giving too much power to the Ministry. In all the public debate that is going on now, the whole tenor of the public voice is not that the Ministers have too little power and Parliament too much, but that the Ministers have too much power and Parliament too little. This clause is still further adding to the power of the Government; and not because it is necessary for the Government to have this power but because it might be necessary in some hypothetical future. And it adds nothing to the power of Parliament. For that reason, I will certainly support the Amendment.
4.17 p.m.
LORD RITCHIE-CALDER: My Lords, since everyone is declaring an interest, I had better declare mine. My interest is that I have written a book about the pharmaceutical industry. The insight which I got then confirms me in going into the Lobby in support of this clause. We have been reminiscing and historicising about this matter, but in point of fact what we are talking about is perfectly straightforward. My noble friend Lady Summerskill emphasised the point. The fact is that drugs which are for the benefit of mankind are being sold at a ransom price. There is no argument about that, and there is no justification whatever in the argument about the totality of the expenditure on research. I know that a lot of money is spent on certain items. But we are talking about an industry which has become fantastically extravagant in terms of recovery of dividends and is intolerably non-extravagant in its attention to the public.
I say this with conviction because not only have I had some insight into the practices of the industry—with a great deal of help from the industry, I hasten to add—but I have also studied the Kefauver Report. I think it is an exaggeration to say that our great dis-
988
coveries have come from the pharmaceutical industry. The refinements of our great discoveries certainly have. I have still to find out the degree of risk which many companies took in exploiting what was a self-evident fact. I would remind your Lordships that the patents for penicillin, discovered by Fleming, Florey and Chain, stand in the British Patents Office in the name of J. A. Moyers, of Peoria, U.S.A. It is a blocking patent, and I should say that that is substantially true of many others.
I should like to ask the noble Lord, Lord Platt, to whom I defer with great respect on this, to tell me how many of the really outstanding discoveries of the post-war world came from the pharmaceutical industry and not from academic research. I can only think of one—and that is, LSD.
LORD PLATT: My Lords, the sulphonamides are a very good example.
LORD RITCHIE-CALDER: My Lords, in point of fact the sulphonamides came from the dyestuff industry. But what are the others? It you think of the tranquiliser and so on, they came derivatively from pure research and not from the industry.
LORD PLATT: My Lords, unquestionably the greatest gains have been from a happy collaboration between academic research and industry; and industry has often come in at a very early stage and made the real discovery—as, for instance, the active principle of vitamin B12, which I gave; and, of course, streptomycin and various others have been largely worked out by industry.
LORD RITCHIE-CALDER: My Lords, the case which the noble Lord cites is an extremely interesting one of the relationship with the industry. Vitamin B12 was discovered by Glaxo and exploited in America with a fortnight's advantage. But what we are talking about is the question of whether or not an industry which is dedicated to the welfare of mankind is entitled to go to the extreme to which the noble Lord, Lord Sainsbury, is trying to prevent them going: that of holding the patients to ransom. My answer is emphatically, No. As the noble Lord, Lord Sainsbury, has pointed out the clause we are discussing to-day is a clause of last resort.
4.22 p.m.
BARONESS PHILLIPS: My Lords, I have listened with great interest, and, if I may say so, a sense of deep humility, to the contributions from noble Lords in all parts of the House. The knowledge which so many of your Lordships have shown must have contributed to clearing the air for those of us who have perhaps not so much knowledge of the industry as others have. I do not intend to speak at great length, but I should like to attempt to reply to the points which have been directly put to me.
The noble Lord, Lord Newton, and also, I think, the noble Lord, Lord Ogmore, made some reference again to the fact that this clause was slipped in. In fact, as those of your Lordships who have studied the Hansard of the other place will know, this clause was discussed on the Floor of the other place. On Second Reading in your Lordships' House I said that I should be submitting an Amendment, and when several noble Lords picked up this point and asked whether the substance would he changed, I quite categorically said that the substance would be unchanged. In other words, I feel that this is a rather unfair debating point, because the clause which we are discussing is substantially the same.
I should like to emphasise what the noble Lord, Lord Sainsbury, has said so eloquently. His Committee said that there must be some procedure to which the Ministry could resort if negotiations on the prices of pharmaceutical products failed. Listening to some of your Lordships, one would get the impression that the Government were to-morrow going to rush out and immediately take up arms against the pharmaceutical industry. Perhaps I may repeat once again that the Minister has a great interest in maintaining a strong pharmaceutical industry; indeed, he has on many occasions paid tribute to the contributions which the industry has made.
Since several noble Lords have quoted Lord Sainsbury's excellent Report, I feel it is wise if I refer to one passage which shows the effect of Section 46, as I feel that there has been occasionally a suggestion that there is an element of doubt about it. When the provisions of Section 46 were used by the Minister in 1961
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the evidence available to the Ministry suggested that the prices of some of the widely used patented medicines wire unreasonably high. It was known that some of them were available from Foreign sources at much lower prices. And in May, 1961, the Minister announced in another place that he proposed to use Section 46 for the purpose of obtaining patented drugs for the hospital services, and hospitals were directed to discontinue purchases of such products from unlicensed sources. Tenders were invited by advertisement for certain medicines which were widely used in hospitals and were showing substantial differences of price between patentees and unlicensed suppliers. These medicines, in the Minister's view, had been in use long enough for the patentees to have had a reasonable opportunity to recoup their expenditure on research.
The leading companies tendered only for medicines for which they were the patentees or licensees, and with the exception of one, all of them quoted existing hospital prices. Substantially lower tenders came from small companies relying on Continental sources either for raw material or for the finished article. Samples were tested by the Government chemist. Inquiries were made into the status of the prospective suppliers, and the officers of the Ministry inspected the premises both of the manufacturers' board and of the suppliers in the United Kingdom. Contracts were awarded on the basis of each batch of material imported, and, where appropriate, each batch of final presentation was tested by the Government chemist and a satisfactory declaration was required before the batch was released to hospitals.
In the event, Section 46 was used in relation to five different medicines The differences between the original price and "Section 46" prices were very great, even allowing for any probable level of compensation which the Ministry might be advised to pay to the patentee. They are demonstrated by some of the figures in a table in the Report from which I have extracted the following: For medicine A the original patentee price in 1961 was 153s. 4d.; but the Section 46 supplied price was 33s. 10d. For medicine B the respective prices were 153s. 4d. and 71s.; for medicine C, 153s. 4d. and 51s. 6d; for medicine D,

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107s. 2d. and 15s.; and for medicine E, 170s. and 20s. 2d. As the Report says, in this instance the differences were very great. I think your Lordships will agree that it is in circumstances of this kind that the Minister envisages using this clause; and only in such circumstances. We know that the voluntary price-fixing arrangement works well, but the Sainsbury Committee quite categorically stated that the Minister should have the power in the clause as a last resort should negotiations fail.
The noble Lord, Lord Auckland, did not quote all of paragraph 265 from the Sainsbury Report, but referred to a different section when dealing with the question of the patentee's monopoly rights. As the noble Lord, Lord Sainsbury, has said, his Committee excluded from waiting for the Banks Committee Report the question of the clause we are considering to-day. I wonder whether the noble Lord, Lord Auckland, noted that the first sentence of the paragraph to which he referred says:
"We have noted elsewhere that most of us doubt whether a patent monopoly of 16 years is necessary to induce adequate research and innovation in the pharmaceutical industry."
In other words, my Lords, I think the case for this clause has been made out, and I would ask your Lordships to reject this Amendment.
LORD OGMORE: My Lords, I shall be very brief in replying to the debate—as is my right.
SEVERAL NOBLE LORDS: Hear, hear!
LORD OGMORE: Well, my Lords, a good deal was said which I think is quite immaterial. I believe that the noble Lord who really put his finger on this was the noble Lord, Lord Conesford. It is not a question at all of whether the prices of pharmaceutical products are or are not too great, but of whether this clause should be in this Bill. In reply to the noble Lord, Lord Conesford, I should like to assure him that the Banks Committee, which was appointed by the President of the Board of Trade, is reviewing the Patent Law and the patent system, and is expected to report in the not too distant future. I have all the way through admitted my interest, but it is
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the custom of your Lordships' House that people with an interest can sit and speak here. It does not necessarily follow that, because we have a personal interest, we have no regard for the public wellbeing—and I am certain that noble Lords on all sides of the House spoke with that in mind—although we differ on certain aspects.
In my view it is absolutely absurd—I can think of no other word for it—to put a clause of this kind in a Bill which has nothing at all to do with patents, and nothing to do with pharmaceutical products for that matter, at the very moment when I hope we shall have the whole issue considered and reported on by the Banks Committee. As the noble Lord, Lord Sainsbury, said, in an extreme case there may be difficulty, because the Government are, as it were, the customer as well as being expected to "hold the ring". Of course the Banks Committee may produce a good solution, and therefore I suggest that it would be most undesirable if we were to pass a clause of this kind, only to find, in a fortnight to three weeks' time, that the Banks Committee come up with something far better.
Therefore, I ask your Lordships to put right out of your minds the question of whether the products of the pharmaceutical industry cost too much. That is nothing to do with the matter. The prices of all pharmaceutical products are agreed by voluntary agreement with the Ministry, and at this particular moment the Ministry is in discussion with the industry as to another and, they think, a better system. So there is no question of allowing the industry to make fantastic profits.
I wish to make one other point in fairness to the industry. I should like to repeat what Sir Derrick Dunlop, the Chairman of the Committee on Safety of Drugs—a Government Committee—has said about the pharmaceutical industry. He said:
"The pharmaceutical industry has made enormous contributions to our society. Professor Chain, of penicillin fame, recently reviewed the 66 most valuable compounds introduced to medicine since aspirin in 1899. His analysis showed that only nine of these came from universities and research institutes, the rest came from scientists in the pharmaceutical industry."

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I think that absolutely refutes the idea that the pharmaceutical industry is interested only in profits and not in research. That view was in fact corroborated to-day by the noble Lord, Lord Platt, who for many years was Professor of Medicine at university. On Second Reading the noble Lord said:
"If the noble Lord, Lord Ogmore, has read my Harveian Oration to the Royal College of Physicians, he will know that I support his claim that a very large number of advances in therapeutics which have come in our life
Resolved in the affirmative, and Amendment agreed to accordingly.
time have come not through the medical profession but through the pharmaceutical industry."—[OFFICIAL REPORT, 23/4/68, col. 580.]
With those remarks I think I need do no more than ask your Lordships to support me in the Lobby to-day.
4.34 p.m.
On Question, Whether the said Amendment (No. 3) shall be agreed to?
Their Lordships divided: Contents, 93; Not-Contents, 63.

CONTENTS

Aberdeen and Temair, M.

Dundonald, E.

Milverton, L.

Ailwyn, L.

Ebbisham, L.

Molson, L.

Albermarle, E.

Effingham, E.

Monsell, V.

Alport, L.

Elliot of Harwood, Bs.

Morrison, L.

Amherst, E.

Emmet of Amberley, Bs.

Mowbray and Stourton, L. [Teller.]

Amulree, L.

Falkland, V.

Asquith of Yarnbury, Bs.

Ferrier, L.

Newton, L.

Atholl, D.

Forester, L.

Nugent of Guildford, L

Auckland, L.

Fraser of Lonsdale, L.

Oakshott, L.

Balfour of Inchrye, L.

Furness, V.

Ogmore, L. [Teller.]

Bannerman of Kildonan, L.

Goschen, V.

Platt, L.

Beaumont of Whitley, L.

Greenway, L.

Rankeillour, L.

Berkeley, Bs.

Grenfell, L.

Rathcavan, L.

Bessborough, E.

Grimston of Westbury, L.

Rea, L.

Brentford, V.

Henley, L.

Redesdale, L.

Brooke of Cumnor, L.

Howard of Glossop, L.

Ruthven of Freeland, Ly.

Brooke of Ystradfellte, Bs.

Hunt, L.

St. Aldwyn, E.

Buckton, L.

Iddesleigh, E.

St. Helens, L

Carrington, L.

Ilford, L.

Sempill, Ly.

Clwyd, L.

Inchyra, L.

Stamp, L.

Coleraine, L.

Inglewood, L.

Stonehaven, V.

Conesford, L.

Jessel, L.

Strathclyde, L.

Craigavon, V.

Kilmany, L.

Swaythling, L.

Craigmyle, L.

Lovat, L.

Teviot, L.

Crathorne, L.

Lucas of Chilworth, L.

Teynham, L.

Croft, L.

Luke, L.

Thurlow, L.

Daventry, V.

MacAndrew, L.

Trefgarne, L.

Denham, L.

Macpherson of Drumochter, L.

Vivian, L.

Derwent, L.

Margadale, L.

Wade, L.

Dilhorne, V.

Merrivale, L.

Wakefield of Kendal, L.

Drumalbyn, L.

Meston, L.

Woolton, E.

Dudley, L.

NOT-CONTENTS

Addison, V.

Hilton of Upton, L. [Teller.]

Ritchie-Calder, L.

Archibald, L.

Hirshfield, L.

Rowley, L.

Arwyn, L.

Kilbracken, L.

Royle, L.

Beswick, L.

Kirkwood, L.

Rushholme, L.

Birk, Bs.

Latham, L.

Sainsbury, L.

Blyton, L.

Leatherland, L.

Samuel, V.

Boothby, L.

Listowel, E.

Segal, L.

Bowles, L.

Llewelyn-Davies of Hastoe, Bs.

Serota, Bs. [Teller.]

Boyd-Orr, L.

McLeavy, L.

Shackleton, L.

Brockway, L.

Mais, L.

Shepherd, L.

Buckinghamshire, E.

Milner of Leeds, L.

Silkin, L.

Burden, L.

Mitchison, L.

Sorensen, L.

Chalfont, L.

Morris of Kenwood, L.

Southwark, Bp.

Champion, L.

Moyle, L.

Stonham, L.

Crook, L.

Noel-Buxton, L.

Strabolgi, L.

Faringdon, L.

Pargiter, L.

Strang, L.

Gardiner, L. (L. Chancellor.)

Peddie, L.

Strange, L.

Garnsworthy, L.

Phillips, Bs.

Summerskill, Bs.

Geddes of Epsom, L.

Plummer, Bs.

Taylor of Mansfield, L.

Granville-West, L.

Popplewell, L.

Walston, L.

Henderson, L.

Rhodes, L.

Wells-Pestell, L.

4.45 p.m.
BARONESS PHILLIPS BARONESS PHILLIPS moved, after subsection (6), to insert:
"() The power conferred by subsection (1) above to make regulations shall be exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament."
The noble Baroness said: My Lords, Clause 63(1)(b) enables the Minister to make regulations specifying the classes of persons for whom he can provide instruction in connection with activities in the health and welfare services (other than the hospital services, which are covered by subsection (1)(a) of the clause). This Amendment has the effect of making the Minister's power to make regulations under subsection (1)(b) exercisable by Statutory Instrument subject to annulment in pursuance of a Resolution of either House of Parliament. That simply brings the clause into line with all the other provisions in the Bill which confer on the Minister a power to make regulations, and corrects an unintended omission. I beg to move.
Amendment moved—
Page 44, line 33, at end insert the said subsection.—(Baroness Phillips.)
On Question, Amendment agreed to.

CARAVAN SITES BILL
Brought from the Commons; read 1a, and to be printed.
FRIENDLY AND INDUSTRIAL AND PROVIDENT SOCIETIES BILL
Brought from the Commons; read 1a, and to be printed.
HIGHLANDS AND ISLANDS DEVELOPMENT (SCOTLAND) BILL
Brought from the Commons; read 1a, and to be printed.
SALE OF VENISON (SCOTLAND) (No. 2) BILL
Brought from the Commons; read 1a, and to be printed.

INDUSTRIAL EXPANSION BILL
4.47 p.m.
LORD SHACKLETON: My Lords, I beg to move that the Report of Amendments be now received.
Moved, That the Report be now received.—(Lord Shackleton.)
On Question, Motion agreed to.
Then, Standing Order No. 41 having been suspended (pursuant to the Resolution of May 21):
LORD SHACKLETON: My Lords, I beg to move that this Bill be now read a third time. We had some interesting debates on this Bill on the Committee stage. It may not have been convenient, I fear, for certain of the noble Lords opposite who are interested in this Bill to be present at this time. I know that the noble Lord, Lord Erroll of Hale, said that he would not be able to be here. Nevertheless, I do not think we are going to run into any difficulties, because I do not think noble Lords opposite need worry about the absence of their particular champions on this occasion.
I would say that I am grateful to them for the way in which they have debated the Bill. It started off with a certain amount of, not exactly fury but activity, but after the initial controversy has subsided I hope that noble Lords opposite will at least give the benefit of the doubt to the Government's intentions and will regard this as a useful, I was inclined almost to say a modest, measure, but it could be of very considerable importance. Although it was also novel, and to that extent contentious, I think the pattern that it will establish of a partnership between Government and industry will come to be generally accepted and that the controversy will die away. I think there is general agreement on all those Rails of the Bill which deal with particular projects: the finance of particular projects, the Concorde, additional finance for the National Research and Development Corporation, and so on.
I should very briefly like to deal with some of the points which noble Lords raised about other parts of the Bill, if only to show that we have listened carefully to the noble Lord, Lord Drumalbyn,

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who always comes up with interesting, sometimes esoteric, points, but always points that need proper consideration. We have considered them carefully. There was one question in particular which I think the noble Lord, Lord Hawke, who is not here, asked, and I know that the noble Lord, Lord Drumalbyn, was concerned about. That was whether the words in Clause 2(3), particularly in the latter part of the clause, could be clarified. It was not clear to some whether the words "and no such scheme" in Clause 2(3) referred to any industrial development scheme or only to one for a shipbuilding undertaking after the dissolution of the Shipbuilding Industry Board. I have looked at this clause again, and although this subsection contains rather a miscellaneous bundle of exceptions I am quite certain that the noble Lord, Lord Drumalbyn, after looking at it again, will agree that the words "and no such scheme" can refer back only to the words "an industrial investment scheme". Therefore, the relevant limb (which I understand is the correct word) of the subsection means what we intend, and contains a general requirement for consent of an existing company to the acquisition of its shares under any scheme.
I have also looked at the rather important point which the noble Lord, Lord Drumalbyn, raised on this subsection, about the absence of any provision that the Government must obtain the consent of a company participating with the Government in establishing a new company "pursuant to a scheme". I stated during Committee:
"I do not see how you can form a joint company with another company unless it consents."
That still seems to me to be clear; but if it was not clear—and perhaps it was ambiguous—may I say that I mean that the Government could combine with an existing company to form a new company pursuant to a scheme only if the existing company agreed to do so. The need for that consent to be obtained, therefore, does not have to be provided for in the Bill.
I have also looked at the points raised by the noble Lord, Lord Drumalbyn, on the question of the approval by Parliament of industrial investment schemes. I
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was myself concerned at the arguments he put forward, which seemed to me, on the analogy of other measures, to have some force. I said in Committee:
"Here we are proposing to have Orders which are primarily intended to provide money."
We accept that such measures are traditionally not subject to rejection by your Lordships' House. I commented on Second Reading that a time might come when perhaps, if the reform of your Lordships' House goes through, the question of Commons financial privilege could be argued again. But clearly this is not the moment for me to raise that point.
The argument that the noble Lord, Lord Drumalbyn, used was that there was respectable precedent to show that the setting up of an industrial board should be the subject of an Affirmative Resolution of both Houses. He cited the Cotton Reorganisation Scheme and schemes under the Industrial Organisation and Development Act. My recollection of those, although not absolutely clear, was clear enough for me to express the view that they were not on all fours, and I find this to be so. Schemes under the Industrial Organisation and Development Act and the Cotton Reorganisation Scheme were essentially regulatory and did not provide authority for the expenditure of Government money. Of course, the provisions here go a great deal further than anything contemplated under industrial investment schemes.
There will be no powers in relation to the Bill to do the sort of thing that could be done under the Industrial Organisation and Development Act For instance, a development council could provide for the imposition of a levy by the Council on persons carrying on business in the industry concerned and in this connection could empower the Council—I am sure the noble Lord will follow these words, as they have a familiar ring—to require such persons to keep records, produce returns and give the Council access to their books. I am most grateful to the noble Lord for raising the matter, if only because it provides a slight touch of nostalgia of the days when we debated these matters in another place. Of course there are enforcement provisions, including penalties. A Cotton Reorganisation Scheme could similarly provide for the imposition of charges and

999
penalties to be imposed if information requested by the Cotton Board was not furnished. Therefore it is clear that this is altogether a different point, and that the setting up of an Industry Board scheme will not be significantly different from others. Of course its form is already provided for in Schedule 2 to the Bill.
I should like to turn briefly to one change in the Bill made by your Lordships' House. Although it is possible to go through it again I do not think it would be correct for me to argue it at great length, but I rather agree with an article I read in the Spectator, that too much attention has been paid by the Conservative Opposition to the theoretical objections to the acquisition by the Government of equity shares in companies. I personally regret that this Bill now leaves this House prohibiting sponsoring Ministers from taking equity under a scheme. I have given arguments why a company concerned may feel that this is an appropriate form of support in a particular case, because it avoids the burden of fixed interest payments. But, again, I do not want to make too much of that because I do not think it is a major part of the scheme.
I must say that I am bothered that we should have dropped this method. There would, of course, be the advice of an independent advisory committee, and a Government shareholding would provide the best possibility of a proper return on the taxpayers' investment, including an equity investment. But, as the Bill stands, if changes are not made it will be necessary to have special legislation before the Government can participate in the financing of the new computer company which we announced and explained in your Lordships' House, International Computers Limited, which is in the process of being set up, with the full consent of the companies concerned. The financial arrangements have been worked out to give both the new company and the taxpayer a fair bargain. One particular fear expressed in the context of Government purchase of equity was that the Government might, unless the Bill were amended, use its provisions to acquire majority shareholdings in companies. I have already said that generally it will not be the Government's intention to acquire majority share-
1000
holdings in companies under industrial investment schemes. It would nearly always be a minority interest. If a scheme envisaged a majority interest it would have to be laid before Parliament.
I was, however, a little concerned as to the possibility of the Government's achieving this by stealth in some way, knowing of the anxiety of noble Lords as to what Governments, if not this Government, might get up to. Here, it is worth pointing out that if, after acquiring a minority interest under a scheme, the Government were offered a further holding and wished to accept that offer, a new Order varying the original scheme by seeking to increase the finance available under it would have to be laid before Parliament; and of course, it would have to be approved in another place. That would be equally true whether or not the additional share acquisition would give the Government control.
I hope that this assures noble Lords opposite that there will be no possibility of the Government's trying to acquire control over companies without informing Parliament. I have already made it plain that this is not our intention; it is not the object of the particular exercise. I have stressed that the aim is to give assistance to industry, selectively and speedily. The computer merger is one example of the need for speedy action. It is not our aim to gain control over private industry, but rather to further partnership between the Government and industry. The Bill lays down clear criteria for Government financial assistance for industrial projects and constitutes an important improvement in constitutional arrangements. It means that, in future, action can be taken more rapidly, under more direct Parliamentary control of individual projects and within more clearly defined limits than has often been the case previously. I believe that is as it should be. We at all times are having to combine in Government the obligation to move quickly and decisively and, at the same time, retain the proper Parliamentary control and the proper scrutiny of the Executive. I believe that this measure will make a contribution, and a by no means minor contribution, to

1001
Britain's competitive position in the world. I beg to move.
Moved, that the Bill be now read 3a. —(Lord Shackleton.)
5.2 p.m.
LORD DRUMALBYN: My Lords, I am sure your Lordships will be extremely grateful to the noble Lord, and I certainly am, for the way in which he has proposed this Motion. I am particularly grateful to him for his efforts to allay some of our misgivings about the Bill and for dealing with certain points that we raised in the course of the Committee stage. The first thing I would say about this Bill is that I do not think anyone could have accused your Lordships of delaying it in any way at all. Indeed, in Committee we discussed only the most important general clauses of the Bill, as distinct from the clauses dealing with the financial support for particular undertakings or ventures, the Concorde, the "Queen Elizabeth II", and the Beagle aircraft, and the replacement of certain temporary provisions in the Supplies and Services (Transitional Powers) Act by permanent powers.
The main reason why we did not have to ask questions about those provisions was because the Leader of the House kindly provided us with explanatory memoranda. His courtesy in doing this undoubtedly saved the time of the House, and I hope that Ministers will follow this excellent example—one which perhaps might have been one of the matters mentioned in your Lordships' debate last week on the procedure of the House. I am sure that if the Government were willing to provide explanatory memoranda on clauses on appropriate Bills in advance of the Committee stage the time taken over the Bills could be reduced, and I, for one, should at least feel more confident that I know what a Bill is about—at least, I should hope so. I perhaps ought to add that of course the noble Lord would expect us to look at the explanatory memoranda at least as critically as he himself does.
The noble Lord has referred to the one change we have made in the Bill—
LORD SHACKLETON: Its one blot.
LORD DRUMALBYN:—which we quite recognise is unwelcome to the Gov-
1002
ernment. That is the omission of the provision which, under an industrial investment scheme, could authorise a Minister to subscribe for or purchase shares in an undertaking with its agreement. If this embarrasses the Government all I can say is that the Government have only themselves to blame. The practice of anticipating the approval of Parliament, virtually taking it for granted, seems to be becoming the rule rather than the exception. It is particularly objectionable when what the Government seek to achieve could have been achieved in some other way—as I believe in the particular case of I.C.T., it could have been achieved through the Industrial Reorganisation Act. Also, according to the Press, there are other schemes ready, or nearly ready, to be presented to Parliament, but Parliament has still not been told about them.
The coyness of the Government in this respect gives cause for concern about the extent of Parliamentary control over schemes provided for in the Bill. This is another point to which the noble Lord the Leader of the House referred. Some schemes, of course, may involve comparatively small amounts of financial support, but others, particularly those involving an entire industry, or indeed a section of an industry, may be both costly and of great importance to the national life.
The noble Lord pointed out the differences that exist with the sort of scheme that will be brought in with this Bill and the schemes made under the Cotton Industry Act 1959. I think it is regrettable that in the Bill the Government have seen fit to treat all schemes alike, whether they are concerned with, say, a single promotion in a small company or assistance to a vast industry, or with support for possibly the improvement of efficiency in a whole industry. As the Bill stands, each scheme is simply to be laid before both Houses of Parliament, and will be subject to approval of the Commons by Affirmative Resolution. No opportunity is to be given in either House to amend the scheme, and this is the essential difference that exists between what is proposed in this Bill and what has been done in the past.
My Lords, the use of the Affirmative Resolution is, of course, a common enough device. I may be wrong, but I

1003
cannot remember an Affirmative Resolution being defeated, or even withdrawn for reconsideration, in my time in the Commons, so this means little more, after all, than rubber-stamping what has already been arranged behind the scenes. I am sure that we all appreciate the need for confidentiality in negotiations in many cases, but it seems to me that if the work under this Bill is to command full public support it is desirable that we should be told well in advance of schemes that are likely to be laid before both Houses of Parliament.
I recognise that in the case of the I.C.T. scheme some advance notice was given and that was even, of course, before the Bill was passed. But I should like the noble Lord to tell us how he envisages that this will work in practice. Will everything be done, so to speak, in the preparation of the investment schemes behind closed doors until the time comes to lay the draft Resolution before the House, or will Parliament be kept informed of the kind of schemes that are under consideration, so that opinion in Parliament, and among the public, upon these particular schemes can be formed in advance of the presentation of the draft Resolution?
What worries me most, however, is the doubt I feel about the way in which this Bill is going to be used. This is a very difficult thing to talk about, because we naturally accept entirely what the noble Lord says about the intentions of the Government in respect of the use of this Bill. He spoke of what some future Government might do. But my doubts arise not so much from what the Ministers responsible for the passage of the Bill have said, as from what other members of the Government and of the Labour Party have said.
One of the things which I think has caused the conflict between the two sides of the House on this matter is that when the Government first presented the Bill its aim appeared to be to promote industrial expansion—indeed, that is what the Long Title of the Bill says. It was also in the name of the White Paper. The Government were to provide financial support, as set out in the Long Title:
"for industrial projects calculated to improve efficiency, create, expand or sustain productive capacity or promote or support technological improvements".
1004
They were to do this where and only where a project could not be expected to go ahead solely on the basis of finance from existing sources. But when the Bill was published the schemes for such technical support were not described as industrial expansion schemes, but as industrial investment schemes. The emphasis was changed from Government support to Government investment.
Although in the debates in this House, we on this side were considering the provisions of the Bill from the Point of view of co-operation in industrial expansion, noble Lords opposite were making speeches about it from the point of view of State investment. Indeed, the noble Lord, Lord Hirshfield, seemed puzzled and rather grieved, I thought, that we did not share his viewpoint. He spoke with great experience as a financier, but we on our side were thinking in terms of production and industrial efficiency. This epitomises the difference which has arisen between the two sides of the House on this Bill.
The real danger of this measure is that, having the powers to seek Commons' confirmation of schemes prepared behind the screen of confidentiality, the Government will find that there are few worthwhile projects which cannot obtain in the market sufficient capital for development, and will accordingly be tempted either to promote expensive schemes unwisely, or else to invest for the sake of investing. These seemed to be the lines on which the noble Lord, Lord Hirsh-field, was suggesting that they should proceed. They may even be tempted to invest in order to get control of a company or of an industry.
The noble Lord, Lord Shackleton, today disclaimed any such intention, and said that in effect if they started by taking a minority share in an industry they would have to come back to Parliament before they could increase that share to a majority share. That is no doubt so, but the fact remains that they could come back to Parliament to increase it to a majority shareholding. The difficulty, as I see it, is that all that is needed is for the Government to declare that, in the opinion of the Minister there is no likelihood that sufficient capital will be forthcoming from other sources to promote technological improvements

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which, again in the opinion of the Minister, are needed. I thought it desirable to show to the House the reasons why we have felt misgivings about the Bill and why we have pressed to a Division and carried the Amendment to which the noble Lord referred.
There is one further question I should like to put to the noble Lord. The noble Lord will be well aware of the help which the Government can give to industry setting up in development areas. One consequence of the Bill could be—I do not say that it will be—that the Board of Trade influence over the location of industry will be weakened. I would ask the noble Lord, the Leader of the House, for an assurance that where new industrial development is involved the competent authorities, before promising financial support to any company, will consult the Board of Trade on the question of location so as to continue to make sure that, if at all practicable, the development takes place in a development area.
While we shall not oppose the Bill, we are not certain that the powers given in this Bill are either necessary or desirable. I, for one, believe also that at least in regard to schemes for an industry or sections of an industry there is insufficient Parliamentary control. Our suspicions have been aggravated by the way in which the emphasis in the Bill has been clanged from "industrial expansion" to "investment". This is a Bill which offers too much scope for misuse. I can only hope that it will not be misused. It will probably do some good, but I doubt very much that it will do as much good as the Government expect.
5.17 p.m.
LORD SHACKLETON: My Lords, the noble Lord is still a little suspicious. I wish I could cure it. I think that he is no longer suspicious of me. I am not sure whether he is suspicious of the Government or of people he is afraid might be in the next Labour Government; but he obviously is a little suspicious. I should like to try to distinguish for him the use of the word "expansion" as opposed to "investment". The way in which this Bill is intended to operate to achieve industrial expansion is by providing industrial investment. It seems to me to be logical
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to have as the Title of the Bill "Industrial Expansion"—
"An Act to authorise the provision of financial support, pursuant to schemes laid before Parliament, for industrial projects to improve efficiency …"
One does this by providing for additional investment where in fact it will not be forthcoming in satisfactory form, or in large enough form, through the existing channels of investment. It seems to me clear that the case has been made by the particular projects which are directly mentioned in the Bill. The difference is that in future, instead of having to bring a Bill to Parliament each time this is done there may be a greater need for more rapid action.
I do not disagree with the noble Lord as to the undesirability of Government moving in on a large scale and taking over majority control of independent businesses. To my mind, there is every possible objection to doing so. This is not to suggest that there are not appropriate cases, as previous Governments have endorsed, where industry should be brought under public ownership. We are in fact having to do so in the case of Beagle Aircraft, but it was only after a number of efforts had been made to leave it, either jointly or with a majority control, in the hands of private industry. The purpose of the Bill is simply to ensure that, where it is necessary or desirable to achieve for reasons which were set out in the White Paper a particular expansion in a certain area of industry, one does so by means of an investment scheme. The noble Lord said there would be few worthwhile occasions for doing so. There may not be many, but the few in which this practice will he carried out are those in which it is thought to be worth while. Computers are an example.
The noble Lord asked whether in fact a number of projects were coming along about which the Government were being secretive. The noble Lord likes to have it both ways. He complained because the Government went ahead with the computer arrangement and hoped to tie it on to the Bill, and announced it in advance. He now complains because we have not announced to Parliament something in advance. But we have not got them yet. They have not reached

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the stage of being clear investment schemes. Indeed, I know of no specific one at the moment, and I do not know whether there are any particular projects coming forward.
The noble Lord made an interesting point as to how far Parliament would be given advance information. I think this must depend on the circumstances. But I very much take his point that the moment an agreement has been negotiated—and it may be necessary to negotiate that agreement in private, if only because of the effect it could have on share markets and so on—it will be desirable to give the maximum notice to Parliament. The speed with which the Order is laid must, of course, depend on the urgency of the particular measure, but I take the noble Lord's point fully, and the more notice Parliament is given the better. Let me also say, again to the noble Lord, Lord Drumalbyn, that before the Government of the day can introduce such a scheme they will almost certainly have had the advice of their Advisory Committee, and in the case of an industry board there will again have been some preliminary inquiries.
I do not doubt that it would have been possible to tie up the Bill very much more tightly; but there is a balance in these matters and we do not want to make it unreasonably bureacratic. However, we want to provide reasonable Parliamentary control and, above all, to ensure that the purposes are clear enough for any abuse of the intentions of the Bill—and this is why I think the Parliamentary role is important—to be brought to light. I have no qualms about anything at present, although the noble Lord is quite right in saying that we are always legislating far ahead. However, I believe that adequate control is provided.
He asked me one question about the location of industry. I hesitate to give him a precise answer without consultation. Clearly, this is a matter which will be considered, but how it will be weighed in the particular circumstances I cannot say with any precision. There is already a degree of Parliamentary and ministerial control. The interests of the Board of Trade are bound to be recognised and, of course, there will be Treasury control over such measures, which will have to
1008
take into account whatever Government policy may be in regard to the location of industry. But I will go into that matter, and if there is anything useful that I can give to the noble Lord I shall write to him, or perhaps we can even arrange for a Question to be asked in the House.
I do not expect we have seen the last of this Bill. On the equity question I must say to noble Lords that I still think they are making far too heavy weather of it. I understand their reasons, but I cannot, for the life of me, see why, in a measure which commends itself to the industries concerned—one of which, as I explained on Second Reading, was not considered appropriate for the I.R.C. for reasons which I shall not repeat—we should deny freedom to an individual company to allow the Government to take some equity, provided it is not under duress. I suspect that noble Lords' views are really rather hostile to the concept of free competitive enterprise.
On Question, Bill read 3a, with the Amendments.
LORD SHACKLETON: My Lords, I beg to move that this Bill do now pass—and may I say that there was nothing offensive for the noble Lord in my last remarks.
Moved, that the Bill do now pass.—(Lord Shackleton.)
On Question, Bill passed, and returned to the Commons.

CLEAN AIR BILL
5.25 p.m.
LORD RAGLAN: My Lords, I beg to move that this Bill be now read a second time. This Bill was promoted by my honourable friend Mr. Robert Maxwell in another place, and its purpose, as the Long Title says, is
"to make further provision for abating the pollution of the air".
It extends and modifies the provisions of the Clean Air Act 1956, in the light of experience gained and improvements in techniques. Anybody who has recently seen the front of the National Gallery, the beauty of the stone of the old Treasury building or the scrubbing of Nelson on his column, and has rather casually wondered why all this had not been done

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before, is only accepting for granted the clearer and cleaner atmosphere which has quite quickly come about in London since the passing of the Clean Air Act 1956. Before that, all this expense and hard work would have been wasted, because the continual pollution and the few smogs would soon have painted over the newly cleaned stone with a coat of standard London grey. But there is now a good chance that all this brightness and whiteness will last a long time, and it is certain that the enactment of this Bill will ensure that the need for washing these buildings will arise very seldom.
This greater cleanliness of surroundings in London and throughout the country is a very pleasant sign of the much more healthy atmosphere in which we are living. Industrial air pollution was first tackled in 1863 by the Alkali Act. This Act, and its several successors, abated principally the hydrochloric acid given off by alkali works, but it also abated many other noxious substances. After the First World War certain cities, such as London, Coventry and Manchester, quite successfully started tackling general smoke pollution, but it was not until after the great London smog of 1952 that general legislation was considered to get smokeless zones throughout the country. A Committee, under the late Sir Hugh Beaver, was set up to see how it could best be done, and the result was the 1956 Act, promoted by Sir Gerald Nabarro and backed with great enthusiasm by my noble friend Lady Summerskill.
If, again, one wonders why so little was done about the matter earlier, the answer is, partly, that it so often needs a disaster before we get around to doing something; and, partly, that the means for smoke control were either not generally known or were not generally available. Industrial furnaces need to be fitted with traps for grit and dust which will work properly without reducing efficiency too much and without being prohibitively expensive to fit or to operate. Also, to have domestic smoke control there must be enough smokeless fuel for everybody. The increasing use of oil has helped reduce smoke pollution; smokeless solid fuels have become more available, and there has been a rapid advance in the techniques of grit and dust arrestment in industry.
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However, it is still very difficult to do anything very much about catching fumes. One can catch dust quite simply, but fumes need much more complicated apparatus. When this Bill was introduced in the Commons it was hoped to be able to include statutory provisions against the emission of fumes, but it became clear that fume control is still imperfect and extremely expensive The best way of coping with this problem at the moment is by having chimneys which send the fumes high enough so that by the time they come down they are so diluted that they can be more or less disregarded as a health hazard or a nuisance. This technique is extremely successful. One of the most troublesome gases is that of sulphur dioxide, which turns into highly corrosive sulphuric acid. But tests have recently been carried out around a new coal-fired station at High Marnham, in Nottinghamshire, which show that only a small part of the sulphur dioxide falling on the surrounding countryside was actually coming from the power station. Most of it was coming from towns some of which were twenty or thirty miles away.
I think I should draw your Lordships' attention to the fact that industry is far from being the chief culprit in air pollution. When one thinks of smoke one tends to think—at least, I do—of great chimneys belching beastly black smoke over everything. I suppose that is because the chimneys are very easy to see. But it was estimated in 1956 that industry was responsible for about one-third of all smoke, and domestic chimneys for about two-thirds. Since then, industry has so successfully put its chimneys in order that it has reduced its smoke emission by nearly 75 per cent.; and already by 1965 industrial smoke was contributing to only just over one-fifth of total smoke pollution. The remaining four-fifths or so was coming from domestic chimneys, so this is where there is the (greatest room for improvement.
It is estimated that so far about 45 per cent. of premises in black areas—that is, particularly heavily polluted towns—have been covered by smoke control orders, and one of the objects of the Bill is to speed up the introduction of smoke control areas by those local authorities which have been left behind

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by the others. It can be, I think your Lordships will agree, a selfish thing for a local authority not to make an effort to abate smoke emission in their district. The prevailing wind will likely bring comparatively clean air into the district from another smokeless zone, while the district's smoky air will be deposited downwind on others who neither made it nor can do anything about it. This Bill, which has been worked out in consultation with local authorities, gives the appropriate Minister power to require local authorities to submit programmes of smoke control, and to get them to carry them out if he thinks they are not doing enough about it.
I will now run your Lordships shortly through the Bill, which has an excellent Explanatory Memorandum. Clause 1 is to control the emission of dark smoke from industrial or trade premises. This does not apply to bonfires or roadworks; and chimneys are already controlled under the principal Act. It applies to the burning in the open of rubbish and waste materials; and there are powers for the Minister to exempt certain materials, such as explosive materials, which have to be burnt in the open for safety's sake, or to exempt builders' rubbish on demolition sites. Clause 2 modifies and replaces Section 5 of the principal Act. It is not yet practicable to legislate against fumes, as I said earlier, but this clause gives the Minister power to prescribe by regulation limits on the quantities of grit and dust which may be emitted from the chimneys of furnaces above a certain size.
The main purpose of Clause 3 is to lower the size of furnace from one ton an hour to 100 lbs. an hour, or equivalent, to which grit and dust arrestment plant has by law to be fitted. Clause 4 provides for special exemptions to Clause 3, and for people to appeal to the Minister against the refusal of a local authority to grant an exemption. Clause 5 deals with the measurement of grit, dust and fumes from furnaces. Larger furnace owners will be expected to measure their own, as they are now. The local authority bears the cost of measuring emissions from smaller furnaces in those cases where, at the owners' request, they come themselves to carry out the
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job of taking the measurements. This is because some of the measuring equipment is extremely expensive, and it is not right to ask small firms to buy their own measuring equipment.
Clause 6 is very important. This gives the local authorities a more complete and satisfactory power of control over the height of chimneys. The Ministry of Housing and Local Government have produced a very jolly booklet, which I could lend any of your Lordships, from which can be calculated the height of a chimney in a few minutes if you know the size of furnace. It is confidently expected that the powers in this clause, which are subject to appeal, will considerably reduce the effects of industrial pollution. The local authority will have no power over what the chimney looks like. That, of course, is left to the planning authority. Clause 7 empowers the Minister to make regulations applying to fumes—that is, particularly to fumes defined in Clause 13—emitted from those furnaces described in Clauses 2 and 3 as and when methods of fume control become practicable and economic; and I may say that the Minister will not make regulations under this clause without prior consultation with industry.
Clause 8 is the clause which empowers the Minister to require the creation of smoke control areas. Clause 9 is rather sensitive, but it has been very carefully drawn. It makes it an offence to buy or to sell for delivery any unauthorised fuel for use in a smoke control area unless the building, fireplace or boiler is exempted. This means that a fuel merchant will not have to move his premises out of a smoke control area if he wants to sell unauthorised fuel for burning out of the smoke control area. Clauses 10 and 11 are administrative, and I think I need not say very much about them. Clause 12 makes it clear that any power of the Minister under the Act is by Statutory Instrument, subject to annulment in either House. Because the emphasis in this Bill is on the tempering of idealism by practicality, the last clause, Clause 15, says that the Act will come into operation on a day appointed by the Minister, and that he may bring in different parts of the Act in different parts of the country on different days if he so wishes.

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My Lords, I hope I have shown that this is a good and practical Bill. I have every confidence that it will have the firm support of your Lordships; and, that being the case, I hope that your Lordships will forgive me if, before I close, I make a philosophical point—because this Bill is a fairly unusual beast. Though it affects so many people—every-body in the country, in fact—it is completely non-Party and, in principle, non-controversial. Yet it contains all those ingredients which we are not supposed to like very much. It is yet another piece of legislation; it involves controls; it means more bureaucracy; and it gives less individual freedom. Yet it is thoroughly desirable.
Because so many of us live so close together, all contributing our little share to the pollution of the atmosphere, we have to find some means of abating smoke and dust. It is not just a matter of cleanliness. It has been estimated that about 4,000 people died from the effects of the great smog in 1952. The smog of 1962, which was caused by similar meteorological conditions and was of a similar duration, caused the deaths, it is thought, of between 400 and 750 people. Although that is still bad, it is clear from these figures that things are getting much better. But the effects on health of air pollution are still very great, although of course they are inestimable. Although we already lead the world in air pollution abatement, the measures in this Bill will go a long way towards making both our towns and our countryside healthier places to live in; and, as that above all else could hardly be a more excellent purpose, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2a. —(Lord Raglan.)
5.40 p.m.
LORD BROOKE OF CUMNOR: My Lords, I know that the noble Lord, Lord Kennet, is interested in this subject, and I am particularly sorry to hear that he is not well enough to attend here to-day to reply to this debate. I feel sure that I can speak for everyone present in saying how much we look forward to seeing him again in good health very soon. Meanwhile, I am certain that the noble Baroness, Lady Serota, will be a fully adequate substitute in dealing with this
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debate on behalf of the Government. I should like to express gratitude to the noble Lord, Lord Raglan, not only for the clarity of his speech but for his action in introducing this Bill which has passed through another place as a Private Member's Bill. A great deal of work is involved, as I know from experience, in piloting a Private Member's Bill, and it is fortunate that this Bill has found so ready and, evidently, so ardent and philosophic an advocate.
I welcome the Bill particularly as one who developed a keen interest in the whole subject of clean air when I became the Minister responsible, some six months after the Clean Air Act 1956 had reached the Statute Book. I was glad to hear the noble Lord, Lord Raglan, emphasing that the efforts to clean the air we breathe did not start merely in 1956. Although that was the first Clean Air Act, Governments and chemists have been struggling with this problem for well over 100 years, going back to the first soda plants in this country when the Leblanc process was brought from France and caused an almost intolerable pollution. I do not know how many of your Lordship; are aware that in the earlier part of the last century, particularly in South Lancashire, there were taking part in the agricultural industry, if I may so call it, people who gained the name of "alkali farmers". They were reputed to make more money by their claims to compensation for loss of crops, due to the pollution of the, air by the soda plants, than their neighbours who were doing what I might call straight farming and not having to contend against pollution.
But, my Lords, in that and in so many other respects there has been an enormous improvement. If any of your Lordships are interested in the more difficult technical problems of keeping the air clean, I would warmly recommend to them the Annual Reports of the Chief Alkali Inspector. I am no technician and no chemist, but I found those Reports so interesting when I was responsible for presenting them to Parliament that I have continued to read them ever since. For example, your Lordships may care to look in a recent Annual Report of the Chief Alkali Inspector at two comparative photographs, one of the town of Widnes, taken not long ago, and one of the same

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view over Widnes taken at the turn of the century. The difference that has been made to the atmosphere by the Alkali Acts and by the control of fumes and pollution is almost unbelievable. I say that in no disrespect to the town of Widnes, which was one of the earliest victims from pollution and which in this century has been one of the greatest gainers from technical advance and from efficient enforcement of the law.
I like to mention the efficient enforcement of the law, because the noble Lord, Lord Raglan, seemed to fear, in his philosophic excursion, that perhaps this was, or might be thought of as, a wholly restrictive measure. On the contrary, I believe that all the work done on clean air has been the opposite of restrictive in its administration and in its effect. I can claim no personal credit for the Act of 1956, because that was piloted through another place by my precedessor, Mr. Duncan Sandys. To him and to the late Sir Hugh Beaver, in particular, I think the country owes a great debt. If I remember aright, it fell to me to preside over the first meeting of the Clean Air Council which was set up under the 1956 Act; and Sir Hugh Beaver was an invaluable member of that Council.
The noble Lord, Lord Raglan, mentioned, rightly, the shift in culpability as between the domestic fire and industrial smoke over the last few years. I agree with him that now the industrial pollution has been so greatly lessened that it is estimated to be responsible for no more than 20 per cent. of the smoke pollution to-day. If he goes back beyond the 1956 Act, he will find that fifteen or sixteen years ago it was estimated that there was an equal balance, fifty-fifty, as between the culpability of industrial and of domestic smoke. That does not mean that we should relax our efforts on the industrial side. It does mean that very great additional efforts are required on the domestic side if we are to receive the full benefit of clean air.
My Lords, this Bill appears to me to be founded on the ten or twelve years of experience that we have had since the 1956 Act came into force. It is founded, as I see it, not only on the practical experience of the working of the 1956 Act but also on the advances
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in science and techniques that have been achieved during those ten or twelve years. So I think it can fairly be said that the Bill is in no sense a criticism of any shortcomings in the 1956 Act, which was an all-Party measure, but that what it does is to recognise that, now that we have discovered how much more can be done, these provisions will make it possible to do more. I should be grateful if at some stage in the proceedings on the Bill either the noble Lord himself or the noble Baroness, on behalf of the Government, would indicate whether the provisions now in the Bill are broadly agreed with all concerned. I know that a great deal of trouble was taken before the Bill was introduced, and indeed during its passage through another place, to try to mould it so that it would be generally acceptable. But I think it is a point on which your Lordships might like to have reassurance before we reach Committee stage.
As to the substance of the Bill itself, I confess that I find it difficult to make a Second Reading speech because really the clauses are related in only one way; that is to say, they are related by their all being practical improvements which have been brought to light since 1956. There is no underlying theme except that. I hope, therefore, that your Lordships will forgive me if in the rest of my short speech I do little more than mention points which, on another Bill, might be more suitably raised in Committee. In this Bill I doubt whether there will be Amendments put down in Committee. The Bill was substantially improved in Committee in another place, and so I think it would be fairer for me to raise these points—there are very few of them—at this stage.
I welcome Clause 1. I was not quite sure whether I understood how the noble Lord, Lord Raglan, could be right when he said that the clause excluded bonfires. It appears to me that if someone did light a bonfire on industrial or trade premises and created dark smoke, that would be caught by this clause. I think it important to mention bonfires. because I happen to remember from my constituency correspondence that when the 1956 Act came into operation and smoke control orders were made in various parts of the big cities (including the borough of Hampstead where the noble Baroness

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and I both were living at the time) considerable doubts existed about whether you might be committing an offence if you got rid of your garden rubbish by lighting a bonfire. If I recollect rightly, it was established that if you burned this rubbish in anything approximating to an incinerator with a small chimney at the top, you might be committing an offence unawares, but so long as there was no chimney attached you could burn your rubbish in your garden with impunity. Bonfires loomed large enough in the aftermath of the 1956 Act to justify my asking now exactly how bonfires come into, or stay out of, Clause 1.
The noble Lord, Lord Raglan, rightly said that, as originally introduced in another place, Clause 2 covered fumes as well as grit and dust, but now there is no mention of fumes in Clause 2 as amended in Committee elsewhere. I cannot help thinking that this Amendment should have been carried through into the Explanatory Memorandum and into the marginal summary of the clause. The Explanatory Memorandum says:
"Clause 2 enables the Minister of Housing and Local Government (in Scotland the Secretary of State) to prescribe limits on the quantities of grit, dust and fumes which may be emitted from chimneys of furnaces."
As I read the Bill, in the form in which it is presented to us, Clause 2 does not mention fumes, and it is only when you come to Clause 7 that you find that the Minister can by regulation apply to fumes the provisions of Clause 2. It seems to me, therefore, that the marginal summary—"Emission of grit, dust and fumes from furnaces"—needs amendment, though I doubt whether it is part of the legislation. I have never seen an Amendment put down to the marginal summary of a clause, but perhaps the noble Lord would look at that.
I will quickly pass over all the technical clauses in between, and come to Clause 8 which gives the Minister power to require local authorities to take steps to create smoke control areas. No doubt the granting of this new power to the Minister has become necessary because of the relatively slow advance of the spread of smoke control areas in some parts of the country where there is sufficient pollution in the air to justify them. It would be helpful if at some stage we could be told a little more about the
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justification for this clause. I lake it that, although 45 per cent. of all premises are now covered by smoke control orders, it is emerging that in some parts of the country local authorities have been slow to act, and therefore it seems desirable for the Minister to step in. I know that during the four years when I was responsible (it was, of course, only the first four years of the operation of the 1956 Act) it was becoming apparent that local authorities responsible for areas in or near certain coalfields were reluctant—I think on grounds of local employment—to take steps to prohibit the use of domestic coal. It is not an easy matter to deal with, because there may be very strong feeling in such areas, but clearly in the national interest it is not desirable that there should be any areas where there is pollution and yet no action is being taken about it.
My Lords, before I pass from this clause, may I say that it would be helpful if the Government would inform us (may I assure the noble Baroness that I am not pressing at this stage for replies to questions of which I have not given previous notice) whether they are satisfied about the availability of supplies of smokeless fuel in connection with this new power which is given to the Minister. I know that I had to consider all the time, in relation to the spread of smoke control areas, that it was useless to encourage or indeed to allow local authorities to go ahead and create smoke control areas unless one was satisfied that there would be sufficient supplies of smokeless fuels. Otherwise one might simply be creating scarcities and pushing up prices. I think that in relation not only to Clause 8 but to the general drive for clean air it would be helpful to know how the Government assess the smokeless fuel position now.
I should like to know whether the provisions of Clause 9 are likely to create difficulties in coalfields over miners' coal. It is not very much use a miner having an entitlement of coal from the Notional Coal Board if he finds that it is not possible for him to use it. Indeed, under the provisions of Clause 9 a miller might find that he was committing an cffence if he used the coal provided for him by the N.C.B. These difficulties may by now have been cleared up without my being aware of it, but certainly ten years ago this was a considerable problem.

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and no one would be more delighted than I to hear that it has been alleviated.
I hope that the provisions of Clause 11 will not give rise to any anxiety on the part of your Lordships. The clause, as I read it, takes away from local authorities control for all clean air purposes of premises which come under the Alkali Acts. Indeed, it is a simplification of the control, and that seems to me an excellent thing. Sometimes there was a certain amount of controversy between the local authorities and the Ministry of Housing and Local Government, as the controlling Department, about whether a particular process should be under the control of the alkali inspectors or the local authority. One sometimes had sympathy with both sides; one certainly had sympathy with those who were trying to run a business and to comply with the law and who wanted to be quite sure that they were responsible to only one source of control and not to two.
In my opinion the majority of local authorities have assumed their additional responsibilities under the 1956 Act and discharged them well, despite the need for Clause 8. Certainly for my part I had great confidence in the Alkali Inspectorate, a small section of a big Government Department, which seldom gets into the news, even into the Parliamentary news. In four and half years I hardly ever had to defend the Alkali Inspectorate against any Parliamentary criticism, or indeed to explain anything it was doing. In passing, may I say that I have never understood who gains by there being a separate Alkali Inspectorate for Scotland. Whether this goes back to some early phenomenon of Scottish nationalism, I do not know. It always seemed to me that in this highly technical work the experience of the Inspectorate ought to be spread over as large a number of works as possible. I cannot really believe that anyone in Scotland gains by the Alkali Inspectorate there being separate from the Alkali Inspectors in England and Wales, who cover so wide an area and must thereby gain rich experience.
I was fortunate because in my time the Chief Alkali Inspector was Dr. Carter, now retired, one of those invaluable public servants who are little known to the
1020
public. I do not think he would mind my repeating in Parliament a remark which he made to me one day before he retired. He said: "Minister, some people criticise me because I am not always instigating prosecutions. I measure the effectiveness of my work less by the number of people I prosecute than by the number of millions of pounds I get British industry to spend on research". That strikes me as exactly epitomising the constructive approach rather than the restrictive, to which I referred earlier in my speech. I have no doubt that Dr. Carter's great work is being admirably carried on by his successor as Chief Alkali Inspector.
I apologise if I have raised a number of small points on this Bill, but it is not a Bill that one can argue about in principle. I believe that the main purpose of the Bill is universally accepted—that is, to make the 1956 Act more effective. In another place it aroused short debates and no serious controversy. One reason why it is desirable that we should debate it adequately here on Second Reading is that in another place, for a special reason, it had only 23 minutes' debate on Second Reading and less than 1½ hours of debate altogether. My impression is that most of the points which might have attracted criticism were remedied in Committee in another place. I, for one, shall wish it a smooth and swift passage through your Lordships' House.
6.4 p.m.
LORD NUNBURNHOLME: My Lords, my noble friend Lord Amulree was going to speak on this Bill. I think he was going to welcome the Bill but object that it does not go far enough. I want to raise two points. The first I consider to be an important one: that is, about fumes from motor vehicles. So far as I can see, this Bill does not deal with petrol or diesel fumes and I do not see why it should not. After all, it is dealing with clean air, and anything that can cut down the filthy fumes from motor vehicles in our towns and cities is to the good. The other point is a small one. Farmers—and, as your Lordships know, I am a farmer—use weed-killers, and the toxic smell of some of these is absolutely filthy. Not only is it filthy but it is dangerous. I think that in the case of these

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toxic fumes some restriction should be imposed on farmers in using these sprays when, for example, the wind is over 5 m.p.h. That is all I have to say.
6.6 p.m.
LORD POPPLEWELL: My Lords, it is not my intention to speak long on this Bill, but I want to congratulate the noble Lord, Lord Raglan, for taking charge of it in this House and to wish the Bill well in its further progress. I would endorse what the noble Lord, Lord Brooke of Cumnor, had to say about the development of an atmosphere favourable to the acceptance of a clean air policy. That has been going on for a considerable period of time. The Clean Air Act 1956 was a great step forward and this Bill is an automatic development of the enlightened local authority line of approach. It has not been an easy task. For a long time coal was our chief fuel. Although the noble Lord, Lord Brooke of Cumnor, has indicated considerable progress in industry, the changeover seems to have been slower among domestic users. But local authorities have been empowered to make grants to assist householders in converting from ordinary coal fires to fires using smokeless fuel. I wonder whether my noble friend Lady Serota, when she comes to reply, can say what expenditure has been incurred by local authorities in making grants towards conversions.
The noble Lord, Lord Brooke of Cumnor, posed the difficulties, particularly in coalfield areas, where miners have concessionary coal. I want to pay a compliment to the National Coal Board for the efforts they have made to encourage people to go on to solid smokeless fuel. The department they have established has done a wonderful job of work. They have conducted a lot of research into this type of fuel and have experts who are available to anyone who is building a new house or is thinking of conversion from coal. I also want to take this opportunity to pay a tribute to the electricity power generating stations. In my old constituency, I took considerable interest in their development. We used to get many complaints about the grey dust that came from the old stations, but now a new type of smoke control has made it possible to clean the dense smoke that used to be there and make it 97½
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per cent. free of dust. This is an important step forward and emphasises what the noble Lard, Lord Brooke, said is relation to industry paying careful attention to trying to eliminate this nuisance.
In my old industrial constituency we have various measuring points for atmospheric pollution. At one particular measuring point we had a 12 per cent. atmospheric pollution. That is a very serious matter. Anyone travelling by air over the city of Newcastle and looking down will see that all the smoke is funnelled into a given direction, which indicates the atmospheric pollution that takes place. We have heard a good deal about lung cancer being created by smoking cigarettes. I hold the view that the atmospheric pollution in our industrial areas is a larger contributory factor to lung cancer than cigarettes, and I think this is borne out by the statistics of respiratory diseases in these industrial areas. One finds that the figures for respiratory diseases and lung cancer, in particular, are of a much higher percentage than those for the open country.
The Bill enables the Minister to make Orders. I am sure this will be done. I want to see clean air as speedily as possible, but there are difficulties. I know local authorities, particularly in the mining areas, who are very much concerned because they feel that if their area is zoned as a clean air area it will do away with the livelihood of their people. I think I am correct in saging that in this direction the National Coal Board have again been most helpful, because, as I understand it, where there is concessionary coal for miners and they have to convert to solid smokeless fuel, the Coal Board are prepared to recompense the miners financially for forgoing their concessionary coal. That is a great step forward. It indicates the forward thinking that is taking place. I ant sure that this Bill, with the automatic development of the working of the 1956 Act, is a good step forward, and I welcome it very much.
6.14 p.m.
LORD RHODES: My Lords, the noble Lord, Lord Brooke, mentioned an area of South East Lancashire that I represented for nearly twenty years. I live on the other side of the border, and I was a recipient of their smoke for many

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years. It was only the 1956 Act which really gave me an opportunity to seek salvation. As soon as the 1956 Act became law, I started some propaganda in my constituency about the smoke that was being deposited on me. At that time, the only hedge that I could grow was a privet hedge. Anybody who knows the ubiquitous privet will know that it is not exactly a thing of great beauty, but when it is the only thing that you can grow, because it likes smoke, you are very glad to grow it. The flowers that we used to grow in the garden used to suffer as well.
To cut a long story short, I may say that when we established our smokeless zone in Ashton-under-Lyne it made an enormous difference to the health of the countryside down wind. For instance, I used to have my white paint washed down three times a year, but now it is quite adequate if it is washed down once a year. That is, of course, an economy which is appreciated by everybody. But I do not think the propaganda that we have put out in support of movements like this has been intelligent or adequate enough. If in areas like ours, where bronchitis has a very high incidence indeed, you can bring it home to people before you start introducing any of these things that their health will benefit by a reduction in smoke, then you are half way there. Instead, what a lot of local authorities have done is to start the argument on the basis of economics instead of social advantage. Where the local authorities have gone wrong, they have done so mainly on the question of comparison between the cost of smokeless fuel and conventional fuel. I would make the plea that an effort should he made to furnish local authorities with this admirable idea and with the means for propagating it. I have great pleasure in supporting the Bill.
6.16 p.m.
BARONESS SEROTA: My Lords, I am sure the whole House will regret the absence of my noble friend Lord Kennet from the discussion of this Bill to-day, and will join me in wishing him a speedy recovery, especially in view of the important matters that will be coming to your Lordships a little later in the week in which he is both closely involved
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and deeply interested. I should like also to join with noble Lords who have spoken in congratulating my noble friend Lord Raglan on his presentation of this measure to us to-day. He has not only explained clearly the details of the different clauses that make up the Bill but, together with other noble Lords who have spoken, given an interesting account of the development of the control of air pollution, both before and after the 1956 Act, from which we go forward with his measure to-day.
The noble Lord, Lord Brooke of Cumnor, has, with his usual courtesy, indicated a number of points which he would like to discuss further on the Committee stage of the Bill, but I hasten to give him one assurance at this stage, which I think the rest of the House would also wish to hear—that is, that this Bill is presented by my noble friend Lord Raglan with the consent, and indeed the co-operation, of all interests concerned including Central Government and the local authority associations. And here one would like to pay particular tribute to the Confederation of British Industry, who assisted the noble Lord in the preparation and drafting of the Bill, the Clean Air Council and all the other interests who have been foremost in the field of controlling air pollution, and thus creating not only a better environment, but also reducing ill-health in our community and, as the noble Lord, Lord Rhodes, has just so vigorously pointed out, the load on the housewife. I myself realised only as he was speaking that the reason why I can now do the spring cleaning in the Summer Recess instead of at Easter is that I now live in a smokeless zone and the white paint can wait that much longer.
I should like to say to my noble friend Lord Popplewell that I have not with me at the moment the information for which he asked, but I will let him know the level of local authority grants to householders who wish to convert solid fuel appliances to the use of smokeless fuel. I agree with those noble Lords in their concern about the availability of smokeless fuel. I will try to give the House that information at the Committee stage.
I will conclude by joining with other noble Lords in wishing this measure every possible success and a swift passage through the House. Judging by the

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debates so far, I think the noble Lord can anticipate little difficulty, and he will know that we are all with him in the object of his exercise; namely, clean air.
6.21 p.m.
LORD RAGLAN: My Lords, I can answer straight away the question put by my noble friend Lord Popplewell. A man who has to convert his fireplace to burning smokeless fuel gets a grant of 70 per cent. of the cost from the local authority—40 per cent. coming from the Treasury and 30 per cent. directly from the local authority.
LORD POPPLEWELL: My Lords, I accept those percentages, but the question I was asking was about the gross total being expended by local authorities.
LORD RAGLAN: My Lords, I am afraid that I am not in possession of that information.
The noble Lord, Lord Brooke of Cumnor was complimentary. He showed an enormous knowledge of the clean air legislation, and I am pleased to find that he uses the Alkali Inspector's Reports as light reading in the evenings. I have found it an extraordinarily interesting subject, and when I made my philosophical discourse towards the end of my speech and spoke about the restriction, I was referring, of course, to restriction on the individual freedom to burn whatever fuel one likes. This we have to accept if we are going to live together in a cleaner atmosphere. My noble friend Lady Serota referred to something which perhaps I did not make quite clear in my earlier speech. All the measures in the Bill have been agreed by local authority associations and by the C.B.I., and the latter body has been extremely helpful in drawing them up.
The noble Lord, Lord Brooke, asked a number of questions. I was referring to domestic bonfires—the ordinary garden bonfire which gives off a white smoke, but I suppose that if you had a few rubber tyres on it and it started to give out black smoke, you might be caught. However, I hope that the Bill will not catch November 5 bonfires. This provision is for people who habitually make a nuisance of themselves.
LORD BROOKE OF CUMNOR: My Lords, if I may interrupt the noble Lord,
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I did not for a moment think that Clause 1 as drafted would catch the person who burns rubbish in his garden, but when the noble Lord said that Clause 1 would not apply to bonfires it seemed to me that some of those who control industrial and trade premises might think that they could light bonfires there and burn anything they liked.
LORD RAGLAN: My Lords, I am sorry if I gave that impression. The noble Lord referred to the marginal note to Clause 2, and the Explanatory Memorandum, and the fact that they still contain the word "fumes". That is a "fair cop". These words were not taken out at the time the word "fumes" was taken out of the Bill but, as the noble Lord said, they are not part of the legislation.
The noble Lord also asked a question in regard to Clause 8, which I think I have already answered. I agree that Clause 9 may create difficulties because of smokeless fuel for miners, where they get smoking fuel at the moment. Of course, as mentioned by my noble friend Lord Popplewell they can receive money in lieu of coal, and in some areas I am told that it is a very fair exchange indeed and the money would buy as much coal, if not more. I do not know whether that satisfies the noble Lord, but I agree that it is a thorny problem.
Clause 11 removes from the local authorities the power to apply to the Minister of Housing and Local Government for permission to prosecute a works registered under the Alkali Act 1906. My advice is that in twelve years this power has been used only five times, and not once has a consent been granted by the Minister. Therefore the power is not really wanted and what we are doing is to remove from stock an article which we did not sell and for which there was no demand; and the local authority associations are not objecting.
The noble Lord, Lord Nunburnholme, mentioned exhaust fumes. We cannot in a Bill like this legislate against exhaust fumes. This Bill is backed by the Ministry of Housing and Local Government, and exhaust fumes are a matter for the Minister of Transport. Further-more, the subject of exhaust fumes is a

1027
complicated matter and one highly charged with emotion. Therefore we decided that it would be well to leave it alone. As the noble Lord, Lord Brooke, said, this Bill is merely an extension of the 1956 Act. The smell of weedkillers may be something to do with the Ministry of Agriculture, Fisheries and Food, but I think that we could not do anything for it in legislation of this kind. I agree that weedkillers make an awful smell and sometimes do an enormous amount of damage, but we cannot do anything about them at the moment.
My noble friend Lord Rhodes mentioned propaganda and said that everybody should learn more about smoke control. I quite agree. But, of course, local authorities already receive a great deal of information from the Ministry of Housing and Local Government, and the Ministry view is rather that if the local authorities do not do what we hope they will do, it is probably not the fault of the Ministry. The information is there for anybody who wants it.
My Lords, I hope that I have answered all the questions that were raised. It only remains for me to thank all those noble Lords who have spoken and to express the hope that this Bill will meet with your Lordships' approval.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

UNIVERSITY OF WALES INSTITUTE OF SCIENCE AND TECHNOLOGY BILL
Reported, with Amendments.